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Performance of the top 75 companies.

The present study includes six tables on top 75 companies according to Sales, Networth, Ratio of Pretax Profit to Networth, Earning per share, Break-up Value and Dividend and Bonus. Pakistan State Oil Company Ltd. commands the first position in our bable on Sales the position which it held for the last eight years. In our table on Networth, PIA commands the first rank with its networth of Rs. 7198.20 million. Hyesons Sugar Mills Limited tops the list in our table on Ratio of Pretax Profit to Networth with its ratio of 119.45 per cent. Last year this position was occupied by Frontier Sugar Mills & Distillery Limited. Ayesha Textile Mills Limited occupies the first position in our table on Earning per share with its earning at Rs. 40.66 per Rs. 10/-. Ayesha Textile Mills Ltd. also tops in our table on Break-up Value with its Break-up up Value at Rs. 141.08 per Rs. 10/-. Dewan Textile Mills Limited is on top in the table of Dividend/Bonus with its dividend at 112-1/2 per cent during the year 1990. From these tables it is clear that companies during the year 1990 have done quite well.


Two companies showed a fall in sales, while decline in profit was registered by 25 companies. Five companies lost money namely Pakistan Engineering co. Ltd., International Industries Ltd., Milkpak Limited, National Motors and Sindh Abadgar Sugar Mills Ltd. in our Table on Top 75 companies according to Sales on KSE in 1990.

Company during the year 1990 fared well. Only two companies namely Millat Tractors (No. 18) and Al-Ghazi Tractors (No. 22) registered a fall in sales as compared to previous year, while decline in profits was registered by 25 companies. Five companies lost money during the year 1990 namely Pakistan Engineering Co. Ltd., International Industries Limited, Milkpak Limited, National Motors Limited and Sindh Abadgar Sugar Mills Limited.

Pakistan Engineering Company Limited (PECO), a state enterprises has lost money because its production suffered due to delay in procurement of sufficient quantity of scrap and secondly, the orders for transmission towers were placed by WAPDA on Chinese firms, as they quoted dumping prices. The prices quoted by Chinese were even less than the price of raw material. As such the furnaces and rolling mills remained mostly closed for first half of the year. Acute shortage of liquid cash also affected production. The decline in the production of major products had its adverse effect on sales and profitability. Although sales during the year increased from Rs. 80206 million to Rs. 837.03 million, but its sales of major products declined. To cover up this short-fall, the company engaged itself in fabrication and other jobs, which had relatively less margin. Total loss was of the order of Rs. 33.82 million as against a pretax profit of Rs. 10.38 million in the preceding year. The factors also contributed to the loss are increase in material prices, extra cost of imported scrap due to, non-availability of berth and railway wagons, increase in wages and burden of MDI charges because of closure of furnace. Company is making efforts to reduce its dependence on WAPDA by increasing sales of steel rolled products for construction industry and engineering products. Plans are underway to introduce shuttleless looms, machine tools of improved design, new range of pumps, fractional horsepower motors etc. the company is also strengthening its design office to undertake fabrication of equipment for industrial plants. Efforts are also being made to economies on cost of production through automation of rolling mills installation of billet caster, use of lighter castings, reduction in rejection rates, wastage of raw material etc.

Another company which sustained loss amounting to Rs. 30.62 million was International Industries Limited. This was due to substantial increases in prices of steel and zinc during the year under review. The company were barely able to recover the increase in prices while increase in zinc costs could not passed on to customers due to severe competition. The production of Cold Rolling Mill remained low, resulting in higher production cost compared to the material being supplied by Pakistan Steel due to depreciation, electricity, as and salaries. As a result depreciation of Rs. 16 million could not be recovered. The Company has taken hard measures to increase margins on pipes in the current year. It is also hoped that the cold rolling mill will be able to cover most of its fixed costs enabling the company to return to profitable levels.

Milkpak Limited sustained loss amounting to Rs.42.85 million as against a pretax profit or Rs. 4.89 million in the preceding year. Financial loss was mainly due to delayed start-up Nido Plant very close to the fresh milk shortage season. Similarly Cereal plant started commercial production in July, 1990 instead of April 1990. The company acquired entire 1.00 million issued shares of Rs. 10/-each of Kabirwala Dairy Limited at a negotiable price of Rs. 7.372 per share in June. 1990 and thus it became wholly owned subsidiary of Milkpak Limited. Kabirwala Dairy is a public Limited Company engaged in processing and packing UGT milk in Tetra Pak containers, with daily production capacity of 50,000 Ltrs. of UHT milk. The production of this plant will be used to meet the market demand of South especially Karachi market.

National Motors also sustained loss amounting to Rs. 36.62 million as compared to a loss of Rs. 63.81 million in 1989, while it was Rs. 69 million in 1988. The company introduced a new version of Isuzu model FTR 12K which was well received in the market. This resulted in the sale of 784 Trucks, including 299 Bedford Trucks as against 668 Trucks last year. Significant steps have been initiated including finalization of agreement with M/s. Isuzu Motors Japan to introduce Isuzu Light Commercial Vehicles in the market in addition to existing brand of Isuzu Vehicles. The company also plans to introduce new version of Bedford Truck with higher leading capacity. Similarly, Sindh Abadgar Sugar Mills Limited sustained a loss of Rs. 8.92 million during 1990. This was due to Government's withdrawal of Excise Duty concession retrospectively during the year 1990.

Pakistan National Shipping Corporation (PNSC), a state enterprise whose networth was frittered away to a negative Rs. 3295.16 million in 1989. The long awaited restructuring of the Corporation was approved by the Government of Pakistan of 12th February, 1990. The financial restructuring, approved by the Federal Government, is aimed at relieving the Corporation of its liabilities, foreign loans, which it owed to the Federal Government, though converting them into equity and setting the losses against the new equity. The new equity would now be Rs. 1,269.94 million. Now the Networth stood at Rs. 1546.32 million in 1990. The company showed a fall in sales by 19.68 per cent, while pretax profit showed a plus balance of Rs. 206.37 million as compared to a loss of Rs. 271.23 million. PNSC has planned to purchase 5 Container Ships, 2 Bulk Carriers and 1 Edible Oil Tanker.

Pakistan State Oll (PSO) has been maintaining the top position for the last one decade. The company showed a rise of 11.20 per cent in sales, and 11.04 per cent in pretax profit as compared to previous year. PSO, a state enterprise continued to make optimum utilisation of the nine Lubricating Oil Blending Plants and Two Reclamation Plants under its control. The company sold 6.912 million tonnes of petroleum products during 1990 as compared to 6.176 million tonnes in the preceding year. The Government has entrusted the company for the construction of 163.900 tonnes of additional storages in the up-country. So far 72,600 tonnes of storages have been completed. Of the remaining 91,300, about 58,300 tonnes is to be located at Machike, development at this site has commenced as per directive of the Government. During the year under review new depots at Taru Jabba and Morgah were commissioned and storages at Khuzdar, Quetta, Shikarpur, Shershah and Chacklala were readied for commissioning. The construction of a 10" Dia, 32 km product pipeline connecting Mahmood Kot with WAPDA's Power Station at Kot Addu and 42,000 tonnes tankage at Kot Addu has been completed and fully commissioned during the year under review. Similarly, the company has completed laying of an 18" Dia, 3 km long pipeline from Port Qasim to KESC power station and construction of a storage tank of 25,000 tonnes at the power station alongwith pumping facilities for transfer of product from receipt tank to KESC tankage was commission in February, 1990 and is functioning satisfactorily. The company controls about 71 per cent of the petroleum distribution market in the Pakistan. Distribution margin for which the company has been trying to get upward revision, has been kept at fixed level since a long. The same problem is being faced by Pakistan Burmah Shell (No. 3) which showed a rise of 25.18 per cent in sales and 28.50 per cent in pretax profit as compared to previous year.

Pakistan International Airlines (PIA) has maintained the 2nd position in the Table for last six years. The Corporation showed 18.00 per cent increase in sales, while pretax profit decreased by 56.18 per cent during the year under review. For the first time in the history the airline achieved and crossed Rs. 15.75 billion mark in terms of revenue. As mentioned in Chairman's brief that the level of capital investment, particularly, in aircraft and spares during the last few years has been very low. As a result of this low investment it will be for the first time in the history that PIA shall be paying Corporation tax. It is expected that the corporation should be able to defer tax liability in the current year with the induction of three new Airbus A 310-300 aircraft. Over 40 new locations were included into the Repak network during 1990 thus bringing the total to over 175. The total passenger carried out during the year stood at 5.14 million as compared to 5.07 million in 1989. The new technology and automation is being introduced in different areas to control cost and enhance the profitability in the current year.
Companies included in the Table
belonged to the following Sector
 No. of Companies
Sector (1990)
Cotton Textile 14
Fuel & Power 9
Chemical & Pharmaceutical 9
Sugar & Allied 9
Auto & Allied 7
Food & Allied 4
Vegetable & Ghee 4
Cables & Electric 3
Cement 3
Tobacco 3
Engineering 3
Transport 2
Leather 2
Paper and Board 2
Insurance 1

[Tabular Data Omitted]


PIA again topped the list though its networth has shown a fall of 1.83 per cent from Rs. 7730.14 million to Rs. 7198.20 million during 1990. The Networth of PNSC stood at Rs. 903.22 million as against an adverse balance of Rs. 3295.16 million in the preceding year.

Table on Top 75 Companies according to Networth shows that 72 companies registered an increase in the Networth during 1990. Companies showing decline were one each from Transport & Communication (Pakistan International Airlines, Pharmaceutical & Chemicals (Exxon Chemical) and Sugar (Faran Sugar). The following table illustrates the sectorwise position of the companies in 1990:-
 Co's on Co's in the
 KSE Table-1990
Transport 3 2
Fuel & Power 11 8
Chemical & Pharma. 33 7
Investment 6 3
Auto & Allied 18 3
Tobacco 7 1
Food & Allied 18 3
Textile 146 19
Paper & Board 12 2
Leather 5 2
Synthetic & Rayon 13 1
Sugar 29 12
Cement 10 5
Cable & Electrical 13 1
Jute 10 1
Insurance 30 2
Engineering 15 3
Total: 75


Pakistan International Airlines (PIA) again topped the list though its networth has shown a fall of 1.83 per cent from Rs. 7330.14 million to 7198.20 million during 1990. The Free Reserves & Surplus of the Corporation were cut from Rs. 4586.03 million to Rs. 4204.68 million in 1990. Similarly, the operating income was also decreased from Rs. 969.54 million to Rs. 684.10 million during the year under review. Pakistan National Shipping Corporation entered a fresh in the table and captured 7th position on the table. The Networth of the Corporation stood at Rs. 903.22 million as against an adverse balance of Rs. 3295.16 million in the preceding year. The long awaited restructuring of the Corporation was approved by the Government on February 12, 1990. The fleet strength of the Corporation as on 30th June, 1990 was 21 multipurpose cargo ships comprising 352,716 DWT with container capacity 5,676 and one passenger ship for 1206 pilgrims.

Fuel & Power

The table included 8 units out of 11 on the list of Karachi Stock Exchange in power sector. These companies showed upward trend in the Networth. Pakistan Oilfields Limited and Pakistan Refinery Limited showed an increase of 24.77 per cent and 23.92 per cent respectively in its networth as compared to preceding year. The companies in fuel section operated on a limited margin and ad hoc readjustment. Due to this fact very little amount was left for companies to build up their reserves and surplus.


Sugar mills numbered 12 in the table out of 31 on the list of Karachi Stock Exchange. All the companies namely Premier, Al-Noor, Habib, Dewan, Bawany, Shakarganj, Sakrand, Shahmurad, Mehran, Faran and United Sugar showed an increase in the Networth as compared to previous year. The networth of Sakrand Sugar Mills Limited was increased by 184.51 per cent from Rs. 59.40 million to Rs. 169.00 million in 1990 due to increase in its Paid-up Capital.

Chemical & Pharmaceutical

Almost all the companies in the Chemical and Pharmaceuticals sectors included in the table showed a rising trend in the Networth except Exxon Chemical. Companies including ICI, Glaxo, Dawood Hercules. Wellcome, Boots and Reckitt & Colman have shown a rise in Networth of 14.86%, 8.92%, 44.19%, 10. 68%, 4.52% and 12.59% respectively over the previous year. The Networth of Dawood Hercules showed a rise of 44.19 per cent from Rs. 310.07 million to Rs. 447.08 million due to increase in its reserves and surplus by 80.09 per cent over the previous year. The Networth of Exxon Chemical was slightly decreased from Rs. 256.64 million to Rs. 256.15 million in 1990.


All the listed companies in the table showed a rising trend in the networth in 1990. Five companies namely Cherat Cement, Pakland, Asbestos Cement, Zeal Pak and Mustehkam Cement were included in the table out 11 cement companies on the list of Karachi Stock Exchange. At present there are approximately 25 cement plants in operations in the country, although some of the existing unites are rather old and in need of Balancing and Modernisation. These units are based on the wet process technology which is becoming out of date because it requires at least 30 per cent higher fuel consumption and a much larger labour force.


Out of 57 companies on the list of Karachi Stock Exchange in the Engineering/ Auto & Allied/Cables & Electrical sector only 7 companies were included in the table. Respective rises in the Networth were Pak Suzuki (23.42%) Millat (39.29%) Philips (7.91%) Metropolitan (21.22%) Siemens (35.09%) Hinopak (21.71%) and Huffaz (6.34%).


The table of Networth included 2 leather companies out of 5 on the list of Karachi Stock Exchange. Bata Pakistan showed a rise of 5.37 per cent in Networth from Rs. 357.49 million to Rs. 376.69 million during the year under review. Service Industries Limited showed a marginal rise of 0.06% over the previous year from Rs. 147.80 million to Rs. 148.83 million during the year under review. The government levied general tax at the rate of 12.5% on footwear with a retail price of Rs. 250/- or above during the year under review. The leather companies were also affected by 10% increase in the customs duty on plastic material.

[Tabular Data Omitted]

Table on Page 22 shows overall performance of Top 75 companies according to Break-up Value. Break-up Value is networth per share and is still one of the important criteria to judge the financial soundness of a company. The Break-up Value per share is assessed by adding together the assets (Current and Fixed), including property and reserves, deducting all liabilities and dividing the resulting figure by the number of ordinary shares. Alternatively for the sake of simplicity the Paid-up capital, free reserves and unappropriated profit are added together and divided by the number of ordinary shares. Thus, the percentage of free reserves and surplus to Paid-up capital gives a clue to the Break-up Value per share. The higher this percentage, the better are chances for bonus or right issue.

While calculating the Break-up Value in the present table in intangibles like deferred expenditure, preliminary expenses, accumulated losses, goodwill etc. were deducted. Also reserves created due to revaluation of assets were excluded.

In 1985-86 rebate of income tax for the listed companies was increased from 5 per cent to 15 per cent. It is felt that this concession be continued upto June 1995. Corporate tax rate for listed companies, majority government owned companies and trusts reduced to 40 per cent effective from assessment year 1986-87. Subsequent changes in the industrial policy are likely to affect favourably.

Balancing & Modernisation

11 Withdrawal of tax credit of 15 per cent has affected the companies quite adversely. Capital gain tax has been extended upto a period of 1993. Karachi Stock Exchange demand the facility may be extended to 1995.

Tax on Dividend Income

In wake of privatisation policy, it is not desirable to discourage investment in NIT, ICP, Bank PLS deposits and shares of listed companies. It is unfortunate that the budget has abolished the limit of tax exemption on profit of these sources. Last year the exemption limit was lowered from Rs. 15,000 to Rs. 10,000. Earlier a tax of 7.5 per cent was imposed on dividend income. Tax on dividend income amounts to double taxation on the same income. Moreover, 2.5 per cent Zakat is also being levied on the dividend. The KSE urged that dividend income in the hands of shareholders of companies private or public be totally exempted from income tax. Zakat should also be made voluntary as they have made in case of disinvestment of PIA shares.

Tax holiday has been allowed by the new Prime Minister Mr. Nawaz Sharif and this will also help companies to build up reserves for plough back.

The table of Break-up Value includes 75 companies in the order as given in the table in the year 1990:
 No. of
- Cotton Textile 28
- Sugar 8
- Vegetable & Allied 6
- Pharmaceutical & Chemical 6
- Engineering 5
- Fuel & Power 5
- Leather & Tanners 4
- Cement 3
- Investment 2
- Paper & Board 2
- Cement 1
- Food & Allied 1
- Jute 1
- Transport 1
- Synthetic & Rayon 1
- Miscellaneous 1
 TOTAL: 75

From the foregoing table it will be seen that Textile sector has the largest number of companies followed by Sugar, Vegetable & Allied, Pharmaceutical & Chemical, Engineering and Fuel & Power. Out of 28 textile mills in the table 23 units showed an increase in the Break-up Value, 2 units showed fall in the Break-up Value as compared to preceding year, while 3 units entered afresh in the table.

In general, out of 75 companies 12 companies showed a decline in their Break-up Value over the previous year. Of these 2 each from Cotton Textile, Insurance and Engineering and 1 each from Vegetable & Allied, Sugar, Leather, Food & Allied, Chemical & Pharmaceutical and Jute, while 11 companies entered afresh in the table with its Break-up Value between Rs. 55.37 (Pakistan Industrial Credit & Investment Corporation Ltd.) to Rs. 29.17 (Shams Textile Mills Limited). One company in the table namely Pakistan National Shipping Corporation (PNSC) have neither paid cash dividend nor issued bonus/right shares. The picture of bonus payment is not very much encouraging. Out of 75 companies as many as 30 companies have issued bonus shares during the year under review.

From table on Page 26 top 75 companies according to Ratio of Pretax Profit to Networth, it will be seen that on the whole profitability of companies have shown marginal decrease from the previous year. Sectors which comparatively fared well were: Sugar, Chemical and Pharmaceuticals, Textile, Fuel & Power. Sugar & Allied sector occupied commanding positions with Ratio between 119.45 per cent highest (Hyesons) to 34.58 per cent lowest (Shahmurad). Hyesons Sugar Mills Limited occupied the first position in the table with its Ratio of Pretax Profit to Networth at 119.45 per cent mainly due to low networth and substantial rise in pretax profit from Rs. 1.04 million to Rs. 18.79 million in 1990 also resulted in a high ratio. It may be stated that Hyesons had an accumulated loss of Rs. 1807 million which resulted in a meagre networth of Rs. 15.73 million. Last year the first position was occupied by Frontier Sugar Mills & Distillery Limited with its ratio of 128.06 per cent. As many as 25 companies were the new entrants in the table during the period under review.

[Tabular Data Omitted]


The table of top 75 companies according to Ratio of Pretax Profit to Networth included 13 sugar mills during the year under review. These are Hyesons Sugar (119.48%), Hussain (62.47%), Thai Ind. (58.39%), Frontier (57.91%), Habib (51.89%), Dewan (50.95%), Mehran (50.60%), Sanghar (49.35%), Mirpurkhas (46.88%), Noon (42.20%), Shahtaj (40.45%), Bawany (39.54%) and Shahmurad (34.58%). Out of 13 companies 7 companies entered afresh in the table namely Hyesons, Thal, Mehran, Mirpurkhas, Noon Bawany and Shahmurad Sugar capturing 1st, 11th 27th, 34th, 43rd, 53rd and 71st position respectively. Thal Industries showed a rise of 109.67 per cent in its pretax profit from Rs. 27.49 million to Rs. 57.64 million in 1990. Similarly, the Networth of the company stood at Rs. 98.71 million as compared to Rs. 77.35 million in the preceding year. The company crushed 253,901 metric tons of sugar cane producing 22,027 metric tons of sugar at an average recovery of 8.68 per cent.


Out of 146 Cotton Textile companies on the list of Karachi Stock Exchange only 12 companies appeared in the table of top 75 companies according to Pretax Profit to Networth. Dewan Textile captured 45th position in the table as compared to 37th position in the preceding year. The fall in ranking was due to the fact that the Networth was increased from Rs. 212.93 million to Rs. 282.24 million in 1990. The company paid highest dividend of 112-1/2 per cent during the year under review. Sindh Fine Textile Mills Limited captured the 13th position by entering afresh in the table with its Ratio of 57.43 per cent. Similarly, Sana Industries, Elite Textile, Mushtaq Textile and Nafees Cotton also entered afresh capturing 48th, 50th, 59th and 70th position with its ratio of 40.38%, 40.10%, 38.31% and 34.82% respectively during 1990.

Chemical & Pharmaceutical

The table on top 75 companies according to Pretax Profit to Networth included 12 companies in the table as compared to 10 in the preceding year. Exxon Chemical (Engro) claimed 4th position in the table with a Ratio of 89.55 per cent as compared to 95.14 per cent in the preceding year. Sandoz entered afresh by capturing 39th position in the table with its Ratio 43.43 per cent. The company's profit increased from Rs. 6.16 million to Rs. 39.05 million in 1990. Similarly, Wyeth, Pakistan Oxygen and Buxlay Paints also entered afresh by capturing 65th, 66th and 67th position in the table respectively.

Auto & Allied

The table included 5 companies out of 18 companies on the list of Karachi Stock Exchange. General Tyre & Rubber Co. of Pakistan Limited captured 5th position as compared to 22nd position in the preceding year. This may be attributed to increase in its pretax profit to Rs. 113.83 million as compared to Rs. 50.68 million in the preceding year. Similarly Exide Pakistan Limited captured 14th position with its Ratio of 57.04 per cent as compared to 33rd position in the preceding year. Hinopak Motors entered afresh in the table capturing 20th position with its Ratio at 55.26 per cent. Similarly, Pak Suzuki also entered afresh with its Ratio of 38.17 per cent. This was all due to increase in their Pretax Profit over the previous year.


Out of 30 Insurance companies on the list of KSE, only 5 companies appeared in the table of top 75 companies. Premier Insurance captured 19th position as compared to 15th position in the preceding year due to increase in its Networth from Rs. 44.15 million to Rs. 55.40 million in 1990. Crescent Star Insurance entered afresh in the table capturing 62nd position with its Ratio of 37.55 per cent.
 Companies included in the Table
belonged to the following Sector
 No. of No. of
 Co's on Co's in the
 K.S.E Table-1990
Sugar 29 13
Glass & Ceramics 8 1
Food & Allied 18 3
Chemical & Pharma.l 33 12
Auto & Allied 18 5
Miscellaneous 26 6
Textile 146 12
Cables & Electrical 13 2
Fuel & Power 11 7
Insurance 30 5
Vegetable & Allied 15 2
Synthetic & Rayon 13 1
Paper & Board 12 1
Engineering 15 1
Tobacco 7 1
Cement 10 2
Leasing 6 1
 TOTAL: 75
[Tabular Data Omitted]
 The dividend picture in 1990 was very
promising. Number of companies declaring
dividend at the rate of 25% and above
increased from 111 to 123 in 1990.
Companies declaring dividend at the rate
of 50% and above increased from 34 to 36
in 1990. Two companies paid dividend
above 100%. These were Dewan Textile
Mills Limited 112.5% (Cash) and Associated
Industries Limited 110% (Cash). The
following table illustrate the dividend
 1990 1989 1988
50% and above 36 34 40
40% AND ABOVE 16 18 17
30% and above 27 27 13
25% and above 44 32 28
 TOTAL:- 123 111 98

From the above table, it will be seen that on the whole 36 companies paid dividend of 50% and above out of 480 listed companies on Karachi Stock Exchange. These included 12 from Cotton Textile (Dewan Textile - 112.5%, Nafees Cotton - 70%, Sapphire Textile - 65%, Khalid Textile 62.5%, Burewala Textile, Dawood Cotton, Gulistan Textile and Fateh Textile 60% each, Sunshine Cotton - 55%, Mushtaq Textile 52.5%, Quetta Textile and Ittefaq Textile - 50% each), 5 companies from Fuel & Power Sector (Pakistan Oilfields 80%, Pakistan Refinery 63.33%, Burshane 60%, Pakistan Burmah Shell 59/28% and Pakistan State Oil 50%), 3 companies from Insurance Sector (I.G.I 55%, Adamjee and Premier Insurance 50% each); 3 companies each form Auto & Allied (Exide Pakistan 85%, Allied Tractors 66.66% and General Tyre & Rubber 55%) and Vanaspati & Allied (Associated Industries 110%, Kakakhel Industries 62.5% and Fazal Vegetable 50%); 2 companies each from Sugar & Allied (Habib Sugar 52.5% and Thal Industries 50%) and Food & Allied (Lever Brothers 70% and Brooke Bond 60%); and One company each from Leasing (National Development Leasing 50%), Engineering (KSB Pumps 55.83%), Chemical & Pharmaceuticals (Exxon Chemicals 90%), Leather & Tanners (Universal Leather 65%), Glass & Ceramics (Prince Glass 80%) an Miscellaneous (Grays of Cambridge 60%). The following table illustrates the percentage-wise dividend picture for the year 1990 according to sector:

[Tabular Data Omitted]

It is interesting to note that as many as 228 companies have not paid any dividend during 1990. The number of such companies last year was 205. It will be seen from the above table that all the 11 units in the Fuel & Energy sector paid dividend ranging from 10 to 80 per cent. Similarly, all the 5 units in the list Leather & Tanners sector paid dividend from 7.5% to 65 per cent. Out of 29 companies in Sugar & Allied sector on the list of KSE 20 companies paid dividend. In the Chemical and Pharmaceutical sector 25 companies paid dividend out of 33 on KSE. As many as 19 Insurance companies paid dividend out of 30 on the list of KSE. Similarly, 10 companies paid dividend in Auto & Allied sector out of 18 on KSE. Companies not declaring dividend are largely from the Textile, Woollen, Synthetic & Rayon, Jute, Engineering, Transport & Communication, Construction and Miscellaneous sector. Out of 146 Textile mills on the list of KSE 65 companies paid dividend as compared to 58 in the preceding year. Dewan Textile Mills Limited captured the first position in 1990, while this position was occupied by Universal Leather & Footwear Companies Limited. Associated Industries Limited from Vegetable & Allied sector and Exxon Chemical (Engro) secured 2nd and 3rd position respectively during the year 1990.

There are 46 multinational companies on the list of Karachi Stock Exchange. Out of 124 companies paying 25 per cent and above dividend in 1990 as may as 19 companies were multinational like Pakistan Oilfields (80 per cent), Lever Brothers (75 per cent), Pakistan Refinery (63.33 per cent), Brooke Bond and Grays of Cambridge (60 per cent each), and Pakistan Burmah Shell (59.28 per cent). As the multinational companies have been allowed to retain average of 60 per cent share holding against 40 per cent available for local investment, the higher dividend payment enable them to remit more profits abroad. No action has been taken to improve the dividend picture of corporate sector. Corporate Law Authority in a probe disclosed that there were 124 companies which have not paid any dividend for 8 years or more.

Corporate companies have been severely criticised that out of 480 companies on Karachi Stock Exchange only 277 had paid dividend in 1990, which comes to about 47 per cent and those which did gave only 9.1 per cent yield on an average of which 2.5 per cent was deducted as Zakat. Of course dividend yield is not the only criterion of the performance of Stock Exchange. Dividend yield of companies is not very high in some countries which had developed stock markets. According to a report published in the Economist of London in its issue of Oct. 12, 1991, average dividend yield ranged between 2.2% in Germany to 4.7% in Britain. The Corporate Law Authority can play an effective role in compelling the an effective role in compelling the companies to pay dividends to its shareholders. It is reported that CLA may get power suo motto power to deal with the defaulting companies listed on stock exchanges.
Dividend Picture for the
Past 10/- Year
 No. of Dividend
 Listed Over
Year Co's 15% Nil
1981 311 87 153
1982 324 103 157
1983 338 110 155
1984 360 104 192
1985 369 127 187
1986 362 154 182
1987 378 178 179
1988 402 179 198
1989 440 193 205
1990 480 207 288

[Tabular Data Omitted]

There are 18 companies on the list of Karachi Stock Exchange. Total Paid-up Capital of these companies stood at Rs. 847.19 million. Free Reserves and Surplus stood at Rs. 768.12 million. General Break-up Value per Rs. 10/- worked out to Rs. 19.07. The Annual report of Saif Nadeem and Suzuki Motorcyles are not available at the time of making this report. Companies with high Break-up Value are as follows:-
Break-up Value per Rs. 10/-
 1990 1989
Pak Suzuki 58.12 47.08
Millat Tractors 56.51 57.71
Exide Pakistan 29.35 28.44
Al-Ghazi Tractors 20.43 20.40
General Tyre 17.55 10.71
Allwin Engineering 16.21 13.82

It will be seen from the above table that almost all the companies showed an increase in its Break-up Value as compared to preceding year except Millat Tractors. Its was due to increase in its Paid-up Capital from Rs. 46.35 million to Rs. 55.62 million in 1990. F.B. Automotive Battery have again shown as adverse balance of Rs. 18.41 million as compared to Rs. 5.03 million in the preceding year. However, it is interesting to note that the loss for the year was Rs. 13.38 million as compared to a loss of Rs. 16.66 million in 1989. Similarly, National Motors and Shaigan Electric also shown an adverse balance of Rs. 59.23 million and Rs. 4.45 million respectively during the year 1990.

The sales in the sector showed an increase except Al-Ghazi Tractors, Millat Tractors and Shaigan Electric who showed decline by 3.23 %, 7.08% and 28.79% respectively over the previous year. The profit in this sector is somehow encouraging. The companies namely Allied Tractors, Automotive Battery, Bela Engineering, National Motors and Shaigan Electric sustained losses during the year under review.

Highest Earning per share was recorded by Pak Suzuki Motors at Rs. 14.03. It was followed by General Tyre & Millat Tractors at Rs. 12.21 and Rs. 10.09 per share respectively in 1990. Dividend & Bonus picture in this sector is encouraging. Out of 18 companies, 9 companies paid Dividend/Bonus in 1990. The highest dividend of 85% (60% cash and 25% bonus) was paid by Exide Pakistan Limited. It was followed by General Tyre & Rubber at 55% cash dividend.

Units in this sector are also being privatised. It is reported that a deal has been finalised for the sale of National Motors to its previous owners General (Retired) Habibullah. Al-Ghazi Tractors has reported been purchased by Dubai - Based Bas Alfutaim. The firm has already paid 50 per cent of the price while 26 per cent of the value is to be paid in January 1992.

The employees of the Millat Tractors Limited are to be owners of the firm after their bid was accepted by the Privatisation Commission. The Commission has issued a commitment letter to the Millat Tractors Ltd. employees group led by Sohail Bashir Rana, Latif Khalid-Hashmi and Laeequddin Ansari. The Federal Government has declared the employees' group as the successful bidder for acquisition of 51 per cent shares of Millat Tractors Ltd., at a price of Rs. 107/86 per share of a face value of Rs. 10 each. In all, 28,36,700 shares, worth Rs. 31 crore, will be sold to the employees. The employees, participating in this buyout plan, are contributing in the purchase of shares by using their provident fund savings and also investing in the shape of cash.

This is the second nationalised institution after the Allied Bank Ltd., which has been given to the employees. In accordance with the conditions for sale, the employees are required to deposit 26 per cent of the value of the bid, minus the earnest money, Rs. 1 million, in favour of the Privatisation Commission within 30 days. The balance payment of 14 per cent of the value of the bid is required to be paid at the time of signing of the agreement, and upon provision of a bank guarantee for the balance of 60 per cent of the bid value, the shares will be transferred to the employees. The group has made the necessary financial arrangements and will be making the 40 per cent payment within the next two weeks and, on receipt of this amount along with bank guarantee, the remaining 60 per cent. The management will be handed over to this buy-out team along with the 51 per cent shares of Millat Tractors.

Suzuki Plant

According to latest reports Suzuki's Bin Qasim plant would be commissioned from February 1992, adding 30,000 cars to the manufacturing capacity. Final touches are being given to the plant which was considerably delayed due to unhealthy situation in the past. The plant was earlier to be commissioned in 1991 but the unforeseen situation pushed the commissioning date a bit further. However, things have changed for the better now clouds are disappearing and things are becoming brighter. There was no reason why the Suzuki's commissioning of Bin Qasim plant should be delayed further. After commissioning, the plant could further be expanded producing 50,000 cars at a cost of Rs. 600 million. Pak-Suzuki has already achieved 50 per cent deletion. However, it will be unfair if other manufacturers were given a free hand and indigenisation plan was not stressed. Suzuki Motor Company has 53 plants in 28 countries and the biggest joint ventures are with Canada, India, Indonesia, Spain, Hong Kong and Pakistan etc. In Canada it has collaboration with General Motors (50 per cent plus 50 per cent), India (40 per cent plus 60 per cent), Indonesia (49 per cent plus 51 per cent local), Spain (51 per cent plus 49 per cent) and Hong Kong (51 per cent plus 49 per cent local). The Suzuki Motor Company manufactures more than one million automotive units, of these 5,50,000 for local market and rest for the export, besides 5,00,000 Suzuki's overseas production.

[Tabular Data Omitted]

Demand of Cement

The production capacity of the existing and new cement plants in the public and private sectors in the country would increase to 12.76 million tonnes by middle of 1995 against the projected demand of 9.7 million tonnes. The State Cement Corporation of Pakistan has undertaken an industry modernisation project consisting of five subprojects.

A new cement manufacturing unit to carry out production of grey cement is proposed for the private sector. At present 23 cement manufacturing units with a total installed capacity of 8,282 thousand tonnes are operating in the country. Of these 15 units with an installed capacity of 5,752 thousand tonnes are operating in the public sector and eights units with installed capacity to 2,530 thousand tonnes are operating in the private sector.

Province wise break-up shows that nine units having an installed capacity of 5,072 thousand tonnes are in the Punjab, nine units with installed capacity of 3,120 thousand tonnes in Sindh, three units with installed capacity of 1,415 thousand tonnes are in the NWFP while two units with capacity of 675 thousand tonnes operate in Balochistan.

Domestic production of cement over the pas five years increase on an average of six per per annum. Domestic demand rose an average of eight per cent per annum. The gap in production and demand is being met through imports. Currently portland, white cement and other industrial cements and being imported from Dubai, France, Thailand, Italy, Netherlands, Germany.

However, there has been a significant reduction in cement imports in the past five years due to the commissioning of new projects in the private sector and expansion of the capacity of units in the public sector.

Cement Industry on KSE

There are ten companies on Karachi Stock Exchange in the Cement Sector. Total paid-up Capital of these companies stood at Rs. 1143.234 million. Break-up Values of companies in the descending order were as follows:
Break-up Value per
Share of Rs. 10
 1990 1989
Zeal-Pak 49.57 47.12
Gharibwal 24.01 24.43
Dadex 21.95 21.51
Mustehkam 17.12 15.87
Cherat 15.82 15.27
Javedan 15.19 15.19
Pakland 14.90 13.98
Dandot 7.09 20.74

Decline in Break-up Values were recorded by two companies namely Gharibwal and Dandot Cement. Annual Reports of Essa Cement Punjab Building Material and Dandot Cement.

Cement factories operating in private sector are being privatised. Letters of intents have been issued to some while others are being processed. There is likely the cement prices may go up. Cement plants in the north are being acquired by one group who will have a virtual monopoly over the market in the region and will thus be able to fix prices of its own choice.

The expansion plan of Dadabhoy Cement is being implemented in view of the increasing demand of Slag Cement in the country, which at the moment is estimated to be 500,000 metric tons, in which this company claims to have 33 per cent market share. The supply of machinery and equipment as well as engineering and supervising services for expansion have been negotiated from a Japanese company.
Production of Cement
 Million Growth
 Tons %
1984-85 4.698 -
1985-86 4.980 + 6.0
1986-87 6.715 +34.8
1987-88 7.072 + 5.3
1988-89 7.125 + 1.0
1989-90 7.488 + 5.0
1990-91 7.735 + 3.3
1991-91-92 8.215 + 6.2

[Tabular Data Omitted]

Chemical sector has eleven companies. These companies are manufacturing different kinds of Chemicals as follows:
Oxygen gas 3
Paints 3
Pesticides 2
Resins & Gum 4
Soda Ash 2
Fertilizers 2
Gelatine 1
Explosive 1
Caustic Soda 19

The operating results are according to the circumstances peculiar to the sectors in which these companies are operating.


Four companies manufacturing paints are represented on Karachi Stock Exchange. These are Buxlys, Kausar, Berger and ICI. Total sales of these companies in 1990 stood at Rs. 1200.873 million as compared to Rs. 954.327 in the preceding year. The following table illustrates the position.
Sales of Paint Industries
 (Rs. in million)
 1990 1989
Buxly 130.751 135.414
Berger 319.662 299.804
ICI 521.740 494.409
Kausar 28.720 24.700
TOTAL 1200.873 954.327
Source: Companies Annual Reports

Companies located in Karachi were affected by law and order situation. Mushroom paint units affected the performance of the units. The erratic supply of key local solvents such as Xylene affected the performance of ICI sales. Change in the duty structure also affected, Budget 1989-90 reduced the excise duty by 5% from 15% to 10% but at the same time imposed Sales Tax on the duty paid prices @ of Rs. 12.5%.


Karachi Stock Exchange has two fertilizer companies on its list. Fauji Fertilizer Company Ltd. is in the process of listing. Sales and Pretax Profits of these companies during the last five years were as follows:
Sales and Pretax Profit of Fertilizer Companies
 D a w o o d E n g r o
 Pretax Pretax
 Sales Profit Sales Profit
1986 912.25 147.59 754.35 220.10
1987 740.56 158.78 826.30 217.44
1988 919.10 241.82 810.02 190.16
1989 804.27 181.02 936.66 244.19
1990 960.85 237.00 1276.75 229.38
Source: Companies Annual Reports

The sales of Dawood Hercules increased from Rs. 740.56 million in 1987 to Rs. 960.85 million in 1990 showing a rise of 29.72 per cent. Pretax Profit during the same period showed a rise of 50 per cent up from Rs. 158.75 million to Rs. 237.00 million. During 1989-90 the national growth in the consumption of urea was over 15%. To meet the shortfall in the indigeneous production of Urea, the government planned to import approximately 500,000 metric tons of urea during 1991.

Total fertilizer sales of companies in 1990 worked out to Rs. 9.393 billion which included sales of private sector companies of Rs. 2.236 billion. Capacity utilization in six units exceeded the designed capacity. The capacity utilisation of Hazara Phosphate Fertilizers was 60 per cent. This was due to non availability of sufficient raw material. The fertilizer market is constantly expanding. As compared to 1989, sales increased by 20 per cent in 1990, up from Rs. 7.802 billion in 1989 to Rs. 9.393 in 1990.

[Tabular Data Omitted]

At present there are 16 companies on the list of Karachi Stock Exchange. Total sales of these companies in 1990 stood at Rs. 8.00 billion as against sales of Rs. 5.40 billion in 1988 showing a rise of 48 per cent. Part of the increase many be attributed to higher prices. Pretax profit has also increased from Rs. 199.32 million in 1988 to Rs. 558.49 million in 1990 showing a rise of 180 per cent. While the profits have shown an upward trend, rigid price control is adversely affecting the profit margins.
 Top Ten Pharmaceutical
 Companies According to Sales
 1990 1989
Ciba Geigy 1734 1487
Sandoz 1109 836
Hoechst 887 736
Wellcome 766 656
Glaxo 693 609
Abbot 596 492
Reckitt & Colman 405 350
Wyet Lab 352 279
Boots 334 279
Cyanamid 324 267

With a view to rationalisation of the drug prices an official Committee headed by the Director General of the Civil Services Academy Dr. Tariq Siddiqui is carrying out a review of the operations of the local pharmaceutical industry. The committee is expected to give its report to the Government shortly. Prices of drugs were reviewed only last May when the local manufacturers were allowed to adjust an indexation of 9.5 per cent in the retail across the board.

According to the industry sources, the Government decision affected about 7,000 drugs which are being manufactured locally, while the prices of some 3,000 imported drugs were being determined by another formula whereby the price rise has been more pronounced. For the locally manufactured drugs, the formula is based on the assumption that the local factors constituting 60 per cent of the production cost depict an inflation of 6 per cent in January 1991. The other 40 per cent production cost of drugs relates to imported ingredients, for which fluctuation in Pakistan rupee value was taken at 3.5 per cent.

Industry sources contend that prices of the most locally manufactured drugs were still much lower than those in India or other neighbouring countries. There has been a price increase of 300 per cent or even more in case of very few and selected drugs which are imported. Their prices are controlled under another formula. For the imported drugs, the Government determines the cost and freight rate of every drug and adds 40 per cent to it for fixing the retail price. The determination of C and F of any imported drug is based on the value of the Pakistani rupee in relation to the basket of international currencies. The prices of some of these imported drugs were not reviewed for the last more than eight years and were re-fixed only in May last when a formula for the locally manufactured drugs was given.
 Pharmaceutical Companies
 with High Earning
 per Share of Rs. 10/-
Wellcome 8.71
Wyeth 5.72
Hoechst 5.07
Ciba Geigy 4.90
Glaxo 4.26
Reckitt & Colman 3.12
Ferozsons 2.82
Parke Davis 2.08
Sandoz 2.06
Cyanamid 1.77
Boots 1.66
SK&F 1.42

"It is hardly in 100 or some more drugs, which are all imported, that price increase has been relatively more pronounced because of the fresh fixation of Pakistan rupee value after eight years". They industry sources said. Further, they said, indexation related formula for price fixation was not a lasting solution as the rapid fluctuation in the Pakistan rupee value and inconsistent government policies were causing a lot of distortions.

They revealed that the 32 multinational industries were planning to carry out expansion programme or more than 50 million dollars which had to be suspended because of the prolonged indecisiveness of the Government about prices. After May last when the Government came out with the indexation formula for drug prices which has reduced the discretionary powers of the officials, many of the multinational companies have started implementing the expansion programme.

There are about 225 licensed units producing medicines and other pharmaceuticals, of them 32 units are owned by multinational companies. The 32 multinationals control about 70 per cent of the country's drug market and the rest is shared by 150 Pakistani firms. Despite 85 per cent self sufficiency in its requirements. The country imported Rs. 4.407 billion worth of medical and pharmaceutical products in the last fiscal year ending June 1991 as against Rs. 3.723 billion of medicines in the preceding year.

Pakistan's exports of medicines and pharmaceuticals has shown a downward trend in 1990-91, came down to Rs. 260.259 million from the preceding year amount of Rs. 382.027 million. Glaxo made a major contribution of the Rs. 50 million towards exports. The main contribution was from the export of bulk ranitidine from company's basic manufacturing plant at Lahore. Ranitidine is the active ingredient of the company's antiulcerant, Zantac which is the worlds largest selling drug. The Government has included pharmaceuticals in the list of items for which income tax relief has been increased from 50 per cent to 75 per cent. Though a welcome step, it falls short of the incentives given by other countries in the region. If the Government is seriously interested in developing exports based on high-tech manufacture, it must consider more attractive incentives. Given suitable incentives, the export of pharmaceuticals can be developed significantly.

There are are 3 refining companies on the list of Karachi Stock Exchange. Total Paid-up Capital of these companies stood at Rs. 830.39 million. Free Reserves and Surplus stood at Rs. 262.96 million. General Break-up Value per Rs. 10 worked out to Rs. 13.16. Break-up Value of Companies in the descending order were as follows:
Company 1988 1989
Pakistan 21.93 26.54
National Refinery 12.18 11.78
Attock Refinery 11.31 10.92

It will seen from the above table that NRL and Attock Refinery showed an increase in the Break-up Value. Pakistan Refinery showed a decline in Break-up Value. The refining sector is now open for a big change. A new liberal pricing policy is being formulated while the existing policy is being phased out. The country's biggest and largest, refinery NRL, has already sent a proposal to the government to introduce either processing fee formula presently applicable only to fuel-based refineries or link both inputs and outputs of the refinery with the international import prices.

The existing refineries effective July 1988 were working on a processing fee formula for a period of three years ending in June 1991. The new formula greatly benefited the fuel based Pakistan Refinery. Pakistan Refinery, on the other is greatly discriminated against the country's biggest refinery, the National Refinery, whose two-third investment was in lube-based refining and only one-third was in the fuel refining. The National Refinery made several representations to the government for the removal of this discrimination; however, no heed was given to any of these appeals. In the processing fee formula, the government calculated the prices of crude oil after adding a fix expense of the refinery in it. So the refinery has one incentive in it, if it refines more it earns more profit.

Still it feels that if the government lifts the pricing formula from the lube refineries under which lube products are kept at 106% of the border price and feed stock prices are fixed at 122% of the border price, profitability of the refinery would have been much improved. At present all the three refineries are planning expansion in the existing capacities. The National Refinery has already completed first phase of Rs. 230 million expansion project under which the refinery's capacity has been increased by 15000 barrels per day (BPD) to its previous capacity of 50,000 BPD.

Both Pakistan Refinery and the Attock Refinery are also carrying out technical studies to expand their production capacities. Experts believe that if the concessions stipulated in the petroleum policy for the country's refining sector, which include removal of all restrictions on the establishment of refineries, concessionary import tariff for the imports of machinery and export of surplus petroleum products, are implemented in letter and in spirit, it will bring about a revolution in the refining sector. Presently, the demand for petroleum products is increasing by 7 to 8 per cent annually. This means that the current refining capacity should be increased from the present 150,000 BPD to 250,000 BPD to keep pace with the increase in the demand for the refined petroleum products.

All the three refineries are listed on the Karachi Stock Exchange. While sales of all the three refineries have shown a big jump, pretax profit of the three refineries, registered a decline. For instance, pretax profit of National Refinery declined from Rs. 495 million in 1989 to Rs. 374 million in 1990. Pakistan Refinery Limited and Attock Refinery Limited have also shown decline in profits as shown in following Table-1.
 Attock National Pakistan
 Name Refinery Refinery Refinery
Paid-up Capital 80.00 666.39 90.00
Free Reserves & Surplus 10.47 145.12 107.37
Net Worth 90.47 811.51 197.37
Fixed Assets at Cost 429.35 3492.54 187.07
Accumulated Depreciation 329.86 1645.47 165.79
Capital Work in Progress 0.51 81.05 0.20
Investment at Cost - 0.02 0.87
Current Assets N.A. 2676.56 1085.57
Current Liabilities N.A. 2692.16 911.22
Sales 3832.81 8422.38 7773.25
Cost of Sales 3764.05 7851.44 7625.46
Pretax Profit 12.85 374.02 108.73
Provision for Taxation 28.45 160.94 48.80
a) Cost of Sales to Sales % 98.21 90.02 98.10
b) Pretax Profit to Sales % 1.12 4.44 1.40
c) Pretax Profit to Net Worth % 47.36 46.09 55.09
d) Current Ratio - 0.99:1 1.19:1
e) Debt/Equity Ratio - 13/87 -
Paid-up Value per Share Rs. 10.00 10.00 10.00
Earning After Tax per Share Rs. 1.80 3.20 6.66
Price Earning Ratio 48:1 19:1 13:1
Dividend per Share Rs. 1.80 2.80 3.00
Bonus or Right Ratio - - 1:3
Retained Earning per Share Rs. 1.31 2.18 11.93
Break-up Value per Share Rs. 11.31 12.18 21.93
Market Value as on 17.11.1991 87.00 59.50 87.00
Dividend Yield % 2.07 4.71 3.44
a) Highest 78.00 28.50 92.50
b) Lowest 31.00 23.75 63.00

There are now 31 sugar mills on Karachi Stock Exchange having a paid-up capital of Rs.21.990 million. The number of mills operating in the country is 52. Sugar mills with high break-up values were as follows:
Break-up Value per
Share of Rs. 10/-
 1990 1989
United Sugar 58.18 49.86
Bawany Sugar 50.27 42.79
Crescent Sugar 42.35 40.28
Mehran Sugar 32.49 31.29
Shakarganj Sugar 31.56 27.76
Habib Sugar 30.34 24.60
Al-Noor Sugar 30.07 31.69
Thal Sugar 27.59 25.94
Husain Sugar 26.67 22.07
Kohinoor Sugar 26.02 24.01
Shahtaj Sugar 25.64 22.20
Noon Sugar 23.91 19.69
Fecto Sugar 22.54 22.12

It will be seen that all the sugar mills in the table showed an upward trend in the Break-up Value except Alnoor Sugar whose Break-up Value declined from Rs.31.69 to Rs.30.07 per share of Rs. 10. Seven Sugar mills have issued bonus shares to their shareholders during the year.

Sales and Pretax Profit

The year under review was somehow good year for the sugar mills as far as sales are concerned. All the sugar mills in the table showed increase in sales. In the case of Dewan Sugar Mills the increase was 122 per cent up from Rs. 515 million in 1988-89 to Rs. 11.45 million in 1989-90. Three factors adversely affected the profits of sugar mills (i) increase in the minimum support price f sugarcane (ii) quality premium at paisa 19 per 40 every 0.1% sugar recovery over 8.7 per cent (iii) withdrawal of concession on the excess production of sugar on two years average with effect from the Budget 1989-90. The rebate is now available on 50 per cent of production achieved in excess of last years production. Since this formula is applicable from 1990-91 n rebate therefore was admissible.
 1990 1989 1990 1989
Dewan Sugar 1145.25 515.32 121.78 87.73
Habid Sugar 827.75 615.66 132.27 86.53
Alnoor Sugar 735.78 521.96 63.09 33.66
Shahmurad Sugar 640.06 - 56.49 -
Bawany Sugar 639.72 468.28 79.52 55.95
Mirpurkhas Sugar 617.75 482.15 57.83 32.93
Shakarganj Sugar 609.10 350.74 51.47 4.09
Mehran Sugar 524.82 455.68 82.22 46.21
Sindabadgar Sugar 514.41 - 8.92 -
Faran Sugar 507.44 459.23 8.69 44.77

Recovery Ratio

Recovery ratios of several sugar mills have improved. Habib Sugar Mills has obtained the highest ratio at 10.16 per cent during the year under review. The second best was of Mehran Sugar Mills at 9.74 per cent.
Top Recovery Ratios
of Sugar Mills
 1990 1989
Habib Sugar 10.16 8.40
Mehran Sugar 9.74 7.95
Bawany Sugar 9.73 9.09
Sindabadgar 9.65 -
Pangrio Sugar 9.71 8.85
Dewan Sugar 9.43 8.72
Sanghar Sugar 9.43 8.44
Faran Sugar 9.41 8.45
Kohinoor Sugar 9.35 8.68
Mirpurkhas Sugar 9.31 8.29

Future Outlook

At present sugar imports are exempt from Custom Duty, after withdrawal of 10 per cent Import Duty since September 24, 1991. Due to huge imports of sugar, about 433320 tonnes and spending foreign exchange of 160 million dollars in 1990-91, when domestic sugar production was about 1,932,150 tonnes a new record, sugar market was in sluggish condition this was due to high inventory held with industry and importers.

The sugar industry, according to its spokesman was in doldrums due to no tariff protection being provided to it. He maintained that present government policy rendering sugar imports duty free, while charging excessive central excise duty at Rs. 2.15 per kilogram on domestic production, meant subsidising imports, providing protection to local import trade and foreign growers.

The sugar industry of the country has been agitating against this "discrimination" and urged Tariff Commission to seek redress. The spokesman claimed that sugar production cost in Pakistan was by and large, being determined by the government in shape of support price for sugarcane, excessive excise duty, tariffs of utilities, etc. All these components accounted for production cost upto 90 per cent.

There are 3 companies in the transport sector on the list of Karachi Stock Exchange. The Paid-up Capital of the 3 companies in 1990 stood at Rs.3528.03 million. Free Reserves and Surplus stood at Rs. 5266.93 million. General Break-up Value per Rs. 10/-worked out to Rs. 24.92. The respective Break-up Values of shares of the three companies were as follows:-
Company 1990 1989
P.I.A. 24.04 30.35
Pan-Islamic 14.61 14.57
P.N.S.C. 30.92 -65.90

It will be seen from the above table that PNSC and Pan-Islamic showed rise in their Break-up Values as compared to previous year. PNSC have shown a positive balance of Rs. 1546.32 million during the year under review, while it had an adverse balance of Rs. 3922.00 million in 1989. Sales and Pretax Profit of Transport & Communication companies are in table:

Pan-Islamic showed an increase of 38.37% in its sales over the previous year, while its profit declined by 44.30% from Rs. 11.14 million in 1989 to Rs. 7.72 million in 1990. In case of PNSC, the restructuring was approved by the Government on 12th February, 1990. It aimed at relieving the corporation of its liabilities, foreign loans, which it owed to the Federal Government, through converting them into equity and setting the losses against the new equity. The government allowed increase in the Authorised Capital of the Corporation from Rs. 500 million to Rs. 2000 million. The fleet strength of the Corporation as on 30th June, 1990 was 21 multi-purpose cargo ships comprising of 352,716 DWT with Container capacity 5,676 and one passenger ship for 1206 pilgrims. The average age of the fleet is 14.6 years. The Corporation has planned gradual disposal of old and obsolete ships, and their replacement with Container Ships, Bulk Carriers and Edible Oil Tanker. In this respect, the Government has already made provision for acquisition of the 5 Container Ships 1200 TEU (new), 2 Bulk Carriers 60,000/ 70,000 DWT (second hand) and 1 Edible Oil Tanker 25,000/30,000 DWT (second hand) by PNSC during the Seventh Plan Period 1988-1993.

[Tabular Data Omitted]
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

Article Details
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Author:Haque, Ansarul
Publication:Economic Review
Article Type:Cover Story
Date:Dec 1, 1991
Previous Article:Privatisation.
Next Article:New flotations on KSE.

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