INTRODUCTION

Day by day technology is changing phenomenal development in science and

technology since 1950 has created a tremendous impact in our lives and lifestyles in our
consumption as well as in our economic welfare. Advances in electronics technical
advancement have very wide impact on all business and activities all over the world.
It becomes a key function to expand the business of HAL TAD, Kanpur in the
emerging aviation scenario.

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

undertaken production, design development of aircraft and manufacturing and
overhauling at HINDUSTAN AERONAUTICS LIMITED which is fully recognized
by the government.

Hindustan Aeronautics Limited is so vast, so capable and one of the best aeronautical
industry in the world. Its main quality is to provide best services and up gradation in
every aspect of the infrastructure.

HAL deals with domestic, national and international customer. Their customer
are fully satisfied with their policy, maintenance, and services. It is the major aviation
industry of the world. It deals with customer successfully.

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

common man through reduction in the cost in improvement in safety aviation brought a
huge change in transport sector.
 COMPANY PROFILE

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

UP.

Number of Company 4

Name of Complexes 1. Accessories Complex

2. Bangalore Complex
3. Design Complex
4. M I G Complex

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

2. Basant Aircraft
3. HPT-32 Aircraft Glider
4. Dornier -228
5. ATP – Tail plane

Product in HAL AVRO & DORNIER

ALH, CHETAK, LANCER, & CHEETAH.
AJEET, MARUT, MIG-27, SU-30, KIRAN,
LCA & JAGUAR.
HT-32, HPT-32 & ITT-36.
IJT PROJECT
 CORPORATE OF H A L
THERE ARE FOUR COMPLEX OF HAL

DESIGN BANGALORE ACCESSORIES MIG

COMPLEX COMPLEX COMPLEX COMPLEX
- Aircraft - Aircraft - Accessories - Aircraft
R&D Division Division, Division,
center - Engine Lucknow Nasik
- Rotary Division - Avionics - Engine
Wing - Foundry Division, Division,
center & Forge Korwa Koraput.
- Engine & Division - Avionics
Test bed - Helicopter Division,
R&D Division Hyderabad
center - Aerospace - Transport
- Strategic Division Aircraft
Electronic - Overhaul Division,
R&D Division Kanpur.
center - Industry
- Transport & Marine
Aircraft Gas
R&D Turbine
center Division.
- Upgrade
R&D
center
- Aerospace
system and
Equipment
R&D
center
- Gas
Turbine
R&D
center
- Central
Material &
Process
 Lab
- NDT center

RESEARCH METHODOLOGY

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

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

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

Another way of classifying the sources of information is :-

1. Primary Data
2. Secondary Data

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

folder, credit slip etc..

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

information.

2. Secondary Data : It is complied by some one other than the researcher for
purpose not directly related to the research currently under consideration .

Sources of Secondary Data

1. General Library
2. Newspaper ,Magazines journal etc .
3. Media
 4. Universities

THE COMPANY

Before commencing my project report, I would like to highlight about to highlight about
this most reputed and the only Aircraft manufacturing company in India.

HISTORY OF H.A.L
Hindustan Aeronautics Limited was formed on 1st October, 1964 by the merger of the
Hindustan Aircraft Limited and Aeronautics India Limited.

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

Shri Walchand Hirachand in December 1940 in associated with the Government of
Mysore, as a Private Limited Company. In the June 1942, Government of India
purchase the interest of the company and took over its management. Shri Walchand
Hirachand has the vision to start this company for manufacture of aircraft for the fist
time in India. The Harlow Trainer and Curtis Hawk Fighter Aircraft were the first two
aircraft produced by Hindustan Aircraft Limited and they were successfully test flown
in 1942. However, soon after, the aircraft manufacturing programs were abandoned in
favour of overhaul and repair of aircraft to support the war effort during World War-II.
Over 1000 aircraft such as Fortress, Liberator, Motchell Bomber, Dakota and
Commando Transport Aircraft, catalane Ambhinious Aircraft and piston engine fitt6ed
to these aircraft were overhauled by Hindustan Aircraft Limited during the war year.
After the company undertook reconditioning and conversion of war surpluses-
Dakota aircraft for use by air Force\ Civil operator and reconditioning of Tiger-moth
Trainers, Hawker Tempest Fighter and Liberator Bomber for the Indian Air Force.
 INTRODUCTION OF H.A.L

Hindustan Aeronautics Limited is a high technology Aerospace complex where

integrated air borne weapon platforms are conceived, developed, manufactured and
service. It is one of the few corporate giant in Asia whose capabilities span the entire
range of activity from product conception to after support. HAL is also involved in the
manufacture and assembly of system for India space programme.

Over more than five decades of its existence. It has established a broad
based technological infrastructure and highly developed manufacturing skills. With its
corporate office located in India’s Aerospace city Bangalore, it employs over 39,000
highly trained and motivated manpower spread over 13 divisions across the country.

CORE BUSINESS OF HAL

-- Design and development of Fixed and Rotary Wing Aircraft ,Avionics and
Accessories.
Manufacture, Maintenance, Repair and Overhaul of :--

 Fighter, Transport and Trainer Aircraft;

 Helicopters;
 Aero Engines;
 Avionics;
  Accessories;
 Ground Support Equipment.
Manufacture of structural components for satellite and Launch Vehicles.
Software development for Aerospace applications.
Design consultancy.
Some new products of HAL organisation developed in recent two or three years are as
follows :-

On November 17 th, 1995 the first technology demonstrator of the Light Combat
Aircraft (LCA) rolled out at Bangalore Complex. LCA is the smallest, light weight,
supersonic , multi-role , single seat fighter aircraft in the world which integrates modern
design concepts like static instability, digital fly-by-wire control system, integrated
avionics, glass cockpit, primary composite structure, multimode radar, micro processor
based utility and brake management system. .

Advance Light Helicopter (ALH) is the first helicopter designed, developed

and produced by HAL and also design and development of PTAE-7 engine for
installation in Pilot less Target Aircraft (PTA) . The maiden flight of this engine on PTA
went off successfully on 18th may , 1995 at the launch center –II of ITR at Chandrapur
on sea .

The company has been manufacturing and supplying aircraft parts to several
world’s leading aircraft manufacturing companies such as Airbus Industries, British
Aerospace, Boeing and Fokker. HAL is exporting its products and spare- parts to 21
countries in the world, including UK, France, USA, Switzerland, Japan, Holland and
Malaysia.
 DIVISIONS OF H A L

BANGALORE COMPLEX :

1. Aircraft division (Bangalore)

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

variety of aircrafts. Currently the division is Mfg. Jaguar international under license.
The division also exports high sub- assemblies to renewed aircraft manufacturers like-
AIR BUS, BOEING, FOKKER AND DORNIER.

2. Aero space division (Bangalore)

This division Mfg. Worthy structure like satellite launch vehicle, interstate
propellant tank and Separator mechanism for ASLV, PSLV, GSLV, IRS and insert
series.

3. Engine Division (Bangalore)

This division with over three decades of experience has acquired the state of the
art technology in manufacture , overhaul and maintenance of Aero engines.

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

804 Garrett TPE-315-5 ARTOUSE IIIB, DART & ORPHEUS Engines. It is also an
authorized service center for Garrett TPE 331-5 Series. The division is also diversified
into manufacture/ repair of industrial gas turbines.
4. Helicopter division (Bangalore)

This division was set up to manufacture , repair and overhaul-Helicopters for the
Defence sector as well as civil sector. The division under takes manufacture, repair and
maintenance of CHETAK & CHEETAH Helicopters. Currently the division is engaged
in setting a facilities for the series production of the ALH (advance light helicopter).

5. Foundry and Forage (Bangalore)

This division’s capacities include precision casting, sand casting, precision

forgings and ring forgings. The division is also involve in the development of materials
and alloys for aerospace and defence application.

6. Over haul division (Bangalore)

This division is established as a repair and overhaul base for fighters. It has so for
overhaul over 40 varieties of aircraft , major servicing and overhaul of associated
rotables in respect of KIRAN- MK- 1/MK-1A/ MK-II, Jaguar and Mirage 2000 are
undertaken. Barrackpore branch factory an unit of overhaul division under take
servicing of chetak, cheetah and AN-32 aircraft.

ACCESSORIES COMPLEX :

7. HYDERABAD DIVISION
 This division undertakes production and servicing of AVIONICS, Air route
surveillance Radar and sub system for IAF/Army /Navy/Coast Guard/ Space and other
civil application. This also undertake design and development of communication system
,Navigation system ,Airborne Radar system, Ground Radar system specific type test
equipment.

8. KANPUR DIVISION

Originally set up for the manufacture of HS-748 Aircraft. Today the division
manufactures HPT-32 and Dornier-228 Aircraft. The division also under takes , repair,
overhaul and maintenance of civil Aircraft including HS-748, Fokker-27, Gliders, Do-
228 and HPT-32.

9. LUCKNOW DIVISION

The manufacturing range of the Division includes the mechanical and Hydro
mechanical accessories, fuel system accessories and instrument accessories for the
complete range of Ground equipment . The division has also set up accessories design
bureau which undertake indigenous development of accessories required for the various
Aircraft engines and tanks for the services.

10. KORWA DIVISION

The capability of this division covers the manufacture, repair and maintenance of
Advance Avionics system for Military aircraft of Eastern origin and western origin
covering inertial Navigational system . Head up displays , weapon Aiming computers,
combined Map Electronic- display , Laser Ranger and Marked Target seeker, integrated
Navigation and sighting complex . Production capabilities also include manufacture and
repair of Electronic modules using ATE.
MIG COMPLEX :

11. NASIK DIVISION

Established as a manufacturing base for MIG series of Aircraft . The division has
manufactured / overhauled a large number of variants of MIG series. Currently the
division manufactures MIG-27, repair and overhauls MIG-21 BIS and MIG-27. It also
manufactures flexible fuel tanks , metallic drop tanks and honey comb structures.

12. KORAPUT DIVISION

In this division the R-11 series engines , R-25 series engine and R-29B engines
are manufacture and overhauled, facilities have also been set up for the overhaul of RD-
33 engines . The division has also excellent hot forging and precision die casting
facilities for both ferrous and non ferrous alloys .

DESIGN AND DEVEIOPMENT BUREAU :

1. AIRCRAFT DESIGN BUREAU (BANGALORE)

Design activity commenced in 1948 by Dr. V.M. Ghatge. When a project was a
project was sanctioned for design and development of HT2 and elementary piston
engine Trainers. Since than the design Bureau has de3signed wide variety of Aircraft
such as Marut, Pushpak, Krishak, Basant ,Ajeet and variants of Kiran and HPT-32. The
design authority function for the LCT vests with HAL.

2. ENGINE DESIGN BUREAU (BANGALORE)

The Bureau design and develops engine and related test set up facilities. The
Bureau has successfully developed a jet engine PLATE-7 for the pilot less target
Aircraft and the Gas turbine starter unit for the LCA . The Bureau has also designed
Fabricated and commissioned test bed for Garrett TPE- 331-5 engine and R-298 engine.

3. HELICOPTER DESIGN BUREAU (BANGALORE)

Responsible for Design and Development of Helicopters. This Bureau also

undertakes programme covering modifications of chetak & FRD blades for the wind
powered Turbines. The design, development and prototype production and flight
certification programme of the Multi-role Multi Mission Advanced Light Helicopter is
in hand.
 THE DIVISION

TRANSPORT AIRCRAFT DIVISION ( T A D ) KANPUR

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

light category Turboprop Aircraft. It was set up in 1960 to manufacture HS-748
(AVRO), a medium overhaul of multi-role transport aircraft. Over the years, It has
vastly developed its infrastructure and capabilities and undertaken the manufacture of
Agriculture Aircraft (HA-31), Basic Trainer Aircraft (HPT-32), 15-19 Seated multi-role
utility aircraft [Dornier (Do-228) ] and a variety of aerospace structural assemblies and
component for both domestic and international market .

Concurrent with threw manufacture activities , Kanpur Division has developed

extensive facilities for repair overhaul and modification of these aircraft as well as for
about 400 types of rotable fitted on these aircraft . Plans are underway to augment the
facilities for maintenance of other medium category aircraft .

Kanpur Division’s production standards are up to the mark., this fact lies in the
sentence that it is a member of ISO-9002 to party and today it is considered a pioneer in
the field of manufacture and overhaul of transport category aircraft in the country.
Staffed with above 3000 suitably trained and skilled workforce, the spectrum of
activities at Kanpur Division encompasses:
(1) Manufacture of Aircraft
(2) Repair and overhaul
(3) Manufacture of spare parts
(4) Services
ABOUT THE PROJECT

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

really interesting. In HAL I was placed Finance Department in valuable guidance of Sri.
Kapil Khanna Dy. Mgr (BPI)

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

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

manufacture spare parts, rot able etc. HAL also provide maintenance to accidental
Aircraft. Their process of servicing is very good. After evaluating all this they provide
service.

Finance Department main function is to send and receive e-mail and order to
payment made according to customer condition and provide best facility to their
customer.

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

upon customer demand. Its main target is to provide 100 seated aircraft for their
customer.
.
FINANCE & ACCOUNT DEPARTMENT

TIME OFFICE

Time office is a part of Finance & Accounts Department . This section prepare
`Punching and Leave records of the employees. Time office is dealing with the
employees of the organisation only. Time office is totally computerise.

Every employee have a punch card on which their personal number is coded in
binary from because computer understand only binary number(0&1). When employee
arrive and departure, they punch their card in punching machine is linked to the
computer of the Time office. They maintain daily records of employees and sent to the
payroll section . Another record they maintain is Leave records . Leave are different
type – Casual leave , Vocational leave , Medical leave , Special leave.

FUNCTION OF TIME OFFICE

--- Placement of time punching cards in the time cards racks for recording
attendance.
--- Receipt of approval leave application, O.T. authorisation , attendance sheets,
employees gate passes.
--- Maintenance of leave records and feeding of attendance data to computer
with reference to the documents received. Where leave records are computerised the
approval leave applications are sent directly to the computerised the approval leave
applications are sent directly to the computer by the respective departments.

PAYROLL SECTION

Payroll section is also part of Finance and Accounts Departments. Payroll section
deals with the pay and allowances of employees only . Payroll section prepares payroll
of the employees based on attendance furnished by the time office .They have full
information / particulars of employees. Pay-slip carries information like –Basic salary,
other allowances and various deduction such as PF etc. Payroll section sent the pay slip
of all the employees to the cash office for the final payment.

FUNCTION OF PAYROLL SECTION

--- Disbursement of salaries and wages,

--- Payment and recovery of advances,
--- Recovery of dues from employers ,
--- Payment of travel and L.T.C. advances and adjustment thereof ,
--- Reimbursement of expenses like medical , conveyance, school
fees etc.
--- Remittances of amounts recovered from employees to various
agencies ,
--- Accounting of all payroll transaction,
--- Maintenance of employees pay record cards ,
--- Miscellaneous.
ACCOUNTING REGISTERS
--- Leave record ledgers/ registers,
--- Salaries and wages Journal,
--- Travel Expenses Journal ,
--- L.T.C. Expenses Journal,
--- Loan Registers,
--- advances Registers for:
[1] Travel advance
[2] L.T.C advance
[3] salary advance
[4] Vehicle advance
[5] Festival advance
[6] Increment Register
--- Cyclone / flood relief loan / special loan,
--- Conveyance Reimbursement Register,
--- Remittances Register of recoveries ,
--- Registers for Reimbursement of other expenses,
--- Unpaid wages Register.

CASH OFFICE

Cash office is responsible for all receipts and payments of cash / cheques and
accounting of the same in the books . Cash office also arranges the disbursement salary
to the employees . the main function of this section are:-
--- Receipt of cash , postal orders, cheques, bank drafts etc. and issue of official
receipts for the same
 --- Banding of all receipts,
--- Drawl of cash from bank to cater for daily needs,
--- Payment of vouchers by cheque / cash,
--- Writing of cash / bank book,
--- Preparation of bank reconciliation statement,
--- Safe custody of cash, cheque books ,bank guarantees, fixed deposit
receipts and other investment.

ACCOUNTING REGISTERS
--- Cash Book,
--- Securities Register,
--- Money order Register,

BILLS PAYABLE SECTION

Bills payable section is one of the most important section of FINANCE &
ACCOUNTS department because of huge transaction. Bills payable section are divided
in to two parts :-
[1] Bills payable indigenous,
[2] Bills payable foreign,
The function of this section is payments of bills of supplies and services of the
Indian &Foreign vendors. Bills section because bulk of the component / material used in
Aircraft Manufacture is important from foreign.

INDEGENOUS BILLS PAYABLE

 This section deals with the bills of the Indian vendors from whom Hindustan
Aeronautics Limited, Kanpur Division , Kanpur buys material / components for the
production purpose as well as for its own consumption e.g. stationary , maintenance
items, capital goods , a consumables and bills of services nature such as Insurances ,
repairs, freight etc . This section deals with the following aspects o0f supplies &services
rendered by Inland vendors to the company :-
--- Payment and accounting of advances to suppliers,
--- Payment and accounting of advances to other vendors,
--- Payment and accounting of final bills,
--- Bank dealing with relation to suppliers,
---Adjustment/ recovery of advances,
--- Accounting/ adjustment of earnest money from work,
--- Accounting and pricing of Receipt Voucher heads of
expenses of revenue/ capital nature.
--- Payment of bills for civil works and welfare expenses.

PAYMENT PROCEDURE
The payment of bills may be classified under following three categories :-
[1] 100% advance payment ,
[2] Payment against delivery/ bank documents,
[3] Payment of bills against credit supply,
[4] Running payment against various work contracts.

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

Purchase Order . This purchase order is prepared by the Purchase Department based on
MPR(Material Purchase Request) raised by stores/ user . In purchase order , the name of
vendor company , item number , description of material, unit purchase, rate ,quantity of
material, and value of order are mentioned. Various details furnished on purchase order
are as fallows :-
--- Price Quoted,
--- Scheduled Delivery of Material,
--- Sales Tax,
--- Payment Terms,
--- Despatch Instruction,
--- Inspection,
--- Addressee to whom the copy of the challan and Invoices,
are to be sent,
--- Special Instruction If Any.

Two copies of purchase order is sent to the bills payable section . When material/
component reached at the stores , the store section prepares `Good Receipt Note ‘ in
which item number , description of material, and quality of material is mentioned . Store
section raises seven copies . The material is then offered to quality control inspection for
necessary inspection . The Inspector, after checking the material with reference to
specifications mentioned in purchase order indicates the Quality accepted / rejected on
Goods Receipts Notes. The Bills Payable section after receiving the GR note , prices it
item wise and payment of the bill is passed in favour of supplier companies . One copy
of GR note duly priced is forwarded to Material Accounts section .

ACCOUNTING REGISTERS
--- Inland Purchase Journal,
--- Inland Services Journal,
 --- Imprest Journal,
--- Advance Journal,
--- Insurance claims Journal,
--- Earnest Money &Deposit Accounts Register,
--- Sundry Creditors Register,
--- Advance to Supplier Register,
--- Miscellaneous Advances Register.

FOREIGN BILLS SECTION

Foreign bills are those bills which relates to bills of items imported from foreign
countries. Foreign bills section is important because most of production material in this
Industry is of import nature. This section deals with the following aspects of supplies
and services rendered by foreign vendors/ collaborators to the company.
--- Payment and accounting of advances to suppliers,
--- Payment and accounting of services obtained from. Collaborators and
others,
--- Payment and accounting of contractual fees (License fees, Royalty
etc.)
--- Payment and accounting of customs duty, freight bills, agency
commission bills etc.,
--- Payment and accounting of final bills ,
--- Adjustment/ recovery of advances,
--- Accounting and pricing of receipt vouchers,
--- Opening of letters of credit and dealings with Banks for obtaining
Foreign Exchange release and Payment thereof,
 --- Maintenance of commitment registers for budgetary purposes ,
--- Maintenance of deferred liabilities accounts.

PAYMENT PROCEDURE
The procedure of payment is little different as compared to Inland payments. The
payment procedure is made through :-
[1] Letter of credit,
[2] Sight Draft,
[3] Advance payment ,
[4] Direct payment,

ACCOUNTING REGISTERS
--- Foreign Purchase Journal,
--- Goods in transit register,
--- Letter of credit Register,
--- Contractual Payment Register,
--- Advances to Suppliers Register,
--- Sundry Creditors Register,
--- Deferred Liability Register.

The present era is" credit era" most of the transaction are performed on credit basis on
account of the following reasons.

1)-intensive competitions & increase in number of sellers have given buyers the option
to purchase goods from seller who can offer him the most for his money.
2)-credit-terms have become one of the most important factors in negotiating a sale.
3)-credit insurance has reduced the risk of credit extension.

-LETTER OF CREDIT:
It is a sort of guarantee to the exporter that his draft will be honored by a specific
bank up to certain amount as per the specified terms.

KINDS OF LETTER OF CREDIT}-Letter of credit may be of the following types.

1}-GENERAL & SPECIAL LETTER OF CREDIT
2}-OPEN & DOCUMENTARY LETTER OF CREDIT.
3}-FIXED & REVOLVING LETTER OF CREDIT.
4}-REVOCABLE & IRREVOCABLE LETTER OF CREDIT..
5}-CONFIRMED & UNCONFIRMED LETTER OF CREDIT.
6}-"WHAT "& "WITH OUT RECOURSE" LETTER OF CREDIT..
7}-TRANSFERABLE & NON-TRANSFERABLE LETTER OF CREDIT..
But in this organization [H.A.L.] mainly three types of letter of credit are used.
1]-REVOCABLE LETTRE OF CREDIT}- A revocable credit is one where the
issuing banker reserve to itself the right to concede or modify the credit at any moment
it likes with out notice to the beneficiary.
Such a credit or correspondents in the exporters 's town to open a letter of credit
in favor of the exporter & the agent or correspondent being unwilling to take any
liability on the document merely advises the beneficiary that the credit has been
Opened & safeguard itself by declaring that the credit is subject to cancellation
At any time without notice.
2]-IRREVOCABLE LETTER OF CREDIT}-An irrevocable letter of credit is one
,which can not be withdrawn by the issuning banker gives an absolute undertaking to
honour the bills of exchange drawn stricity in accordance with the terms of the letter of
credit.

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

advising banker of the exporter’s country , at the request of the issuing banker, adds its
confirmation to an irrevocable credit.
In such a case the advising banker takes upon itself the liabilities as that of the
Issuing banker.
The applicant may request the issuing banker to arrange for such credit when the
beneficiary asks for it. This serves as a perfect & absolute security for the beneficiary.

MATERIAL ACCOUNTS SECTION

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

of materials, stores, and spares of the organisation
. The main function of Materials Accounts Section are cover following point :-
--- Maintenance of Material Ledger cards for all materials held in
stores ,
--- Accounting of the receipts of all materials by various classes and
issues of all materials drawn on work orders and expenses account,
--- Reconciliation of the balances with the General Ledger,
--- Quality reconciliation of Bin Card balances with Material Ledger
Balances,
--- Accounting of inter-divisional transfers of materials and its
 reconciliation,
--- Raising debit advices against contractors and others for materials issued/ sold
and accounting thereof,
--- Maintenance of loan registers for materials issued on loan and
follow up for return ,
--- Scrutiny of slow , non- moving and redundant inventories .

DOCUMENTATION

Material Accounting Section receives various documents and sends the to

computer/ data processing and obtaining necessary accounting output statement . Where
such documents are received in this section, their processing and accountably are
detailed below :-
--- Receiving Reports,
--- Material Requisitions,
--- Store credit Notes,
--- Stock Credit Notes,
--- Stock Transfers/ stock re-classification,
--- Stock Verification Notes.

All documents are received from various section like- stores, purchase, bills
payable etc. From their document, Material Accounting section prepare different
accounts for having information about the material issue, use or other things.

ACCOUNTING REGISTERS
--- Goods Receipt register,
 --- Stock – in- trade Register,
--- Goods issue Register.

BOOK-KEEPING AND BUDEGET SECTION

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

information from all the section of Finance and Accounts Department and then prepare `
Profit and Loss accounts’, `Balance Sheet’, and other accounts books. This section also
prepare. `Budget’ of the organisation. The function of book keeping section are as
following :-
--- Maintenance of journal and general ledger,
--- Preparation of Trail Balance , Profit &Loss and Balance Sheet,
--- Maintenance of Capital Assets ledgers and Location Register,
--- Preparation of Fixed Assets and depreciation schedules,
--- Furnishing data for determination of Income Tax liability,
--- Disposal of surplus /condemned plant & machinery and other
assets,
--- Reconciliation of control accounts of other division/Corporate
office,
--- Liaison with Audit authorities.

ACOUNTING REGISTER
--- Journal,
--- General Ledger,
 --- Main Assets Ledger/ Register,
--- Departmental / Location Assets Register,
---Semi- perishable Equipment Register,
--- Miscellaneous Equipment Register,
--- Fixed Assets Disposal Register,
--- Control Account Advices Register.

Book keeping section maintains records indicating the equipment numbers of

machines and the equipment located in various departments. The department are also
required to maintain Location of each machine in the department to facilities physical
verification.
Book- keeping section calls for annual inventory of capital assets held by the
departments once in every year. The departments furnish list of capital assets together
with equipment numbers held by them to Book- keeping section.

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

Kanpur Division, A budget is an overall blue print of a comprehensive plan of action
expressed in physical and financial terms, it includes plan for each of the activity /
responsibility centers of the business and provides a link between the physical and
financial plans of various department of a company. It is also a document to various
department to serve as a co0ntreol for monitoring and r5eview. A budgeting system is a
comprehensive system of planning and control covering all segments of an undertaking
and giving a sense of direction. The budget system should be such that it makes it
imperative for management to establish goals and objectives, define policies, develop
programs, both long term and short term and allocate resources , measure performance
against the target and in the process, revise the objectives and policies , if found
necessary. The budget period is the financial year commence in mid June . The budget
is projected in a three year time frame covering estimates for :-
--- Current Year (RE) ,
--- Budget Year (BE) ,
--- Forecast Year (FE).

TYPE OF BUDGET
--- Capital Budget,
--- Performance Budget,
--- Production Budget,
--- Sales Budget,
--- Purchase Budget,
--- Manpower Budget,
--- Welfare Budget,
--- Foreign Exchange Budget .

BILLS RECEIVABLE SECTION

Bills Receivable Section is Most important section in the Finance and Accounts
Department. This section is responsible mainly for preparation and submission of
invoices to customers for the supplies made and services rendered , and follow up for
recovery of the amounts and accounts and accounting of the same . The main function
of this section are :-
--- Scruting of sales orders including export sales,
--- Preparation of invoices for work done / to be done and services
rendered,
 --- Recording of invoices rendered,
--- Review of closed work orders for which invoices have not
been prepared,
--- Accounting for sale of equipment and services rendered,
--- Compilation of sales tax return and payment of sales tax,
--- Customs and excuse duty.

PAYMENT PROCEDURE
[1] Old payment procedure are :--
--- Fixed Cost Quotation Basis
(a) Manufacturing projects ,
(b) Repair / overhaul projects .
--- Cost Plus Basis
(a) Manufacturing projects,
(b) Repair / overhaul projects ,

[2] New payment procedure are :--

--- Fixed Price quotation Basis
(a) Manufacturing projects ,
(b)Repair / Overhaul projects ,

ACCOUNTING REGISTERS
--- Sales Journals For :--
(a) Manufacturing of equipment,
(b) Overhaul of equipment,
(c) Manufacturing of spares,
 (d) Miscellaneous .

--- From 530 ( Q423) Register,

--- Invoices Register,
--- Stage Payment Registers For :--
(a) Manufacturing,
(b) Overhauling,
(c) Repair, Maintenance and supply order,

--- Despatch Advices Register,

--- Sundry Debtors Ledgers,
---Claims / Accounts Receivable Ledger.

ELEMENT
There are three broad elements : --
1. Materials;
2. Labour; &
3. Expenses.

MATERIALS:--
Material are substances from which products are manufactured .These materials
can be in a manufactured state. Materials can be described as direct and indirect.

DIRECT MATERIALS:--
Direct materials are those materials and supply which can be identified with the
manufacture of a single product or a group of products.
INDIRECT MATERIALS :--
Indirect materials are those materials and supplies which are consumed in the course
of manufacturing but are not charged to production , e.g. , oil , waste , consumable
stores, rags, cleaning materials for machines etc.

LABOUR
Labour can be defined as that human effort by which materials are shaped in to a
finished from. Labour can be direct and indirect.

DIRECT LABOUR

Direct labour like the direct material, can be identified with the manufacture of a
single productor a group of products . Thus direct labour cost can be allocated
directly to the cost of production.

INDIRECT LABOUR

Indirect labour is employed with a view to carry out tasks incidental to goods or
services. Such labour has no bearing on the condition, composition or construction of
the product or the group of products. Examples of indirect labour costs are wages of
time keeping, foremen , store- keepers, salaries of salesman and the fees of directors
etc .

EXPENSES
 Expenses are also direct / indirect .

DIRECT EXPENCES:--

Direct expenses are those which can be allocated directly, conveniently

and wholly to cost centers or cost units, e.g. cost of defective work on relation to a
particular job or contract, expenses of hire of some special machinery to do a
particular contract, etc .

INDIRECT EXPENSES:--

Indirect expenses are those which can not be allocated directly conveniently and
wholly to cost centers or cost units but which can be apportioned to or absorbed by
cost centers and cost units .
The term indirect expenses should not be confused with the term overheads ,
which has a wider meaning . Overheads are the aggregate of indirect material cost ,
indirect wages and indirect expenses .

CLASSIFICATION OF INDIRECT EXPENSES

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

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

They are incurred in factory and are concerned with running of the plant or
factory . They include expenses on manufacturing management and administration.
E.g. of these expenses related to the following; depreciation of plant and machinery,
 and factory building: power used in factory; rent rates, insurance and lease of the
factory building, manufacturing consultency, etc.

2. Office {or administrative } expenses:

The expenses are incurred on the management , administration and legal entity of
business enterprises and or not related to the factory expenses . Thus they are expenses
of controlling and directing the business, and keeping its entity enact. Examples are;
office premises’ rent, lease, light , heat and depreciation; postage and telegrams;
depreciation and maintenance of office furniture, equipment and machines; office
consultency; audit fees; legal charges; and bank charges; general computer hire charges
for managerial decision making, etc .

3. Selling and Distribution Expenses:

These expenses are incurred to market the products, for creating demand for the
products, for securing orders from customers, for conducting a market research survey
and for building up and retaining market research survey and for building up and
retaining market for the products. Examples: Market survey and advertising exp.,
travelling exp., bad debts, collection charges, and cost of preparing tenders,
warehousing charges on sales, packing and loading charges, etc.

PROCEDURE OF BILLRECEIVABLE

I will take the case of Indian Air Force. H.A.L taken has the three types of
helicopter for the repairs, maintenance and overhauling . These are :--
--- Avro (HS-748)
--- Dornier-228
 --- HPT-32

Bill Receivable Section receipts the all types of payment vouchers, for
preparation and submission of invoices to customers for the supplies made and services
rendered and follow up for recovery of the amounts and accounting of the same . Bill
Receivable Section used the some document.
--- Q-423

It is the three types

(a) Goods Issue (G.I)
(b) H.A.L Advice and Inspection Notes
(C) Customer Inspection certificate.
--- Work done report
--- Acceptance certificate
--- Signal out certificate
--- Date of induction –(Q 431 / 429)
Q-423 document and signal out certificate are compulsory document in every
case of Indian airforce.

H.A.L Bills Receivable section adopted the New payment procedure system in
the Indian Air Force case .

Fixed Price Quotation (FPQ)

 Fixed price quotation is a new type of contract which was introduced after 1995
when IAF demanded the same type of quotation . In this all the elements of cost are
determined in advance before acquiring order from the party . It is just like a tender
which is floated at the time of enquiry raised by the customer.

This concept is New for HAL and due to this now HAL is more conscious about
reducing the cost and adopting the effective method in production to reduce the cost,
because lesser the cost more will be the margin of profit.

This is improved from of FCQ and preparing it all the possible expenditure,
material required, MHR and man-hours. DRE are estimated in advance from past
experiences i.e. by studying the past orders and its costs.

In this profit is also included, infect after ascer4taining all the possible costs, a
percentage of profit is added to it and the quotation is submitted to the party. This
quotation is prepared every year and submitted to the customer. So far the present
quotation which are submitted by HAL are under the process of approval from the
ministry.

That is why the transaction are presently based on FPQ and after the approval the
plus/ minus will be adjusted accordingly. However, the advantages in this system lies in
the advantages in this system lies in the fact that there will be a incentive for the
manufacturing to increase the efficiency / productivity and reduce the costs.

FIXED PRICE QUOTATION (FPQ)

MANUFACTURING PROJECTS:
The projects FPQ in respect of HPT-32 aircraft for the years 2001-2002 and
2002-03 are attached as example-1 to this letter. HAL’S final claims for delivery of 16
aircraft during 2001-02 and 15 aircraft during 2002-03 will be settled at the approved
FPQ rates after adjusting the advances drawn against the project . The Division is to
prefer the finals claims duly supported by the following document:--
(a) certificate of achievement of milestone duly co-ordinated by CRI(Q-423)/ progress
of work.
(b) Work done Report
(c) Goods Issue Voucher duly signed by IAF representative.

In case the work done report specifies that the aircraft is delivered with certain CAT-
B rotables/ assemblies. The cost as included in the BOM for these items will be reduced
from the claim and the amount so deducted will be paid on proof of dispatch of CAT-A
rotables/ assemblies.

OVERHAUL OF AIRFRAME:--

The FPQ for check III servicing of HS-748 (Avro) , HPT-32, and Dornier-228
(1200hrs , 2400 hrs and 3600 hrs , servicing ) . The prices mentioned in the approved
FPQ are inclusive of all costs other than the following :--

(a) In respect of rotables for which the Division does not have facilities and are sent
to outside agencies other than sister divisions of HAL the Division shall be paid the cost
plus percentage freight and Insurance .
(b) Claim for rotables for which facilities exist in the other HAL Divisions and these
are sent for repair / overhaul to those Divisions, the claims shall be preferred by the
division undertaking this task of repair / overhaul and the FPQ of HAL Kanpur does not
include either the material or the labour cost thereof. The same will be claimed by the
division undertaking repair / overhaul.

(c) While the material cost for non- mandatory spares required for check-III servicing
for HPT-32 and HS-748 which are fabricated by the Division has been included. The
labour cost, if any for fabricated of non-mandatory- Own Manufactured (OM) spares
shall be reimbursed extra based on actual along with 10% profit . The FPQ in respect of
DO-228 for 1200 hrs. Servicing and 2400 hrs. Servicing does not include th3e labour
content for fabrication of own manufactured (OM) items.

(d) FPQ for DO-228 3600hours . Servicing does not include the cost of material
which is to be paid on coat plus percentage freight and insurance and profit.

(e) If due to technology charged or flight safety requirement , AHQ/ CRI prescribe a
change in norm of consumption or required substitution of item included in 5the bill of
material the division shall be reimbursed the difference between the value included in
the bill of material and the actual incurrence with freight and insurance profit
percentage.

(f) The following documents shall be submitted directly to along with the final
claims,

(1) Certificate of acceptance duly co-ordinated by CRI (Q-423).

 (2) Certified by MRs (Material Requisition).
(3) Goods issue vouchers duly signed by IAF Representatives.

SUPPLY OF SPARES:--

(a) In the case of supply o0against RMS orders, pending approved of price,
catalogues for the division shall be paid provisionally as per the cost indicated in
the RMS orders for the deliveries and final payment would be adjusted as per
Government approved price catalogues.
(b) In respect of supplies made during years and on wards, against RMS order, the
division shall be paid provisionally a first stage payment of 65% in case the
deliveries against the RMS orders are due with in 12 months from the issue of
RMS order . In case of deliveries beyond 12 months from the date of RMS orders,
a first stage payment of 40% shall be made on placement of RMS orders. A
second stage payment of 30% shall be made 6 months prior to the scheduled date
of deliveries in case of delivery beyond 12 month as per the latest approved price
catalogue. The final payment of 5% in case of delivery with in case of delivery
beyond 12 months will be made as per the govt. approved price catalogue for
schedule year for delivery.
(c) In case if BOF items indented by IAF , an advance stage payment of 65% of order
value will be made to HAL on placement of order on the vender. The balance will
be to reimbursed along with freight and insurance , on the basis of venders
invoice . In case of brought out foreign items which are supplied from HAL stores
the division along for freight and insurance.

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

(a) IAF (Q-423) duly co- ordinated by CRI
(b) Good issue voucher duly signed by IAF representative or dispatch details.

OVERHAUL OF EXTERNAL ROTABLES:--

The FPQ for overhaul of external rotables are exigencies of workload the rotables
which fall within the task range of Kanpur Division are sent to outside agencies/ abroad
for repair and overhaul, the actual expenditure incurred including freight and insurance
will be reimbursed provided air HQ/CRI clearance is obtained prior to sending such
rotables to out side agencies. Document to be submitted to along with final claims are:-
(a) Certificate of acceptance duly coordinated by CRI (Q423) despatch advice.
(b) In case where the overhaul is get carried out from outside agencies , the vendors
invoices shall also be attached.
(c) Certified by TMM incharge duly supported by MRs.

DEFECT INVESTIGATION AND CAT-E ROTABLES:--

(a) The rot able / equipment will be loaded to rotables shop viz mechanical, electrical ,
instrument and avionics for defect investigation / servicing / overhaul as per
customer’s requirement.
(b) The rotables will be visually examined for any defects and extend of damage and
will be subjected to functional checks on test bench.
(c) If functional checks provide satisfactory results in defects investigation cases, the
rotables will be returned to the user as per directive to DI committee.
(d) If functional checks is not satisfactory, then rotable ,if repair / overhaul is advised by
CRI.
(e) If a rotables is categorised as economically or technically beyond repair then the
rotable will be categorised as cat E and labour charges will be paid based on CRI
certification . If rotables sent abroad for repair / overhaul is declared cat- E by the
vendors the cost incurred will be reimbursed with freight and insurance.
(f) The serviceable / usable parts retrieved after stripping of such rotables are to be
credited to HAL held IAF stores duly coordinated by CRI .

CAT- B REPAIES:--
The FPQ attached are not applicable in case of CAT-B repair aircraft. In case of
CAT-B repairs of airframe tasked by IAF as per the approved Govt. task . The division
will be paid on cost plus profit.

MODIFICATION:--

In respect of any additional MODS which are introduced and are not included in
existing schedule of work for repair and overhaul. Payment will be made on cost plus
profit duly coordinated by CRI. The division shall submit a separate FPQ and have the
same approved. In the meanwhile, the division shall be paid advance on the basis of
rates indicated in RMSO.

DUTIES/ TAXES:--

(a) The price is exclusive of taxes and duties i.e. sales tax etc. If any . levied by state/
central Govt./ Local Authorities.
(c) The division shall be reimbursed custom duty paid by them for procurement of
material for IAF task on actual to the extent not included in material cost. In the case
 of multi customer products custom duty paid on purchase will be reimbursed
proportionate to the purchase for each customer.

EXTRA TO SCHEDULE:--

(a) Overhaul of airframes/ rotables

(b) Extra to bill material

The bill of material of overhaul of check III servicing of Aircraft has been worked
out on probably factor of consumption based on past actual data.

HAL-held IAF stores:--

(a) Overhaul/ check III servicing

(b) CAT-B repair/ extra to schedule Jobs/ cost plus jobs
(c) External rotables and internal rotables.

COST PLUS BASIS:--

The cost plus jobs will be valued as per the following procedure:--
(1) Material cost
(2) 4% of ‘A’ as freight and insurance
(3) Total material cost (1+2)
(4) Actual labour hours booked
(5) Approved man-hour rate for the year
 (6) Labour cost(4x5)
(7) Total cost(3x6)
(8) 10% of (7) as profit
(9) Amortisation of DRE with 7.5% profit [ (If any) nit included in Govt. section for
specific projects)
(10)Total Price(7+8+9)

Special exemption is hereby provided for claims which could not be preferred
between September to July due to non- finalisation of FPQ etc. and have become time in
this period.

OUTSTATION JOBS:--

(a) Permanent detachment

(b) Site repair
(c) Visiting aircraft
(d) Pending approval of the man-hours rate for the year and beyond a provisional
claim at the latest approved man-hour rate may be preferred and subsequently
the final claim at the approved man-hour rate will be preferred after adjusting
the amount provisionally drawn on this account.

PAYMENT:--

The price payable for overhaul will be regulated at the FPQ rate applicable as under
irrespective of actual delivery date.
Induction against a financial year’s FPQ rate of the financial
Firm task received with the cut off year of the firm task.
Date specified above.

(1) Induction after the cut off date (unless FPQ rate for the following
Specifically accepted by the division years.
Against that year’s task).

2. In case the work done report specifies that the aircraft is delivered with certain
CAT-B rotables/ assemblies . The cost as included in the BOM for these items will be
paid on proof of dispatch of CAT-A rotables / assembles.
LIQIDATED DAMAGES:--

The claims of the division for supplies during last year and current year will be
paid as per the approved FPQ without having any liquidated damages. The condition for
liquidated damages will be approved by MOD as part of standard terms and conditions.
On issue of orders, the cases for last year and current year will be reviewed for levy of
liquidated damages .

PAYMENT FOR STAGE PROCEDURE FOR STAGE PAYMENTS FOR

ONWARDS:--

The first stage payment shall be worked out on the basis of 65% of the latest
approved FPQ for the firm task. A second stage payment of 30% will be made on
certification of acceptance duly co-ordinated by CRI and from Q423 alongwith dispatch
advice where necessary. The balance 5% will be paid on approval of FPQ for the
relevant years.

IDLE HOURS:--

The case for reimbursement on account for idle hours shall be considered based
on detailed inputs to be provided by the division.

DRE:--
All DRE expenditure incurred on tooling, Jigs and fixtures. Training
foreign specialists. Design and development for tool designing project management
flatons and other preprodution expenses directly related to manufacturing overhaul
projects including license fee. However , this payment will be within the selling
approved for the project.

INTEREST:--

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

on milestones in the last quarter of the preceding financial year. The fund projection
will be mutually discussed and agreed between HAL and IAF, shortfall in the release
of funds with respect to this requirement will attract interest at prevalent cash credit
rate from the time invoice for stage final payment is preferred till the date it is paid
with 5.5% profit per annum.

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

office ,the claims will be paid with 5.5% profit on quarterly basis based on the
 projected sales ratio provisionally and thereafter finally adjusted at the end of the
year based on certified accounts.

COMPUTATION OF MANHOUR:--
TOTAL EXPENDITURE
MAN PER HOUR RATE =
TOTAL MANHOUR

This is the whole description about IAF case. We are maintain the all type of
information about the bill receivable. Now we are showing the format of fixed price
quotation .

FOR EXAMPLE:-- THE FORMAT

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

Sl. Particulars Kanpur Division

No. Last year Current year
.1 Material
Imported
--Raw material
--Rejection[8%]
--bought out items
--Rejection[1.5%]
--Consumables
--Rejection[20%]
Sub- total-1.1
1.2 Indigenous
i. Raw Materials
Rejection[8%0n (i.)]
ii. bought out items
Rejection[1.5%on (ii)]
iii. Consumable
rejection[0%on iii.]
ATF and SACL items
[Chock and Covers]

Sub-total-1.2
Total-(1.1+1.2)
Freight and insurance
1.3 Charges 4% of-(1.1+1.2)
Material cost-1
Conversion cost
2. Man hours :
MHR:
Rs:
Total-2
3.
4. Sundry direct charges
5. Total cost (1TO 3) Profit
@10%/5.5% on NHPOH
6.
Selling price
 SUMMARY

THE COMPANY

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

largest of its kind in Asia, whose capabilities span the entire range of activities in
virtually all areas of aerospace technology. Over more than five decades of its
existence . It has established a broad based technological infrastructure and highly
developed manufacturing skills. With its corporate office located in India’s Aerospace
City Bangalore.

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

engaged in design, Manufacture and overhaul of a variety of aviation products from
basic trainer aircraft to highly sophisticated Fighters, Bombers, Helicopters, Transport
Aircraft, their power plants, avionics, systems accessories and other Aerospace
products.
Since its inception in 1940, the company has grown in to a giant aviation
complex spread all over India and employing a versatile work force of about 39000
motivated, highly trained, skilled and experience personnel .Spread over 13 division
across the country.
 -:ORGANISATION STRUCTURE:--

CORPORATE OFFICE:--
 Design Complex
 Bangalore Complex
 Accessories Complex
 MIG Complex

DESIGN COMPLEX
1. Aircraft R&D center
2. Rotary Wing Aircraft R&D center
3. Engine Test bed R& D center
4. Strategic Electronic R&D center
5. Transport Aircraft R&D center
6. Aircraft Updates R&D center
7. Aerospace system and Equipment
8. Gas Turbine R&D center
9. Center Material and Processes Lab and NDT center.

BANGALORE COMPLEX
1. Aircraft division
2. Overhaul division
3. Foundry and Forge division
4. Engine division
5. Helicopter division
6. Aerospace division
 7. Industrial and marine gas turbine division.

ACCESSORIES COMPLEX
1. Lucknow division
2. Korwa division
3. Hyderabad division
4. Transport Aircraft division

MIG COMPLEX
1. Nasik division
2. Koraput division.

THE DIVISION

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

light category turboprop Aircraft. It was set up in 1960 to manufacturing HD-
748(AVRO) . A medium overhaul multi8role transport aircraft. Over the years, It has
vastly developed its infrastructure of Agriculture Aircraft (HA-31). Basic Trainer
Aircraft (HPT-32), 15-19 Seater multirole utility aircraft [Dornier] (DO-228) and a
variety of aerospace structure assemblie4s and component for both domestic and
international market.

Concurrent with the manufacturing activities Kanpur division has developed

extensive facilities for repair overhaul and modification of these aircraft as well as for
about 400 types of rotables fitted on these aircraft . plans are underway to augment the
facilities for maintenance of other medium category aircraft.

Kanpur division production standards are up to the mark, this fact lies in the
sentence that it is a member of ISO-9002. To party and today it is consider a pioneer in
the field of manufacture and overhaul of transport category aircraft in the country
staffed with above 3000 suitably trained and skilled workforce .

THE DEPARTMENT

FINANCE & ACCOUNT :--HAL- KANPUR DIVISION

The finance department of the division is become one of the most important
department of the division . It is honestly performing its duties towards employees of
the organisation . Organisation’s customers and suppliers and also towards employer .
The whole department is mainly divided into various section viz.

TIME OFFICE
Keeping and maintaining records regarding the attendance and leave of the
employees.

PAYROLL SECTION
Engaged in maintaining the records the remuneration , tax liabilities, deductions
from salary and wages etc. of the employees.

CASH OFFICE
 Cash office perform the task relating to 5the payments approved by the CFA to
the employees and/ or outsiders.

P.F. SECTION
This section deals with the provident fund and family pension of the employees.

BILL PAYABLE(indigenous)
Passing the payments for inland transactions/ activities.

BILL PAYABLE(foreign)
Same activity but for foreign transaction / activities.
MATERIAL SECTION
Keep records regarding utilisation of materials/ purchases of material / wastage
etc.

COSTING SECTION
Find out the cost of sales of the product / services.

BILL RECEIVABLE SECTION

Receipts/ collect the payment due from customers etc.

AUDIT/FINANCE
Verify the orders and approve / reject the same.

BOOK-KEEPING AND BUDGET

 Preparation of budget, maintaining the records of the department and preparing
the final accounts of the division.

The whole department is equipped with qualified professional like –CA’S and
ICWA’S and providing their best to the company/ division and also engage in the
improving the system of work life computerisation of account / transactions etc.

.
 BIBLEOGRAPHY

1. ICWAI, JOURNAL- THE MANAGEMENT ACCOUNTANT

VOL- 32, NO-6.

2. ICWAI, JOURNAL- THE MANAGEMENT ACCOUNTANT

VOL- 31, NO-7

3. FIXED PRICE QUOTATION DOCUMENTS

HIDUSTAN AERNAUTICS KANPUR DIVISION .

4. MANUAL ACCOUNT- HAL

(PUBLISHED ON MARCH 1986)

5. STUDY MATERIAL FOR CERTIFICATION TEST

LEVEL’O’ AND ‘A’ LEVEL
PART-II
VOLUME-1OF 4 VOLUME

6. A PROJECT REPORT.
 BILLS PAYABLE SECTION

Bills payable section is one of the most important section of FINANCE &
ACCOUNTS department because of huge transaction. Bills payable section are divided
in to two parts :-
[1] Bills payable indigenous,
[2] Bills payable foreign,
The function of this section is payments of bills of supplies and services of the
Indian &Foreign vendors. Bills section because bulk of the component / material used in
Aircraft Manufacture is important from foreign.

INDEGENOUS BILLS PAYABLE

This section deals with the bills of the Indian vendors from whom Hindustan
Aeronautics Limited, Kanpur Division , Kanpur buys material / components for the
production purpose as well as for its own consumption e.g. stationary , maintenance
items, capital goods , a consumables and bills of services nature such as Insurances ,
repairs, freight etc . This section deals with the following aspects o0f supplies &services
rendered by Inland vendors to the company :-
--- Payment and accounting of advances to suppliers,
--- Payment and accounting of advances to other vendors,
--- Payment and accounting of final bills,
--- Bank dealing with relation to suppliers,
---Adjustment/ recovery of advances,
--- Accounting/ adjustment of earnest money from work,
--- Accounting and pricing of Receipt Voucher heads of
 expenses of revenue/ capital nature.
--- Payment of bills for civil works and welfare expenses.

PAYMENT PROCEDURE
The payment of bills may be classified under following three categories :-
[1] 100% advance payment ,
[2] Payment against delivery/ bank documents,
[3] Payment of bills against credit supply,
[4] Running payment against various work contracts.

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

Purchase Order . This purchase order is prepared by the Purchase Department based on
MPR(Material Purchase Request) raised by stores/ user . In purchase order , the name of
vendor company , item number , description of material, unit purchase, rate ,quantity of
material, and value of order are mentioned. Various details furnished on purchase order
are as fallows :-
--- Price Quoted,
--- Scheduled Delivery of Material,
--- Sales Tax,
--- Payment Terms,
--- Despatch Instruction,
--- Inspection,
--- Addressee to whom the copy of the challan and Invoices,
are to be sent,
--- Special Instruction If Any.
 Two copies of purchase order is sent to the bills payable section . When material/
component reached at the stores , the store section prepares `Good Receipt Note ‘ in
which item number , description of material, and quality of material is mentioned . Store
section raises seven copies . The material is then offered to quality control inspection for
necessary inspection . The Inspector, after checking the material with reference to
specifications mentioned in purchase order indicates the Quality accepted / rejected on
Goods Receipts Notes. The Bills Payable section after receiving the GR note , prices it
item wise and payment of the bill is passed in favour of supplier companies . One copy
of GR note duly priced is forwarded to Material Accounts section .

ACCOUNTING REGISTERS
--- Inland Purchase Journal,
--- Inland Services Journal,
--- Imprest Journal,
--- Advance Journal,
--- Insurance claims Journal,
--- Earnest Money &Deposit Accounts Register,
--- Sundry Creditors Register,
--- Advance to Supplier Register,
--- Miscellaneous Advances Register.