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Exemption from IFRS provisions: SECP turns down Engro Powergen Qadirpur’s plea

Exemption from IFRS provisions: SECP turns down Engro Powergen Qadirpur’s plea

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) turned down the Engro Powergen Qadirpur (EPQ) plea for relaxation of disclosure requirements of International Financial Reporting Standards (IFRS).

The commission explained that maximum disclosure of information of financial statements was required, and exemptions from provisions of IFRS will suppress the objective of comparability and transparency through financial statements.

EPQ, a public listed company, had requested the SECP to waive the requirement of additional disclosures in the company’s financial statement for few years.

The Commission had issued a notification SRO 24(I)/2012 in January 2012 whereby power sector companies were granted waiver from the requirement of IAS-21 to extent of requirements in respect of accounting principle of capitalisation of exchange difference, subject to the condition that ‘those power sector companies which have chosen to capitalise exchange differences shall not be permitted to recognise Embedded Derivatives under IAS-39 and for the periods beginning on or after January 01, 2013.

The company, in its request, pleaded that audit firms in Pakistan do not have local expertise to verify these additional disclosures and they are engaging their foreign offices to obtain assistance of foreign experts.

The services provided by these foreign experts are extremely expensive as they charge on hourly basis in dollars, resulting in extra burden on the company.

The Commission in its order stated that ‘no company in power sector other than Engro Powergen Qadirpur has requested for waiver from this requirement’.