Syed fahad ali

ACKNOWLEDGEMENT

I am grateful to Al mighty ALLAH who gave me all the strength, courage preservation and patience to finish my Six weeks of Internship Program at SSGC and in achieving my task fruitfully. I would specially like to thank Mr. Shuja Shiekh (Assistant Manager Finance), for his constant support and guidance and for solving all my queries during the course of my internship. It was because of his motivating & encouraging efforts that I have been able to explore the practical world in a very professional manner and to understand different legal ordinance beyond the requirement of my internship.

Syed fahad ali

Table of content

About sui southern gas company

Introduction History Mission Vision Core values Company's objectives 3 4 5 5 6 7

Payroll
Procedure of payroll Experience by me 8 9

Gas purchase section

Responsibilities of gas purchase section Working of gas purchase section Experience by me 10 10 11

Bill payment (non local order)

About bill payment Experience by me 12 12

Bids and bond

About bids and bond Experience by me 13

Capital budget
About capital budget Experience by me 14 15

Recommendations

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Syed fahad ali

INTRODUCTION
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. SSGC in its present form was created on March 30, 1989, following a series of mergers of three pioneering energy companies: Sui Gas Transmission Company, Karachi Gas Company, and Indus Gas Company. Sui Southern Gas Company Limited (the Company) is Pakistans leading integrated gas company having an exclusive distribution and Sales license in the provinces of Sindh and Balochistan.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. The Company is a public limited company listed on the Karachi, Lahore and Islamabad Stock Exchanges with more than 70% direct shareholding by Government of Pakistan (GOP).Sui Gas Transmission Company Limited was formed in 1954 with the primary responsibility of gas purification at the Sui field in Baluchistan and its transmission to the consumption centres 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. The Company sold 442,146,085 million cubic feet (MCF) of natural gas during the year 20082009 to about 2. 155 million industrial, commercial and domest ic consumers. SSGC is also examining the feasibility of installing a pilot project of 500 numbers of Radio Frequency type and 500 numbers of prepayment type meters manufactured by ACTARIS, a French Company. Following the successful test launch of 1,000 imported prepaid meters in 2004-05, the company is proceeding aggressively to set up more pilot projects before rolling out these meters at a faster rate in 2005-06. The Managing Director/Chief Executive is nominated by GOP and has been delegated with such powers by the Board of Directors as are necessary to effectively conduct the business of the Company. The Company also owns and operates the only gas meter manufacturing plant in the country, under an agreement with Schlumberger Industries-France. The Companys core business is to buy natural gas in bulk from E&P companies, transmit it to load centers over its high pressure transmission system, distribute and sell it to its customers through its supply network. in diameter. Domestic consumers comprise the overwhelming majority of those users (98. 8 percent), with commercial (1. 1 percent) and industrial (0. 2 percent) customers representing very small segments of its constituency.The Company has achieved another milestone at the meter plant. Organized into regional offices, SSGC also owns and operates the only gasmeter manufacturing plant in the country, under an agreement with Actaris (a former division of Schlumberger). The distribution network of over 30,000 Km covers 1200 towns and 930 villages in Sindh and Balochistan. It has an authorized capital of Rs. 10 billion, out of which Rs. 6. 7 billion is

Syed fahad ali

issued and fully paid up and is managed by an autonomous Board of Directors having overall control. The plant has an annual production capacity of over 550,150 domestic meters.

History
SSGC in its present form was created on March 30, 1989, following a series of mergers of three pioneering energy companies: Sui Gas Transmission Company, Karachi Gas Company, and Indus Gas Company. Sui Gas Transmission Company Limited was formed in 1954 with the primary responsibility of gas purification at the Sui field in Baluchistan and its transmission to the consumption centres 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. Organized into regional offices, SSGC also owns and operates the only gas-meter manufacturing plant in the country, under an agreement with Actaris (a former division of Schlumberger). Today, SSGCs infrastructure supports more than million customers. Domestic consumers comprise the overwhelming majority of those users (98.8 percent), with commercial (1.1 percent) and industrial (0.2 percent) customers representing very small segments of its constituency.

Syed fahad ali

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

Company 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 stakeholder, community and the nation

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

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

Teamwork Builds strong relationships within across functions. Works well with all type of peoples
and corporate with others. Solicits and share ideas/best practice with others. Supports the achievements of Company/team goals. Contributes to team effectiveness using people's different skills and styles. Arrives at constructive solutions while maintaining positive working relationships. Demonstrates sensitivity.

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

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

Responsibility to Stakeholders Stays abreast of change in operating environment that impacts our
business (i.e. markets, competitors, technology, customers, suppliers, employees, regulatory, political and public). Create solutions to make customer needs. Develops colleagues and team members to improve their skills and performance. Ensure optimum utilization of resources. Balances short term and long term priorities to maximize on results. Ensures compliance of law.

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Companys objective
The Company aims to supply natural gas wherever there is sufficient load to justify the cost of infrastructure. In many places the gas network is being expanded to meet economic and social requirements through active funding support from the Federal and Provincial governments. In 2003, the Company launched a comprehensive five-year gas network development and expansion plan to connect hundreds of small towns and villages in remote areas of Sindh and Baluchistan, which currently are deprived of piped natural gas. Every year, the Company adds nearly 66,000 new customers (industrial, commercial & domestic) to its customer base and lays hundreds of kilometers of transmission pipelines and distribution network and installs other facilities such as metering/ billing stations in its system using its staff of technically qualified and skilled personnel.

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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.

There are different types of pays slips made in SSGC:

1. EXECUTIVE (PERMANENT) EMPLOYEES 2. HR CONTRACT (TEMPORARY) EMPLOYEES 3. UNIONIZED STAFF (PERMANENT) EMPLOYEES PROCEDURE OF PAYROLL NEW APPOINTMENTS 1. Payroll section reserve a copy of letters from HR for new employees being hired 2. Master record for each employee is raised e.g. all information is input into database Oracle System along with basic pay, allowances and benefits for generation of monthly payroll slips AMENDEMENTS IN PAY STRUCTURE OR CONDITIONS HR will send a formal letter to employees & staff section of payroll, the payroll section will then change the definition and amend the master record according to letter given by HR ATTENDANCE RECORD 1. Employee sign in register on daily basis 2. No record of attendance is kept by Payroll section 3. Adjustments in salaries/wages, these advices record show leaves, leaves without pay & absences PAYMENT OF SALRIES WAGES 1. Pay goes in employees account directly from Head office HO Karachi 2. Cash/bank section of finance is responsible for disbursement of cheques payable for respective banks. 3. IT department is responsible for running the payroll batch (result is printing of pay slips) 4. The pay slips are distributed to the employees the day after the bank advices re sent out 5. The copy of pay slip is provided to each employee as evidence

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FINAL SETTLEMENT 1. In case of retirement, leaving the service all dues of the employee become payable immediately 2. All information relating to employee is submitted to HR 3. Payroll section arranges funds for subsequent disbursement

Experience by me: The payroll department is to ensure that all employees are paid accurately and timely with the correct withholdings and deductions, and to ensure the withholdings and deductions are remitted in a timely manner. This includes salary payments, tax withholdings, and deductions from a paycheck.

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GAS PURCHASE-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 operators which include joint ventures. 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 SSGCs 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

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.

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Experience by me: When fresh invoices come through courier of operators in the field, from which SSGC purchase gas, they are sent to KT Karachi terminal, (KT is the area where the transmission network is setup, all gas purchased is passed through KT, meter reads the value of gas input. Invoice are then sent to KT for verification, except 3 fields, one of which is zamzama, because the payments for those fields have to be made immediately, which leaves no time for verification, in case payment is not done fine is imposed. After receiving verification from KT, that the gas purchased mentioned in the invoice is equal to the readings of meter reading of KT terminal, invoice is then punched into oracle financial and payment voucher for invoice is printed and attached for further signatures. GST is paid in Rs, while excise duty is paid to the operator, payments are done in dollar if the operator is foreign based company. Payments to foreign companies are paid within time framework while payments to local government organizations such as OGDCL, PPL are sometimes delayed as well which give rise to LATE PAYMENT SURCHARGE. Late payment surcharge if payment is made late then surcharge has to be paid to E&P companies, there is a very high amount of surcharge due on SSGC because of late payments to government organizations, which is not paid yet, because of reasons such as government organizations dealing with government holding organizations have consensus about payments issues. Surcharge is recorded in case if it is to be paid.

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BILL PAYMENT section

To ensure timely payment of all invoices in accordance with the companys policy. To approve vouchers within limit and to send reports to management on monthly basis regarding details of invoices received , invoices processed during the month and outstanding vouchers. Maintain record of retention money deducted from invoices of suppliers and follow of long outstanding advances on monthly basis Bill Payment is divided into 2 areas

1. NON LOCAL ORDER deals with emergency payments, quick payments, and very few payments against agreements or tenders

2. LOCAL ORDER payments are made against tender and proper agreements

The Bills Payable Section of Finance Department is required to process the bills of services, contracts, utilities, medical, supplies, and other non-local order bills received from various departments including ditching contractors, road cutting charges, civil works, etc. The Section also processes the medical bills of headquarters. The Section is responsible to ensure that all transactions are within the authorized limits and adequately approved. Similarly the payments are made only for authorized acquisition of services, contracts, work orders, etc. and approved by competent authorities.

Experience by me: There was an issue regarding OVERTIME raised by government auditors which goes back to late 1987- 90. The government auditors had raised the overtime issue few years back and had raised it again, they want evidence of allocation of 68Million Rs as overtime, and to proof that it is allocated properly. It was Mr. Imran job to prepare a memorandum on behalf of CFO send to Government auditors giving them reasonable explanation that the allocation of overtime amount was fair and not abnormal I was given the task to prepare that memorandum, for that purpose we had to see old records of 1990-1993 as to get and average of overtime given in that period, and compare it with 1987-1990.

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BID BOND-section
Bid bond equivalent to two percent (2%) of the total bid value, in favor of Sui Southern Gas Company Ltd, shall accompany the bid if bid value is Rs: 100,000 for local bid in the form of a Pay Order, Demand Draft, Call Deposit Receipt or a Bank Guarantee, issued by a scheduled bank in Pakistan. The bid bond shall remain valid for 120 days unless specified otherwise. The bid bond shall be returned / refunded to the un-successful bidders while the bid bonds of the successful bidder shall be retained, till submission of performance bond. Bids without bid bond will not be considered. In case the order value is less than Rs. 500,000/- (less than US$ 25,000, in case of foreign bid) the bid bond in lieu of Performance Bond, will be retained till fulfillment of obligations by the supplier. If bid bond submitted by the supplier is more than 2% of ordered value, it may be replaced with appropriate value. If ordered material is less than Rs. 100,000/the bid bond will be returned along with order. Bid Bond of non-compliant bidders may be released during evaluation process. Experience by me: All offers shall remain valid for 90 days from the date of opening of bids, until any further extension agreed by the bidder. The company reserves the right to accept or reject any or all bids or part thereof, without assigning any reasons. Quoted price shall remain valid, firm, irrevocable and fixed till the fulfillment of obligations by the Supplier and will not be subject to escalation on any account . My task was the evaluation and the comparing the printed data of the bids which have been punched in the oracle software to cross check whether they are punched right or wrong referring to their reference number amount name of the supplier ect.

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CAPITAL BUDGETING (SECTION)

A memorandum is issued from CFO giving guideline for preparation of budget two types of budget are 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 expenditure are those that result in CREATION and or BETTERMENT in the life or productivity of assets, the future economic benefit of such assets are expected to continue for more than one fiscal year The budget proposals of each department should initially be reviewed by departmental/ divisional heads and after having been finalized, these should be signed and submitted to the FINANCE department. The finance department will COMPILE/ ANALYZE the preliminary estimates and will discuss, if required with the concerned departmental/divisional heads, after COMPLETION, the same will be submitted to the management for onward recommendation to the BOD approval 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, e.g. SGM(T) transmission will cut items of budget proposed by Transmission area AFTER THIS A FUNCTION CODE IS ALLOCATED TO BUDGET it is uploaded By GL in case if budget gets less, then an approval is taken from CFO by which either extra budget is approved or items in which some money is left even after purchasing all items mentioned in its budget, the left over amount is then transferred to area where budget is less Making proposed budget (CAPEX), department wise, and account wise, company wise. To maintain the capitalization, depreciation, retirement and disposal of all the fixed assets. Preparation of capitalization and WIP schedules of all the companies i.e. Karachi distribution, Hyderabad distribution, Balochistan distribution, Transmission and Head Office. Prepare quarterly, half yearly and yearly accounts and schedules of organization.

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Experience by me: y Budget is prepared function wise, SGM wise, & category wise, along with different summaries as per required by different SGM(s) concerning their area of concern and authority. The company has 5 functions according to which code are definied, because the budget is so big that codes are used instead of typing functions in itseparate budget is prepared for unit a, b, c, quetta and meterplant. E.g. CODE "b" SGM(T) - T represents Transmission, Every SGM is responsible for cut down in budget of their respective area, employees in Transmission will fill the budget proposal forms and send to finance department in Head office Karachi. Meeting will be held where DM & SGM of transmission will look into the details of budget in form of PowerPoint presentation, he will then decide what is required and what is not. Same goes for other areas represented by their respective SGM.

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RECOMMENDATIONS

Job description should match to employees field of work. Motivation and encouragement is not seen, management should conduct seminars or lectures that can boost employees moral and self-esteem to work in a loyal way towards company. Overtime work should be discouraged, in my opinion overtime policy should be abolished or the overtime incentive given per each extra hour worked should be reduced by 50%. Which will discourage employees to do work in evening or night and sitting idle in morning; instead they would in standard timings, which will result in fast processing of data in timely manner. Corporate culture should be implemented, with strict following of rules and regulations. In the Gas Purchases section, the current practice for recording of the gas purchases from foreign companies is to use the exchange rate as of the last working day of the month and for the payment purpose; the exchange rate used is the exchange rate at the day of payment. As such, huge exchange gain/loss is recorded. Considering the current situation of devaluation of rupee against the dollar, the exchange loss would increase in future, if some kind of hedging is not done. Therefore, it is suggested that to use hedging process in order to avoid heavy losses due to exchange rate changes. Sections staff should be seated in one area, so that communication among them is facilitated. Currently, there are some sections in which the staff is dispersed around the floor, which hinders the free flow of communication. There is no balance between the numbers of employees in each section. Where the number of employees should be more to share the work burden but there are fewer employees then the required need. And where there is no work burden there are more employees than the required need. The need for employees should be analyze properly to allocate employees on right place to completely avail their skills. Corporate culture should be implemented in SSGC