Ssgc Final Report

8/3/2019 Ssgc Final Report

1/24

Sui Southern Gas Company

Syeda Faryal Jafri(Finance)

ACKNOWLEDGEMENT

All the praises are for the almighty Allah, who bestowed me

with his blessings, the ability and potential to complete my

four weeks internship program.

Words are very few to express enormous humble obligations

to my affectionate Parents for their prayers and strong

determination for enabling me to achieve this job.

The inspiring guidance, remarkable suggestions, constantencouragement, keen interest, and friendly discussion

throughout my internship period enabled me to complete

this report efficiently.

I offer my heartiest tribute and cordial gratitude to present

my thanks to Mr. Asad (L/O section), Mr. Gulzar (L/O section),

Mr. Sohail (Budget section),Mr. Iftikhar (budget section), Mr.

Iqbal Batvia (Bid Bond Section),Mr. Amir (Treasury Function),

Mr muneeruddin(Treasury function) who had been a source

of constant support and inspiring guidance throughout my

internship period.

I am also thankful to Mr. Shuja who was source of guidance

and his inspiration led me to learn and nourish my skills in

different sections of the finance department.

1


2/24



TABLE OF CONTENTS

S.N

O

TOPICS PG.NO

1 About the Company 3-5

2 Finance department 6

3 Areas of working 7

4 Billing section 8-10

5 Cash and Bank section 11-13

5 Cost and Budget section 14-16

6 OGRA 16-17

7 Bid Bond section 18-20

8 Recommendations 21

ABOUT THE COMPANY

2


3/24



SNAPSHOT OF SSGC

Sui Southern Gas Company Limited (SGGC) is engaged in thetransmission and distribution of natural gas. The company isalso engaged in the manufacturing and selling of gasmeters. SGGC is a provider of high pressure transmissionand low pressure distribution systems. The company ownsand operates a network of high-pressure gas pipelines tosupply gas. The gas is supplied to customers belonging to afranchise area covering more than 1,200 towns in the Sindh

and southern Pakistan. The company principally operates inPakistan.

SSGC transmission system extends from Sui in Baluchistanto Karachi in Sindh comprising over 3,200 km of highpressure pipeline ranging from 12 - 24" in diameter. Thedistribution activities covering over 1200 towns in the Sindhand Baluchistan are organized through its regional offices.An average of about 357,129 million cubic feet gas was soldin 2006-2007 to over 1.9 million industrial, commercial anddomestic consumers in these regions through a distributionnetwork of over 29,832 km. The company also owns andoperates the only gas meter manufacturing plant in thecountry, having an annual production capacity of over550,150meters

The company is managed by an autonomous board ofdirectors for policy guidelines and overall control.

3
http://www.ssgc.com.pk/ssgc/aboutus/management/http://www.ssgc.com.pk/ssgc/aboutus/management/http://www.ssgc.com.pk/ssgc/aboutus/management/http://www.ssgc.com.pk/ssgc/aboutus/management/


4/24



CORE BUSINESS OF SSGC

PRIMARY ACTIVITY

The core activity in which SSGC is involved is transmissionand distribution of gas in Sindh and Baluchistan.

SECONDARY ACTIVITIES

Certain activities related to the gas business including

manufacturing and sale of gas meters and constructioncontracts for lying of pipelines are also performed by thecompany.

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

4


5/24



COMPANYS VISION

To be a model utility providing quality service bymaintaining a high level of ethical and professionalstandards and through optimum use of resources

COMPANYS MISSION

To meet energy requirements of customers throughreliable, environment-friendly, and sustainable supply of

natural gas, while conducting company businessprofessionally, efficiently, ethically and with responsibility to

all our stakeholders, community and the nation.

5


6/24



FINANCE DEPARTMENT

Finance is the lifeblood of any organization and same is thecase with SSGCs finance department. Under the umbrella offinance Department we can find various sections which arelinked to each other.

1) FINANCE

Payroll Insurance

Gas Sales

Billing

Bid bond

Pre audit

Provident fund2) TREASURY

Cash & Bank Imprest (Petty cash) Gas purchase

Import

Revenue collection3) ACCOUNTS

Inventory

Cost

Budget

Fixed assets

MIS

6


7/24



AREAS OF WORKING

The experience was more than what I had expected. Thecompany provided me with an opportunity to work in areasof my keen interest and utmost importance. It was throughthese times that I got a multidimensional experience byworking under four different sections of finance department.

1) Billing section(L/O and N.L/O)

2) Cost and Budget section

3) Bid Bond

4) Cash & Bank

7


8/24



BILLING SECTIONBACKGROUND

In order to keep in consideration the companys policy andensure timely payments of all invoices the billing section ofthe company is formulated.To approve vouchers with in limitand to send reports to management on monthly basis onregarding details of invoices received and processed duringthe month and outstanding vouchers. The maintenance of

the record of retention money deducted from invoices ofsuppliers and follow of long outstanding advances onmonthly basis are all the functions performed by billingsection of finance department.

BillPaymen

t

Local

OrderNon Local

Order

8


9/24



NON LOCAL ORDER

This deals with emergency payments, quick payments and

very few payments against agreements and tenders.

LOCAL ORDER

Payments are made against tender and proper agreements

in local order section.

WHAT I LEARNED WHILE WORKING FOR 1 WEEK

UNDER THIS SECTION

When Mr. Sajjad receives different invoices so he first

stamps the receiving date and then distributes those

accordingly means those pertaining to L/O section are given

to the people responsible for that and those of N.L/O section

are given to employees responsible for that. Mr. Gulzar inthe L/O section is responsible for making batches and

punching the invoices. The task of making batches is made

simpler by use of ORACLE. The function of ERP (Enterprise

resource planning) is made easier by the implementation of

the new technology due to which not only time is saved but

error less work is ensured. This process is moved further as

the work passes onto Mr. Razzaq and then after small

process which includes printing of yellow vouchers andcalculation of Late delivery, checking the calculations of

G.S.T and S.E.D passes on to the further process of making

cheque.

9


10/24



When one is working under L/O and N.L/O section so he/she

can have a know how of the following documents as these

are required in both the sections.1) Bank payment voucher

2) Checklist

3) Local purchase order

4) Cash memo

5) Comparative statement

6) Work order

7) Income tax invoice

8) Evaluation report

9) Approval

10) Receiving statement

In short, the bill payment section of finance department isrequired to process the bills of service, contracts, utilities,medical, supplies, and other non local order bills receivedfrom various departments including ditching contractors,road cutting charges, civil works etc. The section alsoprocesses the medical bills of headquarters. The section isresponsible to ensure that all transactions are with in theauthorized limits and adequately approved. Similarly thepayments are made only for the authorized acquisition of the

services, contracts, works orders etc and approved bycompetent authorities.

10


11/24



CASH AND BANK SECTION

CASH SECTION

The cash section deals in payments to different parties ondaily basis. This section is responsible for the collection anddisbursements in cash mode. It is involve in the processingof cash receipts from contractor, employee and executivesand payments to employees/executives and suppliersagainst cash payments vouchers. The record is kept of allreceipts and payments on daily basis in newly implemented

Oracles Accounts Payable and account receivable modules.It

has to pay up to certain amount to contractors and also tostaff members for different purposes. Thats why it isinvolved in drawing cash from strong room up to a particularlimit being approved by head of department. One of theperson responsible for strong room is Mr. Muneeruddin.

TYPES OF PAYMENT MADE BY THE SECTION

The nature of disbursements, which the cash section isinvolved on daily basis, includes number of categories (likeadvances to Staff, material/stationery purchase, medical bills& etc).They have to make payments regularly to differentparties to which they deal with. Usually payments of everysort having amount less than Rs. 5000 are made throughcash payment voucher.

11


12/24



BANK SECTION

All payments made through cheques, pay orders and

demand drafts are a part of bank section. SSGC has anumber of disbursement accounts and the bank account isselected according to the payment amount required. OracleAP &, AR modules are used to keeps an up to date record ofall payments and receipts. The department also keeps acheck of each bank balance so that no account would have anegative balance. In case some account has less than theminimum amount, funds are transferred from the ones thathave excess funds means the accounts are reappropriated.

An indispensable role is played in the maintenance of strongroom, disbursement bank accounts reconciliation, depositingof cheques, pay orders in SSGC A/Cs and, orderings Banksstationeries of bank rolls, cheque books. It facilitates internaland external audits and keeps a record of all bank receipts,bank payments and returned cheques. It generates MISreports when required and orders cash from bank for dailyuses. An effective management of fund is done under thesupervision of this department.

TYPES OF PAYMENT MADE BY THE SECTION

Usually payments in this section are made for:

Employee salaries

Payment to Suppliers and contractors for material

purchased

Payments for imports

Purchase of gas.

Funds transfer

12


13/24




UNDER THIS SECTION

As soon as the bank section, indeed Mr. Amir receives thevouchers from the concerned departments, he records thedata, by making an entry in he excel sheet. In which thereceiving date, amount and the name of the party isrecorded so that any further query by the party can be

traced back from the record. Along with the vouchers aresome supporting documents which shows the reason ofpayment. These supporting documents are verified.

After the bank section ensures that the payment voucherhas been validated and supporting documents are attached,the process of making cheques starts. To save time thecompany had made special arrangements with some banksto get cheque rolls printed rather for cheque books. Thecheque rolls are set into the printer and series wise all the

cheques are printed saving time and producing errorlesswork. This facility is provided by the following bank:

1) Bank Alfalah Ltd

2) Muslim Commercial Bank

3) Faysal bank Ltd

4) Habib bank Ltd

5) Union bank.

The next task after cheque making is the signing of the

same from by the authorized signatories (two signatures

are mandatory or compulsory. One is from finance

department and the other is from other than finance.), the

13


14/24



cheques are disbursed to the concerned parties through

courier or the party sometimes send his representatives

for collection.

COST AND BUDGET SECTION

One of the core functions of finance department is carried out

under cost and budget section. This section carries utmost

importance because planning and cost both are the backbone of

every successful organization.

The primary responsibilities of this section is

1) Budget planning

2) Cost monitoring

The two main schedules pertaining to this section are:

1) Transmission & Distribution Cost(operating expenses)

2) Administrative, General and Selling Expenses

BUDGET

14


15/24



Plan of action that forecasts future transactions, activities and

events financial and non financial. The making of budget allows

an organization to establish the following:

1) The minimum desired level of revenue, or target level of

revenues.

2) The corresponding spending for the creation of the desired

revenue.

There are 2 kinds of budgets prepared in SSGC.

1) Revenue budget

2) Capital budget

Revenue Budget: Expenditure on repair and maintenance of fixed

assets or restore its original assessed standard of performance is

normal revenue expenditure and should not become part of

capital budget.

Capital Budget: Capital expenditures are those that result in

creation and betterment in the life or productivity of assets, the

future economic benefit of such assets r expected to continue 4more than one fiscal year.


UNDER THIS SECTION

At first, the budget proposal of each department should be

reviewed by departmental/ divisional heads and after having

been finalized, these should be signed and submitted to the

finance department. Now its the responsibility of financedepartment to compile and analyze the preliminary estimates

and discuss if required with the concerned

departmental/divisional heads, after completion the same will be

submitted to the management for onward recommendation to

the board approval.

15


16/24



SGMS of different divisional heads will be called to Karachi HO

and they will cut and remove items in budget which are not

required only in their area.

After this allocation of function code to budget takes place. The

problem arises when some departments spend their budgets

before the specified period. In order to solve this issue, the

department sends the request for additional budget or re-

appropriation. The cost and Budget section as suitable a lot

additional budget or re appropriate budget. Then the proposed

budget is made department wise, company wise and account

wise.

THE BUDGET PHASE

Budget is a financial statement which is prepared before the

starting of the financial year containing the plans and

policies to be carried out during the period.

The budget section of finance department prepares capital

expenditure budget (capex) annually for all the departments

of SSGCL. All the departments are instructed to make theproposed budget for themselves for their departments,

before the budget section starts to make it. After receiving

the proposed budgets from the departments, the budget

section examines it and discusses all particulars with the

related head of department & staff giving special

consideration to the justification of fixed asset requirement

and funds available in the company.

The budget is then send to the GM and SGM 4 its approval orchanges & finally to the MD for the approval. When the

budgets of all the departments have been finalized, it is

reviewed by the finance committee. Board of directors

grants approval for the agenda after which the budget is

authorized to be followed. Each department is then informed

16


17/24



through interdepartmental note along with the copy of their

budget.

Keeping aside all these issues, the finance department hasto follow the budget as proposed by BOD and then the

budget is released in four quarters but the BOD has to follow

OGRA requirements and without their approval they can not

approve the budget.

OGRA

OGRA has been set up under the oil and gas regulatory

authority ordinance dated 28th march 2002 to foster

competition, increase private investment and ownership in

the midstream and downstream petroleum industry, protect

the public interest while respecting individual rights and

provide effective and efficient regulations, OGRA works

under ministry of petroleum ,as OGRA gives advises to

ministry of petroleum for setting well head and sale prices

for end consumers and producers of natural gas and issue it

when approved from ministry.

FUNCTIONS OF OGRA

1) According to the rules, grant licenses, modify, amend,

extend, suspend, review, cancel and reissue revolve or

terminate any license

2) Prescribe a uniform form of accounting practices by

licensee3) Promote and observe the practices for efficiency

4) Promote competition

5) Enforce compliance by licensee

17


18/24



6) Resolve complains

7) Prescribe fines if rules are not obeyed

8) Protect interest of stake holders.

9) Administer or establish price for those categories of

products for which federal government establishes prices.

10) In consultation with federal government determine a

price for each licensee a reasonable rate which may be

earned by such license.

11) Oversee capital expenditure budget made by licensee ofnatural gas.

12) Determine well head gas prices for the producers of

natural gas.

13) Impose excise duty, taxes, and other forms of charges.

14) Licensee for natural gas means licensee for

transmission, distribution and sale of natural gas to retailconsumers.

15) To check and ensure that the pressures in transmission

and distribution pipelines are according to required pressure

that is less than 300psig

16) OGRA is an independent authority; it can sue and be

sued, acquire and hold.

17) Responsible for issuing sale price and minimum chargesfor SSGCL and SNGPL to charge from their customers.

18


19/24



BID BOND SECTION

The section responsible for developing relationship between

SSGCL and its bidder or suppliers. Updation of all records

regarding the earnest money and performance bond given

by Material Management Section and to retain and releaseall the Pay Orders and Bank Guarantees according to the

conditions are among its primary responsibilities.

FLOW CHART OF BID

Retaining the bid bond from the supplier

Releasing the bid bond to the supplier

Retaining the performance bond from the selected supplier

Releasing the bid bond to the supplier after completion of

the project

19


20/24



Issue the check for the payment of the cheque

FUNCTIONING OF BID BOND SECTION

Bid bond

The earnest money paid by the supplier to SSGC at the timeof submission of any bid against a tender issued by the

company.

Retaining of bid bond

At the time when a company issues a tender for the supply

of any inventory, various interested suppliers acquire this

legal document to submit their bids against the issued

tender. The amount of bid bond is 2% of the total amount of

tender which is obligatory to submit to guarantee the full

and due performance of the contract. Bid bonds are sent to

this bid bond section through the material management

department. This earnest money can be submitted in form of

either pay order or bank guarantee.

Encashment of bid bond

If the bid bonds are in the form of pay order and is more

than 25000 so it is encashed but pay orders less than 25000

20


21/24



are keep intact but if the bid bond amount is in the form of

bank guarantee so no matter what the amount is but it is

kept save and not encashed.

Release of bid bond

On the basis of lowest rates and past performance three

lowest bidders are selected and among them only one is

selected later. After the selection,all other bid bonds are

released.

Performance bond

The amount of money paid by the supplier who had been

selected as a successful bidder. This amount is retained by

the company as a security deposit until the work is

completed. It can be in the shape of either bank guarantee

or pay order.

Retaining of performance bond

The successful selected bidder is bound to pay 10% of total

amount of tender in the form of performance bond. This is

withheld by the company till the completion of work.

Release of performance bond

As the work is completed by the supplier, the company

inspects both the quantity and quality of work done and

21


22/24



when the company is fully satisfied with the work,

instructions are given to release the performance bond.

AN IMPORTANT CONSIDERATION IF THE

PERFORMANCE BOND IS IN THE SHAPE OF

BANK GUARANTEE

If the supplier gives company banks guarantee so the bid

bond section has to keep an eye on it because usually a

project lasts for more than a year and on the contrary

duration for bank guarantee to expire is 6 months. Therefore

a week before the expiry, bid bond section sends a letter to

the supplier to extend the bank guarantee or encash it.

RECOMMENDATIONS

On the basis of my analysis and as recommended by Mr.

Shuja I would like to share some of my suggestion, which if

looked upon seriously can improve the functioning,

operations and promote sense of belongingness for the

company employees.

1) Internees at SSGC are not hired on the basis of their

merit rather on their strong references or some political

background, which is an open discrimination.

22


23/24



2) There is a need to improve morale among employees,

since I found absence of this element while interacting

among different people of the organization and the core

reason I found behind this was the factor that people at

SSGC are aware of the fact hat no matter how hard

they try or how loyal to the company they are, but until

and unless they have a strong reference they can not

be promoted.

3) The young employees do not foresee a bright future in

this organization therefore they have a feeling of

disowning this organization because this company do

not promises career growth on the basis of

performance and hard work.

4) Absence of a separate prayer room for girls.

5) Internees at SSGC should be rotated on weekly basis in

a systematic way so that they can find a proper linkage

between the sections they are sent form time to time.

23


24/24



Date post:	07-Apr-2018
Category:	Documents
Upload:	faryal-jafri
View:	250 times
Download:	0 times

Ssgc Final Report

Documents