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ACKNOWLEDGEMENT

I am grateful to “Al mighty ALLAH” who gave me all the strength, courage

preservation and patience to finish my Six weeks of Internship Program at

SSGC and in achieving my task fruitfully.

I would like to take this opportunity to formally thank Mr. Shuja (Assistant

Manager Finance), Mr. Murtaza Shaiekh (Gernal Ledger Section), Mr. Shamim

& Mr. Nadeem (PayRoll Section) for providing their immense support and

unwavering guidance during conduct and completion of this internship report

on SSGC and it became possible for me to complete this work within short

time.

I would specially like to thank Mr. Shuja Shiekh (Assistant Manager Finance),

for his constant support and guidance and for solving all my queries during the

course of my internship. It was because of his motivating & encouraging

efforts that I have been able to explore the practical world in a very

professional manner and to understand different legal ordinance beyond the

requirement of my internship.

Last, but not the least, our fellow internees. They have been remarkable in

lending me support and encouraging me in my work. A lot of people helped in

one way or the other but there are a few people who deserve special mention

here. I would take this opportunity to thank Farhan, Majid, Basheer & Ilyas

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ABOUT SUI SOUTHERN GAS COMPANY ......................................................... INTRODUCTION .......................................................................................................... 04 HISTORY ...................................................................................................................... 05 DISTRIUTION STORES ................................................................................................. 06 MISSION ..................................................................................................................... 07 VISION ........................................................................................................................ 07 COMPANY'S OBJECTIVES ............................................................................................ 08 BUSINESS AND OPERATING CHALLENGES .................................................................. 08 CORE VALUES.............................................................................................................. 11 ORGANIZATIONAL CHART .......................................................................................... 12 SPECIAL AWARDS AND ACHIEVEMENTS ..................................................................... 13 GAS PRODUCTION OF WORLD .................................................................................... 14 FINANCIAL HIGHLIGHTS 2009 ..................................................................................... 16

GAS PURCHASE SECTION ............................................................................... RESPONSIBILITIES OF GAS PURCHASE SECTION ......................................................... 17 WORKING OF GAS PURCHASE SECTION ..................................................................... 18 GAS SALES AGREEMENT (GSA) ................................................................................... 18 INVOICES OF GAS PURCHASES .................................................................................... 19 PAYMENT OF INVOICES .............................................................................................. 19 SCHEDULES ................................................................................................................. 20 UNIFORM COST AGREEMENT ..................................................................................... 21 COMPARISON OF ACTUAL AND BUDGET .................................................................... 22 WORK DONE UNDER SUPERVISION OF MR SAHBA .................................................... 22 UFG – UNACCOUNTED FOR GAS ISSUE ....................................................................... 23 OGRA .......................................................................................................................... 24 DATA FLOW DIAGRAM OF GAS PURCHASE SECTION .................................................. 25

BILL PAYMENT (NON LOCAL ORDER) ............................................................. FUNCTIONS OF NLO .................................................................................................... 27 PROCEDURE OF MAKING NLO VOUCHERS ................................................................. 29 DATA FLOW OF NLO SECTION ..................................................................................... 31

PAYROLL ........................................................................................................ EMPLOYEE HIERARCHY ............................................................................................... 32 PROCEDURE OF PAYROLL ........................................................................................... 33 EXECUTIVE ALLOWANCE & BENEFITS ......................................................................... 34

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UNIONIZED STAFF ALLOWANCE & BENEFITS .............................................................. 37 CHARTER OF DEMAND ......................................................................................... 37 DATA FLOW DIAGRAM OF PAYROLL SECTION ............................................................ 43 WORK DONE UNDER SUPERVISION OF MR IMRAN .................................................... 44 MEMORANDUM AGAINST GOVERNMENT AUDITOR QUERY REGARDING OVERTIME ........... 45 ISSUES CONCERNING PAYROLL DEPARTMENT ........................................................... 46

CAPITAL BUDGET ........................................................................................... BUDGET PHASE ........................................................................................................... 48 PREPERATION OF CAPITAL BUDGET ........................................................................... 49 WORKING OF CAPITAL BUDGET QURIES IN ORACLE ................................................... 55

RECOMMENDATION’S ................................................................................ 57

APPENDIX A ................................................................................................... APPENDIX B ................................................................................................... APPENDIX C ................................................................................................... APPENDIX D ...................................................................................................

MY RESUME ...................................................................................................

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Sui Southern Gas Company (SSGC) is Pakistan's leading

integrated gas Company. The company is engaged in the

business of transmission and distribution of natural gas

besides construction of high pressure transmission and low

pressure distribution systems.

Sui Southern Gas Company Limited (the Company) is

Pakistan’s leading integrated gas company having an

exclusive distribution and Sales license in the provinces of

Sindh and Balochistan. The Company’s core business is to

buy natural gas in bulk from E&P companies, transmit it to load centres over its high pressure

transmission system, distribute and sell it to its customers through its supply network.

The transmission system of the Company extends from Sui in Balochistan to Karachi in Sindh comprising

2,942 Km of high pressure pipeline ranging from 12” - 24" in diameter. The distribution network of over

30,000 Km covers 1200 towns and 930 villages in Sindh and Balochistan. The Company sold 442,146,085

million cubic feet (MCF) of natural gas during the year 2008-2009 to about 2.155 million industrial,

commercial and domestic consumers. The Company also owns and operates the only gas meter

manufacturing plant in the country, under an agreement with Schlumberger Industries-France. The

plant has an annual production capacity of over 550,150 domestic meters. SSGC is also examining the

feasibility of installing a pilot project of 500 numbers of Radio Frequency type and 500 numbers of

prepayment type meters manufactured by ACTARIS, a French Company. Following the successful test-

launch of 1,000 imported prepaid meters in 2004-05, the company is proceeding aggressively to set up

more pilot projects before rolling out these meters at a faster rate in 2005-06. The Company has

achieved another milestone at the meter plant. It has obtained ISO 9001: 2000 certification.

The Company is a public limited company listed on the Karachi, Lahore and Islamabad Stock Exchanges

with more than 70% direct shareholding by Government of Pakistan (GOP). It has an authorised capital

of Rs.10 billion, out of which Rs. 6.7 billion is issued and fully paid up and is managed by an autonomous

Board of Directors having overall control. Presently, SSGC’s Board has 14 members drawn both from

public and private sectors. The Managing Director/Chief Executive is nominated by GOP and has been

delegated with such powers by the Board of Directors as are necessary to effectively conduct the

business of the Company.

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SSGC in its present form was created on March 30, 1989,

following a series of mergers of three pioneering energy

companies: Sui Gas Transmission Company, Karachi Gas

Company, and Indus Gas Company. Sui Gas Transmission

Company Limited was formed in 1954 with the primary

responsibility of gas purification at the Sui field in Baluchistan

and its transmission to the consumption centres at Karachi.

Two distribution companies were established in 1955 and

were responsible for the distribution of gas to consumers in

Karachi and in other towns along the route of the

transmission pipeline between Sui and Karachi. In 1985,

these two distribution companies were merged to form

Southern Gas Company Limited and later, in 1989, Southern

Gas Company Limited and Sui Gas Transmission Company

Limited were merged to form the Sui Southern Gas Company

Limited.

Organized into regional offices, SSGC also owns and operates the only gas-meter manufacturing plant in

the country, under an agreement with Actaris (a former division of Schlumberger). Today, SSGC’s

infrastructure supports more than million customers. Domestic consumers comprise the overwhelming

majority of those users (98.8 percent), with commercial (1.1 percent) and industrial (0.2 percent)

customers representing very small segments of its constituency.

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The SSGC vision was not without its

challenges. SSGC cuts across many

industries and has many diverse

stakeholders. As a public sector

organization—with the Pakistani

government holding more than 70

percent ownership—SSGC has social

as well as policy-based responsibilities. Although SSGC’s primary mandate is to provide utility services to

citizens, it also is charged with creating jobs, continuously improving the skills of its employees, helping

the Pakistani government fulfill its vision for citizen quality of life and Business productivity, and—not

least—running an efficient enterprise to ensure that oil and gas consumers get access to the country’s

energy resources at affordable rates.

Moreover, as a Business within the oil and gas industry, SSGC must efficiently manage the purchase of

gas from a significant number of explorations and production (E&P) companies, which operate the gas

fields. Furthermore SSGC must operate as a successful commercial enterprise in the oil/gas sector. This

means being profitable and self-funded rather than government subsidized. Finally, as a utility company,

SSGC is responsible for the cost-effective distribution of high-quality natural gas to industrial,

commercial, and household consumers in its operating regions while providing stellar customer service

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The Company aims to supply natural gas wherever there is sufficient load to justify the cost of

infrastructure. In many places the gas network is being expanded to meet economic and social

requirements through active funding support from the Federal and Provincial governments. In 2003, the

Company launched a comprehensive five-year gas network development and expansion plan to connect

hundreds of small towns and villages in remote areas of Sindh and Baluchistan, which currently are

deprived of piped natural gas.

Every year, the Company adds nearly 66,000 new customers (industrial, commercial & domestic) to its

customer base and lays hundreds of kilometres of transmission pipelines and distribution network and

installs other facilities such as metering/ billing stations in its system using its staff of technically qualified

and skilled personnel.

Even as a government monopoly, SSGC was facing many of the

same challenges that commercial enterprises around the world

must confront every day. In particular, SSGC was struggling to

cope with two difficult but common situations. First, because

the organization had been created through the merger of

three companies—two from the public sector and one a

commercial, multinational enterprise—three uniquely distinct

cultures needed to come together if the organization as a

whole was to function smoothly and productively.

The second challenge was technological. SSGC’s legacy

platform—an aging mix of standalone databases and

Business applications from different vendors—was not

integrated and lacked the scalability SSGC needed to

support its mission. Because these legacy systems were

based on obsolete technology, they were inordinately

costly to maintain. Moreover, there were significant data-

compatibility issues arising from soloed systems that

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impeded the organization’s ability to disseminate accurate and consistent information throughout its

operations.

The challenges that arose from these two situations—cultural and technical—fell into the following

categories: marketing, sales, customer service, product/service management, asset management,

regulatory compliance/quality, supply chain, analytics, financials, human resources, and policy.

MARKETING: Due to the fragmented nature of its technology infrastructure, SSGC lacked a holistic view

of its customers. This limited SSGC’s ability to market new products and services effectively and also

prevented it from gathering sufficient intelligence to make effective decisions about pricing, new

services, and other strategic moves.

SALES: The same lack of visibility into operations created delays in signing up new customers and

booking new orders. Additionally, it was difficult for the organization to access timely and accurate data

on credit evaluations. This impacted SSGC’s ability to provide quotes to new customers and to commit to

service-delivery dates for its field resources.

CUSTOMER SERVICE: Because interdepartmental systems were not integrated and there was no

centralized customer database, the firm took unacceptably long to respond to customers’ queries. It also

lacked the capability to quickly create field-service orders and dispatch technicians in a timely manner.

Moreover, because it was adding more than 80,000 new customers annually, SSGC faced a number of

critical Business challenges related to metering and billing. Standalone, soloed applications and

databases hampered its ability to consistently and accurately generate customer billing, resulting in

numerous customer errors and complaints.

PRODUCT/SERVICE MANAGEMENT: This same lack of systems integration made it difficult to gather

sufficient intelligence to create innovative new products and services.

ASSET MANAGEMENT: SSGC’s records of its assets existed mostly on paper, and processes to manage

those assets were mostly manual. In addition, the organization’s “tribal” knowledge about asset

management had never been documented, but instead resided within the expertise of individual

employees.

REGULATORY COMPLIANCE/QUALITY: Regulatory reporting was performed manually and there were no

controls ensuring the accuracy of the data used to generate reports.

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SUPPLY CHAIN: Excess inventory tied up valuable capital, preventing SSGC from being able to invest in

much-needed infrastructure expansion. Additionally, sourcing took an inordinate amount of time—as

long as nine months—which also limited SSGC’s ability to make capital expenditures in other key areas.

ANALYTICS: SSGC had put few metrics in place for monitoring integrated process performance and had

no discernable starting point from which to benchmark any kind of progress.

FINANCIALS: Because SSGC lacked a sophisticated financial system, it took as long as two months to

close its books every quarter. This created a bottleneck for managers seeking timely information on

organizational performance.

HUMAN RESOURCES: Employees were not held accountable for fulfilling their job duties. SSGC’s

nonaggressive personnel-management style failed to inspire employees to innovate. Additionally, there

were no formal programs to develop their skills and no attempt to implement a performance-based

reward system.

POLICY: Global regulatory requirements put pressure on SSGC to produce auditable performance and

quality records that showed it was financially self-sustaining. Yet inefficient operations meant that it was

surviving financially, primarily through higher tariffs and cross-subsidies from other public sector

agencies. SSGC needed to establish and rigorously adhere to policies that dictated its financial autonomy.

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INTEGRITY

Keep Company's Interest above self. Acts in ethical manner. Promote ethical

business environment. Take effective actions if observers unethical behaviour or

situation. Seen & known to be honest. Lives within means. Intellectually hones.

EXCELLENCE

Makes positive contribution towards the achievement of SSGC's Vision. Strives for Continuous

improvement. Respond effectively to customer needs. Takes timely and Quality decisions.

TEAMWORK

Builds strong relationships within across functions. Works well with all type of

Peoples and corporate with others. Solicits and share ideas/best practice with

others. Supports the achievements of Company/team goals. Contributes to team

effectiveness using people's different skills and styles. Arrives at constructive

solutions while maintaining Positive working relationships. Demonstrates

sensitivity.

TRANSPARENCY

Promotes open environment. Displays openness and consistency in applying policies

& Procedures. Respects dissent and resolves conflicts fairly.

CREATIVITY

Comes up with new ideas. Encourages innovation. Promotes modified approaches.

Convert Ideas into actions.

RESPONSIBILITY TO STAKEHOLDERS

Stays abreast of change in operating environment that impacts our business (i.e.

markets, competitors, Technology, customers, suppliers, employees, regulatory,

political and public). Create solutions to make Customer needs. Develops colleagues

and team members to improve their skills and performance. Ensure Optimum

utilization of resources. Balances short term and long term priorities to maximize on

results. Ensures compliance of law.

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ESRI which is the world’s leading GIS software application company has recognized SSGC s outstanding work in the GIS field and SSGC has been selected for a Special Achievement Award in GIS out of 100,000 user sites worldwide.

SSGC has been recognized by Oracle in a worldwide forum as a flagship for technology applications and best business practices.

ICAP/ICMAP Corporate Award for Golden Jubilee Annual Report Best in public sector companies.

Obtaining ISO 9001 and ISO 14001 and OHSAS 18001 certification, first utility company in the oil and gas sector.

Meter manufacturing capacity increased from 293,000 to 500,000 fully meeting increased requirements of SNGPL and SSGC.

Obtained Environment Excellence Award 2004 and 2005 from National Forum for Environment and Health.

Obtained National Excellence Award 2005 and Excellence Award for best HSE Practices from Employees Federation of Pakistan.

SSGC is the first utility in Pakistan to undertake unique implementation of an integrated and comprehensive Customer Information System (CIS), using world-class software application of SPL World Group. Recognizing these efforts, made mostly by SSGC itself, Mr. Munawar Baseer Ahmed - Managing Director of SSGC was specially invited as Key Note Speaker to the SPL User Conference held in November 2006 in USA.

SSGC has been selected by Disease Management Leadership Association (DMAA), USA to receive 2006 Disease Management Leadership Award for Outstanding Leadership in Emerging Health Needs and has been invited to present a paper in Disease Management Leadership Forum 2006 organized by DMAA

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(Refer to APPENDEX A for Complete List)

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2009 - Rupees in "000"

Total Equity 9,683,594 60% 16,147,516

Non-Current Liabilities 31,619,203 59%

53,808,874

Current Liabilities 59,251,203 113%

52,391,734

Total Liabilities 90,870,406 86%

106,200,608

Total Equity & Liabilities 100,554,000 82% 122,348,124

ASSETS

Non-Current Assets 39,521,329 50%

79,211,266

Current Assets 61,032,671 141% 43,136,858

Total Assets 100,554,000 82%

122,348,124

P&L

Gas Sales 118,585,244 74%

160,714,737

Cost of Gas 102,388,858 68%

151,337,319

Operating Expenses

Transmission & Distribution 6,900,794 46%

15,011,529

Administrative expense 1,564,628 91%

1,723,200

Other 2,390,071 80% 2,975,305

Total operating expenses 10,855,493 55%

19,710,034

Net Income 257,489,000 28%

930,567,000

no of shares 671,174,331 122%

549,105,339

EPS 0.38 23% 1.69

Customers (in numbers) 5,953 157% 3,801

Industrial 52,242 221%

23,606

Commercial 3,358,439 158%

2,127,593

Domestic 3,416,634 159% 2,155,000 UFG Loss 2,871,700

61%

4,601,150

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GAS PURCHASE (SECTION)

RESPONSIBILITIES OF GAS PURCHASE SECTION

Following are the responsibilities of Gas Purchase Section:

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

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

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

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

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

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

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

8. To reconcile the GSC-1 statement.

9. Preparation of Revenue Budget of gas purchases.

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WORKING OF GAS PURCHASE

The Sui Southern Gas Company Limited is engaged in the business of gas transmission and distribution in Sindh and Balochistan. The company receives gas from different oil and gas fields located in Sindh and Balochistan. The natural gas received from these fields is transmitted to different cities and towns of Sindh and Balochistan and then the gas is distributed to consumers.

There are total 15 fields and 4 towns controlled by Gas Purchase section. Each field has a operator and under that operator there are several other joint ventures who supply the gas according to a certain limit allowed to them. The operator has direct contact with SSGC whereas other joint ventures contact to the company through the operator and their invoices also come under the letter head of the operator.

GAS PURCHASE FY 2008-09

Volume(MMCF)

Naimat Basal 152,525

Bhit 116,713

Badin 73,673

Zamzama 59,104

Sui/Kandhkot 39,306

Sawan 33,920

Miano 25,995

Kadanwari 15,461

Bobi 5,305

Mazarani 4,000

Latif/Daru/Sari Hundi/Mari 2,564

SNGPL(Ghotki.Rustam/Ubaro) 853

529,419

GAS SALES AGREEMENT (GSA)

The gas sale and purchase between the seller and buyer is governed by the terms of Gas Sales Agreement (GSA), which is signed by the operator’s and their joint venture partners as Sellers and SSGC as Buyer and the Government of Pakistan. Besides operations, legal and other commitments, the GSA also provides payment procedures.

The operator of the field in accordance with the GSA prepares monthly gas sales invoices and sends the same to SSGC on behalf of all the seller partners. The payment of gas bills and sales tax invoices is made to each seller member in accordance with their shareholding and percentage of gas they have

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supplied to SSGC. The excise duty on total volume of gas purchased from such field is paid only to the field operator. The payment of gas bills is to be made within 30 days of receiving invoice.

INVOICES OF GAS PURCHASES

The invoices of gas purchase mainly include three elements which are as follows:

GAS CHARGES Gas charges are the notified gas wellhead price per MMBTU. The gas prices are regulated by OGRA and these prices are generally applicable for a period of six months. (See Appendix A for Well head prices)

EXCISE DUTY Excise duty is charged on the volume of gas produced during the period. SSGC pay Excise Duty to the operater who actually discharges this liability on behalf of the joint venture. Excise duty of 5.09/MMBTU is changed to 10Rs/MMBTU from july1st onwards. (See Appendix A for Dawn Article)

SALES TAX: Sales tax is applicable at the rate specified by the government on the total value of supplies. The prevailing rate of sales tax has also increased from 16% to 17% effective july31 2010. Sales tax is paid individually to each company in case of joint venture

PAYMENT OF INVOICES

RECEIVE INVOICE FROM THE FIELD: At the end of each month invoices are received from the operater of the fields containing the bills of previous month based on total quantity of gas supplied to SSGC.

VERIFICATION OF BILLS: The Measurement department checks the metering of gas purchased by the company. The invoices received from different fields are immediately sent to Measurement department in order to verify the total number of MMBTU received by SSGC from a certain company.

The measurement department sends back the verified invoices with in ten days so that the Gas Purchases Section gets sufficient time to process payments well in time. The delayed payments bear Late Payment Surcharge (LPS) at the rate applicable as per provisions of respective GSA.

PUNCHING OF DATA: Soon after sending the bills to Measurement Department, the data is punched in A/P module of Oracle where new batch is created and all the relevant information regarding the bills are punched.

PAYMENT OF BILLS: After receiving the verified copy of the bills from Measurement Department, payment to local and foreign suppliers is made on following procedure

1. LOCAL SUPPLIER

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The payments to local gas companies are generally made into Pak Rupees. The invoices duly verified by the Measurement department are then send to gas purchase department. The gas purchase section processes these invoices and makes payments in accordance with the provisions of the GSA.

2. FOREIGN SUPPLIER The payments to foreign gas companies are made in foreign currency and before doing payment to foreign suppliers, “M form” along with verified original copy of bills is send to State Bank of Pakistan (SBP) for remittance approval. After approval from SBP, the bills are paid in foreign currency from SSGC’s bank (any commercial bank) to beneficiary bank of the supplier.

SCHEDULES Following schedules are created by gas purchase section:

RECONCILIATION: Monthly reconciliation of gas volume is carried out in which field wise gas volume are reconcile with the gas delivered for distribution, consume internally and transmission loss/gain.

SCHEDULES OF LEDGER ACCOUNTS: Monthly / quarterly / half yearly and annual schedules are prepared for each company. Copies of these schedules are submitted to the Ledger Section for record. These schedules show details of transactions recorded into the ledger accounts and in case of any error or wrong postings, if detected, the same is rectified by passing an adjusting entry.

SCHEDULE FOR ACCOUNTS: These schedules show month-wise and field-wise details of volume and value of gas purchased during the period with necessary effect of opening and closing balance in the pipelines. These schedules are prepared quarterly, half-yearly and annual after closing of accounts and a copy is submitted to the Ledger Section

SCHEDULE OF FIELD-WISE COST OF GAS: These schedules show the field-wise detail of gas purchases and contain the following information of gas bills. 1. Date and Month 2. Volume of Gas purchase both in MCF and MMBTU 3. Gas Price amount of Gas Purchase 4. Excise Duty and Sales Tax 5. Total amount of gas bills (wellhead, excise duty and sales tax) Due date and date of payment

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UNIFORM COST AGREEMENT The Government of Pakistan has decided as for the national interest that there should be a uniform price of gas for consumers throughout the country and pursuant to such decision the Government of Pakistan has issued the following policy guideline: “In order to ensure the uniform consumer gas prices all over the country, the cost of gas purchased should be worked out for both the gas companies (SSGC & SNGPL) as an overall average basis in such a manner that the input cost of gas for both the companies becomes uniform. The OGRA should workout the revenue requirement of both the gas companies. The OGRA should also develop the mechanics for intercompany adjustment of input cost of gas through a formal agreement between the two gas companies.

SSGC & SNGPL are required to send their input cost sheet showing the monthly cost of gas purchased and MMBTU for the OGRA to calculate weighted price

The party with the lower weighted average cost of gas pays to the party with higher weighted average cost of gas.

WORKING OF AMOUNT TO BE PAID BY SSGC TO SNGP *This is an assumed example

SSGC SNGP

Gas Purchase Price "Rs" 705,040,000 677,810,000

Less: (Original Quantity MMBTU X Weightage Average Price) (721,072,309) (661,777,691)

(16,032,309) 16,032,309

SSGC will pay 16,032,309 Rs to SNGP for the purpose of UNIFORMITY OF PRICE

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COMPARISON OF ACTUAL AND BUDGET Monthly statement of gas purchase is prepared to show the comparison of data relating to actual gas purchases with budget. The statement gives a review of monthly gas purchases in terms of volume and value along with the daily off-take rate.

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

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UFG – UNACCOUNTED FOR GAS ISSUE In order to check the efficiency of these gas utilities and to limit their line losses, government sets UFG targets for local gas companies. UFG is the term used for units, which are not billed (due to theft) or lost during the transmission of gas to the consumers. It is the difference of gas purchases and sales after adjusting internal consumption. For this, OGRA has allocated upper and lower limits. This means that if actual UFG losses will be higher than the upper limit, the entity would bear the full loss from its own profits. On the other hand, it can retain the savings in the event of performance being better than the lower target

FY 2008 - 2009

FY 2008 - 2009

FY 2007 - 2008

FY 2007 - 2008

ACTUAL UFG 7.93%

8.05%

6.63%

8.04%

OGRA UFG LIMIT 4.80%

5.15%

5.55%

5.55%

DIFFERENCE 3.13%

2.90%

1.08%

2.49%

LOSS/GAIN PKR 2,817,832,000

PKR 4,601,150,000

PKR 762,000,000

PKR 2,711,000,000

2.817 BILLION

4.601 BILLION

0.762 BILLION

2.711 BILLION

Historically, actual UFG losses are far above the upper targets due to system leakages and theft. Moreover, the value of UFG losses also depends upon cost of gas, as higher the cost of gas higher will be the value of loss units. That means whenever gas prices increases, probability of UFG losses to rise increases.

According to fiscal year 2009 detailed accounts, both SSGC and SNGP posted combined UFG losses of Rs7.4 billion. SSGC’s actual UFG losses stood at 7.9 per cent (target of 5.15 per cent) to Rs2.8 billion whereas SNGP’s actual UFG losses were higher at 8.1 per cent (target of 5.15 per cent) to Rs4.6 billion. Their profits, on the other hand stood at Rs257 million (Earning per Share of Rs0.4) and Rs930 million (Earning per Shares of Rs1.7), respectively

Sui Southern Gas Company (SSGC) plans to spend Rs24 billion over the next five years to replace corroded pipelines, which leak large quantity of gas, a top company official said (Source: The NEWS)

The World Bank (WB) is in final negotiations with the Sui Southern Gas Company (SSGC) for providing a soft loan facility of $125 million to arrest and reduce the uncontrolled Unaccounted For Gas (UFG) in the company’s network (Source: Daily Times)

(Refer to APPENDEX A for News Articles, UFG details for year 2008-09)

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OGRA Oil and Gas Regulatory Authority (OGRA) has been set up under the Oil and Gas

Regulatory Authority Ordinance dated 28th March 2002 to foster competition, increase

private investment and ownership in the midstream and downstream petroleum

industry, protect the public interest while respecting individual rights and provide

effective and efficient regulations, OGRA works under Ministry of Petroleum, as OGRA gives advices to

Ministry of Petroleum for setting wellhead and sale prices for end consumers and producers of natural

gas and issue it when approved from Ministry.

FUNCTION OF OGRA

1. According to the rules; Grant licensees, modify, amend, extend, suspend, review, cancel and

reissue revolve or terminate any license

2. Prescribe a uniform form of accounting practices by licensee

3. Promote and observe the practices for efficiency e.g. pipeline transmission, distribution &

marketing

4. Promote competition

5. Enforce compliance by licensee

6. Resolve complains

7. Prescribe fines if rules are not obeyed

8. Protect interest of stakeholders

9. Administer or establish price for those categories of products for which federal government

establishes prices

10. In consultation with federal government determine a price for each licensee a reasonable rate

which may be earned by such licensee

11. Oversee capital expenditure budget made by licensee of natural gas

12. Determine well head gas prices for the producers of natural gas

13. Impose excise duty, taxes, and other form of charges

14. Licensee for natural gas means licensee for transmission, distribution and sale of natural gas to

retail consumers (Retail consumers means: person who buy natural gas for purpose of

consumption and for resale other than CNG stations)

15. To check and ensure that the pressure in transmission and distribution pipelines are according

to required pressure that is less than 300psig

16. OGRA is an independent authority it can be sue or can be sued, acquire and hold

17. Responsible for issuing sale price and minimum charges for SSGC & SNGPL to charge from their

customers

18. (Refer to Appendix A for OGRA wellhead prices, sales prices)

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DATA FLOW OF GAS PURCHASE SECTION

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BILL PAYMENT –LO/NLO (SECTION)

To ensure timely payment of all invoices in accordance with the company’s policy. To approve

vouchers within limit and to send reports to management on monthly basis regarding details of

invoices received , invoices processed during the month and outstanding vouchers. Maintain record of

retention money deducted from invoices of suppliers and follow of long outstanding advances on

monthly basis

Bill Payment is divided into 2 areas

1. NON LOCAL ORDER – deals with emergency payments, quick

payments, and very few payments against agreements or

tenders

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

agreements

The Bills Payable Section of Finance Department is required to process the bills of services,

contracts, utilities, medical, supplies, and other non-local order bills received from various

departments including ditching contractors, road cutting charges, civil works, etc. The Section also

processes the medical bills of headquarters. The Section is responsible to ensure that all

transactions are within the authorized limits and adequately approved. Similarly the payments are

made only for authorized acquisition of services, contracts, work orders, etc. and approved by

competent authorities. The scope of the Section encompasses:

HOW PAYMENT IS MADE TO CONTRACTORS

The major portion of payment is comprised of contracts being done by SSGC.SSGC has a number of

contractors like civil contractors, electrical contractors & mechanical contracts. All these contracts

are dealt by project and construction department (P&C) at KT.This department receives bills from

all contractors, get them verified by different authorized persons, and then finally dispatched it to

Head Office. Sometimes bills are not processed at a particular time period. In this case most

probably mechanical and civil contractors receive certain amount as advance. At the time of

processing of bills, amount of advance is adjusted.

HOW DOES THIS SECTION WORKS WITH THE MEDICAL DEPARTMENT

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All the Hospitals, OPD, Chemists, Labs, Dentists and Surgeons which are on panel in SSGS Company

are also being paid their bills by sending their supporting documents along with the bills. The

particular hospital or vendor sends reference letter along with hospital bill. The Medical

department prepares a hospitalization summary. After that invoice is prepared by Medical

department which is verified by billing doctor, Deputy Chief Medical Officer/(CMO).if the amount

payable is within 50,000.If the amount is up to 500,000.the invoice is verified by SGM(MS),but if

the exceeds the limit of 500,000 it is signed by MD.

UTILITY BILLS

Apart from all these payments, this section also make payments for all utility bills like KESC, PTCL

,Water Sewerage Board, Mobile phones Connections,& transformer stations which is being

installed by SSGC Moreover all maintenance charges like computer hardware or miscellaneous

payments are being processed by this department after receiving invoices from focal points

The documents required in both the sections are some but few are different. 1. Bank payment voucher 2. Check list 3. Local purchase order 4. Cash memo 5. Comparative statement 6. Work order 7. Income tax invoice 8. Evaluation report 9. Approval

10. Receiving statement

FUNCTIONS OF NLO DEPARTMENT

The core functions of the department is to make payment of bills/invoices received from various

departments against the following expenses. Invoices are required to be verified and approved from

the authorize person of the relevant department

ROAD CUTTING CHARGES

SSGC is required to pay road-cutting charges to authorities like KDA, KMC, City governments and

other authorities for repairing roads according to invoices submitted by them, it is to be noted that

there is no agreement in place with such authorities. Distribution department sends invoices to

NLO in this regard. However, rates are negotiated and approved by GM Distribution/DMD

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DITICHING CHARGES

There are pre-qualified contractors for ditching on SSGC panel and company pay them according to

approved rates of the company. NLO retains 10% of the invoice from the contractors as retention

money and refund such retention money after 1 year. NLO also maintains record of retention

money deducted from their invoices and ensures their timely refund. Distribution department

sends invoices to NLO in this regard

WAY LEAVE RENTALS (WLR)

Way leave rentals paid to authorities including government for utilizing their land for gas pipelines.

The staff has informed us that some old agreements in place, made between SSGC and such

authorities for way leave rentals. Currently SSGC is not paying WLR to all authorities as are not

receiving invoices from them. However, provision is being made on the basis of such agreements.

BILL DISTRIBUTION EXPENSES

Contractors have been retained by SSGC for distribution of bills. The approved list of contractors

maintained by billing department. Billing department after verification of bills with approved rates

and approval of authorized person send invoices to NLO for payment.

PETROL & LUBRICANTS

There are petrol pumps on panel of SSGC. All departments are required to keep record of their

employees for petrol as per their entitlement and requirement and send bills after verification and

approval from authorized personnel to NLO for payment

METER READING CHARGES

There are approved contractors for meter reading. Billing department send invoices to NLO after

verification and approval from authorized personnel to NLO for payment. Approved list of

contractors is maintained by billing department

REPAIR & MAINTENANCE OF VEHICLES

There is no approved list of workshops for repair and maintenance of motor vehicle. However

relevant department sends invoices after verification and approval from authorized personnel to

NLO for payment

MEDICAL EXPENSES/BILLS

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Medical department of SSGC issue reference slip to patient. Patients submits reference slip to

doctor/laboratories/hospitals/medical shop’s then they send invoices supported with reference slip

to medical department. After verification and cross-refer with their own record and approval of

authorized person, medicals department send invoices to NLO for payment. There are approved

doctors/hospitals laborites and medical stores on SSGC panel

COURIER CHARGES

Departments are required to send their own bill of courier service to NLO for payment after

verification and approval from the authorized personnel

AUTO PARTS

Departments are required to send their own bill to NLOF for payment after verification and

approval from the authorized personnel

CONSTRUCTION EXPENSES

The approved list of contractors is maintained by procurement department. Billing department

after verification of invoices with approved rates and after approval of authorized person sends

bills to NLO for payment. NLO on instruction of relevant department may retain some money of

invoice as retention money if provided in agreement/contract. Documents required to NLO for

payment are

1. Deviation order

2. Work contract

3. Certificate of final bill

4. Tender evaluation report and summary of work completion certificate

PROCEDURE OF NLO PAYMENT VOUCHERS

1. Receptionist receives different invoices, it stamps them with date “received by finance department, Mr. saleem receptionist then send invoices to particular people concerned to the type of invoices, see data flow diagram for more information.

2. Mr. usman is responsible for Costing of invoices, and attach a checklist showing which costs are mentioned in the invoice (see Appendix B for checklist)

3. Staff ensures that the invoices are verified and approved by the authorized person of the relevant department and applicable rated have been applied and deduct income accordingly and feed

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invoice into system into system to generate bank payment voucher in yellow color paper, which is attached to the invoice

4. The bank payment voucher along with supported documents send back for checking and further submission for approval

5. Checks that the voucher has been posted properly and ensures that income tax income tax is being deducted and verifies approval of authorize personnel and forward bank payment voucher for approval in case discrepancies invoices are send back to the relevant department along with observation sheet for resolution of queries

6. MR Masud Faiz Approves the voucher if within his financial limits and forward it to DGM/GM finance for approval.

7. After approval of voucher and before sending to cash/bank department Mrs. seema enters voucher number and details in the register for control purposes and received acknowledgement of cash and bank on register.

8. After posting of voucher by cash and bank, copy of voucher along with cheque send to supplier, original copy retain by cash/bank for their own record and supporting documents sent to NLO for record purposes

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DATA FLOW OF NLO

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PAYROLL (SECTION)

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

of SSGC Staff and Executives’ salaries every month, keeping record of all existing employees and updating in

case of new appointments.

There are 3 types of pays slips made in SSGC 1. EXECUTIVE (PERMANENT) EMPLOYEES 2. UNIONIZED STAFF )PERMANENT) EMPLOYEES 3. HR CONTRACT (TEMPORARY) EMPLOYEES

EMPLOYEE HIERARCHY

TYPE GRADE SYMBOL RANK

CONTRACT STAFF TEMP NIL NIL NIL

UN

INO

NZE

D

STA

FF

PER

MEN

AN

T G-I - Clerk – peon

G-II - -

G-III - -

G-IV - -

G-V - Super intendant

EXEC

UTI

VE

STA

FF

PER

MEN

AN

T

G-I - Officer

G-II AM Assistant Manager

G-III DM Deputy Manager

G-IV M Manager

G-V DCM Deputy Chief Manager

G-VI CM Chief Manager

G-VII DGM Deputy General Manager

G-VIII GM General Manager

G-IX SGM Senior General Manager

G-IX CFO Certified Financial Officer

- DMD Deputy Managing Director

- MD Managing Director

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PROCEDURE OF PAYROLL

NEW APPOINTMENTS 1. Payroll section reserve a copy of letters from HR for new employees being hired 2. Master record for each employees is raised e.g. all information is input into database Oracle

system along with basic pay, allowances and benefits for generation of monthly payroll slips

AMENDEMENTS IN PAY STRUCTURE OR CONDITIONS HR will send a formal letter to employees & staff section of payroll, the payroll section will then change the definition and amend the master record according to letter given by HR

ATTENDANCE RECORD 1. Employee sign in register on daily basis 2. No record of attendance is kept by Payroll section 3. Adjustments in salaries/wages, these advices record show leaves, leaves without pay & absences

PAYMENT OF SALRIES WAGES

1. Pay goes in employees account directly from Head office HO Karachi 2. Cash/bank section of finance is responsible for disbursement of cheque’s payable for

respective banks 3. IT department is responsible for running the payroll batch (result is printing of pay slips) 4. The pay slips are distributed to the employees the day after the bank advices re sent out 5. The copy of pay slip is provided to each employee as an evidence 6. In HO pay slip are handed over by payroll section, while to other it is couriered

FINAL SETTLEMENT

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

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EXECUTIVE STAFF (G1 – GIX,DMD,MD) Separate Register is maintained for Executive staff allowances & benefits, following are the listed allowances and benefits that executive staff has

ALLOWANCE & BENEFITS CAR ENTITLEMENT

GRADE CAR "CC"

VII 1000

VIII 1300

IX, MD 1600

PETROL & MAINTENANCE

1. Petrol Allowance is paid in advance

2. if petrol price is changed its adjusted in next month

3. Car maintenance is also borne by the company

DRIVER WAGES

5000Rs (if not on company payroll), no allowance on shofar driven car

CLUB SUBSCRIPTION Given to Grade VIII – IX

TELEPHONE BILLS One connection only for MD’s

MEDICAL EXPENSES 1. Spouse, children (after death or retirement)

2. Medical available for spouse only & 21 year less children’s

3. Maternity leaves – 3 deliveries allowed on SSGC panel

HOSPITALIZATION ENTITLEMENT

GRADE AKUH OMI OTHER HOSPITALS

MD & IX Private VIP

VIII -do- -do- -do-

VIII -do- -do- -do-

IV,V,VI Semi Private Semi Private Private with AC

I,II,III -do- -do- Private without AC

GRADE LITRES/month

VII 184

VIII 273

IX 364

MD 340

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TRAVELLING EXPENCE HALTING ALLOWANCE RENT PAYMENT

45% of basic salary, if not taken it will be adjusted in salary

FIELD ALLOWANCE Allowance given to executives for visiting fields outside their office

LOANS & ADVANCES Authorized by HR department

Festival Loans Amount/year

Muslims Eid-ul-Fitar 30,000

Muslims Eid-ul-Azha 20,000

Non-Muslims Christmas 50,000

Loan are to be paid in 10equal installments, amount will be deducted from salary without interest

LOANS AGAINST PROVIDENT FUND EOBI

Employee old age benefit institution (subscription fees is 180rs/month) See APPENDIX C for EOBI form

SPORTS CLUB Subscription fees is Rs. 1/month

SSGOA – SUI SOURTHER GAS OFFICER ASSOCIATION May opt to contribute 50/month against subscription of SSGC officer Association & 36Rs/month for insurance (see APPENDIX C)

HAJ SCHEME Nine people (3 from each unit A,B,C) will be given money to perform HAJ, billeting is done, 156/month is subscription fees

EXECUTIVE INSRUANCE State Life insurance, Jublee Insurance, based on lowest bid & higher credit rating

ECCS – EXECUITVE CREDIT CORPERATIVE SOCIETY Joint organization of PPL(Pak Petroleum Limited) & unit C of SSGC, 500Rs is contributed towards the society

CONVEYANCE ALLOWANCE Grade 1 to VI – 300/month included in salary

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If female employee takes company transport facility she will not get allowance but 2000Rs will be deducted from salary

HOUSED EXECUTIVE Free accommodation to the executives; free in their SSGC society e.g. employees living in KT terminal accommodation society

RETIREMENT BENEFITS

Deductible from Salary Non-Deductible from Salary

Provident Fund (PF) 7.5% of basic pay Pension 20% if Annual Salary

Benevolent fund (BF) *mandatory 1.10% of basic pay

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UNIONIZED STAFF (G1 – G5) Unionized Staff Payroll Allowances are changed every 2year with respect to “CHARTER OF DEMAND”

CHARTER OF DEMAND Charter of Demand is a “memorandum of settlement” between SSGC & CBA *COLLECTIVE BARGAINING AGENT COD for year 2009-10 is made by PEOPLE LABOR UNION, who won the election and become representative of CBA Management and Staff Union sit together to negotiate & do consensus after every 2year to renew payroll, COD has all the allowances, benefits or any other modification in calculation rates of any allowance or any new policy mentioned is mentioned in this COD

HOW CHARTER OF DEMAND WORK’S

2year period

CHARTER OF DEMAND WORKING

2007-2008 COD expires

2009-2010 New COD Negotiation held before the COD for 2009-10 is made all allowance will be given according to old COD 01-Aug-10 New COD made on 1st august 2010

Effective from 1st Jan 2009 to 1st Dec 2010 Adjustments will be done according to new COD for period in which expired COD was

used 12-Dec-10 COD expires

OBJECTIVES

1. To ensure a sound and materially beneficent industrial and economic relationship between the management and its workmen

2. To set forth herein a complete agreement between the parties covering all aspects of the terms and conditions of services of regular workmen directly employed by the company

3. To stabilize labor-management relations and to specify the rights and responsibilities of the company

4. To ensure continually improving efficiency, higher productivity, control of UFG and optimum use of company resources in order to promote and improve the industrial and economic relationship between the company and its workmen

5. To implement the directives of the competent government agencies e.g. Oil & gas Regulatory Authority etc.

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ALLOWANCE & BENEFITS (ACCORDING TO NEW COD 2009-2010)

APPOINTMENT OF WORKER”S CHILDREN

1. Children/ widows of deceased workers expired during service will be offered employment in the company * provided that no son/daughter/widow is already in the employment of the company

2. Board of directors has principally agreed to revive appointment of retired worker’s children *

provided that no son/daughter/widow is already in the employment of the company 3. 50% Retired employee’s children shall be appointed on seniority of retirement basis effective

1998 when last induction was made

DISABLED QUOTA HAJ

Number of Unionized member performing Hajj is raised from 10 to 14

UMRAH 21 workers (7 from each unit) by draw will be sent to perform umrah every year *for employees who have been in service for last 5years and have not perform umrah on company account

Company will pay Rs 35000/- in lumsum along with 15 days special leave with pay including travel time.

MINORITY WORKERS 6 workers from minority communities (2 from each unit A,B,C) will be selected on service seniority basis to visit the holy places in Pakistan Amount of Rs 15000/ has been enchanced to Rs 35000 for visit of holy places

BASIC PAY/ ALLOWANCES

GRADE EXISTING PAY SCALE (MIN BASICPAY – INCREMENT/YEAR – MAX BASICPAY)

REVISED PAY SCALE (MIN BASICPAY – INCREMENT/YEAR – MAX BASICPAY)

I 1695-120-3495 2695-180-5395

II 1855-130-4195 2855-195-6365

III 2075-150-4775 3075-225-7125

IV 2325-175-5475 3325-265-8095

V 2775-200-3775-250-100025 3775-300-5275-375-14650

Flat increase of 26% of basic pay or minimum of Rs 1000/ will be granted to all unionized staff

HOUSE ALLOWANCE The minimum house allowance for non-housed workers has been enhanced from Rs 1850/- to Rs 2500/- effective july 1st 2008

SPECIAL PAY 50% of special pay is merged into basic pay effective 1st January 2010

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OVERTIME & LEAVE ENCHASMENT FORMULA This formula is effective as of 1st January 2010, (for the period of 1st Jan 2009 to 31 Dec 2009 the old COD formula will be used) OVERTIME FORMULA = Basic + House Allowance + Local Compensatory Allowance X 3 13 X Weekly working hours LEAVE ENCAHSMENT = No of days X Basic Pay + house Allowance + Local Compensatory Allowance + Domestic Amenities + Industrial Area Allowance

ALLOWANCES 1. ADHOC ALOWANCE @ Rs 1200/- per month will be paid to all regular workmen who are on the

payroll of the company as on 1st july 2008 2. ELECTRICIY ALLOWANCE from Rs 450 increased to 750/month *effective 1st july 2010 3. COMPANY DEARNESS ALLOWANCE from Rs 380 increased to 780/month *effective 1st july 2010 4. CLINIC CONVEYANCE ALLOWANCE from Rs 100 increased to 300/month *effective 1st july 2010 5. CONVEYANCE ALLOWANCE from Rs 975 increased to 1275/month *effective 1st july 2010 6. GOOD ATTENDANCE ALLOWANCE if employee take less than or equal to 5 leaves in quarter he/she gets

good attendance allowance

SHIFT DUTY ALLOWANCE

SHIFT COD 2007-2008 (OLD) COD 2009-2010 (REVISED)

Morning 100 /day/attendance 150 /day/attendance

Evening/Night 200 /day/attendance 300 /day/attendance

LEAVES THAT CAN BE TAKEN IN CASH 1. CEL – CASH ENTITLEMENT LEAVE - Employees have 30 Leaves which he/she can take for which

there would be no deduction in pay, employee can take cash against these 30 leaves 2. S&CL – SICK & CASUAL LEAVE - Employees has 50 Sick and casual leaves for which there will be no

deduction in pay a part from 30 leaves of CEL

LEAVE FARE ASSISTANCE LFA is enhanced from Rs 5500 to 10,000/year * effective 1st Jan 2010

1. Once a year employee get this allowance of going outstation 2. Leave must be more than 5days 3. If you don’t avail your FLA it is accumulated for 3years maximum 4. You can also cash the FLA 5. See APPENDIX C

GAS ALLOWANCE Gas allowance is enhanced from Rs 400 to Rs 600/month effective 1st Jan 2009

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TRAVELLING & DEARNESS ALLOWANCES

TA/HA/FA

GRADE EXISTING REVISED

I,II,III 150 240

IV & V 175 260

TATA/DA

GRADE EXISTING REVISED

I,II,III 150 225

IV & V 160 240

HIGHLY EDUCATED WORKERS CHILDREN’S Children’s of highly educated workers will be given preference for employment in executive grade

PROMOTION POLICIES 1. Workers who have no opening in Grade V at present and having eight years of continuous and

satisfactory service in grade IV will be given move over to next grade i.e grade V with same designation effective 1st Jan 2010

2. Workers will be given preference for promotion to executive grade subject to availability of vacancy and meeting required criteria for said post (THIS PROMOTION WAS LAST GIVEN 8YEARS BACK)

3. Workers who remain in the same grade for a minimum period of 5 years will be promoted to the next higher grade subject to fitness/trade test

RETIREMENT Rs 100/ head will be allowed for arranging simple tea party in honor of worker retiring

FREE GAS FACILITY 1. Gas tariff is enhanced from 4MCF to 5 MCF/month & 48MCF to 60MCF/year credits will not be

carried forward to next year 2. Workers in coldest stations (quetta, musung, kalat, ziarat, pishin, kuchhlok and mach etc) is

enhanced to 110 MCF /year effective 1st July 2010

MEDICAL FACILITIES 1. Family medical allowance enhanced to Rs 2500/month 2. Dependent parents of the worker, not availing medical facility from any other source will be

eligible for free medical facility subject to submission of affidavit by the worker and necessary verification from internal audit department

3. Workers songs age has been enhanced to 25years for medical purposes 4. Treatment of congenital disease will be allowed 5. AC room will be provided to IPD patients irrespective of grades at Karachi on recommendation

of consultant physician except AKUH

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6. Private room irrespective of grade will be provided to patients referred to Karachi from interior Sindh and Baluchistan except AKUH

7. Food allowance for IPD patients is enhanced to Rs 200/day providing no food is supplied by hospital

8. Medical bills will be processed as early as possible after completion of all formalities 9. The certificate issued by MBBS doctor for grant of sick leave will be entertained for grant of due

sick leave up to maximum of 30days in continuation of earned leave/out station casual leave 10. Company will consider opening od day care Centre for female worker’s babies where feasible 11. Special children of workers will be allowed to receive free medical facilities including

accessories from the company till retirement of worker

MATERNITY ALLOWANCE Maternity allowance enhanced from Rs 7500 to Rs 10,000 per delivery

HOUSE BUILDING ALLOWANCE House building loan is enhanced from Rs 300,000 to 400,000

MOTORCYCLE MAINTENANCE ALLOWANCE Motorcycle maintenance allowance enhanced from Rs 600 to Rs 900/month

WORKERS UNIFORM Workers uniform Kit new prices, if workers are found not in proper uniform he/she will be given warning, and later on matter will be dealt with as per disciplinary rules & laws

S.NO CATEGORY RATE OF UNOFORM FOR THE YEAR 2010

RATE OF UNIFORM FOR YEAR 2011 & ONWARDS

1 1,2A,2B,3,3F,4,5,6 & 7 4000 5000

2 8 6000 6000

3 8F 8000 8000

4 9 2500 2500

CANTEEN SUBSIDY Canteen subsidy of Rs 400/month will be paid to the workers posted at locations where canteen facility does not exist

ESTABLISHMENT LOAN Establishment loan enhanced from Rs 20,000 to Rs 30,000 *subject to clearance of old loan

SCHOLARSHIP Scholarship for the worker’s children is enhanced from Rs 500 to Rs 800/month

METER READING INCENTIVE

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Meter reading incentive from Rs 2/meter is increased to Rs 3/meter *subject to meter readings above fixed meter readings/day

FAIR PRICE SHOP Management agrees to open fair price shops at the regional offices

SPECIAL FINANCIAL SUPPORT Funeral expenses is enhanced from Rs 15,000 to Rs 25,000Rs

WINTER ALLOWANCE Winter allowance enhanced from Rs 600 to 1000/month

OFFICE BEARER OF CBA (OUTSIDER) President of CBA (not worker of SSGCL) will be entitled for lump sum salary of Rs 50,000/month, free medcal facility for self and his dependant family members If President of CBA is worker of SSGCL he will be entitled for salary equal to Grade V

FESTIVAL ALLOWANCE

GRADE EUD UL FITAR ADVANCE EID UL AZHA ADVANCE TOTAL/ANUM

I 15,000 10,000 25,000

II & III 20,000 15,000 35,000

IV 25,000 20,000 45,000

V 30,000 20,000 50,000

GENERAL POINTS 1. Management has agreed to provide company’s Hut, H-8 at hawks bay to workers on payment

basis only on request forwarded through DGM(IR) 2. A canteen committee comprising representatives of IR, admin N CBA will be constituted to look

after the affairs of canteen including canteen contract 3. A suitable prayers room for the female workers will be provided 4. Workers children will be given preference for selection in sports teams on talent basis 5. Management will arrange library subject to availability of suitable place 6. Company will provide one company’s vehicle, only for one day in connection with marriage of

worker, his sons/daughters and dependent real brothers and sister for use within the city

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DATA FLOW DIAGRAM OF PAYROLL

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WORK DONE UNDER SUPERVISION OF MR IMRAN

There was a issue regarding OVERTIME raised by government auditors which goes back to late 1987-

90

The government auditors had raised the overtime issue few years back and had raised it again, they

want evidence of allocation of 68Million Rs as overtime, and to proof that it is allocated properly

It was Mr. Imran job to prepare a memoredum on behalf of CFO send to Government auditors giving

them resonable explanation that the allocation of overtime amount was fair and not abnormal

I was given the tast to prepare that memoradum, for that purpose we had to see old records of 1990

-1993 as to get and average of overtime given in that period, and compare it with 1987-1990

As SSGC doesn’t keep any record of 20years back, so SSGC had no records to show, so it was my task

to make a memorendum giving them explanation

Memorendum (answer to the government query is given in next page)

The CASE STUDY is attached in APPENDIX C

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From: CFO To: GM(INTERNAL AUDIT)

Ref: AD/RM/1286

Date: June 25th 2010

DAC MEETING HELD ON 18th JUNE, 2010 PARA#54 (1992-93) REASONS FOR JUSTIFICATION OF OVERTIME PAYMENT

This is with Reference to Audit para54)1992-93) related to "excessive overtime" incurred by SSGC in years 1987-90, auditor observation is un doubtful, we would like to add some extra information which is relevant to this case regarding opinion of auditor

As recorded in previous books of accounts, the overtime in year 1989 was 19Million (the average of 4years 1987-1990 was 17million/year) which in comparison with next 4 years 1990-1993 is far less, information provided below in table

Years overtime

Years overtime 1989 19

1993 95

1988 15

1992 51 1987 19

Assumed

1991 46 1986 15

1990 33

68 Million

225 Million

In light of above data, the overtime in 1986-19989 is very less compared to next 4years According to auditor understanding the 225million can also be accounted as humanely impossible with regard to the only 3% increase in employees

High amount of hours id due to the reason of SSGC policy of how it converts rate in term of hours as mentioned below

Double pay or 1.5 of basic pay is recorded as 1.5 & 2 hours added to total hours worked E.g. Normal hours worked/week = 40 hours

overtime on Saturday = 13hours => 13 x 2 hours = 26hours (on Saturdays, sun extra hour worked is given double pay so it is recorded in terms of no of hours worked

As double wage is given on Saturday so 26hours worked in 24hour day is humanly impossible, so the recording in SSGC is done in terms of hours X normal pay

We hope the information provided above will clear the issue

CFO

PAYROLL

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ISSUES CONCERNING PAYROLL DEPARTMENT

CHANGE OF BACK ACCOUNT – employees take loan from bank, bank thinking the load will be cutoff from the salary coming in account, because its salary account, so some employees take heavy loan from banks and then change their salary account from SSGC & take another loan from the new Salary account they opened in new bank. Management took a step of asking each employee wishing to shift salary account to other bank, to get clearance form from the bank in case of any outstanding loans they have with the bank

CHARTER OF DEMAND – COD for unionized staff is very long process, many times COD is finalized when its eligibility is about to expire in few months, arears are calculated, the negociations should be made in proper time, if it takes too much time, then it should start soon enough to end before the period of its activeness starts.

DOCUMENTS ATTACHED IN APEENDIX C 1. MR NADEEM PAY SLIP 2. EOBI FORM 3. LFA – LEAVE FARE ASSISTANCE FORM ALONG WITH ORACLE FINANCIAL INVOICE SIGNED 4. APPLICATION FOR ESTABLISHMENT LOAN FORM 5. CASE STUDY OF OVERTIME QUERY RAISED BY GOVERNMENT AUDITOR’S 6. SEE CD FOR VIDEO CONTENT ON HOW TO OVERTIME & LFA IS PUNCHED IN ORACLE FINANCIAL

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CAPITAL BUDGETING (SECTION)

A memorandum is issued from CFO giving guideline for preparation of budget (see Appendix D for

Capital budget memorandum)

Two types of budget are prepared in SSGC

1. REVENUE BUDGET 2. CAPITAL BUDGET (CAPEX)

REVENUE BUDGET - expenditure on repair and maintenance of fixed assets or restore its original

assessed standard of performance is normal revenue expenditure and should not become part of

capital budget

CAPITAL BUDGET - Capital expenditure are those that result in CREATION and or BETTERMENT in

the life or productivity of assets, the future economic benefit of such assets are expected to

continue for more than one fiscal year

The budget proposals of each department should initially be reviewed by departmental/ divisional

heads and after having been finalized, these should be signed and submitted to the FINANCE

department. The finance department will COMPILE/ ANALYZE the preliminary estimates and will

discuss, if required with the concerned departmental/divisional heads, after COMPLETION, the

same will be submitted to the management for onward recommendation to the BOD approval

SGMS of different divisional heads will be called to Karachi HO and they will cut and remove items

in budget which are not required only in their area, e.g. SGM(T) transmission will cut items of

budget proposed by Transmission area

AFTER THIS A FUNCTION CODE IS ALLOCATED TO BUDGET it is uploaded By GL

in case if budget gets less, then an approval is taken from CFO by which either extra budget is

approved or items in which some money is left even after purchasing all items mentioned in its

budget, the left over amount is then transferred to area where budget is less

Making proposed budget (CAPEX), department wise, and account wise, company wise.

To maintain the capitalization, depreciation, retirement and disposal of all the fixed assets.

P a g e | 48 s

Preparation of capitalization and WIP schedules of all the companies i.e. Karachi distribution,

Hyderabad distribution, Balochistan distribution, Transmission and Head Office.

Prepare quarterly, half yearly and yearly accounts and schedules of organization.

BUDGET PHASE

“Budget is a financial statement which is prepared before the starting of the financial year containing

the plans and policies to be pursued during that period.”

The budget section of finance department prepares capital expenditure budget (CAPEX) annually for all

the departments of SSGCL. When budget section starts to create the budget, all the departments are

notified to make the proposed budget themselves for their departments according to the requirement

of their department and send it to budget section. After receiving the proposed budgets from the

departments, the budget section examines it & discusses all particulars with the related head of

department & staff giving special consideration to the justification of fixed asset requirement & funds

available in the company. The budget section can increase or decrease the proposed amount of budget

keeping in view, the available amount in the budget for that department.

After the proposed budget is prepared by the Budget Section, budget is then sent to GM & SGM for its

approval/changes & finally to the M.D for approval. When the budgets for all the departments have

been finalized and approved by MD, then the agenda is prepared by budget section, which is reviewed

by finance committee. Board of directors grants approval to the agenda after which the budget is

authorized to be followed. Each department is then informed through inter departmental note along

with a copy of their budget.

P a g e | 49 s

PREPERATION OF CAPITAL BUDGET

Budget is prepared function wise, SGM wise, & category wise, along with different summaries as per

required by different SGM(s) concerning their area of concern and authority

COMPANY WISE / FUNCTION WISE

CODE UNIT FUNCTION

i C TRANSMISSION

ii A DISTRIBUTION KARACHI

iii B DISTRIBUTION INTERIOR SINDH (EXCLUDING KARACHI)

iv QUETTA DISTRIBUTION BALUCHISTAN

v METER MANUFACTURING PLANT MANUFACTURING

the company has 5 functions according to which code are definied, because the budget is so big that codes are used instead of typing functions in itseparate budget is prepared for unit a, b, c, quetta and meterplant

DIVISION WISE

CODE HIERARCHY

a CFO

b SGM (T)

c SGM (D)

d SGM (MS)

e SGM (ES)

f SGM (CS)

g GM (SS&M)

h COMPANY SECRETARY

i GM (IA)

j GM (LNG) Project

e.g. CODE "b" SGM(T) - T represents Transmission, Every SGM is responsible for cut down in budget of their respective area, employees in Transmission will fill the budget proposal forms and send to finance department in Head office Karachi

Meeting will be held where DM & SGM of transmission will look into the details of budget in form of PowerPoint presentation, he will then decide what is required and what is not

Same goes for other areas represented by their respective SGM

P a g e | 50 s

Above is the list of SGM(s) responsible for cutting down proposed budget of their division

P a g e | 51 s

CATEGORY

CODE ASSET

1 LAND

2 BUILDING / OTHER CIVIL WORKS

3 PLANT & MACHINERY

4 TELECOMMUNICATION

5 TOOLS & EQUIPMENTS

6 TRANSPORT

7 COMPUTER & ALLIED EQUIPMENT

8 OFFICE EQUIPMENTS

9 FURNITURE

10 SECURITY

These are the categories of which capital budget is prepared, everything in capital budget is

prepared under these 10 heads, in 2011 there has been addition of 1 extra head which makes it total of 11 heads

every head in above mentioned category except s.no 7 & s.no 9 are decentralized, Code# 7: Computer & Allied equipment is Centralized and is dealt by IT department which has a

separate form for it, the overall budget of computer and allied equipment is proposed by IT department

Code#9: FURNITURE: the overall budget of Furniture is proposed by ADMIN department which has a separate form, that is why these 2 areas are called centralized areas

P a g e | 52 s

This is an example of Approved Budget for Unit C

This is an example of Approved budget SGM(T), from the main budget file different budgets are made

for concerned departments & SGM(s)

P a g e | 53 s

Example of Approved Budget for Vehicles

SUMMARY of Approved Vehicles Budget

P a g e | 54 s

e.g. in transmission capital budget approved under land is 0.4 million, and overall transmission capital budget is 330 million , total budget approved under heading of land is 4.65 million

Refer to CD for Video Content for more details.

WHERE EVER CD ICON APPEARS (PLEASE REFER TO DVD FOR VIDEO CONTENT)

P a g e | 55 s

WORKING OF CAPITAL BUDGET QURIES IN ORACLE

Oracle Financial is used to view how much budget is allocated for a particular item, how much of that

budget is used(ACTUAL BUDGET), how much is in process (encumbrance), and how much is left (funds

Available)

P a g e | 56 s

DETAILS OF BUDGET

P a g e | 57 s

RECOMMENDATIONS

UFG should be controlled, and should be taken as 1st priority for SSGC to resolve. Reward should be

granted to employees or anyone pointing out the area of leakage or theft.

Job description should match to employees field of work

Motivation and encouragement is not seen, management should conduct seminars or lectures that

can boost employees moral and self-esteem to work in a loyal way towards company

Overtime work should be discouraged, in my opinion overtime policy should be abolished or the

overtime incentive given per each extra hour worked should be reduced by 50%. Which will

discourage employees to do work in evening or night and sitting idle in morning, instead they

would in standard timings, which will result in fast processing of data in timely manner

Corporate culture should be implemented, with strict following of rules and regulations

In the Gas Purchases section, the current practice for recording of the gas purchases from foreign

companies is to use the exchange rate as of the last working day of the month and for the payment

purpose, the exchange rate used is the exchange rate at the day of payment. As such, huge

exchange gain/loss is recorded. Considering the current situation of devaluation of rupee against

the dollar, the exchange loss would increase in future, if some kind of hedging is not done.

Therefore, it is suggested that to use hedging process in order to avoid heavy losses due to

exchange rate changes

Section’s staff should be seated in one area, so that communication among them is facilitated.

Currently, there are some sections in which the staff is dispersed around the floor, which hinders

the free flow of communication

There is no balance between the numbers of employees in each section. Where the number of

employees should be more to share the work burden but there are fewer employees then the

required need. And where there is no work burden there are more employees than the required

need. The need for employees should be analyze properly to allocate employees on right place to

completely avail their skills

Corporate culture should be implemented in SSGC

APPENDIX – A

WORLD GAS PRODUCTION

RANK COUNTRY NATURAL GAS

PRODUCTION (M3)

RANK COUNTRY NATURAL GAS

PRODUCTION (M3)

 World 3,021,000,000,000 39  Kuwait 12,500,000,000

1  Russia 654,000,000,000 40  Romania 12,500,000,000

2  United States 545,900,000,000 41  Bahrain 11,330,000,000

3  Arab League 405,510,000,000 42  Brazil 9,800,000,000

4  European Union 197,800,000,000 43  Azerbaijan 9,770,000,000

5  Canada 187,000,000,000 44  Italy 9,706,000,000

6  India 140,000,000,000 45  Denmark 9,223,000,000

7  Iran 111,900,000,000 46  Colombia 7,220,000,000

8  Norway 99,300,000,000 47  Vietnam 6,860,000,000

9  Algeria 85,700,000,000 48  Syria 6,500,000,000

10  Netherlands 76,330,000,000 49  Poland 6,025,000,000

11  Saudi Arabia 75,900,000,000 50  New Zealand 4,573,000,000

12  Indonesia 72,300,000,000 51  Japan 3,729,000,000

13  China 69,270,000,000 52  Peru 3,400,000,000

14  Turkmenistan 68,880,000,000 53  South Africa 2,900,000,000

15  Uzbekistan 65,190,000,000 54  Croatia 2,892,000,000

16  Malaysia 64,500,000,000 55  Tunisia 2,550,000,000

17  Qatar 59,800,000,000 56  Hungary 2,545,000,000

18  Mexico 55,980,000,000 57  Israel 2,350,000,000

19  United Arab Emirates 48,790,000,000 58  Philippines 2,200,000,000

20  Egypt 47,500,000,000 59  Austria 1,848,000,000

21  Argentina 44,800,000,000 60  Chile 1,800,000,000

22  Australia 43,620,000,000 61  Mozambique 1,650,000,000

23  Trinidad and Tobago 39,000,000,000 62  Equatorial Guinea 1,300,000,000

24  Nigeria 34,100,000,000 63  Côte d'Ivoire 1,300,000,000

25  Pakistan 31,700,000,000 64  Cuba 1,218,000,000

26  United Kingdom 30,800,000,000 65  France 953,000,000

27  Kazakhstan 27,880,000,000 66  Turkey 893,000,000

28  Venezuela 26,500,000,000 67  Angola 680,000,000

29  Thailand 25,400,000,000 68  Serbia 650,000,000

30  Oman 24,100,000,000 69  South Korea 640,000,000

31  Ukraine 21,050,000,000 70  Ireland 457,000,000

32  Germany 17,960,000,000 71  Taiwan 416,000,000

33  Bangladesh 15,700,000,000 72  Jordan 320,000,000

34  Iraq 15,660,000,000 73  Ecuador 280,000,000

35  Libya 14,800,000,000 74  Republic of the Congo 180,000,000

36  Bolivia 14,700,000,000 75  Czech Republic 172,000,000

37  Brunei 13,800,000,000 76  Belarus 164,000,000

38  Burma 12,600,000,000 77  Tanzania 146,000,000

RANK COUNTRY NATURAL GAS

PRODUCTION (M3)

78  Papua New Guinea 140,000,000

79  Slovakia 128,000,000

80  Gabon 100,000,000

81  Spain 88,000,000

82  Morocco 60,000,000

83  Moldova 50,000,000

84  Senegal 50,000,000

85  Albania 30,000,000

86  Barbados 29,170,000

87  Greece 24,000,000

88  Afghanistan 20,000,000

89  Cameroon 20,000,000

90  Kyrgyzstan 18,000,000

91  Tajikistan 16,000,000

92  Georgia 10,000,000

93  Slovenia 4,000,000

94  Aruba 0

95  Botswana 0

96  Belgium 0

97  Belize 0

98  Benin 0

99  Bhutan 0

100  Guinea 0

101  Guatemala 0

102  Guam 0

103  Greenland 0

104  Grenada 0

105  Gibraltar 0

REST OF WORLD 0

SALE PRICE & MINIMUM GAS CHARGES Reference: http://www.ogra.org.pk/cats_disp.php?cat=90 Download link: http://www.ogra.org.pk/images/data/downloads/1278047663.pdf

OGRA ORDINANCE

Reference: http://www.ogra.org.pk/cats_disp.php?cat=11 Download link: http://www.ogra.org.pk/images/data/downloads/1132553559.pdf

WELL HEAD PRICES Reference: http://www.ogra.org.pk/cats_disp.php?cat=89 Download Link: http://www.ogra.org.pk/images/data/downloads/1271066453.pdf No Field-wise Well Head Gas Prices Field Name Units Price Effective 01-01-10 1 Adhi Rs.per MMBTU 124.03 2 Badin Compression Rs.per MMBTU 188.08 3 Badin Non-Golarchi Non-Associated Rs.per MMBTU 535.62 4 Bhangali Rs.per MMBTU 174.56 5 Bhit $ per MMBTU 3.7585 6 Bhadra $ per MMBTU 3.7585 7 Chachar $ per MMBTU 2.4897 8 Chanda $ per MMBTU 2.7225 9 Dakhani Rs.per MMBTU 124.26 10 Daru Rs.per MMBTU 109.24 11 Dhodak Rs.per MMBTU 248.27 12 Kandkot Rs.per MMBTU 143.87 13 Khipro Mirpurkhas Block $ per MMBTU 2.5348 14 Loti Rs.per MMBTU 116.75 15 Mehran Fateh Shah Rs.per MMBTU 2.6304 16 Meyal / Dhulian Rs.per MMBTU 108.68 17 Miano $ per MMBTU 3.4993 18 Mela $ per MMBTU 2.6525 19 Nandpur Panjpir Rs.per MMBTU 314.47 20 Pariwali $ per MMBTU 3.7585 21 Pindori $ per MMBTU 3.7585 22 Pirkoh Rs.per MMBTU 116.75 23 Qadir Pur Rs per MMBTU 227.68 24 Sadkal Rs.per MMBTU 498.94 25 Salsabil Rodho Rs.per MMBTU 2.8253 26 Sari Hundi Rs.per MMBTU 491.35 27 Sawan $ per MMBTU 3.4993 28 Sui Rs.per MMBTU 143.87 29 Turkwal $ per MMBTU 3.7585 30 UCH $ per MMBTU 3.9223 31 Zamzama SSGCL $ per MMBTU 3.4093 32 Zamzama SNGPL $ per MMBTU 3.4118 33 Zamzama Wapda/Guddu $ per MMBTU 3.4523 34 Zamzama - Phase - II (From 01.01.2010 to 05.06.2010) $ per MMBTU 3.4036 35 Zamzama - Phase - II (From 06.06.2010 to 30.06.2010) $ per MMBTU 3.4992

FFRONT-PAGE

Companies seek huge increases in gas tariff By Khaleeq Kiani

Saturday, 26 Jun, 2010 | 03:06 AM PST |

ISLAMABAD: Two gas utilities have sought Rs20.36 and Rs63.10 per unit increase in their prescribed prices with effect from July 1, to meet their revenue loss arising out of the government’s decision to increase excise duty on gas production by Rs5 per unit. Informed sources told Dawn that the Sui Southern Gas Company Limited (SSGCL) and Sui Northern Gas Pipelines Limited (SNGPL) had submitted their review petitions before the Oil and Gas Regulatory Authority. The ogra had not only rejected their petitions for tariff increase, but also reduced their prescribed prices by Rs4.53 per unit. Ogra sources said that the regulator had received the two review petitions. A petroleum ministry official said that Ogra was unlikely to accept the two review petitions, although it would be obligated to allow about Rs4.90 per unit increase on account of the rise in excise duty. The gas companies will probably be allowed to raise prices proportionate to the rise in excise duty, the official added. The two companies have pleaded that because of the government’s decision to increase excise duty on wellhead prices, it would not be possible for them to pay for gas purchases from producers. In the federal budget 2010-11, the government has raised the excise duty on natural gas from Rs5.09 at present to Rs10 per MMBTU. The decision will bring in an additional revenue of Rs7 billion. The money will go to Sindh in keeping with an understanding reached during negotiations for NFC award. The government has already decided not to pass on an average Rs4.53 per unit reduction in natural gas tariff approved by Ogra to mop up Sindh government’s gas-related revenue loss under the National Finance Commission Award. Ogra had decided on May 18 to reduce prices of natural gas by an average of 2.55 per cent, or Rs4.55 per unit, for all categories of consumers from July 1. A notification for maintaining gas rates is likely to be issued by next week. Sindh had agreed during the NFC talks to allow Balochistan to have higher returns on gas produced from that province for the last few decades to address longstanding grievances of the people of Balochistan The Ogra’s May 18 determination said the prices of gas for domestic, commercial, industrial, CNG stations, fertilizer, cement and power generation would come down both for SNGPL and SSGCL. The two gas utilities had sought an increase in tariff at the rate of Rs20.36 and Rs63.10 per million British thermal unit (MMBTU), respectively, but Ogra held that average tariff for both companies should be reduced by Rs4.53 per cent.

Reference: http://www.dawn.com/wps/wcm/connect/dawn-content-library/dawn/the-newspaper/front-page/companies-seek-huge-increases-in-gas-tariff-660

UNACCOUNTED FOR GAS Saturday, March 13, 2010

KARACHI: The Oil & Gas Regulatory Authority (OGRA) is likely to give some relaxation on Unaccounted for Gas (UFG) targets set for Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipeline (SNGP). “OGRA officials told that plan was under way to raise UFG limit from 5.5 per cent to 6.5-7.0 per cent. This bodes well for the local gas utilities as higher the UFG targets, lower will be the profit erosion for local gas utilities,” said Farhan Mahmood at Topline Securities. If that happens then SSGC and SNGP would be the beneficiaries, he believes, as their earnings will improve. World Bank will extent $250 million loan to gas companies to reduce UFG losses. However, no details have been released by these gas companies till now, he added. In order to check the efficiency of these gas utilities and to limit their line losses, government sets UFG targets for local gas companies. UFG is the term used for units, which are not billed (due to theft) or lost during the transmission of gas to the consumers. It is the difference of gas purchases and sales after adjusting internal consumption. For this, OGRA has allocated upper and lower limits. This means that if actual UFG losses will be higher than the upper limit, the entity would bear the full loss from its own profits. On the other hand, it can retain the savings in the event of performance being better than the lower target while absorb the 50 per cent of the loss on account of UFG between the lower and upper target, he explained. Historically, actual UFG losses are far above the upper targets due to system leakages and theft. Moreover, the value of UFG losses also depends upon cost of gas, as higher the cost of gas higher will be the value of loss units. That means whenever gas prices increases, probability of UFG losses to rise increases. According to fiscal year 2009 detailed accounts, both SSGC and SNGP posted combined UFG losses of Rs7.4 billion. SSGC’s actual UFG losses stood at 7.9 per cent (target of 5.15 per cent) to Rs2.8 billion whereas SNGP’s actual UFG losses were higher at 8.1 per cent (target of 5.15 per cent) to Rs4.6 billion. Their profits, on the other hand stood at Rs257 million (Earning per Share of Rs0.4) and Rs930 million (Earning per Shares of Rs1.7), respectively, Mehmood analysed. If there is an improvement in upper limit, SSGC would be the major beneficiary. According to our estimates, if upper limit of 5.5 per cent (set for fiscal year 10) is improved by 100-200bps, SSGC’s earnings will improve by Rs1-2 per share (263-526 per cent), provided other things remain the same. Similarly, SNGP’s Earning per Share will improve by Rs2 -4 (118-235 per cent of fiscal year 09 earnings). The brokerage house analysis was based on Rs239 per mmbtu cost of gas versus average Rs242 per mmbtu cost last year, he added.

Reference: http://www.thenews.com.pk/print1.asp?id=228625

SSGC TO SPEND RS24BN TO CHECK GAS LOSSES (FIVE-YEAR PLAN)

Last Updated on Saturday, 10 July 2010 16:41 Written by Administrator Saturday, 10 July 2010 11:08

KARACHI: The Sui Southern Gas Company (SSGC) plans to spend Rs24 billion over the next five years to replace corroded pipelines, which leak large quantity of gas, a top company official said on Friday. “We lose Rs10 billion every year owing to leakages,” said Dr Faizullah Abbasi, SSGC Managing Director, while talking to a group of journalists. “The regulator imposes penalty on us for this gas leak and we lose another Rs3 billion.” SSGC, one of the two natural gas distribution companies of the country, operates under strict monitoring of Oil and Gas Regulatory Authority. The utilities have to pay billions of rupees if gas loss, known as unaccounted for gas (UFG), exceeds five percent of total sales volume. SSGC has sales of around 1,100 MMCFD of gas annually. In nine months to March 2010, the UFG loss increased to 8.63 percent and the company reported loss of Rs306 million. “UFG might go up to 12 percent by 2015 if we continued with the current setup,” said Abbasi, who was appointed a few months ago. “We aim to bring it down to 6.5 percent over the next five years.” The World Bank has promised $250 million for improving natural gas supply infrastructure in the country. A part of these funds will go to SSGC, which is arranging most of the funds for the five-year plan from its own resources. Abbasi said that UFG losses stood at 100 million cubic feet per day (MMCFD), enough to run a 500MW power plant. “Fifty percent of this loss is because of pipeline leakages and measurement errors while the rest is due to theft.” The company has fast expanded its outreach in Sindh and Balochistan in the last ten years. From 1.5 million in 2000, the number of customers has jumped to over 2.2 million in 2010. The length of pipelines has increased to 34,000 km from 21,000km 10 years back. The growing thefts will not deter the company from adding customers, said Abbasi. “We have been adding more retail customers recently and that has contributed to the UFG,” he said, “but, being a service provider, we cannot deny anyone the right to have piped connection.” He said that the management has empowered officials at the grass root level to monitor customers and detect gas leakages and theft. “This approach has never been tried. Now there will be accountability of everyone from top to the bottom.” SSGC’s revenue, which is the purchase price of gas, is decided by OGRA. The price of gas is fixed to reflect all costs plus 17 percent return on company's fixed assets. That should have been enough for sustainable profitability. But because of the UFG loss, it often lands in the red. For years, the management has pleaded OGRA to separate its other incomes from gas tariff. SSGC's profit from meter manufacturing, late payment surcharge and royalty from an LPG maker are included in the tariff. Abbasi said that this was like a protection for consumers.

Reference: http://finance.kalpoint.com/highlights/business-news/ssgc-to-spend-rs24bn-to-check-gas-losses-five-year-plan.html

Daily Times - Site Edition Friday, July 16, 2010 By Masroor Afzal Pasha

REDUCING UFG LOSSES - WB TO GIVE $125M TO SSGC KARACHI: The World Bank (WB) is in final negotiations with the Sui Southern Gas Company (SSGC) for providing a soft loan facility of $125 million to arrest and reduce the uncontrolled Unaccounted For Gas (UFG) in the company’s network, which is causing a loss of roughly Rs 8 billion to Rs 9 billion annually. Earlier, the bank offered a soft loan facility of $125 million (Rs 10 billion) as the SSGC was struggling to cap as well as reduce UFG in its network, which is causing huge financial losses to it. “This huge loss is seriously denting the account-book of the SSGC on one hand, while the company (SSGC) is facing heavy fines from the Oil and Gas Regulatory Authority (OGRA) on the other.” This was disclosed by the SSGC’s Managing Director Dr Faizullah Abbasi, while briefing the ‘Orientation and Study Visit’ programme on Thursday. “We have entered in the advanced stage as a team of WB officials have recently visited the SSGC head office and discussed issues related to the gas utility,” Dr Abbasi said, adding “The WB would release the trench to the SSGC without the approval of its board, if the company fulfils and completes all formalities as well as requirements of the bank. The approval will not delay the tranche of WB,” he added. “The company is struggling hard to arrest and reduce the UFG that looms around 9 percent annually in SSGC network and is worrying the company as it costs around Rs 8 to 9 billion loss,” he said. “Due to the UFG loss, the authority (OGRA) is fining the SSGC over this uncontrolled loss to the company, which is also burdening the company’s account-book as well.” Dr Abbasi said, “Six months back immediately after his takeover as SSGC managing director, he launched a full-fledge campaign against the UFG loss and diverted substantial finances to arrest this colossal drain (UFG).” Since the start of this fiscal year 2010-11, we have launched a campaign to arrest gas leakage, theft and transmission losses, he added. Interestingly, the company has started to receive fruitful results after the initiation of UFG control campaign since start of July, this year, he remarked. Recently, the company formally started a 5-year plan for arresting the UFG or line losses. The company’s UFG or line losses hover near 9 percent, three percent higher than the benchmark set by OGRA. The company would have to pay Rs 3 billion, as penalty this year as the UFG level is three percent higher than the OGRA’s benchmark

Reference: http://www.dailytimes.com.pk/default.asp?page=2010\07\16\story_16-7-2010_pg5_7

SNGPL FAILS TO KEEP UFG LOSSES BELOW 5.15%

By Zeeshan Javaid ISLAMABAD: The Sui Northern Gas Pipeline Limited’s (SNGPL) unaccounted for gas (UFG) losses shot up as high as 8.1 percent equivalent to Rs 4.6 billion against a target of 5.15 percent fixed by OGRA for the current fiscal yea r (FY) 2009-10. Sources told Daily Times. He said actual UFG losses are far higher than the upper targets due to system leakages and theft, according to FY09-10 detailed accounts, both SSGC and SNGPL posted combined UFG losses equivalent to Rs 7.4 billion. “SSGC’s actual UFG losses stood at 7.9 percent against a target of 5.15 percent, equivalent to Rs 2.8 billion, while SNGPL’s actual UFG losses were as high as 8.1 percent against a target of 5.15 per cent equivalent to Rs 4.6 billion” sources added. Sources maintained that the reflection seems differing to the fact that the World Bank intends to give Pakistan $250 million so that both the companies could reduce UFG losses. Even if the World Bank was not willing to give money for revamping transmission and distribution network, these companies should have looked into the matter. He said any reduction in such type of loses can improve gas supply as well as cash flow. Therefore, to the utmost disappointment of the gas consumers and the shareholders of these companies, Ogra is contemplating to increase the permissible limit of UFG losses for both the gas companies, he added. In fact, UFG is the quantum of gas that is not billed either due to loss of gas during transmission and distribution of theft. It was believed that Oil and Gas Regulatory Authority (OGRA), being responsible for protecting the interest of all the stakeholders would make it mandatory for these companies to cut down this loss. During the last five years, highest UFG losses were recorded in Bahawalpur as 32.88 percent during FY 2007-08, while the lowest UFG losses during same year were recorded in Abotabad region as 0.31 percent. Sources revealed that during the last five years, Each Per Share (EPS) price of SNGPL has fallen from Rs 4.98 in FY 2004-05 to Rs 0.50 within half yearly FY 2009-10, while it has also learnt that during the last five years EPS price for SNGPL continuously reduced Document available with Daily Times revealed that UFG losses remained from 9.37 to 12.11 percent against the targets from 6 to 5.15 percent from FY 2004-05 to 2008-09, due to which, OGRA applied heavy disallowances from Rs 0.613 billion to Rs 6.283 billion, resultantly, actual percentage of return on operating assets has been reduced from 15.47 percent in FY 2004-05 to 3.74 percent in FY 2008-09 against the prescribed rate of 17.5 percent

Reference: http://www.dailytimes.com.pk/default.asp?page=2010\05\25\story_25-5-2010_pg5_6

Reference to original Document of checklist could not be attached due to confidentiality issue

Video of AP working in Oracle can be downloaded from following link

http://www.mediafire.com/?sharekey=644d2useiwft9

File Name - AP- NLO Working.wmv - 4.23min, 12Mb

File Name - AP - NLO - Printing bank vouchers.wmv – 2.02min, 9.38Mb

Reference to original Document CHARTER OF DEMAND “COD” cannot be added due to Company

Policy

Reference to original Document FLA – FARE LEAVE ASSISTANCE cannot be added due to company

policy

Video of AP working in Oracle of Overtime Punching can be downloaded from following link

http://www.mediafire.com/?sharekey=644d2useiwft9

File Name: Payroll - Overtime Punching in oracle.wmv – time 1.58min - Size 4mb

Reference to original Document CAPITAL BUDGET MEMORENDUM cannot be added due to Company

Policy

EXCEL based File CAPITAL BUDGET 2008-09.xls could not be added due to Confidentiality issues

Video of Capital Budget Explained in Details can be Downloaded from following link

http://www.mediafire.com/?sharekey=644d2useiwft9

File Name: Capital Budget Overview.wmv – time 35min - Size 123mb

File Name: Capital Budgeting checking in oracle.wmv – time 25min – Size 22mb

JOB RESUME- SAAD JAVED

Page 1 | JOB RESUME

Saad Javed

28/2 Phase V – khayban-e-Badar DHA Karachi

Phone: 021-5845779

Mobile: 0322-2771522

E-mail: saadjaved2@hotmail.com

OBJECTIVES

EAGER TO OBTAIN EMPLOYMENT IN THE GLOBAL ENERGY COMPANY, I AM EAGER TO PUT MY

EXTENSIVE KNOWLEDGE TO USE WITH A GLOBAL LEADER. THIS WILL ALLOW ME TO UTILIZE

MY BROAD FINANCIAL SKILLS PROVIDING A CHALLENGING WORK ENVIRONMENT.

EDUCATION

BBA - BAHRIA INSTITUTE OF MANAGEMENT SCIENCE (2010)

CGPA – 3.23

FIELD OF INTEREST

FINANCE

MAJOR COURSES DONE SO FAR

PORTFOLIO MANAGEMENT, AUDITING, FINANCIAL RISK MANAGEMENT

FINANCIAL MODELLING, FINANCIAL MANAGEMENT, DERIVATIVES

PRINCIPLE OF ACCOUNTING

MICRO, MACRO & MANAGERIAL ECONOMICS & INDUSTRIES OF PAKISTAN

WORLD TRADE ORGANIZATION, ORG BEHAVIOUR, MARKETING MANAGEMENT, HRM

REPORTS & PROJECTS

STEEL INDUSTRY OF PAKISTAN

EPZA – EXPORT PROCESSING ZONE AUTHORITY

NFC – NATIONAL FINANCE COMMISION AWARDS OF PAKISTAN

RESEARCH ON ISLAMIC & CONVENTIONAL BANKING (PERCEPTION)

CONFLICT MANAGEMENT REPORT ON PIA

ADVERTISEMENTS – CHANGING OUR VALUES & LIFE IN POSITIVE OR NEGATIVE WAY

INTERMEDIATE - BAHRIA COLLEGE NORE-1(2005)

INTERMEDIATE (SCIENCE) – GRADE C

MATRIC - BAHRIA COLLEGE NORE-1(2003)

MATRIC (SCIENCE) – GRADE B

JOB RESUME- SAAD JAVED

Page 2 | JOB RESUME

EXPERIENCE

SSGC (SUI SOUTHERN GAS COMPANY)

INTERNSHIP DURATION: 6WEEKS INTERNEE PROGRAM (17 June – 29 August 2010)

WORK EXPERIENCE: REVENUE (GAS PURCHASE), GENERAL LEDGER, CAPITAL

BUDGETING, PAYROLL, ACCOUNT PAYABLE

BP (BRITISH PETROLEUM)

INTERNSHIP DURATION: 6WEEKS INTERNEE PROGRAM (15 July – 31 August 2009)

WORK EXPERIENCE: REVENUE (GAS SALES), ACCOUNT PAYABLE, TAXATION,

TREASURY,

BRAND AMBASSADOR(HIRED BY 3RD PARTY IMPACT)

JOB DURATION:3WEEKS ACTIVITY AT MACRO, PARK TOWERS & DMART

JOB DESCRIPTION: COMMUNICATING WITH CUSTOMERS TO PROMOTE PRODUCTS OF UNILEVER

COMPANY, SPREADING AWARENESS OF PRODUCT AND FREE SAMPLING

SKILLS

EXPERTISE IN HARDWARES AND SOFTWARES

EXCELLENT IN REPORT MAKING, WORD, POWERPOINT

FINANCIAL MODELLING – EXCEL

INTERNET AND PC TROUBLESHOOTING

TECHNICAL SKILLS IN APPLICATION SOFTWARE SUCH AS ADOBE PHOTOSHOP

HOBBIES &INTEREST – WEBSITE DESIGNING, SWIMMING & COMPUTER RELATED STUDIES

QUALITIES

ORGANIZED & WELL MANAGED

CREATIVE & INNOVATIVE

STRAIGHT FORWARD

DETERMINATION AND DEDICATION TOWARDS WORK & TASK ASSIGNED

HONEST & LOYAL

FRIENDLY NATURE & FLEXIBLE PERSONALITY

ABILITY TO ADJUST AND WORK IN TEAM ENVIRONMENT