Ragini Project

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I N T R O D U C T I O N

Day by day technology is changing phenomenal development in science and

technology since 1950 has created a tremendous impact in our lives and lifestyles in our

consumption as well as in our economic welfare. Advances in electronics technical

advancement have very wide impact on all business and activities all over the world.

It becomes a key function to expand the business of HAL TAD, Kanpur in the

emerging aviation scenario.

India has establish a strong foundation in aviation soon after independence by

undertaken production, design development of aircraft and manufacturing and

overhauling at HINDUSTAN AERONAUTICS LIMITED which is fully recognized

by the government.

Hindustan Aeronautics Limited is so vast, so capable and one of the best aeronautical

industry in the world. Its main quality is to provide best services and up gradation in

every aspect of the infrastructure.

HAL deals with domestic, national and international customer. Their customer

are fully satisfied with their policy, maintenance, and services. It is the major aviation

industry of the world. It deals with customer successfully.

Advancement in aviation industry technology made possible with in the reach of

common man through reduction in the cost in improvement in safety aviation brought a

huge change in transport sector.


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C O M P A N Y P R O F I L E

Hindustan Aeronautics Limited is established in 1960 in January at Kanpur in

UP.

Number of Company 4

Name of Complexes 1. Accessories Complex

2. Bangalore Complex

3. Design Complex4. M I G Complex

Product in TAD Kanpur 1. HS-748 (Avro)

2. Basant Aircraft

3. HPT-32 Aircraft Glider

4. Dornier -228

5. ATP Tail plane

Product in HAL AVRO & DORNIER

ALH, CHETAK, LANCER, & CHEETAH.

AJEET, MARUT, MIG-27, SU-30, KIRAN,

LCA & JAGUAR.

HT-32, HPT-32 & ITT-36.

IJT PROJECT


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CORPORATE OF H A L

THERE ARE FOUR COMPLEX OF HAL

DESIGNCOMPLEX

BANGALORECOMPLEX

ACCESSORIESCOMPLEX

MIGCOMPLEX

- AircraftR&Dcenter

- RotaryWingcenter

- Engine &Test bedR&Dcenter

- StrategicElectronicR&Dcenter

- TransportAircraftR&Dcenter

- UpgradeR&Dcenter

- Aerospacesystem andEquipmentR&D

center - GasTurbineR&Dcenter

- CentralMaterial &Process

- AircraftDivision

- Engine

Division- Foundry& ForgeDivision

- Helicopter Division

- AerospaceDivision

- OverhaulDivision

- Industry

& MarineGasTurbineDivision.

- AccessoriesDivision,Lucknow

- AvionicsDivision,Korwa

- AvionicsDivision,Hyderabad

- TransportAircraftDivision,Kanpur.

- AircraftDivision,

Nasik

- EngineDivision,Koraput.


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Lab- NDT center

RESEARCH METHODOLOGY

Fact and figures are the raw materials with which researcher works.

1. Internal Sources : Company own records register, folders, documents etc.

2. External Sources : Magazines, Media, Journals etc.

Another way of classifying the sources of information is :-

1. Primary Data

2. Secondary Data

1. Primary Data : Information obtained from original sources as company register,

folder, credit slip etc..

It can be gathered slowly at a high cost. It is personally developed. It gives latest

information.

2. Secondary Data : It is complied by some one other than the researcher for

purpose not directly related to the research currently under consideration .

Sources of Secondary Data

1. General Library

2. Newspaper ,Magazines journal etc .

3. Media


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4. Universities

THE COMPANYTHE COMPANY

Before commencing my project report, I would like to highlight about to highlight about

this most reputed and the only Aircraft manufacturing company in India.

HISTORY OF H.A.L

Hindustan Aeronautics Limited was formed on 1 st October, 1964 by the merger of the

Hindustan Aircraft Limited and Aeronautics India Limited.

Hindustan Aeronautics Limited was set up at Bangalore in Karnataka by the late

Shri Walchand Hirachand in December 1940 in associated with the Government of

Mysore, as a Private Limited Company. In the June 1942, Government of India

purchase the interest of the company and took over its management. Shri Walchand

Hirachand has the vision to start this company for manufacture of aircraft for the fisttime in India. The Harlow Trainer and Curtis Hawk Fighter Aircraft were the first two

aircraft produced by Hindustan Aircraft Limited and they were successfully test flown

in 1942. However, soon after, the aircraft manufacturing programs were abandoned in

favour of overhaul and repair of aircraft to support the war effort during World War-II.

Over 1000 aircraft such as Fortress, Liberator, Motchell Bomber, Dakota and

Commando Transport Aircraft, catalane Ambhinious Aircraft and piston engine fitt6ed

to these aircraft were overhauled by Hindustan Aircraft Limited during the war year.

After the company undertook reconditioning and conversion of war surpluses-

Dakota aircraft for use by air Force\ Civil operator and reconditioning of Tiger-moth

Trainers, Hawker Tempest Fighter and Liberator Bomber for the Indian Air Force.


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INTRODUCTION OF H.A.L

Hindustan Aeronautics Limited is a high technology Aerospace complex where

integrated air borne weapon platforms are conceived, developed, manufactured and

service. It is one of the few corporate giant in Asia whose capabilities span the entire

range of activity from product conception to after support. HAL is also involved in the

manufacture and assembly of system for India space programme.

Over more than five decades of its existence. It has established a broad

based technological infrastructure and highly developed manufacturing skills. With its

corporate office located in Indias Aerospace city Bangalore, it employs over 39,000

highly trained and motivated manpower spread over 13 divisions across the country.

CORE BUSINESS OF HAL

-- Design and development of Fixed and Rotary Wing Aircraft ,Avionics and

Accessories.

Manufacture, Maintenance, Repair and Overhaul of :--

Fighter, Transport and Trainer Aircraft;

Helicopters;

Aero Engines;

Avionics;


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Accessories;

Ground Support Equipment.

Manufacture of structural components for satellite and Launch Vehicles.

Software development for Aerospace applications.

Design consultancy.

Some new products of HAL organisation developed in recent two or three years are as

follows :-

On November 17 th, 1995 the first technology demonstrator of the Light Combat

Aircraft (LCA) rolled out at Bangalore Complex. LCA is the smallest, light weight,

supersonic , multi-role , single seat fighter aircraft in the world which integrates modern

design concepts like static instability, digital fly-by-wire control system, integrated

avionics, glass cockpit, primary composite structure, multimode radar, micro processor

based utility and brake management system. .

Advance Light Helicopter (ALH) is the first helicopter designed, developedand produced by HAL and also design and development of PTAE-7 engine for

installation in Pilot less Target Aircraft (PTA) . The maiden flight of this engine on PTA

went off successfully on 18 th may , 1995 at the launch center II of ITR at Chandrapur

on sea .

The company has been manufacturing and supplying aircraft parts to several

worlds leading aircraft manufacturing companies such as Airbus Industries, British

Aerospace, Boeing and Fokker. HAL is exporting its products and spare- parts to 21

countries in the world, including UK, France, USA, Switzerland, Japan, Holland and

Malaysia.


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DIVISIONS OF H A L

BANGALORE COMPLEX :

1. Aircraft division (Bangalore)

This division was established in 1940. The division manufacturing a wide

variety of aircrafts. Currently the division is Mfg. Jaguar international under license.

The division also exports high sub- assemblies to renewed aircraft manufacturers like-

AIR BUS, BOEING, FOKKER AND DORNIER.

2. Aero space division (Bangalore)

This division Mfg. Worthy structure like satellite launch vehicle, interstate

propellant tank and Separator mechanism for ASLV, PSLV, GSLV, IRS and insertseries.

3. Engine Division (Bangalore)

This division with over three decades of experience has acquired the state of the

art technology in manufacture , overhaul and maintenance of Aero engines.

Currently the division manufacture / overhauls ADOUR MK 811/ ADOUR MK-

804 Garrett TPE-315-5 ARTOUSE IIIB, DART & ORPHEUS Engines. It is also an

authorized service center for Garrett TPE 331-5 Series. The division is also diversified

into manufacture/ repair of industrial gas turbines.


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4. Helicopter division (Bangalore)

This division was set up to manufacture , repair and overhaul-Helicopters for the

Defence sector as well as civil sector. The division under takes manufacture, repair and

maintenance of CHETAK & CHEETAH Helicopters. Currently the division is engaged

in setting a facilities for the series production of the ALH (advance light helicopter).

5. Foundry and Forage (Bangalore)

This divisions capacities include precision casting, sand casting, precisionforgings and ring forgings. The division is also involve in the development of materials

and alloys for aerospace and defence application.

6. Over haul division (Bangalore)

This division is established as a repair and overhaul base for fighters. It has so for

overhaul over 40 varieties of aircraft , major servicing and overhaul of associated

rotables in respect of KIRAN- MK- 1/MK-1A/ MK-II, Jaguar and Mirage 2000 are

undertaken. Barrackpore branch factory an unit of overhaul division under take

servicing of chetak, cheetah and AN-32 aircraft.

ACCESSORIES COMPLEX :

7. HYDERABAD DIVISION


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This division undertakes production and servicing of AVIONICS, Air route

surveillance Radar and sub system for IAF/Army /Navy/Coast Guard/ Space and other

civil application. This also undertake design and development of communication system

,Navigation system ,Airborne Radar system, Ground Radar system specific type test

equipment.

8. KANPUR DIVISION

Originally set up for the manufacture of HS-748 Aircraft. Today the division

manufactures HPT-32 and Dornier-228 Aircraft. The division also under takes , repair,

overhaul and maintenance of civil Aircraft including HS-748, Fokker-27, Gliders, Do-

228 and HPT-32.

9. LUCKNOW DIVISION

The manufacturing range of the Division includes the mechanical and Hydro

mechanical accessories, fuel system accessories and instrument accessories for the

complete range of Ground equipment . The division has also set up accessories design

bureau which undertake indigenous development of accessories required for the various

Aircraft engines and tanks for the services.

10. KORWA DIVISION

The capability of this division covers the manufacture, repair and maintenance of

Advance Avionics system for Military aircraft of Eastern origin and western origin

covering inertial Navigational system . Head up displays , weapon Aiming computers,


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combined Map Electronic- display , Laser Ranger and Marked Target seeker, integrated

Navigation and sighting complex . Production capabilities also include manufacture and

repair of Electronic modules using ATE.

MIG COMPLEX :

11. NASIK DIVISION

Established as a manufacturing base for MIG series of Aircraft . The division has

manufactured / overhauled a large number of variants of MIG series. Currently the

division manufactures MIG-27, repair and overhauls MIG-21 BIS and MIG-27. It alsomanufactures flexible fuel tanks , metallic drop tanks and honey comb structures.

12. KORAPUT DIVISION

In this division the R-11 series engines , R-25 series engine and R-29B engines

are manufacture and overhauled, facilities have also been set up for the overhaul of RD-

33 engines . The division has also excellent hot forging and precision die casting

facilities for both ferrous and non ferrous alloys .

DESIGN AND DEVEIOPMENT BUREAU :

1. AIRCRAFT DESIGN BUREAU (BANGALORE)

Design activity commenced in 1948 by Dr. V.M. Ghatge. When a project was a

project was sanctioned for design and development of HT2 and elementary piston

engine Trainers. Since than the design Bureau has de3signed wide variety of Aircraft


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such as Marut, Pushpak, Krishak, Basant ,Ajeet and variants of Kiran and HPT-32. The

design authority function for the LCT vests with HAL.

2. ENGINE DESIGN BUREAU (BANGALORE)

The Bureau design and develops engine and related test set up facilities. The

Bureau has successfully developed a jet engine PLATE-7 for the pilot less target

Aircraft and the Gas turbine starter unit for the LCA . The Bureau has also designed

Fabricated and commissioned test bed for Garrett TPE- 331-5 engine and R-298 engine.

3. HELICOPTER DESIGN BUREAU (BANGALORE)

Responsible for Design and Development of Helicopters. This Bureau also

undertakes programme covering modifications of chetak & FRD blades for the wind

powered Turbines. The design, development and prototype production and flight

certification programme of the Multi-role Multi Mission Advanced Light Helicopter is

in hand.


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THE DIVISION

TRANSPORT AIRCRAFT DIVISION ( T A D ) KANPUR

Kanpur Division of HAL specializes in manufacture and overhaul of medium and

light category Turboprop Aircraft. It was set up in 1960 to manufacture HS-748

(AVRO), a medium overhaul of multi-role transport aircraft. Over the years, It hasvastly developed its infrastructure and capabilities and undertaken the manufacture of

Agriculture Aircraft (HA-31), Basic Trainer Aircraft (HPT-32), 15-19 Seated multi-role

utility aircraft [Dornier (Do-228) ] and a variety of aerospace structural assemblies and

component for both domestic and international market .

Concurrent with threw manufacture activities , Kanpur Division has developed

extensive facilities for repair overhaul and modification of these aircraft as well as for

about 400 types of rotable fitted on these aircraft . Plans are underway to augment the

facilities for maintenance of other medium category aircraft .

Kanpur Divisions production standards are up to the mark., this fact lies in the

sentence that it is a member of ISO-9002 to party and today it is considered a pioneer in

the field of manufacture and overhaul of transport category aircraft in the country.

Staffed with above 3000 suitably trained and skilled workforce, the spectrum of

activities at Kanpur Division encompasses:

(1) Manufacture of Aircraft


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(2) Repair and overhaul

(3) Manufacture of spare parts

(4) Services

ABOUT THE PROJECT

The project Function of Finance & Account Department is assigned to us is

really interesting. In HAL I was placed Finance Department in valuable guidance of Sri.

Kapil Khanna Dy. Mgr (BPI)

In Finance Department I have studied about the export process and function of Finance & Account Department export the product in various countries like Nigeria,

Zambia, Thailand, Iran etc.

In Kanpur Division, the main work is manufacturing and overhauling. They

manufacture spare parts, rot able etc. HAL also provide maintenance to accidental

Aircraft. Their process of servicing is very good. After evaluating all this they provide

service.

Finance Department main function is to send and receive e-mail and order to

payment made according to customer condition and provide best facility to their

customer.

Hindustan Aeronautics Limited is totally customer oriented company. It is depending

upon customer demand. Its main target is to provide 100 seated aircraft for their

customer.


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.

FINANCE & ACCOUNT DEPARTMENT

TIME OFFICE

Time office is a part of Finance & Accounts Department . This section prepare

`Punching and Leave records of the employees. Time office is dealing with the

employees of the organisation only. Time office is totally computerise.

Every employee have a punch card on which their personal number is coded in

binary from because computer understand only binary number(0&1). When employee

arrive and departure, they punch their card in punching machine is linked to the

computer of the Time office. They maintain daily records of employees and sent to the

payroll section . Another record they maintain is Leave records . Leave are different

type Casual leave , Vocational leave , Medical leave , Special leave.

FUNCTION OF TIME OFFICE

--- Placement of time punching cards in the time cards racks for recording

attendance.

--- Receipt of approval leave application, O.T. authorisation , attendance sheets,

employees gate passes.

--- Maintenance of leave records and feeding of attendance data to computer

with reference to the documents received. Where leave records are computerised the


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approval leave applications are sent directly to the computerised the approval leave

applications are sent directly to the computer by the respective departments.

PAYROLL SECTION

Payroll section is also part of Finance and Accounts Departments. Payroll section

deals with the pay and allowances of employees only . Payroll section prepares payroll

of the employees based on attendance furnished by the time office .They have full

information / particulars of employees. Pay-slip carries information like Basic salary,

other allowances and various deduction such as PF etc. Payroll section sent the pay slipof all the employees to the cash office for the final payment.

FUNCTION OF PAYROLL SECTION

--- Disbursement of salaries and wages,

--- Payment and recovery of advances,

--- Recovery of dues from employers ,

--- Payment of travel and L.T.C. advances and adjustment thereof ,

--- Reimbursement of expenses like medical , conveyance, school

fees etc.

--- Remittances of amounts recovered from employees to various

agencies ,

--- Accounting of all payroll transaction,--- Maintenance of employees pay record cards ,

--- Miscellaneous.


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ACCOUNTING REGISTERS

--- Leave record ledgers/ registers,

--- Salaries and wages Journal,

--- Travel Expenses Journal ,

--- L.T.C. Expenses Journal,

--- Loan Registers,

--- advances Registers for:

[1] Travel advance

[2] L.T.C advance

[3] salary advance[4] Vehicle advance

[5] Festival advance

[6] Increment Register

--- Cyclone / flood relief loan / special loan,

--- Conveyance Reimbursement Register,

--- Remittances Register of recoveries ,

--- Registers for Reimbursement of other expenses,

--- Unpaid wages Register.

CASH OFFICE

Cash office is responsible for all receipts and payments of cash / cheques and

accounting of the same in the books . Cash office also arranges the disbursement salary

to the employees . the main function of this section are:-

--- Receipt of cash , postal orders, cheques, bank drafts etc. and issue of official

receipts for the same


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--- Banding of all receipts,

--- Drawl of cash from bank to cater for daily needs,

--- Payment of vouchers by cheque / cash,

--- Writing of cash / bank book,

--- Preparation of bank reconciliation statement,

--- Safe custody of cash, cheque books ,bank guarantees, fixed deposit

receipts and other investment.


--- Cash Book,--- Securities Register,

--- Money order Register,

BILLS PAYABLE SECTION

Bills payable section is one of the most important section of FINANCE &ACCOUNTS department because of huge transaction. Bills payable section are divided

in to two parts :-

[1] Bills payable indigenous,

[2] Bills payable foreign,

The function of this section is payments of bills of supplies and services of the

Indian &Foreign vendors. Bills section because bulk of the component / material used in

Aircraft Manufacture is important from foreign.

INDEGENOUS BILLS PAYABLE


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vendor company , item number , description of material, unit purchase, rate ,quantity of

material, and value of order are mentioned. Various details furnished on purchase order

are as fallows :-

--- Price Quoted,

--- Scheduled Delivery of Material,

--- Sales Tax,

--- Payment Terms,

--- Despatch Instruction,

--- Inspection,

--- Addressee to whom the copy of the challan and Invoices,are to be sent,

--- Special Instruction If Any.

Two copies of purchase order is sent to the bills payable section . When material/

component reached at the stores , the store section prepares `Good Receipt Note in

which item number , description of material, and quality of material is mentioned . Store

section raises seven copies . The material is then offered to quality control inspection for

necessary inspection . The Inspector, after checking the material with reference to

specifications mentioned in purchase order indicates the Quality accepted / rejected on

Goods Receipts Notes. The Bills Payable section after receiving the GR note , prices it

item wise and payment of the bill is passed in favour of supplier companies . One copy

of GR note duly priced is forwarded to Material Accounts section .


--- Inland Purchase Journal,

--- Inland Services Journal,


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--- Imprest Journal,

--- Advance Journal,

--- Insurance claims Journal,

--- Earnest Money &Deposit Accounts Register,

--- Sundry Creditors Register,

--- Advance to Supplier Register,

--- Miscellaneous Advances Register.

FOREIGN BILLS SECTION

Foreign bills are those bills which relates to bills of items imported from foreign

countries. Foreign bills section is important because most of production material in this

Industry is of import nature. This section deals with the following aspects of supplies

and services rendered by foreign vendors/ collaborators to the company.

--- Payment and accounting of advances to suppliers,

--- Payment and accounting of services obtained from. Collaborators and

others,

--- Payment and accounting of contractual fees (License fees, Royalty

etc.)

--- Payment and accounting of customs duty, freight bills, agency

commission bills etc.,

--- Payment and accounting of final bills ,

--- Adjustment/ recovery of advances,--- Accounting and pricing of receipt vouchers,

--- Opening of letters of credit and dealings with Banks for obtaining

Foreign Exchange release and Payment thereof,


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--- Maintenance of commitment registers for budgetary purposes ,

--- Maintenance of deferred liabilities accounts.

PAYMENT PROCEDURE

The procedure of payment is little different as compared to Inland payments. The

payment procedure is made through :-

[1] Letter of credit,

[2] Sight Draft,

[3] Advance payment ,

[4] Direct payment,


--- Foreign Purchase Journal,

--- Goods in transit register,

--- Letter of credit Register,

--- Contractual Payment Register,

--- Advances to Suppliers Register,


--- Deferred Liability Register.

The present era is" credit era" most of the transaction are performed on credit basis on

account of the following reasons.

1)-intensive competitions & increase in number of sellers have given buyers the option

to purchase goods from seller who can offer him the most for his money.

2)-credit-terms have become one of the most important factors in negotiating a sale.


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2]-IRREVOCABLE LETTER OF CREDIT}-An irrevocable letter of credit is one

,which can not be withdrawn by the issuning banker gives an absolute undertaking to

honour the bills of exchange drawn stricity in accordance with the terms of the letter of

credit.

3]-CONFIRMED LETTER OF CREDIT}-A confirmed letter of credit is one where the

advising banker of the exporters country , at the request of the issuing banker, adds its

confirmation to an irrevocable credit.

In such a case the advising banker takes upon itself the liabilities as that of the

Issuing banker.The applicant may request the issuing banker to arrange for such credit when the

beneficiary asks for it. This serves as a perfect & absolute security for the beneficiary.

MATERIAL ACCOUNTS SECTION

Material accounts section is dealing with maintenance of various record in respect

of materials, stores, and spares of the organisation

. The main function of Materials Accounts Section are cover following point :-

--- Maintenance of Material Ledger cards for all materials held in

stores ,

--- Accounting of the receipts of all materials by various classes and

issues of all materials drawn on work orders and expenses account,

--- Reconciliation of the balances with the General Ledger,--- Quality reconciliation of Bin Card balances with Material Ledger

Balances,

--- Accounting of inter-divisional transfers of materials and its


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reconciliation,

--- Raising debit advices against contractors and others for materials issued/ sold

and accounting thereof,

--- Maintenance of loan registers for materials issued on loan and

follow up for return ,

--- Scrutiny of slow , non- moving and redundant inventories .

DOCUMENTATION

Material Accounting Section receives various documents and sends the tocomputer/ data processing and obtaining necessary accounting output statement . Where

such documents are received in this section, their processing and accountably are

detailed below :-

--- Receiving Reports,

--- Material Requisitions,

--- Store credit Notes,

--- Stock Credit Notes,

--- Stock Transfers/ stock re-classification,

--- Stock Verification Notes.

All documents are received from various section like- stores, purchase, bills

payable etc. From their document, Material Accounting section prepare different

accounts for having information about the material issue, use or other things.


--- Goods Receipt register,


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--- Stock in- trade Register,

--- Goods issue Register.

BOOK-KEEPING AND BUDEGET SECTION

Book keeping section prepare final accounts of the organisation. It receives

information from all the section of Finance and Accounts Department and then prepare `

Profit and Loss accounts, `Balance Sheet, and other accounts books. This section also

prepare. `Budget of the organisation. The function of book keeping section are as

following :-

--- Maintenance of journal and general ledger,

--- Preparation of Trail Balance , Profit &Loss and Balance Sheet,

--- Maintenance of Capital Assets ledgers and Location Register,

--- Preparation of Fixed Assets and depreciation schedules,

--- Furnishing data for determination of Income Tax liability,

--- Disposal of surplus /condemned plant & machinery and other

assets,

--- Reconciliation of control accounts of other division/Corporate

office,

--- Liaison with Audit authorities.

ACOUNTING REGISTER

--- Journal,

--- General Ledger,


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--- Main Assets Ledger/ Register,

--- Departmental / Location Assets Register,

---Semi- perishable Equipment Register,

--- Miscellaneous Equipment Register,

--- Fixed Assets Disposal Register,

--- Control Account Advices Register.

Book keeping section maintains records indicating the equipment numbers of

machines and the equipment located in various departments. The department are also

required to maintain Location of each machine in the department to facilities physicalverification.

Book- keeping section calls for annual inventory of capital assets held by the

departments once in every year. The departments furnish list of capital assets together

with equipment numbers held by them to Book- keeping section.

Book-keeping section prepare budget of the Hindustan Aeronautics Limited,

Kanpur Division, A budget is an overall blue print of a comprehensive plan of action

expressed in physical and financial terms, it includes plan for each of the activity /

responsibility centers of the business and provides a link between the physical and

financial plans of various department of a company. It is also a document to various

department to serve as a co0ntreol for monitoring and r5eview. A budgeting system is a

comprehensive system of planning and control covering all segments of an undertaking

and giving a sense of direction. The budget system should be such that it makes it

imperative for management to establish goals and objectives, define policies, develop

programs, both long term and short term and allocate resources , measure performance

against the target and in the process, revise the objectives and policies , if found


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necessary. The budget period is the financial year commence in mid June . The budget

is projected in a three year time frame covering estimates for :-

--- Current Year (RE) ,

--- Budget Year (BE) ,

--- Forecast Year (FE).

TYPE OF BUDGET

--- Capital Budget,

--- Performance Budget,

--- Production Budget,--- Sales Budget,

--- Purchase Budget,

--- Manpower Budget,

--- Welfare Budget,

--- Foreign Exchange Budget .

BILLS RECEIVABLE SECTION

Bills Receivable Section is Most important section in the Finance and Accounts

Department. This section is responsible mainly for preparation and submission of

invoices to customers for the supplies made and services rendered , and follow up for

recovery of the amounts and accounts and accounting of the same . The main function

of this section are :---- Scruting of sales orders including export sales,

--- Preparation of invoices for work done / to be done and services

rendered,


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--- Recording of invoices rendered,

--- Review of closed work orders for which invoices have not

been prepared,

--- Accounting for sale of equipment and services rendered,

--- Compilation of sales tax return and payment of sales tax,

--- Customs and excuse duty.

PAYMENT PROCEDURE

[1] Old payment procedure are :--

--- Fixed Cost Quotation Basis(a) Manufacturing projects ,

(b) Repair / overhaul projects .

--- Cost Plus Basis

(a) Manufacturing projects,

(b) Repair / overhaul projects ,

[2] New payment procedure are :--

--- Fixed Price quotation Basis

(a) Manufacturing projects ,

(b)Repair / Overhaul projects ,


--- Sales Journals For :--

(a) Manufacturing of equipment,

(b) Overhaul of equipment,

(c) Manufacturing of spares,


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(d) Miscellaneous .

--- From 530 ( Q423) Register,

--- Invoices Register,

--- Stage Payment Registers For :--

(a) Manufacturing,

(b) Overhauling,

(c) Repair, Maintenance and supply order,

--- Despatch Advices Register,--- Sundry Debtors Ledgers,

---Claims / Accounts Receivable Ledger.

ELEMENT

There are three broad elements : --

1. Materials;

2. Labour; &

3. Expenses.

MATERIALS:--

Material are substances from which products are manufactured .These materials

can be in a manufactured state. Materials can be described as direct and indirect.

DIRECT MATERIALS:--

Direct materials are those materials and supply which can be identified with the

manufacture of a single product or a group of products.


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INDIRECT MATERIALS :--

Indirect materials are those materials and supplies which are consumed in the course

of manufacturing but are not charged to production , e.g. , oil , waste , consumable

stores, rags, cleaning materials for machines etc.

LABOUR

Labour can be defined as that human effort by which materials are shaped in to a

finished from. Labour can be direct and indirect.

DIRECT LABOUR

Direct labour like the direct material, can be identified with the manufacture of a

single productor a group of products . Thus direct labour cost can be allocated

directly to the cost of production.

INDIRECT LABOUR

Indirect labour is employed with a view to carry out tasks incidental to goods or

services. Such labour has no bearing on the condition, composition or construction of

the product or the group of products. Examples of indirect labour costs are wages of

time keeping, foremen , store- keepers, salaries of salesman and the fees of directors

etc .

EXPENSES


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Expenses are also direct / indirect .

DIRECT EXPENCES:--

Direct expenses are those which can be allocated directly, conveniently

and wholly to cost centers or cost units, e.g. cost of defective work on relation to a

particular job or contract, expenses of hire of some special machinery to do a

particular contract, etc .

INDIRECT EXPENSES:--

Indirect expenses are those which can not be allocated directly conveniently and

wholly to cost centers or cost units but which can be apportioned to or absorbed by

cost centers and cost units .

The term indirect expenses should not be confused with the term overheads ,

which has a wider meaning . Overheads are the aggregate of indirect material cost ,

indirect wages and indirect expenses .

CLASSIFICATION OF INDIRECT EXPENSES

Indirect expenses can be classified into the following three types;-

1. Manufacturing {factory, works/ production } Expenses:

They are incurred in factory and are concerned with running of the plant or factory . They include expenses on manufacturing management and administration.

E.g. of these expenses related to the following; depreciation of plant and machinery,


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--- HPT-32

Bill Receivable Section receipts the all types of payment vouchers, for

preparation and submission of invoices to customers for the supplies made and services

rendered and follow up for recovery of the amounts and accounting of the same . Bill

Receivable Section used the some document.

--- Q-423

It is the three types

(a) Goods Issue (G.I)(b) H.A.L Advice and Inspection Notes

(C) Customer Inspection certificate.

--- Work done report

--- Acceptance certificate

--- Signal out certificate

--- Date of induction (Q 431 / 429)

Q-423 document and signal out certificate are compulsory document in every

case of Indian airforce.

H.A.L Bills Receivable section adopted the New payment procedure system in

the Indian Air Force case .

Fixed Price Quotation (FPQ)


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Fixed price quotation is a new type of contract which was introduced after 1995

when IAF demanded the same type of quotation . In this all the elements of cost are

determined in advance before acquiring order from the party . It is just like a tender

which is floated at the time of enquiry raised by the customer.

This concept is New for HAL and due to this now HAL is more conscious about

reducing the cost and adopting the effective method in production to reduce the cost,

because lesser the cost more will be the margin of profit.

This is improved from of FCQ and preparing it all the possible expenditure,material required, MHR and man-hours. DRE are estimated in advance from past

experiences i.e. by studying the past orders and its costs.

In this profit is also included, infect after ascer4taining all the possible costs, a

percentage of profit is added to it and the quotation is submitted to the party. This

quotation is prepared every year and submitted to the customer. So far the present

quotation which are submitted by HAL are under the process of approval from the

ministry.

That is why the transaction are presently based on FPQ and after the approval the

plus/ minus will be adjusted accordingly. However, the advantages in this system lies in

the advantages in this system lies in the fact that there will be a incentive for the

manufacturing to increase the efficiency / productivity and reduce the costs.

FIXED PRICE QUOTATION (FPQ)


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MANUFACTURING PROJECTS:

The projects FPQ in respect of HPT-32 aircraft for the years 2001-2002 and

2002-03 are attached as example-1 to this letter. HALS final claims for delivery of 16

aircraft during 2001-02 and 15 aircraft during 2002-03 will be settled at the approved

FPQ rates after adjusting the advances drawn against the project . The Division is to

prefer the finals claims duly supported by the following document:--

(a) certificate of achievement of milestone duly co-ordinated by CRI(Q-423)/ progress

of work.

(b) Work done Report

(c) Goods Issue Voucher duly signed by IAF representative.

In case the work done report specifies that the aircraft is delivered with certain CAT-

B rotables/ assemblies. The cost as included in the BOM for these items will be reduced

from the claim and the amount so deducted will be paid on proof of dispatch of CAT-A

rotables/ assemblies.

OVERHAUL OF AIRFRAME:--

The FPQ for check III servicing of HS-748 (Avro) , HPT-32, and Dornier-228

(1200hrs , 2400 hrs and 3600 hrs , servicing ) . The prices mentioned in the approved

FPQ are inclusive of all costs other than the following :--

(a) In respect of rotables for which the Division does not have facilities and are sentto outside agencies other than sister divisions of HAL the Division shall be paid the cost

plus percentage freight and Insurance .


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(2) Certified by MRs (Material Requisition).

(3) Goods issue vouchers duly signed by IAF Representatives.

SUPPLY OF SPARES:--

(a) In the case of supply o0against RMS orders, pending approved of price,

catalogues for the division shall be paid provisionally as per the cost indicated in

the RMS orders for the deliveries and final payment would be adjusted as per

Government approved price catalogues.

(b) In respect of supplies made during years and on wards, against RMS order, the

division shall be paid provisionally a first stage payment of 65% in case the

deliveries against the RMS orders are due with in 12 months from the issue of

RMS order . In case of deliveries beyond 12 months from the date of RMS orders,

a first stage payment of 40% shall be made on placement of RMS orders. A

second stage payment of 30% shall be made 6 months prior to the scheduled date

of deliveries in case of delivery beyond 12 month as per the latest approved price

catalogue. The final payment of 5% in case of delivery with in case of delivery

beyond 12 months will be made as per the govt. approved price catalogue for

schedule year for delivery.

(c) In case if BOF items indented by IAF , an advance stage payment of 65% of order

value will be made to HAL on placement of order on the vender. The balance will

be to reimbursed along with freight and insurance , on the basis of venders

invoice . In case of brought out foreign items which are supplied from HAL storesthe division along for freight and insurance.

The final payment is to be regulated on cost plus basis.


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(e) If a rotables is categorised as economically or technically beyond repair then the

rotable will be categorised as cat E and labour charges will be paid based on CRI

certification . If rotables sent abroad for repair / overhaul is declared cat- E by the

vendors the cost incurred will be reimbursed with freight and insurance.

(f) The serviceable / usable parts retrieved after stripping of such rotables are to be

credited to HAL held IAF stores duly coordinated by CRI .

CAT- B REPAIES:--

The FPQ attached are not applicable in case of CAT-B repair aircraft. In case of

CAT-B repairs of airframe tasked by IAF as per the approved Govt. task . The divisionwill be paid on cost plus profit.

MODIFICATION:--

In respect of any additional MODS which are introduced and are not included in

existing schedule of work for repair and overhaul. Payment will be made on cost plus

profit duly coordinated by CRI. The division shall submit a separate FPQ and have the

same approved. In the meanwhile, the division shall be paid advance on the basis of

rates indicated in RMSO.

DUTIES/ TAXES:--

(a) The price is exclusive of taxes and duties i.e. sales tax etc. If any . levied by state/

central Govt./ Local Authorities.

(c) The division shall be reimbursed custom duty paid by them for procurement of

material for IAF task on actual to the extent not included in material cost. In the case


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of multi customer products custom duty paid on purchase will be reimbursed

proportionate to the purchase for each customer.

EXTRA TO SCHEDULE:--

(a) Overhaul of airframes/ rotables

(b) Extra to bill material

The bill of material of overhaul of check III servicing of Aircraft has been worked

out on probably factor of consumption based on past actual data.

HAL-held IAF stores:--

(a) Overhaul/ check III servicing

(b) CAT-B repair/ extra to schedule Jobs/ cost plus jobs

(c) External rotables and internal rotables.

COST PLUS BASIS:--

The cost plus jobs will be valued as per the following procedure:--

(1) Material cost

(2) 4% of A as freight and insurance

(3) Total material cost (1+2)

(4) Actual labour hours booked

(5) Approved man-hour rate for the year


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(6) Labour cost(4x5)

(7) Total cost(3x6)

(8) 10% of (7) as profit

(9) Amortisation of DRE with 7.5% profit [ (If any) nit included in Govt. section for

specific projects)

(10)Total Price(7+8+9)

Special exemption is hereby provided for claims which could not be preferred

between September to July due to non- finalisation of FPQ etc. and have become time in

this period.

OUTSTATION JOBS:--

(a) Permanent detachment

(b)Site repair

(c) Visiting aircraft

(d)Pending approval of the man-hours rate for the year and beyond a provisional

claim at the latest approved man-hour rate may be preferred and subsequently

the final claim at the approved man-hour rate will be preferred after adjusting

the amount provisionally drawn on this account.

PAYMENT:--

The price payable for overhaul will be regulated at the FPQ rate applicable as under

irrespective of actual delivery date.


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Induction against a financial years FPQ rate of the financial

Firm task received with the cut off year of the firm task.

Date specified above.

(1) Induction after the cut off date (unless FPQ rate for the following

Specifically accepted by the division years.

Against that years task).

2. In case the work done report specifies that the aircraft is delivered with certain

CAT-B rotables/ assemblies . The cost as included in the BOM for these items will be paid on proof of dispatch of CAT-A rotables / assembles.

LIQIDATED DAMAGES:--

The claims of the division for supplies during last year and current year will be

paid as per the approved FPQ without having any liquidated damages. The condition for

liquidated damages will be approved by MOD as part of standard terms and conditions.

On issue of orders, the cases for last year and current year will be reviewed for levy of

liquidated damages .

PAYMENT FOR STAGE PROCEDURE FOR STAGE PAYMENTS FOR

ONWARDS:--

The first stage payment shall be worked out on the basis of 65% of the latest

approved FPQ for the firm task. A second stage payment of 30% will be made on

certification of acceptance duly co-ordinated by CRI and from Q423 alongwith dispatch


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advice where necessary. The balance 5% will be paid on approval of FPQ for the

relevant years.

IDLE HOURS:--

The case for reimbursement on account for idle hours shall be considered based

on detailed inputs to be provided by the division.

DRE:--

All DRE expenditure incurred on tooling, Jigs and fixtures. Trainingforeign specialists. Design and development for tool designing project management

flatons and other preprodution expenses directly related to manufacturing overhaul

projects including license fee. However , this payment will be within the selling

approved for the project.

INTEREST:--

(a) WORKING CAPTIAL:-- The division is to project quarterly flow of funds based

on milestones in the last quarter of the preceding financial year. The fund projection

will be mutually discussed and agreed between HAL and IAF, shortfall in the release

of funds with respect to this requirement will attract interest at prevalent cash credit

rate from the time invoice for stage final payment is preferred till the date it is paid

with 5.5% profit per annum.

(b) FIXEDCAPTIAL:-- In respect of interest on fixed capital allocated by corporate

office ,the claims will be paid with 5.5% profit on quarterly basis based on the


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projected sales ratio provisionally and thereafter finally adjusted at the end of the

year based on certified accounts.

COMPUTATION OF MANHOUR:--

TOTAL EXPENDITURE

MAN PER HOUR RATE =

TOTAL MANHOUR

This is the whole description about IAF case. We are maintain the all type of

information about the bill receivable. Now we are showing the format of fixed pricequotation .

FOR EXAMPLE:-- THE FORMATHindustan Aeronautics Ltd. Product:--Kanpur Division Quantity:--Break-up of Fixed Price Quotation (Rs. In Lakhs)

Sl. No.

Particulars Kanpur DivisionLast year Current year


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.1

1.2

1.3

2.

3.4.5.

6.

MaterialImported--Raw material--Rejection[8%]--bought out items

--Rejection[1.5%]--Consumables--Rejection[20%]Sub- total-1.1

Indigenousi. Raw Materials

Rejection[8%0n (i.)]ii. bought out items

Rejection[1.5%on (ii)]iii. Consumable

rejection[0%on iii.]ATF and SACL items

[Chock and Covers]

Sub-total-1.2Total-(1.1+1.2)Freight and insuranceCharges 4% of-(1.1+1.2)Material cost-1Conversion costMan hours :MHR:Rs:Total-2

Sundry direct chargesTotal cost (1TO 3) Profit@10%/5.5% on NHPOH

Selling price


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S U M M A R Y

THE COMPANY

Hindustan Aeronautics limited (HAL) is a high technology Aerospace complex , the

largest of its kind in Asia, whose capabilities span the entire range of activities in

virtually all areas of aerospace technology. Over more than five decades of its

existence . It has established a broad based technological infrastructure and highly

developed manufacturing skills. With its corporate office located in Indias Aerospace

City Bangalore.

Hindustan Aeronautics Limited (HAL) is a leading aerospace company of India

engaged in design, Manufacture and overhaul of a variety of aviation products from

basic trainer aircraft to highly sophisticated Fighters, Bombers, Helicopters, Transport

Aircraft, their power plants, avionics, systems accessories and other Aerospace

products.

Since its inception in 1940, the company has grown in to a giant aviation

complex spread all over India and employing a versatile work force of about 39000

motivated, highly trained, skilled and experience personnel .Spread over 13 division

across the country.


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-:ORGANISATION STRUCTURE:--

CORPORATE OFFICE :--

Design Complex

Bangalore Complex

Accessories Complex

MIG Complex

DESIGN COMPLEX

1. Aircraft R&D center

2. Rotary Wing Aircraft R&D center

3. Engine Test bed R& D center

4. Strategic Electronic R&D center

5. Transport Aircraft R&D center

6. Aircraft Updates R&D center

7. Aerospace system and Equipment8. Gas Turbine R&D center

9. Center Material and Processes Lab and NDT center.

BANGALORE COMPLEX

1. Aircraft division

2. Overhaul division

3. Foundry and Forge division

4. Engine division

5. Helicopter division

6. Aerospace division


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7. Industrial and marine gas turbine division.

ACCESSORIES COMPLEX

1. Lucknow division

2. Korwa division

3. Hyderabad division

4. Transport Aircraft division

MIG COMPLEX

1. Nasik division2. Koraput division.

THE DIVISION

Kanpur division of HAL specialists in manufacture and overhaul of medium and

light category turboprop Aircraft. It was set up in 1960 to manufacturing HD-

748(AVRO) . A medium overhaul multi8role transport aircraft. Over the years, It has

vastly developed its infrastructure of Agriculture Aircraft (HA-31). Basic Trainer

Aircraft (HPT-32), 15-19 Seater multirole utility aircraft [Dornier] (DO-228) and a

variety of aerospace structure assemblie4s and component for both domestic and

international market.

Concurrent with the manufacturing activities Kanpur division has developed

extensive facilities for repair overhaul and modification of these aircraft as well as for


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about 400 types of rotables fitted on these aircraft . plans are underway to augment the

facilities for maintenance of other medium category aircraft.

Kanpur division production standards are up to the mark, this fact lies in the

sentence that it is a member of ISO-9002. To party and today it is consider a pioneer in

the field of manufacture and overhaul of transport category aircraft in the country

staffed with above 3000 suitably trained and skilled workforce .

THE DEPARTMENT

FINANCE & ACCOUNT :--HAL- KANPUR DIVISION

The finance department of the division is become one of the most important

department of the division . It is honestly performing its duties towards employees of

the organisation . Organisations customers and suppliers and also towards employer .

The whole department is mainly divided into various section viz.

TIME OFFICE

Keeping and maintaining records regarding the attendance and leave of the

employees.

PAYROLL SECTION

Engaged in maintaining the records the remuneration , tax liabilities, deductions

from salary and wages etc. of the employees.

CASH OFFICE


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Preparation of budget, maintaining the records of the department and preparing

the final accounts of the division.

The whole department is equipped with qualified professional like CAS and

ICWAS and providing their best to the company/ division and also engage in the

improving the system of work life computerisation of account / transactions etc.

.


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BIBLEOGRAPHYBIBLEOGRAPHY

1. ICWAI, JOURNAL- THE MANAGEMENT ACCOUNTANTVOL- 32, NO-6.

2. ICWAI, JOURNAL- THE MANAGEMENT ACCOUNTANTVOL- 31, NO-7

3. FIXED PRICE QUOTATION DOCUMENTS

HIDUSTAN AERNAUTICS KANPUR DIVISION .

4. MANUAL ACCOUNT- HAL(PUBLISHED ON MARCH 1986)

5. STUDY MATERIAL FOR CERTIFICATION TESTLEVELO AND A LEVELPART-IIVOLUME-1OF 4 VOLUME

6. A PROJECT REPORT.


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BILLS PAYABLE SECTION

Bills payable section is one of the most important section of FINANCE &ACCOUNTS department because of huge transaction. Bills payable section are divided

in to two parts :-

[1] Bills payable indigenous,

[2] Bills payable foreign,

The function of this section is payments of bills of supplies and services of the

Indian &Foreign vendors. Bills section because bulk of the component / material used in

Aircraft Manufacture is important from foreign.

INDEGENOUS BILLS PAYABLE

This section deals with the bills of the Indian vendors from whom Hindustan

Aeronautics Limited, Kanpur Division , Kanpur buys material / components for the

production purpose as well as for its own consumption e.g. stationary , maintenanceitems, capital goods , a consumables and bills of services nature such as Insurances ,

repairs, freight etc . This section deals with the following aspects o0f supplies &services

rendered by Inland vendors to the company :-

--- Payment and accounting of advances to suppliers,

--- Payment and accounting of advances to other vendors,

--- Payment and accounting of final bills,

--- Bank dealing with relation to suppliers,

---Adjustment/ recovery of advances,

--- Accounting/ adjustment of earnest money from work,

--- Accounting and pricing of Receipt Voucher heads of


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expenses of revenue/ capital nature.

--- Payment of bills for civil works and welfare expenses.

PAYMENT PROCEDURE

The payment of bills may be classified under following three categories :-

[1] 100% advance payment ,

[2] Payment against delivery/ bank documents,

[3] Payment of bills against credit supply,

[4] Running payment against various work contracts.

These terms and conditions of purchases of HAL,KANPUR arte mention in the

Purchase Order . This purchase order is prepared by the Purchase Department based on

MPR(Material Purchase Request) raised by stores/ user . In purchase order , the name of

vendor company , item number , description of material, unit purchase, rate ,quantity of

material, and value of order are mentioned. Various details furnished on purchase order

are as fallows :-

--- Price Quoted,

--- Scheduled Delivery of Material,

--- Sales Tax,

--- Payment Terms,

--- Despatch Instruction,

--- Inspection,

--- Addressee to whom the copy of the challan and Invoices,

are to be sent,

--- Special Instruction If Any.


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Two copies of purchase order is sent to the bills payable section . When material/

component reached at the stores , the store section prepares `Good Receipt Note in

which item number , description of material, and quality of material is mentioned . Store

section raises seven copies . The material is then offered to quality control inspection for

necessary inspection . The Inspector, after checking the material with reference to

specifications mentioned in purchase order indicates the Quality accepted / rejected on

Goods Receipts Notes. The Bills Payable section after receiving the GR note , prices it

item wise and payment of the bill is passed in favour of supplier companies . One copy

of GR note duly priced is forwarded to Material Accounts section .


--- Inland Purchase Journal,

--- Inland Services Journal,

--- Imprest Journal,

--- Advance Journal,

--- Insurance claims Journal,

--- Earnest Money &Deposit Accounts Register,


--- Advance to Supplier Register,

--- Miscellaneous Advances Register.

Documents

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