Annual Report 2012 - Lahore Stock Exchange

Financial Notes39.3.5 Operational riskOperational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with theCompany’s processes, personnel, technology and infrastructure, and from external factors other than credit, marketand liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards ofcorporate behaviour. Operational risks arise from all of the Company’s operations.The Company’s objective is to manage operational risk so as to balance the avoidance of financial losses and damageto the Company’s reputation with overall cost effectiveness and to avoid control procedures that restrict initiative andcreativity.The primary responsibility for the development and implementation of controls to address operational risk is assignedto senior management within the Company. This responsibility is supported by the development of overall Companystandards for the management of operational risk in the following areas:---------requirements for appropriate segregation of duties, including the independent authorization of transactionsrequirements for the reconciliation and monitoring of transactionscompliance with regulatory and other legal requirementsdocumentation of controls and proceduresrequirements for the periodic assessment of operational risks faced, and the adequacy of controls andprocedures to address the risks identifieddevelopment of contingency planstraining and professional developmentethical and business standardsrisk mitigation, including insurance where this is effective39.4 Capital managementThe Company does not have any share capital nor it has any borrowings, hence, the above disclosure has not beenpresented in the financial statements.ANNUAL REPORT 2011-12 149