Sui Southern Gas Company limitedINTRODUCTION 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 (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. SSGCL transmission system extends from Sui in Baluchistan to Karachi in Sindh comprising over 3,200 KM of high pressure pipeline ranging from 12 - 24" in diameter. The distribution activities covering over 1200 towns in the Sindh and Baluchistan are organized through its regional offices. An average of about 381,277 million cubic feet (MMCFD) gas was sold in 2008-2009 to over 1.9 million industrial, commercial and domestic consumers in these regions through a distribution network of over 29,832 Km. The company also owns and operates the only gas meter manufacturing plant in the country, having an annual production capacity of over 550,150 meters. The Company has an authorized capital of Rs. 10 billion of which Rs 6.7 billion is issued and fully paid up. The Government owns the majority of the shares which is presently over 70%. The Company is managed by an autonomous Board of Directors for policy guidelines and overall control. Presently, SSGC's Board comprises of 14 members. The Managing Director/Chief Executive is nominee of GOP and has been delegated with such powers by the Board of Directors as are necessary to effective conduct the business of the company. ESTABLISHMENT: The Company in its present shape was formed on March 30, 1989 following a series of mergers of three pioneering companies, namely Sui Gas Transmission Company Limited, Karachi Gas Company Limited and Indus Gas Company Limited. 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 centers 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. Today, half a century of professionalism and progress has made the SSGC one of the largest integrated natural gas transmission and distribution companies in ZARA ABDUL AZIZ Page 1 Sui Southern Gas Company limited Pakistan, serving the entire Southern region of the country, comprising the provinces of Sindh and Baluchistan. Company Vision: To be a model utility providing service by maintaining a high level of ethical and professional standards and through optimum use of resources. Company Mission: To meet the energy requirements of the customers through reliable, environment-friendly and sustainable supply of natural gas, while conducting company business professionally, efficiently , ethically and with responsibility to our stakeholders, community and the nation. CORE VALUES Integrity: Keep Company's Interest above self. Acts in ethical manner. Promote ethical business environment. Take effective actions if observers unethical behavior or situation. Seen & known to be honest. Lives within means. Intellectually honest. 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. ZARA ABDUL AZIZ Page 2 Sui Southern Gas Company limited 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. Organizational Structure The Company is organized into six functional divisions -Transmission, Distribution, Commercial, Engineering Services, Management Services, and Finance. Each division is headed by a Senior General Manager assisted by a team of professional staff, with the exception of Finance, which is headed by the Deputy Managing Director. Policy matters relating to the natural gas sector are handled by the GOP. OGRA is responsible for regulation, pricing, revenue determination and compliance to service standards. The Board of Directors has the overall responsibility for the management and control over the Company. The management enjoys operational autonomy. The major portion of the work force consists of technically qualified and skilled personnel. ZARA ABDUL AZIZ Page 3 Sui Southern Gas Company limited FINANCE DEPARTMENT This year the budget for SSGC is announced Rs.6 billion ZARA ABDUL AZIZ Page 4 ORIX POS.700 MMCFD by 2010. Consistent appreciation in shareholder‟s value by increasing the company‟s asset base and significant improvement in productivity and efficiency. training of employees and development of management. Set up Enterprise Information System (EIS) in all areas of business using state of the art technology to make SSGC the “Most IT Enabled Company.” Human resource development and empowerment of employees through career planning and continuous management/vocational training. Call Centres.000 km by 2010 connecting 600 new towns and villages in Sindh and Balochistan Enhancement of gas supply to power plants. NADRA-Kiosk). Increase of the customer base from nearly 1.9 billion. Drop Boxes. occupational health and safety system as required under Certification ISO 14001 and OHSAS 18001 standards. Establishment of 16 fully automated (additional 8 in progress) on line customer facilitation centres. friendly and efficient customer services under the vision of “Service with a smile”.000 new customers to the Company‟s system.942 km in 2005 to 3. Internet. Implement environment management system. Latest technology digital prepaid meters with improvement of call centres to include an online customer information system. ZARA ABDUL AZIZ Page 5 . CIS. to improve company efficiency and implement ERP. Revamp the current business processes.550 km by 2010. GIS and the best business policies for ISO 9000 certification.2 million by adding 447.764 km in 2005 to 31. Improve the quality of human resource through career planning. Expansion of distribution network and supply mains by 5. Focus on improved.236 km from 25. Key objectives of the strategic plan for the next five years (2005-06 to 2009-10) are the following: Expansion of transmission network by 608 Kames from 2. enhancing capacity from 1.300 MMCFD in 2005 to 1. industrial and commercial sectors including supply of gas to previously deprived areas in the domestic sector. Increase surveillance and introduce an automated emergency response system (ERS) and SCADA for the security of company assets including the transmission and distribution networks.8 million to 2. Multiple bill payment options and channels (ATM.Sui Southern Gas Company limited FUTURE OUTLOOK The Company is pursuing an ambitious five year development and expansion plan estimated at Rs 42. The Company is also introducing innovative Pre-paid Gas Meters for convenience of customers. the Information Technology Department is rendering strong support to SSGC.saving valuable time and minimizing errors. DISTINGUISHING FEATURES 1. as a good corporate citizen. SSGC is set to become the most IT enabled Company in the country. Excellence in Customer Service: The SSGC motto is 'Service with a Smile' and SSGC people strive to provide unmatched and diverse services to customers through innovative and progressive ideas in line with best international practices.Sui Southern Gas Company limited Community support services and corporate communication initiatives to meet the national and social responsibilities. Pre-paid meters offer such facilities as advance payment and flexible payment and allow people to manage gas consumption at their own convenience. all SSGC meter reading is now carried out through hand-held computers . queries and suggestions. For speedy and efficient handling of customers‟ complaints. Today. The company undertakes several initiatives to ensure induction and training of professionals with the objective of ensuring high level of professionalism and productivity of its employees. SSGC's computerized billing system prints bills through the online network in the entire franchise areas. 3. Human Resource Development is one of the top priority areas at SSGC. technology brings greater benefits to customers. For example. ZARA ABDUL AZIZ Page 6 . Edge in Technology: Quest for excellence and cutting-edge technology has played a key role in SSGC expansion and strength. Above all. SSGC has developed Customer Facilitation Centers in all major towns and large population centers that provide fast and efficient response to customers‟ queries and complaints. Developing Human Assets: SSGC believes that satisfied employees provide Quality service. 2. SSGC provides satisfaction of its employees and gives them adequate incentives to provide high quality work. Realizing the need for integration of IT into core business processes. such as PL Studio simulation software. wars acts and similar activities. 6. These are fully equipped to deal with any emergency situation in case of transmission gas pipeline rupture/fire resulting from sabotage. Telecommunications: Telecommunications plays a vital role in maintaining high operational efficiency at SSGC. Promoting Safety: SSGC is committed to the health and safety of its employees and preservation of the environment in its areas of operation. processes and procedures needed to achieve safe operations are identified. Through the advanced microwave digital network.a computer-based system that effectively provides forecasting data for further strategy development. 4. 5. Nawabshah. ZARA ABDUL AZIZ Page 7 . implemented and maintained. driving higher performance. efficiency and financial viability of new projects.Sui Southern Gas Company limited A key initiative of this department is the implementation of the Geographic Information System . and with video conferencing facility. Since the pipeline network forms the backbone of SSGC's operations. It‟s Health & Safety and Environment (HSE) management system ensures that the standards. Maintaining its technological edge. SSGC has signed a comprehensive enterprise agreement. with Microsoft . Dadu and Sibi Head Quarters. Enterprise Resource Planning (ERP) software integrates all departments and functions on to a single computer network. Increasing the efficiency of business processes is another priority area for SSGC. Shikarpur. all SSGC offices and facilities remain connected 24 hours a day. Emergency Response Centers (ERCS): ERCs are working at six key locations at Karachi and Quetta terminals. which accurately simulates the large and complex pipeline network.the only such agreement by a public sector utility company in Pakistan. special steps have been taken towards ensuring maximum efficiency. I. Expansion of distribution and transmission network for enhancement of gas supply to power plants. developing Human Resources and pursuing overall business excellence. The company has adopted an aggressive approach to empower the executives and to create awareness in the rank and file for changing the routine business processes with people-centric work methodology with focus on moving over to best business practices. industries and commercial sector including supply of gas to previously deprived areas in the domestic sector. improved business process. ZARA ABDUL AZIZ Page 8 . Enterprise Information System (EIS) and technology implementation in all areas of business to make and maintain SSGC the most IT enabled company. Business Process Re-engineering (BPR). Optimizing market flexibility and maximizing return on investment from major change initiatives are key success factor for the company. Improvement in reliability and security system. re-structuring of select departments and implementation of ERP to provide effective M. processes and technology. Consistent appreciation in shareholder‟s value by increasing the company‟s asset base and significant improvement in productivity and efficiency. Human resource development and empowerment of employees through career planning and management / vocational training. The company has taken the lead in integrating Change Management within its people. The SSGC has pioneered efforts for deployment of a cost-conscious and performance-based culture and empowerment of the employees to provide for achievement and excellent at all levels. The company identified successfully different layers of change that needed to be managed concurrently for large projects to be implemented on schedule and within budget. Customer satisfaction. an appreciable change in productivity was achieved. quality services and promotion of service with a smile culture.S for business operations and control. Within the induction of new. innovation.Sui Southern Gas Company limited STRATEGIES The company has moved beyond basic reengineering as it builds and reinforces culture change by creating performance opportunities. and improved bill delivery. 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. COMPANY’S OBJECTIVE The Company aims to supply natural gas wherever there is sufficient load to justify the cost of infrastructure. commercial & domestic) to its customer base and lays hundreds of kilometres. Community support services and environmental protection initiative to meet the national and social responsibilities as a good corporate citizen. 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 Balochistan. 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. installation of pre-paid meters.000 new customers (industrial. Every year.Sui Southern Gas Company limited Improvement in customer services through additional Customer Facilitation Centers. ZARA ABDUL AZIZ Page 9 . the Company adds nearly 75. which currently are deprived of piped natural gas. This Oracle system is extremely valuable in assisting us to develop a business and technical framework for the future. Oracle. Finance department of SSGC is based on Oracle 11i system. Reengineering business processes according to best practice guidelines is increasing efficiency and streamlining workflows is bringing about increased productivity as well as enhanced information accuracy. integrated business management platform and workflows that adhere to global best-practice standards. SSGC is one of 16 utility companies in Pakistan. but is the only one with a comprehensive. and aligning its business strategy with technology solutions to give the company control over different operational areas of the business. ZARA ABDUL AZIZ Page 10 . SSGC regards the Oracle implementation as an essential ingredient of a wide-ranging Strategic IT Program to achieve business goals. The case study itself mentions that the company experienced “dramatic efficiency improvements” in different functional areas as a result. the world's largest enterprise software company has published a Case Study on Sui Southern Gas Company (SSGC) that sheds a comprehensive light on the company‟s successful implementation of several modules of Oracle E-Business Suite. The Oracle implementation has helped SSGC gain enterprise-wide view of operations by replacing disparate systems with an integrated business management platform. The key benefits SSGC is deriving as a result of the progressive implementation of the integrated Oracle E-business Suite.Sui Southern Gas Company limited Oracle E-Business Suite The SSGC is totally based on Oracle E-Business Suite application which is new integrated enterprise resource planning (ERP) system. Titled “Sui Southern Gas Company improves efficiency with integrated business management platform”. Revenue control b. Bills Payable a.Sui Southern Gas Company limited FINANACE DEPARTMENT These are the following sections included in Finance Department: Cash & Budget section General Ledger Bid bond section GDS & GTPL Projects Bills section. Fixed Assets & Capital Budget ZARA ABDUL AZIZ Page 11 . Local order 4. Treasury Function a. Non-local order b. Payroll section Insurance section Gas purchase section Funds section Cost and budget section Fixed assets & budget section Areas of working: 1. Cash & Bank 3. Funds section 2. Sui Southern Gas Company limited ZARA ABDUL AZIZ Page 12 . Pension fund: 20% of the basic salary fully contributed by the company added in the company‟s cost. Expiry/Death The % which is contributed by the employees and the company are as follow: Gratuity fund: 8. The contribution in these funds by the company is the indirect benefits to the employees which are added in the cost of the company.Sui Southern Gas Company limited FUNDS SECTION INVESTMENT: Since the company established. Pension and Benevolent funds are given after the retirement and provident funds are used as loans. 6. Resignation 4.200 million in Habib Bank Limited for 3 months at because at this time many staff members are getting retired and to make final settlements huge amount is required.499% per annum and about Rs. because of recession. 7. ZARA ABDUL AZIZ Page 13 . 5.5% of the basic salary fully contributed by the company which is added in the cost of the company. On the next pg the rates are given of different saving schemes. Executive staff provident fund Non-executive staff Provident fund Executive staff Gratuity fund Non-executive Gratuity staff Executive staff Pension fund Non-executive staff Pension fund Executive staff Benevolent fund Workers Profit Participation fund The funds and loans are given only to the Executive and Non-Executive staffs of the company. SSGC accumulated funds in billions and deposited in the banks for returns. 3. 8. Termination 2. Funds are given on 4 conditions: 1. took out all the Funds which were deposited in the banks as the discount rate dropped down to more than 50% and invested all the funds in the Government of Pakistan‟s Special Saving Certificates for 3 yrs at the return of 15. Recently SSGC. 4. 2. Retirement 3. TYPES OF FUNDS: 1. Gratuity. 800 3. 1. Resignation: Rs 76. Example: Mr. Basic salary: Rs 76.000/= 2. 450(fixed) => Rs.583.760.096 Years: Rs.26. Its equals to 28 yrs because in executive 6 months are equal to 1 yr.929.20 days with condition of maximum 30 yrs of service.886 = Rs.Sui Southern Gas Company limited Benevolent fund: 1.944/= ZARA ABDUL AZIZ Page 14 .419. 12.509. Basic + Commission on leaving Allowance*2 => Rs 12.1% of the basic salary is contributed by the employee and rest by the company. Provident fund: 7.208.50 days Resignation – 10 days Opt Pension against Gratuity. 10.546 + Rs 1.429 Total Amount: Rs 230.5*12*11. 10.50*27. Gratuity Fund It is the fund which is paid on retirement. 2.050 per month CALCULATION: 1.048*2= Rs. resignation and expiry but not on termination.886(calculated) Rs. Full Gratuity: Rs.146. 76.546/= Net Pension Payable: 50% of Gross pension = Rs.096/365 * 6= Rs.050*10/30*28yrs = Rs. 096 * 8 = Rs.5% of the basic salary is contributed by the employee and the same amount is contributed by the company.096/12 * 10 = Rs.600 = Rs. 3. There are different criteria for executive and non-executive staff for the computation of Gratuity Fund.584/= P. 26.167/= Commutation= 50% of Gross pension*12*11. Non-Executive Staff – 60 days or 2 months Basic salary: Rs.598 Yr of service: 8 yrs 10 months 6 days.747 Days: Rs 26. Total Pension: Rs 1. Opt Pension: As per rule Commutation + Gratuity in lieu of Pension Gross pension = 1% of basic salary * yrs of services.509. GP: Rs.833yrs = Rs.549.768 Months: Rs 26.21.598 + Rs.050* 50/30*28 yrs = Rs. They are as follows: Executive staff: Full Gratuity . 709. 13.ABC Yrs of service: 27 yrs 10 months 14 days.M. 21. Sui Southern Gas Company limited Benevolent Fund It is only for Executive staff. To withdraw funds along with A/c B contribution.001 & above Rs 5000 Case I: On Retirement: Every month the amount of benevolent fund is send to the staff through cheque and on every 1st January .000-20. Workers Profit Participation Fund This fund was introduced by Mr.1% basic salary from the date of joining till the date of retirement.001-25000 Rs 2. then he can withdraw it from his account only that is A/c A. Every year 5% of the company‟s profit is contributed to this fund and according to the basic salary.4. only Rs 2.000 is given in the month of Jan and from Feb.g. range of salary is provided upon which the amount of benevolent fund is given to the staffs.. ZARA ABDUL AZIZ Page 15 . e. Refundable 2.000 Rs 2.000 Rs 20.000 Rs.000 will be given Case II: Before Retirement: It is possible on medical grounds then the fund is given for 5 yrs including the yrs left for retirement. given after retirement on monthly basis for 5 yrs. Calculation is as follows: Benevolent fund for January ‟09= Rs 2. Salary Benevolent Fund Rs 15.Bhutto in 1969 for the needy staff. Rs 90.4. Non-refundable: After attaining the age on 50 yrs. So SSGC renamed it to Workers Profit Participation Fund to provide benefits to the Non-Executive staff. Provident Fund loan 1. (Form Enclosed) These two types of loans are granted to Executive and Non-Executive staff of the company on 6 or 18 months of installments.000 Total payment for January= Rs. the amount of funds is given.000 Arrears = Rs2.050…. According to the ordinance. The funds are collected by taking the % of staff‟s basic salary and accumulated in the staff‟s account which is A/c A and the same amount is accumulated in company‟s account which is A/c B. This fund is collected by the contribution of staff‟s 1. staff has to complete 5 yrs of services or else before 5 yrs if the staff withdraws money. the arrears is included along with the amount of benevolent fund.. XYZ will receive Rs.XYZ has attained the age of 60.5% CONTRIBUTION STATUS Accounts A Rs. 672 as a loan. XYZ‟s 18 months basic salary will be deducted along with property papers so when the amount of loan is paid back. If it‟s refundable then Mr.13986 @ 7. Opening Balance 9394 Date Earned 31-JUL-08 945 31-AUG-08 945 30-SEP-08 945 31-OCT-08 945 30-NOV-08 2466 31-DEC-08 1049 31-JAN-08 1049 28-FEB-08 1049 31-MAR-08 1049 TOTAL: 19836 TOTAL A&B 39672 B Rs.Sui Southern Gas Company limited Example: Provident Fund Loan Mr.XYZ Basic salary: Rs. company will return the papers and 18 basic salary will be added back to his account. ZARA ABDUL AZIZ Page 16 .39. 9394 945 (salary in 2007) 945 945 945 2466 (increment + 1049 (incremental salary) 1049 1049 1049 19836 Mr. Ifs its non-refundable then it means Mr. which are somewhat interrelated. In short. REVENUE CONTROL As we all know that SSGC is a Transmission and Distribution company so its main revenue comes from the bills collection. In the year 2008. Industrial: SSGC is doing an excellent job in fulfilling the gas needs of the industrial sector of our economy. The gas consumption of the industrial sector has been showing growth every year. The division is as follows: Cash & Bank Loan Payments and Funds Management Revenue Control Taxation Investments All these sections have separate section heads that are responsible for the activities of the people working in their section. The customers engaged in the process of creating value added finished products from industrial raw materials are called industrial customers. SSGC have catered to almost new 374 industrial ZARA ABDUL AZIZ Page 17 . payment of foreign or domestic loans. Pakistan steel. receipts. However. FFC Jordan Fertilizer. SSGC is striving hard to increase its customer base and to meet the everincreasing demands of its customers.Sui Southern Gas Company limited TREASURY FUNCTION SECTION The Treasury Function Department of the finance department basically deals with the disbursements. More than 3000 industrial customers buy natural gas from SSGC. The treasury function department can be further subdivided into five major categories. management of funds. These section heads report to Chief Manager (CM) Treasury Function who is responsible for the overall activities of the treasury function Department. treasury functions deals with the flow of money either in the form of inflows or outflows. An important task of the Treasury function department is to keep a check on the company‟s current liabilities account and make sure that their current liabilities do not exceed their current inflows of cash. Ice factories. This category of customers includes the CNG stations. collection. SSGC deals with 3 different types of customers: 1.99% of the revenue is from main business and 1% from bi-product. revenue control and reconciliation of bank and customer accounts. Cement factories. clubs. nearly 1. 3.000 and the list is growing. the SSGC motto 'Service with a Smile'. Commercial: Commercial segment is also one of the important segments of SSGC customer Base. Karachi – unit A Interior Sindh – unit B Baluchistan – Quetta unit ZARA ABDUL AZIZ Page 18 . Almost 686 new commercial customers have registered only in Karachi in the year 2008-09. guesthouses. The processing fee for industrial consumers is Rs. These are the ones having largest debt to pay SSGC which have not been cleared for quite a long time and are increasing day by day. These domestic customers include residential colonies. mosques. colleges. All customers have different duration to pay their bills and the dues are charged as prescribed by OGRA. Govt.000. Nearly 98% of SSGC customers can be categorized as domestic users. ORGA gives the rates for different customers to charge them accordingly. It is collected from 3 different area. churches. other religious places. over 100 smaller towns and 930 villages. offices and hospitals. armed forces messes and universities. Sukkar and Quetta). Of these. Recently Tandoor walas has also been added to the customer‟s list as they are now treated separately. 2. orphanages and other charitable institutions. The number of commercial consumers currently exceeds s 20.Sui Southern Gas Company limited customers‟ demands in Karachi. SSGC charges interest on over dues to both of its industrial customer. and Semi-Govt. maternity homes and other small businesses etc. places of entertainment like cinemas. Keeping in mind. WAPDA and KESC (Largest customer): KESC have 14 stations situated all in Karachi and WAPDA includes 4 different stations ( Jamshoro. SSGC has nearly 1. schools and private educational institutions.40 million are located in Karachi and the reaming in the rest of the Sindh. laundries. and private office.94 million domestic customers in 6 major cities. and hostels attached thereto. These processing charges are non-refundable but adjusted with the cost of the connection charges. theaters. barbershops. Many industrial consumers use natural gas for captive power generation as well as to meet their process needs. 10. The processing fees for domestic customers are Rs. This category includes all establishments registered as commercial units with local authorities or dealing in consumer items for direct commercial sale like cafes. canteens. the people at SSGC have always strive to provide un-matched and diverse services to customers through innovative and progressive ideas in line with best international practices. tea stalls. Kotri . in Karachi only almost 144 new commercial customers have registered. milk shops. Domestic: A large portion of SSGC customer base comprises of Domestic customers. 1000 and it is non-refundable. clinics. As a result. Govt. temples. In the year 2008-09. bakeries. g. A pay order is maintained payable to SSGC of the amount accumulated by every bank branch and deposited in DIB (Dubai Islamic Bank) by NIFT where SSGC account is maintained. This section also deals with bank and customer queries. b. Most frequently the query that this department has to deal with is that.Sui Southern Gas Company limited Process: a. Revenue control department is also responsible to deal with any customer query. When all the bills collection is done on particular day. process them. Bank returns the bill and keep the STUB (a small receipt containing the customer number and the amount paid. e. The customer will go to customer facilitation service centers. Bank employee stamps the bill which includes date of payment. Bank Queries Sometimes queries may also occur in collection of bills payable or in updating customers‟ accounts. and reconcile the amount but if there is a difference between the amount we claimed and gotten amount then that case must be kept in pending. stub is scanned which reads the customer information automatically generated in the system. Customer submits the bill in the bank. The challans received on daily basis are sent to Revenue Control Section for to be listed on daily basis and after listed down in RCA section all documents are transferred to the Billing department for verification that what we got must be equal to the amount we claim for. SSGC have out sourced its collection process through NIFT. Pay order is then handed over to NIFT ( National Institutional Facilitation Technologies). bank sum up all the collections and prepare a PAY ORDER. It is attached to the bill). or Head Office to solve his query. in this case arrears are included in the rent month bill. However SSGC has given a relaxation to banks in this case. It collects all the document. So automatically system Debits the Bank account and Credits the Customer Account. ZARA ABDUL AZIZ Page 19 . Bank records all the paid bills on daily basis on a sheet know as SCROLL SHEET which includes customer number and the amount paid. to cut arrears and receive only current bills in case of any mistake by bank on presenting any prove by customers. So. the bank has received the amount from a particular customer but due to some mishaps or cursory. c. h. amount has not been recorded in the scroll. Consumer Facilitation Services Consumer facilitation centers are at Head office. Regional offices and at all zones. d. f. Query may be of any kind. The amount that is presented in bank statement on debit side and that ZARA ABDUL AZIZ Page 20 . Less: Cheques issued but not presented. So. Basically four heads are included in reconciliation statement. Reconciliation process is carried by tallying the bank book and the bank statement.Sui Southern Gas Company limited Sometimes. this department makes a yearly estimate of gas collection charges to cost department. Bank Reconciliation section maintains a daily bank record in bank book or company book to check the huge difference which might arises due to some mishaps. It is the process of checking the figure that appears in Bank statement and the figures appear in our collection. Add: Amount Debited by bank but not yet accounted for Less: Amount Credited by bank but not yet accounted for Add: amount deposited but not yet credited by bank. Revenue control has also to pay to NIFT for processing charges. All these types of queries are solved or deal by Revenue Control Department. The difference that appear in between them called “Outstanding”. then that particular kind of error is rectified through bank reconciliation statement.SSGC deals with almost 38 banks. Revenue Control Department also pays to bank the collection charge which varies from time to time. NIFT does processing of all the banks collections accept Habib Bank which does its processing itself. Each bank has maintained collection account of SSGC bank while Allied Bank ltd has maintained disbursement account as well. And if differences appeared then that would be checked by going in whole process either the amount is shown would be presented through “RV” in our collection book or by payment vouchers. Process of Reconciliation The process of Reconciliation is quite intrusting. bank has received a smaller amount but has included in the scroll a large sum which is definitely a big issue to deal with. If there any error occurs. Sometimes memo adjustments are made to satisfy query of customers. but this department does it very discreetly and prudently. either that would be presented in credit in bank statement. debit in bank statement.Altough it is a very abstruse and obscure task to manage it. RECONCILATION Bank Reconciliation is an important function of cash and bank section. credit in collection book or debit in collection book. Through this section all the check and balance is maintained over the treasury function department. then there would be a need of payment vouchers that either that amount is being taken out by any other mean and if the amount appear on credit side in bank statement and does not appear in collection book then that must be point out by having a look at RVs. a single mistake would make a big effect on whole reconciliation process of a particular bank and also on Company‟s revenue. all the checking process over the banks has been carried out like credit / transferred inn amount should be checked from bank statement. ZARA ABDUL AZIZ Page 21 . Reconciliation by different Banks Different Banks are reconciled by different methods and behaviors. Along with bank‟s collections reconciliation its booths collections are also reconciled having amount of challans. The Banks having less quantity of branches are reconciled thoroughly like (METROPOLITAN BANK) where as banks having largest quantities of branches are reconciled by total amount like (ALLIED BANK OF PAKISTAN). It is done very professionally. After going through all process like reconciliation etc those amounts has been transferred out to the Head office. the collection of bill payments and challans by a particular bank is transferred in lump sum amount to the SSGC account.Sui Southern Gas Company limited is not completely figured out by all commission charges those are charged by bank / branches or by other expenses. The funds those have been transferred to Head office. At Head office it is the responsibility of RCA to have a close look at those transferred funds and maintain them at Head office. those funds have been kept in respective banks as per declared for transferred funds from higher management for obtaining maximum return. FUND MANAGEMENT Funds Transferred Inn The collection at Quetta and Hyderabad from receiving bills and other payments made to SSGC has been received respectively by regions. The management of funds is very important work and has to maintain / manage with very care. Therefore the lump sum amount should be equal to the amount appeared in collection book by adding bills collection and challans. Management of Funds As per mentioned that funds have been gotten from collection of gas bills and Quetta and Hyderabad unit transferred that amount. bank credit interest rates and also fallow on the change in interest rates. all the charges including collection charges. JJVL also pays royalty and transportation charges to SSGC LTD.Sui Southern Gas Company limited NON-GAS REVENUE Non-gas revenue is also important and fundamental department of Treasury functions. This gas is then transmitted to consumers for domestic or commercial use. oil is separated from that gas..JJVL extracts the LPG from gas. SALE to JJVL (Jamshoro Joint Venture ltd) SSGC LTD has also made an agreement with JJVL for under which JJVL by SSGC is SSGC LTD daily supplies upto 200MMCF in JJVL plant from Badin field which is located in Hyderabad. The revenue generated from the sell of LPG is received by JJVL. 2. After separating the oil from gas. which is the income of SSGC LTD. The four major sources of non-gas revenue are: Condensate sell Sell of gas to JJVL for extraction of LPG. Liquid petroleum gas is then filled in the cylinders and is sold in the market. The gas of Badin gas field contains a large amount of liquid petroleum gas (LPG). less amount is recovered from the sell of this gas. ZARA ABDUL AZIZ Page 22 . The heating value of or chlorofic value(GVC) is reduced after the separation of LPG. SSGC earns a huge income from the sell of other materials and services. Thisdifference of in and out is called gas shrinkage. Before transmission of gas. The volume and heating value is reduced after the separation of LPG. One of the most important field Badin gas field in Hyderabad. The gas which is extracted from Badin gas field contains some quantity of liquid oil. that crude oil. Non-gas revenue means income from other than sell of gas.SSGC has installed separators for the separation of oil from the gas.Because of low heating value. Condensate Sell Condensate sell means the sell of liquid oil which is mixed up with some type of natural gases. on the directions of government is sold entirely to Attock Refinery ltd Attock Refinery LTD uses the crude oil in production of gas line. Gas meters sell Pipeline rental income 1. 1. Pirkoh Gas Field Hasan Gas Field Zamzama Gas Field Bhit Gas Pipeline ZARA ABDUL AZIZ Page 23 . In 1976 meter plant was installed for manufacturing of domestic gas meters. But still industrial and commercial meters are being imported. Previously the gas meters were imported from foreign countries.SSGC LTD mainly constructs two types of pipelines. Hence. Meter Plant transfers meters at cost price to SSGC. Selling Process Meter plant has mainly two customers. These meters are used in the province of Balochistan because of too much cold. SSGC LTD and SNGPL charge meter rent to domestic consumers. Pipeline Rental Income SSGC LTD is also striving hard to generate their income by renting pipelines. no profit no loss exists in the transaction of selling.Sui Southern Gas Company limited 3. Transmission pipeline Distribution pipeline Transmission pipelines are used to transmit the gas from gas fields to another. only domestic meters are produced by meter plant. One is G-16 having low capacity and others are G4 domestic meters which have large capacity.SSGC LTD has given on rent the four gas transmission pipelines to different companies. Price for the sell of meters to the SNGC LTD is negotiated between the two parties. While distribution pipelines are used to distribute the gas to different consumers. Therefore. GAS METERS SALE Gas meter sell is also an important source for SSGC for generating income. 4. One is SSGC LTD and other one is SNGPL LTD. 3. Meter plant produces two types of meters. 2. it becomes a huge source of income. 4. A document known as bill of entry is prepared by clearing agent which includes custom duty. Procurement department sends all those legal documents of quotations. general sales tax. Order Procedure Those who needs material or any type of machinery sends an indent to procurement department for material requisition. pipelines.SSGCLTDmainlycarriesitsimportstransactionswithGermany. income tax. and America. procurement department issues tender among public and then. boltsetc. This department or section is mainly responsible to deal with all types of imports of SSGC LTD. import order is mainly comprised of chemicals. screws. Offer for Opening (L/C) The main procedure of import starts in favor of that particular contractor. France. the goods are shipped by shipping agency too Karachi dockyard which issues bills of lading to the head of Material Management department that goods are being shipped as on the required order. China. sight L/C used in SSGC means payment is made to contractor on sight or presentation of documents without any discrepancy. evolution report and some other legal papers and. commercial evaluation to import section for further procedure which includes application of letter of credit. and federal excise duty etc. also approval of competent committee. purchase order.Sui Southern Gas Company limited IMPORTS SECTION Introduction Import section is also a fundamental operation of treasury function.MCB opens L/C in favor of SSGC. this document indicates the quantity and quality of material for which the order is being placed for. Clearance of Goods Clearing agents cleans the goods on the port. quotations are received from various contractors.these al costs together re called landed cost. fillings. the contract is given to that contractor which offers lowest bid. Belguim. component parts. The clearing agent gets cleared all thee payment and order is shipped to store and all the necessary shipping documents are send to bank by the supplier. Invitation of Tenders Upon receiving the indent. ZARA ABDUL AZIZ Page 24 . Shipment of Order After opening of L/C in favor of contractor. The import section then contacts different banks o open letter of credit (L/C) in favor of SSGC. which is sight L/C. Then. Store transfers goods by giving “debit adviser. When cost of import order is incurred: Import (control) Bank XXX XXX 2. When goods are received by store Store Import XXX XXX Material Requisition Procedure When the goods are in store then any department who needs any type of goods from the store send a material requisition document (MR) which indicates the quality and type of material. then revenue job is depicted and. if it is required for capital expenditure. ZARA ABDUL AZIZ Page 25 . Item cost is allocated in receiving statement on CNF basis. then capital job is debited. a receiving statement is issued to the head office which is prepared item wise.Sui Southern Gas Company limited Issuance of Receiving Statement The goods are stored after received in a proper way. Pricing Process Treasury function department on getting receiving statement carries on pricing procedure. SSGC LTD has given the particular bank a „Debit Authority‟ to pay and clear all the dues.‟ If the material is required for revenue. Pricing of order is valued on the basis of its ratio cost. Accounting Entries Revenue job/Capital job Stock XXX XXX The whole process of financial side of imports starts and ends on this department. Accounting Entries The entries for this whole procedure are interpreted as following. 1. the bank will sell it back to the SSGC at some higher rate. 1. Long term borrowings. ZARA ABDUL AZIZ Page 26 . Short term borrowings are mainly carried by SSGC LTD to meet its working capital requirements. Classification of Loans Banks in two classes mainly classify loan. In this case SSGC LTD sells its anyone of the asset to a particular bank and receives money against it. SSGC LTD is also involved in the activity of borrowing loans from high profiled bank organizations. is the profit. The other kind of loans is Islamic loans which doesn‟t basically include any interest. Long term borrowings are mainly used to fulfill capital expenditure requirements. SSGC LTD normally makes 5-10 years capex plan and borrows finance from banks through proactive plan. Short term borrowing may be facilitated through much market or overdraft facility. Overdraft facility may be renewed on yearly basis. SSGC LTD has to pay a certain rate of interest on conventional loans. means with interest. LOAN SECTION Most of the organizations borrow loan from different banks to meet their capital expenditures and working capital requirements. 2. So this higher rate. Long Term Borrowing (Financing) Long term borrowings are that type of loans whose tenure is more than one year and maximum limit of time period for the retirement for long term loans is 25 years. which are decided after negotiations are held between the two parties. Loans are offered by banks in two categories. SSGC LTD purchases the same asset from that bank. Working capital is defined as the money which is borrowed from different banks to meet its day to day expenditures. which is retained by the bank. At the same time.Sui Southern Gas Company limited Margin against Shipping Guarantee When the shipment documents are misplaced or get lost due to any mishaps. But now. One is a conventional loan. which has been received by bank against that particular asset. Most probably SSGC LTD has to pay 25% on principal amount. Short term borrowings. margin against shipping guarantee is issued by bank PNSC or Supplier bank to a particular bank to pay all the dues and clear the goods from the shipping port. Short Term Borrowing (Financing) Short term borrowings are that kind of loans which are settled or which are paid off within one year. Evaluation committee consists of auditors and finance members. and sends a mandate letter to that particular bank. They send the letter of charge to SSGC LTD and give them charge of their assets. Security Exchange Commission of Pakistan (SECP) SSGC LTD notifies the security exchange commission of Pakistan that they are going to take loan from a particular bank. KIBOR rate changes upon agreement. Mandate Letter The loan sanctioning bank sends an agreement to SSGC LTD which includes different types of sub-agreements. ZARA ABDUL AZIZ Page 27 . bid or quotation should be selected. then after 3 months KIBOR rate changes while interest rate remains the same throughout the year.Sui Southern Gas Company limited Process of Borrowing Loans The management of SSGC LTD informs the loan section department for the requisition of loans and current ratios and. which is also called finance covariance ratio.SSGC LTD also gives insurance facility to SECP. State Year Bank of Pakistan also regulates prudential regulations regarding different policies. and SSGC LTD has to pay that particular rate of interest on its principal amount. then negotiations are held between two parties. Selection of Bids SSGC LTD chooses or borrows loan from that bank which offers lowest interest and. equity ratios. Total amount of interest which is paid by SSGC includes KIBOR rate and interest rate. current assets are given as security for short term financing while for long term financing fixed assets are given as security to SECP. SSGC LTD examines and observes all the clauses of different agreements thoroughly. means that if loan is borrowed for one year and State Bank has applied 3 months KIBOR. Evaluation committee is settled down to decide which offer. Receiving Of Quotations SSGC LTD receives different quotations from all the banks which have been given offer. KIBOR Benchmark is basically learned as KIBOR by State Bank of Pakistan. After negotiations a certain rate of interest is fixed. Loan department on behalf of SSGC LTD sends invitation letters to different parties for the sanctioning of particular amount of loan and get them approved by senior employees.KIBOR is a fixed amount of interest which can‟t be negotiate. Mandate Letter is a type of letter which is issued by SSGC LTD to that particular bank for accepting their deal on different clauses. It was introduced in 2005. Due to its sensitive nature of work. Since this function of treasury function is responsible for processing of all the cash and cheque payments and receipts.SSGC LTD also calculates IRR by all cash flows. legal charges. officers. The record is kept of all receipts and payments on daily basis in newly implemented Oracles Accounts Payable and account receivable modules. employees.Sui Southern Gas Company limited Calculation of IRR Loan section department calculates IRR to know all the hidden charges being charged by the bank from SSGC LTD. the income tax is deducted against gross amount payable to petty suppliers and. ZARA ABDUL AZIZ Page 28 . Furthermore. out of pocket expenses. employee and executives and payments to employees/executives and suppliers against cash payments vouchers. arrangements charges if the loan is syndicated. The executives. banks sends their signatories card to be signed by authorized persons of SSGC LTD. CASH AND BANK SECTION Introduction The cash and bank section is a fundamental part of the treasury function department and is playing a pivotal role in the company daily affairs and operations. therefore all other departments have a direct interaction with this department. assistants and others who are linked with this section are performing their duties and responsibilities loyally and diligently. First signatory is form finance side and the second signatory is from sales department. the necessary information about cash payments and receipts is provided. the employees and officers must properly and consummately organize the working process. these cards are signed by two signatories. record is kept up to date of all cash receipts and cash payments. Daily. Signatures of Authorized Persons Finally when the loan is approved for sanctioning. These cards are signed by two categories in order to ensure double check. cash balance report is generated and is tallied with the balance in the strong room. A strong coordination is kept with the internal and external audits in their audits and with other departments of company and. and the last are financial charges. Cash Section This section involves the processing of cash receipts from contractor. in order to maintain the good will of the company. IT department or other finance. Cash flows includes annual charges. It also issues cheques. the cash balance is updated and checked by any executive of the finance department other than from cash and bank section. these Cash Balance reports are kept in record for future reference. finally. It facilitates internal and external audits and keeps an updated record of all bank receipts. After all the receipts and disbursements are made during the day. pay order. daily closing is done. Total cash balance is found by adding the cash in the main safe and the cash in the hand at the end of the day. cheque books. plays an indispensable role in the maintenance of strong room. The current executives and employees are performing their incumbents in the fullest possible way as inculcated by their high officials. experienced and self motivated workers and executives. demand draft and bank draft on request. company is compelled to hire diligent. All the receipts and payments are fed in respective AP and AR Oracle modules and a Cash Balance report is generated through this report The balance of the main safe is tallied any deviation found is promptly investigated. disbursement bank accounts reconciliation. CASH SECTION The cash section individually is performing its duties in a very effective manner. Due to its frail and delicate nature of work. For this purpose. Entry is made in cash register. the cashier comes to the strong room and draws cash for daily disbursements. Cash in hand at the end of the day is find out by adding total receipts (including the cash drawn from the bank)of the day in the opening balance and the subtracting total disbursements made during the whole day from the total. pay orders in SSGC A/Cs and. cash for daily disbursements also come under the responsibilities of this section. orderings Banks stationeries of bank rolls. a register named “Cash Register” is maintained in the strong room. suppliers and other against bank payment vouchers.Sui Southern Gas Company limited Bank Section In this section. trained. the main safe is replenished by drawing more cash from the bank. depositing of cheques. Daily data feeding of all payments and receipts on a newly implemented Oracle AP &. which contains entries of the inflows and outflows of cash from the main safe. AR modules is done. ZARA ABDUL AZIZ Page 29 . If the balance in the main safe is insufficient. bank payments and returned cheques. The cash is then taken to the cash section where it is kept in a small safe for a particular day activities. the processing of bank receipts from contractors. suppliers. cash in hand is again brought to the main safe where it is kept. employees and executives is done and payments are made to employees/executives. contractors. Daily batch listing of all cash receipts and payments are checked with physical vouchers and. An effective management of fund is done under the supervision of this department. The issuance of remittances. Recording Daily Cash Positioning Of the Main Safe Everyday in the morning. It generates MIS reports when required and orders cash from bank for daily uses. It also deals effectively with banks and foreign exchange and. hardworking. all the headquarters that need money or cash for fulfilling their daily requirements inform the head office cash section through payment vouchers. includes a number of categories. Payment to suppliers The cash section is also responsible for making payments to various suppliers for providing various goods and services as per requirements of SSGC . The cash section on the direction of higher authority can also disburse more cash on urgent basis. which the cash section is involved on daily basis. Cash section deducts ZARA ABDUL AZIZ Page 30 . All the vouchers are properly and accurately made and are being signed by competent authorities. medical bills and payments to petty suppliers for fulfilling SSGC requirements on time. Two signatures are mandatory or compulsory. Along with staff advances they give conveyance allowance. The signatures are verified. That‟s why it is involved in drawing cash from strong room up to a particular limit being approved by head of department. which being made to different category of providers. They make staff advances to number of employees according to their requirements and. All payment is duly approved and sanctioned. employee LFA. These payments are duly verified and checked. These vouchers are then send to head office for sanctioning of required amount of cash. Nature of Disbursements The nature of disbursements. They have to make payments regularly to different parties to which they deal with. All the vouchers are duly verified and checked. they are required to pay by 15thof the next month. The amount and the signing authority are tallied. Disbursement is done through different bank accounts. All the supporting documents of payment voucher are duly checked and are then dispatched to the bank along with a debit advice letter for giving debit authority for transfer of funds to a particular place. Deduction of income tax The cash section is also liable and responsible for deduction of income tax from the payments. If the payment or disbursement is to made in cash. The receiver‟s name is written and his/her signature is taken. then head office directly dispatch that particular amount. its summary is attached. Sometimes the actual payee is not present.Sui Southern Gas Company limited DISBURSEMENTS The cash section also deals in payments to different parties on daily basis. and advances wages as well. so in this case an authority letter is requested and after verification the payment is made. It has to pay up to certain amount to contractors and also to staff members for different purposes. Cash payment section is also responsible to pay for material/stationery purchase. One is from relevant section and the other is from finance department. The Procedure of Disbursements The procedure of payments mainly starts through the preparation of payment vouchers. If they fail to do so. The issuance of remittances. The rates are changed from time to time. then that amount is deducted from the salaries of particular employees of the next month. keeps an up to date record of all payments and receipts on a newly implemented Oracle AP &. An indispensable role is played in the maintenance of strong room. It facilitates internal and external audits and keeps a record of all bank receipts. Responsibilities and functions Following are the responsibilities and functions of bank section. bank payments and returned cheques. ZARA ABDUL AZIZ Page 31 .it generates MIS reports when required and orders cash from bank for daily uses. disbursement bank accounts reconciliation. orderings Banks stationeries of bank rolls. Imprest Apart from all these activities. The advances to staff are made in the same way as other payments are made by cash section. pay orders in SSGC A/Cs and. cash section also make petty payments to all regional offices and HQ of SSGS. depositing of cheques. BANK SECTION Introduction Bank section is a key part of treasury function department. pay order. and payments of bank receipts against bank payment vouchers. cheque books. It also issues cheques. An effective management of fund is done under the supervision of this department. cash for daily disbursements and dealing with banks and foreign exchange is the duty of this department. demand draft and bank draft on request and. which deals with the processing. AR modules. Staff advances The cash section also deals in making payments or advances to staff.” all the staff members are directed by high authorities to repay that particular amount up to the 15th of the next month.Sui Southern Gas Company limited income tax on the rates as are prescribed by central board of revenue on different types of payments.This is termed as imprest by cash &bank section which is authorized to make payments to all the locations of SSGC up to a particular limit. Cash section disburses to the employees a particular sum of amount according to their requirement. These all advances are recorded and maintained by cash department in the register named “staff advances. In this way they also keep their separate reconciliations of imprest statement. The very first reference is the BRV (Bank Receipt Voucher) number. these cheques are sent back to the section from where it was received and request is made for validation.the branch name is also mentioned and a receipt is issued. In this situation. The process These cheques are verified. Extreme cases Sometimes. The carbon copy is kept in record for future reference. pipeline. For example the date is verified whether it is valid and correct and that the cheques are in favors of SSGCL. ZARA ABDUL AZIZ Page 32 . Receipt from revenue control section Receipt from the revenue control are shown to transfer in collection book and receipt in disbursement book. It is printed on the receipt voucher and manually written on the cheques. A number of cheques received in the bank section from various others such as sales of meter. rentals. earnest money etc.Sui Southern Gas Company limited Receiving cheque and pay orders Although the main collection section is the revenue control section but it only deals the collection of gas bills only. Answering enquiries A number of enquiries are attended here regarding the confirmation of the deposition of cheques. Record keeping After the receipt vouchers are printed the original copy is available for dispatch. Deposition Cheques/Pay Order The cheques/pay order along the deposit slip is sent to the respective banks for crediting in the SSGC disbursement bank A/C‟s. in adverse cases. The cheques received by the section from the other departments are time barred. The unit then finds the deposit slip of the concerned bank on the particular date to verify whether it was deposited or not. The processing unit can search the receipt voucher number against the amount of cheque received through computer software. This is done by reconciliation of bank statement with the bankbook print outside. Funds Transfer: This unit also prepares Bank Payments and Receipt vouchers for transfers of funds from one bank to another. the name of the deposition bank and date is written.Sui Southern Gas Company limited To find out the receipt voucher number. Any disparity is then reconciled through this unit by approaching banks. For example a summary is attached along with its source to know how it looks like: JV’s Preparation: The unit is also responsible to prepare any JV for adjusting entry on account of any mistake committed while punching. ZARA ABDUL AZIZ Page 33 . It keeps a proper record of all JV‟s passed by the Bank section for future reference. Verification of Batch Payments: This unit also verifies the computerized batch listing through bank payment vouchers. Reconciliation The reconciliation unit is responsible to ensure that all the transactions in the Bank Book appear in the Bank Statement. the unit obtains services of the processing unit. On the receipt voucher. This section checks the huge differences that might arises. Verification of Daily Bank Book Balance: This unit also checks and verifies daily bank book balance report and reconciles it with the counter slip of receipt and payments. LO & NLO Payments Apart from all these responsibilities. LO payment is made in parts or installments over a short period of time. Contra Account Reconciliation One of the major responsibilities of the unit includes reconciliation of contra A/C used between other locations and head office which are called as company.Sui Southern Gas Company limited Trouble shooting This unit also facilitates to recover payments in case of misplaced cheques etc. ZARA ABDUL AZIZ Page 34 . under the supervision of the Central control Unit. bank section has also to make payments against LO & NLO payment vouchers. Effort is made to reconcile this A/C on monthly basis and to have a zero balance. Imports Cost This section also makes payments against L/C after receiving all the required documents from imports section. Special Duties Performance of special assignment as and when assigned by section head or department heads. While NLO payment is that which is made directly or at source. After that period vendors receive late delivery charges. but the time period is fixed for which partial payment should be made. the invoice is verified by SGM(MS). Medical Department 4. Sometimes bills are not processed at a particular time period. At the time of processing of bills. 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. ZARA ABDUL AZIZ Page 35 .000.000 it is signed by MD. Payment to contractors The major portion of payment is comprised of contracts being done by SSGC.CNG or diesel from those specified petrol pumps. OPD. After that invoice is prepared by Medical department which is verified by billing doctor. All these contracts are dealt by project and construction department (P&C) at KT. It has also to pay to different companies and vendors for supply of goods and services. Clearance of Goods 5. The following are the major areas of payment: 1. electrical contractors & mechanical contracts. amount of advance is adjusted. Transportation Cost 2. The Medical department prepares a hospitalization summary. Chemists. Deputy Chief Medical Officer/(CMO).if the amount payable is within 50. they send the total amount of bill by specifying the vehicle numbers to focal points which are authorized by SSGC to do so.This department receives bills from all contractors. Utility Bills Transportation cost Sui southern Gas Company operates its transport for every dealing outside the offices has specified the CNG & petrol pumps for their official purpose. Medical Department All the Hospitals. All types of payment vouchers are recorded and preceded through this section of finance department. In this case most probably mechanical and civil contractors receive certain amount as advance.If the amount is up to 500.but if the exceeds the limit of 500. and then finally dispatched it to Head Office.SSGC has a number of contractors like civil contractors. The particular hospital or vendor sends reference letter along with hospital bill.000. All the vehicles of SSGC consume petrol. At the end of the month. Payment to Contractors 3.Sui Southern Gas Company limited BILLS PAYABLES Sui Southern Gas Company is involved in various kinds of payables because it has to carry on its operations and activities. get them verified by different authorized persons. Bank payment voucher 2. Non. address. and then send it to the payables section that then precedes it. PROCESSING OF NLO PAYMENT VOUCHERS Receiving Of Invoices The first step involved in processing of payment vouchers is receipt of invoices from main focal points.Moreover all maintenance charges like computer hardware or miscellaneous payments are being processed by this department after receiving invoices from focal points. Approval 10. Local purchase order 4. When the order is being shipped to the Karachi dockyard as per requirements of imports section. Cash memo 5. Evaluation report 9. Batch number and supplier code is also being issued to keep on control. It also mentions site that either it is LO or NLO and ledger code is also categorized for LO & NLO payments.& transformer stations which is being installed by SSGC.Sui Southern Gas Company limited Clearing Agent Cost This section also maintains some links with imports section in making payments to the clearing agents.Water Sewerage Board. This section is divided into 2 parts: 1.PTCL. Local order The documents required in both the sections are some but few are different. NTN (National Tax Number) which is issued by income tax department. Utility Bills Apart from all these payments. Income tax invoice 8. this section also make payments for all utility bills like KESC. Check list 3. Work order 7. the clearing agent prepares invoice and enclose necessary supporting. which are created through Oracle ERP System. Control Summary is also attached with invoices by focal points. Receiving statement. Comparative statement 6. Mobile phones Connections. ZARA ABDUL AZIZ Page 36 . This number is always comprised of 7 digits.local order 2. Following are the documents: 1. The invoices include name. After this click on distribution icon to check the payee name and amount. Accounting Entry 1 When the voucher is validated: Expenses Dr Cr Liability Liability Bank ZARA ABDUL AZIZ Dr Cr Page 37 2 When the payment is made: . Finally the payment voucher will be validated &manually approved. Then click E-Business Homepage.Sui Southern Gas Company limited Signed By Authorized Signatories These invoices which are being received from focal points are all afterwards signed by authorized signatories according to limit of amount being specified in the financial powers. First click on Logon links then a page will be shown. Then budget is checked in a particular account by clicking on “check funds” option. In the end print is taken of the payment voucher. After then user name and password is entered to run the application. Finally a navigator is appeared on the screen and then chooses AP invoice entry to proceed payment voucher.& then “ok” it. After validation these are authorized by finance department and then dispatched to bank section. then “action” icon is clicked. All the data is punched in the system. Proceeding of Payment Vouchers The department processes the payment vouchers through oracle ERP System. Then a screen appears click on the “validate” and “approval”. Validation After all the details have been thoroughly checked. If the budget is not sufficient as that of invoice amount then it is returned back to particular department. GL date and term date is entered of that particular day on which that invoice is processed. Operation of Oracle Application The main process starts after operation of oracle application. The payment voucher is not accounted until it is paid by bank section. This distribution amount & invoice amount must be tallied. All the details of a particular vendor is checked and duly verified by analyzing their invoices. R&D and intender copy. supplier (Original). evaluation report and purchase order is prepared with five copies i. LO Section deducts few charges from the amount payable to supplier. too. Or advertisement is given in the newspaper for bid invitation. Usually tax rates applied are: 3. is sent to the cash and bank section for cheque preparation. finance. procurement. is sent to bills section. These tax rates depend on the kind of good for which bill have generated. receiving statement and invoices of the supplier are attached together and process for payment voucher is attached.5% GST Withholding tax@20% on GST amount Liquid Damages @0. The payment vouchers are checked and approved by the DCM. Purchase order. quotations are taken from three different suppliers. DGM and GM if required and.1% ZARA ABDUL AZIZ Page 38 . LOCAL ORDER (L/O) In local order processing: Intends are received from departmental head by the department deputy and.Sui Southern Gas Company limited WITHHOLDING TAX POLICY: On all bills a certain tax rate is deducted as instructed by the government. They are: General Sales tax @16% Withholding tax @3. After the selection of bids and approval from the top authorities. When materials are received and checked.5 % on supplies expenses 5 % on advertisement expenses 6 % on services expenses 2 % on transportation expenses 0 % on medical expenses The tax deducted on these bills is recorded in the separate company account and after each month the total tax deducted is deposited in the government tax office. receiving statement is prepared at R&D department (store) and.e. capitalized or charge to revenue account.Sui Southern Gas Company limited In this division those bills are processed that are incurred through local order.e. Receiving Statement: The statement sent by the user department which states that the goods supplied are of the same quantity & quantity as per order. Pipes Spare parts of meter plant Stationary Computers including computer stationary Supplies other than overhead Diesel. capitalized or charged to revenue account. Normally the capital purchases are done through local order such as supply of pipes. It is the practice of LO to reconcile their Bankbook Record with LO-Day Book and with their register on monthly basis in addition to daily reconciliation. machinery etc. LO section after receiving these documents process the bills in the same manner as discussed above and send voucher to the cash & bank section for the payment. New general code for LO are attached: ZARA ABDUL AZIZ Page 39 . In this regard LO verifies invoices quantities and rates against Receiving Slip and Purchase Order (PO) and ensure that the authorized person has approved these.It is also the responsibility of LO to insure that goods and services are recorded correctly i. Supplier Bill: The bill submitted by the supplier for the goods. Lubricants and Petrol Paint Vehicles Office Equipment It is also the responsibility of LO to ensure that goods and services are recorded correctly i. Local Order: The company’s order of the purchase of goods.e. Functions of Local Order: The core function of the department is to arrange payments against purchase orders issued by the procurement department of Unit “A” & “C” in respect of the following purchases. ZARA ABDUL AZIZ Page 40 . At this stage. which is reviewed by finance committee. On receiving the requirements. The budget [in the form of budget proposal] is now sent to GM. then agenda is prepared by budget section. When the budgets for all the departments have been finalized and approved by BOD. the budget section notifies the department to prepare list of assets required by them & forward it to the budget section. Each department is now intimated through inter departmental note (along with a copy of their budget) that the budget has been approved. which may be considered to be necessary as that may be defined to latter period. Functions: Making Capital Budget Capitalization Depreciation Policies Adjustment Reclassification & Transfers Retirement Disposal Working of Fixed Asset: Budget Proposal The budget section of finance department prepares capital expenditure budgets annually for all the department of SSGCL. the budget team examines it & discusses all particulars with the related head of department & staff giving special consideration to the justification of fixed asset requirement & funds available with the company. Whenever a budget is to be prepared for any department. the budget team may reduce the requirements of fixed assets of the department.Sui Southern Gas Company limited FIXED ASSETS & CAPITAL BUDGET PROCESS Objective: To manage Fixed Assets & Capital budget Processes and Policies. CFO & SGM for its approval/changes which may be made by them & finally to the BOD for its approval. the board of directors‟ grants approval to the agenda and now the budgets are authorized to be followed. following entry is generated: Liability account Bank xxx xxx According to company policy.7. which should be approved by the head of that department. The FAR is now forwarded to Procurement department. Account payable department enter invoice in AP module which match invoice with material receiving statement and following entries are generated: AP accrual account Liability account Asset cost account Asset clearing account Depreciation expense Accumulated depreciation xxx xxx xxx xxx xxx xxx xxx xxx At payment of invoice. the return on Fixed Asset is 17% and this year the total assets capitalization is Rs. All assets are received by the KT stores department. following entry is generated: Asset clearing account Inventory receiving account Capitalization of Fixed Assets: When invoice received by finance department. Following entry is generated: Inventory receiving account AP accrual account xxx xxx On delivery of asset to the concern department.1 billion aprox. FAR contains details of assets required by the department. where quality inspection is conducted (however not documented) and then a Material Receiving Statement (MRS) is generated and a copy of which is forwarded to the finance department. where Deputy Manager checks whether the FAR falls within the budget. a supplier is selected (all such procedures documented in Evaluation Report) and then Purchase order (PO) is prepared and sent to supplier. The procurement department invites quotations through tender (if not available in store) and on the basis of commercial and technical evaluation and lowest bidders. ZARA ABDUL AZIZ Page 41 .Sui Southern Gas Company limited Fixed Asset purchasing process: In order to purchase an asset. fixed asset requisition (FAR) is required to be filed by concerned department. The company uses the straight line method of depreciating except for meter plant. Step2: Requisition verified by the inventory section and approved by CM. Depreciation and Adjustment Process: Once an asset has been capitalized.g. transfer of an asset from one unit to another. Step4: Requisition sent to the procurement department for order placement.: a plant and machinery item booked in tools and equipment it is the responsibility of fixed asset dept to check all the required items to their respective accounts. ZARA ABDUL AZIZ Page 42 . On next page I have shown the working on depreciation which was given to me by Sir Gulab. Transfers & Reclassification: When an asset booking are wrongly recorded in any clause of asset e. different between assets in books and its physical existence etc. Step3: Supply of assets by the supplier at Receipt & Dispatch section at Karachi Terminal. A form is issued called Asset Transfer Advice (ATA) which is to be filled by sender and receiver dept.g. DGM and GM/MD. working for its depreciation starts. Full year depreciation is charged for the first year regardless of its purchase data. It even differs for same assets in different cities. Depreciation rates differ for different assets. In the certain situation we call for making adjustments e.Sui Southern Gas Company limited Steps for Requisition: Step1: Fixed Asset Requisition sent to the inventory section duly authorized by the departmental head. Step6: Details incorporated in the relevant records at month end. Step5: Asset delivered to the user / requisitioning department. where reducing balance method is used. g. Asset sent to store at KT for disposal. which should be approved by the DGM store. After approval the asset sent to store at Karachi Terminal (KT) for disposal. After inspection the report sent to the fixed asset section along with ARA. are deleted from the books through approval of the management. And some old assets. it is sold on written down value or at 7.5% of its cost. Retirement advice is approved / disapproved on the basis of inspection report by GM. 5. which are fully scraped and not present physically. DGM and SGM. Disposal of Fixed Assets: In order to dispose of an asset. DGM and SGM. Process: 1. Inspection of the asset to be retired is conducted for verification of the condition of that asset 3. That inspection team inspects the asset. It is approved / disapproved on the basis of inspection report by GM. In case of gain: Sale Proceed account xxx Accumulated Depreciation xxx Asset cost account Gain on sale of fixed asset xxx xxx ZARA ABDUL AZIZ Page 43 . After checking the book value the inspection team is to be formulated. only those asset which have a zero book value can be retired. whichever is higher. The company SSGC‟s follows certain policies for the retire of asset e. Asset Disposal Advice (ADA) is required to be filed by store department. And send to the fixed asset dept to retire the assets from books of company. ADA contains details of asset and sale precede amount. Asset Retirement Advice prepared by the user department and sent to the inventory section 2. Section Inspection report sent to the inventory along with ARA 4. which is to be retired for verification of the condition of the asset.Sui Southern Gas Company limited Retirement of the Asset: After the completion of life of asset which is fixed by company we retire it. In case an employee of the company buys it. 1 st the Assets Retirement Requisition (ARA) is prepared by the user department and it is sent to the fixed asset section of finance to retire that asset. 3rd: 15% on the written down value (WDV) By adding 50%+15%+15% gives the total depreciation tax amount. ZARA ABDUL AZIZ Page 44 .Sui Southern Gas Company limited In case of loss: xxx xxx xxx xxx Sale Proceed account Accumulated Depreciation loss on sale of fixed asset Asset cost account Tax Depreciation: Its is annually calculated on the total depreciated amount in 3 steps: 1st : On additions 50% declining balance method 2nd: 15% on the remaining addition balance. The proper calculations are attached. pavements and related Transmission mains (GTPL) Distribution mains (GDS) Compressor station equipment Telecommunication Plant and machinery Consumer meters Measuring and regulating station equip-gen (TBS. DRS) Tools and equipment Motor Vehicles Construction equipment Furniture & equipments Solar Power Energy System Office Equipment Computer and ancillary equipment Software Intangible SCADA Prepaid Gas Meters Others Fixed Assets Asset clearing A/c ZARA ABDUL AZIZ 3011101 3011102 3011105 3011107 3011107 3011108 3011109 3011110 3011111 3011112 3011113 3011114 3011115 3011116 3011117 3011118 3011118 3011119 3011120 3011121 3011122 3011124 3011123 3011999 Page 45 .Sui Southern Gas Company limited Assets Accounts Categories Land Freehold Land Leasehold Building on freehold land Building leasehold land Roads. The company has made momentous progress and has brought the fruits of clean. Akhter Hassan & Actuaries in 1994. So I would suggest that heads should select people with multiple task oriented who can manage different duties of work. Families of deceased employees are suffering because of these types of long delays in payment of claims. commercial and industrial customers all over Sindh and Baluchistan. Discrimination It has been noted that there is a lot of discrimination between permanent employees and contract employees. the company has emerged as a leading fully integrated utility company that continues to play a major role in fuelling national progress. low cost and environment friendly natural gas within the reach of millions of domestic.Sui Southern Gas Company limited SUGGESTIONS & RECOMMENDATIONS SSGC is playing a leading role in the energy sector of Pakistan and is on its track of meeting its strategic goals and objectives over the past 56 years. So I would recommend that the company should take a strick note on overheads and be focused on its profitability. The task which single person can perform is divided into many. However. Over staffing: The total employees of SSGC are 7000 aprox and many of them are useless as they are not require. Now it is proper time to revalue the Assets again and it is recommended that revaluation of Assets should be done periodically after a certain time frame. based on my analysis I would like to make the following suggestions: Reduction of overheads: The return on assets presently is 17% which is a good return government is giving to SSGC but still its not sufficient enough to pay to overheads as they are increasing day by day. Revaluation of SSGC Assets: Revaluation of SSGC Assets was done by M/S. It is recommended that there should be equal treatment with permanent as well as contract employees as both of these are doing same type of work for ZARA ABDUL AZIZ Page 46 . Employee’s matters: It has been noted that employee‟s death claims are not settled in time. Long delay is caused due to non-availability of documents and lack of coordination between departments. As a result. Some times payment is made to deceased employee‟s families after one and half year of death of employees. It dose reduce the burden but in the end it results in a crowd. Such type of assets should be capitalized under a broad category of “chairs” (or even broader category of “furniture & fixtures”) CONCLUSION In the end I would like to conclude that SSGC is a great Organization to work in because here what I saw is the pure process on Finance. Everything was related to what I studied in my academic life and it was fun to be here. Asset Capitalization: According to the company policy only the assets which worth more than Rs. ZARA ABDUL AZIZ Page 47 .Sui Southern Gas Company limited the organization. 5000 can only be capitalized whereas there are some assets which worth less than Rs. The equal treatment will lead to boast up the potential and coordination between them. 3000 each and company purchase 300 chairs then these 300 chairs are capitalized in account of one “chair” instead of 300 chairs separately. In future I would wish to join SSGC to serve my people. SSGC has its monopoly around Pakistan with largest customer dealing and they provide best services with quality product. Such assets are usually capitalized in bulk quantity. Such as if a chair worth Rs. 5000 such as Furniture and Tools etc.