WEB DESK: Pakistan Steel Mills (PSM) Board of Directors (BoD) dominated by the public sector, in its meeting on October 24, 2016, is expected to approve a three-year net loss of the Mills at Rs 62.8 billion, well informed sources in PSM told Business Recorder from Karachi.
The budget for FY-2015-16 and FY-2016-17 has been compiled and presented to Board of Directors of PSM for approval after incorporating actual results for the period July 2015 to June 2016.
The sources said, due to uncertain environment ie working on privatization, financial crunch / deficit in working capital and drastic reduction in gas pressure almost all production units like COBP sintering, blast furnaces, iron making, steel making, slab caster, billet caster, hot strip mills, cold rolling mills, power generation plant (TPP & TBS) and auxiliary units have stopped operations from June-2015 till date (15 months).
The production level of raw steel is at zero percent during the year 2015-16 and restoration of gas is not yet assured for FY-2016-17, therefore, the budget FY 2016-17 would be zero.
“If the gas pressure is restored, and financial assistance from the GoP extended then considering the circumstances at that time a revised budget FY-2016-17 would be presented to Board of PSM,” the sources added.
PSM management, sources said, has proposed the following to the Board (represented by only one member from the private sector who also follows government’s line): (i) formal approval of revised budget for the year 2014-15 with net loss of Rs 25.736 billion as per 3rd draft (un-audited accounts);(ii) budget 2015-16 actual net loss of Rs 18.760 billion;(iii) budget estimates for 2016-17, net loss of Rs 18.305 billion (projected);(iv) immediate restoration of natural gas pressure; and (v) funds by GoP for employees net salaries in 2015-16 amounting to Rs 4.994 billion and Rs 5.641 billion for the year 2016-17.
According to sources, Board has also been requested to pass a resolution that the entity is unable to pay bank mark up and repayment of loans in the fiscal year 2015-16 and 2016-17 due to liquidity crises.
The Board will approve resolution to regularise procurement of materials and stores and spares to meet urgency requirements amounting to Rs 1.267 billion and Rs 312 million during the FY-2015-16 and FY-2016-17 (budgeted) respectively on case-to-case basis.
The sources said PSM Board in its previous meeting observed that there are only five members on the PSM Board at present. The clause 90 of Memorandum and Articles of Association of PSM states that the number of directors of the Corporation shall not be less than five and not more than twelve, including Chairman and the Chief Executive.
At present, PSM is operating with minimum number of Directors and there is always a problem to complete the quorum of the BoD meetings.
Keeping this in view the Board in its previous meeting decided to constitute a committee under the convenership of Engr. Memon Abdul Jabbar with Sardar Ahmed Nawaz Sukhera and Zahoor Ahmad as members to nominate the suitable and competent candidates for PSM Board.
The Board has also raised the remuneration of Directors to Rs 25,000 from Rs 5000 for Board and Board committee meetings without keeping in mind the financial woes of employees who are not getting salaries.