Islamabad - The Saindak Metals Limited Company’s profit was decreased by 32 percent during 2017-18 as compared to the previous year while it has registered a sharp increase of up to 304 percent in its various other expenses.
The Saindak Metals Limited Company’s profit for 2017-18 was decreased by 32 percent from Rs562.33 million in 2016-17 to Rs380.31 million in 2017-18. The net profit of the company in 2011-12 was Rs6,444.60 million. The reasons for sharp decline in net profit in each year may be explained, the Auditor General of Pakistan (AGP)said on the audit report on the Account of Petroleum division for 2018-19.
The Saindak Metals Limited Company has been formed for exploration, mining and metallurgical processing of copper, gold and other minerals at Saindak in District Chagai, Balochistan.
Talking about the Saindak Metals Limited working results for the year 2017-18 as compared with those of the previous years the report said that the travelling & conveyance, communication and office rent of the company jumped by 61 percent, 20 percent and 53 percent and increased to Rs3.18 million, Rs1.18 million and Rs1.87 million in 2017-18 as compared to previous year of Rs1.98 million, Rs0.98 million and Rs1.20 million respectively in 2016-17. The extraordinary increase in expenses needs justification said the Auditor General.
Similarly the legal and professional charges of the company increased by 304 percent which increased to Rs10.92 million in 2017-18 as compared to previous year of Rs3.60 million. The abnormal increase in legal and professional charges needs to justify with full facts and figures, said the report. The BOD expenses of the company increased by 21 percent in 2017-18 as compared with 2016-17 as it is increased to Rs1.85 million from Rs1.52 million.
The trade debts of the company increased by 1320 percent as it was Rs794.30 million in 2017-18 as compared to Rs55.93 million in 2016-17. This was receivable from MCC Resources Development (Pvt) Ltd (MRDL), China in respect of share of production and consumption of stores and spares. Such sharp increase in trade debts showed weak credit policy of the management and needs justification.
The management placed an amount of Rs4,730.26 million in 2017-18 and Rs5,187.00 million in 2016-17 in short term investments on interest rates of 5.7 percent to 6.85 percent. The surplus should have been used for long term investments to for high profits. The imprudent investment policy needs justification.
The GOP investment amounting to Rs15,733.53 million had been treated as loan which carried zero interest rate. The company had no plan for repayments, which needs to be explained, said the report.
The company had a negative equity of Rs7,697 million in 2017-18 (Rs 8,055 million in 2016-17). The company’s current liabilities exceeded its current assets by Rs10,961 million, said the report.
The Saindak Metals Limited was incorporated in Pakistan as a private limited Company on April 15, 1974 under the name of Resource Development Corporation (Private) Limited. The name of the Company was changed to Saindak Metals (Private) Limited on October 03, 1993. The Company was convened into public limited company on January 16, 1996. Equity of the Company is owned by the Government on Pakistan (GOP). The Company has leased its main plant to M/s MCC Resource Development (Pvt) Limited (MRDL) of China for a period of ten years under the terms of lease contract dated November 30, 2001. The plant was handed over to MRDL on October 2, 2002. As per addendum dated October 26, 2017 the lease agreement has been extended up to October 31, 2022.
As per Aghaz Haqooq-e-Balochistan package agreed between the Government of Pakistan and Government of Balochistan,the ownership of Saindak Project would get transferred to Balochistan after the expiry of existing lease contract i.e. October, 2012 in accordance with decision of Cabinet Committee on Aghaz Haqooq-e-Blochistan package dated December 16. 2009. Furthermore, it was also decided in the said package that the company will offer 30 percent share out of 50 percent profit share from Saindak Project to Government of Balochistan under Aghaz Haqooq-e-Balochistan Package.