SSGCL REPORT

Page
 Company overview 3

 Back ground of sui southern 4

gas company limited
 Vision and Mission Statement 5
of SSGCL
 Organization and 6
Management
 Organizational Chart 7
 Company Operation 7-8
 Company Core Value 8-9
 Company Objective 9

 Business Challenges 10-11

 Awards and Achievements 12
 Gas Purchase and 12-13
Responsibilities of gas
purchase
 Supplier of SSGCL 13
 Gas Sales Agreement 14
 Quality Services 14
 Customer Facilitation Center 14-15
and its functions
 CFC located in Pakistan 15
 Customer Call Center 16
 Software used by SSGCL for 16
customers management
 SCADA “supervisory control 17
and data acquisition”
operation and transmission
control room function
 SSGC reaches out to 18-19
customers
 The pioneering spirit of SSGL 19
 focused towards customers 19

 HSE-conscious company 19

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 SSGCL REPORT

 Promoting cogeneration to 19
conserve energy

 To facilitate customer
introduction of different bill 20
payment system

 Excellence in customer service 21

 human resources management 21
of ssgcl
 Training & certification 21
courses conducted in ssgcl
 H.S.E policy (health, safety, 22
environment policy
 Corporate social responsibility 23-25
of ssgcl
 Technology used by ssgcl 25
 Oracle Financial 26
 Customer Care and Billing 26
System
 Resource enterprise planning 27
 Sui southern gas company 28-29
limited (ssgcl) - financial and
strategic analysis review
 Internal audit department of 30
sui southern gas company
 Future outlook of sui southern 31-32
gas company

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 SSGCL REPORT

COMPANY OVERVIEW:

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 Balochistan 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 Balochistan are organized through its
regional offices. An average of about 357,129 million cubic feet (MMCFD) gas was sold in
2006-2007 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.
The transmission system of the Company extends from Sui in Balochistan to Karachi in
Sindh comprising 2,942 Km of high pressure pipeline ranging from 12” - 24" in diameter.
The distribution network of over 30,000 Km covers 1200 towns and 930 villages in Sindh
and Balochistan. The Company sold 442,146,085 million cubic feet (MCF) of natural gas
during the year 2008-2009 to about 2.155 million industrial, commercial and domestic
consumers. The Company also owns and operates the only gas meter manufacturing plant in
the country, under an agreement with Schlumberger Industries-France. The plant has an
annual production capacity of over 550,150 domestic meters. SSGC is also examining the
feasibility of installing a pilot project of 500 numbers of Radio Frequency type and 500
numbers of prepayment type meters manufactured by ACTARIS, French Company.
Following the successful test-launch of 1,000 imported prepaid meters in 2004-05, the
company is proceeding aggressively to set up more pilot projects before rolling out these
meters at a faster rate in 2005-06. The Company has achieved another milestone at the meter
plant. It has obtained ISO 9001: 2000 certifications.
The Company is a public limited company listed on the Karachi, Lahore and Islamabad
Stock Exchanges with more than 70% direct shareholding by Government of Pakistan
(GOP). It has an authorized capital of Rs.10 billion, out of which Rs. 6.7 billion is issued and
fully paid up and is managed by an autonomous Board of Directors having overall control.
Presently, SSGC’s Board has 14 members drawn both from public and private sectors. The
Managing Director/Chief Executive is nominated by GOP and has been delegated with such
powers by the Board of Directors as are necessary to effectively conduct the business of the
Company.

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 SSGC INFRASTRUCTURE: SSGCL REPORT

Gas Infrastucture

Gas Operations

Gas Transmission

Gas Distribution

Province Wise Distribution

BACK GROUND OF SUI SOUTHERN GAS COMPANY LIMITED:

SSGC in its present form was created on March 30, 1989, following a series of mergers of
three pioneering energy companies: Sui Gas Transmission Company, Karachi Gas Company,
and Indus Gas Company. Sui Gas Transmission Company Limited was formed in 1954 with
the primary responsibility of gas purification at the Sui field in Baluchistan and its
transmission to the consumption 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.

Organized into regional offices, SSGC also owns and operates the only gas-meter
manufacturing plant in the country, under an agreement with Actaris (a former division of
Schlumberger). Today, SSGC’s infrastructure supports more than million customers.
Domestic consumers comprise the overwhelming majority of those users (98.8 percent), with
commercial (1.1 percent) and industrial (0.2 percent) customers representing very small
segments of its constituency.

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COMPANY VISION SSGCL REPORT

COMPANY MISSION

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VISION & MISSION STATEMENT OF SSGCL DEFINES ITS FUTURE SSGCL REPORT
OBJECTIVES AND PROVIDING QUALITY SERVICE TO ITS CUSTOMERS:

The SSGC vision was not without its challenges. SSGC cuts across many industries and has
many diverse stakeholders. As a public sector organization—with the Pakistani
government holding more than 70 percent ownership—SSGC has social as well as policy-
based responsibilities. Although SSGC’s primary mandate is to provide utility services to
citizens, it also is charged with creating jobs, continuously improving the skills of its
employees, helping the Pakistani government fulfill its vision for citizen quality of life and
Business productivity, and—not least—running an efficient enterprise to ensure that oil and
gas consumers get access to the country’s energy resources at affordable rates. Moreover, as
a Business within the oil and gas industry, SSGC must efficiently manage the purchase of gas
from a significant number of explorations and production (E&P) companies, which operate
the gas fields. Furthermore SSGC must operate as a successful commercial enterprise in the
oil/gas sector. This means being profitable and self-funded rather than government
subsidized. Finally, as a utility company, SSGC is responsible for the cost-effective
distribution of high-quality natural gas to industrial, commercial, and household consumers
in its operating regions while providing stellar customer service.

ORGANIZATION AND MANAGEMENT:

SSGC is managed by a Board of Directors which is headed by a Chairman, while the

Managing Director is the Chief Executive Officer of the Company. The Company operations
are run by the following main departments which are manned by competent engineering and
other professional staff:

a) Transmission Operations b) Distribution Operations c) Planning and Development d)

Project and Construction e) Finance f) Personnel, Administration and Corporate Affairs g)
Materials h) Internal Audit i) LPG Operations j) Meter Manufacturing k) Marketing and
Billing l) Data Processing

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 ORGANIZATIONAL CHART OF SSGCL: SSGCL REPORT

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COMPANY'S OPERATIONS: SSGCL REPORT

GAS TRANSMISSION AND PURIFICATION:

 SSGC operates a train of 10 purification banks with a total gas processing capacity of
790 MMSCFD MMSCFD Millions of Standard Cubic Feet per Day (measure of gas
produced in a reservoir) .

 High Pressure Gas Transmission Pipeline System comprises of 1888 kilometer high
pressure pipelines and 53200 horsepower compression.

DISTRIBUTION:

The Company's franchise for distribution of gas covers the Provinces of Sindh and
Balochistan. To maintain close contact with the consumers the distribution operations have
been classified into four regions. These regions are named after major cities i.e. Karachi,
Hyderabad, Sukkur and Quetta. The total distribution network of over 10,108 Km. in terms
of length has been laid until June, 2010. This expanded network has enabled the Company to
cater for the gas requirement of 809105 consumers located in 52 towns and cities.

The Company has provided 66,173 new connections during 1995-2008. The Company's
operations are being further geared to provide gas supply to new areas and it is planned to
connect about 1, 10,358 new connections in the current financial year 2009-2010.

MANUFACTURING OF DOMESTIC METERS:

The Company started manufacturing domestic gas meters at its plant in Karachi in June 1976
at a total cost of Rs. 4.980 million with an initial annual capacity of 60,000 meters which was
enhanced to 120,000 meters in 2008-2009. During 2009-2010 the Company manufactured
238,230 gas meters. During the current financial year, it is planned to manufacture 300,000
large and small meters which should meet the country's total requirement for these items thus
saving precious foreign exchange.

COMPANY’s CORE VALUE:

CHALLENGES:
The challenges of transporting energy from the supply sources to the load centre. The
Company is meeting the challenges head on to bring these supplies to the load centre in its
franchise areas through most cost effective and sustainable means. OPPORTUNITIES:
Opportunities to find deeper powers within ourselves come when life seems most
challenging. Pakistan has enjoyed the supply of natural gas as a premium fuel both in the
domestic and commercial sectors, as well as in general industry.

COMMITMENT:
Desire is the key to motivation, but determination and commitment is an unrelenting pursuit
of your goal. SSGC is contributing towards adoption of modern technology that would
conserve energy, save on operating costs, bring overall production efficiency and improve
customer service on the continuing basis.

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 SSGCL REPORT
TEAMWORK:

It 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, demonstrates sensitivity contributes to team
effectiveness using people's different skills and styles, arrives at constructive solutions while
maintaining positive working relationships.

TRANSPARENCY:

It promotes open environment, displays openness and consistency in applying policies &
procedures; respects dissent and resolve conflicts fairly.

RESPONSIBILITY TO STAKEHOLDERS:

SSGCL stays abreast of change in operating environment that impacts their business (i.e.
markets, competitors, technology, customers and suppliers, employees, regulatory, political
and public). The company creates 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 and ensures
compliance of law.

COMPANY OBJECTIVE:

The Company aims to supply natural gas wherever there is sufficient load to justify
the cost of infrastructure. In many places the gas network is being expanded to meet
economic and social requirements through active funding support from the Federal
and Provincial governments. In 2003, the Company launched a comprehensive five-
year gas network development and expansion plan to connect hundreds of small
towns and villages in remote areas of Sindh and Baluchistan, which currently are
deprived of piped natural gas.

Every year, the Company adds nearly 66,000 new customers (industrial, commercial
& domestic) to its customer base and lays hundreds of kilometers of transmission
pipelines and distribution network and installs other facilities such as metering billing
stations in its system using its staff of technically qualified and skilled personnel.

BUSINESS CHALLENGES
Even as a government monopoly, SSGC was facing many of the same challenges that
commercial enterprises around the world must confront every day. In particular, SSGC was
struggling to cope with two difficult but common situations. First, because the organization
had been created through the merger of three companies—two from the public sector and one
a commercial, multinational enterprise—three uniquely distinct cultures needed to come
together if the organization as a whole was to function smoothly and productively. The

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second challenge was technological. SSGC’s legacy platform—an aging mix of standalone SSGCL REPORT
databases and Business applications from different vendors—was not integrated and
lacked the scalability SSGC needed to support its mission. Because these legacy systems
were based on obsolete technology, they were inordinately costly to maintain. Moreover,
there were significant data-compatibility issues arising from soloed systems that impeded the
organization’s ability to disseminate accurate and consistent information throughout its
operations. The challenges that arose from these two situations—cultural and technical—fell
into the following categories: marketing, sales, customer service, product/service
management, asset management, regulatory compliance/quality, supply chain, analytics,
financials, human resources, and policy.
MARKETING:

Due to the fragmented nature of its technology infrastructure, SSGC lacked a holistic view of
its customers. This limited SSGC’s ability to market new products and services effectively
and also prevented it from gathering sufficient intelligence to make effective decisions about
pricing, new services, and other strategic moves.

SALES:

The same lack of visibility into operations created delays in signing up new customers and
booking new orders. Additionally, it was difficult for the organization to access timely and
accurate data on credit evaluations. This impacted SSGC’s ability to provide quotes to new
customers and to commit to service-delivery dates for its field resources.

CUSTOMER SERVICE:

Because interdepartmental systems were not integrated and there was no centralized
customer database, the firm took unacceptably long to respond to customers’ queries. It also
lacked the capability to quickly create field-service orders and dispatch technicians in a
timely manner. Moreover, because it was adding more than 80,000 new customers annually,
SSGC faced a number of critical Business challenges related to metering and billing.
Standalone, soloed applications and databases hampered its ability to consistently and
accurately generate customer billing, resulting in numerous customer errors and complaints.

ASSET MANAGEMENT:

SSGC’s records of its assets existed mostly on paper, and processes to manage those assets
were mostly manual. In addition, the organization’s “tribal” knowledge about asset
management had never been documented, but instead resided within the expertise of
individual employees.

REGULATORY COMPLIANCE/QUALITY:

Regulatory reporting was performed manually and there were no controls ensuring the
accuracy of the data used to generate reports.

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 SSGCL REPORT

SUPPLY CHAIN:

Excess inventory tied up valuable capital, preventing SSGC from being able to invest in
much-needed infrastructure expansion. Additionally, sourcing took an inordinate amount of
time—as long as nine months—which also limited SSGC’s ability to make capital
expenditures in other key areas.

ANALYTICS:

SSGC had put few metrics in place for monitoring integrated process performance and had
no discernable starting point from which to benchmark any kind of progress.

FINANCIALS:

Because SSGC lacked a sophisticated financial system, it took as long as two months to close
its books every quarter. This created a bottleneck for managers seeking timely information on
organizational performance.

POLICY:

Global regulatory requirements put pressure on SSGC to produce auditable performance and
quality records that showed it was financially self-sustaining. Yet inefficient operations
meant that it was surviving financially, primarily through higher tariffs and cross-subsidies
from other public sector agencies. SSGC needed to establish and rigorously adhere to
policies that dictated its financial autonomy.

AWARDS AND ACHIEVEMENT:

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

 SSGC has been recognized by Oracle in a worldwide forum as a flagship for

technology applications and best business practices.

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

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

 Meter manufacturing capacity increased from293, 000 to 500,000 fully meeting

increased requirements of SNGPL and SSGC.

 Obtained Environment Excellence Award 2004 and 2005 from National Forum for
Environment and Health.
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 SSGCL REPORT
 Obtained National Excellence Award2005 and Excellence Award for best HSE
Practices from Employees Federation of Pakistan.

 SSGC is the first utility in Pakistan to undertake unique implementation of an

integrated and comprehensive Customer Information System (CIS), using
world-class software application of SPL World Group. Recognizing these
efforts, made mostly by SSGC itself, Mr. Munawar Baseer Ahmed -Managing
Director of SSGC was specially invited as Key Note Speaker to the SPL User
Conference held in November 2006 in USA. SSGC has been selected by
Disease Management Leadership Association (DMAA), USA to receive 2006
Disease Management Leadership Award for Outstanding Leadership in
Emerging Health Needs and has been invited to present a paper in Disease
Management Leadership Forum 2006 organized by DMAA.

GAS PURCHASE

The Sui Southern Gas Company Limited is engaged in the business of gas transmission and
distribution in Sindh and Balochistan. The company receives gas from different oil and gas
fields located in Sindh and Balochistan. The natural gas received from these fields is
transmitted to different cities and towns of Sindh and Balochistan and then the gas is
distributed to consumers. There are total 15 fields and 4 towns controlled by Gas Purchase
section. Each field has an operator and under that operator there are several other joint
ventures who supply the gas according to a certain limit allowed to them. The operator has
direct contact with SSGC whereas other joint ventures contact to the company through the
operator and their invoices also come under the letter head of the operator.

SUPPLIER OF SSGCL:

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 Volume(MMCF) SSGCL REPORT

Naimat Basal 152,525

Bhit 116,713
Badin 73,673

Zamzama 59,104

Sui/Kandhkot 39,306

Sawan 33,920

Miano 25,995

Kadanwari 15,461

Bobi 5,305

Mazarani 4,000

Latif/Daru/Sari Hundi/Mari 2,564

SNGPL(Ghotki.Rustam/Ubaro) 853
529,419

QUALITY SERVICES:

Customer services are headed by Mr. Zahid Mumtaz.

To maintain quality and to facilitate its customer SSGCL have adopt following steps:

 Open CFC (Customer Facilitation Center) for the facility of customers and to receive
complaints from customers.
 Open Customer Call Center to receive customer feedback through phone call.
 Introduce CC&B system (Customer Care and Billing System) to maintain record of
customers.
 Introduce SCADA “Supervisory Control and Data Acquisition” to maintain quality of
gas.

CUSTOMER MANAGEMENT OF SSGCL

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1. CUSTOMER FACILITATION CENTER : SSGCL REPORT

SSGCL provides quality services to their customers, for this purpose they open various CFC
(Customer Facilitation Center) at various locations of Pakistan in different cities.CFC is form
to facilitate customers and provides one window solution for their problems related to billing.
Different natures of complaints attended by the customer facilitation center are as under:
 Issuance of duplicate bills (due to late delivery /non delivery of bills).
 Installment (for high gas bills, leakage or PUG cases).
 Reconciliation
 Payment updated after billing completed
 Bank query (payment missing cases).
 LPS (late payment surcharge) withdrawal where payment made before due date.
 Change name / address
 Complaint logging
 Meter number correction
 Disconnection on customer’s request
 Wrong meter number correction.
These are the main function or facilities provided by customer facilitation center, other
functions perform by customer facilitation center are:

OTHER FUNCTIONS PERFORM BY CFC:

 Bank Booths / NADRA kiosk for payment of bills.

 Prepared meter (issuance of advance billing for the requested amount).
 Installment/duplicate bills for commercial customers.
 Service complaints e.g. low gas pressure, meter change of damaged DPG and PUG
cases.
 Additional services line, house line leakage and over head leakage etc .
CFC opens for the facilities of customers and it’s located at various locations in Pakistan:

2. CUSTOMER CALL CENTER

The other means of complaining is through calls. Customers can any time call at 1199-
helpline number and ask for any queries. The call centre again have the same procedure, once
the complaints are received, they are noted and are forwarded to the concerned department
for immediate action and solution of the problem. The call center has 24/7 service. The
employees are also facilitated through shifts. Monday – Friday, 9 am to 5 pm is the shift for
females. And the rest of the time, males are on duty.

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 SSGCL REPORT

3. SOFTWARE USED BY SSGCL FOR CUSTOMER CARE:

SSGCL is using software name CC&B (Customer Care & Billing) to record and maintain
customer record and to facilitate customer.

CC&B (Customer Care & Billing)

Oracle Customer Care and Billing (SPL Customer Care & Billing) handles every aspect of
customer information-service connection, meter reads, rating, billing, and more-while also
undertaking associated functions like payment processing, collections, field service, and
meter management. The product evolves with business demands, minimizing cost and risk. It
helps utilities in any market maximize revenue, create cost efficiencies, and respond to
market change. It scales from a few thousand to many millions of customers. Upgrades are
quick and easy.

4. SCADA “SUPERVISORY CONTROL AND DATA ACQUISITION” OPERATION

AND TRANSMISSION CONTROL ROOM FUNCTION:

Company import SCADA system and maintain SCADA control room to provide best gas
quality to its customers. In Karachi, Gas is distributed through different channels such as
SCTPS, KGTPS, BQASIM, PASMIC, CMS, FJFC, and KCTPS. The system which monitors
the whole process is imported from Canada and it is known as “Supervisory Control and
Data Acquisition” (commonly SCADA).SSGCL form through the merger of three companies
and basic function of SSGCL is distribution of gas, SSGCL transmission control room

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control the transmission of gas and work on 24/7 basis, control room check the quality gasREPORT
SSGCL
that received from different fields because SSGCL purchase 10% gas from sui field and 90%
from other fields.

Transmission control room check:

 Temperature of gas
 Pressure of gas
 Trend of gas
Control check the input and out put of gas and in case of gas pipe line damage control room
stop the supply of gas with in 20 seconds.
Control room collect data through two sources:
 Telecommunication
 Another way to collect data is SCADA (Supervisory Control and Data
Administration) (on line system).
SSGCL is using microwave networking, for the transmission of data (relay of data) repeater
must be used to boost the signal at the distance of 40 km SSGCL place 23 repeater for the
relay of data from
distribution location to
control room. First
repeater is place at
Khadeji. Gas supply to
Karachi through 5
stations. To become
ISO 9001 certified
company SSGCL
properly follows the
OGRA rule and
regulations OGRA is
an oil and gas
regularity authority
and control all oil and
gas exploration and distribution companies.

CUSTOMER RELATION:
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The primary responsibility of Sales Department is to ensure that customers are given proper
SSGCL REPORT
guidance/service with smile and not put them to un-necessary hardship in obtaining gas
connection and post commissioning problems. To achieve this objective Sales Department
will maintain close contact with the customers at Sales Customer Facilitation Desk. The
customer's complaints of any nature will be registered and referred for early redressed.
Customer will also be informed accordingly.

SSGC REACHES OUT TO CUSTOMERS!

Sui Southern Gas Company (SSGC) is Pakistan's model gas utility and a blue chip company
with a sound financial base, an annual turnover of over US$1 billion, a 3,000km high-
pressure transmission network and a 26,000km distribution network, extending across the
two southern provinces of Sindh and Balochistan.

It is the first utility in Pakistan to receive ISO-14001 and OHSAS-18001 certification.

Commencing operations in 1954 as Sui Gas Transmission Company (SGTC), SSGC today
delivers natural gas to over 1.8 million customers comprising 2,800 industrial units including
two large power plants, and 19,000 commercial organizations in 6 major towns, 100 smaller
towns and more than 930 villages.

SSGC buys gas in bulk from a dozen international and local E & P companies, for
distribution across its franchise areas. Its transmission network capacity of 1.3bcfd is fully
utilized with supply meeting demand. The company's five-year, US$ 800 million
Development Plan is designed to expand T & D capacity to 1.8bcfd by the year 2010,
enhance system efficiency and optimize service quality.

SSGC is widely acknowledged for its world-class expertise in the engineering, design,
construction, operation and maintenance of an extensive gas supply infrastructure and is fully
capable of providing innovative gas technology solutions to other companies in the region.

The optimal use of technology across all functions has earned the company the reputation of
Pakistan's most technology-enabled utility. A Geographic Information System (GIS) that
creates seamlessly integrated intelligent drawings of the pipeline network based on satellite
images is currently under implementation. By end-2006, GIS will be integrated with the
company's Customer Information System (CIS) based on SPL World Group's software and
Enterprise Resource Planning (ERP) system based on Oracle e Business Suite. The advanced
SCADA system provides on-line, real-time monitoring of the entire transmission network as
well key customer locations.SSGC launched Pakistan's first integrated LNG import project
which is making good progress. The company has already advertised for interested firms,
JVs and consortia to participate in the _Expression of Interest process. SSGC's LNG project
is perfectly timed to meet the anticipated energy gap, resulting from an accelerated rate of
economic growth in the country over the next 3-4 years. The first imported LNG landing is
expected in Quarter 1, 2010.Meanwhile, in order to provide customers professional help and
support in optimizing the use of natural gas and bringing about substantial reduction in
energy and fuel costs, SSGC has taken a bold new initiative by launching its Technical
Advisory Services (TAS). This trend-setting, one of its kind initiative, in the oil and gas

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sector, has been taken at the behest of the Managing Director, Mr. Munawar Baseer Ahmad.
SSGCL REPORT
TAS will address the urgent need to conserve natural gas in the country and introduce
energy-efficient systems, mainly in the industrial sector.

"Service with a Smile" in your neighborhood is the company's motto, and reflects its
renewed spirit and commitment towards providing customers world-class service. It is
backed by 24 Customer Facilitation Centers (CFCs), state-of-the-art Call Centers and an
Emergency Helpline 119 where customers may call in case of any gas-related emergency.

THE PIONEERING SPIRIT OF SSGC

Pakistan's model public sector utility, today serves as a reference standard in the natural gas
sector, thanks to its strong business vision and a comprehensive gas development plan. The
Company operates more than 3,300 km high-pressure transmission and a 31,900 km
distribution network extending across the two southern provinces of Sindh and Balochistan.
The Company has a compression capacity of 62, 600 Bhp.

FOCUSED TOWARDS CUSTOMERS

"Service with a Smile" is the company's motto, and reflects its commitment towards
providing customers first-class service through more than 20 Customer Facilitation Centers
(CFCs), state-of-the-art Contact (Call) Centers and an Emergency Helpline 1199. In addition,
the Company has provided its burgeoning customer base with myriad bill payment options
through internet, credit and debit cards, NADRA kiosks, ATM machines, Orix terminals,
post offices, its CFCs and contact centers. Its media campaigns cover a range of issues from
introducing customer convenience options to advocating the judicious use of natural gas.

HSE-CONSCIOUS COMPANY

Having successfully achieved an accredited certification for ISO-14001:2004 & OHSAS-

18001:1999 Standards, SSGC is now moving towards ensuring comprehensive
implementation of integrated HSE Management system. The Company has always complied
with National Environment Quality Standards (NEQS) and all other National safety and
environmental Legislations.

PROMOTING COGENERATION TO CONSERVE ENERGY

Pursuing the policy of Government of Pakistan for co-generation in Captive Power Plants,
the Company launched its Technical Advisory Services (TAS) several years ago to facilitate
its captive power customers, in achieving high level of efficiency through use of energy
efficient systems. Substantial savings in gas consumption have been achieved by adopting
co-generation and combined cycle system in new captive power plants.

INTO A CHALLENGING FUTURE

SSGC has focused itself on gaining competitive advantage through an increasing gas supply
portfolio, including planned LNG supplies, application of energy-efficient environmentally
friendly gas usage, and the induction of best business practices and state-of-the-art

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technologies in all aspects of its operations. In addition, SSGC will have a major construction
SSGCL REPORT
role in the $1.2 billion Iran Pakistan pipeline project. By taking proactive steps with a sharp
eye on the future, the Company is well placed to meet growing challenges of tomorrow.

And last but certainly not the least Inarguably, Team SSGC is our valuable asset the
dedication of all those who work at SSGC - from a focused executive at his workstation to an
indefatigable welder working in the roughest of terrains - will continue to be a matchless
resource for increasing our credibility and trust with the customers.

TO FACILITATE CUSTOMER INTRODUCTION OF DIFFERENT BILL

PAYMENT SYSTEM:

To facilitate customers SSGCL has launch following different bill payment methods:

1 ATMs

2 Call Centers

3 Cheque Collection

4 Credit Card

5 Customer Facilitation Centers

6 Franchise Shops

7 Internet

8 IVR

9 Kiosk

10 Mobile Phone

11 Petrol
“SERVICES Pumps
WITH SMILE” Page 19

12 Payment Plans
EXCELLENCE IN CUSTOMER SERVICE: SSGCL REPORT

The SSGC motto is 'Service with a Smile' and SSGC people strive to provide un-matched
and diverse services to customers through innovative and progressive ideas in line with best
international practices.

For speedy and efficient handling of customers’ complaints, queries and suggestions, 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. The Company
is also introducing innovative Pre-paid Gas Meters for convenience of customers. Pre-paid
meters offer such facilities as advance payment and flexible payment and allow people to
manage gas consumption at their own convenience.

HUMAN RESOURCES MANAGEMENT OF SSGCL:

1-DEVELOPING HUMAN ASSETS

SSGC believes that satisfied employees provide Quality service. SSGC provides satisfaction
of its employees and gives them adequate incentives to provide high quality work.

Human Resource Development is one of the top priority areas at SSGC. 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.

TRAINING & CERTIFICATION COURSES CONDUCTED IN SSGCL:

• Permit to Work
• Confined Space
• Crane Inspection & Safe Rigging Operations
• Hazard Identification Task Risk Assessments
• Fire Fighting & Emergency Handling
• Safety Watch
• Advance First Aid
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• Defensive Driving SSGCL REPORT
• Manual Handling
• Office Ergonomics
• Behavioral Based Safety
• Incident Investigation and Root Cause Analysis
• Train the Trainer
• Crisis Management & Business Continuity Planning

H.S.E. POLICY (HEALTH, SAFETY, ENVIRONMENT POLICY):

SSGC is committed to the health and safety of its employees, preservation of environment
and continual improvement of HSE performance by reducing potential hazards, preventing
pollution, conserving resources and adhering to applicable laws and regulations, in all its
activities relating to the transmission and distribution of natural gas.

TECHNOLOGY USED BY SSGCL:

SSGC EARNS THE STATUS OF WORLD-CLASS UTILITY THROUGH

TECHNOLOGY REVOLUTION:

"SSGC's biggest strength is its people, technology, management commitment, and a

structured set of world-class methodologies that takes us through the transformation process
successfully."

Shattering the stereotypes associated with utility companies in Pakistan, IT team of SSGC
has brought the company in limelight as the biggest success story of technology driven
growth in Pakistan's history. TFD zooms into the pleasant change SSGC has undergone by
making technology-oriented business solutions the backbone of growth. SSGC has clinched
the position of top-notch utility by blending technology-oriented business solutions with the
vision of "Service with a Smile".

FOR CUSTOMERS FACILITATION SSGCL IS USING FOLLOWING

SOFTWARES:

 Oracle Financial
 Customer care and billing system ( CC&B)

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 SSGCL REPORT
ORACLE FINANCIAL:

Sui Southern Gas Company Limited (SSGC) has completed the first phase of its Oracle
Enterprise Resource Planning (ERP) applications implementation. Oracle ERP is a key
component of the Oracle E-Business Suite. With this, SSGC joins a group of over 23,000
organizations that are successfully using applications products from Oracle.

In 2007, SSGC deployed an Oracle-based infrastructure in an ongoing implementation that

has helped to reinvent the way the company does business, from tracking and delivering gas
to billing customers and handling complaints.

“SSGC’s biggest strengths are our people; technology; management commitment; and a
structured, Oracle-enabled re-engineering methodology that took us through the
implementation successfully,”

“Oracle Utilities Applications Power Customer Information System for

Pakistan’s Sui Southern Gas Company
SSGC will service its 1.9 million customers better and faster through the
Internet and call center using Oracle(r) Utilities applications”
Pakistan's leading integrated gas company has successfully migrated its billing, customer
care, metering and other customer-related functions to Oracle(r) Utilities Customer Care and
Billing. The solution provides SSGC with a platform that integrates business processes,
aligning them with industry benchmarks and industry-leading practices. Fully integrated with
Oracle E-Business Suite -- SSGC's ERP system -- the Oracle Utilities Customer Care and
Billing implementation addresses the unique needs of Pakistan's utility industry and
variations in demographics and geography With a distribution network of 25,764 kilometers
covering 120 towns and 930 villages, SSGC has an exclusive distribution and sales license in
the provinces of Sindh and Balochistan in Pakistan. SSGC's core business is to buy natural
gas in bulk, transmit it to load centers over its high-pressure transmission system and
distribute and sell it to its customers through its supply network. By implementing this state-
of-the-art application, SSGC has become the first utility company in the entire South Asia
region to deploy such an advanced customer management solution. SSGCL IT professionals
within the Customer Services Division, Utilization, Measurement and Finance departments
have collaborated remarkably well on this project. They have demonstrated tremendous
dedication and worked extensively to attain business excellence.

CUSTOMER CARE AND BILLING SYSTEM (CC&B SYSTEM):

With the completion of the implementation of Oracle Utilities Customer Care and Billing,
SSGCL will be able to better maintain customer records, handle credit and collection
activities, track service orders and interface better with our customers,". "This system will
reduce billing errors and help us resolve customer queries faster through real-time tracking of

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these queries. The information technology department has been at the forefront for theREPORT
SSGCL
deployment and effort to change the people's mindset around a cost-conscious and
performance-based culture. SSGCL have now set clarity of vision, having created
willingness to change, and established commitment at all levels, developed skills for change
agents, empowered people to manage change resistance, realigned organization culture,
managed the environment, embedded change element in the project plans and ensured open
and honest communication."

"Oracle Utilities Customer Care and Billing will also enable greater compliance with country
regulatory guidelines,"

Oracle Utilities Customer Care and Billing has led to complete automation of SSGC's
customer-facing processes with well-defined accountabilities leading to greater efficiency,
productivity and quality of customer operations. The new implementation will allow SSGC
to embrace industry best practices. Through a state-of-the-art call center, SSGC staff will use
Oracle Utilities Customer Care and Billing and Oracle E-Business Suite to track customer
complaints on a real-time basis and efficiently manage and resolve customer queries. Oracle
Utilities Customer Care and Billing will also allow customer self-service over the Internet.

"Our Customer Information System combines the right blend of IT infrastructure, well-
trained personnel, customer-centric business processes and software applications. It also
provides a technology platform integrating business processes that are aligned with leading
industry benchmarks to enable more accurate billing, improved customer service and
business practices that enhance customer value," SSGCL has addresses the unique needs of
the utility industry, integrating demographic and geographic variations that permit our
'Service with a Smile' objective to become even more a reality,".

"SSGC has been an Oracle technology and applications customer since 1996. With Oracle
Utilities Customer Care and Billing we will be directly touching SSGC's 1.9 million
customers in the country," said Samina Rizwan, Regional Director for Oracle's South
Asia Growth Economies. "We are proud to be a part of this new milestone in SSGC's
history."

SSGC is a public limited company listed on the Karachi, Lahore and Islamabad Stock
Exchanges with 60.43 percent direct share holding by the Government of Pakistan (GOP). It
has an authorized capital of Rs.10 billion, of which Rs. 6.7 billion is issued and fully paid up
and managed by an autonomous Board of Directors having overall control. Presently,
SSGC's Board has 14 members drawn both from the public and private sectors. The
Managing Director/Chief Executive is nominated by the GOP and has been delegated with
such powers by the Board of Directors as are necessary to effectively conduct the business of
the Company.

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SUI SOUTHERN GAS COMPANY LIMITED (SSGC) - FINANCIAL SSGCL
ANDREPORT
STRATEGIC ANALYSIS REVIEW:

Finance department:

Sui Southern Gas Company Limited (SGGC) is engaged in the transmission and distribution
of natural gas. The company is also engaged in the manufacturing and selling of gas meters.
SGGC is a provider of high pressure transmission and low pressure distribution systems. The
company owns and operates a network of high-pressure gas pipelines to supply gas. The gas
is supplied to customers belonging to a franchise area covering more than 1,200 towns in the
Sindh and southern Pakistan. The transmission system of the company comprises of 3,200
km of high pressure pipeline having a diameter of 12 - 24 inches. The company principally
operates in Pakistan.

Sui Southern Gas Company Limited Key Recent Developments:

 Jan 28, 2010: 4Gas Wins Approval to Build Floating LNG Terminal at Port Qasim,
Pakistan
 Dec 24, 2009: First Tri-Star and SSGC Enter Into Gas Supply Agreement for Supply
Of Natural Gas
 Dec 14, 2009: Hycarbex and SSGC Sign EWT-GSPA Agreement
 May 05, 2009: Hycarbex Signs Gas Sales Agreement with SSGC for Haseeb #1 Well
 Jan 30, 2009: American Energy Announces Allocation of Gas For Haseeb #1 Well In
Yasin Block.

RECENT FINANCIAL ANALYSIS OF SSGCL 2010:

The total debt to assets ratio has remained constant over the years and has shown marginal
increase. The total assets and total liabilities have increased at the same pace. It stands at 0.93
for FY09. The debt-to-equity ratio has gradually increased over the years. From 2.06 in FY02
up to 5.95 in FY08, the ratio is now hovering at an all time high of 9.38 in FY09. This
gradual rise is because the overall debt burden of the company has increased. The total debt
of the company now stands at Rs 90.9 billion. The current liabilities make up a higher
proportion of liabilities than non-current. Even the sudden jump of debt-to-equity ratio up to
9.38 is due to a 77% rise in Total Current Liabilities mainly attributable to creditors, accrued
and other liabilities. There was no short-term borrowing for the period under consideration.
The deferred tax liability has increased from Rs 4.85 billion to Rs 5.01 billion. The employee
benefits have increased from Rs 1.1 billion to Rs 1.31 billion. The deferred credit is the main
contributor to increase in non-current liabilities and has increased by 26.87%. The resultant
total increase is of 48.03% in liabilities. The TIE ratio has plunged from a high of 26.66 in
FY07 to 5.53 in FY08 to 0.81 in FY09 due to an increase in financial charges. Under these
charges, the redeemable capital (i.e. musharaka arrangements) has shot up by 132% during

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FY09. Given also that operating profit has gone down, the TIE has drastically decreased. TheREPORT
SSGCL
EBITDA Coverage ratio has sharply declined and is at 1.65 due a 41.6% decrease in
EBITDA and increase in financial charges. The comparison with industry average is not
favorable as the firm is over leveraged.

ASSET MANAGEMENT:

The inventory turnover has sown a stable trend. The inventory is sold in a reasonable number
of days i.e. around 6-7 days. This is also because gas is an inelastic good so its demand will
not vary much and may only show seasonal fluctuations. However the conversion of
accounts receivable to cash takes significantly more days than before. In FY09 the DSO has
increased to 100 from 87 in FY08. Compared with the industry average the operating cycle
of SSGC is higher by 19 days.

MARKET VALUE RATIOS:

The market value ratios show that P/E that saw a major decline in FY08 has recovered in
FY09. It has plunged from 63 in FY07 to 19 in FY08 and back to 44 in FY09. The previous
year & apos; s decline was due to a decline in market value to Rs 28.06 and increase in EPS
to 1.48. However, with EPS reducing to a mere 0.38 and market value declining to Rs 16.67,
the net effect is such that the P/E has recovered somewhat. The earnings per share have
shown a decrease in the current fiscal year due to decrease in profits. The price to cash flow
ratio has remained steady. The market to book value has shown an erratic trend and shows a
slight decline in the current fiscal year from 1.83 to 1.16 on a y-o-y basis. The dividend per
share has increased to Rs 1.24/share in FY09 from Rs 0.50/share in FY08 against a high of
Rs 1.8 in FY04. Compared to the industry averages, the performance is not optimum, the
competitor has more favorable ratios and industry average of market value of Rs 24.39/share
is higher than that of SSGC stock. The current price of stock is Rs 13.5/share (30th October
2009) as against Rs 22.7/ share (17th October 2008). This trend is persisting since the current
fiscal year. The general economic recession in the country is also one of the reasons for low
share prices to exist.

FUTURE OUTLOOK OF SUI SOUTHERN GAS COMPANY:

The Company is pursuing an ambitious five year development and expansion plan estimated
at Rs 42.9 billion. 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 kms from 2,942 km in 2005 to 3,550 km

by 2010, enhancing capacity from 1,300 MMCFD in 2005 to 1,700 MMCFD by 2010.
 Expansion of distribution network and supply mains by 5,236 km from 25,764 km in
2005 to 31,000 km by 2010 connecting 600 new towns and villages in Sindh and
Balochistan.

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  Enhancement of gas supply to power plants, industrial and commercial sectors SSGCL REPORT
including supply of gas to previously deprived areas in the domestic sector.
 Increase of the customer base from nearly 1.8 million to 2.2 million by adding
447,000 new customers to the Company’s system.
 Consistent appreciation in shareholder’s value by increasing the company’s asset base
and significant improvement in productivity and efficiency.
 Focus on improved, friendly and efficient customer services under the vision of
“Service with a smile”;
 Establishment of 16 fully automated (additional 8 in progress) on line customer
facilitation centers;
 Multiple bill payment options and channels (ATM, Call Centers, ORIX POS, Internet,
Drop Boxes, NADRA-Kiosk);
 Latest technology digital prepaid meters with improvement of call centers to include
an online customer information system.
 Revamp the current business processes, to improve company efficiency and
implement ERP, CIS, GIS and the best business policies for ISO 9000 certification;
 Increase surveillance and introduce an automated emergency response system (ERS)
and SCADA for the security of company assets including the transmission and
distribution networks;
 Improve the quality of human resource through career planning, training of employees
and development of management.
 Implement environment management system, occupational health and safety system
as required under Certification ISO 14001 and OHSAS 18001 standards;
 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.
 Community support services and corporate communication initiatives to meet the
national and social responsibilities, as a good corporate citizen.

Substantial expansion and enhancement in the existing distribution network will also be
undertaken under the five-year development plan. As a consequence, the net operating fixed
assets of the Company will increase to about Rs.36 billion by the Year 2008 while there will
be a substantial increase in net sales from gas expected to become available from new fields.
With additional capacity in pipeline network under the GIREP – II coming on stream, sales
will increase at a higher rate per year moving to about 1,700-1,800 MMCFD from the current
1,300 MMCFD in the next few years.

SSGC is also actively involved in LNG import development for the Karachi region. The
LNG project consultants have been retained and will be following a fast-track schedule for
policy framework formulation for the government and project development. It is expected

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that the implementation agreement for the LNG project would be finalized after approval ofREPORT
SSGCL
the Board of Directors involving new owners. This would be in mid-2006.

The Company’s strategic five-year business plan has been launched at a most appropriate
time while financing is available to the Company at extremely attractive rates, which are
currently below 3%. The Company enjoys inherent financial strength with a debt equity ratio
of 41:59, which provides it with a good leverage to finance expansion at lower interest rates.

The Company has undertaken further new initiatives, which will significantly improve its
productivity and revenue through improved corporate governance and implementation of
technology-based solutions in various business areas. Through a gas price equalization
agreement with the other major gas company, the Company is now assured of an equitable
cost of gas, which should facilitate maintenance of adequate operating margins in the coming
years.

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