| BERGER |
|
|
|
|
|
|
|
|
|
|
| ANNUAL REPORT 2003 |
|
|
| The Directors take
pleasure in submitting their Report together with the Audited Accounts of the
Company |
|
| for the year ended
June 30, 2003. |
|
|
2003 |
2002 |
|
|
|
(Rupees in thousand |
|
| Profit before tax
for the year |
|
|
38,051 |
|
| Less : Taxation |
|
|
|
| Current - for the
year |
|
16,374 |
16,794 |
|
| - for the prior year |
|
-5,260 |
21,257 |
|
|
|
11,114 |
23,504 |
|
| Deferred - for the
year |
|
5,680 |
44,761 |
|
| Profit after tax |
|
|
|
| Add :
Unappropriated profit brought forward Transfer from surplus on revaluation of
fixed assets |
1,122 22,382 |
|
| Amount available
for appropriation |
|
|
|
| APPROPRIATIONS |
|
|
| The Directors
recommend the payment of dividend at the |
|
| rate of 40 percent
equivalent to Rs 4.00 per share of |
|
| Rs. 1 0 each |
|
|
1 2,334 |
|
| Transfer to General
Reserve |
|
30,000 |
|
|
|
42,334 |
|
| Unappropriated
profit carried forward to next year |
|
2,427 |
|
| BOARD OF DIRECTORS |
|
|
| Zahid Zaheer |
|
|
| Dr. Mahmood Ahmad |
|
|
| Maqbool H.H.
Rahimtoola |
|
|
| Sikander Dada |
|
|
| Muhammad Abdul
Samad |
|
|
| Bashir Ahmed |
|
|
| Christopher H.
Clover
(Alternate Mr. Javed Shakoor) |
|
|
| William Alfred
Morley
(Alternate Mr. Khalid Mansoor) |
|
|
| Replaced Mr. Syed Mohammad with effect from
April 22, 2003. |
|
| Replaced Mr. Saeed M. Shiekh with effect
from April 22, 2003. |
|
|
| This statement is
being presented to comply with the Code of Corporate Governance as contained
in Regulation |
|
| No. 37 of the
listing regulations of the Karachi Stock Exchange for the purpose of
establishing a framework |
|
| of good governance,
whereby a listed company is managed in compliance with the best practices of
corporate |
|
| governance. |
|
| The company has
applied the principles contained in the Code in the following manner: |
|
| 1 . The company encourages representation of
independent non-executive directors, at present the Board |
|
| has five
independent non-executive directors. |
|
| 2. The directors have confirmed that none of
them is serving as a director in more than ten listed companies, |
|
| including this
company. |
|
| 3. All the resident directors of the company
are registered as taxpayers and none of them has defaulted in |
|
| payment of any loan
to a banking company, a DPI or an NBFI. None of them is a member of a stock |
|
| exchange. |
|
| 4. No casual vacancy occurred during the year
ended June 30, 2003. |
|
| 5. The Company has prepared a 'Statement of
Ethics and Business Practices', which has been signed by the |
|
| directors ana
employees of the Company. |
|
| 6. The Board has developed a vision and
mission statement, overall corporate strategy and significant policies |
|
| of the company. A
complete record of particulars of significant policies alongwith date on
which they |
|
| were approved or
amended has been maintained. |
|
| 7. All the powers of the Board have been duly
exercised and decisions on material transactions, including |
|
| appointment and
determination of remuneration and terms and conditions of employment of the
Chief |
|
| Executive Officer
(CEO) have been taken by the Board. |
|
| 8. The meetings of the Board were presided
over by the Chairman and, in his absence, by a director elected |
|
| by the Board for
this purpose. The Board met once in every quarter during the year ended June
30, 2003. |
|
| Written notices of
the Board meetings, alongwith agenda and working papers, were circulated at
least |
|
| seven days before
the meetings. The minutes of the meetings were appropriately recorded and
circulated. |
|
| 9. The company has ensured that its directors
are fully appraised of their duties and responsibilities. |
|
| 10. The Board has
approved appointment of Chief Financial Officer (CFO) and the Head of
Internal Audit, |
|
| including their
remuneration and terms and condition of employment, as determined by the
Chief Executive |
|
| Officer. |
|
| 1 1. The Directors'
Report for the year ended June 30, 2003 has been prepared in compliance with
the |
|
| requirements of the
Code and fully describes the salient matters required to be disclosed. |
|
| 1 2. The financial
statements of the company were duly endorsed by the CEO and CFO before
approval of |
|
| the Board. |
|
|
| HOLDING COMPANY |
|
| The holding company
of Berger Paints Pakistan Limited is Slotrapid Limited which is incorporated
in the United |
|
| Kingdom. |
|
| AUDITORS |
|
| The present
auditors M/s A. F. Ferguson & Co., Chartered Accountants have given their
consent to be auditors |
|
| for the year ending
June 30, 2004. However, the Board in order to comply with the requirements of
Code |
|
| of Corporate
Governance has recommended changing the auditors. |
|
| CORPORATE
GOVERNANCE |
|
| Statement of
Corporate and Financial Reporting Framework |
|
| i. The financial statements, prepared by
the management of the Company, present fairly its state of affairs, |
|
| the result of its
operations, cash flows and changes in equity. |
|
| ii. Proper books of account have been
maintained by the Company. |
|
| iii. Appropriate accounting policies have been
consistently applied, except for the changes stated in note 3 |
|
| to the accounts, in
preparation of financial statements and accounting estimates are based on
reasonable |
|
| and prudent
judgment. |
|
| iv. International Accounting Standards, as
applicable in Pakistan, have been followed in preparation of |
|
| financial
statements. |
|
| v. The system of internal control is sound
in design and has been effectively implemented and monitored. |
|
| vi. There are no significant doubts upon the
company's ability to continue as a going concern. |
|
| vii. There has been
no material departure from the best practices of Corporate Governance, as
detailed in |
|
| the Listing
Regulations. |
|
| viii. Key operating
and financial data of the last six years is summarised on page 9. |
|
| ix. A brief
description of outstanding statutory payments on account of taxes, duties,
levies is given in note |
|
| 1 4 to the
accounts. |
|
| x. The directors, CEO, CFO, Company
Secretary and their spouses and minor children did not carry out |
|
| any trade in the
shares of the company. |
|
|
| We have reviewed
the Statement of Compliance with the best practices contained in the Code of
Corporate |
|
| Governance prepared
by the Board of Direcctors of Berger Paints Paistan Limited to comply with
the Listing |
|
| Regulation No. 37
of the Karachi Stock Exchange and Chapter XI of the Listing Regulations of
the Islamabad |
|
| Stock Exchange
where the company is listed. |
|
| The responsibility
for compliance with the Code of Corporate Governance is that of the Board of
Directors |
|
| of the company. Our
responsibility is to review, to the extent where such compliance can be
objectively |
|
| verified, whether
the Statement or Compliance reflects the status of the company's compliance
with the |
|
| provisions of the
Code of Corporate Governance and report if it does not. A review is limited
primarily to |
|
| inquires of the
company personnel and review of various documents prepared by the company to
comply |
|
| with the Code. |
|
| As part of our
audit of financial statements we are required to obtain an understanding of
the accounting |
|
| and internal
control systems sufficient to plan the audit and develop an efffective audit
approach. We have |
|
| not carried out any
special review of the internal control system to enable us to express an
opinion as to |
|
| whether the Board's
statement on internal control covers all controls and the effectiveness of
such internal |
|
| controls. |
|
| Based on our
review, nothing has come to our attention which causes us to believe that the
Statement of |
|
| Compliance does not
appropriately reflect the status of the company's compliance, in all material
respects, |
|
| with the best
practices contained in the Code of Corporate Governance as applicable to the
company for the |
|
| year ended June 30,
2003. |
|
|
| DEAR SHAREHOLDERS |
|
| It gives me great
pleasure to welcome you to the fifty-third Annual General Meeting of the
Company, and to present |
|
| a review of the
operations and financial results of your Company for the year ended June 30,
2003. |
|
| BUSINESS CLIMATE |
|
| During the year
2002-03 there was a marked improvement in macro economic indicators of the
country's economy, |
|
| and improved
economic growth. There has been a decline in fiscal deficit of the Government
inflation and interest |
|
| rates. |
|
| The external
accounts balances have improved. The recently announced economic assistance
package of $ 3 Billion |
|
| from the USA should
help to further improve foreign exchange reserves. This augurs well for the
future.Government |
|
| spending in the
PSDP should increase stimulating further growth. |
|
| OPERATING
PREFORMANCE |
|
| Your Company's
operating results showed improvement during the year under review. Sales
volume increased by |
|
| 15% and in terms of
value, sales for the year were 12.9% higher than the previous year. There was
also an increase |
|
| of 16.7% in the
profit before tax. Apart from the substantial increase in sales, another
factors contributing to improved |
|
| profitability was a
reduction of Rs.20 million in Financial Charges, as a result of declining
interest rates during the |
|
| year. |
|
| To support the
Company's ongoing drive to improve its brand presence and marketing and sales
strategy, expenditure |
|
| on advertising and
sales promotion was increased. Salaries, wages and benefits have also
increased as a result of |
|
| necessary additions
in the sales force. The increased manning levels have already contributed to
the improved sales |
|
| performance during
the year, and will be instrumental in the achievement of even better market
penetration in the |
|
| future. |
|
| Trade receivables
have improved from 95 days sales to 70 days sales and further efforts by your
Company's |
|
| management to
improve collections will continue. |
|
| INCOME TAX |
|
| At the year end an
income tax refund of Rs.32.119 million was due from the Income Tax
Authorities. A sum of |
|
| Rs.21.40 million
has been received subsequent to the year end. |
|
| MARKETING
INITIATIVES |
|
| In line with trends
in the market, the Company successfully repositioned its All Rounder Matt
Enamel. The product |
|
| is being positioned
as ^Highly Washable and Extremely Durable' and there is focus on Berger
Robbialac as the parent |
|
| brand. |
|
| To cater for the
increased demand in the market for cheaper alternatives to premium and more
expensive brands |
|
| of paint, the
Company has adopted a marketing strategy which aims to maximize profits by
further improving sales |
|
| of non-premium and
less expensive products like SPD, Economy Emulsion and Eazy Clean. |
|
|
|
|
Note |
2003 |
2002 |
|
|
|
(Rupees in thousand) |
|
| SHARE CAPITAL AND
RESERVES |
|
|
|
| Share capital |
|
|
|
| Authorised |
|
|
|
| 5,000,000 (2002:
5,000,000) ordinary shares of Rs 1 0 each |
50,000 |
50,000 |
|
| Issued, subscribed
and paid - up |
|
4 |
30,834 |
30,834 |
|
| General reserves |
|
5 |
205,000 |
1 75,000 |
|
| Unappropriated
profit |
|
|
2,427 |
1,122 |
|
|
|
|
238,261 |
206,956 |
|
| SURPLUS ON
REVALUATION OF FIXED ASSETS (NET) |
6 |
1 8,576 |
43,779 |
|
| LONG-TERM FINANCES |
|
7 |
- |
21,500 |
|
| LIABILITIES AGAINST
ASSETS SUBJECT TO |
|
|
|
| FINANCE LEASES |
|
8 |
361 |
12,359 |
|
| DEFERRED TAXATION |
|
10 |
6,390 |
- |
|
| DEFERRED INCOME |
|
15.5 |
600 |
1,224 |
|
| CURRENT LIABILITIES |
|
|
|
|
| Current maturity of
long-term finances |
7 |
20,000 |
21,000 |
|
| Current maturity of
liabilities against |
|
|
|
|
| assets subject to
finance leases |
|
8 |
1 1 ,968 |
11,129 |
|
| Short-term finances |
|
11 |
150,000 |
148,000 |
|
| Running finance
under mark-up arrangements Creditors, accrued expenses and |
12 |
5,855 |
|
| other liabilities |
13 |
|
|
1 73,978 |
1 78,906 |
|
| Unclaimed dividends |
|
|
1,110 |
836 |
|
| Proposed dividend |
|
|
|
1 2,334 |
10,792 |
|
|
|
375,245 |
420,441 |
|
| CONTINGENCIES AND COMMITMENTS |
14 |
|
|
|
|
|
639,433 |
706,259 |
|
| The annexed notes
form an integral part of these financial statements. |
|
|
|
Year Ended June 30, |
|
|
|
|
2003 |
2002 |
2001 |
2000 |
1999 |
1998 |
|
|
( Rupees in
Thousand) |
|
|
| NET ASSETS |
|
|
| Fixed Assets (Net) |
118,505 |
1 1 3,845 |
1 1 9,957 |
115,537 |
85,726 |
84,761 |
|
| Long Term
Investment |
17,947 |
17,947 |
1 7,947 |
7,550 |
2,550 |
3,500 |
|
| Long Term Loans
& Deposits |
11,931 |
1 1 ,501 |
9,601 |
11,001 |
9,201 |
7,818 |
|
| Deferred Taxation |
|
- |
2,111 |
2,203 |
- |
- |
- |
|
| Net Current Assets |
115,805 |
140,414 |
160,576 |
110,781 |
134,609 |
165,514 |
|
| Total |
|
264,188 |
285,818 |
310,284 |
244,869 |
232,086 |
261,593 |
|
| FINANCED BY |
|
|
| Share Capital |
|
30,834 |
30,834 |
30,834 |
30,834 |
30,834 |
30,834 |
|
| Reserves |
|
207,427 |
176,122 |
169,126 |
151,837 |
134,172 |
124,981 |
|
| Surplus on
Revaluation of |
|
|
| Fixed Assets |
|
18,576 |
43,779 |
43,779 |
43,779 |
43,779 |
43,779 |
|
|
256,837 |
250,735 |
243,739 |
226,450 |
208,785 |
1 99,594 |
|
| Long Term &
Deferred |
|
|
| Liabilities |
|
7,351 |
35,083 |
66,545 |
18,419 |
23,301 |
61,999 |
|
| Total |
|
264,188 |
285,818 |
310,284 |
244,869 |
232,086 |
261,593 |
|
| TURNOVER &
PROFITS |
|
|
| Turnover |
|
987,452 |
874,582 |
861 ,508 |
746,829 |
713,893 |
732,687 |
|
| Profit before tax |
|
38,051 |
32,585 |
28,240 |
48,658 |
28,241 |
53,827 |
|
| Taxation |
|
16,794 |
14,797 |
-1,383 |
15,576 |
11,341 |
10,054 |
|
| Profit after tax |
|
21,257 |
17,788 |
29,623 |
33,082 |
1 6,900 |
43,773 |
|
| Dividend |
|
12,334 |
10,792 |
12,334 |
15,417 |
7,709 |
7,709 |
|
| Transfer to General
Reserve |
30,000 |
10,000 |
20,000 |
20,000 |
10,000 |
30,000 |
|
| Earnings &
Dividend |
|
|
| Earnings per Rs. 10
share Rs. |
6.89 |
5.77 |
9.61 |
10.73 |
5.48 |
14.2 |
|
| Dividend per share
-Cash Rs. |
4 |
3.5 |
4 |
5 |
2.5 |
2.5 |
|
|
|
|
Note |
2003 |
2002 |
|
|
|
|
(Rupees in thousand) |
|
| Sales |
|
|
25 |
987,452 |
874,582 |
|
| Cost of goods sold |
|
26 |
729,753 |
656,148 |
|
|
|
257,699 |
218,434 |
|
| Selling and
administration expenses |
|
27 |
199,981 |
1 45,740 |
|
|
|
57,718 |
72,694 |
|
| Other income |
|
|
28 |
8,392 |
7,764 |
|
|
|
66,110 |
80,458 |
|
| Financial charges |
|
|
29 |
25,336 |
45,413 |
|
| Other charges |
|
|
30 |
2,723 |
2,460 |
|
|
|
28,059 |
47,873 |
|
| Profit before
taxation |
|
38,051 |
32,585 |
|
| Taxation |
|
|
31 |
16,794 |
14,797 |
|
| Profit after
taxation |
|
|
21,257 |
1 7,788 |
|
| Unappropriated
profit brought forward |
|
|
1,122 |
4,126 |
|
|
|
|
22,379 |
21,914 |
|
| Appropriations |
|
|
|
|
|
| Transfer to general
reserve |
|
|
-30,000 |
-10,000 |
|
| Transfer from
surplus on revaluation of fixed assets |
|
|
|
|
| to unappropriated
profit for |
|
|
|
|
| - prior years |
|
|
21,799 |
- |
|
| - current year (net
of deferred taxation) |
|
|
583 |
- |
|
| Proposed dividend -
Rs 4.0 per share (2002: Rs 3.5 per share) |
|
|
-12,334 |
-10,792 |
|
|
|
|
-19,952 |
-20,792 |
|
| Unappropriated profit carried forwarc |
j |
|
|
2,427 |
1,122 |
|
| Basic and diluted
earnings per share |
|
32 |
Rs 6.89 |
Rs 5.77 |
|
| The annexed notes
form an integral part of these financial statements. |
|
|
|
|
|
Note |
2003 |
2002 |
|
|
|
|
(Rupees in thousand) |
|
| Cash flow from
operating activities |
|
|
|
| Cash generated from
operations |
|
33 |
1 35,295 |
105,022 |
|
| Financial charges
paid |
|
|
-30,336 |
-48,871 |
|
| Taxes (paid) /
refunded |
|
|
-17,052 |
21,477 |
|
| Long-term loans and
advances (net) |
|
|
50 |
-1,985 |
|
| Long-term deposits
(net) |
|
|
-480 |
85 |
|
| Net cash inflow
from operating activities |
|
87,477 |
75,728 |
|
| Cash flow from
investing activities |
|
|
|
|
| Fixed capital
expenditure |
|
|
-20,620 |
-7,001 |
|
| Sale proceeds on
disposal of fixed assets |
|
739 |
1,081 |
|
| Dividend received |
|
|
274 |
- |
|
| Net cash (outflow)
from investing activities |
|
-19,607 |
-5,920 |
|
| Cash flow from
financing activities |
|
|
|
|
| Long-term finances
less repayments |
|
|
-22,500 |
-1,000 |
|
| Repayments of
liabilities under finance leases (net) |
|
-11,159 |
-9,606 |
|
| Short-term finances
(net) |
|
|
2,000 |
101,369 |
|
| Dividends paid |
|
|
-10,518 |
-12,002 |
|
| Net cash (outflow)
/ inflow from financing activities |
|
-42,177 |
78,761 |
|
| Net increase in
cash and cash equivalents |
|
25,693 |
148,569 |
|
| Cash and cash
equivalents at the beginning of the year |
|
1 1 ,227 |
-137,342 |
|
| Cash and cash
equivalents at the end of the year |
34 |
36,920 |
11,227 |
|
|
| 13. The directors,
CEO and executives do not hold any interest in the shares of the company,
other than |
|
| that disclosed in
the pattern of shareholding. |
|
| 14. The company has
complied with all the corporate and financial reporting requirements of the
Code. |
|
| 1 5. The Board has
formed an Audit Committee. It comprises of three members, of whom two are
non-executive |
|
| directors including
the chairman of the committee. |
|
| 1 6. The meetings
of the Audit Committee were held at least once every quarter prior to
approval of interim |
|
| and final results
of the company and as required by the Code. The terms of reference of the
committee |
|
| have been framed,
approved by the Board and advised to the committee for compliance. |
|
| 1 7. The Company
has setup an effective internal audit function for the company. |
|
| 1 8. The statutory
auditors of the company have confirmed that they have been given a
satisfactory rating |
|
| under the quality
control review programme of the Institute of Chartered Accountants of
Pakistan, that |
|
| they or any of the
partners of the firm, their spouses and minor children do not hold shares of
the company |
|
| and that the firm
and all its partners are in compliance with International Federation of
Accountants (IFAC) |
|
| guidelines on code
of ethics as adopted by the Institute of Chartered Accountants of Pakistan. |
|
| 1 9. The statutory
auditors or the persons associated with them have not been appointed to
provide other |
|
| services except in
accordance with the listing regulations and the auditors have confirmed that
they have |
|
| observed IFAC
guidelines in this regard. |
|
| 20. We confirm that
all other material principles contained in the Code have been complied with. |
|
|
| Defined
contribution plan |
|
| The company also
operates a recognised provident fund scheme for its employees. Equal monthly
contributions are made, both by the company and the employees, to the fund at
the rate of 8.33 percent |
| of basic pay and
cost of living allowance for unionised staff and 1 0 percent of basic salary
for non- |
|
| executive staff and
executives. |
|
| 2.4 Taxation |
|
| Current |
|
| Provision for
current taxation is based on taxable income at the current rates of taxation
after taking into |
|
| account tax credits
and tax rebates available, if any, or minimum tax at 0.5 percent of turnover,
whichever |
|
| is higher. |
|
| Deferred |
|
| Consistent with
prior years deferred income tax is provided in full, using the liability
method, on temporary differences arising between the tax base of assets and
liabilities and their carrying amounts in the financial |
| statements. |
|
| Tax rates enacted
or substantially enacted by the balance sheet date are used to determine
deferred |
|
| income tax. |
|
| Deferred tax assets
are recognised to the extent it is probable that future taxable profits will
be available |
|
| against which the
temporary differences can be utilised. |
|
| 2.5 Tangible fixed
assets and depreciation |
|
| Leasehold land,
buildings thereon and plant and machinery as at March 31,1 988 have been
revalued |
|
| by an independent
valuer as of that date and are shown at net revalued amounts. Additions
subsequent |
|
| to that date and
all other operating assets are stated at cost less accumulated depreciation.
Capital work- |
|
| in-progress is
stated at cost. |
|
| Depreciation is
charged to income applying the straight line method whereby the cost of an
asset is written off over its estimated useful life. A full year's
depreciation is charged on additions, while no |
| depreciation is
charged on items disposed off during the year. Freehold land is stated at
cost. Leasehold |
|
| land is amortised
over the period of the lease. |
|
| Where the carrying
amount of an asset is greater than its estimated recoverable amount it is
written down |
|
| immediately to its
recoverable amount. |
|
| Maintenance and
normal repairs are charged to income as and when incurred. Major renewals and |
|
| improvements are
capitalised and the assets so replaced, if any, are retired. Profit or loss on disposal |
|
| of fixed assets is
recognised in income currently. |
|
|
| We have audited the
annexed balance sheet of Berger Paints Pakistan Limited as at June 30, 2003
and the |
|
| related profit and
loss account, statement of changes in equity and cash flow statement together
with the notes |
|
| forming part
thereof, for the year then ended and we state that we have obtained all trie
information and |
|
| explanations which,
to the best of our knowledge and belief, were necessary for the purposes of
our audit. |
|
| It is the
responsibility of the company's management to establish and maintain a system
of internal control, |
|
| and prepare and
present the above said statements in conformity with the approved accounting
standards |
|
| and the
requirements of the Companies Ordinance, 1 984. Our responsibility is to
express an opinion on these |
|
| statements based on
our audit. |
|
| We conducted our
audit in accordance with the auditing standards as applicable in Pakistan.
These standards |
|
| require that we
plan and perform the audit to obtain reasonable assurance about whether the
above said |
|
| statements are free
of any material misstatement. An audit includes examining, on a test basis,
evidence |
|
| supporting the
amounts and disclosures in the above said statements. An audit also includes
assessing the |
|
| accounting policies
and significant estimates made by management, as well as, evaluating the
overall |
|
| presentation of the
above said statements. We believe that our audit provides a reasonable basis
for our |
|
| opinion and, after
due verification, we report that- |
|
|
| (a) in our opinion,
proper books of accounts have been kept by the company as required by the
Companies Ordinance, 1 984; |
|
| (b) in our opinion- |
|
| (i) the balance sheet and profit and loss
account together with the notes thereon have been drawn up |
|
| in conformity with
the Companies Ordinance, 1 984, and are in agreement with the books of
account |
|
| and are further in
accordance with accounting policies consistently applied except for the
change |
|
| as stated in note 3
to the financial statements with which we concur; |
|
| (ii) the expenditure incurred during the year
was for the purpose of the company's business; and |
|
| (iii) the business
conducted, investments made and the expenditure incurred during the year were
in |
|
| accordance with the
objects of the company; |
|
| (c) in our opinion and to the best of our
information and according to the explanations given to us, the |
|
| balance sheet,
profit and loss account, statement of changes in equity and cash flow
statement together |
|
| with the notes
forming part thereof conform with approved accounting standards as applicable
in Pakistan, and, give the information required by the Companies Ordinance, 1
984, in the manner so required and |
| respectively give a
true and fair view of the state of the company's affairs as at June 30, 2003
and of |
|
| the profit, its
changes in equity and cash flows for the year then ended; and |
|
| (d) in our opinion
zakat deductible at source under the Zakat and Ushr Ordinance, 1980 was
deducted by |
|
| the company and
deposited in the Central Zakat Fund established under section 7 of that
Ordinance. |
|
|
| Investments in
subsidiaries and associates are stated at cost. Impairment losses are
recognised whenever |
|
| the carrying amount
of investment exceeds its recoverable amount. An impairment loss is
recognised |
|
| in income directly. |
|
|
| 2.12
Foreign currencies |
|
| Transactions in
foreign currencies are recorded in Pakistan rupees at the rates of exchange
approximating |
|
| those prevalent on
the date of transactions except if such transactions are covered through
forward |
|
| foreign exchange
contracts in which
case they are recorded at the contracted rate. |
|
| Monetary
assets and liabilities in foreign currencies are reported in Pakistan rupees
at the rates of |
|
| exchange
approximating those prevailing on the balance sneet date except those
liabilities covered |
|
| under
forward foreign exchange contracts which are reported at the contractual
rates. Exchange gains |
|
| and losses are
included in income currently. |
|
