By Ali Ahmad · Friday, Mar 30, 2012 1 Comment
Southern Network Limited, also known as Sun TV and formerly known as Shaheen Pay TV), a wireless cable network broadcaster in Pakistan, and also the parent company of Digital Wireless Network (DWN) operating in Karachi, Lahore and Islamabad/Rawalpindi regions, is now facing a voluntary delisting of its shares from Stock Exchange, after facing serious cash flow problems law suits from creditors.
Southern Networks was incorporated in 1995 as a joint venture between the Shaheen Foundation and private shareholders with a view to provide subscribers with multiple channels of broadcast television programmes in addition to premium pay-per-view channels. Under new management, the company installed a digital broadcast system under the name of Sun TV. Sun TV airs more than 50 Digital channels.
Southern Networks is the pioneer of introducing MMDS (Multi point & Multi Distribution system) American Technology in Pakistan.
Company applied for voluntary delisting from stock exchange after facing heavy losses. Southern Network did not pay any divided for last 5 years.
Many creditors initiated legal action against the company upon failure of paying their liabilities. Although one of the major shareholder has advanced Rs 16.2 Crore which was utilized for payment of overdue bank and leasing companies’ liabilities.
Accumulated losses has already eroded the paid-up capital and shareholders’ reserves. Net equity is negative to the extend of Rs 8 Crore. Majority shareholders of the company representing almost 78% shares agreed to buy-back shares from minority shareholders at a price of Rs 1 per share.
By Ali Ahmad · Thursday, Mar 29, 2012 1 Comment
Attock Petroleum, the third largest oil marketing company after PSO and Shell Pakistan, and which is believed to be benefited from the departure of Caltex from Pakistan, is leading a consortium which has submitted its financial bid to Civil Aviation Authority (CAA).
According to the documents available to EconomyAge, Attock Petroleum, which might be bidding for Caltex, is also bidding for establishing Fuel Farm and Operation and Maintenance of Hydrant Refueling system at New Benazir Bhutto International Airport, Islamabad, which will be evaluated by Infrastructure Project Development facility (IPDF) and Pakistan Civil Aviation Authority.
Byco Petroleum and Fauji Faoundation’s Fauji Fertilisers are appearing to be the key contenders among existing players to acquire Caltex operations in Pakistan
Attock Petroleum – a subsidiary of the Attock Group – has about 331 retail outlets but a market share of around 8%.
By M Yasir · Wednesday, Mar 28, 2012 1 Comment
MCB has appointed A.F. Ferguson & Company, Chartered Accountants, as it auditing and accounting firm for the next calendar year 2012, an official sources said. Riaz Ahmed and Company and KMPG were maintaining accounts of Pakistan’s largest bank at present.
According to sources said that the two firms were replaced as they maintained bank’s account for three-year and completed maximum period with a corporation in accordance with a law.
A F Ferguson has recently replaced KMPG as auditing firm of Meezan Bank.
MCB Approves 30% dividends and 10% Bonus
MCB Bank’s Board of Directors has approved final cash dividend of 30 percent and 10 percent bonus issue after shareholders adopted the audited financial statements of MCB Bank Limited and its subsidiaries at MCB Bank’s 64th Annual General Meeting. This is in addition to 90 percent interim cash dividend already paid in 2011.
Chairing the AGM to transact the ordinary and special business of the Bank, Director of MCB Bank, Aftab Ahmad Khan said that MCB has completed yet another remarkable year in terms of financial performance and registered an increase of 20% and 15% in profit before tax (PBT) and profit after tax (PAT) respectively.
Net Interest Income of the Bank increased by 21% over last year with non markup income increasing by 29% to Rs. 8.112 billion. Provisions for the period were reported at Rs. 3.654 billion with a nominal increase of 2% over last year.
Strong financial growth was seen in the asset base registering an increase of 15% to Rs. 653.233 billion. The investment portfolio increased considerably by Rs. 103.6 billion over 2010 with higher concentration in risk free government securities.
Advances (gross) of the Bank were reported at Rs. 248.135 billion with a decrease of 9% over 2010, mainly on account of conversion of commodity financing / circular debt exposure to risk free government securities.
The deposit base of the Bank went up by 14%, with 11% and 16% increase reported in current and saving deposits respectively, maintaining the CASA percentage at 81%.
Earnings per share (EPS) as of December 31, 2011 came to Rs. 23.23 compared to Rs. 20.18 for last year. Return on assets improved to 3.18% (2010: 3.13%) whereas return on equity improved to 26.23% (2010: 25.91%).
By Ali Ahmad · Tuesday, Mar 27, 2012 0 Comments
A major shareholder of Hub Power Company,International Power is interested to sold its 17.44% stake in Hub Power. 
HUBCO, which is a leading energy giant in Pakistan, who has been lately in news with its tax battle against FBR which is not seeing any end and is now entered into Supreme Court. This tax battle involves Rs 2 Billion between FBR and Hub Power which will now be settled in Pakistan’s Apex Court.
According to a notice, Hub Power informs stock exchange members that International Power went into share sale and purchase agreement with Dawood Group and Allied Bank Limited to sell their whole stake in company.
Government of Pakistan still has to give its consent to make this sale final.
By Ali Ahmad · Tuesday, Mar 27, 2012 1 Comment
Kraft Foods, a new and leading consumer company in Pakistan, is set to acquire famous brand TANG for Rs 65 Crore from Clover Pakistan. The sale will be completed in few weeks, subject to approval from Competition Commission of Pakistan.
Clover Pakistan’s shareholders finalized this deal in a meeting on 22nd March.
Clover Pakistan, the owner of TANG brand in Pakistan, and Kraft Foods Limited entered into an Asset Purchase agreement whereby Clover agreed to sell to Kraft Foods certain assets relating to Clover’s TANG business, including the manufacturing facilities, leasehold land measuring 19,000 square meters and free hold land of 7,175 Acres and intangible assets relating to TANG business, including termination of the users’ rights, the provision of a list of the company’s customers, selling trade outlets and distributors.
The deal is subject to obtaining exemption from Competition Commission of Pakistan, an undertaking from the company not to compete in the non-carbonated fruit flavored powdered beverage business for a period of 2 years.
The Pakistan’s consumer food market which is estimated to be around $4.2 Billion annually is already expecting a competition with new entrants in market. With Kraft foods in market with a leading consumer brand in its hands, coming days might witness interesting competition in beverage industry.
By Ali Ahmad · Monday, Mar 26, 2012 0 Comments
DG Khan Cement Company Limited (DGKCC), one of the largest cement-manufacturers in Pakistan, has announced the deployment of Oracle E-Business Suite Release 12 to help improve its operational efficiency, enabling it to automate its management and financial accounting system, reducing the time it needed to compile monthly operating results from 15 days to just three days.
“The unique and competitive value that Oracle has provided us in shape of smooth and integrated Procure-to-pay and Order-to-Cash business flows has facilitated us to get various types of real time information rapidly rather online, which saves a lot of time and money,” said Muhammad Aslam, Chief Information Officer, DG Khan Cement Co. Ltd. “Integrated information provided by the Oracle E-Business Suite Release 12 helps us to make better decisions about purchasing and inventory to run business efficiently.”
“Oracle E-Business Suite has a strong footprint in the manufacturing industry and we are delighted that DGKCC has leveraged the most comprehensive suite of integrated, global business applications to further improve their operational efficiency and transform its business with the support of our partners.” said Akkasha Sultan Shaikh, Country Manager, Applications Business, Oracle Pakistan and South Asia Growth Economies – West. “The business benefits being enjoyed by DGKCC is a good example for other key players not only in cement industry but also in other manufacturing industries to follow.”
Prior to the deployment of the Oracle E-Business Suite Release 12, the company was using standalone legacy systems for financials, payroll,inventory and sales which were neither automated nor integrated. As a result, reports were being prepared manually at the end of month using manual vouchers.
With the help of Oracle Applications, DGKCC has now been able to generate daily cement production and power generation reports automatically at midnight as the system consolidates the production data, dispatches and inventory balances.
Oracle Purchasing enabled DGKCC to increase its efficiency of purchasing activities by helping to enable the company to process more than twice the purchase requests in the same amount of time as compared to its legacy system.
Implemented in house by the DGKCC ERP team, Oracle Daily Business Intelligence and Oracle Business Intelligence Applications are assisting the organization in generating various management reports efficiently in minimum time and gain more insight and greater value from a range of data sources and applications. Some of these reports have been put online and are being updated automatically after predetermined intervals.
DGKCC has also implemented Oracle Order Management, Oracle Inventory Management, Oracle Enterprise Asset Management and Oracle Discoverer which assist the management in quick and informed decision-making.
By Nabila Mujtaba · Monday, Mar 26, 2012 1 Comment
Indian oil companies – such as the Hindustan Petroleum Corporation, the Indian Oil Corporation and GAIL India – are gearing up to cash in on the opportunity by exporting petroleum products and gas to its energy-starved neighbour. Pakistan’s existing refining capacity meets only half its total domestic requirement, while India now exports almost one fourth of its 185 million tonne refining capacity.
“Pakistan’s move to ease trade with India could translate into a big opportunity for HPCL, as it will be best positioned to use its INR19,000 crore Bhatinda refinery as a critical gateway. It will be a pragmatic business model, where revenue will more than offset relatively low investment in the pipeline,” said a Mumbai-based oil analyst.
Affirming speculation, an Hindustan Petroleum’s board member told the Times of India on Saturday that: “we plan to tap capital markets as soon as our Bhatinda refinery is nearing completion. A part of the initial public offering proceeds will be used to build a product pipeline to Lahore. We are strategically located to sell our products to Pakistan as the border is less than 50 km away from our refinery.”
Exporting gas is also a good opportunity for India’s largest gas transporter and marketer GAIL, as Pakistan does not have a liquefied natural gas (LNG) terminal and the country is likely to experience its gas crisis by 2016, when the shortfall is expected to hit over three billion cubic feet (bcf) per day, a report said.
Even India’s biggest oil refiner, the Indian Oil Corporation, is exploring possibilities to connect its Panipat and Mathura refineries with the Bhatinda product pipeline, so that it may also export its products to Pakistan.
A Pakistan delegation led by petroleum and natural resources secretary Mohammad Ejaz Chaudhry is in New Delhi holding talks on ways to facilitate trade in petroleum products and petrochemicals between the two nations.
By Nabila Mujtaba · Monday, Mar 26, 2012 1 Comment
According to the Planning Commission findings the cost of a minimum food basket escalated by 79 percent during the four years of the current government thereby fuelling malnutrition and poverty.
These damning statistics are in line with general inflation which went up by 73.5 percent in the same period.
No doubt external factors have played a significant role in domestic price escalation – a claim that is supported by the steady erosion in the nominal rupee value from an average of 62.5 rupees to the dollar in 2007-08 to over 90 rupees per dollar in four years due to the adjustment for inflationary differential vis-a-vis our competitors and trading partners.
A steady rise in the price of oil, due to the Arab Spring as well as the escalating tensions between Iran and the US-led West, has accounted for a massive rise in our oil import bill.
In 2007-08 Pakistan’s total oil and products import bill was 7.2 billion rupees, which rose dramatically to 12.3 billion rupees in 2010-11.
The State Bank of Pakistan website makes a provisional estimate for the current fiscal year at 9.87 billion rupees for July-February 2011-12 – around 2.5 billion rupees in excess of the corresponding period last year. Another external factor that continued to negatively impact on our balance of payment position was the global recession, however significantly this factor did not impact negatively on our exports which rose to 25 billion rupees last year and are forecast to be around 16.2 billion rupees during July-February this year – 843 million dollars more than in the corresponding period last year.
Exports growth has slowed to 3.9 percent compared to the 189 percent rise during first half of last year. The expected fall in textile sector exports is likely to persist possibly into the next fiscal year as well. This is indeed worrisome and requires a closer re-look at our balance of payment position.
Friends of Pakistan
Additionally, the global recession has compromised the capacity of Western nations to meet their pledged assistance to Pakistan under the umbrella of Friends of Democratic Pakistan.
While one can dismiss external factors over which the Pakistan government has little or no control, yet one cannot so easily dismiss internal policies that, without doubt, did play a key role in fuelling prices of those items that account for the bulk of the income of the poor in a given month.
There is little doubt that the prices of oil and products were raised in line with their international price.
However, these items are taxed – there is a petroleum levy as well as sales tax that, according to the formula, rises with a rise in the price of the commodity – therefore the government cannot lay the entire blame for a rise in the domestic price of oil and products on the international price.
Thus with a rise in fuel prices the cost of transportation escalated sharply with its consequent impact on the income of the poor.
Electricity Problems
The government was also lax, and continues to be lax, in meeting electricity demand which has accounted for national productivity below capacity as well as lay-offs in various industrial towns and cities around the country.
Again part of the reason is external, due to rising costs of oil, but part is internal as the government fails to contain the inter-circular debt thereby compromising the capacity of the sector to pay for oil imports or contain the massive transmission losses.
Instead it has focused on eliminating the inter-disco tariff differential through large annual injections that in effect indicate support for the poor performing discos.
And finally due to paucity of external funding, attributed to the failure to get a Letter of Comfort from the International Monetary Fund which accounts for cessation of programme (budgetary) assistance the government has increased reliance on domestic borrowing.
This is a highly inflationary policy as it is not backed by an increase in productivity.
In the past year domestic borrowing escalated considerably.
Thus while foreign debt servicing declined – from 76.7 billion rupees in the budget for 2010-11 to 74.4 billion rupees actual payment due to the non-materialisation of foreign lending – domestic debt servicing rose from the budgeted 621.7 billion rupees to 653.6 billion rupees last year and is budgeted to further rise to 714.6 billion rupees this year.The top leadership appears to be more interested in project lending.
There is much more to running the economy than approval of pork and barrel projects.
There is an urgent need for the government to turn its attention towards arresting the inflationary spiral that is raising malnutrition and poverty levels in the country.
The government’s approach so far has been to make cash transfers under the Benazir Income Support Programme, however, there is an urgent need to arrest the erosion of the rupee both domestically and internationally through significant curtailment of current expenditure (the government has so far relied exclusively on decreasing development expenditure while raising non-development expenditure), enhanced revenue generation through the levy of equitable as opposed to inequitable taxes (which would raise the tax-to-GDP ratio) and reduced domestic borrowing to reduce inflation.
By Ali Ahmad · Monday, Mar 26, 2012 2 Comments
The Pakistan Business Council (PBC) has opposed certain provisions in capital gains tax amendments proposed by the Securities and Exchange Commission of Pakistan (SECP) for stock market trading.
Pakistan Business Council specifically rejects the provision of allowing investment without disclosing source of income to funds from 1st April 2012 to 30th June 2014 in the stock exchanges without disclosure of source of income is particularly objectionable. This could potentially become a major route for laundering of funds generated from illegal sources, says a press statement issued by PBC.
While on one hand, SECP is directing other sectors to combat money laundering affairs, its suggesting stock exchange to avoid asking the source of income which could lead to laundering of illegal money.
The Federal Board of Revenue, in the last two decades, has announced two tax amnesty schemes to allow declaration of undisclosed funds and wealth to bring these in the tax net. Both schemes failed to augment any large scale declaration of undisclosed funds.
Such an amnesty scheme will directly impact capital market activity, which in turn can influence genuine investor behaviour and lead to distortion of capital allocation.
PBC, on the other hand, supports other provisions in the proposed amendment meant to facilitate and make transparent the computation of CGT by National Clearing Company of Pakistan (NCCPL) as well as freezing the present rates of CGT till 2014.
By Nabila Mujtaba · Friday, Mar 23, 2012 0 Comments
In keeping with ‘Sheep’’s commitment to provide brand accessibility, comfortable and convenient retail, the team at ‘Sheep’ announces the opening of their third store in Karachi at Dolmen Mall today (Thursday). The Tariq Road outlet opening follows soon after the launch of the ‘Sheep’ space at Dolmen City Mall in January 2012.
Further, in addition to their three Karachi stores, ‘Sheep’ also offer a ‘Shop from Home’ service across Pakistan providing local shoppers with the option to purchase ‘Sheep’ from the comfort of one’s home with the pieces delivered to the local customers’ doorsteps through its Facebook page.
Indeed the ethos of ‘Sheep’ is to cater to the modern day woman with premium quality Ready-to-Wear clothes, reflected in the easy accessibility of the brand. Investing in style and fashion for the urban woman, ‘Sheep’ retails fashion, which is cognisant of local trends yet consistently innovating to introduce and pioneer new trends each season. The idea is to create pieces that are uncomplicated, wearable and smart fashion for the confident woman, which is both elegant and classic.
‘Sheep’ is home to four diverse design lines, thereby ensuring versatility within wardrobe aesthetic and affordability options for the urban Pakistani woman. Encompassing both Eastern and Western, the brands four lines are Smart Casuals, Work Wear, Luxury Prêt and Black Sheep, encompassing a price range from Rs 1,650 – Rs 25,500. pr
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