profit.com.pk Friday, 25 May, 2012 KARACHI ISMAIL DILAWAR The dollar-hungry country has “success- fully” repaid around $ 2.53 billion dur- ing the current fiscal year until May 18. These repayments are inclusive of $ 809 million the country paid in two different installments to the International Mone- tary Fund (IMF) under the 2008’s $ 11.3 billion, but half-paid, Stand-By Arrange- ment (SBA). What comforts the central bank is the fact that despite recent serv- icing of the country’s huge external debts, which have accumulated to around $ 62 billion, the country’s dollar reserves surged by $ 207 million. According to central bank, the gross foreign exchange reserves of the country increased to $16.311 billion up to in the week that ended on May 18 against $16.104 billion of the previous week. The State Bank’s holdings of the greenback swelled by $152 million to $11.936 billion during the review week compared to last week’s $11.784 billion. The commercial banks held up to $4.375 billion against $4.319 billion, the central bank said. “The rise in the reserves is due to some multilateral inflows and remit- tances,” viewed Syed Wasimuddin, the SBP chief spokesman. Receipts from the multilaterals, the spokesman said, amounted to $94 million during the cur- rent month, up to May 18. Wasimuddin said up to May 18 of FY12 Pakistan had repaid debts worth $2.53 billion, inclusive of $ 809 million to IMF, and other miscellaneous pay- ments of $1.52 billion. The receipts from multilaterals and others, however, remained lower at $ 1.21 billion. The country, the SBP spokesman said, had made the first installment under the IMF’s SBA facility of $399 million in the week ending on February 24 (2012). Whereas the second install- ment of $394 million was also “success- fully” paid to the Fund on 25th of current month. Wasimuddin also contradicted some media reports that the State Bank had been aggressively buying dollars from the market to make the SBA repayment to the IMF. “The central bank has not been con- ducting any purchases from the market in the recent weeks, including the cur- rent week, and the movement in ex- change rate has been somewhat sentiment-driven rather than any exces- sive demand and supply mismatches prevailing in the market,” he clarified. Adding: “The State Bank is watching the situation closely”. During the first 10 months of current fiscal year, ranging from July to October FY12, the dollar inflows remitted by overseas Pakistanis rose by 20.2 percent to $ 10.877 billion. This helped the Bal- ance of Payments despite widening of trade deficit, he said. Whereas the country’s current ac- count deficit widened beyond $ 3.39 bil- lion against last year’s surplus of $ 466 million, the workers remittances ap- peared as the only comforting item on the Balance of Payment list. ISLAMABAD STAFF REPORT W HILE agreeing to a GDP growth rate es- timate of 4.3 percent for the next fiscal year, the National Economic Council (NEC) on Wednesday approved Rs 873 billion development outlay including a federal Public Sector Development Programme of Rs 360 billion the next fiscal year 2012-13. Prime Minster Syed Yousaf Raza Gillani said the meeting which was attended by the Finance Minister, Governor KPK, Chief Ministers of Sindh, Balochistan and KPK, Prime Minister of AJK and CM Gilgit Baltistan attended the meeting. Punjab Chief Minister skipped the important meeting due to PML-N’s non acceptance of incumbent PM as legitimate after the Supreme Court contempt of court order. Agenda before the council was to review and ap- prove the Annual Plan 2011-12 and 2012-13, review of PSDP 2011-12 and approval of PSDP 2012-13, imple- mentation plan of framework for economic growth and progress report of the schemes approved by CDWP and ECNEC. NEC approved growth targets of 4.3 percent as en- visaged in the Annual Plan 2012-13 under the Growth Strategy. The targets will be achieved through im- provement in productivity and competitiveness, re- forms in the markets, promoting cities as regional clusters, improve connectivity, reforming the civil service, institutions and PSEs, harnessing the poten- tial of youth and embarking on result based manage- ment. Investment targets. Inflation during 2012-13 will be further brought down to 9.5 percent. Total national development outlays for the next fiscal year has been proposed at Rs 863 billion, wherein Federal PSDP would amount to Rs. 350 bil- lion. The meeting approved development budget of Punjab at Rs 206 billion, Sindh Rs 188 billion, KPK Rs 78 billion and Balochistan Rs 41 billion. Federal ministries have formulated their own de- velopment priorities while remaining in their ap- proved ceilings and adopting guidelines of the Planning Commission and Finance Division. Empha- sis has been placed on completion of on-going priority projects during 2012-13. New un-approved projects were discouraged as they may cause thin spread resource allocation result- ing in time/cost overrun. It was ensured that Foreign Assistance is not underestimated. In the total pro- posed PSDP 2012-13, the size of FA has been esti- mated at Rs100 billion. 9. The position of on-going and new projects in PSDP 2012-13 is as under: During 2012-13, 262 projects are likely to be completed as per following details: 11. Sectoral allocations for 2012-13 as compared to current year are as under: It was informed that no reduction in current year’s PSDP size was made to help restore GDP growth. As such, the National Development Outlays 2011-12 remained at Rs 730 Billion. The proposed PSDP 2012-13 has prepared in line with the growth strategy framework to ensure in- clusive growth, reducing poverty, achieving MDGs, min- imizing wastages, ensuring balanced development, food, water and energy security. The proposed PSDP 2012-13 also articulates the division of subjects between Provin- cial and Federal Governments after passage of Constitu- tional 18th Amendment. While reviewing the Annual Plan 2011-12 and pro- posed Annual Plan 2012-13, the NEC was informed that the performance of the economy during the current fiscal year was satisfactory. The GDP growth is expected to be 3.7 percent as against 3 percent achieved during the last year. The size of GDP (mp) has been estimated at Rs 20.7 tril- lion or $ 232 billion. Total investment as a percentage of GDP will be at 12.5 percent during the current fiscal year, slightly lower than the revised estimates of 13 percent during the last year mainly due to reduction in the national savings from 13.1 percent to 10.8 percent during the same period. On the external front, exports and imports have been esti- mated at around $ 25 billion and $ 40 billion, respectively with current account balance of negative 1.7 percent. Tax revenue during the period July-April, 2011-12 is Rs 1246 billion, while workers remittances stands at $ 10.8 bil- lion during the same period. Inflation during July-April 2011-12 has been maintained at 10.8 percent against 13.8 percent during the corresponding period last year. Inflation during 2012-13 will be further brought down to 9.5 percent. It’s payback time! Well kind of… NEC hauls out development portion from the budget cauldron g Approves Rs 873 billion development budget for next fiscal g PSDP of Rs 360 billion g Punjab Rs 206 billion g Sindh Rs 188 billion g KPK Rs 78 billion g Balochistan Rs 41 billion g Foreign assistance estimated at Rs100 billion FBR freezes Mobilink’s bank accounts MONITORING DESK Federal Board of Revenue, authority re- sponsible for collection of taxes, has at- tached all bank accounts of Mobilink, while blocking all imports for the com- pany, said a statement issued by FBR today. Statement said Pakistan Mobile Communication Ltd (Mobilink) owed Rs. 8.6 billion to the exchequer on ac- count of mis-declaration of Sales Tax and FED, for which Mobilink had ap- pealed the Income Tax Appellate Tribu- nal for a hold. However, the Income Tax Appellate Tribunal recently upheld the decision of LTU, Islamabad and con- firmed the payable tax amount of 8.6 billion rupees. On receiving the decision of the Tribunal, Syed Ijaz Hussain, Chief Commissioner, LTU, Islamabad formed various teams of officers headed by Commissioner, LTU, Malik Muhammad Ashraf to recover the amount from the company through attachment of Bank accounts, blocking of imports and recov- ery through suppliers of the company, which include other telecom companies as well as the Pakistan Telecommunica- tion Authority. Mobilink said that it is in process of evaluating the situation, and their clarification on the development will come in a while. We will update the story when we get any word from Mo- bilink. Sources close to FBR said that authority will now de-attach accounts only after recovering taxes and owed funds from Mobilink. FBR had carried out a similar operation for collection of taxes from PTA last year. FBR state- ment confirmed that, as of today, all Bank Accounts of the Company have been attached and imports blocked ac- cordingly. FBR will take any further ac- tion on next working day, the statement said. Mobilink’s Viewpoint on the Mat- ter: Responding to FBR’s action, Pak- istan Mobile Communications Limited (Mobilink) has clarified that the FBR’s ruling on Sales Tax and FED is sub-ju- dice. Mobilink in its statement said that company is one of the largest corporate tax payers in Pakistan, and has always remained at the forefront of making its due contribution to the nation’s excheq- uer. Mobilink said that it paid PKR 34 billion as taxes in 2011 alone. “Over its 17 year history of operations, Mobilink has remained committed to Pakistan, and respectful of all laws, including tax laws, which govern over Pakistan”, Mo- bilink’s statement concluded. Petroleum ministry steps on the gas Page 2 g Pakistan ‘successfully’ repays $2.53b to external debtors, including IMF g Some $809mn repaid to IMF in two installments under SBA g Second installment of $394m paid to the Fund on May 25 g Around $1.52b cleared under other miscellaneous heads g Multilateral inflows, remittances jack up dollar reserves by $207 million to $16.311b g C/A gap widens to $3.39b against $466mn surplus in FY11 g Remittances up by 20pc to $10.877b in July-OctoberFY12 PDF Profit_Layout 1 5/25/2012 1:36 AM Page 1
Transcript
profit.com.pk Friday, 25 May, 2012
KARACHI
ISMAIL DILAWAR
The dollar-hungry country has “success-fully” repaid around $ 2.53 billion dur-ing the current fiscal year until May 18.These repayments are inclusive of $ 809million the country paid in two differentinstallments to the International Mone-tary Fund (IMF) under the 2008’s $ 11.3billion, but half-paid, Stand-By Arrange-ment (SBA). What comforts the centralbank is the fact that despite recent serv-icing of the country’s huge externaldebts, which have accumulated toaround $ 62 billion, the country’s dollar
reserves surged by $ 207 million.According to central bank, the gross
foreign exchange reserves of the countryincreased to $16.311 billion up to in theweek that ended on May 18 against$16.104 billion of the previous week.
The State Bank’s holdings of thegreenback swelled by $152 million to$11.936 billion during the review weekcompared to last week’s $11.784 billion.
The commercial banks held up to$4.375 billion against $4.319 billion, thecentral bank said.
“The rise in the reserves is due tosome multilateral inflows and remit-tances,” viewed Syed Wasimuddin, the
SBP chief spokesman. Receipts from themultilaterals, the spokesman said,amounted to $94 million during the cur-rent month, up to May 18.
Wasimuddin said up to May 18 ofFY12 Pakistan had repaid debts worth$2.53 billion, inclusive of $ 809 millionto IMF, and other miscellaneous pay-ments of $1.52 billion.
The receipts from multilaterals andothers, however, remained lower at $1.21 billion.
The country, the SBP spokesmansaid, had made the first installmentunder the IMF’s SBA facility of $399million in the week ending on February
24 (2012). Whereas the second install-ment of $394 million was also “success-fully” paid to the Fund on 25th ofcurrent month.
Wasimuddin also contradicted somemedia reports that the State Bank hadbeen aggressively buying dollars fromthe market to make the SBA repaymentto the IMF.
“The central bank has not been con-ducting any purchases from the marketin the recent weeks, including the cur-rent week, and the movement in ex-change rate has been somewhatsentiment-driven rather than any exces-sive demand and supply mismatches
prevailing in the market,” he clarified.Adding: “The State Bank is watching
the situation closely”.During the first 10 months of current
fiscal year, ranging from July to OctoberFY12, the dollar inflows remitted byoverseas Pakistanis rose by 20.2 percentto $ 10.877 billion. This helped the Bal-ance of Payments despite widening oftrade deficit, he said.
Whereas the country’s current ac-count deficit widened beyond $ 3.39 bil-lion against last year’s surplus of $ 466million, the workers remittances ap-peared as the only comforting item onthe Balance of Payment list.
ISLAMABAD
STAFF REPORT
WHILE agreeing to a GDP growth rate es-timate of 4.3 percent for the next fiscalyear, the National Economic Council(NEC) on Wednesday approved Rs 873
billion development outlay including a federal PublicSector Development Programme of Rs 360 billion thenext fiscal year 2012-13.Prime Minster Syed Yousaf Raza Gillani said themeeting which was attended by the Finance Minister,Governor KPK, Chief Ministers of Sindh, Balochistanand KPK, Prime Minister of AJK and CM GilgitBaltistan attended the meeting. Punjab Chief Ministerskipped the important meeting due to PML-N’s nonacceptance of incumbent PM as legitimate after theSupreme Court contempt of court order.
Agenda before the council was to review and ap-prove the Annual Plan 2011-12 and 2012-13, review ofPSDP 2011-12 and approval of PSDP 2012-13, imple-mentation plan of framework for economic growthand progress report of the schemes approved byCDWP and ECNEC.
NEC approved growth targets of 4.3 percent as en-visaged in the Annual Plan 2012-13 under the GrowthStrategy. The targets will be achieved through im-provement in productivity and competitiveness, re-forms in the markets, promoting cities as regionalclusters, improve connectivity, reforming the civilservice, institutions and PSEs, harnessing the poten-tial of youth and embarking on result based manage-ment. Investment targets. Inflation during 2012-13will be further brought down to 9.5 percent.
Total national development outlays for the nextfiscal year has been proposed at Rs 863 billion,wherein Federal PSDP would amount to Rs. 350 bil-lion. The meeting approved development budget ofPunjab at Rs 206 billion, Sindh Rs 188 billion, KPKRs 78 billion and Balochistan Rs 41 billion.
Federal ministries have formulated their own de-velopment priorities while remaining in their ap-proved ceilings and adopting guidelines of thePlanning Commission and Finance Division. Empha-sis has been placed on completion of on-going priorityprojects during 2012-13.
New un-approved projects were discouraged asthey may cause thin spread resource allocation result-ing in time/cost overrun. It was ensured that ForeignAssistance is not underestimated. In the total pro-posed PSDP 2012-13, the size of FA has been esti-mated at Rs100 billion.
9. The position of on-going and new projectsin PSDP 2012-13 is as under:
During 2012-13, 262 projects are likely to becompleted as per following details:
11. Sectoral allocations for 2012-13 ascompared to current year are as under:
It was informed that no reduction in current year’sPSDP size was made to help restore GDP growth. As such,the National Development Outlays 2011-12 remained atRs 730 Billion. The proposed PSDP 2012-13 has preparedin line with the growth strategy framework to ensure in-clusive growth, reducing poverty, achieving MDGs, min-imizing wastages, ensuring balanced development, food,water and energy security. The proposed PSDP 2012-13also articulates the division of subjects between Provin-cial and Federal Governments after passage of Constitu-tional 18th Amendment.
While reviewing the Annual Plan 2011-12 and pro-posed Annual Plan 2012-13, the NEC was informed thatthe performance of the economy during the current fiscalyear was satisfactory. The GDP growth is expected to be 3.7percent as against 3 percent achieved during the last year.
The size of GDP (mp) has been estimated at Rs 20.7 tril-lion or $ 232 billion. Total investment as a percentage ofGDP will be at 12.5 percent during the current fiscal year,slightly lower than the revised estimates of 13 percent duringthe last year mainly due to reduction in the national savingsfrom 13.1 percent to 10.8 percent during the same period.On the external front, exports and imports have been esti-mated at around $ 25 billion and $ 40 billion, respectivelywith current account balance of negative 1.7 percent.
Tax revenue during the period July-April, 2011-12 is Rs1246 billion, while workers remittances stands at $ 10.8 bil-lion during the same period. Inflation during July-April2011-12 has been maintained at 10.8 percent against 13.8percent during the corresponding period last year. Inflationduring 2012-13 will be further brought down to 9.5 percent.
It’s payback time! Well kind of…
NEC hauls out developmentportion from the budget cauldrong Approves Rs 873 billion development budget for next fiscal g PSDP of Rs 360 billion g Punjab Rs 206 billiong Sindh Rs 188 billion g KPK Rs 78 billion g Balochistan Rs 41 billion g Foreign assistance estimated at Rs100 billion
FBR freezesMobilink’s bankaccounts
MONITORING DESK
Federal Board of Revenue, authority re-sponsible for collection of taxes, has at-tached all bank accounts of Mobilink,while blocking all imports for the com-pany, said a statement issued by FBRtoday. Statement said Pakistan MobileCommunication Ltd (Mobilink) owedRs. 8.6 billion to the exchequer on ac-count of mis-declaration of Sales Taxand FED, for which Mobilink had ap-pealed the Income Tax Appellate Tribu-nal for a hold. However, the Income TaxAppellate Tribunal recently upheld thedecision of LTU, Islamabad and con-firmed the payable tax amount of 8.6billion rupees. On receiving the decisionof the Tribunal, Syed Ijaz Hussain, ChiefCommissioner, LTU, Islamabad formedvarious teams of officers headed byCommissioner, LTU, Malik MuhammadAshraf to recover the amount from thecompany through attachment of Bankaccounts, blocking of imports and recov-ery through suppliers of the company,which include other telecom companiesas well as the Pakistan Telecommunica-tion Authority. Mobilink said that it is inprocess of evaluating the situation, andtheir clarification on the developmentwill come in a while. We will update thestory when we get any word from Mo-bilink. Sources close to FBR said thatauthority will now de-attach accountsonly after recovering taxes and owedfunds from Mobilink. FBR had carriedout a similar operation for collection oftaxes from PTA last year. FBR state-ment confirmed that, as of today, allBank Accounts of the Company havebeen attached and imports blocked ac-cordingly. FBR will take any further ac-tion on next working day, the statementsaid. Mobilink’s Viewpoint on the Mat-ter: Responding to FBR’s action, Pak-istan Mobile Communications Limited(Mobilink) has clarified that the FBR’sruling on Sales Tax and FED is sub-ju-dice. Mobilink in its statement said thatcompany is one of the largest corporatetax payers in Pakistan, and has alwaysremained at the forefront of making itsdue contribution to the nation’s excheq-uer. Mobilink said that it paid PKR 34billion as taxes in 2011 alone. “Over its17 year history of operations, Mobilinkhas remained committed to Pakistan,and respectful of all laws, including taxlaws, which govern over Pakistan”, Mo-bilink’s statement concluded.
Petroleum ministry stepson the gas Page 2
g Pakistan ‘successfully’ repays $2.53b to external debtors, including IMF g Some $809mn repaid to IMF in two installments under SBA g Second installmentof $394m paid to the Fund on May 25 g Around $1.52b cleared under other miscellaneous heads g Multilateral inflows, remittances jack up dollar reserves by$207 million to $16.311b g C/A gap widens to $3.39b against $466mn surplus in FY11 g Remittances up by 20pc to $10.877b in July-OctoberFY12
PDF Profit_Layout 1 5/25/2012 1:36 AM Page 1
ISLAMABAD
AMER SIAL
AFTER concluding two gaspipeline import agreementsand possibility of LiquefiedNatural Gas import being
intensely worked out, the PetroleumMinistry has sought imposition of gasinfrastructure development cess atthe maximum limit to generate fundsfor laying completely new gas infra-structure for transmitting the im-ported gas to the nationaltransmission network.
An official source said that the Pe-troleum Ministry has sought hike ingas cess on the fertilizer sector frompresent level of Rs 197 per mmBTU toRs 300 per mmBTU, CNG in regionone from Rs 144 to Rs 300 mmBTUand in region two from Rs 79 to Rs200 mmBTU, industrial sector Rs 13to Rs 100 mmBTU, GENCOs andKESC from Rs 27 to Rs 100 permmBTU and IPPs from Rs 70 to Rs100 per mmBTU.
The government had imposed gascess from the start of the current cal-endar year. It was to be used for de-veloping new gas infrastructure andsubsidizing the alternate fuels to shiftthe energy mix that has becomeovertly reliant on the low cost natural
gas. It was estimated to generate Rs16 to 18 billion during the last twoquarters of the current fiscal year.However, the target is unlikely to bemet due to extreme gas shortage dur-ing the last winter season.
The government was aiming togenerate close to Rs 40 billion perannum from the cess to offer as col-
lateral to the banks agreeing to fi-nance estimated Rs 120 billion IranPakistan gas pipeline infrastructureand Rs 100 billion dedicated LNGtransmission pipeline form Karachiport to power houses in Punjab.
Petroleum Minister Dr. AsimHussain confirmed that they havesought imposition of the gas cess at
the maximum limit as it was one ofthe options available to timely lay themuch need gas pipeline infrastruc-ture. He said the gas cess was not partof the finance bill and will be imposedafter approval from the government.He said the government will be decid-ing to which limit the cess will be in-creased even though the ministry hasrecommended hiking it to maximumlimited.
The minister said the increasewas necessary to change the energymix and to allow introduction of otherfuels, as only hydrocarbons alongcould not meet the rising energy re-quirements. Coal and hydel must beexploited to generate more powerfrom these resources.
When asked that Oil and Gas Reg-ulatory Authority (OGRA) has deter-mined a decrease in gas prices fromJuly 1, 2012 what will be its impact onthe cess. An infuriated ministertermed OGRA a rudderless body try-ing to subvert the government’s at-tempts to change the energy mix.
The minister said he will be writ-ing a complaint letter to the PrimeMinister mentioning the flouting ofthe government’s policy decisions bythe OGRA authorities. They are ruin-ing the attempts of the government toput the sector in the right direction.
news02Friday, 25 May, 2012
ISLAMABAD
ONLINE
In order to safeguard the investors' interests, theEnforcement Department of the SECP took vari-ous regulatory and punitive actions duringMarch and April.The department ordered inspection of books andaccounts of four companies. The inspection hadbecome necessary because of adverse audit opin-ions from statutory auditors, unlawful inter-cor-porate financing, non-cooperation on part ofcompany in response to the SECP’s call for infor-mation or non-confirmation of the balances ofassets and liabilities of concerned companies.Taking notice of abuse of powers by directors ofa listed company, the department passed penalorders. The directors had approved an arrange-ment with an associated company and indulgedin making huge unauthorized donations in utterdisregard to the legal requirements regardingquorum and disclosure of interest. In another case the SECP imposed penalty on di-rectors of the company for renting out company-owned premises to its associated companywithout following quorum requirements laiddown in the law and for failing to recover timelyrentals. Another company was penalized for pro-viding unauthorized loans to the associates. Twocompanies were found guilty of misstating theaccounts for which a fine was imposed on bothcompanies.Furthermore, penalties were imposed on thestatutory auditors of 13 unlisted companies forfailing to act in conformity with the statutory re-quirements. The audit reports issued did notbring out material facts about the affairs of com-panies. Besides imposing fines, the auditors were ad-vised to discharge their responsibilities with dueprofessionalism, giving an independent and ob-jective opinion on financial statements of thecompanies. The details of action taken againstthe auditors were also shared with Institute ofChartered Accountants of Pakistan.In a related development, the SECP has directedall the non-listed companies, designated as Eco-nomically Significant Companies under the 1984Companies Ordinance to appoint a chartered ac-countant firm as external auditor holding a satis-factory rating under the Quality Control ReviewProgram of the ICAP, w.e.f. the financial year be-ginning on or after July 1, 2012.The department actively oversees the transac-tions relating to substantial acquisition of sharesof companies. In this regard, the proceedingswere initiated against the acquirer of a companyin cement sector, which failed to comply with therequirements of Takeovers Ordinance. One of the directors of the said company alsofiled a complaint in the High Court on similargrounds. After detailed analysis and keeping inview the consent order of High Court, the SECPdirected the acquirer to conduct fresh valuationof the company, by a valuer duly registered withthe Pakistan Bankers Association.
SECP swingsinto actiong Takes action against
companies’ directors, auditors
BRUSSELS
REUTERS
European Union leaders, advised by sen-ior officials to prepare contingency plansin case Greece decides to quit the singlecurrency, urged the country to stay thecourse on austerity and complete the re-forms demanded under its bailout pro-gram. After nearly six hours of talks heldduring an informal dinner, leaders saidthey were committed to Greece remainingin the euro zone, but it had to stick to itsside of the bargain too, a commitmentthat will mean a heavy cost for Greeks.
"We want Greece to stay in the euro,but we insist that Greece sticks to com-mitments that it has agreed to," GermanChancellor Angela Merkel told reportersafter a Wednesday evening summit inBrussels dragged long into the night.
Three officials told Reuters the in-struction to have plans in place for aGreek exit was agreed on Monday duringa teleconference of the Eurogroup Work-
ing Group (EWG) - experts who work foreuro zone finance ministers. The Greek fi-nance ministry denied there was any suchagreement but Belgian Finance MinisterSteven Vanackere, said: "All the contin-gency plans (for Greece) come back to thesame thing: to be responsible as a govern-ment is to foresee even what you hope toavoid." Two other senior EU officials con-firmed the call and its contents, sayingcontingency planning was only sensible.
In its monthly report, Germany'sBundesbank said the situation in Greecewas "extremely worrying" and it was jeop-ardizing any further financial aid bythreatening not to implement reformsagreed as part of its two bailouts. It said aeuro exit would pose "considerable butmanageable" challenges for its Europeanpartners, raising pressure on Athens tostick with its painful economic reforms.
Greek officials have said that withoutoutside funds, the country will run out ofmoney within two months and there re-mains the threat that if it crashes out of
the euro zone, other member states couldbe brought down too. A document seen byReuters detailed the potential costs to in-dividual member states of a Greek exitand said that if it came about, an "amiabledivorce" should be sought with the EUand IMF possibly giving up to 50 billioneuros to ease its path. Although EU lead-ers' minds will have been focused by thatprospect, disagreements have flared overa plan for mutual euro zone bond issuanceand other measures to alleviate two yearsof debt turmoil, such as giving countrieslike Spain an extra year to make thespending cuts demanded of them.
"The idea is to put energy into thegrowth motor. All the member countriesdon't necessarily share my ideas. But acertain number expressed themselves inthe same direction," new French Presi-dent Francois Hollande told reporters.
For the first time in more than twoyears of crisis summits, the leaders ofFrance and Germany did not huddle be-forehand to agree positions, marking a
significant shift in the axis which has tra-ditionally driven European policymaking.
Instead, Hollande met Spanish PrimeMinister Mariano Rajoy in Paris to dis-cuss policy, before the pair travelled toBrussels by train. Despite fears Greekscould open the departure door if they votefor anti-bailout parties at a June 17 elec-tion, Spain, where the economy is in re-cession and the banking system in need ofrestructuring, is at the front line of the cri-sis. After meeting Hollande, Rajoy said hehad no intention of seeking outside aid forSpain's banks, which are laden with baddebts from a property boom that bust andstill has some way to go before it touchesbottom. But his government said its res-cue of problem lender Bankia would costat least 9 billion euros and it is also seek-ing ways to help its highly indebted re-gions meet huge refinancing bills.SHIFTING SANDS: Socialist Hollande'selection victory has significantly changedthe terms of the debate in Europe, with hiscall for greater emphasis on growth rather
than debt-cutting now a rallying cry forother leaders. That has set up a showdownwith conservative Merkel, whose primaryobjective is budget austerity and structuralreform. At his first EU summit, Hollandechose to make a stand on euro bonds - is-suing common euro zone debt - despiteconsistent German opposition to the idea."I was not alone in defending euro bonds,"he said. Merkel showed no sign of droppingher objections to the proposal, which shehas said can only be discussed once there ismuch closer fiscal union in Europe. "Therewere differences in the exchange abouteuro bonds," she said bluntly. The Nether-lands, Finland and some smaller euro zonemember states support her. No major de-cisions were made at Wednesday's summit,which was intended to promote ideas onjobs and growth ahead of another meetingat the end of June. But debate was intense,not just over euro bonds but over how torescue banks and whether to give moretime to struggling euro zone countries tomeet their budget deficit goals.
EU urges Greece to stay in euro, plans for possible exit
Petroleum Ministry steps on the gasg Maximum limit for gas cess proposed to successfully under take gas import projectsg Petroleum minister terms OGRA rudderless body trying to undermine the govt
ISLAMABAD
ONLINE
Ukraine would open Trading House in Pakistan toimnprove bilateral business ties with Pakistan. Thishas been stated Ukrainian Ambassador, AlexanderIvanchuk while leading a delegation at Federationof Pakistan Chambers of Commerce and Industries(FPCCI) on Thursday.
Tariq Sayeed, founder and former PresidentSAARC CCI and former President of FPCCI wel-comed the visit of a large Ukrainian delegation atthe Federation of Pakistan Chambers of Commerceand Industry Head Office, as a follow-up to theFPCCI’s own delegation to Ukraine in December lastyear on the initiative of our Ambassador to Ukraine,Saleem Mela.
The delegation was visiting FPCCI to ink a MoUon the establishment of the Pakistan Ukraine JointBusiness Council. The delegates were accompaniedby Volodymyr Lakomov, the Ambassador of Ukraineto Pakistan, and Saleem Mela, the Ambassador ofPakistan to Ukraine.
While speaking on the occasion, Tariq Sayeedsaid that both Ukraine and Pakistan forms a trademarket of over $200 billion. The volume of trade,
however, was unfortunately between $125 million-$175 million, which is below 0.25 percent of thetotal trade of both countries with the rest of theworld.
He mentioned the following reasons for the lowlevel of trade include limited range of items, lan-guage barrier, no banking facility, and inadequatefollow-up of government decisions.
To remove these bottlenecks, he proposed thefollowing measures that include an exchange of factfinding missions, establishment of commercial sec-tions in the diplomatic missions of both countries,reciprocal establishment of the representative of-fices of both national chambers, elimination ofNTBs and progress towards greater trade liberaliza-tion through signing a PTA.
He praised both the Ambassadors for their veryactive role in making this visit possible. He alsolauded the appointment of former Vice President-FPCCI, Engineer M.A. Jabbar, as the Honorary Con-sul General of Ukraine in Karachi, saying that thiswas very appropriate decision. He said that Engr.Jabbar will contribute more towards furthering Pak-Ukraine trade.
The leader of the delegation, AlexanderIvanchuk, who is President of the Ukraine Pakistan
Business Council and Counselor of Ukraine Cham-bers of Commerce & Industry, said that a tradingHouse is desired to be set-up by a consortium ofUkrainian companies preferably in the Export Pro-cessing Zone.
This will serve not only as the representative of-fice of the Ukrainian Chamber of Commerce and In-dustries (UCCI) but will also connect businessmenof both the countries to promote the export interestsof each other.
Earlier, while welcoming the Ukrainian delega-tion, Shiekh Shakil Ahmed Dhingra, the ActingPresident of FPCCI expressed his pleasure at the in-auguration of the Joint Business Council as a forumthat would allow both countries to achieve greaterease in conducting trade.
Engr. M.A. Jabbar said that we are witnessinghistory in the making because this was the first del-egation from Ukraine, which was visiting Pakistanafter independence of Ukraine in 1991. We have wit-nessed the strong desire of both sides to do businessas an outcome of the visit. This stand alone wouldsuffice to say that a way forward assuring betterprospects for both side businessmen exist to enterinto trade regime of 250 billion US dollars availablein both countries.
Learning Eastern European tricks of the tradeg Ukraine to open trading house in Pakistan
PDF Profit_Layout 1 5/25/2012 1:36 AM Page 2
news
Friday, 25 May, 2012
03
CGMA report reveals gap in rhetoric,reality on business ethicsKARACHI: Four out of five businesses worldwidehave committed to ethical performance, but rhetoricdoes not always match reality, according to a newreport from the American Institute of CPAs (AICPA)and the Chartered Institute of Management Ac-countants (CIMA). The report found a weakened“tone from the top” and more pressure on financialprofessionals – especially in emerging economies —to act unethically. Managing Responsible Business, a global survey of almost 2,000 Chartered GlobalManagement Accountants ( CGMA ) in nearly 80countries, found that 80 per cent of organisationsprovide a code of ethics to guide employees aboutethical standards in their work, up from 72 percentin 2008. However, only 36 per cent collect ethics in-formation such as the number of employees attend-ing ethics training and actions taken on hotlinereports. Since ethical performance can only be man-aged with the right information, this suggests ethi-cal practice falls short of stated poli cy, according tothe report. What’s more, neither senior manage-ment nor boards of directors seem to be reviewing,analyzing and monitoring ethics information at thelevel recorded four years ago. In 2008, 86 per centof senior management and 68 percent of boards re-viewed ethics data, according to the report. In 2012,it was 78 per cent and 56 per cent, respectively. This“weakened tone from the top” comes as more thana third of those surveyed, 35 per cent, said theysometimes or always feel pressured to compromisetheir organisation’s standards of ethical conduct.This compares to 28 per cent of respondents in2008. The pressure is most pronounced in develop-ing economies such as Malaysia, 54 per cent, andIndia, 51 per cent, and lowest in the U.K. and U.S.,where 18 per cent of those surveyed feel pressure.“Positive steps have been taken to build the archi-tecture for ethics through codes and policies, butpressure to act unethically persists and companiesacross the globe continue to be faced with the chal-lenge of strengthening ethical culture from the top,”said AICPA President and CEO Barry Melancon,CPA, CGMA. “CGMAs can play a key role in guidingcompanies in how to better collect and report ethi-cal information by drawing on their training and un-derstanding of professional ethics, as well as theirskills in obtaining, analyzing and acting upon man-agement information.” The report is a follow up toone conducted by CIMA in 2008 and is the first timeresponses from the U.S. have been included. Geog-raphy and company size are key factors in the find-ings, with larger companies from more developedeconomies generally having more advanced ethicsprograms. U.S. companies, for instance, are mostlikely to monitor or evaluate ethical standards, ac-cording to the report.
Senior PTCL officers celebrate the OneMillion Broadband customers mark
ISLAMABAD: Telecom giant, Pakistan Telecommuni-cation Company Limited (PTCL), celebrated its one mil-lion Broadband customers mark at the commemorationof World Telecommunication and Information Societyday at Pak-China Friendship Centre, Islamabad. SeniorPTCL officials gathered at the occasion and a special cakedesigned to mark the One million Broadband customerswas cut jointly, marking the solidarity and unity of Pak-istan’s largest telecommunications service provider.“PTCL plans to reach 5 million customers mark in thenext five years. We know it is a huge challenge, but wehave the capability and technical potential to rise to thischallenge”, SEVP Commercial PTCL, Naveed Saeed.
Pizza Hut inks agreementwith Centaurus MallISLAMABAD: An agreement was signed betweenPakGulf Construction Pvt Limited and MCR Pvt Limitedfor the opening of Pizza Hut at the Centaurus Mall. Thesigning ceremony took place at The Centaurus’ sales andmarketing suite, here in Islamabad. Mr. Rasikh Ismail,Group Deputy COO of MCR Pvt Ltd that operates PizzaHut in Pakistan was present to sign off on the agreement.During the ceremony, President PGCL, Mr. Sardar Tan-vir Ilyas Khan said, “We feel extremely proud that TheCentaurus Mall is a place of preference for world classrestaurant operators. With exciting restaurant chains likePizza Hut, The Centaurus Mall shall become the mostvisited destination for all.”
PSO to maximise productuplift from local sources, refineriesKARACHI: As part of the new vision, PSO has em-barked on a mission to strengthen the petroleumproducts’ supply line by maximizing fuel upliftmentfrom local refineries aand local fuel oil blenders. In thepursuit of this objective, the company has recently en-
tered into sale purchase agreement and renegotiatedits contract with two refineries namely BYCO Petro-leum and PARCO and one local fuel oil blender ieBakri Trading Company. This initiative will benefit thenational economy by reducing the nation’s depend-ence on imported oil products, reduce foreign ex-change expenditure, encourage foreign investment inthe domestic energy sector and maximize local refiner-ies’ through-put. In the recent agreements signed bythe company, the payment modalities will involve PSOopening Letters of Credit (LC’s) for its suppliers. How-ever, this arrangement can only be sustained if backto back LC’s from the power entities are ensured toPSO so that the payment cycle in the energy sector isstreamlined and accumulation of further debt is min-imized. PSO takes pride in playing a proactive part inthe energy supply value chain and await the remainingstakeholders to come forward to ensure success of thisendeavor in the best interest of the nation.
RAK Free Trade Zone visitsPakistan to attract investorsKARACHI: Ras Al Khaimah Free Trade Zone (RAKFTZ) is currently visiting Pakistan with an agenda toattract Pakistani businessmen to Ras Al Khaimah.Pakistan is the third biggest market for RAK FTZ, andthe free zone is looking to improve and succeed evenmore by demonstrating complete dedication to the re-gion. To achieve this, RAK FTZ is conducting a seriesof road shows and seminars in Pakistan. The first
show will be held today and tomorrow (May 22 andMay 23) at Marriott Hotel in Karachi. The purpose ofthese road shows is to showcase RAK FTZ as the‘home of Pakistani businesses’, where one can investand benefit from packages that offer residence visa,eligibility for a bank account in the UAE, peace, secu-rity, stability, 100% business ownership, 100% tax-free income, and room for growth and success.Commenting on the business prospects in Ras AlKhaimah for Pakistanis, Oussama El Omari, CEO ofRAK FTZ, stated, “At RAK FTZ, we have always sup-ported pro-investment policies that are firmly rootedin the principles of free trade and promoting entre-preneurship. Through these road shows and seminarsall around Pakistan, we are looking at establishingand nurturing strong business contacts with Pakistanientrepreneurs and companies. The cost effectivenessof setting up business at RAK FTZ, coupled withvalue-added services and easy access to do businesswith neighbouring regions are our salient advantagesthat are unmatched in the region.” With minimumamount of paperwork requirement, Pakistani entre-preneurs can avail this grand opportunity and set-uptheir businesses at RAK FTZ, as it is one of the mostcost-effective free zones in the UAE. RAK FTZ Mar-keting Representative Omar Ul Haq comments, “RAKFTZ has planned several activities in Pakistan, andRAK FTZ is certainly worth a closer look for a major-ity of start-ups and existing Pakistani businesses. Weare conducting these road shows and seminars to cre-ate awareness and to enable Pakistani businessmen,entrepreneurs and investors to benefit from the prod-ucts and services available at RAK FTZ.”
Interbank RatesUS Dollar 91.9837UK Pound 144.6076Japanese Yen 1.1579Euro 116.2766
Dollar EastBuy Sell
US Dollar 93.00 93.60Euro 116.06 117.45Great Britain Pound 144.97 146.68Japanese Yen 1.1593 1.1728Canadian Dollar 89.78 91.34Hong Kong Dollar 11.81 12.01UAE Dirham 25.21 25.48Saudi Riyal 24.71 24.95
BOSTON
REUTERS
FIDELITY Investments said it wasworking with "thousands" of broker-age clients affected by trading issuesthat have engulfed Facebook Inc's
much-anticipated initial public offering, ac-cording to a source familiar with the situation.The social media site's IPO has been steeped incontroversy since it started trading last Friday.Almost a week later, many investors havefound that their orders for Facebook were notexecuted at the prices they thought, said advis-ers, who declined to be identified because theyare not allowed to speak to the press.
All Facebook stock trades in clients' ac-counts from May 18 have been confirmed, a Fi-delity spokesman said. "On behalf of ourcustomers, Fidelity's senior management hasbeen working with the regulators, market mak-ers and NASDAQ to represent all of our cus-tomer's trading issues from May 18, and wewill continue to do so until we are confidentthat NASDAQ has done everything it can tomitigate the impact to our customers," thespokesman said. Nasdaq had all orders, exe-cuted or not, returned to member firms by 1:50p.m. EDT (1750 GMT) on Friday, according toa trading alert issued by the exchange on Mon-day morning.
Fidelity, a mutual fund company that alsoruns a large brokerage, issued a special noticeto customers who submitted orders to buyFacebook shares on Friday, saying they mayhave experienced delays in status updates. "Werealize that some customers still have ques-tions about how these delays may have af-
fected their trading activity," Fidelity said inthe notice. "We understand that Nasdaq isworking with federal regulators to determinewhat, if any, accommodation might be made.However, customers should assume that anyshares of Facebook stock currently credited totheir accounts are owned by them and avail-able for trading."SEEKING RESOLUTION: Facebook's IPOdid not go as planned as its sky-high valuation,combined with trading glitches, left the stocklanguishing below its offering price. Fidelitysaid Facebook order glitches were an industry-wide issue that affected many different broker-dealers.
"We will continue to work with the indus-try to get NASDAQ to come to a resolution thataddresses the concerns of our customers," Fi-delity said in the notice. Fidelity was not im-mediately available to comment on the extentof customer issues related to the FacebookIPO. Boston-based Fidelity has 18.3 millionbrokerage accounts and reported nearly396,000 average daily commissionable tradesin the first quarter. Most of that activity cen-tered on personal investing. Facebook's sharesgained a penny to $32.01 in midday trading onThursday.
Fidelity facing ‘thousands’hit by Facebook woes
One mango milkshakefor Uncle Sam pleaseg USAID-backed mango
farms ready for exports KARACHI
STAFF REPORT
Mango farmers across country continue theirpartnership with the USAID to maximizeyields, improve product quality, introducebetter packaging and create market linkages.All these advancements are helping Pak-istani mango growers tap into new exportmarkets with each passing season. As themango season for 2012 begins, this partner-ship continues to bear fruit. “We are confi-dent that with USAID’s support, all of theground work has been done,” said GhulamSarwar Abro of Mustafa Agricultural Farmsin Kotri (Sindh), who has been a partnerwith USAID’s Mango Program.“We have the required standards, infrastruc-ture and linkages to tap the internationalmarkets on a competitive footing,” added thegrower.Some seven mango farms from Sindh are al-ready scheduled to send commercial ship-ments to high-end markets across the globein June this year.More farms would participate in commercialshipments as soon as harvesting begins inPunjab. The USAID has signed Infrastruc-ture Upgrade Agreements (IUAs) with 15mango farmers across Pakistan on a cost-sharing basis to build pack houses.The USAID has also provided assistance to15 farmers in achieving GlobalG.A.P. certifi-cation under a similar cost-share agreementand has planned to increase this number bythe end of this season by adding another 12certified farms.
BAGHDAD: Qatar Airways Senior Vice President GCC, Levant, Iraq, Iran and Indian subcontinent Fathi Al Shehab, left, withErbil International Airport Director Talar Faiq celebrating the airline's new services to Iraq.
