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Chapter-1 Introduction
1.1 Introduction The growing role of energy sector in facitating and expeding economic,social developmentbis now being recognized by most of developing countries.Energy is therefore incorporates an important part of the growing business activity.This study content includesthe overall activities of the company and use of those activities in gas sector. With Socio-economic development of the country demand for energy is rising very fast. Government is highly aware and active for increase of energy supply which is indispensible for continuation of country's progress. Over the last five years, Government has accomplished various infrastructure development and technical building in the energy sector that is gas and coal sector. Exploration and production activities are primarily carried out by the Petrobangla.Petrobangla (Bangladesh Oil,Gas & Mineral Corporation) is a govermentowned national oil company of Bangladesh.Petrobangla was founded in 1985 by merging two goverment organization,Bangladesh Oil & Gas Corporation(BOGC) and Bangladesh Mineral Development Corporation(BMEDC).Petrobangla explores,produces,transports and sells oil,natural gas and other mineral resources.It also concludes production sharing agreements with international oil companies for exploration and development of oil and gas resources in Bangladesh. Petrobangla is responsible for overall corporate planning for the gas sector. The relevant specific companies implement most of the investment plans but the final decision and approval authority lies with Petrobangla. The national economic strategy and the role of energy sector embedded in it guide the corporate planning of Petrobangla. Petrobangla has formulated a plan that includes the whole range of activity from exploration to marketing, taking in to cognizance both the public sector and private sector operators. Petrobangla markets gas to various customers through its marketing companies. There are now five marketing companies operating in their respective franchise areas. The companies are Titas Gas T & D Company Ltd., Bakhrabad Gas System Ltd., Jalalabad Gas T & D System Ltd., Pashchimanchal Gas Co. Ltd., Karnafuli Gas Distribution Co. Ltd. Over the last five years gas production has been increased by 895 million cubic feet daily by drilling/work over/production increased from 44 wells. Natural Gas is the most important source of energy in our country as it accounts for about 80% of the total commercial energy of the country. At present, about 37% of natural gas production is used as fuel for electricity generation. Overdependence on the natural gas must be reduced as the present reserve is not sufficient enough to support the country for long term economic growth. Overall, in long term, an intelligent mix of the different available energy sources can enable Bangladesh to
ensure a sustainable economic growth of the country. Right conditions and framework at policy and regulatory level is a must.
1.2 Origin of the report Theoretical knowledge becomes fulfilled when it is applied in practical field. As such to apply the theoretical knowledge in practical field the department of Business Administration of Metropolitan University, Sylhet, has introduced an internship program as a part of its BBA academic curriculum for its concerned students. Under this program each student has to take practical training in a specific organization for three months so that they can know how the theoretical knowledge can be applied in practical field. After taking practical training she/he has to prepare a report assigned by the faculty supervisor of MU . In such a state of the affairs I joined Jalalabad Gas T & D System Ltd (JGTDSL), Head Office, Gas Bhaban, Mendibagh, Sylhet under the guidance of my supervisor Md. Afsarul Islam Lecturer , Department of Business Administration Administration , Metropolitan University, Sylhet. The topic of my internship report is "Overall activities of Jalalabad Gas T & D System Ltd". My experience involved with the overall work on Jalalabad Gas T & D System Ltd. So, I have prepared this internship report with the mentioned topic.
1.3 Objectives of the study The main objectives of the study as follows
To gather practical experience. To become acquainted with the functions and services provided by the organization. To know their strategies for serving the customers. To study the Financing, auditing and reporting practices followed by the JGTDSL.
To study the legal framework of the company.
To study the organizational set-up of the JGTDSL.
To give a clear insight about the books, forms, and registers maintained in the JGTDSL.
To expose allstatements of JGTDSL.
To identify the problems of JGTDSL.
To submit an internship report on overall activities and procedures of my job.
1.4 Scope of the Report The study report is prepared in term of the three months of internship program. I got the opportunity to work as an intern inJalalabad Gas T&D System Ltd. So I decided to make an internship report about "Overall activities of Jalalabad Gas T & D System Ltd"
1.5 Significance of the Report Internship report is an important part requirement of BBA program of Metropolitan University. As the parties, education institution and organization sustainability benefit from such program. Recognizing the importance of practical experience, Metropolitan University has introduced a three months practical exposure as a part of the curriculum of BBA program. Internship program is the significant idea of learning, which gives us clear view of corporate operation. And it may also give us the real corporate atmosphere for work before we get introduce to the real job.
1.6 Limitations of the Study Like any other study the limitations of this study is not out of questions. The study suffers from some problems as below:
Reluctance of JGTDSL in providing data on the plea of secrecy hampered concrete analysis of reporting practices in some cases.
There are needed enormous times to accomplish this internship program successfully, but the allocated time 3 months.
Unavailability of the reference books.
Sometimes I could not take some relevant information from concerning officers and employees because of their busy time.
If I could take interview of more respondents, my study could be more truthful.
Chapter- 2 Company Overview
2.1 Background of JGTDSL Jalalabad Gas Transmission and Distribution System Limited (JGDTSL /the company),a public limited company,owned by Petrobangla is registered as a company with the Registrar of Joint Stock Companies and Firms on 01 December 1986 under the Companies Act 1913(now the Company Act 1994) With the completion of Hobigonj Tea Valley project, a program on Sylhet town gas supply project was initiated by Petrobangla. On merging of the side two project in 1977, formal Gas distribution on Sylhet town was started 1977with the implementation of Sylhet tea estate gas supply Project-1, Sunamgonj town gas supply project, kailashtilla -Chhatak pipeline Project and Chhatak town gas supply project, the Gas supply network recorded a significant expansion in the region. To meet the growing demand, Jalalabad Gas Transmission and Distribution System Limited was formed on December 1, 1986 under the Ccompany Act with an authorized capital of tk.150 crores .The objective was to help developing the socio-economic condition of the people of Sylhet region. The company has been playing an important role since role inception in reducing dependency on imported fuel, saving of foreign currency and maintenance of ecological balance through construction of pipeline, installation and maintenance of related facilities to ensure uninterrupted transmission and distribution of gas throughout the franchise area.
2.2 Vision, Mission and Strategic Objectives of JGTDSL
Vision:
Safe and efficient distribution of natural gas.
Mission:
Build our company into efficient, market driven, customer focused institution with good corporate governance structure.
Continuous improvement in our business policies, strategy, procedure and operation through integration of technology at all levels.
Provide natural gas to all areas and all socio-economic groups under company franchise area.
Strategic Objectives
Enhancing Energy security as well as gas supply security.
Enhancing efficient use of gas and its supply throughout the franchise area of JGTDDSL.
Improving HR for function of overall activities of the company.
2.3 Board of Directors
Chairman
Muhammad AhsanulJabbar Additional Secretary Energy & Mineral Resources Division Ministry of Power, Energy & Mineral Resources
Director
Parveen Akhter Joint Secretary Energy & Mineral Resource Division.
Director
Md. Aminuzzaman Director (Planning),Pe (Planning),Petrobangla. trobangla.
Director
A T M Saiful Islam Deputy Secretary Labour& Employment Ministry.
Director
Zanendra Nath Sarker Deputy Secretary (Dev.-2) Energy & Min. Resources Div.
Director
Akramuzzaman Deputy Secretary(Operation-2) Energy & Min. Resources Div.
Director
Khawja Ahmed Managing Director Jalalabad Gas T & D System Ltd. Sylhet.
Director
Barrister AbulKalam Azad Director Jalalabad Gas T&D System Ltd.Sylhet
Director
Md. Saiful Islam Jalalabad Gas T&D System Ltd.Sylhet.
2.4 Organogram of the Company
2.5 Customer services
Gas pipeline contractor’s enlistment renewal form.
Preliminary Consent Application Form for Industrial/Captive/ CNG.
Application Form for Commercial Customer.
Declaration of Property Ownership.
Rules for domestic & commercial connection.
Gas bill book issue from.
Domestic/Commercial Application Form.
Road Cutting Permission.
List of Documents to be attached with the application.
Gas Volume calculation Form for Office meter.
Gas connection & bill outstanding enquiry form.
Meter Reading Form.
Defaulter list of domestic customer.
Notice for defaulter customer.
Final notice for defaulter customer.
Second reminder notice for defaulter customer.
Safety instruction for customer.
One stop service desk form(commercial).
One stop service desk form(Domestic).
One stop service desk form(Name change/Burner Change etc.).
Supplementary demand form.
Important for commercial connection.
Metered bill form.
Gas connection information Card.
Service line & Riser layout Map.
Certificate of Gas Bill Dues.
2.6 Company Details 1.
Name of of or organization
:
JALALABAD GA GAS TR TRANSMISSION AN AND DISTRIBUTION SYSTEM LIMITED
2.
Date of Incorporation
:
December 1, 1986
3.
Head Office
:
Gas Bhaban, Mendibagh, Sylhet - 3100 Bangladesh.
4.
Background
The enterprise is a Public Company limited by shares
:
registered under Company Act, 1913 on December 01,1986 and it is a subsidiary of Bangladesh Oil, Gas and Mineral Corporation (Petrobangla). 5.
Adminis isttrativ ivee Ministry/Division
6.
Ministry of Power Energy & Mineral Resources/
:
Company Business
Energy & Mineral Resources Division. :
The Company carries out transmission and distribution of natural gas within the northeast part of Bangladesh, covering
the Sylhet Division consisting of the districts of Sylhet, Moulvibazar, Hobigonj and Sunamgonj. Natural gas is purchased from its associated companies viz. Sylhet Gas Fields Ltd., Bangladesh Gas Fields Co. Ltd. and Titas Gas T&D Co. Ltd. and sold to different categories of consumers, Viz, Power, Fertilizer, Industrial, Commercial, Tea Estates, CNG and Domestic.
7.
Ann nnua uall Re Reve venu nuee Ea Earn rnin ing g
:
Taka Ta ka 100 006. 6.3 35 Cr Cror oree.
:
Taka 151.19 Crore.
(2014-2015) 8.
Ann nnua uall Pr Pree-ttax Pro roffit
(2014-2015) 9.
System Lo Loss / (Gain)
:
.23%
:
Taka 71.01 Crore.
:
3 : 97 (Standard Ratio 70:30).
(2015-2016, up to Apr- 2016) 10.. 10
Cont Co ntri ribu buti tion on To Na Nati tion onal al Exchequer (2014-2015)
11.. 11
Debt De bt-E -Equ quit ity y Ra Rati tio o
(2014-2015)
12.
Authorized Capital
:
13.. 13
Gass Pip Ga Pipel elin inee Net Netwo work rk
:
Taka 150 Crore.
(Up to April 2016)
i) Transmission Pipeline ii) Distribution Pipeline
-
465.08 km.
-
3,351.93 km.
Total - 3,817.01km. (appox)
14. Sources of
Sylhet Gas Fields Ltd. (SGFL)
i)
-From Kailashtilla Gas Fields and Horipur Horipur Gas Field for distribution
Gas Purchase
of gas to all categories of customers in Sylhet and Sunamgonj districts. ii ii))
Gass Tran Ga Transm smis issi sion on Co Co.. Ltd Ltd (GT (GTCL CL)) -From North-South pipeline (Fenchugonj) for distribution of gas to different power stations in Fenchugonj
iii) Bangla Banglades desh h Gas Gas Field Fieldss Co. Co. Ltd. Ltd. (BG (BGFCL FCL)) -From Hobigonj Gas Field at Shahjibazar for distribution of gas to all categories of customers in Moulvibazar and Hobigonj districts. iv)) iv
Gass Tran Ga Transm smiss issio ion n Co. Co. Ltd Ltd (GTC (GTCL) L) -From North-South pipeline (Munshibazar) for distribution of gas to Kulaura, Juri and Baralekha..
v)
Titas Gas T & D Co. Ltd. (TGTDCL)
-From Hobigonj-Ashugonj Pipeline (Madhabpur) of Titas Gas for distribution of gas to all categories of customers in MadabpurUpoZilla, Hobigonj.
15. Category Wise Gas Connection:
(Up to April 2016)
Sl No
Category
Nos. Of Connection
1
Power
14
2
Captive Power
3
Fertilizer
4
CNG
5
Industrial
102
6
Tea Estate
94
7
Commercial
8
Domestic (Burner)*
110 1 56
1,695
Total -
2,17,401 2,19,473
* Domestic Meter Nos.- 1379 * Domestic Non Meter Nos.- 99357
Total Domestic Connection- 100736 (appox)
Power: Governmentand non-government organization that use natural gas to product
power.
Captive power: The customer who product electricity to himself for using natural gas
is called captive power.
Fertilizer: Government and non-government that use natural gas feedstock.
CNG: Different type of customer who compress natural gas to supply various type of
vehicle are called CNG customer.
Industry: In BASIC small and cottage industry ceramic, sanitary, electrical good and
other equipment thus product by their company is called industry.
Tea Estate: Tea leaf freshness, process and other type of work are using natural gas.
Commercial: Commercial customer pays the more value from the domestic
metercustomer. They generally use 16 hour.
Domestic: In a residence for a family gas used flat rated and burner basis is called
domestic customer. Domestic customer pays 600/- TK for a single burner and 650/Tk. for double burner.
Domestic Meter: This type of customer gas used as like as domestic customer but
their gas used showed by the gas bill payable as per as meter reading.
17. Gas Supply Areas - Jalalabad Gas Franchise Areas (Sylhet Division).
Sylhet District
- Sylhet Sadar, South Surma, Jaintapur (Horipur), Fenchugonj, Golapgonj and Beanibazarupo-zillas.
Sunamgonj District
- Sunamgonj. Chhatak&Doarabazarupozilla areas.
Moulvibazar District
- Moulvibazarsadar, Srimongol, Komolgonj, Kulaura, Borolekha and Juriupo-zilla.
Hobigonj District
- Hobigonjsadar, Madhabpur, Nobigonj, Chunarughat and BahubolUpo-zilla.
Chapter-3 Organizational Setup of Different Division
3.1 Organ gram of Finance and Revenue Division Finance and accounts department is under the supervision of General Manager of Finance who is qualified person and the revenuedivision is headed by a General Manager who is also a qualified person.
The organizational structure of the finance division is given in the following:
3.2 Functions of Finance and Revenue Division The functions of finance and revenue division are summarized below:
To maintain books of accounts and record therein day by day transaction of the company.
Preparation of annual income and expenditure statement and Balance sheet.
Preparation of periodical financial statement of company.
To carry out payroll and arrange payment of salaries and wages.
To process bill for payment.
To furnish various data to management for financial control.
Preparation of budget and funds flow statement.
Maintenance of capital account and revenue account.
Maintenance of related accounts of fund of company.
Maintenance of fixed and current assets and loans and related accounts.
Preparation of the accounts related to provident fund, gratuity, poor fund group insurance and benevolent fund and pension fund.
Maintenance of accounts related to collection of charges on accounts of electricity.
Maintenance of accounts related to granting loans and advance and its recovery or payment to staff/workers.
Assistance to internal and external auditor with supporting documents.
3.3 Sections of Finance and Revenue Division In finance division, there are two departments: 1) Fina Financ ncee De Depa part rtmen ment; t; 2) Acco Accoun unts ts Dep Depart artme ment nt..
The finance department has three sections such as; 1) Budg Budget et Se Sect ctio ion; n; 2) Stor Storee Se Sect ctio ion; n; 3) Bank Bank & Cas Cash h Sect Sectio ion. n.
The Accounts department has three sections such as; 1) Fun und d Sect Sectio ion n; 2) Bill Bill & Pa Pay y Sec Secti tion on;; 3) Gene Genera rall Acco Accoun unts ts Secti Section on..
The revenue division has two sections such as;
1) Cent Central ral R Rev even enue ue Sect Sectio ion; n; 2) MIS Se Sect ctio ion. n.
3.4 Functions of department sections of JGTDSL 3.4.1 Functions of Budget section Budget section performs the following functions:
Prepare budgets for individual departments with the help of concerned Department Coordinator Officer (DCO).
Budget plan is expressed in quantitative, covering a specific period of time, usually one year utilization of manpower and material resources.
Budget represents estimate future costs of cash expenses and revenues.
Every expenditure included budget register before preparing voucher as per respective budgeted accounts head.
Monitor budget, calculate variances and identify causes of major variances in consultation with budget holders.
3.4.2 Functions of Store Section The Store Accounts maintain and keep record all kinds of material in ledger book as well as Software. The main functions of Store Accounts are:
Receipts of incoming Material Receive Report(MRR).
Inspection of all receipts.
Valuation of the products.
Storage and preservation.
Identification of all materials stored.
Material handling.
Packing.
Issue and dispatch.
Maintenance of store records.
Deliver the material to side office or work places by issuing Material Issue Voucher(MIV) for future accounts.
Inventory control.
Preparing depreciation worksheet.
Maintaining the schedule of fixed assets (Assets Register).
Maintain L/C related documents.
Recording Foreign and Local purchase matters.
Analyze the MRR, MIV & MTV.
Prepare Store Ledger Accounts.
Record the work-in-progress.
Provide journal voucher of related transactions.
3.4.3 Functions of Bank & Cash section The Bank & Cash section is responsible for all type of bank and cash related activities. The Bank & Cash section executes the following activities:
Payment of bills authorized by Bill & Pay section.
All transactions made by cheque.
Receipt of cash against donation, various fees, and sales proceeds.
Deposit of cash and cheques in banks.
Withdrawal of cash from banks.
Provide a short amount of money in various expenditure such as contractor, supplier and customer purpose.
Receive the VAT for contractor and suppliers.
Maintain the JGTDSL's all the bank accounts.
Maintain funds of the company by a numbers of bank accounts (STD Account/ Current Account) in whole service area in Sylhet division.
The current accounts mainly collects fund from the STD accounts and makes payment for employee salaries and other expense (subscriptions, scholarships).
The STD accounts in every branch collects Gas Bill to Petrobangla, SGFL, BGFCL and other third parties bill.
The company has huge amount of idle money. As per Ministry of Finance regulations the company lending the money FDR in six month basis public and private commercial bank.
Issues cheque for payment by the order voucher of account section.
Prepare Bank Reconciliation Statement.
Posting software ledger, the cheque details including payee name, purpose of payment and the amount in company own software on the basis of issued Bank. After completing month reconcile the ledger balance with bank balance.
3.4.4 Functions of Fund Section The Fund section is responsible for handling the personnel facilities of the companies employees. Fund section performs the following functions:
The retired employee's final settlement as per pension rules are prepared and payment is made by the fund section.
Prepare financial statement of funds.
Maintain gratuity funds, pension fund, welfare funds, provident funds (general provident funds, contributed provident provident funds), and workers participation funds.
Prepare vouchers and payment to employee’s welfare in case of their welfare loan and different funds reserved amounts.
Maintain the employee's group insurance.
Keep all records regarding the employee's welfare loans payment, receipts due etc.
Investing the funds reserved money, opening FDR accounts in different commercial banks and maintain the accounts.
Preserve all records relating to various functions performed by the section.
3.4.5 Functions of Bills & Pay section
Bills and pay section is responsible for maintaining office expenses like-entertainment bill, advance payment to employee’s salary etc. Bills and Pay performs the following functions
Prepare all vouchers including cash voucher, bank voucher, and journal vouchers for internal transaction, transfer or any other provisions.
Make final payment to staff/officials in the case of registration, termination of retirement etc.
Meet up utilities bill like electricity, water, telephone, internet, faxpaper etc.
Collect relevant information from HR and other department/sections on salary and benefits, leave availed without pay, deductions etc. required for payroll preparation.
Input all required information in the salary software.
Prepare and check salary register.
Advice banks to transfer net salary to individual staff.
Prepare and check salary register.
Maintain and preserve all records and information related to salary.
Maintain the salary software.
Keep the record of the employees’ personnel loan-computer loan, house building loan and motor-cycle loan.
3.4.6 Functions of General Accounts Section General accounts section is the heart of Accounts. The General Accounts section performs the following functions:
Control operation of JGTDSL bank accounts.
Maintain effective operation of the computerized accounting packages.
Posting all the vouchers with Accounts code number and voucher number.
Prepare financial statements of JGTDSL at the end of fiscal year and preserve hardcopies in file.
Maintain consolidated financial statements on monthly basis.
Reconcile inter department transactions.
Maintain books, registers and documents required for smooth functioning of accounts section.
Co-ordinate Annual External Audit and work with internal auditors.
Handling the company's tax and insurance related issues.
3.4.7 Functions of Central Revenue section The Central Revenue section performs the following function:
Total revenue collection from the JGTDSL's site office.
Preparing bill against corporate clients.
Handling the JGTDSL's corporate clients.
Prepare monthly report on total gas sales and revenue collection.
Maintaining the necessary register books.
3.4.8 Function of MIS section The Management Information System (MIS) section performs the following functions:
Keeping the record of the company's gas sale, gas connection- disconnection and other necessary information's.
Preparing monthly progress report.
Preparing MIS report.
After preparing monthly progress report and MISreport, send these report to Petrobangla and all department/division head of JGTDSL.
Chapter- 4 Finance practice of JGTDSL
4.1 Finance Practice of JGTDSL The company is a service oriented organization. Here finance practice is necessary not only for recording of transaction but also for managerial planning and control. It is also necessary for compliance with legal requirements. Financial system may be either manual or electronic (computerized). My organization has been using both manual computerized computerized financial by using finance software.
4.2 Flowchart of Financial Systems
Financial system of JGTDSL
Collection Source of Document
Preparing Debit Credit Journal
Verifying the Vouchers
Internal Audit of the vouchers
Vouchers Approval
Posting them to different models (AP,AR using finance software )
Any Adjustment entries can be given any time
Trial Balance is prepared bythe software
Financial statement are also prepared by software
Closing Current years revenue
Expenditure through closing entries
Post closing trial Balance is prepared automatically
Posting opening journal
4.3 Financial structure The company’s financial structure comprises:
Equity capital, all of which are effectively owned by Petrobangla on behalf of the government of Bangladesh, and
Long term loan comprising of foreign and local currency loans.
4.4 Financial Management Policies and Procedures 4.4.1 General Purpose The purpose of these policies is to establish guidelines for developing financial goals and objectives, making financial decisions, reporting the financial status of the Agency, and managing the Company funds.
4.4.2. Financial Responsibilities It is the responsibility of the Board of Directors to formulate financial policies and review operations and activities on a periodic basis. The Board delegates this oversight responsibility to the Treasurer of the Board and the Finance Committee of which the Treasurer is the Chair. This responsibility is shared through delegation with the Company CEO and the Head of Finance. The Agency CEO acts as the primary fiscal agent, implementing all financial policies and procedures. The Company CEO, CEO, with oversight of The Finance Committee is responsible for the coordination of the following: Annual budget presentation, management of the Endowment and other fund investments, selection of the outside auditors, and approving revenue and expenditure objectives in accordance with the Board approved long-term plans. The Head of Finance with oversight by the Finance Committee has the day-to-day operations responsibility for managing Agency funds, ensuring the accuracy of the accounting records, internal controls, financial objectives and policies, financial statement preparation, and bank reconciliation review and approval. The Accountant is directly supervised by the Head of Finance and is responsible for the preparation of the Chart of Accounts, Reporting Formats, Formats, Accounts Payable Processing,
Payroll input and Payroll processing, Cash Receipts input, Journal Entries for General Ledger as well as Bank Reconciliations.
4.4.3 Conflict of Interest Members of the Board of Directors are prohibited from activities that might present conflicts of interest. The powers of directorship may not be used to personally benefit the Director at the corporation’s expense. If a Director has a financial interest in a corporate transaction, the Director must fully disclose the interest and abstain from voting. Loans to Directors are prohibited.
4.4.4 Budgeting Process The Company’s CEO, the Head of Finance, and the Treasurer shall be responsible for presenting to the Finance Committee and other Board Committees Committees an annual operating budget draft sixty (60) days prior to the end of the fiscal year and thirty (30) days prior to its submission to the Board of Directors. The Finance Committee shall review and approve the recommended fiscal year budget revenues, expenditures and cash flow, and submit it for approval to the Board of Directors. The budget shall contain revenues and expenses forecasted by month. A chart describing monthly cash flow shall be included.
4.4.5 Financial Statements The Company’s financial statements shall be prepared on an accrual basis in accordance with Generally Accepted Accounting Principles (“GAAP”). The presentation of the Financial Statements shall follow the recommendation of the Financial Accounting Standards No. 117, “Financial Statements of Not-For-Profit Organizations” (SFAS No. 117). Under GAAP, net assets and revenues, expenses, gains, and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, the net assets of the agency and changes shall be classified as unrestricted, temporarily restricted and permanently restricted. Separate from Unrestricted Funds, resources for various purposes are classified for accounting and maintained for each fund. Several funds are in place for this purpose
including but not limited to: Endowment Fund, Restricted Funds, Cash Management Fund, Property and Equipment Fund, etc. The Head of Finance shall prepare and present Monthly Financial Statements in a format approved by the Company CEO and Finance Committee. The statements shall be presented to the Company CEO, senior management, and the Finance Committee for review.
4.4.6 Cash Fund A cash fund of one-quarter to one-third of the Company’s annual operating expenses shall be maintained. When the fund balance falls below this minimum, the Finance Committee and the Board shall develop a plan and budget for rebuilding it.
4.4.7 Audit The company will have an audit of its financial statements annually, within 4 months of the end of each the fiscal year. The audit shall be completed by a firm of Independent Certified Public Accountants. The Company CEO and the Head of Finance shall have direct responsibility in overseeing the implementation of the Annual Financial Audit. The Audit Committee shall have board oversight. In no cases shall the number of Board Members holding seats on the Audit Committee be less than the number of agency staff and management. The Company CEO and the Head of Finance shall recommend to the Audit Committee for approval, the selection of a firm to perform the annual audit. In addition, the Audit Committee 3 shall assist when necessary in the audit preparation, and report the final results to the Board of Directors. A representative of the audit firm shall be invited to attend the annual presentation to the Audit Committee, and shall be required to make a presentation to the Board if the audit report is other than unqualified, or if the auditor's report material weaknesses in internal controls or reportable conditions. The Head of Finance or the Auditor shall prepare the Form 990 and it shall be reviewed by the, the Company’s CEO, and the Finance Committee before submission to the IRS.
4.4.8 Revenue andIncome Procedures The Company CEO in conjunction with the Vice President of Fund Development, and the Head of Finance, develops and proposes revenue goals and objectives and submits them to the Fund Development Committee prior to Board discussion and approval. All contributions shall be recorded in accordance with GAAP, with specific attention to standards FASB(Financial Accounting Standards Board) 116 and 117. Contributions are recorded as pledged or received in accordance with FASB(Financial Accounting Standards Board) 116, and must be credited to the appropriate revenue lines as presented in the annual budget and coded with the appropriate appropriate account number as designated in the Agency’s Chart of Accounts.
4.4.9 Expenditures Procedures All expenditures shall be approved by the Agency’s CEO or a Vice President. All expenditures shall be coded by account number using the Agency’s Chart of Accounts. The Accountant maintains standard accounting records containing all aspects of the Agency’s financial operations. They include but are not limited to:ageneral ledger, a check register, and a payroll register. Invoices shall be approved by either the Agency’s CEO or a Vice President. Following the review and approval, check payment vouchers shall be prepared and the invoices shall be distributed to the Agency’s Accountant for check payment preparation. Upon payment of a bill, a copy of the check or duplicate of stub shall be stapled onto onto the bill and payment date and check number shall be printed on the invoice. The paid invoices shall be filed alphabetically according to company/individual name and shall be kept on a fiscal year basis on file.
4.4.10 Signature Policy The Agency CEO and the Head of Finance (two signatures) shall unless otherwise decided by the Board, sign all checks, drafts, or orders for payment of money, contracts, and commitments for services issued in the name of the Agency. In the absence of either individual, the signature of the Chair of the Board must be obtained.
4.4.11 Compensation and Payroll (important point: ensure board approval of CEO salary and salary ranges.) Payroll is executed periodically. Paychecks or direct deposits will be provided to each employee by the Accountant. Monthly payroll expenses shall be verified by the accountant against payroll reports and direct deposit reports and reconciled with checking account reports. The compensation of the Agency’s CEO shall be determined by the Board of Directors or their designees and CEO compensation is based on a board-approved process that considers comparable data and CEO performance. The salaries of all other employees shall be determined by the Agency’s CEO. Compensation ranges for all staff positions shall be approved by the Agency’s CEO. No employee of the Agency may be compensated outside of the approved range, without the approval a pproval of the Agency CEO.
4.4.12 Local Travel AndExpense Reimbursements Employees must abide by the Agency’s Travel and Expense policy. Travel and expense reports for mileage, meals, hotel, supplies, etc., will be maintained by each employee and then submitted to the supervisor for approval and payment on a weekly basis by the Accountant. Mileage to and from the employee’s residence to the place of work will not be paid by the Agency. Reimbursements will be based on the travel rate established by the Agency CEO and the Head of Finance and approved through the budgeting process. Travel reimbursement shall not be above guidelines. All parking and other expenditure receipts must be attached to the expense voucher as a condition for payment.
4.4.13 Purchasing Any expenditure in excess of an amount determined by the Board of Directors for the purchase of a single item should have bids from three (3) suppliers suppliers if possible. These bids are reviewed by the Head of Finance and the bid award must be specifically approved in advance by the Agency’s CEO and the Head Head of Finance. Purchase of less than the approved amount may be made at the discretion of the Agency’s Agency CEO or Head of Finance without
competitive bids. However, for fixed assets, reasonable diligence should be exercised to comparatively shop for available sources. Any purchase made by a Board member on behalf of the Agency will require prior approval by the Agency CEO.
4.4.14 Leases and 0ther Contractual Agreements The Agency conducts a major part of its operations from leased facilities. Leases and other contractual agreements are negotiated by the Head of Finance and executed with the approval of the Agency CEO. New leases in excess of an amount determined by the Board of Directors require the approval of the Finance Committee. The Agency CEO and the Head of Finance are authorized to develop and enter into contractual agreements with vendors, bankers, and third parties for the purpose of ensuring the Agency’s general operations. The Finance Committee shall review such agreements and make recommendations when necessary.
4.4.15 Bank Accounts AndInvestment Accounts The Head of Finance shall maintain and oversee Bank and Investment accounts, and ensure the Agency’s day-to-day financial operations. Several accounts may be maintained by the Agency as follows:
Checking Account
Money Market Account
Certificates of Deposit
Brokerage Account
These accounts may be changed as the Agency’s financial conditions and requirements change.
4.4.16 Checking Account All checks, cash, money orders, and credit card deposits, are reviewed by the Accountant and deposited in the appropriate Accounts. Fund raising events, foundations and corporate donations and miscellaneous contributions, shall be deposited into the accounts. Money shall be transferred from the cchecking account into the money market account or the the investment account when necessary, by the Head of Finance. Checks are written weekly to meet obligations, or ongoing operational expenditures.
4.4.17 Bank Reconciliations Bank reconciliations shall be completed monthly by the Accountant and cross-referenced with the cash and receipts logs and the monthly Financial Statements. The Financial Statements shall be compiled by the Head of Finance. The Statements shall be then reviewed by the Agency CEO and presented to the Finance Committee. All Bank Statements, Credit Card Statements, and Endowment Fund Reports will be reconciled every month by the Accountant, and records will be kept in the Finance office.
4.4.18Cash AndCash Equivalents Cash and cash equivalents include all cash balances and highly liquid investments with a maturity of six months or less. The Agency places its temporary cash investments with highly rated financial institutions. The Head of Finance shall closely monitor the balances of the Checking account, Money Market and Certificates of Deposit accounts. At times such investments may be outside of the FDIC (Federal Deposite Insurance Corporation) insurance limit.
4.4.19 Investments Reports and Investments Policy Investments shall be reported with the monthly financial statements at cost or market value. The Agency CEO and Head of Finance, with oversight of the Finance Committee, shall review and determine the general investment strategy for all funds. The philosophy of the Agency’s short-term investments is safety of principal and liquidity. Acceptable investments shall be: Certificates of Deposit and Bankers Acceptances rated A1; Domestic Corporation Commercial Paper rated A1 and/or P1 by two (2) major rating services; all short-term Securities of the U.S. Government or an agency thereof. The Endowment Fund investment strategy shall be reviewed and evaluated by the Finance Committee annually, to ensure the portfolio’s proper diversification, security and return on investments. All financial institutions shall be selected and approved by the Finance & Legal Committee and must have long-term investment rating of A or higher by Standard and Poor’s, or a compatible rating.
4.5 Maintenance of Necessary Books, Forms and Register JGTDSL maintains the following books, forms and register for the purpose of recording and analyse transactions and institute an internal control
4.5.1 Cash Book In the company there has some cash transaction for receipts and expenditure and some receipts and expenditure are made through Bank. Cash Book records all cash and bank transactions. The transaction items are identified through a code system. The computerized cash book is more informative than traditional cashbook. The cashbook provides cash and bank balances at the end of the day. It also provides details of daily transactions and balance balance of cash and bank account. So, it is one of the important books of accounts to record receipts and expenditure.
4.5.2 Cheque Register The cheque management system is used to enter the name of the of the payee, amount, cheque number and date of the cheque. The system prints cheque, which is delivered to the parties. A cheque register is printed which includes all relevant information of cheques issued in a particular period. The register has a column for recipient's name and signature.
4.5.3 General Ledger General ledger records both cash and non-cash transactions. The cash transactions are automatically transferred to the general ledger book. Non-cash transactions are separately entered through journal vouchers.
4.5.4 Store Ledger Store Ledger Account is kept for recording all types of store items; how much items receipt, issue and remain everything is recorded in this A/C book.
4.5.5 Personal Loan Register This register books are maintained to keep record of the employee's house building loan, computer loan and motor cycle loan.
4.5.6 Fixed Asset Register This register is maintained for recording control and subsidiary accounts of all fixed assets owned by the company, control accounts are maintained for trial balance preparation.
4.5.7 Work in Process Register The register is maintained for recording expenditure incurred in respect of going projects. Control Accounts are maintained for keeping project wise accounts while subsidiary accounts are kept for detailed regarding of individual assets. Besides the above principal book the company maintains a good number of subsidiary books for facilitating their preparation.
4.5.8 Salary Register Salary is one of the largest parts of operating expense of JGTDSL.
4.5.9 Pay Slip Pay slip portrays details of an employee's salary. Pay slip is prepared for the staffs, and the officers of the company.
4.5.10 Voucher Forms Voucher is the most basic document needed for recording financial transactions. JGTDSL follows several types of vouchers:
Debit voucher
Credit voucher
Journal voucher Material Issue Voucher (MIV)
Material Transfer Voucher (MTV)
prepared to record cash and bank payments. This voucher Debit voucher: Debit voucher is prepared is alternatively called payment voucher. Credit voucher: Credit voucher is to record cash and bank receipts. It is alternatively called
receipt voucher. Journal Voucher: All non-cash transactions are recorded in the books of accounts through
journal vouchers. Provident fund, income tax and other deductions from salary, expense or
income transfer from department to another, depreciation on fixed assets etc. are recorded in the books of accounts through journal vouchers. Material Receipt Report (MRR): Material purchase for the company receives by Material
Receipt Report (MRR). After received, it is added to the remaining balance of the respective material item with both of unit and value. Material Issue Voucher (MIV): When the material is shifting to side office or work places
that times the store accounts deliver the material by issuing MIV for future account. Store-in-Transit Register: Store-in-Transit Registeris kept to record the company's
foreign/local purchase information JGTDSL completes their final account on 30th June in every year. Sometimes, the company advance for purchase materials. But the materials did not reached in the company within the financial year. At this situation, the value of the material has to remain in transit account.
4.6 Receipts JGTDSL's receipts are broadly classified as:
Sales of gas.
Interest income.
Non-operational.
Operational income.
Receipts are accounted for through credit vouchers. Appropriate head in the respective department is credited for receipt. Income from gas sales: The actual income source of JGTDSL is gas sales. This company
sales its gas to different categories of customer; such as, commercial industries, CNG station, Tea estate etc. Income from non-operational: non-operational: JGTDSL collects non-operational income from the
following sources:
Sale of tender schedule
Suppliers registration fees
Sale of pipeline materials (customer finance)
Sale of condensate
Sale of gas bill books
Testing charges
Other rental income
Penalty
Miscellaneous income
Income from other operational sources: JGTDSL gets income from the sources:
Minimum Charges against sanctioned loan
Surcharge for the Late Payment
Meter Rent
Service Charge
Connection charges
Heating Value
The accounting entry for recognition of income is: Bank..................................... Bank............... ........................................Dr. ..................Dr. RespectiveIncome Head.......................Cr. Head.......................Cr. Respective income head would include gas sales, service charge, penalty, testing charge, meter rent etc.
4.7 Payments JGTDSL's payment can be categorized as follows:
Internal Payment
Salary Payment
Staff Final Payment
Payment of other expenses
External Payment
4.7.1 Internal Payment Salary payment: Payroll is one type of largest payments that take place every month. And
this is one of the largest components of JGTDSL's annual expenditure. The bills & pay section of Accounts department manages the whole process of preparation and payment of salary. Staff Final Payment: Final payment is made when a staff leaves JGTDSL by way of
resignation, termination, dismissal or redundancy. The staffs need to take clearance from his/her department in-charge and other relevant departments to get final payment. The final payment includes gratuity, provident fund, fund, leave pay etc. If the staff has an outstanding loan or other dues it is adjusted from the final payment. Travelling and other payment: This includes payment of traveling allowance, local
conveyance, and overtime bill, daily allowance, entertainment, electricity, paper bill, and other reimbursements. Employee's prepare their bills and get approval from their respective departmentsheads. Then the bill & pay section makes payment. Accountant prepares payment voucher. The voucher is approved by the head of accounts.
4.7.2 External Payment External payments are usually made against purchase of goods and services. They include office rent, fixed assets supply etc. The supplier/contractor, after performance of the contract, submits bill to purchase department which approves the bill after necessary verification.
4.8 Bill Payment Procedure JGTDSL maintains a system to bill payment. For the payment of any bill, the company must take approval from the authority against bills. Approval are two kinds:
Administrative Approval
Financial Approval
.
.
For passing a bill, at first, it needs to take administrative approval from the Managing Director of the company. After getting administrative approval from the Managing Director, then, it is needed to take financial approval from the authority for financially payment of this bill.
4.9 Reporting Practices of JGTDSL The reporting practices of Jalalabad Gas T & D System Ltd. are of two kinds i.e.
Internalreporting
Annual reporting
they are described below: Internal Report:
Internal reporting is very much important for managerial decision. For the purpose of managerial decision accounting data and information are supplied on monthly and quarterly basis to the officials.
Monthly MIS report.
Monthly progress report.
Monthly statement showing budget and cost center.
Monthly sales.
Monthly revenue collection.
Annual Report:
The company authority is under legal obligation to submit an annual report to the corporation offer the end of every financial year. A scamming of the annual report to the company shows that it contains the following:
Auditors reports.
Balance sheet.
Statement of profit & loss and other comprehensive Income. Cash Flow Statement.
Details of property, plant and equipment.
Statement of budget variance analysis.
Key performance Indicator.
AUDITOR’S REPORT TO THE SHAREHOLDERS JALALABAD GAS TRANSMISSION AND DISTRIBUTION SYSTEM LIMITED For the year ended 30 June 2015
We have audited the accompanying financial statements of Jalalabad Gas Transmission and Distribution System Limited (the company), which comprise statement of financial position (balance sheet) as at 30 June 2016, statement of profit and loss and other comprehensive income, statement of changes in equity, and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management’s Management ’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Financial Reporting Standards, the Companies Act 1994 and other applicable laws and regulations. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatements, whether due to fraud or error; selecting selecti ng and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing. Those standards require that we comply with relevant ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion
In our opinion, the financial statements of the company, prepared in accordance with Bangladesh Financial Reporting Standards, give a true and fair view of the financial position of the company as at 30 June 2016 and of the results of its operations and cash flows for the year then ended and comply with the requirements of Companies Act 1994 and other applicable laws and regulations. We also report that:
1) We have obtained all the information and explanations which to the the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof; 2)
In our opinion, proper books of account as required by law have been kept by by the
company so far as it appeared from our examination of those books; 3) The statement of financial position (balance sheet) and statement of of profit or loss and other comprehensive income dealt with by this report are in agreement with the books of account and returns. Dhaka, Bangladesh S. F. AHMED & CO. Dated, 08 October 2015 Chartered Accountants
JALALABAD GAS TRANSMISSION AND DISTRIBUTION SYSTEM LIMITED
(A Company of Petrobangla) MENDIBAGH, SYLHET Statement of Financial Position (Balance Sheet) as at 30 June 2015 2015
1.
2015
2014
BDT
BDT
Share Capital
704,816,200
449,194,100
Deposit against share (equity)
282,862,486
282,862,486
-
255,622,124
5,724,890,357
5,016,788,901
6,712,569,043
6,004,467,611
53,629,476
63,495,476
184,454,545
184,346,456
238,084,021
247,841,932
2,439,831,140
1,990,658,496
3,675,963
3,607,073
44,962,195
54,699,445
2,488,469,298
2,048,965,014
Capital a an nd re reserve
Capital reserve Revenue reserve
2.
Non-current li lia abiliti tiees
3.
Lo Long ng term term borr borrow owin ings gs – un unse secu cure red d Local
Foreign
4.
Long Long ter term llia iabi bili liti tiees – ot othe herrs
Security deposits-customers (cash and non-cash) Retirement benefit obligations (gratuity) Provision for leave pay
5.
Total non-current liabilities (3+4)
2,726,553,319
2,296,806,946
6.
Total capital employed (1+5)
9,439,122,362
8,301,274,557
7.
Non-current assets
1,571,317,798
1,698,328,071
89,799,020
167,760,026
1,661,116,818
1,866,088,097
5,053,304,527
4,252,724,721
Loan to employees
333,080,055
232,680,416
Inter-company loans
194,172,600
194,172,600
Investment in shares
17,687,000
17,687,000
1,729,642,000
1,465,946,449
7,327,886,182
6,163,211,186
8,989,003,000
8,029,299,283
Property, plant and equipment Capital work-in-progress
8.
Inve Invest stme ment ntss and and ot othe herr a ass sset etss
Fixed deposit receipt (FDR)
Security deposit of customers and contractors (non-cash)
9.
Total non-current assets (7+8)
10.
Current assets
Inventories
251,520,260
202,983,218
Advances, deposits and prepayments
2,980,825,610
2,597,296,580
Trade receivable
2,302,550,454
2,393,281,137
Cash and cash equivalents
1,064,603,254
324,040,084
11.
Total current assets
6,599,499,578
5,517,601,019
12.
Current li lia abil iliities
2,365,456,615
2,045,090,299
Gas transmission charges
43,948,168
45,291,671
BAPEX margin
15,525,831
21,924,313
Deficit wellhead margin for BAPEX
90,424,638
20,409,559
Gas development fund
101,479,898
122,202,382
Group current accounts
68,934,490
87,973,895
Creditors and accruals
358,731,324
336,292,733
9,866,000
10,366,000
79,578,774
70,435,673
6,099,148
5,502,734
Provision for income tax
3,009,335,330
2,480,136,486
13.
Total current liabilities
6,149,380,216
5,245,625,745
14 14..
Ne Nett cu curr rren entt asse assets ts (1 (111-13 13))
450,119,362
271,975,274
15.
Net assets (9+14)
9,439,122,362
8,301,274,557
Gas purchase and price deficit fund
Long term loan current portion Workers’ profit participation fund Provision for doubtful debts
JALALABAD GAS TRANSMISSION AND DISTRIBUTION SYSTEM LIMITED
(A Company of Petrobangla) MENDIBAGH, SYLHET Income for for the year ended 30 June June Statement of Profit & Loss and other Comprehensive Income 2015
1.
BDT
BDT
10,063,585,747
9,458,245,056
377,667,508
286,331,179
10,441,253,255
9,744,576,235
7,367,175,866
6,550,596,008
74,639,774
71,924,313
Gas development fund Deficit wellhead margin for BAPEX
443,779,624 144,493,100
422,202,382 70,409,560
Gas transmission charges
201,427,842
223,304,648
Price deficit fund charges
507,201,395
908,940,500
Operating expenses
464,326,358
447,837,941
12,000,000
12,000,000
596,414
552,788
143,605,006
142,486,335
9,359,245,379
8,850,254,475
1,082,007,876
894,321,760
47,212,852
50,449,490
1,129,220,728
944,771,250
Interest income
477,135,743
471,924,216
Interest expense
(14,781,000)
(7,982,000)
462,354,743
463,942,216
1,591,575,471
1,408,713,466
(79,578,774)
(70,435,673)
Other operational income
Cost of sales
Gas purchases BAPEX margin
Petrobangla service charge Bad debt expenses Depreciation
3.
Operating profit (1-2)
4.
Non-operati tio onal iin ncome
5.
Profit before interest and tax (3+4)
6.
Financial income
7.
2014
Revenue
Gas sales
2.
2015
Prof Profit it befo before re cont contri ribu butio tion n to to wor worke kers rs’’ pro profi fitt participation fund and tax (5+6)
8.
Prov Provis isio ion n for for cont contri ribu buti tion on to work worker ers’ s’ pr prof ofit it participation fund
9.
Pro Profit be befor fore ta tax ((7 7-8)
1,511,996,697
1,338,277,793
10.
Income tax ex expense
(529,198,844)
(468,397,227)
11 11..
Pr Prof ofit it after fter tax tax (9(9-10 10))
982,797,853
869,880,566
4,926,931,369
4,334,278,915
2,503,603
11,871,888
5, 5,91 912, 2,23 232, 2,82 825 5
5, 5,21 216 6,0 ,031 31,3 ,369 69
Contribution to National Exchequer.
(277,200,000)
(289,100,000)
Accumulated profit, transferred to statement of financial
5,635,032,825
4,926,931,369
12. 12.
Ac Accu cumul mulat ated ed prof profit, it, brou brough ghtt ffor orwa ward rd
13. 13.
Prio Priorr y yea ears rs'' adj adjus ustm tmen entt for for expe expens nses es
14 14..
Pr Prof ofit it ava vail ilab able le for for dis distrib tribut utio ion n (1 (11+ 1+12 12+1 +13) 3)
15 15..
Appr Approp opri riat atio ion n Acc Accou ount nt::
position
JALALABAD GAS TRANSMISSION AND DISTRIBUTION SYSTEM LIMITED
(A Company of Petrobangla MENDIBAGH, SYLHET Statement of Cash Flows for the year ended 30 June 2015
2015
2014
BDT
BDT
982,797,853
869,880,566
143,605,006
141,706,040
596,414
552,788
2,503,603
11,871,88
1,129,502,876
1,024,011,282
(48,537,042)
14,489,688
(383,529,030)
(447,151,613)
90,730,683
(77,274,411)
320,366,320
66,659,413
Creditors for gas transmission charges
(1,343,503)
10,414,939
BAPEX margin
(6,398,482)
(130,840)
A Cash flows from operating activities . Net profit after tax
Adjustments for non-cash items: Depreciation Provision for doubtful debts Prior years’ adjustment for expenses Operating profit before changes in working capital Changing in working capital
Inventories Advances, deposits and prepayments Trade receivable Creditors for gas purchase and price deficit fund
Deficit wellhead margin BAPEX
70,015
Gas Development Fund
(20,722,484)
(7,718,050)
Group current accounts
(19,039,404)
865,000)
22,438,591 9,143,101
13,310,803 6,343,009
529,198,844
468,397,227
(9,737,250)
3,219,343
68,890
693,887
(277,200,000)
(289,100,000)
275,454,313
(238,510,970)
Increase in fixed deposits receipts (FDR)
(800,579,806)
(1,283,579,227)
Increase in employee loans
(100,399,639)
(40,070,229)
(16,594,739)
(73,728,640)
77,961,006
29,368,649
-
(25,500,000)
Creditors and accruals Provision for income tax Leave pay Payable for retirements benefit obligations (gratuity) Contribution to national exchequer Net cash flows from operating activities
B Cash flows from investing activities .
Acquisition of property, plant and equipment Payments for capital work-in-progress Inter-company loan
Net cash flows from investing activities
(839,613,178)
(1,393,509,447)
Repayment of long term loans
(10,366,000)
(9,866,000)
Customers and contractors security deposit
449,172,644
324,730,051
(263,695,644)
(257,911,727)
108,089
391,912
255,622,100
-
(255,622,100)
-
(24)
-
Net cash flows from financing activities
175,219,158
57,344,236
Net increases/(decrease) in cash equivalents (A+B+C)
740,563,169
(550,664,899)
Cash and cash equivalents at the beginning of the year
324,040,084
874,704,983
1,064,603,254
324,040,084
C Net cash flows from financing activities .
Customers and contractors security deposit – non–cash Foreign loan ERF Share deposit Capital reserve Adjustments
Cash and cash equivalents at the end of the year
4.10 Users and uses of financial reporting of JGTDSL Being an autonomous service oriented organization. The user and uses of financial reporting of the company are very wide. The users and uses of financial reporting of Jalalabad Gas T& D System Ltd. are summarized in the following: Chairman of the Petrobangla:
Chairman of the corporation uses the financial reporting for the purpose of major decision.
Member finance:
Finance and Accounting department is under the control of member finance.
Financial reporting of the authority is mostly used by the member finance for performance evaluation and managerial decision.
Chief finance and accounts officer:
Chief finance and account officer used the financial report for performance evaluation and decision making.
Government(Ministry of power energy and mineral resources of Bangladesh):
Government is the external user of financial reports. Ministry of Bangladesh government uses the financial reports of the company for the purpose of development budget, loan sanctioning and other decisions.
Board of Directors of JGTDSL:
The board of directors of the companyalso uses the financial reports.
Chapter-5 Knowledge Gained During BBA Program
I am a student of Bachelor of Business Administration(BBA).This program contains 12 semesters including internship.1st to 11th semester deal with educational activities, and 12th semester requires internship. As a student of BBA program,I gained a variety of knowledge through the class lectures,text book,assignment,presentation,class test,quiz,viva,exams etc. While concluding my internship in JGTDSL,some of this knowledge was very helpful which Iapplied in my internship. During my internship,I found this knowledge very essential for practical professional life.
5.1 Principles of Finance 5.1 As a student of Finance,I can see lots of things how these courses applied in company. Finance is a study, that describes how to collect funds at minimum cost and utilization of those funds at maximum return.The key point of finance is the time value of money,which refers to A to A Currency Today Is Worth More Than A Currency Tomorrow. Finance related courses basically helped me by the following ways
In JGTDSL,all ratios like current ratio,quick ratio,receivable turnover,profit margin,Earnings Per Share(EPS) etc. I learnd from Finance related courses.So it was easy to understand,how these courses are applied in JGTDSL.
In Finance course,I learned about deposites, loans, accounts etc.
When I joined the JGTDSL,I wrote many cheques,bills.I learned how to write different cheques like bearer cheque, crossed cheque etc.
5.2 Principles of Accounting In the Accounting courses,I broadly understand the accounting system and procedures of my organization.The Accounting is essential to business,and has been called the ‘Language of Business’ because it is the means by which business communicates their activities to investors,creditors and other stakeholders. Accounting that provides information to people outside the business entity is called Financial Accounting. Cost Accounting is the process of collecting,analyzing,summarizing and evaluation various alternative courses of action. Management Accounting is concerned primaryly with providing a basis for making management or operating decisions.
In my Company,all the transactions are maintained by double entry system,which I learned broadly in my accounting related courses.So it was very easy to understand,what side should be debit and what side should be credit,when a transaction is occurred.
I have learned different types of statements in my Accounting courses,those knowledges gave me an advantage in making the Journal,Ledger,Trial Balance and Balance Sheet of JGTDSL.
Bank reconcile is an important segment in any organization,The intermediate Accounting course helped my to understand the Bank Reconcilation of different sections of JGTDSL.
5.3 Principles of Marketing In the BBA program, I have completed two courses of marketing named ‘Principles of Marketing’ and ‘Marketing Management’.These two courses teach me how to behave with
clients/consumers that I performed my internship.Marketing courses basically helped me by the following sectors
In marketing courses,I broadly learned that every business or organization has some products or services.So when I joined JGTDSL,it JGTDSL,it was very easy to me to find out what kind of services are available in JGTDSL.
I learned about different types of customers in my academic courses.As JGTDSL is a different types of organization, its customer category is also different.
5.4 Principles of Management In this course I have learned about different management principles e.g planning,organizing,leading,controlling.Having planning,organizing,leading,controlling. Having a firm grasp of the principles helped me analyzing the issues the planning dept. faces,the chain of command,and the alternative courses of actions etc. The management courses helped me by following ways
In my academic courses,I learned deeply how to manage human resources,how to motivate their performance etc. So when I was joining in JGTDSL,I saw that there were so many types of motivation program,trianing program arranged by managing committee.My academic knowledge here to understand the main objective of those programs.
5.5 Principles of Economics The theory of supply and demand is an organizing principle for explaining how prices coordinate the amounts produced and consumed.The law of demand states that,in general,price and quantity demanded in a given market are inversely related.That is,the higher the price of a product,the less of it people would be prepared to buy of it.As the price of a commodity falls,consumers move toward it from relatively more expensive goods.
5.6 Organizational Behavior The course named ‘Organizational Behaviour’ was included in the syllabus of BBA program.Organizational Behavior is a field of study that investigates the impact that individuals,groups and structures have on behaviour within an organization.This course helped me on developing an understandung of practical implications of various theories of human behaviour at work.This course also helped me identifying the various personality traits through observation and dealing in a appropriate manner with them,working as a team member.This course played a vital role in my internship.This course taught me
How to behave formally within an organization.
How to express feelings in an organization.
Leadership,motivation,teamwork.
Different personality issues.
5.7 Business Communication The study of Business Communication teaches me about the communication channels,how to interact with customers,negotiate with suppliers etc.I applied that knowledge to understand the communication channels of JGTDSL.
5.8 Business Research The Business Research course has been the most useful course while preparing this report.Right from the observational study,collecting primary data,analyzing secondary data,taking formal and informal interviews Business Research course has helped throughout the whole period.Following the ways in which I got benefited the most
Data collection (Primary & Secondary).
Selecting relevant and legal data sources based on the purpose of the report.
Maintaining the proper guidelines of the report.
Filtering and interpreting the collected data on the basis of need.
Using right information in right place.
5.9 Banking and Insurance The course Banking and Insurance is an important course in Finance.I learned many important things from this course and I applied my academic knowledge acquired from BBA program.I also knew about the loan and advances from the course.I also learnt the types of cheque,features of cheque which was very essential information for me,as an intern.I learnt the apparent tenor of a cheque which are date, sum payable(both in fig. and word),signature,payee.Without these four things cheque are not be considered as valid.I applied these knowledge in JGTDSL while writting cheques.
5.10 Computer Application During the BBA program we had a course named ‘Introduct ‘Introduction ion to Computer’,where I learnt to use different types of computer applications.Besides this course during BBA, I learnt to use different types of computer applications and softwares from our teachers like- MS Excel, MS Word etc.These helped my tremendously in my internship period.
Deviation of Practical Working Experience from Theory Theoretical knowledge is only the bookish knowledge and practical knowledge is the implementation of that theoretical knowledge in the working place. In working place I didn’t get a huge deviation between theoretical and practical knowledge. In the time of studing, I thought that the activities are more difficult but when I was in internship for three months,though I felt difficulty at first but after a few days,I realized that practical knowledge is easier than the theoretical knowledge.Practically,I could complete almost all the task easily.
Chapter--6 Chapter Each Task Completed During Internship Program
6.1 Nature of The Job Working in JGTDSL as an intern was the very first opportunity for me to acquire practical knowlegde about company.I joined my internship on 1st Sep,2016. It was a tre tremendous mendous journey for me to go through through the actual experience of company. As an intern of JGTDSL,I had experienced of so many new things. I came to know actual works of company officers and observed how the works are being done according to serve the public properly.
6.2 Overview of JGTDSL
Jalalabad Gas Transmission & Distribution System Limited (JGTDSL). Gas Bhaban,Mendibahg,Sylhet-3100,Bangladesh. E-mail Address-
[email protected] Website Address- www.jalalabadgas.org.bd Phone No. 0821-717092, 01711-401557 6.3 Specific Responsibilities of the Job: During my internship period I got a chance to do work on Bill & Pay Section,Bank & Cash Section. During my intern period, I have learned about the necessary documents which are related with bills.The duties I have performed are given below-
6.3.1 Filing Filing all types of documents including individual documents of each employees, utility bills etc.
6.3.2 Preparing vouchers Prepare all vouchers including cash voucher, bank vouchers and journal vouchers for internal transaction, transfer or any other provisions.
6.3.3 Utilities bill payment Meet up utilities bill like electricity, water, telephone, internet, newspaper, fax paper etc.
6.3.4 Client data entry or edit in software Input all the required information of clients in software.
6.3.5 Registering All kind of bills recording in register book which includes the bills of parties and employee’s TA/DA bills. Separately recording the vat, tax and net amount of bills.
6.3.6 Bank Reconciling Matching the amount of balance remaining in our bank account with our office ledger.
6.3.7 Posting in ledger Posting of employees’ medical allowance, festival allowance retirement allowance etc. in ledger.
6.3.8 Scanning of different documents Scanning different types of documents.
Chapter:7 Chapter :7 Findings, Recommendations and Conclusion
.
7.1 Findings
The company create a large number of employment facilities for own country citizens.
The company maintains Corporate Social Responsibility (CSR). During the FY 201415, the company had a budget allocation of Tk.30.00 lac for Corporate Social Responsibility (CSR) of which, a total of Tk. 13.00 lacwasspent for financial assistance to different religious, educational and autistic institutions during the year under review.
The JGTDSL follows several Finance related software's to perform their daily activities and periodic financial reports. They use software against salary, inventory and financial statement related works.
The JGTDSL maintain its accounts with eight sections, because of its complicated system sometimes it causes hamper to prepare financial report properly.
Earned a high amount of interest from ideal money and public bank got priority to collect FDR from the company ideal money.
Net profit after tax is increased in both financial year, balance transferred to the balance 5,635,032,825 5,635,032,825 and 4,926,931,369 4,926,931,369 are simultaneously.
Net asset is increases in financial year 2015 and 2014, which is 9,439,122,362 9,439,122,362 and 8,301,274,577.
Net profit before taxes is increasing in current financial year.
Manpower shortage in one of the major problems of Finance & Accounts department.
JGTDSL maintain both manual and computerized systems to perform its regular activities.
The JGTDSL maintain its register books (TA/DA register, utility register, cheque register, loan register, final settlement register, miscellaneous register etc.) manually which is very time consuming, risky and too much hard work to find out the different categories of these register books.
7.2 SWOT Analysis SWOT analysis is a strategic planning tool to evaluate the strengths, Weaknesses, Opportunities and Threats involves in a project or business venture. It involves identifying the internal factors that are favourable and unfavourable to achieve the objectives. The aim of the SWOT analysis is to identify the key internal factors (Strengths, Weaknesses) which are controllable and external factors (Opportunities, Threats) which are uncontrollable. SWOT analysis of the project is given bellow.
A) Strengths
Existing manpower are very expert.
Provide core service to the customer.
Higher economical value.
(If consumers are willing to buy a good, it implies that the customer Places a higher value on the good than the market price)
Socio- economic development.
Use of locally produce pipe than foreign.
State owned company.
Government got a large amount of tax.
Public Bank got priority to collect FDR from the company ideal money.
Contribution fund to national exchequers.
Profit distribution to intercompany employer.
Create a large number of employment facilities for own countries citizens.
B) Opportunities
Increasing number of consumers.
Exploration of new gas field in Sylhet area.
Large number of CNG filling station.
Supplier Company very near.
Profitable company.
Improve net profit margin.
Interest earned ratio is very higher.
Government policy.
Monopoly market.
Large market area.
Geographical location.
Got available fitting materials locally with cheap price.
Coverage/Provide gas different large industry. (Such Tea Estate, Power plant, Lafarge Cement Factory, Fertilizer industry, Ceramics factory etc.)
C) Weaknesses
Lower rate of return.
Rising cost of goods sales.
Interest coverage cost in increasing.
Project cost is higher than the benefit.
Long transmission line.
Machinery is expensive.
Maximum machinery has to input foreign country.
Has to provide large amount of transportation cost.
Has to empower foreign engineer.
Fund collection period is very weak.
Current and quick ration is decreasing than previous year.
Higher budget expenses.
C) Threats
Exchange rate movement
Natural disaster.
Non-available of materials
Declining natural resources
Alternatives product of fuels.
7.3 Recommendations
Fund or service collection period should be shorter.
To make control functions effective in the JGTDSL the number of qualified and trained personnel should be increased to the optimum.
Proper training should be conducted for the executives to improve their professional standard. As a result, they will be able to perform their activities in a more efficient way.
Legal system should be made adequate and quick in order to deal with the problems of overcome.
The board of director of the company should come forward to ensure good governance through transparency and accountability.
In order to ensure transparency in financial transactions JGTDSL should develop procurement guidelines to ensure optimum usage of company's company's financial resources.
JGTDSL should install more financial software's and other necessary software's to make its activities moreeasier than before.
More upgrade PC should be given to the company accounts for better functioning.
Luxurious budget should be minimized.
7.4 Conclusion From the preceding discussion it is clear thatoverall system has over the years and has now taken a concertshape. The authority has put in efforts to modernizes the system. Demand for the natural gas is increasing day by day from the different sector of the society. So, there is a strong need for transmission and distribution system to transmit and distribute gas from natural sources to fulfill demand and Jalalabad Gas T & D System Ltd. plays a crucial role in it. As the JGTDSL is state owned, doing monopoly business in Sylhet divisional area. The company is growing profit in every fiscal year and growing contribution to national exchequer, also rising the total capital employed. In the Finance and Accounts department of JGTDSL go through planning to investment for short-term FDR, all kinds of companies and project revenue collection, issuing cheque for customer and companies different kinds of expenses, maintain cash inflow and outflow, making budget for internal expenses, maintaining s store ledger an preparing required financial statements. Throughout the report, I tried to introduce Jalalabad Gas Transmission and Distribution System Ltd. and the overall activities of the JGTDSL. For doing this report, I can relate my theoretical knowledge to practical work. It was an honor for me that I have worked as an intern in a reputed organization like Jalalabad Gas Transmission and Distribution System Ltd. Finally, I think this report will help to know the Jalalabad Gas Transmission and Distribution System Ltd. and financial system of the company.
Appendix-1 Acronyms:
BOGC: Bangladesh Oil & Gas Corporation T & D: Transmission and Distribution JGTDSL: Jalalabad Gas T & D System Ltd. DCO: Department Coordinator Officer MIV: Material Issue Voucher EPS: Earning per Share SWOT: Strengths, weaknesses, opportunities, and threats MTV: Material Transfer Voucher MIS: Management Information System FASB: Financial Accounting Standard Board GAAP: Generally accepted accounting principles FDIC: Federal Deposit Insurance Corporation.
Appendix-1
References
Annual Audit Report-2012, 2013, 2014 and 2015 of Jalalabad Gas.
Madura, J (2008), Financial Market and Institution. USA: Thomson South-western.
Stanley, B. B., & Geoffrey, A. H. (2008-2009). Foundation of Financial Management. International: McGraw-Hill.
Website
www.jalalabadgas.org.bd http://www.investopedia.com/terms/p/price-earningsratio.asp http://www.investopedia.com/terms/p/price-earningsratio.asp http://www.investopedia.com/terms/p/payoutratio.asp http://www.investopedia.com/terms/p/payoutratio.asp http://www.investopedia.com/terms/t/totaldebttototalassets.asp http://www.investopedia.com/terms/t/totaldebttototalassets.asp http://www.investopedia.com/terms/d/debtequityratio.asp http://www.investopedia.com/terms/d/debtequityratio.asp http://www.investopedia.com/terms/a/assetturnover.asp
