PERSEVERE
PROGRESS
PROSPER
Un-Audited Condensed Interim Financial Information for the quarter ended September 30, 2021
Unconsolidated Condensed Interim Financial Information (Un-Audited)
for the quarter ended September 30, 2021
CORPORATE PROFILE
BOARD OF DIRECTORS
AS ON SEPTEMBER 30, 2021
Dr. Shamshad Akhtar | Chairperson | |
Mr. Muhammad Raziuddin Monem | Director | |
Mr. Faisal Bengali | Director | |
Ms. Nida Rizwan Farid | Director | |
Mr. Hassan Mehmood Yousufzai | Director | |
Dr. Ahmed Mujtaba Memon | Director | |
Dr. Sohail Razi Khan | Director | |
Mr. Manzoor Ali Shaikh | Director | |
Mr. Zuhair Siddiqui | Director | |
Mr. Ayaz Dawood | Director | |
Mr. Mathar Niaz Rana | Director | |
MANAGING DIRECTOR | CONTACT DETAILS | |
Mr. Imran Maniar | ||
COMPANY SECRETARY | Ph: 92-21-99021000 | |
Fax: 92-21-99224279 | ||
Mr. Shoaib Ahmed | Email: info@ssgc.com.pk | |
AUDITORS | Web: www.ssgc.com.pk | |
SHARE REGISTRAR | ||
M/s. BDO Ebrahim & Co., Chartered Accountants | ||
LEGAL ADVISOR | CDC Share Registrar Services Limited, | |
CDC House, 99-B, Block B, SMCHS, | ||
M/s. Orr, Dignam & Co. Advocates | Main Sharah-e-Faisal, Karachi. | |
REGISTERED OFFICE | Ph: 021-111-111-500 | |
SSGC House, Sir Shah Suleman Road
Gulshan-e-Iqbal, Block 14, Karachi - 75300, Pakistan
BOARD OF DIRECTORS' COMMITTEES
Board HR and Remuneration Committee | Board Risk Management, | ||
Dr. Shamshad Akhtar | Chairperson | Litigation and HSEQA Committee | |
Mr. Muhammad Raziuddin Monem | Director | Mr. Muhammad Raziuddin Monem | Chairman |
Mr. Hassan Mehmood Yousufzai | Director | Ms. Nida Rizwan Farid | Director |
Dr. Ahmed Mujtaba Memon | Director | Mr. Manzoor Ali Shaikh | Director |
Dr. Sohail Razi Khan | Director | Mr. Zuhair Siddiqui | Director |
Mr. Manzoor Ali Shaikh | Director | Mr. Ayaz Dawood | Director |
Mr. Mathar Niaz Rana | Director | Mr. Mather Niaz Rana | Director |
Board Finance and Procurement Committee | Special Committee of Directors on UFG | ||
Dr. Ahmed Mujtaba Memon | Chairman | Dr. Shamshad Akhtar | Chairperson |
Ms. Nida Rizwan Farid | Director | Mr. Faisal Bengali | Director |
Mr. Ayaz Dawood | Director | Mr. Nida Rizwan Farid | Director |
Dr. Sohail Razi Khan | Director | Mr. Mather Niaz Rana | Director |
Mr. Zuhair Siddiuqi | Director | Mr. Hassan Mehmood Yousufai | Director |
Mr. Hassan Mehmood Yousufzai | Director | Dr. Sohail Razi Khan | Director |
Board Audit Committee | Mr. Zuhair Siddiqui | Director | |
Mr. Faisal Bengali | Chairman | Board Nomination Committee | |
Dr. Ahmed Mujtaba Memon | Director | Dr. Shamshad Akhtar | Chairperson |
Dr. Sohail Razi Khan | Director | Dr. Ahmed Mujtaba Memon | Director |
Mr. Manzoor Ali Shaikh | Director | Mr. Faisal Bengali | Director |
Mr. Ayaz Dawood | Director | Mr. Manzoor Ali Shaikh | Director |
Mr. Muhammad Raziuddin Monem | Director | ||
Mr. Hassan Mehmood Yousufzai | Director |
01
DIRECTORS' REVIEW
For three months period ended September 30, 2021
Financial Overview
During the period, the Company recorded a Net Profit after Tax of Rs. 736 Million after incorporating major disallowances by OGRA.
The summary of financial highlights of the period is given below:
Sep 2021 | Sep 2020 | Variance | |
Amount | |||
(Rupees in Million) | |||
Profit / (Loss) before | 1,470 | (111) | 1,581 |
Taxation | (734) | (610) | (124) |
Taxation | 736 | (721) | 1,457 |
Profit / (Loss) after | 0.84 | (0.82) | 1.66 |
SSGC Profitability is derived from the Guaranteed Return Formula prescribed by OGRA. Under this formula, SSGC was allowed 17.43% Return on its Average Net Operating Fixed Assets before Financial Charges and Taxes. However, OGRA makes disallowances/ adjustments while determining the revenue requirements based on efficiency related benchmarks viz a viz Un-accounted for Gas (UFG), Human Resource Benchmark Cost, Provision for Doubtful Debts and some other expenses/ charges. These disallowances/ adjustments affect the bottom-line of the Company.
In line with OGRA Determination on Final Revenue Requirement (DFRR) for FY 2020-21 issued on November 24, 2022, total disallowances absorbed/ credits allowed in these three month financial results amounted to Rs. 1,359 million against Return on Assets of Rs. 3,918 million. Finance cost for the period is Rs. 1,089 million.
As compared to the corresponding period of last year in which Loss after Tax of Rs. 721 million was reported, there is significant improvement in bottom line of current period with reported Net Profit after Tax of Rs. 736 Million. Improvement in bottom line is mainly attributed to the following factors:
Acceptance of UFG Allowance on RLNG Business
SSGC has been pursuing vigorously OGRA through the Ministry of Energy (Petroleum Division) as well as through Islamabad High Court to allow Actual UFG on RLNG
business in Distribution Network. As a result of IHC restraining Order, OGRA has allowed Actual UFG on RLNG Distribution business.
However, still high UFG disallowance is mainly due to the fact that OGRA is not accepting RLNG Volume Handling benefit allowed to SSGC vide a Summary approved by the Economic Coordination Committee (ECC) dated May 11, 2018. With vigorous follow-up of SSGC Management & Board of Directors, OGRA has engaged a Consultant to determine the extent of UFG on RLNG and its impact on each Sui Company, namely SSGC and SNGPL.
Provision against impaired debts
In past, OGRA had the practice to allow provision against impaired debts as operating expense related to disconnected customers only whereas, adoption of IFRS-9 requires provisioning on Expected Credit loss basis i. e. forward looking approach which also covers provisioning against Live Customers. Resultantly, bottom-line of the Company was significantly affected in last year comparative period.
In DFRR FY 2020-21, OGRA has allowed Provision against Impaired Debts as operating expense computed on the basis of average of last five year allowed provisions. Following the same principle, the provisions disallowed has been restricted to Rs. 46 million as compared to Rs. 648 million in last year comparative period.
02
Financial Cost
SSGC has to account for financial charges of Rs. 1,089 million against borrowing which is mainly due to the Long-Term Loan obtained to finance its Pipeline Infrastructure Project for transmission of RLNG from Karachi to Sawan delivering the RLNG volumes to SNGPL network for meeting the energy requirements of North.
An amount of Rs. 452 million to be allowed by OGRA as per past practice to compensate the impact of delay in Tariff Notifications.
Future Outlook
Moving forward, reduction in UFG is the key factor for keeping the Company operationally and financially viable. Further, it is critical that the Company be allowed to calculate UFG allowance based on RLNG handling on volumetric basis based on the decision of ECC of the Cabinet.
Acknowledgements
The Board wish to express their appreciation for the continued support received from the shareholders and its valued customers. The Board also acknowledges the dedication of all the employees who hard work on, despite number of challenges confronting the Company. The Board also thanks the Government of Pakistan, the Ministry of Energy and the Oil and Gas Regulatory Authority, for their continued guidance and support.
On behalf of the Board.
Dr. Shamshad Akhtar | Imran Maniar |
Chairperson | Managing Director |
Dated: April 13, 2023 | |
Place: Karachi |
03
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Sui Southern Gas Company Ltd. published this content on 07 June 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 June 2023 09:53:03 UTC.