KARACHI: The total expenditures sustained by Pakistan Steel Mills (PSM) in the first three months of the current financial year stood at Rs 8.09 billion.
The tentative balance sheet of the PSM made available with Pakistan Today, reveals that the total expenditure of the mills in the first three months – July, August and September – of the current fiscal was calculated to be 2.54 billion, 2.83 billion and 2.69 billion, respectively.
The items of expenditures include raw material, personnel-related costs, utilities, selling and distributing expenses, financial expenses, and other operating expenses were under headings for the costs incurred. The raw material expenditures sustained by the mills were Rs 3.13 billion in three months.
In terms of human resource expenses, the expenditures were registered at Rs 2.42 billion. The utilities expenditures cost emerged at Rs 1.62 billion and other operating expenses were Rs 41.78 million.
The financial expenses of the PSM during these three months were Rs 450.25 million.
The reasons for these expenses included accrued mark-up on the National Bank of Pakistan loan, legal and professional fees, salaries and allowances of officers, daily wages, education tax, leave encashment and canteen subsidy amongst other.
The salaries and allowances of officers and staff alone was indicated to be Rs 1.5 billion and the salaries of foreign experts during these months was a figure of Rs 10.7 million. The expense the PSM has incurred in terms of its canteen subsidy was Rs 16.85 million.
In the last meeting of the PSM board, it was decided to sell some land of the mills out of its 22,000 acres to Qatar in order to overcome the financial crisis the PSM is facing.
The board also approved a 15 percent increase in the salaries of employees in line with the decision announced in the federal budget of 2009-10 and 2010-11.
However, the move is yet to get approval from the ministry. The PSM bears total financial expenditure of Rs 59.365 million approximately in the course of a month for the revised house rent, conveyance, utility and shift allowances and a 15 percent dearness allowance for the workers in terms approved after an agreement signed between the mills and its CBA.
The house rent allowance for the workers and lower staff was increased by more than doubled for pay group 1 to pay group VII after the signing of accord.
Officers working at the mills remained deprived of this benefit.
The administration hired Administration Director Noor A Memon, General Manager Security Khursheed Abbas, Director Administration Brig (R) Rao Wahab and Deputy General Manager Administration Razzaq Baloch and a financial adviser.
The administration of PSM hired these five officers on contractual basis on high salaries, despite the fact that the mills is going through dire financial straits.
Similarly, the administration has regularised the contracts of 55 workers of units like galvanising, temper mills, and billets which have been non-functioning for a period of a year and a half. The contracts of those working on non-permanent basis in closed units are also renewed after every three months.
It must be noted that the proposed budget of the mills for the current financial year has not yet been approved by its board of directors, and the mills has reported losses of around Rs 6 billion in the four months of the current fiscal period.
According to the tentative balance sheet of the mills for the three months of the current fiscal, the profit/loss after tax of the mills for July this year, stood at Rs 982.76 million, Rs 775.12 million in August and Rs 620.70 million in September.
The total revenue of the mills in July this year stood at Rs 1.54979 billion, Rs 1.60145 billion in August and Rs 1.60671 billion in September. This included the mark-up, sale of waste material, and other sources of income.
PSM accrues Rs 8.09b in expenses
