Report to Shareholders

Transcription

1 Report to Shareholders Pursuat to the Notificatio from the Miistry of Petroleum & Natural Resources (MPNR), dated February 12, whereby PSO was iformed by the MPNR that the Federal Govermet i exercise of the powers uder Sectio 7 of the Marketig of Petroleum Products (Federal Cotrol) Act, 1974 "the Act" has dissolved/de-otified the BOM with immediate effect. The above-referred Notificatio also stated that the Maagig Director, Pakista State Oil Compay Limited (PSO) shall exercise ad perform all the powers ad fuctios of the Board uder Sectio 6(4) of the Act till a ew BOM is appoited by the Govermet of Pakista. Accordigly, the affairs of the Compay were beig maaged by the Maagig Director (MD) of the Compay till the recostitutio of the Board of Maagemet (BOM) o November 2,. The BOM of PSO is pleased to preset the aual report ad audited fiacial statemet of the compay. The report covers PSO s activities for the year eded Jue 3, ad describes our fiacial ad operatioal performace. PSO eded with a market share of 55.9% (aroud 13 millio MTs) that icluded a growth i market share of 4% i Black Oil products ad a declie of 3% i market share of White Oil products. PSO sourced the total volume through local refieries ad imports. The sourcig of 1 millio MTs was imported through 182 vessels (i.e., a icrease of aroud 6% over last year). Growth i imports was primarily witessed i Mogas ad HSFO. PSO also improved its local refiery upliftmet by 2% over last year to 2.9 millio MTs. PSO is also actively participatig ad leadig with MPNR to itroduce 92 Ro Motor Gasolie ad Euro-II 5 ppm High Speed Diesel. Movemet of 2.14 millio MTs of Mogas was arraged through Tak Lorries (TLs) from Karachi to various upcoutry locatios, a icrease of 13% vs FY15, resulted i maitaiig optimum level of ivetory at depots ad istallatios. Similarly, keepig i view the eed of cotiual fuel oil supply to the power sector, the Compay esured roud-the-clock fuel product availability i order to reduce load sheddig i the coutry durig the year ad i particular durig Ramada. This was facilitated by regular paymets by CPP. The circular debt is Rs. 22 billio (iclusive of LPS). PSO also executed Log Term Sales Purchase Agreemet (SPA) with QatarGas o February 8, for import of LNG uder G2G arragemet ad is ow receivig 2.25 millio tos per aum of LNG from QatarGas, which will be ramped upto receive 3.75 millio tos per aum. O directios of MPNR, PSO also executed a Term Agreemet with Guvor through tederig process uder PPRA Rules, for a period of 5 years for the supply of.75 millio MTs of LNG per aum. These cotracts will ovate i third quarter 217 to PLNG. Furthermore, PSO reewed LPG supply agreemets with PARCO ad PRL. Efforts are i progress to secure more LPG.

2 JP-1 experieced a growth of 1.5% i FY after icrease i iteratioal carriers/flight operatios. Durig FY local refieries produced 9.7 millio MTs, while the deficit requiremet of 13.8 millio tos was imported. The major import was i FO (6.2 millio MTs), HSD (3.1 millio MTs) ad MOGAS (4.3 millio MTs) Volume (Millio MTs) Market Share (%) Market Share (%) Market Share (%) 214 Volume (Millio MTs) Black Oil Mogas I White Oil (MOGS, HSD, SKO, Jet Fuel) PSO achieved a market share of 46.8%. Volumes (Millio MTs) Idustry cosumptio of FO declied by 2.9% i FY over SPLY maily due to itroductio of LNG i the product mix I FY, HSD sales witessed a icrease of.4% over SPLY ad PSO maitaied its market leadership with a market share of 48.1% i FY Volume (Millio MTs) Mogas busiess has bee competitive due to icetivizatio of IFEM durig FY ad those with refiig back-up. However, the compay Market Share (%) Percetage (%) Percetage (%) 6 7 HSD 5 Volumes (Millio MTs) White Oil 8 icreased its sales volume i Mogas by 9.3% i FY over SPLY ad achieved a market share of 42.1% i FY. Volumes (Millio MTs) The growth i HSD demad by 4.6% i FY over SPLY was cotributed primarily due to declie i price of HSD by 17% i FY ad lesser availability of product from across the border. Competitio by icreasig umber of OMCs is a challege i the curret sceario. The busiess has to strive for improvemet though iovative methods to achieve efficiecy ad excellece. Accordigly, PSO is takig steps to excel i deliverig value to the customers. Through team work ad dedicatio the compay maaged to achieve a market share of 55.9% i FY. Percetage (%) The declie i the POL products prices i FY over SPLY viz-a-viz icrease i sale of motor vehicles, motorbikes ad uavailability of CNG resulted i a icrease i idustry sales volume of MOGAS by 22%. The declie i CNG coverted vehicles ad discotiuatio of CNG-fitted vehicles also impacted the cosumptio of CNG i the idustry which also declied due to o-issuace of ew CNG liceses by Oil & Gas Regulatory Authority (OGRA). PSO Sales Performace Percetage (%) The cosumptio of POL products grew by 5.1% i FY over Same Period Last Year (SPLY) which was maily due to a icrease of 1.9% i White Oil cosumptio. However, a declie of 3.1% was observed i Black Oil cosumptio. Fiacial Capital Volumes (Millio MTs) Petroleum Idustry Overview 214 Volume (Millio MTs) PSO retaied its market leadership positio i FO with a icrease i market share to 7.5% i FY from 66.7% durig SPLY. The reductio i loadsheddig resulted from cotiuous supplies durig Ramada combied with circular debt beig limited by Miistry of Water & Power icreased PSO s sales volume by 2.7% over SPLY. (Source: OCAC) 54 55

3 The mai factors cotributig to this icrease i bottom lie are icrease i sales volume ad margis of white oil products (revised i November 1, 214) coupled with reductio i operatig ad fiace cost by 1% ad 35% respectively. The impact of the above positive developmets was partly off set by a declie i black oil margis by 45% cosequet to dip i oil prices. Sales Reveue cash divided of Rs. 5 per share. The total divideds for the year stad at Rs per share as compared to Rs. 1 per share i FY, traslatig ito a total payout of Rs. 3.4 billio vs Rs. 2.7 billio i FY to the shareholders. Divideds 3,5 3, 2,5 2, Rs. i millio Durig the fiacial year (FY), the Compay reported sales turover of Rs..9 trillio as compared to Rs. 1.1 trillio durig FY, registerig a declie of 19% maily because of dip i iteratioal crude oil prices by 23%. After tax earigs witessed a icrease of 48% to Rs. 1.3 billio as compared to Rs. 6.9 billio durig FY. Earigs per share icreased to Rs i FY from Rs i FY. 3,396 1,5 2,717 2,322 1, 1, ,544 1, ,2 1,295 1, ad foreig currecy borrowigs throughout the fiacial year. This had a positive impact o the bottom lie of the Compay. Due to this paymet disciplie, the Compay has ot faced ay default situatio agaist its paymet commitmets durig the fiacial year uder review cotrary to last fiacial year. However, liquidity challeges posed by the outstadig balace of circular debt coupled with icreased outstadig of Rs billio from SNGPL ad PIA ad timely paymets to local refieries i order to esure maximum availability of products from local sources cotiuously affects the liquidity positio, which remaied uder pressure ad was maaged through short-term bak borrowigs. 1, The Compay closed the fiacial year uder review with the amout of circular debt at Rs. 147 billio ( : Rs. 148 billio). Due to cotiuous paymets from Power Sector uder a special seve (7) day credit mechaism established by GoP, o sigificat icrease was witessed i circular debt balace. 214 Divideds ad other Appropriatios Based o this performace, the Board of Maagemet has declared a fial cash divided of Rs. 7.5 per share i additio to the earlier iterim Average Overdraft Utilizatio Cotributios to Natioal Exchequer Durig FY, the compay has made cotributios to the atioal exchequer uder the followig heads: Rs. i billio Sales Tax Petroleum Levy Other duties ad taxes Total Qtr 1 Qtr 2 Qtr 3 Qtr 4 Fiace cost reduced due to lowest iterest rates i decades coupled with maitaiig a mix of local 56 Fiace Cost 12, 1, 8, 6, 11,93 11,659 11,17 9,544 4, 7,591 7,15 2, Durig the year, the maagemet has made reletless efforts for reductio i circular debt ad have requested the GoP to cosider various proposals submitted by the Compay, which if implemeted, will improve liquidity positio ad eable the Compay to maitai adequate ivetory levels for meetig the growig fuel requiremets of the coutry Rs. i billio Rs. i billio 12 Aalysis of Liquidity Situatio ad Strategy to Overcome Liquidity Problems Rs. i millio Compariso of Etity's Fiacial Performace from Last Year Despite the ogoig challeges due to outstadig circular debt balace ad maitaiig timely paymets to suppliers, the maagemet is cofidet that the Compay would keep meetig the eergy requiremets of the coutry through efficiet fiacial maagemet ad close liaiso with GoP. However, ay sharp icrease i fuel prices could pose serious challege for the compay to maitai the eergy supply chai i case timely paymets are ot esured by the Miistry of Water ad Power, PIA ad SNGPL. 57

4 Busiess Lies Commercial Fuels Retail Busiess PSO s retail outlet etwork spreads over 3,5 retail outlets out of which 1,892 have bee upgraded uder the New Visio Retail program. The Compay operates 26 flagship sites amely Compay Owed ad Compay Operated (COCO) statios providig the best services ad customer care. Amid itese idustry competitio, PSO sold approximately 2.4 Millio MTs of Motor Gasolie ad 3.2 Millio MTs i High Speed Diesel durig the year i Retail segmet. As part of its efforts to automate ad streamlie the sales order process, the Compay deployed a Olie Orderig Maagemet System (OOMS) at 892 outlets atiowide with the objective of providig coveiece to dealers ad replacig the covetioal maual orderig system. PSO has also a effectively utilized it s Mobile Quality Testig Uit (MQTU) etwork to carry out radom checks at its retail outlets to provide products i the right quality ad quatity to its customers. Customer experiece was facilitated through Ta aluq Care Lie. Approximately 136 complaits were amicably resolved to the best of customers satisfactio agaist 1631 complaits 58 received. I order to provide coveiece to its potetial busiess parters, PSO has iitiated web-based applicatio for the developmet of ew retail outlets wherei the applicat is able to keep a track / status of the applicatio through a trackig umber. Traiigs were imparted at various retail outlets to esure that the compay s valued customers receive superior quality service. Power Sector & Cosumer Busiess Aviatio, Marie & Exports Cogizat of its role beig the largest atioal OMC of Pakista, PSO supplied 6.2 millio MTs of Furace Oil to the power producers durig the year. I the Cosumer Busiess segmet sales of 5 KMT of High Speed Diesel, 49 KMT of Superior Kerosee Oil, 11 KMT of Premier Motor Gasolie, 6 KMT of Local Light Diesel Oil & 1 KMT of Idustrial Lubricats to geeral trade was observed durig the year. Durig the period uder review, the sales volume of Jet fuel (Local & Export) grew by 23% to 519 KMTs through safe ad icidet free operatios. The volume provided to oe of the major local airlies Icreased by a staggerig 93% from 19 KMT to 37 KMT. By capturig its busiess at Karachi ad Islamabad Airports the market share of Jet Fuel icreased to 66.5%. The compay achieved a major milestoe by eterig ito a agreemet with the Chia East Resource Import & Export Corporatio (CERIECO), for the supply of HSD to the Thar Miig Project Block II. The deal holds great atioal sigificace as it esures uiterrupted work o the Thar Miig Project. I order to support the revival of Pakista Railways, PSO provided the atioal railway with 117KMTs of High Speed Diesel ad 2.5 KMT of Lubricats o credit terms which was 13% ad 34% more as compared to the previous year. The compay played its role i the successful completio of the Hajj operatio by refuelig 422 hajj flights while registerig a 25% icrease i volume at 11 KMTs. Supplies to Defece Forces (Army/Navy/PAF) icreased by 12.5% at 1.2 KMTs as compared to same period last year. I FY16, the compay successfully reewed 6 cotracts with iteratioal airlies at differet airports icludig Air Chia, Emirates, Chia Souther Airlies, DHL, Turkish Airlies ad Thai Airways. The busiess of Emirates was successfully recaptured at Karachi airport with a volume of 5.3 KMTs. New busiesses of M/s Malido Air & Srilaka Airlies were also acquired with volumes of 1 KMTs & 3.6 KMTs respectively. Exports Departmet registered a growth of 25% with the sale of 58 KMTs of JP-8. PSO is the sole supplier of High Speed Diesel Filtered HSD (F) to the etire sea-goig fleet of Pakista Navy, which registered a growth of 12%. 59

5 Gaseous Fuels LNG For import of LNG, ECC authorized MPNR to egotiate with Qatargas o Govermet to Govermet basis for import of LNG for up to 5 mmcfd o DES basis. Subsequetly MPNR omiated PSO ad the Govermet of the State of Qatar omiated Qatargas to egotiate the Log Term LNG Sale ad Purchase Agreemet. For this purpose, a Agreemet i Cooperatio i Eergy Sector betwee the Govermet of the State of Qatar ad the Govermet of Islamic Republic of Pakista was siged. The ECC, i August 214, also costituted LNG Price Negotiatio Committee (PNC) comprisig of Secretary Petroleum (Chairma), Represetatives of Fiace Divisio, Water & Power ad BOI, Maagig Directors of SNGPL, SSGCL, PSO ad ISGSL (Secretary Committee). PNC, after holdig a series of meetigs with Qatargas; fialized the price ad key commercial terms of the Log Term LNG SPA with Qatargas. The PNC report alog with saliet features of the Qatargas SPA were preseted to the ECC i its meetig held o 13th Jauary, wherei ECC cosidered ad accorded i-priciple approval of the recommedatios made by PNC ad also allowed PSO, as buyer to execute the Log Term LNG SPA with Qatargas as seller, pursuat to Govermet to Govermet agreemet as per due process. PSO etered ito a Log Term Sales Purchase Agreemet (SPA) with Qatargas o February 8, for the import of LNG. The historical deal was executed uder a G2G arragemet ad Pakista is ow receivig 2.25 Millio Tos per aum of LNG (equivalet to 3 MMCFD of Re-gasified LNG) from Qatargas, which will be ramped upto 3.75 Millio Tos per aum LNG (equivalet of 5 MMCFD of Re-gasified LNG) by Jue. I additio to above, PSO executed five years term teder i compliace with PPRA rules o 9th November. Leadig suppliers icludig BP, GNF, Guvor, Shall, Petro Chia, ENI SPA, 6 Trafigura participated i the term teder. Pakista has bee receivig.75 Millio Tos per aum (equivalet to 1 MMCFD of Re-gasified LNG) through this arragemet. Cumulatively (3 Millio Tos per aum (equivalet to 4 MMCFD of Re-gasified LNG) is beig received from QatarGas ad Guvor at preset; which has resulted i overcomig the demad supply gap. By mid ext year this quatity will reach approximately 4.5 Millio Tos per aum (equivalet to 6 MMCFD of R-LNG). LPG MOL. Furthermore, imports are also beig plaed. of CNG is beig delivered to the compay s valued customers. Seve Auto Refuelig Statios are ready ad shall be commissioed as soo as the marketig liceses are issued by OGRA which are pedig sice early. The authority issued a decisio i PSO s favor ad the requiremet of fresh/revalidated DCO NOC for PSO s existig retail outlets was withdraw through OGRA s decisio o Dec 9, after a appeal was filed by PSO. However the implemetatio of the decisio i it s true letter ad spirit remais. PSO s CNG busiess is based o a frachise model, therefore the ivestmet o CNG statios is made by CNG licecees. As per the CNG Licece Agreemet, CNG licecees are boud to pay a mothly CNG share to PSO, however, due to a uilateral Arbitratio Award, PSO CNG outstadig dues has bee accumulated to Rs. 854 millio as of Jue 3,. The said impuged Award is either bidig upo parties or eforceable util the same has become Rule of the Court. Moreover, it has also bee challeged by PSO before the Hoorable Islamabad High Court, which is subjudice before Court. Sice the Award is ot bidig upo parties, therefore PSO CNG Licece Agreemet are still itact ad bidig upo parties. PSO is i the process of egotiatio ad out of court settlemet with idividual CNG licecees to resolve this matter amicably. Gaseous Fuels successfully etered a ew market i Souther Pujab by establishig LPG Hospitality services at Multa ad established LPG distributors to market Pak Gas i the same regio. Aother LPG Hospitality arragemet materialized i Karachi for the uiterrupted upliftmet of LPG from PRL. I order to supply LPG i bulk to commercial customers ad LPG Autogas Statios effectively alog with the upliftmet of the same from PARCO ad PRL, six state of the art LPG Bobtail Bouzers are curretly beig used by the compay. The total storage capacity of all LPG plats is 88 MTs. CNG Durig the period uder review, the LPG busiess experieced a 1% growth i volumes. However, gross margis decreased by 13% ad prices remaied volatile due to the heavy iflux of imported LPG. The compay successfully reewed agreemets with PARCO ad PRL for the supply of 12,6 MTs of LPG per aum. Efforts are i progress to secure LPG from other major LPG producers ad suppliers i Pakista such as OGDCL, GHPL ad No-Fuel Retail The No-Fuel Retail busiess cotiued to support the compay s bottom lie through various strategic iitiatives. Numerous ew areas ad aveues were explored durig the period uder review. Beig the first Oil Marketig Compay to commissio a CNG facility i Jauary 1996, PSO cotiues to maitai its leadership positio i the CNG idustry with a market share of 23% i the period uder review. I compariso with other OMCs, the compay has the highest umber of CNG statios operatioal coutrywide with the umber reachig 225 statios as of Jue 3,. All PSO CNG dispesig facilities are carefully ispected by qualified HSE specialists o a regular basis i order to esure the highest safety stadards. The statios are also equipped with Gas leakage Detectio systems which automatically close the gas supply o detectio of leakage(s) i the system. Mobile CNG Quatity Measuremet Uits esure that the right quatity 61

6 Ifrastructure Capital Retail Cards Durig the period uder review, Cards Busiess cotiued to cater to the fast-chagig dyamics of the fuel-cards idustry effectively despite varyig treds ad market dyamics. The busiess registered a 13% growth i litre volumes alog with ehacemet i profitability. Durig the period uder review, Cards Busiess successfully surpassed the Rs. 2.9 billio mark i terms of collateral through additioal security deposits ad cotiuig bak guaratees. Despite stiff competitio i the Cards idustry, agreemets with key cliets were successfully reewed. Furthermore, the revamp of the complete ed to ed cards busiess solutio has bee iitiated. Lubricats Lubricats registered a growth of 1.4% with sales of approximately 27 KMTs. The compay took measures to improve sales through differet chaels which resulted i a growth of over 7% i High Street. Profitability icreased by 22% as the compay kept kee focus o quality ad sales which balaced the product basket ad improved the cotributio margi of lubricats. The compay cotiued to be the supplier of major atioal accouts such as Pakista Army, Pakista Railways, Pakista Air Force ad NLC. The busiess is beig reorgaized ad steps take to improve brad visibility. Leadig the idustry as the top atioal Oil Marketig Compay (OMC), PSO has the largest retail outlet etwork spreadig over 3,5 outlets. The Compay operates 26 flagship sites amely compay owed ad compay operated (COCO) statios providig the best services ad customer care. With a view towards developig ew relatioships ad further expadig PSO s extesive retail etwork, 67 ew visio retail outlets were developed durig the year at strategic locatios, atiowide. Supply Durig the period uder review, PSO sourced a total volume of 13.5 millio toes through local refieries ad imports. Sourcig through imports icreased by 7% with a volume of 1.4 millio toes imported via 182 vessels. A 9% ad 17% growth was witessed i imports of Mogas ad HSFO respectively. The highest ever imports i a sigle moth were recorded i May whe 1295 KT of product was imported icludig 587 KT of HSFO, 43 KT of HSD, 27 KT of Mogas, 6 KT of LSFO ad 11 KT of Jet Fuel. i majority of the products. PSO has actively participated i the Miistry of Petroleum ad Natural Resources iitiative to itroduce better quality fuels i Pakista ad plas are i place to import improved grades i FY217. Other iitiatives iclude retig out idle takage to UEP for crude hospitality which resulted i additioal reveue to the compay i the period uder review. HSD LSFO HSFO Jet A-1 MOGAS 24.37% 9.17% 46.5%.78% 19.63% HOBC PMG SKO Jet A-1 LDO HSD LSFO HSFO.74% 16.27% 2.63% 15.34%.36% 37.64% 6.4% 2.99% Local refiery upliftmet improved by 3% over last year at 2.9 millio toes. Upliftmet icreased 62 63

7 Operatios Shikarpur ad 89 KLs to 36 KLs at Daulatpur. Similarly, PMG storage capacity was ehaced at Habibabad to from 21 KLs to 221 KLs. Meterig system was istalled at the PMG/SKO ad HSD loadig bays at JIMCO. A ew shippig pump was istalled at Lalpir alog with the ehacemet of Kapco Shippig capacity ad reductio i moisture cotet i FO. A RO Plat was istalled at Lalpir. Product cross verificatio activity was uder take alog with decatatio of T/Ls at Kapco complex. With a view to ehace security, bukers have bee built at the etraces of PSO depots / istallatios all across Pakista. Logistics The costructio ad commissioig of the ew Oil Depot at Faisalabad is a major milestoe for the compay durig the period uder review. This state of the art facility spread over 12 acres of lad with a storage capacity of 12,84 MT ad is desiged to hadle over 2 MT of product i a sigle shift. I compliace with iteratioal HSE stadards, high quality equipmet has bee istalled which icludes Scully based groudig system, the latest fire fightig system icludig smoke detectors with fire call poits, storage tak high level alarm system ad foam pourig system. The depot is also equipped with the latest lab facility ad has a state of the art tak lorry fillig ad off loadig ifrastructure with latest product flow meters. A ew fillig gatry has bee costructed at Mehmood Kot to ehace the hadlig of HSD, PMG, SKO with ehaced fillig capacity of HSD from 12 fillig poits to 19 poits, PMG from 3 fillig poits to 6 ad SKO with 1 fillig poit. The ew fillig capacity is ow 18,24 KL as compared to 14,4 KL. Overall capacity ehacemet i POL is 27%, PMG 33% ad HSD 25%. Laboratories have bee set up at Sihala ad Lalpir to esure superior quality of products. Quatity moitorig has bee further ehaced with the istallatio of flow meters at JIMCO & Machike. I lie with the compay s commitmet to HSE, fire 64 water taks have bee made at PMY ad KTA, fire trolleys have bee added at JIMCO, a fire water pump has bee added at Habibabad, Kotla Jam ad Machike ad the fire water lie at Quetta has bee exteded. PSO has successfully equipped the ew Hyderabad depot for safe ad proper lube oil ad T2 oil storage ad hadlig. The compay has also improved its curret ifrastructure with the successful rehabilitatio of a 2 ich Taker discharge lie at Keamari Termial. The same was completed without ay hidraces i the taker receipt operatios. PSO provided uiterrupted POL supplies to all its customers icludig Defece, Power, Retail, Idustrial, Aviatio ad Marie customers throughout the year. I light of the icreased demad of Petrol across the Coutry, the compay moved 2.14 MMTs of Petrol from Karachi to various upcoutry locatios through tak lorries which was 13% higher as compared to the previous year. This helped maitai a optimum level of ivetory at all depots/ istallatios. To help reduce load sheddig i the coutry, PSO esured roud-the-clock product availability to its power sector customers. 3,871,172 MTs of FO was supplied via rail ad road i the period uder review. To facilitate the revival of POL trasportatio through rail etwork, PSO provided large busiess volumes to Pakista Railways. Movemet vide Railways crossed 1 MMTs for the first time i the past 5 to 6 years ad 1.13 MMTs of FO was trasported through Railways which is 5% higher tha the previous year. 19 tak lorries were upgraded i lie with the compay s policy of equippig tak lorries as per latest stadards. As part of the Road Trasportatio Maagemet System Program aimed at improvig safety stadards for tak lorries ad their crew, 25 drivers traiig/awareess sessios were coducted at all Logistics locatios wherei 568 drivers were imparted with HSE/Safe drivig techiques ad iformatio. 99% of PSO s tak lorry fleet cosistig of 7,964 tak lorries has bee equipped with tracker systems i lie with OGRA directives to optimize fleet operatios. This goal was achieved after cosistet follow up ad a series of meetigs with relevat stakeholders. I FY, PSO hadled 182 import vessels (4 Mogas, 8 Jet Fuel, 15 LSFO, 72 HSFO & 47 HSD) successfully. Tak No. 32 was rehabilitated which stored HSD for Pak Navy. Furthermore, the Ehacemet of PMG Hadlig Capacity was successfully completed at Machike Istallatio. As a result of this up-gradatio, the PMG Fillig Process has become 6% more efficiet ad the PMG Decatatio Process 4% more efficiet. Other ehacemets icluded the rehabilitatio of PMG storage tak at Sihala, costructio of a water tak at KTA (with a capacity of 1 lac gallos), rehabilitatio of a 2,4 MT capacity tak at KTB, costructio of a ew fire water tak at PMY (with a capacity of 15 MTos). Mogas capacity was ehaced from 2 Kl to 29 Kl at 65

8 push , PSO Itraet, SCCM, Ativirus server etc. This adoptio has ot oly reduced hardware maiteace costs but has also lesseed the admiistrative work required to maitai servers. Iformatio Techology Various SAP system based cotrols have bee implemeted to stream lie busiess processes. Some of the cotrols iclude restrictios o the misuse of customer owed tak lorries, average daily retail sales restrictios, reservatio maker ad checker cotrols restrict sales to agecy customers without explosive liceses. Others iclude restrictio o double ivoicig agaist a sigle GR. paymets received from customers. With the itroductio of this ew system, customers ca ow submit their paymet cheques directly to desigated UBL Braches. Upo receivig the paymet cheque, UBL will trasfer fuds from the Customer's Bak Accout to PSO's Bak Accout. As soo as the fuds are credited to PSO s Bak Accout, UBL Bakig system will sed details of the electroic paymet to PSO usig FTP commuicatio mechaism which will the be posted to PSO's SAP System. This system has ot oly decreased the staff s work load ad provided customers with coveiece but has also sigificatly reduced the chaces of huma error. Applicatios Developmet A web based e-loggig portal has bee lauched successfully for exteral customers to check olie the status of their submitted ivoices. Holdig up its commitmet of deliverig roud the clock IT services to the compay ad its busiesses, the DR ifrastructure at Lahore has bee upgraded with olie real time replicatio of SAP through High speed Fiber Optic etwork for ear istataeous data replicatio to the remote DR site thereby upgradig the cold site ito a warm site. Aother major milestoe was achieved with the migratio of SAP/Oracle Database from HP-UNIX to SUSE Liux Eterprise Servers o Itel Platform which eabled the deploymet of cost effective Itel servers at reduced capital ad maiteace costs, elimiatig vedor lock-i ad eabled the adoptio of the latest SAP Iovatios icludig SAP HANA I-Memory Platform i future. The etire migratio was performed seamlessly without ay major disruptios i busiess ad successfully wet live o the ew Itel hardware. With the aim of ehacig etwork ifrastructure ad security, the PSO Data ceter has bee equipped with Eterprise class data ceter switches to provide 1/4 G data lik alog with ehaced L2/L3 security features to cope up with the requiremets of ew techological platforms. With the istallatio of Fiber ad Copper ifrastructures at KTC ad ZOT, both the sites ow 66 have a state of the art resiliet ifrastructures, all the iteral office blocks are coected with each other through Gigabit LAN ad every idividual has bee provided with a dedicated Gigabit port. Commuicatio Racks of both sites are ow equipped with a olie ehaced power backup system to provide power protectio ad uiterrupted supply i case of log power failures. This up-grade has ehaced the sites up time to more tha 99.99%. These sites have bee developed as role models to support virtualizatio platform. Aother milestoe has bee achieved with the deploymet of the latest Microsoft System Cofiguratio Maager R2 through which differet admiistrative tasks ca be performed. Amogst its key features is Remote Maagemet, through which majority of the help desk system complaits ca be resolved remotely by helpdesk egieers. This tool has icreased employee productivity alog with reducig the time ad effort required to resolve Helpdesk complaits. Almost 4% of complais are ow resolved through this tool. IT departmet has also adopted the latest Virtualizatio techology for umerous applicatios icludig Lotus , DHCP, Lotus A ew electroic work flow applicatio has bee developed to replace the Customer Appoitmet & Cacellatio Advice Form labelled SLS -37 which was used for the creatio or cacellatio of a customer i the System Customer Master Data sice The applicatio has ot oly drastically reduced processig time, elimiated the courier expese ad provided immediate access but has also ehaced cotrol, stadardizatio ad validatio of each field o the form. ICT departmet also developed dashboards to deliver a real-time view of the compay's sales & busiess outlook. Real-time busiess critical metrics were icluded for the Customer Services Departmet to respod to challeges such as reducig call hadlig time, icreasig productivity ad improvig average complait resolutio time. Dashboards were developed for the Supply ad Operatios Departmets to help the maagemet review supply chai ad operatioal activities, moitor performace treds ad take strategic decisios. OOMS Portal Ehacemets IT departmet i collaboratio with UBL Bak has created a automated paymet processig mechaism to streamlie the processig of 67

9 Huma Capital Employee Sourcig & Recruitmet The compay s strategies ad assessmet play a major role i attractig the best resources. With the belief that hirig the best affects busiess growth goals, the best professioals were selected from the market through equal opportuity employmet for both experieced ad etry level positios. I the period uder review, diversified talet i the fields of Egieerig, Marketig, Fiace, Huma Resources ad Iformatio Techology were hired at various levels. A proactive approach was adopted wherei upcomig retiremets i the ext three years were aalyzed ad recruitmet of seior maagemet positios was plaed accordigly. These iitiatives were udertake to further stregthe the cocrete foudatio laid for the achievemet of log term corporate strategies ad goals. Total Work Force & Turover The compay s maagemet cadre cosists of professioals possessig qualificatios such as CA/CMA/ACCA, PhD, MBA, ad BE amogst others. I the period uder review, the compay s professioal stregth has icreased by 11.2%. Professioals 8 Number of employees 7 Number of employees Employee Welless Total Employees Maagemet Employees No-Maagemet Employees The attritio rate has decreased by 3.68% as compared to 4.1% i the previous year due to the icreased employee egagemet. 2 1 Attritio FY Qualificatio Others A etworkig iitiative was udertake with the objective of attractig top talet from prestigious busiess ad egieerig istitutes, so that they may help bridge the gap betwee Idustry ad Academia ad cotribute i future compay profits. Represetatives from the compay s Huma Resource Departmet ad seior maagemet visited various istitutes ad couseled youg professioals o shapig their careers. This exercise also aimed at tappig potetial talet for future employmet plas at etry level positios. 5% 4% Attritio rate FY Qualificatio Professioals 3% 2% Successio Plaig 4.1% 3.68% 1% % 68 Employee Welless ad Health is amogst the compay s top priorities due to which a aual medical checkup for employees aged 45 years ad above was coducted atio-wide. Medical reports were discussed with employees by the compay s pael of cosultats/chief Medical Advisor who provided guidace to the employees o their health related problems. I additio to the services of Chief Medical Advisor, a medical ceter/cliical facility is also available withi the office buildig to provide the best health care facilities to the employees. A camp for diagosig diabetes alog with guidace o utritio was also held for the employees. With the help of this camp, a early detectio was made so that remedial measures could be take to attai a healthy ad effective work force that efficietly cotributes towards strategic goals. Successio Plaig cotiues to be a key priority for PSO s Huma Resource Departmet. I order to maitai leadership cotiuity, the compay recruits employees, develops their kowledge, skills, abilities ad prepares them for advacemet ito more challegig roles. Successio plaig is carried out to esure the compay s cotiued growth ad prosperity by developig employees ad buildig a pool of strog coteders for future leadership positios. I this regard, followig steps were take: Policies, procedures ad criteria for career maagemet of employees were prepared i lie with the future goals of the compay. Itroductio of potetial assessmet as prerequisite of the eligibility criteria for elevated positios so that the future leaders could be idetified ad groomed accordigly. This potetial assessmet could oly be possible i the presece of a orgaizatio wide structure. A program was udertake where all the departmets were reviewed for maximum effectiveess of recourse optimizatio. New etrats were hired o a six (6) moths probatioary period ad were rotated i various departmets before beig placed i their respective departmets. The rotatio pla yielded two fold beefits i.e. it ehaced employee egagemet as it raised their learig curve, secod it reduced the chaces of their leavig the orgaizatio at a early stage as it prepared the youg leaders for achievig targets effectively for the compay. 69

10 Traiig & Orgaizatioal Developmet Employee Beefits The employees are compesated with market competitive salary packages, aual bouses ad termial beefits. Perks iclude iterest free persoal/car/house loa facilities, medical coverage of OPD & Hospitalizatio for self, spouse ad childre, life isurace coverage, subsidized meals, PSO club with gym ad sports facilities ad trasport facility for female employees. Moreover, to foster work-life balace, reduce abseteeism ad icrease productivity, especially of workig mothers, PSO employees are facilitated with a state-of-the-art Day Care Ceter withi the office premises. The compay s approach to huma capital developmet is based o best practices i Pakista. The T&OD Departmet aims to ecourage, develop ad fie tue employee s skills ad itroduce them to ew oes, lettig them apply ad excel to their best potetial. PSO s commitmet to learig ad developmet exteds from the first day of joiig of employees to the cotiuous developmet throughout their careers with PSO. The Core Competecy Framework Ethics Policy T&OD has prepared a 'competecy framework' which outlies each idividual competecy required by employees workig i various fuctios of the orgaizatio. The mai purpose is to idetify the specific behaviors ad skills eeded for each role ad trai the employees accordigly. The model is desiged keepig i mid the traiig eeds of the: PSO follows its Busiess Priciples & Ethics Policy where there is zero tolerace towards ay violatio of this code. All employees are expected to uphold these priciples ad help create a eviromet where discipliary actios are least desired. I order to provide female employees a coducive eviromet where they ca play a effective role i the achievemet of orgaizatioal objectives, a Protectio agaist harassmet of wome at workplace, Act 21 is beig practiced. This law eables female employees to file formal complaits i cases where ay provisio of the law is violated. Employee Relatios PSO has a culture based o the values of trust, mutual respect ad dialogue. The compay s Collective Bargaiig Aget (CBA) ad maagemet work together to develop ad maitai positive idividual ad collective relatioships. The maagemet cosiders good labor relatios imperative to the compay s growth. Owig to the amicable relatios betwee the CBA ad maagemet, o strikes, lockouts ad o loss of workig hours at our operatig locatios were observed. The 17th Hajj Ballotig was successfully carried out o April 6, at PSO House i which te fortuate employees were selected to perform Hajj. 7 Stadardizatio of Policies ad Procedures HR departmet s achievemets are completely aliged with corporate accomplishmets. Improvemet is a itegral part of the compay s culture where HR costatly strives to alig policies, procedures ad operatioal efficiecy. For stadardizatio of processes, a thorough job aalysis was coducted where orgaizatio wide traiig of distict positio holders was coducted to improve Job Descriptios. HR Departmet alog with the compay s maagemet reviewed ad revised HR policies i lie with best practices. Performace Appraisal PSO believes that the iterests of both the employee ad the compay are served by a strog emphasis o learig, staff developmet ad performace improvemet. It is, therefore, compay policy that all employees go through a aual appraisal review which is recorded ad moitored to assess overall developmet eeds for the Compay ad seeks to create a idetifiable lik betwee a idividual, departmet, compay ad corporate objectives. Overall Orgaizatioal Level Etire Fuctioal Level Specific / Idetified Promiet Roles i Orgaizatio The Talet Developmet Program icludes madatory traiig, maagemet soft skills traiig ad fuctioal skills traiig for its employees. Employmet of Special Persos Hirig is doe through a structured ad well defied recruitmet process. Special/differetly able persos are ecouraged to be a part of the process. Curretly there are 21 special/differetly abled employees workig at PSO that are a itegral part of the team while some of them are employed at seior maagemet positios. 71

11 Itellectual Capital Ivestig i people Orietatio of New Iductees The focus is o fuctioal skills developmet, SOPs traiigs, skill developmet i Operatios ad HSE (Health Safety ad Eviromet), as these are the key areas to improve customer services, the compay also coducted traiigs o customer service ad retail outlet maagemet held i Karachi, Hyderabad, Sukkur, Sahiwal, Faisalabad ad Peshawar. A thorough 5 Day orietatio program was coducted for 8 ew iductees i the orgaizatio durig FY16, to help them familiarize with the culture, the orgaizatio s policies ad procedures of all the departmets i the compay. The followig programs were coducted durig the year: Maagerial Grid Operatioal Maagemet & SOPs Programs at various locatios Livig Leadership Maagerial Soft Skills Developmet Hazard ad Operability Study (HAZOP) Sessios Executive Project Maagemet Costructio Safety Maagemet Leadership Code Leadership Xpeditio Key Accomplishmets FY FY FY 214 Total umber of Traiigs 171 Participats 2, , ,3 PSO Itership Program PSO offers oe of the most prestigious ad comprehesive itership programs i the coutry providig youg professioals exposure to a professioal workig eviromet. Two iterships, summer ad witer, accommodated 189 studets i FY - from all over Pakista for a period of 4-6 weeks. The compay ivests i hads-o-learig of iters through projects ad assigmets that ecompass a great deal of resposibility ad autoomy. Usig Techology & Iitiative to Achieve Log-Term Sustaiability PSO implemeted SAP i 25. With the passage of time, data size grew at a rapid pace ad is ow termed Big Data. Big Data cotais the compay's core busiess data of the last 1 years. I order to aalyze Big Data, ICT adopted busiess itelligece tool for advace data aalysis to improve operatioal efficiecy, makig evidece based busiess decisios ad fidig ew opportuities for busiesses to gai competitive advatage over competitors. These live dashboards will help the maagemet make effective decisios based o the overall aalysis of the compay performace which is ow oly a few clicks away. This achievemet will defiitely lead PSO to big chages i the log-term. Skill Set ad Experiece of IT Team PSO s IT team is a qualified ad professioal workforce which cosists of Computer Egieers ad SAP certified cosultats. The IT team provides i-house support o SAP Fuctioal, Networks Commuicatio, Techical (BASIS), Lotus Domio, Widows ad other applicatios. delivers services ad support to busiess fuctios o a roud the clock basis. The departmet has implemeted resiliet ifrastructure of back-ed servers, storages ad etwork techologies to provide uiterrupted support to critical busiess operatios. Performace has bee sigificatly improved i SAP alog with ehacemet i capacity with the migratio from legacy UNIX servers to latest geeratio Itel Xeo multicore servers for SAP ERP ECC6. Latest techology treds such as Solid State Storage have bee implemeted to achieve improved performace at storage level. Active stadby eviromets for ERP ad work flow applicatios have bee implemeted ad fully tested at PSO House ad LMT Koragi to esure 24/7 availability. ICT departmet is cotiuously keepig itself abreast with the latest techological advacemet to cater to preset ad future busiess eeds of the compay. Quality Assurace Ivestmet i our People POL Traiig Program for Armed Forces This year over 165 Armed Forces persoel were traied through various courses such as Advaced POL Course, Orietatio Visits ad study. The persoel icluded military delegatios from Commad & Staff College Quetta, Army Supply Corps (ASC) School Nowshera, Army School of Logistics Kuldaa, Murree. ICT departmet successfully coducted QlikView Desiger workshops to trai busiess aalysts ihouse. The workshop covered a variety of QlikView desig ad developmet topics, ragig from begier to advaced skill levels. The participats were give a thorough uderstadig of what QlikView is ad how iformative data visualizatio is created usig QlikView. This workshop eabled participats to maage, maitai ad exted the fuctioality of dashboards for their respective busiess fuctios. Robust ad Fit for Purpose I lie with the compay s visio to excel i deliverig value usig iovatio, ICT departmet 72 22,272 visits were carried to various retail outlets by MQTUs to check the quality ad quatity of fuel, 36 depots ad istallatios were checked for product quality while 1 visits were carried out to check ad verify the quatity of CNG beig dispesed to customers. 85 istrumets were calibrated, 2 exterally ad 65 iterally. 3, POL samples were tested at seve laboratories across Pakista. New equipmet was procured for 73

12 Natural Capital differet laboratories to ehace their testig capabilities, icludig Bomb Caloric Meter, Automatic Noack Evaporatio Loss equipmet, FTIR apparatus, Spectroil M, Sulphur Aalyzer ad Distillatio Uit. New tracker systems were istalled i 24 MQTUs across Pakista. Two ISO 91: traiigs were coducted for ISO Certified Departmets. A QMS Revival Pla was prepared for coversio to the ew ISO 91: stadard. Various i-house traiig sessios were coducted for the skill ehacemet of QA Staff i testig, auditig ad calibratio techiques. Two MQTUs were replaced with ew vehicles at Sukkur ad Islamabad. The MQTU uits reder testig services at the door step of the idustrial customer to ehace their cofidece i PSO products with live testig. Two ew ad state-of-the-art laboratories have bee developed at Faisalabad depot ad Sihala istallatio to check product quality. outboud call cetre, which esures that all calls are aswered before the pre-defied threshold time. Durig the period uder review, a total of 457,339 customers were served via outboud/iboud calls, s, fax ad automated lubricat secure code SMS Service. Ta aluq Customer Services plays a major role i improvig the compay s image ad strives to satisfy all of the compay s customers. Cards Commitmet to HSE As Pakista s leadig Oil Marketig Compay, PSO is well aware of its commitmet to the broader stakeholder commuity. PSO esures that its policies & procedures are eco-friedly ad over the years we have demostrated our focus o the eviromet by decreasig our evirometal footprit year o year. Similarly the health ad safety of each idividual who iteracts with our busiess remais a paramout cosideratio. HSE at PSO Customer Services PSO is a customer orieted orgaizatio placig customer satisfactio at the core of its busiess decisios ad activities. PSO Customer Services provides after sales services, complait resolutio services ad aswers to queries of ew ad existig customers of all the busiess fuctios. The departmet is a full-fledged iboud ad Cards Divisio had created uique propositios for each segmet of target market by itroductio of differet card schemes. PSO Fleet Card caters vehicle specific fuelig requiremets. This eables fleet maagers ad admi maagers at orgaizatios to track the fuel cosumptio of each vehicle i the fleet. PSO Corporate Card caters fuelig requiremets of a idividual. This card aims to provide fuelig solutio to orgaizatios for their employees ad helps track idividual expediture. PSO Commercial Card complemets a orgaizatio s commercial fuellig requiremets, eablig it to claim Sales Tax rebate from the tax authorities via issuace of a GST Ivoice. PSO Privilege Loyalty Card rewards customers' loyalty by offerig a smart way to save moey o Fuel products. 74 Our HSE policy is a importat igrediet of our overall code of busiess coduct. It states that PSO will esure: The health of its employees, cotractors, customers ad public is protected. All activities are carried out safely. Eviromet is protected. To implemet the HSE policy, Pakista State Oil Compay Limited will: Comply with Pakista s relevat laws ad regulatios. Esure that all its activities are carried out i accordace with the Compay s Health, Safety ad Evirometal Stadards ad Procedures. Esure that evirometal performace meets legislative requiremets. Require every employee to exercise persoal resposibility i prevetig harm to self or others ad to the eviromet. Maitai public cofidece i the itegrity of its operatios by opely reportig its performace to all stakeholders who work with the Compay. Provide appropriate Health, Safety ad Eviromet traiig/iformatio to employees, cotractors ad other stakeholders who work with the Compay. Itegrate Risk Assessmet with all busiess processes. Promote prevetio of pollutio ad proper hadlig ad disposal of solid, liquid wastes ad gaseous emissios. Cotiuously improve our performace by improvig the leadership, capability ad capacity of our orgaizatio. The compay also accords paramout importace to the traiig of employees ad cotractors to ehace safety awareess ad miimize the occurrece of icidets. I FY16, PSO emphasized o urturig ad developig a robust HSE culture. The Safety Observatio ad Recommedatio (SOR) System was lauched for the systematic idetificatio, review ad addressal of usafe coditios ad acts arisig from job related activities. The objective was to prevet the occurrece of icidets by egagig stakeholders. SOR Cards have bee placed i SOR Boxes at all compay locatios so that they are easily accessible to employees ad busiess parters for the recordig of good practices as well as usafe coditios. 75

13 A major milestoe was achieved i Process Safety Maagemet (PSM) with the itroductio of the Maagemet of Chage System. This procedure sigificatly ehaced operatioal efficiecy ad effectiveess by keepig HSE & Operatioal Risks arisig from proposed chages i check ad maagig them to a acceptable level (ALARP As low as reasoable practicable). HSE traiig ad refresher programs were orgaized at various compay locatios ad facilities icludig the head office to ehace the skills of employees ad cotractors i meetig world class HSE stadards ad practices ad implemetig them withi the orgaizatio. The traiig sessios were coducted by iteral ad exteral traiers o topics such as HAZOP, Retail & Operatios SOPs, Defesive Drivers Traiig, Permit to Work ad Certified First Aid Traiig amogst others. values. Employees at all locatios ad facilities stood dow for 15 miutes to promulgate the curret year s theme Workplace stress: a collective challege. PSO established a Crisis Maagemet System with a aim to prevet, prepare for, respod to ad recover from a potetial crisis i a orgaized ad systematic fashio. These activities iclude tactical respose, icidet maagemet at the scee alog with the maagemet of busiess cosequeces that may arise from the emergecy or circumstace. The compay celebrated World Health & Safety day o April 28, to promote safe, healthy ad decet work by vowig to adhere to HSE policies ad procedures ad fosterig a orgaizatioal culture based o Health, Safety ad Evirometal A Safety Statistics Board has bee desiged for istallatio at all PSO facilities icludig istallatios, depots, aviatio statios, LPG Plats ad LMT. The Safety Statistics Board icorporates vital safety ad operatioal performace idicators of the facility for each idividual busiess fuctio ad will help i improvig the safety performace of the orgaizatio. Water Testig As water is a essetial elemet of health, the compay puts great emphasis o its safe use. I lie with PSO s commitmet to provide safe ad healthy drikig water to its employees ad to prevet outbreak of water bore diseases, testig of drikig water is coducted (chemical ad microbiological aalysis) from reputable laboratories which also icludes our ow lab at LMT. The test results are aalyzed to esure quality compliace of drikig water with WHO guidelies. 76 Maagemet of Ucotrolled Oil Release PSO has a oil spill cotrol mechaism i place to avert ay oil spill, coserve soil i its atural form ad prevet groudwater cotamiatio. I order to achieve this objective, field staff that is hadlig oil is imparted traiig o oil spill prevetio at regular itervals. Moreover, compay staff is also traied o oil spill emergecy procedures to adequately cater to ay emergecy. Eergy Coservatio Measures As part of the eergy coservatio drive, employees were give awareess about the eed ad beefits of eergy coservatio ad were ecouraged to switch off electrical appliaces while leavig the workstatio or whe the appliaces were ot i use. With the aim of promotig a gree office eviromet, platatio was icreased at PSO House ad surroudig areas. Old chillers were replaced with ew eergy efficiet soft starter chillers which require less operatioal power thereby reducig the cost of electricity by approximately 25%. A eergy audit of PSO House was carried out as a result of which three potetial eergy coservatio areas were idetified - LED lights, VFDs ad heat resistat sheets. Eergy surveys of PSO House ad Keamari Termial-A were carried out usig hi-tech ad state-of-the-art istrumets such as Thermal Imager, Power Logger, Clamp Meter ad Light Meter through which eergy coservatio opportuities were idetified, the sources of eergy were categorized ad optios of effective utilizatio of eergy were explored. The report made as a result of the survey gives a aalysis ad study of Eergy Performace ad Eergy Efficiecy Ratig which estimate the potetial for cost savigs ad comprises of the followig mai sectios: These iitiatives will pave the way for eergy coservatio measures at PSO Offices ad PSO Facilities. Eergy coservatio measures i FY17 iclude the replacemet of covetioal tube lights with LEDs which will save aroud 195 KW of eergy ad will traslate ito savigs of PKR 9 M per year. Waste Maagemet The compay strives to prevet pollutio by maagig waste i a eviromet friedly maer. Evirometal programs aim to improve sustaiability of our busiess processes ad reduce waste. All the waste from facilities is segregated ito hazardous ad o-hazardous waste. The hazardous waste is properly disposed off through icieratio whereas o-hazardous waste is recycled through approved third party cotractors as per EPA requiremet. PSO also provides guidelies for the disposal of highly hazardous wastes such as Asbestos, Petroleum sludge etc. i a safe ad evirometal friedly maer. Air Emissio/Effluet Moitorig The compay is compliat with applicable regulatory requiremets ad esures its effectiveess agaist Natioal Evirometal Quality Stadards (NEQS). The compay also moitors effluet ad gaseous emissios at all of its istallatios through reowed testig laboratories o a aual basis for the compliace of NEQS. The test results are reviewed ad maitaied at the respective facilities. Necessary corrective measures are take to improve performace wherever required. All compay facilities carry out air emissio ad effluet moitorig tests every six moths so as to comply with PSO Eviromet Maagemet Pla as well as legislative requiremets. Checkig Lux level at PSO House workstatios [sample basis] agaist the OSHA recommeded Stadard. Idetificatio of overheated compoets such as, pumps, breaker, switches ad other equipmet. 77

14 Social & Relatioship Capital Beig the atio s largest oil marketig compay, PSO takes owership of the welfare ad developmet of the commuities where it operates ad society as a whole. Corporate Social Resposibility (CSR) is oe of PSO s core values ad a itegral part of the Compay s overall missio. With operatios across the coutry, PSO utilizes its scale of operatios as a stregth to positively impact the uderprivileged atiowide, especially i the viciities where PSO operates. By itegratig CSR ito our busiess strategy, PSO is helpig drive shared value amogst its stakeholders. Uder the CSR umbrella, PSO has supported sustaiable social developmet activities atiowide, by parterig with reputable charitable orgaizatios workig across Pakista i the fields of healthcare, educatio ad commuity buildig. The compay s fiacial cotributio (1% of et profit before tax) has bee ivested ad mobilized i various social ad commuity developmet projects. PSO Impact I the period uder review, the compay has moved beyod busiess to iteract with the commuities i which it operates by reivetig ad revitalizig the CSR fuctio. While makig cotiual efforts i the focus areas of educatio, healthcare, eviromet, commuity developmet ad disaster relief, PSO has ow itegrated all its activities uder oe baer with the aim of empowerig idividuals ad orgaizatios i makig real time positive impact atiowide through the PSO Impact Program. A olie applicatio has also bee lauched through the corporate website ad social media to garer ideas ad facilitate two way commuicatio betwee iteral/exteral stakeholders ad the CSR Team. Uited Natios Global Compact PSO joied the Uited Natios Global Compact (UNGC) fraterity i Jue. This iitiative sigifies the compay s commitmet to makig the society ad world at large a better place to live i by followig the priciple based framework of the Compact i the areas of huma rights, labor, the eviromet ad ati-corruptio. As a resposible corporate citize, PSO believes i fulfillig its social, ecoomic ad evirometal resposibilities to promote sustaiable 78 developmet alog with carryig out plaed activities i the areas of educatio, healthcare ad commuity buildig by parterig with reputable charitable orgaizatios atiowide. Natioal Cause Doatio As a leadig atioal compay, PSO exteded support worth Rs. 86 Millio from its total CSR budget to various causes ad orgaizatios atiowide. Commuity Developmet With a eye towards social upliftmet ad bettermet of the society, PSO ecouraged orgaizatios through cotributios of approximately Rs. 19 millio such as Dar-ul-Suku, Network of Orgaizatios Workig with People with Disabilities, Pakista Village Developmet Program, Roshi Homes, Shiaki Area Developmet Orgaizatio, SOS Childre's Village, Taraqee Foudatio etc. Employee Care PSO provides its employees with various value added services icludig a Day Care ceter where workig parets ca leave their childre durig work hours as well as a Fortified Medical Ceter where employees ca be treated for umerous ailmets. PSO Club with gym ad idoor games has bee provied for the physical fitess of employees. STATEMENT OF CHARITY ACCOUNT Busiess Ethics ad Ati-Corruptio Measures Educatio PSO has policies/procedures i place to esure trasparecy ad accoutability, to ehace effectiveess of compay s goverace ad iteral cotrols ad to maitai itegrity i the compay s busiess dealigs. A brief summary of activities carried out by the compay i the followig charity accout is metioed below: With the objective of promotig literacy at all levels, PSO has exteded sigificat support of approximately Rs.9 millio to various orgaizatios workig i this field i the form of doatios ad edowmet fuds. This icluded fiacial assistace to educatioal istitutios i urba areas such as IBA, IoBM as well orgaizatios workig i rural areas such as The Citizes Foudatio, Kagha Memorial Trust, Progressive Educatio Network, Zidagi Trust, Family Educatio Services Foudatio etc. The importace of educatio for special childre was also reflected i PSO s door list with doatios dedicated to NGOs like Autism Society of Pakista, Istitute for Special Childre, Karachi Vocatioal Traiig Ceter etc. Healthcare I its efforts to improve healthcare coverage across Pakista, PSO has provided assistace of approximately Rs. 58 millio for the purchase of medical equipmet as well as for treatmet of eedy patiets to various hospitals ad medical orgaizatios. This icluded support for the purchase of Laparoscopy High Defiitio Istrumetatio to Civil Hospital, purchase of Nuclear Medicie Gamma Camera Machie to Kira Hospital Welfare Society, purchase of vetilators for Natioal Istitute of Cardiovascular Diseases (NICVD), purchase of Ambulace for Koohi Goth Hospital etc. Support for equipmet was also provided to The Cacer Foudatio, Hayatabad Medical Complex, Poor Patiets Aid Society, Al-Shifa Trust, Fatimid Foudatio, Jiah Hospital, Mayo Hospital etc. Moetary doatios for the treatmet of patiets was provided to various istitutios icludig Child Aid Associatio, Gaga Ram Hospital, Patiets Aid Foudatio, The Health Foudatio, Al-Umeed Rehabilitatio Associatio etc. Eviromet The Compay has also supported evirometal coservatio activities i various parts of the coutry by supportig orgaizatios like The World Wildlife Fud (WWF) ad the Pakista Village Developmet Program (PVDP). 1. Whistle Blowig Policy: To provide PSO employees, directors, related officers, cotractors, service users, customers or ay member of public ( the Whistle Blower ) a aveue to highlight ay improper coduct / wrog doig. A report o the complait received vis-a-vis the actio take was preseted i the iteral audit committee meetigs held durig the year. 2. Busiess Priciples ad Ethics Policy: Already established ad circulated to employees, it aims at guidig the employees to observe the highest ethical stadards i the coduct of all their busiess ad professioal activities i the iterest of the compay, i cosoace with its core values ad to exclusio of the cosideratio of persoal gai. 3. Coflict of Iterest Policy: I place ad outlies specific forbidde situatios which clash directly with the iterests of the compay. A exercise is beig coducted to brig ito record ay possible coflict case ad to take corrective actios, where eeded. 4. Risk-based audits of busiess fuctio: These are performed by Iteral Audit Departmet to provide idepedet ad objective appraisal ad aalysis of the operatios, systems ad iteral cotrols. 5. SOP for holdig prelimiary ivestigatios ad domestic iquiries: This SOP exists i case of a fraudulet activity. 79