Mohsin Annual Report-Final 1-91:Layout 1.qxd - Siemens Pakistan

Directors’ Report 21promote especially talented people who want to and are able to assume more responsibilities - particularlyyoung leaders and technical experts? How do we create a culture that stimulates everyone to excel?They say that the secret to success is never being satisfied with what you have achieved. That is whatlinks Siemens with the high-performance culture: people who want to measure themselves against thebest, who assume personal responsibility for their actions, who have excellent skills, and, last but notleast, carry out their tasks with commitment and even enthusiasm. If Siemens wants continued successin the market, this constant striving for competitiveness is indispensable. That means developing and utilizingthe different skills of all management personnel and employees to achieve the best possibleresults.Material changesThere have been no material changes since September 30, 2007 to the date of this report and theCompany has not entered into any commitment during this period, which would have an adverse effecton the financial position of the Company. However, the management wishes to put on record that theCompany filed suites on October 8, 2007 against Karachi Electricity Supply Corporation (KESC) for therecovery of outstanding payments in respect of the fixed and variable fee plus mark-up accrued thereonand against unauthorized access to Company's intellectual property (i.e. SAP ERP) by KESC. The matterhas been fully explained in note 11.6 to the annexed financial statements.External auditorsThe present external auditors, KPMG Taseer Hadi & Co. retire and being eligible, offer themselves forreappointment. The external auditors have been given satisfactory rating under the quality controlreview program of the Institute of Chartered Accountants of Pakistan (ICAP). The external auditors haveconfirmed that their firm is in compliance with International Federation of Accountants (IFAC) guidelineson code of ethics as adopted by the ICAP. The external auditors have not been appointed to provideother services except in accordance with the listing regulations and they have confirmed that they haveobserved IFAC guidelines in this respect.As suggested by the Audit Committee, the Board recommends their reappointment for the year endingSeptember 30, 2008.Holding companyThe Company is a subsidiary of Siemens Aktiengesellschaft, which is incorporated in Germany.Business risk, challenges and future outlookAlthough Pakistan's economy has been performing remarkably well since past several years and somevisible infrastructural development could be observed, however, this economic growth needs to be nurturedby concrete planning, sound fiscal and monitory policies and most importantly a politically stableenvironment on a long term basis to get to a level where short term economic adversities could easily beabsorbed and addressed.Business risks invariably surround every organization. Due to the buoyant local market, new competitorsare continuously being attracted. The efforts of new entrants to buy market share are putting enormouspressure on our prices which is not in line with rising prices of our inputs, and rising interest andexchange rates, especially of the Euro. The Company has a comprehensive risk management system inplace in order to avoid, mitigate, or transfer risks, where possible.