awais internship report

Sui Southern Gas Company Limited

Internship ReportFinance

Department

AWAIS MAHMOODUNIVERSITY OF SINDH

JAMSHORO

P r e p a r e d B y : A W A I S M A H M O O D I N T E R N S H I P R E P O R T 2008


Dedication

These Efforts are dedicated to

My Parents

&

My Teachers

Whose kind co-operation, Blessing, Help and Inspiration gave impetus

To complete this work



ACKNOWLEDGEMENT

I am grateful to “Al mighty God” who gave me all the strength, courage

preservation and patience to finish my Six weeks of Internship Program at

SSGC and in achieving my task fruitfully. Then I would like to extend my

gratitude to SSGC HR management especially to Madam Shazia Siddiqui

for giving me an opportunity to enrich and upgrade my experience and

skills. It was quite a great experience for me to work with diversified and

literati people and helped me to understand cross-cultural-differences.

I would like to take this opportunity to formally thank Mr. Gulab Baloch

(Deputy Chief Manger-Fixed Asset), Mr. Saleem Durani (Manager --

Store), MR. Anees Hussain (Chief Manager- Local Order Section) and Mr.

Wajeeh (Deputy Chief Manager- GDS) for providing their immense

support and unwavering guidance during conduct and completion of this

internship report on SSGC and it became possible for me to complete this

work within short time.

I would specially like to thank Ms. Aliya peerzada (Deputy Manager-

GDS) and Mr. Waseem (Deputy Manager- Insurance Section) for their

constant support and guidance and for solving all my queries during the

course of my internship. It was because of their kind efforts that I have

been able to explore the practical world in a very professional manner



INTRODUCTION


INTRODUCTION TO SSGC

Introduction:

Sui Southern Gas Company (SSGC) is Pakistan's leading integrated gas Company.

The company is engaged in the business of transmission and distribution of natural

gas besides construction of high pressure transmission and low pressure distribution

systems.

SSGC is a model utility company responsible for supplying uninterrupted natural gas

to domestic, commercial, industrial and bulk customers in Sindh and Baluchistan.

SSGCL transmission system extends from Sui in Baluchistan to Karachi in Sindh

comprising over 3,200 KM of high pressure pipeline ranging from 12”- 24" in

diameter. The distribution activities covering over 1200 towns in the Sindh and

Baluchistan are organized through its regional offices. An average of about 378,468

million cubic feet (MMCF) gas was sold in 2007-08 to over 2.040 million (industrial

3,448, commercial 22,192 and domestic 2,014,827 consumers) in these regions

through a distribution network of over 31,877 Km. The company also owns and

operates the only gas meter manufacturing plant in the country, having an annual

production capacity of over 550,150 meters. The Company has achieved another

milestone at the meter plant. It has obtained ISO 9001: 2000 certifications.

The Company has an authorized capital of Rs. 10 billion of which Rs 6.7117 billion is

issued and fully paid up. The Government owns the majority of the shares which is

presently over 70%.

The Company is managed by an autonomous Board of Directors for policy guidelines

and overall control. Presently, SSGC's Board comprises of 14 members. The

Managing Director/Chief Executive is nominee of GOP and has been delegated with

such powers by the Board of Directors as are necessary to effective conduct the

business of the company.

SSGC at a Glance:

P r e p a r e d B y : A W A I S M A H M O O D I N T E R N S H I P R E P O R T Page 24 of 95

http://www.ssgc.com.pk/ssgc/aboutus/management/


The Company in its present shape was formed on March 30, 1989 following a series of mergers of three pioneering companies, namely Sui Gas Transmission Company Limited, Karachi Gas Company Limited and Indus Gas Company Limited.

Sui Gas Transmission Company Limited was formed in 1954 with the primary responsibility of gas purification at the Sui field in Baluchistan and its transmission to the consumption centers at Karachi. Two distribution companies were established in 1955 and were responsible for the distribution of gas to consumers in Karachi and in other towns along the route of the transmission pipeline between Sui and Karachi. In 1985, these two distribution companies were merged to form Southern Gas Company Limited and later, in 1989, Southern Gas Company Limited and Sui Gas Transmission Company Limited were merged to form the Sui Southern Gas Company Limited.

Today, half a century of professionalism and progress has made the SSGC one of the largest integrated natural gas transmission and distribution companies in Pakistan, serving the entire Southern region of the country, comprising the provinces of Sindh and Baluchistan.

Core Business:

The main activity of the company is transmission and distribution of gas in Sindh and Baluchistan.

Secondary Activities:

The company is also engaged in certain activities related to the gas business including manufacturing and sale of gas meters and construction contracts for laying of pipelines.

Thus the core functions of SSGC can be elaborated as under

Purification of Natural gas from Sui Fields

Transmission of Natural Gas from Pirkoh, Sari Hundi, Badin, KandhKot,

Mari, Daru and Kadanwari gas fields

Distribution of Gas in Sindh and Baluchistan provinces

Manufacturing and sale of gas meters

Construction contracts of laying pipelines



SSGC’s VISION

To be a model utility, providing quality service by maintaining a high level of ethical and professional standards and through the optimum use of resources.

SSGC’s MISSION

To meet the energy requirements of customers through reliable, environment-friendly and sustainable supply of natural gas, while conducting company business professionally, efficiently, ethically and with responsibility to all our stakeholders, community and the nation.

CORE VALUES

Integrity:

Keep Company's Interest above self. Acts in ethical manner. Promote ethical business environment. Take effective actions if observers unethical behaviour or situation. Seen & known to be honest. Lives within means. Intellectually hones.

Excellence:

Makes positive contribution towards the achievement of SSGC's Vision. Strives for Continuous improvement. Respond effectively to customer needs. Takes timely and Quality decisions.

Teamwork:

Builds strong relationships within across functions. Works well with all type of Peoples and corporate with others. Solicits and share ideas/best practice with others. Supports the achievements of Company/team goals. Contributes to team effectiveness using

people's different skills and styles. Arrives at constructive solutions while maintaining Positive working relationships. Demonstrates sensitivity.

Transparency:

Promotes open environment. Displays openness and consistency in applying policies & Procedures. Respects dissent and resolves conflicts fairly.



Creativity:

Comes up with new ideas. Encourages innovation. Promotes modified approaches. Convert Ideas into actions.

Responsibility to Stakeholders:

Stays abreast of change in operating environment that impacts our business (i.e. markets, competitors, Technology, customers, suppliers, employees, regulatory, political and public). Create solutions to make Customer needs. Develops colleagues and team

members to improve their skills and performance. Ensure Optimum utilization of resources. Balances short term and long term priorities to maximize on results. Ensures compliance of law.

Organizational Structure:

The Company is organized into six functional divisions -Transmission, Distribution, Commercial, Engineering Services, Management Services, and Finance. Each division is headed by a Senior General Manager assisted by a team of professional staff, with the exception of Finance, which is headed by the Deputy Managing Director. Policy matters relating to the natural gas sector are handled by the GOP. OGRA is responsible for regulation, pricing, revenue determination and compliance to service standards. The Board of Directors has the overall responsibility for the management and control over the Company. The management enjoys operational autonomy. The major portion of the work force consists of technically qualified and skilled personnel.

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ORGANISATIONAL CHART



FUTURE OUTLOOK

The Company is pursuing an ambitious five year development and expansion plan estimated at Rs 42.9 billion. Key objectives of the strategic plan for the next five years (2005-06 to 2009-10) are the following:

Expansion of transmission network by 608 Kms from 2,942 km in 2005 to

3,550 km by 2010, enhancing capacity from 1,300 MMCFD in 2005 to 1,700

MMCFD by 2010.

Expansion of distribution network and supply mains by 5,236 km from 25,764

km in 2005 to 31,000 km by 2010 connecting 600 new towns and villages in

Sindh and Baluchistan.

Enhancement of gas supply to power plants, industrial and commercial sectors

including supply of gas to previously deprived areas in the domestic sector.

Increase of the customer base from nearly 1.8 million to 2.2 million by adding

447,000 new customers to the Company’s system.

Consistent appreciation in shareholder’s value by increasing the company’s

asset base and significant improvement in productivity and efficiency.

Focus on improved, friendly and efficient customer services under the vision

of “Service with a smile”.

Establishment of 16 fully automated (additional 8 in progress) on line

customer facilitation centres.

Multiple bill payment options and channels (ATM, Call Centres, ORIX POS,

Internet, Drop Boxes, and NADRA-Kiosk).

Latest technology digital prepaid meters with improvement of call centres to

include an online customer information system.

Revamp the current business processes, to improve company efficiency and

implement ERP, CIS, GIS and the best business policies for ISO 9000

certification.

Increase surveillance and introduce an automated emergency response system

(ERS) and SCADA for the security of company assets including the

transmission and distribution networks.



Improve the quality of human resource through career planning, training of

employees and development of management;

Implement environment management system, occupational health and safety

system as required under Certification ISO 14001 and OHSAS 18001

standards;

Set up Enterprise Information System (EIS) in all areas of business using state

of the art technology to make SSGC the “Most IT Enabled Company;”

Human resource development and empowerment of employees through career

planning and continuous management/vocational training.

Community support services and corporate communication initiatives to meet

the national and social responsibilities, as a good corporate citizen.



DISTINGUISHING FEATURES

Developing Human Assets:

SSGC believes that satisfied employees provide Quality service. SSGC provides satisfaction of its employees and gives them adequate incentives to provide high quality work.

Human Resource Development is one of the top priority areas at SSGC. The company undertakes several initiatives to ensure induction and training of professionals with the objective of ensuring high level of professionalism and productivity of its employees.

Excellence In Customer Service:

The SSGC motto is 'Service with a Smile' and SSGC people strive to provide un-matched and diverse services to customers through innovative and progressive ideas in line with best international practices.

For speedy and efficient handling of customers’ complaints, queries and suggestions, SSGC has developed Customer Facilitation Centers in all major towns and large population centers that provide fast and efficient response to customers’ queries and complaints.

The Company is also introducing innovative Pre-paid Gas Meters for convenience of customers. Pre-paid meters offer such facilities as advance payment and flexible payment and allow people to manage gas consumption at their own convenience.

Edge in Technology:

Quest for excellence and cutting-edge technology has played a key role in SSGC expansion and strength.

Above all, technology brings greater benefits to customers. For example, all SSGC meter reading is now carried out through hand-held computers - saving valuable time and minimizing errors.

SSGC's computerized billing system prints bills through the online network in the entire franchise areas.

Today, SSGC is set to become the most IT enabled Company in the country. Realizing the need for integration of IT into core business processes, the Information Technology Department is rendering strong support to SSGC.

A key initiative of this department is the implementation of the Geographic Information System - a computer-based system that effectively provides forecasting data for further strategy development.

Increasing the efficiency of business processes is another priority area for SSGC. Enterprise Resource Planning (ERP) software integrates all departments and functions on to a single computer network.



Maintaining its technological edge, SSGC has signed a comprehensive enterprise agreement, with Microsoft - the only such agreement by a public sector utility company in Pakistan.

Since the pipeline network forms the backbone of SSGC's operations, special steps have been taken towards ensuring maximum efficiency, such as PL Studio simulation software, which accurately simulates the large and complex pipeline network, driving higher performance, efficiency and financial viability of new projects.

Telecommunications:

Telecommunications plays a vital role in maintaining high operational efficiency at SSGC. Through the advanced microwave digital network, and with video conferencing facility, all SSGC offices and facilities remain connected 24 hours a day.

Promoting Safety:

SSGC is committed to the health and safety of its employees and preservation of the environment in its areas of operation.

It’s Health & Safety and Environment (HSE) management system ensures that the standards, processes and procedures needed to achieve safe operations are identified, implemented and maintained.

Emergency Response Centers (ERCS):

ERCs are working at six key locations at Karachi and Quetta terminals, Shikarpur, Nawabshah, Dadu and Sibi Head Quarters. These are fully equipped to deal with any emergency situation in case of transmission gas pipeline rupture/fire resulting from sabotage, wars acts and similar activities.



STRATEGIES

The company has moved beyond basic reengineering as it builds and reinforces

culture change by creating performance opportunities, developing Human

Resources and pursuing overall business excellence.

The company identified successfully different layers of change that needed to be

managed concurrently for large projects to be implemented on schedule and

within budget. Within the induction of new, improved business process, an

appreciable change in productivity was achieved.

The company has taken the lead in integrating Change Management within its

people, processes and technology. Optimizing market flexibility and maximizing

return on investment from major change initiatives are key success factor for the

company.

The company has adopted an aggressive approach to empower the executives and

to create awareness in the rank and file for changing the routine business

processes with people-centric work methodology with focus on moving over to

best business practices.

The SSGC has pioneered efforts for deployment of a cost-conscious and

performance-based culture and empowerment of the employees to provide for

achievement and excellent at all levels.

Expansion of distribution and transmission network for enhancement of gas

supply to power plants, industries and commercial sector including supply of gas

to previously deprived areas in the domestic sector.

Customer satisfaction, innovation, quality services and promotion of service with

a smile culture.

Consistent appreciation in shareholder’s value by increasing the company’s asset

base and significant improvement in productivity and efficiency.

Business Process Re-engineering (BPR), re-structuring of select departments and

implementation of ERP to provide effective M.I.S for business operations and

control.

Enterprise Information System (EIS) and technology implementation in all areas

of business to make and maintain SSGC the most IT enabled company.

Human resource development and empowerment of employees through career

planning and management / vocational training.



Improvement in reliability and security system.

Improvement in customer services through additional Customer Facilitation

Centers, installation of pre-paid meters, and improved bill delivery.

Community support services and environmental protection initiative to meet the

national and social responsibilities as a good corporate citizen.

COMPANY’S OBJECTIVE

The Company aims to supply natural gas wherever there is sufficient load to justify the cost of infrastructure. In many places the gas network is being expanded to meet economic and social requirements through active funding support from the Federal and Provincial governments. In 2003, the Company launched a comprehensive five-year gas network development and expansion

Plan to connect hundreds of small towns and villages in remote areas of Sindh and

Baluchistan, which currently are deprived of piped natural gas.

Every year, the Company adds nearly 75,000 new customers (industrial,

commercial & domestic) to its customer base and lays hundreds of kilometers.

Transmission pipelines and distribution network and installs other facilities such

as metering / billing stations in its system using its staff of technically qualified

and skilled personnel.

PERFORMANCE

Over the period 2000-01 2006-07, the Transmission Network has increased from

2, 777 km to 3,290 km i.e. an addition of 285 km (10%) and the Distribution

Network has increased from 22,159 kms to 29,832 kms showing an addition of

7,673 km (26%).



The above expansion has contributed towards increasing the number of customers

from 1.57 million in 2000-01 to 2.040 million in 2007-08. Yearly gas sales have

shown an increase from 206,967 MMCF in FY 2000 to 409,375 MMCF in FY

2008. Furthermore, with an addition of around 550 new towns / villages since

2000-01, the total strength of towns and villages on gas has reached 1260 by the

close of FY 2007-08.

Annual gas sale revenue has increased from Rs. 29.237 billion in FY 2000-01 to

Rs. 85.716 billion in FY 2006-07, showing an increase of (56.479 billion) over the

past seven years. This increase is mainly due to connecting newly discovered gas

fields through transmission system network enhancement and optimizing gas

flows.

Meter manufacturing capacity has increased from around 292,750 in FY 2000-

2001 to over 513,250 in FY 2007-08 fully meeting increased requirements of

SNGPL and SSGC.

Personal Introduction:

Currently, I am studying in the 2nd oldest university of Pakistan, University of Sindh, Jamshoro in BBA (Hons) P-III. I have completed five semesters of my studies and have been successfully enrolled in the sixth semester. . I have scored 84% with CGPA (3.54) in 2nd year. At present, I have done introductory courses of Management, Economics, Marketing, Finance and Accounting. However, I have developed substantial interest in Finance and therefore, plan to do my majors in Finance. I have a keen interest in doing internship in SSGC (Sui Southern Gas Company) as it would be beneficial for me in future and it is the leading and best company.



My internship experience at SSGC has provided me with valuable insight and has helped me in increasing my knowledge of the subject. It has introduced me to the operations that take place in the professional world and has provided me with the opportunity to work in a dynamic environment where I can exploit my concepts.

Personal Data:

Father Name: Khalid Mahmood Date of Birth: 27th May, 1986NIC No: 41304-2883443-3Marital Status: SingleReligion: IslamNationality: PakistaniCell No: 0321-3050821Email Address: [email protected]

Computer Skills:

Dos, Windows-98. 2000. XP

MS-Office- 2007, XP

Internet

HTML and basic Knowledge of networking

Effective Communication

Internet Browsing

MY EXPERIENCE IN SSGC

Purpose of the Internship:

The purpose of internship is to learn the skills regarding working in industries, behavioral conduct, know-how about the corporate culture & Organizational environment. It was essential to me that I enter in highly regarded or reputable organization. During our BBA degree I have been studying the different business related subjects, than as the time I could gain real experience. Throughout Six weeks I learnt a lot of things regarding my specialization, which were quite informative and bit challenging. Different projects & assignments had promoted me to meet challenges and be confident.

Personal Learning



Corporate Culture; Understanding:

As the basic purpose of internship is the introduction of corporate culture to the students. It aims at understanding how the things are practically going on in the organizations, how the theories we read in books are implemented and executed. In this regard, I learnt a lot in the dynamic organization of Pakistan SSGC. I learnt the core values of the organization. The meeting and communication with the diverse people made me understand and adjust myself with the different people working in the organization. More over, the dynamic employees shared their ups and downs and other different experiences of their corporate life that has been a great learning for me.

Corporate Social Responsibility:

CSR was mere a term for me as I used to come across with this topic in my texts. But I came to realize its importance when one of the groups from internees look this challenge and firmly decided to visit the hospital where nobody wants to go.

Successful arrangement of this event was a empirical example of “Event Management” full of lesson, in which I participated for a “good cause” (above all) we were all basking in the glory of the success of this event.

As I said SSGC is our mother and Caring Organization was always there to facilitate us. SSGC is very keenly fulfilling its corporate social responsibility with its loyal and committed workforce along with energetic etc. and enthusiastic ambassadors (internees).

Punctuality:

Punctuality the first and foremost things which is essential for a professional at work i.e. punctuality and the very first thing I have learnt in SSGC i.e. previously I have heard that famous quotation which goes like that “late comer must suffer” I did not know in terms of what he may suffer. At SSGC I saw its practical exhibition in terms of not paying the attention of BOSS or he may not learn as he can for his slackness for being late, SSGC made me punctual and made me realized that ‘TIME IS MONEY”.

Leading & Becoming Effective Team Player:

Blending with different people becoming social able and building affinity with them was an insurmountable task for me. SSGC has bridged this unbridgeable gap in my personality and enabled me to adjust myself in any environment for becoming effect team player I have learnt the requisites that:

I. Respect each team member

II. Respect the way people work

III. Be patient and listen to all and play your part

IV. Appreciate noble / gracious ideas presented by any your team member and try

to become part of the solution not part of the problem.

V. Be flexible and show sensitivity for others feelings.




OVERVIEW OF

FINANCE

DEPARTMENT


Overview of the Finance Department


FINANCE

Finance Treasury Accounts

Payroll Cash & Bank

Loans

Investments

Insurance

Payments

Gas Purchase

Transmission Project

Gas Sales

Taxation

Cost & Revenue Budget

Fixed Assets

MIS

Distribution System

Financial Feasibilities

Revenue Control


TREASURY FUNCTION

The Treasury Function Department of the finance department basically deals with the

disbursements, collection, receipts, management of funds, payment of foreign or

domestic loans, revenue control and reconciliation of bank and customer accounts. In

short, treasury functions deals with the flow of money either in the form of inflows or

outflows. An important task of the Treasury function department is to keep a check on

the company’s current liabilities account and make sure that their current liabilities do

not exceed their current inflows of cash.

The treasury function department can be further subdivided into five major categories,

which are somewhat interrelated. The division is as follows:

Cash & Bank

Loan Payments and Funds Management

Revenue Control

Taxation

Investments

All these sections have separate section heads who are responsible for the activities of

the people working in their section. These section heads report to Chief Manager

(CM) Treasury Function who is responsible for the overall activities of the treasury

function Department.

FINANCE DEPARTMENT

The Finance Department is further subdivided into sections, which includes the

following:

Payroll

Fixed Assets

Insurance

Gas Purchase

Transmission Project

Payments



MAJOR ACCOUNTING POLICIES

Property, Plant & Equipments:

Assets are not revalued and historical cost is taken into account. Property, plant

and equipment except freehold land, leasehold land and capital work in progress

are stated at cost less accumulated depreciation. Freehold land, leasehold land and

capital work in progress are stated at cost

Depreciation on compressor, transmission lines and other operating assets is

calculated under the straight line method over their estimated remaining useful

lives. It is charged from the dates these projects are available for intended use up

to the date these are disposed off.

Stock-in-trade:

The stock in trade comprises of Gas in pipelines and Meter manufacturing

division.

Stock of Gas in transmission pipelines is valued at lower of cost determined under

the weighted average basis and net realizable value whereas the materials for

meter manufacturing division is valued at lower of moving average cost and net

realizable value.

Net realizable value is the estimated selling price in the ordinary course of

business less the estimated costs of completion and the estimated costs necessary

to make the sale.

Stores, Spares and Loose Tools:

These are valued at cost determined under the moving average basis less impairment

losses, if any. Goods in transit are valued at cost incurred up to the balance sheet date

Trade Debts:

Trade debts are carried at cost less provision for doubtful debts, if any. Balances

considered bad and irrecoverable are written off when identified.

Trade and Other Payables:



Liabilities for trade and other payables are carried at cost which is the fair value of the

consideration to be paid in the future for goods and services received.

Deferred Credit:

Amount received from customers and the government as contributions and grants for

providing the service connections, extension of gas mains, laying of transmission

lines, etc are deferred and are recognized in the profit and loss account over the useful

life of the related assets.

Revenue Recognition:

Revenue from Gas sales is recognized on the basis of gas supplied to customers at

rates periodically announced by the Oil and Gas Regulatory Authority (OGRA).

The meter rental is recognized monthly at specified rates for various categories of

customers on an accrual basis whereas the sale of meters and gas condensate is

recognized on dispatch to the customers.

Deferred credit income is amortized to the profit and loss account over the useful

life of the related assets. Dividend income on equity investments is recorded on

accrual basis.

However the company is required to earn a minimum annual return before

taxation of 17% per annum o the net average operating fixed assets (net of

deferred credit) for the year. Income earned in excess or short of the above

guaranteed return is payable to or recoverable from the Government of Pakistan

and is adjusted from or to the gas development surcharge payable to or receivable

from GOP.



Long Term Deposit:

Long Term deposits consist of security deposits from Gas customers and gas

contractors.

Gas customers’ deposits represent Gas supply deposits based on an estimate of

three months consumption of gas sales to industrial and commercial customers

while deposits from domestic customers are based on the rates fixed by the

Government of Pakistan. These deposits are repayable and adjustable on the

disconnection of gas supply.

Security deposits from contractors are free of mark-up and refundable on the

cancellation of contract.

P r e p a r e d B y : A W A I S M A H M O O D I N T E R N S H I P R E P O R T of 95


AREAS OF WORKING

I sought opportunity to join SSGC to upgrade my skills in multi-dimensional

approach to the section of the Finance Department. Whatever I attained there is

elaborated as under:

Fixed Asset and Capital Budget

General Ledger

Gas Distribution System (GDS)

Inventory Accounting

Local Order

Insurance Section



FIXED ASSEST

Responsibilities of Fixed Assets:

Following are the main responsibilities of fixed assets:

1. Making proposed budget (CAPEX), department wise, account wise, company wise.

2. To maintain the capitalization, depreciation, retirement and disposal of all the fixed assets.

3. Preparation of capitalization and WIP schedules of all the companies i.e. Karachi distribution, Hyderabad distribution, Baluchistan distribution, Transmission and Head Office.

4. Prepare quarterly, half yearly and yearly accounts and schedules of organization.

Budget Phase:

“Budget is a financial statement which is prepared before the starting of the financial year containing the plans and policies to be pursued during that period.”

The budget section of finance department prepares capital expenditure budget (CAPEX) annually for all the departments of SSGCL. When budget section starts to create the budget, all the departments are notified to make the proposed budget themselves for there departments according to the requirement of their department and send it to budget section. After receiving the proposed budgets from the departments, the budget section examines it & discusses all particulars with the related head of department & staff giving special consideration to the justification of fixed asset requirement & funds available in the company. The budget section can increase or decrease the proposed amount of budget keeping in view, the available amount in the budget for that department.

After the proposed budget is prepared by the Budget Section, budget is then sent to GM & SGM for its approval/changes & finally to the M.D for approval. When the budgets for all the departments have been finalized and approved by MD, then the agenda is prepared by budget section, which is reviewed by finance committee. Board of directors grants approval to the agenda after which the budget is authorized to be followed. Each department is then informed through inter departmental note along with a copy of their budget.

FIXED ASSET ADITION PROCESS

Capitalization:

Whenever a budget is to be prepared for any department, the budget section notifies the department to prepare list of assets required by them for the coming year. After the approval of the budget, the concerned department will be only allowed to purchase the assets listed in the budget for the whole year.

In order to purchase an asset, fixed asset requisition (FAR) is required to be filed by concerned department, which should be approved by the head of that department. FAR contains details of assets required by the department.



The FAR is then forwarded to Material Management department, where Deputy Manager checks whether the FAR falls within the budget or not. If the amount for the required asset is available in the budget then the Material Management department invites quotations through tender (if not available in store) and on the basis of commercial and technical evaluation and lowest bidders, a supplier is selected (all such procedures documented in Evaluation Report) and then Purchase order (PO) is prepared and sent to supplier.

All assets are received by the KT stores department, where quality inspection is conducted (however not documented) and then a Material Receiving Statement (MRS) is generated and a copy of which is forwarded to the finance department.

Depreciation:

Once an asset has been capitalized, working for its depreciation starts. Full year depreciation is charged for the first year regardless of its purchase data. The company uses the straight line method of depreciating except for meter plant, where reducing balance method is used. Depreciation rates differ for different assets. It even differs for same assets in different cities.

In the certain situation we call for making adjustments e.g. transfer of an asset from one unit to another, different between assets in books and its physical existence etc.



FLOW CHART OF FIXED ASSET ADITION

* Department** Fixed Asset Requisition*** Material Management****Performance Bank Guarantee

Approval In

Budget

Approval In

Budget

User *Deptt.

Sent **FARTo ***M.M

User *Deptt.

Sent **FARTo ***M.M

****PBG Is

Submitted By

Supplier

****PBG Is

Submitted By

Supplier

Purchase Order

Sent To Supplier

Purchase Order

Sent To Supplier

Asset Is Capitalize

d

Asset Is Capitalize

d

Charge To

AssetClearingAccount

Charge To

AssetClearingAccount

Material Receiving Statemen

t Is Prepared

Material Receiving Statemen

t Is Prepared

Asset Is Received By R&D At KT

Asset Is Received By R&D At KT

Intent Letter Is Sent To Supplier

Intent Letter Is Sent To Supplier

Evaluation Report

Is Prepared

Evaluation Report

Is Prepared

Quotation Is

Received From

Supplier

Quotation Is

Received From

Supplier

Bid Opening

ForPurchase

Bid Opening

ForPurchase

Work InProgress(In case of

construction)

Work InProgress(In case of

construction)



Fixed Asset Retirement process

After the completion of life of asset which is fixed by company we retire it. 1 st the

Assets Retirement Requisition (ARA) is prepared by the user department and it is sent

to the fixed asset section of finance to retire that asset. The company SSGC’s follows

certain policies for retire of asset e.g. only those asset which have a zero book value

can be retired. After checking the book value the inspection team is to be formulated.

That inspection team inspects the asset, which is to be retired for verification of the

condition of the asset. After inspection the report sent to the fixed asset section along

with ARA. It is approved / disapproved on the basis of inspection report by GM,

DGM and MD. After approval the asset sent to store at Karachi Terminal (KT) for

disposal. In case an employee of the company buys it, it is sold on written down value

or at 7.5% of its cost, whichever is higher. And some old assets, which are fully

scraped and not present physically, are deleted from the books through approval of the

management.

Fixed Assets Retirement Process

Asset Retirement

Advice prepared by

the user department

and sent to the

inventory section

Inspection of the

asset to be retired

is conducted for

verification of the

condition of that

asset

Section Inspection

report sent to the

inventory along

with ARA

Retirement advice

is approved /

disapproved on the

basis of inspection

report by GM, DGM

and MD

Asset sent to

store at KT for

disposal



FIXED ASSET ACCOUNTING CYCLE

Module Step AccountingDr. /Cr.

Contra

Purchasing RequsitionNo Accounting

Purchasing RequisitionNo Accounting

Inventory Receiving Inventory Receiving Account 3081111 C1AP Accrual Account 2073214 C2

Inventory Deliver Asset Clearing Account 3011999 C3Inventory Receiving Account 3081111 C1

AP Invoice AP Accrual Account 2073214 C2Liability Account 2073201 C4

AP Payment Liability Account 2073201 C4 Bank Bank a/c.

FA ADDITION Assets FA MODULE Asset Cost Account Asset Cost DRAssets FA MODULE Asset Clearing Account 3011999 C3 CRAssets FA MODULE Dep. Exp 5062101 DRAssets FA MODULE Acc. Dep. 3012117 CR

DISPOSAL OF ASSETS (IN CASE OF PROFIT)

Assets FA MODULE Acc. Dep. 3012117 DRAssets FA MODULE Asset Cost Account 3011117 CRAssets FA MODULE Proceed from sale of FA 3013991 DRAssets FA MODULE Profit on sale of FA 4026401 CR

DISPOSAL OF ASSETS (IN CASE OF LOSS)

Assets FA MODULE Acc. Dep. 3012117 DRAssets FA MODULE Asset Cost Account 3011117 CRAssets FA MODULE Proceed from sale of FA 3013991 DRAssets FA MODULE Loss on sale of FA 4026401 DR



FIXED ASSETS MANDATORY STEPS

Following are the required steps involved to add asset in Asset Module through System:

1. In “PREPARE MASS ADITION” select Book “SSGC Corporate” and Queue “New” and press “Find” Button.

2. Select asset from Mass Addition’s summary whose Queue is “New”.

3. Select



asset from Mass Additions Summary window, press open button and change the Queue from "New" to "Post" and enter the following Information.

a. Category.



b. Depreciation Charge Account

C. Location.

d. Press “Done” to confirm the action.



4. Go to Menu Mass Addition --> Post Mass Addition Run Post Mass Addition Report

5. Detail of Capitalized asset can be seen from “Work Bench”.



GENERAL LEDGER SECTION

Function:

Processing of all journal voucher (JV) from different section and location in

finance department

Resolution of queries raised by the ERP system during JV processing

Posting of all financial modules to general ledger

Processing of reports from oracle on monthly, quarterly, yearly basis for top

management

Processing of reports from oracle on monthly, quarterly, yearly basis for oil and

gas regulatory authority (OGRA)

Purpose:

To maintain proper and accurate, books of accounts.

To facilitate and co-ordinate the annual audit

To comply with the policies and the procedure notified by OGRA from time to

time.

To comply with the policies and the procedure notified by Security and Exchange

Commission of Pakistan (SECP).

To report the results to board of directors and share holders of the company



The General Ledger Accounting Cycle



Follow these steps to enter, maintain, and report on actual accounting information for your enterprise:

1. Open an accounting period. 2. Enter manual journal entries, including:

Standard journal entries Foreign and dual currency journal entries Statistical journal entries Intercompany journal entries

3. Import journals from subledgers. If you encounter an error when trying to import a subledger journal, you can correct the import data and rerun journal import.

4. Define recurring journal formulas for transactions that have a common format or that you enter frequently. You can also create recurring journal formulas to create allocation entries.

You can use recurring journals to create three types of journal entries:

Skeleton entries affect the same accounts each period, but have different posting amounts.

Standard recurring journal entries use the same accounts and amounts each period.

Formula entries use formulas to calculate journal amounts that vary from period to period.

5. Define MassAllocation formulas to allocate a cost pool across a group of departments, companies, etc.

6. Generate recurring journal and MassAllocation journal batches based on formulas you defined.

7. Review the details of your unposted journal batches. To view and optionally change unposted journal batches online, use the Enter

Journals window. To view unposted journal batch detail online, use the Journal Inquiry window. To print a report showing unposted batch detail, produce a Journals - General

report (set the Posting Status parameter to unposted).8. Edit unposted journals to change information about an unposted batch or its

journal detail, including the batch period and the journal currency. 9. Post your journal batches manually or automatically. 10. Check for posting errors. General Ledger automatically produces a Posting

Execution Report so you can check the results of your posting. This report notifies you of any errors.

11. Reverse journals. You can reverse a posted or unposted journal entry. Once you assign a reversing period to the journal, generate and post the reversing batch.

12. Revalue your foreign-denominated assets and liabilities to reflect exchange rate fluctuations at the end of each accounting period.

13. Translate your actual account balances to any foreign currency for reporting purposes.

14. Consolidate sets of books by defining and running a consolidation. You can consolidate sets of books that have different charts of accounts and calendars.

15. Produce financial reports and perform online inquiries to review current account balances.



Review account balances online using the Account Inquiry window. Review posted journal details in the Posted Journals Report, as well as in the

General Ledger and Account Analysis reports. You can also define an unlimited variety of custom reports using the Financial

Statement Generator to review account balances in the format of your choice.16. Enter journals to clear suspense account balances. Examine General Ledger and

Account Analysis reports to identify the source of suspense account entries. 17. Close the current accounting period. 18. Open the next accounting period.

General Ledger- Reports

With the help of Oracle Financial Application general ledger reports can be viewed.

General Ledger Reports facilitate tracing back each transaction to the original source.

These reports list beginning and ending account balances and all journal entry lines

affecting each account balance. The report provides detailed information on each

journal entry line including source, category and date. Through this option the journal

details can be reviewed and checked for errors.

For generating general ledger reports we first need submit a request. We can either

submit a single request or a request set.



After selecting the type of request, we need to enter the type of report that we want to

view. In order to run the request, first we need to type in the name of the report that

we want to generate. Oracle GL provides us with a number of options. For example

we can view a detail Trial Balance detail report or an account analysis Reports etc.



Accounts Analysis Reports:

These reports list the accumulated balances of a range of Accounting Flex fields and

all journal entries that affect that range. Detailed information is provided for each

journal entry line which includes the source, batch name, and description.

Trial Balance Reports:

Use trial balance reports to review account balances and activity in summary or detail.

Journal Report:

These reports print journal entry batches and include journal entry subtotals, and

descriptions and reference information for each journal entry line. You can report on

foreign currency, posted, non-posted or error journal entries and report on a specific

batch or on journal entries from a specific source.

Reports can be generated in clusters and groups by entering any of the following:

Company

Function

Location

Organization Unit

Project

After selecting the type of report that we want view, we need to enter the details of the

projects that we want to view. Details like segment, Account type, Period Currency

etc.



As soon as the request is submitted, Oracle application starts processing the given

request and as a result of that it provides the user with various options which includes

viewing the output or details of the requests. It also provides the option of diagnostics

and holding and canceling of a request.

The Screen shot below shows the format of the generated reports.



By selecting the view detail button, the user can easily view the details of the project which includes the date, submission date, completion date, status etc



GAS

DISTRIBUTION

SYSTEM

(GDS)P r e p a r e d B y : A W A I S M A H M O O D I N T E R N S H I P R E P O R T Page 24 of 95


GDS - An Introduction:

The Gas Distribution System (GDS) is one of the vital sections of SSGC’s Finance

Department. The basic task of the Finance department’s GDS is to perform all the

accounting activities related to the expansion of distribution and transmission network

for enhancement of gas supply to power plants, industries, domestic and commercial

sector including supply of gas to previously deprived areas in the domestic sector.

Distribution System accounting include development of mains laying rates (MLR) all

region rectification and monitoring of Distribution Budget of all region and project

accounting related to distribution Projects.

For achieving the above mentioned targets the GDS of the finance department

performs a number of activities. These include preparation of feasibilities of

Transmission projects and Gas fields under various options, preparation and

monitoring of Annual Distribution budgets for all new town and villages, uploading

the budget of each project on ERP system, processing Rehabilitation, Reinforcement

and New towns schemes of all regions including re-appropriation of Budget and

settling issues related to Distribution of all regions, maintaining funds position related

to New Towns & Villages and coordinating with Sales Department and Ministry of

Petroleum & Natural Resources (MNPR) in this regard . It includes submission of

performance reports/ status reports to MNPR through Sales.

Infrastructure:

SSGCL transmission system extends from Sui in Baluchistan to Karachi in Sindh

comprising over 3,200 KM of high pressure pipeline ranging from 12-24" in diameter.

The distribution activities covering over 1200 towns in the Sindh and Baluchistan are

organized through its regional offices. An average of about 378,468 million cubic feet

(MMCF) gas was sold in 2007-08 to over 2.040 million customers. It includes 3,448

industrial, 22,192 commercial and 2,014,827 domestic consumers in these regions

through a distribution network of over 31,877 Km. The company also owns and

operates the only gas meter manufacturing plant in the country, having an annual

production capacity of over 550,150 meters.



Responsibilities of GDS:

The issuance of Job cards, Journalisation, reconciliation of deposit is also the

responsibility of the finance department. For the GDS, it is also necessary to ensure

that the amount transferred to Deferred Credit with respect GOP funds & customers

advance is in accordance with IAS & Company’s policy.

Preparation of financial feasibilities is one of the major tasks of this department.

Feasibility reports are prepared for providing recommendations to the managements

regarding the approval of various projects. These financial feasibilities and reports are

prepared for the following projects.

For supply of Gas to Industrial, Commercial, CNG stations and Co-operative Housing

society on cost sharing basis.

Transmission projects

Supply of gas from Gas fields

Construction of pipeline and to received pipeline rental.

Supply of gas to New towns & villages on request of GOP

Industrial estate

Other Capital project

This section consists of one Deputy Chief Manager and two Deputy Manager. Two

ERP executives are also a part of the GDS team.



Customer Pay The Advance

Finance Dept. Issues The Job Card

Visit The Customer Premises

Determine The Cost Of Customer Connection

Sales Dept. Received Request With Processing Fee

Receipt Send To The Finance Department

Quotation Send To Customer

Approval By GM Sales

Job Card Send To The SITE Through Sales Dept.

SITE Team Start The Work

Once The Job Has Completed, Job Card Send To The Finance Dept.

Through Sales

Finalize The Project By Finance Dept

PROCESS OF NEW PROJECT



GDS ACCOUNTING CYCLE AND MANDATORY STEPS

Cash & Bank

Bank Dr.

Advance Cr.

Store

Project Dr.

Store Cr.

GDS

Asset/Revenue Dr.

Project Cr.

Advance Dr.

Loan/Deferred Credit/Installation Cost Cr.



Categories of Customers:

The SSGC is the second largest gas production and transmission company of the

nation with a franchise covering Sindh and Baluchistan. Commencing operations in

1954 as Sui Gas Transmission Company (SGTC), SSGC today delivers natural gas to

over 1.94 million customers comprising 3,184 industrial units, 20,971 commercial

organizations and 1.92 million domestic customers in more than 1,200 towns and

villages.

SSGC is widely acknowledged for its world-class expertise in the engineering, design,

construction, operation and maintenance of an extensive gas supply infrastructure and

is fully capable of providing innovative gas technology solutions to other companies

in the region.

Sui Southern Gas Company Limited has four major categories of customers.

Domestic Customers:

A large portion of SSGC customer base comprises of Domestic customers. Nearly

98% of SSGC customers can be categorized as domestic users. These domestic

customers include residential colonies, mosques, churches, temples, other religious

places, and hostels attached thereto, Govt. and Semi-Govt. offices and hospitals,

Govt. guesthouses, armed forces messes and universities, colleges, schools and

private educational institutions, orphanages and other charitable institutions.

Keeping in mind, the SSGC motto 'Service with a Smile', the people at SSGC have

always strive to provide un-matched and diverse services to customers through

Categories of Customers

Categories of Customers

Domestic CustomersDomestic

CustomersCommercial Customers

Commercial Customers

Industrial CustomersIndustrial Customers

Power Generation

Power Generation



innovative and progressive ideas in line with best international practices. As a result,

SSGC has nearly 1.92 million domestic customers in 6 major cities, over 100 smaller

towns and 930 villages. Of these, nearly 1.40 million are located in Karachi and the

reaming in the rest of the Sindh. Almost 686 new commercial customers have

registered only in Karachi in the year 2008.The processing fees for domestic customers are Rs. 1000 and it is non-refundable.

Commercial Customers:

Commercial segment is also one of the important segments of SSGC customer Base.

This category includes all establishments registered as commercial units with local

authorities or dealing in consumer items for direct commercial sale like cafes,

bakeries, milk shops, tea stalls, canteens, barbershops, laundries, places of

entertainment like cinemas, clubs, theaters, and private office, clinics, maternity

homes and other small businesses etc. The number of commercial consumers

currently exceeds s 20,000 and the list is growing. In the year 2008, in Karachi only

almost 144 new commercial customers have registered.

Industrial Customers:

SSGC is doing an excellent job in fulfilling the gas needs of the industrial sector of

our economy. The customers engaged in the process of creating value added finished

products from industrial raw materials are called industrial customers. This category

of customers includes the CNG stations, Ice factories, Cement factories, Pakistan

steel, FFC Jordan Fertilizer.

However, SSGC is striving hard to increase its customer base and to meet the ever-

increasing demands of its customers. The gas consumption of the industrial sector has

been showing growth every year. More than 3000 industrial customers buy natural

gas from SSGC. In the year 2008, SSGC have catered to almost new 374 industrial

customers’ demands in Karachi. Many industrial consumers use natural gas for

captive power generation as well as to meet their process needs.

The processing fee for industrial consumers is Rs. 10,000. These processing charges

are non-refundable but adjusted with the cost of the connection charges.

Power Generation:

All units generating power through gas are called power generation units. This includes WAPDA, KESC, and HABIBULLAH COASTAL.Sales to the power sector constituted 46.5% of the total volume. KESC, the single

largest customer has converted its entire power generation to natural gas and now

consume between 200-300 mmcfd of gas to run its 1400 MW gas turbine power

plants. KESC accounted for 28% of SSGC sales in 2004-05.



The core activities of DSS can be broadly divided into two major areas

Existing Areas New Town and Villages

DSS works for supply of gas to the previously derived areas which includes many

towns and villages and also for the enhancement of the existing gas supply system to

our industrial, domestic and commercial sector. However the detail process is

discussed in the later part of the report

Core areas of DSS

Existing AreasNew Town and

villages

Functions of DSS – Existing areas

Mains Extension

Service connections

Meter Installation

Other Capex

Recoverable Jobs



Mains Extensions for Domestic /

Commercial Customers

Main extension can be classified into two major categories

Supply/ Feeder Mains

Distribution Mains

Supply/ Feeder Mains:

These Mains are generally for the supply of gas to a particular area and then other

connection are further provided from the Supply Main or Transmission Pipeline.

Distribution Mains:

Distribution Mains consist of network of pipes laid in streets and towns for providing

gas to the customers.

These mains are constructed from the outlet of T.B.S / from the SSGC system up to

the prospective consumer premises i.e. in streets of Cities, Towns & Villages. The

Normal pressure of gas is maintained from 08 to 60 PSIG.

Every year Physical Targets are fixed by the company, for the expansion of the

distribution network of mains for te supply of gas to residential, commercial and

Main Extensions

Distribution MainsSupply/ Feeder

Mains

Major Mains

Minor Mains

Paid Mains



industrial areas. These targets and the amount involved are allocated in the Annual

Budget, which is approved by the Board of Directors. Details of physical targets are

proposed by the Sales department, which contains capital cost/ length and diameter of

mains to be extended and number of gas connections to be processed during the

financial year. Physical targets for the following are approved by the Company’s

Board for each financial year.

The Distribution mains can be further classified into three categories:

Major Mains Minor Mains Paid Mains

Major Mains:

As per present practice of the company, Mains extension of 1 km and above for any

particular scheme or area is categorized as Major Main. All such cases are approved

by the management once in a financial year in the Annual Development Plan.

Minor Mains:

In cases, where length of mains extension required, is less than 1Km then it is

categorized as Minor Main. In this case also, it is necessary to get certain kilometers

approved by the management. However, these cases are processed throughout the

year under the limit of approval obtained.

Paid Mains:

When the case does not fall under the CCE criteria and the capital cost per consumer

far exceeds CCE criteria then the case is treated as PAID MAINS.

Under this case an option will be given to the customer to either process the project through cost sharing or on self-finance basis, if they agree.



Standard Procedures Applicable To The Process Of Distribution Of Gas

Standard Procedures

Request for mains

Review of request

Planning and site survey

Cost calculation

Feasibility

Payments

Issuance of job card

Execution of the job

Commissioning advice

Issuance of Circulars

Booking of cost



Request for Mains:

Request for mains extension in existing areas may be placed by:

District Governments Parliamentarians Residents

Review of Request:

The request will be review for the completion of documents. Sales department ensures that area drawing is

Available Not available

If the area drawing is available then the case is forward to planning for the survey of site.

If the drawing is not available then sales department informs the customer to arrange the area drawing. If the customer arranges the area drawing then the case forward to planning for site survey otherwise the case will not be further proceed.

Sales department forwards the case to planning department on Book No.1

Planning and Site Survey:

Survey is conducted by planning department in order to determine the work involved. After performing the survey of the site, planning department informs the sales department about the case on Book No. 2

Cost Calculation:

After receiving the survey proposal, sales departments works out the estimated cost of the case according to the data provided by the planning department. Sales department checks that whether the extension is for major mains or minor mains.

If the case is for the extension of major mains and it is feasible then the case is included in the ANNUAL DEVELOPMENT PROGRAM’S PENDING file.

The criteria for checking the feasibility of the case is fixed by the CABINET COMMITTEE ON ENERGY (CCE) are as under:

If the case is falling under the above criteria then it is treated as feasible. A list is prepared by the sales department on the basis of least cost method (projects are arranged in order of the least cost). The list is then forwarded for the approval of the

PROVINCE CAPITAL COST PER CONSUMER Punjab and Sindh Rs.20,000 N.W.F.P Rs.40,000 Balouchistan Rs.100,000



management. After approval list is sent to finance department for the processing of job cards.

If the case is not falling under the above criteria and the capital cost per consumer is far exceeding CCE criteria then the case shall be treated as PAID MAINS.

Under this case an option will be given to the customer that the project may be processed through cost sharing / self-finance basis if they agree.

Approval of Project:

The criterion for the approval of the project is as under:

CASE – I CASE – IIPROJECT COST

Less than or equal to 1 million More than 1 millionTheses projects requires approval from two SGMs- SGM ( Customer Services)- SGM (Transmission &

Distribution)

Theses projects are forwarded to finance department for the preparation and approval of financial feasibility of the project

Feasibility Study:

Following are the steps involved in the process of feasibility.

Letter fromSales department

Preparation and approval of feasibility

Letter to salesDepartment

Step (a): Letter from sales department:

Sales Department sends a request letter to finance department to carry out the financial feasibility of the project. DGM Sales forwards the letter of request to GM Accounts, which forward to DCM accounts. DCM accounts after studying the case forwards it to DM accounts whose job is to prepare the feasibility report.



Step (b): Preparation and Approval of Feasibility Study:

DM accounts prepare a feasibility report. DM accounts calculate the impact on Gas Development Surcharge (GDS). And works out the whether the cost of project being financed by the company or the customer as per the mentioned policy of the company.

Category of

Connection

Impact on GDS after Allocating for Regulatory

Return

Project Cost

Policy

Industrial / CNG

connections in existing areas / new

areas

Irrespective of Impact

Project Cost is lees than Rs.1 million

100% project cost financed by the company

Full Positive Project cost is more than Rs.1 million

50% project financed by the customer refundable over 48 monthly installments with nominal interest.

Partial Positive 50% project financed by the customer refundable over 48 monthly installments with nominal interest.

Negative 100% cost of mains recovered from customer as non-refundable

Project Cost includes:

Cost of Mains including DIRECT DEPARTMENTAL COST (DDC)Cost of CUSTOMER METER STATION (CMS)Cost of TOWN BORDER STATION (TBS) / PRESSURE REDUCING STATION (PRS) if dedicated to the customer

After preparation of feasibility report the feasibility report requires approval from the management. If the cost of project is less than or equal to 2.5 million then CFO has the authority to approve the case other wise the case shall be approved by the MD.

Step (c): Letter to Sales Department:

After approval of feasibility report DSS issues a letter to sales department informing about the approval of the project and the amount to be received from the customer as refundable / non-refundable advance as per the policy of the company.



Issuance of Job Card:

The list is sent to finance department for the preparation of job cards.

Job card is prepared and sent to sales department. Sales department sends job card to planning for the execution of work.

Execution of Job:

The job is executed with the involvement of Planning and Construction.

Commissioning Advice:

The construction department sends a commissioning advice to sales department to inform that the area is now on gas.

Issue of Circulars:

Sales department issues circulars to registered contractors stating that they can start the sales activities. This circular is only issued in the case of major mains.

Booking of Cost:

All executed job cards are sent to finance department along with all material requisitions and other coast details for the booking of cost of the scheme.



STORES SECTION

The store is responsible for receiving, keeping and sending all the necessary materials

the company uses for its operations in various locations throughout the country. All

the items have a 9-digit index number.

Purpose:

To check the store balances, maintain and control the records of every kind of

stock/material placed in stores at different locations of company.

Here, in SSGC Head Office record of each store all location in company is controlled

and checked for proper receipt and issue of items.

Working:

1. Extracting stores balances in ERP.

2. Checking of stores balances with ledger balances on ERP.

3. Reconciliation store stock loan balances with ledger balances for the more

accuracy.

4. Checking of miscellaneous reports of stores balances for confirmation.

5. Preparation of reports of stores stock on quarterly, half yearly and annually.

Functions Performed By Company Stores:

Major functions are performed by company includes:

Receipt of stores

Issuance of stores for Distribution Projects

Issuance of stores for Transmission Projects

Issuance of stores for Meter Plant Projects

In order to fulfill these functions, company has several stores ate different locations.

And here we go in the detail of these stores by using tables.



The following chart shows the different documents, which causes

inflows and outflows from the stores.

INFLOWS

OUFLOWS

OUT

NFLOWSReceiving Statement

Local / Imports

Debit

Adjustment

VoucherReturn

Vouchers

STORE

Material Requisition

FormCredit

Adjustment

Voucher

Meter Requisition

Form


COMPANY

DISTRIBUTIONTRANSMISSIO

NMETER PLANT

DISTRIBU-TION STORE

KARACHI SINDH QUETTA

MAIN STORE SITE

GULSHAN STORE

ST.STORE SITE

DISTRICT SITE

HYDERABAD SUKKUR

NAWABSHAH LARKANA

ST. HYDERABAD ST. SUKKUR

QNGDP

ST. QUETTA


MAJOR FUNCTIONS OF COMPANY

DISTRIBUTION STORES



TRANSMISSION STORES

METER PLANT STORES

TRANSMISSION

OPERATION STORE-KT HQ-III HYDERABAD

HQ-II NAWABASHAH HQ-I, SUKKUR

IRBPC-HQ-DADU IRBPC-HQ –SHIKARPUR

QPL(O&M)-SIBI QPL(O&M)-QUETTA

CD-KHADEJI GRIEP PROJECT KHADEJI

PIRKOH-SUI ST. KHADEJI

DISTRICT KHI KHADEJIDISTRICT KHI

TERMINAL


METER PLANT

METER PLANTST. METER

PLANT


STORE DEALINGS

Store accounting is based on meaning average basis. Each item has been allotted

index number according to the description and specification of material. Store index is

based on seven digits having fields of 00/00/000. 1st 2 digits denote main section to

whom material is to be sent e.g. HO, Trans, MMP, etc. 2nd 2 digits denote sub section

e.g. Finance in HO etc. 3rd 3 digits denote serial no of item like as Printing Paper, Pen,

Pipes etc. Stores system is based on the following store documents:

1. Material Receiving Statement

Foreign Receiving Statement

Local Receiving Statement

2. Material Requisition

3. Inter Store Stock Transfer



4. Material Return Voucher

5. Adjustment Memo

Store accounting is based on above store documents for generation of cost of material

received of issued.

PURPOSE OF STORE DOCUMENT

1. Material Receiving Statement :

When the material is received in the store department by the supplier or the

company the store department sends two receipts 1st for supplier or respected

department and 2nd for store section for maintaining the record and controls it.

That receipt is known as Material Receiving Statement. If the material is supplied

from abroad in that case the Foreign Receiving Statement is issued and in the case

of local supplier the Local Receiving Statement is issued. When the receipt is

received by the store section from the store department the store section check R/S

number, date of issue, delivery challan / invoice no: Supplier name and address,

index number, description, units, and quantity (ordered, received, and balance)

through ERP that the received material is present at store department or not. After

confirmation, the receipt is put into records.

2. Material Requisition :

When the store department issue the material to the user department according to

user demand the receipt is send to the store section for informing that we issue

that material to that user department in case of availability and approval of high

level management. That receipt known as Material Requisition. After receiving

that receipt the store department check the indenting department and particular of

job, store location code where from the material is issued, requisition serial NO:,

date of issued material, company code, function, account, organization unit and

project code, order number, quantity required, store index number, and quantity

issued through ERP that the requisite material is issued from store department or

not. After confirmation the receipt is put into records.

3. Inter Store Stock Transfer :



Sometimes material is required for one store due to out of stock and that material

is in access for another store department then needed department sent the requisite

for material and then material will transfer from accessible point to out of stock

point and receipt is to be sent to the store section for maintaining and controlling

the account with the name of Inter Stores Stock Transfer. The store section check

that from which store department to which store department material is transferred

along with the respected location code. And store section also check the issuing

store code NO:, serial NO:, date of transferring, description of material

transferred, store index number, unit code and quantity transferred through ERP

that the transferred material is in actual transferred from one store department to

another store department. After confirmation the receipt is put into records.

4. Material Return Voucher :

When the material is issued against the requisition sometimes material is not in

use or unserviceable and the user department return that unserviceable material to

the store department. When it is received by the store department they send the

voucher to the store section with the name of Material Return Voucher for the

purpose of maintaining. When it is received by the store section they check that

from which location material is return, department name, date of return,

organization code, serial number, description, job number, M.R NO. & date

against which drawn, index NO., and quantity returned through ERP that the

returned material is correctly record or not by the store department. After

confirmation the receipt is put into records.

5. Adjustment Memo :

Sometimes during the entry we are doing mistake like wrong entry of index

number, invoice number, quantity, amount, job number, or others fro correct these

mistake companies make a journal voucher (JV) and correct the mistake. After

correcting the mistake the store department sends a receipt to the store section

with the name of Stores Adjustment Memo for updating changes. When the

receipt is received by the store section they check date of changing, store index

no: job number, quantity and remarks for what purpose that adjustment memo

made.



LOCAL ORDER

The local order section is one of the most important section of finance department. The local order section entirely responsible for the payment of bills to various suppliers and vendors. This section is only responsible for make payment to the material suppliers. This section prepares the voucher for only tangible goods not for intangible goods (services).

The main object of LO is to make ensure, secure and smooth payment to the supplier timely and to gain the confidence of suppliers. The bill payments made under LO are classified into:

Revenue Job denoted by 11/TKT

Stores Stocks Items denoted by 12/TKT

Capital Job denoted by 13/TKT

This section deals with material management department, R&D (store) and the suppliers. LO section uses the Oracle application software to print a voucher after punching data into system. The advantage of this software is that, if the wrong data is punched in to the system, the voucher will not be printed.

LO section does not go though the payment process if any of the required documents are missing just like, purchase order, receiving statement and the invoices.In LO, payment system under go though some steps and procedures.

Functions of Local Order:

The core function of the department is to arrange payments against purchase orders issued by the procurement department of Unit “A” & “C” in respect of the following purchases.

In this regard LO verifies invoices quantities and rates against Receiving Slip and Purchase Order (PO) and ensure that the authorized person has approved these.

It is also the responsibility of LO to ensure that goods and services are recorded correctly i.e. capitalized or charge to revenue account.

It is the practice of LO to reconcile their Bankbook Record with LO-Day Book and with their register on monthly basis in addition to daily reconciliation.



CHEQUE CREATION PROGRESS

INVOICE

TENDER ENQUIRY

INTENDS

QUOTATION

PURCHASE ORDER

APPROVAL

RECEIVING STATEMENT

LOCAL ORDER PROCESSING



LOCAL ORDER PROCESSING

Intends:

Intents or the requisition is received from concern Departmental head by the procurement department. If any department needs any (item), then the head of that department submit the requisition to material management department in order to purchase that thing. Now it is the responsibility of material management department to purchase that item for concerned department.

Tender Enquiry:

Once the requisition is submitted and approved by the GM of material management department, the tender process takes place. SSGCL issues the tenders for the purchasing of material through advertisement in newspapers. All the potential and interested suppliers come forward and submit their quotations and bids. Quotations are taken by three lowest bidders.

Purchase Order:

After the bid selection and approval from top authorities, the evaluation report and purchase order is prepared with five copies, and the copy of purchase order is sent to these following departments.

Procure Department. Finance Department Supplier (Original) R&D Department Intender copy

Evaluation report is prepared by analyzing the budget available for concerned department. If the budget for concern department is available, the purchase order is sent to supplier.

After the success of evaluation report, the order is placed through purchase order. Purchase order comprises the quantity of material needed, the price of material, date on which the order was placed and the date of delivery. Purchase order also comprises the name of supplier and purchase order number.

Invoice:

Invoice is a bill, which is prepared by supplier and sent to the customer for payment.

Receiving Statement:

When the materials are received and checked, receiving statement is prepared at R&D department (store) and sent to bill section. Receiving statement comprises amount of quantity, order number and the date on which material was received.

Approval & Cheque Creation:



Purchase order, receiving statement and the invoices of the supplier are attached together and the process for the payment starts by preparing voucher. Receiving statement, purchase order and invoice items and amount are match and then data is punched in oracle based application system under the “invoice batches” head. After the punching of data voucher is printed and attached with purchase order, receiving statement, invoices, delivery challan, sales tax invoice and the evolution report. A checklist is also prepared to make sure that all the formalities are compiled with, and then the payment vouchers are checked and approved by the DCM, DGM, and GM if required.After the approval of payment voucher, this set of document is sent to cash and bank section for preparing cheque in favor of supplier.

Other Activities in Local Order:

LO section deducts few charges from the amount payable to suppliers. They are:

General Sales Tax @ 16%

GST 16% is added into the payable amount.

Withholding tax @ 3.5%

This is the income tax, which is deducted from payable amount, and then tax is given to tax department of Pakistan.

GST withholding tax @ 20% on GST amount

20 % withholding tax is deducted from GST amount and then SSGC gives that amount to sales tax department.

Liquid Damage (LD) @ 0.1% per day

LD is deducted from payable amount if the delivery is late.0.01% is deducted for one day. LO can deduct only up to 10% of payable amount even late delivery exceed the 100 days.

Bank Guarantee:

It is the practice of SSGC to obtain bank guarantee from the supplier where tender price exceeds Rs. 500,000 with respect to purchase order.

Financial Powers:

Previously payments up to Rs. 100,000, 200,000, and Rs. 500,000 required to be approved by DCM, DGM and GM respectively. However, Deputy Managing (DMD) has approved revised financial powers.

MIS Reporting:



DCM submits report on monthly basis regarding details of bills received and processed during the month and detail of outstanding bills to DGM for further submission to GM and DMD.

Generalization of Receiving Slip on Monthly Basis:

At the end of each month, LO generalized receiving slip received and processed during the month by passing the following entry:

Stores /Revenue / Capital Account Dr.

Sales Tax-Adjustable Dr.

Sundry Creditor Cr.

Sundry Creditors Dr.

Liquidated damages Cr.

Income Tax Deducted at Source-Payable Cr.



STEPS TO PROCESS A PAYMENT VOUCHER

Following are the required step involved to process PAYMENT VOUCHER in AP Module through System:

1. Open the invoice batches.

2. Enter the batch name to open the entry.



3. Now we enter the following data: Supplier No: Invoice date Receiving date Invoice No: GST No:

After giving the following data, system allots the unique reference no. to the supplier.

Here reference no allot to the supplier.



4. Now we add the GST.

5. Now we click on “MATCH” to match the Purchase Order (PO) with the Receiving Statement.



6. Now we click on the distributions and do the following transactions.

Add general sales tax (GST) Deduct income tax 3.5% Minus liquid damage (LD) (If required) Add freight SED 1% (Special Excise Duty) Minus GST withholding 20%

7. Now we click on the “ACTIONS” to validate the entry and do the following actions:

Validate and force approval Force approval and release hold Create accounting

8. Now we click on “REQUESTS: SUBMIT” to submit a request and to print the voucher.



9. First we select the “LO PAYMENT VOUCHER” and then give following parameters.

Batch name Supplier name

Then click on “SUBMIT” to run the report.



10. Now we click on “VIEW OUTPUT” to retrieve the voucher and then print it.



Insurance Section

In the present world, where life is full of anxiety, dangers and risks, insurance is essential to protect and compensate for sudden loss of life and property. It has also been made compulsory by law in most of the countries to protect assets/property of Government concerns and corporate bodies.

Basically insurance cover is confirmed when premium is fully paid and POLICY is issued by the insurers, but in case of very huge volume of business like that of Sui Gas Southern Gas Company Limited, a HOLD COVER letter from the insured is enough for confirmation of insurance cover.

Responsibilities of Insurance Section:

Following are the responsibilities of insurance section:

1. Insurance coverage of All the Assets and Employees of SSGCL under:

a. Fire Insuranceb. Motor Vehiclesc. Employees Benefit

i. Group Insuranceii. Personal Accident

d. Marine Insurancee. EAR Insurancef. Casual / contract labor Insurance

2. Lodging and settling of Insurance claims under above mentioned policies.

3. Renewal of Fire Insurance and other policies on Annual Basis.

4. Preparing Budget of Insurance on Annual Basis of following:

a. Fire Insuranceb. Motor Vehicle Insurancec. Employees Benefit

5. Payment of Debit Notes to NICL and Adamjee Insurance throughout the year.

6. Passing Recurring JV of Fire Insurance and Motor Vehicle on Monthly basis.

7. Correspondence with NICL.

8. Correspondence with Surveyors.

9. Correspondence with other departments.

10. Preparing Reports for Management.



Kinds of Insurance Policies Maintained By SSGC:

There are seven kinds of insurance policies which are maintained by SSGC are given below:

1. Fire policies.2. Accident policies.3. Marine policy.4. Motor Vehicles policies (M.V).5. Employees benefit policies.

a) Group life insurance.b) Personal accident policy.

6. Erection all risk policy (EAR).7. Voluntary insurance.

1.Fire Policies :

It provides full comprehensive coverage in respect of “Loss or damage to property due to fire and lightening “, which can be extended to cover explosion, earthquake (fire and shock), atmospheric disturbance (rain, flood, hurricane), heat or combustion, riot and strike damage etc.

NICL provides this coverage in conjunction with the fire. It provides protection against loss of gross profit incurred as a result of business interruption or interference in business caused by an event indemnifiable under fire and allied perils policy.

Presently SSGC Fire Insurance Policy is taken from NICL Insurance Company.

Following are the list of Fire Insurance Policies:

A. Gas Pipeline: Transmission and Distribution.B. Compressors.C. Stores.D. Badin Gas: Liquid Handling Facility.E. SCADA.F. Gas Odorants.G. Consequential Loss of Profit.H. Compressors – Terrorism.I. LHF – Terrorim

J. Buildings: other than Head OfficeK. Contents in Company's Premises including Head Office and other locationL. Construction Equipment at KhadejiM. Buildings: Head OfficeN. Telecommunication, Plant & Machinery at K.T.O. Computers Including Lap Top.P. Hand Held ComputersQ. Plant (Meter Plant) Including Building.R. Stores at Meter Plan.



2.Accident Policies :

All the Accident policies are taken from NICL which are mentioned below:

a) Cash & Safe

Money insurance provides cover against loss of cash-in-safe and cash in transit caused by robbery, theft, or any fortuitous event; loss of money from the insured’s premises during business hours caused by theft or robbery; and loss of money from the insured’s safe or strong room caused by theft or robbery.

b) Director Pat Policy

Traveling inside the country or worldwide is an essential part of most of the executive’s working lives. Certainly, along with it comes the risk for any personal and financial loss that they might face on a business trip. This policy covers the employer and employees for any accident, sickness, and medical attention in an emergency that may occur whilst traveling.

c) Fidelity Guarantee

This policy covers the risk of employee’s embezzlement and misappropriation of cash and other assets of the company.

d) Workmen's Compensation

This is mandatory by law. As per law SSGC is bound to provide insurance cover to its contract employees.

e) Public Liability

This policy is obtained to reimburse loss sustained to assets of third party under possession of SSGCL.

3. Marine Policy:

Marine insurance policy covers the risk of imports and exports as per requirement of the organization. This policy can be extended to provide adequate cover to protect all goods in transit by other modes of transportation, viz., by Air, Rail & Road. Through insurance company the goods are protected from the time the goods leave the seller’s warehouse until they reach the buyer’s warehouse.

The party usually responsible for insuring the goods is determined by the sales contract. To help the insured familiarize with the buyer’s and seller’s responsibilities.Presently SSGC Fire Insurance Policy is taken from NICL Insurance Company.

Policy Purchasing For Marine Insurance:

Proposal for insurance (request for insurance) is made by the procurement department direct to NIC. NIC issues certificates for each consignment proposed for insurance



and sends to insurance section along with a statement on monthly basis. This statement is sent to procurement department for verification/confirmation. On receipt of this confirmation, premium is paid by insurance section through a Cheque.

4. Motor Vehicles Policies (M.V): Motor vehicle insurance policies provide coverage against accidental damage including fire, theft, snatching away by violent means, riot and strike damage, loss or damage due to natural calamities, road traffic act, and at common law, third party liability (Bodily, Injury and property damage).

The policy can also be extended to include accidental personal injuries to and death of driver and passengers.

Presently SSGC Motor Vehicle Policy is taken from NICL Insurance Company.

Following are the list of Motor Vehicle Insurance Policies:

A. Commercial Vehicles.B. Commercial Vehicles with Tracker.C. Private Vehicles.D. Private Vehicles with Tracker.E. Motor Cycles.

5. Employees Benefit Policies:

There are two types of policies are maintained under this group by SSGC:

a) Group life insurance

In Group Life Insurance, the organization can decide the benefits it wants for each employee. Sum Insured Can be a flat amount or a multiple of the salary. Premiums for Group Life Insurance are paid by the organization.

Presently SSGC Group Life Policy is taken from American Life Insurance Company. Group insurance covers the natural death of SSGC employees. Family of deceased employee will be entitled for following claim.

Sum Insured of Executives is One Annual Gross salary. Sum Insured of Non Executive is Rs. 20,000 for each employee.

b) Personal accident policy

In an increasingly competitive business scenario, every organization has to prepare for the unexpected. This implies not just to its property, but also the employees. An employer is responsible for the health and safety of all the employees while they are working in the organization. This insurance indemnifies the insured in case if at any time during the period of the insurance any employee during his service shall sustain personal injury by any accident.



Presently SSGC Personal Accident Policy is taken from Century Insurance Company. Personal Accident insurance covers the accidental death of SSGC employees. Family of deceased employee will be entitled for following claim.

Sum Insured of Executives is as per following slabs:

GradeNO. of Executives

Sum Insured Rs.

1 to 3 1628 1,500,0004 to 5 343 2,000,0006 to 7 97 2,500,0008 to 9 31 3,000,000MD 1 10,000,000

Chairman 1 10,000,000Total 2101

Sum Insured of Non-Executive employees is Rs.800,000 for each employee.

6. Erection All Risks Policy (EAR):

EAR provides coverage against all risks during:

The erection of machinery, plant and all kinds of steel structures Testing /trial run of new machinery Third party legal liability for loss of or damage to property and bodily injuries Expansion of an existing project. Dismantling and re-erection of an existing facility.

The interests of suppliers, manufacturers, contractors as well as subcontractors can be included in the policy. Cover the project site and terminates on completion of testing or handing over of the project to the principal or the period chosen, whichever is earlier.

Presently SSGC Erection All Risk Policies are taken from NICL Insurance Company.

Policy Purchasing For EAR Insurance: This policy is taken for projects. Specified proposal form is completed by P&C or P&D and sent to insurance section for getting insurance cover. After processing the required formalities, EAR policy is issued by NIC. This is one time cover till completion of Project and premium is charged for the entire period.

7.Voluntary Insurance :

Voluntary Insurance has following features:

The plan is specifically designed for the organization. No direct cost to the organization as employer Each employee decides the level of cover they want. Involves minimal administration and paperwork. Premiums are directly deducted from employee’s salary.



Presently SSGC Voluntary Insurance Policy is taken from New Hampshire Insurance Company.

Process For The Claim of Insurance Policies:

When there is a damage or loss, the process of insurance starts. The first step is taken by the location incharge who informs Finance either or through concerned G.M. Further steps to be taken are narrated below:

1) On receiving report of damage or loss, Insurance Section will enter the loss in Insurance Register and allot a file no. this file no will be the reference no. of that claim for further process.

2) Immediately, a formal notice of claim will be served upon the Insurers.

3) On receiving formal notice of claim, the Insurer allots their claim no. (Reference no.) That will be their reference in future and till finalization. A surveyor is also appointed at the same time by the Insurer.

4) Insurance Section makes liaison with the appointed surveyors and arrangements are made to take him to the place of survey in consultation and co-ordination with the concerned department.

5) After completion of survey, the surveyor asks Finance Dep’t. To provide documents.

6) Usual documents required are:

Claim Form: This form is completed and signed by department concerned and forwarded to finance for onward submission to the surveyors and insurers.

Copy of FIR where required. Statement of loss. Departmental Enquiry Report. Details of repair works. Documents in support of expenses incurred such as cash memo, receipts etc. Any other document as required by surveyors/insurers.

7) Documents are prepared and arranged by concerned department and are provided to finance for onward submission to surveyors/insurers.

8) Documents are prepared in duplicate sets one each for the Surveyors and the

insurers.

9) Insurance section always keeps strong and constant liaison with concerned department for arranging /preparing claim documents.

On completion of claim document with the insurers, Insurance keeps pursuing insurers for settlement.



Documents Required In Case Of Group And Personal Accident Claims:

1. Claim form: Completed and signed by I.R. or H.R Department.2. Physician’s statement.3. Proof of age.4. Death certificate.5. Burial certificate.6. Photocopy of NIC of the deceased.

In Case Of Accidental Death:

In addition to the above mentioned documents, the following documents are also required for accidental death claims: 1. Copy of FIR2. Copy of post mortem report.

First information of incident ( either death or accidental injury ) may be given by the concerned location where the employee was working or may given by Medical Department or by IR/HR department .Further process is completed by Insurance Section in collaboration with IR department in case of unionized staff and with HR Department in case of executive staff.

Claim Process For Marine Claims:

Information for any shortage, damage or missing in the consignment is reported to Insurance section by procurement department. Based on this information, notice of claim is served with the insurers by insurance section. A surveyor is appointed by the insurers who give his report upon which claim is paid by the insurance company. Damages up to 2% of C&F value is not claimed under voluntary excess. Documents Required For Marine Claims: Usually, following documents are required for settlement of marine claims:

1. Bill Of Lading.2. Bill Of Entry.3. Purchase Invoice.4. Original Insurance Certificate

First three documents are provided to insurance section by procurement department and insurance certificate is available with the section.

Claim Process For EAR:

Claim process for EAR losses/damages is the same like FIRE CLAIMS but voluntary excess is not applies rather Compulsory deduction is applied the amount of which differs from policy to policy.



Renewal Of Insurance Policies:

SSGC’S all the insurance policies expire on 30th June and the renewal of the policies is done on 1ST July. As every year there is some change (increase or decrease) in the value of assets but the exact figure of this change can only be determined after finalization of financial statements. So in order to get insurance coverage of all the assets, SSGC obtains endorsement by paying 50 percent of the proposed budgeted premium to NICL and the remaining amount is paid after finalization of financial statements.



Accounting of Insurance Section

Journal Entries:

1 Accounting for Prepaid Insurance

I At the time of booking of prepaid premium: Prepaid Insurance Dr. Payable to Insurance Company (Through NLO) Cr. II At the time of payment of premium to Insurance company: Payable to Insurance Company (Through NLO) Dr. Cash / Bank Cr. II At the time of charging of prepaid Insurance expense: Insurance Expense Dr. Prepaid Insurance Cr.

2 Accounting for Insurance Claims

Case I : Accident / damage of Asset

I In case of Accident / damage to Vehicle. Booking of Loss: Recoverable From Insurance Company Dr. Payable to Contractor / Workshop Cr.

IIIn case of Accident / damage to Vehicle. Payment to Workshop:

Payable to Contractor / Workshop Dr. Cash / Bank Cr.

III At the time of Settlement of claim from Insurance company: Cash / Bank Dr. Recoverable From Insurance Company Cr.

Case II : Total loss of Asset

I In case of total loss of asset. Booking of Loss: Recoverable From Insurance Company Dr. Asset Cr.



II At the time of Settlement of claim from Insurance company: Cash / Bank Dr. Recoverable From Insurance Company Cr.

3 Accounting for Death Claims

I At the time of receiving Cheque from Insurance Company: Cash / Bank Dr. Recoverable From Insurance Company Cr. II At the time of booking payment: Recoverable from Insurance Company Dr. Payable to family of deceased. Cr. III At the time of payment of claim to the family of deceased: Payable to family of deceased. Dr. Cash / Bank Cr.



NICL Deducts Rs. 20 Million Voluntary Excess on Each

And Every Claim

Based On That ReportNICL Settle The

Claim

Surveyor Submits The Survey Report

To NICL

Insurance Section Collects Documents From The

Concerned Department And Submits It To The Surveyor

NICL Appoint Surveyor And Issue Claim

Number

Surveyor Performs the Survey of the Location And Send Insurance Section List Of

Required Documents

Insurance Section Inform NICL With in 15 Days From

The Date Of The Loss

Concerned Department Send Notice of Loss to

Insurance Section

FLOW CHART FOR THE CLAIM OF INSURANCE POLICIES



All The Remaining Payments

Are Paid According To The Schedules

All The Assets Are Endorsed From NICL

50% Premium From The Proposed Budget

Is Paid To NICL

Renewal Is Done On 1ST July

All The Policies Expired On 30TH June

FLOW CHART FOR THE RENEWAL OF INSURANCE

POLICIES:



Invoice Entry & Payment Cycle On Oracle

1. Creating a New Invoice Batch Of Payment Voucher:

2. New Batch Is Created:

3. Description Of Payment Voucher Through NLO:



4. Account Codes To Be Specified For Each Payment:



5. Validation Window For Authentication Of Payment:



RECOMMENDATION &

SUGGESTIONS



SSGC is playing a leading role in the energy sector of Pakistan and is on its track of meeting its strategic goals and objectives. Over the past 50 years, the company has made momentous progress and has brought the fruits of clean, low cost and environment friendly natural gas within the reach of over 1.9 million domestic, commercial and industrial customers all over Sindh and Baluchistan. As a result, the company has emerged as a leading fully integrated utility company that continues to play a major role in fuelling national progress.

Following are the recommendations:

1.Management Issues :

During my internship, I observed that the contract employees are unfairly treated poorly motivated because of their dissatisfaction with pay and working conditions. The salaries of the contract employees are very low as compare to amount of work performed by them. Contract employees should given a chance to work on career basis.

Lack of Training :

There is lack of training in some departments which create problem for employees to work on the ERP system.

Recommendation:

It is recommended that training should be given to each employee periodically. Sufficient training of the human resource is very important, so they would become acquainted and proficient with the ERP system that is implemented.

SSGC needs to address various kinds of issues like some employees are under-valued, some are under-trained, and some may be under utilized. Similarly some may be poorly motivated and consequently perform well below their true capability.

2.Delay in Bills Payment in Local Order Section:

ISSUE:

It is observed that in Local Order (LO) Section payment of bills are delayed due to inefficiency of employees and no check and balance system is there. Some times “Receiving Statement” comes late from stores because of in efficiency of the stores departments. And sometimes some bills are processed first because of favoritism.

Recommendation:

The payment of invoices should be paid on first come, first out basis. Proper time frame should be followed for the payment of the bills i.e. 15 days after the delivery date of material to maintain the trust of suppliers on the company.



3. Internship Program :

Stipend issue:

Company policy for MBA/BBA internees is rather unfair. Some of the internees are paid stipend while some of them are not. This creates question in the mind of internees about company policy for internees. Company should have a same policy for all internees i.e. all internees should be paid stipend equitably.

Issue:

During my internship, I interact with many employees. Some of the employees of finance department of some sections are very cooperative while employees of some sections are non-cooperative like GL section.

Recommendation:

In my opinion the objective of any internship program should be to facilitate the learning of the internee, provide an environment where he/she could implement and observe the practicality of the theories learned.

If proper documentations are maintained then it may help in the understanding of the internees of the business processes as well as decrease the amount of interaction with employee. Section incharge of each department should be directed to cooperate with internees.
