PSM audit account approved by BoD

Pakistan Steel Mills (PSM) Board of Directors has approved annual audit account of PSM for the year 2018-19 to comply with the conditions of International Monetary Fund (IMF), sources close to Chairman PSM Board told Business Recorder.

On November 21, 2019, Finance Division wrote a letter to the Ministry of Industries and Production, stating that Finance Division argues that PSM should accurately reflect its assets and liabilities position along with accrued markup on the loans provided by the Finance Division in its financial statements. Terms and conditions of loans applicable retrospectively and prospectively have been conveyed.

The sources said, Finance Division has released Rs 51.149 billion as GoP loan during FY 2009-10 and upto October 20, 2019. The loan will be recovered in 20 years along-with interest with a grace period of five years for recovery of principal amount. The interest will be chargeable at the prevailing rate for the respective year.

Chairman PSM, Aamir Mumtaz, recently informed BoD that the company was working under a strict deadline with limited resources to produce and to audit financial statements since 2015 so that it may become current as a responsible company and fulfill its reporting requirements.

He stated that accounting and finance team and audit committee had been working day and night to complete this task and in this case were unable to provide the expected review time due to deadline given by the IMF.

After explaining the situation, the Chairman of the Board advocated that the Board may trust the members of BA & FC headed by a qualified Chartered Accountant, Munir K. Bana.

In view of the timeline given by MoI&P to complete the audit of PSM accounts up to 2018 latest by December 2019 to fulfill the conditions of the IMF, the Chairman suggested that the Board (except the BA& FC members) may forward their comments/observations in respect of this matter within 48 hours of the meeting for incorporation in the minutes and if no such comments/observations are received within stipulated time period, annual audited accounts of PSM for the year ended June 30, 2017 shall stand approved. The Board agreed with his opinion.

ACFO requested the Board that in view of the shortage of time to complete the audit of the Corporation for the default years latest by December 2019, MoI&P should request the Securities Exchange Commission of Pakistan (SECP) for a waiver of prerequisite notice period of 21 days to hold Annual General Meeting (AGM).

The production of PSM is at a halt since June 2015 due to reduction of gas supply by Sui Southern Gas Company (SSGC). The monthly net salary of its employees is being paid by Government of Pakistan to the extent of Rs.380 million as loan. In this situation, day to day expenditures including electricity bill, water bill, POL etc are being managed from limited resources, i.e., from sale of scrap and collections from housing units and downstream industrial estate, etc.

PSM has had to arrange payment of retirement benefits of its retired employees since June 2013 and they are pressing hard through different forums for their legitimate dues. In this regard Sindh High Court (SHC) also initiated contempt proceedings by attaching assets/ immovable properties of PSM and accounts of Ministry of Industries and Production.

On Wednesday, a committee comprising acting CEO PSM, Sher Alam Mehsud, Additional Secretary, MoI&P and Chairman PSM Board and a few other officials of PSM interviewed five or six shortlisted candidates for the position of CEO PSM.

According to sources, Chairman PSM is staying in a hotel in the federal capital as the residential apartments in Steel House of PSM in Islamabad are occupied by a recently-hired person and his family.

Insiders claim that the debts and liabilities of PSM have risen to Rs 515 billion from July 2008 to December 2019 with Rs 1.5 billion being added to liabilities per month.