HMC

AN INTERNSHIP REPORTHEAVY MECHANICAL COMPLEX (Pvt.) Ltd.

TAXILA RAWALPINDI.

SUBMITTED BY,MUMTAZ AHMAD.

MASTER OF BUSINESS ADMINISTRATIONINFORMATION TECHNOLOGY

SESSEION (2002-2004)

COMSATS INTITUTE OF INFROMATION TECHNOLOGY LAHORE

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IN THE NAME OF ALLAH THE MOST GRACIOUS AND BENEFICIENT WHO’S HELP AND GUIADANCE I ALWAYS SOLICIT AT EVERY STEP, AT EVERY MOMENT.

ACKNOWLEDGEMENT

HMC has very friendly and co-operative working atmosphere. Every one has co-operated with me. I am very thankful to Mr. Muhammad Saleem Deputy General Manager (Accounts), Rana Abdul Rauf Junior Officer (Store Accounts), Mr. Ali Bahadur Junior Officer (Corporate Finance),

And especially I am very thankful to Ghulam Siddque DSO (Billing) for their kind co-operative behavior’s I can not work in HMC with out their help. Moreover at this time it is necessary to remember all those teachers from Nursery to University time, friends, family members and especially my parents who contribute in building of “mine personality”. Its all due to efforts and prayers of those people that I am standing here today. God bless them all.

I left no stone unturn to attain knowledge and experience for my practical life and is also desire of parents, stand like shining star in the surroundings. I pay the best compliments to my brother (Jamshaid Ahmed) who guided me in his better attainment of knowledge and affectionately.

PERFACE

According to the rules of Higher Education Grant Commission 06 to 08 weeks internship is necessary for the completion of MBA-IT two years course which also included the submission of the report on the functioning method of organization attended by students concerned.

My Internship was in Heavy Mechanical Complex (Pvt) Limited Taxila.It is a big industrial setup in Engineering products and capital goods manufacturer in the country. It was very difficult to visit each and every department of this project. Any how during my internship programme I have focused my intention mainly in Finance and Accounts Department. I have generally visited concerned departments like as Sales & Marketing, Procurement, Production Planning & Control (PPC), and Human Resource Management & Quality Assurance Departments.

This Internship report provides information about main functions, operation and working structure of Heavy Mechanical Complex (HMC). I observed all this through my personal visits & interviews of executives and staff members etc.

DEDICATION

Mr.JumshaidAhmad

EXECUTIVE SUMMARY

HMC is a well reputed organization for the manufacturing of the engineering goods in Pakistan. They are having unique facilities of production in their fields with in country. The whole report is based on four departments of the organization.

The first chapter is “Introduction to organization” which includes the whole story of the organization from very beginning till today, major achievements, product mix of the company and all other related information about the different departments in brief.

Second chapter is “Production Planning Control” which is detail study of the functions of the department, duties distribution and legal commercial aspect of the functions performed there.

Third chapter is “Purchase department” where I gave tried to explain the local and foreign purchase procedures in detail. Different diagrams are designed by me to explain the procedures.

Fourth chapter is “Sales and Marketing” in this chapter sales and marketing activities are explained product wise. Due to unique products this section is quite different from ordinary business. It is the most interesting part of this effort.

Fifth chapter is “Finance Department” in which the major activities and different section of finance department is explained in detail. Each and every section is given special attention to do every thing in detail.

Sixth chapter is “Analysis” which includes analysis of production, sales, market conditions and financial statement analysis.

Seventh chapter is “Recommendation and suggestions” although the management style is very perfect there in HMC up to papers. My opinion in this chapter discussed the practical implementation of some very useful plans.

Although my internship was in Finance and Accounts department but in this way I tried my best to go in detail of every aspect that is related to management in HMC. However due to limited time I don’t think this report explain each and every thing comprehensively.

RESEARCH METHODOLOGY:

The methodology which I have adopted for this report is based on both primary and secondary data.

Primary data:

Interviews and discussion with the staff and management. My own personal observation.

Secondary Data:

The sources of secondary data are, Annual Reports. Manuals. SEC Journals. Relevant books.

During the research project there were a lot of limitations. Firstly the time was much limited i.e. 6 weeks which are not enough to study the management in an organization like HMC “the capital goods manufacturer”. Secondly very few management professional opt HMC for internship, so I couldn’t find enough help from previously done work. So I tried much to study all the related aspects of management at HMC.

Those on responsible seats do not hesitate to disclose the information which helps me a lot. I also avail assistance from few books of finance and management etc.

LIST OF ACRONYMS:

PPC. Project Planning and Control.BOQ Bill of Quantity.PS Pick Slip.SR Store Requisition.PMD Project management department.MMG Material Management Group.RR Receiving Report.EDP. Electronic Data Processing.ICR Insurance & Custom Rebate.CBR. Central Board Of Revenue.D.D. Demand Draft.Ms. Microsoft.MIS Management Information System.SEC. State Engineering Corporation.BOM. Bill Of Material.S&M Sales & Marketing.CAD Computer Aided Design.CAE Computer Aided Engineering.

TABLE OF CONTENTS

PrefaceAcknowledgementExecutive SummaryResearch Methodology.List of Acronyms.

CHAPTER NO.1 INTRODUCTION TO ORGANIZATION 1 PAGE NO1.1 Organizational chart of HMC 21.2 Introduction to Organization. 31.3 Overview. 41.4 Objective 41.5 Design and engineering 51.6 Engineering contract/ project management capabilities. 61.7 Computer aided design facilities 71.8 Contract and project management 81.9 Manufacturing Facilities 111.10 Product mix 111.11 Quality assurance and control. 141.12 Statement of quality policy 151.13 Major achievements 161.14 Departments of HMC 16 Systematic Chart of ISO 9000 Certification 18

CHAPTER NO 2 Production Planning Control 19 Organizational Chart Of PPC 202.1 Introduction 212.2 Material management group 222.3 Core planning and EDP 232.4 Dispatch cell. 232.5 Insurance custom and rebate. 232.6 Sales tax. 242.7 Registration with sales tax 252.8 Sales tax formula 25

CHAPTER NO.3 Purchase Department 26

Organization chart of Purchase Deptt. 273.1 Introduction 283.2 Raising Indents 29 PAGE 3.3 Processing of Indents. 293.4 Modes of procurement 293.5 Time frame 293.6 Suppliers registration 293.7 Delisting and blacklisting 303.8 Purchase Process 303.9 Purchase diagram Local Purchase 31

Foreign Purchase 323.10 Demand form. 333.11 Earnest money. 333.12 Negotiation of rates. 333.13 Performance bond 333.14 Counter offer 343.15 Proprietary items. 343.16 Time frame for tender enquiry 343.17 Tender document 343.18 Tender opening 343.19 Rejection of quotation 353.20 Comparative statement 353.21 Technical evaluation. 353.22 Purchase approval 353.23 Purchase order 353.24 Repeat order 363.25 Rate running contract 363.26 Liquidated damages 363.27 Letter of credit 363.28 Receipt of material. 363.29 Imported material. 373.30 Local Material. 373.31 Weight of material 383.32 Emergence material procurement. 383.33 Abroad visit. 383.34 Inspection. 383.35 Rejection review committee 393.36 Preparation of RR 393.37 Payments 393.38 Late deliveries penalties 403.39 Imprest account 403.40 Other responsibilities 40

CHAPTER NO.4 SALES and Marketing Department 41 Organizational chart of S & M Department

4.1 Introduction 434.2 Main activities 434.3 Contract finalization 444.4 Amendment to contract 45 PAGE4.5 Engineering products 454.6 Plants 464.7 MIS section 464.8 Cost estimation sheet 474.9 Dispatchment 474.10 Customer complaint sheet 484.11 Order processing format 484.12 Dispatch invoice 484.13 Contract 494.14 Pre qualification 494.15 Present order position 504.16 Other functions

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CHAPTER NO.5 FINANCE DEPARTMENT 51

5.1 Introduction 525.2 Financial accounting section 525.3 Billing section 525.4 L/C section 535.5 L/C documents 555.6 Payment procedures 565.7 Credit control 565.8 Guarantee section 575.9 Bank commission 585.10 Pre audit section 585.11 Payroll and provident section 595.12 Computation of payroll 595.13 Allowances 595.14 Deductions 595.15 Overtime 605.16 Gratuity 605.17 Leave salary 605.18 Traveling allowances 605.19 Daily allowances 615.20 Provident fund 625.21 Cash and banking section 625.22 Project financing 62 5.23 Cost section 645.24 Costing of project 655.25 MIS section 655.26 System and software 66

5.27 Store accounts 66

CHAPTER NO. 6 ANALYSIS 68 PAGE NO

6.1 Market conditions 696.2 Exports 696.3 Export orders executed 696.4 Factors effecting performance of HMC 706.5 Major steps taking by HMC to improving performance 706.6 Analysis of production at HMC, Taxila 716.7 Production at HMC, Taxila 726.8 Overall production review 736.9 Production of cement plants 746.10 Production of sugar plants. 746.11 Production for Pakistan steel, Karachi 756.12 Production for boilers and pressure vessels 756.13 Production of building machines 766.14 Production of cranes 766.15 Production of power plants 776.16 Production of defence 776.17 Production of oil and gas 786.18 Production of railways 786.19 Production of miscellaneous commercial orders 796.20 Analysis of sales at HMC 806.21 Overview of sales at HMC 816.22 Sales of cement plant and equipment 826.23 Sale of sugar plant and equipment 826.24 Sales to oil and gas industry 836.25 Sales of Pak steel Karachi 836.26 Sales of cranes 846.27 Sales of building machinery 846.28 Sales of boilers 856.29 Sales of Power plants 856.30 Sales to defence 866.31 Sales to railways 866.32 Sales to miscellaneous items 876.33 Financial statement analysis 886.34 Ratio analysis 96

CHAPTER NO .7 Recommendation and Suggestions 102

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7.1 Recommendation and suggestions 103

REFRENCES

Chapter 1. Introduction To Organization

CHPATER 1

INTRODUCTION TO ORGANIZATION

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1.1 ORGANOGHRAM OF HMC:

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MANAGING DIRECTOR

DIRECTORQuality assurance & new products

GENERAL MANAGERDesign & Sales A&B.

GENERAL MANAGERPurchase & sales c.

GENERAL MANAGERMechanical works.

HEAD Foundry & Forge works.

Dy.GENERAL MANAGER Project Management.

Dy.GENERAL MANAGER Production Planning and Control.

MANAGER Administration.

Dy. GENERAL MANAGER Finance & Accounts.

CHIEF MEDICAL OFFICER

1.2 INTRODUCTION TO ORGANIZATION:

Heavy Mechanical Complex (HMC) having its registered office at Taxila, District Rawalpindi ,is situated at 35 Km from Islamabad ,Pakistan.HMC is biggest engineering and manufacturing organization of the country and forms a unit of State Engineering Corporation in the public sector under the administrative control of Ministry of Industries and Production. Government of Pakistan. The Company is governed through a Board of directors and objectives and policies are implemented by the Managing Director of the company.

HMC was established with the Technical & Financial assistance of People’s Republic of China during the third “Five year plan” of Pakistan with basic aim establishing key industries in country.HMC is the most sophisticated engineering concern of its kind in Pakistan and provides and important industrial linkage for the development and growth of heavy engineering industry and manufacture of capital goods.Total factory area is 1,031,985 Sq. Meters (255 Acres) , with covered area of 158,207 Sq. Meters (39 Acres).

HMC compromises of two main production facilities:

WORKS DEPARTMENT (MECHANICAL & FOUNDRY & FORGE).

Mechanical works started commercial production in 1971 whereas Foundry & Forge works started commercial production in 1978.

Major facilities of this integrated company include design & Engineering, Contract & Project Management, Fabrication, Heat Treatment, Pattern making, Galvanizing, Assembly Machining . And comprehensive Quality Assurance and Control set up in addition to other infrastructure facilities.

Plants and Equipments supplied by HMC confirm to International Standards Specifications (API/ASME).

HMC has also made a contribution by exporting some of its products to Far East, Africa and Sub-Continent’s regions thus putting Pakistan in the list of industrial goods exporting countries.

Supplier/ Buyer’s credit facilities are available through development financial institutions for HMC’s manufactured Plants and Equipment.

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1.3 OVERVIEW:

Status Private Limited Company

COMMENCMENT OF PROJECT:

HMC 1970

HFF 1977

Merger of HFF into HMC 1-7-1990

Owned By: Government of Pakistan Established with the Technical and Financial Assistance of the Peoples Republic China.

Covered Area. 160,000 Sq. Meters

Total Area 1.03 million sq.Meters

Paid up Capital Rs 1.162 Billion

Total Assets Rs 2.927 Billion

No. of employees 1118

Indirect Jobs Created

In Taxila Region and

Other Part of Country(Approx.) 28500

1.4 OBJECTIVE:

Ensuring rapid move towards self reliance. Saving foreign exchange through import and export. Broadening the engineering base of the company through acquisition

/development of the lattest design and manufacturing technologies. Exploring and developing new avenues for expansion and growth of engineering

units through out the country. Acquiring the state of art in melting technology.

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Development of supply of turn key plants. Undertaking projects of national economic significance. Providing service of training manpower to other engineering units both in public

and private sector. 1.5 DESIGN AND ENGINEERING:

Design and engineering facilities are manned by about 55 qualified Design personnel including engineers ,experienced and trained abroad in their respective disciplines vise; Mechanical Engineering ,Electrical ,Chemical ,Metallurgical ,instrumentation and Civil Engineering . The design department is equipped with computer aided Designing and Drafting facilities and simulation, modern record and retrieval systems and Library of technical books and international standards and specifications.

MECHANICAL WORKS

The Mechanical works is spread over 60 acres produces 16,750 tons of finished goods annually. Our dynamic engineering policy plus experience acquired through our participations in major national projects, gives us the know-how and confidence to offer a wide range of services and equipment including plants on turn-key basis.

FABRICATING FACILITIES

Fabrication shop is one of the largest in the country, has over 115 machine tools including a Plano-milling machine, size 1250mm a horizontal boring of 160mm spindle dice, a lathe meter dia 15 meter center-to-center distance and mear hobbing machine.

FORGING FACILITIES

Forge shop caters for all forging required for products. It is equipped with 800 ton forging press a part from various other types of presses and a range of furnaces operated on natural gas.

HEAT TREATMENT SHOPThe most sophisticated Heat treatment shop in the Country, capable of heat

treating any type of steel to any desired quality.

QUALITY ASSURANCE

All products undergo through inspection and tests by Quality Control Department at various stages of manufacture according to internationally established inspection procedure and methods.

5Chapter 1. Introduction To Organization

HMC is equipped with both destructive and non-destructive testing and a metrological laboratory.

SOCIAL/ WELFARE FACILITIES:

HMC is firmly committed to modern and effective techniques of Human Resource Development and believes that a motivated and satisfied worker.HMC work force of over 1118 persons is well looked after by its management. The housing colony of the factory is over a vast area and has over 2000 residential units for workers and officers, with necessary amenities like mosque, hospital, school, club, shopping centre and recreation centre. Food grains and other daily requirements are provided to HMC work-force at subsidize rates.

1.6 ENGINEERING, CONTRACT/PROJECT MANAGEMENT CAPABILITIES :

HMC since its inspection has acquired know-how and experience from world renowned technologies leaders and developed expertise, needed for the execution of the projects.HMC being an Engineering ,Manufacturing ,Site supervision during construction, Project Management during the execution of the projects in Cement, Sugar, Petroleum refining ,Gas processing ,Chemical and petrochemical, Fertilizer, Power generation Plants and other sectors of the Process industry (including Boilers, Pressure Vessels, Heat exchangers, Columns ,Towers, Piping & General steel structures etc.)Computers with adequate software support are extensively used in carrying out the activities of the company.

ENGINEERING

HMC’s design and engineering facilities are manned by qualified and competent engineers trained locally and abroad in their respective disciplines vise; Mechanical, Chemical ,Electrical ,Instrumentation, Metrological and Civil Engineers. The design department is equipped with Computer Aided designing engineering (CAD/CAE) and drafting facilities, process simulation, development of software, Record and retrieval system and library of technical books and International codes and standards. The main functions of engineering /design department are:-

Preparation of Process and strength calculations. Preparations of Plot Plans and layouts. Detail Engineering, Development of

equipment design, Piping Systems, Structures, Civil works, Electrical and instrumentation systems.

‘Preparation of specifications, drawing and data sheets.

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1.7 COMPUTER AIDED DESIGN FACILITIES:

CAD/CAE department is responsible for utilizing suitable hardware /software with management services and requisite training facilities to design engineering and draft men to enable them to use this technology tool to enhance their capability and quality/quantity of engineering out put.

MAJOR ACTIVITIES OF CAD/CAE SECTION:

a) Archiving. b) Drafting.c) Plant engineering. d) Process equipment design.e) Piping /structural design /engineering and analysisf) Machine design.

MAJOR FACILITIES AVAILABLE AT CAD/CAE SECTION:

a) Computer Hardware: Word processing work stations. Engineering/ drafting works stations.

b) Network Hardware: File server with on-line storage capacity of 60GB & 134 Network Nodes

c) Computer Peripherals Dot matrixs. Laser Jets. Paint Jets. Pen Plotter A0 Size. Inkjet Plotter A0 Size. Scanner A3. Scanner A0.

d) Engineering Software: AutoCAD. Pro-series Pro-Pipe. Pro-series Pro-Plant. Pro-series Pro-Steel. Pro-series Pro-Flow. Pro-series Pro-ISO. Pro-Vessel. TRI-Tank 650.


TRI-Tank 620. TRI-Therm. ANSYS. CAESER –II Piping Stress Analysis. Thermal Design Program (B-JAC). CHEMCAD – III Process simulation.

e) Network software: Network software Novell Netware 3.11.

1.8 CONTRACT /PROJECT MANAGEMENT :

HMC regards effective control effective control as the essence of Project Management, Which is performed under the direction of experienced project managers.For major projects, a project task force is formed to execute the works and to manage required personnel for project functions.

Project Management services provided by HMC includes following:-

Engineering co-ordination.Planning, schedule monitoring and reporting.Preparation of the project control budgets.Cost monitoring and reporting.Contract administration.Quality Assurance /Control.Documentation Control.Interface control.Safety.Logistics.Project audit.

1.9 MANUFACTURING FACILITIES

MECHANICAL WORKS

The mechanical Works is laid out in an area of 213,000 Sq. Meters (53Acres), out of which 56,000 Sq. Meters (14 Acres) is covered area.

FABRICATION SHOP

This shop has an are of 22,800 Sq. Meters (5.63 Acres).Preparation of material and welding of all fabricated parts, assembly, cleaning, painting operations, shot blasting and stress relieving of welded structures are undertaken in this shop.


Hydraulic presses, ranging up to 3000 Tons are available to under take various fabrication Jobs. The annual out put of the shop is 8,600 Tons.

MACHINE AND ASSEMBLY SHOP

Operations of machining and assembling are done in this shop where 200 machines of different types have been installed.

HEAT TREATMENT/ STRESS RELIEVING SHOP

a. Post machining heat treatment on medium and small size parts especially for Alloy steel gears, shafts and pins is performed here.

b. Heating the vessels /Members which are larger than the furnace depth is stress relieved in two heats with an overlap of 1.5m.By using this method, as allowed by ASME codes clause UW – 40, a vessel of 28.5 m length can be stress relieving furnace of 15 m depth.Furnace of 7.5 (w) x 8.5 (h) x 30 (1) meters shall soon be installed at our new project HMC- 3.

FORGE SHOPThis shop manufactures medium and small size forging as per specific

requirements including forging for tools, dies etc.This shop can handle ingots up to 7 Tons with length of forging up to 5.5 meters.

GALAVNIZING SHOP:

This shop covers an area of 1320 Sq. Meters and is equipped with most modern galvanizing equipment.

a) Hot dip galvanizing Max. Width 01.0 MetersMax. Length 10.0 MetersMax. Weight 02.0 Tons.

b) Metal spray galvanizing.The components which are beyond the hot dip capacity are spray galvanized.

SURFACE PREPARATION:a. Sand blasting b. Shot blasting

Shot size Dia 1.5 mmChamber size 3.6 (w) x 3.6 (H) x 13.5 (L) MeterWeight of Job. 34 Tons max.

c. Spray painting


AUXILIARY SHOPS:

Tool room for manufacturing of special Cutters, Gauges, Fixtures, Dies etc. Meteorological room for calibration of Measuring Instruments, Dies, Jigs, Fixtures etc.The mechanical works is designed to run on double shift with an annual turn over of approximately 17,500 Tons.

FOUNDRY & FORGE WORKS:

STEEL FOUNDRY

Steel foundry is the largest of its kind in the country equipped with 2 x 15 Tons and 1 x 3 Tons Electric ARC furnaces, incorporating centrally controlled sand preparation and regeneration system. Melting facilities are supported with Spectrometry to control the composition of the molten steel in accordance with the intentional standards and specifications.

PRODUCTION CAPABILITYCasting 6,500 Tons/yearMax. Casting weight 32 TonsIngots 38,000 Tons/yearMax. Ingot weight 50 Tons

IRON AND NON FERROUS FOUNDRY SHOP

Iron and Non Ferrous Foundry is equipped with 03 hot Blast Cupolas (each having a capacity of five Tons /hour) .line frequency Induction Furnaces and Centrifugal casting machine.

PRODUCTION CAPABILITYIron casting 5,000 Tons/yearMax. Casting weight 28 TonsNon ferrous casting 100 Tons/yearMax.casting 2 Tons

HYDRAULIC PRESS SHOP

Hydraulic press shop has the capacity to forge ingots up to a maximum weight of 50 Tons to produce finished forgings weighing over 30 Tons. The shop has special heat treatment furnaces (both vertical and horizontal) large oil and water quenching tanks.


Production Capability:Free forgings 4,000 Tons/yearMax. Weight of ingot 50 TonsMax. Weight of forging 30 TonsMax. Dia of ring forging 1,800 mm

FORGE SHOP

Forge shop is engaged in the Field of production Die-Forged and free free forged parts and has manufactured variety of components for the Automotive, Tractor and Defense sector successfully.

PRODUCTION CAPABILITYFree forgings 7,750 Tons/yearMax. Weight of free forging 500 KgsDie forgings 2400 Tons/yearMax. Weight of die forging 150 Kgs

MACHINE SHOP

Machine shop is equipped with a number of metals –working machine tools, designed to finish or rough-machine castings and forgings. In addition, Copy-Milling, Die-sinking, Shaping Milling, Plano Milling, Boring, deep hole drilling /Boring Machines (having capacity to drill up to depth of 8 meters) are also available.The shop is fully equipped to undertake manufacture of Forging and Trimming Dies for components weighing up to 150 Kg per piece.OTHER SHOPSGrinding media shop.Pattern shop.Fettling shop.

1.10 PRODUCT MIX :

CEMENT PLANTS

Machinery /equipment for a number of new and existing Cements Plants have been manufactured and supplied so far under Chinese, Fuller, F.L.Smith, KHD and FCB technical know-how. HMC have the design and technology for manufacture of large module Cement Plants up to 5,000 Tons/day capacity in collaboration with world renowned Cement Plants Designer/ Manufactures.

Plants of following capacities can be engineered /manufactured at HMC.

11Chapter1. Introduction To Organization

a) Portland Cement Plant (Large module) up to 5000 Tons/yearb) Portland Cement Plant (Mini) up to 700 Tons/yearc) White Cement Plant up to 50-300 Tons/year

HMC is designed to produce one complete Cement Plant per year on turn key basis.

SUGAR PLANTS

HMC manufactures Sugar Plant on turn key basis. So far HMC have completed 25 Sugar Plants on turnkey basis which are in production. HMC have the design and technology to manufacture Sugar Plants of 300, 500, 1500, 2000, 3000, 4000, and 12000 Tons per day crushing capacities and can produce two plants up to 500-12000 Tons/day Cane crushing capacity can be engineered /manufactured at HMC.

PROCESS PLANTSOIL & GAS PROCESSING PLANTS

HMC has arranged collaboration for design and process technology with some leading design houses in the world. We are producing equipment based on the latest process, design and manufacturing technology and equipment supplied by HMC conform to API /ASME standards specifications and are offered with guarantees and warranties as per International practices. HMC in its products mix has the provision for the regular production of Oil and Gas processing plants and equipment and manufacturing the following Plants for Oil & Gas industry:

Glycol Gas Dehydration Plant. Amine Treating Plant. NGL/LPG Recovery Plant. Sulphur Recovery Plant. Crude Stabilizing Plant. Oil and Gas Separators. Off Sites and Utilities. Cementing Equipment. LPG Tanks. Chlorine Containers.

CHEMICAL AND PETRO- CHEMICAL PLANTS. Basic Chromium Sulphate. Sulfuric Acid Plant. Equipment for Refineries. Equipment for Soda Ash & DOP Plant. Equipment for polyester and Acrylic Fiber Plant.


FERTILIZER PLANT & EQUIPMENT

HMC have manufactured major equipment for fertilizer plant like SSP & Urea. HMC is manufacturing misc. equipment for fertilizer industries.

INDISTRIAL /UTILITY BOILERS

Range of Boiler manufacturing is as fallows:

a. Industrial Boilers 2-80 t/Hr, For Oil, Gas and Biogases Fibred.b. Utility Boilers For Thermal power station up to 350 MW.

CRANES

ELECTRIC OVERHEAD TRAVELLING CRANES

HMC is manufacturing over head Cranes for the last two decades. We have to our credit supply of EOT Cranes up to 150 Tons lifting capacity. So far, we have supplied around 450 Cranes to various clients within the country as well as exported to Ghana Railways and Bangladesh Railways.We have the capability of manufacturing E.O.T cranes for hazardous areas including spark proof, explosion proof Cranes for special applications.

GANTRY CRANES

We have the design and necessary know-how for manufacture of Gantry Cranes up to 250 Tons lifting capacity and have supplied such Cranes for Terbela Dam project in collaboration with cone of Finland. So far, we have supplied 75 such Gantry Cranes of various capacities and can manufacture 20 Gantry Cranes per year.

JIB CRANES

We have the design and know-how and manufacturing of Jib Cranes Up to 20 Tons lifting capacity and have manufactured a number of such Cranes. We can manufacture 20 such Cranes for various capacities per year.

DOCK SIDE PORTAL CRANES

We have the design and know how from Sothert and Pitt of U.K. for manufacturing of Dock side portal Cranes up to 20 Tons lifting capacity .We are manufacturing such cranes for last one decade of various capacities.


ROAD CONSTRUCTION MACHINERY:

ROAD ROLLERS

Static Road roller 10/12 Tons capacity in regular production line. HMC have supplied above 100 Road Rollers in the country so far.

MISC.PRODUCTS:

HEAT EXCHANGERS, PRESSURE VESSELS & STORAGE TANKS.

HMC has very vast experienced of Fabrication of Heat Exchangers, Pressure Vessels and Storage Tanks of various capacities, types and sizes. So far, we have fabricated over 100 such equipment.

STEEL STRUCTURES

HMC have vast capacity to undertake manufacture of Steel Structure of different nature fabrication of Steel Structures for fertilizer, Sugar, Cement and Chemical Plants etc.The capacity of fabrication in our fabrication shop to undertake manufacture of steel structure and steel bridges.

1.11 QUALITY ASSURANCE AND CONTROL

HMC has independent and comprehensively Quality Assurance and Control Department. The function of this department is to provide quality management system, Control procedures and to have a check on the quality of products being manufactured both within the factory, items procured from other firms and design control.

HMC has been authorized for ASME code stamping for the followings:

“PP” Pressure piping.“U” Pressure/vessels.“S” Boilers.“U2” Pressure vessels Div -2.

HMC has the detailed Quality Assurance & Control manual and the whole system has ISO 9001 certification. The quality assurance department is organized as such to meet the strict quality requirements of all products.

In addition to above, Following facilities are available for metallurgical testing, Non destructive testing with precision instruments.


TESTING LABORTORIES

NON DESTRUCTIVE TESTS Hydraulic testing (Max.Press 650 kg/Cm2) X-ray testing (up to 55 mm thickness) Gamma-rays testing (up to 80 mm depth) Ultra sonic testing (up to 10,000 mm depth) Eddy current test (for coating ,thickness measuring) Spectroscopy Dye penetrates testing.

MECHANICAL TESTS

Tensile and yield strength Elongation Impact strength Compression strength Bend test

METALLURGICAL TESTS Micro structure with camera option Sulphur print Micro hardness

SAND TESTING FACILITIES Grain compression strength Moisture strength Permeability Mesh size Clay contents

CHEMICAL ANALYSIS Wet analysis Spectrometer Carbon equivalent instruments Gas analysis for entrapped H2 & gases in steel.

1.12 STAMENT OF QUALITY POLICY The quality policy of Mechanical complex (Pvt.) Ltd. Is based upon:

“QUALITY PERFORMANCE IS COMITTMENT TO EXCELLENCE BY EACH COMPANY EMPLOYEE,


IT IS ACHIEVED BY TEAM WORK AND THROUGH A PROCESSING OF CONTINOUS IMPROVEMENT”

“HMC IS DEDICATED TO BEING AS AN ORGANIZATION WHICH PROVIDES QUALITY PRODUCTS AND SERVICES WHICH MEET OR EXCEED THE EXPECTATION OF OUR CLIENTS”

The quality management system and procedures described in HMC quality assurance manual have been prepared to satisfy international quality management system define in ISO 9001-1994 and are mandatory for all personnel within the organization.

The head of quality assurance department has been authorized by the undersigned for preparation, approval, distribution, revision and maintenance of the manual. He has the authority, responsibility and organizational freedom to identify quality related problems, stop work if necessary and to verify resolution of such problems through his team.

To provide additional assurance to customer, the company when specified can undertake work to ASME standards in accordance with its “PP”. “SS”, “U” & “U2” code stamp approved to nominated certification body.

1.13 MAJOR ACHIEVEMENTS Certification of ISO 9001. ISO 9000 is concerned about the quality of company’s

product and services; detail is given in fig 1.1. Attained capability to design, engineer and manufacture of machinery of turn-key

supply of sugar and Cement Plants. Up gradation of facilities including introduction of computer aided designing. Supplied 26 sugar mills and 6 cement plants. Supply of spares to all major industries. Developed and regularly supplied spares for Pakistan steel. Helped in maintaining the prices of engineering products at a reasonable level. Export of complete sugar & other plants & equipment to other countries. Diversification in to oil & gas sector supply and erection of equipment for

Dakhni gas purification project on total responsibility basis. Supply and supervision of 36 Hydel power station for northern areas. Taxes & duties paid during the last 10 years amounting to Rs.656 million.

1.14 DEPARTMENTS OF HMC:

1) Purchase department.2) Administration department 3) Sales and Marketing department.4) PPC department.


5) Project management department.6) Design department.7) Quality and Assurance department.8) Training department.9) Finance department.

1. PURCHASE DEPARTMENTAccording to purchase order or demand of the product by PPC department

purchase the items from the industrial market on net or credit basis.

2. ADMINISTRATION DEPARTMENT

It administrates the whole department and atmosphere of the company in fruit full way.

3. SALES AND MARKETING DEPARTMENTThese departments market their products and create or make the tender to get the

order.

4. PROJECT PLANING CONTROL DEPARTMENTAccording to project, they create the demand of goods for consuming in the

workshop as a raw material. They check the demand of goods is valid or not. 5. PROJECT MANAGEMENT DEPARTMENT

These departments go to sight and check the location. If they find any problem then solve it according the demand of plant.

6. DESIGN DEPARTMENTThe responsibilities of these departments to design the projects in new style, so

that they complete with their competitors and increase the sales volume.

7. QUALITY AND ASSURANCE DEPARTMENTThese departments check the quality of product, which are incoming and outgoing

from the organization.

8. TRAINING DEPARTMENTThey give guidance to the new employees and the train the trainee in the best

way.

9. FINANCE DEPARTMENTThe main objective of this department to maintain the accounts of factory.

Payment of expenses and salary are responsible of this department. This department also arranges the currency to meet these expenses.

17

SYSTEMATIC CHART OF ISO 9000 CERTIFICATION

(Fig 1.1)

18Chapter 2. Production And Control

ISO 9000Guidelines for the selection and use of quality assurance standards

ISO 9001Quality system model for quality assurance in design /development, production, installation and services.

ISO 9002Quality system model for quality assurance in production and installation.

ISO 9003Quality system model for quality assurance in final inspection and test.

ISO 9004Guidelines for the quality management and quality system elements

CHAPTER 2PRODUCTION PLANNING AND CONTROL

19

Chapter 2. Production and Control

ORGANIZATION CHART OF PRODUCTION PLANNING & CONTROL DEPARTMENT:

20Chapter 2. Production and Control

Dy.GM.PPC

DM.P&C MW.

AM.Cement group.

AM.Sugar Plant.

AM.EDP/CPG.

AM.Boilers/cranes.

Dy.GM.PTD.

2AM+1FM.Processing Planning.

3AM.Tool Design.

FM.Feasibility & Quant Detail.

Dy.GM.MMG.

DM.Stores.

DM.Material Planning.

DM.Dispatch

Cell

Dy.GM.FFW.

AM.Planning Control.

AM.MMG &

Stores

AM.Dispatch

Cell.

Dy.GM.PTD.

AM.Custom

Clearance

AM.Ind.Surve

y.

J.O.Office

Management.

2.1 INTRODUCTION:

Project planning and control (PPC) is a separate department in HMC for the overlooking of the current project in progress in HMC. The major responsibility of PPC is procuring material, arrangements of documents, preparation of job order, and distribution of technical instruction.

Other activities of the PPC is as under,

Receive the copy of contract from sales and marketing after the contract become final. This copy is held by the PPC for future processing of the contract.

Demand preliminary BOQ’s of raw material and critical items from design department to procure the material.

Drawings of job from design department. Brief of sales contract .It mentioned the important item of the sales contract

related to production planning activity. It includes Material procurement from preliminary BOQ’s/drawings from design to reserve

the existing material in store or initiate for indenting the material which is not available in store. Sometimes the required material become almost difficult to procure, purchase department ask PPC for best fit substitute. In such situation PPC take decision in collaboration with design department.

One drawing is sent to technology for setting” route”. Route specified the systematic floe of the project in different shops and sections smoothly with no lag of time between activities to complete the project.

On the arrangement of the material and drawings job order package is prepared and send to works.

Issuance of standard items and material to dispatch call on PS. Estimation, arrangement and issuance of all material to dispatch cell and PMD for

sub contracted items. Technical scrutiny of vendor’s item only.

The whole PPC is divided into following sub sections,

MMG (Material Management Group.)

ICR (Insurance Custom Rebates)

Dispatch Cell.

Sales Tax.

Technology.


2.2 MATERIAL MANAGEMENT GROUP(MMG):

The whole management of material for the entire project which is in progress in HMC is responsibility of MMG. MMG is responsible only for the technical scrutiny and timely existence of the material; rating is headache of finance and purchase department. First of all MMG search for material in their own stores.

This requisition is made through PS In mechanical works side and by SR on foundry side and by SR on foundry side .if material is not found in stores side then MMG contact for acquisition of material to purchase department (as shown in PPC chart).Purchase department procure material according to their procedure (explained in later chapter) and material finally comes to stores issued to works on requisition by MMG.

Actually MMG bridge the gap between finance and stores .if material is needed to works on urgent basis then it is issued on loan list, then after this other document requirements like preparation of pick slip and other procedure takes place. MMG is also responsible for the proper storage of the material. Ensure that all incoming material is passed by the inspection (Quality assurance) section and further ensure the issuance of RR (receiving report) from store. Establishment of maximum and minimum inventory level comes under the responsibility of MMG.

MMG is further distributed into sections,

1 Material Planning and Control:

This section plan control for the procurement of material timely. They also indicate for the material and follow the whole process till the procurement of the material occurs. This section codes the items of the brought to store for identification purpose. This code gives the identity to the items and the store accounts section of the finance department enters the records of material in and used on this code. Works also submit their requirement of material to this department, and they issue them the required material from stores.

2 General Store:This section receives the all coming material and responsible for their proper

storage. When material comes to HMC premises this section issue RR (receiving report) after the complete inspection at quality assurance section.

3 Production Technologies:Production technology is having the technical staff; they check the feasibility and

other quantitative detail of the contract material estimation and other details about machine hours development details etc are decided here by Skilled technical staff .


Technology also designs the tool which are required Manufacturing of job Technology also prepared the DPL (detail part list) of the whole project and forwards it to MIS section of the PPC.

2.3 CORE PLANNING AND EDP :

Core planning and processing center provides necessary assistance from beginning to end completion of the project .The issue sale order number to the project and also kept record of the sale order directory .Production technology prepared the routing of the

Whole project and forwards it to EDP section. EDP posts the route of the project in the Format called as shop scheduling detail part list is prepared by the EDP section on the basic of drawings and route from production technology section.

EDP prepares the monthly sale and production report project wise and also Sale and production budget doth in term of money and volume. They also perform Monitoring and updation of the balance order position. They also forward these reports for the information of upper management and head office. Core planning and data processing section also help MMG in local and foreign Status. This record of receipt and issuance provided by the MMG IS also kept with the Section. They also provide the record of the job order status and brief of the project. If some new material is purchased which have never needed before then this section under the assistance of MMG assigns it identity code specific category .Data processing Section also look after the installation, system of PPC department.

2.4 DESPATCH CELL:

The main responsibility of the Dispatch cell is to deliver the completed project to client. However they are also responsible for few other things like, feeding of raw material to Mechanical works side, keep open yard tidy and organized. Sand blasting and point necessary for the finished job dispatch cell perform it before the delivery of the project When project has been completed dispatch cell recover it from the shop arrangements proper packing (if required) which is usually wooden box transportation is performed by the dispatch cell. They also insure the complete documentation before the delivery of project. A monthly dispatch report is also prepared in the department show the total project has been dispatched during the month.

2.5 INSURANCE CUSTOM AND REBATE:This section deals with the custom duty and sale tax on the import of the material

as purchase are made through purchase department , when they receive the bill of lading ,packing list ,mill test certificate ,sent by supplier they forward a copy of all document to (ICR) to clear custom and sales tax.


Consignment is cleared by Karachi and sends a letter to company site to receive the material from Rawalpindi Dry port ICR than apply for the provisional certificate for getting the discount on custom duty. To get the rebate on material ICR section goes for certificate from the “Engineering development board.” That the specified material is not locally available.

BILL OF ENTRY

When the material is received by the agent of HMC at dry port agent issues a bill of entry. The purpose of the bill of entries to clear the good from custom it is submitted by agent in NBP specified branch along with other documents. Latter on. Bill of entry contains following information,

Masser’s and consignee name. Value of goods in local and foreign currency. Sales tax registration number. Bill of lading number. Material number. Material information. Certificates and other information regarding rebates.

Documents are attached to bill of entry are,

Commercial invoices Indent/performance invoices. Bill of lading. Certificate of origin. L/C copy. Valuation to confirm goods price. Delivery order sent by the buyer.

After the preparation of these documents then ICR send a note to finance department to arrange a D.D (demand draft) of required document. Account section arranges D.D and forwards it to ICR (PPC). Now ICR representative go to clearing and agent submit D.D at NBP airport branch and get stamped on ‘Bill of entry’ after giving the warehouse charges goods are cleared from custom.

2.6 SALES TAX:

For local material sales tax is duty of seller, but for the imported items it is the liability of the importer. Some of the supplies are Exempting from sales tax under the sales tax ordinance 1990.


Taxable Supplies:

Under the sales tax ordinance the supplies are categorized in to sub heads. Rate of sales tax some time differ for the different nature of supplies.

Common Supplies:

Common supplies include the material used in various projects for instance welding rods, bolts etc.

Exempt Supplies:

Some of the supplies are exempted from sales tax, but company needs an acceptance letter from respective directorate of the sale tax. It is usually given for those materials which are used to manufactured goods for export.

Zero rated supplies:

These supplies are totally exempt from sales tax. It is only for the finished goods to be exported from Pakistan.

2.7 REGISTRATION WITH SALE TAX DIRECTORATE:

It offers registration of companies against fee charges. The advantage of registration is the registered company pays tax on rate 14% but the others on rate of 18%.

2.8 SALES TAX FORMULA:

As discussed earlier for the imported material it is responsibility of importer to pay the sales tax. The respective importer also has to pay the sales tax after the sale of same goods after value addition. Then the sales tax is calculated as,

Sales tax = Tax on outputs- tax on inputs.

For instance a company pays $3m sales tax on finished goods manufactured and sold down per month during same month paid $1.4m on raw material purchased. The company will claim for $1.4m because the liability on the sales tax on the company was,

Sales tax = 3.0-1.4= $ 1.4m.

25Chapter 3. Purchase Department.

CHAPTER 3 PURCHASE DEPARTMENT

26Chapter 3. Purchase Department

ORGANIZATION CHART OF PURCHASE DEPARTMENT:


GMCommercial

ManagerPurchase

ManagerS & M

DSOForeign Purchase

2AMLocal Purchase

DSOLocal Purchase

DSO

DSO

DSO

DSO

DSO

DSO

DSO

3.1 INTRODUCTION:

“Purchase department is responsible for all kinds of purchases both from local and foreign resources”

Purchase department is further divided in to following sections.

I) Local Purchases:

Section responsible for the purchases from the local resources with in country borders. This section also handles spot purchases on the emergency basis, if it is required for urgent completion of any job. Rate running contracts are also handled by the section.

II) Foreign Purchases:

Section is responsible for the all type of arrangement necessary to undertake for foreign purchases. Also establish a close contact with foreign firms and suppliers .L/C opening, guarantee /warrantee, negotiation rates are key fields to do by foreign purchase section.

III) Co-Ordination Section:Section responsible for,

Receipt and Issue. Registration of Suppliers’ Maintenance of control record room. General correspondence to out side parties. Typing pool. Other assignment on departmental basis.

IV) MIS & DATA PROCESSING:Section key duties are as follows,

Keep complete record of all purchases. Generate required reports for management to supports decision making process. Updating the preparation of procurement status report Issuance of computerized tender enquiries. Supplier’s performance report by using available data.

V) Technical Evaluation & Department Audit: Technical security and evaluation of items. Departmental audit of procurement less than 100,000.00 (usually of those items

bought for daily use of office having small value).


3.2 Raising Of Indents:

Indents of import of material must contain ITC # marked by ICR department.

Production items (PPC)* Non production items (Administration). CAD/ Design tools (Design Office).

3.3 Processing Of Indents:

Indents for revenue items come from PPC to purchase department and go to tender enquiry by approval of competent authority. In case amount less than 100,000 approvals will be given General Manager Purchase, otherwise by managing director.

3.4 Modes of Procurement:

Mode of procurement depends upon, Indented Target. Availability in local market & Quality. Price reasonability. Repeat order. Rate running contract. Proprietary items.

3.4 Time Frame:

A time frame schedule is settled by the Purchase department. After indents received by purchase department. It takes time listed in following table for procurement of material.

Local Purchase months 14 days Manufacturing items (local) 2 ---4 months Imports:-

Raw material 4---6 months Proprietary items 4---6 months Plant & Equipment 8---10 months.

3.6 Suppliers Registration:

Fresh registration is done by the purchase department. Main things which must kept in mind during registration are, supplier must be,

Reputable FirmFinancially soundFull fill Terms and conditions of application form.


Registration of suppliers is for three years.Fee for registration is Rs 4000/- Renewal of registration also done by the purchase department fee is 1000/-.

3.7 De-listing & Black listing Suppliers:

Purchase department has full right to de-list and black list supplier on following grounds:-

Suppliers do not respond three consecutive enquiries sent to him. Malpractice or anything acted against company’s interest. Practicing wrong with quality or quantity of supplies.

3.8 Purchase Process:

The whole purchase process consists of following phases. Two separate flow charts depending upon nature of purchases are drawer.

(Both are explain at next page)

30

LOCAL PURCHASES:

3.9 PURCHASE DIAGRAM:

Two types of Purchases

Local Purchase

Foreign Purchases

DEMAND FORM PURCHASE TENDER ENQUIRY QOUTATION (PPC) DEPTT. (Registered suppliers) (From Suppliers)

APPROVAL PRE AUDIT COMPARATIVE TENDER LIST OPENING FORM

(Through competent (At purchase deptt) Depending upon amount Of tender)

SCRUTINIZATION PURCHASE ORDER INSPECTORS GOES TO SUPPLIERS (BY PPC) (WITH PAYMENT)

MRR QUALITY ASSURANCE STORE MADE PAYMENT &

ACCEPT MATERIAL

REJECTED MATERIAL PURCHASE SUPPLIERS DEPARTMENT

31

Chapter 3. Purchase Department

FOREIGN MATERIAL :

DEMAND FORM LIMITED TENDER ENQUIRY LOCAL OR TENDER ENQUIRY. REPRESENTATIVE OF FOREIGN

SUPPLIERS.

NEGOTIATION ON PRICE PURCAHSE ORDER DELIVERY PERIOD, SIZE ETC. BIDDING (Technical support from PPC)

LC SHIPMENT ARRANGMENT COMMERCIAL INVOICES(From seller)

CLEARANCE OF CONSIGNMENTRECEIVE OF SITE FROM KPT.

(FROM Karachi office)

INSPECTION STORE (MMR). (By quality assurance) (Send a copy to purchase department).


3.10 DEMAND FORM:-

Demand form is document prepared by PPC for indentation purpose. It explains all technical explanation of needed material.

Tender Enquiry:HMC is performing tender enquiry in to three ways.

i) Advertised Tender:

Tenders up to 100,000 are often advertised in news papers for bidding. Usually call both technical offer and commercial offer together in single envelopes, or it may be called separately first technical offer than go for commercial one after checking technical suitability of offer. ii) Single Tender Enquiry:

It is usually followed for proprietary items or items stay with single individual under suitable premises. But it is often discouraged as it reduces competition.

iii) Limited Tender enquiry:

If job demand material is urgent, it is not suitable to advertise or amount less than 100,000 limited tender enquiries is send to registered suppliers proposed by PPC.

3.11 Earnest Money:

Also named as bid-bond guarantee. A 2% of total amount should reach purchase department before opening of the tender. It is not needed if amount is less than 0.4 million Rupees. Earnest money of rejected bidders is given back to them, and of accepted bidder given back after presentation of performance bond.

3.12 Negotiation of Rates:

Negotiation on prices of indents with the bidder is also responsibility of purchase department. Negotiation is required when you feel rates are little bit high than it was expected.

3.13 Performance Bond:

Performance bond is demanded to make sure adequate performance of contract. It order’s amount is greater than Rs 400,000.


3.14 Counter Offer:

Some time it is needed to be change in quotation’s specifications, and than all parties are again allowed to re-quote. If counter offers are invited due to high quoted prices first time, then first three (Lowest ones) are allowed to quote again by giving right of refusal to first lowest only.

3.15 Proprietary Items:

Proprietary item can be item of specific name, brand, manufactured by some specific manufacturer. Generally it is avoided to go for proprietary items as it reduces competitions. In case of proprietary items order is placed on basis of single enquiry.

3.16 Time Frame for Tender Enquiry:

Time for submission of tender enquiry is as follows:-

Local Foreign Advertised Tender Enquiry 14 days 21 days Limited Tender enquiry 10 days 14 days Single Party Tender Enquiry 7 days 7 days Gallop Tender 10 days 10 days.

3.17 Tender Document:

Tender document of HMC must contain nomenclatures, specification, quantity, delivery, scheduling and any other requirement regarding material required.

Tender fee is as follow:

Amount with Drawing without Drawing 1.00-2.40 m Rest. 400 Rs. 400

2.40-4.00m Rest. 1000 Rs. 800 4.00- above m Rest. 2400 Rs. 2000

3.18 Tender Opening:

All the suppliers put their sealed bid in tender box at purchase department keys of which are possessed by head purchase department. Tender opening authority is possessed by Heads of Purchase, Pre-audit and indenting department. After opening tenders these authorities or late quotations are never acceptable.


3.19 Rejection of Quotation:

A quotation may be rejected by the purchase department on following grounds,

i. Quotation without bank guarantee for earnest money.ii. Quotation with overwriting, cuttings, or with out signature of bidder.

iii. Unauthorized participation by the bidder.iv. Non-execution/ Acceptance of any of term or condition of tender.

3.20 Comparative Statement:

Statement is prepared by purchase department for purpose of comparison. It consists following things.

Name of supplier. Items. Quantity. Total value Discount. Tender opening date. Remarks. Commission.

3.21 Technical Evaluation of Quotations:

Technical evaluation of most of quotation is done at purchase department, but where more technical efforts are needed it is sent to PPC. However in both cases PPC scrutinize the quotation. Normally lowest offer with matching requirements is accepted.

3.22 Purchase Approval:

After satisfied with both and price aspect of quotation, a purchase proposal is sent to Pre-audit department. (Detained in Finance section) who simply checks the conversion rates and other particulars?

Final power to accept tender is usually delegated by SEC, board of directors to any one in top management.3.23 Purchase Order:

After purchase approval, purchase order shall be placed on specified Performa to supplier.


Copies of purchase order must be sending to:

Finance department. Stores. Indenting department. Regional office Karachi (Only Foreign Purchase)

3.24 Repeat Order:

To avoid advertisement charges and other cost including time factor sometimes head of purchase department go for repeat order. But few of following conditions must be satisfied.

Supplier should be x-lowest bidder for required item.Urgent requirement.If prices are quoted high, then purchase department, indenting department and Pre-Audit department decide to put order by keeping market in view.

3.25 Rate Running Contract :

To avoid day to day purchase complexities, company good for good rate running contract, usually made for one year. During contract year’s specified goods are delivering by supplier keeping rate running contract. This often made for daily used office supplies, employee’s uniforms etc.

3.26 Liquidated Damages: Incase of delay in delivery due to supplier’s mistake minimum 2% and

maximum 10% of price of goods can be penalties from supplier. However depending upon the situation head of purchase department can also cancel the contract, buy some supplies from some one else and claim extra cost from previous suppliers. In case of any dispute between supplier and purchase department arbitration will be held according to arbitration act 1940.

3.27 Letter of Credit:

After receiving of purchase order indicating ITC number, L/C section among a letter of credit of required amount and must have to inform purchase department within three days. Finance department also has to contact beneficiary of L/C within seven days.3.28 Receipt of Material:

Different treatment is given to material on basis of its origin. Certainly procurement of material from foreign is quite different as for local material.


3.29 Imported Material:

After getting dispatch receipts of particular from suppliers, purchase department informed Karachi office to arrange clearance and at same time ask finance department for retirement of original documents. After payments made by finance department, documents are send to Karachi office, they cleared goods from port and send to HMC site by trucks and trains. Damages, short landing, is reported by Karachi office to KPT and send the report to HMC finance manager to claim for damages, insurance etc. In case of short packaging company can also contact to the Government agencies for recovery but it is rarely needed.

Now material comes to site of HMC. first of all it goes for inspection in quality assurance section. Inspection report is prepared by Quality Assurance within three days. Past material goes to store and they issue RR (Receiving Report), a copy of which is sending to purchase department to confirm them acceptance of material. Damages are reported to finance section to claim insurance depending upon nature of contract. Usually all imported material is on FOB basis.

3.30 Local Material :

Procurement of material from local market (within the country) is having different procedure

i. Ex-Go down:

In this case purchase dept has to arrange for supplies from premises of supplier (store of supplier).

ii. For basis:

Supplier sent the goods through railway or goods agency. Company arranges for clearance form these agencies.

iii. Free delivery:

Supplier is responsible for all transportation of goods up till company premises.

iv. Insurance:

In case of on godown / free delivery company has to pay for insurance, but in FOR basis delivery supplier is responsible for transit insurance.


3.31 Weight of Material :-

All the materials are weighed before entry to company premises. No less weighed material as per contracted material is acceptable. If supplier sent material in excess he can claim for 4% excess of material and 3% of other tons, no facility for material in numbers (bolts, nuts etc).

3.32 Emergency Material Procurement:-

Spot purchases are made for material required in emergency.These purchases are only allowed when company has to face serious damages

otherwise.Purchase deptt has to arrange:

Justification letter from indenting department. Approval of competent authority. No compromise on accurate and complete technical

requirement.

If cost of material is up to Rs. 10,000 then decision can be taken by purchase deptt head by himself. He can procure it from local sources, tender notice is not advisable. It is expected from head of purchase department that he bout material after complete survey of market at lowest possible cost. If price of material exceed by Rs 10,000 then

Action Amount Rs<400,000 Purchase department must invite executives of EPS (3)

above for decision. Amount Rs>400,000 Decision taken by purchase committee (included

Executive of EPS (4) and (4) from pre-audit Indenting deptt.

3.33 ABROAD VISIT:-

If visit to some foreign company is required to buy some material a committee from purchase department constituted of high official executives is sent by managing director. Managing Director also need permission from chairman. Written justification is necessary.

3.34 INSPECTION:-

Foreign Material:Generally a certificate of quality is issued by manufacturer company is a warranty

/ guarantee against quality of goods. International companies are providing their services against fee i.e. usually paid by buyer, but depending upon contract stipulations.


Hence buyer can arrange inspection from these companies (SGS, Lloyds, and Griffith etc) for its own satisfaction.

Local supplies:-

When purchase deptt accept quote of some supplier, generally supplier send sample of material to purchase deptt for approval. Purchase deptt send it to quality assurance for laboratory check, and reply to supplier.

When whole consignment reach the company site, those sample tests match with material test from whole consignment. Quality assurance must have to prepare inspection not in 6 days from receiving of material. In case of rejection of material quality assurance contact to purchase deptt to inform supplier.

3.34 Rejection Review Committee:

To decide about rejected material and negotiate with supplier this committee is Constituted. It consists of:

Head of purchase department / nominee Head of pre-audit section / nominee Head of indenting deptt / nominee

If required meeting of committee can be add any time but in routine they meet on alternate Thursday.

3.36 Preparation of RR:-

After the inspection stores the material and issue RR (Receiving Report) also known as MMR (Material Receiving Report). One copy of it is sending to purchase deptt to forward it to supplier.

3.37 Payments:-

Payments liability incurred due to purchase are,

Payments of bills against purchase order on first come first serve basis. Payments against inland L/C`s. Advance payments according to supplier offer as mention in purchase order. Payment of freight. Agency commission of foreign purchases. Refund of earnest money and securities. Loading/unloading charges.


All the bills received by purchase deptt are firstly verified against purchase order record held in deptt. Then they record the payment and forward it to finance deptt for physical payment. Finally supplier got payment from cash and banking section of finance deptt after completing general procedures. Usually cheques /Bank Drafts/ pay orders are sent on supplier’s address.

3.38 Late Delivers Penalties:

Purchase deptt do this interest of company. It is not source of income purpose but to ensure the timely receiving of material. Penalty depends upon mainly the loss sustained by company due to delay and further if it is due to supplier’s own mistake rather than external factors.

3.39 Imprest Account:-

An amount of Rs 20,000 is always kept in imprest account to meet day to day purchases work permission of head of purchase deptt. Sometimes this amount is also utilized in meeting emergency requirement of material.

3.40 Other Responsibility:

1. Co-ordination with Karachi office: Purchase deptt also have to co-ordinate with Karachi office for Timely clearance of imported goods. Demurrage repot from clearing agent if applicable. Procurement of material from Pakistan steel and other suppliers in Karachi.

2. Correspondence with suppliers: It is necessary for purchase department to remain in correspondence with

suppliers for, To ensure timely delivery of goods. To ensure quantity and quality up to defined standard. Other departments also communicate with suppliers through purchase department

to avoid complication of financial and procedural nature.

3. Maintenance of the record:

Other then purchase files the department also keeps record of,

Indent form register. In this register department keep the record of indentation made by other departments

for the material.

40Chapter 4 .Sales and Marketing

Chapter 4 Sales and Marketing

41ORGANIZATION CHART OF SALES & MARKETING DEPARTMENT:

42Chapter4 .Sales and Marketing

DIRECTORSales & Marketing

GMEngineering Products

GMChemical Engineering

CranesDefencePower Plant

Cement Plant

Sugar Mill

Petro Chem.

OGDCE

4.1 INTRODUCTION:

Sales and marketing is responsible for the sales and marketing of plants, equipment, spare parts, and services to present and potential customers. Sales and marketing handle customer’s enquiries review and finalize the contracts and orders for execution.Responsibilities;

To investigate the existing market for sale of the products and services. To investigate the market and develop the related new market and products. To sell the products, services and spare parts. To ensure receipts and transfer of required information from and to the clients.

4.2 MAIN ACTIVITIES: Public dealing. Business development. Enquiry review and processing. Contract agreement and contract finalization with clients. Advising dispatch and shipment. Customer complaints handling. Contract amendment.

i ) Public Dealing:

Sales promotional activities such as brochure, plug up documentaries and participation in exhibitions with in and outside the country. Advertisements through various Medias.

ii) Business Development:

Relationship development with clients for the company, considering competitors skills and capabilities.

iii) Market research and Product Identification:

Preparation of Marketing strategy, present and future plans as well as company’s capabilities and experiences to meet the contracts received from Clients. Coordination with government’s policy making agencies for the creation of those policies which help the development of business in country and indirectly help the company to create the market of its product.

43 Chapter 4 .Sales and Marketing

ENQUIRY REVIEW AND PROGRESSING:

Enquiry receiving and enter into receipt register.

S&M sent enquiries to head of department for further processing. Product manager must go through enquiry with help of design and technology to

check the feasibility, HMC capabilities and other terms and conditions. Product manager send it to design for detail of cost estimate, delivery schedule,

erection, installation charges etc. enquiry format. Design sent BOQ/BOM directly to finance or through sales and marketing along

with specification for further processing. Sales and marketing prepare price to be quoted on the base of cost estimate from

finance, submit the offer to be client. Important proposal are discussed with head of department, sometimes with managing director.

Sometimes for some standard (routine) products price is directly quoted by the S& M without sending it to design or technology.

Tender through newspaper, telephonic orders, or personal visit are entertained. Proposals are sent through the receipt and dispatch center, one copy to concern

department and one to dispatch cell. After the submission of the proposal S&M also perform the role of negotiator

with the party. Deviation to the tender must be resolved with the customer before the contract

finalization.

4.3 CONTRACT FINALIZATION WITH THE CLIENT:

Upon the acceptance of proposal/tender before signing the contract the product manager must check the proper documentation and changes made if any.

Product manager must Product manager must concern to head of department, legal advisor for legal

affairs, technical, financial and commercial affairs. Contract must include contract price, mode and term of payments, delivery

schedule, scope of work and technical specification, liabilities, guaranties, warranties, liquidated damages.

For consortium agreement/ technical collaboration in tender approval by the managing director is necessary.

For the contracts involved the commission agent’s approval from managing director or board of directors is compulsory.

Sometimes cost estimates are also sending to the chairman for the approval.

44

Chapter 4 .Sales and Marketing

Upon finalization of the contract and fulfillment of the financial obligation it is send to project management department (PMD) on order processing format.

Product manager provide the correspondence to the client. Payments are also received by the S&M forwarded to finance department.

4.4 AMENDMENT TO THE CONTRACT:

Changes made if both HMC and client agreed. Amendment must show impact on price, delivery time and scope of the work. Amendments are also communicated to the concern department.HMC is manufacturer of the capital goods, hence routine sales and marketing

activities are not required as it is in case of consumer goods. However a sales and marketing department is well established here to perform several specific functions discussed below.

Sales department is mainly divided into two sections,

1- Engineering Products.2- Plants

4.4 ENGINEERING PRODUCTS:

This section deals with the sales of engineering goods categorized into four heads.

a. Oil and Gas :

This section deals with the project received from oil and gas sector both from inside and outside the country.

b. Chemicals :

This section is providing services to contracts related to chemical industry. Chemical engineers are appointed in this section to handle the technicalities.

c. Thermal Section :

Thermal section is looking for the technical solution and other contract overlooking for boiler and heat chamber manufacturing.

d. Hydal Power:

Hydral power projects are overlooked by this section. They are responsible for the procurement of job from client and its monitoring while it stands in works section.


4.6 PLANTS:

Plants section is taking the full projects of plants. Depending on different fields of expertise this section is also further classifies in four heads.

Cement Plants:

Cement plant section is providing procurement, monitoring of the cement plants manufacturing in HMC.

Sugar Plants:

Activities of section are related to manufacturing of the sugar plants.

Cranes and road rollers:

These personnel are dealing in the contracts of cranes and road rollers. They are always remaining ready to get a job in related field and provide future technical assistance in works.

Miscellaneous:

This section under the supervision of GM plants to tackle with the general orders taking and their manufacturing in works. However sales and marketing is primarily responsible for the taking of contract by bidding or other ways and provide necessary information to clients about the scope of work in HMC, but they are also providing and overlooking control on the manufacturing of the products. The reason is most of the project in HMC are long term, taking time to complete. Sales have to monitor the manufacturing to ensure timely delivery of the project and keep informing the client about completion of the project. It does not mean that sales always invade in manufacturing process but provide its services when it felt necessary. Hence sales and marketing is the department that is directly related with the project from its procurement to delivery.

4.7 MIS SECTION:

MIS section performs directly under the GM(S&M). Like finance department technical facilities are not as much up to date and also management of technology is not efficient. The importance of this section is however vital in the procedures of management and staff is also performing well even working. Most of system in S&M are 486 having window 3.1 operating system. Ms Office is frequently is use in this section and successfully fulfills the requirements of the section.


MIS section generates reports on monthly and annual basis. Nature of the reports varies with the requirements of management, SEC and ministry of production. Following are few reports most common

i) Order Procurement Report:

It shows how many orders are procured my sales and marketing during the month, at the end of the year same report is prepared for the whole year. Repot is prepared on the basis of Ms Access database. The detail of customer name, order description, affective order date, delivery date, total order value, balance order value, current year sales, current year confirm orders, in effective value, effective value.

ii) Enquiry Status Report:

Enquiries (quotations) put on by the sales and marketing is kept in record in Ms Excel spreadsheet program. It include details of the enquiry number, sales program(plants or engineering products), customer, enquiry receiving date, bid submission date, process department, value in rupees & in $ (final contractual value), status of enquiry, remarks.

Estimation and Actual Sales:

Document prepared on annual basis shows the figures of estimated (target) sales and actual sales. It also gives a comparison between the current year and past year performance regarding orders procured. Sales target are set at the beginning of each fiscal year, but unfortunately HMC did not meet its targeted sales due to bad economic and political situation of the country. Along with these reports MIS section also prepared reports required by management, SEC and ministry of production requirements

4.8 COST ESTIMATION SHEET:

Cost estimation is also a major activity of sales and marketing, with the help of finance department and design department. BOQ/BOM prepared by the design department is send to sales and marketing to prepare cost estimation sheet. It includes customer name, project name, material description, units, weight, rate, financial expenses paid to the financial institution (interest etc), admin expenses, sales tax, and sales price and quoted price.

4.9 DESPATCHMENT:

On dispatch sales and marketing issue dispatch advise (on standard format) to dispatch cell (PPC) after confirm the payments position from finance. As per contract if customer inspection, latter of acceptance if required must be received. Dispatch advice issued to PPC and concern department.


4.10 CUSTOMER COMPLAINT HANDLING:

Complaint must be entered into register of complaints maintained in S&M. Complaints forwarded to head of department. Head of the department and product manager take remedial action refer to

concern department. Concern department study complaints and go for the resolution. In case of road roller technical staff from assembly shop goes to the client and

check the matter. Visiting person should go and remove the defect with concern official. Product manager ensure the defect has been removed and customer is satisfied. Customer complaints are filed on a specific document containing SR no, dated,

complaint no., customer name, product, quantity, customer reference no., dated, customer purchase order. No, dated, nature of complaints, S&M comments.

4.11 ORDER PROCESSING FORMAT:

After acceptance at offer from customer GM sales and marketing forwarded this letter to PPC to start work physically. On other hand finance department is also asked to prepare advance payment bank guarantee & get advance payment. Order processing format is according to ISO-9001 requirement. After receiving order processing format PPC start procurement of material & go for physical production. Order processing format contains information like, customer name and address, product name, contract, reference, total order value, completion period, delivery date, remarks.

After the completion of the project all invoices are also send to customer from sales and marketing through credit control finance department according to contract stipulations.

4.12 DESPATCH INVOICE:

When the project is completed and ready for the delivery a dispatch advise is marked by the sales and marketing to PPC (dispatch cell). According to ISO-9001 format of the dispatch advice must have fallowing information,

Value of order. Specification of goods. Customer name and address. Consignee. Nature of delivery (ex works, FOB etc). Payment details. Tax details.


A copy dispatch invoice send to finance, security in charge, MIS, dispatch cell and a copy is held at sales and marketing office.

4.13 CONTRACT:

Contract document is also responsibility of sales and marketing. There is no prescribed format of contract from ISO-9001 standards, but usually contract may possess fallowing details,

Definition of different terms. Scope of supplies and services. Contract price. Terms and mode of payments. Supervisory services. Duties and tax liabilities. Price adjustments. Completion period. Delay condition in completion period. Technical documents, confidentiality of technical documents. Ownership of documents and drawing, Erection and installation of the project, commissioning, performance test. Inspection terms and condition. Indemnification if any. Variation. Warranties and guaranties. Performance bond. Limitation of seller’s liability. Force major (in case of any unavoidable incident causes delay or any other

discrepancy this stipulation shows the course of action from both sides.) Arbitration agreed from both side for conflict resolution.

Miscellaneous.

4.14 PRE QUALIFICATION :

Sometime customer invited pre qualification of suppliers to ensure the best commencement of the project. Pre qualification of firm affirms previous record of the firm regarding current project. Often customers demand few documents from suppliers for pre qualification purpose. Another method is of questionnaires provided by the customer to be filled up by the suppliers and send back along with necessary documents.

In questionnaires questions are generally asked like addresses of the company and subsidiaries turn over report financial position technical capability parent company information record of previous related contract finished by the company, other miscellaneous information about the company and financial reports of the company.


4.15 PRESENT ORDER POSITION:

Present order report is generated by the sales and marketing department quarterly, yearly basis.

4.16 MAJOR FUNCTION :

Most important function of sales and marketing related to business activities directly is as follows. Sales get enquiry from customer and forwarded it to design office to prepare BOQ/BOM along with local and foreign purchase requirements with tender submission date. Design forwarded it to finance to estimate full cost of the project. Finance forwarded it to sales and marketing to add an adequate profit in their estimated cost of the project and go for the bidding.

50

Chapter 5. Finance Department

CHAPTER5

FINANCE DEPARTMENT

51


5.1 INTRODUCTION:

Centre of financial activities is finance department. Finance department is providing central control over the inflow and out flow of the cash. Finance department is divided in to four main heads.

Financial Accounting Section. MIS Section. Cost Accounting Section. Store Accounting Section.

5.2 FINANCIAL ACCOUNTING SECTION:

Financial accounting section is further classified in to further sections listed below,

Billing Section. L/C Section. Credit Control. Guarantee Section. Pre-Audit Section. Payroll and Provident funds. Cash Office. Project Financing.

5.3 BILLING SECTION:

Responsibilities and duties of billing section are as fallows.

Payment of sales tax, income tax, excise duty and other tax payments.Realization and adjustment of advance payments to suppliers and vendors.Payment of outward freight.Reconciliation of advance payments to suppliers and vendors.Payments of inspection charges for the goods inspection conducted usually by Lloyds.Payment of canteen subsidy.Payment of bills from consultants and professionals.Payment of imprest and other subsequent charges.Payments of the bills from chemist, telephone, telex, advertisement, vehicle maintenance, postage, courier other medical bills.Prepare monthly statement for the tax, earnest money, freight, and other miscellaneous recoveries from the suppliers and vendors.Follow up of realization of advance payments to suppliers.BOC debit note clearance.Pricing of receiving report from store section.

52Chapter 5. Finance Department

Deposition of the income tax recovery and submission of the annual income tax return.Issuance of income tax return certificate to each concern.Miscellaneous reimbursement and payments to employees.

5.4 L/C SECTION:

Letter of credit is opened to minimize the risk of payment by involving two banks one from seller side and one from the buyer. Letter of credit is needed on daily basis here because of the nature of the business. That’s why a separate L/C section is working in Finance department.

Letter of credit is of two types,

Letter of credit for foreign trade. Inland letter of credit.

In former case letter of credit is for the situation when buyer and seller are located in different countries, but in later case both lies in the premises of the same country. Generally in case of letter of credit document requirements depends upon the banks and virtually upon the relationship of the seller and the buyer ,NBP ,HMC branch is providing the services to HMC both as issuing and negotiating bank.

In HMC as it is needed in every contract round about hence it is found that following few documents is common all the time.

Guarantee and warrantee certificate from sailor. Purchase order with the detail of local agent name, address, project name and

description of material, quantity, unit price and total price. Country of origin certificate. Nature of contract (FOB, CIF etc). Destination. Consignee name. Packing instruction and rates of packing cost. Principal name and addresses. Terms and conditions for the inspection, either mill test certificate, Lloyds

certificate or warranty/ guarantee certificate will enough. Mode of payment.

53

ORGANIZATION CHART OF FINANCE & ACCOUNTS DEPARTMENT

54


List of shipping documents usually included bill of lading, suppliers invoices, packing list, freight memo, inspection certificate, country of origin certificate,

Dy.G.MFinance & Account

Dy.G.MAccounts.

J.OStore Acc.

AMMIS.

AMPayroll.

J.OPF/Payroll.

Senior OfficeAssistant.

DSOPayroll.

J.OPayroll.

DSOP.F.

ManagerC/C/Bills/Cash.

DMPF/Payroll.

Junior OfficerCash.

DSOBills.

DSOBills.

AMCrop Affairs.

payment claim as per purchase order. Bill of lading and invoices most important as buyer should posses it when go to receive goods.

5.5 L/C DOCUMENT :

An L/C document formally contain following specifications,

Negotiating bank name. Amount of contract. Beneficiary address. Material Specification. Port of shipment. Partial/ Transshipment condition. List of documents needed by issuing bank to open L/C, as discussed in previous

section. Instruction for the negotiating bank.

55


5.6 PAYMENT PROCEEDURE: Payment procedure against L/C is performed as follows:

(Payments)

SELLER ADVISING (Bill of lading + invoices) BANK.

(Bill of lading & Invoices)

(Bill of lading + invoices +Bill of Exchange)

BUYER ISSUING(HMC) BANK

(Payment) (Debit amount to To buyer and credit to Advising bank)

(All documents)

KARACHI OFFICE KPT (HMC) (Bill of lading, invoices, bill of exchange) (Release goods after

Getting satisfactory Documentary Collection)

Fig. 5.1 Bill of lading is document for forwarded to the supplier after loading checking material. Bill of exchange is the document for forwarded by the bank to buyer shows money amount of material to be paid to addressing bank against shipment made by the suppliers.5.7 CREDIT CONTROL: Credit control is mainly responsible for the monitoring and collection of receivables. When the project is near to completion, PPC informed credit control to go for invoicing.


Payment schedule is according to stipulations of the contract, but usually part of payment (10% to 50%) are taken as advance and remaining part is settled after the delivery of the

project. Hence credit control is obliged for the processing and realization of the deferred receivables both local and foreign.

Functions of Credit Control:

Following are the functions of credit control section,

Monitoring and control of receivables. Complete export documents. Forward invoices to buyer on advice of PPC. Participation in sales contract to tackle with financial clauses of the sales contract. Keeping liaison with sales, PPC, PMD for obtaining the delivery documents and

raising of invoices. Dealing for inland LCs. Reconciliation of accounts and making final settlement with client. Keeping liaison with regional offices of HMC at Karachi for realization of the

receivables. Recording of sales and related vouchers. Monitoring cash receipt. Preparation of monthly budget and sales variance report. Follow up the customer for the realization of payments. Maintaining receivables and customer advance ledger. Preparation of monthly journal vouchers for recording of sales, receivables,

advances, cash receipts and other related transactions.

5.8 GUARANTEE SECTION:

Guarantee section is assurance for performance of the contract from third party on behalf of the performer of the contract. Due to expanded nature of the business guarantees are required in HMC in day to day business. Following are most common types of guarantees used in HMC,

1. BIB BOND GUARANTEE:

It is also known as earnest money. An amount of the 2% of the total contract value is kept as bid bond guarantee by HMC and it has to submit by the performer along with tender documents before the opening of the tender. It is accepted only from the bank (guarantor is always bank).Earnest money of the successful bid is refunded to supplier on submission of performance bond and to rejected bidder at the time of opening of tender.


2. CONTRACT PERFORMANCE GUARANTEE:

Guarantee given to beneficiary that supplier will perform the contract according to its stipulation, usually provided by the schedule bank or insurance company. In case of HMC 10% of the contractual amount is required as performance bond.

3. ADVANCE PAYMENT GUARANTEE:

Some time beneficiary provides supplier advance payment for the performance of the specified contract. This guarantee is provided against this advance payment. It is usually provided by some bank or other financial institution.

4. PERFORMANCE JOB GUARANTEE:

Guarantee possessed by the creditor that the whole contract will be completed by the contractor in time and it will work according to expectations. It is also provided by some financial institution or issuance company.

5. RETAINTION GUARANTEE:

Very occasionally but some time certain payable amount is retained by the purchaser for the asuirty of the future performance of the manufactured item. For instance If HMC performed a contract of 100 million and purchaser paid 9.5 million, retain .5 million as an assurity of performance of the manufactured item. Then HMC provide them retention guarantee and draw the entire amount from the buyer against this guarantee.

5.9 BANK COMMISION:

What the banks get against this providing the guarantee. Bank charges a fix amount by providing this guarantee i.e. 1.6%.Bank which is providing the guarantee also keep healthy account of the company, mortgage or pledge or hypothecated goods. Some time under the contract stipulations of the contract creditor can assign a third party on his behalf to collect the payments.

5.10 PRE AUDIT SECTION:

Pre-audit section works under the finance department. Main activities of pre audit sections is as follow,

Check specification of material posted by the purchase department on purchase proposal according to the indentation.

Check quantity of material according to the indentation, rate of FOB, CIF etc, exchange rate of currency calculation of foreign currency in to rupees.


Most important function of pre-audit is to observe whether quotation amounts are properly posted to comparative statement and further more the quotation accepted is feasible both from technical and commercial aspect or not.

Also check other feasibilities like delivery period, country of origin, inspection (if any), L/C charges, performance bond, sales tax computation etc.

After checking and satisfying the above stated specifications Pre Audit section posted the entries in to two register and other in proposal register.

5.11 PAYROLL AND PROVIDENT FUND:

Payroll is also a main head of finance department .Following are the main functions of payroll section,

Computation of Salary. Gratuity. Leave Salary.

5.12 COMPUTAION OF PAYROLL:

For the computation of salary payroll section need three documents,

1. Appointment letter.2. Medical fitness report.3. Attendance report.

Normally No.1 & 2 are provided on monthly basis. Daily attendance of workers and staff is maintained both in time office and on the shop floor. Time office forwards the record of salaries computation purpose.

5.13 ALLOWANCES:

Following are the list of allowances added to salaries,

i. Medical allowance.ii. House rent allowance.

iii. Washing allowance.iv. Conveyance allowance.v.

5.14 DEDUCTIONS:

Following the list of deductions made to salaries of employees in HMC,i. Hajj fund (Rs 10 per month)


ii. Provident fund @ 10% of the total salary.iii. Musjid fund (depend upon the employee will).iv. House rent (depend upon the scale of employee).v. Electricity, water, sports funds deductions.

vi. Income tax (if applicable).

5.15 OVERTIME:

Over time is applicable on worker and staff salaries. It is computed with the help of following formula,

O/T Allowance = [Basic pay/30.5*1/7.58] (overtime Hrs)

Square bracket gives per hour basic salary of the employee, when multiplied with overtime hours give total overtime allowance added to salary of the employee.

5.16 GRADUITY:

It is the amount fully paid by the company to its permanent employees at time of the retirement. Actually this is the amount company earned through saving certificates, buying NIT units from provident fund investment. Gratuity is given on the basis of following formula ,

Gratuity = complete service year x basic salary.

It is payable from company side in case of death of employee.

5.17 LEAVE SALARY:

This is the amount accumulated against the UN availed leaves during the job. It is also payable from company side at retirement time. It is also known as leave encashment. Each employee is allowed to avail 33 leaves in year cause no deduction from salary.

5.18 TRAVELLING ALLOWANCES :

Executives or any other person who travel for interest of the company is entitled to traveling allowance. Traveling allowance is paid on the following chart basis,

Table 5.1 at next page defines the traveling allowances:


Table 5.1

On Tours .

Person on company duty is also eligible for hotel stay if required.Company pay for their stay on following basis.

Table 5.2

5.19 DAILY ALLOWANCES: Daily allowances included laundry, meals refreshment and other incidental expenses incurred by the person who was out on behalf of the company travel order is the necessary document to be submitted by the traveler before traveling. It contains the name of the person, department, position and place to be visited dates of departure and arrival purpose of visit mode of traveling.


Daily allowance are calculated as on following basis.

Grade. Public transport. Own transport.

EPS ii & above Taxi fares at actual. Rs. 3 Km for car.

EPS i Auto rikshaw fare actual Rs.9/Km scooter

Grade. By air. By rail. By road

Management Personnel Economy class. Air conditioner coach Public transport EPS ii ,above -do- -do- -do-

EPS i. 1st class. Sleeper -do-

Position. Hotel.

Management personnel Four Star.

Eps iii, iv , v. Three Star.

Eps i , ii. Romm @ 300/day.

Table 5.3

5.20 PROVIDENT FUND:

A cutting of 10% of basic pay is applied to salary of each employee on monthly basis. Company invested the amount in various areas (term certificate etc) and pays double to accumulated amount from employee deductions at the time of retirement. Employee can also draw loan from provident fund at rate of 8.8% mark up rate and payable in 20 installments.

5.21 CASH AND BANKING SECTION:

Cash and banking section handle the flow of the cash and perform all other banking functions. The major pints of the cash and banking function is as under.

Issue cheque payments to suppliers and vendors. Accept the payments for the laboratory test charges or any other service provided

by the company. Receive electricity and bass bills from shop keepers and other residents. Cash office also reimburses the medical expenses to workers. Cash office also issues all other types of cheques to other suppliers, vendors, and

sub contractors.

5.22 PROJECT FINANCING:

Project financing or bridge financing is required by the company when it has project but lack finances to start by buying raw material. Some time purchasing party do not agree to pay the payment in advance to start the contract or company don’t have enough liquid funds to run the project. For these projects HMC go for “bridge have enough liquid funds to run the project.


Grade Stay in hotel. No stay in hotel.

Management personnel Rs 377/day. Rs 450/day.

EPS iii, iv ,v . Rs 270/day. Rs 340/day.

EPS I ,ii . Rs 225/day. Rs 180/day.

As HMC is capital goods manufacturer and handle machinery manufacturing hence these finances comes under the head of “Finances for locally manufactured machinery”.

FINANCES FOR LOCALLY MANUFACTURED MACHINERY:

Actually finances for the locally manufactured machinery are provided by the SBP, but not directly to the organization. these finances are categorized in to two main types.

i.) Pre delivery finances.ii.) Post delivery finances.

PRE DELIVERY FINANCES: When it is contracted that purchaser will pay invoices on each partial delivery and wholesome will be paid before the delivery completed. Each payment made by the purchaser to the organization is forwarded to the bank project finances.

POST DELIVERY FINANCES:

When it is contracted that purchaser will make payments when the whole project will be delivered and start working. In this case payments are made after the completion of said contract mark up rate from bank is high for these types of the finances as compared to the previously discussed.

DOCUMENTS REQUIRED:

Following are the documents which are commonly required by the bank.

Original contract/from order. Subsequent amendment if made any to the contract. Charge documents and security as provided by the financing institution need. If finances is needed for more than 360 days then clearance certificate by the

industrial credit department of SBP.

BANKS AND DFI’s:

Bank and DFI provided these finances to the companies. Bank and DFI’s (Development financing Institution) includes,

i. Pakistan industrial credit and investment corporation (PICIC).ii. Industrial development bank of Pakistan (IDBP).

iii. National development finance corporation (NDFC).


iv. Banker’s equity Limited (BEL).v. Pak Libya holding company.

vi. Pak Kuwait investment company.vii. Investment Corporation of Pakistan.

viii. HBL, UBL, ABL, MCB, NBP.

MODE OF PAYMENT And OTHER STIPULATIONS :

i. Rate of mark up for locally sold product is 14 % and foreign sold (export) is 8%.Low rate of foreign sold product is to encourage exports.

ii. Finances are only allowed on FOB basis. No finances are provided on CIF basis.iii. If imported material contribute more than 80% of total material used in an

individual machine then it will not qualified for the finances.iv. Purchaser must pay at least 10% of the total contract price in advance.v. If sales price is greater than 10 million, purchaser should make payment in not

more than 20 equal half year installments with maximum grace period of 2.5 year.vi. In case sale price is between 1 and 10 million payments must be made in half year

equal installment (not more then 20 installments) within maximum 10 years and there is no grace period.

vii. In case of small amount less then 1 million, payment must be made in half year equal installments within the period of 5 year with no grace period.

5.23 COST SECTION:

Finance department separated the cost section under its supervision. The two main functions of the cost department is as under,

Pre costing of the project when BOQ (bill of quantity) is forward by the design department before starting the project.

Costing of project started and completed in HMC for purpose of setting the price.

PRE COSTING:

When HMC decide to go for the project then first of all design department prepare initial structure drawings, BOQ, forwarded to finance department costing section. Cost section estimates the total estimated cost for the project and forwards it to sales department.

In sales and marketing department after adding an adequate profit they went for quotation. Later on provision of under and over applied is made to bridge the gap between estimated and actual price. Hence the pre-costing section is performed to estimate the total cost of the project for bidding purpose.


5.24 COSTING OF THE PROJECT:

Standards for the procedure of costing are as follow:

Material is recorded on the basis of PS (Pick slip) or SR (Store requisition)which are issued from store and priced in billing section of finance department. Work order number for the specific project is always mentioned on the PS or SR ,in this way the whole cost of the total material consumed in specific project accumulate at the end.

Labor is calculated from the workers time sheet prepared on shop floor daily basis. Record of payroll is also available in payroll section of finance department shop wise. All these data is handled by MIS section. By using oracle technology they prepare all these reports shop and project wise which help a lot costing department in calculating cost of the project.

Factory overhead is calculated in to two different ways Foundry and Forge works it is based upon the weight of item for machine works it is divided in to two sub classes

Labor hour. Machine hour.

DIRECT EXPENSES:

Direct expenses/cost account is maintained by HMC which is not normally found in text books. Sometimes during erection and installation or when a part of contract is completed by the sub contractors some expenses are directly record under the head of direct expense .These expenses might be like electricity charges on eriction site ,vehicle used on site other than of company ,fueling etc.

5.25 MIS SECTION:

MIS section of HMC is well equipped. How ever hardware facilities are not much to update, but HMC is using Linux based oracle system from early 90’s.Oracle 5 installed at MIS section of finance department. Most of the systems are 486 Compaq with Linux as operating system.

MIS section is preparing the reports on monthly, quarterly, and annually basis according to the requirements of SEC, Ministry of production, board of directors and internal management.

Monthly operation report (MOR’s) is a set of reports prepared by the MIS section after the end each month. It contains,


Profit and lost statement. Balance sheet. Operating expenses incurred during month. It includes selling, distribution and

administrative expenses. Cost of goods sold. Manufacturing expense including salaries, other benefits to employees and

factory overhead. Consumption of material both local and foreign material. Sales information. Production value. Cash balance at bank. Trade receivables trends. Finished goods inventory. Short term loan position. Taxes and duties both incurred and accrued. Summary of Raw material imported. Misc. It included production losses, water, gas oil consumption etc both for plant

and residential colony.

All above stated reports are prepared on comparative basis usually for two months but it can vary according to the requirements of demand seeker. Moreover adjustments for under and over applied is also made here. All other record of employees salaries are also maintained on computers. MIS section also issue salary slips to employees. All this information helps to prepare ‘MOR’.

5.26 SYSTEMS AND SOFTWARE:

Hardware environment is not much up to date here in finance department but one can say it is quite acceptable. All network of finance department is administrated by a Compaq pro Pentium III processor. Clients are 486 IBM computers. For oracle 5 Linux is used as operating system. Excel is used for report generation. Ms word is also in common used for office memos, other letters typing.

5.27 STORE ACCOUNTS:

Store accounts are maintained to keep goods eyes upon material consumed in the running projects. As HMC is merger of HMC and HFF (heavy foundry and forge).The requisition format for material put by mechanical works side is called Pick Slip (PS) and from foundry side it is called Store Requisition (SR). Actually PS is a computer based format and SR is filled by shop supervisor manually by hand. The whole record of these PS and SR is kept in MIS section of finance department. A coding system for recording of material is designed by Mr. Saeed Akhter an ex General Manger (GM) of the company.


He technically designed the material in to categories and then further divide them. Record in MIS section is also maintained on the basis of these code numbers. All this data is stored in oracle where a primary key is imposed on this code field, it helps in later retrieval of the data material wise.

67Chapter 6.Analysis

CHAPTER 6

ANALYSIS

68

Chapter 6.Analysis

6.1 MARKET CONDITION:

HMC started Commercial Production in 1978.The main products of HMC are Sugar Plants and Cement Plants. After some time the requirement of Sugar Plant and Cement Plants in the country because these Plants are more than the requirements of the country. In early the demand of sugar plant is about 60%, cement plant is 30% and miscellaneous 10% is remaining.

As far as international market is concern, the quality of product of HMC is the best but due to some Govt policies and bank rate the export of HMC is not increasing. China, India and various other countries providing these products on 2% interest whereas Pakistan Govt. Policy is to provide on 8% .So HMC is behind these countries. In local market HMC is manufacturing defense product which quality is better than Germany, China, Australia, and the India and the prices are also very cheep, but unfortunately Pakistan army buy these thing from foreign companies it is not understandable why they do so this.

6.2 EXPORTS: Besides catering the needs of engineering goods within the country, HMC has

also exported a number of plants to various countries such as Indonesia, Bangladesh, and Srilanka etc.The exports include:

Sugar Mills. Cement Mills Equipment. Asphalt Mixing Plants. Electric Over Head Cranes. Gates for Canal.

6.3 EXPORT ORDER EXECUTED: US$ IN MILLION

SUBANG SUGAR MILLS 3000 TCD INDONESIA 14.9PABNA SUGAR MILLS 1500 TCD BANGLADESH 12.1NATORE SUGAR MILLS 1500 TCD BANGLADESH 8.4CLINKER GRINDING PLANT BANGLADESH 5.5SPARE/ EQPT. FOR SUDANESE SUGAR PRODUCT COMPANY SUDAN 2.6OVER HEAD CRANES BANGLADESH 0.3GATES FOR CANALS SRILANKA 0.2 PACKAGED TYPE BOILER 10 T/HR BANGALADESH 0.2ELECTRIC OVER HEAD CRANES GHANA 0.1ASPHALT MIXING PLANTS 30 T/HR KENYA 0.1

TOTAL 44.4


6.4 FACTORS EFFECTING THE PERFORMANCE OF HMC:

SATURATION IN SUGAR INDUSTRY.

Installed capacity 5.0 million/ TonsRequirement 3.0 million/ TonsSurplus 2.0 million/Tons.

Composition of general sales tax @ 12.5% on all engineering goods in 1994 led to adverse impact on new investment and consequently had adverse effect on order book of HMC.

Liberal issuance of NOCs for import of cement plants.Share of HMC 03

As a result of liberal import of plant and machinery,The role of HMC was reduced to that of a sub- contractor.

Introduction of energy policy in the year 1997 restricted public sector companies to set up thermal power plants and withdrawal of tariff production to local industry.Delay in implementation of major export orders.

Kazakhstan Cement US$ 51.5 mIran Sugar Plant US$ 44.0 mBangladesh Sugar US$ 08.0 m

Excessive and expensive manpower and lack of freedom to adjust manpower according to the needs. Increasing input costs of energy, material, manpower, etc. Due to high inflation whereas the average selling prices of HMCs products could not increase in the same proportion due to market conditions.

6.5 MAJOR STEPS TAKEN BY HMC TO IMPROVE PERFORMANCE:

Deduction of manufacturing cost; Batter control for material usage in production. Usage of specific tooling. Reduction of manpower & improvement productivity.

DEDUCTION IN LEVEL OF INVERTORY: Computerization of stores. Standardization of item. Effective monitoring systems.


ENERGY CONVERSATION: Power factor improvement. Batter load management. Strict monitoring system.

IMPROVEMENT OF MANUFACTURING FACILITIES /TECHNOGIES: Addition of special fabricating equipment (for thermal power plants). Installation of continuous casting plants. Introduction of better steel melting & refining techniques. Employment of computer aided designing (CAD).

QUALITY IMPROVEMENTS: Certification of ISO 9001. Improvement in quality assurance procedures. Preparation of Q.A manuals.

6.6 ANALYSIS OF PRODUCTION AT HEAVY MECHANICAL COMPLEX, TAXILA:

HMC is capital goods manufacturer. They are mainly deals in cement plants & equipment, sugar plants and equipment, boilers, chemicals (refineries), railways , defense work etc company does not meet its minimum production level through out its era.

First of all analyzing its production data as a whole and then product wise. This is estimated data but reliable as I collected it very carefully and did not left any ambiguity as far as my effort is concerned.

71

Chapter 6.Analysis

6.7 PRODUCTION AT HEAVY MECHANICAL COMPLEX TAXILA :

Production/volume in Tons.

Serial Project 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02

1 Cement plant And Equipments.

1592 2899 6380 4714 759 1264

2 Sugar plants andEquipments.

2773 2003 116 116 272 287

3 Boilers and Pressure Vessels.

240 173 50 16 398 129

4 Power Plants. 8845 2708 3665 204 720 1814

5 Oil and Gas Chemicals.

426 343 43 79 555 288

6 Railways. 27 ------ ----- 164 ----- 198

7 Defense. ------ 6 1 ----- ----- ------

8 Building Machines.

129 355 332 156 32 ------

9 Pak steel Mills. 42 90 9 31 5 -------

10 Cranes. 179 85 155 4 98 172

11 Other commercialOrders.

437 624 1976 329 787 1147

TOTAL 14690 9286 12730 5813 3626 5299


6.8 OVERALL PRODUCTION:

Production

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02


6.9 PRODUCTION OF CEMENT PLANT:

Years 1996-97 1997-98 1998-99

1999-00

2000-01

2001-2002

Production 1592 2899 6380 4714 759 1264

Production in Tons

The most important product of the HMC is its cement plant. Boom in the production of cement plants is observed in 1998-1999 and a year onwards. Situation is not appreciate able during last few years because enough cement plants are installed inside the country and for exports we are facing enough barriers from cost effectiveness to trade briers.

6.10 PRODUCTION OF SUGAR PLANT:

Years 1996-97 1997-98 1998-99

1999-00

2000-01

2001-2002

Production 2773 2003 116 116 272 287

Production in Tons

74

Chapter 6.Analysis

Production

01000200030004000500060007000

1996-97

1997-98

1998-99

1999-2000

2000-01

2001-2002

Production

Production

050010001500200025003000

1996-97

1997-98

1998-99

1999-2000

2000-01

2001-2002

Production

Sugar mills were also included as an important product since 1997-98.As investment in all sector declined after 1998-1999, hence HMC got much less orders of sugar plants after 1997-98.

6.11 PRODUCTION OF PAKISTAN STEEL:

Years 1996-97 1997-98 1998-99

1999-00

2000-01

2001-2002

Production 42 90 9 31 5 0

Production in tons

Production at HMC for Pakistan steel Mills Karachi is showing fluctuating situation 1997-98 is the best year when HMC produce relatively better for Pakistan steel .Afterwards due to numerous reasons Pakistan steel graph of efficiency goes for downwards slope that’s why the order given to by steel mills to HMC declines steadily 6.12 PRODUCTION OF BOILERS & PRESSURE VESSELS:

Years 1996-97 1997-98 1998-99

1999-00

2000-01

2001-2002

Production 240 173 50 16 398 129

Production in tons

75

Production

0

20

40

60

80

100

1996-97

1997-98

1998-99

1999-2000

2000-01

2001-2002

Production

Production

0

100

200

300

400

500

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

Production

Chapter 6.Analysis

A high production of boilers and pressure at HMC is done 2000-2001.Boilers and pressure vessels products are imported parts of product mix as it is shown by the production graph of boilers and pressure vessels.

6.13 PRODUCTION OF BUILDING MACHINE:

Years 1996-97 1997-98 1998-99 1999-00

2000-01 2001-2002

Production 129 355 332 156 32 0

Production in tons

Building machine is enough revenue generating products for HMC. Its production decline during last few years due to bad economic condition in country and unstable political environment due to which construction inside the country stops down and production of building machines stops at HMC.

6.14 PRODUCTION OF CRANES:

Years 1996-97 1997-98 1998-99 1999-00

2000-01 2001-2002

Production 179 85 155 4 98 172

Production in tons

Production

0

100

200

300

400

1996-97

1997-98

1998-99

1999-2000

2000-01

2001-2002

Production

Production

0

50

100

150

200

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

Production

Chapter 6.Analysis

Relatively less import product are cranes. Different types of cranes are produced at HMC (detail given in introduction). Graph shows relatively consist production of cranes except in 1999-2000.

6.15 PRODUCTION OF POWER PLANTS:

Years 1996-97 1997-98 1998-99 1999-00

2000-01 2001-2002

Production 8845 2708 3665 204 720 1814

Production in tons

Ghazi Barotha projects is source of main activities in this regard 1996-1997 shows best efficiency for power plants production. In year after 1996 the production declines fastly.

6.16 RPODUCTION TO DEFENCE:

Years 1996-97 1997-98 1998-99 1999-00

2000-01 2001-2002

Production ---------- 6 1 ------- --------- ---------

Production in tons

Production

01234567

1996-97

1997-98

1998-99

1999-2000

2000-01

2001-2002

Production

Production

0

2000

4000

6000

8000

10000

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

Production

Chapter 6.Analysis

HMC is not producing much for defence because army has its own production plants as HIT (Heavy Industries Taxila) and HMC-3.Sometimes they orders from defence when needed. Graphs showed a negligible production for defence during last six years.

6.17 PRODUCTION TO OIL & GAS/ CHAMICALS:

Years 1996-97 1997-98 1998-99 1999-00

2000-01 2001-2002

Production ---------- 6 1 ------- --------- ---------

Production in tons

HMC produces parts for different oil refiners, SNG, SSG etc. The graph shows that commonly they hold some orders from oil and gas sectors every year.1998-2000 was the worst period of production of oil gas and chemicals.

6.18 PRODUCTION TO RAILWAYS:

Years 1996-97 1997-98 1998-99 1999-00

2000-01 2001-2002

Production 27 -------- --------- 164 --------- 198

Production in tons

Production

0100200300400500600

1996-97

1997-98

1998-99

1999-2000

2000-01

2001-2002

Production

Production

0

50

100

150

200

250

1996-97

1997-98

1998-99

1999-2000

2000-01

2001-2002

Production

Occasionally railways also put orders of related works to HMC. HMC is unable to get enough orders from railways; reasons might be crisis of railways, not having enough facilities to meet their requirements, etc.


6.19 PRODUCTION OF MISCELLANEOUS COMMERCIAL ORDERS:

Years 1996-97 1997-98 1998-99 1999-00

2000-01 2001-2002

Production 437 624 1976 329 787 1147

Orders in Tons

Miscellaneous commercial orders include mainly the maintenance and repair of already installed projects.1998-99 is the best year for production of miscellaneous items.

Production

0

500

1000

1500

2000

2500

1996-97

1997-98

1998-99

1999-2000

2000-01

2001-2002

Production


6.20 ANALYSIS OF SALES AT HEAVY MECHANICAL COMPLEX TAXILA

SALES IN MILLION

Serial Project 1996-1997

1997-1998

1998-1999

1999-2000

2000-2001

2001-2002

2002-2003

1 Cement plant & Equipment

92.634 174.32 320.806 326.12 91.042 86.825 12.498

2 Sugar plants &Equipment.

810.765 343.214 9.605 14.266 35.511 43.849 95.075

3 Boilers & pressureVessels.

46.139 47.149 7.405 0.089 95 12 107.434

4 Power Plants.

409.447 150.305 204.9 0.88 53.684 76.108 139.187

5 Oil gas &Chemicals.

134.875 203.339 5.275 10.470 24.162 48.806 72.421

6 Railways. 1.413 --------- -------- 6.642 1.1993 5.754 -------

7 Defence. 2.71 6 0.36 0.223 -------- ------- 42.655

8 Building Machine

49.436 355 8.933 2.209 17.419 3.005 -------

9 Pak steel Mills

2.736 90 4.155 ------- ------- ------- -------

10 Cranes. 51.245 85 85.425 ------- 37.48 64.185 38.946

11 Other commercial Orders.

5.235 624 87.842 62.383 31.532 65.797 -------

Total 1606.63 998.274 733.816 423.2 387.028 406.329 508.216

80

Chapter 6.Analysis

6.21 OVERVIEW OF SALES AT HEAVY MECHANICAL COMPLEX ,TAXILA

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

81

Chapter 6.Analysis

6.22 SALES OF CEMENT PLANTS AND EQUIPMENTS:

Sales in Millions Years 1996-

971997-98

1998-99 1999-2000

2000-01 2001-2002 2002-2003

Sales 92.634 174.32 320.806 326.12 91.042 86.825 12.498

Sales

As cement plant and equipment is main product of HMC, graph revenue generated by this product. Up till 2000 its sales are satisfactory but onward it is going

down ward. In 2002-03 it is recorded very

6.23 SALES OF SUGAR PLANTS AND EQUIPMENT:

Years 1996-97

1997-98

1998-99 1999-2000

2000-01 2001-2002 2002-2003

Sales 92.634 174.32 320.806 326.12 91.042 86.825 12.498

Sales

Sales of sugar plant and equipment show that abrupt proceeding. For 1996-97 it is too high because of huge investment was coming in this sector. After that due to bad

sales

0

100

200

300

400

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

sales

0200

400600

8001000

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

crops and other political and economic reasons investment decline and establishment of new plants fell down.


6.24 SALES TO OIL & GAS INDUSTRY:

Years 1996-97

1997-98

1998-99 1999-2000

2000-01 2001-2002 2002-2003

Sales 134.875 203.339 5.275 10.470 24.162 48.806 72.421

Sales

6.25 SALES TO PAKISTAN STEEL KARACHI:

Years 1996-97

1997-98

1998-99 1999-2000

2000-01 2001-2002 2002-2003

Sales 2.736 90 4.155 ------ ---------- -------------- --------------

Sales

HMC some produces for Pakistan steel mill Karachi but not often. Sales graph to Pakistan steel mills shows the real situation.

sales

050

100150

200250

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

sales

020

4060

80100

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03


6.26 SALES OF CRANES:

Years 1996-97

1997-98

1998-99 1999-2000

2000-01 2001-2002 2002-2003

Sales 51.245 85 85.425 ------- 37.48 64.185 38.946

sales

020

4060

80100

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

Sales

Cranes are also one of the main items in product mix of HMC .Except 1999-2000 the sales of cranes are relatively consistent as shown in graph.

6.27 SALES OF BUILDING MACHINERY:

Years 1996-97

1997-98

1998-99 1999-2000

2000-01 2001-2002 2002-2003

Sales 49.436 355 8.933 2.209 17.419 3.005 -----------

Sale

sales

0

100

200

300

400

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

In 1997-98 was year of sale building machines. It declines in coming years even in 2002-03 it goes to zero level.


6.28 SALES OF BOILERS:

Years 1996-97

1997-98

1998-99 1999-2000

2000-01 2001-2002 2002-2003

Sales 46.139 47.149 7.405 0.089 95 12 107.434

Sales

6.29 SALES OF POWER PLANTS:

Years 1996-97

1997-98

1998-99 1999-2000

2000-01 2001-2002 2002-2003

Sales 409.447 150.305 204.9 0.88 53.684 76.108 139.187

Sales

sales

020406080100120

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

sales

0100

200300

400500

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

HMC is also producing for establishment and maintenance /repair of power plants. Due to high quality in this field company is getting high level sales in last seven years except 1999-2000


6.30 SALES TO DEFENCE :

Years 1996-97

1997-98

1998-99 1999-2000

2000-01 2001-2002 2002-2003

Sales 409.447 150.305 204.9 0.88 53.684 76.108 139.187

Sales

Graph shows that HMC is producing very less for the defence. The reason is not understandable.

6.31 SALES TO RAILWAYS :

Years 1996-97

1997-98

1998-99 1999-2000

2000-01 2001-2002 2002-2003

Sales 1.413 --------- ----------- 6.642 1.1993 5.754 ------------

Sales

sales

010

2030

4050

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

sales

0

2

4

6

8

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

Last year in 2002-03 HMC have not got any order from Railway. There is not consistency in orders.

86

Chapter 6.Analysis

6.32 SALES OF MISCELLANEOUS COMMERCIAL ITEMS:

Years 1996-97

1997-98

1998-99 1999-2000

2000-01 2001-2002 2002-2003

Sales 5.235 624 87.842 62.383 31.532 65.797 -----------

Sales

The graph shows the misc. commercial orders handled by HMC which include the maintenance and repair of cement, sugar plants etc.

sales

0

200

400

600

800

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03


6.33 FINANCIAL STATEMENT ANALYSIS:

The purposes of financial statement analysis is to find out the hidden attribute of financial attributes if financial statement. First it self and outsider providers of the capital (creditors and investors) do financial statement analysis. Bonus holders are more interested in cash flow ability of the firm the service debt over the long term period of time.

Investors are concerned about the profitability of the firm calculates present and future earning and stability of these earning over a period of time.

Financial statement analysis involves using the various financial statements. The common and necessary requirements are balance sheet and Income statement. Balance sheet shows the financial position of the firm. Income statement shows the firm revenue and expenses. Possible frame work of financial analysis can be as shown in diagram,

Analysis of funds Need of firm.

Analysis of financial Determine the financial Negotiation with suppliers needed s of the firm with Condition and profit Suppliers Ability of firm. Of capital.

Analysis of the risk Of the firm.

Fig 6.1

Financial Statement analysis consists of three types of calculation.

Ratio Analysis. Common –size analysis.

Index Analysis.


Heavy Mechanical Complex (Pvt) Ltd.Balance Sheet

As on June 30, 2001

2001 2000 (Rupees in Thousands)FIXED CAPITAL EXPENDITURE

Operating assets

Capital work in progress

1,230,078 1,304,115

LONG TERM INVESTMENT 2,500 2,500

LONG TERM TRADE RECEIVEABLES 305,776 355,675

LONG TERM LOANS, DEPOSITS,AND DEFFERED COST 1,620 1,620

CURRENT ASSETS

Stores and spares

Tools

Stock in trade

Trade debtors

Current portion of long term receivables

Advance deposits, prepayments

And other receivables

Cash and bank balance

1,230,078

--------------

1,303,174

941

96,808

7,035

368,170

222,909

132,349

185,603

26,902

124,576

8,308

456,983

113,328

79,074

159,451

8,479

1,039,776 950,199

2,582,750 2,614,150


Heavy Mechanical Complex (Pvt) Ltd.Balance Sheet

As on June 30, 2001

2001 2000 (Rupees in Thousands)CAPITAL AND RESERVESAuthorized Capital 1,080,000 1,080,000Issued, subscribed and paid Up capital

Deposits for shared Capital

Foreign exchange equalization reserves

Accumulated loss(917,819) (618,334)

SURPLUS ON REVAULEATION OF FIXED ASSETS 935,452 953,452

35,633 335,118LONG TERM LIABILITIESLocal currency loans 253,235 236,935DEFFERED LIABILITIESEmployees retirement benefit payable 92,660 171,567CURRENT LIABILITIESBank borrowings

Current portion of long term loans

Creditors, accruals, provision and Other liabilities

2,201,222 1,870,530

CONTIGENCIES AND COMMITMENTS ------------- ------------2,582,750 2,614,530

1,077,008

85,341

143,073

(2,223,241)

1,077,008

85,341

143,073

(1,905,046)

804,203

91,733

1,305,286

687,204

87,105

1,096,221

90

Chapter 6.Analysis

Heavy Mechanical Complex (Pvt) Ltd.Income Statement

For the Year ended June 30, 2001

2001 2000 (Rupees in Thousands)SALES 632,883 631,312

COST OF SALES 781,839 800,621

GROSS LOSS (148,956) (169,309)OPERATING EXPENSESGeneral & Admin

Selling & distribution

116,590 117,195

OPERATING LOSS (265,546) (286,504)

OTHER INCOME 43,545 64,343

FINANCIAL EXPENSES (178,190) (157,303)

PRIOR PERIOD ADJUSTMENT 85,175 --------

NET LOSS BEFORE TAXATION 315,016 379,464

TAXATION (179) (3165)

NET LOSS AFTER TAXATION (318,195) (382,629)

ACCUMULATED LOSS BROUGHT FORWARD (1,905,046) (1,522,417)

ACCUMULATED LOSS CARIED FORWARD (2,223,241) (1,905,046)

92,186 24,404

101,551 15,644


Heavy Mechanical Complex (Pvt) Ltd.Balance sheet

For the Year ended June 30, 2002

2002 2001 (Rupees in Thousands)CAPITAL AND RESREVES

Share capital 1,077,008 1,077,008Deposit for issue of shares 85,341 85,341Reserves (2,258,174) (2,080,168) (1,095,825) (917,819)SURPLUS ON REVALUATION OF FIXED ASSETS 935,452 935,452

LONG TERM LOANS 1,042,205 273,252

DEFFERED LIABILITIESEmployees retirement benefit payable 116,663 92,660

CURRENT LIABILITIESCurrent portion of long term loansObligation under lease financeBank borrowingsCreditors, accruals, provisions andOther liabilities

1,513,929 2,201,800CONTINHENCIES AND COMMITMENTS ------------- ------------

2,530,242 2,603,345TANGIBLE FIXED ASSETS 1,165,672 1,230,078LONG TERM INVESTMENT 629 2,500LONG TERM TRADE RECIEVEABLES 222,270 308,776LONG TERM AND DEPOSITS 1,582 1,620

CURRENT ASSETSInventories Trade debtorsCurrent portion of long term receivablesAdvances, payments, and other receivables

120,086 --------- 238,845

1,154,998

91,242 491 804,203

1,305,864

406,270 325,074 177,846 212,404 18,677

472,013 222,909 132,349 206,198 26,902

Cash and bank balance 1,140,271 1,060,3712,530,424 2,603,343

92

Chapter 6.Analysis


For the Year ended June 30 , 2002

2002 2001 (Rupees in Thousands)SALES 681,198 632,883

COST OF SALES 655,539 781,839

GROSS LOSS (25,659) (148,956)

OPERATING EXPENSESGeneral & AdminSelling & distribution Provision for the diminution in Value of long term investment

80,387 116,590

OPERATING LOSS (54,728) (265,546)



NON RECURING ITEMS 34,496 85,175

NET LOSS BEFORE TAXATION (177,685) (315,016)

TAXATION (3,411) (3,179)




70,070 24,404

1,871

92,186 24,404 ---------


Heavy Mechanical Complex (Pvt) Ltd.Balance sheet


2003 2002 (Rupees in Thousands)CAPITAL AND RESREVES

Share capital 1,077,008 1,077,008Deposit for issue of shares 85,341 85,341Reserves (2,391,345) (2,258,174) (1,228,996) (1,095,825)SURPLUS ON REVALUATION OF FIXED ASSETS 935,452 935,452

LONG TERM LOANS 981,331 1,042,205

DEFFERED LIABILITIESEmployees retirement benefit payable 144,016 134,573

CURRENT LIABILITIESCurrent portion of long term loansBank borrowingsCreditors, accruals, provisions andOther liabilities

1,781,046 1,496,020CONTINHENCIES AND COMMITMENTS ------------- ------------

2,530,242 2,603,345TANGIBLE FIXED ASSETS 1,106,724 1,165,672LONG TERM INVESTMENT 629 629LONG TERM TRADE RECIEVEABLES 225,855 222,270 LONG TERM AND DEPOSITS 1,582 1,582

CURRENT ASSETSInventories Trade debtorsCurrent portion of long term receivablesAdvances, payments, and other receivablesCash and bank balance

173,619 238,845

1,368,582

122,077 238,845

1,135,098

473,491 319,361 219,388 201,686 82,133

406,270 325,074 177,846 212,404 18,677

1,296,059 1,140,2712,630,849 2,530,424

94

Chapter 6.Analysis



2003 2002 (Rupees in Thousands)

SALES 689,056 681,198

COST OF SALES 661,987 655,539

GROSS LOSS (27,069) (25,659)

OPERATING EXPENSESGeneral & AdminSelling & distribution Provision for the diminution in Value of long term investmentProvision for bad debts

78,747 80,387

OPERATING LOSS (51,678) (54,728)



NON RECERING ITEMS (3,455) (34,496)

NET LOSS BEFORE TAXATION (169,933) (177,685)

TAXATION (3,446) (3,411)




65,179 8,534 --------- 5,034

70,070 24,404

1,871 ---------

95

Chapter 6.Analysis

6.34 RATIO ANALYSIS:

Ratio is the mathematical tool used to measure one quantity to other quantity. In ratio one variable is expressed in term of other variable is expressed in term of other variable. Ratio is classified broadly on the basis of source (Balance sheet, income statement or both) of the ratio.

i. Balance sheet ratios.ii. Income statement & income statement / balance sheet ratios.

BALANCE SHEET RATIOS

The ratios are calculated with both nominator and denominator from balance sheet. Liquidity ratios and Leverage ratios are calculated from balance sheet. Liquidity ratios are used to measure the firm’s ability to meet short term obligations.Leverage ratios find out the risk ness of the company, that how management is behaving to take risk. It also shows the extend to which the firm is financed by the debt.

LIQUIDITY RATIOS:

i) Current Ratio: Current ratio is the most frequently used ratio to find out the liquidity of the firm. It shows the firm’s ability to cover the current liabilities with its current assets.

Current ratio = Current assets/ Current liabilities

The ratio for HMC for the last three years is,

For 2000-2001 = 1060371 = 1:2 2201800

For 2001-2002 = 1140272 = 1:1.3 1496020

For 2002-2003 = 1296059 = 1:1.38 1781046The company is not having efficient resources to meet liabilities.

ii) Acid test (Quick) Ratio:

The more conservative measure of liquidity is the acid test ratio or quick ratio. The ratio concentrates primarily on the most liquid assets (cash, marketable securities, and receivables in relation to current obligations.

Quick ratio = Current assets – inventory/ current liabilities.


The ratio for HMC for the last three years is, For 2000-2001 = 1060371-406270-201686 = 1:5.8

2201800 For 2001-2002 = 1140272-406270-201686 = 1:2.8

1496020For 2002-2003 = 1296059-473491-209603 = 1:2.9

1781046The ratio shows the liabilities of the company is exceeding its resources to meet

them.

LEVERAGE RATIOS:

These ratios shows the extend which the firm is financed by the debt.

i ) Debt to equity ratio.This ratio shows how much is provided by the creditor and how much from the

shareholders.

Debt to equity ratio = Total debt / Shareholder equity.

The ratio can not be calculated because of loss incurred by the company during last three years.

ii) Debt to Total assets ratio:The purpose is the same for the previous one

Debt to total assets ratio = Total debt/ total assets.

For 2000-2001 = 273225+92660+2201800 = 98% 2603345

For 2001-2002 = 1042205+134573+1496020 =51% 2530485

For 2002-2003 = 981331+144016+1781046 =110%

It shows that how much of the total asset is financed by the debt.

iii) Long term capitalization Ratio:

It is related with long term capitalization of the firm .Total capitalization will represents long term debts and total share holder’s equity. It is often more useful to take market values instead of book value for all debts ratios to get more clear picture of financial position of the firm.


Long term debt to capitalization Ratio = Long term debt/ Total capital

The ratio for HMC for the last three years is,For 2000-2001 = 273225+92660 = 14.05%

2603345For 2001-2002 = 1042205+134573 = 46.5%

2630849

Ratio shows that company is getting much long term loans to run its business.

INCOME STATEMENT AND INCOME STATEMENT /BALANCE SHEET RATIOS:

In this case to calculate the ratio we will take either one item from balance sheet or other from income statement or both items from income statement. These ratios are also divided in to three categories.

i. Profitability Ratios.ii. Activity Ratios.

iii. Coverage Ratios.

Profitability Ratios in relation to sales .It is the measure of efficiency of the firm operations as well as how they are pricing their products. If nominator becomes negative it means they are selling below cost.

Gross profit margin = Net sales-cost of goods sold Net sales The ratio for HMC for the last three years is, For 2000-2001 = NA For 2001-2002 = 681198-655539 = 3.76% 681198 For 2002-2003 = 689056-661987 = 3.92% 689055ii) Net profit margin ratio:

This ratio show clear scenario as compared to previous one .Here we deduct all the expenses from earning hence find out actual situation of earning. It tells us about the income per dollar of the firm.

Net profit margin = Net profit after taxes Net sales


The ratio for HMC can not calculated because of the loss incurred by the company during last three years.

Profitability ratio in relation to investment:

i) Return on investment:

This is the second group of the profitability ratio. It shows how much company earns in percentage on its investment

Return on investment = Net profit after taxes Total assets

The ratio for HMC can not be calculated because of the loss incurred by the company during last three years.

ii) Return on equity:

The ratio tells us about the earning power of the company on book value of the share holder’s equity. A high return on investment usually shows the firm’s acceptance of the strong investment opportunities. It is given by,

Return on equity = Net profit after taxes Shareholder’s equity

The Ratio for HMC cannot be calculated because of the loss incurred by the company during last three years.

COVERAGE RATIO:

It shows how much the firm has capability to service or cover the financial charges. Bond rating agencies frequently use this ratio to find out firm financial position to meet its obligations. Usually interest coverage ratio is calculated in coverage ratio.

Intrest Coverage Ratio:

This ratio serves as measure of the firm to pay its interest obligation. Generally if the ratio is high it means that firm can easily meet its interest obligation.

Interest coverage ratio = Earning before interest and expenses Interest expenseThe ratio for HMC can not be calculated because of the loss incurred by the company during last three years.


ACTIVITY RATIOS:

These ratio are also known as efficiency or turn over ratios, It measure how effectively the firm using its assets. These ratios primarily focus on how effectively the firm is managing its receivables and inventory.

Receivable turnover ratio = Annual net credit sales Receivables

If the credit sales figure is not available then total sales figure is often consider as “total credit sales”.

The ratio for HMC for the last three years is,For 2000-2001 = 632883 = 2.83 times

222909For 2001-2002 = 681198 = 2.09 times

325074For 2002-2003 = 689056 = 2.157 times 319361To calculate receivables turn over in days we will use the following formula,

Receivable turnover (in days) = Days in a year Receivable turnover

Usually days are taken 300 (some times 365).The ratio for HMC the last three years is,

For 2000-2001 = 365 = 128 days 2.83

For 2001-2002 = 365 = 174 days 2.09

For 2002-2003 = 365 = 169 days 2.157

The ratio of receivable activity is declining which is not good sign.

INVENTORY ACTIVITY:

These ratios show how effectively the firm is managing its inventory, because it is always bad impression to have heavy inventory. As we do in previous section we will first calculate inventory turnover ratio.

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Chapter 6.Analysis

Inventory Turnover ratio = Cost of goods sold Total inventory.

The ratio for HMC for the last three years is,For 2000-2001 = 781839 = 1.65 times

472013For 2001-2002 = 655539 = 1.61 times

406270For 2002-2003 = 661987 = 1.39 times

473491The ratio shows the ability of company to convert inventory in to cash is

declining, the reason might be the company is having the inventory in stock for precautionary reasons or production is declining.

The CGS is always for the year under study but inventory is measured by taking average of the beginning and ending balance for the year. To find out the inventory turnover in days we will use,

Inventory turnover in days = Days in a year Inventory turnover

The ratio for HMC for the last three years is, For 2000-2001 = 365 = 221days

1.65For 2001-2002 = 365 = 226days

1.61For 2002-2003 = 365 = 262days

1.39

The ratio shows that the credit collection of HMC is not improving. Due to ineffective credit collection policy they may face monetary constraints in coming future.

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Chapter 7. Recommendation and Suggestions

CHAPTER7 RECOMMENDATION AND SUGGESTIONS

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7.1 RECOMMENDATION AND SUGGESTION:

The management style at HMC, Taxila has been studied. Their system is ISO 9001 certified. According to my opinion they must take following few steps to be at the step:

1. Motivation of Employees:

Due to massive downsizing in government departments employees got the fear of loosing their jobs any time. These circumstances create depression which leads dysfunction and finally ends at “apathy”. For healthy progression of the company employees must feel satisfied and honored to the part of the organization. Management must take some steps for the motivation of the employees. Some of employees are given “Golden Shake hand” and again appointed on contract basis. In this way company has to pay them less.

It is better to appoint few fresh, competent professionals on healthy remuneration to carry on the operation of company on right track. In this way motivated employees stay with company for long time. No argument that motivated employees are always and an asset of the company.

2. Up-To-Date Technology:

As it is discussed in cost section of finance department that for each project machine depreciation charges are charged to client. But due to mismanagement of the funds this money was not utilized properly to install new technology for the quality production. Due to out dated machinery company is facing problem in price competition (incur high cost for the project).

A strategy for the installation of the new computerized technology is need of the hour to complete in term of both price and quality. A long term loan with low interest rate for the installation of new machinery can be solution of problem. After acquiring new technology new trained staff is also required to run it. It is requiring high cost but the company has no way out.

3 Working Conditions:

Except sales and working conditions are not up to minimum standards. As modern research proves that the working condition is also major factor in employees’ performance and satisfaction (motivation).

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Hence management must give attention to this side. Improving working condition is never a costly step. Simply appointment of two sweepers in each department, blinds on windows, enough ventilation, proper management of lights, white wash annually and flowers in corridors and inside the office improves the working conditions a lot.In this way good surrounding helps the employees to work more efficiently. Further more changes are necessary.

Change the arrangements maximum after six months. Wall pictures paintings and charts are affordable items to give pleasant effect to human beings all the time. Internationally now ISO 8000 is designed to draw frame work for the work condition in the organization.

4 TRAINING OF EMPLOYEES:

Now all around the world companies are emphasizing on trained and specialized staff. It counts for company’s growth and future efficiency. It means specific persons for the specific job.

In recent years training of the technical staff was under the spot for decision makers but on management side no training was given to staff especially in Marketing and Finance fields. Managers must know new techniques of the financial, human resources and marketing management.

5 Marketing Outside The Country:

HMC is giving very less attention towards the marketing of its products outside of the country. Except Bangladesh they do not have any appreciable exports. The reason is that the marketing department limited to boundaries of the country. They must arrange participation in international technology fairs, cross the borders to create awareness that, what are they producing at what cost and with how much standards?

The company has enough human resources to create and meet such challenges Pakistan is not as much large country that’s why a manufacturer of engineering goods must have a global perspective. Europe and North America can be potential perspective for HMC in future.

6 Computer Technology:

A very nice step was taken by the management in 1992 when they bought CAD and Oracle software along with the system. This environment was beautifully established that time. Unfortunately it is never been up dated after that.

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Old systems are maintained and repaired at high cost. Installation of new systems and software the help the country in producing at low cost and especially high quality products.

Some other suggestions and recommendations for Finance Department are as follow:

Slow moving and dead inventory should be reduced and only regular running items should be kept in stores.

Overhead cost should be minimized. Proper arrangement of manual work documents. Online accounting should be implemented for update analysis Payment commitments should honor for restoration of confidence Receivables must be

105REFRENCES:

1. Annual Reports for the Years 2000-2001, 2001-2002, 2002-2003 .2. Company Profile Document. 3. Mr. Muhammad Saleem ,DGM (Accounts)4. Mr.Abdul Rauf, Rana Junior Officer (Store Accounts).5. Mr. Ghulam Siddique DSO (Bills).6. Mr.Ali Bahadur ,Junior Officer (Finance)7. Mr. Ayaz Malik Assistant Manager (Finance).8. ISO Charts in quality assurance section.9. Miscellaneous Documents.

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Heavy Mechanical Complex (Private) Limited is a leading engineering goods manufacturing enterprise in Pakistan located at Taxila about 30 Kilometers north of capital Islamabad. It is a professionally managed progressive organization with over 160,000 sq. meters covered facilities and 1,100 employees.

HMC have the resources to handle large projects with demanding delivery schedules. Being the largest and most extensive fabrication and machining facility equipped with state of the art technology. HMC provide manufacturing services both on our own or customers design.

HMC have gained rich experience in designing and manufacturing of large projects through collaboration with internationally reputed engineering organizations. All its processing facilities are in-house including Designing,

Fabrication, Machining, Iron and Steel Castings, Forgings, Heat Treatment, Assembly, Sand Blasting, Painting and Galvanizing etc.

HMC is ISO 9001 certified and is authorized to use 4 ASME stamps U, U2, S & PP for equipment manufactured according to ASME code. The manufacturing is backed by excellent quality control and testing facilities to meet the product and customer quality requirements. 3rd party inspection facilities are also available, where required.

HEAVY MECHANICAL COMPLEX (PVT) LTD

Taxila, Distt. RawalpindiPAKISTAN

Certificate No.9704143

Telephone : 92-51-9270562 ( 4Lines )

92-596-9314181

Fax : 92-51-9270560, 92-0596-9314202 , 9314203

Telex : 5607 HMC PK, 5512 HFF PK

E-mail : [email protected]@micro.net.pk

mailto:[email protected]



HMC specializes in Engineering, Designing, Manufacturing, Installation and Commissioning of plants and machinery including ;

Cement Plant and Spares : 600-5000 TPD

Sugar Plant and Spares : 500-12000 TCD

Process Plant Equipment : Pressure Vessels, Columns, Heat Exchangers, Drums, Storage Tanks and Kilns

Chemical & Petro-Chemical Plants :

Sulphuric Acid Plant, Basic Chromium Sulphate Plant, Industrial Alcohol distillery, Gas Dehydration, LPG/LNG, Gas Purification & Sulphur Recovery Plants.

Industrial Boilers : Fire tube Package units, water tube package units, heat recovery boilers, begasse fire boilers (capacity upto 200 T/hr

Thermal Power Plants : Equipment for utility boilers, membrane wall, turbine/generator parts.

Hydel Power Plants : Gates, penstocks, wicket gates, head covers, turbine/generator parts

Cranes : Electric overhead trevelling crane, portal & mobile cranes.

Road Construction Machinery : Static & vibratory road rollers, asphalt mixing plant.

Steel Structures : For thermal power plants, process plants etc.

Railways Equipment : Railway axles, surface troverser, screw coupling & screw jack.

Castings : Iron & steel castings as per specifications

Forgings : Shafts, rings and others as per specifications

Automotive Forging : For tractors and other automobiles

Sugar chemical cement

http://www.hmc.com.pk/products/railway.htm

http://www.hmc.com.pk/products/road.htm

http://www.hmc.com.pk/products/cranes.htm

http://www.hmc.com.pk/products/power.htm

http://www.hmc.com.pk/products/power.htm

http://www.hmc.com.pk/products/chemical.htm

http://www.hmc.com.pk/products/chemical.htm

http://www.hmc.com.pk/products/sugar.htm

http://www.hmc.com.pk/products/cement.htm

Thermal Power

HMC

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