SNGPL suffers Rs244 million loss in six months

LAHORE: The Sui Northern Gas Pipelines (SNGPL) has suffered a net loss of Rs244 million in the first six months of the current fiscal year despite an increase of 18 per cent in gas charges.

Consumers will be in for a big shock if the government allows a further tariff increase to keep the company solvent.

According to information given to shareholders by the SNGPL, they will suffer a loss of Rs0.44 per share of Rs10. This is for the first time that the company has gone into loss, says the audit review report.

During the period, the company also developed a huge gap between receivables and payables. It has receivables of Rs15.06 billion against the federal government and Wapda and owes Rs40.44 billion to the Oil and Gas Development Corporation, Pakistan Petroleum and Government Holdings.

With net payables of Rs25.38 billion, it is clear that inter-corporate debt adjustment would have little effect on the company’s financial health.

During the period, the company’s liabilities increased from Rs52.56 billion to Rs57.58 billion.

SNGPL’s long-term liabilities went up from Rs53.8 billion to Rs55.67 billion.

The company also could not offer profit to its shareholders at the end of last fiscal year.

Its assets stand at Rs48.07 billion and liabilities Rs57.58 billion — a difference of Rs9.51 billion.

During the six months, it sold 289 billion cubic feet (Bcf) of gas and suffered transmission losses of 27.6Bcf -- lost sale of Rs7.3 billion or Rs1.22 billion a month.

The company’s losses will multiply if the Oil and Gas Regulatory Authority (Ogra) imposes a fine for failing to meet the line losses standards.

Ogra may slap a “Rs2.44 billion disallowance on profit” on current transmission losses. Last year, the authority had imposed a Rs5 billion disallowance on profit for failing to meet transmission losses targets. The company has failed once again to meet the targets.

“Beyond the numerical rigmarole, it is virtual bankruptcy,” an official said.

He said the situation, by all means, was precarious for the company.

For the past two months, the company has been disbursing travel and medical allowance to its employees selectively.

There are rumours that the management is planning to draw provident fund of employees and invest it in the company’s assets.

Chairman of the SNGPL board of governors Mian Misbahur Rehman said he had taken over only three days ago and had sought all financial statements. “But at the moment I cannot comment on itLINK.”

Western sanctions draft targets Iran's banks abroad

UNITED NATIONS: A Western proposal for fresh UN sanctions on Iran includes a call for restricting new Iranian banks abroad and urges “vigilance” against the Islamic Republic's central bank, diplomats said on Friday.

Speaking on condition of anonymity, Western diplomats familiar with negotiations on the draft proposal — which Washington worked on with Britain, France and Germany and then shared with Russia and China — said they were no longer pushing for an official UN blacklisting of the central bank.

The draft also calls for restrictions on new Iranian banks abroad, which would make it difficult for Tehran to skirt a global crackdown on transactions with existing Iranian financial institutions by setting up new ones.

“We will be looking for a tightening of restrictions of new Iranian bank activity overseas,” a diplomat told Reuters.

The UN Security Council has imposed three rounds of sanctions on Iran for defying UN demands it halt nuclear enrichment. Tehran rejects Western charges that its nuclear program is aimed at developing bombs and says it will only be used to generate electricity.

Another diplomat said urging vigilance about Iran's central bank in the US-drafted proposal should be more acceptable to Russia and China than blacklisting it, which would have made it difficult for anyone to invest in Iran.

“The idea is to call for strengthened vigilance regarding transactions linked to the Iranian central bank, which the European Union and United States and others can then use as the basis for implementing their own tougher restrictions on (such) transactions,” a second diplomat said.

Only one Iranian bank — Bank Sepah — is blacklisted under an array of UN sanctions spelled out in three resolutions adopted by the Security Council in 2006, 2007 and 2008.

The council has issued warnings about two others — Bank Melli and Bank Saderat — but has not blacklisted them.

The draft does not call for sanctions against Iran's oil and gas industries as an earlier French draft had proposed.

No Reaction From China

The new draft also targets Iranian shipping firms and the Islamic Revolutionary Guard Corps and firms linked to it. The measures would restrict insurance and reinsurance coverage of cargo shipments in and out of Iran, diplomats said.

It would also expand the restrictions on arms trade with Iran into a full arms embargo, including a global inspection regime similar to one in place against North Korea.

The diplomats said Russia's initial reaction was negative.

“Russia says the draft does not correspond to their idea of what the sanctions should be and they reject many of the measures in the latest draft,” a diplomat said.

China has not reacted and has so far refused to engage in “substantive negotiations” on a fourth round of UN sanctions against Tehran. The four Western powers hope to organize a conference call with officials from all six countries to discuss the draft but have been unable to do so due to China.

Both Russia and China have lucrative trade ties to Tehran, though Moscow has indicated it could support new punitive steps against Iran provided they are not too severe. China has not ruled out backing new sanctions but has repeatedly said the issue should be resolved through dialogue, not punishment.

Moscow and Beijing reluctantly supported the three previous rounds of travel bans and frozen assets targeting individuals and firms tied to Iran's nuclear and missile industries. Russia and China, like the United States, Britain and France, have veto powers on the UN Security Council.

Western diplomats hope to present a formal draft resolution to the full 15-nation Security Council in the coming weeks so it can be adopted some time next month at the latestLINK.

Staley spells out strategy at maiden investor meet

Jes Staley, the chief executive of JP Morgan’s investment bank met investors for the first time since taking on the job five months ago and outlined a three-pronged strategy for the division - including a determined push to double its market share in Asia.LINK

Back to the future

China is all set to launch stock index futures in March after the country’s securities regulator gave its final approval to regulations on February 20. The long-awaited introduction of index futures is expected to further development and inject much-needed sophistication into China’s stock markets. Fiona Lau and Helen Bartholomew reportLINK

BoP case a precedent for loan recovery

ISLAMABAD: The National Accountability Bureau (NAB) submitted a comprehensive report before the Supreme Court on Friday, claiming recovery of Rs5.612 billion out of the Rs9 billion involved in the Bank of Punjab (BoP) loan scam and outlining a course of action for early extradition of the bank’s former chief Hamesh Khan from the US.

“This case should be taken as a model and considered a precedent for recovery in another case of Rs256 billion loans written off since 1947,” Chief Justice Iftikhar Mohammad Chaudhry observed.

He said it was the court’s duty to bring back looted money to the country.

The report prepared by NAB, the Federal Investigation Agency (FIA) and the foreign ministry said the amount had been recovered in the shape of movable and immovable property through a voluntary return and plea bargain.

The three-judge bench adjourned the matter to April 7 with a directive to complete the entire process.

The report revealed that 17 accused in the scam had entered voluntary return/plea bargain, 11 had been released on an interim basis, six were yet to be arrested and four had completed the documentation required for transfer of their assets to the bank.

At a meeting convened on orders of the apex court, NAB, FIA, the Foreign Office and BoP agreed to coordinate all actions for expeditious completion of the investigation of the case both abroad and within Pakistan.

The report said some officers would be sent to the United States for quick extradition of Hamesh Khan if the accused contested the proceedings. A team comprising the investigation officer, a NAB official and a representative of the bank will visit the United Arab Emirates and Malaysia after consulting the Foreign Office and Pakistan’s consulates in the countries to secure and transfer traced property.

Seth Nisar, brother to Sheikh Afzal, chief executive of Haris Steel Mills, was found liable to pay Rs530 million to the bank in addition to the Rs400 million he had already deposited. However, he has been absconding.

The authorities decided to complete the exercise of his arrest and freezing of assets within three weeks.

A loan of Rs9 billion was sanctioned by the BoP to Sheikh Afzal of Haris Steel, Ali Ejaz of Haider Steel Industries and Waris Malik of Prime Steel Industries, and 22 other steel concerns some of which, according to the authorities, existed only on paper, against a declared collateral of Rs11 billion whose actual value was Rs40 million.

Mr Afzal was arrested in Malaysia through Interpol and brought to Pakistan in November, while Hamesh Khan has fled to the US. LINK

cast iron skillet to cook pizza

Maybe I don't need a pizza stone after all. Last night we made pizza and since I really, really wanted to make sure the dough cooked all the way through (this time) I decided to cook it in our large cast iron skillet that had I heated in the oven and slid the pizza into to cook, around 450 degrees. I was thinking of Cinnamon as I was pulling out the skillet as she is currently doing the final edits on her cast iron cook book. (You go!)

This pizza is spicy Italian sausage, kale and leftover fresh mozzarella. It could have used a bit more garlic, a note for next time.LINK

‘I'll Know the Recession Is Over When ... ’

The stock market is up. Interest rates are down. Sales of existing homes have jumped. The economy grew in the year’s third quarter. All this has led some people—including Federal Reserve Chairman Ben Bernanke—to say that the two-year recession has “very likely ended,” although an official declaration probably won’t come for months.

Has the economic bungee cord finally snapped back?

“I wish there was a simple way to boil it down,” says Brian Bethune, chief U.S. financial economist with IHS Global Insight, a business consulting company based in Boston. “But there are a variety of indicators like production, profits, employment and income.”

“It’s sort of like making a soup,” he says. “You throw the ingredients in the pot, blend them and then look at the result. Green soup, the recession is over. Yellow, we’re in a twilight zone. Red, we’re still in trouble.”

While some experts may see a “green soup,” many Americans see the pot bubbling red. Consumer confidence, which had risen last spring, has been stagnant or falling since May. Part of the anxiety is due to persistent unemployment. The rate dropped a scant 0.2 percentage points to 10 percent in November, prompting a hastily convened White House Forum on Jobs and Economic Growth. “Digging ourselves out of the hole ... is not going to be easy,” said President Barack Obama.

Some 15.7 million Americans out of work agree: It doesn’t matter what the economic indicators say. To them, the recession is over when they get a job.

But for others, there are personal benchmarks, ranging from the simple to the serious, about when they think the recession will be over. Here are a few:

“When folks smile again—there’s lots of grim desperation out there along with lots of empty buildings.” —Dave Murrow, public relations consultant, Phoenix.

“When people start building their ugly McMansions again and living beyond their means—that would be terrible.” —Ayako Doi, journalist, Falls Church, Va.

“When my handyman stops finding things to fix in my house. I think maybe he’s breaking stuff just to keep busy.” —Paul Ben-Victor, actor (The Wire, In Plain Sight).

“When I have the confidence that I can get financing and make the payments on a new truck.” —Thomas J. Guldi, electrician, Bridgehampton, N.Y.

“When there’s an increase in sales of men’s underwear, which is an interesting indicator. Since those sales are usually flat, a dip is a bad sign for the economy.” —Bill Patterson, market analyst, Chicago.

“When I stop bringing my own drink and candy to the movies.”—Barry Moltz, author, motivational speaker, Chicago.

“When my son, who recently graduated from college, gets a job and moves out of our home.” —Diane Nygaard, lawyer, Overland Park, Kan.

“When the mailbox contains an unsolicited credit card offer again.”—John L. Herman Jr., author and entrepreneur, Lutherville, Md.

“When we don’t receive 75 job applications for one open position.”—Alicia Munnell, executive director, Center for Retirement Research at Boston CollegeLINK.