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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
G-I - Clerk – peon
PERMENANT
UNINONZED

G-II - -
STAFF

G-III - -
G-IV - -
G-V - Super intendant
G-I - Officer
G-II AM Assistant Manager
G-III DM Deputy Manager
G-IV M Manager
EXECUTIVE STAFF

PERMENANT

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 GRADE LITRES/month


1. Petrol Allowance is paid in advance VII 184
2. if petrol price is changed its adjusted in next month VIII 273
3. Car maintenance is also borne by the company IX 364
MD 340
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

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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
CHARTER OF DEMAND WORKING
period
2007-2008 COD expires
2009-2010 New COD Negotiation held before the COD for 2009-10 is made all
01-Aug-10 st
New COD made on 1 august 2010 allowance will be given according to old COD
Effective from 1st Jan 2009 to 1st Dec 2010 Adjustments will be done according to new
12-Dec-10 COD expires COD for period in which expired COD was
used

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 REVISED PAY SCALE


(MIN BASICPAY – INCREMENT/YEAR – MAX BASICPAY) (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 RATE OF UNIFORM FOR YEAR 2011


FOR THE YEAR 2010 & 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 1991 46
Assumed
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

P a g e | 45 s
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

P a g e | 46 s
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 | 47 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 | 48 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 | 49 s
Above is the list of SGM(s) responsible for cutting down proposed budget of their division

P a g e | 50 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 | 51 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 | 52 s
Example of Approved Budget for Vehicles

SUMMARY of Approved Vehicles Budget

P a g e | 53 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 | 54 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 | 55 s
DETAILS OF BUDGET

P a g e | 56 s
RECOMMENDATIONS
UFG should be controlled, and should be taken as 1 st 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

P a g e | 57 s
APPENDIX – A
WORLD GAS PRODUCTION
RANK COUNTRY NATURAL GAS RANK COUNTRY NATURAL GAS
PRODUCTION (M3) 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

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

 Page 1 | JOB RESUME


JOB RESUME- SAAD JAVED

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

 Page 2 | JOB RESUME