Annual Report 2012 - Lahore Stock Exchange

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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
Financial Notes<strong>2012</strong> 201140 Increase / (decrease) in working capital (Rupees in thousand)Decrease / (increase) in current assets:Stores 76 (852)Loans and advances (3,979) (4,502)Trade debts 6,529 (78,120)Other receivables 537 1,473Short term prepayments (1,435) 3441,728 (81,657)Increase / (decrease) in current liabilities:Members’ contribution fund 41,056 (7,218)Investors’ protection fund 20,292 16,809Trade and other payables 14,641 (58,693)75,989 (49,102)77,717 (130,759)41During the year the difference between the liabilities and assets of "Members Contribution Fund" (MCF) and "InvestorsProtection Fund" (IPF) amounting to Rs. 42.9 million and 4.7 million respectively, were corrected as follows:41.1 Retrospective adjustmentsa)The Company made an investment amounting to Rs. 9.71 million in the Certificates of Deposit (CoDs) of InnovativeInvestment Bank Limited (IIBL) by utilizing the funds of Investors Protection Fund (IPF). Due to liquidation of IIBL,whole of the investment was provided in the books of account, during the year ended 30 June 2010. However,instead of charging provision against the liability of IPF the said provision was wrongly charged against the profits ofthe Company.b)Fee for the year ended 30 June 2005 amounting to Rs. 3.39 million paid to SECP on behalf of MCF was wronglycharged against the income of the Company, instead of reducing the MCF liability.The management has decided to account for the impact of above in accordance with IAS 8 "Accounting Policies,Changes in Accounting Estimates and Errors".c) The effect of retrospective restatement of profit and loss account is tabulated below:2011 2010(Rupees in thousand)Decrease in other charges - 9,710Increase in profit before tax - 9,710Increase in income tax expense - 3,399Increase in profit after taxation - 6,312d)The effect of retrospective restatement on balance sheet for 2010 and 2011 is tabulated below:2011 2010(Rupees in thousand)Decrease in investors’ protection fund 9,716 9,716Decrease in members’ contribution fund 3,411 3,411Increase in accumulated income 9,723 9,723e)Effect on unappropriated profit as at 30 JuneIncrease in accumulated income 9,723 9,723150LAHORE STOCK EXCHANGE
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L A H O R E S T O C K E X C H A N G
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2LAHORE STOCK EXCHANGE
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Corporate InformationLahore Stock E
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Board of Directors
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First Board of Directorsafter Demut
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Profile of DirectorsMr. Aftab Ahmad
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Profile of DirectorsMr. Ammar-ul-Ha
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Profile of DirectorsMs. Bushra Naz
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Profile of DirectorsMr. Masood Akba
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Profile of DirectorsMr. Mumtaz Huss
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Directors’ Report
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Directors’ Reportmembers are regi
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Directors’ ReportIncomeActual Act
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Directors’ ReportDescriptionThe A
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Directors’ ReportSEGREGATION OF C
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Participation in the International
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Directors’ ReportHUMAN CAPITAL IN
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Directors’ ReportPOSSIBLE LISTING
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Directors’ ReportBOARD COMMITTEES
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Corporate Governance
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Statement of Compliance with CCGFor
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Organizational Roundup
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Market Operations DivisionMarket Op
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Market Operations DivisionName of C
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Market Operations DivisionThe ongoi
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Market Operations DivisionThe follo
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Corporate Management DivisionSittin
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Corporate Management DivisionHUMAN
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Corporate Management DivisionWeb an
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Regulatory Affairs DivisionSitting
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Regulatory Affairs DivisionInvestor
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Technology Services DivisionSitting
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Technology Services DivisionAssets
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Technology Services Division In ord
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Financial Management DivisionSittin
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LSE Highlights
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PictorialVisit of National Defence
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PictorialMr. Thomas Morris Chief Ec
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PictorialSECP Chairman Mohammad Ali
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Visitors’ CommentsThank you for s
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Visitors’ CommentsMany thanks to
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Financial Highlights
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Summary of key operating & financia
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Income & Expenditure StatementVerti
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Financial HighlightsBalance Sheet H
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Financials
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Auditors’ Reportaccordance with t
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Income and Expenditure AccountFor t
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Statement of changes in Funds and R
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Page 118 and 119: Financial Notes8 Liabilities agains
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Page 124 and 125: Financial NotesBalance of Members
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Page 132 and 133: Financial Notes2012 201118 Long ter
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Page 146 and 147: Financial NotesBank balancesBank Ba
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Annual Report 2012 - Lahore Stock Exchange

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