Tuesday, 15 November, 2011Pages: 8

Privatisation an economicwatershed Page 2No load sheddingfor industry: LESCO Page 4

The political economy oftrade blocs Page 3

Remittances increaseto $4.3 billion

KARACHI

ISMAIL DILAWAR

PAKISTANIS working abroadremitted over $4.315 billionduring first four months (July–October) of the current fiscal year

(2011-12), the central bank reportedMonday. This shows what the regulatorcalled an “impressive” growth of 23.24 percent or $813.66 million over $3.501 billionthe country had received during thecorresponding period last year (July-Oct2010). Remittance receipts from across theworld grew during the review period, saidState Bank of Pakistan (SBP). Central bankattributes this increase in remittances to ajoint initiative named “Pakistan RemittanceInitiative (PRI)” it had taken incollaboration with the ministries of financeand overseas Pakistanis to facilitate foreigninflows in the dollar-hungry cash-strappedcountry through formal channels. “Thisinitiative has shown remarkable progress,”the SBP chief spokesman Syed Wasimuddinsaid. Inflow of remittances in July-Octoberfrom Saudi Arabia, United Arab emirates,USA, UK, GCC (Gulf Cooperation Council)countries (including Bahrain, Kuwait, Qatarand Oman), and eU countries amounted to$1.145 billion, $963.12 million, $795.35million, $486.92 million, $486.15 millionand $129.81 million, respectively. Last year,the country’s receipts from thesedestinations stood at $764.31 million,$819.57 million, $666.27 million, $393.24million, $416.91 million and $117.07 million,respectively. The remittances received fromNorway, Switzerland, Australia, Canada,Japan and other countries during the saidperiod amounted to $308.34 million asagainst $324.03 million received in July-October 2010. The monthly averageremittances for the July-October 2011period comes out to $1.078 billioncompared to $875.35 million during thecorresponding period of 2010, registering anincrease of 23.24 per cent. In October lastyear, $1.017 billion were sent back home byoverseas Pakistanis, up 19.03 per cent whencompared with $855.11 million received inthe same month last year. It may be pointedout that except for the month of September(2011), overseas Pakistanis have remittedover $1 billion in July and August of thecurrent fiscal year, the State Bank said. InOctober 2011, the inflow of remittancesfrom Saudi Arabia, UAe, USA, GCCcountries, UK, and eU countries amountedto $291.20 million, $216.50 million,$167.60 million, $131.54 million, $117.56million and $28.08 million, respectively.The corresponding stats last year were$187.99 million, $198.28 million, $154.35million, $104.18 million, $96.35 million and$32.42 million. The remittances receivedfrom Norway, Switzerland, Australia,Canada, Japan and other countries duringOctober accumulated to $65.39 millioncompared to $81.53 million received in thesame month last year. export receiptsconstitute another stimulus for the country’sdeclining foreign exchange reserves that inrecent weeks have contracted to $ 17.02billion after crossing the historic $18 billionmark. During the first quarter of FY12, thecountry exports grew to $6.141 billionagainst $5.241 billion of corre spondingperiod in FY11. But, the imports grew moreprecipitously to $10.178 billion compared to$8.233 billion of first quarter last year. Thiswidened the country’s deficit-prone tradebalance to $4.037 billion compared to lastyear’s $ 2.992 billion. More worrisome foreconomic managers perhaps is the zeroingforeign financing especially in the post-May2 episode, as foreign disbursementsnosedived to merely $246 million duringJuly-Sept (FY12) compared to $623 millionof the same quarter last year. Foreigninvestment, viewed by the economists asonly permanent stimulus for the terrorism-hit country’s dollar reserves, also dipped to$236.2 million during the first quarter.

ISLAMABAD

AMER SIAL

STATe owned Oil andGas Development Com-pany Limited (OGDCL)has made a major oil dis-

covery from “Nashpa well two”, inKarak, Khyber Pakhtunkhwa. Ini-tial estimate of production of3370 barrels per day, nearlyequals 20 per cent of the com-pany’s current crude output of36,092 barrels per day (bpd).

Output LikeLy tO iNCReaseA senior official of OGDCL said thisis a major crude oil discovery as theoutput from the first formation is3370 bpd of crude oil and it is likelyto go up as the remaining fourother formations are tested withinnext four weeks. he said there arehigh expectations of increase inoutput once other formations aretested but it was too early to give anestimate. Testing of four potentialreservoir formations will also beundertaken wherein similar en-couraging results are expected. Fullflow potential of this well and theextent of the discovery will be de-termined after completing the test-ing program. An announcementmade by the company said,OGDCL, the operator of Nashpaexploration License, together withits joint venture partners PakistanPetroleum Limited (PPL) and Gov-ernment holding Private Limited

(GhPL) have discovered a new hy-drocarbon bearing horizon from itsappraisal well Nashpa 2, located indistrict Karak, KP.

iNDiGeNOus expeRtise empLOyeD

Structure of well was delineated,drilled and tested, utilising in-digenous expertise. Nashpa well 2was drilled down to depth of 4340meter, to test the oil and gas po-tential of Datta, Shinawari,Samanasuk, Lumshiwal, hanguand Lockhart formations. Signif-icant reserves of hydrocarbonshave been found at the well. Firsttargeted zone “Datta Sandstone”has been tested and has produced3370 barrels per day of crude oiland 11 MMCFD gas through32/64 choke at well head flowingpressure 3800 psi. This discoverywill add to the hydrocarbon re-serve base of the company andjoint venture partners, bringingsignificant savings to the countryin term of oil import bill.

ResuLts fROm ZiN bLOCk

OGDCL earned a net profit after taxof Rs63.5 billion for the fiscal yearended on 30th June, 2011. Duringthe first quarter of the current fiscalyear, the company’s crude oil pro-duction remained 36,092 bpdwhich was almost equal to produc-tion during the same period last fis-

cal year. however, its gas produc-tion saw an increase of 7.8 per centto 1,023 mmcfd as compared to thesame period last year. The com-pany is working on many develop-ment projects and the results fromits most prospective Zin block areexpected soon.

Net saLes iNCRease tORs44.6 biLLiONOGDCL’s net sales increased toRs44.6 billion in July-Septemberperiod of current fiscal year ascompared to Rs39.4 billion in thecorresponding period last fiscalyear. Net profit before taxation in-creased to Rs31.0 billion as com-pared to Rs24.1 billion in thecorresponding period last fiscalyear. The net profit after taxation

increased to Rs21.9 billion as com-pared to Rs16.7 billion in the cor-responding period of precedingyear translating into earnings pershare of Rs5.10 with a payable in-terim dividend of Rs1.50 per share.

faCt CheCkThe flagship national oil and gasexploration and production com-pany, OGDCL is the largest up-stream company in the country.It is listed on all three stock ex-changes of the country and onLondon Stock exchange sinceDecember 2006. Based on re-cently concluded reserve evalua-tion study carried out by TracsInternational, UK OGDCL’s totalproved, probable and possibleremaining recoverable reserves

as of 30th September, 2011 stoodat 214 million barrels of oil and10,660 billion cubic feet of gas.

It holds the largest portfolioof the recoverable hydrocarbonreserves of Pakistan, at 37 percent of gas and 48 per cent of oil,respectively, as at December31st, 2010. It contributed 23 percent of the country’s total natu-ral gas production and 56 percent of its total oil production asat August 31, 2011. With a port-folio of 34 exploration licences,the company has the largest ex-ploration acreage in Pakistan,covering 22 per cent of the totalawarded acreage as of August31st, 2011. While its primary ac-tivities are focused at onshoreexploration, the company hasalso begun conducting offshoreexploration activities.

KARACHI

ISMAIL DILAWAR

The cash-strapped countrywould see some ease in itsburgeoning oil import bill asthe Oil and Gas Development

Company Limited (OGDCL) hasdiscovered what the company said were,“significant reserves” of hydrocarbons inthe Khyber Pakhtunkhwa province.“Significant reserves of hydrocarbonshave been found,” the OGDCL told itsshareholders at the stock exchanges inLondon, Karachi, Islamabad and Lahorethrough a notice Monday.Oil impOrt bill: According toFederal Bureau of Statistics data, duringthe first quarter of current fiscal year thecountry’s oil import bill accumulated to

$3.827 billion, registering an increase of62.46 per cent when compared with$2.356 billion of the same quarter lastyear. Of the total imports, the crude oilimport ballooned by 98.97 per cent to$2.506 billion against $1.259 billion of thelast corresponding period.CushiOning Oil impOrts:

Amidst rising demand for crude oil,such discoveries by the OGDCL mightcomfort the country’s economicmanagers who are supposed to beconcerned over the increasing oil importbill that might offset the positive impactof healthy dollar inflows to the cash-strapped country on account of workerremittances and exports. The newreserves of oil and gas have been foundby a join venture comprising OGDCL,Pakistan Petroleum Limited (PPL) and

Government holding Private Limited(GhPL) from its appraisal well Nashpa02 located in District Karak of KhyberPakhtunkhwa.“This discovery would add to thehydrocarbon reserves base of thecompany and (the) joint venturepartners,” said Company Secretary erumAli Aziz. The company secretary believesthat the new finding would also bring“significant savings” to the country interms of oil import bill. She went on to saythat the structure of the newly-discoveredwell was delineated, drilled and testedutilising indigenous expertise. She saidthe well was drilled down to the depth of4340 metres targeting to test the oil andgas potential of Datta, Shinwari,Samanasuk, Lumshiwal, hangu andLockhart formations.

pOtential disCOveries: Thefirst targeted zone called “DattaSandstone” had been tested andproduced 3370 barrels per day of crudeoil and 11 MMCFD gas through 32/64”coke at well head flowing pressure 38700Psi, she said. Testing of another fourpotential reservoir formations, thesecretary said, would also be undertakenwherein similar encouraging results areexpected. The full flow of potential of thiswell and the extent of the discoverywould be determined after completingthe testing phase. The OGDCL and alllisted firms are required under Clause(xxiii) of the Code of CorporateGovernance to notify its stakeholders inthe local and international stocksmarkets of all such developments thatcould affect the price of its shares.

OGDCLmakes landmark oildiscovery

OiL impORt biLL tO ease ON aCCOuNt Of bReakthROuGh

g Nashpa well 2 drilled down to depth of 4340meter, to test oil and gas potential

g OGDCL earned net profit after tax ofRs63.5 billion last fiscal

profit.com.pk

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02DuRDANA NAjAM

We live and survive in a need basedeconomy; one of the roles of the gov-ernment in any economy has been tomanage resources so that people

would get what they want with ease of time andavailability. Prudent identification and strict man-agement of resources were believed to be the keyto development of an economic system. For yearsgovernments assumed – and more so the socialistsocieties – that if left on people, the greed ofamassing all into one and the desire to subjugateothers through deprivation could piece the societyinto pockets of individuals thinking about theirown interest. Therefore, to keep the notion of self-interests in check, governments have been produc-ing, supplying and selling goods and services to itscitizens on its own; although without much suc-cess. hence state organisations, instead of becom-ing a resource, become a burden due to lack ofcompetition .At the turn of the 80s, in the preced-ing century, it was finally decided that govern-ments should concentrate on anything butproduction. It was decided that self-interest couldbe best checked through government regulations –the original business of a government. It was de-cided to let the private sector take over governmentowned entities, through different contracting orselling mechanism so as to draw maximum advan-tages from resource utilisation.

Why pRivatise?

Different government adoptprivatisation for differentpurposes but the objective ofall these remain the same:cost affectivity and efficiency. Itis believed that owing to its massive sizeand intertwined arrangements governmentsthemselves become the cause of failure of stateowned enterprises, by using it as an instrument tofurther political interests. One loud and clear alle-gation on Pakistan’s state owned enterprises hasbeen the recruitment of incompetent people onstrategic positions. On top of it, excessive employ-ments coupled with unjustified perks and privi-leges had become the additional louts that suckedinto the remaining productivity of SOes.

In the pre-1945 era, colonisation has been thefate of most of the world we live in today. State wasomnipresent in every endeavour. This governingstrategy moved into the system in the post colonialperiod as well. States controlled the economy, attimes to give maximum benefits to the citizens andat other instances to exert more pressure overthem. however, in early 80s it was fully realisedby many developed as well as less developed coun-tries that the intervention of government intoevery production activity was creating losses.SOes were eating into the government budgetthrough subsidies and capital infusions, whilesoaring debt and increasing fiscal problems cameas a by-product of the former two. Thus it wasthought that capital released from the sale of stateowned entities would be made available for publicservice development ventures to further facilitatepeople. In the years to come, privatisation openedthe doors of economic participation throughshares ownership, widening the sphere of collec-tive prosperity. As British government, on the eveof its thunderous success of privatisation in late80s, narrated its success story by saying that “ris-

ing number of ownership shares have con-tributed to the government’s goal of creatingproperty-owning democracy through privati-sation.” Privatisation opens new avenue for in-vestment, brings new skill dimensions to thelabour market, widens the tax base of the stateand infuses a flare of competitiveness in people,taking progress to a new high. There is a positivecorrelation between growth and privatisation.

What aND hOW tO pRivatise?

Looking into the British experience of privatisationwe find a complete tilt towards getting away withstate-owned infrastructure industries or what canbe called the national utilities. United Kingdom hassold electricity, water, gas, rail network,and now the NhS run hos-pitals are finding theirway into the private sec-tor as well. In fact in anideal scenario, everysmall or large, prof-itable or non prof-itable entity shouldbe privatised to

makeit efficient.Though privatisa-tion reduces governmentcontrol but it can mess withpeople’s control as well if the prop-erty of competitiveness is not taken into ac-count. In the example of United Kingdom as wellas in France and Japan, industries were restructuredbefore put on sale. Sector competitiveness is impor-tant to keep people from exploitation of the privatesector. It is argued that privatisation in Pakistan hasgiven birth to cartelisation. In theory it is not enoughto have two large enterprises and one small to guar-antee competitive environment, it requires a bal-anced spread of companies to give a fair price,quality and quantity to the consumers. It is perhapsfor this very reason that industries in UK, France aswell as in Japan have been floated in the open mar-ket, encouraging individual citizens to share theownership. The divisibility of companies in term ofloosening off of structures, fragmenting marketthrough lower entry barriers, raising public stakesin the entities sold and putting regulations to mon-itor the private sector have made privatisation a suc-cess not a burden to the people of these and manycountries that followed right rules of privatisation.According to the competitive commission of Pak-istan and World Bank estimation, monopolisticpractices and cartels are perceived to hold sway inPakistan in such businesses as banking, cement,

sugar, auto-mobiles, fer-

tilisers andpharmaceuti-

cals after privati-sation. The million

dollor question is; didprivatization improve

the life of a common manin Pakistan or was it a boonfor the top twenty again?

pRivatisatiON iNpakistaN

As is always the case,any venture undertaken by

the government of Pak-istan reeks of finan-

c i a l

cor-r u p -

t i o n ,the pri-

vatisationprocess too

has this foul airabout it. The fa-

mous judiciarymovement, that happened to change the fate ofthis country by almost 40 per cent, has its originin the privatisation plan of Pakistan Steel Mills,sold by the Musharf-Aziz government at a throwaway price. The intervention of Supreme Courtthrough a petition moved by different stakehold-ers, layered off the deal to its bare reality that in-cluded massive kickbacks, personalaggrandisement and the non-national approach ofour leaders in disposing of national entities. Sell-ing the steel mills short and without taking into ac-count the consequence of rendering its employees,numbering in thousands, unemployed, wastermed by the Chief Justice of Pakistan IftikharMuhammad Chaudhry a callous move. During oneof the proceeding in 2006 the Chief Justice of Pak-istan remarked that “the objective of privatisationof state owned enterprises is to alleviate povertyand debt retirement, but this was not considered

fully in the mill’s privatisation deal. The CabinetCommittee on Privatisation took the PrivatisationBoard’s recommended price of Rs17.20 per sharefor granted and consequently, shares were sold ata low rate of Rs16.81.” The echo of short selling ofstate owned entities can be heard in nearly everysale the government undertook; PTCL and KeSCbeing a few toppers. On the flip side however, em-pirical evidences of different countries have shownthat countries usually fail to balance the optionsbetween privatising quickly and extensively andthe desire to maximise proceeds from privatisa-tion. Observers believe that privatisation shouldbe implemented slowly and carefully but of coursenot at the cost of strengthening opponents by giv-ing them sufficient time to organise their resist-ance. What differentiates Pakistan’s case from therest is not short selling but the use of proceeds ofprivatisations for developmental purposes. WhenMusharaf left the throne of Pakistan in August2008, the country was snarled in the worst fiscalcrisis, with its foreign reserves almost dried up andits financial managers knocking at the doors of

IMF to bail the country out of financial crisis.Though, only a year earlier on 12th Novem-ber 2007 Shaukat Aziz, then Prime Minis-ter of Pakistan, claimed to have earned$6.41 billion from privatisation. Oneshould not be misdirected by 8.96 percent growth rate during much of 2005-06 – the windfall of foreign aid, forbeing the frontline ally of America, inthe war of terror has feared the beastof sluggish economy away.

maNaGiNG stakehOLDeRs The hue and cry that comes following the an-

nouncement of privatisation is common to allcountries. employees, contractors, suppliers

even consumers fear losing something in the wakeeither in term of jobs, orders, or high prices. It isthe job of the privatisation commission, or what-ever board is asiigned the task of dealing with pri-vatisation process, to assuage the fears ofstakeholders. Governments do not let unemploy-ment or missed contracts give sleepless night to itspeople. Compensation in term of different welfareprogrammes aimed at giving monitory incentive incase of job loss is built in the privatisation contract.It is how the government pitches its case to thepeople, determines the reaction to and executionof the sale deal. What we saw in the case of KeSCand recently in the case PePCOs, it was a show ofthe communication gap between people and thegovernment. Fears of unknown is a normal emo-tion bound to overwhelm the stakeholders.

The process of privatisation is not merelychanging hands of ownership; it is a processwhereby goods and services are enhanced throughspecialisation and competitiveness of private sectordriven by profit but sustainable only if quality,quantity and accessibility of goods and services areguaranteed. To prevent the private sector from get-ting carried away by profit, regulations are definedby the government to check any deviation from themechanisms of market economy.

“Durdana Najam is a freelance financial featurewriter, currently doing Executive MA in

Governance and Public Policy, from FC CollegeLahore, she could be reached at

durdananajam456@hotmail.com”

HEATHER TIMMONS

BLooMBERg

NeWSMOODY’Sdowngraded State Bank ofIndia’s rating to D+ fromC- in October. how bad

will things get for India’s banks? Itdepends on who you ask.Moody’s downgraded the outlook forthe entire sector Wednesday from“stable” to “negative,” setting off aselling spree on Dalal Street that leftIndian markets as one of Asia’s worstperformers on Wednesday.“India’s economic momentum isslowing because of high inflation,monetary tightening, and rapidlyrising interest rates,” Moody’s wrote.Borrowers will be late on loanpayments or not make them at all,and profitability will come underpressure in the sector over the next 12to 18 months, the rating agency said.Rival ratings agency Standard &Poor’s did the opposite on Thursday,

assigning Indian banks a rating of 5on its Banking Industry Country RiskAssessment, or BICRA, animprovement from a rating of 6. Arank of 10 represents the highest riskon the BICRA scale, so India’s banksmoved up a notch, to the sameeconomic risk as those in China,Turkey and Portugal. “We considerthe lending and underwritingstandard to be moderatelyconservative,” S&P wrote, and sectorconcentrations and currency riskslow. Whether you see the glass as halffull or half empty, there’s littlequestion that the strength of India’sapproximately $1.3 trillion bankingsystem is about to be tested.The financial system in India isdominated by state-run banks, whichcontrol about 75 percent of themarket’s assets. They, with theircommercial banking counterparts,lent aggressively to the nation’s fast-growing companies, infrastructureprojects and private-public

partnerships during the recenteconomic boom years. Corporatelending increased by 21 percent a yearin the last fiscal year, even as signs ofa slowdown were showing.The bank lending system now needsto weather a nasty storm, a growingnumber of analysts and economistssay. “We haven’t seen the worst. Wehaven’t even seen the beginning of theworst,” said V. Krishnan, a bankanalyst with Ambit Capital in Mumbaiwho downgraded State Bank of India,India’s largest bank with a 1.2 trillionrupee ($24 billion) marketcapitalization, to “sell” in August.Conditions will be “meaningfully badfor the entire economy,” predicts Mr.Krishnan, and companies will beunable to pay back bank loans.“Corporates are bleedingoperationally, and they have less andless money to service their debtobligations,” he said.Paradoxically, the bad times to comeare in part the government’s own

making. While negative globaleconomic conditions present a bleakbackdrop, analysts and businessmensay that some of the immediate loanproblems can be traced to a paralyzedcentral government, corruption-related losses, sector blowups andmisguided policies that have left evendecently performing companies at themercy of the whims of variousgovernment agencies.essar energy said in August that threeprojects were being delayed overregulatory clearances, sending thecompany’s value plummeting,Kingfisher Airlines is teetering on thebrink of bankruptcy, in part, itsfounder says, because of thegovernment’s continued support tostate-run Air India, and United Stateselectricity producers AeS said thismonth it will scale down in India afterfailing to get planned projects off theground, worsening confidence inIndia’s power sector.On Friday, the government

announced that India’s industrialgrowth rate fell to its lowest rate intwo years. “Indian policy makers canat times be their own worstenemies,” said Rajeev Malik, senioreconomist with CSLA Singapore, aresearch firm. There is a saying inIndia that applies here, Mr. Maliksaid. The english translation is “touse the ax on one’s own foot,” hesaid. If things go very bad forIndia’s banks, rating agencies doagree on one thing – the Indiangovernment, which helped to createthe mess, will be forced to helpclean it up. “We classify the Indiangovernment as ‘highly supportive,’”Standard & Poor’s wrote Thursday.“The government is likely to providetimely financial support to thebanks, if needed.” Moody’s concurs. Moody’s “expectsthe government to remaincommitted towards providingsupport to both public and privatebanks,” the rating agency wrote.

Storm approaches for India’s banks, analysts say

Tuesday, 15 November, 2011

debate

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TIMe has come for Pakistan to seri-ously consider just how long it canlet security concerns overshadowcommercial and economic interests.For over 60 years, the establish-

ment has reacted to safety concerns by increas-ingly assuming a security-state posture, often atconsiderable financial and trade revenue cost.There can be no denying that security issues musttake precedence, but unprecedented international

economic developmentsmandate shifting focusto an economic welfarestate for the greaterbenefit of the people aswell as the government.The emergence of trad-ing blocs, and subse-quent spill-over

advantages to member states provide both exam-ples and opportunities for countries like Pakistan.

Presently, proximity and cost-effectivenesshas led to the establishment of three giant inter-national trading blocs – Asean, eU and Nafta – re-ducing the cost of doing business and increasingmutual revenues. Pakistan, too, is part of twomajor trade associations, eCO and Saarc, a $3 tril-lion economy even if China is excluded. eventhough Pakistan’s current share is less than fiveper cent either way, it remains the only countrywith representation in both bodies. And consider-ing our geographic location, by acting as a trade-bridge between the two and opening crucial traderoutes connecting them, we can attract major rev-enue by simply managing the traffic. We can bethe bridge through which Central Asian States,Iran, Turkey and Afghanistan can trade withIndia, Bangladesh and Nepal, materialising un-precedented gains for all concerned, while bene-fiting Islamabad in the form of transit fees.

Again, such decisions can only be the conse-quence of bigger concerns that invariably includepolitics and security. Pakistan’s trade issues with

India also incorporate just such matters. But itneeds to be noted that engineering a more re-laxed trade environment can prove mutually ben-eficial, and to no small extent. As an example,cement needs in Delhi are better addressed byimports from Lahore than Andhra Pradesh. Sim-ilarly, agriculture and commodity prices in Pak-istan can be rationalised to a great extent in caseof unhindered trade with the eastern neighbour,highlighting the positive impact of increasedtrade on price rationalisation.

It is also important to understand how India’slarge corporations give it added muscle in the in-ternational trade environment. The likes of Tataand Reliance can leverage large amounts of capitalessential for ambitious investments, hence India’sincreasing footprint in the African continent.There is a way to use this advantage for Pakistan’sadvantage also, provided political and securityconcerns are cleared amicably. Pakistan is natu-rally endowed with huge Thar coal reserves, sittingright next to India. If a mutually beneficial agree-ment can be reached and targeted investmentschanneled towards their proper exploitation, bothPakistan and India can share subsequent powergeneration, marking a new chapter in the politicaland economic history of the sub continent.

Similarly, Gwadar is another potential gold-mine for Pakistan if taken advantage of judi-ciously. Given the right circumstances, we caninvite participation from India, China, Japan andeven Turkey to exploit this strategic corridor be-tween the Middle east, Iran, Central Asian Re-publics and Pakistan, raising it to a position ofcentrality in international maritime trading.

The benefits of softening the traditional se-curity-centric posture in favour of increased eco-nomic, financial and commercial linkages areenormous. But arriving at such an arrangementrequires political will in all parties concerned.The proposed shift involves risks, but also bringsunprecedented rewards. The deciding factor willbe the criteria these states set to define theirstanding as the international financial systemundergoes serious overall transformation. If weremain committed to safeguarding the presentposition with security issues dictating overall di-rection, numerous avenues of mutual coopera-tion will go waste. But if public and officialbenefit is put at the centre of a new, integratedstrategy, chances of graduating into the economicwelfare state model are encouraging.

The writer is a former finance minister

LO they have not been able toshed their diapers these manyyears, observed renownedeconomist ProfessorSamuelson regarding inability

of various industries/sectors to grow out ofgovernment protection. Contrary to what theeconomic orthodoxy once held sacred, officialpatronage invariably ends up doing moreharm than good, turning entire sectors intocomplacent producers at best, addicted tounending injections to stay afloat. Yet thesubsidy/protection phenomenon remainscentral to our economic model, despiteobvious wastage.

The centre’s position is understandable toan extent. Resource and energy bottleneckscontinue to undermine central pillars of ourgrowth, with no immediate sign ofimprovement. Also, there is a blatant lack ofcapacity in both government structures andindustry setups to engineer economic growth.The development budget is a prime example.Despite devolution of crucial powers toprovinces, we observe a disturbing inability to

implement policy, resulting in economicretardation.

In industry, we observe resistance toprogressive change primarily because ofgovernment patronage bailing out sickenterprises, in effect discouraging necessaryupgradation without which competitiveness willforever be compromised. Little surprise, then,that our industry manages little value additionin the export market. The government is advisedto channel subsidy funds into capacity buildingwhere most needed, so dedicated sums becometargeted investments, enabling recipients tostand on their own feet sooner rather than later.

The international financial environment isundergoing a phenomenal change in theaftermath of the great recession, with countriesturning to their comparative advantages to fine-tune new trade regimes. For Pakistan to partakein this paradigm shift, we will need industry toproduce at its maximum. And for that, capacitybuilding must replace subsidy dispersal. In thepresent system, patronage, essential though itseems, is actually adding to resource drainage.This trend must reverse immediately.

Drainage through patronage

Pakistan must makeits guiding policymore trade specific

The political

economy of trade blocs

Shaukat Tarin

Let economic forces work

Pakistan and India are traversingthrough their worst energy crisis. It istime to resolve them. The TAPI projectprovides best opportunity besides the IPproject. Pakistan must serve its nationalinterest and it is in the interest of Pak-istan that it must adhere to both IP andTAPI projects to meet its energy needs. Ifgeopolitics could be averted on grantingthe Most Favored Nation status to India,it should also be averted on both IP andTAPI projects. Let economic forces workand build trust and peace. There is noAfghan-like irritant on the IP project.Geopolitics should not affect these proj-ects, as they would bring enormous pros-perity to Pakistan in the near future.

AHMAD RASHID MALIK

KARAchI

Quality education

The article raises a number of very im-portant issues. Unfortunately, the edu-cation system of Pakistan is such, thatrote learning is patronised instead ofbeing discouraged. And this is not onlylimited to Pakistan but also, many de-veloped countries as we know them.There is a need to completely revampeducational structures, but for that tohappen, as you rightly pointed out, weneed to redefine the definition of edu-cation. The modern system is a processof standardisation where batch bybatch students are churned out, with-out much value addition. Also, aspointed out in the article, the definitionof literacy courtesy UNeSCO is not onlyambiguous but immensely bizarre.

DANISH HAMEED

LAhoRE

E D I T O R I A L

Debt, Berlusconi and pepperoni

ANY ardent follower of theItalian cuisine would let youknow whether the toppingatop any given pizza has de-served its right to be there

or not. The quintessential pepperoni pizzahas its meat topping blending seamlesslywith the layer of cheese beneath it. even ifit is slightly overcooked, the pepperoni losesits shape and the pizza becomes a tastelessserving of unfulfilled promises. however,only a deluded chef would continue to tryand have another go at the same recipe,

without giving much thought to the fact thatthe same ingredients could not possibly re-sult in a rejuvenated taste, especially whenthe oven simmers to unprecedented tem-peratures. Italy’s political arena is one suchsweltering oven, and Silvio Berlusconiproved himself to be that pepperoni thatfails to fulfill the collaborative demands ofthe cheese below it and succumbs to in-crease in temperatures.

As the Italian market continues toplunge into obscurity, the groundbreakingdebt numbers being posted have obviousrepercussions for the rest of europe as well.The FTSe has been disturbed owing to theItalian predicament while the Dax in Ger-many and the Cac-40 in France have hadtheir applecarts upset at varying scales.Italy, being the third largest country in theeuro domain would, without a shadow ofdoubt, encompass most of the zone as far asafter effects are concerned. Also, while themassive Italian debt encumbers the neigh-bourhood, its sheer volume connotes that

that it is too big to bailout, unlike Greece,Ireland and Portugal.

As the focus shifts from the GreekApáki to the Italian Pizza, there is a myr-iad of reasons to destroy the european ap-petite. Italy is the eighth largest economyin the world, with a GDP of $2 trillion, anddebts exceeding the $2.2 trillion mark –or 120 per cent of the total GDP, it wouldbe an understatement to say that the chefslightly overcooked this pizza. Rates onItalian bonds have escalated to over 7 percent – while the numbers are haunting,the precipitous increase is even moredaunting. Amidst such earth shatteringcrises, the tasteless pepperoni is only ex-acerbating the situation.

Berlusconi’s idea to tackle the matterwas manifested via his reform policy,which was met with scrutinising glaresand sceptical noises – the businessmenwere perturbed and the politicians weredownright offended. It seems as if theItalian crisis is at a point where recovery

seems like a herculeantask – and not justyour Average Joe her-cules; someone withunprecedented savoirfaire and drive.

According to esti-mates if Italy’s borrow-ing continues to mount,the Italian hierarchywould have to raisearound $880 billion in the next three years.The devil is becoming more menacing dayby day and the deep blue see has reached anunparalleled depth, so to speak. And nowwith the pepperoni, out of colour, out ofshape and out of demand which toppingwould the cuisine doctor order? The firstoption is a dose of ‘endive’ straight from theSicilian recipe – Angelino Alfano. Often la-beled as the fixer ingredient and fresh intaste and spirit, this particular brand of en-dive has stuck loyally to the pepperoni andenhanced its taste in the past – but is it time

for him to become ‘the’topping? The second op-tion is the plum tomatofrom up north – MarioMonti. hardly anythingcould be more contrast-ing to the ferocity of thewould-be supplantedpepperoni. A bankingconnoisseur, Monti is atechnocratic tomato

and might just have enough sauce to whetthe appetite of the Italians.

Nevertheless, it is clear that Italy is in asweltering pot and it would take a lot ofcourage and prudence for the nation – andindeed europe as a whole to – dig itself out.There are a lot of key players in the gameand one could hope for the europeans sakethat too many cooks do not spoil the broth.

The writer is sub-editor, Profit andcan be reached at

khulduneshahid@gmail.com

Kunwar Khuldune Shahid

For comments, queries and contributions, write to:

email: profit@pakistantoday.com.pk ph: 042-36298305-10 fax: 042-36298302 Website: www.pakistantoday.com.pk

babuR saGhiRCreative Head

hammaD RaZaLayout Designer

shahab JafRyBusiness Editor

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Tu e s d a y, 1 5 N o v e m b e r, 2 0 1 1

Silvio Berlusconiproved to be thatpepperoni that failsto fulfill thedemands of thecheese below it

kuNWaR khuLDuNe shahiDSub-Editor

maheeN syeDSub-Editor

Profit pages 15-11-2011_Layout 1 11/14/2011 10:57 PM Page 3

Tuesday,15 November,2011

Industry is my priority and Iam taking all possible stepsto facilitate the businesscommunity

04news

Bears return to KSE with 30 point dipKARACHI

STAFF REPoRT

The extension of Friday’s ses-sion witnessed low volumegains during early trade,

wherein oil stocks witnessed change ofhands on strength, while the triple digitachieved in international oil market be-came an excuse for relatively expensivetrade. The fauji group stocks from fer-tiliser sector continued to invite buyingfrom local quarters, however, the steamsoon fizzled out with FFC being an ex-ception due to prolonged stagnationand absence of follow-up support.

The high priced stocks witnessedoff-loading thus wiping off the earlygains, and massive decline in turnoverwith improving values that has be-come a trend continued to send horrorsignals to the local stake holders,thereby keeping the trading horizonquite narrow. high quantum trade

through change of hands in BAFLhowever contributed substantially tothe overall turnover that stayed almost50 per cent at midday trade, allowingonly the blue eyed brokers to cherishthe commission revenue while otherswere mere spectators. The KSe 100index closed at 12008.48 levels withthe loss of 30.45 points, while KSe 30index lost 2.47 points to close at11380.51 levels. All Share index closedat 8304.29 levels after losing 21.34

points. Total 88 scrips advanced 142declined and 99 remain unchangedout of total 329 scrips traded.

Absence of buyers on intervals didinvite a colour of panic, thus forcing thebenchmark to melt at high pace in postmidday trade. Targeted activity in indexheavy weights however did restrict un-precedented decline besides allowingthe benchmark to manage 12000 psy-chological that was made to sustain dueto early close on Friday.

The fears of further deterioration infragile fiscal numbers becoming a real-ity with widening trade gap coupledwith start of interest re payments toIMF early next year will have an adverseimpact on the dollar reserves, whereinmore than 50 per cent are financed byIMF through reserve support funding.

The long awaited CGT review prob-ably stays the only hope for the revivalof local equity market, hasnain AsgharAli at Aziz Fidahusein said.

sbp asks banks to automateCapital adequacy ReturnsKaraCh: Central bank, asked the banks anddevelopment finance institutions (DFIs) to submit softcopies of their quarterly and annual Capital AdequacyReturns (CARs). State Bank’s move, which wasnotified by the regulator through the issuance of BSDcircular number 2, is aimed at the automation ofCARs. “This refers to BSD Circular No 02 dated 26thMarch 2007 and BSD Circular No 01 dated 6thJanuary 2009, wherein reporting formats wereprescribed for the calculation of the Capital AdequacyRatio by banks and DFIs,” the circular said. Centralbank advised the banks and DFIs to submit soft copiesof their quarterly un-audited CARs on consolidated aswell as on stand-alone basis, on the enclosed formatswithin 18 working days of the end of each calendarquarter. The regulator also asked the banks and DFIsto submit soft copies of their annual audited CARs onconsolidated and stand-alone basis on the enclosedformats within three months of the end of eachcalendar year. STAFF REPoRT

seCp extends the last date for filingdetails of form 29 till November 18 islamabad: Securities and exchangeCommission of Pakistan (SeCP) has extended thelast date of filing Form 29, till 18th November, tofacilitate the corporate sector. Form 29 ofCompanies Ordinance, 1984 (Section 205)demands particulars of directors and officers,including chief executive, managing agent,secretary, chief accountant, auditors and legaladvisers of the company. Last date of filing Form29 for most of the companies is 14th November.This extension shall be applicable to both onlineand offline filing of Form 29. Corporate sector andrelevant quarters had requested the SeCP toextend the last date in view of eid holidays. Mostcompanies are already busy in filing their incometax returns with Federal Board of Revenue (FBR),which made it difficult to prepare and file Form-29with the SeCP in time. Companies are required tofile annual returns on Forms A/B within 45 days,in case of listed companies and 30 days in case ofother companies, of holding of annual generalmeetings (AGMs). STAFF REPoRT

proposed increase in wheatprice to cause inflation: pfmalahOre: Pakistan Flour Mills Association (PFMA)Punjab Chairman Chaudhry Abdul Jabbar has saidproposed increase in wheat prices will result in a newwave of price hike in the country. Proposed increase willmake it impossible for masses to even basic necessitieslike flour. In a statement issued, he claimed Pakistanhad become self-reliant in wheat production for the lastthree years. It is not only producing for its ownrequirement but also exporting wheat and wheatproducts. But, increase in the wheat support pricewould destroy flour milling industry set up in thecountry with an investment of billion of rupees, AbdulJabbar added. PFMA Punjab claimed wheat prices inPakistan were already high from the internationalmarket and further increase would cut the country fromrest of the world market. STAFF REPoRT

No load shedding for industry: LESCOLAHORE

STAFF REPoRT

ON demand of Lahore Cham-ber of Commerce and Indus-try, LeSCO chief hasannounced to put an end toforced load shedding for the

entire industrial sector. “From now onwardsthere would be no more forced load sheddingfor the industry.” LeSCO chief said industrywas his priority and he was taking all possiblesteps to facilitate the business community ingeneral and the industrial sector in particular.he also informed LCCI members that longawaited New Kahna grid station and trans-mission line project has been commissioned.

When LCCI took up high prices of elec-tricity and repeated increases in power tariff,Sharafat Ali Sayyal informed LCCI membersthat negotiations with NePRA are underwayon high fuel adjustment charges in LeSCO.The distribution company is the highest rev-

enue generation DISCO, while the line lossesare at the lowest ebb when they are com-pared with other distribution companies incountry. LeSCO chief said to stop the elec-tricity pilferage, LeSCO has adopted the pol-icy of stick-and-carrot and all LeSCO menfound involved in this heinous crime wouldbe given exemplary punishments. Those whoare doing good work would be rewarded headded. he said a quarterly review would becarried out in this regard. he said the LeSCOmanagement committee in which privatesector representation is involved to makecertain decisions with regards to sector-wiseload management would also be activated assoon as LCCI forwards names for the com-mittee. LeSCO chief also said that LCCI-LeSCO Dispute Resolution Committeewould be activated as soon as the LCCI for-wards names for the committee.

Speaking on the occasion, LCCI Presi-dent Irfan Qaiser Sheikh drew the attentionof LeSCO chief towards the ever-mounting

energy crises which are causing sufferings toall the segments of society. he said thatpower outages not only halt the productionprocess but also increase the cost of produc-tion because shifting to generators fueled bydiesel is hardly affordable.

Irfan Qaiser Sheikh said the price of elec-tricity had been increased by 72 per cent inthe span of four to five months. It seems thathigh-ups only know one way to manage thedemand and supply of electricity. Whereasno serious attention is being given to effi-ciently do the load management and also ex-plore the other economical ways ofgenerating electricity.

LCCI President said the LeSCO stillneeds to do a lot to minimise the line losses,reduce the distribution losses and control thepilferage that is done by some unscrupulouselements. LeSCO’s overall distributionlosses amount to 11 per cent which are muchlesser than the losses of other DISCOs wheresituation is very pathetic. PeSCO’s distribu-

tion losses are roughly up to 35 per cent fol-lowed by KeSC at around 40 per cent plus,heSCO at around 40per cent, QeSCO ataround 25 per cent.

The most unfair outcome of these factorsis that the genuine and fair-minded usershave to bear the brunt. he urged the LeSCOchief to ensure the electricity rates are deter-mined as per the performance and efficiencyof the particular DISCO. “Why the cost of in-efficiency of certain DISCOs is to be borne bythose areas or users whose DISCOs are com-paratively efficient.”

LCCI President said the LeSCO shouldstrictly follow the schedule of load sheddingin Quaid-e-Azam Industrial estate, Fer-ozepur Road industrial estate, Kattar Bundroad industrial estate and some associationsespecially Steel Re-rolling association, PlasticBags & Sheets Manufacturers Association asany deviation from the schedule hits themvery hard as they can neither meet the pro-duction targets nor can bear the extra cost

because of running heavy generators.he said that there are some areas in La-

hore like Daroghawala and Mehmood BootiBund Road where industrial feeders need tobe separated from residential feeders. Due totripping and unscheduled load shedding, theindustrial units face lot of problems. The fol-lowing executive Committee Members alsoattended the meeting:- Rehman Chann,Raees A. Sheikh, Mehmood Ghaznavi, MianAbuzar Shad, Nabila Intisar, Kh. ShahzebAkram, Khamis Saeed Butt, Sheikh Moham-mad Ayub, Shoaib Zahid Malik.

LeSCO Chief executive Sharafat AliSayyal was speaking at the Lahore Cham-ber of Commerce and Industry on Mon-day. LCCI President Irfan Qaiser Sheikhpresented the welcome address whileSenior Vice President Kashif YousifMeher, former Presidents Mian AnjumNisar, Mian Misbahur Rehman and for-mer Senior Vice President Abdul Basitalso spoke on the occasion.

LesCO Chief executive sharafat ali sayyal

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05

Tuesday,15 November,2011

news

CORPORATE CORNERRaja Riaz addresses waseela-e-haqcheques distribution ceremony

Faisalabad: Opposition leader in Punjab Assembly,Raja Riaz addressed the waseela-e-haq chequesdistribution ceremony under Benazir Income SupportProgramme (BISP). he said that the programme isempowering women and providing rights of the people attheir door steps. Director General BISP Punjab, ShahidAslam Mohar said the waseela-e-haq component of BISPis aimed at making the beneficiary families self sufficientby enabling them to earn their livelihood in a dignifiedmanner. PRESS RELEASE

ufone distributes eid gifts and conductstree plantation activity at sOs village

islamabad: Members of Ufone volunteer groupavailed the opportunity to be part of an eco-friendlyproject and took part in making the SOS Children villagegreener. The Plant-a-Tree activity was conducted at thevillage to promote a healthy environment and alsoprovides shade for the children, guardians and teachers.Akbar Khan, Chief Marketing Officer at Ufone alsodistributed eid gifts amongst the children and shared aspecial moment of bonding with them. PRESS RELEASE

ptCL to bring high qualitybroadband services to sukkhur regionislamabad: Pakistan Telecommunications CompanyLimited (PTCL) has won yet another Universal ServiceFund (USF) project for installation and provision ofbroadband services in Sukkhur region. “PTCL iscommitted to the government of Pakistan’s vision forbridging the digital divide and creating an expansivegrowth of broadband in Pakistan,” said PTCL Seniorexecutive Vice President Corporate Development,Sikandar Naqi. Through an open bidding process, PTCLhas won the rights to provide broadband services in 10districts covering the entire Sukkur region. PRESS RELEASE

usaiD and heC award 155in-country university scholarships islamabad: US government in partnership with thehigher education Commission of Pakistan has initiateda merit and needs based scholarship program aimed atproviding financial assistance to talented, but financiallychallenged students. Recently, the National ScholarshipManagement Committee of the higher educationCommission has awarded 155 scholarships under thisprogram. PRESS RELEASE

We're going to continueto be firm that Chinaoperate by the same rulesas everyone else

KARAchI: The annual financial report of Pakistan State oil(PSo), the nation’s leading energy company, was awarded2nd position in the Fuel and Energy Sector at the recent“Best corporate Reports 2010” award ceremony organisedby IcMAP and IcAP. Seen in the pictures is Mr YacoobSuttar, Executive Director (Finance and IT) receiving theaward on behalf of PSo. PRESS RELEASE

Obama to China:Behave like a ‘grown up’

HONOLuLu

REuTERS

PReSIDeNT BarackObama served noticeon Sunday that theUnited States was fedup with China's trade

and currency practices as he turnedup the heat on America's biggesteconomic rival.

"enough's enough," Obama saidbluntly at a closing news conference ofthe Asia-Pacific economic Cooperationsummit where he scored a significantbreakthrough in his push to create apan-Pacific free trade zone and pro-mote green technologies. Using someof his toughest language yet againstChina, Obama, a day after face-to-facetalks with President hu Jintao, de-manded that China stop "gaming" theinternational system and create a levelplaying field for U.S. and other foreignbusinesses. "We're going to continue tobe firm that China operate by the samerules as everyone else," Obama told re-porters after hosting the 21-nationAPeC summit in his native honolulu."We don't want them taking advantageof the United States."

China shot back that it refused toabide by international economic rulesthat it had no part in writing.

"First we have to know whose ruleswe are talking about," Pang Sen, adeputy director-general at China's For-eign Ministry said. "If the rules aremade collectively through agreementand China is a part of it, then China willabide by them. If rules are decided byone or even several countries, Chinadoes not have the obligation to abide

by that." even as Obama issued theveiled threat of further punitive actionagainst China, it was unclear howmuch of his tough rhetoric was, at leastin part, political posturing aimed ateconomically weary U.S. voters whowill decide next November whether togive him a second term.

Obama insisted that China allow itscurrency to rise faster in value, saying itwas being kept artificially low and washurting American companies and jobs.he said China, which often presents it-self as a developing country, is now"grown up" and should act that way inglobal economic affairs. The sharpwords between the U.S. and China con-trasted with the unified front that Asia-Pacific leaders sought to present with apledge to bolster their economies andlower trade barriers in an effort to shieldagainst the fallout from europe's debtcrisis. The members of APeC, which ac-counts for more than half of the world'seconomic output, said they had agreedon ways to counter "significant down-side risks" to the world economy. Thatfollowed an appeal by Obama, seekingto reassert U.S. leadership to counterChina's growing influence around thePacific Rim, for a commitment to ex-pand trade opportunities as an antidoteto europe's fiscal woes. InternationalMonetary Fund chief Christine Lagarde,in honolulu to consult with APeC lead-ers, said the euro zone upheaval riskedsweeping the world economy into a"downward spiral" that all countrieshad a stake in resolving the crisis.

TRADE LIBERALISATION

APeC said in a final commu-

nique: "We recognize that furthertrade liberalisation is essential toachieving a sustainable global recov-ery in the aftermath of the global re-cession of 2008-2009."

The communique also expressed afirm resolve "to support the strong,sustained and balanced growth of theregional and global economy" -- a clearreference to U.S. concerns about ahuge trade deficit with China's export-driven economy, fiscal problems in de-veloped nations and the low savingsrate in the United States.

In another bow to U.S. pressure,APeC committed to reducing tariffs onenvironmental goods and services to 5per cent as a way to promote greentechnology trade, overcoming China'sresistance to the idea. Differences per-sist among APeC members -- a pointhammered home by U.S.-China ten-sions -- and the question remains howfar leaders will be able to go in turningpromises into action. Many, Obama in-cluded, will face resistance to openingmarkets further to foreign competition.Obama's public denunciation ofChina's policies came as he faces pres-sure at home, from Republican presi-dential contenders as well as fellowDemocrats, for a tougher line on Bei-jing. But U.S. leverage is limited, notleast because Beijing is America'slargest foreign creditor.

Though Obama acknowledged a"slight improvement" in the value ofChina's yuan, he insisted it was notenough. The United States has longcomplained that China keeps its cur-rency artificially weak to give its ex-porters an advantage. China countersthat the yuan should rise only gradu-

ally to avoid harming the economy anddriving up unemployment, whichwould hurt global growth. hu wasquoted by Chinanews.com in Beijingon Sunday as saying a big appreciationin the yuan against the dollar wouldnot help U.S. trade and unemploymentproblems.The yuan inched up againstthe dollar. Dealers said hu's commentsin honolulu indicated that China hadno intention of letting the currency risefaster in the near term.

US ENGAGEMENT

Obama declared U.S. engagementin the Asia-Pacific region as "absolutelycritical" to America's prosperity. By har-nessing the potential for expandedtrade with the world's fastest-growingregion, Obama hopes he can create U.S.jobs to help him through a tough reelec-tion fight in 2012. Obama's drive towarda pan-Pacific free trade zone -- the sig-nature U.S. achievement of the summit-- got a boost when Canada, Mexico andJapan said they were interested in join-ing talks now under way among ninecountries, and they agreed to completethe detailed framework in 2012. ThePhilippines was discussing the matter,US officials said. The Transpacific Part-nership adds momentum to Obama'spledge to double U.S. exports, mademore urgent by the virtual collapse ofthe Doha round of trade talks. A freetrade zone in the region would outstripthe market size of the european Union.But for Japan, such a deal faces majorpolitical obstacles at home. Yet therewas little promise of immediate eco-nomic dividends as such trade dealsoften take years to take effect.

PAKISTAN TRACTOR INDUSTRY

International exhibitionattracts large orders

ISLAMABAD

STAFF REPoRT

RePReSeNTATIVeS oftractor industry fromPakistan are getting

large orders at Agri-technika In-ternational exhibition 2011, theworld’s largest agricultural ma-chinery and technology fair athannover, Germany.

Statement issued by engi-neering Development Board(eDB) said the Agri-technika In-ternational exhibition 2011 willlast for a week till 20th Novem-ber in which two tractor vendersout of a total of seventeen are alsodisplaying their products at thestand of the Dutch “Centre forPromotion of Imports from De-veloping Countries” (CBI).

Organiser of Agri-technikahas designed one-hour forumsfor broad range of other organi-sations to bring participantsfully up-to-date on specific top-ics and to promote a dialoguethat increases overall under-standing of the subject.

This year forum subjects aresmart farming, machinery andfarm management, and forestmachinery and energy crop culti-vation. A total of 18 forums are

going to take place.Smart farming forums, which

all take place in hall 16, along-side the special smart farmingshow, will explore topics as di-verse as controlled-traffic farm-ing; what N-sensors can do; useof eGNOS and Galileo for preci-sion farming; and social media’srole in agriculture.

Machinery and farm manage-ment forum topics include mar-ket trends in the fertilisermarket; how to find and keepgood staff; using the money mar-kets to tackle exchange ratevolatility; and successful directdrilling in Argentina and Russia– a session that is hosted jointlyby DLG and the club of europeanArable Farmers.

Forums on forest machineryand energy crop cultivation ad-dress a range of topics relevantto these sectors including or-ganising logistic chains the useof bio digester residues as fer-tiliser. Other sessions includehow woodland visitors shouldprotect themselves from healthhazards and the importance ofcompacting and storing bio-mass silage properly. Pakistaniparticipants at Agri-technikarecommended that Pakistani

agriculturists, agricultural pro-fessionals, universities as wellas machinery manufacturersshould attend Agri-technika inlarge numbers. They could ben-efit from knowledge and experi-ence, as well as from the growthopportunities it provides forPakistan’s agro machinery ex-ports and the insights whichcan be gained for value addedagriculture.

An important part of thismission is the special shows andforums that are carefully selectedto reflect trends taking place inthe Agro-machinery marketthroughout the world. To makethe forums accessible to a globalaudience, a number of the ses-sions provide simultaneoustranslation from German intoenglish to open them up to inter-national participation.

The exhibition will last for aweek. It promised to be a para-digm of showcasing future tech-nology of agriculture in 27 halls.At the heart of Agri-technica isthe tradition of giving visitorsthe opportunity to benefit fromglobal knowledge and perspec-tives on a wide range of topicsrelated to agriculture and re-lated industries.

kisan board pakistanstages protest

LAHORE

STAFF REPoRT

GROWeRS across thecountry on call of KisanBoard Pakistan (KBP)

staged demonstrations and tookout rallies to protest againstincreasing prices of fertiliser,electricity, pesticides and otheragricultural inputs. Rallies anddemonstrations were held inPattoki, Kashmore, NankanaSahib and other places of Punjaband Sindh provinces asking thegovernment to restore subsidy onagricultural inputs. KBP CentralPresident Sardar Zafar husseinand Sindh President Dr AbdurRazzak Soomro led the rally atKashmore and demanded thatthe government should withdrawsales tax from agricultural inputsand implements as it would ruinour economy and lead thecountry to food shortage. KBPCentral Secretary Informationhaji Muhammad Ramzan,District Chief Nazir Ahmad ledthe rally in Pattoki and alsostaged a sit-in out side districtcourts. While in SheikhupuraKBP workers staged a sit-in outside haseeb Waqas Mills, KBPSecretary Information hajiRamzan claimed. Speakersurged the government toaccept their justifiabledemands or they would bestaging similar demonstrationsin front of assemblies.

us president barack Obama

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top 5 perForMers sector wisesymbOL OpeN hiGh LOW CuRReNt ChaNGe vOLume symbOL OpeN hiGh LOW CuRReNt ChaNGe vOLume

Food ProducersAbdullah Shah 8.00 8.00 7.00 8.00 0.00 53Colony Sugar Mills 1.75 1.75 1.70 1.74 -0.01 23,501Engro Foods Ltd. 23.52 23.90 22.50 22.54 -0.98 91,748Habib Sugar Mills 28.10 28.50 27.50 27.88 -0.22 70,820Habib-ADM Ltd.XD 11.58 11.70 11.50 11.50 -0.08 2,995

Household Goods(Colony) Thal 1.70 1.11 1.11 1.11 -0.59 1,000AL-Qadir Textile 11.25 11.25 11.25 11.25 0.00 500Amtex Limited 1.67 1.70 1.45 1.60 -0.07 132,822Annoor Textile 13.00 14.00 14.00 14.00 1.00 1,000Artistic Denim XD 18.50 18.50 18.25 18.49 -0.01 1,049

Personal GoodsAHCL-NOV 31.00 31.00 29.45 29.51 -1.49 376,500AHCL-OCT 30.82 30.82 29.28 29.32 -1.50 516,500ANL-OCT 4.01 4.25 3.90 3.95 -0.06 24,500ATRL-NOV 120.42 121.50 117.90 119.21 -1.21 201,000ATRL-OCT 119.16 120.30 116.50 117.71 -1.45 200,000

Future ContractsAbbott Laboratories 102.49 103.00 101.00 102.10 -0.39 1,283Ferozsons (Lab) Ltd. 80.00 80.00 78.10 80.00 0.00 45GlaxoSmithKline Pak. 68.92 68.26 67.01 68.06 -0.86 1,557Highnoon (Lab) 28.09 28.09 27.65 28.09 0.00 100IBL HealthCare XD 10.92 11.92 10.99 11.92 1.00 25,154

Pharma and Bio TechP.T.C.L.A 10.89 10.98 10.65 10.71 -0.18 470,873Pak Datacom LtdXD 35.03 34.01 34.01 34.01 -1.02 500Telecard Limited 0.95 1.00 0.90 0.90 -0.05 68,502Wateen Telecom Ltd .68 1.70 1.52 1.65 -0.03 152,954WorldCall Telecom 1.13 1.19 1.00 1.06 -0.07 235,458

Fixed Line TelecommunicationP.T.C.L.A 11.47 11.77 11.42 11.64 0.17 4,752,418Pak Datacom Ltd. 31.65 32.66 31.65 32.66 1.01 1,430Telecard Limited 1.09 1.09 1.01 1.03 -0.06 194,249Wateen Telecom Ltd 1.51 1.68 1.47 1.50 -0.01 449,333WorldCall Telecom 1.32 1.35 1.15 1.28 -0.04 649,632

ElectricityGenertech 0.50 0.50 0.36 0.50 0.00 1Hub Power Co.XD 36.38 36.50 36.10 36.10 -0.28 1,022,035Japan Power 0.75 0.77 0.70 0.71 -0.04 38,682K.E.S.C. XR 1.70 1.70 1.56 1.60 -0.10 752,756Kot Addu PowerXD 41.36 41.80 41.25 41.53 0.17 220,355

BanksAllied Bank Ltd 63.16 64.00 62.50 62.69 -0.47 32,694Askari Bank 11.15 11.29 10.75 10.89 -0.26 944,906B.O.Punjab 5.94 6.08 5.79 5.83 -0.11 319,287Bank Al-Falah 11.15 11.35 10.70 10.89 -0.26 1,929,563Bank AL-Habib 29.95 30.20 29.55 29.91 -0.04 175,090

Non Life InsuranceAdamjee Ins XD 49.64 49.50 48.60 49.40 -0.24 6,785Ask.Gen.Insurance 8.50 8.50 8.10 8.47 -0.03 1,651Atlas Insurance 34.49 35.00 33.86 33.99 -0.50 1,110Central Ins Co. 48.67 50.00 48.00 49.79 1.12 3,909Century Insurance 7.16 7.50 7.06 7.50 0.34 1,500

Life InsuranceAmerican Life 14.50 14.50 13.50 14.50 0.00 2East West Life Assur 1.40 2.34 1.40 1.40 0.00 1EFU Life Assur 65.53 68.80 65.53 65.53 0.00 157

Financial ServicesAMZ Ventures A 0.32 0.35 0.22 0.30 -0.02 9,463Arif Habib InvesXD 15.89 15.50 14.89 14.89 -1.00 13,487Arif Habib Ltd. 17.96 18.34 17.20 17.71 -0.25 19,659Dawood Equities 0.88 1.09 0.86 0.86 -0.02 9,495Invest & Fin.Sec. 7.26 7.26 7.25 7.25 -0.01 2,100

Equity Investment Instruments1st.Fid.Leasing Mod 1.70 1.50 1.50 1.50 -0.20 15,000AL-Noor ModarXD 3.98 4.00 3.60 4.00 0.02 25,100Allied RentalModXDXB 19.90 19.90 19.88 19.90 0.00 3,700Atlas Fund of Fund 6.00 6.10 5.90 5.90 -0.10 414,000B.F.ModarabaXD 5.56 5.56 5.00 5.56 0.00 7

MiscellaneousCentury Paper 13.82 14.15 13.60 13.62 -0.20 11,206Pak Paper Prod. 32.07 32.98 32.00 32.00 -0.07 8,305Security Paper 35.59 36.10 35.59 35.59 0.00 50Johnson & Philips 7.00 7.00 6.35 7.00 0.00 1Pakistan Cables 31.00 32.50 30.31 31.00 0.00 355P.N.S.C.XD 16.00 16.80 15.56 16.46 0.46 9,801Pak.Int.Con. SD 70.01 72.00 70.00 70.01 0.00 822TRG Pakistan Ltd. 1.69 1.79 1.61 1.73 0.04 357,472Murree BreweryXDXB 72.30 72.90 70.50 70.87 -1.43 1,280Shezan Inter.XD 112.81 116.00 109.00 115.85 3.04 1,400Hala Enterprise 7.99 7.99 7.99 7.99 0.00 20Hussain Industries 2.95 3.80 2.95 2.95 0.00 106Pak Elektron Ltd. 4.33 4.58 4.49 4.50 0.17 24,044Tariq GlassXD 8.70 8.65 8.50 8.60 -0.10 13,049Grays of CambrXD 25.00 25.70 25.00 25.00 0.00 75Pak Tobacco Co. 65.60 68.87 62.35 65.60 0.00 331Philip Morris Pak. 140.00 140.00 133.00 140.00 0.00 1Shifa Int.Hospitals 29.50 29.90 29.80 29.90 0.40 610Hum Network XD 16.50 16.40 16.40 16.40 -0.10 2,000Media Times LtdXR 8.96 9.00 7.96 8.48 -0.48 101P.I.A.C.(A) 2.21 2.18 1.99 2.04 -0.17 6,511P.T.C.L.A 10.80 10.95 10.80 10.83 0.03 284,606Telecard Limited 1.04 1.05 1.00 1.00 -0.04 64,702Wateen Telecom Ltd 2.00 2.13 1.95 2.01 0.01 231,690

symbOL OpeN hiGh LOW CuRReNt ChaNGe vOLume

Oil and GasAttock PetroleumXD 403.85 404.69 396.00 396.87 -6.98 61,485Attock Ref.XD 118.78 120.40 116.10 117.57 -1.21 833,559Byco Petroleum 6.89 6.98 6.75 6.77 -0.12 399,510Mari Gas Co.XB 91.01 93.80 89.30 92.03 1.02 91,674National Ref.XD 325.19 334.90 308.94 310.82 -14.37 314,938

ChemicalsAgritech Ltd. 15.00 15.00 14.00 15.00 0.00 1,500Arif Habib CoXDXB SD 30.83 31.05 29.29 29.30 -1.53 2,485,646Biafo IndustriesXD 68.59 71.99 65.17 70.64 2.05 855Clariant Pakistan 140.69 143.49 137.50 139.79 -0.90 4,017Dawood Hercules 38.96 40.80 37.06 37.39 -1.57 244,529

Industrial metals and MiningCrescent Steel 23.90 24.70 23.25 23.59 -0.31 40,885Dost Steels Ltd. 1.45 1.50 1.41 1.45 0.00 8,285Huffaz Seamless Pipe 8.93 9.00 8.60 9.00 0.07 3,035Int. Ind.Ltd. 34.98 35.00 34.00 34.50 -0.48 25,300Inter.Steel Ltd. 11.56 11.52 11.00 11.00 -0.56 63,850

Construction and MaterialsAl-Abbas Cement 2.00 2.00 1.90 1.92 -0.08 26,799Attock CementXD 51.11 51.99 50.81 51.02 -0.09 108,952Berger Paints 11.79 12.00 11.60 11.91 0.12 4,762Bestway Cement 8.11 9.11 8.11 8.11 0.00 100Cherat Cement 7.66 8.19 7.50 8.01 0.35 197,042

General IndustrialsCherat PackagingXD 29.62 30.40 28.14 28.14 -1.48 14,022ECOPACK Ltd 2.49 3.25 2.21 3.08 0.59 614,084Ghani Glass LtdXD 41.17 42.00 39.12 39.60 -1.57 16,802MACPAC Films 7.72 7.95 7.01 7.65 -0.07 993Merit Pack 22.00 22.00 20.95 22.00 0.00 70

Industrial EngineeringAdos Pakistan 6.93 7.90 6.93 6.93 0.00 10AL-Ghazi Tractors 184.30 184.30 184.30 184.30 0.00 90Bolan CastingXD 28.50 28.50 28.25 28.26 -0.24 5,055Ghandhara Ind. 7.00 6.90 6.25 6.70 -0.30 5,004Hinopak Motor 108.00 108.00 102.60 108.00 0.00 2

Automobile and PartsAgriautos Indus.XD 58.00 58.00 58.00 58.00 0.00 2,000Atlas Battery Ltd. 169.52 170.00 168.50 168.94 -0.58 240Atlas Honda Ltd. 117.00 118.00 117.00 117.94 0.94 302Dewan Motors 2.63 2.79 2.43 2.51 -0.12 39,802Exide (PAK) 168.53 169.99 168.53 168.53 0.00 31

BeveragesMurree Brewery Co. 110.49 111.43 109.00 111.18 0.69 1,170Shezan Int’l 150.02 150.00 145.05 145.58 -4.44 203

Mutual Funds

fund Offer Repurchase NavAlfalah GHP Cash Fund 501.2900 501.2900 501.2900 Askari Islamic Asset Allocation Fund 114.7196 111.8516 111.8516Askari Islamic Income Fund 103.6501 102.6136 102.6136 Askari Sovereign Cash Fund 100.6900 100.6900 100.6900 Atlas Income Fund 519.3500 514.2100 514.2100 Atlas Islamic Income Fund 519.0900 513.9500 513.9500Atlas Money Market Fund 516.9700 516.9700 516.9700 Atlas Stock Market Fund 453.1500 444.2600 444.2600 Crosby Dragon Fund 82.9800 81.3500 81.3500

fund Offer Repurchase NavHBL Money Market Fund 100.2768 100.2768 100.2768 HBL Multi Asset Fund 87.0103 85.3042 85.3042 HBL Stock Fund 97.6745 95.2922 95.2922 IGI Income Fund 101.8987 100.8898 100.8898IGI Stock Fund 112.3545 109.6141 109.6141 JS Principal Secure Fund I 121.5000 111.5200 117.3900 JS Principal Secure Fund II 104.1200 96.5000 101.5800 KASB Cash Fund 0.0000 0.0000 100.1087Lakson Equity Fund 106.3763 103.2779 103.2779

Markets

Tuesday, 15 November, 2011

06top 10 sectors

24% 01%Construction & Materials

Chemicals General Industrial

07%Electricity

02%03%

Fixed Line Telecommunication

01%Equity Investment Instruments

Financial Services

09%Banks35%Oil & Gas10%Personal Goods08%

International Oil PriceWTICrude Oil

$98.33

BrentCrude Oil

$113.99

STOCK MARKET HIGHLIGHTS

Index Change Volume Market ValueKSE-100 12008.48 -30.45 33,960,091 1,918,969,223LSE-25 3168.28 -10.19 1,221,701 30,959,720ISE-10 2669.76 -20.74 115,816 1,998,565

Major Gainers

Company Open High Low Close Change TurnoverUniLever Pak Ltd. 5594.77 5790.00 5390.00 5646.35 51.58 879Indus Dyeing XD 390.18 409.00 401.00 403.84 13.66 611Indus Motor Co. 201.09 208.00 201.00 202.57 1.48 15,540Clariant Pakistan 151.20 156.00 151.00 155.07 3.87 13,852Fauji FertilizerSPOT 185.63 189.60 185.65 189.26 3.63 1,962,738

Major Losers

Nestle Pakistan 3096.80 3090.00 2965.00 3016.81 -79.99 349National Ref.XD 326.25 328.49 322.00 322.45 -3.80 34,649Clover PakistanXD 56.95 59.78 54.11 54.11 -2.84 3,619ICI Pakistan 132.10 132.39 129.50 129.88 -2.22 34,202Engro Corporation 132.00 133.65 129.00 129.72 -2.28 1,219,826

Volume Leaders

Bank Al-Falah 11.88 12.11 11.70 11.76 -0.12 10,703,127Lotte PakPTA 11.18 11.34 10.91 10.98 -0.20 2,929,178Meezan Bank XB 19.99 20.99 19.50 19.88 -0.11 2,305,693Fauji Fertilizer 185.63 189.60 185.65 189.26 3.63 1,962,738Fatima Fert.Co. 23.79 24.25 23.91 24.00 0.21 1,693,417

Bullion MarketPer Tola (PKR) Per 10 Gm (PKR) Per Ounce US$

Gold 24K 57,659.00 49,486.00 1,777.00Gold 22K 51,608.00 44,245.00 –Silver (Tezabi) 1,111.00 953.00 35.05Silver (Thobi) 1025.00 880.00 –

Interbank RatesUS Dollar 86.6528UK Pound 138.0640Japanese Yen 1.1267Euro 118.6711

Buy SellUS Dollar 86.00 87.00Euro 116.59 118.48Great Britain Pound 136.19 138.31Japanese Yen 1.1071 1.1269Canadian Dollar 84.03 87.83Hong Kong Dollar 10.85 11.18UAE Dirham 23.33 23.62Saudi Riyal 22.85 23.12

Profit pages 15-11-2011_Layout 1 11/14/2011 10:58 PM Page 6

Tuesday,15 November,2011

indus motors will be able to post adecent growth in profitability of 17per cent in fy12 due to higher carprices rendering into higher absolutemargins and improved other income

news

07 furqan punjani at topline Research

p&G pakistan finalistfor us corporate excellence award

ISLAMABAD

STAFF REPoRT

PROCTOR and Gamble Pakistanhas been chosen as one of the 13finalists out of 62 nominations

submitted by US Ambassadors aroundthe world for States Secretary of State’sAward for Corporate excellence (ACe)2011. A statement issued by the USembassy said ACe finalists areinternational business leaders whorecognise the vital role that USbusinesses play abroad as goodcorporate citizens. The company wasnoted for consumer products and itshumanitarian assistance efforts thatprovided clean drinking water, food,hygiene products, medical care, andlaundry services after unprecedentedfloods in the region. Furthermore,sustainable partnerships to establish anetwork of schools, early educationprogrammes, and support fororphanages also enhanced thecompanies repertoire. And,implementation of science andtechnology standards, reduction ofcarbon dioxide emissions at its facilitiesand collaboration with universities todevelop young business leaders wereother highlights. The awards, which wereestablished in 1999, demonstrate howAmerican firms can have a tremendousimpact by promoting our values andhelping define the United States as apositive force in the world. As Secretaryof State hilary Clinton has stated,“Corporate social responsibility andsocially responsible development are notmarginal to our foreign policy butessential to the realisation of our goals.”

Largest container shipberths at port Qasim

KARACHI

STAFF REPoRT

PORT Qasim Authority (PQA)safely berthed the largest con-tainer ship that has ever visited

the country’s second largest port. Ac-cording to a statement issued by theport operations division of the PQA, thecontainer vessel, M.V Maersk UTAh,having a length overall (LoA) of 292meters and 11.7 meters draught wasberthed. “Since the start of night navi-gation facility at PQA in 2004, this ves-sel with largest LoA was berthed” at theQasim International Container Termi-nal (QICT), the statement said. Thishistorical achievement, it said, was dueto immaculate planning of the port op-erations division, the ship agent andQICT (DP World).

g steel mills owes Rs4.6 billion to ssGC g Company does not have revenue to pay staff salaries

steeL miLLs CRisis

KARACHI

WAQAR hAMZA AnD ghuLAM ABBAS

SUI Southern Gas Company (SSGC) whilenot upholding its promise has started 8hour gas loadshedding to Pakistan SteelMills (PSM) from last Saturday.

OutstaNDiNG biLLsSources informed Profit that PSM was issued anotice by the gas company earlier that the com-pany would disconnect the gas connection of themills from 22nd of this month if the mills don’tpay the bill amounting to Rs4.6 billion. Intrigu-ingly, from Saturday, before ten days of the finaldisconnection date, the SSGC started 8 hours gasloadshedding at the mills from 12pm to 8pmdaily, which is piling on to the miseries of theloss-making PSe that is passing through it’sworst financial crisis, sources added.

WORseNiNG fiNaNCiaL CRisisSince the coke oven battery of the mills is notworking, the plants of the mills are being run onnatural gas for 16 hours a day, which consumesgas worth Rs400 million a month, and now thetotal amount of the gas bill due to financial crisishas exacerbated to Rs4.6 billion. ‘On the otherhand, the authorities at the government ownedSteel Mills does not have cash to pay this gargan-

tuan bill, as total revenue earned this monthbarely crossed Rs210 million. Therefore the ques-tion of paying the bill does not arise till the gov-ernment intervenes to settle this issue,’ sourcessaid, adding that the loss making PSe does noteven have money to pay staff salaries, they added.SSGC stance to pick on the mills that is alreadyin turmoil does not seem to have sound justifica-tion because SSGC is not disconnecting the gas ofother organisations that have to pay a greateramount than PSM in terms of gas bills, sourcessaid. ‘KeSC is defaulting Rs30 billion to SSGC,but they are not interrupting gas supplies toKeSC,’ sources explained.

suspeNsiON Of Gas tO DefauLteRsWhen the Deputy Managing Director (opera-tions) SSGC Syed hassan Nawab was contactedhe said the company has issued notices to all de-faulting institutions which collectively owearound Rs45 billion to SSGC as the gas companywas unable to keep the uninterrupted supply ofgas under the acute financial crisis. ‘As the com-pany is facilitating supplies through borrowingcredit from banks it will no longer be able to en-sure uninterrupted supply to various governmentand private institutions including Pakistan SteelMills, Karachi electric Supply Company whichdefault around Rs5 billion and Rs30 billion toSSGC respectively,’ he added. he said the com-pany has not started loadshedding for PSM andsupplying gas to the PSe round the clock withoutany interruption.

KARACHI

STAFF REPoRT

DeSPITe highest ever profitsduring the first quarter (ofFY12) on account of better grossmargins, continuous weakening

of the rupee against Japanese yen and USdollar and subdued volumetric growth areexpected to keep the Indus Motor’s grossprofitability in check, analysts say.

Further, the analysts believe, resur-facing of regulatory risk due to concernsover revision in Auto Industry Develop-ment Plan (AIDP) policy, due to be an-nounced in this fiscal year, has alsocompelled the observers to associate

higher discount to the Indus’ valuation.“Indus Motors will be able to post a

decent growth in profitability of 17 percent in FY12 due to higher car prices ren-dering into higher absolute margins andimproved other income amid better cashposition,” viewed Furqan Punjani atTopline Research. “We expect Indus topost ePS of Rs41.0 compared to ePS ofRs34.9 in FY11,” the analyst added.

he said since the Japanese earth-quake, yen had gained strength againstother major currencies on account of re-construction activities.

During FY12YTD, Pak rupee has de-preciated by 2 per cent (post interven-tion) against yen, which was expected to

mount cost pressures on local car assem-blers as imported CKDs and other hightech parts were yen-denominated.

This, coupled with reducing pricingpower due to recent relaxation in used carimports, would also kept gross marginsunder pressure. Thus, with all these risksexpected to continue in FY12, we estimategross margins to clock at 6.8 per cent, upby a meager 20bps assuming 5-6 per centincrease in car prices. however amid con-tinual interventions by Japanese govern-ment to curb Yen’s appreciation, Indushas capitalised through forward bookingfrom the parent company. Thus, if theseinterventions continue, gross marginsmay increase due to aforementioned rea-

sons. With squeezing farm income due tohigher cost pressures and lower agri-product prices, tmajor sales market forIndus is expected to remain muted.

Furthermore with no revival in con-sumer financing despite reduction in dis-count rates, sales from urban areas wouldalso depict meager growth.

Therefore, current pace of volumetricsales (up 9 per cent in 3MFY12) is not atrue depiction of full year sales and wouldease going forward.

It is expected that Indus would showminute growth of 5 per cent in locally as-sembled car to 52.5k units compared to50.0k units last year. “The major growthdriver would continue to be prime Corolla

with its newly launched eco models withcheaper fuel source (CNG),” Furqan said.

Apart from fundamental concerns,the analyst said, local car assembling in-dustry was also surrounded by regulatoryrisks like recently relaxed used car policyand upcoming AIDP policy.

Government is expected to announcea revised AIDP policy in current fiscalyear with new import tariffs for CKDs andCBUs, he said. “The news flow in recentmonths have also indicated that govern-ment might also peruse relaxing the newentrant policy by reducing duties onCKDs in first, second and third year to 5per cent, 10 per cent and 15 percent, re-spectively,” Furqan said.

Strengthening yen haunts local car assemblersg During fy12ytD, pak rupee has depreciated by 2 per cent against yen g indus motors to show growth in profitability of 17 per cent: topline Research

KaraChi: Administration of Pakistan Steel Mills hasissued charged sheets against five of its officers who werenamed in the forensic audit report for being involved incorruption. Sources informed Profit that on Friday eveningPSM has issued charged sheets against its officers including,Riaz Mangi (manager at purchase department), Naeem-ul-haq (principal exchange officer from BMR department),Khalid Ghani (manager at PPC department), Azim Soomro(General Manager BMD department), and ChaudharyMasood (director at production department). Azim Soomroand Chaudhary Masood were given 3 charge sheets each,sources added. Sources further said that forensic audit reportwas carried out by a local audit company on the directions ofthe mills and it has named a total of 22 people involved incorruption. Out of those named, only those five officers areregular employees of the mills. Many of the named personswere either under contract or had already retired. This reportwas supposed to be submitted with the Supreme Court on 6thJune, 2011, by the mills regarding the suo muto notice by theapex court, sources said. The mills had made this report injust 40 days for which SC had asked for a hearing in March,sources further added. ‘So, Pakistan steel mills has to submitthis report to the SC, therefore, issuing charged sheets to itsofficers is simply a gimmick showing that the institution isstern against the corruption,’ sources added. PSM has takenthis step just to show that they are serious about corruption,but the involved officers have not been removed from theirposts, which is sad indeed, sources added. WAQAR hAMZA

steeL miLLs issues ChaRGesheet aGaiNst five OffiCeRs

Profit pages 15-11-2011_Layout 1 11/14/2011 10:58 PM Page 7