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Performance of top 75 companies.

Performance of Top 75 Companies

Companies during the year 1989 fared well. However, 9 companies including National Refinery (No. 5), Pakistan Refinery (No. 6), Dawood Hercules (No. 37), Zeal Pak Cement (No. 39), Phillips Electrical (No. 43), Gul Ahmed (No. 50), Fatima Enterprise (No. 55), Burewala Textile (No. 65)) and Al-Noor Sugar (No. 66) registered a fall in sales as compared to previous year, while decline in profit was registered by 26 companies. Two companies lost money during the year under review namely Pakistan National Shipping Corporation and Hyderabad Electronics.

Pakistan National Shipping Corporation (PNSC) a state enterprise has again lost money. Its networth has frittered away and negative networth increased to 3295.16 million from Rs. 3018.16 million in 1989. This was mainly due to exchange losses on the principal amount of long-term loans and interest thereon. The long-term borrowings in 1988 stood at Rs. 1,927 million including the translation loss. During the 1988-89, the exchange value of Japanese Yen and Danish Kronar further increased by 9 per cent and 6 per cent respectively resulting in a further translation loss of Rs. 228.7 million. After taking into account the total translation loss of Rs. 1,979 million the long term borrowings worked out to Rs. 3,007 million on 30th June, 1989. The interest on total borrowings increased from Rs. 135.8 million in 1988 to Rs. 137 million in 1989. Interest on long term loans was Rs. 134.2 million. The outstanding interest on borrowings increased from Rs. 1,051.5 million in 1988 to Rs. 1,273.9 million in 1989 after accounting for translation loss on overdue interest amounting to Rs. 88.2 million arising during the year. The corporation listed 4.16 million tonnes of cargo as compared to 3.19 million tonnes in the preceding year, showing an increase of 30.4%. The increase in liftings was mainly attributable to the carriage of about one million tonnes of wheat imported by Government. With sustained efforts in exercising strict cost control and improved marketing strategy, the Corporation was able to earn operating profit of Rs. 167.62 million as against the loss of Rs. 132.56 million in the preceding year. One multi-purpose cargo vessel m.v. Murree of 18,050 DWT built in 1981 was lost in the fierce typhoon. PNSC Fleet comprised of 22 vessels with an average age of about 14 years. The proposal for financial restructuring of the Corporation are under active consideration of the Government at the highest level. Once the restructuring proposals are approved by the Government. PNSC would be placed in sound financial condition, more ahead with its fleet development plan and lift greater share of the national trade as stated by Chairman PNSC.

Another company which sustained loss amounting to Rs. 3.36 million was Hyderabad Electronics during the year under review. This was due to increase in financial expenses from Rs. 48.15 million in 1988 to Rs. 89.89 million in 1989 showing an increase of 24.38 per cent over the previous year. This coupled with general cost cuts and increase in selling prices, although the production of Television in 1989 was lower than the level required to absorb fixed costs of the company. The company's investment in Fixed Assets was Rs. 5.88 million during the year under review, of which around 30 per cent was spent in acquisition of Machinery and Equipment, required for the purpose of a new Television model introduced. Although the year 1990 has started with disturbed conditions in the country, management feels that with increase in market share of Black & White Televisions and higher quantity of imported Televisions, the company shall be able to regain the pattern of sales achieved in the previous years and with more emphasis on deletion of imported parts through local fabrication, control on expenditures and better inventory and cash management, it shall have better results as mentioned in Chairman's Review.

Pakistan State Oil (PSO) has been maintaining the top position for the last many years. The company showed a rise of 10.95 per cent in sales, while pretax profit decreased by 4.02 per cent during the year under review. PSO, a state enterprise continues to make optimum utilisation of the nine Lubricating Oil Blending Plants and two Reclamation Plants under its control. A new brand of long drain motor oil, RX-Super, was launched and the popular brand GTX was also marketed in 1 litre tins during the year under review. The lubricant trade during 1989 remained under pressure and the company was not able to increase its sale volume over last year. Despite subdued activity, the company managed to retain its leadership in the bulk Petro-chemical business with sales of 35,000 tons as against 33,850 tons in the preceding year showing an improvement of 3.4 per cent. In 1989, PSO's contribution to the National Exchequer on account of savings from import and handling of bulk chemicals, as against packed import, was US $ 6.22 million. The company also introduced some new products, among them being chlorinated Paraffin which is used as extender in the formation of PVC compound and has been introduced in bulk for the first time in the country. The company controls about 60 per cent of the petroleum distribution market in Pakistan. Distribution margin for which the company has been trying to get upward revision, has been kept at fixed level for more than one and half decade. The same problem is being faced by Pakistan Burmah Shell (No. 3) which showed a rise of 10.01 per cent in sale and 21.64 per cent in pretax profit over the previous year.

Pakistan International Airlines (PIA) has maintained the 2nd Position in the table for last five years. The Corporation showed 11.38 per cent increase in sales, and 25.03 per cent increase in pretax profit. For the first time in the history the airline achieved and crossed the Rs. 13.51 billion mark in terms of revenue. The company have negotiated the purchase of four second-hand F-27 aircraft to lend support to Feeder Services, and open up new destinations, airport facilities permitting.

An agreement has also been signed for the purchase of three A-310 aircraft for deliveries commencing from 1991. Efforts are also underway to purchase an additional used A-300 aircraft in order to meet planned capacity expansion, considering the high growth experienced in the recent past. The total passenger carried out during the year stood at 5.30 million as compared to 4.72 million in 1988. The new technology and automation is being introduced in different areas to control cost and enhance the profitability in the current year.

Networth

Table on Top 75 companies according to Networth shows that 73 companies registered an increase in the Networth during 1989. Companies showing decline were, one each from Insurance (Pakistan Insurance) and Tobacco (Premier Tobacco). The following table illustrate the sectorwise position of companies in 1989:-

Transport

Pakistan Internation Airlines (PIA) again topped the list and its networth has shown an increase of 5.20 per cent from Rs. 6967.61 million to Rs. 7330.14 million during the year under review. PIA has earned an all time high operating revenue of Rs. 13.51 billion as compared to Rs. 12.49 billion in the preceding year showing an increase of 8.16 per cent. The higher networth may be attributed to a faster growth of revenue as compared to expenditure. The company has paid 10-1/2 per cent bonus share as compared to 12-1/2 per cent in the preceding year.

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 Refinery Limited and Karachi Electric Supply Corporation showed an increase of 89.67 per cent and 17.09 per cent respectively in the 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

Sugar mills numbered 11 the table out of 27 on the list of Karachi Stock Exchange. All the companies namely Premier Sugar, Al-Noor, Habib, Dewan, Bawany, Shakarganj, Faran, Crescent, Mehran, Shahmurad and United Sugar showed an increase in the Networth as compared to previous year. The networth of Dewan Sugar Mills was increased by 41.52 per cent from Rs. 135.57 million to Rs. 191.87 million in 1989 due to increase in its reserves and surplus. Similarly, Habib Sugar showed an increased of 30.96 per cent in its networth over the previous year due to increase in its Paid-up Capital and also in reserves and surplus during the year under review.

Chemical & Pharmaceutical

All the 6 companies in the Chemical & Pharmaceutical sectors included in the table showed a rising trend in the Networth. These are ICI, Glaxo, Dawood Hercules, Exxon Chemical, Wellcome and Reckitt & Colman showing a rise of 5.60%, 5.92%, 7.79%, 9.37%, 28.47% and 7.71% respectively over the previous year. The networth of Wellcome Pakistan showed a rise of 28.47 per cent from Rs. 143.12 million to Rs. 183.88 million in 1989 due to increase in its reserves and surplus by 52.53 per cent over the previous year.

Cement

All the listed companies in the table showed a rising trend in the networth in 1989. Seven companies namely Cherat Cement, Pakland, Asbestos Cement, Zeal Pak, Mustehkam, Javedan and Gharibwal included in the table out of 10 companies on the list of Karachi Stock Exchange. Pakland entered afresh in the table capturing 21st position among the Top 75 companies according to Networth. At present there are 23 cement plants in operations in the country, although some of the existing units 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.

Engineering

Out of 46 companies on the list of Karachi Stock Exchange only 8 companies in the Engineering sector were included in the table. Of these companies Pak Suzuki, Millat Tractors, Philips Electrical, Metropolitan Steel, Huffaz Seamless, Hinopak Motors and Siemens have shown a rise of 28.06%, 18.59%, 96.63%, 8.54%, 8.99%, 5.64% and 1.45% respectively over the previous year. International Industries entered afresh in the table capturing 68th position by increasing 54.16 per cent in its networth over the previous year.

Tobacco

The table of Networth includes 2 Tobacco companies out of 7 on the list of Karachi Stock Exchange. One company namely Pakistan Tobacco Company Ltd. showed a rising trend, while Premier Tobacco showed a marginal fall of 2.44 per cent from Rs. 126.54 million to Rs. 123.52 million in 1989. The tobacco crop in 1989 was adequate to meet the industrial requirements. As an aftermath of Government's announcement in Federal Budget 1988-89 of assessing excise duty in lower and middle price brands at unified rate of 73 per cent and imposition of 12-1/2 per cent sales on cigarette, industry's sales received a major setback with a market decline of 9.4 per cent in 1989 over the previous year.

Table on Page 20 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 intangibles like deferred expenditure, preliminary expenses, assets left in East Pakistan 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

Another encouraging measure is the tax credit at the rate of 15% of the amount invested by a Pakistani company in the purchase of plant and machinery installed between 1st July 1990 and the 30th June 1993 for BMR. This facility was withdrawn last year. This will enable the industrial units to improve their efficiency. Tax credit of 15% should have been restored from July 1988 so as to avoid hardship to those who already invested last year.

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 lowered the limit of tax exemption on profit of these sources from Rs. 15,000 to Rs. 10,000. Last year a tax of 7.5 per cent was imposed on dividend income. The government would realise a paltry sum of Rs. 8 million from this measure. It is likely to discourage listing of companies and widen participation of general public in their ownership. 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 share holders of companies private of 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 reserver for plough back. Their shares in the market will no more be backed by investros as enthusiastically as before.

The table on Break-up Value includes 75 companies in the order as given in the table in the year 1989:- No. of Companies - Cotton Textile 25 - Vegetable & Allied 5 - Leather & Tanners 3 - Sugar 8 - Engineering 6 - Fuel & Power 8 - Insurance 4 - Cement 1 - Food & Allied 1 - Investment 1 - Pharmaceutical & Chemical 5 - Paper & Board 2 - Jute 1 - TTransport 1 - Synthetic & Rayon 2 - Miscellaneous 2 Total 75

From the foregoing table it wiil be seen that Textile sector has the largest number of companies followed by Sugar, Fuel & Power, Engineering, Vegetables & Allied, Chemical & Pharmaceutical and Insurance. Out of 26 textiles mills in the table 13 units showed an increase in the Break-up Value, 10 units showed fall in the Break-up Value, while 3 units entered afresh in the table.

In general, out of 75 companies, 24 companies showed a decline in their Break-up Value over the previous year. Of these 10 are from Cotton Textile, 3 from Sugar & Allied, 2 each from Fuel & Power, Insurance and Leather and One each from Food & Allied, Chemical & Pharmaceutical, Paper & Board, Engineering and Transport, while 13 companies entered afresh in the table with its Break-up Value between Rs. 57.16 to Rs.26.03. Two companies in the table namely Pakistan Services Ltd. and Polypropylene Products have neither paid cash dividend nor issued bonus shares. The picture of bonus payment is not very much encouraging. Out of 75 companies as many as 28 companies have issued bonus shares during the year under review.

Froms table on Page 22 top 75 companies according to Ratio of Pretax Profit to Networth, it will be seen that on the whole profitability of companies has shown marginal decrease over the previous year. Sectors which comparatively shared well were: Textile, Chemical & Pharmaceutical, Insurance, Sugar and Fuel & Power. As many as 17 units of Cotton Textile sector were included in the table. 10 companies from Chemical & Pharmaceutical sector were included in the table out of 24 on the list of Karachi Stock Exchange. Out of 29 Insurance companies on KSE only 8 companies were included in the table. Seven companies from Sugar & Allied sector and Six companies from Fuel & Power sector were included in the table. Sugar & Allied sector occupied commanding positions with Ratio between 128.06 per cen (Frontier Sugar Mills & Distillery Ltd.) to 35.85 per cent (Shahtaj Sugar Mills). Frontier Sugar Mills occupied the first position in the table with its Ratio of Pretax Profit to Networth at 128.06 per cent mainly due to substantials rise in pretax profit which resulted in a high ratio. Last year this position was occupied by Chaudhry Textile Mills with its ratio of 2098.03 per cent. As many as 26 companies are the new entrants in the table during the period under review.

Sugar

The table of top 75 companies according to Ratio of Pretax Profit to Networth included 7 sugar mills during the year under review. These are Frontier sugar (128.06%), Premier (57.42%), Sanghar (50.81%), Dewan (45.72%), Habib (41.85%), Hussein (36.09%) and Shahtaj Sugar (35.85%). Out of 7 companies 3 entered afresh in the table namely Sanghar Sugar, Dewan Sugar and Habib Sugar capturing 30th, 41st and 47th position respectively. The pretax profit of Sanghar Sugar stood at Rs. 57.39 million in 1989, while it was in negative figure of Rs. 14.69 million in the preceding year. Similarly, the Networth of the company stood at Rs. 112.95 million during the same period as compared to Rs. 39.61 million in the preceding year. The period under review was first full year of operating the company. The company crushed a record 558,036.30 tons of sugarcane producing 47,106.5 tons of sugar at an average recovery of 8.44%.

Textile

Out of 123 Cotton Textile companies on the list of Karachi Stock Exchange, 17 companies appear in the table of top 75 companies according to Pretax Profit to Networth. Elahi Cotton Mill captured the 6th position as compared to 4th in the preceding year in the table with its Ratio of 83.26 per cent. The fall in ranking was due to the fact that the pretax profit of the company decreased from Rs. 10.08 million to Rs. 6.37 million in 1989. The companies namely Nagina Cotton and Dawood Cotton entered afresh in the table capturing 52nd and 54th position with its Ratio of 38.61% and 38.5% respectively during 1989.

Chemical & Pharmaceutical

The table of top 75 companies according to Ratio of Pretax Profit to Networth included 10 companies in the tables as compared to 5 in the preceding year. Ciba-Geigy claimed 3rd position in the table with a Ratio of 100.19 per cent entered afresh during the year under review. The pretax profit of the company stood at Rs. 31.08 million in 1989 as compared to a loss of Rs. 4.36 million in 1988. Similarly, Hoechst Pakistan, Pakistan Gum & Chemical, Sindh Alkalis and Wellcome Pakistan also entered afresh capturing 25th, 36th, 45th and 66th position respectively in the table.

Food & Allied

The table included 5 companies out of 17 companies on the list of KSE. Lever Brothers captured 7th position as compared to 23rd in the preceding year due to increase in its pretax profit to Rs. 278.98 million in 1989 as compared to Rs. 277 million in 1988. Similarly, Brooke Bond and Rafhan Maize also captured higher position in the table as compared to previous year. Hilal Four Mills occupied the 19th position for the first time entering in the table with its Ratio of 57.34 per cent. Similarly, Shezan International also entered for the first time capturing 58th position with its Ratio of 36.54 per cent.

Insurance

Out of 29 Insurance companies on the list of KSE, only 8 companies appear in the table of top 75 companies. Premier Insurance captured 15th position as compared to 49th position in the preceding year due to increase in its pretax profit from Rs. 17.54 million to Rs. 27.10 million in 1989. EFU entered afresh in the table capturing 59th position with its Ratio of 36.46%.

Dividend

The dividend picture in 1989 was very promising. Number of companies declaring dividend at the rate of 25% and above increased from 98 to 111 in 1989. Companies declaring dividend at the rate of 50% and above decreased from 40 to 34 in 1989. three companies paid dividend above 100%. These were Universal Leather & Footwear Company Ltd. 125% (Cash 25% and stock 100%), Associated Industries Limited 110% (Cash) and EFU Co. Ltd. 110% (10% cash and 100% stock). The following table illustrate the dividend position:-

From the above table, it will be seen that on the whole 34 companies paid dividend of 50% and above out of 440 listed companies on Karachi Stock Exchange. These include 12 from Cotton Textile (Dewan Textile 87.5%, Crescent Textile 82.5%, Nafees Cotton 72%, Burewala Textile 70%, Sapphire Testile and Dawood Cotton 65% each, Quetta Textile 63.33%, Gulistan Textile 60%, Ayesha Textile and Fateh Textile 55% each, Calico Cotton 52%, and Kohinoor Spinning 50%) 4 each from Insurance (EFU 110%, Adamjee Insurance 55%, IGI 55% and Central Insurance Co. 50%) and Fuel and Power (Pakistan Oilfields 90%, Pakistan Refinery 80%, PBS 60% and PSO50%) 3 companies from Vanaspati & Ghee (Associated Industries 110%, Kakakhel Industries 62.5% and Wazir Ali Industries 60%) 2 companies each from Sugar (Thal Industries 60% and Premier Sugar 50%, Auto & Allied (Exide and Millat Tractor 55% each) and Food & Allied (Lever Brothers 83.33% and Brooke Bond 52.5%) and One each from Synthetic and Rayon (Dilon 50%), Cables & Electric (Singer 85%), Chemical & Pharmaceutical (Exxon Chemical 80%), Leather & Tanners (Universal Leather 125%) and Glass & Ceramics (Prince Glass 60%). The following table illustrates the percentagewise dividend picture for the year 1989 according to sector:-

It is interesting to note that as many as 205 companies have not paid any dividend during 1989. The number of such companies last year was 198. It will be seen from the above table that all the 11 units in the Fuel and Energy sector paid dividend ranging from 12.5% to 90% per cent. Similarly, all the 5 units in the Leather & Tanneries sector paid dividend from 7.5% to 125 per cent. Out of 36 companies in Investment Sector on the list of KSE 30 companies paid dividend. In the Sugar sector 22 companies paid dividend out of 27 on KSE. As many as 16 Insurance companies paid dividend out of 29 on the list of KSE. Similarly 20 companies paid dividend in Chemical & Pharmaceutical sector out of 34 on KSE. Companies not declaring dividend are largely from the Textile, Woollen, Synthetic & Rayon, Jute, Engineering, Auto & Allied, Construction and Miscellaneous Sector. Out of 123 textile mills on the list of KSE 58 paid dividend as compared to 47 in the preceding year. Universal Leather and Footwear Company Ltd. captured the first position in 1989, while this position was accompanied by Kohinoor Spinning in the preceding year. Associated Industries from Vegetable & Ghee and EFU from Insurance sector secured 2nd and 3rd position respectively during the year under review.

There are 44 multinational companies on the list of KSE. Out of 11 companies paying 25 per cent and above dividend in 1989 as many as 19 companies were multinationals like Pakistan Oilfields (90 per cent), Singer Pakistan (85 per cent), Lever Brothers (83.33 per cent), Pakistan Refinery and Exxon Chemicals (80 per cent each), Exide Pakistan (55 percent), Brooke Bond (52.50 per cent) etc. As the multinationals companies have been allowed to retain an average of 60 per cent shareholding against 40 per cent available for local investment, the higher dividend payment enable them to remit more profits abroad. Perhaps due to this fact the KSE in its budgetary proposals suggested that MNC equity holding should not exceed 50 per cent. In the neighbouring countries like India the maximum foreign participation is limited to 40 per cent.

Dividend from companies was totally exempt from tax upto June 30, 1988 (relevant assessment year 1988-89) in the hands of the shareholders under clause 80 of Second Schedule to Income Tax Ordinance 1979. This clause has been modified by Finance Act of 1989 and in assessment year 1989-90. The dividend income subject to exemption of Rs. 15,000 is now subject to tax of 7.5 per cent. The limits has now been reduced to Rs. 10,000. The KSE has urged the Government to withdraw this tax as it has adversely affected the stock market. Moreover revenue would be hardly Rs. 50 million only. According to the rules the AGM should be held within six months of the closing and issue of dividend warrants should not take more than six months. Clearly these rules are flouted. It is suggested that the present six months time for closure of accounts should be reduced to 3 months and the time for issue of warrants to 4 weeks. The Corporate Law Authority (CLA) has taken steps in this direction and issued a charter of five points for a better performance of the corporate sector. This relates to compliance of legal requirements for disclosure of assets, finance etc., holding of annual general meetings regularly, timely publication of half-yearly and annual reports, to end abuses of inter-corporate financing and to protect the interests of shareholders.

Share of companies paying handsome dividend are hard to get in the stock market. The reason being that out of the total Paid-up Capital of listed companies 60 per cent is held by the management itself while 25 per cent is held by the financial institutions and banks. According only 15 per cent is available for the investors on the stock market. To broaden the base of the investment it is imperative that the Government should enlist all the public limited companies which are outside the fold of the stock exchange.

The revolutionary steps have been taken by the Federal Government in the deregulation of economy facilitating the private limited companies to increase their maximum limit of Paid-up Capital and public limited companies to issue Participation Term Certificate (PTC) for public subscription. According to the new policy, a private limited company has been allowed to start its operation with the Paid-up Capital of Rs. 50 million. Uptil now the private companies were allowed to start business with the maximum Paid-up Capital of Rs. 10 million only. With the enhancement of the Paid-up Capital the companies will usually operate independently and will also not be asked to get them listed on the stock exchanges.

According to the other step, the companies listed on stock exchanges have been allowed to issue PTCs for public subscription. Uptil now, these companies were allowed to issue PTCs only to Development Financing Agencies (DFIs). Now, the PTCs to be issued by listed companies will be traded on stock exchages like shares of limited companies.

refinery

There are 3 companies on the list of Karachi Stock Exchange. Total Paid-up Capital of these companies stood at RS. 806.39 million. Free Reserves and Surplus stood at Rs. 223.27 million. General Break-up Value per Rs. 10 worked out to Rs. 12.76 Break-up Value of Companies in the descending order were as follows:-

It will be seen from the above table that NRL and Pakistan Refinery showed an increase in the Break-up Value. Attock Refinery maintained the same value as in the previous year.

The truth is that the two Karachi based refineries have been allowed to charge a processing fee for refining the imported crude. On the other hand the refinery in the North is still on a fixed return of 18 per cent on the equity and is completely dependent on local crude. It is believed that the Government is paying around Rs. 24 per barrel as processing fee for important crude refined by the two Karachi based refineries Pakistan Refinery Limited and National Refinery Limited, while the return on cost plus formula for refining indigenous crude in the North works around to Rs. 12 per barrel. The processing fee concept is also a better deal as it gives the refiners an incentive to reduce operational cost and thereby earn more. Compared to this under the fixed return formula the Government bears the cost of inefficiency in refining operation.

This is also reflected in the sales and profit picture. Sales and profits of Attock Refinery were more or less static while profits of NRL and PRL have considerably improved. Dividend payout of PRL and NRL has also substantially increased. The government will have to revise price policy in regard to Attock Refinery. The expansion of the refinery has become necessary in view of newly discovered oil field.

Transport and Communication

There are3 companies on the list of Karachi Stock Exchange in the Transport & Communication section. The Paid-up Capital of the 3 companies in 1989 stood at Rs. 3277.63 million. Free Reserves and Surplus stood at Rs. 1806.21 million. General Break-up Value per RS. 10/-worked out to Rs. 15.51. The respective Break-up Values of shares were as follows:

It will be seen from the above table that PIA and Pan-Islamic showed rise in its Break-up Value as compared to previous year. PNSC have shown an adverse balance of Rs. 39220 million during the year under review. It had a negative Break-up Value of Rs. 65.90 per share of Rs. 10 as compared to Rs. 60.36 negative Break-up Value in 1988. Sales and pretax profit of Transport & Communication companies are in Table.

The sales Revenue and Pretax profit picture in this section are somehow encouraging during the year 1989. Pan-Islamic showed an increase in its sales of 21.99% over the previous year. Similarly profit has shown a substantial increase of 250.31%. The accumulated losses of PNSC increased form Rs. 3,645.01 million to Rs. 3922.00 million during the year under review, mainly due to the losses. PNSC fleet consisted of 23 vessels with a combined deadweight of 370,766 tonnes. The average age of a ship in the fleet was about 14 years. Pan-Islamic fllet consisted 5 vessels of which 2 are passengers-cum-cargo vessels. PNSC has been pursuing Government for financial assistance and there is a possibility of equity participation. According to Chairman's review that if the positive trend of improvement in foreign rates continues along with limitations of fleet structure, PNSC would be placed in sound financial condition in the current year.
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Title Annotation:Pakistan
Author:Haque, Ansarul
Publication:Economic Review
Article Type:Cover Story
Date:Dec 1, 1990
Words:5187
Previous Article:War in the Gulf.
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