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PSO CUSTOMER FOCUSED COMPANY TODAY: MANAGING DIRECTOR

The Managing Director of Pakistan's largest oil marketing company, Mr Tariq Kirmani, said that Pakistan State Oil (PSO) was geared to solving problems to its customers' satisfaction.

Addressing a large gathering of PSO dealers, media representatives, company employees and other guests at the launch of PSO Castrol Master Brand, Mr Tariq Kirmani said wherever human element was involved, problems were bound to erupt. "We are now training our employees to solve customers' complaints to their satisfaction and not ours'," he said.

The Managing Director said that he personally went through all the customer complaints because he took them very seriously.

Mr Tariq Kirmani said that we have come a long way in PSO. "It is not simply a question of change but of real transformation," he said, adding that all PSO employees — from filling operators to general managers — had contributed to the massive change.

Mr Kirmani said that all PSO employees and its business partners were making efforts to satisfy our customers. "We are not only working to satisfy our customers rather we want to delight them," he said, explaining that the after sales service was as important as making the sale itself.

Mr Kirmani said BP Castrol was one of the largest petroleum companies in the world and the relationship between PSO and Castrol was flourishing.

Mr Kalim Siddiqui, General Manager Lubricants and Chemicals, said that this division had made tremendous progress during the last one year. He said with the launching of the Castrol Master Brand, PSO had now completed the range of its products. "PSO means business and quality," he asserted.

Mr Siddiqui said quality was now being maintained through improved packaging, trend-setting anti-counterfeit measures like laser-jet coding and introduction of Dedicated Lubricants Transportation.

BP Castrol Country Manager, Mr Asad Ayub, speaking on the occasion said that Castrol was the most preferred brand in the world. The company, which now makes more than 5,000 products, was present in South Asia since the 1930s. He said the change at PSO that he had seen during the last one year was nothing short of a miracle.

He congratulated the PSO's management for the revolutionary transformation that was achieved in a short period.

PSO WINS PROGRESSIVE AWARD FOR OUTPERFORMING RIVALS

Pakistan State Oil (PSO) has recently been awarded the "Most Progressive Partner" by the British Petroleum Middle East (BPME) in the annual Partners Conference 2002 held at Sun City, South Africa.

Mr. Jeremy Bowen, General Manager, BP Middle East, presented the shield to Mr. Kalim A. Siddiqui, General Manager, Lubricants & Chemicals, PSO.

"PSO's name could well have been Progressive State Oil instead of Pakistan State Oil. During the last year, Pakistan State Oil has done something short of a miracle in outperforming its rivals like Shell, Caltex, Mobil & Total," Mr Brown said.

In the lubricants field, PSO has fought back to revive its position of leadership with remarkable improvement in all areas.

Heavy investment in branding had led to a revival of the Castrol image in Pakistan — this includes ASP, improved lubricants displays at retail outlets and setting up Lube Change Centres.

Product range improvements include introduction of new packs, rationalization and revitalization of the lubricants range and Masterbrand launch.

Improved packaging, trend-setting anti-counterfeit measures like laser-jet coding and introduction of Dedicated Lubricants Transportation have also been taken.

Moreover, Inventory Management, Additives Rationalization and other cost control measures have been adopted to bring down the costs of production.

A new HSE Department has been set up and work has started to make improvements in this important field.

With some other major changes on the way that include complete modernization of LOBP, setting up of state-of-the art laboratory to ensure world-class testing facilities, setting up of small pack manufacturing and introduction of a new MIS, PSO is truly on a fast track.

Finally, Mr. Jeremy Bowen mentioned that Castrol has had a long and fruitful relationship with PSO he was looking forward to a great future together.

All these efforts were made under the aggressive leadership of Mr. Kalim A. Siddiqui, who has led his team from the front and deserves full credit for the transformation.

PSO DISPLAYS UNMATCHED PERFORMANCE

The Board of Management, Pakistan State Oil, met at PSO House, Karachi, to review the performance and accounts for the first quarter ended September 30, 2002. Mr. M. Salim, Chairman BoM, presided over the meeting.

The Board observed that the company continued to further improve on its preceding year's performance and achieved newer landmarks.

During the first quarter of FY-03, PSO sold 2.6 million tons of POL products translating into sales revenues of over Rs. 48 billion, up by 12% over the prior year period. Profit before tax rose to Rs 1.4 billion, registering an impressive growth of around 143% over the same period last year, whereas profit after tax soared to Rs 1.05 billion, up by 176%. This remarkable and impressive performance demonstrated by the company was mainly due to increased operating efficiency, more concentration on higher margin products, further expansion of new product line and services and enhanced margins.

During July - Sept 2002, the domestic POL industry displayed a modest growth of 1%, which was essentially the same growth witnessed during the second half of FY-02. The political stability in the country coupled with economic revival led to consumption growth of key products. In July - Sept 2002 Mogas, HSD and JP1 showed growth of 3%, 12% and 26% respectively. However, FO demand decreased by 13%, owing to improved hydel generation and low product off take by IPPs and HUBCO.

PSO consolidated its position as the market leader in the industry despite intensifying competition in the wake of deregulation, impediments from cartage contractors and arrival of new entrants. During the first quarter of FY-03, PSO increased its market participation in Mogas to 41.7% (an increase of 2%) over the prior year period, while in HSD the company showed significant growth of 14% in sales volume, thus, increasing its share to 59.5% (an increase of 1.3%). Similarly in JP 1, PSO sales grew substantially by 31% compared to the same period last year, increasing its market share by 3% to 71%. However, in Fuel Oil PSO sales have declined owing to general decline in the overall industry.

The deregulation and privatization of Oil & Gas sector remained the top priority of the government. As part of its staged deregulation of downstream sector, the government mandated OMCs to announce their product price on fortnightly basis with the margin remained capped at 3.5%. With the enhancement in POL product margins from July 1, 2002, OMCs have strengthened their financial health, which would lead to further investment and improved services.

The board expressed fullest satisfaction and hoped that with the resolution of stuck up claims combined with the strategic initiatives undertaken by the company and the full impact of enhanced margins, PSO is well placed to face the challenges of changing business environment and maintain its leadership in the downstream sector.

FIRST GRINDLAYS MODARABA (FGM)

FGM is managed by Grindlays Services of Pakistan (Private) Limited which is a wholly owned subsidiary of Standard Chartered Grindlays Bank Limited. In Pakistan, the Standard Chartered Group comprises of Standard Chartered Bank, Standard Chartered Grindlays Bank and FGM.

FGM is one of the largest leasing entities in the country with gross leased assets of over Rs. 3.6 billion. FGM maintains the highest modaraba financial strength rating in the modaraba sector of A2 which signifies a modaraba in outstanding financial condition with a consistent record of above average performance.

FGM has made the highest profit before tax amongst all leasing companies and modarabas for the year ended June 30, 2002 resulting in a record 40% cash dividend. FGM's profitability ratios of return on total assets of 7% and return on equity of 24.80% for the year ended June 30, 2002 continue to remain, by far, the highest amongst all leasing companies and modarabas.

COM scheme of FGM has been formulated within parameters laid down by the Religious Board and has been specifically approved by the Securities and Exchange Commission of Pakistan. These certificates are similar to certificates of investments of leasing companies with maturities ranging from 3 months to 5 years. For only Rs. 10,000 you can invest in COMs directly from FGM or across 21 Standard Chartered Bank (SCB) or Standard Chartered Grindlays Bank (SCGB) branches without even opening an account. COMs pay profits quarterly and the certificate is transferable and encashable at any time. These transfer and encashable features are similar to those found in shares of a company and make COMs extremely liquid.

A certain percentage of total profits (stated on the face of each certificate) is shared by FGM's certificate holders (shareholders) and the COM holders. The profit (and also the encashed/matured principle) can be credited to any SCB and SCGB account on a quarterly basis or if the investor does not have an account with these banks the profit cheque is delivered to the investor's address.

The COM scheme affords many safeguards to its investors like, disclosure of credit rating on all offer for sale and advertising materials, publication of quarterly profit and loss account in two national dailies for the information of COM holders, premature encashment at any time, appointment of a Trustee (A. F. Ferguson & Co.) to oversee the use of a Redemption Reserve Fund created for premature encashment and strict reporting requirement of the SECP.

FGM's web site (www.grindlaysmodaraba.com) contains inter-alia, full terms and conditions of the COM scheme.

CERTIFICATES OF MUSHARIKA (COMS)

Major features of the COM Scheme are given below:

Maturity Available in tenors of three months, six months, one year, two years, three years, four years and five years.

Currency Pakistan Rupees only.

Denominations Minimum denominations of Rs. 5,000

Investment Limit A minimum investment of Rs. 10,000

Expected returns*

* 3 months 5.50% per annum
* 6 months 6.50% per annum
* 1 year 7.00% per annum
* 2 years 7.50% per annum
* 3 years 8.50% per annum
* 4 years 8.75% per annum
* 5 years 9.00% per annum

* subject to change. Profit payments are made on a quarterly basis.

Profit Calculation Profit rates to be computed on a 365 days basis and paid for the actual number of days the certificate remains outstanding within the relevant profit payment quarter.

Premature Encashment Permitted at any time. A redemption reserve fund equal to 5% of the face value of COMs outstanding has to be maintained by FGM to cater to premature encashments.

Penalty for early encashment 1% of encashment value.

Transferable Yes.

Taxation/Zakat/Stamp duty Subject to 2.5% Zakat and withholding tax 10% wherever applicable. Stamp duty 0.15% of face value on issue and 0.10% on transfers.

Profit Payment Mode By crossed cheque/ direct account transfer for SCGB/SCB account holders.

PROFESSIONAL CONDUCT OF CHARTERED ACCOUNTANTS

Members & students of the Institute of Chartered Accountants of Pakistan (ICAP) are required to maintain professional conduct as laid down in the C.A. Ordinance, 1961. The Institute of Chartered Accountants of Pakistan (ICAP) has also issued a Code of Ethics for Chartered Accountants based on the recommendations of the International Federation of Accountants (IFAC). Cases of professional misconduct, against ICAP's members and students, are investigated by an Investigation Committee, which submits its findings to the ICAP Council for necessary consideration.

ICAP's Investigation Committee has been functioning ever since the inception of the Institute in 1961, and includes two persons (not being members of the Council), of whom one is a person who has exercised the powers of or who is or has been, a judge of the High Court or has been an advocate of a High Court and is qualified to be a judge of a High Court.

During the year 2001-2002, the Council disposed of 46 complaints. In 15 cases ICAP members found guilty, and were reprimanded by name, in one case the name of the member was removed for five years and one case was referred to the Sindh High Court with the recommendations to remove his name from the Register of members permanently. In four cases the members were reprimanded without name and in six cases, the members were cautioned; whereas 19 complaints were not proved.

The ICAP expects that its members would maintain a high level of professional conduct. The Institute encourages all concerned persons to report cases of professional conduct by Chartered Accountants but frivolous complaints should be avoided.

LG & MADADGAR 15

Regional and global leader LG Electronics joins hand with Karachi Capital City Police to make Karachi crime free.

Madadgar 15, the Police help line, is a rapid emergency response center operating in all parts of the city. Recently a suitably furnished office of Madadgar 15 Clifton Town started its operations on main Shahra-e-Faisal.

LG Electronics has sponsored the main hoardings of Madadgar 15 emergency response center and 15 helpline bill boards across the city.

"Such moves by the corporate side are certainly encouraging and give us strength to serve our fellow citizens with more interest & care" commented Duty Officer Madadgar 15 Station Sharah-e-Faisal.

ACCA PAKISTAN

ACCA Pakistan held its second graduation ceremony in Karachi on Thursday, October 31, 2002. The ceremony was well attended by over 120 newly qualified ACCA affiliates, their families and members of the business community. The chief guest, Ms. Musharaf Hai, Chief Executive, Unilever Pakistan Ltd, handed out the certificates to the affiliates and placewinners. The Keynote speaker was Mr. Shabbir Zaidi, Partner A.F. Ferguson

Addressing the students at the ceremony, Arif Masud Mirza, ACCA's head of Pakistan affairs said, "Your ACCA qualification is a passport to career opportunities around the world. It has equipped you with the skills worthwhile of a career in any business sector — industry, commerce, public sector, financial services or public practice here in Pakistan or in any of the more than 160 countries in which ACCA has members and students."

The Association of Chartered Certified Accountants (ACCA) is the largest, fastest growing global professional accountancy body, with over 300,000 members and students. The latest global innovation from ACCA provides students with the opportunity to obtain a BSc Honours in Applied Accounting from Oxford Brookes University while studying for the ACCA qualification.

ACCA Pakistan provides counseling and support services to some 10,000 members and students in Pakistan and has offfices in Karachi, Lahore and Islamabad.

Pakistani delegation led by Tariq A. Nizami of Sir Syed University with Japanese IT Official in Japan to promote IT for Pakistan.

FAYSAL BANK ORGANIZES GOLF TOURNAMENT

Mr. Khalid Tirmizey, General Manager Commercial Banking of Faysal Bank, is seen in the picture going for a tee off. Faysal Bank was one of the two organizers of the tournament in which around 60 players had participated.

OMEGA SERVICE CENTRE

New Era Watches, the distributor of Omega in Pakistan proudly inaugurated the first official Omega Sales and Service Center at Clifton Center. The simple ceremony was performed by Mr. Khalid Latif, Secretary, Govt. of Sindh amidst a select gathering of industrialists and traders. Omega had long felt the need of an official Service Outlet in Karachi where Swiss-trained technicians have the equipment and ability to service Omega Watches.

PPL OPERATED JOINT VENTURE DISCOVERS GAS IN SINDH

Pakistan Petroleum Limited, the Operator of the Block 2768-3 (Block 22) Exploration Licence has announced a gas discovery at Khanpur Well X-1, the fifth exploration well drilled and the fourth discovery in the Block, located about 35 Km from Sukkur in the districts of Shikarpur and Sukkur in the Province of Sindh.

Pakistan Petroleum Limited 45% (Operator), Petroleum Exploration (Pvt.) Ltd. (30%), Pyramid Energy International Inc. (20%) and Government Holding (Pvt.) Ltd. (5%) are the working interest owners in Block 22.

The Khanpur Well X-1 was spud on 1 September, 2002 and reached a total depth of 1230 meters in 20 days. The structure was defined using latest seismic technology. The well has penetrated 26 meters of gas column in the Sui Main Limestone formation with 24 meters of net pay.

One successful Drill Stem Test was carried out which produced 10 MMscfd of gas on 1/2" choke at flowing wellhead pressure of 800 psig. Initial gas analysis indicates gas with approximate heating value of 840 BTU/scf.

The Joint Venture intends to appraise the reserves and commercial viability of the Khanpur X-1 gas discovery along with the earlier discovery at Well Hamza X-1 in the block.

PPL is actively pursuing an ambitious exploration programme besides being the operator and producer from Adhi, Kandhkot and Sui — the largest Gas Field in Pakistan.