Lahore Electric Supply Company Limited

Business Plan FY 2010 2010-11 11

Workshop on Power Sector Reforms 5th October | 2010

SchemeofPresentation
Vision Mission Core Values Operational & Business Overview Technical Overview Stakeholders SWOT Analysis Objectives Forecasting Assumptions Financials

Lahore Electric Supply Company Limited

Vision

To Transform and Develop the Company into Sustainable Electric Utility

Lahore Electric Supply Company Limited

Mission To p provide reliable electricity y in the regulatory g y regime, transform the company into a viable electric utility by employing emerging technologies and motivating human resources to support economic activities in the service territory

Lahore Electric Supply Company Limited

LESCOCoreValues

Team Work Si li it Simplicity Flexibility Transparency

Lahore Electric Supply Company Limited

Service Territory
FESCO

Nankana
GEPCO

0 41M 0.41

0.38M

MEPCO

POWERFLOW
NTDC 220kV Ravi NTDC 500kV SKP NTDC 220kV BundRd IPP Saif Power (225MW) ( ) IPP Saba Power (123MW) ( ) IPP Orient Power (225MW) ( )

IPP Nishat Power (225MW)

LESCONetwork
Peak Demand 3916 MW

IPP Nishat Chunnian (225MW)

NTDC 220kV KSK

NTDC 220kV NKLP

NTDC 220kV
S/N S/Nagar

IPP KEL (120MW)

IPP Sepcol (112MW)

IPP JapanPower (107MW)

CategorywiseComparison
EndingJUN2010

Consumers

Revenue

Lahore Electric Supply Company Limited

CategorywiseComparison
EndingJUN2010

Consumption

Revenue

Lahore Electric Supply Company Limited

OperationalOverview
Description
Districts (Lahore, Sheikhupura, Okara, Kasur, Nankana) Area (Lahore, Sheikhupura, Okara, Kasur, Nankana) Circles 7(OP), 1(GSO), 1(Const), 2(M&T), 1(GSC) Operation Divisions (32 Operation + 1 Industrial) Operation Subdivisions (168 + 1) Construction Divisions Construction Subdivisions M&T Divisions Employees (538 Officer + 19639 Others) No. of Consumers 05 19,064 12 33 169 06 20 07 20,177 3.2 Nos. KM2 Nos. Nos. Nos Nos. Nos. Nos. Nos. Nos. Mln

Lahore Electric Supply Company Limited

TechnicalOverview
Description
Grid Stations Grids feeding Lahore City NTDC Grid Stations Feeding LESCO Grid feeding Individual Consumers IPPs feeding LESCO SPPs feeding LESCO Small Hydel Power Stations Feeding LESCO No. of 11kV Feeders Length e gt of o HT Line e Length of LT Line Distribution Transformers Peak Demand LESCO (2009-2010) Summer 89 41 6 15 8 16 2 1,249 24,910 ,9 0 14,425 81,289 5764 3916 Nos Nos. Nos. Nos. Nos. Nos. Nos. Nos. Nos. KM KM Nos MVA. MW

Lahore Electric Supply Company Limited

Stakeholders
Customers Employees Suppliers Contractors Regulator Government Lenders Community

SWOT
Strengths Exclusiveserviceterritory ExperiencedHumanResources SupportiveBoardofDirectors ERPimplementation(Partly Completed) Opportunity IncreaseinSalesGrowth IntroductionofNewTechnologies Autonomy Weaknesses Administrativelosses LackofAutomationofBusinessProcesses. UnsatisfiedEmployees
Non aligned Rules & Regulations with Non-aligned Regulatory Regime

Threats PowerShortage Lackofinvolvement inPowerPlanning PoliticalInterferenceintheBusinessMatters Poor GovernanceSysteminPowerSector Entities ConsumersAffordability Nonpaymentcultureof fgovernmentagencies Delayeddetermination/notificationoftariffs
Lahore Electric Supply Company Limited

ProfileofBoardMembers
# NAME OF OFFICER DESIGNATION QUALIFI CATION TOTAL EXP: YEAR WITH LESCO

1 Syed Yawar Ali 2 Mr. Mr Shahzad Alam 3 Mr. Khalid Saeed

Chairman Director Director

B.E. B E (Chem.), (Chem ) Master (Mgmt (Mgmt. Sc.), Advanced Management Program (Harvard) MBA USA MBA, BSC (Engineering) UK. FIET, P.Eng (Canada) B.Sc (Electrical Engg.) MSC (Engineering) B.Sc (Electrical Engg.) Nominee of MOW&P

36-Y 28 -Y 35-Y 36-Y 35-Y 34-Y

06-Y 06-Y 11-Y 1.8-Y Recently Joined 15-Y

4 Mr. Munawar Ahmad Malik Director 5 Mr. Muhammad Ishaq Bhatti Director CEO Director

6 Mr.Saleem Akhtar 7 Raiz Ahmad Khan

Lahore Electric Supply Company Limited

Profile f l of fSeniorManagement
# NAME OF OFFICER DESIGNATION QUALIFI CATION TOTAL EXP: B.Sc (Electrical Engg.) Engg .) B.Sc (Electrical Technical Director Engg.) Engg .) B.Sc (Electrical Operation Director Engg.) Engg .) B.Sc ( (Electrical CS Di Director t Engg.) Engg .) CEO Finance Director HR&Admn Director Legal Director Manager (MIS) FCMA MPA & Diploma in HRM B.A, LLB M.Sc 3434 -Y 3434 -Y 3636 -Y 3333 -Y 21 21-Y 2424 -Y 15 15-Y 28 28-Y YEAR WITH LESCO 15 15-Y 2424 -Y 6-M 0101 -Y 0202 -Y 25Y 2.5 05 05-Y 16 16-Y

1 Saleem Akhtar 2 Rana Muhammad Ajmal Khan

3 S. Javed Hashmi 4 Farasat F t Zaman Z 5 Abid Latif Lodhi 6 Saghir Ahmed 7 S. Mubashar Masood 8 Imtiaz Ahmed Butt

Lahore Electric Supply Company Limited

Objectives
To Be Profitable Within Regulated Tariff
Reduction In T & D Losses Reduced Tripping Cost Reduction By Improving Productivity

Improvement In Recovery Excellence In Customer Services Knowledge g Workers Through g Continuous Trainings g

Lahore Electric Supply Company Limited

KeyInitiatives
Cascading of Performance Contract down to Individual Employee D Development l t of f Strategic St t i Business B i Plans Pl Capacity Building Plan for Operation Circles / Divisions as SBU Distribution Management System based on SCADA and GIS Implementation of ERP Project Implementation of AMR Pilot Project Establishment of Call Center (118) Initiative for Demand Side Management g

Lahore Electric Supply Company Limited

ForecastingAssumptions
Description Sales Growth T & D Losses Maximum Demand Collection A/R Turnover (in days) Tariff Subsidy Collection FY 08* -1.30% 0.15% 1.9% 98.45% 43 134% FY 09* -4.34% 0.43% -2.4% 95.90% 39 46% FY 10* 5.42% 0.50% 15.5% 93.22% 55 39% FY 11 13.06% -0.7% 5.9% 99.00% 40 100% FY 12 7.00% -0.50% 7.0% 99.00% 37 FY13 7.40% -0.52% 7.4% 99.00% 34 -

Lahore Electric Supply Company Limited

InvestmentPlan
FY201011

Mln. Rs
Description STG DOP ELR SCADA Others FY 08 4,621 400 500 318 FY 09 2,884 500 500 602 FY 10 3,661 400 500 561 FY11 4,918 500 500 561 FY 12 6,639 550 700 1500 586 FY 13 4,208 600 700 1399 520

STG - Secondary Transmission and Grid DOP - Development of Power ELR - Energy Loss Reduction

Lahore Electric Supply Company Limited

GST, ED,Ptv Fee, NJS

1.33

GOP
Energy Pol licy

Market / Consumers/ Service Territory y

Consumer Eligibility Criteria
7.44
GOP Notified Tariff

Subsidies

1.83

GOP
Appointment

GOP Guidelines

OGRA

NEPRA
Distr ribution Lice ensees
(9.27) Regulated Tariff (1.0 + 8.17) DM + PPP Investment Program Consumer Service Manual Performance Standard Power Acquisition Program
PPAs

BODs C CEO & EM MT

Regulato ory Contracts

Integrat ted Power Plan

Power Market Stages As per NTDC License Generation Licensees

After 2009 / COMD

Oil & Gas Pricin ng

Energy Plan

PPAs

Generation Licensees
2004 09 /Single Buyer Plus
PPAs

Energ Supply Energy S ppl Agreements

Generation Licensees
Before 2004 / Single Buyer
PPAs

Transmission Licensee / NGC (TNO,SO,MO& ( O,SO, O& CRPEA) C )-C CPPA

Lahore Electric Supply Company Limited

KeyPerformanceIndicators
Description No. of Consumer (Mln.) Avg. Peak Demand, MW Units Purchased, GWh Units Sold , GWh Losses, % NEPRA Target Variance from NEPRA Collection Ratio % AT&C Losses NEPRA Target Var. from NEPRA Revenue lost for the Var. SAIFI (Nos.) SAIDI (Minutes) FY 08 2.9 3,440 15,795 13,766 12.85% 12.50% -0.35% 98.45% 86% 88% 2% % 1,161 67 3 960 3,960 FY 09 3.0 3,158 15,184 13,168 13.28% 12.30% -0.98% 95.92% 83% 88% 5% % 4,067 100 6 847 6,847 FY 10 3.18 4,069 16,100 13,881 13.78% 12.00% -1.78% 93.22% 80% 88% 8% % 9,817 39 2 745 2,745 FY11* 3.31 4,307 18,044 15,694 13.02% N/A N/A 99.00% 86% N/A N/A N/A 38 2 600 2,600 FY12* 3.47 4,608 19,196 16,792 12.52% N/A N/A 99.00% 87% N/A N/A N/A 35 2 450 2,450 FY13* 3.64 4,949 20,495 18,035 12.00% N/A N/A 99.00% 87% N/A N/A N/A 33 2 300 2,300

Lahore Electric Supply Company Limited

BreakDownofRevenueRequirement
Description A O&M B Depreciation C D E F RORB Gross DM (A+B+C) Other Income Net DM (D E)

RORB - Return on Regulatory Assets Base DM Distribution Margin

Lahore Electric Supply Company Limited

CostBehaviorofPPP+DM
Cost Component P Power P Purchase h Price Pi Capacity Transfer Charge Energy Transfer Charge Use of System Charge Distribution Margin O&M Depreciation RORB Other Income Fixed Fixed Fixed Semi Variable Semi-Variable Presently 5% of total Revenue Requirement is allowed to be recovered through fixed component (MDI x Rs / kW / Month) of tariff and 95% through variable component (Rs. / kWh). This needs to be rationalized. Fixed Variable Fixed MDI, Capacity Costs of Generation system Plant Availability, GWh, Fuel Mix, Fuel Prices MDI, Transmission Costs of NTDC Nature Remarks

Lahore Electric Supply Company Limited

Key yPerformanceIndicators
Continued
Description RORB Mln. RORB, Mln Rs. Rs (with PYA) RORB, % RORB by NEPRA O&M, , Mln. Rs. O&M, Rs/kWh O&M by NEPRA Other Income, Mln. Rs. Other Income,% of sales Other Income by NEPRA DM, Mln. Rs.
(with PYA) (with PYA)

FY 08 (9 643) (9,643) -120.46% 7,270 , 0 0.53 2,834 4.15% (4,172) 6 11% -6.11% 68,277 4.96 -

FY 09 106 1.17% 12,379 10,304 0,30 0.78 8,002 3,765 4.18% 2,890 7,809 6 96% 6.96% 18,652 90,006 6.84 99,421

FY 10 5 312 5,312 50.10% 15,080 9,364 9,36 0.67 9,041 4,211 3.27% 4,177 12,137 9 43% 9.43% 21,305 128,669 9.27 132,461

FY11* 2 546 2,546 17.79% N/A 11,448 , 8 0.73 N/A 4,510 3.23% N/A 17,349 12 44% 12.44% N/A 145,492 9.27 N/A

FY12* 3 875 3,875 17.79% N/A 12,754 , 5 0.76 N/A 5,018 2.89% N/A 13,946 8 04% 8.04% N/A 173,398 10.24 N/A

FY13* 5 123 5,123 17.79% N/A 14,366 ,366 0.80 N/A 5,589 2.67% N/A 16,650 7 95% 7.95% N/A 209,406 11.61 N/A

DM as % of sales DM by NEPRA (with PYA) Sales Rev., Mln. Rs. Sales Rev., , Rs/kWh Sales Rev. by NEPRA

PYA Prior Period Adjustment (Due delay Tariff Determination & Notification
Lahore Electric Supply Company Limited

KeyPerformanceIndicators
Continued
Description RORB, Mln. Rs. (with PYA) RORB by NEPRA (with PYA) O&M, Mln. Rs. O&M, Rs/kWh O&M by NEPRA Other Income, Mln. Rs. Other Income,% of sales Other Income by NEPRA DM, Mln. Rs. (with PYA) DM as % of sales DM by NEPRA (with PYA) Sales Rev., Mln. Rs. Sales Rev., Rs/kWh Sales Rev. by NEPRA FY 08 (9,643) 7,270 0.53 2,834 4.15% (4,172) -6.11% 68,277 4.96 FY 09 106 12,379 10,304 0.78 8,002 3,765 4.18% 2,890 7,809 6.96% 18,652 90,006 6.84 99,421 FY 10 5,312 15,080 9,364 0.67 9,041 4,211 3.27% 4,177 12,137 9.43% 21,305 128,669 9.27 132,461 FY11* 2,546 N/A 11,448 0.73 N/A 4,510 3.23% N/A 17,349 12.44% N/A 145,492 9.27 N/A FY12* 3,875 N/A 12,754 0.76 N/A 5,018 2.89% N/A 13,946 8.04% N/A 173,398 10.24 N/A FY13* 5,123 N/A 14,366 0.80 N/A 5,589 2.67% N/A 16,650 7.95% N/A 209,406 11.61 N/A

PYA Prior Period Adjustment (Due delay Tariff Determination & Notification
Lahore Electric Supply Company Limited

FinancialSummary(1/3)
Description Rs./kWh PPP Adjusted PPP Unadjusted Distribution Margin Prior Period Adj. Total A t lR Actual Revenue Variance, Rs/kWh Sales Revenue + GOP Subsidy + Other Operating Inc. - PPP - Operating Expenses + Non-operating Inc. - Fin. & other Exp. EBT ( (with PYA) ) Taxes Net Income 5.26 4.59 0.50 5.77 4 96 4.96 (0.81) 65,612 65 612 2,665 845 72,449 7,270 1,989 2,411 (11,020) ( , ) (11,020) 6.24 5.41 0.71 6.95 6 84 6.84 (0.12) 75,185 75 185 4,821 946 82,197 10,304 2,819 1,421 (151) ( ) (151) 8.40 7.24 0.63 0.84 9.86 9 27 9.27 (0.59) 95,154 95 154 33,516 877 116,532 9,364 3,334 1,877 5,108 , 5,108 8.17 7.10 0.72 0.38 9.27 9 27 9.27 116,772 116 772 28720 958 128,142 11,448 3,552 2,207 8,203 , 8,203 9.50 8.31 0.83 10.33 10 33 10.33 173,398 173 398 1,085 159,452 12,754 3,934 3,397 2,813 , 2,813 10.69 9.41 0.92 11.61 11 61 11.61 209,406 209 406 1,214 192,757 14,366 4,375 4,015 3,859 , 3,859 FY 08* FY 09* FY 10* FY 11 FY 12 FY 13

Income Statement Summary (Mln Rs.)

Lahore Electric Supply Company Limited

FinancialSummary(2/3)
Description Balance Sheet Summary Net Fixed Assets Work-in-Progress Other LT Assets Trade Debts Subsidy Receivables Other Current Assets Total Assets Long-term debt Other long-term Liabilities Current Liabilities Total Liabilities Equity Li biliti + Equity Liabilities E it 21 311 21,311 2,130 51 7,686 19,731 50,908 , 1,337 40,910 10,385 52,633 (1,725) 50 908 50,908 26 092 26,092 2,645 75 8,113 11,026 19,507 67,458 , 1,140 48,566 19,629 69,334 (1,876) 67 458 67,458 29 836 29,836 2,371 85 14,400 23,745 24,111 94,549 , 1,443 45,785 44,090 91,317 3,231 94 549 94,549 37 666 37,666 4,162 96 15,855 23,596 81,376 , 2,712 47,727 19,502 69,941 11,435 81 376 81,376 47 716 47,716 5,308 109 17,589 29,224 5,985 50,626 29,087 85,699 14,247 56 350 56,350 4,879 122 19,683 35,264 7,113 53,381 37,698 98,192 18,106 FY 08* FY 09* FY 10* FY 11 FY 12 FY 13

99,946 , 116,298 ,

99 946 116,298 99,946 116 298

Lahore Electric Supply Company Limited

FinancialSummary(3/3)
Description Cash-flows Summary CF Operating Activities Capital Expenditure CF Investing Activities Debt Repayment New Long-term Long term Loans CF Financing Activities Key Ratios Operating Profit Margin -16.14% Operating Expense as % of 10.65% Sales Interest Coverage Ratio (with PYA) (7.00) Self-financing g Ratio % (1.32) ( ) Trade Debt Turnover 9.77 Fixed Asset Turnover 3.20 Long Term Debt to Equity (0.81) Total Liabilities to Assets 0 83 0.83 -0.17% 9.73% 0.41 0.17 11.39 3.45 (0.73) 0 74 0.74 4.36% 8.00% 26.00 2.05 11.43 4.31 0.52 0 50 0.50 5.88% 8.21% 7.85 0.90 9.22 3.70 0.26 0 62 0.62 1.62% 7.36% 3.65 0.48 10.37 3.63 0.44 0 57 0.57 1.84% 6.86% 4.05 0.38 11.24 3.72 0.41 0 52 0.52 (5,286) 4,704 (4,702) (2,281) 1,029 15,229 860 6,461 (6,485) (58) 35 5,276 11,138 5,143 (5,153) (233) 535 (4,021) 6,927 11,503 (11,515) (233) 1,502 1,351 4,800 13,531 (13,543) (233) 3,508 6,686 4,574 10,955 (10,968) (235) 1,399 5,574 FY 08* FY 09* FY 10* FY 11 FY 12 FY 13

Lahore Electric Supply Company Limited

BusinessPlan201011
SnapShot Customer, , Tariff and Sales Structure
Description Annual MkWh % MkWh Number of customers (Mlns) Average Tariff - Business Plan (Rs/kWh) Average Notified Tariff (Rs/kWh) GOP Tariff Subsidy (Rs/kWh) Residential Industrial Commercial 6 011 6,011 38% 2.69 9.32 6.23 3.09 6 568 6,568 42% 0.07 8.90 7.91 0.99 1 282 1,282 8% 0.49 12.71 11.30 1.40 Others (Agri, etc) 1 833 1,833 12% 0.05 8.02 7.08 0.94 Total 15 694 15,694 100% 3.31 9.27 7.44 1.83

Lahore Electric Supply Company Limited

Tariff Petitions & Determinations History

Description Petition filing date Petition Period Date of Determination Basis of Determination Review Motion Notification Date Effective Notification 2004 -05 Jun-03 Annual 02-07-04 Petition 2003 Filed No SRO 1064 of 2003 2005-06 29-04-05 Multi-Year (MYT) No N/A 2006-07 No Petition N/A 23-02-07 MYT Petition dt. 29-04-05 Filed 24 02 07 24-02-07 2007-08 No Petition N/A 10-01-08 Review Motion 2006-07 No No 2008-09 16-06-08 Annual 2009-10 09-04-09 Annual 2009-10 31-12-2010 2nd, 3rd, 4th Qtrs 19-04-10
(2nd Qtr)

29-09-08 & 10-12-09 04-09-09 (1st Qtr) Petition Petition 2008-09 2009-10 No 12 11 08 12-11-08 Filed 21 12 2009 21-12-2009

Petition 2009-10 NO NO SRO 1129 of 2009

N/A N/A SRO 1064 of 2003

SRO 1064 SRO 157 of 2003 & of 2007 SRO 157 of f 2007 4 Months No for Recovery recovery y of DRR of DRR

SRO 157 of SRO 1180 2007 & of 2008 & SRO 1180 SRO 1129 of f 2008 of f 2009 7.5 Months for recovery y of DRR

Available No No Recovery Period Recovery Recovery of DRR of DRR

No No Recovery of Recovery of DRR in 1st DRR Qtr

Note: - The DRR could only be recovered for a period of 11.5 months against total period of 66 months (2004 to 2nd Qtr 2010)

Th k Thanks
Lahore Electric Supply Company Limited

InvestmentPlan
FY201011
Description STG- Budget, Rs Mln. STG Capitalized-% Physical Target Achievement -% DOP- Budget, Rs Mln. Capitalized-% Physical Target Achievement -% ELR-Budget, Rs Mln. p Capitalized-% Physical Target Achievement -% SCADA- Budget, Rs Mln. FY 08 4,621 22% 64 25% 400 100% 270 200% 500 106% 1,790 94% FY 09 2,884 67% 29 76% 500 107% 270 93% 500 102% 1,790 72% FY 10 3,661 64% 43 73% 400 97% 370 93% 500 83% 630 97% 86% FY11 4,918 90% 90 (Qtr-1) 500 90% 780 80% (Qtr-1 500 90% 1,350 80%(Qtr-1) 1500 1399 700 90% 1,210 700 90% 1,220 550 90% 385 600 90% 440 FY 12 6,639 90% 87 FY 13 4,208 90% 71

Lahore Electric Supply Company Limited

ForecastingAssumptions
Description O & M Expenses Depreciation Distribution Equipment Office Buildings Vehicles Office Equipments Collection from Customers Payable to CPPA Other Income Interest Rates Borrowing Terms 55 days 107 days Baseline FY 11 22% FY 12 11% FY13 13%

3.50% 02 00% 02.00% 10.00% 10.00% 40 days 25 days 7%

3.50% 02 00% 02.00% 10.00% 10.00% 37 days 36 days 11%

3.50% 02 00% 02.00% 10.00% 10.00% 34 days 41 days 11%

15% for Local & 17% for Foreign Loan 7 Years for Local Loan and 15 Years for Foreign Loan

Lahore Electric Supply Company Limited

BusinessPlan201011
SnapShot

A. MkWh Purchased (NTDC)

Description MkWh % Growth in MkWh Aug-10 1,793 4.1% 12 month average 1,342 6.03% 2009-2010 Actual 16,100 6.03% 2010-2011 Goal 18,044 12.1%

B. MkWh Served to Customers

Description MWh % Growth in MWh Aug-10 1,777 4.1% 12 month average 1,341 6.54% 2009-2010 Actual 16,089 6.55% 2010-2011 Goal 17,863 11.0%

Lahore Electric Supply Company Limited

BusinessPlan201011
SnapShot C. Billed to Customers
Description MkWh % Growth (MkWh) Rupees Million % Growth (Rs Mln.) Aug-10 1,514 4.5% 12,712 44.9% 12 month average 1,157 5.4% 7,921 28.0% 2009-2010 Actual 13,881 5.42% 95,055 28.0% 2010-2011 Goal 15,694 13.1% 116,850 22.9%

D. Collected from Customers

Description MkWh % Growth (MkWh) Rupees Million % Growth (Rs '000) 000) Aug-10 1 394 1,394 14.6% 12,0487 61 5% 61.5% 12 month average 1 078 1,078 0.90% 7,530 23 39% 23.39% 2009-2010 Actual 12 940 12,940 0.90% 90,359 23 39% 23.39% 2010-2011 Goal 15 537 15,537 20.1% 115,682 28 0% 28.0%

Lahore Electric Supply Company Limited

BusinessPlan201011
SnapShot E. Collection Ratio
Description MWh collected (D)/MWh Purchased (A) - %age Rs. collected (D)/Rs Billed (C) - %age Aug-10 77.75% 94.8% 12 month average 10.12% 3.68% 13.8% 12 month average 426 0.37 0.67 12 month average 80.36% 95.1% 2009 2010 2009-2010 Actual 80.37% 95.1% 2009-2010 Actual 10.15% 3.65% 13.8% 2009-2010 Actual 5,107 0.37 0.67 2010 2011 2010-2011 Goal 86.11% 99.0% 2010-2011 Goal 10.0% 3.0% 13.0% 2010-2011 Goal 8,203 0.52 0.73

F. Energy Losses
Description Technical Losses Non-Technical Losses Total Losses Aug-10 12.12% 3.48% 15.6% Aug 10 Aug-10 2,458 1.62 0.55

G. Financial Health
Description Net Margin (Rs.Million) Margin per kWh O&M Costs (Rs/kWh) Cash In Transit

Lahore Electric Supply Company Limited

BusinessPlan201011
SnapShot H. Reliability
Description DEC (duration of outages) SAIDI FEC (frequency of outages) - SAIFI Aug-10 245.80 3.90 12 month average 234.90 3.30 2009-2010 2009 2010 Actual 2,744.52 39.41 2010-2011 2010 2011 Goal 2,607.00 37.43

I. Productivity
Description MkWh Billed/employee Bill d/ l Customers Billed/employee Aug-10 0 75 0.75 164 12 month average 0 75 0.75 164

J. Customer Satisfaction
Description Numbers of customers served Cl i /C t Claims/Customers Aug-10 3.2 Mln. 0 01 0.01 12 month average 3.2 Mln. 0 01 0.01

Lahore Electric Supply Company Limited

PerformanceContract
Indicators&Targetsfor201011 Operational & Commercial
KPIs Line Losses Collection Ratio Transformer Failure Rate Line Failure Rate < 20 Minutes Line Failure Rate > 20 Minutes Defective Meters (7 (7-12 12 months as % of total) 2009-10 Target 13.7% 100.0% 4.00% 250.0 46.0 5 0% 5.0% 2009-10 Actual 13.8% 93.2% 3.73% 232.1 47.5 14 3% 14.3% 2010-11 Goal 13.0% 99.0% 3.75% 225 45.0 5 0% 5.0%

Lahore Electric Supply Company Limited

PerformanceContract
Indicators&Targets Financial Performance
KPIs Cash In Transit (Monthly Average) O & M Expenses (Rs. (Rs / kWh) 2009-10 2009 10 Target 10.0% 0 81 0.81 2009-10 2009 10 Actual 5.91% 0 67 0.67 2010-11 2010 11 Goal 9.0% 0 77 0.77

Capital Expenditure Project Implementation

KPIs Capitalization (Completion of A-90) Capital Expenditure Secondary Transmission & Grids Distribution of Power Energy Loss Reduction Rural Electrification 90% 90% 90% 90% 50% 97% 99% 99% 90% 90% 90% 90% 2009-10 Target 70% 2009-10 Actual 79% 2010-11 Goal 80%

Lahore Electric Supply Company Limited

PerformanceContract
Indicators&Targets Customer Relations Management
KPIs New Connection Customer Facilitation Efficiency of Supply Compliant Resolution Efficiency of Billing Complaint Resolution 2009-10 Target 100 00% 100.00% 95.00% 100.00% 100.00% 2009-10 Actual 85 42% 85.42% 95.00% 95.57% 100.00% 2010-11 Goal 100 00% 100.00% 96.00% 100.00% 100.00%

Lahore Electric Supply Company Limited

PerformanceContract
Indicators&Targets

Human Resource Management

KPIs Officers Strength Occupancy R ti Ratio Staff Strength Occupancy Ratio Resolution of Disciplinary Cases % of Officers Trained % of Staff Trained 2009-10 Target 98.18% 85.22% 54.15% 69.23% 15.95% 2009-10 Actual 95.25% 83.01% 58.36% 58.06% 15.03% 2010-11 Goal 95.33% 79.33% 80.00% 24.86% 12.28%

Employee y Safety y
KPIs No. of Accidents Fatal No. of Accidents Non Fatal 2009-10 Target 0 24 2009-10 Actual 12 26 2010-11 Goal 0 24
Lahore Electric Supply Company Limited

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Lahore Electric Supply Company Limited

Components of Power Purchase Price

Rs / kWh Sold Rs.

ActionPlanForEnhancementofRecovery y
2010 11
Figures in bn. Rs.

FY 2010-11

Billing g 175

Recovery y 173

%age g 99

Action Plan to Achieve the Target

94% of Billing 80% of f Govt G t Arrear A 10% of Disconnected Arrear 70% of Running Defaulters 80% of Govt. Subsidy (Agri.+GST) 10% of Deferred Amount Total 165.00 3 90 3.90 0.20 2.17 1.89 0.18 173.32
Lahore Electric Supply Company Limited

ForecastingAssumptions
Description Sales Growth T & D Losses Maximum Demand Collection A/R Turnover (in days)
( ith PYA) WACC/RORB (with

FY 08* -1.30% 0.15% 1.9% 98 45% 98.45% 43 -120.46% 120 46% 134%

FY 09* -4.34% 0.43% -2.4%

FY 10* 5.42% 0.50% 15.5%

FY 11 13.06% -0.7% 5.9%

FY 12 7.00% -0.50% 7.0%

FY13 7.40% -0.52% 7.4%

95 90% 93.22% 95.90% 93 22% 99.00% 99 00% 99.00% 99 00% 99.00% 99 00% 39 1 17% 1.17% 46% 55 40 37 34

50 10% 17.79% 50.10% 17 79% 17.79% 17 79% 17.79% 17 79% 39% 100% -

Tariff Subsidy Collection

Lahore Electric Supply Company Limited

Growth of Units Sold

UnitsSoldGWhandGrowth%
13 .1% 15,694

6.5%
10.6 %

1 .3% 13,766 4 .3% 13,168

5 .4% 13,881

13,947

13,089

2006

2007

2008

2009

2010

2011

Sale of Power to Taxes & Duties

(Historical Trend 2006-2010)
2010 20 0

95,154 100% 75,185 100% 65,612 100% 61,823 100% 55,381 55 381 100%
20,000 40,000

20,876 22% 16,831 22% 10,961 17% 10,168 16% 9,765 18%

116,030(Mill) 92,016(Mill) 76,574(Mill) 71,991(Mill) 65,146(Mill)

2009

2008

2007

2006

60,000

80,000

100,000

120,000

140,000

SoPBilling

Taxes&Duties

Sale of Power to Taxes & Duties

2011 2010 2009 2008 2007 2006

139,509 100% 95,154 100% 75,185 100% 65,612 100% 61,823 100% 55,381 100%
20,000 40,000

30,919 22% 20,876 22%

170,429 , (Mill) ( )

116,030 (Mill) 92,016(Mill) 76,574(Mill) 71,991(Mill) 65,146(Mill)

16,831 22% 10,961 17% 10,168 16% 9,765 18%

60,000 80,000 100,000 120,000 140,000

160,000

180,000

SoPBilling

Taxes&Duties

TO K.S.KAKU FROM REWAT TO SHAMKEY RACHNA TOWN SHAHDARA SCARP SHAHDARA P/H RUSTAM NEW SHAHDARA UIS

L A H O R E RING
RAVI B.BAGH KHOKHAR ROAD BHOGI WAL

MPB EMCO TO GATTI

G.VIEW DESCON

NEW SHALIMAR 220kV SHALIMAR SHALIMAR-II DAROGHA WALA / (M.PURA-II) PRESS COLONY FATEH GARH MOMIN PURA BATA PUR

LAHORE

S.WALA GATE BHATIGATE FORT

WASAN PURA

CHAHMIRAN

MOCHIGATE SAGGIAN M.ROAD SANDA RIWAZ GARDEN SUNNYVIEW GULSHAN RAVI QARTABA SHADMAN SABZAZAR SAIDPUR IQBAL TOWN NEW G. TOWN THOKKAR BALLOKI P/H REHMAN PARK GULBERG LAHORE CANTT AIR PORT P.W.R

GHAZI ROAD NEW

BARKI DHA PH-VI DHA PH-VII RIA GOLF

WALLINGTON MALL WALTON ROAD (AIR PORT) INAYAT PURA (STATE LIFE H/S) SPRING MEDOWS

PUNJAB UNIV. JOHAR TOWN-II JOHAR TOWN MODEL TOWN MODEL TOWN SOCITY OLD KOT LAKHPAT EME LEFO P. UNIV. H. S. TOWN SHIP WAPDA TOWN DHA REHBAR BAGHRIAN NEW KOT LAKHPAT

CHUNG

FEROZ PUR RD.

PACKAGES

EXISTING
GRIDS
500KV 220KV 132KV 66KV HYDEL STATION THERMAL STATION

LEGEND PROPOSED
GRIDS LINES

LINES

JUBLI TOWN (SUKH CHAIN) MULTAN RD BAHRIA TOWN

KAKEZAI TOWN (AUD & ACC) K.E MEDICAL H/S

KAHNA NAU CENTRAL PARK DWN D.M C.E G.M

AWT (KOTBAGH)

FIZAIA H/S CHINAR BAGH JAPAN P/H

TO LULYANI LAHORE NEW

SHAHID MAHMOOD M. WASEEM YOUNUS JAVID IQBAL ABDUL MAJID MALIK

N. T. D. C G. M. PLANNING POWER L E S C O ELECTRICAL NETWORK (Geographical)

DRG# GMPP/Geog/L/004B
DATE 03-07-09

COCA COLA

JURISDICTION & CONSUMERS

Jurisdiction&Consumers
5Di Districts, t i t 3 3.2 2Millions Milli C Consumers

NANKANA

0.41M

0.38M

Total Consumers 3.21 Millions Lahore Electric Supply Company Limited

CustomerSatisfaction
RegionalCustomerServicesCenters

1 2 3 4 5

LESCO HQ Lahore Ravi Road Lahore Ichhra Lahore Sh l Shalamar Lahore L h Defence Lahore

6 7 8 9 10

Town Ship Lahore A I Town Lahore A.I.Town Kasur Ok Okara Sheikhupura

Lahore Electric Supply Company Limited

CustomerSatisfaction
PrimeFunctionsofCustomerServicesCenter

Correction and Adjustments of Bills Immediate Correction of Wrong Reading Extension in Due Date of Electricity Bills Installments of Bills Duplicate Bills N New A li ti Forms Application F

Lahore Electric Supply Company Limited

TO G.H.RD SUKHEKI K.K. DOGRAN JANDIALA SHER KHAN FAROOQ ABAD SANGLA HILL SAFDAR ABAD SABA P/H MACHIKAY SKP (Indst) CKM MURIDKE SAPHIRE 225MW AYESHA ICI I.C.I PUB Y. ST.

FROM MANGLA CKM CCPP

FATEH PURI / MURIDKEY

TO NAROWAL NARANG K.K.RD.

P/H

ITHAD.C

ATTABAD 225MW

(W/SOHAIL) FEROZ WATTWAN TO SITTARA TXT./ NISHATABAD TO JARANWALA / BUCHEKI MOHLAN THATTA ISMAIL SHAH KOT MANAWALA NANKANA SAHIB WAR BURTON

ASSOCIATED GROUP SHARQ PUR ZTM MANGA

LAHORE RING
SUNDER

TO NISHATABAD TO JARANWALA/ MOHLAN

BUCHEKI TO JARANWALA 225MW ORIENT RENTAL JUMBER DOULA CHOCHAK SADAR GOGERA RENALA KHURD CHAK - 29 OKARA CITY-I QADIRABAD (MEPCO) SHER GARH HABIBABAD (WRR) BHAI PHERU

SARFRAZ NAGAR

K.NOOR P/H SEPCOL P/H LULYANI KASUR-II PAKAGES-II

200MW

ALI J JAJ J

PATTOKI CHUNIAN

NISHAT 200MW CHUNIAN NISHAT POWER 200MW KHUDIAN MANDI USMAN WALA THIANG MORE (ELLAHABAD) KANGANPUR

KASUR

TO ARIFWALA DARBAR ISMAIL

OKARA CANTT

O.CITY-II

BONGA HAYAT (MEPCO)

SAIF 225MW

CHAK 40 - D BASIRPUR

MANDI AHMADABAD

EXISTING
GRIDS
500KV

LEGEND PROPOSED
GRIDS LINES

LINES

HAVALI

220KV 132KV 66KV HYDEL STATION THERMAL STATION

DWN D.M C.E G.M

SHAHID MAHMOOD M. WASEEM YOUNUS JAVID IQBAL ABDUL MAJID MALIK

N. T. D. C G. M. PLANNING POWER L E S C O ELECTRICAL NETWORK (Geographical)

DRG# GMPP/Geog/L/004A
DATE 03-07-09

CustomerSatisfaction
TelephonicContactRoundTheClock

CallCentre(118) RegionalCustomerServicesCentre,allSub Divisions TollFree080000118(FreeCalls) TelephoneNumbersofDMOs&AMOson Bills Bill

Lahore Electric Supply Company Limited

CustomerSatisfaction
7MobileCustomerServicesCenter

4 MOBILE CUSTOMER SERVICES CENTRES FOR LHR. 3 MOBILE CUSTOMER SERVICE CENTRES FOR SKP SKP, OKARA & KASUR

Lahore Electric Supply Company Limited

CustomerSatisfaction
LESCOOfficialWebsite URL: http://www.lesco.gov.pk

Lahore Electric Supply Company Limited

CustomerSatisfaction
TelephonicContactRoundTheClock

DEFECTIVEMETERREPLACEMENT200910
SINGLEPHASE (Nos) 139305 THREEPHASE (Nos) 12140

DETECTIONANDRECOVERY200910
NO of Detection 51022 FIRs 6766 Units Charged g (Mkwh) 110.32 Amount Charged (MRs (MRs.) ) 930.52 Amount Recovered (MRs.) 374.66

Lahore Electric Supply Company Limited

DEFECTIVEMETERREPLACEMENT200910
SINGLEPHASE (Nos) 139305 THREEPHASE (Nos) 12140

DETECTIONANDRECOVERY200910
NOof Detection FIRs UnitsCharged (Mkwh) AmountCharged (MRs.) AmountRecovered (MRs.)

51022

6766

110.32

930.52

374.66

B k Slid Backup Slides

Lahore Electric Supply Company Limited

GridStationWorksof6th STG
CompletedDuringYear200910
Sr. No 1 Type of Work 5 New Grid Stations Capacity 26 MVA 13 MVA 40MVA 26 MVA 13 MVA L/Bay 40 MVA 26 MVA 13 MVA 26MVA Nos 3 3 1 4 1 18 3 1 34 MVA Added 157

5 Extensions

104

21 Augmentation

291 13 565

4 1 Conversion Total 32 Works Completed

Cost of Grid Stations Works Completed In 2009-10 From Own Resources (In Million Rs.) From ADB Financing (In Million Rs.) Total Cost

1669 244 1913

Lahore Electric Supply Company Limited

TransmissionLinesWorksof6th STG
CompletedDuringYear200910

Type of Work

Length In Km 39 33 72

1 132 kV New Line 2 Re-Conductoring of Lines Total

CostofTransmissionLinesCompletedin200910from OwnResources(InMillionRs.)

421

Lahore Electric Supply Company Limited

Grid Station Works Of 6th STG Planned In Year 2010-11

No. of Transformers added S.No Type of Work Capacity 40MVA 26 MVA 13 MVA 26 MVA L/Bay 40 MVA 26 MVA 13 MVA Nos 4 15 1 12 31 18 19 99 MVA Added 563 312 519 1394

1 2 3 Total

10 New Grid Stations 43 Extensions 37 Augmentation 90 Works

InMillionRs Rs.

CostofGridStationsWorksProposedIn201011
FromOwnResources FromADBFinancing FromWorldBankFinancing TotalCost 1892 1000 440 3332

Transmission Lines Works Of 6th STG Planned In Year 2010-11 2010 11 S.No Type of Work 1 132kV k NewLine i 2 ReConductoring ofLines Total LengthInKm 67 245 312

CostofTransmissionLinesPlannedin201011
(InMillionRs.)

FromOwnResources FromADBFinancing FromWorldBankFinancing TotalCost GrandTotalforGridStations+T/LinesPlannedin201011

1524 0 62 1586

4918

Grid Stations Works Of 6th STG Completed During Year 2010-11 to date
S.No 1 2 Type of Work 1 New N G Grid id Stations St ti 3 Extensions No. of Transformers added Capacity Nos 26 MVA 1 26 MVA 1 15 MVA 1 13 MVA 1 40 MVA 10 26 MVA 4 13 MVA 18 MVA Added 26 54

3 Total

14 Augmentations 18 Works Completed

192 272

CostofGridStationsWorksCompletedIn201011to Date
FromOwnResources(In MillionRs.) FromADBFinancing(In MillionRs.) FromW.BFinancing(InMillionRs.) 451 390 130

TotalCost

971

11 & 132 kV Capacitors

11kV Capacitors Installed During 2009-10 2009 10 = 151.5 151 5 MVAR 11kV C Capacitors it already l d i in th the St Stock k under d I Installation t ll ti = 304 MVAR Capacitors to be Procured under ADB (2010-11) = 96 MVAR of 132kV and 450 MVAR of 11kV.

NEWTECHNIQUESOFTHEFTOFELECTRICITY
Intherecentyear,thefollowingnewtechniquesoftheftofelectricityhavebeen detectedinLESCOparticularlyinsteelrerollingIndustryandACpremises:
ManipulatingCT/PTcircuitsofCToperatedLTMDImeteringequipmentbyinserting g devicesoperative p on433MHzfrequency q ybandwidth. RemoteControlSignal Vanishing/damagingLCDdisplayofelectrostaticmeters. ErasingdataofEPROMofelectrostaticmeterbyapplyinghighvoltagefromexternal source. Directhookingfrom11KVfeederbylayingunderground11KVcablesandutilizingown Transformers. DirecthookingfromTransformerthroughconcealedcables(underground/underwall). Burningofmetersthroughexternalsourcetoeliminatetheevidenceoftheft.

Onlyin3rd LahoreCircle29.817MillionunitsworthRs.235Millionweredetected d i last during l t14months th .

NEWTECHNIQUESOFTHEFTOFELECTRICITY
Difficulties faced during detection and recovery of detected amount charged.
Political Interference Noncooperation of Police Department during investigation regarding FIRs against the stealers of electricity (In most of the cases investigating officers were hesitant to send challan to the courts due to different reasons) Undue U d relief li f to t the th electricity l t i it stealers t l f from th Civil the Ci il Courts C t and d in i most t of f the th cases the th higher courts were approached to get the decision in favor of LESCO Lenient punishments in Electricity Act

Suggestions to Curb theft of Electricity Revision of Penalties under Electricity Act regarding theft of electricity. Setting up of LESCO LESCOs s police stations by hiring manpower from Police Department like Customs and Railways. Establishment of more Courts for speedy trials of thieves of Electricity. In case of FIR against g stealers of electricity y under section 39 A, , the investigation g report p should be signed jointly by I.O. (Investigating Officer) from Police Department and concerned XEN as Technical Expert.

ForecastingAssumptions
Description Expenses g Salaries & Wages House Acquisition Utility Allowance Repair & Maintenance Management Fees NEPRA Fee Vehicle Running All Other Expenses Other Income Sale of Scrap Meter & Service Rentals Ammortization of Deferred Income Mi Miscellaneous ll Interest Rates Borrowing g Terms Income tax
Lahore Electric Supply Company Limited

FY 11 50% Increase & 5% Increments Effect 10% 20% 3.50% 10% 15% 15% Avg. of Yearly Increase for last 3 Years 20% 15% 3.5% of Deferred Credtis Avg. g o of Yearly ea y Increase c ease for o last 3 Years 15% for Local & 17% for Foreign Loan

FY 12

FY13

15% Increase & 5% 15% Increase & 5% Increments Effect Increments Effect 5% 5% 11% 11% 3.50% 3.50% 10% 10% 15% 15% 31% 31% Avg. of Yearly Increase for Avg. of Yearly Increase for last 3 Years last 3 Years 20% 15% 3.5% of Deferred Credtis 20% 15% 3.5% of Deferred Credtis

Avg. g o of Yearly ea y Increase c ease for o Avg. g o of Yearly ea y Increase c ease for o last 3 Years last 3 Years 15% for Local & 17% for 15% for Local & 17% for Foreign Loan Foreign Loan

7 Years for Local Loan and 7 Years for Local Loan and 7 Years for Local Loan and 15 Years for Foreign Loan 15 Years for Foreign Loan 15 Years for Foreign Loan

StakeholdersAnalysis
Customers
Meetingneeds ConsistentSupply atLowPrices High Quality&ReliableService TimelyProvisionofConnections TimelyBilling QuickResponsetoComplaints

Suppliers
Timely & steady supplyofproduct Communicatefutureneeds Arriveatafair&reasonableprice Ensuretimelypayments Developpartneringrelationships

Employees
PerformancebasedRewardSystem Professionalgrowth&career development SafeWorkingEnvironment ProperlyDefinedOrganizational Structure&Roles Jobsecurity

Contractors
StandardOperatingProcedures Transparent a spa e tContract Co t actManagement a age e t TimelyPayments DisputesSettledWithoutDelays EasyAccesstoWorkSite DevelopPartneringRelationship

Regulator
LicenseObligations Compliant Good Go Governance e a ce MeetwithPerformanceand OperatingStandards Compliancewithinformationand regulatoryrequirements

Government
SupportaBroaderEconomicagenda Realize ea ehigh g value a uefor o its tsassets Provideinfrastructuretoattract investors Demonstrategoodcitizenship

Investors

Community
ProtecttheEnvironment PublicSafety ProvideSupportinTerms of: Projects LocalSourcing Education
Lahore Electric Supply Company Limited

ReturnonInvestment PredictableRegulatoryStrategy FreedomtoPursueBusiness Objectives

TOP3BESTCIRCLES(Losses)
Circles Units Received Units Billed % Age g Loss

SKP EASTERN NORTHERN

2547.36 2083 50 2083.50 2633.05

2272.75 1822 27 1822.27 2291.54

10.8 12 5 12.5 13.0

TOP 3 WORST CIRCLES (Losses)

KASUR OKARA CENTRAL 1708 70 1708.70 1214.83 2771.17 1366 75 1366.75 1009.32 2334.05 20 0 20.0 16.9 15.8

TOP3BESTDIVISIONS(Losses)
MkWh

Divisions CITY SKP GULBERG MCLEOD ROAD

Units Received

Units Billed

% Age g Loss

626.44 770 92 770.92 357.23

584.81 707 09 707.09 324.25

6.6 83 8.3 9.2

TOP 3 WORST DIVISIONS (Losses)

K R KISHAN K.R. KASUR RURAL CHUNIAN

152 62 152.62 419.70 376.02

115 00 115.00 325.22 292.49

24 6 24.6 22.5 22.2

TOP3BESTCIRCLES(Recovery)
Circles Billing g Collection % Age Collection

SKP SOUTHERN CENTRAL

17577.56 19939 20 19939.20 21195.23

16646.36 18877 90 18877.90 19735.72

94.70 94 68 94.68 93.11

TOP 3 WORST CIRCLES (Recovery)

OKARA KASUR EASTERN 7113 69 7113.69 10069.05 16235.91 6476 29 6476.29 9201.49 14917.32 91 04 91.04 91.38 91.88

TOP3BESTDIVISIONS(Recovery)
Divisions Billing g Collection % Age Collection

Defence Road Muridke Shahkot

5336.53 4393 79 4393.79 1391.60

5232.69 4302 52 4302.52 1332.25

98.05 97 92 97.92 95.74

TOP 3 WORST DIVISIONS (Recovery)

Ch i Chunian Hujra Depalpur 1984 78 1984.78 1493.91 1755.92 1739 65 1739.65 1317.14 1554.88 87 65 87.65 88.17 88.55