38926127 Internshinterneship reportip Report on Sui Gas

7/26/2019 38926127 Internshinterneship reportip Report on Sui Gas

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1.0 Introduction of Organization

1.1 Nature of Organization

Sui Northern Gas Pipelines Limited is the largest integrated gas company serving more

than 2.7 million consumers in north central Pakistan through an extensive network in

Punja and North !est "rontier province. #he company has over $% years o" experience

in operation and maintenance o" high pressure gas transmission and distriution system.

&t also has expanded its activities to undertake the planning' designing and construction o"

pipelines' "or oth itsel" and other organi(ation.

Sui Northern Gas Pipelines Limited in a region o" the nation that has a rapidly growing

demand "or natural gas and power generation due to signi"icant industrial development.

1.2 Natural Gas Natural gas' as the name implies' is "ound in gaseous "orm naturally' underground at

varying depths and geographical "ormations. &t is one o" the most aundant energy

sources in Pakistan' and ecause it is produced domestically' it is not suject to "oreign

disruptions o" price or supply. )omprised primarily o" methane' natural gas is odorless

and colorless when it comes out o" the ground. *"ter impurities are removed' the natural

gas is introduced into the pipeline system where it is transported to the consumers.

Prior to distriution' a harmless odorant is added to the gas so any leakage can e easily

detected e"ore an unsa"e situation occurs. &n addition to this +rotten egg+ odor' natural

gas has some uilt,in sa"ety "eatures. &t is lighter than air' so it will rise and dissipate into

the atmosphere in the event o" a leak. *nd it has a very narrow comustion range'

igniting only when mixed with air at a ratio o" etween $ and -$ percent. *ny mixture

higher or lower than that range and natural gas simply wont urn. &t also re/uires a very

high degree o" heat' at least -200 degrees 1ahrenheit' e"ore it will ignite.

nce comustion occurs' natural gas is one o" the cleanest,urning "uels availale today.

!hen it is urned properly' the only emissions are caron dioxide 3which is what we

exhale when we reathe4 and water vapor. 5ecause o" its clean,urning properties'

natural gas has ecome the environmental "uel o" choice "or many residential'

-



commercial and industrial applications. Such applications include6 space heating' water

heating' cooking' and as a "uel "or "ireplaces' vehicles' power plants' commercial and

industrial oilers' as well as commercial and industrial processing.

1.3 Establishment of OGRA

#he "ederal government promulgated the natural gas regulatory authority ordinance in

anuary 2000 ased on the ill already passed y the national assemly in-888. 9nder the

ordinance' natural gas regulatory authority ordinance was estalished to regulator the

transmission' distriution and sale o" natural gas' including determination o" gas tari""s o"

the companies with the prime ojective o" sa"eguarding the consumers interest. later'

"ederal government decided to enlarge the scope o" natural gas authority and

conse/uently the oil : gas regulatory authority ordinance was promulgated in march'

2002 which included the technical regulations o" re"ineries' oil storages' oil pipelines' oil

marketing companies' compressed natural gas and li/ue"ied petroleum gas and natural

gas regulatory authority ordinance was susumed in oil : gas regulatory authority.

conse/uent upon oil : gas regulatory authority was estalishment on 2;th march' 2002

and with e""ect "rom march -<' 200% "ederal government assigned to oil and gas

regulation authority "or the regulation o" li/ue"ied petroleum gas and compressed natural

gas sectors in the country and has designated the oil : gas regulatory authority as an

authority in place o" the director general 3gas4 o" the ministry o" petroleum and naturalresources. ten main gas companies are working in Pakistan under the oil : gas regulatory

authority'

-. Sui Northern Gas Pipelines Limited.

2. Sui Southern Gas )ompany Limited.

%. il and Gas =evelopment )ompany Limited 3Such Gas 1ield4.

$. il and Gas =evelopment )ompany Limited 35hal Syedan 1ield4.

<. il and Gas =evelopment )ompany Limited 3Nandpur : Panjpir 1ields4.

>. )entral Power Generation )ompany Limited.

7. ?ngro )hemical Pakistan Limited.

;. 1uji 1ertili(er )ompany Limited.

8. Pakistan Petroleum Limited.

-0. @eri Gas )ompany Limited

2



1. O!er!ie" of organization

& am discussing aout the sui Northern Gas Pipelines Limited' which is working in

province Punja and north west province. Sui Northern Gas Pipelines Limited was

incorporated as a private company in une -8>% with the oject o" transmission and

distriution o" natural gas in Punja' North !est "rontier province' and the "ederal capital

area. Sui Northern Gas Pipelines Limited was later converted into a pulic limited

company in anuary -8>$ under the companies act -8-% 3now companies ordinance

-8;$4' and is listed on three stock exchange o" the company. #he company took over the

existing Sui,@ultan system 3%$8 Ams o" -> inch and -28 Ams o" -0 inch diameter

pipeline4 "rom Pakistan industrial development corporation and =hulian,Bawalpindi,!ah

system 3-%2 Ams o" > inch diameter pipeline4 "rom *ttock il )ompany limited. the

companys commercial operations commenced y selling an average $7 @@)1= gas in

two regions vi(. @ultan and Bawalpindi' serving a total numer o" >7 consumers. Sui

Northern Gas Pipelines Limited is the largest integrated gas company with an existing

transmission system o" >'-8< Ams and distriution system o" $>;7- Ams. #he company

serves more than 2.7 million consumers in north central Pakistan through an extensive

network in Punja and North !est "rontier province. #he company has over $% years o"

experience and maintenance o" high pressure gas transmission and distriution system. it

has also expanded its activities to undertake the planning' designing and construction o" pipelines' oth "or itsel" and other organi(ations.

1.# $om%an& 'rofile Sui Northern Gas Pipelines Limited 3SNGPL4 is the largest integrated gas company

serving more than %.$ million consumers in North )entral Pakistan through an extensive

network in Punja and N!1P. #he )ompany has over $> years o" experience in

operation and maintenance o" high,pressure gas transmission and distriution systems. &t

has also expanded its activities to undertake the planning' designing and construction o"

pipelines' oth "or itsel" and other organi(ations. SNGPL operates in a region o" the

nation that has a rapidly growing demand "or natural gas and power generation due to

signi"icant industrial development.

SNGPL was incorporated as a private limited )ompany in -8>% and converted into a

pulic limited company in anuary -8>$ under the )ompanies *ct -8-%' now )ompanies

%



rdinance -8;$' and is listed on all the three Stock ?xchanges o" the )ountry.

SNGPL transmission system extends "rom Sui in 5aluchistan to Peshawar in North !est

1rontier Province 3N!1P4 comprising over 7'%$7 A@ o" #ransmission System 3@ain

lines : Loop lines4. #he distriution activities covering -'>2$ main towns along with

adjoining villages in Punja : N!1P are organi(ed through ; regional o""ices.

=istriution system consists o" >7'$$8 A@ o" pipeline.

SNGPL has %'$<-'-$2 consumers comprising )ommercial' =omestic' General &ndustry'

1ertili(er' and Power : )ement Sectors. *nnual gas sales to these consumers were

<;$';8< @@)1 worth Bs. ->;'8%% million during ul 0; , un 08.

1.( $om%an& O!er!ie"

• Begional ?stalishment

• *dministrative Structure

• rgani(ational Structure

1.(.1 Regional Establishment

Sui Northern Gas Pipelines Limited was incorporated as a private company in une -8>%

with the oject o" transmission and distriution o" natural gas in Punja' North !est

"rontier province' and the "ederal capital area. Sui Northern *s Pipelines Limited was

later converted into a pulic limited company in anuary -8>$ under the companies act

-8-% 3now companies ordinance -8;$4' and is listed on the three stock exchanges o" the

company.

&n Sui Northern Gas Pipelines Limited' three main departments are working.

-. #ransmission.

2. =istriution.

%. Project.

1.(.1.1 )ransmission

asically on operational out li"t' the company handles the entire operation o" a lengthy

network o" high pressure gas lines comprising >-8< km in length' varying "rom > inch to

%> inch o" diameter in accordance with the mineral gas sa"ety rules' oil and gas regulatory

authority regulations and international gas transmission industrys standards.

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1.(.1.2 *istribution

#he companys usiness strategy is to maximi(e sales o" gas y entering in to new areas

through developmentCexpansion o" its in"rastructure. in accordance with the policy o"

government o" Pakistan. #he company has "ocused on countrys economic revival y outreaching industries "or gas supply. =uring the last "iscal year' the company has provided a

record numer o" <%- industrial gas connections resulting in displacement o" imported

li/uid "uels to save precious "oreign exchange.

#he share o" natural gas in PakistanDs energy supply mix has increased "rom $- E to <-F'

whereas that o" oil has decreased "rom $% E to 28 E during the last three years. #he

company has its gas distriution network in ;%- di""erence towns and villages o" Punja

and North !est "rontier province. *s on une %0' 200>' the total length o" distriution

network o" Sui Northern Gas Pipelines Limited stands at $>8>$ km.

1.(.1.3 'ro+ect

Sui Northern Gas Pipelines Limited' as contractor' carried out construction o" pipelines

; dia' 20 km 5adar gas "ield to Hadir pur "ield. Similarly an engineering' procurement

and construction. )ontract was success"ully executed "rom @Cs. @L Pakistan in the

shape o" -0 dia' ;.7< km @akori,Aharrapa' and gas pipelines. =uring the year' the

company success"ully completed various mega projects like gas supply to @urree' Aot

Badha Aishan' Lilla town 3through )NG4 and many other projects in di""erence regions

o" Punja and the North !est "rontier province.

#he company has planned to undertake the project o" gas supply t various southern

districts o" north west "rontier province 3with estimated cost o" rs.2.- illion4 vi( Iangu'

Aarak' Lakhi' 5annu' =era &smail Ahan' #ank and southern district o" Punja 3with

estimated cost rs.%.7 illion4 vi( Iasilpur' )hishtian' @andi' 5ahawalnagar' 5urewala'

Pak Pattan' Iaroonaad' =uniapur' Aaror Pakka' Jehari' #iu Sultan' Ahairpur

tammawali' Ka(man' @inchinaad and 1ort *as through construction o" transmission

lines o" %-< km and --< km' respectively and distriution supply mains o" $>0 km.

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>



1., Administrati!e -tructure

Policy guidelines and overall control is vested in the elected 5oard o" =irectors as

provided "or in the )ompanies rdinance -8;$

1. Organizational structure

Iead o""ice o" the company is situated in Lahore' chairman' managing director' other

departmental senior general managers and all directors o""ices are there. #hey control all

the areas o""ices "rom there. *ll the "inancial and non "inancial matters i.e. credit "rom

ank casting udgeting' allocation o" "unds matter' taxes' training to employees etc' are

made under the supervision o" the chie" "inancial o""icer. )ompany has the separate

internal audit department. #he audit department checks that the work is eing done

according to the company policies' departmental procedures. #he audit department

periodically conducts the audit o" di""erent departments ut on the other hand the audit

department trans"ers the pre,audit "unction to the accounts department o" limited

payments. )hie" "inancial o""icer is eing appointed according to the clause 3xv4 o" Fcode

o" corporate governance y Securities and ?xchange )ommission o" Pakistan. *udit

committee is eing estalished according to the clause 3xxx4 o" Fcode o" corporate

governance y securities exchange commission o" Pakistan. #hese committees are

estalished "or the purpose o" improving transparency and discourse in "inancial

reporting o" companies and "or improving their governance to protect the interests o"

investors.

5oard o" directors is elected y the share holder o" the company. #he managing director

and the chie" executive o""icer o" the company is working under umrella o" oard o"

directors. #he oard o" directors who made the decision "or the entire satis"action o" the

investors as well as the consumer. ther the senior general managers are working under

the deputy managing director who directly reports to the managing director and chie"

executive o""icer.

7



;



1./ RegulationsBegulatory Begime comprises o"6

)ode o" )orporate Governance.

il : Gas Begulatory *uthority rdinance 3J&& o" 20024 dated 2;th @arch 2002

Natural Gas Begulatory *uthority 3Licensing4 Bules 2002 dated 2>th 1eruary 2002.

Natural Gas #ari"" Bules 2002 3=ra"t M < uly 20024.

Such other Bules and Begulatireons which the il : Gas Begulatory *uthority

3GB*4 may prescrie. 9nder the existing pricing and regulatory regimes' "ollowing

operating conditions have een laid down6

*llocation o" gas "rom di""erent sources is made y GP while the wellhead prices are

"ixed y the GB* per Petroleum )oncession *greementsCcontracts.

)onsumer selling price including sales to major consumers 3i.e. power' "ertili(ers etc4

are noti"ied y the GPCGB*.

SNGPL is guaranteed a rate o" return -7.<E on its net "ixed assets in operation

3B*4 "or meeting "inancial charges' taxation and a reasonale return to the

shareholders.

#he prescried price i.e. the price which the company is allowed to retain out o"

consumers selling price to meet the covenanted rate o" return' is determined y GB*.

1.10 -tatements

• )ore Jalues

• jectives

• Jision : @ission Statements

1.10.1$ore alue

$OI)EN)

!e are committed to our vision' mission' and to creating and delivering

stakeholder value.

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$OR)E-

!e are courteous , with our customers' stakeholders and towards each

other and encourage open communication.

$O'E)EN$E

!e are competent and strive to continuously develop and improve our

skills and usiness practices.

RE-'ON-I4I5I)

!e are responsile as individuals and as teams , "or our work and our

actions. !e welcome scrutiny' and we hold ourselves accountale.

IN)EGRI)

!e have integrity , as individuals and as teams , our decisions are

characteri(ed y honesty and "airness.

1.10.2 6e& Ob+ecti!es

Sui northern gas pipelines limited committed "orO

-. ?nhancement o" System )apacity

2. ?xpansion o" #ransmission and =istriution Network.

%. &ncrease in Gas Sales.

$. Behailitation o" #ransmission and =istriution Network.

<. Beduction in 9naccounted "or Gas Losses.

>. &mprovement in Pro"itaility.

7. &mprovements in )onsumer Services.

;. *doption o" &n"ormation #echnology.

8. Iuman Besource =evelopment.

-0. Pursue Pipelines construction and *dvisory 5usiness

1.10.3 ision -tatement

#o e the leading integrated natural gas provider in the region seeking to improve the

/uality o" li"e o" our customers and achieve maximum ene"it "or our stakeholders y

providing an uninterrupted and environment "riendly energy resource.

1.10. ission -tatement

* commitment to deliver natural gas to all door steps in our chosen areas through

-0



continuous expansion o" our network' y optimally employing technological' human and

organi(ational resources' est practices and high ethical standards.

1.11 4oard of *irectors

ian isbah7ur7Rehman

$hairman

r. A. Rashid 5one $hief E8ecuti!e9anaging *irector

r. *r. :aizullah Abbasi

*irector

r. ansoor uzaffar Ali

*irector

r. -. . Asghar

*irector

r. uhammad I;bal A"an*irector

r. A. -amad *a"ood

*irector

r. Abdul 4ari 6han

*irector

r. )ari; I;bal 6han

*irector

ian Raza ansha

*irector

r.Inam ur Rahman*irector

ali< )ahir -arfraz

*irector

oint Secretary 3*dmin4' @inistry o" Petroleum : Natural Besources

r. -&ed =ahir Ali -hah

*irector

1.12 essage :rom anaging *irector

--



!elcome to the o""icial wesite o" Sui Northern Gas Pipelines Limited 3SNGPL4' we

invite you to get to know our )ompany y exploring this site on which you will learn

aout our mission' vision' ojectives' core values and a host o" other in"ormation.

Since its inception in -8>%' SNGPL has grown mani"old as a result o" sustained

e""orts' progressive outlook and dynamic approach in its operations. ur human

resource capital is always there to serve you with passion and dedication. *s we look

ahead' we elieve that SNGPL is ideally positioned "or continued growth.

#he wealth o" our )ompany is our customers. !e view them as our stakeholders. &

would welcome email messages "rom all stakeholders giving suggestions on ways to

provide you with a etter service. Should your suggestion e o" particular interest to

us' & would e pleased to have an opportunity to meet with you and explore them in

more detail.

1.13 'rofile of Em%lo&ees

*s on monthly report o" *ugust' 2008 there are >88$ employees are working in which

>><2 employees are working as an operation' and %$2 employees are working as a

project.

ears O%eration 'ro+ect )otal

200< >80$ 2>$ 7->;

200> >;<2 2$8 7-0-

2007 >7-2 208 >82-

200; >8-> 22$ 7-$0

2008 >><2 %$2 >88$

-2



)he other de%artment "ise details are as under> ?under the August@ 200/

*e%artment E8ecuti!e -ubordinate )otal

@*N*G?@?N# < 7 -2

=@= % < ;

SG@ 3IB4 2 2 $

)1 - 0 -

SG@ 3?S42 2 2 $

*))9N#S >7 %-7 %;$

LG&S#&) S9PPB# $8 <$$ <8%

*9=&# %2 %8 7-5&LL&NG >7 ;>> 8%%

)&J&L )NS# % 7$ 77

)@PB?SS&N $0 2$8 2;8

)BP. *1#?B > -2 -;

=&S#B&59#&N -2% 2-08 22%2

1&N*N)? -% 20 %%

&#C@S %7 ;2 --8

-%



I.S : ?NJ $ 2 >

#B*&N&NG : =?J?LP@?N# < 0 <

L?G*L $ -0 -$

@?#?B&NG -- 22- 2%2

PL*NN&NG : =?J?LP@?N# 8 < -$

I9@*N B?S9B)? PS -- %2 $%PB?)#S $2 -27 ->8

P9B)I*S? : S#B? $- 2$< 2;>

H9*L&#K : )N#BL 8 -08 --;

S*L?S $< 282 %%7

#?L?)@ -7 <- >;

#B*NS@&SS&N 78 <8% >72

91G )N#BL ; 7 -<

)BBS&N 2; 208 2%7

)O)A5 ,(3 (231 (//

-$



$ha%ter 2

4usiness O%eration

-<



2.0 4usiness O%eration

2.1 'roduct 5ine

*lthough the company sales only natural gas. #he main source through the Sui Northern

Gas Pipelines Limited is otaining gas PPL 3Pakistan Petroleum Limited4. Iowever' i" we think there are two types o" gas.

-. Li/uid Petroleum Gas 3LPG4

2. )ompressed Natural Gas 3)NG4

#here details are as underO

2.1.1 5i;uid 'etroleum Gas ?5'G

Li/uid petroleum gas it is used "or "illing cylinders and it is li/uid "rom gas. 5e"ore

"illing the cylinders' the gas temperature is reduced and then "ills the cylinders' which

used "or domestic purpose' welding purpose etc

.

2.1.2 $om%ressed Natural Gas ?$NG

Now a day every one knows aout this type o" gas. &t is using in vehiclesO it is "illed

through compressed "unction and "ill in speci"ic pressure.

2.2 ain offices of -ui Northern Gas 'i%elines 5imited

Bead office 5ahore

Gas house

2- Aashmir road'

P..oxno.<>'

Lahore, <$000' Pakistan.

Ph6 382,$24 880;0000 : 880;2000

1acsimile6 382,$24 8820-%>8 : 8820-%02

!esite6 www.sngpl.com.pk

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http://www.sngpl.com.pk/




:aisalabad

Sargodha road.

Ph6 0$-,82-00%%,%<

1ax6 0$-,82-00%7

Islamabad

2;,%0 sector -,8' industrial area.

Ph6 0<-,82<77-0,-8

1ax6 0<<,82<7770

5ahore

2-, industrial area

Gurumangat road' gulerg &&&

Ph6 0$2,882>%%>-,;0

1ax6 0$2,882>%$00

ultan

Piran ghai road.

Ph6 0>-,82200;-,;>

1ax6 0>-,8220080

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2.3 $ore 4usiness

2.3.1 Gas -ources

*E-$RI')ION )otal ?$: A!g9*a& ?$:

4A5O$BI-)AN

Sui3S@L4 -%8'78< %;%

Sui3S9L4 -0'->0 27.;$

PirkohLoti -<'>>$ $2.82

)O)A5 1(#@(1/ #3.,(

'NCA4

=hodak 2'-20 <.;-

@eyal <-; -.$2

=hurnal -$8 0.$-

=akhni -7'278 $7.%%

*dhi -$'%<< %8.%%

5hanghali <$ 0.-<

Sad/al 72% 2

Batana %>> -

Pariwali <'->> -$.-<

Pindori ><% -.7;

=hullian >82 -.8

Salsail -%';07 %7.;2

)O)A5 ##@2 1#3.1

N.D.:.'

)handa 2'>0; 7.-$

@ela <'77< -<.;2

@akori ;';>< 2$.%

Gurguri -2'8$8 %<.<

)O)A5 30@1/, 2.,(

-IN*B

Iassan <'$-$ -$.;%

Qam(ama >;'7%< -;;.%2

Sawan ;8'$<% 2$<.-

#ajjal $'027 --.0%

Hadirpur -7<'<;8 $;-

Hadirpur3B*! G*S4 -<'2$7 $-.77

Hadirpur 3=?IK=B*#?=4 ;'%$< 22.;>

Aandhkot 2-'$>$ <;.;

)hachar %'$0- 8.%2

Behmat $'<-% -2.%>

5adar <'272 -$.$$

)O)A5 01@(0 1@100

GRAN* )O)A5 (#3@1#, 1@,/

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2.3.2 )ransmission -&stem• Kear !ise &ncrease in #ransmission System

• #ransmission Network @ap

• Segment,!ise #ransmission 5reak,up

• Province,!ise #ransmission 5reakup

2.3.2.1 ear Dise Increase in )ransmission -&stem

ear 6ms Age Increase O!er

're!ious ear

Age Increase from

1//3

-88% %'%-- , ,

-88$ %'>-$ 8.-<E 8E

-88< %';>< >.8<E -7E

-88> $'2$% 8.7;E 2;E-887 $'>;7 -0.$>E $2E

-88; $'820 $.87E $8E

-888 <'--2 %.80E <$E

2000 <'2-7 2.0<E <7E

200- <'-22 ,-.;2E <<E

2002 <'$0< <.<%E >%E

200% <'7<8 >.<<E 7%E

200$ <'77> 0.%0E 7$E

200< >'-2- <.87E ;$E

200> >'-8< -.20E ;7E

2007 >'>2< >.8$E -00E200; 7'0-> <.80E --2E

2008 7'%$7 $.<0E -22E

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2.3.3 *istribution -&stem

• Gas =istriution )apacity

• =istriution Network

2.3.3.1 Gas *istribution $a%acit&

#he =istriution System )apacity as on %-.-2.2008 is as "ollow.

-R. No. REGION$A'A$I) ?$:*

)O)A5 $ON)RA$)E* AAI5A45E

- 5ahawalpur %0> 2%> 70

2 @ultan >-0 $7- -%8

% 1aisalaad <%0 $0; -22

$ Lahore 808 ;;< 2$

< Gujranwala %-> 2<; <;> &slamaad %;- 22% -<;

7 Peshawar 2%7 -72 ><

; *ottaad -<0 -%$ ->

)O)A5 33/ 2,, (#2

#he =istriution System )apacity as on %0.0>.2008 is as "ollow.

-R. No. REGION$A'A$I) ?$:*

)O)A5 $ON)RA$)E* AAI5A45E

- 5ahawalpur 20< 2%$ ,28

2 @ultan <8> $>< -%-

% 1aisalaad <-$ %8> --;

$ Lahore ;2- ;>< ,$$

< Gujranwala %00 2$0 >0

> &slamaad %70 2-%.< -<>.<

7 Peshawar 228 ->> >%

; *ottaad -$; -%-.> ->.$

)O)A5 313 2,11.10 ,1./0

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2.3.3.2 *istribution Net"or<

ear Dise Increase In *istribution Net"or< ?-tatus as on 2/.02.200

2.3. ear Dise Increase in Gas $onsumers

ear Dise Increase in Gas $onsumers as on 2/.02.200

ear 6msIncrease O!er the 're!ious

ear

Age Increase

-88; 2;'>>- , ,

-888 28'8<$ -'28% $E

2000 %-'$77 -'<2% <E

200- %2';2< -'%$; $E

2002 %$'08% -'2>; $E

200% %<';-$ -'72- <E

200$ %;'2;$ 2'$70 >E

200< $2'-82 %'80; 8E

200> $>'>7- $'$78 -0E

2007 <-';>> <'-8< -0E

200; <7'%8< <'<28 -0E

2-



earNo. of

$onsumersIncrease from 're!ious ear

Age Increase O!er

're!ious ear

-887,8; -'>%7';0% , ,

-88; ,88 -'7$7'%20 -08'<-7 7E

-888 ,00 -';;7'008 -%8'>;8 ;E

2000,0- -'8;>'<;% 88'<7$ <E200-,02 2'--%';$7 -27'2>$ >E

2002,0% 2'20;'8>; 8<'-2- $E

200%,0$ 2'%$0';72 -%-'80$ >E

200$,0< 2'<->'78< -7<'82% ;E

200<,0> 2'72%'22< 20>'$%0 ;E

200>,07 2'8<%';-; 2%0'<8% ;E

2007,0; %'-02'>>7 -$;';$8 <E

2.3.# ear Dise Increase in Gas -ales

22



ear 6msIncrease from 're!ious ear

ol. in $: Age

-88;,88 2<%'-0$ , ,

-888,00 2;$'%%; %-'2%$ --E

2000,0- %0;'--- 2%'77% ;E

200-,02 %2-'8<7 -%';$> $E

2002,0% %$-'>$% -8'>;> >E

200%,0$ $<2'%%; --0'>8< 2$E

200$,0< <%7'0;> ;$'7$; ->E

200<,0> <7-'$;- %$'%8< >E

200>,07 <7>'><; <'-77 -E

2.3.( 'ro+ects

-r. No Acti!it& *IA ?Inch5ength ?6$ommissioned On

-=.G )ement Line 3=era Gha(i

Ahan4; 2>.00 0%.0-.200>

2 Shakardara, Lachi Line ; 2<.<0 0>.0;.200<

2%



)O)A5 #1.#0

4udgeted $ost ?illion Rs.

2.3., $onstruction Acti!ities in 'rogress

-r.

NoActi!it&

*IA

?Inch

5ength

?6

$ommissioned

On

- Bawat M @urree Line -2 <;.00 77E

2 Sukho M Bawat Line -> %<.<0 2%E

%)hoa M 5estway )ement, =.G )ement M )hakwal )ement Line

10 23.00 8;E

$ @akori Line "or @Cs @L Pakistan -0 8 ,

<5adar Gas 1ield M Hadirpur Gas 1ield Line

"or @Cs Pakistan ?xplorations Ltd.; 20.<0 88E

)otal 1#.#0 4udgeted $ost ?illion Rs 112#.00

2.3. %coming $onstruction Acti!ities

-r. No Acti!it&*IA

?Inch

5ength

?6$ommissioned On

- Iattar M *ottaad Line -> >2.<0

Procurement o" @aterial C

*c/uisition o" Land and

Preparation o" =esign=rawings in progress

2@ian )hannun M Iasilpur

Line-2 80.00 *s aove

%Iasilpur M )histaian @andiLine

; %<.00 *s aove

$ Lachi M @anjuwala Line -2 ;<.00 *s aove

< Iangu Line ; %<.00 *s aove

> @anjuwala M ?nd Point Line ; -8<.00 *s aove

)otal #02.0#

4udgeted $ost ?illion Rs 200.00

2.3./ :uture 'ro+ects

#he conceptual study o" Project,& is underway to carry maximum gas eyond @ultan '

to "acilitate gas consumers "rom all walks o" li"e in central Punja and Northern areas o"

the country. #he asic intent o" Project,& is the elimination o" ottle necks in SNGPLDs

2$



existing transmission network and to transport gas to independent Power Plants in Punja

province' through system up,gradation with loop lines and system compression

enhancement' eside construction o" pipelines to asor additional gas availale "rom gas

sources o" Potohar region and newly discovered Gurguri,@akori "ield in Aarak =istrict

o" N!1P province

2.3.10 'erformance

• Per"ormance "or the Kear 31K 200;,084

• Per"ormance "or the Kear 31K 2007,0;4

'erformance for the ear ?: 20070/

200/ 200

?Ru%ees in )housandNo of em%lo&ees

peration >'><2 >'8->

Project %$2 22$

)otal (@// ,@10

Gas -ales ?in $:

<;$';8< <87'8-%

$onsumers ?in numbers

%'$<-'-$2 %'-80'-;-

$ustomers ?in numbers

&ndustrial <'8<% <'$$2

)ommercial <2'2$2 $8'-7>

=omestic %'%<;'$%8 %'-0-'%0%

)otal 3@1(@(3 3@1##@/21

2<

http://sngpl.com.pk/indexArtcle.jsp?pgids=1121&pgname=Performance&secs=ss3146974axd5872&cats=ct96563iok34952&artcl=artuyh8erf285294&artids=501








)ransmission and *istribution -&stem ?in 6ilometers

#ransmission main 7'%$7 7'0->

=istriution main and services >7'$$8 <8'8<-

'erformance for the ear ?: 200,70

200 200,

?Ru%ees in )housand

No of em%lo&ees

peration >'8-> >'7-2

Project 22$ 208

)otal ,@10 (@/21

Gas -ales ?in $:

<87'8-% <7>'><;

$onsumers ?in numbers

%'-80'-;- 2'8<%';-;

$ustomers ?in numbers

&ndustrial <'$$2 $'$2<

)ommercial $8'-7> $<'82<

=omestic %-0-'%0% 2';>8'20;

)otal 3@1##@/21 2@/1/@##

)ransmission and *istribution -&stem ?in 6ilometers

#ransmission main 7'0-> >'>2<

=istriution main and services <8'8<- <2'%8$

2.3.11 4ill t&%es

#here are di""erent "our types o" ill.

-4 Normal 5ill

24 Provisional 5ill

%4 @inimum 5ill

$4 ?stimated 5ill

2.3.11.1 Normal 4ill

5ill is issued as per meter reading supplied y the meter reader and calculated as per rates

provided y govt. "or all categories o" consumer. Pressure "actor is applied "or the

2>


http://www.sngpl.com.pk/index.jsp?Billing-Info/BillTypes.html#act%23act

http://www.sngpl.com.pk/index.jsp?Billing-Info/BillTypes.html#prov%23prov

http://www.sngpl.com.pk/index.jsp?Billing-Info/BillTypes.html#min%23min

http://www.sngpl.com.pk/index.jsp?Billing-Info/BillTypes.html#est%23est


http://www.sngpl.com.pk/index.jsp?Billing-Info/BillTypes.html#act%23act

http://www.sngpl.com.pk/index.jsp?Billing-Info/BillTypes.html#prov%23prov

http://www.sngpl.com.pk/index.jsp?Billing-Info/BillTypes.html#min%23min

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calculation o" volume o" gas consumed "or commercial consumers' while pressure'

temperature : super compressiility "actor is also applied to work out volume o" gas

consumed y &ndustrial C ulk supply consumers.

2.3.11.2 'ro!isional bill

!hen meter reading could not e recorded due to "ollowing reasons' a Provisional 5ill is

issued to the consumer.

-4 &ndex glass dirtyCmisty.

24 !ater inside meter.

%4 @eter covered with dust.

$4 @eter covered with ushes.

<4 @eter under rain water.

>4 @eter installed aove normal height.

74 @eter position is not approachale.

;4 @eter locked inside the premises.

84 =og at site.

-04 Not allowed y the consumer.

--4 Premises not "ound.

#hese -- reasons are recorded y meter reader and re"lected on your monthly ill.Provisional ill amount is --0E o" the previous ill.

Provisional ill amount is adjusted in next normal ill when proper reading is provided.

2.3.11.3 inimum bill

5ill is charged as minimum due to (ero consumption o" gas. 5ill is charged as minimum

due to the gas consumption elow the minimum consumption limit as per Govt.

noti"ication o" minimum charges as de"ined elow 3without @eter BentCGS#46

=omestic Bs. 88.7$

)ommercial Bs. -0$>.8>

Special =omestic Bs. 88.7$

General &ndustry Bs. >>$>.$%

)ement &ndustry Bs. 7><7.%$

27



5ulk =omestic Bs. $0>.>8

&t is suject to change

2.3.11. Estimated bill

?stimated 5ill is charged due to any violation o" Gas )onnection Bules : Begulation

such as the"t or i" meter is sticky 3ut o" rder4 and is unale to record the gas passing

through it.

5ill is charged on seasonal annual consumption. &n this case average o" previous years

seasonal consumption is used.

#here are two types o" seasonal average6

Summer *verage R *verage o" 3 @ar to Nov4.

!inter *verage R*verage o" 3=ec to 1e4.

$ha%ter 3

2;



-tructure of :inance *e%artment

3.1 -tructure of finance de%artment

&n the "inance department' aout -%%- employees are working under the supervision o"

chie" "inancial o""icer and senior general manager "inance. &n the distriution o""ice

1aisalaad' employees are working under the senior area accountant and senior illing

o""icer. #he corporate structure o" "inance department to ensure accurate' timely' e""icientand e""ective discharge o" accounting "unctions. #he departO mental head is chie"

"inancial o""icer. General @anager *ccounts and general manager "inance are eing

working under the umrella o" chie" "inancial o""icer. =own the line duties and

responsiilities are assigned to chie" accountant' deputy chie" accountants' senior

accountants' sectional head' executive and support sta"". #he structure chart o" "inance

department is given as6

3.1.2 :inance F accounts functions

#he "inance and accounts department is primarily responsile to keep proper ooks o"

accounts with respect to6

*ll sums o" money received and expended y the company and the matters in

respect o" which the receipt and expenditures takes place.

28



*ll sales and purchases o" goods y the company.

*ll assets o" the company.

*ll liailities o" the company.

&n pursuit o" the achievement o" corporate ojectives and targets "ixed' the accountsdepartment transacts all the activities o" the company in the "inancial terms' record it with

accuracy' manage to provide re/uisite "unds at minimum cost' plae the surplus "unds with

the secured "inancial institutions in accordance with the approved policies o" the oard o"

directors and on overall asis acts as "inancial controller y estalishing e""ective and

udgetary controls.

3.1.3 Organization

#he corporate structure o" sui northern gas pipelines limited provides "or estalishment o"

"inance and accounts department to ensure accurate' timely. ?""icient and e""ective

discharge o" accounting "unctions. #he department is headed y chie" "inancial o""icer.

Ie is assisted y the general manager 3"inance4 and general manager 3accounts4. =own

line duties and responsiilities have een assigned to chie" accountants' deputy chie"

accountants' senior accountants' section heads and the support sta"".

3.1.3 Accounting for areas

3.1.3.1 Introduction

&n order to "acilitate smooth operation o" the area o""ices imp rest accounts are approved

y the head o""ice "or making payments to contractors' suppliers' and other outside

agencies and "or sta"" claims. #he che/ues sent y head o""ice are deposited in ank

account which is operated jointly y the imp rest holder 3area general manager4 and the

senior area accountant. *ll payments in the area are made out o" imp rests on the asis o"

payments vouchers duly approved y the area general manager and signed y the area

accountant. ?ach voucher is serially numered and entered in the imp rest cash ook. Be,

imursement "rom head o""ice is claimed on the asis o" voucher entered in the imp restcash ook showing the accounts headsCjo numers and the amounts paid. Similarly

receipts are recorded through credit vouchers which are also entered in the imp rest cash

ook. #he area accountant is also responsile to monitor gas ill collection and its

reconciliation' receive amounts "rom consumers on account o" securities' and cost sharing

%0



jos and relocation o" service line jos. #he re/uest "or jo cost numers "or cost sharing

cases are also processed y the respective area accountants.

:unctions and accounting %rocedures

1ixation o" imprest lmit new areas

?nhancement o" imprest limited

*pproval o" imprest

&mprest payment at areas

!ork ordersCcontracts

SupplierDs payments

)ontractorDs payments

Beceipts "rom outside parties

)ompletion o" cash ook

Phusical checking o" cash and monitoring o" ank accounts

Gas ills collection and security accounts reconciliation

&ssuance o" jo numers "or cost sharing works

Pre,audit

#ax deduction

5ooks and records

3.1.3.2 :i8ation of im%rest limit ne" areas

#he limit "or new imprest is "ixed taking into account the "uture estimated volume o"

expenses. #he asis considered "or this purpose is in transit period C amount and

reimursement period' which is normallu one third o" total expenses in month.

3.1.3.3 Enhancement of im%rest limited

#he trend o" expenses incerred at the area during last one year C > months is consideredtaking into account the "ollowing data "or the said period which represent the total

existing limit6

?xpenses incurred

5ank alance

%-



)ash in hand

utstanding advances

&n transit

3.1.3. A%%ro!al if im%rest

n the re/uest o" area accounts' the approval "rom chie" "inancial o""icer is otained and

new ank account is opened with the signatures o" competent authority as approved y

the oard o" directors. 1or enhancement o" imprest' limited the justi"ication on the asis

o" re/uired data is prepared and i" "ound "easile the approval "rom chie" "inancial o""icer

is otained and this increase is continuously monitored.

3.1.3.# Im%rest %a&ments at areas

Payments out o" imprest are to e made y the area accountants to contractors' suppliers

and "or other services and to sta"" a"ter approval o" the competent authority.

3.1.3.( Dor< orderd9contractors

Payments are made to contractors "or laying distriution network' civil works'

transmission lines' haulage works and "or miscellaneous activities. =istriution

contractors "or per"orming various activities are approved y the company "or each area

"rom time to time. Bates "or each activity are also approved C revised y the company

a"ter every two years. !orks orders are issued y the area general manager assigning

work to each contractor. )opies o" work orders are sent to accounts department.

&n other departments' like projects' transmission and civil contracts C work orders are

awarded on the asis o" competitive idding according to the approved procedures and

copies sent to accounts department.

Similarly contracts "or haulage o" goods and "or hiring o" e/uipment are awarded on

annual asis y purchase : store department according to the purchase : stores

procedures and copies sent to accounts.

)heck that the contract C work order has een approved y the competent

authority.

)heck computation and keep it in an area,wise contractors "ile.

3.1.3., -u%%lierHs %a&ments

%2



Payment to suppliers against local purchase orders should e checked with the supporting

documents i.e. Local purchase order and receiving statement etc. * monthly ill paid

register should e sumitted to head o""ice 3ills section4 duly reconciled with the

payments deited to sundry creditors account in the imprest cash ook.

)ontractor payments

*ove payments dully approved y the competent authority will e made a"ter due

checking o" supporting documents and included in jo cost columns o" imprest cash

ook.

)heck that the supporting documents attached to the vouchersCclaims are in agreement

with the claim amount and cash memos attached' i" any are proper.

Beceipts "rom outside parties

Beceipts on accounts o" cost sharing charges' service line relocation charges etc. recorded

through credit vouchers showing the appropriate account head. &t will e ensured that all

receipt in the "orm o" che/ues' demand dra"t' pay orders and cash received on company

account will e deposited into ank on daily asis. #he receipt i" any collected a"ter

anking hours is to e deposited in company account on next working day.

)ompletion o" cash ook

• *ll payments vouchers and credit vouchers must e serially numered accurately

and entered in the imprest cash ook. * data control slip should e completed andattached to the imprest cash ook sent to head o""ice "or re,imursement.

• 5e"ore sending the imprest cash ook "or re,imursement the computations and

alances carried "orwarded to next sheets must e con"irmed. #he imprest cash

ook must e signed y area general manager and the senior area accountant.

3.1.3. 'h&sical chec<ing of cash and monitoring of ban< accounts

• #he account should check the cash physically on daily asis at the end o" each

day. )ash physically checked should e recorded in a register kept "or this purpose and signed y the cashier and accountant showing the denomination o"

notes.

• =uplicate keys "or the cash chest will e held and one each will e retained y the

cashier and the accountantCincharge.

%%



• #he area accountant must monitor the ank account on continuous asis so that

the alance is kept reconciled. #he area accountant sends ank reconciliation y

7th o" each month with amount appearing in the cash ook.

• #he area accountant should monitor the regular receipt o" ank statements "or

checking and pointing out discrepancies e.g. time arred che/uesO ank charges or

some other receipt not recorded in the imprest cash ook.

3.1.3./ Gas bills collection and securit& accounts reconciliation

• )ompany has authori(ed various anks to collect gas ills. *s per standing

instructions all anks are re/uired to trans"er all collections to companyDs main

collection accounts on daily asis. #he area accountant is re/uired to otain ank

statements "or each accounts on monthly asis and prepare proper reconciliation

so as to ensure that all "unds collected on ehal" o" the company have een

trans"erred as per instructions. *ll outstanding items will e pursued "or "inal

settlement.

• #he reconciliation o" the gas sales collection account will e sumitted to head

o""ice y -<th o" each month.

• #he area accounts received amounts "rom the prospective consumers and the

connected consumers under the "ollowing heads o" accounts.

• Gas connection application "ee "or domestic and commercial connections.

• Security "or domestic' industrial' domestic and special domestic consumers.

• Service line charges.

• *dditional security as and when due.

• Be,connection "ee.

• * separate security account "or depositing the amount collected in connection

with gas connections and other heads as stated aove has also een opened in the

area. #he accountant is re/uired to collect ank statements "or each account on

monthly asis and prepare reconciliation. *ll outstanding items will pursue "or

settlement.

3.1.3.10 Issuance of +ob numbers for cost sharing "or<s

%$



)ompany undertakes cost sharing jos and service,line relocation works on payment y

consumers. Proper jo numer is slotted y the area accountant so as to record all cost

and "acilitate suse/uent re"undCrecovery. n receipt o" the completion reports these will

e checked y area accounts and recoveryCre"und will e arranged.

Pre,audit

@anaging director o""ice note 82- dated Novemer <' 200% pre audit "unctions have een

trans"erred to accounts. #he area accountant is responsile "or evaluation o" all purchases

orders as per procedure. Pre,audit o" all contract payments including partial payment

certi"icateC"inal payment certi"icate and other purchases will e carried out as per

company procedure and instructions issued "rom time to time.

#ax deduction

=eduction o" tax should e made according to the relevant section o" income tax

ordinance' 200- keeping in view the di""erent rates applicale to contractors' suppliers

and service contracts.

3.1.3.11 4oo<s and record

• Serial numer,wise paid imprest voucher kept in ound "orm.

• &mprest cash ooks pertaining to each area.

• 5ank reconciliation statements pertaining to cash account.

• =aily cash reconciliation registers.

• Security registers.

• Stock o" received goods.

• Serial numer and date wise paid and receipt vouchers.

3.1.3.12 obilization of funds

)ash moili(ation techni/ues "all into two areas6

• *cceleration o" receivales

• )ontrol o" disursements

Beceivale are those "unds that come into the organi(ationDs treasury. )ash "low can e

expedited

%<



%>



$ha%ter

:inancial -tatements and Anal&sis

4.1 Balance sheet (Liabilities)

Sui Northern Gas Pipeline LtdBalance SheetAs on June 30

200/ 200 200, 200(

E;uit& and 5iabilities

Share )apital and Besrves

*uthori(ed share capital

-<00000000 3200>6 -<000000004

rdinary Shares o" Bs -0. each -'<00'000' -'<00'000' -'<00'000' -'<00'000'

&ssued Suscried and

%7



paid up capital <'$8-'0<% <'$8-'0<% <'$8-'0<% $'88-';>>

Bevenue Beserves -0'><>'$>% --'>$7'78> -0'78;'$22 -0'-->';2>

)otal E;uit& 1(@1,@#1( 1,@13@/ 1(@2/@,# 1#@10@(/2

Non )urrent Liailites

Long #erm 1inancing

Secured 0 >2'<00 >>2'<00 -'8$8'0;$

9nsecured -'78;'%-2 2'7-7'8>% %'7-0'-;-

<'$7$'08>

Security =eposit --'$%8'8>8 8'0>;'-02 7'270'$07 <';><'778

=e""ered )redit %2'000'-%% %-'%;>'<$; 2%'-0;'$-2 ->'>>%'770

=e""ered Liailities , , , ,

=e""ered #ax ;'-7;'2-- 7'<>2'$-2 >'7<2'<70 >'0$>'882

?mployee ene"its %82'2$8 %%>'>>7 28;'02> %-2'><$

#3@0@, #1@13@1/2 1@02@0/( 3(@312@3,#

$urrent 5iabilities

#rade and other payale $8'7;<'7%> 27'$->'%;$ 22';-0'<82 22'0%-'280

*ccured @ark upCinterst <<2'->0 %8>'%2% $>7'$<2 <$;'2-7

Short #erm 5orrowing 8<0';<; 0 0 0

)urrent portion o" long "inancing -'-02'8;0 -'<>-';8< 2'2;-'2$% 2'<<8'><0

#axation,net 0 0 0 >7>'%$<

<2'%8-'7%$ 28'%7$'>02 2<'<<8'2;7 2<';-<'<02

)otal 5iabilities 10(@200@(0 0@#0@,/ (,@3(1@33 (2@12,@,,

Contingencies and commitments 0 0 0 0

!otal "#uit$ and liabilities 1%%34&1%4 '443 &3*0&*& %3*'

%;



4.% Balance sheet (Assets)

Sui Northern Gas Pipeline LtdBalance SheetAs on June 30

200/ 200 200, 200(

Non $urrent Assets

Property Plant and ?/uipments 7;'%$<'$%2 >2'02<'782 <0'0<%'8%0 $%'<>;'-8%&ntangile assets 270';$< ->;';2< 0 0

&nvestment in an associate company $'800 $'800 $'87; $'800

Long term loans 2%<'0>0 22$'>$< 222'%-0 208'$;%

?mployee 5ene"its %$7'<$7 %<7'-$0 0 0

Long term =eposits and prepayments 7'$;2 7'-%; >'$0> 7'07%

%8



,/@211@2(( (2@,@0 #0@2,@(2 3@,/@(/

$urrent assets

Stores and spare parts 2'-7-'8<% 2'2;7'0;$ -'0;8'<2> -'-;$'-$0

Stock in trade, gas in pipelines 7;%'%>2 <2<'%70 $7%'$0$ $$<'772

#rade dets 2<'70>'%>2 -;'7<7'%;< ->'228'0>7 -$'<-7'<%>

Loan and advances -%>'7>> -$;'$0% -;-'$-$ ;2'---

=eposits and short term prepayments 8%'<7% 8<'$2; %%'28% %-'82>

&nterest accrued -%'>%$ $0'8;; 72'7<> >0'7>0

ther receivales --'-7>'8;7 2'2%<'$$- -'%$0'2%$ 8;0'><0

#axation,net -'%02'$28 7>$'<2- -%$'078 0

Sales tax recoverale $%$'8-< -'%<>'%%8 2>%'2%% 7$%'<07

Short term investments 0 <--'08> 0 0

)ash and ank alances -'%->';77 ;'-%7'-$; -%'<$>'22; -<'$00'<-;

3@13(@# 3@#/@203 33@3(3@23 33@(@/20

)otal Assets 122@3@12 /,@(,@(3 3@(#0@# ,,@23(@#(/

4.3 Pro+it and Loss Account

Sui Northern Gas Pipeline LtdPro+it and Loss Account

As on June 30

'rofit F 5oss Account 200/ 200 200, 200(

Gross Sale ->0'7-$'7%7 -2%'$0$'<%7

-22'08-'><2

-07';87'28-

*dd6 =i""erential @argin

;'2-8'08$ 7<0'$8> , ,

->;'8%%';%- -2$'-<<'0%%

-22'08-'><2

-07';87'28-

)ost o" gas sold

-<-'%%7'%%8 -08'-07'$>-

-0;'>;2';<0

8$'0%2'$8<

Gross pro"it -7'<8>'$82 -<'0$7'<72 -%'$0;';02 -%';>$'78>

Bental and service income 880'-0- 8->'%<- ;2;'-$0 7$$'8<<

$0



Surcharge and interest on gas sales

arrears

-'200';22 70%'%2; >7%'2$- <%$'$70

*morti(ation o" de"erred credit -'08>'0%% 780'2;8 <8-'%<$ $72';78

%'2;>'8<> 2'$08'8>; 2'082'7%< -'7<2'%0$

20';;%'$$; -7'$<7'<$0 -<'<0-'<%7 -<'>-7'-00

perating ?xpenses

=istriution cost

-<'0--'<28 --'787'77; -0'>82'0>- 8'>27'07>

*dministrative expenses

-'72%'200 -'%78'0;0 -'%-2'8;% -'-72';>0

->'7%$'728 -%'-7>';<; -2'00<'0$$ -0'788'8%>

$'-$;'7-8 $'2;0'>;2 %'$8>'$8% $';-7'->$

ther operating expenses

2'87<'%0< 8<7'-8$ 2$-'%2$ %$>'%00

-'-7%'$-$ %'%2%'$;; %'2<<'->8 $'$70';>$

ther perating &ncome

-'2-0'00; -'$$>'<>; -';<<'--; -';2;'%88

perating pro"it

2'%;%'$22 $'770'0<> <'--0'2;7 >'288'2>%

1inance cost

><%'-;2 7;8'2$7 ;>0'7-<

-'-;0'20%

Pro"it e"ore taxation and share "romassociate

-'7%0'2$0 %'8;0';08 $'2$8'<72 <'--8'0>0

Share in pro"it o" associate,e"ore

tax , $22 7; ,

Pro"it e"ore taxation -'7%0'2$0 %'8;0'%;7 $'2$8'$8$ <'--8'0>0

#axation

788'70$ -'$;$'<$7 -'<7-'%07 -'%8>';->

Pro"it a"ter taxation

8%0'<%> 2'$8<';$0 2'>7;'-;7 %'722'2$$

?arrings per share, asic and diluted

-.>8 $.<< $.;; >.7>

$-



. Jer tical9$ross7-ectional9$ommon -ize Anal&sis )echni;ues

JerticalC)ross,sectionalC)ommon si(e statements came "rom the prolems in comparing

the "inancial statements o" "irms that di""er in si(e.

• &n the alance sheet' the assets as well as the liailities and e/uity are each

expressed as a -00E and each item in these categories is expressed as a

percentage o" the respective totals.

• &n the common si(e income statement' turnover is expressed as -00E and every

item in the income statement is expressed as a percentage o" turnover 3sales4.

4.4 ,ertical Anal$sisSui Northern Gas Pipeline Ltd

,ertical Anal$sis (P-L Account)As on June 30

Cune@30@200( Cune@30@200, Cune@30@200 Cune@30@200/

'rofit and loss items

?:igure in

%ercentage

Gas sales -00 -00 -00 -00*dd C 3 Less4 6 =i""erential @arginC

3Gas =evelopment surcharge4 ,-.8 ,7.78 0.>- <.--

8;.- 82.2- -00.>- -0<.--)ost o" Gas Sold ;<.2< ;-.22 ;;.$- 8$.-7

Gross Pro"it -2.;< -0.8; -2.-8 -0.8<

Bental and Service income 0.>8 0.>; 0.7$ 0.>2

Surcharge and interest on gas sale arrears 0.< 0.<< 0.<7 0.7<

*morti(ation o" de"erred credit 0.$$ 0.$; 0.>$ 0.>;

-$.$7 -2.7 -$.-< -2.88

Less6 operating expenses

$2



=istriution )ost ;.82 ;.7> 8.<> 8.%$ *dministrative expenses -.08 -.0; -.-2 -.07

-0.0- 8.;% -0.>; -0.$-

$.$> 2.;> %.$7 2.<;

ther operating expenses 0.%2 0.2 0.7; -.;<

$.-$ 2.>7 2.>8 0.7%ther operating income -.>8 -.<2 -.-7 0.7<

perating pro"it <.;$ $.-8 %.;7 -.$;

1inance cost -.08 0.7 0.>$ 0.$-

Pro"it e"ore tax and share "rom associate $.7$ %.$; %.2% -.0;share in pro"it o" associates,e"ore tax 0 0 0 0

pro"it e"ore taxation $.7$ %.$; %.2% -.0;

less6 tax -.28 -.28 -.2 0.<

pro"it a"ter tax %.$< 2.-8 2.02 0.<;

4.4.1 ,ertical Anal$sisSui Northern Gas Pipeline Ltd

,ertical Anal$sis (Balance Sheet)As on June 30

Cune

30@200(

Cune

30@200,

Cune

30@200

Cune

30@200/

4A5AN$E -BEE) I)E- 31igre in percentage4

A--E)-

Non 7 current assets

Property' plant and e/uipment <>.$- <8.78 >%.>> >$.0%&ntengile assets 0 0.02 0.0% 0.22

&nvestment in associate 0.0- 0.0- 0.0- 0Long term loans 0.27 0.27 0.2% 0.-8

?mployee ene"its 0 0.07 0.%7 0.2;

Long term deposits and prepayments 0.0- 0.0- 0.0- 0.0-

<>.7 >0.-> >$.% >$.7$

$urrent Assets Stores and spare parts -.<% -.% 2.%$ -.7;

Stock in trade,gas in pipelines 0.<; 0.<7 0.<$ 0.>$

#rade dets -;.; -8.%8 -8.2- 2-.0-Loans and advances 0.-- 0.22 0.-< 0.--

trade deposits and short term

prepayments 0.0$ 0.0$ 0.- 0.0;interest accrued 0.0; 0.08 0.0$ 0.0-

ther receivales -.27 -.<; 2.28 8.-$

&ncome tax recoverale,net 0 0.-> 0.7; -.0>Sales tax recoverale 0.8> 0.%- -.%8 0.%>

Short term investments 0 0 0.<2 0

)ash and ank alances -8.8$ ->.-8 ;.%% -.0;

$%



$%.% %8.;$ %<.7 %<.2>

)otal assets -00 -00 -00 -00

4.4.% ,ertical Anal$sis

Sui Northern Gas Pipeline Ltd,ertical Anal$sis (Balance Sheet)

As on June 30

EI) AN* 5IA4I5I)IE-

-hare ca%ital and reser!es

*uthori(ed share capital3-'<00'000'000 ordinary shares o" Bs.-0

each4&ssued suscried and paid up share

capital >.$> >.<> <.>2 $.$8

Bevenue reserves -%.- -2.8 --.8% ;.7-#otal ?/uity -8.<> -8.$7 -7.<< -%.2

Non7$urrent 5iabilities

Long term "inancing

,Secured 2.<2 0.78 0.0> 0 ,9nsecured 7.08 $.$% 2.7; -.$7

Security deposits 7.<8 ;.>8 8.28 8.%<

=e"erred credit 2-.<7 27.>- %2.-$ 2>.-<=e"erred tax 7.;% ;.07 7.7$ >.>;

?mployee ee"its 0.$ 0.$ 0.%$ 0.%2

$7.0- $8.88 <2.%7 $%.8;

$urrenat 5iabilities #rade and other payale 2;.<2 27.2> 2;.0; $0.>8

&nterest C mak up accrued 0.7- 0.<> 0.$- 0.$<

)urrent portion o" long term "inancing %.%- 2.7% -.> 0.7;

#axation,Net 0.;; 0 0 0.8

%%.$2 %0.<$ %0.0; $2.;2

#otal Liailities ;0.$$ ;0.<% ;2.$< ;>.;

)ontingencies and commitments 0 0 0 0

)otal E;uit& and 5iabilities -00 -00 -00 -00

Inter%retation1rom the vertical analysis aove' we can compare the percentage mark,up o" asset items

and how they have een "inanced. #he strategies may include increaseCdecrease the

holding o" certain assets. !e may as well oserve the trend o" the increase in the assets

and liailities over several years.

$$



$.< Borizontal :inancial -tatement Anal&sis

#his techni/ue is also known as comparative analysis. &t is conducted y setting

consecutive alance sheet' income statement or statement o" cash "low side,y,side and

reviewing changes in individual categories on a year,to,year or multiyear asis. #he most

important item revealed y comparative "inancial statement analysis is trend.

* comparison o" statements over several years reveals direction' speed and extent o" a

trend3s4. #he hori(ontal "inancial statements analysis is done y restating amount o" each

item or group o" items as a percentage.

Such percentages are calculated y selecting a ase year and assign a weight o" -00 to the

amount o" each item in the ase year statement. #herea"ter' the amounts o" similar items

or groups o" items in prior or suse/uent "inancial statements are expressed as a

percentage o" the ase year amount. #he resulting "igures are called index numers or

trend ratios. 1rom the alance sheet statement in exhiit -. #he "ollowing indexed

alance sheet can e estalished.

4.* ori/ontal Anal$sis

Sui Northern Gas Pipeline Ltdori/ontal Anal$sis (P-L Account)

As on June 30

June

30%00 June 30%00

June

30%00&

June

30%00'

$<



'rofit F loss items

(iure in

Percentae)

Gas Sales 168 190 192 250

Add / (Less):Diffeential !agin / 1"580 #10$1 #11$"1

(Gas De%elo&ment S'cage) 2920 1$5 19" 26"

165 188 20$ 288Cost of Gas Sold 1$5 116 1"0 152

Goss ofit 120

*ental and Se%ice +ncome 11$ 1"0 1," 155S'cage and +nteest on Gas

Sales Aeas 101 128 1", 228

Amoti-ation of Defeed Cedit 1"2 165 220 "05

119 118 1"" 159

Less: .&eating &enses

Disti'tion Cost 12, 1"8 152 19,

Administati%e &enses 125 1"9 1,6 18"

12, 1"8 152 19"

109 $9 9$ 9,.te .&eating &enses 1$6 12" ,86 1512

106 $$ $9 28

.te .&eating +ncome ,50 ,5$ "56 298

.&eating ofit 1"6 110 10" 51

inance Cost 122 89 81 6$

ofit efoe 3aation 1,0 116 109 ,$

Less:3aation 102 115 109 59

ofit afte 3aation 162 11$ 109 ,1

aning &e Sae#4asic and

Dil'ted (*'&ees) 1,$ 106 99 "$

4.*.1 ori/ontal Anal$sis

Sui Northern Gas Pipeline Ltdori/ontal Anal$sis (Balance Sheet)

As on June 30

4A5AN$E -BEE) I)E-

Cune

30@200(

Cune

30@200,

Cune

30@200

Cune 30

200/A--E)- 31igure in percentage4

Non 7 current assets

Property' plant and e/uipment --; -%< ->; 2-2

&ntengile assets 0 0 0 0&nvestment in associate -00 -02 -00 -00

Long term loans 82 8; 88 -0%

?mployee ene"its 0 0 0 0

$>



Long term deposits and prepayments --% -02 --$ --8

--; -2$ ->8 2-%

$urrent Assets Stores and spare parts -87 -;2 %;- %>2

Stock in trade,gas in pipelines ->2 -72 -80 2;$

#rade dets -$8 ->7 -8% 2>$Loans and advances <; -28 -0< 87

#rade deposits and short term prepayments 8- 8< 27% 2>;

interest accrued -7< 208 --; %8ther receivales 27$ %>8 >2> %-2;

&ncome tax recoverale,net 0 0 0 0

Sales tax recoverale 0 0 0 0

Short term investments 0 0 --0; 0)ash and ank alances -;- -<8 8> -<

->8 ->8 -7> 2-;

#otal *ssets -%> -$7 -72 2-<

4.*.% ori/ontal Anal$sis

Sui Northern Gas Pipeline Ltdori/ontal Anal$sis (Balance Sheet)

As on June 30

EI) AN* 5IA4I5I)IE-

-hare ca%ital and reser!es

*uthori(ed share capital

3-'<00'000'000 ordinary shares o" Bs.-0

each4 -00 -00 -00 -00

&ssued suscried and paid up share

capital -00 --0 --0 --0

Bevenue reserves -7% -%7 -88 -;2

#otal e/uity -%8 -<0 -<; -$8

Non7$urrent 5iabilities Long term "inancing %8 -% - 0

,Secured 8- >2 $< %0

,9nsecured -%2 ->$ 20$ 2<;Security deposits 20> 2;< %;; %8<

=e"erred credit -08 -22 -%> -$7=e"erred tax -> -7 -7 20

?mployee ene"its --7 -%$ ->$ -7%

$urrent 5iabilities

#rade and other payale ->; -7$ 208 %;0

&nterest C mark up accrued %<$ %0- 2<> %<>Short term orrowings 0 0 0 0

)urrent portion o" long term "inancing -<8 -$2 87 >;

$7



#axation,Net 8-2 0 0 0

-7% -7- -87 %<-

#otal liailities -%< -$> -7< 2%-

)otal E;uit& and 5iabilities -%> -$7 -72 2-<

Inter%retation

*s asis o" *nalysis' the analyst may seek variales which seem to improve or

deteriorate and ring a challenge to the stakeholders in their various decisions. ?xample

"rom the previous tale one can ask the "ollowing /uestionsT

• !hy is there an increase in the stock o" the companyT Ias the company changed

its inventory policyT

• !hy did taxation increase so tremendouslyT !ere there any changes in taxationT

&s it re"lected y the increase in salesT Pro"itT

• !hy is there an increase in the "ixed assets and at the same time decrease in the

long,term detT Iow were these assets "inancedT

$;



.( Ratio Anal&sis

Batio analysis is one o" the techni/ues o" "inancial analysis where ratios are used as a

yardstick "or evaluating the "inancial condition and per"ormance o" a "irm. *nalysis and

interpretation o" various accounting ratios gives skilled and experienced analyst a etter

understanding o" the "inancial condition and per"ormance o" the "irm than what he could

have otained only through a perusal o" "inancial statements.

$8

RA)IO

ANA5-I-

RA)IO

ANA5-I-

5II*I) RA)IO-

A$)II) RA)IO-

5EERAGE RA)IO

'RO:I)A4I5I)

RA)IO-



.(.1 5II*I) RA)IO-

Li/uidity represents the aility o" a company to e""iciently and economically

accommodate deposits withdrawal as well as "und increase in assets. * company has a

li/uidity potential when it has the aility to otain su""icient "unds in a timely manner at a

reasonale cost. &lli/uidity is a primary "actor leading to a )ompanyDs "ailure whereas

high li/uidity helps otherwise weak institutions to remain "unded during the period o" di""iculty.

• Li/uidity re"ers to the aility o" a "irm to meet its short,term "inancial oligations

when and as they "all due.

• #he main concern o" li/uidity ratio is to measure the aility o" the "irms to meet

their short,term maturing oligations. 1ailure to do this will result in the total

"ailure o" the usiness' as it would e "orced into li/uidation.

I. )urrent ratio

II. Huick *sset to =eposit ratio

.(.1.2 $RREN) RA)IO

#he )urrent Batio expresses the relationship etween the "irmDs current assets and its

current liailities.

)urrent assets normally include cash' marketale securities' accounts receivale and

inventories. )urrent liailities consist o" accounts payale' short term notes payale'

short,term loans' current maturities o" long term det' accrued income taxes and other

accrued expenses 3wages4.

$urrent Ratio >7 $urrent Assets

$urrent 5iabilities

200/ 200 200, 200(

$urrent Asset $%'-%>';<; %$';<8'20% %%'%>%'2%$ %%'$$>'820

<0



$urrent 5iabilities <2'%8-'7%$ 28'%7$'>02 2<'<<8'2;7 2<';-<'<02

$urrent Ratio 0.2 1.1/ 1.31 1.30

IN)ER'RE)A)ION

#his ratio shows that whether the current assets o" the company are Su""icient to meet the

current liailities or not. &n 200> it was -.%0 that shows low li/uidity ut comparatively

etter other years ecause this ratio is aove standard that is 2. &n 2007 it was -.-8' that

shows that "irm use "inancing leverage in 2007 and approximately to 0.;2 in 200;' that

shows that "irm take more short term loans "rom market.

.(.1.2 I$6 RA)IO OR )E-) A$I* RA)IO

@easures assets that are /uickly converted into cash and they are compared with current

liailities. #his ratio reali(es that some o" current assets are not easily convertile to cash

e.g. inventories.

#he /uick ratio' also re"erred to as acid test ratio' examines the aility o" the

usiness to cover its short,term oligations "rom its F/uick assets only 3i.e. it

ignores stock4. #he /uick ratio is calculated as "ollows

uic< Ratio>7 uic< assets

$urrent 5iabilities

<-



200/ 200 200, 200(

$urrent Assets $%'-%>';<; %$';<8'20% %%'%>%'2%$ %%'$$>'820

In!entor& 7;%'%>2 <2<'%70 $7%'$0$ $$<'772

$urrent 5iabilities <2'%8-'7%$ 28'%7$'>02 2<'<<8'2;7 2<';-<'<02

Acid )est Ratio 0.1 1.1, 1.2/ 1.2

IN)ER'RE)A)ION

#his ratio shows that how much /uick assets are availale to meet the demand o" the

accountholders. #his ratio was -.28E in 2007 and decreased to -.-7E in 200;. &t shows

that in 2007 the immediate li/uidity position o" the company was comparatively weak.

5ut it is also more decreases in 2008.

.(.1.3 Net Dor<ing $a%ital

$urrent Assets 7 $urrent 5iabilities

%00' %00& %00 %00

2urrent Asset ,"1"6858 ",85920" """6"2", "",,6920

<2



2urrent Liabilities 52"91$", 29"$,602 2555928$ 25815502

Net orin 2apital ('%*4&) *4&401 &03'4 3141&

.(.2 Acti!it& Ratio

&" a usiness does not use its assets e""ectively' investors in the usiness would rather

take their money and place it somewhere else. &n order "or the assets to e used

e""ectively' the usiness needs a high turnover.

9nless the usiness continues to generate high turnover' assets will e idle as it is

impossile to uy and sell "ixed assets continuously as turnover changes. *ctivity ratios

are there"ore used to assess how active various assets are in the usiness.

Note6 &ncreased turnover can e just as dangerous as reduced turnover i" the usiness

does not have the working capital to support the turnover increase. *s turnover increases

more working capital and cash is re/uired and i" not' overtrading occurs.

.(.2.1 Recei!able )urn O!er Ratio

Annual $redit -ale

<%



7777777777777777777777777

)otal Recei!able

200/ 200 200, 200(

Recei!able 2<'70>'%>2 -;'7<7'%;< ->'228'0>7 -$'<-7'<%>

-ale ->0'7-$'7%7 -2%'$0$'<%7 -22'08-'><2 -07';87'28-

A!erage

Recei!ables 22@231@, 1,@/3@22( 1#@3,3@302 1@#1,@#3(

Recei!able )urn

O!er ,.2 ,.1 ,./ ,.

IN)ER'RE)A)ION

#his ratio measures the numer o" times' on average' receivales 3e.g. *ccounts

Beceivale4 are collected during the period.

&n 200; : 2008 this ratio is decreased .07 : .0> "rom last year 2007. &t shows that "irm

has change its account receivale policy.

.(.2.2 In!entor& )urno!er Ratio

$ost of Goods -old

7777777777777777777777777777

A!erage In!entor&

%00' %00& %00 %00

2ost o+ oods sold 151""$""9 10910$,61 108682850 9,0"2,95

5n6entor$ $8""62 525"$0 ,$",0, ,,5$$2

<$



A6erae 5n6entor$ *43 4''3& 4*'*&& 44*%

5n6entor$ !urn 76er 8atio %31.% %1&.4& %3.4& %10.'4

Inter%reatation

#his ratio measures the stock in relation to turnover in order to determine how o"ten the

stock turns over in the usiness.

&t indicates the e""iciency o" the "irm in selling its product. &t is calculated y dividing he

cost o" goods sold y the average inventory.

.(.2.3 )otal Asset )urn O!er

Sales

,,,,,,,,,,,,,, #otal *ssets

%00' %00& %00 %00

!otal sale 160$1,$"$ 12",0,5"$ 122091652 10$89$291

!otal Assets 122",812, 9$6,$6," 8"650858 $$2"6569

!otal Asset !urn 76er 1.31 1.% 1.4 1.40

<<



Inter%retation

*sset turnover is the relationship etween sales and assets

• #he "irm should manage its assets e""iciently to maximi(e sales.

• #he total asset turnover indicates the e""iciency with which the "irm uses all its

assets to generate sales.

• &t is calculated y dividing the "irmDs sales y its total assets.

• Generally' the higher the "irmDs total asset turnover' the more e""iciently its assets

have een utili(ed.

.(.2. :i8ed Asset )urn O!er

)otal sale 9 :i8ed Asset

%00' %00& %00 %00

!otal sale 160$1,$"$ 12",0,5"$ 122091652 10$89$291

i9ed Asset $9211266 62$88,,0 5028$62, ,"$896,9

i9ed asset turn o6er %.03 1.' %.43 %.4

<>



.(.3 5e!erage ratio

• #he ratios indicate the degree to which the activities o" a "irm are supported y

creditorsD "unds as opposed to owners.

• #he relationship o" ownerDs e/uity to orrowed "unds is an important indicator o"

"inancial strength.

• #he det re/uires "ixed interest payments and repayment o" the loan and legal

action can e taken i" any amounts due are not paid at the appointed time. *

relatively high proportion o" "unds contriuted y the owners indicates a cushion

3surplus4 which shields creditors against possile losses "rom de"ault in payment.

Note6 #he greater the proportion o" e/uity "unds' the greater the degree o"

"inancial strength. 1inancial leverage will e to the advantage o" the ordinary

shareholders as long as the rate o" earnings on capital employed is greater than the

rate payale on orrowed "unds.

#he "ollowing ratios can e used to identi"y the "inancial strength and risk o" the

usiness.

<7



.(.3.1 *ebt to -hare holder e;uit& Ratio

)otal *ebt

77777777777777777777777

E;uit&

%00' %00& %00 %00

!otal :ebt 106200608 80508$9, 6$"61"8" 6212$8$$

Shareholders "#uit$ 161,$516 1$1"88,9 16289,$5 15108692

:ebt to "#uit$ 8atio *&; 40; 414; 411;

IN)ER'RE)A)ION

#his ratio indicates the extent to which det is covered y shareholdersD "unds. &t re"lects

the relative position o" the e/uity holders and the lenders and indicates the companyDs

policy on the mix o" capital "unds.

#his ratio shows that how much company is "inanced more y det than its own e/uity.

1rom 200> to2008 it goes on raising which shows that gradually companyDs operationsare more "inanced y its dets than y e/uity' this is due to increases in short term

"inances

.(.3.2 5nterest 2o6erae

<;



"arnin Be+ore 5nterest And !a9<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<5nterest "9pense

%00' %00& %00 %00

"B5! 2"8",22 ,$$0056 511028$ 629926"

5nterest "9pense 65"182 $892,$ 860$15 118020"

5nterest 2o6erae 8atio 3.* .04 *.'4 *.34

Inter%reatation

#his ratio measure the extent to which earnings can decline without causing "inancial

losses to the "irm and creating an inaility to meet the interest cost.

• #he times interest earned shows how many times the usiness can pay its interest

ills "rom pro"it earned.

• Present and prospective loan creditors such as ondholders' are vitally interested

to know how ade/uate the interest payments on their loans are covered y the

earnings availale "or such payments.

• wners' managers and directors are also interested in the aility o" the usiness to

service the "ixed interest charges on outstanding det.

<8



#he companyDs major "orms o" credit are non,interest earing 3trade creditors4 which

results in the usiness enjoying very healthy interest coverage rates. &n 200> the company

could pay their interest ill <.%$ times "rom earnings e"ore interest and tax. Iowever

this is a massive drop "rom <.8$ times and in 200- and %.>8 times in 2008.

.(. 'RO:I)A4I5I) R A)IO-

Pro"itaility is the aility o" a usiness to earn pro"it over a period o" time.

*lthough the pro"it "igure is the starting point "or any calculation o" cash "low' as

already pointed out' pro"itale companies can still "ail "or a lack o" cash.

Note6 !ithout pro"it' there is no cash and there"ore pro"itaility must e seen as a critical

success "actors.

• * company should earn pro"its to survive and grow over a long period o" time.

• Pro"its are essential' ut it would e wrong to assume that every action initiated

y management o" a company should e aimed at maximising pro"its' irrespective

o" social conse/uences.

The ratios examined previously have tendered to measure management efficiency and

risk.

Pro"itaility is a result o" a larger numer o" policies and decisions. #he pro"itaility

ratios show the comined e""ects o" li/uidity' asset management 3activity4 and det

management 3gearing4 on operating results. #he overall measure o" success o" a usiness

is the pro"itaility which results "rom the e""ective use o" its resources.

1ollowing pro"itaility ratios have een calculated

I. Gross Pro"it @argin Batio

II. Net perating &ncome Batio

III. Net Pro"it Batio

I. Beturn on e/uity

>0



.(..1 Gross 'rofit argin Ratio

Gross pro"it,,,,,,,,,,,,,,,,,, -00

sale

Inter%retation• Normally the gross pro"it has to rise proportionately with sales.

• &t can also e use"ul to compare the gross pro"it margin across similar usinesses

although there will o"ten e good reasons "or any disparity.

• #he ratio aove shows the increasing trend in the gross pro"it since the ratio has

decreased "rom -%E in 200> to -%E on 2007. #his indicates that the rate in

%00' %00& %00 %00

Sale 160$1,$"$ 12",0,5"$ 122091652 10$89$291

Gross Pro+it 1$596,92 150,$5$2 1",08802 1"86,$96

Gross Pro+it8atio 11; 1%; 11; 13;

>-



increase in cost o" goods sold are less than rate o" increase in sales' hence the

increased e""iciency.

.(..2 Net O%erating argin

O%erating Income

777777777777777777777777 8 100

-ale

%00' %00& %00 %00

Sale 160$1,$"$ 12",0,5"$ 122091652 10$89$291

7peratin Pro+it 2"8",22 ,$$0056 511028$ 629926"

7peratin Pro+it 8atio 1; 4; 4; ;

Inter%reation

&t is a measurement o" what proportion o" a companys revenue is le"t over' e"ore taxes

and other indirect costs 3such as rent' onus' interest' etc.4' a"ter paying "or variale costs

o" production as wages' raw materials' etc. * good operating margin is needed "or a

company to e ale to pay "or its "ixed costs' such as interest on det. * higher operating

margin means that the company has less "inancial risk.

&n 200> company has ratio >E ut it has een constantly decreasing with time eing to

-E' which very danger "or "irm.

>2



.(..3 Net Pro+it =arin

Net Pro"it a"ter tax x -00

Net Sales

200/ 200 200, 200(

-ales ->0'7-$'7%7 -2%'$0$'<%7 -22'08-'><2 -07';87'28-

Net 'rofit after ta8es 8%0<%> 2$8<;$0 2>7;-;7 %7222$$

Net 'rofit argin 1 2 2 3

IN)ER'RE)A)ION

#his is a widely used measure o" per"ormance and is comparale across companies in

similar industries. #he "act that a usiness works on a very low margin need not cause

alarm ecause there are some sectors in the industry that work on a asis o" high turnover

>%



and low margins' "or examples supermarkets and motorcar dealers.

!hat is more important in any trend is the margin and whether it compares well with

similar usinesses.

Net pro"it ratio indicates that how much net sales are contriuting towards generating Net

Pro"it. &n 200> it was %E and decreased to 2E in 2007. &t is decreasing constantly and in

2008' it is only -E. &t shows the "irm crises.

.(.. Return on E;uit&

#his ratio shows the pro"it attriutale to the amount invested y the owners o" the

usiness. &t also shows potential investors into the usiness what they might hope to

receive as a return. #he stockholdersD e/uity includes share capital' share premium'

distriutale and non,distriutale reserves. #he ratio is calculated as "ollows6

Net 'rofit

7777777777777777777

E;uit&

200/ 200 200, 200(

Net %rofit after ta8 8%0<%> 2$8<;$0 2>7;-;7 %7222$$

-hare holder e;uit& ->'-$7'<-> -7'-%;';$8 ->'2;8'$7< -<'-0;'>82

Return on e;uit& ( 1# 1( 2#

>$



IN)ER'RE)A)ION

#he ratio shows that how much e/uity is contriuting towards generating Net &ncome. &n

200> it was 2<E and decreased to ->E in 2007 ut in 200; it also decreased to ->E in

2008 it was too much decreased to >E. #his shows that in organi(ation increases det

"inancing.

.(..# Earning 'er -hare

200/ 200 200, 200(

Net %rofit after ta8 8%0<%> 2$8<;$0 2>7;-;7 %7222$$

No. of shares

outstanding <$8-0< <$8-0< <$8-0< $88-;7

Earning 'er -hare 1.(/ .## . ,.(

.(..( Brea >p 6alue per share

Share holder?s e#uit$ @ No. o+ share outstandin

%00' %00& %00 %00

Share holder?s e#uit$ 161,$516 1$1"88,9 16289,$5 15108692

No. o+ share out standin 5,9105 5,9105 5,9105 ,9918$

Brea up 6alue per share %'.41 31.%1 %'. 30.%

><



$BA')ER NO.#

-DO) ANA5-I-

>>



#.1 -DO) ANA5-I-

#.1.1 Internal and E8ternal factors.

#he Internal com%onent o " *nal ys is i s conce rned wit h t he as ic

strengths and " ea <n es se s o" t he o rgan i(at ion. #hus' i t dep ic ts t he

internal environment o" the company. #he strengths o" the company may

e its "inancial or human resources' processes' operational methods'market ing s t rategies ' segmentat ion techni/ues or any exper t i se that the

company may " ee l a s i ts cor e compe tenc ies. )on tr ar y t o t hi s' any

d is cr epanci es i n t hese " ac to rs ' a t t he s ame t ime' may ecome t he

weaknesses o" the company. Ience' i t is the internal environment o" the

company that shapes i t s usiness s t rategies and provides di rect ion to

survive in the marketplace.

#he e8ternal com%onent deals with the "actors that the company "aces in

i t s external compet it ive environment. #hese "actors are categori(ed as

o%%ortunities avai lale "or the company in the market p lace and the

threats s t rained y i t s compet i tors . #he o%%ortunities o" the company

may y i ts ail i ty to sat is"y the ever aris ing needs o" i ts customers etter

>7



t han i ts compe ti to rs ' new ava il a le mar ke ts ' r oom " or s et ti ng new

operations' "alling o" arriers due to gloali(ation trend etc. &" a "irm "ails

to avai l the opportunit ies as soon as they arr ive ' these opportunit ies

ecome threats "or that company. #his is ecause yo ur competitors will

ava il t ha t oppor tuni ty i n t he ir " ir st a tt empt and a tt ai n " ir st mover

advantage over you.

-DO) Anal&sis is a popular techni/ue used to analy(e some companyDs

present usiness situation. &t provides us with an overview o" companyDs

major strengths and its critical weaknesses. #he external opportunities and

threa ts that the company "aces in the external envi ronment are a lso

highlighted in this approach.

#.2 -DO) Anal&sis

<.2.- -trengths>

Government rgani(ation

Iigh )umulative )ustomer retention rate since the start o" operations

Sustained growth rate o" annual sales turnover.

)onsistent Huality

Jertically integrated.

?xcellent market image in the local and international market.

Iighly /uali"ied management.

*de/uate "inancial resources.

*dopting in"ormation technology.

Skilled Laor.

5road and motivational vision.

>;



5.2.2 Weaknesses:

Iigh employee turnover

Low production capacity.

=e,motivated Sta"".

Less promotional activities.

Non,)orporative culture.

&nsu""icient ene"its "or the employees.

Stereotype machinery "or processing.

)ommunicational gap among di""erent departments.

No Proper #raining to employees

@anual !ork

@ineral Stocks

<.2.% O%%ortunities>

)an expand its division such as "inding new minerals

)an reduce the cost y proper utili(ation o" resources.

)an hire well,educated and experienced sta"".

#.2. )hreats>

New plans to take gas "rom outside the country

5uyer need and demand changes.

Political instaility.

)hanging geopolitical situation.

)hange o" government policies.

Less stocks o" minerals

>8



70



$BA')ER NO.(

$ON$5-ION AN* RE$OEN*A)ION

(.1 $ON$5-ION

#he company earned Bs -'7%0'2$0 thousand pre tax pro"it' which is decrease than the last

year. #he revenue "rom sales was Bs ->0'7-$'7%7 thousands during the year' which is

also decrease than the previous year. #his year the company has taken a tax re"und o" Bs

788'70$ thousands "rom the tax authority on di""erent accounts. )ompanyDs current ratio

also decreased -.-8 to 0.;2 "urther more the company has tried its est optimi(e

utili(ation o" all its availale resources to the maximum level resulting in improvement o"

the inventory turnover ration "rom 2-;.$; #o 2%-.27 the company need to e taken

e""ective measures to recover its old situation and improve its "inancial position.

(.2 RE$OEN*A)ION-

5e"ore joining this organi(ation & know a little aout the organi(ation work' its working

system and environment' so & learned a lot "rom this experience. 5ased on my experience

7-



: oservation regarding the operations and policies o" organi(ation' there are some

recommendations which include short term as well as long term issues "or the

improvement.

(.2.1 Assess the 'erformance of em%lo&ees

#here is no e""icient method introduced y organi(ation "or his assessment o"

per"ormance o" employees. Promotions are completely relying on higher management

like managers .Ds there can e some sort o" "avoritism. So to avoid all this' there should e

a proper method to judge the employees.

(.2.2 Im%ro!e Information )echnolog& -&stem

Sui Gas Northern Ltd. should immediately improve its &n"ormation #echnology System.

#he so"t wares currently in use should e made error "ree as it is the need o" the hour.

(.2.3 $om%uterized Accounting -&stem

*s "ar as accounting is concerned' although the entire system is computeri(ed' ut there

still involves lots o" paperwork. So this should e minimi(ed ac/uiring more advanced

accounting so"tware

(.2. Cob Rotation

#here is no rotation o" employees within departments and cross departments. So the top

management should immediately start thinking in terms o" rotating the employees invarious departments' as this trans"orms work "orce into human capital.

(.2.# *istribute Dor< E;uall&

@anagement should distriute work e/ually among di""erent employees. Some o" the

employees are overurdened while some sections are oversta""ed.

(.2.( Im%ro!e its Debsite

Sui Gas Northern Ltd needs to improve its wesite. @ore in"ormation relating to "inancial

per"ormance and sale o" the organi(ation should e availale on the wesite.

(.2., E!ol!e anagement 'olic&

Sui Gas Northern Ltd should evolve a very serious management policy to attract multi

national corporations as its clients. #his action' i" actuali(ed' would not only prove to e

highly pro"it generating' ut it would also contriute a lot towards Gohar #extile image

uilding.

72



(.2. Ad!ertise

ne o" the most pressing needs o" the time is to advertise Sui Gas Northern Ltd in the

electronic media. Sui Gas Northern Ltd has not' till date' employed advertisement in

electronic media as a "ull "ledge marketing tool. & think it is high time that organi(ation

does this

(.2./ ar<et -ur!e&

#he management should make the market survey time to time to get more and latest

in"ormation aout the market "actors like the price' demand' current consumer trends etc.

Reference and source used

)he follo"ing sources are used for %re%aring this internshi% re%ort

-, *nnual Beport 2007' 200;' 2008

2, @onthly report o" "inancial year 2007'200;' 2008

%, Sui Northern Gas wesite 3www.sngpl.com.pk 4

$, Sta"" @emers o" Sui Gas Northern



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