CSAPL conducts its business in a responsible manner and with honesty, and integrity. We also have the same expectations from all those with whom we have relationships. We insist on doing what is right and this sets the tone for all our actions. We also insist that all transactions be open and transparent, and this extends to our responsibilities for financial reporting. We understand our responsibilities to the shareholders and ensure that all transactions not only comply with all laws but are also fairly and accurately reflected in the accounts.


INTEGRITY
CSAPL does not use bribe as an instrument for any business or financial gain. Employees are not authorized to give or receive any gift or payment which may be construed as such.

Employees are also required to avoid engaging in any personal activity or financial interests which could conflict with their responsibility to the Company.


ROLE OF THE BOARD OF DIRECTORS
The Board has a fiduciary responsibility for the proper direction and control of the activities of the Company. This responsibility includes such areas of stewardship as the identification and control of the Company’s business risks, the integrity of management information systems and clear, transparent reporting to shareholders. The Board accepts its primary responsibility for the overall control architecture of the Company. However, it recognizes that the internal control system has to be cost effective and that no cost effective system will preclude all errors or irregularities. The system is based upon written procedures, policies, guidelines, an organogram that provides an appropriate division of responsibility, a programme of internal audit, manning of all key functions by qualified personnel and constant training.


CODE OF CONDUCT
The Board has adopted a code of conduct for its members, executives and staff, specifying the business standards and ethical considerations in conducting its business. The code includes:
• Corporate governance
• Relationship with employees, customers and regulators
• Confidentiality of information
• Trading in Company’s shares
• Environmental responsibilities


BOARD COMMITTEES
The Board has constituted an Audit Committee and a Human Resource Committee to review and improve the current human resource architecture.


AUDIT COMMITTEE
The governing charter of the Audit Committee addresses the requirement of the code of corporate governance issued by the SECP and includes the requirements of best practices. The Committee is accountable to the Board for the recommendation of appointment of external auditors, directing and monitoring the audit function and reviewing the adequacy and quality of the audit process. CEO and the CFO are responsible for the accuracy of financial information for inclusion in the annual report; the Committee provides the Board with additional assurance.

The Committee also ensures that the Company has an effective internal control framework. These controls include safeguarding of assets, maintaining of proper accounting records complying with legislation and ensuring the reliability of financial information.


HR COMMITTEE
The HR Committee has been constituted to address and improve the crucial area of Human Resource Development. The Committee has framed a terms of reference and its aim is to guide the management in formulating an overall strategic plan for HR, in developing new program initiatives and formulation of policies. In short to ensure the attainment of the maximum effectiveness from the overall HR service delivery system.


MANAGEMENT STRUCTURE
The Company has two distinct business units, a Steel Division and a Cotton Division. The accounting for these units is done separately in an arms length manner to arrive at the true profit before tax for each unit. The five key functional areas as defined in the system manuals with clear responsibility and authority matrix have direct reporting lines to the Chief Executive Officer. The control manual, however, is being updated to fix fresh limits of authority. The Internal Audit function is responsible to monitor compliance with the manual.


RESPONSIBILITY TO STAKEHOLDERS
Our primary purpose is to run our business efficiently and profitably to enhance shareholder value but we do it with responsibility to all stakeholders. Profitability is essential to discharge this responsibility and the corporate resources are primarily deployed in the achievement of this end.

However the Company does not operate in isolation with its environment and accordingly feels responsible to all stakeholders which are:

• Our Shareholders
• Our Customers
• Our People
• Our Business Partners
• Our Society


SERVICES TO SOCIETY
We are increasingly conscious of the role we have to play as responsible corporate citizens in fulfilling a wide variety of community needs. We believe in “giving something back” by helping address issues such as education, healthcare, public safety, environmental health etc. This is also arising from our basic belief that individual entities when they work together can create powerful synergies and help to improve the conditions of the societies in which they are operating.

These principles are not just put forth on paper but we have over the years actively strived to promote issues of education, health and environment. Major portion of our budget for philanthropy and sponsorship is allocated to primary and secondary schooling for less privileged children.


HEALTH AND SAFETY
Maintenance of health and safety standards at our plants and offices is a serious issue at CSAP. We are committed to actively managing health and safety risks associated with our business and are actively working towards improving our procedures to reduce, remove or control the risk of fires, accidents or injuries to employees and visitors. We also ensure that our products are shipped in a safe manner complying with the safety standards and legal requirements.


ROLE OF SHAREHOLDERS
The Board aims to ensure that shareholders are informed of all major developments affecting the company’s state of affairs. Information is communicated to the shareholders in the annual report and the interim quarterly reports. The Board encourages the shareholders’ participation at the annual general meetings to ensure a high level of accountability. The Company’s financial statements are available on the Company’s web site and an officer is designated to answer all shareholder inquires.

We at CSAPL strive for high ethical standards in all our dealings with our customers, our staff, our shareholders, the regulators and the community. We are of the strong opinion that good governance is more about behavior and relationships, about embedded values, and about the integrity with which boards and management go about their business than it is about ticking boxes and adding further pages to annual reports.

CSAPL has always remained focused towards its ultimate goal – adding to shareholder value and all its strategies are developed keeping this goal in view.

Our strategy has been to build growth businesses on the solid foundation of our technology, equipment, people and the point of contact with ultimate customers. Our Corporate Values and Business Principles are woven into the fabric of our strategy. An important development over the past years has been recognizing and capitalizing on synergies.

The Company is endeavoring to achieve sustained business growth by enhancing / modifying existing production capabilities of both steel and cotton divisions and by diversifying areas of operation. Modification of pipe production line in steel division is under progress which will enable the Company to produce higher length pipes and augment existing capacity. Further, a study is being undertaken for the production of smaller diameter pipes to enhance our existing product range. We are also looking at diversification opportunities in the engineering field to complement our leadership position in large diameter pipe manufacturing and pipe coatings. To retain our position as vendor of first choice, Crescent Quality Assurance and Development set up ensures highest quality standards on one hand and continuous research and development efforts in retaining cost leadership and improved operational efficiency on the other.

Investment in human capital is another important area of focus. HR initiatives are focused, programmatic and clearly visible on our strategy map. Every employee of the Company has a tailor-made training plan. At the management level, the training program initiated back in 2002 is continuing in full force. The first batch of the LUMS-CRESCENT Diploma in Business Management has completed their graduation and the second batch has reached half way. The executive courses have to a large extent helped in enriching and enhancing the skill sets of our employees, making them better prepared to face the challenges of tomorrow.

In summary, we know the competitive environment is not going to get any easier, but we can see plenty of opportunities for further growth. Our challenge, quite simply, is to keep improving every aspect of our business every day of the year and through every one of our products.