| 1. |
Under
section 5 of the Marketing of Petroleum Products
(Federal Control) Act, 1974 (the Act), the Federal
Government has taken over the management of the
Company and the Act shall have effect notwithstanding
anything contained in the Companies Act, 1913
(now Companies Ordinance, 1984) or the Companies
(Managing Agency and Election of Directors) Order,
1972 or any other law for the time being in force.
A ten
member Board of Management (BOM) including a Managing
Director (MD), is appointed by the Federal Government
to run the operations of the Company. Under section
6 of the Act, the administration and management
of the Company is vested in MD of the Company
and the MD shall exercise and perform all the
powers and functions of the Board of Directors
of the Company. Furthermore, provisions relating
to the Board’s affairs are governed through
Board of Management Regulations, 1974 approved
by the Federal Government. The ‘Code of
Corporate Governance’ promulgated by the
Securities and Exchange Commission of Pakistan
(SECP) has laid down certain criteria for the
election, functioning and responsibilities of
the Board of Directors. However, the said criteria
of the Code are not considered applicable to the
extent of overriding provisions of the Marketing
of Petroleum Products (Federal Control) Act, 1974,
and Board of Management Regulations, 1974 approved
by the Federal Government. |
| 2. |
The members of BOM
have confirmed that none of them is serving as a
director in more than ten listed companies, including
this Company. |
| 3. |
All
the resident members of the BOM are registered
as taxpayers and none of them has defaulted in
payment of any loan to a banking company, a DFI
or an NBFI or, being a member of a stock exchange,
has been declared as a defaulter by that stock
exchange. |
| 4. |
No casual vacancy occurred in the
BOM. |
| 5. |
The Company has prepared
a ‘Statement of Ethics and Business Practices’,
which has been signed by employees of the company. |
| 6. |
The BOM has developed
a vision/mission statement, overall corporate strategy
and significant policies of the Company. |
| |
A complete record of particulars
of significant policies, approved or amended, has
been maintained. |
| 7. |
All
the powers of the BOM have been duly exercised
and decisions on material transactions, including
appointment and determination of remuneration
and terms and conditions of employment of the
CEO and other executive directors, have been taken
by the BOM. |
| 8. |
The meetings
of the BOM were presided over by the Chairman
and the BOM met at least once in every quarter.
Written notices of the BOM meetings, along with
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 members of BOM are well aware
of their duties and responsibilities. |
| 10. |
The BOM has approved appointment
of CFO, Company Secretary and Head of Internal Audit. |
| 11. |
The directors’
report for this year has been prepared in compliance
with the requirements of the Code and fully describes
the salient matters required to be disclosed. |
| 12. |
The financial statements of the
Company were duly endorsed by CEO and CFO before
approval of the BOM. |
| 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. |
| 15. |
The BOM has formed an audit committee.
It comprises three members, all of whom are non-executive
directors. |
| 16. |
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 formed and advised to
the committee for compliance. |
| 17. |
The BOM has set up an effective
internal audit function. |
| 18. |
The statutory auditors of the Company
have confirmed that they have been given a satisfactory
rating under the quality control review program
of the Institute of the 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 Institute of Chartered Accountants
of Pakistan. |
| 19. |
The statutory auditors
or the persons associated with them have not been
appointed to provide other services except in accordance
with the listing regulation 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. |
