SSGC Complete Report

SSGC Internship Report Part Two

Prepared by

Samad Saleem Bombaywala Internship Duration: Feb 3rd – Mar 17th, 2014

College of Banking & Finance

April 1st, 2014

SSGC Internship Report


SSGC Internship Report

Prepared for

Sui Southern Gas Company Ltd. Department of Finance

Prepared by

Samad Saleem Bombaywala Internship Duration: Feb 3rd – Mar 17th, 2014

College of Banking & Finance

April 1st, 2014


C. Acknowledgement

At the completion of this report, I’m first thankful to the One and Only Almighty ALLAH

who gave me ability to make this report, who gave me the courage, motivation, power and

eagerness and with his grace; today I am able to prepare my report on internship at Sui

Southern Gas Company Limited.

While the extent of my debts cannot be fully acknowledged, it is a joy to record my

gratitude to all the people, who helped us in the preparation of this report.

It is a pleasure to acknowledge my debts and express my special thanks to Mr. Ameen

Muhammad (Funds), Mr. Zafar Waqar (Funds), Mr. Qamar-ul-Hassan (Pre-Audit), Mr.

Tanveer Hussain (Pre-Audit), Mr. Gulab Baloch (Fixed Assets), Mr. Aurangzeb Khan (Fixed

Assets), Mr. Murtaza Ahmed (Sales Tax), Mr. Iqbal Ahmed (Cost & Budget), and Mr. Nisar

Ahmed (Cost & Budget). I would also like to thank Mr. Abdul Mujeed Khan (Imprest), Mr.

Kamran Iqbal (TF), Mr. Sarfaraz Ahmed (TF), Mr. Abdullah Zahoor (TF), Mr. Muhammad

Munir (TF), Mr. Khaliq Nazaz (TF), Mr. Zahid bin Yousuf (Gas Sales), Mr. Syed Rizwan

(Other Income), and Mr. Adeel Iqbal (Other Income) 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 am also thankful to my Parents who cooperated with me and understood my problems

and work schedules throughout the report.


E. Table of Content

I. PART ONE C. Acknowledgement

II. PART TWO

A. Personal Introduction

B. My Experience at SSGC

C. SSGC – The Company

1. Introduction

2. SSGC at a Glance

3. Company’s Vision

4. Company’s Mission

D. Main Functions of SSGC

E. Department of Finance

F. Divisions of Finance Department

1. Treasury Function

Loans Section

Revenue Control Section

Bank Reconciliation Section

Gas Sales Section

Cash & Bank Section

Non-Gas Revenue Section

Import Section

2. Finance

Payroll Section

NLO Section


LO Section

Gas Purchase Section

Insurance Section

Funds Section

3. Accounts

Cost & Budget Section

GDS Section

General Ledger Section

Fixed Assets & Capital Budgeting Section

Stores Section

Admin Section

G. Recommendations


Internship Report Samad S. Bombaywala

A. Personal Introduction

Currently, I am studying at the College of Banking & Finance, an affiliated institute from the

Karachi University Business School (KUBS) in the BSBA (Four Year) program. As of

now, I have completed four semesters of my studies and have been successfully enrolled in

the fifth semester. 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 had a keen interest in doing

internship in huge Governmental organisation such as SSGC (Sui Southern Gas Company)

as it would be beneficial for me in future since it is the leading and a well reputed company.

NIC #: Date of Birth: Father’s Name: Gender: Nationality: Marital Status: Religion: Cell No: Email Address: LinkedIn Profile:

42501-8066155-7 March 24th, 1993 Mohammad Saleem Male Pakistani Single Islam +92 0345 305 9815 [email protected] linkedin.com/in/samadbombaywala


B. My Experience at SSGC

At the time when I joined SSGC, as

an undergraduate Student of

Karachi university, I had close to

no experience or knowledge

regarding the financial realm.

Dragging pre held notions

concerning the inefficiency

mundane nature of local

companies plus the tedious and

dull character of the business

world, I stepped into the door of

SSGC. It would be quite clichéd to

describe my experience as a

memorable one, however I would

like to extend to the staff of SSGC

my heart felt gratitude for

altering obstinate perceptions

about the work environment.

I found in these people the enthusiasm and zeal quite unexpected especially at this level.

Not only did the staff here welcome me warmly but also they extended their valuable time

to teach me the functioning of their respective sections while making it enjoyable and

appealing. I was absorbed into their everyday office lives instantly, receiving notice from

lower in the hierarchy all the way to the higher level management. Expecting discomfort in

a male dominated sphere, I was astounded yet proud at the improving gender ratio and the

equal treatment of both sexes at the office. I would like to applaud the continuous stream of

young management trainees; being incorporated into the system, since fresh perceptions

and fervor for an ambitious career keeps an organization up beat with an increasingly fast

paced world.

Finally I wanted to highlight the current growth rate of the Pakistani economy and the

adverse impact of the brain drain. SSGC has encouraged me to and stand out as a leader in

the driver towards prosperity and development.


C. SSGC – The Company

1. 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.

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 an authorized capital of Rs.10 billion of which Rs6.7117 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.


2. SSGC at a Glance

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 Balochistan 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.

3. Company’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.

4. Company’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.


D. Main Functions of SSGC

The Company is organized into four functional divisions -Transmission, Distribution, Meter Plant &

the Head Office. 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.

As I did my internship in the Finance Department of SSGC, I’ll be discussing its different

sections & their sub-sections in this report.

E. Department of Finance

Finance department is one of the distinct departments in an organization or company. The primary

purpose of the Finance Department is to monitor and report on the financial position of the company

and to provide an excellent level of service to their customers and customers in other departments. The

financial department deals with everything that concerns finances in the company.

SSGCL

Transmission Distribution Meter Plant Head Office


F. Division of Finance Department

Department of Finance at SSGC is divided into three major sections that are as follows:

And now I would further discuss these department section in detail by mentioning their

sub-sections, their purpose & their functions.

Department of Finance

Finance Treasury Function Accounts


1. 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:

Treasury Function

Loan

Revenue Control

Bank Reconciliation

Gas Sales

Cash & Bank

Non-Gas Revenue

Import


LOANS SECTION-

Most of the organizations borrow loan from different banks to meet their capital expenditures and

working capital requirements. SSGC LTD is also involved in the activity of borrowing loans from

high profiled bank organizations. Loans are offered by banks in two categories.

1. Short term borrowings.

2. Long term borrowings.

Short Term Borrowing (Financing)

Short term borrowings are that kind of loans which are settled or which are paid off within one

year. Short term borrowings are mainly carried by SSGC LTD to meet its working capital

requirements. Working capital is defined as the money which is borrowed from different banks to

meet its day to day expenditures. Short term borrowing may be facilitated through much market or

overdraft facility. Overdraft facility may be renewed on yearly basis.

Long Term Borrowing (Financing)

Long term borrowings are that type of loans whose tenure is more than one year and maximum

limit of time period for the retirement for long term loans is 25 years. Long term borrowings are

mainly used to fulfill capital expenditure requirements. SSGC LTD normally makes 5-10 years capex

plan and borrows finance from banks through proactive plan.

Classification of Loans

Banks in two classes mainly classify loan. One is a conventional loan, means with interest. SSGC LTD

has to pay a certain rate of interest on conventional loans, which are decided after negotiations are

held between the two parties. Most probably SSGC LTD has to pay 25% on principal amount.


The other kind of loans is Islamic loans which doesn’t basically include any interest. In this case

SSGC LTD sells its anyone of the asset to a particular bank and receives money against it. At the

same time, SSGC LTD purchases the same asset from that bank. But now, the bank will sell it back to

the SSGC at some higher rate. So this higher rate, which has been received by bank against that

particular asset, is the profit, which is retained by the bank.

Process of Borrowing Loans

The management of SSGC LTD informs the loan section department for the requisition of loans and

current ratios and, equity ratios, which is also called finance covariance ratio. Loan department on

behalf of SSGC LTD sends invitation letters to different parties for the sanctioning of particular

amount of loan and get them approved by senior employees.

Receiving Of Quotations

SSGC LTD receives different quotations from all the banks which have been given offer. Evaluation

committee is settled down to decide which offer, bid or quotation should be selected. Evaluation

committee consists of auditors and finance members.

Selection of Bids

SSGC LTD chooses or borrows loan from that bank which offers lowest interest and, then

negotiations are held between two parties. After negotiations a certain rate of interest is fixed, and

SSGC LTD has to pay that particular rate of interest on its principal amount.

Mandate Letter

The loan sanctioning bank sends an agreement to SSGC LTD which includes different types of sub-

agreements. SSGC LTD examines and observes all the clauses of different agreements thoroughly,

and sends a mandate letter to that particular bank. Mandate Letter is a type of letter which is issued

by SSGC LTD to that particular bank for accepting their deal on different clauses.


Security Exchange Commission of Pakistan (SECP)

SSGC LTD notifies the security exchange commission of Pakistan that they are going to take loan

from a particular bank. They send the letter of charge to SSGC LTD and give them charge of their

assets, current assets are given as security for short term financing while for long term financing

fixed assets are given as security to SECP.SSGC LTD also gives insurance facility to SECP.

KIBOR

Benchmark is basically learned as KIBOR by State Bank of Pakistan. It was introduced in

2005.KIBOR is a fixed amount of interest which can’t be negotiate. Total amount of interest which is

paid by SSGC includes KIBOR rate and interest rate. KIBOR rate changes upon agreement, means

that if loan is borrowed for one year and State Bank has applied 3 months KIBOR, then after 3

months KIBOR rate changes while interest rate remains the same throughout the year. State Year

Bank of Pakistan also regulates prudential regulations regarding different policies.

Calculation of IRR

Loan section department calculates IRR to know all the hidden charges being charged by the bank

from SSGC LTD.SSGC LTD also calculates IRR by all cash flows. Cash flows includes annual charges,

out of pocket expenses, legal charges, arrangements charges if the loan is syndicated, and the last

are financial charges.

Signatures of Authorized Persons

Finally when the loan is approved for sanctioning, banks sends their signatories card to be signed

by authorized persons of SSGC LTD. these cards are signed by two signatories. First signatory is

form finance side and the second signatory is from sales department, IT department or other

finance. These cards are signed by two categories in order to ensure double check.


REVENUE CONTROL SECTION-

One of the major sections of Treasury Functions, Revenue Control Section us responsible for proper

management of sales, revenue and collection. The major responsibilities of this section are:

1. To check whether the collection of bills was within due date or after the due date.

2. As different things can be demanded from consumer in the bill, this section takes care

whether proper accounting is done under the required heads.

3. As, there is a separate accounting procedure for domestic, commercial and industrial

consumers, this section makes sure that one category consumer is not treated under the

head of other category.

4. To check whether the data is punched properly in the computer or in the day book and that

the proper accounting entries are made or not.

THE PROCESS:

The tasks assigned to this section need to be done with close observation and concentration. There

is a proper process of work, which is to be followed by the people working in this section in order

to manage the things accordingly and satisfactorily. The process starts from the collection of bills in

different branches of SSGC’s recommended banks that are authorized to carry out their collection of

bills.

THE ROLE OF BANK:

Banks are authorized to receive collections. But this is not the responsibility of bank to check

whether the consumer is industrial, commercial or domestic. So, the banks have to collect whatever


the amount is, and whoever the customer is. But this is the responsibility of every branch to make a

daily list of all the consumers who paid their bills on that day.

This list contains the serial number; consumer number and the amount paid by him. This list along

with a copy of bill receipts and credit advice is then sent to lead branch, which may be termed as a

representative branch of each bank.

BRANCH CONTROL:

The lead branch manages all its branches by receiving the daily collections from all the branches

along with the copy of bills.

A list of a control copy is then sent to SSGC at the end of each day by the lead branch.

MATCHING:

The revenue control section will then see, whether the amount submitted by each consumer in

bank matches with the stubs, which are received from NIFT, and whether the total of all the stubs is

equal to the amount shown in credit advice sent by the bank.

DATA ENTRY:

All the stubs are then sorted out bank-wise and are then punched in the computer. The consumer-

wise data is also maintained with the help of the consumer numbers mentioned in the stubs. That

consumer number represents, whether the consumer is industrial commercial and domestic

consumer.


DAILY REPORT (BD – 01):

A daily report is formed that represents the daily collection of consumer bills of a particular bank

at a particular date. This amount of DB – 01 is called daily sale. They do segregation in DB – 01 in a

sense that the data is separately punched for domestic, commercial and industrial consumers. The

collective amounts of these three types of consumers will then be transferred to daybook on daily

basis. These amounts are also transferred without segregation to collection book. The daybook, at

the end of month, is sent to Sales Accounting Section.

The revenue control section is liable to make sure that the collection processes are running

smoothly and timely and reports to higher management about the sales figure of each month.


BANK RECONCILIATION SECTION-

This section of Treasury Functions Department is responsible for making a bank reconciliation

statement. This statement identifies the amounts that were not included in the Bank Book

maintained by the company with the help of Bank Statement which is issued by the Bank. This

statement is made in order to rectify the discrepancies in the Bank Book maintained by the

company. This is a kind of matching the amount shown in the Bank Book maintained by the

company with the original amount present in the Bank Account. It deals with four types of different

discrepancies.

Amount Debited by the Bank, not yet credited by the company

Amount Credited by the Bank, not yet debited by the company

Cheques issued but not presented in the bank

Amount deposited, not yet Credited by the bank.

Amount Debited by the Bank, not yet credited by the company:

This includes the different type of amounts debited by the bank, but the company has not yet

lessoned it from its bankbook. Some of the examples are; Bank Charges, Commission, penalties etc.

Sometimes, it so happens that the company gets late in receiving the debit advice of different sorts

of charges from the bank. In this situation, this discrepancy normally occurs.

Amount Credited by the Bank, not yet debited by the company:

Same is the case with delayed credit advices. Company debits its bankbook after receiving the

credit advice from the bank. So, if the company gets late in receiving that credit advice, this sort of


discrepancy occurs. The Bank statement sent to the company shows the amount transferred in the

company’s account of which the company is not aware.

Cheques issued but not presented in the bank:

The company issues a large number of checks every day. At the time of the issuance of checks, the

company credits its bank book which shows that this much amount has been lessoned by the

company’s account from a specific branch. But some of these issued checks are not presented in the

bank by the check holders and the company earns unnoticed profit on that money which is still in

its bank account. As the company does not become aware of the time, that when the issued checks

will be presented in the bank, therefore company cannot make exact profit calculations. Bank

statement is then issued to rectify such kind of discrepancies.

Amount Deposited, not yet Credited by the bank:

Another type of discrepancy occurs in case of Bank deposits. For example, SSGC deposits certain

amount of money in some of its bank account by the issuance of deposit slip. At the time of issuance

of deposit slip, the company debits its bank book and considers that money as their current asset.

But sometimes, it so happens that banks take little time to credit that amount in the bank amount.

At that time, such type of discrepancy occurs.

After a certain period, the banks send “the bank statement” to the company, so that the company

can update its books according to the bank statement. Here is the sample of the Bank Reconciliation

made by the Company of its account in ABL (Civic Centre Branch, Karachi) based on the bank

statement issued by the bank.


GAS SALES SECTION-

As SSGC is a distribution company and they are not the producers. Therefore their main

concern is the distribution of gas to Domestic, Commercial and Industrial users. Gas Sales

Accounting department is responsible for the accounting of the above mentioned three

type of consumers. As the rates charged from these three types of consumers are different

so they make different accounting entries for them. Every consumer has been given a

consumer number, which gives the indication that whether the consumer is domestic,

commercial or industrial consumer.

If the 1st digit of the consumer number is 9 then it is an industrial consumer

If the 3rd digit of the consumer number is 9 then it is an commercial consumer

Other than this are all domestic consumer numbers.

GAS SALES ACCOUNTING RELATED TO DOMESTIC CONSUMERS:

As far as domestic consumers are concerned, SSGC has established 12 Area wise zones, which cover

all the domestic consumers. Each zone is responsible for all the consumers, which come in its area.

These 12 zones are:


City Zone

Nazimabad

Gulshan

Malir

Orangi

Defense

Society

North Karachi

Hub / Buldia

Central

Saddar

Landhi

Zone Wise JV’s (journal vouture) are being sent to Head Office. The Gas Sales Accounting

department, then make entries in the subsidiary ledger and then to the consumer journal. Summary

of each zone is then transferred to General Ledger.

GAS SALES ACCOUNTING RELATED TO INDUSTRIAL & COMMERCIAL

CONSUMERS:

There are no zones for industrial and commercial consumers because they are far less in number as

compared to domestic consumers, and their data is maintained directly in head office.


THE PROCESS:

After the distribution of gas to these three types of consumers, there is a step-by-step process of

accounting for the gathered data.

The process starts from meter reading.

After the meter reading is done, the bills are then formed and then are raised to the

consumers.

Daybook is then formed, related to the sale of gas. Data is punched on daily basis in the

daybook. This daybook contains the complete record of each an every consumer including

the volume of gas sold, meter rent, quantity etc.

Any kind of customer complaints is dealt with including wrong billing adjustments.

All the data is then updated in General Ledger and the adjustments are the made related to

customer complaints.

The data is then recorded in the computer system. The system is monthly updated on the

basis of fixed price approved by Government of Pakistan. The system automatically

calculates the consumer’s bills on the basis of units shown by the meter reading.

General Sales Tax is then paid to the Government of Pakistan on the overall collection of the

month.


CASH AND BANK SECTION-

This section of the Treasury function unit is responsible for receipts, payments and collection of

funds either in the form of cash or through cheque or through bank delivery. This section is further

divided into

Cash Section

Bank Section

Cash Section

Cash section deals with different sorts of payments which are required to be made in the form of

cash Everyday the cash section receives a certain amount of money (upto a certain limit) in the

form of petty cash and at the end of the day, the excess amount is returned to the strong room.

Strong room carries a certain amount of company’s cash in order to meet situations in which

immediate payments are required. This is a continuous process and a part of the routine activity.

Bank Section

The bank section is further subdivided into two main desks.

Collection Desk

Disbursement Desk

Collection Desk handles all the inflows whereas the disbursement deals with all the outflows and

disbursements


The collection desk is also known as collection book section. It deals with all sorts of collections that

made through various channels. SSGC has a very large customer base and this section is basically

responsible for collecting the returns from these consumers either in the form of Account

receivable or cash.

However there are certain other units with in cash & bank section which helps in facilitating the

task at hand and the assist the department in achieving its goals efficiently and effectively.

Control Unit

Facilitating Unit

Authenticating Unit

Harmonizing Unit

Processing Unit

Outdoor Shooting Unit


NON-GAS REVENUE SECTION-

Non-gas revenue is also important and fundamental department of Treasury functions. Non-gas

revenue means income from other than sell of gas.

SSGC earns a huge income from the sale of other materials and services. The four major sources of

non-gas revenue are:

Condensate sell Sell of gas to JJVL for extraction of LPG. Gas meters sell Pipeline rental income

1. Condensate Sell

Condensate sell means the sale of liquid oil which is mixed up with some type of natural gases. One

of the most important field Badin gas field in Hyderabad. The gas which is extracted from Badin gas

field contains some quantity of liquid oil,. Before transmission of gas, oil is separated from that gas.

SSGC has installed separators for the separation of oil from the gas. After separating the oil from

gas, that crude oil, on the directions of government is sold entirely to Attock Refinery ltd Attock

Refinery LTD uses the crude oil in production of gas line.

2. SALE to JJVL (Jamshoro Joint Venture ltd)

SSGC LTD has also made an agreement with JJVL for under which JJVL by SSGC is SSGC LTD daily

supplies upto 200MMCF in JJVL plant from Badin field which is located in Hyderabad. The gas of

Badin gas field contains a large amount of liquid petroleum gas (LPG).JJVL extracts the LPG from

gas. This gas is then transmitted to consumers for domestic or commercial use. Liquid petroleum

gas is then filled in the cylinders and is sold in the market. The revenue generated from the sale of

LPG is received by JJVL.


The heating value of or chlorofic value (GVC) is reduced after the separation of LPG. Because of low

heating value, fewer amounts are recovered from the sale of this gas.

The volume and heating value is reduced after the separation of LPG. This difference of in and out is

called gas shrinkage. JJVL also pays royalty and transportation charges to SSGC LTD, which is the

income of SSGC LTD.

3. GAS METERS SALE

Gas meter sell is also an important source for SSGC for generating income. In 1976 meter plant was

installed for manufacturing of domestic gas meters. Previously the gas meters were imported from

foreign countries. But still industrial and commercial meters are being imported; only domestic

meters are produced by meter plant. Meter plant produces two types of meters. One is G-16 having

low capacity and others are G4 domestic meters which have large capacity. These meters are used

in the province of Baluchistan because of too much cold.

Selling Process

Meter plant has mainly two customers. One is SSGC LTD and other one is SNGPL LTD. Price for the

sale of meters to the SNGC LTD is negotiated between the two parties. Meter Plant transfers meters

at cost price to SSGC. Therefore, no profit no loss exists in the transaction of selling. SSGC LTD and

SNGPL charge meter rent to domestic consumers. Hence, it becomes a huge source of income.

4. Pipeline Rental Income

SSGC LTD is also striving hard to generate their income by renting pipelines. SSGC LTD mainly

constructs two types of pipelines.

Transmission pipeline Distribution pipeline


Transmission pipelines are used to transmit the gas from gas fields to another. While distribution

pipelines are used to distribute the gas to different consumers. SSGC LTD has given on rent the four

gas transmission pipelines to different companies.

1. Pirkoh Gas Field 2. Hasan Gas Field 3. Zamzama Gas Field 4. Bhit Gas Pipeline


IMPORTS SECTION-

Introduction

Import section is also a fundamental operation of treasury function. This department or section is

mainly responsible to deal with all types of imports of SSGC LTD. import order is mainly comprised

of chemicals, component parts, pipelines, fillings, screws, bolt sets. SSGC LTD mainly carries its

imports transactions with Germany, France, Belgium, China, and America.

Order Procedure

Those who needs material or any type of machinery sends an indent to procurement department

for material requisition, this document indicates the quantity and quality of material for which the

order is being placed for.

Invitation of Tenders

Upon receiving the indent, procurement department issues tender among public and then,

quotations are received from various contractors. Then, the contract is given to that contractor

which offers lowest bid.

Offer for Opening (L/C)

The main procedure of import starts in favor of that particular contractor. Procurement

department sends all those legal documents of quotations, commercial evaluation to import section

for further procedure which includes application of letter of credit, purchase order, evolution

report and some other legal papers and, also approval of competent committee. The import section

then contacts different banks o open letter of credit (L/C) in favor of SSGC.MCB opens L/C in favor

of SSGC, which is sight L/C. sight L/C used in SSGC means payment is made to contractor on sight or

presentation of documents without any discrepancy.


Shipment of Order

After opening of L/C in favor of contractor, the goods are shipped by shipping agency too Karachi

dockyard which issues bills of lading to the head of Material Management department that goods

are being shipped as on the required order.

Clearance of Goods

Clearing agents cleans the goods on the port. A document known as bill of entry is prepared by

clearing agent which includes custom duty, general sales tax, income tax, and federal excise duty

etc.these al costs together re called landed cost. The clearing agent gets cleared all thee payment

and order is shipped to store and all the necessary shipping documents are send to bank by the

supplier.

Issuance of Receiving Statement

The goods are stored after received in a proper way, a receiving statement is issued to the head

office which is prepared item wise. Item cost is allocated in receiving statement on CNF basis.

Pricing Process

Treasury function department on getting receiving statement carries on pricing procedure. Pricing

of order is valued on the basis of its ratio cost.

Material Requisition Procedure

When the goods are in store then any department who needs any type of goods from the store send a material requisition document (MR) which indicates the quality and type of material. Store transfers goods by giving “debit adviser.’ If the material is required for revenue, then revenue job is depicted and, if it is required for capital expenditure, then capital job is debited.

The whole process of financial side of imports starts and ends on this department. SSGC LTD has

given the particular bank a ‘Debit Authority’ to pay and clear all the dues.


Margin against Shipping Guarantee

When the shipment documents are misplaced or get lost due to any mishaps, margin against

shipping guarantee is issued by bank PNSC or Supplier bank to a particular bank to pay all the dues

and clear the goods from the shipping port.


2. Finance Section

Finance section is one of the distinct departments in an organization or company. The primary

purpose of the Finance Department is to monitor and report on the financial position of the

company and to provide an excellent level of service to their customers and customers in other

departments. The financial department deals with everything that concerns finances in the

company.

Finance Section

Payroll

NLO

LO

Gas Purchase

Insurance

Funds


PAYROLL SECTION-

Payroll is one of the important sections of the finance department. It main functions include

preparation of SSGC Staff and Executive salaries every month, keeping record of all existing

employees and updating in case new appointments. Payroll section is divided into two main parts.

One deals with the Executive payroll while the other deals with the Staff. Salaries vouchers, Income

tax deductions, job wise summaries are all prepared by the Payroll Department

Flow of Data from Different Departments into Payroll Section

Payroll is the one of the most important section of Finance department... Its main activities includes

preparation of SSGC Staff and Executives’ salaries every month, keeping record of all existing

employees and updating in case of new appointments. Payroll section is mainly divided into two

parts. One deals with Executives payroll while other deals with staff. I was assigned to Executives

section that performs the following duties: such as salaries vouchers, Income tax deduction, job

wise summaries etc.

Payroll performs activities under THREE categories, which are as following:

HRM related activities

Salary related activities

Miscellaneous activities

PAYROLL FUNCTION RELATED TO HRM ACTIVITIES

HRM department make two types of appointment letter for executives.

1. CAREER APPOINTMENT

2. CONTRACT APPOINTMENT

Deductions For

Leasing Co.

Banks

Insurance Co.


In the appointment letter the HRM Department clearly mention the grade of executive and its salary

& allowances.

After appointment letter, HRM dept make “Assumption of duty form for executive staff”. This form

include all necessary information such as executive no, name, date of birth, date of joining, religion,

designation, destination, account no etc.

On the basis of duty form, payroll dept make every month Pay Cards. On debit side it has pay &

allowances and on credit side deduction of contributions and loans. The items include in

contributions are: BEN.FUND, HAJJ, P.F, and EOBI. Company provides two types of loans Festival &

loan against P.F.

One more important activity of payroll section is making a “Final Settlement”. It happens when an

executive retire/terminate/dead/resign from the job .It is used to fulfill the difference between

salary & allowances and outstanding dues.

After final settlement they do generalization to offset the amount. If amount is payable they make

cheque payment voucher .If amount is recoverable then fund dept make cheque to balance the

amount.

At the end of each month they make unit wise Summary of payroll. Summary divided into two

parts:

Salary Summary

It includes the whole summary of payable & recovery amount without job no.

Salary Job Cost Allocation

It includes job no. E.g., finance, procurement, admin etc.


PAYROLL FUNCTION RELATED TO SALARY ACTIVITIES

Data punching Compiling Summarizing Preparing bank advices Bank voucher Signing in payroll Issued to cash & bank In cash & bank make cheque & send to payroll Covering letter attach in payroll Issued to bank Generalization


NON-LOCAL ORDER (N.L.O)-

Non-local order deals with all the bills, which don’t involve the purchase order of goods. It consists of all the expenses, which does not deal with the utility section of employee (i.e. electricity, telephone, etc).

The most common expense heads that non-local order deals with are hospitals, chemists, repair and maintenance of cars, emergency expenses of company e.g. stationary, contractors for laying down pipelines, etc.

The core function of the department is registration of liability, which is done by Bank Payment Voucher. It includes name of company/supplier, issue date, invoice no, term date, amount, withholding tax etc.

Withholding tax deduction on:

Services 5 % Suppliers 3.5 % Transport 2 %

Commission 10 %

To better understand the process of non-local order departments we shall take into

account an example, which is as follows:

Let’s suppose an employee falls ill and goes to a doctor enlisted in the company’s panel. After

diagnosing him/her the doctor sends a receipt to the company, the company issues an invoice

in favor of the doctor, then after verification of the said document it is directly sent to the cash


and bank department from which a cheque is issued of the stated amount. The approval of

payment is exactly the same as in local order.

The process is followed in N.L.O

Step 1:

Receipt of bills/invoices from various departments duly verified and approved by competent authority.

Step 2:

Scrutiny of Bills/Invoices.

Step 3: Verification of job numbers, Basic Head and Budget provision.

Step 4: Processing of Payment Voucher.

Step 5: Authorization of Payment as per Financial Powers.

Step 6:

Payment Vouchers sent top Cash & Bank Section for issuance of Cheques.

Step 7: Processing Statements for Income Tax deducted from suppliers.

Step 8: Depositing Income Tax into SBP on weekly basis.

Step 9:

One copy of Challan to be provided to the Supplier/Contractor. Step 10:

Submission of monthly Tax return with the Income Tax Authorities. Step 11:

Reconcile supplier wise ledger cards in monthly basis. Step 12:

Passing necessary Journal Entries at the end of every month.


LOCAL ORDER (L.O.)-

The local order section is one of the most important sections of finance department. The local order

section is 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 through 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


GAS PURCAHSE SECTION-

RESPONSIBILITIES OF GAS PURCHASE SECTION:

Following are the responsibilities of Gas Purchase Section:

1. To receive the invoices of gas purchase every month from the field operaters which include their joint ventures also.

2. Memo along with original invoice is send to measurement department through transmission for verification of bills and the data is punched in oracle.

3. According to the gas sales agreement, payment for bills are made to local companies in local currencies whereas the payment to foreign companies is made according to the procedure i.e. M form with verified original copy of bills is send to State Bank of Pakistan for remittance approval. After approval from SBP, the bills are paid in foreign currency from SSGC’s bank to beneficiary bank.

4. To prepare schedules of Cost Of Gas and the schedules for Creditors quarterly.

5. To do Reconciliation between the records of gas supplier and the records of SSGC.

6. To maintain Purchase Register in respect of Sales tax.

7. To raise Inward Note monthly in respect of uniform cost.

8. To reconcile the GSC-1 statement.

9. Preparation of Revenue Budget of gas purchases.


WORKING OF GAS PURCHASE SECTION:

The Sui Southern Gas Company Limited is engaged in the business of gas transmission and

distribution in Sindh and Balochistan. The company receives gas from different oil and gas fields

located in Sindh and Balochistan. The natural gas received from these fields is transmitted to

different cities and towns of Sindh and Balochistan and then the gas is distributed to consumers.

There are total 15 fields and 4 towns controlled by Gas Purchase section. Each field has a operator

and under that operator there are several other joint ventures who supply the gas according to a

certain limit allowed to them. The operator has direct contact with SSGC whereas other joint

ventures contact to the company through the operator and their invoices also come under the letter

head of the operator.


FLOW CHART FOR THE PAYMENT OF GAS INVOICE:

In Case Of Foreign

Suppliers, The Payment

Is Done In Foreign

Currency After Approval

From State Bank Of

Pakistan

In Case Of Local Supplier,

The Payment Is Done In

PKR Rs:

Measurement

Department Verifies The

Bill Within 10 Days And

Send It Again To Gas

Purchase Section

Punching Is Done In

Oracle And New Batch Is

Created

Verification Letter With

Original Copy Of Invoice

Is Send To Measurement

Department

Invoice Received From

The Operater & Joint

Ventures For 1 Month

Period


INSURANCE SECTION-

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 Insurance

b. Motor Vehicles

c. Employees Benefit

i. Group Insurance ii. Personal Accident

d. Marine Insurance

e. EAR Insurance

f. Casual / contract labour 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 Insurance b. Motor Vehicle Insurance

c. 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.

INSURANCE POLICIES MAINTAINED BY SSGC:

There are following types of insurance policies maintained by SSGC:

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.

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.


FUNDS SECTION-

This section of finance department deals with the reserves or accumulation of money which is set

aside for specific purpose and the final settlement of the payments to the employees in relation

with Payroll Section. The criteria of payment for the final settlement include:

Retirement

Death

Resignation

Dismissal/ termination

There are separate rules for each case. Each payment is done accordingly.

The funds which Sui Southern Gas Company Limited deals with are:

Pension Fund

Provident Fund

Gratuity Fund

Benevolent Fund

PENSION FUND:

Literally, the term pension means,

‘Regular payment given to people who have crossed a certain age limit to enable them to carry out

their living expenditures without working’

Company provides 20% of the basic salary each month in the pension fund of the employee.

On the death of an employee, 50% of the pension goes to the person’s widow.

In the case where widow is also expired, 10% pension is given to the children under the age

of 18 years.

BENEVOLENT FUND:

The term benevolent means,

‘Showing goodwill, doing welfare or help to others’


This is another kind of retirement benefit given to executive employees after their retirement.

After being the member of this fund, employees need to pay 1.1% of their basic salary until a

minimum number of five years as a contribution.

The benefits of benevolent fund include:

Executives receive the money till 5-years after their retirement.

If person dies, and he is a member of benevolent fund, then his/her family receives this

money till 5- years.

This is an additional benefit, excluding pension, gratuity and provident fund.

MONTHLY GRANT

PAY RANGE (RUPEES) MONTHLY BENEVOLENT GRANT (RUPEES)

Upto 15,000 1500

15,001-20,000 1650

20,001-25000 1800

The monthly grant increases by Rs.150 for every Rs.5000 increase in salary.

WORKERS’ PROFIT PARTITIAN FUND (WPPF):

A law was introduced in late sixties, which made it mandatory for companies/firms/individual

businesses, to distribute five per cent of their pre-tax profit to workers under WPPF. But the law

was so framed that only a handful of workers, drawing minimum wages, (the upper limit being Rs

5,000) were eligible to share WPPF under a formula.

For Sui Southern Gas Company Limited, the spirit behind the WPPF laws was to make profitable

business share their fortunes with the workers. Another goal envisaged at the time of its creation

could be to lure workers to improve their productivity to make their company profitable so that

they may qualify for this extra bonus.


GRATUITY FUND:

Gratuity fund refers to,

‘Amount of money given for services rendered.’

Or

‘Monetary award given for meritorious services rendered without claim or obligation’

Company provides 8% of the basic salary each month in the Gratuity fund of the employee. This

appears as a cost to the company.

On the death of the employee, gratuity of 40 days’ basic salary is given to the widow along

with 50% of the pension.

No gratuity will be paid if employee is dismissed from the company.

On retirement, if the employee opts for pension, then 20 days’ gratuity will be given.

On retirement, if the employee opts for full gratuity of 50days, no pension will be given.

Service exceeding six months is counted as a full year for service and calculation of gratuity.

For less than six months, gratuity shall not count.

PROVIDENT FUND:

The term literally means,

‘Providing carefully for the future’

The provident fund grants the employees retirement benefits. It enables the employees to save

fraction of their salary to be used in a situation when the employee is no longer able to work. The

provident fund primarily applies to retirement, but it also covers sickness, physical or mental

disability or death.

The moral is to give monetary security to employees when they retire.

For non-executives, 8.33% of the basic salary is deducted from the payroll and is put into

the provident fund.

For executives, 7.5% of their basic salary is deducted and is put into the provident reserve.

This section holds the money from the employees’ payroll and puts it in the A account which is

called ‘Employee Contribution”. The company puts exactly the same amount in B account, also

known as ‘Company Contribution.”

The person can withdraw the money from the fund as loan to acquire property, for marriage

expenses etc. Mr. Zafar Vaqar handles the loan payments and installment deductions from the

employees’ salary.


The loans provided to the employees by Sui Southern Gas Company are of two kinds:

Refundable loan

Non-refundable loan

REFUNDABLE LOAN:

The employee will be able to get amount equals to his/her 6 basic salaries

17% markup is implied

5 years’ service is necessary to qualify for the loan

The interest deteriorates each month in refundable loan.

On returning the amount taken as a loan, the money in the fund again increases and the

employee will be given a profit on whatever the fund amount totals to.

For general staff and non-executives, the loan is to be returned in 30 monthly installments

or 205 years.

For executives, the loan is to be paid in 48 monthly installments or 4 year time period.

NON-REFUNDABLE LOAN:

The employee will be able to get amount equals to his/her 18 basic salaries

No markup implied

Applying for non-refundable loan is like the employee is permanently withdrawing the

money form his/her fund.

The profit which a person gets on keeping that fund will vanish.

The employee needs to put the property papers as collateral to acquire non-refundable

loan.

At 50 years of age, the employee can withdraw 60% money from his/her fund without any markup.

In this case, there is no need to give any collateral.


INVESTMENTS

The cash present with the FUNDS SECTION is then invested in:

Defense Saving

National Saving

Mutual Funds

Shares

Financial institutions/ Banks

Pakistan Investment Bonds (PIB)

Federal Investment Bonds (FIB)

These short-term and long-term investments produce profits which are then given to the

employees on the basis of their contribution in the funds and the investments.


3. Accounts Section

Accounting department provides accounting services and financial support to the organization it

belongs to. The department records, accounts payable and receivable, inventory, payroll, fixed assets

and all other financial elements. The department's accountants review the records of each department to

determine the company's financial position and any changes required to run the organization cost

effectively.

Accounts Section

Cost & Budget

GDS

General Ledger

Fixede Assets

Stores

Admin


COST & BUDGET SECTION-

Function:

The major function of cost and budget section is cost controlling and maintaining of

revenue expenses and also accumulation of revenue cost which is incurred during the

period, and planning for allocating the budget to the individual department. And another

function of this section is to calculate the cost of operating and administration section.

Purpose:

To minimize the extra cost

To operate the organization effectively and efficiently

Closely watch t the individual department

To run the organization smoothly

To control the cost of operating and administration.

Budget Planning Process:

Cost & Budget is one of the hub sections of finance department. This section is

indispensable because planning & cost both are the backbone of every successful

organization and this section is first and foremost responsible for the budget planning.

Budget planning begins before the distribution of budget for the new fiscal year. The SSGC

provide the authority to every department to make their budget likewise, it means

department wise and it is controlled and maintained by the cost and budget section in

finance department. The 1st step of budget scheduling is “Proposal”. This section send

proposal to every department of company in order to know the requisite budget by the

departments. Every department suggest their required budget for the new fiscal year along

with the details where they want to spend budget and send the proposal back to cost &

budget section. The section checks their budget proposal and compare with previous

budget. In case of big difference between the current and previous budget the budget will

not approved before the justification of respected department.


Then this section brings together these proposals according to organizations wise and

sends these proposals to the board for the approval. The board makes necessary changes

and approves the compiled budget and report will send to every department. And

approved proposals are loaded in ERP system (Oracle Financial). The budget is to be made

according to year wise but it is issued quarter wise. After that we are uploading the budget.

Additional Budget & Re-appropriation:

This Re-appropriation form will use due to shortfall in budget or the departments spend

their budget before the specified period or that project is not mentioned in their budget for

whom they are sending the requisition. In order to solve this problem which are occurred

due to shortfall in budget, 1st the required department sends the appeal for Additional

Budget or Re-appropriation to CFO for approval of required material. After the approval

from CFO they sent that request to cost and budget section for further procedure.

The cost and budget section checks that from which department the required department

to take budget and also checks that is that department budget is available or not and also

check the required department is really needed for that material or not.

After checking and confirmed these things the cost and budget section transfer the budget

from the required department is needed through ERP.


GAS DISTRIBUTION SYSTEM (GDS)-

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.

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.


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


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 shareholders 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 sub-ledgers. If you encounter an error when trying to import a sub-ledger 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 Mass Allocation formulas to allocate a cost pool across a group of departments, companies, etc.

6. Generate recurring journal and Mass Allocation 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.


FIXED ASSETS & CAPITAL BUDGETING SECTION-

FUNCTION

To maintain and control the fixed asset of the company

Working of Fixed Asset:

Budget Proposal

The budget section of finance department prepares capital expenditure budgets annually

for all the department of SSGCL. Whenever a budget is to be prepared for any department,

the budget section notifies the department to prepare list of assets required by them &

forward it to the budget section. On receiving the requirements, the budget team examines

it & discusses all particulars with the related head of department & staff giving special

consideration to the justification of fixed asset requirement & funds available with the

company. At this stage, the budget team may reduce the requirements of fixed assets of the

department, which may be considered to be necessary as that may be defined to latter

period.

The budget [in the form of budget proposal] is now sent to GM & SGM for its

approval/changes which may be made by them & finally to the M.D for its approval the case

of transmission project which exceeds Rs.100 million approval is then sought from the

government by filing PC-1 form & after its approval , same procedure is followed for others.

When the budgets for all the departments have been finalized and approved by MD, then

agenda is prepared by budget section, which is reviewed by finance committee, the board

of directors’ grants approval to the agenda and now the budgets are authorized to be

followed.

Each department is now intimated through inter departmental note (along with a copy of

their budget) that the budget has been approved.


Fixed Asset purchasing process:

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 now forwarded to Procurement department, where Deputy Manager checks

whether the FAR falls within the budget. The procurement 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 and Adjustment Process

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.

Retirement of the Asset

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

the 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.


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.


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.


ADMINISTRATION SECTION-

Definition of Administration: “An organizational unit that performs management activities benefiting the entire

organization includes top management personnel and organization headquarters”.

Purpose of Admin Department The mission of Admin Department is to established procedure for setting the level of finance admin. Admin department of finance facilitating the effective and efficient delivery of their services at each section to resolve the queries and problems of the section, through planning, police and performance they build a trusting relationship with their finance staff.

The Function of Administration Department

The Department lies within the Directorate of Finance and Administration. It is tasked with providing administrative and logistical support to the entire organization.

Mandate of the Administration Department include:

General office Management and Running. Transport Management. Registry Management. Assets Management. Property Management. Security and Safety.

1. General Office Management And Running Provides Services, Which Include: Provision of offices for all staff. Provision of all office equipment for use by staff e.g. Computers. Ensuring a clean and secure office environment. Ensuring availability of adequate lighting, water, telecommunication, email, fax,

computers etc. Providing, where possible, designated parking for vehicles. Ensuring availability of stationery. Ensuring availability of crockery, furniture etc. Setting of internal operating rules.


2. Registry Management

All incoming and outgoing mails and vouchers (receipt/delivery/payment) must go through the registry.

The registry must have in place good and efficient record filing and trucking systems for all the records i.e. all mail must be recorded in a mail book and all vouchers (receipt/delivery/payment) must be recorded into voucher register and then the file/voucher (receipt/delivery/payment) sent to the addressee for action. The registry shall maintain a file movement book for tracking all station files.

3. Assets Management

This includes; Acquisition of assets Management of assets (engraving, locating, checking/counting etc) Recommending disposal of assets

4. Property Management

Management of all the property of includes buildings installations e.g quarry sites,

land, office equipment, stationery etc.

5. Security and Safety

Security is supposed to be provided at all sites. Security should be for all assets and property (e.g voucher registers, staff’s

attendance register, stationery, office equipment etc). Users must ensure safety of assets in their possession. Risk assessment must be conducted to determine what special areas the security firm shall cover.

Cash Payment Procedure:

Admin department has authority to make payment voucher/issue payment voucher for

office expenses. If the amount is below or equal to 10,000 rs then the admin officer signs

the approval for the final payment, whereas if the amount is above Rs.10, 000 then the

general manager (GM) only has the authority to approve the payment for office expenses.


Summary:

Administration section is basically engage in the assistance for all departments by providing and procuring all the stuff required by the remaining sections of finance. It is basically attached with the scrutiny section from where the vouchers come after checking so that they can be validate through oracle module of accounts payables so that payments can be made to the clients or employees.


G. Recommendations

There should be a proper penalty system for the Banks who do not transfer the complete

amount of daily Gas Bill payment to SSGC every day. As I saw in the TF department, that there

were certain Banks who were deliberately retaining the Company’s rightful money for several

days, and in some cases even for weeks, just to make additional profit that normally went to

millions of Rupees – the amount which should have been the profit of SSGC-, but since there

has been no strick actions taken, those Banks are still doing this unethical practice.

In Budget Section when proposals are sent to different departments, they should be instructed

that the increase in Budget should not be more than a certain percentage % from the last year

and for the expenditures which are necessary and are much more than that percentage should

be discussed with GM Finance or related person individually.

There should be a proper schedule given to internees for their internship so that it will be easy

for them to cover important areas and to give proper time to each section.

There should be an introduction session given to internees about the SSGC and their related

department which will help internee develop good understanding of Company and their

department.

I hope these actions to be taken as soon as possible, and our very own SSGC shines among

every other company in Pakistan.

SSGC Complete Report

Documents

ssgc internship report

internship report samad

department of finance

main functions of ssgc

college of banking finance

sarfaraz ahmed tf

iqbal ahmed cost budget

kamran iqbal tf