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INTERNSHIP REPORT

SUBMITTED TO Instructor. Sir Inayat Dull SUBMITTED BY Humair-ud-din 0804-bba04 BBA-Hons

ISRA UNIVERSITY, HYDERABAD

ACKNOWLEDGEMENT

I owe my felt thanks to Allah Almighty who enables me to discharge such responsibility with due care and caution. My report will remain incomplete if I dont mention the sincere efforts of those gentlemen who helped and guided me in completion of my internship and this report. First of all I want to thanks to ALLAH Almighty; I also want to thanks to my worthy teachers the main source of enlightenment of our minds and the development of natural potentials. After them I want to thanks Mr. Anwer Ali Jokhio Manager HRM, Mr. Manji Khan Hingorjo Dy. Manager (TMP) and Imdad-ullah Kalwer Asst Manager Post Audit Section HESCO, which helped me in all matter. At the end I want to say thanks to whole staff and management of Lahore Electric Supply Co. for their cooperation and for providing a very friendly environment to gain practical knowledge.

HUMAIR-UD-UDDIN 0804-bba04 BBA-Hons ISRA University.

EXECUTIVE SUMMARY EXECUTIVE SUMMARY


Experience is not what happens to you, it is what you do with what happens to you. (Aldous Huxley) After having intensive coursework of BBA-Hons it is prerequisite to have six week internship in any organization in order to get practical experience and familiarity with corporate atmosphere. Being having specialization in Finance I had completed my internship in HESCO (WAPDA). Internship was started from 06th June, 2011 and end on 16th July, 2011, this period was the real experience of my life and I saw the setup, working process and formal documentation of the HESCO Hyderabad Electric Supply Company Limited (HESCO) is one of the nine-electricity distribution companies (DISCOs) established as a result of the unbundling of the vertically integrated power wing of Pakistan Water and Power Development Authority (WAPDA). It was organized to take over the properties, assets, obligations and liabilities of former Hyderabad Area Electricity Board (AEB) of WAPDA. The company was incorporated in March 1998 as a public limited company under Pakistan Companies Ordinance 1984. HESCO distributes and supplies electricity to about 1.3 million customers within its service territory with a population of over 20 million under a Distribution License granted by National Electric Power Regulatory Authority (NEPRA) pursuant to the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (NEPRA Act). The HESCO is a very big organization with several departments working in the head office Hyderabad. The human resource department which deals with the internees has assigned me to work in Directorate of Finance, HESCO for 3 weeks, and remaining 3 weeks I worked in HR, MIS, and Commercial Directorates one week respectively in each. HESCO gave me the opportunity to view, how the books of accounts are prepared, how to fill the different forms and about the record keeping procedures in Directorate of Finance. While working in Commercial Directorate of HESCO I learned about distribution system of HESCO. In MIS Directorate I learned the technical correspondence between departments and flow of data between departments. I also learned billing system of HESCO and also how to apply for new connection and what is the procedure. Here staff gave me opportunity to do practical work. It was a really nice and fruitful experience for my upcoming practical life. I would like to conclude by saying that even though every person will have a different story to tell, the common factor that binds us all is the good work done by our predecessors in the ISRA UNIVERSITY. I have given more than 100% of my efforts to keep up that good work and I am sure that my colleagues have done the same. I am hopeful that as we pass through the

corridors of this great institution into the real world, this legacy will be kept and upheld by the future generation of Israians.

TABLE OF CONTENTS

1 CHAPTER....................................................................................8 POWER SECTOR IN PAKISTAN........................................................8 1.1 HISTORY............................................................................................................................8 1.2 INTRODUCTION TO WAPDA........................................................................................9


1.2.1 ESTABLISHMENT.....................................................................................................................10 1.2.2 CHARTER OF DUTIES WAPDA..............................................................................................10 1.2.3 FIELD OF ACTIVITIES.............................................................................................................10

1.3 FORMATION OF PEPCO..............................................................................................10


1.3.1 ESTABLISHMENT.....................................................................................................................10 1.3.2 LISTING OF COMPANIES WORKING UNDER PEPCO GUIDANCE..................................11

1.4 FORMATION OF NEPRA..............................................................................................12


1.4.1 ESTABLISHMENT ....................................................................................................................12 1.4.2 RESPONSIBLITIES ...................................................................................................................12

1.5 METHODOLOGY...........................................................................................................13 1.6 PURPOSE OF STUDY.....................................................................................................13 1.7 LIMITATIONS.................................................................................................................13 2 CHAPTER..................................................................................14 HESCO COMPANY........................................................................14 2.1 BRIEF ON HESCO..........................................................................................................14
2.1.1 ESTABLISHMENT.....................................................................................................................14 2.1.2 OBJECTIVES..............................................................................................................................15 2.1.3 AREA OF OPERATION.............................................................................................................16 2.1.4 PRODUCT LINE.........................................................................................................................16 2.1.5 BUSINESS VOLUME.................................................................................................................16 2.1.6 OFFICES OF THE COMPANY..................................................................................................17

2.2 ORGANIZATION OF COMPANY................................................................................17


2.2.1 BOARD OF DIRECTORS...........................................................................................................17 2.2.2 TOP MANAGEMENT TEAM....................................................................................................18 2.2.3 ORGANIZATIONAL STRUCTURE..........................................................................................18

2.3 FUNCTIONAL DEPARTMENTS..................................................................................20


2.3.1 COMMERCIAL DIRECTORATE..............................................................................................20 2.3.2 MATERIAL MANAGEMENT...................................................................................................20 2.3.3 MIS DIRECTORATE..................................................................................................................21 2.3.4 HUMAN RESOURSE MANAGEMENT ..................................................................................23

3 CHAPTER..................................................................................24 FINANCE DIRECTORATE...............................................................24 3.1 ORGANIZATION OF FINANCE...................................................................................24


3.1.1 FINANCE DIRECTOR................................................................................................................24 3.1.2 MANGER CORPORATE PLANING AND CONTROL (MCPC).............................................25 3.1.3 MANAGER CORPORATE ACCOUNTING (MCA).................................................................25 3.1.4 ORGANIZATION CHART OF FINANCE................................................................................25

3.2 SECTIONS IN FINANCE................................................................................................26


3.2.1 BUDGET SECTION....................................................................................................................26

3.2.2 ADMINISTRATION SECTION.................................................................................................26 3.2.3 BANKING SECTION..................................................................................................................27 3.2.4 COMPILATION SECTION........................................................................................................28 3.2.5 ASSET SECTION........................................................................................................................28 3.2.6 PRE-AUDIT SECTION...............................................................................................................29 3.2.7 POST-AUDIT SECTION............................................................................................................29 3.2.8 PENSION SECTION...................................................................................................................30

4 CHAPTER..................................................................................31 CONCLUSION AND RECOMMENDATIONS........................................31 4.1 SWOT ANALYSIS...........................................................................................................31


4.1.1 STRENGTHS...............................................................................................................................31 4.1.2 WEAKNESSES...........................................................................................................................32 4.1.3 OPPORTUNITIES.......................................................................................................................32 4.1.4 THREATS....................................................................................................................................33

4.2 CONCLUSION.................................................................................................................33 4.3 SUGGESTIONS................................................................................................................33

1 CHAPTER POWER SECTOR IN PAKISTAN


1.1 HISTORY
At the time of independence in 1947, Pakistan inherited 60MW of power generation capability for a population of 31.5 million, yielding 4.5 units per capita consumption. The Government of Pakistan in 1952 by acquiring majority shareholding took control of the Karachi Electric Supply Company (KESC) engaged in generation, transmission and distribution of electric energy to the industrial, commercial, agricultural and residential consumers of the metropolitan city of Karachi and its suburbs . In 1958, Water and Power Development Authority (WAPDA) was created as a semi-autonomous body for the purpose of coordinating and giving a unified direction to the development of schemes in water and power sectors, which were previously being dealt with by the respective electricity and irrigation department of the provinces. In 1959, the generation capacity had increased to 119 MW and by that time the country had entered the phase of development, which required a dependable and solid infrastructure, electricity being its most significant part. The task of power development was undertaken by WAPDA for executing a number of hydel and thermal generation projects, a transmission network and a distribution system, which could sustain the load of the rapidly increasing demand of electricity. After the first five years of its operation by 1964-65, the electricity generation capability rose to 636 MW from 119 MW in 1959. At the inception of WAPDA, the number of electrified villages in the country to the early 1990s, the supply of electricity was unable to keep pace with demand that was growing consistently at 9-10% per annum. In the early 1990s, the peak demand exceeded supply capability by about 15-25%, necessitating load shedding of about 1,500 - 2,000 MW. On the demand side, there was a weak link between the electricity price and demand, which failed to manage the demand. On the supply side, the main reason behind this capacity shortage was the inability of the public budget to meet the high investment requirement of the power sector, despite the allocation of a high share to this sector. In order to eliminate power shortage/load shedding in the minimum possible time, the Government constituted an Energy Task Force in 1993 to devise a consolidated and comprehensive policy for revamping the energy sector. In the year 2000, the vertical disintegration of WAPDA started as part of the countrys new electricity market restructuring and liberalization program. Since then WAPDA has been broken down into fourteen separate units: four

thermal power generating companies, nine distribution companies and a transmission and distribution company. In November 2005, the Government of Pakistan privatized (74.35%) the Karachi Electric supply Company (KESC). At present, KESC and WAPDA operate their own networks and are interconnected through 220 KV double circuit transmission lines and can supply power to each other. In October 2007, WAPDA has been bifurcated into two distinct entities i.e. WAPDA and Pakistan Electric Power Company (PEPCO). WAPDA is responsible for water and hydropower development whereas PEPCO is responsible for the management of all the affairs of WAPDAs fourteen public limited companies in the areas of thermal power generation, transmission, distribution and billing. On June 30 2010, the total generation capacity from WAPDAs own hydel and thermal sources plus generation from two nuclear power plants, KESC and Independent Power Procedures (IPPs) stood at 20,922 MW Installed Electricity Generation Capacity (As on June 30, 2010)1 Type Hydel, WAPDA Thermal, WAPDA Thermal, KESC Thermal (IPPs) Nuclear Total MW 6481 4900 1955 7123 462 20,922 Percentage 30.97 23.42 09.34 34.04 02.02 100.00%

1.2 INTRODUCTION TO WAPDA

Pakistan Energy Book (HDIP), 2010, url: http://www.scribd.com/doc/53512742/Pakistan-EnergyYearbook-2010.

1.2.1 ESTABLISHMENT
The Pakistan Water and Power Development Authority (WAPDA) was established through an act of parliament in February 1958 for integrated and rapid development and maintenance of water and power resources of the Country. This includes controlling soil salinity and water logging to rehabilitate the affected land in order to strengthen the predominantly agricultural economy of the country.

1.2.2 CHARTER OF DUTIES WAPDA


The charter of duties of WAPDA includes investigation, planning, and execution, of schemes in the following fields 1. Generation, transmission and distribution of power. 2. Irrigation, water supply and drainage. 3. Prevention of water logging and reclamation of water logged and Saline land 4. Flood control. 5. Inland navigation. The organization was also entrusted with the work of implementing Indus Basin Settlement plan signed between India and Pakistan in 1960 to develop replacement works for management of river water and irrigation system. The life saving action for Pakistans agriculture has been WAPDAs role in the field of water logging and salinity. During past four decades WAPDA has planned and executed 60 scraps at a total cost of Rs.37.8 billion to cover an area of 19 million acres of affected land for putting it back into production.

1.2.3 FIELD OF ACTIVITIES


The field of activities is divided into THREE wings; which are following: 1. Water wing. 2. Power wing. 3. Finance/coordination wing

1.3 FORMATION OF PEPCO


1.3.1 ESTABLISHMENT
PEPCO was created in May 1998 as a Management Company, owned by Government of Pakistan vested with the following corporate objectives

1. The corporatization and commercialization of WAPDAs assets block ingeneration, transmission and distribution. 2. Overseeing the design and implementation of the Manpower Transition Program 3. Stewardship of early business operations by the newly formed companies. 4. Privatization initiatives Pakistan Electric Power Company is a Registered Company since May, 1998 under Companies Ordinance 1984 (owned by Government of Pakistan) and started functioning since 14.04.1999. It falls under the category of Exempt Entity under Nam. It is a Management Company owned by Government of Pakistan working under the Ministry of Water & Power. The core operations of the company are: 1. 2. To act as a managing agent in respect of all business, assets, properties and right of the Power Wing. To carry on, expand, extend, privatize or restructure all businesses, assets, properties. The company is responsible for restructuring WAPDA Power Functions into 14 companies, establishing business relationship amongst them, help them become administratively and financially self-sufficient, improving their efficiency and preparing them for privatization. And reporting to Secretary, Ministry of Water and Power (Government of Pakistan). There is a manual system of recording all the transactions under double entry system according to companies ordinance 1984.

1.3.2 LISTING OF COMPANIES WORKING UNDER PEPCO GUIDANCE


1.3.2.1 NINE DISTRIBUTION COMPANIES (DISCOs)

1. 2. 3. 4. 5. 6. 7. 8. 9.

Faisalabad Electric Supply Co. (FESCO) Gujranwala Electric Power Co. (GEPCO) Hyderabad Electric Supply Co. (HESCO) Islamabad Electric Supply Co. (IESCO) Peshawar Electric Supply Co. (PESCO) Quetta Electric Supply Co. (QESCO) Multan Electric Power Co. (MEPCO) Lahore Electric Supply Co. (LESCO) Tribal Electric Supply Company (TESCO)

1.3.2.2

FIVE THERMAL POWER GENERATION COMANIES (GENCOs)

1. Southern Generation Power Company Limited (GENCO-1) head quarter at Jamshoro district Dadu near Hyderabad Sindh. 2. Central Power Generation Company Limited (GENCO-2) head quarter at Guddu district Jacobabad Sindh. 3. Northern Power Generation Company Limited (GENCO-3) head quarters at TPS Muzaf-fargarh district Muzaffargarh Punjab. 4. Lakhra Power Generation Company Limited (GENCO-4) Headquarter at WAPDA House Lahore.
1.3.2.3 A TRANSMISSION AND DISPATCH COMPANY.

1. National Transmission and Dispatch Company (NTCD)

1.4 FORMATION OF NEPRA


1.4.1 ESTABLISHMENT
National Electric Power Regulatory Authority (NEPRA) was created to regulate the unbundled Power Sector in order to promote competitive power market to ensure reliable power supply at affordable rates to millions of electricity customers in Pakistan.

1.4.2 RESPONSIBLITIES
Major responsibilities of NEPRA include: 1. Issuance of licenses to the power utilities. 2. Tariff determinations in a transparent manner. 3. Establishment of performance standards for the utilities and their monitoring.

1.5 METHODOLOGY
The internee is placed at a middle level management position in the Finance Department of HESCO. In order to have access to various other departments/components of HESCO a recommendation letter from the Chairperson Faculty of Commerce Economics and Management Science ISRA University was obtained. The said letter facilitated the internee in conducting the internship study by spending few days in each of the department viz Human Resource & Administration, Commercial (Marketing), Computer, Field Operation, Account and Internal Audit. During the course various techniques were adopted which included personal interview, collection of Primary Data. Collection of Secondary Data from various reports/-statements which have been incorporated in this report. Since HESCO is corporatized entity of WAPDA, various policies, rules instructions and procedures framed by WAPDA and published in various bulletins and reports have also been referred to.

1.6 PURPOSE OF STUDY


Every study has some purpose and some objectives to achieve. The present study is aimed at: To fulfill the basic requirement of the course leading to BBA-Hons Degree. To help enhance the writing skills as well as to learn the techniques of conducting research on any major business concern. To practically see the application of Business Administration/Management techniques being applied in a big utility organization like HESCO. To provide reader insights into Business Process of HESCO.

1.7 LIMITATIONS
Every study has certain limitations; similarly various limitations were faced by the internee while conducting internship study in HESCO. If there were no such limitations the report would have been more perfect and richer. The limitations are: Lack of cooperation from different departments. Secrecy of data made it difficult to gather the information. HESCO domain is spread throughout Sindh touching the borders of Baluchistan and Punjab which made it difficult to practically reach at every strategic place.

2 CHAPTER HESCO COMPANY


2.1 BRIEF ON HESCO
2.1.1 ESTABLISHMENT
Hyderabad Electric Supply Company Limited was incorporated during July 1998 under the companys ordinance 1984 as public company limited by

shares. The companies is formed to takeover/acquire all the properties, assets and liabilities of Hyderabad Area Electricity Board owned by Pakistan Water and Power Development Authority (WAPDA) and such assets and liabilities as decided by the authority. The companys main object is to distribute/supply of electricity to the existing consumer residing in the province of Sindh except Karachi Division and extend/expand the business, infrastructure, facilities and activities within the geographical boundaries to provide electric supply services to prospective consumer. The authorized share capital of the company is Rs. 50,000,000 million divided into five thousand million ordinary shares of Rs. 10.00 each. It is run through a board of Directors consisting seven (7) members one being its Chief Executive. As per memorandum of association, companys other objectives include:-

2.1.2 OBJECTIVES
To carry out the village electrification within the area of supply.

To carry out the renovation and augmentation including extension of HT/LT lines. To ascertain the tariff rate with the approval of National Electric Power Regulatory Authority (NEPRA). To built, construct, maintain buildings and offices as per own requirement.

To install services & equipment, meters & other devices for the purpose of measuring power consumption. To acquire transport of any kind which are necessary for supply & distribution of electricity. To carry out business of running, managing concerning to software and computer program for use in connection with the same. To enter into agreement with firms etc. for the purpose of carrying out any business of the company. To carry on the business & provide services associated with engineers etc.

To borrow, raise funds on secured money in such a manner as the Company deems fit. To open, operate bank accounts of the Company with any bank.

To act & undertake the business as mentioned in the memorandum of association of HESCO. 2.1.3 AREA OF OPERATION
To ensure uninterrupted supply of electricity and most intimate customer services to about 1.3 million consumers, HESCO has administratively into Three operation Circles, 13 operation Divisions and 111 operation Subdivisions along with 5 construction divisions, and 5 M&T divisions. 404 officers & 14446 officials of the company are striving day & night for efficient and effective running of the business. Circle is headed by Superintending Engineers (SEs), Divisions are managed by Executive Engineers (XENs) and Subdivisions are run by Sub Divisional Officers (SDOs). Each division has a Customer Services Officer (CSO). HESCO has three Circles. 1. Circle Hyderabad

2. Circle Hyderabad 3. Circle Nawabshah.

The Divisions under various Circles are given below.

Circle 1 Hyderabads Circle 2 Hyderabads Divisions. Divisions. 1. Tando Alhyar 1. Kotri 2. Latifabad 2. Phuleli 3. Mirpur Khas 3. Tando Mohd Khan 4. Dighri 4. Thatta 5. Qasimabad 5. Badin (Source: - Brief on HESCO 2010)

Circle 3 Nawabshahs Division. 1. Nawabshah

2. Sanghar
3. Tando Adam

2.1.4 PRODUCT LINE


Hyderabad Electric Supply Co. distributes the electric power/supply to Domestic, Commercial, Industrial and Bulk consumers. The company also provides the maintenance of Electrical Equipments.

2.1.5 BUSINESS VOLUME


ASSETS Non-Current Assets Operating fixed assets Rs. 18,350 (Million)

Capital work-in-process Long Term Loan & Advances Current Assets Store and Spares Trade Debts Advances, deposits & other receivables Cash & Bank Account Total Assets

Rs. Rs.

2,329 8

Rs Rs Rs

1,071 8,298 Rs 14,897 4,456 Rs 50,413 Annual (Million) Report

(Source: 2010)

HESCO

2.1.6 OFFICES OF THE COMPANY


Registered Office: Chief Executive Officer 158-WAPDA House, Shahrah-e-Quaid-e-Azam, Lahore. URL: www.hesco.gov.pk

Head Office: WAPDA Offices Complex, Fatima Jinnah Road, Hussainabad, Hyderabad. Phone #: 0092 (221) 9260161 Fax #: 0092 (221) 9260361

2.2 ORGANIZATION OF COMPANY


2.2.1 BOARD OF DIRECTORS
Name Mr. Abdul Majid Kazi Mr. Guftar Ahmed Mr. Salman Iqbal Dr. Abdul Qadeer Khan Designation Chairman CEO Director Director

Mr. Masood Pervez Mr. Muhammad Jamil ENGR. Tahir Bashir Cheema

Director Director Director

2.2.2 TOP MANAGEMENT TEAM


Name Mr. K. B. Qureshi Mr. Habibullah Khilji Mr. Muhammad Aftab Alam Mr. Suhail Ahmed Khatian Director Designation Transmission & Grid Stations Director Technical Director Finance Director Admin & Human Resource

2.2.3 ORGANIZATIONAL STRUCTURE

CEO
MANG: INTERNAL AUDIT
M(S&I) HYD MANG (COMM) RM (M&T)
FINANCE DIRECTOR

CHIEF COMMERCIAL OFFICER MANG TN&CM MANG (MIS)

CHIEF OPR: OFFICER M (OPR) HYD-I M (OPR) NSHAH M (OPR) HYD-II

DIR. O&M (T&G) SE GSO HYD M (TECH) GSO

DIR O&M DIST:

D.DIR (O&M)

CHIEF TECHNICAL OFFICER MANAG: CIVIL L.A.O GSC L .O


M.S HOSPITAL

DIR: HR& ADMN PRO MANG: HRM MANAGER ADMN


C.E P&D

MANAGER (M.M) P.D (CONST)

MANG: L&L

PRINICIPAL (RTC JAMSHORO

C.E DEV: PMU P.D (GSC)

2.3 FUNCTIONAL DEPARTMENTS


2.3.1 COMMERCIAL DIRECTORATE
Head of Commercial Department is Chief Commercial Officer. The Chief Commercial officer has Staff Members as Follows: Manager Commercial.

Manager Tariff, Marketing & Contract Management. Manager Surveillance & Investigation Manager Metering & Testing

There are three circles in HESCO, Deputy Manager Commercial is at circle, and Assistant Manager Commercial is at Division. Commercial Section is mostly controlled by Revenue Officer. Revenue Office has five sections. 1. Billing Section: Billing is done through Sub division office by CP21C which is for general consumers & CP34 are for MDI consumers. When CP21C & CP34 are come in commercial section, Commercial Assistant checks it & makes it error free & then gives it to billing supervisor who check it randomly. Then he/she send to R.O, then R.O checks it randomly then send it to Computer Sector or DTC(Data Transfer Center) DTC Is at each R.O Office.

After Computer Center Data for billing will be sent to MIS for final process, billing section checks it that data which was sent to commercial section is same. 2. Debtors control section: (Receivables) Payment is received that are managed by debtor control section. Debtor control section checks that amount is same as consumer account number. This section Checks & manage the receivable section. 3. Accounts Section 4. Consumer Record Section 5. Computer Section

2.3.2 MATERIAL MANAGEMENT


Material Management department is responsible for handling all the affairs required to procure, handle, and dispatch the tangible resources required for the operations. These all tasks are performed through well structured process. The department is controlled by Manager Material Management. The Material Manager receives yearly demand from field formation, Planning and Engineering. He calls tender through newspapers, all the interested parties

apply for the tender and the tender is issued to the contractor with the lowest bid. After is issuance of tender, the contractor receives the letter of intention and pays 5% of tender bid as security deposits. The contractor is bound for on time delivery, If delivery is late, he has to pay liquidate damages fine. Function of Material Management Asses consolidated requirement for materials Prepare Procurement Schedules Price Monitoring of material & services Bidding & Negotiation Prepare Contracts & Purchase Order Inventory Management Practical storage of equipment material(warehouse) Monitoring and surveillance of material Disposal of dismantled & redundant material/vehicles

2.3.3 MIS DIRECTORATE


Till 1990 the bills were prepared manually. That was time consuming & there were lot of chances of Fraud and also need of computerized data of consumers. Due to increasing of Consumers the authority decided to introduce Computerize Section (i.e. MIS department). The Computer Section was introduced in 1976 in Punjab by WAPDA. In Sindh there are four computer sections. 1. Hyderabad

2. Nawabshah 3. Sukkur 4. Larkana

The Computer Center issues electricity bills, Disconnection Notice, Equipment Removal Order, Weekly/Monthly Reports as well as Payment and Adjustment Posting. Payroll and Inventory Control System are also computerized There are 154 C.P (Commercial procedures) with separate codes on the basis of which whole Computer Section goes on operation.

Work Flow Chart Of Computer Center:

R.O office send stuff & bank scroll

liaison

Control Section

Data Entry Section

Cash Section

Machine Room

1. Liaison section: In liaison section two basic functions are carried out and this section receives and sends data to numerous departments. Input: Liaison section receives meter readings file, transactions, paid bills and bank scrolls. They apply certain validation checks in the input received and then send it to concerned departments for record keeping. Usually Liaison receives input from Asst: Commercial Manager (RO).. Output: It receives bill from numerous departments to carry on the authentication and validation checks. Data Entry Side: Other MIS sections data and different stuff sends raw data to Entry Section. Entry Section scan & punch it, then Entry Section forward it to cash section as Inputs Received at Computer Section 2. Control Section: Control Section check the CP21C & then put coding on it after that CP21C sent to entry section for entry. After that Entry Section again send the CP21C to Control Section for billing. Data Side has four Sections

a) Liaison Section: Receives all inputs from Assistant Manager Operation & Process it send it in the form of Output.

b) Data Control: Liaison Section receives data from Revenue Officers & Send it to data control section. c) Co ordination Section: Deals with MDI section, receives data & Process that data and then Dispatch the output of that data.

3. Cash Section: There are 13 Divisions and 13 R.Os. Bank codes are given to Revenue Officers. All the Divisions have given the ID Number or Unicode, which are given by Cash Section. Id numbers tells from which division Cash has been come. Revenue Office send the stuff & bank scroll to Liaison office. Liaison office send that things to Entry Section. Entry Section scan & punch it, then Entry Section forward it to cash section. Cash Section Reconcile it to make it error free. After cash correction then cash section send request to machine room for cash compare list. Cash Compare list is to make update of error correction into master file. Machine room compare error corrections in master file & send back to cash section. 5 Machine room: Printings of electricity bills of consumers occur in machine room along with this other reports are also printed here. the record is kept in the form of backup on backup storage devices also keeps records of jobs processed

2.3.4 HUMAN RESOURSE MANAGEMENT


The human resources department of HESCO deals with the employee issues and recruitment processes. The former administration department was converted into a modified form named as human resource department.

FUNCTIONS OF HR HESCO's HR department goes through following functions 1. Recruitment & promotion: Recruitment in HESCO is done either for direct quota seats which are done by giving advertisements, and hiring directly from external market. For promotional seats employees on the hierarchy have to give such tests and interviews to clear the promotional tests. 2. Employee benefits & maintenance:

Hr department is responsible for maintenance employees, providing the following services: Training of employees for better performance Providing higher studies opportunities Provision of TA/DA Health benefits Leaves Maintaining employee performance appraisal Authorizing residential allowances Transportation facilities Handling work related legal issues

and

development

of

3 CHAPTER FINANCE DIRECTORATE


3.1 ORGANIZATION OF FINANCE
3.1.1 FINANCE DIRECTOR
Finance Director (F.D) is over all head of finance and accounts department. He is responsible for maintaining computerized accounting and management information system, corporate planning and budget control as well as funds management. The finance director has under him managers of corporate planning and control and corporate accounting.

3.1.2 MANGER CORPORATE PLANING AND CONTROL (MCPC)


Manager corporate planning and control (MCPC) works under supervision F.D. and is the incharge of finance section. He is responsible for supervising the corporate planning activities in HESCO which includes costing/pricing of electricity, budgeting, financial planning, funds and loan management.

3.1.3 MANAGER CORPORATE ACCOUNTING (MCA)


Manager corporate accounting is the in-charge of accounts section. He is responsible for consolidation and compilation of accounts received from field accounting units. He performs his functions through three Dy. Manager Accounts and is responsible for preparation of financial statements and assets accounting.

3.1.4 ORGANIZATION CHART OF FINANCE


FINANCE DIRECTOR

MANAGER CORPORATE ACCOUNTING ASSET SECTION

MANAGER CORPORATE PLANINIG

ESTABLISHM EN SECTION

COMPILATIO N SECTION

BUDGET SECTION

BANKING SECTION

ADMN SECTION

3.2 SECTIONS IN FINANCE


3.2.1 BUDGET SECTION
Budget & Tariff: Ministry take view on tariff rates. Tariff are rates between Government and NEPRA. Tariff approvals are given by Government of Pakistan. Central Power Purchasing is that how many units are purchased by Distribution Company. HESCO Purchases 697 Million Units. While year budget are Compiled or Maintained in Budget Section. In Budget Section they watch Budget and stop it from over expenditure. All the Offices send their demand to Budget Section. If any offices budget increases from expected budget, they get approval from Finance Director through additional demand. Re appropriation of Budget: If any account head has more budget and other has less then at the end of year the budget of first account head will transfer to another account head, from eliminating it from loss. At the 30th june if government or HESCO account remain in account then it will laps and Money will be go back to Government.

3.2.2 ADMINISTRATION SECTION


Administrative Matters are deals in this section. Transfer/Posting of Field offices, Salary Account HESCO Headquarter etc, This section deals the Promotion Cases, from Thatta to Jacobabad Accounts maintenance is deal in this office. Finance Director is same for HESCO & SEPCO. In all the offices of HESCO there is one section of Accounts. The Headquarter of Accounts is at the HESCO Headquarter Hyderabad. There are 25 Operations & 25 Revenue Collection Offices in HESCO. In all Operations there are 3 subdivisions. Sub divisions work is repair and maintenance of lines. In Early days there were Superintend Engineers and now they are called Managers. Officials Correspondence, Personal records & annual reports are kept & done in this section. They are two types of Reports. Annual Confidential Report (ACR) is for officials from 7 to 16 scales. Personal Evaluation Report (PER) is for Officers above 17 grades

Administration Section Covers Section of Leaves 1. Casual leave: 25 days in a year are casual leave.

2. Earned leave: In Earned leave traveling allowance will be deducted. 3. Pakistan leaves, 4. Study Leave: 5. Medical leave:

3.2.3 BANKING SECTION


This section collects bills. If the Telenor gets the bill of HESCO the guarantee is Micro Finance bank. Banking Section does Reconciliation with Banks. Institutions that collect HESCO bills: Allied bank Limited National bank of Pakistan Muslim Commercial Bank of Pakistan United bank limited. Pakistan Post office In HESCO there is Contractor system and the bills of Contractors are passed by Banking Section. Interim: Imprest Limit 10 Lacks, 70% are Fixed Salary, 30% Overhead like minor repair of vehicles , postage charge, Medical and other minor claims of staff which will be given to all Head at 05 date of month. How much revenues are collected, needed cash is kept in HESCO & 70% are sent to Head office. Electricity is purchased from Lahore Head office and PEPCO will give money to Lahore Head office behalf of HESCO. First of All HESCO send their Weekly demands to PEPCO, They Approve their demands that the HESCO can hold the money according to their demand, they cannot hold above their demand. They are two types of Cash Books. 1. Imprest Cash Books: The cash book in which cash & cash expenditure is called Imprest Cash books. All Divisions have impressed account. In Division Revenue Officers have the Imprest Cash Books.

2. 3.
4.

All releases of demands are made through Impressed Cash books. Collection Cash Books: If HESCOs any division is calling the tenders, the tender fee is been put in Collection Cash Books, that amount will be sent to HESCO by Monthly, weekly or daily basis.
Revenue Officer Watches daily in Banks about bills.

GENCO produces the Electricity and sends to NTDC. NTDC (National Transmission Distribution Company) is Distributing the Electricity to 9 Distribution Companies.

There are four GENCO companies in Pakistan. 1. GENCO 1 JAMSHORO Power House

2. GENCO 2 3. GENCO 3 4. GENCO 4

GUDDU Power House MUZZAFFAR GARH Power House LAKRAH Power House

There are three types of Nomination: 1. GLI: (Group Life Insurance) if any one dies during the service his/her Nominees gets the Insurance Fund. But any one Retirees he/she did not get the GLI.

2. 3.

GPF (General Provident Fund) employees own contribution amount are kept in this fund. WWF (WAPDA Welfare Fund) It will be given to Widows, Scholarships for WAPDA Employees & Marriage grant. 3.2.4 COMPILATION SECTION
Issue and Maintain the Trail Balance of all accounts. They compile all the accounts. There are two types of accounts in this Section. 1. Receivable Payable: If any person is getting the Electricity bill from HESCO and doing job at other company, they will get the money from that company money will go in Receivable account.

2. IOT (Inter Office transaction) if any transaction is found wrong in Pre Audit Section, then the permission is got from Finance Director for General Voucher. In these transaction Cash is not involved, Accounts are Settled with each other. If Material is purchased from LESCO they will not get cash of that material but the cash transfer will be done. 3.2.5 ASSET SECTION
Polls, Wires, Meters are assets of HESCO. They are maintained at asset section. All the expenses of Assets are Record in Asset section. Asset Section Informs about Asset Increase or Decrease. Account Heads in Asset section: 1. Land:

a. Freehold land b. Leasehold land c. Right of way 2. 3. 4. 5. 6. 7. Offices on fire hold land Stores houses on free hold land Other buildings on free hold land Officers on lease hold land Store houses on lease hold hand Other building on lease hold land

8. 132KV Grid Station Equipments 9. 66KV Grid Station Equipments 10. 11KV Grid Station Equipments 11. 132KV Dist. Lines 12. 66KV Dist. Lines 13. 33KV Dist. Lines 14. 11KV Dist. Lines 15. 400KV Low Tension Lines 16. 220KV Low Tension Lines 17. Underground conduct 18. Underground conductor & Lines 19. Dist. Transformers (11KV/400V) 20. Service Drops (SAP) 21. METERS (SAP) 22. 11 KV Distribution H/T --- L/T (SAP) 23. Conductor (SAP) 24. Capacitor 25. Computer office equipment 26. Furniture & Fixture 27. Vehicles 28. Store Equipment 29. Work shop Equipment 30. Medical & Hospital Equipment

3.2.6 PRE-AUDIT SECTION


All the claims of HESCO Employees are pre audit before final payment, like as telephone bill that employee has limit of 5000 and its bill of telephone for month is 6000, If He/She claim for it then it will pre audit and HESCO will pay it 5000 & for other 1000 he himself is responsible. Salaries are verified at pre audit section. Service Books record are Entertained in Pre audit section. In Pre audit Section Verification of All Claims Of Employees for Salaries, Allowances, Medical Expenses, Transportations & Utility bills are done. Pre audit Section verifies it & Stamp it. In Pre audit Section They Check/Control according to Amount of Budget, so that expenses may not increase. They check the nature of claim that the claim is according to procedure. Service are employees are verified in Pre audit Section.

3.2.7 POST-AUDIT SECTION


If any ones signature is not mention Post audit will point out it. Any mistake of Sign is corrected in Post audit Section. After Post audit, Private auditors comes then in the last Government auditors verify it.

After 3, 4 Months of Pre audit if sign remain or any mistake is corrected in this Section.

3.2.8 PENSION SECTION


AT 25 Year of Service employees are voluntarily get Retirement. 60 Years Old Employees are Retire Automatically. Compulsory Retirement: In this System if anyone is doing his/her job SDO has power to terminate that Employee from job. Self Pension: After 25 years job Employee can get the Self Pension. In valid Pension: Disable Person Family pension: During Service any one died the amount of pension will be given to family. Super Annuation Pension: At the age of 60 Years Employee gets the Super annuation penson.

Formula of Pension: Basic pay x Qualifying years of Service x 7 300 Maximum service limit is 30 even he anyone has done 40 years service because 30 years limit is fixed. 65% are given on gross pension as commutation to the retired employee. 35% are given as net pension.

4 CHAPTER CONCLUSION AND RECOMMENDATIONS


4.1 SWOT ANALYSIS
Strength and weakness are basically occurring in the internal environments of the organization. It provides the information that in which area we are strong and weak and it provides the solution how we can overcome the weakness and utilize the strength in aright direction. The SWOT analysis is a comprehensive and critical overview of the operations, procedures, rules and regulations, services and other related activities, the analysis include the analysis of HESCO in the light of the specific variables which directly or indirectly affect the operations of the HESCO. The tool selected for the analysis of organization is SWOT analysis. It is the moral and professional duty of the directors, managers and executives to overcome the weakness and convert them into strengths, and get maximum benefits and opportunity from the prevailing resources.

4.1.1 STRENGTHS
The HESCO top management is the combination of both experience and young energetic professionals which are proving to be the real strength of HESCO. HESCO website provides every information about HESCO to the customers and investors. HESCO has equipped with the latest technology. The HESCO employees are locally so, the turnover rate is low.

The HESCO has efficient internal audit department, which keep check and balance.

The HESCO has experienced of strategic apex and managerial skilled staff. Full support from Federal Government.

No Local direct Competitor.

4.1.2 WEAKNESSES
The administrative cost of the company is very high due to which the profitability of the company decreases. There is still improvement of technology in the HESCO like in computers.

There customer service are not up to mark they have to improve the customer services to satisfy the customers There divisions are not well furnished they have the need to improve them. Telecom and Media revolution Dependency on suppliers of power generation equipment. Government intervention leads to slow development.

4.1.3 OPPORTUNITIES
Electrification of Rural Areas of Sindh can increase the demand of electricity.

There is no competitor in the local market; there is a big opportunity to get more share. Buyers of HESCO services are easily available in the local market.

The extension plan of divisions by the HESCO is very good to capture the market. The HESCO has maintained better relationship in the market which helps the HESCO to increase the customers. Research and development in power generation equipment

Thar Coal Project can provide cheaper electricity.

4.1.4 THREATS
One major threat to the HESCO is increasing number of customers day by day.

Consistent fluctuations in the supply of electricity leads to massive load shedding. Withdrawal of support from suppliers. There are small number of suppliers of equipments required in power sector, hence the suppliers enjoy monopoly to some extent, and can charge more. Delays in the supplies can increase cost and delay the operations.

4.2 CONCLUSION
After completion of internship the internee has come to the following conclusions. It appears that corporatization has not been fully implemented in HESCO. WAPDA Head office still seems to be controlling the affairs. Consequently, organization of HESCO appears to be partly commercial and partly Government controlled public sector organization. It seems that executives and workers have not been oriented to work in a commercial environment. HESCO is a public utility service organization but alike other Government department people working there appeared to be lacking in the concept of service. Employees were found dissatisfied with their remuneration, considering the services being rendered by them. The department appears to have been running in losses. This may be due to high rate of electricity which compels people to steal the electricity. The HESCO employees seem to be unable to check such tendency due to several economic, social and political constraints.

4.3 SUGGESTIONS

After careful study of the system the internee has made following suggestion to the conclusions arrived at in the preceding section. HESCO may be allowed to assume full autonomous role so as to run its affairs on commercial basis instead of being controlled by WAPDA. All employees & executives may be trained and oriented in modern management techniques including marketing, finance and organizational behavior. All HESCO employees may be oriented about the concept of service and how to act like a service provider in market environment. In stead of Government basic pay scale the employees may e allowed salaries comparable with other service utility organization. The rate of electricity may be rationalized so that a common man can easily manage to pay bill within budget.