news 26 oct 2013 email # 244-2013 26... · pak law publication news alerts 26 october 2013 email #...

PAK LAW PUBLICATION News Alerts 26 October 2013EMAIL # 244-2013

Mail to: [email protected]

13

Daily News

Saturday, October 26, 2013

PAK LAW

PUBLICATION

2013

Office # 05, Ground Floor, Arshad Mansion, Near Chowk A.GOffice, Nabha Road Lahore.

Ph. 042-37350473Cell # 0300-8848226



News ContentsTop Stories.............................................................................................................................................4

Foreign direct investment: address investor concerns, German envoy tells government.....................4

GSP-Plus: economic package in final stages ...........................................................................................5

Water, power projects: only 10 percent of PSDP allocation released in first quarter ...........................6

Government may procure another 50,000 tons of sugar.......................................................................7

Indus Water Treaty: Minister expresses reservations ............................................................................8

SHC declares tax rates for salaried individuals illegal...........................................................................10

Pakistan to pursue IP gas pipeline project: Nawaz told Obama ...........................................................11

Taxation: Pakistan ..............................................................................................................................14

Printed circuit board: DG Valuation rejects review plea ......................................................................14

MCCs to remain open today: FBR .........................................................................................................16

Intelligence and Internal Audit: FBR panel to determine core functions of key wings ........................16

Delivery of notices to potential taxpayers: FBR exploring alternate options.......................................17

Taxation: World...................................................................................................................................19

Malaysia to impose consumption tax, abolish sugar subsidy...............................................................19

Business & Economy...........................................................................................................................20

Pakistan has potential for export of value-added gems, jewellery: Minister.......................................20

LCCI to give recommendations for economic revival ...........................................................................21

Foreign investment to bring economic stability: Chairman BoI ...........................................................22

Weekly inflation up by 0.18pc ..............................................................................................................23

Industries & Sectors ...........................................................................................................................24

Power supply to remain suspended due to maintenance work...........................................................24

PR earns Rs32.8mn extra income due to Eid discounts........................................................................24

Cotton and Textiles: Pakistan ...............................................................................................................25

Rains, floods: Cotton crop worth Rs 1.84 billion damaged in Punjab...................................................25

CM Punjab approves Garments City project.........................................................................................26

Agriculture and Allied: Pakistan .......................................................................................................27

Free seed distribution to small farmers................................................................................................27

Indus Water Treaty: Minister expresses reservations ..........................................................................27

Engro Fertilizer earns Rs 3.2 billion profit.............................................................................................29

Fauji Fertilizer earnings slightly low......................................................................................................30

Over 0.175 million acres to come under sunflower crop .....................................................................30

Government may procure another 50,000 tons of sugar.....................................................................31

KBP urges government to fix sugar cane procurement price at Rs 230 per maund.............................32



Fuel and Energy: Pakistan .................................................................................................................33

Water, power projects: only 10 percent of PSDP allocation released in first quarter .........................33

Pakistan to pursue IP gas pipeline project: Nawaz told Obama ...........................................................34

Gas shortage in winter to touch 2BCFD mark.......................................................................................36

Rawalpindi, Islamabad: large number of illegal gas connections unearthed in two days....................37

OGDC posts Rs 33.6 billion profit for 1QFY14.......................................................................................38

Power shortfall soars to 3,000 megawatts ...........................................................................................38

Chinese team discusses Nandipur power project with Shahbaz ..........................................................39

Fuel and Energy: World......................................................................................................................40

US oil futures up; Brent/WTI spread narrows ......................................................................................40

Iran oil exports to plunge......................................................................................................................41

Miscellaneous News ............................................................................................................................42

Trade preferences: Germany backs Pakistan’s bid for EU GSP Plus status ..........................................42

Undelivered tax notices: NADRA takes FBR to task, rejects claim of fake addresses...........................43

PTA reviews progress on blocking unverified SIMs ..............................................................................45

Corporate results: Banking sector posts mixed results ........................................................................46

Corporate results: OGDC profit jumps 31% to Rs33.5 billion ...............................................................47

Corporate results: FFBL profit up despite gas curtailment woes..........................................................48

Becoming sophisticated: Branchless banking accounts grow 10%.......................................................49

Corporate results: Engro Fert breathes sigh of relief as both plants online.........................................50

Govt appeares to be bowing to pressure from traders once again......................................................50

OPEN MARKET FOREX RATES................................................................................................................53

INTER BANK RATES................................................................................................................................54

Bullion Rates (Gold Prices) in Pakistan Rupee (PKR).............................................................................55



Top Stories

Foreign direct investment: address investorconcerns, German envoy tells governmentOctober 26, 2013

WASIM IQBAL

Ambassador of Germany to Pakistan Cyrill Nunn on Friday urged government of Pakistan toaddress the concerns of foreign investors if it wanted to promote foreign direct investment(FDI) in the country. He said that Pakistan government should do some more work if itintended to improve foreign investment in the country. The measure needed to be takenimmediately, the Ambassador said, is for improvement in security situation in the country.

"Sialkot is a peaceful city, but not all the cities are, which have negative impacts on theforeign investment in Pakistan," he pointed out. He cited energy crisis in the country asanother concern of the foreign investors. He proposed that investment laws needed to befurther strengthened so that transparency and conducive business environment could beensured, adding that promoting transparency and enacting unambiguous investmentprotection rules would help increase the volume of foreign investment in Pakistan. He saidthat strengthening of business protection mechanism in the country was not only in theinterest of German businessmen but also for world business community. He announced thatthe biggest Pakistani trade delegation since the establishment of diplomatic relations betweenthe two countries would leave for Germany to attend the ''Pakistan Business Days'' in Berlinand Munich on October 30 and 31.

The delegation will consist of 90 representatives of around 60 companies from varioussectors and will be accompanied by high-ranking representatives of the federal and provincialgovernments including Chief Minister of Punjab Shahbaz Sharif, Secretary Commerce QasimNiaz and Chairman Board of Investment (BoI) Mohammad Zubair.

Cyrill Nunn and the Consul General of Germany in Karachi, Tilo Klinner, will also beaccompanying the delegation. In Germany the delegation will be welcomed by theAssociation of German Chambers of Commerce (DIHK) as well as the Chamber ofCommerce for Munich and Upper Bavaria. The delegation will be meeting numerous Germancompanies as well as high-level representatives of the German government.

Responding to a question, the ambassador said that the German government had invited ChiefMinisters of four provinces to Germany to attend the ''Pakistan Business Days''. But, he said,only Chief Minister of Punjab Shahbaz Sharif showed his interest and no respond werereceived from other Chief Ministers.

The ''Pakistan Business Days'' is organised by the Pakistan German Business Forum (PGBF)in co-operation with the German Embassy in Islamabad and the German Consulate Generalin Karachi. German Foreign Minister Dr Guido Westerwelle and German Federal SecretaryCommerce will be officials who will attend the business meetings there. With a trade volumeof over $2 billion, German Ambassador said, Germany is Pakistan''s biggest trading partnerin the European Union. Over 40 German companies are present in Pakistan in different sector



such as engineering, energy, pharmaceuticals or logistics and still there is potential for more,he maintained.

"The export volume between the two countries is almost balance because of Pakistani textileproducts'' export to Germany which is nearly $750 million. There is a need to work more forimproving the trade volume as Germany''s trade with Bangladesh is almost double than thetrade volume of Germany with Pakistan," the ambassador maintained. The companies likeEngro, Atlas Power, Excel Engineering, EMR Consult along with other companies areattending the B to B meetings with German businessmen, he said.

"We have altogether 330 participants of both Pakistani and German companies who willattend the Pakistan Business Days," he added. "We have seen the new government havealready taken various initiatives to improve the economic condition of the country like to endthe energy crisis and on taxation side and new incentives have been introduced to attract newforeign investment in Pakistan. We also monitored the new IMF programme for Pakistan," headded.

He hailed the government for calling a multi-party conference to reach a consensus onnational economic agenda, which is encouraging message for the outside world. TheAmbassador said that Germany was contributing in the field of economic and developmentco-operation with Pakistan. "For improving its economic growth, Pakistan has to increase itstrade relations with world and Germany is willing to support Pakistan in achieving this goalthrough trade. He recalled during the visit of German Foreign Minister Dr Guido Westerwelleto Pakistan on June 8, 2013, Prime Minister Nawaz Sharif and Westerwelle agreed upontangible measures to further enhance bilateral co-operation between Pakistan and Germany inthe area of trade and business. "First step of the tangible measures is opening of the Lahoreoffice of the Pakistan-German Business Forum in late August and now the upcoming high-level delegation to Germany," he added.

Copyright Business Recorder, 2013

GSP-Plus: economic package in final stagesOctober 26, 2013

The economic package of GSP-Plus by the EU Commission to Pakistan is in final stages. Itwill go to the Trade Commission this month and in early November to the EU Parliament forapproval. The decision to grant the status of GSP-Plus is not Pakistan-specific but also fornine other countries, German Ambassador to Pakistan Cyrill Nunn said in a press conferenceon Friday. He said Germany is pushing for the package in the EU Parliament.




Water, power projects: only 10 percent ofPSDP allocation released in first quarterOctober 26, 2013

ZAHEER ABBASI

The government released only Rs 10.8 billion for water and power sector projects during thefirst quarter of the current fiscal year, which is 10 percent of the total Public SectorDevelopment Programme (PSDP) allocation for the sector. According to federal PSDPfigures released by the Planning Commission up to October 11, 2013, the governmentreleased Rs 5.9 billion for water and power division out of total allocation of Rs 57.8 billionfor the current fiscal year and Rs 4.9 billion to Wapda (Power) from Rs 51.543 billionspending projected in PSDP for the sector.

Pakistan Atomic Energy Commission received Rs 11.960 billion out of the total allocation ofRs 52.300 billion for Chashma Nuclear Power and other projects under the federal PSDP forthe current fiscal year. Higher Education Commission received Rs 3.698 billion out of Rs18.490 billion, National Health Services and Co-ordination Division received Rs 5.644billion and Finance Division Rs 1.577 billion.

The government released Rs 5.589 billion to Railways Division out of the total allocation ofRs 30.964 billion for the division under federal PSDP for the current fiscal year and InteriorDivision received Rs 1.197 billion out of the total allocation of Rs 6.259 billion. NationalHighways Authority (NHA) received Rs 7.312 billion out of the total PSDP allocation of Rs63 billion, and under the head of special areas, Earthquake Reconstruction and RehabilitationAuthority (Erra) received Rs 1.570 billion from the allocation of Rs 10 billion. However, nofunds were released to Tameer-e-Pakistan Programme out of Rs 5 billion allocated in thebudget.

Special Areas, AJK and Gilgit Baltistan were released Rs 2.654 billion and Rs 4.342 billion,respectively and Safron/Fata received Rs 3.316 billion. The government allocated Rs 19.9billion for AJK and Rs 9.598 billion for Gilgit-Baltistan under the federal PSDP for thecurrent fiscal year and Rs 18 billion for Safron/Fata. The Cabinet Division was released Rs614 million during the first quarter of the current fiscal year from the federal PSDP allocationof Rs 2.179 billion for the sector, Climate Change Division received Rs 17.263 million,Commerce Division Rs 158 million out of Rs 841 million, Communication Division otherthan NHA Rs 17.209 million out of Rs 109 million, Defence Division Rs 129 million out ofRs 3.545 billion.

Economic Affairs Division (EAD), National Heritage and Culture Division, Federal TaxOmbudsman and Ports and Shipping have yet to receive releases from the PSDP. Thegovernment released Rs 63.476 billion under the PSDP, which is 11.75 percent of the federaldevelopment programme amounting to Rs 540 billion for the current fiscal year.




Government may procure another 50,000tons of sugarOctober 26, 2013

MUSHTAQ GHUMMAN

The government is likely to procure another 50,000 tons of sugar to appease local millowners who are reportedly exerting pressure on the Ministry of Industries and Production(MoI&P) through Punjab-based association. With the approval of new proposal by theEconomic Co-ordination Committee (ECC) of the Cabinet headed by Finance Minister IshaqDar, total procurement will reach 150,000 tons. The next meeting of the ECC will be heldshortly.

According to official documents available with Business Recorder as per the ECC decision incase No: ECC.178/14/2007 dated 30-11-2007, Trading Corporation of Pakistan (TCP) isrequired to keep 500,000 MT of sugar at any one time as strategic reserve stock to ensureprice stability in the market in case of any unforeseen situation. The National Sugar Policy(2009-10) also emphasised that TCP shall maintain strategic reserves of 500,000 million tonsof white sugar at any one time and its modalities would be reviewed periodically.

TCP is however, required to allocate monthly quota of 50,000 MT sugar to Utility StoresCorporation (USC) and also provide sugar to Canteen Stores Department (CSD), PakistanNavy, Pakistan Army and any other government entity on the directions of the governmentfrom time to time. For this purpose, TCP maintains strategic reserves of sugar and iscontinuously engaged in procurement of sugar from local sugar mills and also imports sugarfrom international market as per requirements on the directions of ECC of the Cabinet.

The documents further disclose that presently, TCP has 31,091 MT of sugar in it stocks fromwhere 24,668 MT sugar is being allocated to USC for October 2013, leaving a balance of6,823 million tons of sugar with TCP in October 2013. According to the MoI&P,procurement of 100,000 MT sugar is under process, which will be utilised for regular quotaof USC during November/December 2013. Meanwhile, Pakistan Army has also placed arequisition for 12,400 million tons of sugar for their utilisation during 2013-14 for whichTCP has no reserve stocks to meet the requirement.

The MoI&P argues that based on the stocks, TCP requires 150,000 MT of sugar forallocation to USC against its quota for January/February 2014 and to meet the requirementsof Pakistan Army as well. For this purpose, procurement process needs to begin in the firstweek of November 2013, as procurement cycle takes about 50-60 days inclusive of the timefor re-sampling for completion of codal formalities and taking possession of stock afterpayment to sugar mills.

The ministry has proposed that keeping in view prevalent situation TCP may be allowed toprocure 150,000 million tons of sugar from domestic sugar mills to maintain strategicreserves and for ensuring smooth supply of sugar in January/February, 2014 to USC, PakistanArmy and other institutions.

The Commerce Ministry is expected to hand over the case of powerful Punjab based sugarmillers who obtained TCP tenders of a large amount by quoting the lowest price that enabled



them to avail interest-free working capital but who did not deliver the commodity and causeda loss to national exchequer to the National Accountability Bureau.


Indus Water Treaty: Minister expressesreservationsOctober 26, 2013

MUSHTAQ GHUMMAN

Pakistan on Friday expressed reservations over the World Bank-brokered Indus Water Treaty1960 and announced that it would safeguard the country's interests militarily. These remarkswere made by Minister for Water and Power, Khawaja Muhammad Asif at a press conferenceafter he presided over a meeting on water issues with India.

Khawaja Asif's remarks came just one day after a meeting with the Belgian Ambassador whocalled on him in the Ministry and discussed the Indus Water Treaty in detail. The Ministersaid Pakistan is heading towards becoming a water-starved country from a water-stressedcountry.

Replying to a question, Asif said that many patriots have doubts over the Indus Treaty inkedby the then dictator, Field Marshal Ayub Khan, adding that the Treaty was skewed towardsIndia. "We will ensure implementation on the Treaty in letter and in spirit and whateverrights are available in the Treaty must be safeguarded militarily," he added.

Asif further stated that "delays and mistakes" have been committed in the past and theincumbent government is trying to retrieve the damage, and requesting the media to be on thesame page with the government in issues related to water. India, he added, submitted twoarticles carried by the Pakistani print media in the case of controversial KishangangaHydroelectric Project before the Hague-based International Court of Justice. "I want thegovernment and media should be on the same page on issues which are being contested at theinternational fora or bilaterally with India." "I personally feel that the Indus Water Treaty isnot in favour of Pakistan," Asif continued but acknowledged that India enjoys geopoliticaladvantage over western rivers which the treaty granted were to be for Pakistan's exclusiveuse.

When asked if Pakistan would seek to review the "controversial" Treaty Minister for Waterand Power, who recently met with Indian Prime Minister, Manmohan Singh in New York onthe sidelines of the UN General Assembly meeting as a team member of Prime MinisterNawaz Sharif said that he cannot take such a decision individually as "reopening of Treatywill be Government of Pakistan's decision". Pakistan's water rights are being violated, theMinister added. Asif warned that the country may face a famine in the next 10-15 years ifappropriate measures were not taken.

He said water is the issue of life and death for Pakistan and implementation of Indus WaterTreaty with India will be ensured. To a question‚ the Minister said electricity situation isimproving in the country. Earlier‚ the Minister for Water and Power was given briefing onwater situation.



Pakistan also announced that if India doesn't change the design of Kartely project on theChenab River, the issue would be raised at the International Court for Justice. AdditionalSecretary Incharge, Saif Ullah Chattha and other officials of Water and Power Ministry werealso present at the press conference.

APP adds: Earlier, during a briefing Minister for Water and Power Khawaja MuhammadAsif said Pakistan is currently contesting with India over five water projects includingKishenganga, Ratle, Miyar, Lower Kalnai hydroelectric projects, Wullar Barrage and TulbulNavigation project. Pakistan's Commissioner for Indus Water Mirza Asif Baig and SecretarySaifullah Chattha were also present in the briefing.

Khawaja Asif said water is a life and death issue for the people of Pakistan as the country iswater-stressed and could become water-starved in future. He said there is a need to evolve aconsensus on water issues so rights of the country could be defended vigorously. He said inhis opinion Indus water treaty signed with India did not judiciously distribute water.

When the treaty was signed Pakistan had population of 30-40 million but now it hadincreased five fold to 180-200 million, he added. He said there is need to change the waypeople use water in their homes and for agriculture. He said work will simultaneously start onDiamer-Bhasha and Dassu dams. Funding options are available for the two hydel projects. Rs21 billion has already been spent on Diamer dam and land acquisition for it has beencompleted.

The Secretary Water and Power said India has been trying to get water in excess of the limitsit is allowed under the Indus Basin Treaty. The Indus Water Commissioner said the disputeregarding the proposed diversion of Neelum water by India and draw down of the deadstorage level was referred to International Court of Arbitration.

The Commissioner said the final hearing of Court of Arbitration was concluded on 31 August2012 and partial award of the court has been awarded on 18 February, 2013 in which the firstquestion of diversion was decided in favour of India and the second question of draw down instorage level in Pakistan's favour.

Both the parties have to submit additional data and written submissions to the Court ofArbitration and accordingly the court will decide the quantum of water to be released belowKishenganga Hydroelectric Plant in Neelum River as environmental releases. The final awardof the court is expected by December 2013, he noted.

He said Pakistan has objected on freeboard, magnitude of pondage and placement of spillwayof Ratle Hydroelectric plant of 850 megawatts, Miyar Hydroelectric Plant of 120 megawatts,Lower Kalnai plant of 48 megawatts and Pakal Dul Hydroelectric Plant of 1,000 megawattslocated on Chenab River. These objections were discussed before in two meetings of thePermanent Indus Commission in March and September and will finally be discussed in thenext meeting of the Commission likely to be held in December 2013. Pakistan and India aremembers of the Commission.

Another disputed project is Wullar barrage and during the 6th round of secretary level talks, itwas agreed that the Indian side will provide additional technical data to Pakistan. Pakistanwill examine the data to furnish its views before the next round of the talks. They informedthat unilateral construction of Wullar Barrage by India on Jhelum River was reported in 1985.Pakistan objected that storage is not allowed to India on main Jhelum. The work on the



project is suspended since 1987 and it was last verified on May 30, 2013.

The Indus Water Treaty contains provisions allowing India and Pakistan to establish river-runpower projects with limited reservoir capacity and flow control needed for feasible powergeneration. Under the treaty, all the water of the Eastern Rivers of Pakistan is available forthe unrestricted use of India. Pakistan is allowed limited agriculture use of 45,000 acres fromtributaries of river Ravi. Pakistan should receive unrestricted use of all waters of westernrivers.


SHC declares tax rates for salariedindividuals illegalOctober 26, 2013

SOHAIL SARFRAZ

Sindh High Court (SHC) on Friday declared tax rates prescribed for salaried individuals inthe First Schedule to the Income Tax Ordinance, 2001 through Finance Act, 2012 illegal,ultra vires of the Constitution and Income Tax Ordinance 2001. Sources told BusinessRecorder here on Friday that the SHC while deciding a constitutional petition filed by SyedNaveed Andrabi Advocate Supreme Court has declared tax rates prescribed for salariedindividuals in the Finance Act 2012 as illegal.

It has been further declared that the arbitrary increase in the slabs at serial number 4, 5 and 6is against the graduated rates of taxation and principle of natural justice. Hence, all salariedindividuals shall be paying the tax according to the principles of graduated slab rates oftaxation with no arbitrary increase.

According to sources, SHC has also directed the tax department to issue tax refund to all thesalaried individuals whose tax has been withheld and deposited in the treasury pursuant toincorrect amount of tax under Finance Act 2012, within a period of one month from the dateof filing such return.

Sources said the petitioner, who is a salaried individual has challenged the vires and legalityof the table inserted through Finance Act, 2012 in Clause (1A) of Division-I of Part-1 of theFirst Schedule to the Income Tax Ordinance, 2001. The petitioner requested the court that theTable inserted through Finance Act, 2012 in Clause 1A of Division-I of Part-1 of the firstSchedule to the Ordinance be declared to be arbitrary, illegal and ultra vires of theConstitution.

Sources said the SHC has declared that the anomaly in the calculation and quantification oftax at S.No 4, 5 and 6 of the Table-B has crept due to inadvertence on account of incorrectarithmetic calculation as there is no rational basis or reasonableness whatsoever in suchdetermination of the tax liability. The amount of tax as calculated under slabs of taxableincome at S.No 4, 5 and 6 of table "B" is without any conscious application of mind. It alsolacks certainty of charge and is devoid of any rationale basis and has resulted in creation ofadditional burden of tax upon a particular group of salaried individuals without legalsanction. The anomaly in tax calculation for salaried individuals neither existed for the earlier



tax years, whereas, by Finance Act, 2013, it has been rectified for the Tax Year 2014 insimilar set pattern of tax calculation on the basis continued gradual increase of tax rate asdiscussed hereinabove.

Accordingly, SHC holds that the table inserted by Finance Act, 2012 for the Tax Year 2013in respect of rates of tax for salaried individuals with particular reference to amount of taxcalculated under slabs of income at S.No 4, 5 and 6 of table "B" is ultra vires of theconstitution, the Income Tax Ordinance, 2001 and also inconsistent with the slabs of taxableincome of the table "B" itself, hence of no legal effect.

The table inserted through Finance Act, 2012 in clause (1A) of Division-I of part-1 of theFirst Schedule to the Income Tax Ordinance, 2001 is declared to be illegal, arbitrary and ofno legal, whereas valid table under Clause (1A) of Division-1 of Part 1 of the First Scheduleto the Income Tax Ordinance, 2001, contains the correct arithmetic calculation of tax of thesalaried individuals falling under different slabs of income as detailed therein.

The SHC has directed the department to make necessary correction in the table by removingthe anomaly and to notify the tax rates of salaried individuals for the Tax Year 2013 inconformity with the judgement of the court, sources said. The tax department should alsoissue refund of tax to all the salaried individuals whose tax has been withheld and depositedin treasury pursuant to incorrect amount of tax as prescribed under Table-B, which wasintroduced by Finance Act 2012, within a period of one month from the date of filing suchreturn, sources said referring to the SHC.


Pakistan to pursue IP gas pipeline project:Nawaz told ObamaOctober 26, 2013

ALI HUSSAIN

Amid US concerns, Pakistan declared Friday that it was pursuing the multi-billion dollarIran-Pakistan gas pipeline project due to acute energy crisis in the country and it was alsoconveyed to the US side by Prime Minister Nawaz Sharif during his recent meetings inWashington. Foreign Office spokesperson Aizaz Ahmad Chaudhry responding to queriesduring a weekly press briefing said the issue of IP gas pipeline project also came underdiscussion during the recent meeting between Prime Minister Sharif and President BarackObama in Washington.

"Yes, the matter of [IP] was discussed. The position of the government of Pakistan was madeclear. It should be seen in the context of acute energy crisis that we have in our country," hesaid, adding that all options are on the table and the government is pursuing the project. Hedescribed the Prime Minister's visit to the US as successful and result-oriented, and expressedthe hope that it will help strengthen bilateral relations based on mutual respect.

He said the Prime Minister focused on all issues of interest and concern to Pakistan includingeconomic growth, seeking US co-operation to solve energy crisis, enhance trade co-operation, social sector development, counter-terrorism, regional stability and a balance in the



bilateral relationship based on mutual respect and benefits.

"The visit was certainly successful from every angle as it would now enable the two countriesto rebuild ties on the basis of mutual respect and interest, and bring things out of the mistrustwitnessed in the recent past," he remarked. He said the primary achievement of the visit wasthat "a new beginning has been made by the elected leadership of Pakistan to buildrelationship with the US based on mutuality of interest."

Referring to the US co-operation in addressing the energy crisis, he said that Pakistan and theUS energy group constituted under the strategic dialogue will be meeting in November 2013followed by a US-organised Pakistani trade mission to meet US energy companies inHouston, Texas.

To a question about the US President bringing up the issue of prosecuting those involved inthe Mumbai attacks in his meeting with Prime Minister Sharif, the spokesperson saidPakistan needed more evidences from the Indian side to move ahead in the Mumbai attackscase.

He did not specify the nature of evidences, saying that terrorism is of great concern toPakistan since it was also a victim and the answer lay not in blaming each other but workingjointly. He said the Prime Minister briefed President Obama on the progress in theimprovement of Pakistan-India ties and stressed the need that Pakistan and India should joinhands to fight against terrorism. The spokesman said that Pakistan strives for good relationswith all its neighbours including Afghanistan and India to ensure peace and security in theregion.

About the LoC violations, he said that Pakistan has already expressed serious concerns overrecent violations of cease-fire by India, adding that the time was very unfortunate as PrimeMinister Sharif was in Washington on official visit. He said the Indian troops in recent dayshave intensified unprovoked shelling on the working boundary and targeted 27 Pakistaniposts that resulted in the death of two civilians and one security personnel.

Despite these violations, he said that Prime Minister Sharif has extended a hand of friendshipto India and he has repeatedly expressed Pakistan's desire to have good neighbourly relationswith India. He said that India should respect the cease-fire and reciprocate to Pakistan'ssincere efforts for peace and stability in the region.

To a question, he said Pakistan has no intention to indulge in firing first and Pakistani troopsonly retaliate when fired upon. About the upcoming Pak-India DGMOs meeting, he said thatPakistan believes that the decision of the two Prime Ministers about the meeting of theDGMOs must be implemented immediately to resolve the matter. To a question about DrShakeel Afridi, he said that Afridi had violated laws of the country and Pakistani courts willdecide about his fate and present democratic government does not interfere in the affairs ofthe country's courts.

About the drone strikes, he said that the Prime Minister voiced Pakistan's position on dronestrikes in clear manner "we do hope that the drone strikes will end". He said that pressure wasbeing built at international level as well within the US regarding drone attacks, adding that"the strategy is working and we should give some time...hopefully, we will have a goodsolution to it".

Replying to another question, the spokesperson declined to go in 'further details' whether or



not there was an understanding between the government of Pakistan and the US in the past.Asked whether Pakistan intends to initiate a war crime case against President Obama forkilling Pakistani citizens through drone strikes as referred in the Amnesty International'srecent report, he said that Pakistan and the US are not members of the International CriminalCourt, adding that we believe that the strategy that the leadership of Pakistan is pursuing iseffective.

It is two-pronged, he said, adding we are raising the drone attacks' issue with the USbilaterally in clear terms and at every level and we have also raised this issue in theinternational fora. "The drone strikes have implications for inter-state relations and peace andsecurity of the world. There are also serious human rights and humanitarian implications. Weare convinced that Pakistan's view point will prevail," he observed.

Responding to a question, he said that the government's proposed talks with the Taliban is aninternal matter of Pakistan and is part of the efforts to secure peace and the US side shouldhave no difficulty in the talks. To another query, he said that the issue of Dr Afia Siddiquiwas also raised in one of the meetings during the PM's visit. He said that the government ofPakistan had rendered considerable help during the trial phase and now the focus is on thetransfer of offenders.

"Transfer of offenders, means that the offender can serve the remaining sentence in his/herown country...since there is no bilateral agreement between Pakistan and the US on transferof offenders, Pakistan has applied for acceding to the Council of Europe Convention. Oncethat process is over, it could provide a framework for further discussion on the matter", hesaid. However, he clarified that the arrangements will not mean to transfer Dr Shakeel Afridito the US.




Taxation: Pakistan

Printed circuit board: DG Valuation rejectsreview pleaOctober 26, 2013

Directorate General of Customs Valuation Karachi has rejected the review application filedby M/s World-wide Trading Co, against the new customs value determined on import ofprinted circuit board under Valuation Ruling No 555/2013. Sources told Business Recorderhere on Friday that the directorate has issued an Order-in-Review against the ValuationRuling No 555/2013.

According to the directorate, an appeal against the Order-in-Review lies with the AppellateTribunal, Customs having jurisdiction under section 194-A of the Customs Act, 1969, withinstipulated period as prescribed under the law. The review application was filed under section25-D of the Customs Act, 1969 by Muhammad Khalid Hayat, Advocate High Court, Counselof the applicant ie M/s Worldwide Trading Co, against customs value determined for 'printedcircuit board' vide Valuation Ruling No 555/2013 dated 04-06-2013 inter alia on thefollowing grounds:

Firstly, the Director Valuation issued Valuation Ruling No 555/2013 dated 04-06-2013revised/determined under section 25A of the Customs Act, 1969 on Printed Circuit Board.Secondly, section 25A of the Custom Act, 1969 cannot be used for the wholesaledetermination of the custom value. In the instant matter, the Director Valuation contrary tothe provisions of the section 25A has fixed the custom value of the impugned goods which isimpressible as held by this Honourable Court in CP No 2673 of 2009 as such the customdepartment instead of determining the value under section 25 in sequential order has donemalpractice of assessing the impugned goods on the predetermined value on the basis of thevaluation ruling on the alleged ground of under invoicing from time to time, which is notpermissible under the law.

Thirdly, the impugned Valuation Ruling is silent as to non-application of the identical andsimilar goods method provided under the sub-section (5) and (6) of the Act, 1969 whichclearly established that impugned ruling is arbitrary and has been issued in contravention ofsection 25A of the Act, 1969.

Fourthly, no enquiry as envisaged under sub section (7) of the section 25 of the Act, 1969was conducted as the difference between the prices of the primary and secondary quality ofimpugned goods is easily identifiable which has not been done. The prices of the goods inopen local market are much less than the custom value determined in the impugned ValuationRuling.

Fifthly, the impugned Valuation Ruling refers to some of the methods of section 25 of theCustom Act, 1969, but it does not disclose any evidence either obtained from the producer ofthe imported goods or from the commercial market. It appears that no exercise of any enquirywas carried out; therefore, on this ground the impugned Valuation Ruling is illegal andunlawful.



Sixthly, it is pertinent to note that impugned Ruling was so haphazardly issued that no marketdata mentioned or found to have been received and the alleged Valuation Ruling is based onassumption, surmises and opinions of the different stakeholders ie manufacturers interested toget increased custom values. The previous data of similar goods were not taken intoconsideration and the alleged Valuation Ruling on the subject is still on higher side, vague,illegal and against the independent mechanism of determination of value under the law.

Seventh, the criterion fixed for assessment vide aforementioned Valuation Ruling is $6.07/kgand $13.40/kg without specifying the breed of the PCB, hence apparently it seems that it hasbeen done to safeguard the interests of parties keen to maintain their monopoly and topromote their locally manufactured products in the local market with a clear view todiscourage the import of printed circuit board.

Eighth, it may be mentioned that Circuit Board are always double sided printed and there isno question of its single side printing and that Printed Circuit Board are always sold out onper pieces basis instead of its weight as it has been made basis for valuation by thedepartment.

Ninth, if as per the input/advice rendered by M/s Elite PCB, custom value of single sideCircuit Board should be @ $6.07/kg and $3.40/kg for Double Side Circuit Board. Faking intoconsideration the suggested custom value, the custom duty would come around Rs 6,000,000to Rs 7,000,000 for single side circuit board, whereas it would be around 12,000,000 to Rs14,000,000 for double sided circuit board, if the average weight for container is found to be23,000 kg to 24,500 kg. Hence, the question arises that what kind of Printed Circuit Board ismanufactured by M/s Elit PCB which attracts custom duty ranging from Rs 6,000,000 to Rs10,000,000 and how much taxes are paid by them to the government exchequer.

Tenth, Director Valuation failed to consider that Printed Circuit Board are highly prone itemto smuggling and the unreasonable high fixation of values will surely encourage its way tomarket through grey channels which totally deprives government from its legitimaterevenues.

In view of the above, the company requested the directorate that that Valuation Ruling No555/2013 may be set aside being illegal and unlawful and without following sequential ordersof section 25 of the Customs Act, 1969 and direct the Director Valuation to carry out the fairvaluation determination exercise after inviting all stakeholders including present applicant aswell as other unrepresented importers within fifteen days of time.

Hearing in the case was fixed on August 27, 2013. However, the Counsel of the applicantrequested for adjournment vide his letter dated 26-08-2013. Therefore, another hearing wasfixed on September 26, 2013 wherein advocate appeared and reiterated same arguments asgiven in the memo of review.

As per order of the directorate, the case record has been examined. Perusal of record revealsthat the applicant was asked to furnish import documents but he did not furnish any valid andlegally maintainable documents like proforma invoice, commercial invoice, bill of lading,packing list, L/C so as to enable this forum to verify truth and accuracy of transaction valueunder section 25(1) ibid. As per Rule 109 of the Valuation Rules issued under SRO450(1)/2001 dated 18th June 2001 (Chapter-X), in the absence of valid import documents, theburden to prove correctness of transaction value shifts to the importers/applicants. Non-submission of valid import documents clearly manifest that the applicant has not come to this



forum with clean hands. The applicant who did not furnish import documents, thus failed tosubstantiate cause of his grievance with conclusive evidence, order said.

The order said that the applicant stressed for acceptance of his transaction value but did notsubmit relevant import documents to substantiate his claim. Scrutiny of import data revealsthat other importers have accepted customs values given in the impugned ruling. Theapplicant also failed to clearly point out any illegality in the impugned ruling.

In view of aforesaid factual improprieties and legal infirmities, the review application meritsno consideration and is accordingly rejected, the order said. Being identical on facts and lawpoints, this order shall apply mutatis mutandis to two other cases, order added.


MCCs to remain open today: FBROctober 26, 2013

The Federal Board of Revenue has announced that all the Model Customs Collectorates shallremain open and observe normal working hours on Saturday (October 26) to facilitate thetrade and industry in getting their cargo cleared for imports/exports and payment ofduty/taxes. In this regard, the FBR has issued instructions to the field formations on Friday.

According to the FBR, the Chief Collectors of Customs would co-ordinate with managementof the State Bank of Pakistan and National Bank of Pakistan to provide banking facility by allof its designated branches on the said date to ensure the collection of duty/taxes. The portauthorities/port operators may also be advised to synchronise their working accordingly, theFBR added.


Intelligence and Internal Audit: FBR panelto determine core functions of key wingsOctober 26, 2013

The Federal Board of Revenue has constituted a high-level committee to determine corefunctions of the Directorate General of Intelligence and Investigation Inland Revenue andDirectorate General of Internal Audit to avert overlapping of functions and organisationalrestructuring of the agency.

Sources told Business Recorder on Friday that the organisational restructuring of DirectorateGeneral of Intelligence & Investigation was discussed threadbare during the last Board-in-Council meeting chaired by FBR Chairman Tariq Bajwa. A top tax official, Syed IjazHussain, Director General, Directorate General of Intelligence & Investigation was invited tothe meeting with the permission of FBR Chairman. The Director General made presentationsuggesting therein that some organisational restructuring is necessary to streamline variousfunctions assigned to the Directorate General of Intelligence & Investigation.



Sources said that the proposed changes in the functions and structure of the DirectorateGeneral were discussed in detail at the Board-in-Council. The Chairman, FBR pointed outthat a separate system is operating for broadening the tax base under Commissioner BTBFBR (HQ), which, however, focuses on individuals rather than businesses and organisations.It may therefore, be in the fitness of things that the businesses, not in tax net, may be maderesponsibility of the Directorate General Intelligence & Investigation and Inland Revenue(I&I-IR) for the purposes of comprehensive survey and identification. This may be one of thecore functions of the Directorate General (I&I-IR). The FBR Member (Legal) proposed that aCommittee may be constituted to examine core functions of the Directorate General (I&I-IR)and the Directorate General of Internal Audit (IA) to avert any overlapping of functions andalso to come up with concrete recommendations on the proposals under consideration.

The FBR Member Customs pointed out that BTB currently relates to Income Tax whereasDirectorate General (I&I-IR) can play its role in registration of new sales tax cases. The FBRChairman emphasised that core functions of the Directorate General (I&I-IR) should bespecific, clear, categorical and without any overlapping/duplication with other organisations,sources maintained.

After detailed discussions, a Committee comprising Member (Admn.), Member (Legal), DG(I&I-IR) and DG Internal Audit (IR) has been constituted to carry out detailed scrutiny of theexisting and proposed functions of the Directorate General (I&I-IR) to avert any difficulty.Secondly, any expansion in the Directorate General of Intelligence & Investigation (IR) shallbe examined once its core functions are finalised and approved.

Thirdly, the database of the Directorate General (I&I-IR) shall be one, comprehensive andaccessible to all members of the Board-in-Council. The action would be taken by FBRMember (IT) and DG (I&I-IR). The ownership of all modules developed by and relating tothe Directorate General (I&I-IR) shall vest with the IT Wing of the Board, sources added.


Delivery of notices to potential taxpayers:FBR exploring alternate optionsOctober 26, 2013

The Federal Board of Revenue (FBR) is exploring alternate options for delivery of notices tothe potential taxpayers and decided to utilise alternate courier services and Pakistan Postextensively for areas not covered by other courier services.

According to a press release issued by the FBR here on Friday, during the first quarter ofcurrent financial year, 30,533 notices were issued to potential taxpayer in cases where FBRhad information of quantifiable economic activity and the person was not on tax roll.

In order to ensure a higher standard of delivery of these notices, the online delivery report ofthe tracking software of the courier service has not been made the basis of reporting. Noticeswere reported as delivered only when the physical acknowledgement receipt with signatureand particulars of a person received the notice back from the courier. So far, 11,373 notices



have been delivered.

Out of these 1189 have registered themselves as taxpayers and 9,365 notices have beenreturned undelivered by the courier. Of the undelivered notices, 30 percent were returned dueto incomplete addresses, 32 percent addresses were outside service areas of courier service,15 percent had incorrect address, 18 percent cases were reported shifted or closed and afurther 5 percent refused to receive the notice.

Delivery report of further 9,795 notices is in transit with courier. FBR is cognisant of theurgent need to improve the delivery rate and exploring alternate options for delivery ofnotices. It has been decided to utilise alternate courier services and Pakistan Post extensivelyfor areas not covered by other courier services. NADRA has been contacted for provision offull addresses in cases where notices could not be served due to incomplete addresses orshifting of the potential taxpayers. As a last option the service through field staff shall beundertaken, FBR added.-PR




Taxation: World

Malaysia to impose consumption tax,abolish sugar subsidyOctober 26, 2013

Malaysian Prime Minister Najib Razak on Friday unveiled plans to impose a 6-percentconsumption tax and abolish a sugar subsidy, as his government aims to cut the budgetdeficit. Najib said the government aims to cut the budget deficit to 4 per cent of the grossdomestic product (GDP) in 2013 and 3.5 per cent of GDP in 2014. Malaysia recorded abudget deficit of 4.5 per cent last year.

The Goods and Services Tax (GST) will go into effect in 2015 and the sugar subsidy will beabolished on Saturday. "The Government will do what is right for our economy," he told theparliament, presenting the 2014 budget of 264.2 billion ringgit (85 billion dollars). "Somemeasures may not be popular now, but over the medium term what is good for the economyis also good for the people," he added. Najib said he expected the economy to grow between5 per cent and 5.5 per cent in 2014, up from the projected 2013 growth of between 4.5 percent and 5 per cent.

Copyright Deutsche Presse-Agentur, 2013



Business & Economy

Pakistan has potential for export of value-added gems, jewellery: MinisterFriday, 25 October 2013 18:31

Posted by Shoaib-ur-Rehman Siddiqui

KARACHI: Federal Minister for Industries and Production Ghulam Murtaza Jatoi Friday saidthat Pakistan has immense potential for export of value added products of gems andjewellery.

The Minister said the country can earn billion of dollars of Foreign Exchange through theirsale in the international market. He said this after attending a presentation on Pakistan's Gemsand Jewellery, organised here by Pakistan Gems and Jewellery Development Company(PGJDC).

On the issue of shortage of staff at various centres of the Gems and Jewellery, the Ministerassured that the matters related to the Company including release of funds and filling up ofthe vacant posts will be taken up with the concerned authorities.

He further stated that the Government wants that all organisations should become self-reliantand they should not be dependent on the government.

CEO of PGJDC, Bakhtiar Khan, gave a detailed presentation to the Minister about theworking and the progress of the Company.

He informed the Minister that the size of Pakistan's jewellery market was about $ 12.5 billionwhereas the annual consumption of gold in Pakistan was around 170 tons.

He further stated that more than fifty thousand workers were engaged in 90000 enterprises ofvarious sectors of the gems and jewellery.

While briefing the Minister about the aim and objectives of setting of this Company, the CEOstated that its main objective was to raise the value chain productivity from mine to themarket and to the end users.

About the targets, he informed that the company had set a target of achieving the export of $1.50 billion by 2017 while the Company has so far set up centres of gems and jewellery in 12cities.

Bakhtiar said that gems and jewellery worth $ 1.18 billion were exported during the currentyear which was the second largest export of Pakistan.

The meeting was attended by CEO, PIDC Khalid M. Chadda and Member of the CompanyMrs Semeen Siddiqi among others.



Copyright APP (Associated Press of Pakistan), 2013

LCCI to give recommendations foreconomic revivalFriday, 25 October 2013 18:30


LAHORE: The Lahore Chamber of Commerce and Industry has decided to give a set ofcomprehensive recommendations to the government for the revival of economic activities inthe country.

The decision was made at a meeting of LCCI President Engineer Sohail Lashari with a 4-member delegation of Ferozepur Road Welfare Organization (FRWO) led by its chairmanRiaz Ahmad Sheikh here Friday.

The LCCI president said that the Lahore Chamber of Commerce & Industry had alreadystarted spade work in this regard and fast holding meetings with trade and industrialassociations to gather the challenges being faced by them and their impact on economicactivities.

He said that these recommendations would be presented to the Prime Minister and ChiefMinister Punjab for implementation.

He said that business community was the backbone of the economy as more than 90 percentrevenue is being generated through trade and industry. Engineer Sohail Lashari said, duringmeetings with a number of trade and industry associations, they came across quite a fewissues that could be resolved only through facilitation to the business community.

He said that problems like traffic mess, encroachments, infrastructure development and law& order need to be tackled on urgent basis as these are hampering the business activities.

The LCCI president informed the visiting delegation that the Lahore Chamber had alreadyappealed to the government for the simplification of taxation procedures and expansion in thetax net.

He said that business community believes that Pakistani merchandise were best of the best inthe world but fast losing their due place in the international market because of high input costin Pakistan.

Proposals would also be incorporated in the recommendations as to how costs could becurtailed in the country without any loss to the revenue, he said. Sohail Lashari said that theGovernor State Bank of Pakistan would be urged to bring down the rate of markup to ensureavailability of cheaper liquidity to the industry as it would not only help cut fast going upgraph of unemployment but would also give needed boost to the manufacturing sector.

Earlier, the chairman of the Ferozepur Road Welfare Organization, Riaz Ahmad Sheikhbriefed the LCCI president about the problems being faced by the industrialists.




Foreign investment to bring economicstability: Chairman BoIFriday, 25 October 2013 15:31

Posted by Parvez Jabri

ISLAMABAD: Chairman, Board of Investment (BoI) Mohammad Zubair has said that thegovernment wants to bring foreign investment for the economic stability and prosperity in thecountry.

He said that the government is concentrating on revenue generation, increase exports,investment and remittance in the country to revive the country's economy.

Zubair said that Japanese Company Yamaha has decided to invest 150$ million forestablishing its plant in Pakistan, which will encourage other famous brands to invest in thecountry.

Chairman BoI said the government has short and long term plan for economic stability andprosperity of the country.

Talking to a private television channel, he said, "We have introduced the economic reformsfor boosting the country's economy.

He added that long term planning would imperative for sustainable economic growth in thecountry and to improve the financial condition of common people.

Replying to a question, he said that all steps are being taken by the government to attractdirect foreign investment for the development of local industry.

He added that the local industry would have to introduce modern technology to get thebenefits of new policy formed by the government.

He said that peace in the country would be essential to enhance the foreign investment in thecountry for economic growth.




Weekly inflation up by 0.18pcFriday, 25 October 2013 14:31


ISLAMABAD: The Sensitive Price Indicator (SPI) for the week ended on October 24, for thelowest income group up to Rs8,000 registered an increase of 0.18 percent as compared to theprevious week.

The SPI for the week under review in the above mentioned group was recorded at 201.38points against 201.02 points registered in the previous week, according to data of PakistanBureau of Statistics (PBS).

The weekly SPI has been computed with base 2007-2008=100, covering 17 urban centers and53 essential items for all income groups and combined.

The SPI for the combined group recorded increase of 0.08 percent and reached at 209.79points which stood at 209.63 points in previous week.

As compared to the corresponding week of last year, the SPI for the combined group in theweek under review swelled by 11.68 percent.

As compared to the last week, the SPI for the income groups from Rs.8001-12,000, 12,001-18,000, 18001-35,000 and above Rs.35,000 increased by 0.14 percent, 0.10 percent, 0.08percent and 0.03 percent respectively.

During the week under review average prices of 6 items registered decrease, while that of 19items increase with the remaining 28 items' prices unchanged.

The items which registered decrease in their prices during the week under review includedtomato, chicken farm (live), gram pulse (washed), gur and moong pulse (washed).

The items which recorded increase in their average prices included potatoes, bananas, breadplain (mid size), egg hen (farm), cooked beef plate, masoor pulse (washed), rice basmati(broken), sugar, wheat, cigrettes, wheat flour 20 kg (bag), onion, LPG cylinder (11 kg), redchillies, mash pulse (washed), fire wood, milk fresh and vegetable ghee (loose).

The items with no change in their average prices during the week under review included beef,mutton, curd, milk powder, mustard oil, cooking oil (tin), vegetable ghee (tin), salt powder,cooked dal plate, tea prepared cup, long cloth, shirting, lawn, georgette, sandal gents, chappalspang, sandal ladies, electric charges, gas charges, kerosene oil, energy savor, washing soap,match box, petrol, diesel, telephone local call and bath soap.




Industries & Sectors

Power supply to remain suspended due tomaintenance workFriday, 25 October 2013 18:37


ISLAMABAD: The power supply would remain suspended at various feeders and gridstations due to electricity maintenance and development work.

According to IESCO spokesman the following feeders and grid station, power supply wouldremain suspended as under Saturday October 26, 08:00 am to 02:00 pm, Dina City, 09:00 amto 03:00pm, Industrial, Pir Wadhai, Mongtal, Hali Road, Bagh Sardaran, Quaid Abad, DMMills, 10:00am to 02:00 Pm Fagal Ghee, SES (ind), Sunday October 27, 09:00 am to 03:00Pm, R. Course, Askari- 11, AFIRM, Muslim Abad, Iqbal Road, Gulshan Abad, 10:00am to02:00pm , Fagal Ghee, SES (Ind), Monday October 28, 09:00 am to 01:00am Kaka Khail,Sohawa, Islam Pura Guliana, Baba Shaheed, Sana Ullah Shah, Machine Mohallah, Bolani,Nisar Shaheed, S.A. Gir, Main Bazaar Chakwal, 09:00 am to 02:00 pm, Bhara Kahu, T&T,Company Bagh, Berot, Upper Topa, 09:00 am to 03:00 pm, Dhoke Hassu, Ratta CarriageFactory, M. Road, AMC,Benazir Bhutto Shaheed, MM Kiyani Shaheed Road, S.S. Sori, KalaKhan, Lala Zar, Shamas Abad, Sirka GBC-3, M/WALI Ahmedal Feeders and surroundingareas.


PR earns Rs32.8mn extra income due toEid discountsFriday, 25 October 2013 14:28


LAHORE: Pakistan Railways earned Rs 32.80 million additional income during three days ofEid ul Azha as compared to the previous year on the same occasion due to special discountedfares.

According to the information collected from the PR sources on Friday, the PR reduced fareby 40 percent for all passenger trains on Eid on the direction of PR Minister Khwaja SaadRafique to facilitate passengers.

A number of people enjoyed the facility and expressed their trust on the PR by travelling viatrains.




Cotton and Textiles: Pakistan

Rains, floods: Cotton crop worth Rs 1.84billion damaged in PunjabOctober 26, 2013

TAHIR AMIN

Punjab government has estimated a Rs 1.84 billion cotton loss. The crop - sown on 2,46,110acres - was damaged by recent rains and floods across the province, it is learnt. According toa report of Agriculture Department of Punjab, cotton was sown on 5.40 million of acres,whereas 2,46,110 acres have been affected by floods.

According to the report Rajanpur is the worst-hit district where cotton crop on about 1,08,584acres was damaged, followed by Multan where cotton on 19,791 acres was damaged. About18,195 acres having cotton crop was damaged in Jhang, 16,279 acres in Khanewal, 14,596acres in Bahawalpur, 16,279 acres in Vehari, 3,525 acres in Pakpattan and 7820 acres in D GKhan.

According to officials, during 2013-14, cotton crop was planted on an area of 5.4 millionacres in Punjab against the target of 6 million acres, showing 9 percent decrease against thetarget, which is 5.2 percent less than the last year's sown area. Rain and floods furtherdamaged 2,46,110 acres, said officials adding that decrease in sowing was mainly attributedto the low prices of seed cotton during last two to three years and farmers' preference towardsmaize, sugarcane and rice due to monetary advantage over cotton.

The Cotton Crop Assessment Committee (CCAC) has projected cotton production target forthe current season (2013-14) at 11.95 million bales against the initial target of 13.22 millionbales, while the local industry requirement is about 13 million bales. Pakistan is likely toimport about 3 million bales of cotton, worth $1.2 billion to meet local industry requirement,after missing commodity production target, officials maintained.

According to officials, the decline in cotton production would not only result in increasingthe price, but create shortage of raw material that would also affect negatively in the value-added textile exports. The expected decline in commodity production would also deprive thecountry of valuable foreign exchange earning, they added.




CM Punjab approves Garments CityprojectOctober 26, 2013

Punjab Chief Minister Shahbaz Sharif has granted approval to the project of setting upGarments City near Kala Shah Kaku Motorway. He said that the Garments City would be setup over 1000 acres of land where Pak-China industrial zone would also be established. Hesaid that all facilities would be available to the industrialists under one roof in the GarmentsCity while a labour colony, hospital and other facilities would also be provided on prioritybasis.

He was presiding over a high level meeting at Model Town which was attended by ProvincialMinisters, Colonel Shuja Khanzada (Retd), Muhammad Shafique, Tanvir Aslam Malik,Hameeda Waheed Uddin, Advisor Dr Ijaz Nabi, MPA Ayesha Ghaus Pasha, acting chiefsecretary, senior member Board of Revenue, chairman Planning & Development, secretariesof concerned departments, office-bearers of Pakistan Garments Association and seniorofficials. Advisor to Chief Minister Dr Ijaz Nabi gave a briefing on the proposed project ofGarments City.

Addressing the meeting, the CM said that the project of Garments City is of vital importanceand would be implemented expeditiously. He said that all matters regarding the gloriousproject of Garments City would be settled in a transparent manner. Shahbaz said that theimplementation of the project would result in promotion of garments industry. He said thatChinese investors associated with textile, readymade garments and knitting have showninterest in investment in Punjab-China Industrial Zone.

The CM while issuing instructions to the concerned authorities to prepare a practicablefinancial model of the Garments City directed that a complete survey be conducted for theassessment of energy requirements of the Garments City and comprehensiverecommendations be formulated in this regard.

He also directed that proper planning should be made for the provision of infrastructure in theGarments City. He emphasised the need of special training in various skills for textile,garments and other sectors. The CM issued instructions for constituting a committee toevolve technical training programme and directed that the committee should prepare acomprehensive training programme as early as possible so that skilled workforce could beprovided to the factories to be set up in the Garments City.

Office-bearers of Pakistan Garments Association welcomed the establishment of the projectof the Garments City and said that chief minister has evolved a glorious project fordevelopment of garments industry. They assured full co-operation to Punjab government inthis regard.




Agriculture and Allied: Pakistan

Free seed distribution to small farmersOctober 26, 2013

Punjab Irrigation Department is executing seed distribution to eligible small farmers, havingland up to five acres, in Thal Canal command area of districts Layyah and Muzaffargarh freeof cost. According to the plan, as many as 37,740 small farmers of 703 villages in these twodistricts will be provided around 100,000 wheat seed bags (50 kg each bag) and 5,000 canolaoilseed packets (one kg each packet) for Rabi crop 2013-14.

The activity is a component of Social Development Action Plan of Jinnah BarrageRehabilitation and Modernisation (Phase-II) Project, disclosed a department's spokespersonhere on Friday. For the execution of seed procurement and distribution plan, the services ofPunjab Rural Support Programme have been sought by the irrigation department. In order toensure timely distribution of wheat seed to the eligible farmers for early sowing of wheatcrop, a number of distribution centres have been established at union council level. Thefarmers of 703 villages of two districts (533 villages of Layyah and 170 villages of Kot AdduTehsil of district Muzaffargarh) will be benefiting from this scheme. As of October 24 report,16,374 eligible farmers have been provided with 43,161 wheat seed bags and 2,051 canolaoilseed packets. The seed distribution activity, which commenced from October 7, isscheduled to be completed by November 7.


Indus Water Treaty: Minister expressesreservationsOctober 26, 2013

MUSHTAQ GHUMMAN

Pakistan on Friday expressed reservations over the World Bank-brokered Indus Water Treaty1960 and announced that it would safeguard the country''s interests militarily. These remarkswere made by Minister for Water and Power, Khawaja Muhammad Asif at a press conferenceafter he presided over a meeting on water issues with India.

Khawaja Asif''s remarks came just one day after a meeting with the Belgian Ambassador whocalled on him in the Ministry and discussed the Indus Water Treaty in detail. The Ministersaid Pakistan is heading towards becoming a water-starved country from a water-stressedcountry.

Replying to a question, Asif said that many patriots have doubts over the Indus Treaty inkedby the then dictator, Field Marshal Ayub Khan, adding that the Treaty was skewed towardsIndia. "We will ensure implementation on the Treaty in letter and in spirit and whateverrights are available in the Treaty must be safeguarded militarily," he added.



Asif further stated that "delays and mistakes" have been committed in the past and theincumbent government is trying to retrieve the damage, and requesting the media to be on thesame page with the government in issues related to water. India, he added, submitted twoarticles carried by the Pakistani print media in the case of controversial KishangangaHydroelectric Project before the Hague-based International Court of Justice. "I want thegovernment and media should be on the same page on issues which are being contested at theinternational fora or bilaterally with India." "I personally feel that the Indus Water Treaty isnot in favour of Pakistan," Asif continued but acknowledged that India enjoys geopoliticaladvantage over western rivers which the treaty granted were to be for Pakistan''s exclusiveuse.

When asked if Pakistan would seek to review the "controversial" Treaty Minister for Waterand Power, who recently met with Indian Prime Minister, Manmohan Singh in New York onthe sidelines of the UN General Assembly meeting as a team member of Prime MinisterNawaz Sharif said that he cannot take such a decision individually as "reopening of Treatywill be Government of Pakistan''s decision". Pakistan''s water rights are being violated, theMinister added. Asif warned that the country may face a famine in the next 10-15 years ifappropriate measures were not taken.

He said water is the issue of life and death for Pakistan and implementation of Indus WaterTreaty with India will be ensured. To a question‚ the Minister said electricity situation isimproving in the country. Earlier‚ the Minister for Water and Power was given briefing onwater situation.

Pakistan also announced that if India doesn''t change the design of Kartely project on theChenab River, the issue would be raised at the International Court for Justice. AdditionalSecretary Incharge, Saif Ullah Chattha and other officials of Water and Power Ministry werealso present at the press conference.

APP adds: Earlier, during a briefing Minister for Water and Power Khawaja MuhammadAsif said Pakistan is currently contesting with India over five water projects includingKishenganga, Ratle, Miyar, Lower Kalnai hydroelectric projects, Wullar Barrage and TulbulNavigation project. Pakistan''s Commissioner for Indus Water Mirza Asif Baig and SecretarySaifullah Chattha were also present in the briefing.

Khawaja Asif said water is a life and death issue for the people of Pakistan as the country iswater-stressed and could become water-starved in future. He said there is a need to evolve aconsensus on water issues so rights of the country could be defended vigorously. He said inhis opinion Indus water treaty signed with India did not judiciously distribute water.

When the treaty was signed Pakistan had population of 30-40 million but now it hadincreased five fold to 180-200 million, he added. He said there is need to change the waypeople use water in their homes and for agriculture. He said work will simultaneously start onDiamer-Bhasha and Dassu dams. Funding options are available for the two hydel projects. Rs21 billion has already been spent on Diamer dam and land acquisition for it has beencompleted.

The Secretary Water and Power said India has been trying to get water in excess of the limitsit is allowed under the Indus Basin Treaty. The Indus Water Commissioner said the disputeregarding the proposed diversion of Neelum water by India and draw down of the deadstorage level was referred to International Court of Arbitration.



The Commissioner said the final hearing of Court of Arbitration was concluded on 31 August2012 and partial award of the court has been awarded on 18 February, 2013 in which the firstquestion of diversion was decided in favour of India and the second question of draw down instorage level in Pakistan''s favour.

Both the parties have to submit additional data and written submissions to the Court ofArbitration and accordingly the court will decide the quantum of water to be released belowKishenganga Hydroelectric Plant in Neelum River as environmental releases. The final awardof the court is expected by December 2013, he noted.

He said Pakistan has objected on freeboard, magnitude of pondage and placement of spillwayof Ratle Hydroelectric plant of 850 megawatts, Miyar Hydroelectric Plant of 120 megawatts,Lower Kalnai plant of 48 megawatts and Pakal Dul Hydroelectric Plant of 1,000 megawattslocated on Chenab River. These objections were discussed before in two meetings of thePermanent Indus Commission in March and September and will finally be discussed in thenext meeting of the Commission likely to be held in December 2013. Pakistan and India aremembers of the Commission.

Another disputed project is Wullar barrage and during the 6th round of secretary level talks, itwas agreed that the Indian side will provide additional technical data to Pakistan. Pakistanwill examine the data to furnish its views before the next round of the talks. They informedthat unilateral construction of Wullar Barrage by India on Jhelum River was reported in 1985.Pakistan objected that storage is not allowed to India on main Jhelum. The work on theproject is suspended since 1987 and it was last verified on May 30, 2013.

The Indus Water Treaty contains provisions allowing India and Pakistan to establish river-runpower projects with limited reservoir capacity and flow control needed for feasible powergeneration. Under the treaty, all the water of the Eastern Rivers of Pakistan is available forthe unrestricted use of India. Pakistan is allowed limited agriculture use of 45,000 acres fromtributaries of river Ravi. Pakistan should receive unrestricted use of all waters of westernrivers.


Engro Fertilizer earns Rs 3.2 billion profitOctober 26, 2013

Engro Fertilizers, an unlisted company, announced 9M2013 profits of Rs 3.23 billion (EPSRs 2.77) as compared to loss of Rs 2.98 billion (LPS Rs 2.62) in the same period last year.This translates into EPS of Rs 6.33 as against LPS of Rs 5.83 on Engro Corp 511 millionshares, Topline Securities (Pvt) Ltd, said on Friday.

During the period, revenues increased by 78 percent YoY to Rs 34 billion mainly due tocompany operating its more efficient EnVen plant. In addition to this, both plants wereoperational during the 3Q2013. Both the reasons resulted in gross margins rising to 43percent (up 12pps YoY), it said.

Moreover, other income increased significantly by 188 percent to Rs 612 million while



financial charges declined by 14 percent to Rs 6.9 billion lending support to the bottom line,it said. On a quarterly basis, the company's profits stood at Rs 1.8 billion (EPS Rs 1.48) in3Q2013 as compared to loss of Rs 1.2 billion (LPS Rs 1.10) in same quarter last year, whileup 2.0x when paired against 2Q2013 EPS of Rs 0.7. 3Q2013 earnings are primarily driven by31 percent higher urea sales as both plants were operational, the securities said.


Fauji Fertilizer earnings slightly lowOctober 26, 2013

Fauji Fertilizer Bin Qasim Limited (FFBL) on Friday announced earnings of Rs 1, 477mn(EPS of Rs 1.58) in 3Q2013 compared to Rs 1, 487mn (EPS of Rs 1.59) in the same periodlast year. The earnings came in slightly below our estimate where the DPS of Rs 1 alsoremained below expectation, analysts at JS Global said.

The deviation in earnings from our expectation is primarily due to higher finance cost of Rs625mn (up 38 percent YoY and 74 percent QoQ) that can be attributed to AKBL transaction.To recall, the Askari Bank (AKBL) transaction was completed towards the early part of June,2013. The top line of FFBL has dipped by 24 percent YoY on account of 31percent YoYlower DAP off take, they said.

Nevertheless, the bottom-line of the company remained almost flat where better DAPmargins and higher urea offtake have delivered an EPS of Rs 1.58 (-1percent YoY) in3Q2013. Cumulatively, the company reported 55percent YoY higher earnings of Rs 3,295mn (EPS of Rs 3.53) in 9M2013, they said. Along with the result, they added, FFBL alsoannounced a second interim cash dividend of Rs 1/share that is in addition to first interimcash dividend of Rs 1.75/share.


Over 0.175 million acres to come undersunflower cropOctober 26, 2013

Over 0.175 lakh acres of land would be brought under sunflower crop in various areas ofPunjab. Agriculture department under special directives of Punjab government has prepared adetailed plan for the promotion of sunflower crop in the province. Sources in agriculturedepartment told Business Recorder on Friday that under the plan, special attention would begiven to grower community with a view to encouraging them to bring their maximum landunder sunflower cultivation to cope with domestic requirements.

At present, only 30 percent edible oil is being produced in the country while 70 percent beingimported to fulfill domestic needs. The demand of edible oil is on the rise due to a fastincrease in population of the country. It is high time that more efforts should be madetowards cultivation of oilseed crops, including sunflower, to minimise the import of edible



oil. The Sunflower crop can play a vital role in enhancing the production of edible oilbecause sunflower seeds have 40 percent oil capacity.

Keeping in view the importance of edible crops, the Agriculture department was makingstrenuous efforts towards, motivating growers that they should cultivate sunflower crop intheir fields and get economic benefits and help in enhancing the production of edible oilsources said. In Sialkot district, sunflower crop would be cultivated on 4000 acres of land.The Tehsil-wise break-up is Sambrial 1500 acres; Dask 200 acres; Pasrur 2000 acres and 200acres in Sialkot Tehsil.


Government may procure another 50,000tons of sugarOctober 26, 2013

MUSHTAQ GHUMMAN

The government is likely to procure another 50,000 tons of sugar to appease local millowners who are reportedly exerting pressure on the Ministry of Industries and Production(MoI&P) through Punjab-based association. With the approval of new proposal by theEconomic Co-ordination Committee (ECC) of the Cabinet headed by Finance Minister IshaqDar, total procurement will reach 150,000 tons. The next meeting of the ECC will be heldshortly.

According to official documents available with Business Recorder as per the ECC decision incase No: ECC.178/14/2007 dated 30-11-2007, Trading Corporation of Pakistan (TCP) isrequired to keep 500,000 MT of sugar at any one time as strategic reserve stock to ensureprice stability in the market in case of any unforeseen situation. The National Sugar Policy(2009-10) also emphasised that TCP shall maintain strategic reserves of 500,000 million tonsof white sugar at any one time and its modalities would be reviewed periodically.

TCP is however, required to allocate monthly quota of 50,000 MT sugar to Utility StoresCorporation (USC) and also provide sugar to Canteen Stores Department (CSD), PakistanNavy, Pakistan Army and any other government entity on the directions of the governmentfrom time to time. For this purpose, TCP maintains strategic reserves of sugar and iscontinuously engaged in procurement of sugar from local sugar mills and also imports sugarfrom international market as per requirements on the directions of ECC of the Cabinet.

The documents further disclose that presently, TCP has 31,091 MT of sugar in it stocks fromwhere 24,668 MT sugar is being allocated to USC for October 2013, leaving a balance of6,823 million tons of sugar with TCP in October 2013. According to the MoI&P,procurement of 100,000 MT sugar is under process, which will be utilised for regular quotaof USC during November/December 2013. Meanwhile, Pakistan Army has also placed arequisition for 12,400 million tons of sugar for their utilisation during 2013-14 for whichTCP has no reserve stocks to meet the requirement.

The MoI&P argues that based on the stocks, TCP requires 150,000 MT of sugar forallocation to USC against its quota for January/February 2014 and to meet the requirements



of Pakistan Army as well. For this purpose, procurement process needs to begin in the firstweek of November 2013, as procurement cycle takes about 50-60 days inclusive of the timefor re-sampling for completion of codal formalities and taking possession of stock afterpayment to sugar mills.

The ministry has proposed that keeping in view prevalent situation TCP may be allowed toprocure 150,000 million tons of sugar from domestic sugar mills to maintain strategicreserves and for ensuring smooth supply of sugar in January/February, 2014 to USC, PakistanArmy and other institutions.

The Commerce Ministry is expected to hand over the case of powerful Punjab based sugarmillers who obtained TCP tenders of a large amount by quoting the lowest price that enabledthem to avail interest-free working capital but who did not deliver the commodity and causeda loss to national exchequer to the National Accountability Bureau.


KBP urges government to fix sugar caneprocurement price at Rs 230 per maundOctober 26, 2013

Kisan Board Pakistan (KBP) urged the government to fix sugar cane minimum procurementprice at Rs 230 per maund in line with the increase in the prices of agricultural inputsregistered during the year 2013 compared to year 2012. KBP Chief Sardar Zafar HusseinKhan after an emergency meeting of the Board here on Friday while talking to media personssaid different agricultural inputs registered increase of 40 percent to 140 percent in thecurrent year as compared to 2012. He said it has increased the expenses incurred on variouscrops manifold for the growers.

He warned if the minimum procurement price of sugar cane is not fixed at Rs 230 per maundthen growers will make 'gur' or fodder from their sugar cane crop which would be moreprofitable for them. He warned that in such a case sugar millers would also struggle to buyeven a kilogram of sugar cane. KBP Chief also urged the government to give representationin cane board meetings to true representatives of the growers and fixed the support price afterconsultation of real growers and their representatives. He said sugar cane board shouldprotect the rights of the growers instead of millers and traders.

He also urged the government should immediately ensure payments to growers due againstthe mills of last crops. Cheques should be made compulsory against sale of sugar cane insteadof Cane Procurement Receipt (CPR), true growers organisations should be included in teamsto check the weighing bridges and sugar mills should be asked to run the mills at the earliestunder the sugar cane act. Sardar Zafar stated if the mills are not run immediately then therewould be dearth of land available for next wheat crop which might lead the country to afamine like situation.




Fuel and Energy: Pakistan

Water, power projects: only 10 percent ofPSDP allocation released in first quarterOctober 26, 2013

ZAHEER ABBASI

The government released only Rs 10.8 billion for water and power sector projects during thefirst quarter of the current fiscal year, which is 10 percent of the total Public SectorDevelopment Programme (PSDP) allocation for the sector. According to federal PSDPfigures released by the Planning Commission up to October 11, 2013, the governmentreleased Rs 5.9 billion for water and power division out of total allocation of Rs 57.8 billionfor the current fiscal year and Rs 4.9 billion to Wapda (Power) from Rs 51.543 billionspending projected in PSDP for the sector.

Pakistan Atomic Energy Commission received Rs 11.960 billion out of the total allocation ofRs 52.300 billion for Chashma Nuclear Power and other projects under the federal PSDP forthe current fiscal year. Higher Education Commission received Rs 3.698 billion out of Rs18.490 billion, National Health Services and Co-ordination Division received Rs 5.644billion and Finance Division Rs 1.577 billion.

The government released Rs 5.589 billion to Railways Division out of the total allocation ofRs 30.964 billion for the division under federal PSDP for the current fiscal year and InteriorDivision received Rs 1.197 billion out of the total allocation of Rs 6.259 billion. NationalHighways Authority (NHA) received Rs 7.312 billion out of the total PSDP allocation of Rs63 billion, and under the head of special areas, Earthquake Reconstruction and RehabilitationAuthority (Erra) received Rs 1.570 billion from the allocation of Rs 10 billion. However, nofunds were released to Tameer-e-Pakistan Programme out of Rs 5 billion allocated in thebudget.

Special Areas, AJK and Gilgit Baltistan were released Rs 2.654 billion and Rs 4.342 billion,respectively and Safron/Fata received Rs 3.316 billion. The government allocated Rs 19.9billion for AJK and Rs 9.598 billion for Gilgit-Baltistan under the federal PSDP for thecurrent fiscal year and Rs 18 billion for Safron/Fata. The Cabinet Division was released Rs614 million during the first quarter of the current fiscal year from the federal PSDP allocationof Rs 2.179 billion for the sector, Climate Change Division received Rs 17.263 million,Commerce Division Rs 158 million out of Rs 841 million, Communication Division otherthan NHA Rs 17.209 million out of Rs 109 million, Defence Division Rs 129 million out ofRs 3.545 billion.

Economic Affairs Division (EAD), National Heritage and Culture Division, Federal TaxOmbudsman and Ports and Shipping have yet to receive releases from the PSDP. Thegovernment released Rs 63.476 billion under the PSDP, which is 11.75 percent of the federaldevelopment programme amounting to Rs 540 billion for the current fiscal year.




Pakistan to pursue IP gas pipeline project:Nawaz told ObamaOctober 26, 2013

ALI HUSSAIN

Amid US concerns, Pakistan declared Friday that it was pursuing the multi-billion dollarIran-Pakistan gas pipeline project due to acute energy crisis in the country and it was alsoconveyed to the US side by Prime Minister Nawaz Sharif during his recent meetings inWashington. Foreign Office spokesperson Aizaz Ahmad Chaudhry responding to queriesduring a weekly press briefing said the issue of IP gas pipeline project also came underdiscussion during the recent meeting between Prime Minister Sharif and President BarackObama in Washington.

"Yes, the matter of [IP] was discussed. The position of the government of Pakistan was madeclear. It should be seen in the context of acute energy crisis that we have in our country," hesaid, adding that all options are on the table and the government is pursuing the project. Hedescribed the Prime Minister''s visit to the US as successful and result-oriented, andexpressed the hope that it will help strengthen bilateral relations based on mutual respect.

He said the Prime Minister focused on all issues of interest and concern to Pakistan includingeconomic growth, seeking US co-operation to solve energy crisis, enhance trade co-operation, social sector development, counter-terrorism, regional stability and a balance in thebilateral relationship based on mutual respect and benefits.

"The visit was certainly successful from every angle as it would now enable the two countriesto rebuild ties on the basis of mutual respect and interest, and bring things out of the mistrustwitnessed in the recent past," he remarked. He said the primary achievement of the visit wasthat "a new beginning has been made by the elected leadership of Pakistan to buildrelationship with the US based on mutuality of interest."

Referring to the US co-operation in addressing the energy crisis, he said that Pakistan and theUS energy group constituted under the strategic dialogue will be meeting in November 2013followed by a US-organised Pakistani trade mission to meet US energy companies inHouston, Texas.

To a question about the US President bringing up the issue of prosecuting those involved inthe Mumbai attacks in his meeting with Prime Minister Sharif, the spokesperson saidPakistan needed more evidences from the Indian side to move ahead in the Mumbai attackscase.

He did not specify the nature of evidences, saying that terrorism is of great concern toPakistan since it was also a victim and the answer lay not in blaming each other but workingjointly. He said the Prime Minister briefed President Obama on the progress in theimprovement of Pakistan-India ties and stressed the need that Pakistan and India should joinhands to fight against terrorism. The spokesman said that Pakistan strives for good relationswith all its neighbours including Afghanistan and India to ensure peace and security in theregion.



About the LoC violations, he said that Pakistan has already expressed serious concerns overrecent violations of cease-fire by India, adding that the time was very unfortunate as PrimeMinister Sharif was in Washington on official visit. He said the Indian troops in recent dayshave intensified unprovoked shelling on the working boundary and targeted 27 Pakistaniposts that resulted in the death of two civilians and one security personnel.

Despite these violations, he said that Prime Minister Sharif has extended a hand of friendshipto India and he has repeatedly expressed Pakistan''s desire to have good neighbourly relationswith India. He said that India should respect the cease-fire and reciprocate to Pakistan''ssincere efforts for peace and stability in the region.

To a question, he said Pakistan has no intention to indulge in firing first and Pakistani troopsonly retaliate when fired upon. About the upcoming Pak-India DGMOs meeting, he said thatPakistan believes that the decision of the two Prime Ministers about the meeting of theDGMOs must be implemented immediately to resolve the matter. To a question about DrShakeel Afridi, he said that Afridi had violated laws of the country and Pakistani courts willdecide about his fate and present democratic government does not interfere in the affairs ofthe country''s courts.

About the drone strikes, he said that the Prime Minister voiced Pakistan''s position on dronestrikes in clear manner "we do hope that the drone strikes will end". He said that pressure wasbeing built at international level as well within the US regarding drone attacks, adding that"the strategy is working and we should give some time...hopefully, we will have a goodsolution to it".

Replying to another question, the spokesperson declined to go in ''further details'' whether ornot there was an understanding between the government of Pakistan and the US in the past.Asked whether Pakistan intends to initiate a war crime case against President Obama forkilling Pakistani citizens through drone strikes as referred in the Amnesty International''srecent report, he said that Pakistan and the US are not members of the International CriminalCourt, adding that we believe that the strategy that the leadership of Pakistan is pursuing iseffective.

It is two-pronged, he said, adding we are raising the drone attacks'' issue with the USbilaterally in clear terms and at every level and we have also raised this issue in theinternational fora. "The drone strikes have implications for inter-state relations and peace andsecurity of the world. There are also serious human rights and humanitarian implications. Weare convinced that Pakistan''s view point will prevail," he observed.

Responding to a question, he said that the government''s proposed talks with the Taliban is aninternal matter of Pakistan and is part of the efforts to secure peace and the US side shouldhave no difficulty in the talks. To another query, he said that the issue of Dr Afia Siddiquiwas also raised in one of the meetings during the PM''s visit. He said that the government ofPakistan had rendered considerable help during the trial phase and now the focus is on thetransfer of offenders.

"Transfer of offenders, means that the offender can serve the remaining sentence in his/herown country...since there is no bilateral agreement between Pakistan and the US on transferof offenders, Pakistan has applied for acceding to the Council of Europe Convention. Oncethat process is over, it could provide a framework for further discussion on the matter", hesaid. However, he clarified that the arrangements will not mean to transfer Dr Shakeel Afridito the US.




Gas shortage in winter to touch 2BCFDmarkOctober 26, 2013

ABDUL RASHEED AZAD

Gas shortfall in the country during the upcoming winter is expected to reach two BillionCubic Feet per Day (BCFD) mark, due to which the government will have to curtail gassupply to all sectors, excluding domestic consumers, Petroleum Ministry officials said.

They said that total gas shortfall in the system of Sui-Northern Gas Pipeline Limited(SNGPL) and Sui-Southern Gas Company Limited (SSGC) stood at 1.3 BCFD, of whichSNGPL was facing a gas shortfall of 1.1 BCFD while SSGC of 200 Million Cubic Feet perDay (MMCFD). With the start of November, gas shortfall will swell due to increased use ofgas by domestic consumers for heating and other purposes and in the December-January itwill reach its peak when gas shortage will touch 2 BCFD mark.

Shortage in SNGPL network is expected to reach 1.4 to 1.6 BCFD mark in December-January while on SSGC''s system it will touch the 400 MMCFD mark. To deal with thisshortage, the management of SSGC will reduce gas supply to industrial sector from sevendays a week to five days a week, while gas supply to fertiliser sector will remain completelysuspended during winter and CNG stations will get four days a week gas.

SNGPL is expected to completely curtail gas supply to fertiliser and industrial sectors whilethe management has taken no decision about gas supply to CNG stations which, according totop Petroleum Ministry officials, will get the supply of this fuel for two or three days a week.The management of SNGPL is contemplating different options to deal with gas shortagesincluding time-bound gas supply to domestic and commercial consumers, ie four-hour gassupply three times a day in the morning, day and evening times for cooking and otherpurposes.

Gas consumers on the network of SNGPL especially in Punjab and federal capital will befacing the worst gas load-shedding as the company will be supplying 1.9 BCFD gas againsttotal demand of 3.3 BCFD. While SGGC is to face a shortfall of 400 MMCFD gas, due tochilly weather gas demand will increase by 200 MMCFD from current 1.1 BCFD to 1.5BCFD. "Domestic consumers will be preferred over the rest; however, after fulfilling gassupply agreements the remaining gas will be distributed among all sectors on an equitablebasis," an official said.




Rawalpindi, Islamabad: large number ofillegal gas connections unearthed in twodaysOctober 26, 2013

ABDUL RASHEED AZAD

The management of Sui-Northern Gas Pipelines Limited (SNGPL) has detected a largenumber of illegal gas connections in twin cities of Rawalpindi/Islamabad during the past twodays, officials stated. Official sources told Business Recorder here on Friday that as per initialestimates, the current illegal gas users unearthed in last two days were causing a loss of Rs 25million per annum to national kitty.

"So far we have detected gas theft cases worth Rs 375 million in the limits of Potohar Regionin four months," officials added. "Owners of Habib Restaurant Mandi Morr were caught red-handed for directly using gas from the mainline, Shanwari Hotel was using gas throughtampered domestic meter for commercial purposes, while gas supply to Marina Guest House,British Lodges Guest House, Oasis Guest House on Nazim-ud-Din Road Islamabad, andNana's Kitchen was disconnected for using domestic meter for commercial purposes.

Madina's Boys Hostel Sihala's gas disconnected, Spring Salt Restaurant Kohsar Market gasdisconnected for using gas from domestic meter illegally, while gas supply to AQS cafeopposite Rose and Jasmine garden disconnected for using domestic meter for commercialpurposes. Pizza Party Rest F-7, Luxury Palace F-7, Liam Cafe F-6, Maskan Guest House G-9, Fresh & Frozen F-6 and Afghan Namkeen were also doing the same practice," officialwhile sharing the unearthed gas theft cases told this scribe.

To deal with the gas theft issues in the twin cities and other areas, he said, high-ups of the gasutility had formed special monitoring teams which are conducting raids in different parts ofthe area and so far have detected thousands of gas theft cases. The company had lodged casesagainst the gas thieves as per relevant laws, he added. "Connections of as many as 17 hotelsin the federal capital have been disconnected on account of using different tactics fortampering gas meters. We have started legal proceedings against the owners of these hotelsand a fine in the range of Rs 2 million to Rs 7 million could be imposed on those involved inthe gas theft," said a senior official of SNGPL talking to this correspondent.

The official added that from January 2013 to-date some 3,000 illegal gas meters had beenremoved by the concerned department of the company. "We have also identified four peopleinvolved in providing undocumented gas meters to different clients and those persons arebehind the bars," he maintained. Gas connections of as many as 50 Tandoors and 100 milkshops have been disconnected and 36 CNG stations in the region have also been foundstealing the gas.

Gas connections given to nine plaster of paris plants were also removed, which were causingan estimated loss of Rs 110.5 million to the national kitty per annum. These plants werepaying Rs 2,000 average monthly gas bill against over Rs 10 million. SNGPL has alsodisconnected gas supply to some 25 baking plants in the twin cities, which were involved intampering gas meters. These bakeries were using domestic gas meters for commercial



activities. The top bakeries of the twin cities including Tehzaib and Rahat were also using thegas illegally.

Officials also said local police was not co-operating with the SNGPL raiding teams and wereprotecting the gas thieves. They said the federal government should take stern action againstthose police officials who were protecting gas thieves. "When we conducted raid on plaster ofparis plants on Japan Road of Islamabad, officials of local police station engaged by theraiding team informed the owners of the factories and they removed gas meters from theirplants," official said, adding that such behaviour of the law enforcement authorities was onlyencouraging the gas thieves. They said that detection of gas theft in over-populated areas ofthe twin cities as compared to less-populated areas was much difficult, but localadministration of SNGPL was committed to purge the area of gas thieves.


OGDC posts Rs 33.6 billion profit for1QFY14October 26, 2013

The OGDC, Pakistan's largest listed company with market cap of more than $10 billion,posted profit of Rs 33.6 billion that translated into EPS of Rs 7.81 in 1QFY14, up 31 percentfrom Rs 5.97 posted in the corresponding period last year, according to Topline Securities onFriday. It said this falls quite short against market consensus of Rs 6.5-7.0. The corporateresult is also accompanied by first interim cash dividend of Rs 2.00 per share.

The hike in earnings comes from (i) increase in the company's topline and (ii) higher otherincome, it said. During the period under review, the company's topline increased by 16percent to Rs 62.4 billion versus Rs 53.8 billion last year on account of 2.8 percent higher oilproduction and 8.7 percent year on year PKR depreciation in 1QFY14, it said.

Moreover, the company's other income increased by a massive 185 percent, which furtherenhanced its bottom-line. This is primarily driven by interest income from investments inTFCs and PIBs, Topline Securities said.


Power shortfall soars to 3,000 megawattsOctober 26, 2013

Power shortfall has started widening again, soaring to 3,000MW on Friday amidst fear offurther escalation ahead. According to the NTDC, power generation stood at 9,900MWagainst a demand of 12,900MW, leaving the system with a shortfall of 3,000MW.Meanwhile, power generation through hydel, thermal and IPPs remained 3,150MW,1,650MW and 5,100MW, respectively.

The NTDC further said scheduled of loadshedding had been implemented in the country



however, the consumers pointed out that the level of loadshedding was on the rise with everypassing day. Especially, they expressed their concerns over drop in generation of electricity,falling below 10,000MW, which had reached to 16,000MW at one point of time.

They said mixed reports were being received that the government was going to change theMinister for Water and Power that might be the one reason of drop in power generation.

Meanwhile, the industrial consumers have reiterated their demand of exempting them fromloadshedding during coming winter to meet the energy demand during gas load managementin Punjab. However, no tangible decision has so far been taken in this regard.


Chinese team discusses Nandipur powerproject with ShahbazOctober 26, 2013

A delegation of Chinese company Dongfang Electric International, which is working onNandipur power project, led by company's chief, Han Zhiqiao met Punjab Chief MinisterShahbaz Sharif on Friday. Provincial Minister for Energy, Sher Ali Khan, Secretary Energyand Managing Director Nandipur power project, Captain Mehmood (Retd), concernedofficials as well as Vice President Dongfang Electric International Zhang Guorong andProject Manager, Chen Youping were also present on the occasion.

Matters regarding completion of Nandipur power project were discussed in the meeting.Speaking on the occasion, Shahbaz said that Nandipur power project is of vital importanceand should be completed as early as possible. He said that PML-N government has revivedthis project and transported machinery from Karachi after which work is being carried outexpeditiously on the project.

Government wants to complete this project even before the stipulated period with the co-operation of the Chinese company as this project will help in resolving energy crisis in thecountry, he added. He further said that Nandipur power project will serve as another shiningexample of Pak-China friendship and it is hoped that due to sincere efforts, the project willbecome operational at the beginning of next year.

He said that China is a trustworthy friend of Pakistan and his recent visit will help in openingup new avenues of co-operation between the two countries in energy sector. Shahbaz offeredco-operation to the officials of the Chinese company in other energy projects in Punjab towhich the chief of Dongfang Electric International (DEC) thanked the CM and assured tocooperate in other energy projects in Punjab as well. Han Zhiqiao said that special attention isbeing paid to the standard of construction of the project. He said that he is deeply impressedwith the working style of CM Shahbaz Sharif whose speed of execution of projects isunbelievable. He said that Shahbaz Sharif is playing an important role in strengthening Pak-China friendship.




Fuel and Energy: World

US oil futures up; Brent/WTI spreadnarrowsOctober 26, 2013

US oil futures ended higher for the second day in row on Friday while European Brent crudefell, tightening the trans-Atlantic spread as traders bet that increasing refinery operations anda major new Midwest pipeline will slow the rise in inventories. Brent was pressured by newsthat Scotland's Grangemouth refinery, which provides power for a major oil pipeline, willremain open, keeping streams of the North Sea crude that underpins the Brent contractflowing.

"It seems as if that situation in Scotland has resolved itself and you're witnessing profit takingin the Brent/WTI spread," said Gene McGillian, analyst with Tradition Energy in Stamford,Connecticut. US gasoline futures fell after gaining sharply in the previous session on news ofa fire at Citgo's Lemont, Illinois, refinery. Gasoline futures traded lower for much of thesession but ended virtually flat at $2.5871 per gallon.

Traders sold crack spreads as supplies of the fuel remain high, some brokers said, but thecontract ended virtually flat on the day. US crude oil ended 74 cents higher at $97.85 a barrelbut finished the week with a 3 percent loss and its third weekly decline. Brent crude forDecember ended 6 cents a barrel lower at $106.93, its third day of losses and second weeklydecline. Brent ended the week 2.7 percent lower, its biggest weekly decline in one month.

Brent's premium over US oil narrowed by as much as $1.16 by early afternoon to trade at alow of $8.72, breaching the 15-day moving average of $8.87 for the first time in one month.The spread settled at $9.08. US crude oil prices have been pressured by a seasonal dip indemand and increasing domestic oil production that has boosted stockpiles, particularly onthe US Gulf Coast. Signs of growing inventories pushed the Brent/WTI spread to a nearseven-month low of more than $13 a barrel earlier this week.

Some traders and analysts said that the spread's move had been overdone, and by Friday themarket had returned its focus to refineries returning from maintenance and the start-up ofTransCanada's MarketLink pipeline to the Gulf. The line, which is due to begin filling nextmonth, will drain supplies from the oil hub in Cushing, Oklahoma by creating another link tothe Gulf Coast. Economic data reflecting a slowdown from the fallout of the partialgovernment shutdown kept a lid on prices. A durable goods report showed new ordersoutside of transportation equipment fell in September in a possible sign companies wereholding back on investments due to uncertainty over government spending.

Speculators cut their net long US crude futures and options positions in the week to October1, the US Commodity Futures Trading Commission (CFTC) said on Friday. The data wasdelayed due to the partial government shutdown. The CFTC will release subsequent reportsover the next two weeks. In the European oil market, Brent oil was also pressured on higheroutput from several producers in the Middle East and North Africa, analysts said.



"Balances are not as tight as we, or the market, had expected," said Virendra Chauhan, oilanalyst at London-based consultancy Energy Aspects. "The worst of this year's supplyshortfalls is now behind us, with maintenance at non-Opec fields largely complete and someof the lost Opec production also coming back in Libya, Nigeria and Iraq," Chauhan added.

Copyright Reuters, 2013

Iran oil exports to plungeOctober 26, 2013

Iran's oil sales in October will fall to their lowest in months, according to sources who tracktanker loadings, indicating no early petrodollar dividend for Iran despite its apparentwillingness to compromise on its disputed nuclear work. The Opec-member is reaching out toits mostly Asian oil buyers to start clawing back the million barrels in market share lost torivals such as Iraq and Saudi Arabia since the US and EU slapped it last year with thetoughest sanctions in decades.

Copyright Reuters, 2013



Miscellaneous News

Trade preferences: Germany backsPakistan’s bid for EU GSP Plus statusBy Our Correspondent

Published: October 26, 2013

ISLAMABAD:

As the European parliament is going to consider Pakistan’s request for duty-free accessto its markets, Germany – Islamabad’s biggest European trading partner – hasprovided its support for the country’s bid to qualify for the trade preferences scheme.

“Germany’s position on the Generalised Scheme of Preferences (GSP) Plus is known and itsupports Pakistan’s application,” said German Ambassador to Pakistan Cyrill Nunn whilespeaking at a press conference here on Friday.

He said the European parliament would consider at the beginning of next month the GSP Pluspackage for 10 countries including Pakistan and the ball was in its court. The EuropeanCommission has already approved the package that will allow the 10 developing countries toexport their products without any duties.

The GSP Plus is granted to those countries that ratify and implement internationalconventions relating to human and labour rights, environment and good governance. The EUhas been closely watching Pakistan’s human rights record and also fiercely opposes the deathpenalty.

Nunn held the media interaction just a couple of days before a 90-member Pakistandelegation comprising over 60 leading companies and headed by Punjab Chief MinisterShahbaz Sharif leaves for Germany to attend a conference.

The delegation will attend Pakistan Business Day conference in Berlin and Munich onOctober 30 and 31. It is being organised by the Pakistan German Business Forum inassociation with the German Embassy in Islamabad and the German Consulate General inKarachi.

The trip comes in the backdrop of meetings held between German Federal Foreign MinisterDr Guido Westerwelle and Prime Minister Nawaz Sharif in early June this year, in whichthey agreed on tangible measures to enhance bilateral cooperation.

Nunn said it would be the largest and highest-ranking Pakistan trade delegation in the historyof bilateral relations. Germany had extended the invitation to all provincial chief ministers, headded. But only Shahbaz chose to attend the conference.



Many German multinational companies and medium-sized firms have registered for theconference, showing their interest in enhancing trade ties with Pakistan. This initiative wouldhighlight the potential of Pakistan’s economy to German investors and at the same time bringrelevant Pakistan companies together with business partners to Germany, he added.

With a trade volume of over $2 billion, Germany is Pakistan’s biggest trading partner in theEuropean Union and the second biggest in the world followed by China. Over 40 Germancompanies are present in the Pakistan market in different sectors such as engineering, energy,pharmaceuticals and logistics.

But Nunn said the volume was far below the potential. Germany’s trade with India was over$12 billion, with Malaysia $10.3 billon, with Thailand $10.8 billion and with Bangladeshdouble than that with Pakistan.

Nunn said last year there was a 10% increase in bilateral trade despite absence of any majorinitiative, adding German companies manufacturing mining machines were keen to dobusiness with Pakistan.

Highlighting common concerns of foreign investors, Nunn said energy crisis, rule of law,transparency and protection of investment were the issues that worried the investors. “Weneed more conducive surroundings, which also encompasses security situation,” he added.

He said the new government was taking encouraging economic decisions, particularly in theareas of energy and taxation. Its decision to hold an all parties conference on economy wasalso a welcome sign, he said.

Supporting normalisation of Pak-India trade ties, he stressed that opening borders for tradewas very important and the European experience showed free trade between nations wouldlead to a win-win situation.

Pakistan could be a good place for setting up manufacturing units to serve neighbouringcountries but it was linked with opening of borders, he said.

Published in The Express Tribune, October 26th, 2013.

Undelivered tax notices: NADRA takesFBR to task, rejects claim of fake addressesBy Our Correspondent


ISLAMABAD:

The National Database and Registration Authority (NADRA) on Friday took theFederal Board of Revenue (FBR) to task for holding the authority responsible forfailure of the tax net broadening drive.

NADRA rebuffed the FBR’s claim that due to NADRA’s mistake out of over 30,000 noticessent to potential taxpayers, about two-thirds could not be delivered due to fake addresses.



FBR Member Facilitation and Taxpayers Education Riffat Shaheen Qazi gave the statementon Thursday.

“In the backdrop of upcoming IMF visit, this is a strategy aimed at passing the buck to aninstitution of international repute,” said a top NADRA official who spoke on condition ofanonymity.

He said the FBR embarrassed itself by claiming that NADRA’s data about tax evaders waswrong and hence they could not collect taxes from them. NADRA Chairman Tariq Malik metwith FBR Chairman Tariq Bajwa on Friday and sought data of 30,500 tax evaders as well asclarification.

After the meeting, the FBR clarified that out of 30,533 notices issued to potential taxpayers,only 9,365 notices had not been delivered by the courier. The FBR admitted that it was in thedark about the status of the remaining about 10,000 notices as the delivery report was intransit.

The FBR stated that of the 9,365 undelivered notices, 2,809 returned due to incompleteaddress, 3,000 addresses were outside the service area of the courier and the remaining hadincorrect addresses. Furthermore, 18% of them were said to have shifted to another place ortheir homes were closed and a further 5% refused to receive the notice.

The NADRA official said the FBR never contacted the authority before sending notices to thetax dodgers. The FBR used its own data for issuing the notices, and used NADRA’s onlineservice provided to banks known as Verisys (CNIC verification service). It is still unclearwhether the FBR sent notices to present, temporary or permanent addresses.

The official expressed his surprise over the fact that the FBR did not have any report of about10,000 notices as the courier has not yet given their status.

After creating a mess, “the FBR has now approached NADRA for assistance,” the officialsaid. NADRA seeks details of undelivered notices as there are multiple ways to find out theperson of interest.

One is through family tree. In NADRA database, more than 93% of citizens have samecurrent and permanent addresses on the CNIC. On the basis of real identities, verification ofelectoral rolls was carried out by the Election Commission of Pakistan for preparingtransparent electoral rolls.

Besides, the same real identities are being used in the processing of passport, issuance ofcellular SIMs, opening of bank accounts and delivery of bank statements at postal addressesgiven in the CNICs.

However, in a bid to avoid a situation like this, NADRA has been asking the FBR to sign amemorandum of understanding for sharing data for the last four months. If NADRA’s data ofreal identities was used, the situation would have been quite different, he added.

In this regard, NADRA is still waiting for data from the FBR. NADRA is seeking paymentsin return for sharing the data, a demand the FBR is not ready to accept.




PTA reviews progress on blockingunverified SIMsBy Our Correspondent


ISLAMABAD: Pakistan Telecommunication Authority (PTA) has said that it hasinspected Home Location Registers of cellular mobile operators (CMOs) to ensure theblocking of unverified SIMs.

A PTA team, headed by the director general (enforcement), visited CMO offices on Thursdayand Friday to confirm the blocking of SIMs that could not be re-verified beyond September2013, the PTA says in a press release.

During the visit, PTA – the telecom regulator – examined the progress made by the CMOs onidentifying and blocking unverified SIMs. Mobile operators assured the regulator that theywould continue efforts to check identity theft that led to activation of SIMs without theknowledge of CNIC holders.

PTA has set up a system called “SIM Information System – 668” in order to ensure that SIMsare registered against the CNIC of the authorised user.

A customer can get the count of each mobile company’s SIMs registered against his CNIC bysending the CNIC number to short code “668”. In case of any data mismatch, the customercan remove extra SIMs issued against his CNIC by requesting the operator concerned.

Users of all SIMs, which are disowned, are then approached by the respective mobileoperator to get the SIM registered against their CNIC. Otherwise, they are blocked after 15days.

PTA has asked people to support the regulator and CMOs by using this system and disownextra SIMs registered against their CNICs without consent.

“PTA is following policy guidelines of the government on blocking and verification of SIMs.It is hoped that the issue of unauthorised SIMs will be resolved through efforts of allstakeholders including the general public,” the regulator said.




Corporate results: Banking sector postsmixed resultsBy Our Correspondent


KARACHI:

HBL Pakistan released its financial results for the first nine months of calendar year2013, with profit after tax reported at Rs16.7 billion, compared to Rs17.4 billion earnedin the corresponding period last year, a mere 4% drop on a consolidated basisconsidering the fall in banking spreads throughout the industry.

Earnings per share for the bank were recorded at Rs12.43 for the nine month period, down4% from Rs12.92 in the previous year. The board of directors issued a dividend payment ofRs2 per share.

Net Interest Income (NII) for the nine month period clocked in at Rs40.4 billion, down 7%from Rs43.6 billion in the previous year.

The bank was able to bring down provisions for non-performing loans to Rs1.17 billion,compared with Rs4.18 billion in the year-ago period, a 67% drop.

Net non mark-up/interest income rose to Rs12.8 billion from Rs11.5 billion in the previousyear, an 11% increase contributed to mainly from fee, commission and brokerage incomewhich clocked in at Rs5.7 billion (up from Rs4.6 billion), and sale of securities whichamounted to Rs1.58 billion (up from Rs753 million).

Administrative expenses also rose to Rs26.7 billion from Rs22.8 billion in the previous year,bringing total non-markup expenses to Rs27.1 billion, up 16% from Rs23.4 billion.

National Bank of Pakistan

National Bank of Pakistan announced its financial results for the first nine months of calendaryear 2013, showing an after-tax profit of Rs7.2 billion, down 46% from Rs13.4 billion for thecorresponding period in the previous year on a consolidated basis, resulting in earnings pershare of Rs3.41 compared to Rs6.34 previously.

The board of directors decided against paying a dividend, which coupled with thedisappointing result led to a drop of Rs2.48 in the stock prices on the Karachi StockExchange on Friday.

The massive drop in profits came mainly from reduced Net Interest Income (NII), whichstood at Rs16.9 billion compared to Rs26.4 billion in the previous year, a 36% drop on a



consolidatedbasis. The bank saw its provisions against loans rise from Rs4.5 billion in the previous year toRs12.1 billion.

The fall in NII comes as banking spreads shrunk across the board this quarter as the StateBank, after an increase in interest rates, announced an unexpected rise in deposit rates, whichresults in an increase in cost for banks. In this scenario, most banks have relied on non-interest income to boost revenues. According to Topline Securities, low banking spreadscenarios averaged 6.26% in the nine month period compared to 7.14% in the correspondingperiod of last year.

Total non-mark up income witnessed some gains, increasing from Rs17 billion in theprevious year to Rs19.5 billion in the reporting year, mainly through gains in fees,commission and brokerage incomes and higher capital gains. However total non-markup/interest expenses also rose from Rs24.5 billion to Rs27.3 billion.


Corporate results: OGDC profit jumps31% to Rs33.5 billionBy Our Correspondent


KARACHI: Oil and Gas Development Company (OGDC) on Friday announced a30.9% rise in profit for the first quarter of current fiscal year 2013-14 on the back ofhigher production and better petroleum prices.

Profit for the July-September quarter soared to Rs33.59 billion from Rs25.655 billion in thesame period of previous year, a better result than what most analysts had predicted. Thecompany announced a cash dividend of Rs2 for the quarter.

State-run OGDC, which is Pakistan’s largest petroleum producer, also benefited fromdepreciation of rupee as most of the wellhead gas prices were benchmarked with the USdollar, analysts said.

Another major boost to profit came from other income, which rose 184% to Rs7.425 billion.Most of this increased income came from interest earnings on Pakistan Investment Bonds,which the government had issued to settle inter-corporate circular debt.

OGDC’s exploration expense jumped 34% to Rs1.95 billion, but some analysts said it wasbelow what had been expected. Petroleum explorers are under increasing pressure to ramp upproduction as gas shortages have hampered industrial and commercial activity.



With a market capitalisation of more than $10 billion, OGDC is also the largest listedcompany. Its share price rose 2.8% to close at Rs261.36 at the Karachi Stock Exchange.

The company accounts for 54% and 26% of oil and gas production respectively. It isdeveloping fields, which hold substantial potential, including Kunnar Pasakhi Deep, Sinjhoroand Uch fields. OGDC is also on the list of companies, which the government intends toprivatise.


Corporate results: FFBL profit up despitegas curtailment woesBy Our Correspondent


KARACHI: Fauji FertilizerBin Qasim Limited (FFBL) announced its financial resultsfor the first ninth months of calendar year 2013, revealing an after-tax profit of Rs3.2billion, up 51% on a consolidated basis from Rs2.1 billion in the previous year. Howeverprofit after tax for the third quarter of the fiscal year remained largely the same atRs1.4 billion when compared to last year’s figure of Rs1.48 billion.

Earnings per share for the nine month period were recorded at Rs3.58, up 57% from Rs2.28in the previous year. The company issued a dividend of Rs1 per share.

The company recorded a rise in net sales for the nine month period at Rs33.7 billion, up 15%from Rs29.2 billion in the previous year. The rise in sales resulted in a gross profit of Rs9.1billion compared to Rs6.43 billion in the previous year.

The rise in monetary sales is primarily because of a low base as the company produced lowerDi-Ammonium Phosphate (DAP) and urea due to non availability of gas coupled with annualoverhaul of the plant because of which production operations remained suspended for about64 days. However, the company was still able to increase production over the previous yearfor both urea and DAP, resulting in higher off-takes, according to Sarfraz Abbasi of SummitResearch.

However net sales in the third quarter of the calendar year actually dropped 24% to Rs13.6billion when compared to Rs17.9 billion of last year, bringing gross profits down from Rs3.9billion to Rs3.8 billion, earnings per share down to Rs1.58 from a previous Rs1.59.

According to Shajar Capital, DAP sales during the first nine months witnessed a 21%increase year on year, although urea offtake witnessed a slight decrease on 3% year on year.

The company also saw an 8% drop in financial costs coming in at Rs1.2 billion, from Rs1.3billion in the previous year.



The improvement in earnings is primarily attributable to the ~21%YoY increase in thecompany’s DAP sales during 9MCY13, although urea offtake witnessed a slight decrease on3%YoY.


Becoming sophisticated: Branchlessbanking accounts grow 10%By Our Correspondent


KARACHI: Branchless banking accounts grew 10% in the April-June quarter this yearand reached 2.6 million, says the 8th issue of the State Bank of Pakistan’s BranchlessBanking Newsletter for the second quarter of calendar year 2013.

In the quarter, branchless banking services providers performed 44.8 million transactionsvaluing Rs173 billion, a 9% growth in volume and 1% growth in value. On average, agentsperformed 497,333 transactions per day with an average transaction size of Rs3,870.

The number of agents offering branchless banking services rose above 93,800. However, thegrowth was also supported by the growing trend of shared agents.

According to the analysis provided in the newsletter, 83% of transactions have been donethrough over-the-counter (OTC) model, whereas only 12% transactions were performedthrough m-wallets.

OTC means transactions from one CNIC to another CNIC that do not involve mobile walletas opposed to more sophisticated channels that entail greater know-your-customer (KYC)requirements.

Fund transfers continued to have a major share in volume and value of OTC transactions,followed by utility bill payments. Both types of transactions not only constituted a majorshare in branchless banking, but also represented prime categories for industry-wide growthand earnings.

The newsletter says that the branchless banking industry is expected to become competitivewith the entry of new players. In the last two quarters, three new players – Mobicash,Timepey and HBL Express – have initiated branchless banking operations whereas U-Microfinance Bank commenced branchless banking under the brand name U-Paisa in August.

Further expansion in the market is also likely in the coming quarters, since a few other banks,which are currently in the pilot phase, are preparing to launch branchless banking activities.




Corporate results: Engro Fert breathes sighof relief as both plants onlineBy Our Correspondent


KARACHI: Engro Fertilizers, a subsidiary of Engro Corporation, posted its financialresults on its website, announcing a profit of Rs3.2 billion for the first nine months ofcalendar year 2013. This compares to a loss of Rs2.97 billion in the correspondingperiod last year, resulting in earnings per share of Rs2.77 for the current period,compared with a loss per share of Rs2.62 in the previous year.

The company was able to increase net sales by 78% to Rs34.4 billion, resulting in a 151%increase in net gross profits from Rs5.9 billion in the previous year to Rs14.8 billion in thefirst nine months of the current calendar year.

The increase in sales was mainly due to availability of gas for Engro’s EnVen plant. As aresult of which, both plants owned by the company were operational in third quarter of thecurrent calendar year. However, the supply of gas to the new plant is temporary, and analystsexpect a reversion to its previous inactive state once the allotted time is over.

Engro Fertilizer also saw an increase of 188% in other income, which rose from Rs212million to Rs611 million for the current nine month period. Conversely finance costs fell 15%from Rs8.1 billion to Rs6.9 billion.

On quarterly basis, the company’s profits stood at Rs1.8billion in the third quarter of calendaryear 2013, as compared with a loss of Rs1.2 billion in the corresponding period last year.Profits almost doubled on a quarter on quarter basis, driven primarily by 31% higher ureasales due to gas availability for both plants.

Engro Fertilizer is one of the largest fertiliser producers in Pakistan. Its EnVen plant was thecompany’s biggest investment in the country, and the largest single train fertiliser plant inSouth Asia. However, the plant has not been supplied gas for long periods of time, resultingin massive losses for the company. The current reprieve, though temporary, was welcomedby investors, especially after Engro Foods, another subsidiary of Engro Corporation, postedlower than expected income.


Govt appeares to be bowing to pressurefrom traders once againBy Shahbaz Rana




Earlier, PML-N government retreated from a major tax policy introduced to document theentire supply chain on the demand of the country’s industrialists. CREATIVE COMMONS

ISLAMABAD: The PML-N’s federal government seemed to be compromising ondocumentation of economy, as on Friday it considered withdrawing the condition offiling wealth statement in an attempt to please the traders’ community – its traditionalvoters.

A meeting was held here at the Federal Board of Revenue (FBR) headquarters with therepresentatives of traders, mainly hailing from Punjab and some from Peshawar, according tosources. The traders’ delegation was led by PML-N’s Member of National Assembly fromLahore, Pervaiz Malik.

One of the main demands of the traders was to withdraw the condition of filing wealthstatement – a form that carries details of all moveable and immovable assets and is also abase for calculating the income support levy that the government imposed in the budget thisyear.

It was the second time that the PML-N government was bowing to pressure from its voters.Earlier, it retreated from a major tax policy introduced to document the entire supply chain onthe demand of the country’s industrialists.

In June, the government brought an amendment to the Income Tax Ordinance and made itbinding for individuals and Association of Persons to file wealth statement along with incometax returns. Initial deadline for filing the statement and the return was September 30, whichhas been extended twice. The fresh deadline is November 30.

Furthermore, the government levied 0.5% income support levy on the value of tangible andintangible movable assets, mentioned in the wealth statement. It estimates to collect Rs15billion on this account in the current financial year. However, the levy cannot be assessedwithout the wealth statement, according to FBR officials.

“I met with the FBR chairman on the directive of Punjab Chief Minister Shahbaz Sharif andwith the consent of Finance Minister Ishaq Dar,” said Pervaiz Malik while talking to TheExpress Tribune.

He said the traders sought withdrawal of the requirement of filing the wealth statement.

Malik said FBR Chairman Tariq Bajwa assured them that the revenue board would removethe irritants and the Punjab chief minister had constituted a committee, headed by him, toaddress the issues of traders.

Sources said the chief minister had also called the FBR chairman in Lahore earlier this weekand asked him to sit with the traders and address their woes.

To a question about mixing political and pure economic issues, Malik said the governmentbelieved in widening the tax base and economic growth.

It was the second time that Shahbaz sought major tax concessions for the traders. Earlier, hehad pleaded the case of agriculturalists, seeking relief in electricity tariffs for tube wells.



Bajwa was not available for comments. However, according to a senior FBR official, theFBR only listened to the demands of traders and would place them before the financeminister when he returned from a foreign visit. It would need major changes in law, he said.

The traders also pressed for taking back the decision on increasing penalties on late filing ofreturns and statements, sources said.

The government has increased the penalty on failure to furnish the statement under Sections115, 165 and 165-A to Rs2,500 per day subject to a minimum penalty of Rs50,000.




OPEN MARKET FOREX RATESUpdated at: 26/10/2013 7:37 AM (PST)

Currency Buying Selling

Australian Dollar 101.15 101.4

Bahrain Dinar 282.25 282.5

Canadian Dollar 101.25 101.5

China Yuan 17.35 17.5

Danish Krone 19.25 19.5

Euro 145.5 145.75

Hong Kong Dollar 13.3 13.55

Indian Rupee 1.7 1.8

Japanese Yen 1.087 1.18

Kuwaiti Dinar 375.25 375.5

Malaysian Ringgit 33.4 33.65

NewZealand $ 88.75 89

Norwegians Krone 17.75 18

Omani Riyal 275.75 276

Qatari Riyal 29.15 29.4

Saudi Riyal 28.1 28.35

Singapore Dollar 84.9 85.15

Swedish Korona 16.5 16.75

Swiss Franc 117.5 117.75

Thai Bhat 3.25 3.4

U.A.E Dirham 28.8 29.05

UK Pound Sterling 171 171.25

US Dollar 106.6 106.85



INTER BANK RATESUpdated at: 26/10/2013 7:37 AM (PST)

CurrencyBank Buying

TT CleanBank Selling

TT & OD

Australian Dollar 101.93 102.13

Canadian Dollar 101.82 102.01

Danish Krone 19.63 19.67

Euro 146.43 146.7

Hong Kong Dollar 13.67 13.7

Japanese Yen 1.0904 1.0924

Saudi Riyal 28.26 28.32

Singapore Dollar 85.68 85.84

Swedish Korona 16.7 16.73

Swiss Franc 118.97 119.2

U.A.E Dirham 28.86 28.91

UK Pound Sterling 172.13 172.45

US Dollar 106 106.2



Bullion Rates (Gold Prices) in PakistanRupee (PKR)As on Sat, Oct 26 2013, 04:00 GMT

Metal SymbolPKR

for 10 GmPKR

for 1 TolaPKR

for 1 Ounce

Gold 24K XAU 46,253 53,892 143,865

Palladium XPD 25,406 29,602 79,022

Platinum XPT 49,748 57,964 154,735

Silver XAG 773 900 2,403

Gold Rates in other Major Currencies

Currency Symbol 10 Gm 1 Tola1

Ounce

AustralianDollar

AUD 454 528 1,411

CanadianDollar

CAD 454 529 1,413

Euro EUR 315 367 980

JapaneseYen

JPY 42,349 49,343 131,722

U.A.EDirham

AED 1,597 1,860 4,967

UKPoundSterling

GBP 269 313 836

USDollar

USD 435 507 1,352

* These rates are taken from International Market so there may be some fluctuation fromLocal Market.

news 26 oct 2013 email # 244-2013 26... · pak law publication news alerts 26 october 2013 email #...

Documents