Converter error - FORUM_ROOT

I new here and have just downloaded punbb-1.3.2, I apologise if this thread has been covered.

I started with phpBB3 and what to convert to punBB. The only hassle free way was to use the new phpBB3 - SMF converter which worked perfectly (the cleanest conversion I have see actually). Now I'm trying to migrate my freshly converted SMF (1.1.7) to punBB. I have downloaded the converter from the download page and uploaded to my FTP as per instructions provided. 

I get this error:

These are the first lines of the index file.

<?php
    session_start();

    $pun_root = '../';
    define('PUN_ROOT', '../');
    define('CONV_VERSION', '140');
    @include $pun_root.'include/common.php';
    require 'functions.php';

    // Check if punbb is initialized
    if(!defined('PUN'))
        myerror('Unable to locate PunbB!<br><br>Please put the converter in a subdirectory in the punbb-directory.');

I am stuck,  can anyone explain this error?

Thanks