Islamabad August 20 2021: While determining the SSGC petition for Determination of Estimated Revenue Requirement for Fiscal Year 2021-22, Oil and Gas Regulatory Authority (OGRA) has reworked the Rate of Return on Average Net Assets (ROA) for the year 2021-22 and reduction in allowable depreciation rates.
While the change in rate of depreciation of Computer Hardware will have positive impact but it would be insignificant due to meagre share of these assets in overall assets base. However, the adverse impact on the profitability of FY 2021-22 due to reduction of Rate of Return is estimated to be PKR 576 Million.
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The ROA is reworked at 16.60 percent as compared to the previous ROA rate of 17.43 percent determined up to 2020-21. The decision is in line with the present tariff regime and Reduction in net rate of return will have a negative impact on the profitability of the Company for FY 2021-22.
At the same time, OGRA has also advised the reduction in depreciation rates of Computer Hardware only from present rates of nearly 33.33 percent per annum to rates ranging from 15 percent to 25 percent per annum.