in Foreign Exchange,
of Pakistan has formulated a new investment policy. Pursuant
to the said policy, the following amendments in the Foreign
Exchange Manual (7th Edition 1992) are made with
3 Chapter XIX shall be substituted as under:-
the purpose of borrowing, foreign controlled companies
are classified in the following four categories:-
companies including oil distribution companies.
companies including construction companies.
companies involved in trade, and, services, social
and agriculture Sectors as allowed under Governments
Investment Policy; and
Para 4 Chapter XIX shall be substituted as under:-
State Bank has accorded general permission to the Authorized
Dealers to grant rupee loans and credits to the foreign
controlled companies in all the four categories to the
extent of the following specified percentages of their
paid-up capital, reserves, undistributed profits and un-remitted
dividends in case of companies incorporated in Pakistan,
and of Head Office permanent investment and un-remitted
profits, in case of branches of foreign companies, as
disclosed by their last audited annual balance sheet provided
the loans and credits required by them are intended exclusively
for meeting their working capital requirements and not
for capital expenditure:
(I) No limit
calculating the borrowing entitlement,the following pointswill
be kept in view :
word 'reserves' used above refers to general reserve
or other free reserve of the company available
for declaration of dividend or issue of bonus shares.
unremitted profits and dividends are taken into consideration
for determining the borrowing entitlement,the
entitlement will be reduced proportionately as and when
the remittance of profit or dividends is effected.
the company has any adjusted from its paid-up capital
or head office investment, as the case may be, for the
purpose of working out its borrowing entitlement.
a company having a negative net worth,raises its paid-up
capital,its borrowing entitlement may be worked out
with reference to the additional capital injected.This
facility would be available for a period of three years
from the date of increases in capital after which the
normal rules shall apply.