Group Members Name

Khawaja Danish Farooq

Id:BB26119
Course
Organization Ethics and Advanced Communication
Course Code
EGL502
Submitted To
Sir. Muhammad Bilal
Topic
Organizational Ethics Of K-Electric(KESC)
(Report on KESC about their Policies, Strategies, Practices & Procedure)

1
History
On 13 September 1913 Karachi Electric Supply Corporation (KESC) was incorporated
under the now repealed Indian Companies Act, 1882 (currently Companies
Ordinance, 1984). In 1952, the Government of Pakistan took control of the Company
by acquiring majority shareholding of KESC.

Timeline:

1913:

On September 13th, 1913, a company was formed to meet the power needs of a
small port town called Karachi.

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1913 -1946:

From day one, KESC served its consumers with the utmost zeal, growing quickly with
the growing city.

1947 1951:

As Pakistan became a reality, Karachi saw a sudden surge in population and power
demand also increased rapidly.

1952:

KESC was nationalized by the Government of Pakistan in order to facilitate the much
needed investment in its infrastructure.

1953 1980:

To meet the growing industrial, commercial and residential demand, eight new
generating plants were added, with a total capacity of 513 MW.

1981 2000:

KESCs flagship Bin Qasim 1 was added to the generation fleet. KESC was first placed
under WAPDAs control and later the Pakistan Army took over the companys
management.

2005:

KESC was privatized with the government retaining a stake of approximately 26%,
while 71% was transferred to a foreign consortium.

2009:

The new management, led by the Abraaj Group, took charge and the turnaround
story began.

Vision
To restore and maintain pride in KE, Karachi and Pakistan.

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Mission
Brightening lives by building the capacity to deliver uninterrupted, safe and
affordable power to Karachi cites.

Value
At K-Electric, our employees are the key driver of our success. This ethos is reflected
in our values CARES which define our corporate culture.

K-Electric CARES their customer & gives her a value in corporate culture.

Customer Centric:
We aim to satisfy our customers and all our stakeholders by anticipating their needs
and delivering the best possible solutions and services.

Accountable:
We take ownership, initiative & responsibility for all our actions and we are honest
and fair in all our dealings.

Respectful:
We respect each other in all aspects and support our communities for societal and
environmental well being.

Energized:
We are energized to inspire and empower our people to add real value for all
stakeholders.

Safe:
We ensure that safety remains our top priority in all our operations and behaviors.

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Introduction
The Karachi Electric Supply Company Limited was in corporate on 13th September
1913 under the Indian Companies Act, 1882 as amended to date Wide the
Companies Ordinance 1984.

The Government of Pakistan took control of the Company by acquiring majority

shareholding in 1952.

The licensed area of KESC is spread over entire Karachi and its suburbs up to Dhabeji
and Gharo in Sindh and over Hub, Uthal, Vindhar and Bela in Baluchistan.

The privatization of the Company has been finalized in November 2005 with the
transfer of 73% shares of Government of Pakistan along with Management Control to the
new owner via M/s KES Power & others.

KESC has been established for 100 years. It was established even before the creation
of Pakistan in .7. It came into existence on September 13, 1913 uncle the Indian
Companies Act of 1882 and was nationalized in 1952 before 2. KESC was a
government organization with limited population and limited capacity generators
power supply. It was privatized in November 2005 and gradually began to grow
when in 2008 Abraj Capital took over. It slowly spread over in all the provinces and
new plants were developed. Over the years the backbones of distributional system
increased to 1100. KESC is a monopoly and therefore faces no other competition in
load shedding or transmission. It focuses on supplying Karachi and other remote
areas near to Karachi south as Uthal, Bela, Vindhar, Hub and Gharu. These remote
networks prefer KESC over other supplying companies because KESC is nearer to
thern other than the other supplying companies such as WABDA, HESCO and PESCO,
who are the supplying net + Naks for Baluchistan, Quetta etc. This network stretches
for 6500 km 2. It is currently serving 2.2 million customers. KESC provides electricity
to industrial, merdal, residential and agricultural areas.

With a staff of 11,600 people KESC is said to be one of Karachi's largest employers.
KESC is listed on all three of Pakistan's stock exchanges: the Karachi Stock Exchange,
the Lahore Stock Exchange and the Islamabad Stock Exchange.

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'To help restore Karachi to its rightful position as the City of Lights.

To generate transmit and distribute electricity for the progress and prosperity of
the city and of the country.

To exceed our customer's expectation with reliable, stable and affordable

electricity, with service to match.

To enhance the performance, health, safety and overall! well being of our people
and to strive to recognize their diversity and skills.

To improve our operational and financial performance, for the benefit of our
employees, customers and shareholders.

To generate transmit and distribute electricity for the progress and prosperity of
the city and of the country.

To exceed our customer's expectation with reliable, stable and affordable

electricity, with service to match.

To enhance the performance, health, safety and overall! Well being of our people
and to strive to recognize their diversity and skills.

To improve our operational and financial performance, for the benefit of our
employees, customers and shareholders.

To make lasting social contribution to the people of Karachi.

We Care Our Health Philosophy

Employee health is a top priority at KE, and under the We Care program employees
and their families receive preventive treatment. Regular vaccination campaigns are
run in line with the World Health Organization National Health Program and
Expanded Program for Immunization to protect employees and their families against
Hepatitis-B and other highly infectious diseases. Awareness sessions on first aid and
personal hygiene are also conducted. This program has reduced the occurrence of
diseases, lowered absenteeism, and increased employee efficiency.

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Nobody Gets Hurt Our Safety Philosophy
The Nobody Gets Hurt philosophy was adopted to provide a safe and injury-free
work environment to employees, and a safer distribution network to consumers. A
comprehensive Safety Management System was formulated and implemented on
the principles of International Standards Organization (ISO) OMS 9001, EMS 14000
and Occupational Health and Safety Assessment Specification (OHSAS) 18000, to
inculcate a safety culture throughout the organization.

Business Units are encouraged to take safety initiatives and safe behavior is
acknowledged through various awards for individuals and Business Units; violations
of safety are reprimanded. On average, more than 10,000 employees are trained
annually on topics within HSE.

Emergency Response Plans are in place for all locations of strategic importance and
all occupational accidents are investigated by the HSEQ team promptly for future
prevention.

Reaching Out to the Customers Public Safety

For the first time in Pakistan, a power utility has invested marketing dollars to
promote safety. Marketing awareness campaigns on general public safety are
conducted annually, especially during the monsoon season, through extensive
coverage in electronic, print and outdoor media. Public outreach are also organized
on an annual basis. Feedback from the campaigns has been positive, and the number
of fatalities reported has generally declined.

One can also report any electrical safety hazards here for a quick response by our
team which is active round-the-clock. Since 2011, more than 2,000 safety hazards
have been reported and resolved.

Recognition
KEs HSEQ standards have also been formally commended by its peers. These public
and prestigious acknowledgements of our commitment to HSEQ are a testament to
our continuous adherence to HSEQ throughout the organization.

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In 2016 the organization KE won the prestigious renowned ACCA-WWF award, the
National Forum for Environment & Health NFEH Environmental Excellence Award for
the seventh year running, and the National Level Safety and Fire Prevention Award.

KE is working with the Pakistan Engineering Council to develop the National Electric
Safety Code for power and telecom sectors, and has also been recognized by the
United States Agency for International Development for its safe practices.

Generation
Over the last few years, KE has enhanced its generation capacity by approximately
1,057 MW and improved its overall fleet efficiency by 23%. The organization now
generates almost 55% of the electricity it distributes through its own systems.

KEs fleet efficiency has increased from 30.4% in (Jan-Dec, 2008) to 37.1% (Jan-Dec,
2015).

Transmission & Distribution

T &D losses have been reduced to an all-time low of 22.2%.
Collection from more than two-thirds of the city stands at 92%.
61% of consumers are load shed-free.
The organization has achieved a complete roll-out of SAP IS-U, the first of its
kind in the region.
KE became the first ever distribution company in Pakistan to earn an ISO 9001
2008 certification for its Integrated Business Centers. To date, 17 IBCs and
four departments have achieved the certification.
KE has initiated an e-bill payment solution with major banks at the branch
level, aiming to eliminate manual processing, control invalid transaction
processing and improve overall data processing.

Health, Safety and Environment

Employee training on safety tools/techniques resulted in a 51% reduction in
employee accidents and an 80% reduction in asset damage (from 2010 to 2015).

Privatization

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During 2002 and 2003, incentives were introduced in preparation for KEs
privatization, which eventually finalized on 29 November 2005 with a 71% transfer of
ownership to a consortium of the Saudi Al-Jomaih Group of Companies and Kuwaits
National Industries Group (NIG), with the government still retaining around 26%
stake. The privatized consortium was unable to improve the Companys financial and
operational crisis.

Term Finance Certificates

In July 2012, KE declared that the first ever utility sector bonds issued by it, the Rs. 2
billion AZM Term Finance Certificates, were fully subscribed. The history making
venture received an overwhelming response from investors - the entire subscription
was completed within the first six weeks of the three-month period, which was
reflective of the confidence reposed in KE's certificates.

In January 2014, KE introduced Pakistans first sharia-compliant investment

certificate named, Sukuk. Like its predecessor AZM, the Sukuk certificates is also
expected to set new records in sales and add to the trust of the KE consumers.

Largest Employee Engagement Program In The History Of

Pakistan
KE declared 2012 as the Year of Turnaround, and organized AZM Tameer-e-Nau
Conference spread over 45 sessions during the year in which all its 10,962 employees
took part. The Conference was aimed at transformation of the Company mindset and
to convert the once government-controlled half-working utility into an efficient,
effective and successful entity. The AZM Conference expressed the unanimous
commitment to transform KE into a truly customer-centric private entity. The
employees pledged to reinforce the common goal to restore Karachi to its former
glory as the City Of Lights.

Power generation & transmission

By 2012, KE achieved Gross Dependable Generation Capacity of 1670 Megawatts.
The latest addition to its generation fleet took place in May 2015 when its Korangi
plant saw the addition of another Combined Cycle unit. This added another 27 MW
to the existing 220 MW that the power plant was generating. Before that, in April
2012, KEs newly constructed prime power station called Bin Qasim Power Station
No. II started to generate 560 additional megawatts when it was converted to

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Combined Cycle technology. Overall, 1057 MWs had been added to KEs installed
power generation capacity, from January 2009 to May 2015, by construction of new
power plants, improvement of existing fleet efficiency by 21.7 per cent through the
measures stated above in addition to the replacement of old machines with highly
efficient machines, timely and digital annual maintenance and overhaul of Bin Qasim
Power Station Is old units and by optimum dispatch of electricity. Reliability of the
system has been improved by reducing unit tripping by 33% and by 31% reduction in
the loss of un-served energy. KEs 180 MW GE Jenbacher Gas Engines Project has
been awarded Best Fast Track Project (Silver Award) and Best Plant in the Region
title by Asian Power Magazine.

Integrated Business Centers (IBC)

To provide one-window service to customers, KE management launched 29 IBCs
(Integrated Business Centers) across Karachi catering to all customer related issues
from new connections to bills amendment and faults repair. The IBCs were
established after clubbing maintenance centers and billing zones. In June 2011, KE
also launched Virtual IBCs after the success of IBCs for giving customers better
services. VIBCs work just like IBCs. Call Centre 118 has also been modernized
reinforced and its performance has improved, bringing the complaint attendance
time to a just few hours from the days and weeks in the past.

In addition to these, KE has also introduced Mobile IBCs especially in under-

privileged areas for on-spot bill-payment facilities and distribution of low-cost
meters among people. It has ensured a quick resolution time and received great
response from consumers.

Thought Leadership Forum

KE, in line with its vision to promote enlightened thoughts and objectivity, has
created a prestigious "Thought Leadership Forum" as a contribution towards the
development of the countries economy. Under this forum, seminars related to key
economic issues and opportunities are organized periodically focusing on logical,
implementable and contemporary perspectives aimed at sustainable economic and
social development. KE invites most respected and established thought leaders who
present their in-depth analysis of various economic issues and their solutions.
Businesspersons, corporate leaders, diplomats, media personalities and key
achievers from various walks of life are invited to attend these seminars.

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Campaigns
While describing key challenges faced by power sector, State Bank of Pakistan notes:
" Leakages in terms of theft and inefficiencies at the generation and transmission
stage must be seriously addressed. In this regard, the example of a privatized KE is
insightful: this utility has shed surplus staff (despite stiff union opposition); has cut
power supply of unpaid bills (even for high-profile government agencies); has
invested in more efficient generation units; and has formulated a commercially
driven load-shedding schedule. As a result, the situation is quite different in Karachi
compared to the rest of the country. In May 2015, KE launched a mega campaign
against defaulters and power thieves called Operation Burq. Working in tandem
with law enforcement agencies, teams were appointed to collect payments, register
cases against non payers, and reduce losses through actively chasing defaulters. TV,
print, and social media campaigns were run to bring people into the loop about the
campaigns results. This campaign continued successfully till July of the same year
having had an aggressive approach. After the success of Operation Burq in 2015,
Operation Burq II was launched in January 2016. The bill against electricity theft and
default which was passed in the Assembly armed KE teams this time to deal with the
perpetrators according to the law. TV, print, and digital media campaigns kept the
consumers apprised with the progress of the Operation.

Project Ujala is an effort that KE is carrying out all across Karachi to bring an end to
power theft and bring about a positive change in the lives of thousands of people by
spreading Ujala (brightness) in their lives. Through the implementation of kunda-
resistant Aerial Bundled Cabling, distribution of low-cost meters to low income
communities KE is on the mission to light up Karachi household by household. It aims
to work towards a better livelihood, reliable supply of electricity with consistent
voltage for its consumers, and to spread Ujala to 200 communities - 1 million people
- by June 2017.

The target will be achieved through the conversion of existing power lines to Aerial
Bundled Cables. ABC are overhead power lines consisting of a number of insulated
wires bundled tightly together. It is a safer and more reliable way of conducting
electricity and it requires less maintenance. Most importantly ABC prevents power
theft through the use of kundas/hooks. It seeks to put an end to kunda (hook)
culture in the city thus preventing power theft.

Communities are also being provided with on-the-spot healthcare facilities,

sanitation awareness, and fun-filled fairs for children as part of Ujala.

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 Online bill payment
KE in a major value addition departed from conventional practice of bill payment and
established a system of online payment service in collaboration with 12 leading
banks of the country, becoming the first power utility in Pakistan to bring the
convenience of an integrated and round the clock online bill payment service. The
banks are: Allied Bank, Burj Bank, Bank Al Habib, HBL, KASB Bank, MCB Bank,
Standard Chartered bank, Summit Bank, Samba Bank, Soneri Bank and UBL.
Customers can log on to www.ke.com.pk, the KE official website, anytime and from
anywhere in the world, and pay by using their 13 digit account number. KE
customers can also visit their own internet banking page and pay their power bills by
entering their 13 digit KE account number. This convenient service saves them from
waiting for the printed bill to arrive and physically visiting bank branches and
standing in queues. Customers not familiar with online payment, have been offered
other value added alternate payment facilities via Easy Paisa outlets, UBL Omni
shops and NADRA offices by just presenting their 13 digit account number at a much
wider distribution network of these institutions.

Power plants
KE is the only vertically-integrated power utility in Pakistan. It produces electricity
from its own generation units with an installed capacity of 2262 MW. It also has
power purchase agreements for 1021 MW from various IPPs (Independent Power
Producers), WAPDA, KANUPP (Karachi Nuclear Power Plant) and through imports.
These purchases are based on an optimized generation cost that is governed by the
fuel cost at the respective power facilities and their operating efficiencies.

Bin Qasim Power Station 1 (Capacity: 1260 MW)

Bin Qasim Power Station 2 (Capacity: 560 MW)
Korangi Combined Cycle Power Plant (Capacity: 247 MW)
SITE Gas Turbine Power Station (Capacity: 97.5 MW)
Korangi Gas Turbine Power Station (Capacity: 97.5 MW)

More facts about KE:

1st company to be listed on Karachi Stock Exchange

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 Load Management. (high, medium & low loss areas)
Public Safety Drives
1st Power Utility to Exempt Industries from Loadshed
Lowest ever Transmission & Distribution losses from 40% to record lowest 25%
where 1 percent line loss is equivalent to PKR 1 billion.
Khuli Kacheri
Football youth development programs
1st Power utility to implement SAP-ISU.
1st utility to receive A rating from Global Reporting Initiative (GRI)
Launched the 1st Shariah compliant listed Sukuk worth PKR 6 billion which was
oversubscribed within the first 12 business hours
Despite stiff competition & violent resistance for over a year KE the Only power
utility in Pakistan without a UNION
61% of Karachi exempted from Load shed.
KE today stands as the 2nd largest private entity in Pakistan in terms of revenue.
The 3rd largest company with a total assets base of PKR. 367 billion.
In nationwide football ranking, KE Football team for the 1st time is at 2nd position.

SALES REVENUE:

5TH LARGEST COMPANY OVERALL

2ND LARGEST PRIVATE COMPANY AFTER HUB POWER

TOTAL ASSETS;

3RD LARGEST OVERALL

LARGEST COMPANY PRIVATE SECTO

17TH LARGEST COMPANY OVERALL

12TH LARGEST COMPANY PRIVATE SECTOR

PAID UP CAPITAL:

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 LARGEST COMPANY - OVERALL

The Rebrand
Rebrand was an important pillar of the holistic, inside out & outside in framework
which was articulated in 2009 known as the Value Creation Plan that aimed to
convert KE, from a weak brand to an exemplary brand and a rebrand could only be
done once positive changes & traction towards turnaround (tandem with reality) was
consistently experienced by majority of the stakeholders & star customers that dont
steal or default. The scorecard of milestones achieved in the last 4 years is very
extensive however; it is worthwhile to mention few achievements that paved the
way to rebrand:

56% of the city including industries exempted from load shed.

Lowest ever T & D losses from 40% to just 23.7% (1% line loss is equivalent to
approximately US$ 1 million)
Union-free work environment
Unprecedented investment of approximately US$ 1.3 billion in the power
infrastructure
One-window-solution offices

The Management and the Board are encouraged by the success the Company has
experienced during the past few years as part of the turnaround and wish to
continue with a stronger zeal and energy under a new identity that is in line with our
aspirations, ESG philosophy, does not restrict us geographically & yet does not shy
away from its legacy.

New Identity
To reflect its renewed commitment to serve its vast consumer-base and instill its
core resolve into its functions, the Company revamped its corporate identity
changing its name, logo and tagline. The new identity, that entails 3 feathers that
represent their primary function & ESG (Environmental, Social Governance) values,
creates a perception of a robust organization dedicated to serve Karachi & hence
Pakistan.

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Check Bill Online
If you want to check Bill online then you should to Go on K Electric website. write
there your Meter Number and you will get Duplicate bill. Now you can Pay These Bill
Online through your Bank Account, Mobile credit or Credit card.

Social Investment Plan

KEs Social Investment Program (SIP) is aimed at extending support to various vital
healthcare and educational institutions serving the under-privileged and needy on
purely humanitarian grounds. KE has so far signed 15 Memorandums of
Understanding under SIP: with Bait ul Sukoon, Behbud Association Karachi, Karwan-
e-Hayat, Lady Dufferin Hospital, SOS Children's village, and The Kidney Centre with
Sindh Institute of Urology and Transplantation (SIUT), to provide absolutely free of
cost electricity to its three dialysis centers in the City; with Indus Hospital for bearing
50% of their electricity cost: with Marie Adelaide Leprosy Centre (MALC), Layton
Rahmatulla Benevolent Trust (LRBT) and The Citizens Foundation (320 TCF schools),
for covering 100% of the cost of electricity used by these institutions every month. At
present we are proud to support close to 3.9 million lives annually through this
program. At present, KEs SIP partners include:

Sindh Institute of Urology and Transplantation (SIUT)

The Indus Hospital
Layton Rahmatulla Benevolent Trust (LRBT)
Marie Adelaide Leprosy Centre (MALC)
The Kidney Center
Baitul Sukoon Cancer Hospital
The Citizens Foundation (TCF)
SOS Childrens Village
Kashif Iqbal Thalassemia Care Center (KITCC)
Behbud Association
Karwan-e-Hayat
Rana Liaquat Craftsmen Colony (RLCC)
Lady Dufferin Hospital
Family Educational Services Foundation (FESF)
SINA Health, Education and Welfare Trust

15
Future Plans
K-Electric unveils plan for the development of a 900 MW power project that will
significantly increase generation capacity and play a critical role in further supporting
the energy needs of Karachi.

The 900 MW Bin Qasim Power Station III will be built at K-Electrics Bin Qasim site at
an estimated cost of US$ 1 billion and includes simultaneous upgrades to associated
transmission infrastructure. The plant will be dual fired with primary fuel expected to
be RLNG (Re-gasified Liquid Natural Gas). Once completed, it will represent one of
the largest private sector investments of its kind in the countrys power sector.

According to K-Electric CEO Tayyab Tareen, The 900 MW BQPS-III is a big investment
for K-Electric but our conviction is that this is essential in meeting Karachis
immediate energy demands. We aim to commission the project in the fastest
possible time and are confident that with the right facilitation from all quarters,
power from the plant may be added to our supply as soon as summer of 2018.

Waqar Siddique, Chairman K-Electric and Managing Partner The Abraaj Group, said
An investment of the size and magnitude of BQPS-III once again reinforces Abraajs
commitment to improving the lives of K-Electrics customers. We believe the
company is ideally poised to continue its investment in generation, transmission and
distribution projects within an investment friendly environment. Shanghai Electric
Power (SEP), as a potential incoming investor, have also expressed complete
confidence in this project and fully endorses K-Electrics vision for Karachis
transformation. This 900 MW project marks the beginning of a multi-billion dollar
investment plan which is set to accelerate Karachis economic potential.

Mr. Wang Yundan, Chairman Shanghai Electric Power (SEP) stated, Shanghai Electric
Power issued a fresh public announcement of our intention to acquire up to 66.4%
shares of K-Electric. While the transaction is yet to be completed, we are actively
following K-Electrics plans which have been comprehensively outlined in their Multi
Year Tariff review petition. This is indeed an exciting milestone and we fully endorse
their vision for Karachi. SEP looks forward to leveraging its strengths as a strategic
investor to further realize K-Electrics potential in providing better services to the
people of Karachi.

The investment for the 900 MW plant and associated transmission upgrades is in
addition to over US$ 1.4 billion which has already been invested since 2009 by K-

16
Electric. As a result of these investments, K-Electric has substantially improved
services for Karachis consumers and businesses. Amongst other initiatives, the
company added 1,057 MW of generation, reduced transformer trips by 58% and
reduced line losses from 36% to 22%. These improvements have enabled the
company to make 61% of Karachi load-shed free (from 23% in 2009), including all
industrial customers, and reduce the duration and frequency of outages by 45% and
41% respectively (from 2011). K-Electric additionally created 29 Integrated Business
Centers (IBCs) to improve and enhance customer engagement.

Adding new generation capabilities and strengthening its transmission and

distribution network are currently K-Electrics highest priorities.

The power utility is also taking major steps towards enhancing transformation
capacity and improving the reliability of power supply to its customers. The
development work of TP-1000 (Transmission Enhancement Plan), a US$ 450 million
project, is progressing on a fast track.

KE has further intensified its overall drive against power theft and illegal abstraction.
Replacement of old wires with kunda-resistant Aerial Bundled Cables (ABC), which is
an innovative concept for power distribution guaranteeing both safety and higher
system efficiencies, as part of the vision to further enhance the reliability of power
supply across its network.

The power utility remains fully committed to better serve the people of Karachi and
to ensure the growth of economy of Karachi and Pakistan.

Value Creations
KE creates value both for its customers and its employees. This is based on a
harmonious pursuit of the companys operational and financial goals, blended with a
holistic value-creation approach which fully incorporates the companys
sustainability objectives.

This approach is demonstrated in the following areas:

Generation
Over the last few years, KE has enhanced its generation capacity by approximately
1,057 MW and improved its overall fleet efficiency by 23%. The organisation now
generates almost 55% of the electricity it distributes through its own systems.

17
KEs fleet efficiency has increased from 30.4% in (Jan-Dec, 2008) to 37.1% (Jan-Dec,
2015).

Transmission & Distribution

T&D losses have been reduced to an all-time low of 22.2%.
Collection from more than two-thirds of the city stands at 92%.
61% of consumers are load shed-free.
The organisation has achieved a complete roll-out of SAP IS-U, the first of its
kind in the region.
KE became the first ever distribution company in Pakistan to earn an ISO 9001
2008 certification for its Integrated Business Centres. To date, 17 IBCs and
four departments have achieved the certification.
KE has initiated an e-bill payment solution with major banks at the branch
level, aiming to eliminate manual processing, control invalid transaction
processing and improve overall data processing.

18