In the name of Allah the most beneficent the most merciful

INTERNSHIP REPORT

General Fan Company (PVT) Limited Pakistan

Submitted by:

Muhammad Sarfaraz

Master in Business Administration

(Finance)

Registration no: 11-US-119-12

Rawalpindi College of Business Administration Rawalpindi

Session: 2012-2015

University Of Sargodha

Scanned Copy of Internship Letter

Dedicated to my beloved Parents and Siblings

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ACKNOWLEDGEMENTS

First of all my humble thanks toALLAH (Subhanahuwata’ala) for all of His

blessings.He enlightened me and gave me strength to accomplish my objectives

of life.All the respect forHoly Prophet HAZART MUHAMMAD (Peace Be

U0pon Him) who lit the whole world with knowledge when all the humanity

wasignorant. I am grateful to my Parentsfor giving me courage in my work. I

can never return them what they have done for me but I will always try to live

up to their expectations. Deep gratitude for my teachers who guided me well in

my studies and helped me preparing my report. Special thanks to GFC Staff for

giving me opportunity to work and to explore my knowledge. I am thankful to

my colleagues whose support and help made me complete my work.

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EXECUTIVE SUMMARY

This report is about my internship program in General Fan Company (PVT) ltd. Pakistan

(Distribution center). In this report I have discussed all the major aspects of the GFC as a

whole and its Distribution centerwhich I observed during my internship in the particular

branch. In this report you will find the business volume, function, current position, details of

all departments and SWOT analysis of GFC fans.

There are many departments such as Accounts, Sales, Purchase, HRM, Import/Export,

production and Research and Development are working in GFC fans. During my internship I

mainly worked in accounts department but I have also observed other departments of GFC

fans. So all the details regarding accounts such as cash flows, receivables, payables,

inventory and maintaining record of purchase and sales are discussed.

The main purpose of my internship was to use my knowledge by working in a healthy

practical environment in order to use my academic skills acquired during my study.

In this report detailed analysis of organization is done along with its functions, prospects and

strategies and financial position of the organization.

Furthermore, in this report all the details of my work that I did during my internship is given.

SWOT analysis and financial analysis of organization is given.

At the end recommendations and conclusion is made for the GFC by keeping in mind the

knowledge I have gained during my internship.

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Table of Contents

1 Overview Of The Organization..........................................................................................1

1.1 Brief History Of Organization.....................................................................................1

1.2 Vision..........................................................................................................................2

1.3 Mission........................................................................................................................2

1.4 Business Volume.........................................................................................................3

1.5 Hierarchical Level Of Company.................................................................................4

1.6 Board Of Directors......................................................................................................5

1.7 Exports.........................................................................................................................6

1.8 Products.......................................................................................................................7

1.8.1 Fans......................................................................................................................7

1.8.2 Home Appliances.................................................................................................8

1.8.3 Other products......................................................................................................8

1.9 Competitors.................................................................................................................9

2 Company Departments.....................................................................................................10

2.1 Purchase Department.................................................................................................10

2.2 Inspection Department...............................................................................................12

2.3 Production Department..............................................................................................13

2.3.1 Motor section.....................................................................................................14

2.3.2 Body Section......................................................................................................14

2.3.3 Fitting Section....................................................................................................15

2.3.4 Packaging Section..............................................................................................15

2.4 Marketing And Selling Department..........................................................................16

2.5 Research And Development Department..................................................................16

2.6 Internal Audit Department.........................................................................................16

2.7 Human Resource Department....................................................................................17

2.8 Imports And Exports Department.............................................................................18

2.9 Accounts Department................................................................................................19

2.9.1 Functions And Operations Of Accounts Department........................................19

2.9.2 Sources Of Receipts And Payments...................................................................21

3 Plan For Internship............................................................................................................22

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4 Training Program..............................................................................................................23

4.1 Brief Introduction Of Branch Where I Have Worked...............................................23

4.2 My Training And Learning.......................................................................................23

4.3 Tasks assigned to me by the accounts department....................................................24

4.3.1 Inventory accounts register................................................................................25

4.3.2 Trial balance (FAN)...........................................................................................27

4.3.3 Daily Voucher Activity Report (FAN)..............................................................28

4.3.4 Cash book...........................................................................................................30

4.3.5 Pass book............................................................................................................31

4.3.6 Financial statements...........................................................................................33

5 SWOT analysis.................................................................................................................37

5.1 Strengths....................................................................................................................38

5.2 Weaknesses................................................................................................................39

5.3 Opportunities.............................................................................................................41

5.4 Threats.......................................................................................................................42

6 Conclusions.......................................................................................................................43

7 Recommendations.............................................................................................................44

8 References.........................................................................................................................46

Table of Figures

Figure 1-1: Details of Exports during Last 13 Years.................................................................5

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1 OVERVIEW OF THE ORGANIZATION

1.1 BRIEF HISTORY OF ORGANIZATION

General Fan Company is ISO 9001 certified company. GFC is one of the largest fan

manufacturing companies in Pakistan. It was established in 1954 as a small manufacturing

company but later on it flourished and became the largest fan manufacturer and Export

Company of Pakistan. Its head office is in Gujarat and mostof its manufacturing is done in

Gujarat. In 1960the Company started exporting fans to Iraq. In 1970 due to some

management Issues Company faced the bad financial times but in 1978 the new management

took over and mechanical engineer Muhammad Ilyas became the CEO (chief executive

officer) of GFC Fan Company and Company took its new start and made itself pride in no

time. In 1982 some new machines like Automatic Capstan Lathe Machines and Die Casting

Machines were introduced. In 1985 some latest Automatic Winding Machines were

purchased from Taiwan. In 1987 a Japanese made Enameled Wire Manufacturing machine

was purchased to manufacture the quality Enameled Copper Wire for providing the quality

product to the customers. In 1993 Plastic Injection Molding Machine was installed to make

plastic parts of fans. A modern tool room was made for making dies, molds and it is consist

of Wire cut machines, EDM machines, CNC milling machines, surface grinders, cylindrical

grinders and Automatic Rotor Machines. GFC Fan Company sooner became one of the best

exporters of Pakistan and now it is exporting its products almost to 30 other countries of the

world. Due to its quality is has surpassed all of its competitors and become the best fans

company in Pakistan. It was first company receives the Export trophy and brand of the year

award.GFC has won twelve Export Trophy Awards so far.[1]

1

GFC is also a pioneer in introducing the latest technologies in Pakistan and it has pride that

many other countries especially Chinese are now copying its designs and adopting its product

strategies.[1]

1.2 VISION

GFC fan vision statement is:

“Our goal is to go beyond the expectation of our customers by providing them, products of

outstanding quality and greater value, to extend presence in international market through

innovative technology and make the “PAK” brand an icon and symbol of quality on the map

of this world”[1]

1.3 MISSION

GFC fan mission statement is:

“Our goal is to exceed customer satisfaction through supreme quality products,

manufactured to the highest standards that last a lifetime.”[1]

2

1.4 BUSINESS VOLUME

GFC fan (PVT) Ltd. Pakistan is the one of the largest fans manufacturer company in

Pakistan. It is progressing leaps and bounds.[1] It has more than five hundred manufacturing

units in Gujarat and few in all over Pakistan.It is capturing almost all the major markets in

Pakistan. Today it’s exporting best quality fans to more than thirty countries in the world.Last

year GFC’s total export was $13 million. And this year it is expected to be $15 million.

Haji Muhammad Ilyas CEO of GFC fans has said that despite the inflation and shortage of

gas and electricity, the export of fans has increased in the first seven months of this financial

year, compared to the last financial year.[2]

GFC fans Pakistan has total of 895,000 fans, with a monetary value of Rs 1.95 billion, have

been exported compared to last financial year's 619,000 fans, with a monetary value of Rs 1.2

billion. This shows a 45 percent volume growth this year. [2]

GFC’s total number of employees is between 501-1000.

GFC fan capturing three major markets:

Domestic market 16 %

South Asia 16%

Eastern Asia 16%

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Board of Directors

Chief Executive Officer (CEO)

Director MarketingDirector Fin. &Pur. Director Production

ManagerH. R. M

General ManagerAccounts

ManagerAuditing

ManagerSales

ManagerExp. & Imp.

ManagerCeiling & Pedestal

ManagerQuality Control

R & DDepartment

CashierInternal External

1.5 HIERARCHICAL LEVEL OF COMPANY

In hierarchy all the levels of management and workers are discussed. Board of directors and

CEO are the top management, then directors come in middle management and at the end

managers lie in low level management.

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1.6 BOARD OF DIRECTORS

Shareholders select the board of director. Board of directors has the ultimate authority of

making policies and decisions of company. Board of directors selects CEO of a company.

Muhammad Ilyas and Muhammad Ijaz both are brothers and they jointly own the company.

Muhammad Ilyas is a CEO of the company and Muhammad Ijaz is a Director of finance and

purchases. All board of directors is family members. GFC Fans Company is managed by two

joint families.

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Board of DirectorsMuhammad IjazNazim Ijaz Asim IjazFarhat IjazMuhammad IlyasNabeel Ahmed IlyasMobeen Ahmed IIyasNighat Ilyas

1.7 EXPORTS

GFC manufacture a large range of products and it provides its products to local customers as

well as to foreign customers.[1]

In 1960 GFC started exporting fans to Iraq. GFC majorly started its exports in 1993, it is now

exporting its products in more than thirty countries over the globe. It is being known as one

of the best fans manufacturers in Pakistan. Its total exports have been reached to US$ 12

million per year and it is increasing day by day. Due to its quality it is now capturing the

markets of Asia, Middle East, Africa and Europe.[1]

GFC exports its products to USA, UK, France, Italy, Malaysia, Bangladesh, Sri Lanka, Saudi

Arabia, Qatar, Yemen, UAE, Iraq, Iran, Jordan, Afghanistan, Sudan, Djibouti, Kenya,

Mozambique, South Africa, Angola, Senegal, Cameroon, Nigeria, Gambia, Ghana, and

Congo.[1]

Details of export during last thirteen years are given in the image below:

Figure 1-1: Details of Exports during Last 13 Years

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1.8 PRODUCTS

Following products are currently being manufactured by GFC Fans.

1.8.1 FANS

Major fans categories are:

1.8.1.1 CEILING FANS

Standard Series

Elite Series

Export Series

Reversible Series

1.8.1.2 PEDESTAL FANS

1.8.1.3 BRACKET FANS

Standard Series

Elite Series

Heavy Duty Series

1.8.1.4 CIRCUMATIC FANS

1.8.1.5 TCP AND TABLE FANS

TCP

Table

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1.8.1.6 LOUVRE FANS

1.8.1.7 EXHAUST FANS

Exhaust Plastic

Exhaust metal

1.8.1.8 MIST FANS

1.8.1.9 FLOOR FANS

1.8.2 HOME APPLIANCES

Major home appliances are:

Washing machines

Room coolers

Water heaters

1.8.3 OTHER PRODUCTS

Skimming Machine

Copper Wire

Cooler Pump

Cooler Fan

[1]

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1.9 COMPETITORS

Competitors are basically considered as the rivals but actually they help the company to make

strategic decisions and to make more valuable and quality products to stay in the market.

Every company wants to have a competitive edge by making cheap and quality product.

GFC has a list of competitors who are manufacturing fans in Pakistan.

Few of them are given below:

ROYAL FANS

PAK FANS

YOUNUS FANS

INDUS FANS

MILLAT FANS

MEFCO FANS

METCO FANS

VALUE FANS

LIAQAT FANS

KARAM FANS

WAHID FANS

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2 COMPANY DEPARTMENTS

To run any company in an efficient way and to achieve its desired goals many departments

are need to work together. So, to work in an organized way GFC fans company works in

following departments.

List of departments is given below:

Purchases Department

Inspection Department

Production Department

Accounts Department

Sales And Marketing

Research And Development

Human Resource Department

Imports And Exports

Internal Audit

2.1 PURCHASE DEPARTMENT

Purchase department is one of the main departments in any manufacturing company. Its

major task is to purchase raw material from local and international market. Functions of

purchase department are muchvided. Major responsibility of this department is to purchase

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goods. Quality of production depends on the quality of raw material and customer’s trust can

only be build up by providing them the best quality product.

In every manufacturing company purchase department place order for raw material and

provide that raw material to production department. GFC is the major vendor, it provides its

product to all its ware houses.

GFC (Distribution center) purchase department also purchases raw material from local

market such as Gujranwala, Lahore and other local cities. It also imports raw material from

foreign countries such as China, Taiwan, Korea, UK Honk Kong and Japan.

GFC imports following products from other countries:

Chemicals

Machinery

Mini motors

Aluminum sheets

Copper wires and rods

Plastic material

Purchase department take quotations and keep all the record of purchases and cost incurred.

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Material Purchased From Market

Purchase Department

Inspection Department

2.2 INSPECTION DEPARTMENT

GFC has an inspection department, whose duty is to check all the material purchased and

sold. There is an inspection incharge whose work is to check all the material received and

material in Distribution center. GFC Distribution center has an inspection department which

makes sure the quality of the product received and sold.

GFC inspection department does not allowed and accept the low quality product and sent

back all the defected material back to seller and makes sure the standard of the product.

Inspection department restrict the entry of following products:

Defected

Low quality

From unauthorized dealer

Inspection department ensures the following products:

Best quality

From authorized dealer

No defected good

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2.3 PRODUCTION DEPARTMENT

In every company production department has its own importance and none of the company

can flourish without good production. GFC does its major part of production itself and

manufacture all of its products in Gujarat and then supply to its Distribution centers.

GFC Distribution centergets all the products from its main vendor and supplies it to the final

suppliers of its products.

GFC production departments works under the supervision of Mr. AsimIjaz(director of

Production Department) and with his foremen. Their duty is to make sure that quality of

production as it should be.

All the staff in production department is not highly skilled but still 20 people among them

plays their role in the management and 700-800 people are labor who actually work for

quality production and they are the real assets of the company.

GFC production department is further divide into four sub departments:

Motor Section

Body Section

Packing Section

Fitting Section

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2.3.1 MOTOR SECTION

A. This is the major section of production department. In these section motors of various

products such as ceiling fan, pedestal fan, air cooler etc. is produced.

B. Ceiling fan use variety of motors i.e. 36”, 48” and 56”.

C. Pedestal fans motors are totally different from ceiling fans’. This department produces

motors for pedestal fan as well.

D. Room cooler uses motor in two ways; for fan and for water pump.

This section also covers the following sections:

2.3.1.1 WINDING SECTION

In this section copper wire is used and is made winded to make the motors and for further

production.

2.3.1.2 COIL TESTING SECTION

In this section the coil for winding is being tested and only recommended wire is used for

winding section.

2.3.2 BODY SECTION

In this section bodies of various departments are made no matter whether the body is made up

of plastic or any metal. Bodies of fans, washing machines, coolers, heaters and other products

are made.

This section consists of following subsections:

Blade Section

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CNG Milling Section

Plastic Molding Section

Copper Wire Section

2.3.2.1 BLADE SECTION

In this section blades for fans and air cooler are produced and this section makes sure the

quality and elegant design of product.

2.3.2.2 PLASTIC MOLDING SECTION

This section is particularly for the plastic manufacturing. Plastic is used for manufacturing of

plastic bodies and spare parts of various products.

2.3.2.3 COPPER WIRE SECTION

In this section GFC makes copper wire for its own production and for selling in the market.

This copper wire is used for motor winding.

2.3.3 FITTING SECTION

In this section all the parts manufactured in different sections are assembled to make final

product. In this section finished product is made to sell.

2.3.4 PACKAGING SECTION

It is the final section before the product is going to sell. After packaging products are sent to

selling marketing department which actually makes the product sell in the market.

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Raw

Material

Production Department

Finished

Goods

2.4 MARKETING AND SELLING DEPARTMENT

Selling and marketing department is very important in all the companies. This section

actually makes the product sell and work as a bridge between company and customer. This

department advertises the company’s product that is manufactured.

In GFC Mr. Nabeel Ahmad Ilyas son of Muhammad Ilyas working as director of marketing

and it is his responsibility to advertise and market the product. Marketing department actually

let the customers know about the specialty and specification of product.

GFC sells its product in many local markets as well as in foreign market. It is selling its

product 40% registered companies and remaining 60% to nonregistered companies. Mainly in

Karachi GFC occupies 18% of market out of 40%.

2.5 RESEARCH AND DEVELOPMENT DEPARTMENT

Research and development (R&D) is very important in any company and it takes the

companies away from their competitors. This department makes research of market and its

changes. This department informs the production department about the taste of customer and

varying trends of the market.In GFC department Mr. Shahbaz is the manager of Research and

Development department.

2.6 INTERNAL AUDIT DEPARTMENT

Internal audit is done to check the responsibility of accounts department and it reconciles all

the errors done in the accounts whether intently or un-intently.

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GFC also has internal audit department which is working under the supervision of Mr. Malik

Tafheem.

Major responsibility of this department is to maintain the accounts of the company and make

sure that are error free.

This department prevents company account from all kinds of frauds occurring in the

company and saves the company from a great loss.

2.7 HUMAN RESOURCE DEPARTMENT

Human resource department is responsible of hiring, training and firing of employees.

Like many other companies GFC also has a human resource department which does all the

functions mentioned above.

GFC has human resource department which works on employees training, improving their

skills and to motivate them.

There are three types of training done in GFC HR department:

Induction Training

On The Job Training

Off The Job Training

There is a well-trained team behind every successful business. GFC has a best team that

collectively works for the completion of company’s goals.

Employee’s selection is done after a complete recruiting process. Any person who fulfills the

jobs requirement is selected on merit basis.

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2.8 IMPORTS AND EXPORTS DEPARTMENT

Strength of GFC depends on exports a lot. Mr. Shahid Ali is the manager of this department.

And this department is really the revenue generator for GFC Company. GFC exports

machinery and many other parts from many other countries such as China, Japan, HongKong,

Taiwan etc.

GFC also exports its products to thirty other countries such USA, UK, France, Italy,

Malaysia, Bangladesh, Sri Lanka, Saudi Arabia, Qatar, Yemen, UAE etc.

In 1960 GFC started exporting fans to Iraq. GFC majorly started its exports in 1993, it is now

exporting its products in more than thirty countries over the globe. It is being known as one

of the best fans manufacturers in Pakistan. Its total exports have been reached to US$ 12

million per year and it is increasing day by day. Due to its quality it is now capturing the

markets of Asia, Middle East, Africa and Europe.

This department is actually responsible for maintaining the imports and exports as per need.

Imports and exports department of GFC is very important and working vigilantly for

capturing global markets for importing and exporting products. Especially GFC is unique in

exporting fans and many countries are appreciating quality and durability of GFC because of

their advanced technology and cheapness in prices.

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2.9 ACCOUNTS DEPARTMENT

For any organization Accounts department is the most important department. None of the

organization can run without maintaining their accounts. It is really a vast and complicated

department because it deals all kinds of monitory related issues. Such as income, expenses,

salaries of employees etc.

GFC accounts department works under the responsibility of Mr. Shahid-Ur-Rehman who is

the general manager of accounts department.

GFC Distribution center account department is maintained by Muhammad Saleman Chowhan

who is the accounts manager here.

2.9.1 FUNCTIONS AND OPERATIONS OF ACCOUNTS DEPARTMENT

Following functions are performed by the accounts department:

Prepare statement of daily receipts and payments

Voucher Preparation

Preparation Of Financial Statement

Cash Disbursement

Monthly Trail Balance Preparation

Ending Adjustments

Monthly Cash Flows Projection

Bank Reconciliation Statements

Sales Invoices

Sales Tax Invoices

Report To FBR

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It also performs the following functions:

Inventory Reports

Comparison Of Cash Flows Actual Vs Budgeted

Capital Investment

Fixed Assets Schedule Report

Receivables

Payables

Fixed Overheads

Variable Overheads

Preparation Of Productions Statement

Preparation Of Stock Statements

Wages And Salaries Preparation

Sales Volume Preparation

Capital Budgeting

Raw Material Including Material On The Way

Finished Goods Stock

Advances And Receipts

Factory Over Heads

Cash/Bank Balance In Hand

Cash And Pass Books

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2.9.2 SOURCES OF RECEIPTS AND PAYMENTS

2.9.2.1 SOURCES OF RECEIPTS:

Recovery From Sales Through Distribution center

Sales Proceeds Of Left Over Material

From Export

2.9.2.2 SOURCES OF PAYMENTS:

Wages

Staff Salaries

Utilities Expenses

Govt. Dues

2.9.2.2.1 GOVT. PAYMENTS:

Custom Dues

Sales Tax

Electricity, Sui Gas And Telephone Bills

2.9.2.2.2 PAYMENTS TO SUPPLIERS

Suppliers Are Paid On Credit/Cash Basis

Vendors Are Paid On Cash Basis

Payments To Foreign Suppliers

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3 PLAN FOR INTERNSHIP

For my MBA (finance) program I was required to do internship for at least twenty weeks. I

was also supposed to do work in any finance department where I could use my academic

knowledge practically and could be able to learn more about accounts and finance. I searched

for commercial organization and applied for internship. Finally I got a chance to work in

GFC Distribution center situated in Rawalpindi. It was a store room of great and possibly one

of the largest fan manufacturing companies In Pakistan.

I was basically intending to work in accounts department but when I entered in that friendly

environment I got opportunity to learn many other departments and the working of GFC in

large.

GFC Distribution center is working as a hub supplier of GFC’s products of the region. It has

sixty cities and almost four hundred (dealers) customers that purchase GFC’s products and

supply to final users. The GFC Distribution center customers’ city region starts from Jhelum

to Kashmir.

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4 TRAINING PROGRAM

4.1 BRIEF INTRODUCTION OF BRANCH WHERE I HAVE WORKED

I got training for twenty weeks in GFC Distribution centersituated in Rawalpindi.

MalikNaheed sultan is the managing director of the center. M. Suleman Chowhan is the

manager of accounts. Other staff are assistant manager and other non-managerial staff. This

distribution center is supplying GFC fans products to more than twenty cities of Pakistan and

it has more than four hundred customers.Following are the standard operations that are being

performed in Accounts department of the distribution center:

Inventory

Purchases

Sales

Accounts

4.2 MY TRAINING AND LEARNING

I worked under his supervision. Working environment suited me up to my satisfaction. I got

major training in accounts department but I learned working of all other departments as well.I

tried to learn all the working in the finance department. I was assigned to maintain accounts

department. Present working accountant helped me a lot learning about all the functions and

working of accounts department and maintain them quite well. He also helped me

understanding the practical implications of what I have learned during my academic career in

MBA.

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In addition I also learned about the other departments of Distribution center besides Accounts

department such as purchase department, audit department and inspection of material as well.

During my internship time span I learned all major standards of operations of GFC

Distribution center

GFC Distribution center has a single vendor which is GFC and it is supplier too. Its accounts

department majorly works on following accounts.

Major accounts I worked in during my internship in GFC Distribution centeraccounts

department:

4.3 TASKS ASSIGNED TO ME BY THE ACCOUNTS DEPARTMENT

Inventory Register

Trial Balance

Daily Voucher Activity

Cash Book

Bank Book (Pass Book)

Auditing Report

Purchases Account

Sales Account

Receipts Account

Payments Account

Capital Budgeting

Financial Statements

Reconciliation Of Accounts

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Details of all departments and work I have done during my internship is given below along

with general entries and working for each.

4.3.1 INVENTORY ACCOUNTS REGISTER

Inventory or stock is most important account of any manufacturing company so as GFC

Distribution center has inventory account register which records the following items:

Opening Inventory

Inventory in last year in storeroom

Sales to Customers

Sales to customers

Sales Return

Return of the defected inventory from customers

Purchases

Purchases from vendor (GFC)

Purchases Return

Return of defected material from store room to vendor

Issued Quantity

Quantity issued to customer on credit/cash basis

Received Quantity

Quantity received from vendor or suppliers

Per Unit Rate

Per unit rate of each product belongs to different category

Closing Inventory

Inventory at the end of month or year

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Specimen for inventory register is given:

Narration:

Above entry is about bracket fan, it shows all the transactions done in a day with opening and

closing quantity and balance.

Entry belowis about ceiling fan, it shows all the transactions done in a day with opening and

closing quantity and balance.

Similarly all the transactions are done and at the end of period total balance and quantity for

each item is calculated.

Total balances and quantity in books must be matched with the quantity in the storeroom.

(The values for the data above were assumed for demonstration only)

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Inventory Register

GFC Pvt. Ltd Pakistan (Distribution center)

For the month of February 2015

(Bracket fan)

Code

Qty.

Item

Name

Open

Qty.

Sales

Qty.

Sales

Return

Purchases Purchases

Return

Closing

Qty.

Pur

Rate

Amount

005 Bracket

Fan

5 3 1 8 2 9 2000 18000

(Ceiling Fan)

Code

Qty.

Item

Name

Open

Qty.

Sales

Qty.

Sales

Return

Purchases Purchases

Return

Closing

Qty.

Pur

Rate

Amount

001 Ceiling

Fan

10 5 1 5 3 8 3000 24000

4.3.2 TRIAL BALANCE(FAN)

A trial balance is a list and total of all the debit and credit accounts for an entity for a given

period – usually a month. The format of the trial balance is a two-column schedule with all

the debit balances listed in one column and all the credit balances listed in the other. The trial

balance is prepared after all the transactions for the period have been journalized and posted

to the General Ledger.

Key to preparing a trial balance is making sure that all the account balances are listed under

the correct column. The appropriate columns are as follows:

Assets = Debit balance

Liabilities = Credit balance

Expenses = Debit Balance

Equity = Credit balance

Revenue = Credit balance

GFCDistribution center prepares the trial balance in the same way.

Specimen for trial balance is given:

27

Trial Balance (Fan)

For the period of………!

Account ID Account NameOpening Current Closing

Dr. Cr. Dr. Cr. Dr. Cr.

01-002-005 Customer A 00 5000 00 00 00 500001-003-006 Customer B 1000 00 00 200 800 0001-003-007 Customer C 4000 00 00 00 4000 00

Narration:

In the above three entries a trail balance is prepared for the GFC Distribution center

customers, as you can see that when some product is sent to customer the company Cr. Its

customer and when some amount is received company Dr. It. Same way trial balance is

prepared and balanced at the end.

(The values for the data above were assumed for demonstration only)

4.3.3 DAILY VOUCHER ACTIVITY REPORT (FAN)

4.3.3.1 RECEIPTS AND PAYMENTS

Daily activity voucher report is basically for both receipts and payments from the customers

on daily basis.When cash is received a voucher receives and similarly when cash is paid a

voucher is recorded in daily voucher activity books.

Receipts:

When some amount is collected form customer we record an entry:

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Debit Credit

Cash A/C xxx 00

Customer A/C 00 xxx

Narration: cash received from customer

Payments:

When some amount is sent through Bankto main GFC account, we record entry as:

0

Note: along with account name, voucher sequence, voucher type and voucher date is also

mentioned.

That all is done on worksheet.

A specimen for daily voucher entry is given under.

Specimen for receipts and payments of voucher is given under:

Daily Voucher Activity Report (Fan)

For the month of February 2015

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Debit Credit

Bank A/C xxx 00

Cash A/C 00 xxx

Narration: cash payment is made to GFC through bank

Receipts:

Voucher Date

Voucher Seq. Account Code

Account Name Debit Credit

01-01-15 10001 200005 Cash A/C 50000 001-01-15 10001 200002 Customer A A/C 0 5000002-01-15 10002 200005 Cash A/C 80000 002-01-15 10002 200004 Customer B A/C 0 80000

Narration: in the above entries cash is received from customer A and B and voucher is made

and recorded.

Every account has its unique code. As you can see cash account has a code; 20005 so it

means wherever Cash is recorded it have the same code, same as for all other accounts.

(The values for the data above were assumed for demonstration only)

4.3.4 CASH BOOK

Cash book is basically a financial journal that contains all cash receipts and payments,

including bank deposits and withdrawals. Entries in the cash book are then posted into the

general ledger. The cash book is periodically reconciled with the bank statements as an

internal method of auditing.

So GFC distributor center has a cash book that records of its cash transactions.

It also records all the expenses which are made on daily basis.

Specimen of Cash book is given under:

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Payments:

Voucher Date

Voucher Seq. Account Code

Account Name Debit Credit

03-01-15 10005 50004 Allied Bank A/C 40000 003-01-15 10005 20005 Cash A/C 0 4000004-01-15 10006 50004 Allied Bank A/C 70000 004-01-15 10006 20005 Cash A/C 0 70000

Cash Book

For the month of February 2015

Narration:

In the above table few temporary accounts are made. You can see that all the receipts are

debited and all the outflows are credited and after each entry updated balance is given.

Similarly all the entries are recorded and at the end of the period updated balance is made. At

the end reconciliation of cash and pass book is done.

4.3.5 PASS BOOK

Contrary to cash book pass book is written by the bank but remains in the depositor's

possession.Money deposited is entered on the credit side and withdrawn on the debit

side.GFC distribution center also maintain a pass book of accounts which at the end helps for

the reconciliation of accounts.

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Date Voucher A/C ID

Account Name Narration Debit Credit Closing

Opening Balance 200005-02-15 600005 12345 Ali Electronics Amount Received 1000 0 3000

05-02-15 600006 78967 Freight In Truck Rent 0 50 2950

05-02-15 600007 34567 Ahmad & sons Amount Received 2000 0 4950

05-02-15 600008 10002 Allied Bank Money Withdrawn 0 1000 3950

General entries in Pass book are as follows:

Pass book

For the month of February 2015

Narration:

In the above general entries you can see the amount collected is credited in pass book and

amount withdrawn is debited in pass book.

Same like cash book an updated balance is made and at the end of the period it is reconciled

with the cash book.

All the books of accounts are maintained manually before posting it to the computerized

sheets so that all the data can be maintained properly and error free.

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Date Particulars Debit(Withdrawals)

Credit(Deposited)

10-10-14 Cash A/C (check no….) 80000 0

Narration: cash withdrawn by check

11-10-14 Cash A/C 0 60000

Narration: cash deposited

4.3.6 FINANCIAL STATEMENTS

The standard contents of a set of financial statements are:

4.3.6.1 BALANCE SHEET

Balance sheet is one of the major financial statements used by accountants and business

owners.It shows the entity's assets, liabilities, and stockholders' equity as of the report date. It

does not show information that covers a span of time.

GFC distribution department prepares a balance sheet at the end of a period and its basically

tells the actual position of company.

Here is a simple sample of balance sheet:

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GFC fans (distribution centre)

Balance sheet

For the year…………!

Assets Liabilities& Owners’ Equity

Current Assets Current Liabilities

Investments Long-Term Liabilities

Property, Plants and Equipments Total Liabilities

Intangible Assets

Other Assets Owners’ Equity

Total assets Total Liabilities & Owner Equity

From this statement company actually finds its financial position. Most of the financial ratios

such as solvency ratio, quick ratio, current ratio and turnover ratios are calculated to check

the current position of company.

4.3.6.2 INCOME STATEMENT

It shows the results of the entity's operations and financial activities for the reporting period.

It includes revenues, expenses, gains, and losses.

A sample of double entry income statement is given under:

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GFC fans distribution centerIncome statement

For the year………………!

Sales (Revenues) xxxLess: Cost of goods sold (xxx)

Gross profit xxxLess: Operating expenses:

Wages expenses xxx

Rent expenses xxx

Utilities expenses xxx

Admin expenses xxx

Depreciation expenses xxx

Interest expenses xxx

Total expenses: (xxx)

Total income xxx

Above sample is according to double entry system. Company prepares income statement to

check the net losses.

By using income statements company finds the ratios such as gross margin, earning per share

(EPS) and times interest earned etc to check the financial position of the company.

4.3.6.3 STATEMENT OF CASH FLOWS

Statement of cash flow shows changes in the entity's cash flows during the reporting period.

GFC Fan Company also maintains the financial statements of above the kinds. It has three

sections

1. Cash Flows from Operating Activities

This section includes cash flows from the principal revenue generation activities such as

sale and purchase of goods and services. Cash flows from operating activities can be

computed using two methods. One is direct and the other indirect method.

2. Cash Flows from Investing Activities

Cash flow from investing is cash in-flows and out-flows related to activities that are

intended to generate income and cash flows in future. This includes cash in-flows and out-

flows from sale and purchase of long term assets.

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3. Cash Flows from Financing Activities

Cash flows from financing activities are the cash flows related to transactions with

stockholders and creditors such as issuance of share capital, purchase of treasury stock,

dividend payments etc.

The cash flow statement provides a crucial link between the income statement and the

balance sheet. The cash flow statement helps you ascertain whether cash is coming from

normal operations, whether a firm is reinvesting in itself, and if a firm is raising additional

cash.

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Analysis of the GFC fan company Pakistan:

5 SWOT ANALYSIS

SWOT basically is a short form of Strengths, weaknesses, opportunities and threats.

SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses, and

for identifying both the Opportunities open to you and the Threats you face.

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Strengths and weaknesses are the internal factors whereas opportunities and threats are the

external factors affecting the company. For this SWOT analysis is sometimes called the

internal-external analysis. Strengths and opportunities are the helpful area of achieving the

objectives whereas weaknesses and threats are the harmful area to achieve the objectives.

Short definition of all the four parts is given under along with a complete SWOT analysis of

GFC fans company Pakistan is given.

5.1 STRENGTHS

The strengths segment of a SWOT analysis provides an area to list everything done right

either individually or as an organization

Strengths tell us about the following things that needed to be taken into account to achieve

the goals.

What advantages does our organization have?

What do we do better than anyone else?

What lowest-cost resources can we draw upon that others can't?

What do people in your market see as our strengths?

What factors mean that we "get the sale"?

By keeping in mind all the given points GFC fans have the following strengths:

GFC has following edge over its competitors:

GFC is the largest manufacturer of fans in Pakistan

GFC the largest market in the Pakistan

GFC has the highest export of fans

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GFC has the largest captured market globally

GFC providing the best quality

GFC using the latest machinery to manufacture its products

GFC has a stream of products

GFC’s products are cheaper than its customers

GFC is a contributing the major part in GDP

GFC has the flexibility to meet market changes

GFC providing a great number of job opportunities

GFC providing the best innovation products

GFC products are less harmful to the environment

GFC always makes customer oriented books

5.2 WEAKNESSES

The weaknesses segment contains needed improvements within an organization or

personally. Weaknesses are the internal but harmful region of any organization to achieve its

goals.

Weakness area basically tells the followings things to be considered:

What could we improve?

What should we avoid?

What are people in our market likely to see as weaknesses?

What factors lose we sales?

Our company has no market presence or reputation

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We have a small staff with a shallow skills base in many areas

We are vulnerable to vital staff being sick, leaving, etc.

Our cash flow will be unreliable in the early stages

By considering all of above points GFC has the following weaknesses:

GFC is investing less in inspection R &D department.

GFC still lacking in technology

GFC paying less attention to its economy of scale

GFC is paying less attention to rural area market

GFC has male dominated workforce

GFC is mostly stagnant with the fans only

GFC is providing comparatively less pay to its employees

GFC has all it manufacturing in Gujarat

GFC has Low electricity safety standards

GFC is only restricted to urban areas

GFC has non-proactive marketing

GFC has comparatively less staff in its distribution centers

GFC is paying less attention regarding solar energy consumption

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5.3 OPPORTUNITIES

Next part of SWOT analysis is Opportunities. It means opportunities for improvement exist

within all organizations. This makes the opportunities segment of the SWOT analysis

important. Within this segment, organizations identify internal and external opportunities.

Opportunities are the basically the external factor bur helpful to achieve the company’s goals.

Useful opportunities can come from such things as:

Changes in technology and markets on both a broad and narrow scale.

Changes in government policy related to your field.

Changes in social patterns, population profiles, lifestyle changes, and so on.

Local events.

Our competitors may be slow to adopt new technologies

By taking into account all the above mentioned points GFC is starving to capture its

opportunities, which are as follows.

Growing demand in export market

Growing demand in rural areas

Scope for economies of scale

Innovation towards energy efficient fans

Innovation regarding solar energy consumption

Capturing more international market

Adopting latest technology to reduce cost

Using workforce diversity concept

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Producing other electric appliances

Hiring professionals to improve quality

Franchising abroad to reduce custom charges

5.4 THREATS

Threats are basically the external factors that adversely affect the goodwill of business. By

examining threats, such as new competitors in the market, organizations can implement

counter measures prior to the threat occurring.Threats are basically about:

What obstacles do we face?

What are our competitors doing?

Are quality standards or specifications for our job, products or services changing?

Is changing technology threatening our position?

Do we have bad debt or cash-flow problems?

GFC is facing following threats:

Emerging of global competitors

Low electricity safety standards

Decreasing trends in Income of customers

Local political issues

Negative image of Pakistan due to terrorism

Demand for imported products

Industry resistance to change

Low entry and exit barriers for new entrants

Change in mood, life style and demands of customers

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6 CONCLUSIONS

It was really an excellent experience for me to work in GFC fans (distributions centre).

During my internship I learned a lot about the real aspects of business and I really helped me

to explore my interpersonal skills and to utilize my academic skills into practical work.

After doing internship I have become more confident and responsible in my work. I have

learned to deal with the audience and to work with colleagues and it helped me to enhance

my skills of interacting with the people of different areas.

Since I have specialized in finance so, my internship in accounts department really helped me

to have command over finance related matters. I tried to learn all the major aspects of finance

department and documents that are prepared to run the distribution center accounts.

During my internship I also learned how to behave and help out the peers during work.

GFC has become one of the largest manufacturing industries in Pakistan and it is progressing

leaps and bounds. So, all of its departments are doing well. It is also launching its products in

abroad and it’s maintaining its quality also.

During my internship I have learned all the major things required maintaining accounts and I

also was able to observe the methods and strategies required to run business.

Besides accounts departments I observed the other entire department working in GFC

distribution center especially sales and purchased of products.

All the departments working in GFC are discussed and at the end SWOT analysis explains all

the strengths, weaknesses, opportunities and threats of GFC.

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7 RECOMMENDATIONS

During my internship in GFC fans distribution center I have observed all the functioning of

the center and tried to focus on the working GFC fans company as a whole. GFC is working

quite efficiently but still there is a need of improvement in many departments.

Though GFC is a leading fans manufacturing company in Pakistan but still there are many

areas where lot of improvement can be made to fill up the flaws which are also discussed in

SWOT analysis.

Here are some problems observed by me are discussed with their solutions.

GFC is still paying more attention to production department, it should give attention

to other departments especially R&D and inspection department.

GFC is paying less attention to its employees especially on their salary package, due

to low salary there is less motivational level of employees. Commitment level of

employees can be increased by addressing properly.

Another major issue is that FGC is run by two joint families and they are the board of

directors and decision makers of the company so, due to no involvement of employees

in management they are less owning GFC and try not to stay long time. There

motivational level can be increased by giving them part in decision making.

GFC technology is still not up to international standard so, it be raised up by

searching the global market. MIS system should be more efficient so that manual

system can be eliminated.

In accounts department GFC is still using the old system so that should be replaced by

latest accounting software.

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GFC is less focusing on the rural areas so it should focus on the rural areas as well to

increase the size of its market.

GFC is doing all of its manufacturing in Gujarat, it should shift manufacturing to

some other areas as well so that carriage and freight cost can be decreased.

GFC should diversify its business by investing in other electric appliances so that risk

can be minimized.

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8 REFERENCES

[1] "Gujrat Online," [Online]. Available: http://www.gujratonline.info/fanindustry.php.

[2] "GFC Fans," [Online]. Available: http://www.gfcfans.com/.

[3] "Pak Biz," [Online]. Available: http://pakbiz.com/Fan_SID104.html.

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