Investor Presentaiton
ANNUAL REPORT
PP
Private Power and Infrastructure Board
ANNUAL REPORT
171
2020
2019
29
29.1
FINANCIAL RISK MANAGEMENT
Financial risk factors
Private Power and Infrastructure Board
22
22
23
24
24
25
25
26
26.1
27
28
NOTE
PRINTING AND STATIONERY
Computer stationery
Office stationery
Printing
AUDIT FEE
Riaz Ahmad and Company
Statutory audit fee
A.F. Ferguson & Co.
Gratuity fund audit
Provident fund audit
Bank charges
(Rupees in thousand)
636
618
891
768
971
677
2,498
2,063
363
363
108
350
330
458
330
821
693
FINANCE COST
26
Employees' provident fund trust
15.1
2,903
85
2669
(a)
2,929
2,754
OTHER EXPENSES
Newspapers and periodicals
Training, conferences and seminars
Entertainment and office supplies
Security services
Miscellaneous
TAXATION
Current
Deferred
336
334
1,295
2,321
1,834
1,738
2,492
1,881
524
6,481
725
6,999
(i)
10
8.1
17,037
27,928
(11,967)
5,070
27,712
55,640
Provision for current tax represents income from other sources/ alternate corporate tax because of gross loss for the year
and in view of available tax losses of Rupees 796.888 million (2019: Rupees 983.664 million). Reconciliation of tax
expense and product of accounting profit multiplied by the applicable tax rate has not been prepared being impracticable.
FUND MANAGEMENT
PPIB's objective when managing fund is to safeguard PPIB's ability to continue as a going concern so that it can achieve
its primary objective, provide benefits for other stakeholders and to maintain a strong fund base to support the
sustainable operations. There were no changes to PPIB's' approach to fund management during the year and PPIB is not
subject to externally imposed fund requirements.
RELATED PARTY TRANSACTIONS
PPIB operates in an economic regime currently dominated by entities directly or indirectly controlled by the Government
of Pakistan ("State controlled entities") through its government authorities, agencies, affiliates and other organizations.
Transactions with these state controlled entities are not very significant and hence impracticable to quantify for
disclosure in these financial statements.
Other related parties are key management personnel and gratuity fund/trust. Transactions with key management
personnel and gratuity fund/trust other than those specifically disclosed in relevant notes of these financial statements are
as follows:
Salaries and benefits to key management personnel
Contribution to gratuity fund/trust
2020
2019
(Rupees in thousand)
129,765
29,298
141,043
82,588
PPIB's activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including currency risk,
interest rate risk and price risk). PPIB's overall risk management policy focuses on the unpredictability of financial markets
and seeks to minimize potential adverse effects on PPIB's financial performance. The Board members have overall
responsibility for the establishment and oversight of PPIB's risk management framework. The Board members are also
responsible for developing and monitoring PPIB's risk management policies.
This note presents information about PPIB's exposure to each of the above risks, PPIB's objectives, policies and processes
for measuring and managing risk, and PPIB's management of fund. Further quantitative disclosures are included throughout
these financial statements.
Risk management policies are established to identify and analyze the risks faced by PPIB, to set appropriate risk limits and
controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to
reflect changes in market conditions and PPIB's activities. PPIB, through its training and management standards and
procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles
and obligations.
Market risk
Market risk is the risk that the value of financial instrument, may fluctuate as a result of changes in market interest rates or
the market price due to change in credit rating of the issuer or the instrument, change in the market sentiments, speculative
activities, supply and demand of securities and liquidity in the market, will affect PPIB's income or the value of its holdings of
financial instruments. The objective of market risk management is to manage and control market risk exposures within
acceptable parameters, while optimizing the return on risk. PPIB is exposed to currency risk, interest rate risk and price risk
only.
Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
foreign exchange rates. Pak Rupee is the functional currency of PPIB and as a result currency exposure arises from
transactions and balances in currencies other than Pak Rupee. PPIB's potential currency exposure comprises;
-Transactional exposure in respect of non-functional currency monetary items.
-Transactional exposure in respect of non-functional currency expenditure and revenues.
The potential currency exposures are discussed below;
Transactional exposure in respect of non-functional currency monetary items
Monetary items, including financial assets and liabilities, denominated in currencies other than the functional currency of
PPIB are periodically restated to Pak Rupee equivalent, and the associated gain or loss is taken to the income and
expenditure account. The currency risk related to monetary items is managed as part of the risk management strategy.
Transactional exposure in respect of non-functional currency expenditure and revenues
Performance guarantees encashed, income from operations, and certain income on investments and bank deposits is earned
in currencies other than the functional currency. These currency risks are managed as a part of overall risk management
strategy. There were no forward exchange contracts.
Exposure to currency risk
PPIB's exposure to currency risk is as follows:
Short term investments - amortized cost
Bank balances
Net exposure
The following significant exchange rates applied during the year:
2020
2019
(US Dollars in thousand)
7,660
7,413
17
7,677
14
7,448
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