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INTERNSHIP REPORT ON FICO ELECTRIC (PVT.) LTD.

MBA (Semester 4th)

Name of Internship AssessorSignature of Internship Assessor

Detail Page Table of Contents

EXECUTIVE SUMMARY..06INTRODUCTION07OVER VIEW OF ORGANIZATION..07PESTL ANALYSIS.10 ORGANIZATION STRUCTURE...11 INTRODUCTION OF ALL DEPARTMENTS..12WORK DONE BY ME.14WEEKLYTIME TABLE...14SWOTANALYSIS16CONCLUSION.17 RECOMMENDATIONS 18 REFERENCES...................................................................................................................19

Acknowledgement

Simply put, I could not have done this work without the lots of help I received Cheerfully from whole management of Fico Electric (PTV.) LTD. The work culture in Fico really motivates. Everybody is such a friendly and cheerful companion here that work stress is never Comes in way.

I would specially like to thank to may Supervisor who is the Chief Accountant Sir Aftab Ahmad and also the General Manager Syed Muhammad Haider and Purchase Manager Sami Ullah Mohsin for proving the nice ideas to work upon. Not only did they advise about my project but listening to their discussions during the work has evoked a good interest in Image analysis. I am also highly indebted to Assistant Accountant Waqas Mir and Cashier Imran Hanif, who seemed to have solutions to all my problems.

DEDICATION

I DEDICATE THIS REPORT

To Holy Prophet Hazrat Muhammad (P.B.U.H), to my Parents who financially sport me, without their help Iwill not be able to complete my MBA Finance as well as my internship report.

INTRODUCTIONFico Electric (PVT) LTD was the part of Fico Hi-Tech. Fico Electric (PVT) LTD is a well known organization in Pakistan. Before the establishment of Fico Electric (PVT) LTD. There were three owners of Fico Hi-Tech. All of three was brothers. When Fico Electric (PVT) LTD comes into existence at date of 01-july-2011, two brothers take the ownership of Fico Electric (PVT) LTDThese two brothers choose the products to be manufactured was the 11-20 KV current transformer and 11-15 voltage transformer. And the sales of these two products in the Fico Hi-Tech were the 66% among all the products manufactured. Fico Electric (PVT) LTD is a manufacturing organization. My Aim in Fico Electric (PVT) LTD is to get check and find out the practical knowledge of whatever I studied. The objective of this is: Who much this company follow the rules of the business To attract the management in respect of my capabilities To check the implementation of bookish knowledge To get MBA(Mastersin commerce)degree.

OVERVIEW OF THE ORGANIZATIONHistory FICOwas established in 1952 with name FAIZI INDUSTRIES and was incorporated as a Private Limited Company in 1985. Since then FICO is involved in manufacturing of Switchgears, Control Gears, Distribution Protections and Measuring Equipments. FICOis associated with the group of companies comprising of M/s Climax Engineering. Co. Ltd, Faizi Brothers, Aziz Steel Mill and Aziz Electric Co. These Companies are playing a key role in development of Industrial sector in Pakistan. FICOmade revolutionary developments with its wide range of well-designed and engineered Distribution, Protection and Measuring Equipments and also meet all parameters of International Standards. FICO focused its all efforts to produce highly reliable and quality product to compete relevant competitive products. Within short spanFICOwas considered as the Name of Guarantee. After achieving an honorable position in the economy FICO started manufacturing of Low Voltage & 11 KV Medium Voltage Current Transformers with great zeal and zest during the year 1985 by their own experience and research. The continuous struggles and aim to produce best quality product resulted high demand of FICO make LV & MV Current Transformers.In 1995 the name of FAIZI INDUSTRIES (PVT) LTD was replaced by FICO (PVT) LTD and during the year 2002 FICO (PVT) LTD was bifurcated to further two separate companies, based on nature of its products, with commitments to make entire efforts for development, improvement and best quality of their particular products according to International recommended standards:1. FICO HI-TECH (PVT.) LIMITED(For Fuse Switches & Dropout cutouts etc).

2.FICO ENGINEERING CO. (PVT.) LIMITED(For LV & MV Switchboard etc).

3. FICO ELECTRIC (PVT) LIMITED(For Instrument Transformers)

A brief introduction of FICO Electric (PVT.) LTD. is as under: Technical StaffIn order to maintain the quality assurance according to the international standards, the company has hired the services of qualified Engineers, Technical staff and Skilled Workers.

Plant and MachineryCompany has installed modern, sophisticated machines, equipments and instruments to meet all parameters of Electrical and Mechanical areas according to International Standards. In addition to the above Company have in house facilities of Casting Electroplating and Hot Dip Special Galvanizing at its own works.Testing FacilitiesCompany has privilege on having a well equipped laboratory comprising the worlds most latest testing instruments to perform all routine & quality control tests and also all others particulars tests verify and test the standards of its products in accordance with the international as well as the required standards of our local valued customers i.e. IEC, ANSI, BS, WAPDA and KESC.

Products CertificationsFICO Electric (PVT) LTDis very much enthusiastic to verify the quality and standard of its products, therefore always keen to get it product certified from international independent labs like KEMA Holland, HV/SC Rawat, Pakistan, RTL Faisalabad, and UET Lahore.Product RangeResin Casted MV Instrument Transformers i.e. Low Voltage Current Transformers (LVCT) Import businessFico import instruments from the china and Thi-land which are used in the manufacturing of transformersNature of the BusinessNature of Business is Manufacturing. This company produces transformers which use in production of electricity. Reward honors & success storiesIt is the reward for FICO-Electric that it is delivering the products to multinational companies such as Siemens Engineering Company of Germany.Product linesFico hi-tech produces different related products, which are as following:Resin Casted MV Instrument TransformersLow Voltage Current Transformers (LVCT)

PESTL Analysis The PESTL analysis looks specifically at factors which are external to the organization and have a serious impact on the business through which organization can know which strategy we need to persu to finish or lower down the impact of such factors on the organization. These factors may includes competitors, government, legal and technological factors etcPolitics influences Competitors use the political influence to make their product saleable to the wapda. Sometimes they give bribe to the National testing design company (NTDC) to check the prototype of the Fico Electric products which leads to stop the production of the Fico products and company cannot start its production until testing of the products is complete.Economic influencesEconomic conditions also affect the Fico Hi-Tech. Pakistan is not so much strong country. Pakistan is facing inflation problem also. Due to inflation the raw material is too much costly and it restricts the Fico Hi-Tech to increase the production. There are no new plans for increasing the energy such as dames etc. if the economic conditions of Pakistan are strong then there will be new plans for energy sectors. New plans for energy sector mean more demand for Fico Hi-Tech products. Social influences Fico Electric is providing employment to the society. There is no influence of society on the organizationTechnology influences Technology has a great influence on the Fico Electric. Recently Fico replace its plants due to change in the technology, because Fico has to check the quality of its products through modern way of technology. Fico has its own In-house technology when technology becomes change. Fico also changes its In-house technology according to latest standers to produce the quality products according to the requirements.Legal and environmental factorsFico Electric also follow consumer laws. It is certified ISO 9000 (2). There is no labor union in Fico. Fico follow the labor laws. Environment is totally save because Fico make its production from the electricity Contribution of Fico Hi-Tech toward economic development The overall contribution of Fico Electric (PVT) TLD, Fico Hi-Tech and Fico Engineering has a great toward economic development. In the presence of Fico Electric there is no need to import the Low voltage current transformer, Medium current transformer. And all the FICOS providing are the source of employment for the people of Gujranwala.

Organizational structureOrganizational structure of Fico Electric is explained as under:

Number of employees In Fico Electric there are 40 employees who are working in different departments such as Production, Sale, Purchase, Accounts and Security etc.

OfficesMain office of Fico Electric is situated in Climaxabad near Educator College G.T Road, Gujranwala.Fico Electric has two offices one at Lahore and at Karachi.Introduction of all DepartmentsThere are following departments which are working in Fico Hi-Tech:Purchase DepartmentIn purchase department there is only one purchase manager performing all duties related to purchases. According to the demand of production department, purchase manager give orders to the suppliers. Orders include a set of regular supplies which need not to tell to the suppliers they give it after the specified period. Sometimes purchase department also need unusual items which he purchase. Its important for the purchase department to ensure that they are not over or under ordering and that all purchased items actually reach the stock room. There are times when the order you receive is not that which was ordered, there may be damages or shortages. Obviously the amount you pay must be changed; the supplier notified and returned the damaged goods. Production departmentFico Electric is producing electric product which is Resin Casted MV Instrument Transformers, Low Voltage Current Transformers (LVCT). A supervisor control whole of the department. Production department also perform the activities of sale department. Because there is no sales department in Fico Electric. Production manager done sale activities with the help of production supervisor.Accounts departmentAccounts department is managed by chief accountant. He has three subordinates; two are assistant accountants and one is cashier. Accounts department maintain all accounts regarding sales, purchase, debtors, creditors, Tex deduction, import & export etc.

Comments on organizational structureStructure of the organization was brilliant because the Managers of all departments are very much specialized in their duties. That is the reason before making any decision. Top authorities call all the managers for knowing their point of view for the matter under discussion. After knowing their point of view Directors are the final authorities to take the final decision. So in Fico Electric there is a concept of work specialization. Here is a concept of Departmentalization because for accounts, purchases and production. There is a separate department. There is no Human Resource Department. Accounts department perform all the activities of Finance department.

Work done by Me

IntroductionThere are some of departments which are working in Fico Electric. The department where, I spent my most of time during internship is Accounts Department. Accounts Department is run by chief accountant and two assistant accountants. Accounts department record all accounts regarding sale and purchase, receivables, bank receipts and payments etc. First of all Accounts department prepare manual vouchers. Then these vouchers are computerized thorough a software Account Master which is used by the company. Then these journal vouchers are posted in to ledgers through the software. Sale tax invoices are also prepared by the accounts department. Income tax, under sec 151 and 153, details are also recorded by the account department.

Detail of supervisorsDuring my internship I was supervised by Chief Accountant Mr. Aftab Ahmad and Assistant accountant Mr. Waqas Mir.Activities performed during internshipI have worked in Accounts department as an assistant accountant. My job was passing the journal entries of sale, purchase expenses and making vouchers etc. I also record the unregistered purchase on the excel sheet, bank receipts and bank payments as well as prepared bank reconciliation statement. I also file the returns of the company. During my internship i also make visits in the banks with the cashiers.Weekly timetable I have spent my whole of the internship period as following:

First week

At first week Chief Accountant give me a task to check the account balances of Fico Electric Company with the bank statements of three months for the following banks: Allied bank Habib bank Silk bank There was a difference between the balances of bank statements and the balances that was in the record of accounts department.The difference was regarding: Bank charge the amount for their services being performed but Company has to deducted the fee of Bank charges from his record in order check the exact amount of cash in his account. The same procedure was with the withholding tax. Company deposits the cash in his account and debits his account for that amount but banks have to still credit the company account in respect of company deposits. Company make withdrawal from the bank to meet the current cash needs but bank has to still debit the account for his withdrawals. Company debits his account after the deposit of cheque at the last date of month but the difference were regarding bank credit this cheque in the next month. Similarly Customer deposit and withdraw amounts to and from company accounts but bank has to still make addition and subtraction. Work after seeking the differences: To match the accounts balances with the bank Balances Company first adjust the bank charges and withholding tax by making the voucher. The accounts that are prepared by the company before seeking the bank statement are needed to manipulate after finding the differences in the balances of bank statements. The differences are automatically posted in the relevant accounts by making the single click on software after preparing the voucher. I see manager activities on the software regarding that then I practice on software. Then to match the balance with the balance of bank shows the un-presented and un-credited cheques in the bank reconciliation statement.

Second week

Types of purchasesFico Electric Company make purchases on sale tax invoices, on credit and on cash. When company sell goods to the customers. Customers make payment to the company after deducting the income tax and sale tax on the sale invoices. I calculate the sales tax and income tax that our customers deduct on sale invoices then they submit to the government. Customers deduct tax of 3.5% as income tax of inclusive value of company sales and 1% of exclusive value as sales tax and submit to the government. Similarly company deducts income tax and sales tax of the suppliers and pay net amount to them. But company cannot deduct taxes of suppliers who attach exempt note with the invoices or if the suppliers are commercial traders.

Third week

I calculate the manager income tax through simple and marginal relief per month salary of one director is 65000 and per month tax through marginal relief is 4500 and through simple method per month tax is 4875. Chief Accountant Pays after deducting the tax net salaries to directors. I record company purchases on excel sheet that were made recently on sale tax invoices and utilities bills details.

Fourth week

I make list of payments and consult with the directors about that. Who give approval and subtract some suppliers from the list of payment. They also give order how much we will pay to supplier after checking the list of payment. Finally account manager make cheques of payments and I check those cheques amounts with the new payment list and get signed from director. I file returns of sales tax, sales tax withheld and purchase tax on the Federal Board of Revenue side with the help of assistant accountant. Before this, I crosscheck the amounts of sales tax & purchase tax with the relevant invoices and approve it from the accounts department.

Fifth week

Income tax & wealth statements verified with record and make summaries with evidence. I check the serial of voucher from the voucher register and tally the amounts of vouchers with the bills and make the register of cash payment vouchers for the month of February. I get practice the method of making vouchers in which the major portion was Account name and Description of making the purchase. Then these vouchers are post into the ledgers. Finally from the software head REPORT get vouchers in printed form. I make vouchers and attach it to the bills from which company make purchases. Record of that purchase was also maintained by the store keeper and gate keeper. This record was also attached with the vouchers.

Six week

Types of voucher Bank payment voucher Bank receipts Cash payment (cash purchase+ cash expenses) JVs (purchase + transfer + other adjusting entries) Cash receipt (sales + withdraw from bank)Under these conditions company make vouchers:- When supplier gets their payment through Bank Company make voucher called bank payment voucher. When company gets payment from customer there is a need for making voucher called bank receipts. When company makes payment in cash to suppliers then there is a need of cash payment voucher. Similarly when company gets payment in cash then there is a need of cash receipt voucher. In case of credit purchase there is a need of general voucher. At that day I make the deposit slips of cheques and cash and go with the cashier for deposits in the banks. After doing the daily work we make arrangements of files and keep them in their lockers and waste the unnecessary papers and files. I update the record of daily cash purchases. Make cash payment vouchers and attach it in the file in descending order.Summary of learning I am very glad to see a lot of practical related to my Accounts subjects. That internship repeats my pervious concepts of Accounting, just like checking bank statements and making vouchers etc. I have learned about the software being used in the Fico Electric for Accounts. I have learned that under what conditions a voucher is made and who it is made. I learn the who the cheque is made what are the points through which other person can do by our mistakes in a preparing a cheque. I also learned a little bit related to tax matters such as filing returns at FBR website. One thing I have learned that if there is a field which have proper implementation that in accounts.

SOWT Analysis There are two part of the swot analysis. First include the strength and weaknesses that are internally second include opportunities and threads which are externally. An organization conducts the swot analysis for determining the internal factors contributing to the success of the organization and what are the areas needs for betterment. Secondly organization checks what are opportunities and thread which we can face in the external environment.

Followings are the strength weakness and opportunities and thread of the Fico Electric.

Strengths Its the major strength of the Fico that it is only one company in the Pakistan who make sales of its products to the Wapda. Fico Electric has a skilled employees at the top level of every department The strength of the organization is the brand name of FICO, which is known throughout the Pakistan for its excellence. Fico competes with the competitors due to the technicality in the products. Fico get involvement of employee at the time decision making, through which employees are know that company give them importance. Fico Electric has good location. Fico has quality infrastructure. Fico give quality facilities to their employees. Fico has the reward system.Weaknesses Fico Electric has not its own website. Employees are not satisfy with their salary package. Fico Hi-Tech has no proper marketing management. Company doesnt motivate its employees. Lower Employee satisfaction level. Higher employee turnover rate at production. Opportunities Fico Electric is dealing in the energy components and Pakistan is facing serious energy shortage so its opportunity for fico to increase its goodwill through quality products to get attraction. Customers are trusting on the Fico products. Its the opportunity for the company to increase its product line. Fico Electric can increase its sales through e-commerce.Threats Energy crises are the biggest threat for Fico Electric. Cost of raw material is increasing day by day. Uncertainty of WAPDA is also a big threat because it is major one customer of Fico Electric.

Conclusion Fico is the important part of the energy sector. After achieving an honorable position in the Wapda through its products of low voltage & 11 kv voltage current transformers, Now Fico has the opportunity to enter in the international market because Fico major customer is wapda and future is uncertain so its necessary to produce its customer for in spite of relying on single customer.Recommendations After spending the four weeks at Fico Electric I will suggest Fico to make improvements in the followings areas: Fico Electric should establish his website as early as possible. Fico should enter in the international market. Employees didnt know their role in the process which they are performing. Company should tell to his employees what they are contributing in the total order So that they should know timely and effective completion of work will increase their company position. Fico has given good infrastructure and facilities to his employees. But turnover is due to low salary. There should be modification in the salary structure in such a profitable company so that turnover can be minimize. Fico Electric should start e-business. Because this will be the time saving and increase in sale. To enhance the quality of the products Fico should establish the partnership with the suppliers As we know that improvements can never be end So Fico should show commitment to continuous improvements. Fico Electric is a renowned organization it should expand its product line to increase its customers. There should be scissions for proper training of employees. Employees should be empowered. When responsibility is assigned to someone authorities should also be assigned to that person. This helps in getting quality work. There should be department of Human Resource Management, Marketing and Finance. Fico should follow the Statical process control for checking the defects in the products. There should be proper internal check system so that working of one employee can be automatically checked by others. Employees should be empowered so they can be worked with confidence without fear. To maintain the interest at the workplace there should be job rotation among the employees.

REFERENCES

ficoelectric.com

Mr. Aftab Ahmad (Chief Accountant)

Mr. Sami-Ullah (Purchase Manager)

Mr. Waqas Mir (Assistant Accountant)

Mr. Imran Hanif (Cashier) Page 1