Sinopec Finance Company funds settlement and centralized control case study

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					Sinopec Finance Company funds settlement and centralized control case study
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2008-02-28 20:30
Fund settlement center and centralized control is centralized under the system of
choice for models because of its efficient resource allocation, investor achieve money
Youxiao monitoring 功能 has long been widely used by Chinese and foreign
enterprises. However, settlement of funds and focus not simply a matter of arbitrary, is
related to internal control system, organization, processes, and supporting the external
environment and building a series of institutional arrangements, and thus in the mode
of operation has shown a lot of corporate control objectives and results of the great
differences.
1, Sinopec Group, and financial settlement center of the background
Sinopec Group is the period of 1998 State Council approved the reorganization of 7
large group of countries, its wholly-owned, holding and shareholding enterprises and
units directly over the country except Taiwan Province of the region, its business
covers the oil, gas and other industries, 20 several products. The group introduced
upstream and downstream, domestic and foreign trade, production and sales
integration, operations and external market, internal close of business management
principles. October 1999, Sinopec holding stock company in New York, Hong Kong
and London listed three places, this is the first state-owned enterprises listed overseas
success of the three, raising 3.462 billion yuan of funds.
Sinopec Finance Company is a subsidiary of China Petrochemical Corporation,
established in July 1988, 1993, approved by the Central Bank, transformed into a
limited liability company, in 1997 to increase their investment, the current capital of
1.5 billion.
Petrochemical settlement center set up finance companies are primarily internal
transfer and settlement needs. Over the years, due to many factors, business links
between the settlement of arrears seriously, provinces and municipalities less oil
refining business, refining business due to pipeline companies, pipeline companies
due to the formation of oil companies in the payment of debt chain, had a maximum
of 400 billion. Was owned by Sinopec Petrochemical Enterprises Management,
provincial and municipal levels of local government owned oil company leaders,
pipeline companies and oil companies have returned to the Oil and Natural Gas
Corporation leadership, therefore, the debt chain solution involves three different
departments. How to unlock the upper, middle and lower reaches of the debt chain
between enterprises has been a group of concern, but also to carry out the direct cause
of the internal settlement. In addition, the concentration of settlement before the bull
by the affiliates own bank account, long loans, funds distributed, and inefficient use of
high occupancy costs, and became a tool for all branches of discipline and law, will
finally transfer risk to the general company. In 1998 the State Council decided on the
Petroleum and Natural Gas Corporation and Sinopec restructuring the petroleum,
petrochemical two group. Group restructuring and change management system
requirements within the finance group, centralized management, and re-integration
after the Sinopec Group and internal operations management and internal close close
management transfer and settlement for the work carried out within the conditions
were created.
Centralized billing and control has achieved significant results. Corporate credit
growth accelerated to promote the flow of funds, corporate accounts receivable also
declined substantially, the end of 1997 to 22.518 billion yuan, reduced 17.71 billion
yuan at the end of 1999. Petrochemical internal settlement of the actual number of
days faster than in the past 10 days by bank clearing around. In particular, March 1,
2000 oil unified settlement began, the participants settled oil refinery companies and
sales companies and other parties to large areas almost no payment default, this group
wanted to do for many years and not do things . Internal settlement promoted the
provincial oil company of enterprises, especially the establishment of the centralized
management mechanism. Most oil companies to promote unity within the settlement
and the oil companies have been established between the prefecture and county funds
"expenditure" in management. Carried out within the settlement
to promote the business (especially oil provinces) the establishment of the centralized
management model to enhance the intensity of capital managed. At the same time to
promote the group within the settlement of the internal operating mechanism
improved. Materials and funds to be supporting operation, not only money to be
withdrawn from circulation in time, is more important is oil and petrochemicals in the
allocation of resources can be fundamentally improved, for crude oil, refined oil
market order to improve, to avoid disorderly competition between enterprises bring
the crude oil and refined oil market chaos. For crude oil, refined oil pricing
mechanism by the market form, so that oil, the price of crude oil in place, increasing
the market competitiveness of petrochemical enterprises.
Second, financial companies Sinopec and operational mechanism of mode of
settlement center
Sinopec finance company operating mode of settlement center, not simply concentrate
funds into the settlement, but the financial plan, use, control, reward and punishment
of the whole process of audit and centralized management. Participating in the main
(two levels) a clear mandate, posts and to define the duties and responsibilities based
on the settlement limit the scope of the provisions of the four uniform, signed three
agreements for the participating of the main settlement in a strict discipline, hierarchy
clearly defined, incentive and restrictive rules of symmetry to run.
(A) limit the scope and object settlement: Group has 13 subsidiaries and shares have
been listed company, Shanghai Petrochemical and Yizheng Chemical Fiber 2 is both
A-share listed companies is H-share listed companies, Beijing Yanhua and Zhenhai
Refining & Chemical to H shares of listed companies and the rest are
A-share listed companies. The first group is characterized by a sub-listed company,
and then transferred to the parent company, parent company of such a rare another
capital market operation. Therefore, centralization is the key business integration,
which focus on the settlement and funds were limited to the scope and variety.
Limited to group objects within the settlement of their member units, including the
Group's wholly owned holding enterprises and shareholding enterprises
(including listed companies and the surviving corporation), a subordinate unit of the
main types of enterprises can apply for settlement through the main business
operations; internal settlement species largely confined to the settlement within the
main group of products and services, such as: purchase and sale of crude oil, refined
oil purchase and sale of raw materials for each other, material and equipment
purchase and sale, related transactions.
(B) implement the "four unities", "three
agreements," "two financial control" mechanism.
"Four unifications", ie (1) unified billing software; (2) Unified
certificate format; (3) uniform bills passed; (4) unified statement of accounts. To
participate in the settlement of the reunification of branches must be regulated in a
unified reporting format for the company, time and requirements of the Settlement
Department to submit the settlement of financial companies statistical reports, billing
by the headquarters office on the 2nd month summary report compiled statement, sent
to the unit leaders. Branch will be at 4 pm every day, "the balance of
receipt and payment of settlement funds transfer daily report," Clearing
Agency Fax companies, led by the Settlement Department to report the.
Implementation of the "four unity" is the basis for the
implementation of the Settlement Centre to participate in settlement of the parties to
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