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INTERNSHIP REPORT

SUBMITTED TO

: Incharge (Trg. Wing) HRD

SUBMITTED BY

: Ayesha Saeed
Umair Usman Ghani

TECHNOLOGY

: B.B.A

NO. OF WEEKS

: Four (4)

PERIOD OF TRG. FROM

: 16-08-2010 TO 10-09-2010

NAME OF UNIVERSITY

: PRESTON UNIVERSITY

PREFACE

This report content the briefing of selected four departments namely accounts, marketing,
finance, and information system maintains of Pakistan Steel mill, which we have visited for the
purpose to understand the procedures which are follows in this corporation to run the daily
operations.
At the first part of this report, we address accounting department. In that department we got
briefing over bill section, advances section, taxes section, sales section, store section, cost
account section, funds section, final account section, and payroll section.
Next department, which this report will discuss about marketing. In which bi-product, dealership,
data coordination cell, research, and customer service sections have to be our focus of
discussion, where deem to be done from planning to price setting, and from selling to providing
services to the customers.
Third part of the report consists on finance department activities which include scrutiny section,
local L/C and foreign L/C, tendering activities, and procurement. They perform different task
related to budget allocation for new product and ordering existing product and investigating
about ongoing orders and purchasing activities for materials and other related things.
At last, we describe the Information System Maintained department working in brief way where
they follow ISO and maintain all Pakistan Steel mills departments data requirement and
providing them information. They are also making new programs according to the needs of
particular departments and giving troubleshooting service too.
Finally we ended up this report with suggestion for improvement and for further progress in steel
industry.

ACKNOWLEDGEMENT

We are very thankful from the core of our to honorable Chief Executive Officer, PAKISTAN
STEEL, for providing us opportunity for training and whos intelligent, wise and sound
leadership has converted manpower into wining combination by this industry into a Gold mine.
We wish to express our deep gratefulness to Mr. Nazimuddin Sahito, APEO (A&P) for his
consideration and supervision. It was a memorable time in Pakistan Steel due to his kind
concern.
We are also thankful to Mr. Engr. Nisar A. Khowaja, Incharge (Training Wing) and Mr.
Yousuf Ayub, Deputy Manager / Incharge (In-Plant Training) for his precious advice and for
the great encouragement and corporation, because of which we have successfully completed our
internship training at PAKISTAN STEEL where we learned a lot.

CONTENTS

Accounting Department ---------------------------------------------------------------------------- 1 - 15


Marketing Department ----------------------------------------------------------------------------- 16 - 20
Finance Department -------------------------------------------------------------------------------- 21 - 25
ISM Department ------------------------------------------------------------------------------------ 26 27
Suggestions ------------------------------------------------------------------------------------------ 28

ACCOUNTSDEPARTMENT

The Pakistan Steel Mills accounts department consist on nine different sections, and all of these
are describe below with their purpose and functions in detail.
1. Bills Section:
Bills section maintains all types of bills of Pakistan Steel related to all itsexpenses and utilities.
This particular section also divided into six parts to well manage all the bills. These sections are
described as follows;
a. Miscellaneous:Miscellaneous operate to record variety of small scale of bills such as
canteen, stationery, etc. They enter product code number, its date of payment,
quantity, and amount which had to be paid.
b. Medical: Medical section manages the doctors bills that provide their service to
Pakistan Steel employees. These doctors may or may not belong to assign panels of
Pakistan Steel but as the send their bill which will have matched with employee
request for medical facility. After that particular process the required amount will
paid to doctor by Pakistan Steel through cheese.
c. Import: In import, letter of credit, bills department receive ledger from finance
department, who mention to whom L/C has been opened. They record all the
particulars of the order both in manually and digitally, and issue bills accordingly.
d. Supplier: Here theyrecodeappliers bills, which product, amount, and quantity of the
product suppliers have been supplied to the Pakistan Still Mill and how much they are
obligated to pay them. They check all the necessary requirements for issuance of the
bills plus with past balance (if any) of the supplier.
e. Taxes: Taxes section just detected tax from the bills they have received from various
departments and make sure to tax payer that their tax to govt. of Pakistan has been
paid from Pakistan Still. All the taxes have been detected according to the current tax
rate issued by the govt. of Pakistan.
5

f. Terminal: The terminal in bill section support and it is in use of Information System
Management (I.S.M.) to provide vital information in order to make Pakistan Still
paperless organization. In it, they up-date all the bill section activities on mainframe,
from which all concern departments collects their information according to their need.
2. Advances Section:
Advances section providesa fix amount of money according to the expense. They handle all P.S.
(Pakistan Still) department according to their describe limits for the expense.
In odder to deal with various types of advances, advances section made three different types of
advance accounts;
i.

Imprest Account

ii.

Daily Expense

iii.

Advance Against Expenses

There detail is given as follows;


i.

Imprest Account: The need for Imprest Account was felt when the product was
needed on urgent bases and it was not available in store. So, it is such kind of urgent
or emergency account for allocating capital to requested department.
Imprest account work under account department, in which a certain amount of money
allowed to all departments within P.S. according to their emergency needed expense.
It works under certain cases when some product is urgently needed without that the
machinery will stop working and that product is not available currently in store. To
safe from stoppage of machinery and long traditional purchase through tender,
imprest accounts idea comes. In which concern department feels its request for
particular parts or product and submit it to accounts dept. who will allocate their
requested money accordingly.
In case of exceed request out of their assign limits for money; the beneficiary dept.
will have to get special permission from chairman.

ii.

Daily Expense:For the office purpose, if employee make tour to outside the office or
city or even country, then P.S. is obligatory to pay his or her visiting expense. To
coupe-up with this case Advance Section has made daily expense account which is
consist upon three different limits,
a. Regular T.A. & D.A. mean travel allowance and daily allowance. This facility
gives to employee when he/she travel and/or live outside office premises for job
purposes.
b. Transfer T.A. & D.A. means in the case if employee transfer from one city to
another city by the organization for work reasons, then organization will be
obligatory to pay him half of his basic salary. And if he is transfer with his family
then he will be paid in full his basic salary.
c. Foreign T.A. & D.A. for foreign visit, which is usually done by executives for
office work, P.S. will pay thoseallowances in dollar currency for their travel and
daily expenses.
Pakistan Steel mill also facilitate to their employee to avail them opportunity to take
advances, which they are obligatory to pay after fix time period. If they would not pay
after fix time limits them P.S. has the right to recover their advances from their salary.

3. Taxes Section:
Taxesare one of the big things for govt. to generate income. All over the world governments
charge taxes from all people living within their country through different ways to fulfill their
various expenses such as salary, infrastructure, security, etc. There are many kinds of taxes such
as income tax, sales tax, and excise duty. Some of them are federal taxes and some of them are
provincial taxes. Pakistan Steel mill, as the big producer in Pakistan detect different taxes before
selling the product to their consumers.
They are majorly dealing with two tax departments, which are explaining as follows;
i.

Income Taxes:When we talk about corporate income tax it means tax on corporates
earning. According to Pakistans income tax law, any corporate who generate profit
in a fiscal year must pay 35% as an income tax out of itsprofit.

In the case if corporate does not earn profit within its fiscal year then it will
obligatory to pay 1% tax on its Net Sales + Other Income.
As the P.S. is a big organization, and it has permission to detect taxes of it consumers
on behalf of government of Pakistan, so make tax collection efficient, P.S. pay taxes
to Federal Bureau of Revenue (FBR) in four quarters in a year. Pakistan Steels
income tax include

ii.

Advance-able Return

Salary Taxes (above Rs. 25,000/-)

Customers Purchases

Sales Taxes: Sales taxes charge on three months notes on Credit Receive-able when
the debit is.

Refund only related items to finished products after chemical examination.

Sales tax and excise duties are refundable but custom duty is not refunded.

4. Funds Section:
Pakistan Steel as a responsible organization and working in the benefits for all its stakeholders
including industry, country, society as well as for its employee. As it recognize and appreciate it
employees efforts to take P.S. on major identifiable position in countrys welfare, it provide
them various kinds of funds to support them financially. There detail is given as follows;
i.

Provisional Funds: Provisional fund is a kind of fund which works like a saving
account for only permanent employees not for contract daily wages personal. In this
account 10% of employees basic salary detected and deposited into it, this amount of
money employee can take any withdraw anytime.

After passage of three years organization will also contribute same amount of money
which is equal to his/her 10% basic salary.

[Note: Employee would not allowed to withdraw those amount out of money from his/her
P.F. which is contributed by firm, this will only given to him on his retirement.]
Employee has two options when he is opening his P.F. account, with interest or not.

1) In the case of interest, if employee withdrawsP.F. 9% loan then on that particular


amount of money and not submitted within one month then 4% interest rate will be
charge and this will gradually increase till fully not submitted.
On the other hand the benefit of interest account is that on P.F. interest also increases
saving money of the employee.
2) On the other side, where employees P.F. account is not on interest benefit. Then it
will be simple account on which no interest charge on taking loan and/or no any
increase in saving money.

Another point of attention is that when employee pass 50 years of his age and
withdraw money from P.F. then it will be non-refundable.

ii.

P.F.maximum requires 48 installments.


Welfare Fund: The purpose of welfare fund is to facilitate its members to avail loan
without charging interest. The amount of loan is separated according to the position
or grade of personal.
a. Rs.30, 000/- for under 16th grade personal which will recover with Rs.1, 000 /installments per month.
b. Rs.60, 000/- for above 16th grade personal which will recover with Rs.1, 500
/- installments per month.

Welfare fund also give Rs.35, 000/- to dependents on the death of his member.

Membership of welfare fund is only available to the percentemployees of P.S. it are


not for contract and daily wages employees.

There are three options available to refund loan, it can be submitted through;
a) Cheque
b) Payroll
c) Voucher

iii.Benevolent Fund:
Benevolent fund means the amount of money given to dependents of the employee on his/her
death which occurs during period of employment. The purpose of benevolent fund is to help

employees family financially on his death and give feeling of security to employee during his
employment.

Benevolent funds facility is only available to percentemployees; this facility is not for
contract and daily wages employees.

Benevolent Funds for Officers

The distribution of the amount of money is categories in six different categories according to
employment grades, which is given below;
i. Junior Officer

25

ii. Assistant Manager

30

iii. Duty Manager

35

iv. Manager

40

v. Duty General Manager

45

vi. General Manager & Above

50

There are certain pay range limits are describe from which the fix amount for benevolent
fund will be detected for officers which is describe below;

Pay Range

Monthly Benevolent

Rs.2001 to 2500/-

Rs.990/-

Rs.10001 to above

Rs.4260/-

[Note: Benevolent fund is only given on occurrence of the death during working period. It is not
given on natural death.]
Benevolent Funds for Workers
For workers benevolent funds range is;
i. Workers

25-35

There are certain pay range limits are describe from which the fix amount for benevolent
fund will be detected for workers which is describe below;

10

Pay Range

Monthly Benevolent

Rs.2000 to 5001/-

Rs.700 to 1100/-

[Note: Benevolent fund is available for all workers but they must qualify 180 days job without
leave.]
iv. Worker Profit Fund:
Worker Profit Fund (W.P.F.) means corporate profit will be share with workers at the end of the
calendar year.

W.P.F. only given on the condition when corporate earns healthy profit.

It is some kind of bonus, which is given to every personal according to their basic salary. For
this purpose a committee sits to decide the distribution of it.

This is distributed through bank vouchers.


v.

Worker Education Fund:

Pakistan Steel mill has categorized its workers education funds for their children are according to
their position in three different categories;
i.Worker

Rs.25/- per Month

ii. From Junior Officer to Director Manager

Rs.50/- per Month

iii.Manager and Above

Rs.100/- per Month

For Officers W.E.F. is not allowed.


vi. Gratuity Fund:

Graduated fund means the specific amount of money given to the employee on his retirement.
There are some criteria for distribution of graduate, which is describing as follows;

Gratuity is the sum of the last 5 years basic pays of the officer.

For staffgratuity is count on his last 3 years gross pay. (Gross Pay=Basic Pay + Allowances).

For employees gratuity charge on his 1 year or 6 months last salary withdrawal.

[Note: Gratuity will not given on dismissal of the employee]

11

In the case of death the loan which is given to employee will be recovered from graduate or
Provisional fund or insurance,if any.

Gratuity is only given to parmenantemployees not for contract and/or daily wages
employees.

Function of Gratuity Section:


Gratuity section work is to check employees loan or any recovery remain or not, if any, then
detect and allocate gratuity.
This section first asks all departments within the steel mill that how many employees are
working in their department. After receiving quantity they will make gratuity for all of these
employees for that particular year and ask that particular amount of money from Pakistan Steel
mill.
As all employees will not retail on that year, the remaining amount of money of gratuity will be
invested in banks. For that purpose a 5 members committee sat for this task in which 2 are
sectaries and 3 are trustees, who will find the best deal to invest that particular amount of money
for suitable time period. The trustees must approve interest rates.
5. Payroll Section:
The payroll Section mainly deals with the salaries, allowances, loans and advances, full and final
settlement of employees at the time of retirement, resignation or filing, income tax and other
deductions from employees salaries, deposit of deducted income tax in government treasury,
etc.
The Manager Payroll is heading this section. He is granted with unlimited authority over
approval of monthly salaries of the following categories of employees:

Permanent Employees (including staff and officers)

Contract Employees

Daily Wages Employees

Deputed Employees (posted to Steel Mills from Federal Government)

Responsibilities of Payroll Section


12

The scope and functions the Payroll Section may be summarized as follows:

Payroll processing of Daily Wages Employees: Daily wages employees are appointed
by the Administration and Personnel (A&P) Department. The Payroll Section receives
the details of daily wages employees from respective departments and processes their
salaries.

Payment and Deduction of Loans and Advances: Employees are provided with loans
and advances against their salaries. These granted loans are secured against the
employees provident and gratuity fund balances. The Payroll Section receives details of
the loans and advances and initiates the payment process that ends with preparation of
cheque by Cash Section. The granted loans are deducted from the employee monthly
payroll in installments over a defined recovery period.

Payroll Processing of Employees:Payroll processing is completed as per the salary


program/ schedule prepared in advance. Payroll Section complies the attendance data
received from various departments and processed it with the help of the ISM Department.

Reconciliation of Payroll Subsidiary Ledgers: The ISM Department provides


subsidiary ledgers to the Payroll Section. The payroll Section compares these ledgers
with the control accounts and reconciles the both.

Monthly and Annual Income Tax Returns of Employees: Income tax is deducted at
source from the salaries of employees and deposited in government treasury on monthly
basis. Payroll Section prepares the annual income tax returns of the employees for
subs\mission to tax authorities.

Full and Final Settlement of Dues of Outgoing Employees:Full and final dues of
outgoing employees are calculated by the Payroll Section. The positive balance is paid to
the employee whereas, the negative balance (if any) is recovered from the employee or
from the provident / gratuity fund balances.

6. Final Account:
There are also three types of cells used to avail the financial support to any employee or
department of the organization in different conditions.
1) Fixed cell

13

2) Current cell
3) Finalization cell

Fixed Cell
There are two type of fixed cell:
a) Moveable: Such as machinery, etc.
b) Immoveable: Such as Building and Land.

Current Cell
It deals with cash that what cash is going out from organization and what is coming in.
For e.g.: - Inventory is a current cell and also deals with the inventory that how many inventories
are remains in the store.
Finalization Cell
Profit and loss are deal there; the balance sheet is prepared here, cash flow Statement, budget,
profit and loss statement, sales and revenue.
VOUCHER
There are three types of vouchers.
1) General Voucher
2) Cash Receipts Voucher (C. R.)
3) Cash Payment Vouchers (C. V.)
Fixed Accounts
There are some types of fixed account
K1 = Land
K2 = Factory and Building
14

K3 = Non FactoryBuilding
K4 = Plants
K6 = Computers and Hardware
K7 = Vehicles
7. Store Section:
Store section in accounts department do only recording works of all the stores items. In Pakistan
Steel mill, there are total 7 stores. All stores are allocated according to their concern department
or plant. The purpose of creating stores in P.S. is to provide all necessary products to concern
department on time when they need them without losing of time.
In order to run the store and it up-to-date, there are certain procedure has been followed, which is
describe below.
1. First of all Material Management Department (M.M.D.) check demand of every
departments demand for their concern products. And then issue annual Material
Inventory (M.I.) of that departments required quantity and inform this to store
department.
2. M.M.D approval goes to purchase department and then they will publish tender for
required material.
3. Central Receiving Bureau (C.R.B.) receive all the material for S.M.
4. After that Material Receiving Voucher (M.R.V.) issued to the qualified tenderer.
5. Then Material Receiving Report (M.R.R.) issued after inspection will be done by P.S.
inspectors to check the specification of the required material.
6. As the M.R.R. given then payment will be made through bill to supplier.
7. As soon as the material arrive into the store C.R.V. send to Concern Store (C.S.) through
M.R.R. in order to allocate its material.
The material has been allocated according to the Racks then Alphabetical Order and in last
according to the Code Numbers.

15

8. Before issuing material C.S. check M.M.D. of concern department. And there are three
S.R.s copies issued one for receiving end and one for issuing end and last for recording.
9. To maintain the required amount of material not in excess or short form, there is an
Internal Verification Cell has been created to check store stock material quantity. And
this check is done two time in a month.
10. Stores Account Section is responsible for valuing the raw material and spares at the time
of receipt and issuance from the stores.
11. They also update raw material and spares issue, transfer, return and adjustment made by
respective stores. And on the bases of that they make value assessment of parts and
material.
12. Store classified raw material and spares as follows;
a. Stores and spares for ongoing maintains of plant and manufacturing by third
parties.
b. Common user items such as stationery.
c. Uncommon items.
13. Allotment of change account codes to all user departments for material issues from stores
and allocation of expiry.
14. To allowed meeting of Reserve Price Fixation Committee Tender and Maintained of
related record site.
8. Sales Account Section:
As the Pakistan Steel mill is the largest steel producer in Pakistan. So, it sale its products to
wholesalers. In order to sales, the sales record maintained by sales account section.
To purchased steel products from P.S. there must be Traderor Consumer dealership.
1. Trader Dealership: As the traders are reseller or they may convert the form of the P.S.
finished product and sale to end-user. For that purpose P.S. give them commission or
Rebate. P.S. also take security deposited for dealership to ensure his safe hand from any
future deal problem.
2. Consumer Dealership: Consumers are end-user of

P.S. finished products. They

transform P.S. product into their finish product for their own use such as car
manufactures. In the case of shortage of product and order come from both trader and
16

consumer, then P.S. first prefer consumer because consumers are wholly depend on P.S.
product and P.S. does not give any commission to them.
There are four types of accounts to handle different situations in P.S. which are given below;
i. Advance Account:Before plotting order from customers, P.S. take advance from dealer.
And after order has been given the Delivery Order (D.O.) will be issued in the Invoice
form.
ii. Cash Account: Deal for cash account done by Zonal Sales Office.
iii. Security Account: To bond dealer on their order so that they will never return after
placing order or lift their material on time, P.S. make security account for this.
iv. CreditAccount: In the case of specified amount by dealer does not fulfilled, it may be
short or excess lifted sometime, to tackle with this problem P.S. make credit account in
which the remaining amount of money might be refunded or adjusted in future deals, on
dealers request.
9. Cost Account Section:
Cost Account means the costing of all expenditure in P.S. They make profit and loss report on
monthly and yearly basis which will given to managers and ministry and for audit.

Process Costing: In which some products are finished goods which are produce to sale
while others are for internal use.

They calculate the cost by adding fixed cost + variable cost + production cost + wastage
cost.

For costing, data are coming from different departments such as quantitative data given
from Production Department. And financial data taken from Final Accounts from there
profit and loss account through M.I.S and other are comes from Salary and Sales Section
and utilities consumption given from Monitory Department.

Stores account givesconsumption report and other information comes from Production
Unit Department.

Miscellaneous quantity comes from production unit given by M.I.S. process.

Depreciation information given by Final Accounts.

Costing on actual consumption bases.


17

Information from cost account goes to Production, Marketing, and other related
departments and ministry.

Job Order costing calculate the value for sales.

Functions:

This section has specific functions to prepare Monthly Operating Results (M.O.R.s) of all
productions complexes and scrap shops.

Job Order Costing system is applied for calculation and valuation of job cards of all C.M.D.
clops and Personal Electric Relationship System (P.E.R.S.).

Preparation of cost sheet of S.M.C. lhr.

Service costing of various cost centers.

Section is also involved in billing of electricity settlement of accounts between K.E.S.C. and
P.S. and generalizing sales and purchase of electricity.

Finished Stock Accounting is one of the core functions of this section which involves
preparation of inventory position on monthly and annually basis reconciliation of finished
goods as well as work improves inventory and maintains of record related stock accounting.

C.M.D.: Two methods of costing


1. Seven types of shops for maintain.
2. They receiving Job Card in which Job is written, materials used in it, machinery used in
it, labor used in it is all written. Then they calculate cost of the product.

Seventh shops are;


i.Electrical
ii.Mechanical

iii.Fabricated
iv.Material
v.Repaired and Maintained

Every shop send their Job Card on monthly bases.

The basic purpose of cost is to control the cost of the product. They also make Journal Voucher
which is also called Ledger. Final Account give them actual cost after finding difference in
applied cost.
18

At the end, final and management through profit and loss account. Profit/loss account make two
things whether increase in C.O.G.S. or decrease.

19

MARKETING DEPARTMENT

INTRODUCTION

Pakistan steel is the only integrated metallurgical complex of the country.

It provide techno economic base for the development and growth of engineering and
construction industry

Established with the collaboration of the former USSR.

Designed capacity of 1.1 million tones per annum with potential up to 3.0 million tones
per annum.

Based on the utilization of high grade imported iron ore and metallurgical grade coking
coal.

Commissioned in stages between April - 1981 to august 1985

PRODUCTION UNIT OF PAKISTAN STEEL

UNIT

CAPACITY (0000 TPY)

DATE OF COMMISSIONING

Coke Ovens and By-Products

970

April 1981

Iron Making

1230

August 1981

Steel Making

1100

December 1982

Billet Mills

260

October 1982

Hot Strip Mills

790

December 1983

Cold Rolling Mills

200

December 1984

Galvanizing Line

100

August 1985

MAIN PRODUCTS

Coke
20

Pig Iron/ Hot Metal

Cast Billets

Rolled Billets

Hot Rolled Sheets/coils

Cold Rolled Sheets/coils

Galvanized Rolled Sheets/coils

MARKETING AND SALES SETUP

in order to ensure smooth flow of Pakistan steel products and to cover promptly and effectively
all activities relating to the customer, Marketing and sales has been organized purely on
commercial lines with zonal sales offices at Karachi, Lahore ,Gujranwala and Islamabad under a
centralized control of Marketing Department of Pakistan steel at Bin Passim..
MARKETING AND SALES SETUP

MARKETING
DEPARTMENT

ZONAL SALES
OFFICEKARACHI

ZONAL SALES
OFFICE LAHORE

ZONAL SALES
OFFICE GUJRAWALA

21

Pakistan Steel
Products Store

ZONAL SALES
OFFICE
ISLAMABAD

ON-LINE COMPUTER SALES

THE zonal sales offices organized on modern lines using computer facilities to promote
sales , provide one window operation to the customer

Available computer facilities have been utilized to develop ON LINE COMPUTER


SYSTEM for the production and marketing and sales activities

ONLINE COMPUTER SALES SYSTEM

The Customer

PSPS

On Line

Computer

Customer Services at ZSO`S

Marketing
Department Bin
Qasim

Production Planning
Department

Production
Units

DOWNSTREAM INDUSTRIES

Pakistan Steel has been making promotional efforts for establishment of downstream industries
in the private sector based on utilization of its main and by-products.
22

Pakistan Steel has created a fully developed industrial estate within its periphery for the benefit
of the entrepreneurs.

The downstream industries are basically producing value added engineering goods such as steel
pipes (small, medium and large diameter) including seamless pipes wire rod & bailing hoops,
light & heavy vehicles small sections, reinforcement bars, slag cement, slag wool, automotive
parts etc.

CONTRIBUTION TO NATIONAL EX-CHEQURE

Pakistan Steel has been contributing to the national exchequer in a big way. Since the
commissioning of the Mills, over Rs. 28.0 billion have been paid to the government in the form
of Duties & Taxes, as compared to its cost of Rs 24.7 billion. It causes saving of above one billion
dollars in foreign exchange annually.

In short, a project of the size and magnitude of Pakistan Steel, if established today, would cost
more than Rs 150 billion and its cost having already paid, Pakistan Steel stands as bonus for the
nation. Apart from other innumerable collateral benefits, such as attainment of Steel
Technology, having acquired skilled manpower, and a source of employment of thousands of
families.

DEALERSHIP NETWORK
The sale of Pakistan Steel Products is channelized through Dealership Network. Dealerships
are offered in the following categories against refundable Security Deposit.
Security Amount
>Category

Coke,

Pig

Iron

and

By-Product

Rs.

100,000/-

> Category B Billets and Long Products

Rs

150,000/-

> Category C Flat Products

Rs

350,000/-

Production and quality control


An increasing trend in production has emerged on sustained basis. By creating quality
consciousness among the employees and through introduction of proper documentation, right
from the raw-material stages up to finished state, rejection rate have decreased considerably.
23

Vigilant quality control, during the production process, has shown marked decline in
customers complaints for quality. Quality complaints are attended immediately by the
representative of Customer Service Team. All-out efforts are made to settle quality
complaints within fifteen (15) days.

24

FINANCE DEPARTMENT

Tender
Bidders are invited to submit quotations on C&F/FOR Bin Qasim, Karachi basis (For only local
manufacturers for the products produced by them). In Case of FOR , the tender documents will
only be issued to the interested parties who are registered with Sales Tax Department and will be
required to submit photo stat copies of Sales Tax Registration Certificate at the time of
purchasing tender documents.
Please collect the tender documents on payment of Rs. 300/- each (non-refundable) in the form
of pay order / bank draft in favor of PAKISTAN STEEL from the following offices of
PAKISTAN STEEL.
Purchase Department,

C&F Purchase Department,

Zonal Sales Office (Central),

Barrack No.7,

FTCBuilding,

42-A, Zafar Ali Road,

PAKISTAN STEEL,

Shahrah-e-Faisal

Gulberg,

BIN QASIM, KARACHI

KARACHI.

LAHORE

Zonal Sales Office (North),

Zonal Sales Office (Central)

48 Atta Turk Avenue,

UnitTrustPlaza,

Sector G-6/3,

GDA Complex,

ISLAMABAD.

GUJRANWALA.

Tender documents are to be dropped in Tender Box available in TOC Room-13, Barrack-7,
Purchase Department, Pakistan Steel, Bin Qasim, Karachi, before 10:30 AM which shall be
opened there at 11:00 AM in the presence of bidders who may like to attend.
It is further advised that case number and opening date be clearly mentioned on left top corner of
envelope.
Note: With special Terms & Conditions, Tender Fee Rs. 300/25

Budgeting
Budget is prepared each year covering the period from 1st July to 30th June. The budget exercise
is started well before the start of financial year. All the production and service departments are
advised to submit their estimates with full justification.
The process of budget making is explained as under
i) Production plan indicating the production of various steel products during the year is indicated
by the Production planning & Control Department (PP&C). Based on the production plan, The
tentative shipping schedule for import of bulk raw materials i.e. coking coal, iron ore and
manganese ore etc.; is prepared by PPC in consultation with the shipping department.
ii) Sales plan indicating quantities, price and value is submitted by the marketing department for
estimating the sales value.
iii) The quantities of raw materials required for achieving the production plan are calculated
taking into account the consumption norms indicated by the designer of the plant as well as the
past experience.
iv) Pakistan steel has concluded long-term agreements with foreign suppliers (for a period of 5
years) for supply of bulk inputs i.e. coking coal, iron ore manganese ore etc. . The prices of
theses inputs are reviewed each year effective 1st April. Similarly, contracts for transportation of
these inputs are concluded with shipping companies each year. The materials cost is worked out
on the basis of contracted rates of raw materials and its transportation.
v) The consumption of utilities i.e. natural gas, electricity, water, POL etc. is determined keeping
in view the level of production/available current norms of consumption. The utilities are valued
at prevailing prices plus anticipated future increase in rates.
vi) Personnel related cost, repair and maintenance, depreciation; overheads etc.; are estimated on
the basis of actual/past experience and anticipated future increases in such expenses.
vii) Based on the above data, the budget is compiled and the projected profit and loss and cash
flow statements are prepared.

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viii) The budget so compiled is submitted to the steel mills management for review. After
clearance of the budget by the management, the same is submitted to finance committee of the
board for consideration and approval in the first instance. Thereafter, it is finally submitted to the
board of directors for their consideration and approval.
ix) The budget approved by the board of directors is circulated to all the concerned departments
with the advice to strictly adhere to the budgeted provisions.
Financial Scrutiny
1. Initiation of case by the respective department e.g. Billet Mill
2. Noting of fund through Finance.
3. Preparation of indent by MMD.
4. Approval of indent by competent authority
5. Tendering by purchase department
6. Technical evaluation by the respective committee.
7. RRC (if required)
8. Preparation of Purchase Proposal by the Purchase Department.
9. Processing of the case for financial concurrence by the Finance department.
10. Issuance of PO by the purchase department.
11. Billing.
12. Cash payment.
Letter of CreditSection
Functions:

Establishment of foreign and local letter of credits through commercial banks.

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Scrutiny of purchase orders / contracts / letter of awards received from purchase / ECD /
BMD / BMR&E and other departments for establishment of LC in accordance with the
financial approval / concurrence by the competent

Maintain letter of credit opening register

Request the ministry of finance for release of foreign exchange on bi-annual basis against
total approved annual foreign exchange budgetary allocation.

Classify code number of imported items according to international trade control number
(ITC) schedule / import policy, and obtain confirmation from C&F department for ITC
code.

Submit LC opening application forms duly filled in accordance with the terms and
conditions of the purchase order, letter of award and contract.

To check LC establish by respective bank

Arrange confirmation of LC by foreign banks if allowed

Incorporation of amendments in the LC from time to time as desired by respective


departments supported with amendments to purchase orders, letter of awards and
contracts ant its approval from competent authority

Request cash section to arrange funds with bank for retirement of documents

Collection and checking of original shipping documents duly retired by bank and its
distribution to C&F and all respective departments for clearance of imported
consignments

Preparation of cash/debit voucher in respect of opening of LC(s), amendments and retired


documents after obtaining debit and Credit advises from cash section.

Maintenance of record in respect of item-wise foreign exchange allocation, utilization


there against and balance available for utilization along with its time to time
reconciliation with SBP.

To maintain and on serve record pertaining to shipping schedule of raw material LCs
(Coal, iron ores and manganese ore) issued by production planning and control (PP&C)
department.

Obtain confirmation of Shipment obtained by BMD from Coal and iron ore suppliers.

Obtain approval of Annexure-I from the state bank of Pakistan to establish letter of
credits for imports
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Prepare and maintain record of item and value wise imports during the years.

Checking of foreign experts salary invoices and arrange monthly remittance after
obtaining permission from SBP

Examination of cases received from Secretariat / Protocol departments pertaining to


claims of excess bagged, Air Tickets etc.

Arrangement of foreign exchange covers for official visit abroad

Maintenance of records / register of foreign exchange for invisible payments.

Obtain approval of Annexure - I from the state bank of Pakistan to establish letter of
credits for imports.

Arrangement of foreign exchange remittances with regards to subscription fee, of


periodic journals, books, etc. After obtaining permission from SBP.

Examination of Documents required by suppliers directly or through concerned


department according to PO / contract / letter of awards.

Out-door follow-up cases with commercial banks, state bank and other related
departments in connection with establishment of LCs) etc.

Obtain approval from gm. finance for nomination of bank for opening of LC(s) on the
basis of volume of LC amount and according to seller nomination.

Check dispatch / demurrage calculation of BMD

- shipping department before

enhancement of LC (s) of freight

Obtain acceptance of discrepant document from purchase , ECD and

BMR&E to

onwards submission to bank for retirement of documents for clearance of consignment

Foreign exchange budget

Provide expenditure incurred against invisible payment to budget section for preparation
of FE budget of invisible and import.

Maintain record / register of foreign exchange for invisible payments.

Price of Coal, Iron Ore & Manganese Ore

Examination of cases received from BMD regarding revision of prices according to


contract and ascertains approval and concurrence from chairman (Pakistan steel) and
director (finance)

Function And Procedure Of Cash Section

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CRS Sales Collection:


Receipt of instrument and issue of Cash Receipts is carried out by concerned ZSO under on line
arrangements. A daily Cash Book to the effect is received regularly through MIS, by succeeding
working day. Copies of CRS are afterwards received with in one to three days. Amount on
realization is transferred to Current Account of Pakistan Steel.
Documents Prepared:
CRV/CV (Adjustment) signed by the Sectional Head
Amount without limit Scrutiny of CRS, on Receipt of Bank Statement, the amount of CR is
matched with the Bank Statement
Auction
Amount of Official Auction of the item declared for the purpose is collected through the Bank
Account with ABL in control of Store Department. The amount collected by the Bank in this
connection is transferred to Pakistan Steel Account as per advice from Stores Department by way
of letter to the bank copy of the same is endorsed to Cash Section. On receipt of the letter, bank
transfer the amount to the Main Account of Pakistan Steel and issue Credit Advice. Credit
vouchers are passed for incorporation in Books of Accounts.
Payments
i) Employees -Payment vouchers received from Pay Roll, Bills, Advances,

Final Accounts, and

Sales Accounts are entered in relevant Register.


Cheques are prepared signed joint by the signatures.
Cheques are collected by the payees on their identification.
Authority for approval of P.A.C.V.
ii) Cheque signed by authorized officials. Payments Petty Cash an amount of Rs.50, 000/- is
kept in Petty Cash, CRV/CVs are raised and signed by Sectional Head cheque is signed by the
authorized officers.
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iii) CRV/CV/Cheques signed by authorized officer physically cash is matched with daily Cash
Book Computer Based. Soviet Expert Salaries Note to the effect is received from Finance
Department, Voucher is prepared by Cash Section, voucher on the basis of note from Finance
Department, is signed by Sectional Head, Cheque is prepared and signed by Authorized
signatories.
iv) CV amount as per Finance Note. Corporate Secretariat payment Note is moved by Corporate
Secretariat regarding filing fee for, nomination of Directors of Board of Directors, payment
relating to Security Exchange Commission of Pakistan. A voucher is prepared in the light of the
Note. Cash is sent to Corporate Secretariat for depositing the amount for the purpose.
v) CV amount limit Rs.20, 000/- signed by Sectional Head Amount of note and deposit challan
is matched. Refund of Security Deposit Request through Purchase, ECD, BMD.

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INFORMATION SYSTEM MANAGEMENT DEPARTMENT

ISMD offer two systems to marketing department to operate its data, and these system are;
1. DB2 (Data Base-2)
2. Flat File System (VSAM)
Computer System Bureau:
1. Quality Policy: At CSB our policy is to provide our customer high quality service with
100% on time delivery and ever in growing level of satisfaction through our proactive
and dynamic team of IT. CSB is dedicated to continualimprovement.
Internal Working System:
2. Purpose: It is to define quality plan and systematic activities carried out at different
sections of CSB for providing data processing services to various departments.
General Activities:
At CSB, to perform all activities in efficient way, there work is conducted in two shifts which
handle seven sections. And all there activates are given as follows;
1. Application Development:
a. System analysis, and analyst programmer
b. Developing new system
c. Maintenance of operational system
2. System Operation/D.B.Admin:
a. Responsible for smooth functioning of mainframe and database
b. Installing hardware and configuring
c. Problem handling and trouble shooting
3. Network Admin:
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a. Installing terminals
b. Monitoring network performance
c. Complaint handling
4. PC/Logistics:
a. Personal Computer
b. Printer and scanner
5. Data Control:
a. Smooth flow of Input and Output
b. MIS report produced
6. Data Entry:
a. Proper and timely key punching with space and accuracy.
7. Admin:
a. Attendance and absentee report and leave records of CSB employees.
b. Computer maintenance charge bills
c. Annual department budgeting and inventory.
Account and Sales Data Control:
Virtual Systems Exercise Management (VSEM) save data at tape, provide General
Journal, Trial Balance, Expense Breakup, Profit and Loss, General Ledger, Subsidiary
Ledgers, Schedule if F.A, Sub ledger, Trial Balance, MIS at requirement.

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SUGGESTIONS

As we have spend good time at Pakistan Steel mill to learn practical work life. And this learning,
obviously, benefits us in our future career. Through this learning we observe some pros and cons
when working in Pakistan Steel. So, we would like to give our suggestion for the improvement
and creating it dynamic organization. These suggestions are as under;
Although accounts department performing well and putting fine efforts to coordinate
between paper and paperless system. We suggest that there are as already infrastructure build
for computer networking but it is not completely utilizing in the way it can perform. So, as
the latest development allows us to facilitate our firm from efficient working softwares to
give greater productivity than we should use them.
Apart from that we have not visited A. & P. department but perhaps we feel to share our
observation that Pakistan Steel need to give attention to there employee in-terms of their job
satisfaction. And this not only comes through financial reward but also through placement
and the quality and quantity of work conducted from them.
There is also need for up gradation in finance department way of processing work. There are
highly recognized and reputable softwares and programs are available in the world market
which can give better service to increase productivity ten times such as Orical, Microsoft,
and other ERP program can facilitate firm and employees as well.

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