Sui Southern Gas : Financial Results for the Year Ended 30 June 2020

SSGC Gompany Limited

6 Sui Southern Gas

sscc/cs/2022-os2

25 April,2022

FORM-3

The General Manager

Confidential

Pakistan Stock Exchange Limited Stock Exchange Building

Under Sealed Cover

Stock Exchange Road Karachi.

rtruAruclAt stAtrurruts ron txe rlruaructnt yreR eruoeo gorH turue zozo

Dear Sir,

We have to inform you that the Board of Directors of our company in their meeting held on 25 April2022 at 02:00 pm, at SSGC Board Room, Head Office Building, Gulshan-e-lqbal, Karachi recommended the following:

(i) cAsH DTVTDEND (ii) BoNUs SHARES

• (iii) RIGHT SHARES

• (iv) ANY OTHER ENTITLEMENT/CORPORATE ACTTON

• (v) ANY OTHER PRICE-SENSITIVE INFORMATION

NrL NIL NIL NIL NIL

The financial results of the Company are attached as Annexure A and B. The Auditors in their initialed draft report to the members have stated:

QUALIFIED OPINION

BASIS FOR OUA LIFIED OPINION

• 1. As disclosed in notes 30.1 and 30.2 to the unconsolidated financial statements, trade debts include receivables of Rs.33,415 million and Rs. 24,332 million from K-Electric limited (KE) and Pakistan Steel Mills Corporation (Private) limited (PSML), respectively. Significant portion of such receivables include overdue amounts, which have been considered good by management and classified as current assets in the unconsolidated financial statements. Further, KE and PSML have disputed Late Payment Surcharge (LPS) on their respective balances due to which management has decided to recognise LPS on a receipt basis from the aforesaid entities effective from July 01, 2012.

  Due to the adverse operational and financial conditions of PSML, disputes by KE and PSMLwith the Company on LPS, and large accumulation of their respective overdue amounts, we were unable to determine the extent to which the total amounts due from KE and PSML were likely to be recovered and the timeframe over which such recovery will be made;

• 2. As disclosed in note 33 to the unconsolidated financial statements, interest accrued includes interest receivable of Rs. 8,685 million and Rs. 4,391 million from Sui Northern Gas Pipeline Limited (SNGPL) and Water and Power Development Authority (WAPDA), respectively. These have been accounted for in line with Company's policy of charging LPS on overdue amounts, but h ave

SSGC House, Sir Shah Suleman Road, Gulshan-e-lqbal, P.O. Box 17989, Karachi-75300 PABX Telephone : [phone], Fax : [phone], Website :www.ssgc.com.pk

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Sui Southern Gas Company Limited

not been acknowledged by the counter-party. Due to dispute with WAPDA, and large accumulation of their respective overdue amounts of interest, we were unable to determine the extent to which the interest accrued amounts due from SNGPL and WAPDA are likely to be recovered and the timeframe over which such recovery will be made.

3. On April 30,2018, The lnternationa I Cou rt of Arbitration decided against the Com pa ny in the case with Habibullah Coastal Power Company (Private) Limited (HCPCL) and imposed liquidated damages amounting to Rs. 4,158 million. Prior to the decision, the Economic Coordination Committee (ECC) through its meeting held on February 07,201.8 had proposed waiver of liquidated damages and directed Ministry of Energy -Petroleum Division to work out modalities in consultation with all stakeholders. Based on that decision, management has recognised a receivable of Rs. 4,158 million from HCPCL as disclosed in note 34 to the unconsolidated financial statements. However, no agreement has been finalized to date between the relevant stakeholders. ln the absence of the agreement, there is no contractual right to receive cash or financial asset from HCPCL and the requirements of IFRS 9 'Financial lnstruments' are not met.

Emphasis of Matter

Without further modifying our opinion, we draw attention to the following:

• 1. Note 20 to the unconsolidated financial statements that describe that the Company is subject to various material litigations and claims involving different courts. The outcome of these cases is uncertain and beyond management's control;

• 2. note 1.3 to the unconsolidated financial statements which states that in view of the financial position of the Company, the Government of Pakistan (Finance Division) has confirmed to extend necessary financial support to the Company for the foreseeable future to maintain its going concern status. Hence, the sustainability of the future operations of the Company is dependent on the said support.

• 3. note 19.1 to the unconsolidated financial statements that describes that the Company has reversed the late payment surcharge (LPS) expense of Rs. 26,222 million on delayed / payables pertaining to gas supplied by Government Controlled E & P Companies i.e. Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL) and Government Holding (Private) Limited (GHPL) with effect from July 01.,2012 to June 30,2Ot6 and not recorded IPS expense for the year ended June 30, 2077, June30,2O8, June 30,2019 and June 30, 2020 amounting to Rs. 7,569 million, Rs.7,477 million, Rs. 10,525 million and Rs. 26,335 million, respectively, for reasons described in the said note; and

• 4. note 2.1.1 to the unconsolidated financial statements that describes the reasons why the Company has staggered losses, due to the effect of Sindh High Court decision, based on the permission received from the ECC, Securities and Exchange Commission of Pakistan (SECP) and the Oil and Gas Regulatory Authority (OGRA).fi.y/

Sui Southern Gas ComPanY Limited

Annual General Meeting:

The Annual General Meeting of the Company will be held on Friday, 03 June 2022 at 10:30 a.m at SSGC Head Office, Karachi, ln person as well as through electronic means / Video link facility '

The Share Transfer Books of the Company will be closed from 27 May 2022 to 03 June 2022 (both days inclusive). Transfers received in order at the office of Share Registrar M/s. CDC Share Registrar Services Limited, CDC House, 99-8, Block-B, S.M.C.H.S, Main Sharah-e-Faisal, Karachi at the close of business on 26 May 2022 treated in time for the purpose of above entitlement to the transferees.

The Annual Report of the Company will be transmitted through PUCARS atleast 21 days before holding of Annual General Meeting.

Yours Sincerely,Mateen Sadiq Company Secretary

Executive Director/HOD,

Cc: Offsite-ll Department, Supervision

Division, Securities & Exchange

Commission of Pakistan, lslamabadSenior Manager,

CDC Share Registrar Services Limited Central Depository Company of Pakistan CDC House, 99-8, Block B, S.M.C.H.S, Main Shara h-e-Faisal, Karachi

Head of Operations,

Central Depository Company of Pakistan CDC House, 99-B, Block B, S.M.C.H.S, Main Sharah-e-Faisal, Karachi

A*nE xuRE - A

SUI SOUTHF..RN GAS COMPAI.TY LAtrTED UNCONSOLIDATED STATEMENT OF PROFIT ORLOSS FORTEE YEAR ENDED JUNE 30,2020

2020

2019

Note

(Rupees in'000)

Sales, Saies tax

Gas development swcharge RLNG di-fferential margm Net sales

Cost of sales

Gross (loss) / profit

Admin istrative and selling elpenses Other operating experres

Impairrrent loss against fi:rancial assets

Other income

Loss before interest and taxation Finance cost

Loss before taxation Taxation

Loss for the year

Loss per share - basic and diluted

37 37 38 39

295,',122,225

(43,92r,9s4)

25t,800,n1 219,264,033

37,600,s01 84,884,740

839,594 290,240,366

• 40 (307,290,936)

4l

42

25t,645,232 (32,381,199)

(6,982,069) 29'.7,166,704 (29s.r 20,476)

l7

(4,792,69s (4,820,392

(1, (20,695,914

(10,192,870)

43

44

45

(27,243,440) t5,429,311

(24,309,576) t4,247,647

(1 1,814,129) (10,061,935)

(7,234,593) (6,759,292)

(t9,048,722) (16,820,227)

(2,343,869)

(1,s74,s41)

(21,392,s91) _98;94,?6q

(Rupees)

47

(24.28)

(20.88)

*

q

;

SUI SOUTIIERN GAS COMPAI.IY LIMITED CONSOLIDATED STATEIVIENT OF PROFIT OR LOSS FORTI{E YEAR ENDED JUNE 30,:O2O

Sales Sales tax

Gas development surcharge RLNG d;fferent ial margin Net sales

Cost of sales Cross (loss) I pro,fit

Adrlinisrative and selling expenses Other operating expenses trmpairment loss againsl financial assets

An,rE xusa - B

2020

2019

Note

(Rupees in'000)

40 4l

39

3i9.

295,722,225
25t,645,232
(431921,954) _	(32,38 l, l99J
251,,800,271	219,264,033
37,600,501	84,884,740
9,594	(6,982,069)

290,240,366 7g'7,1ffi,7{t4

42

43 44

(4

(r 797

(4,941

o?

(27,399,214)

124,438,650)Other income

Loss,before interest and taxation .Finanee coS

Loss before taxation Taxation

Loss for the ycar

Loss per share - basic and diluted

45

ar6

4:lI5,769,045 14,409,909 (11,630,169) {t0,a28,742:}

(f,?41r,778) 6/s+rl+3)

( I8,871347) (t6,78',t ,925

Q,397,285) (1,574,8E4)

__-Qt,g,3Jj!] __j]_qig}!oe)

(Rupees)

49

(24. r4) ____e!.85I