Internship Report On

LESCO (Lahore Electric Supply Company Limited)

Submitted by:

Class:

LESCO

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Acknowledgment
No one can say that I am perfect, everyone should admit that without the help of ALLAH
and His people a man cant get anything so I bow my head before almighty Allah with gratitude.
I am also very much thankful and presents salute to many individuals who have helped me in
shaping this report .I am also very much thankful to lot of former fellows and contemporary
colleagues who took the time and trouble during the last few days to speak to me about the way
this text could be further improved. I have no words to express my gratitude to my advisor BZU
Business Administration for intellectual guidance without which it could have been rather difficult
for me to complete this report.

I am also very thankful to the staff LESCO (Lahore Electric Supply Company Limited)
Office Of Chief Financial Officer and especially to every Department where I worked who
provided me an opportunity to work in friendly environment.

LESCO

Page 2

Executive's Summary
"Lahore

Electric Supply Company is building its future upon a foundation of strong core values.

As electricity industry undergoes massive change, our success will come from respect for people,
uncompromised commitment to safety, quality customer services and support for the
communities we serve. Through public-private partnerships, that reflects these values; Lahore
Electric Supply Company looks forward to grow in this era of unprecedented opportunity. I
invite you to learn more about LESCO's vision for the future and contribute through your valued
suggestions. We trust you will find our internet site interesting and informative."
MISSION STATEMENT
As the leading electricity distribution company, strive to provide un-interrupted electric supply
and quality service to all customers at the minimum possible cost.

VISION

Achieve and maintain the highest degree of efficiency, reliability and responsiveness as a

public service organization for variety of customers.

Public and company workers safety shall be high on our priority.
Retaining and growing our business, staff and customer base will be of primary

importance.
Developing innovative business relationships both inside and outside our local
distribution area will be key to our success.

Goals

Smooth and consistent flow/supply of electricity.

Prompt restoration of disrupted electricity supply.
Accurate and timely meter reading and billing.
Provision of electricity connection in minimum time.
Open door policy to facilitate our customers.
Special concessions for quick and timely payment of bill.
Availability of stores to deal with emergencies.
Feedback through Customer Services Centers.

Table of Contents

LESCO

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Acknowledgement

02

Executive's Summary

03

Company & Department Introduction

05

My Activities & Learning

07

Application of class room learned in Org

14

Financial Statements

15

SWOT Analysis

24

PEST Analysis

24

What has internee Learn in the

26

organization

10

LESCO

27

Suggestion

Page 4

Introduction
The environment and structure of the power industry throughout the world are undergoing
dramatic change. The power sector is moving from monopoly to privatization and from
integration to disintegration. To keep pace with this change, the Government of Pakistan
approved a Strategic Plan in 1994 as a consequence of which the power wing of WAPDA has
been unbundled into 12 Companies for generation, transmission and distribution of electricity.
In December 1998, the WAPDA Act was amended, which allowed the creation of Pakistan
Electric Power Company (PEPCO), and unbundling of WAPDAs Power Wing into: Eight (8)
distribution companies (formed from existing area boards); three (3) generating companies
(comprising 11 of WAPDAs generating plants); and National Transmission and Dispatch
Company (NTDC).
Various Regions of WAPDA were performing the local areas electricity distribution service.
Then the Area Electricity Board (AEB) Lahore, on the eight AEBs in Pakistan, was established
under the scheme of Area Electricity Boards in 1982, in order to provide more autonomy and
representation to provincial government, elected representatives, industrialists, agriculturalists
and other interest groups in functions of the AEBs.
Lahore Area Electricity Board was reorganized into one such corporatized entity under the name
of Lahore Electric Supply Company (LESCO.) with effect from 22-03-1998, with the aim of
commercialization and eventually privatization.

LESCO

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Department Introduction
Pension Department:
1. Retirement and resignation of service
2. Preparation of Pension Papers
3. Actively supervise and coordinate the working of all Admin staff posted under LESCO
4.
5.
6.
7.
8.

HQ
Establishment matter relating to Technical / non-technical staff
Establishment matter of officer regarding training and development.
Permission of higher education to all employees under LESCO
Permission to employee for another job
All establishment matter not covered here

Budget & Escrow:

Budget:
In Budget department they get budget demand from every Division. After getting Budget
Demand they prepare budget for every Division then they allocate budget for division with head
wise. They issue budget in July for every Company by Office and Head wise.

Escrow
A financial instrument held by a third party on behalf of the other two parties in a transaction.
The funds are held by the escrow service until it receives the appropriate written or oral
instructions or until obligations have been fulfilled. Securities, funds and other assets can be held
in escrow.

Finance Directorate:
Major Responsibilities of Finance Director

The Finance Director has overall responsibility of Finance Department. He is Financial

Advisor of the Company. He assists management in Strategic Management decision
making. He controls all financial activities of the Company.

He has additional responsibility of Company Secretary.

LESCO

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ACTIVITIES OF FINANCE DIRECTORATE

The major sections, responsibilities and activities as per new Organogram given by PEPCO
under Finance Director's control are as under:
Sr. No
1

Section

Corporate
Accounting

Responsibility
Manager Corporate Accounting

Corporate Planning & Manager Finance (CP&C)

Control (CP&C)

Head Quarter
Accounts

Dy.Manager A/cs (H/Q)

Field Formation A/cs

Dy.Manager A/cs (F.F)

Activity
Corporate Accounts
Administration
Payroll
Corporate Planning &
Control
Costing/Pricing
Budgeting
Loan Management
Imprest Banking
Pension & Funds
Audit Observation
Reply
Pre-Audit &
Payments
IOT Reconciliation
Receivables/Payables
Fixed Assets Register
Accounts
Consolidation &
Financial Reporting

Payment Section:
Payment section is the customer relationship department that How we get bills. We
have two types of payment of billing.
Billing System
Online Payment System

LESCO

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My Activities as Internee
As internee I worked in different departments in specific period which I mentioned
Sr. No

C.F.O office (Section)

Period

Pension

25-06-2015 to 20-07-2015

Budget & Escrow

21-07-2015 to 29-07-2015

CP&C

30-07-2015 to 10-08-2015

Payment

11-08-2015 to 13-08-2015

1. Pension
In this I got lot of knowledge about the Pension fund which is provided by the government of
Pakistan. Whole staff is cooperative and friendly. In this department they allot the pension to the
employee of LESCO and other companies which are working under LESCO. Whole work of
pension is manual. They check the all data of the employee and different officer work on it.
Miss Niala:
Shes the lady who made the pension case of the employee according to his record. After
completion of the case then the file of employee is transfer to next officer which is
Mr. Bukhari:
He is the person whos made the amount of pension according to the scale of the employee. He
made the amount according to Government Law which is every year changed with increment.
Then the file is Transfer to next officer.
Mr.Nadeem:
His responsibility is to check the whole case that is properly made and amount is made according
to law and sign on it.

LESCO

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This is the procedure of the pension allotment to the employees and other companies which are
working under them. In this department they also collect the voucher of all companies because
the LECSO sale electricity to the different companies which are

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)
Karachi Electric Supply Company Ltd.
(KESC)
National Electric Power Regulatory Authority (NEPRA)
Pakistan Electric Power Company (PEPCO)
NATIONAL TRANSMISSION & DESPATCH COMPANY (NTDC)

These companies buy electricity from LESCO and give payment to the LESCO thats why they
get the voucher every month from these companies and the collecting the voucher responsibility
on MR.SHAHBAZ KHAN who is the Assistant manager and he put all the data on the Excle and
gives the report to the upper Authority.

2. Budget & Escrow section

In this section I get information about Budget and Escrow. Every person of this section
cooperates with me and gives full information.
Budget:
Mr. Naveed tells me what we do in Budget Section and how we allocate the Budget for the year.
He tells me that we get budget demand from every Division. After getting Budget Demand we
prepare budget for every Division then we allocate budget for division with head wise. We issue
budget in July for every Company by Office and Head wise.
In this section there are two types of Budget which are
1) Capital Budget
2) O&M (Operating & Maintaining Expenses)
In Budget Section we deal with only O&M Budget.
LESCO

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Control Budget:
This section also controls the budget that every Company is working in their budget or out of
budget. For this purpose every company gives us a statement which is known as Budget and
Expenditure Statement every month.
Additional Fund Demands:
This demand is comes from any office that we need additional fund. They send us Additional
Fund Acquisition with full detail of funds. After that we check that this fun is within the budget
or out of budget. If this fund is within the budget we give the certificate which is known by the
name Budget Certificate. Giving budget certificate we send this demand to CP&C section for
payment.
Escrow:
This is the main revenue account. Every consumer pays their bills in Banks. We have 50 plus
Banks a/c. But our main revenue a/c is in HBL Peco Road Branch. When all consumers pay their
billing their Banks branches then all Banks transfer payment to our main revenue a/c. Two a/c
are used after transfer the payment in Escrow.
1) CPPA (Central Power Purchasing Agency)
2) Allied Account
CPPA (Central Power Purchasing Agency):
This a/c is of that company where we purchase electricity. Only needed amount we kept in the
Escrow and other is transfer to that a/c.
Allied Account:
After transfer payment to the CPPA other remaining amount transfers to Allied a/c. When we
transfer payment from Escrow to Allied a/c we use Latter for this procedure that is called
Retention of Fund. On this procedure two authorities sign on it 1 st is CFO and 2nd is Dy. Manager
Finance. Without their signs this procedure cant works
LESCO

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In Allied a/c we used three a/c for further expenses which are as

1) PPPP (Power Purchase Price Payment a/c):

This account is used for LESCO because if LESCO buy electricity from other company except
CPPA then they give payment from that a/c.
2) Taxes and Duties a/c:
From this a/c we pay to different taxes and duties like as Income Tax, GST (General Sales Tax),
NJS (Neelam Jehlum Surcharge), TV licenses fee, Refund of GST to Supplier.
3) Distribution Margin a/c:
To run and maintain the LESCO Company all payments are made by this a/c which are Salaries,
Pension, Day to day expenses. But in that a/c only expenses are kept not transfer to related
expense a/c for transfer payment for expense we use another a/c which is called General a/c.
Transfer money from Allied to General a/c we use Latter for this procedure that is called Transfer
of Fund.
We maintain Cash Book on daily basis and we made LPS (Ledger Posting Summary) and BRS
(Bank Reconciliation Statement) at the end of month.

3. Corporate Planning and Control (CP&C):

To receive the budget requirements from different formations of LESCO and consolidate

the budget on the basis of activity level.

To prepare and present the budgeted P&L and Balance Sheet to the Finance Director for

the approval of Authority & Board of Directors.

Allocation of annual budget on the basis of activity i.e., Area, No of consumers, No of

transformers and No of Vehicles.

Monitor the budget with actual results on the basis of variance analysis
Close liaison with Financial Module group of WAPDA and prepare the Financial Model

of LESCO on the basis of prehistoric data and different indicators.

Development of monthly management accounts reporting system covering Financial,

Operational and other efficiency / performance indicators of the company

To assist Finance Director in Board of Directors meetings and AGM

LESCO

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Any other Job assigned by the Finance Director or Chief Executive.

4. Payment Section
Billing System

Data Preparation system.

Electricity billing of 3.92 million consumers
Electricity bills are available on LESCO Website. Also web based bills are acceptable for
bank collection

Online Payment System

Payment Channels

Payment using Bank Alfalah Credit Card. LESCO, in collaboration with Bank Alfalah,
has started the service of bill payment through credit cards for the convenience of its
customers. The collection data is submitted by Bank Alfalah to LESCO servers on daily

basis.
Payment using NADRA, has also started the service of bill collection using NADRA
kiosks machines, NADRA Swift Centers and NADRA Franchises. The collection data is

submitted to LESCO server on daily basis.

Payment using Mobilink (Gene) through mobile phone with KASB Bank as financial

entity. The collection data is submitted by Kasb Bank to LESCO servers on daily basis.
Payment using 1-Link consortium having 16 banks through ATMs, Web Banking and
Call Centers etc. The collection data is submitted by Abn Amro Bank to LESCO servers

on daily basis.
LESCO bill Payment Software executed at 750 online bank Branches and Post offices.

Customer Account on Company Website

The billing and receipt data is uploaded to the online server whenever it experiences any change.
Consumers are able to access true online services at the company website, which include the
following.

Viewing monthly bills.

Printing duplicate bills.
Payment confirmation.

LESCO

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Consumption and Payment History.

Account Status.

Benefits of Machine Readable Bill Collection System (MRCBS)

MRBCS offers a win-win situation for all the three stakeholders.

For LESCO

Reduced time gap between collection and posting to customer account

Instant recovery analysis & timely remittance processing
Easier stub data entry, reporting & reconciliation
Overall reduced cost of collection processing & cash posting
Boost to overall image of the company
Improved customer service

For Customers

Much less time for making payments at banks

Ease in obtaining duplicate bills
Can use company website to
Confirm payment made
View & print electricity bills
Retrieve consumption & payment history
Check account status

For Banks
Much less time required for receiving bills

Data consolidation on a utility company provided system

Effortless scroll and report generation
Reduced cost of bill collection

Application of class room learning in Organization

My internship is in government department and thats why their style of management is
DEMOCRATIC. Because every person is responsible for his work and he try to complete work
on time because if the work is not done on time than the higher Authority put pressure on them

LESCO

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by insulting. If the work is done on time then there is no reward and they say this is your
responsibility to complete work on time.

Democratic
The manager consults their team before making decisions, while still maintaining overall control.
Team leaders decide how tasks will be addressed, and who will perform them, while never losing
sight of the fact that the manager bears ultimate responsibility.

Financial Statements

LESCO

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LESCO

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LESCO

Page 16

LESCO

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Cash Flow Statement (2009 - 2014)

For the year Ended 30th June
2014

LESCO

2013

Page 18

2012

2011

2010

2009

M.
Rs.

Profit/(loss) for the year

M.
Rs.

M.
Rs.

M.
Rs.

M.
Rs.

11,02 13,77
27,17 1,595 6,490
0
1
4

M.
Rs.

-151

Adjustment for non cash

charges & other Operating
Expenses
Depreciation

2,201

1,987

1,790

1,553

1,673

1,165

Amortization of Deferred Income

(931)

(856)

(752)

(658)

(626)

(486)

Provision for Retirement Benefits 5,805

5,283

4,786

3,364

3,341

3,137

(384)

(274)

84

403

Income from Non utility

Operations

(504)

(315)

Worker's Profit Participation Fund

580

725

Profit On Bank Deposits

(1,198
)

(840)

Financial Charges

518

593

108

323

178

257

Provision for Bad Debts

2,207

1,392

1,170

346

(150)

1,542

8,678 7,967 6,719 4,736 4,820 5,613

Cash generated from
operating activities before
Working Capital Changes

19,69 21,73
11,30
20,45 6,331
5,462
8
7
9
5

(Increase)/ Decrease in
current assets
Store & Spares

LESCO

(148)

182

Page 19

(683)

(537)

(495)

(239)

Trade debts
Loan, advances and other
receivable

(6,895
6,756
)

(10,80 (4,770 (7,303 (1,969

0)
)
)
)

(14,01 (31,49 (6,845

5)
8)
)

12,38
8

(19,74 (10,91
7)
2)

Increase in current liabilities

Short Term Loans

Creditors, accrued and other

liabilities

8,234

6,622

40,80
1

(10,02
4)

24,22
9

9,153

Effect on cash flow due to

working capital changes

(12,8
24)

(17,9
38)

22,47
3

(2,94
2)

(3,31
6)

(3,96
7)

cash Flow Generated from

operating activities

6,874 3,799 2,018 3,390 7,993 1,495

Pension Benefits Paid

(1,757 (1,516 (1,073

)
)
)

(770)

(597)

(522)

Financial charges paid

(627)

(112)

(557)

(393)

(112)

833

2,063 7,003

Net cash Flow Generated

from operating activities

(68)

4,490 2,215

861

Cash flow from Investing

Activities
Fixed capital expenditure
incurred

(4,820 (5,006 (6,233 (6,426 (5,521 (6,461

)
)
)
)
)
)

Long term advances

(77)

14

Long term deposits

0.04

(0.48)

Bank Profit Received

1,149

857

LESCO

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(9)

(8)

(0.002 (0.004
(0.03)
)
)

(24)
0.01

Net cash Used in Investing

activities

(3,74
8)

(4,13
5)

(6,24
2)

(6,43
4)

(5,51
6)

(6,48
5)

Increase in Redeemable Capital

Increase in Deposit for Share

Proceeds of long term loan

241

861

1,458

1,524

2,258

2,781

Repayment of long term loan

(662)

(238)

(233)

(233)

150

(23)

Receipt against deposit work

4,440

3,826

4,337

2,841

872

859

Amount paid/ Received against

Sukuk Bonds

(4,180
)

(820)

(2,000
)

950

Security deposits

906

850

846

837

934

710

Cash Flow From Financing

Activities

Net cash generated from

Financing activities

4,925 5,299 2,228 4,149 2,213 5,277

Net cash (Decrease)/

Increase in cash and cash
equivalents

5,666 3,378

(3,18
0)

-222

3,700

-347

Cash and cash equivalents at 12,86

12,66 12,88
9,484
9,186 9,534
the beginning
2
4
6
Cash and cash equivalents at 18,52 12,86
12,66 12,88
9,484
9,187
the end of year
8
2
4
6

LESCO

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Profit and Loss Statements (2009 - 2014)

June 30,
2014

June 30,
2013

June 30,
2012

June 30,
2011

June 30,
2010

June 30,
2009

M. Rs.

M. Rs.

M. Rs.

M. Rs.

M. Rs.

M. Rs.

Revenue from
Electricity

224,244

192,997

152,653

135,716

127,903

90,466

Amortization
of Deferred
income

931

856

751

658

626

486

TOTAL
REVENUE

225,175

193,853

153,404

136,374

128,529

90,952

Cost of
Electricity

195,903

163,053

167,897

125,219

113,478

82,197

Other
operating cost
excluding
depreciation

19,565

16,589

14,080

10,950

9,446

10,304

Depreciation
on operating
fixed assets

2,201

1,987

1,790

1,553

1,673

1,165

217,669

181,629

183,767

137,721

124,597

93,666

Operating
Profit/(Loss)

7,506

12,224

(30,363)

(1,347)

3,932

(2,713)

Add: Other
Income

4,612

2,864

3,299

3,349

3,139

2,819

YEAR
ENDING

REVENUE

OPERATING
COST

LESCO

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Profit/(Loss)
before
interests &
Tax

12,118

15,088

(27,064)

2,002

7,071

105

Financial
Charges

518

593

110

323

178

257

Worker's
Profit
Participation
Fund

580

725

84

403

Provision for
taxation

1,098

1,317

110

407

581

257

11,020

13,771

(27,174)

1,595

6,490

(152)

Less:
Financial
Charges

Profit /(Loss)
for the year

LESCO

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SWOT Analysis of LESCO

Strengths

The most important factor which shows strength of LESCO is monopoly.

A large no of customers the company has its own is also strength of LESCO.

Weakness

Corruption is the most and major part that reflect the weakness of this organization.

There is no enhancement in modern technology.

The management performance is not proper.

Opportunity

If the company invests more and more so, there is big opportunity for the organization.

The company another opportunity is that to capture a new area such as countryside area
etc.

Threats

The entrance of new companies in the external environment is the threats of that
company.

The main source to get the electricity is WAPDA who is facing a lot of water crises which
is the source to generate the electricity.

PEST Analysis of LESCO

Political Factor
The government has already transferred governance of DISCOs, three GENCOs, and the NTDC
to new boards of directors and management. The authorities have given commitment to building
LESCO

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the institutional capacity of the Water and Power Development Authority (WAPDA), and begun
to strengthen WAPDA's financial capacity by allowing the tariff to incorporate capital investment
plans. The government also assured that it will ensure timely payments by CPPA (G) for all
power purchased from WAPDA Hydel. The government has included several DISCOs in
privatization plans with the goal of privatizing three of them in the next fiscal year. The
government has begun the process of introducing competitive pricing and direct contracting
between power producers and wholesale customers in the power sector.

Economic Factor
The construction stage will face negative impacts in form of dust, smoke and noise on account of
employment of vehicles, machinery and equipment. The generation of construction waste, solid
waste and oil spills/seepage will have negative impacts on land and air resources. Further, the
stringing process will involve traffic congestion at Saggian grid station site. All such impacts are
temporary and are of minor nature. The mitigation measures have been suggested in the EMMP.
The project operation phase will come across issues such as clearance of ROW, leakage/seepage
of transformer oil, generation of noise from transformers and waste management. These are
reversible impacts and accordingly mitigation measures have been given in the EMMP.

Social/Culture Factors

The project affectees should be compensated for the loss of their assets and livelihood

according to the provisions of the Resettlement Policy Framework.

The land should be purchased at negotiated rates between the owners and the LESCO.
Compensatory plantation should be made in lieu of removed trees.

Technological Factor
Technology is a major macro-environmental variable which has influenced the development of
many of the Lesco. The new technologies benefit both customers and the company: customer
satisfaction rises because services can become more personalized. Because the Supply of
electricity is proper and the cost of electricity is low. Lesco use the old way to produce electricity
and this way is very costly as compare to Ne w Technology.

LESCO

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What has internee Learn in the organization?

During my internship I learn lot of things means how to deal with others according to post. Each
department where I spend my internship period give different types of lessons which are
Learn more about yourself.
Through my internship, I gain clarity on my strengths, weaknesses, and interests. Equally
important, I also learn what I doesnt enjoy doing.
Increase my professional confidence.
I confront and overcome the fear of the unknown that i may have about what its like to work
in a professional.
Improve my communication skills.
The #1 skill employers look for in job candidates is strong communication skills. By interacting
with others in a professional environment during my internship, I got many opportunities to
become a better communicator and I improve my communication skill.
Develop better work habits.
Through my internship, I learn how to manage tasks/projects and learn how to carry myself in a
professional environment. I also learn from my colleagues by observing their positive and
negative work habits.
Collect professional references.
By doing great work in your internship, you can impress bosses and generate a group of people
willing to endorse you to potential hiring persons in the future.

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Suggestions
Create a strong team environment
Strong employee engagement is dependent on how well employees get along, interact with each
other and participate in a team environment.

Trust
Employees need to trust each other as well as their leadership. Employees are constantly
watching leadership to see how their decisions affect the strategic direction of the organization
and if their behaviors reflect what they say.

Give immediate feedback

Feedback is two way communications. It is the opportunity to share opinions and find solutions.
Too many managers think should be the province of the annual personnel revue. Its not. It
should be a daily occurrence.

Collaborate and share on problem-solving

When employees get the idea that their manager or leader is the one who has to solve all the
problems, it takes away from their sense of empowerment, and ultimately is likely to decrease
engagement over time. Encourage team members to take responsibility, and work through
problems or issues on their own, or collaboratively. Its not the managers job to fix everyone
elses problems.

Incentives
Incentives that are matched to accountability and results. Managers who want their employees to
be engaged recognize that incentives must be allocated based on objective criteria and that
different employees are motivated by different things.
LESCO

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