Karachi, March 19, 2013 (PPI-OT): The 58th Annual General Meeting (AGM) of SSGC, held on March 19, 2013 in Karachi, approved the Financial Statements, Chairman’s Review and Directors’ Report along with the Auditors’ Report for the financial year ending June 30, 2012. The AGM was chaired by Shahid Aziz Siddiqui, Chairman SSGC, with the participation of Managing Director, Zuhair Siddiqui, Company Directors, senior management and a large number of shareholders.
The AGM approved the payment of 22.5% cash dividend to the shareholders. During FY 2011-12, the Company registered a net profit of Rs. 2,581 million against Rs. 4,724 million in FY 2010-11. Comparing from the last financial year, the customer base grew from 2.37 million to 2.49 million, whereas the gas sales increased from Rs. 126 billion to Rs. 153 billion with an increase in sales volume from 356,040 mmcf to 364,409 mmcf.
While replying to a query from a shareholder, CFO Abdul Malik said that the major reason in decline of Company’s profit is attributed to the rising trend of Unaccounted-for-Gas (UFG) on the factors which are beyond Company’s control, such as law and order situation in Balochistan.
The Chairman and Managing Director responded to many queries raised by the shareholders. They informed the house that company is adhering to the many initiatives taken by the former government in bridging the energy gap, such as transnational pipeline projects including IP and TAPI and setting up of LPG-Air mix plants. MD said that the tender for LPG-Air mix plant at Bin Qasim is currently under process which shall add 50 mmcfd gas in the system by the end of this calendar year.
Responding to the shareholder’s concerns on the matters related to OGRA, Director Mirza Mahmood Ahmad said that for the last 3 years the Company has been vociferously pleading its case with the regulator to revisit the UFG benchmark in light of ground realities and to regulate the other incomes as non-operating.
The efforts were successful in the year 2010 when the UFG benchmark was revised at 7% but after that OGRA did not allow the same and the Company approached Sindh High Court in this regards and the court’s decision is awaited on the issue, however it may be noted that a favourable decision can result in increase in profitability whereas an unfavourable decision can adversely affect the profit margins.
The shareholders asked to be advised for the next date of OGRA’s hearing in Karachi so that they can personally appeal to the regulator for a fair judgment in light of facts for rising UFG, of which most of them are beyond the Company’s control. Mirza Mahmood said that if OGRA accepts our point of concern then the Company’s profit margin can rise to three times.
With regards to the issue of UFG, the MD informed that a Natural Gas Efficiency Project (NGEP) has been approved in cognizance with the World Bank’s funding of USD 200 million that will bring about a phased reduction in UFG over a five year period by rehabilitating 5,000 kms of aging pipelines. Replying to the queries of Shareholders the MD said that for last one year KESC has only paid the current monthly dues and in view of the mounting receivables which have touched a massive figure of Rs. 45 billion, the management is taking all steps in recovering this mammoth amount from KESC.
A suit has also been filed against the KESC in this regards. The Chairman added that KESC’s annual accounts reveal a false profit, as they do not show the massive payables to SSGC. He said that this receivables issue is a major sore point for the Company, compelling it to borrow from bank at higher rates.
The Shareholders showed their solidarity with the Company and assured the management of their complete support in recovering the massive outstanding amount from KESC, Pakistan Steel Mills and other defaulters. They stressed the management to go all out in taking concrete steps for recovery as this would not only stabilise the Company but will subsequently safeguard their interests as well.
The Shareholders said that SSGC’s profitability is their foremost priority and advised the management to completely shut off the gas supply to KESC, Pakistan Steel and other defaulters, as they have failed to settle their dues.
The MD said that in the best interest of people of Karachi, SSGC is adhering to its Boards’ directives by supplying 120 mmcf gas everyday to KESC. MD further said that shutting off gas supply to Pakistan Steel would result in closure of their blast furnace and restoration of the same would be an extremely hard task. This would become a threat to jobs of thousands of their employees, which we do not want by any means, the MD added.
The Shareholders also paid glowing tributes to the services rendered by former Managing Director Azim Iqbal Siddiqui who was associated with SSGC for nearly four decades. Members of SSGC’s Board of Directors including Agha Sher Shah, Ayaz Dawood, Azhar Maud, Dr. Shahab Alam, Fazal-ur-Rehman Dittu, Mirza Mahmood Ahmad and Nessar Ahmed also attended the AGM who were seated on the stage, alongwith the Chairman, MD, CFO and Company Secretary Yusuf J. Ansari. The Company’s senior management comprising of SGMs, GMs, DGMs and other officials were also present at the Annual General Meeting.
For more information, contact:
Sui Southern Gas Company (SSGC)
Deputy Chief Manager
Corporate Communication Department (Media Relations)
Tel: +9221 9902 1773
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