ssgc company

SSGCL REPORT

Page Company overview 3

Back ground of sui southern

gas company limited 4

Vision and Mission Statement of SSGCL

5

Organization and Management

6

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

Responsibilities of gas purchase

12-13

Supplier of SSGCL 13 Gas Sales Agreement 14 Quality Services 14 Customer Facilitation Center

and its functions14-15

CFC located in Pakistan 15 Customer Call Center 16 Software used by SSGCL for

customers management 16

SCADA “supervisory control and data acquisition” operation and transmission control room function

17

SSGC reaches out to customers

18-19

The pioneering spirit of SSGL 19 focused towards customers 19

HSE-conscious company 19

“SERVICES WITH SMILE” Page 1

SSGCL REPORT

Promoting cogeneration to conserve energy

19

To facilitate customer introduction of different bill payment system

20

Excellence in customer service 21

human resources management of ssgcl

21

Training & certification courses conducted in ssgcl

21

H.S.E policy (health, safety, environment policy

22

Corporate social responsibility of ssgcl

23-25

Technology used by ssgcl 25 Oracle Financial 26 Customer Care and Billing

System26

Resource enterprise planning 27 Sui southern gas company

limited (ssgcl) - financial and strategic analysis review

28-29

Internal audit department of sui southern gas company

30

Future outlook of sui southern gas company

31-32


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.


SSGCL REPORT

SSGC INFRASTRUCTURE:

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.


Gas Infrastucture

Gas Operations

Gas Transmission

Gas Distribution

Province Wise Distribution

SSGCL REPORT

COMPANY VISION

COMPANY MISSION


SSGCL REPORT

VISION & MISSION STATEMENT OF SSGCL DEFINES ITS FUTURE 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


SSGCL REPORT

ORGANIZATIONAL CHART OF SSGCL:


SSGCL REPORT

COMPANY'S OPERATIONS:

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.


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 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.


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.


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:


Volume(MMCF) Naimat Basal 152,525Bhit 116,713Badin 73,673Zamzama 59,104Sui/Kandhkot 39,306Sawan 33,920Miano 25,995Kadanwari 15,461Bobi 5,305Mazarani 4,000Latif/Daru/Sari Hundi/Mari 2,564SNGPL(Ghotki.Rustam/Ubaro) 853 529,419

SSGCL REPORT

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

1. CUSTOMER FACILITATION CENTER :

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.


SSGCL REPORT

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.

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.


SSGCL REPORT

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 control the transmission of gas and work on 24/7 basis, control room check the quality gas 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 REPORT

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:

The primary responsibility of Sales Department is to ensure that customers are given proper 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.


SSGCL REPORT

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 sector, has been taken at the behest of the Managing Director, Mr. Munawar Baseer Ahmad. 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.


SSGCL REPORT

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 technologies in all aspects of its operations. In addition, SSGC will have a major construction 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:


SSGCL REPORT

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

EXCELLENCE IN CUSTOMER SERVICE:

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.


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 Pumps

12 Payment Plans

SSGCL REPORT

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• Defensive Driving• Manual Handling• Office Ergonomics• Behavioral Based Safety• Incident Investigation and Root Cause Analysis• Train the Trainer


SSGCL REPORT

• 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)

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.


http://www.oracle.com/index.html

SSGCL REPORT

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 these queries. The information technology department has been at the forefront for the 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."


SSGCL REPORT

"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.

SUI SOUTHERN GAS COMPANY LIMITED (SSGC) - FINANCIAL AND 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


SSGCL REPORT

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 FY09. Given also that operating profit has gone down, the TIE has drastically decreased. The 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


SSGCL REPORT

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.

Enhancement of gas supply to power plants, industrial and commercial sectors 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);


SSGCL REPORT

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 that the implementation agreement for the LNG project would be finalized after approval of 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.


SSGCL REPORT


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