20 January 2005	Thursday	09 Zilhaj 1425

ISLAMABAD, Jan 19: A round table meeting of listed, public sector companies was held here at the head office of the Securities and Exchange Commission of Pakistan (SECP) on Wednesday.

The participants of the meeting, which was chaired by the SECP Chairman, Dr Tariq Hassan, discussed the need for extending principles of good corporate governance to public sector enterprises, whether listed or non-listed.

It was highlighted that there was a need to improve corporate efficiency among these enterprises and the role of various stakeholders, therefore, needs to be defined.

It was urged that the forum of Board of Directors should be strengthened in line with good corporate governance. The participants also discussed the role of nominee directors and separation of offices of chief executives and chairmen.

The participants were briefed about the recently established Pakistan Institute of Corporate Governance, which would provide training to directors and other executives as well as raise awareness on corporate governance issues.

The public sector companies were encouraged to actively participate in the activities of the Pakistan Institute of Corporate Governance in order to orientate their directors and managers on the subject.

The participants gave valuable suggestions for introducing necessary mechanisms to improve corporate governance within public sector enterprises. These mechanisms will be further discussed and deliberated to bring about necessary changes in the corporate governance regime.

The meeting was also attended by Mr Pervaiz Kausar, chairman, Pakistan State Oil (PSO), Mr Tariq Kirmani, chief executive, PSO, Mr. Junaid I. Khan chief executive, Pakistan Telecommunication Company Ltd Mr. Najam K Hyder, chief executive, Oil and Gas Development Company Ltd, Mr. Zafar Iqbal chairman, National Refinery Ltd (NRL), Mr M. Qaiser Jamal, chief executive, NRL, and Syed Naseem Ahmad, chairman/managing director, Security Papers Ltd.

Meanwhile, the SECP has issued necessary clarification vide Circular No-1 dated January 19, 2005 in order to remove practical difficulties of listed companies and their subsidiaries upon revision of the Fourth Schedule to the Companies Ordinance, 1984 w-e-f July 5, 2004.

In this regard, Circular 1 clarifies that listed companies and their subsidiaries, which were carrying deferred costs in their financial statements as on July 5, 2004, are allowed to continue to treat such costs according to the requirements of the substituted Fourth Schedule.

However, subsequent to July 5, 2004, such companies are not allowed to include any further deferred cost in their financial statements.

Regarding capitalization of exchange gain or loss, listed companies and their subsidiaries, which had a policy of capitalizing such exchange fluctuations and had outstanding liabilities for foreign currency loans as on July 5, 2004, are allowed to capitalize gains/losses from exchange fluctuations up to September 30, 2007, notwithstanding that any foreign exchange loan remains outstanding after such date. However, in the case of any foreign currency loan contracted on or after July 5, 2004, the aforesaid accounting treatment would not be permissible.