mse illustrative financial statements
TRANSCRIPT
MEDIUM-SIZED ENTITIES
Chartered Accountants of Pakistan
ILLUSTRATIVE FINANCIAL STATEMENTSSEPTEMBER 2009
The Institute of
Introduction i
Balance Sheet 1
Income Statement 2
Cash Flow Statement 3
Statement of Changes in Equity 4
Notes to the Financial Statements 5
1 Status and Nature of Business 5
2 Statement of Compliance 5
3 Summary of Significant Accounting Policies 5
3.1 Basis of Preparation 5
3.2 Revenue 5
3.3 Borrowing Costs 6
3.4 Foreign Exchange 6
3.5 Retirement Benefits 6
3.6 Taxation 7
3.7 Property, Plant and Equipment 7
3.8 Intangible Assets 8
3.9 Investments 8
3.10 Impairment of Assets 8
3.10 Leases 9
3.12 Stores, Spares and Loose Tools 9
3.13 Stock in Trade 9
3.14 Trade and other receivables 9
3.15 Provisions 10
3.16 Dividend 10
3.17 Cash and Cash Equivalents 10
3.18 Related party transactions 10
3.19 Offsetting 10
3.20 Financial instruments 10
4 Property, Plant & Equipment 12
5 Intangible Asset 13
6 Long-term Investment 14
7 Long-term Loans and Advances 15
8 Long term Derposits and Prepayments 16
9 Stores, Spares and Loose Tools 16
10 Stock in Trade 16
11 Trade Receivable 16
12 Short Term Loans and Aadvances 16
13 Short Term Deposits and Prepayments 16
14 Short Term Investments 17
15 Other Receivables 17
16 Cash and Bank Balances 17
INDEX Page No.
17 Share Capital 18
18 Capital Reserve 18
19 Revenue Reserve 18
20 Surplus on Revaluation of Fixed Assets 18
21 Long Term Borrowing-Secured 19
22 Liabilities against assets subject to Finance Leases 20
23 Deferred Liabilities 20
24 Trade and Other Payables 21
25 Interest and Markup Accrued 22
26 Short Term Borrowings - Secured 22
27 Current Portion of Long term Liabilities 22
28 Contingencies and Commitments 22
29 Revenue 23
30 Cost of Sales 23
31 General and Administration Expenses 24
32 Finance Costs 24
33 Other Income 25
34 Taxation 25
35 Related Party Transactions 25
36 Cash Generated from Operations 25
37 Cash and Cash Equivalent 26
38 Corresponding Figures 26
39 General 26
INDEX Page No.
i
INTRODUCTION AND EXPLANATORY COMMENTS This illustrative set of financial statements seeks to provide guidance to the reporting entities and their auditors with regard to the disclosures to be made in the financial statements prepared in accordance with the Accounting and Financial Reporting Standards for Medium Sized Entities (MSEs) as defined in the Institute’s circular No. 06/2007 dated November 02, 2007 and the requirements of the Companies Ordinance, 1984. The illustrative is merely a technical practice aid and in no way represents the authoritative pronouncements of the Institute. It does not aim at interpreting the statutory disclosure requirements set out in the Fifth Schedule and the MSE Standard of ICAP. This illustrative seeks to represent minimum requirements and does not purport to be all inclusive and would need review in the light of changes in statutory requirements and accounting standards from time to time. Users may need to modify the financial statements when further accounting standards are issued or made applicable subsequently. The specimen disclosures should not be considered as the only acceptable form of presentation. The form and content of each reporting entity’s financial statements are the responsibility of the entity’s management. Alternative presentations to those proposed in this illustrative may be equally acceptable if they comply with the specific disclosure requirements prescribed in the accounting standards for MSEs. Use of the illustrative requires the exercise of individual professional judgment and may require some modification based on the circumstances of individual reporting entities. Each disclosure requirement listed in the illustrative, wherever applicable, is denoted by relevant reference of the Accounting and Financial Reporting Standards for Medium Sized Entities (MSEs).
MSE illustrative Financial Statements
MSE LIMITEDBALANCE SHEETAs at 31 December 20X8
Note 20X8 20X7 Para #Rs. Rs. 1.1, 1.19
1.14Non-current assetsProperty, plant and equipment 4 XXX XXXIntangible assets 5 XXX XXX 5.26Long-term investments 6 XXX XXXLong Term Loans and Advances 7 XXX XXX Long term Deposits and prepayments 8 XXX XXX
XXX XXXCurrent assets 1.16Stores, Spares and Loose Tools 9 XXX XXXStock in Trade 10 XXX XXXTrade Receivable 11 XXX XXXShort term Loans and Advances 12 XXX XXXShort term Deposits and Prepayments 13 XXX XXXShort term investments 14 XXX XXXCurrent portion of long term investments XXX XXXOther Receivables 15 XXX XXXCash and bank balances 16 XXX XXX
XXX XXX XXX XXX
Share capital & Reserves
Authorised: xxxx ordinary shares of Rs.10 each 17 XXX XXX 1.21aIssued, subscribed & paid up capital 17 XXX XXXCapital Reserve 18 XXX XXX 1.21bRevenue Reserve 19 XXX XXX 1.21b
(XXX) (XXX)
Surplus on Revaluation of Fixed Assets 20 XXX XXX
Non-current liabilitiesLong term Borrowing - Secured 21 (XXX) (XXX)Liabilities against assets subject to Finance Leases 22 (XXX) (XXX) 4.9Deferred Liabilities 23 (XXX) (XXX) 11.12
(XXX) (XXX)
Current liabilities 1.17Trade and other payables 24 (XXX) (XXX)Income tax payable (XXX) (XXX) 11.1Due to related parties (XXX) (XXX) 15.4Interest and Mark up Accrued 25 (XXX) (XXX)Short term Borrowings - Secured 26 (XXX) (XXX)Current portion of long term liabilities 27 (XXX) (XXX) 4.9
(XXX) (XXX)
Contingencies and Commitments 28XXX XXX
The annexed notes 1 to 39 from an integral part of these financial statements.
____________________ Chairman Chief Executive Director
The Institute of Chartered Accountants of Pakistan 1
MSE Illustrative Financial Statements
MSE LIMITEDINCOME STATEMENTFor the year ended December 31,20X8
Note 20X8 20X7 Para # Rs. Rs.
1.1, 1.22
Revenue 29 XXX XXXCost of sales 30 (XXX) (XXX)
Gross Profit XXX XXX
General and Administrative Expenses 31 (XXX) (XXX)Other operating expenses (XXX) (XXX)
Profit /Loss from Operating Activities XXX XXXFinance costs 32 (XXX) (XXX)
XXX XXX
Other income 33 XXX XXX
Profit before tax XXX XXX
Taxation 34 (XXX) (XXX) 11.9, 11.14
Profit after tax XXX XXX
The annexed notes 1 to 39 form an integral part of these financial statements.
____________________ ____________________ ____________________ Chairman Chief Executive Director
The Institute of Chartered Accountants of Pakistan 2
MSE Illustrative Financial Statements
MSE LIMITEDCASH FLOW STATEMENTFor the year ended December 31, 20X8
Note 20X8 20X7 Para#
Rs. Rs.1.1, 2.1, 2.5(b)
CASH FLOWS FROM OPERATING ACTIVITIES 2.2
Cash generated from operations 36 XXX XXX Finance cost paid (XXX) (XXX) Income tax paid (XXX) (XXX) 2.12 Payment to gratuity fund (XXX) (XXX)Net cash from operating activities XXX XXX
CASH FLOWS FROM INVESTING ACTIVITIES 2.3
Fixed capital expenditure (XXX) (XXX) Proceeds from sale of property, plant and equipment XXX XXX Interest received XXX XXX 2.11 Increase /Decrease in Investment XXX XXX Dividend received XXX XXX 2.11Net cash generated from investing activities XXX XXX
CASH FLOWS FROM FINANCING ACTIVITIES 2.4
Long term financing - proceeds XXX XXX - repayments (XXX) (XXX)Long term loans - repayments (XXX) (XXX)Long term murabaha - repayments (XXX) (XXX)
Increase / (decrease) in short term borrowings XXX (XXX) Dividend paid (XXX) (XXX) 2.11Net cash used in financing activities (XXX) (XXX)
Net increase in cash and cash equivalents XXX XXX Cash and cash equivalents at beginning of the year XXX XXX Effect of exchange rate changes XXX XXX 2.8
Cash and cash equivalents at end of the year 37 XXX XXX
The annexed notes 1 to 39 form an integral part of these financial statements.
____________________ _______________ ______________Chairman Chief Executive Director
The Institute of Chartered Accountants of Pakistan 3
MSE Illustrative Financial Statements
MSE LIMITEDSTATEMENT OF CHANGES IN EQUITYFor the year ended December 31, 20X8
Share Capital
Capital Reserve
Other Reserve
General Reserve
Un-appropriated
profitTotal Para#
Balance at December 31, 2006 XXX XXX XXX XXX XXX 1.1, 1.3Net profit for the year ended Dec 31, 2007 XXX XXXTransfer from general reserve (XXX) XXX XXXCurrent year incremental depreciation- net of tax XXX XXX
Dividends Final dividend 2006: Rs XXX per share (XXX) (XXX) Interim dividend 2007 : Rs XXX per share (XXX) (XXX)
Balance at December 31, 2007 XXX XXX XXX XXX XXX
Net profit for the year ended Dec 31, 2008 XXX XXX 1.30(a)Transfer from general reserve (XXX) XXX XXXCurrent year incremental depreciation- net of tax XXX XXXGain / (loss) recognised directly in equity XXX XXX 1.30(b)
Dividends Final dividend 2007: Rs XXX per share (XXX) (XXX) Interim dividend 2008: Rs XXX per share (XXX) (XXX)
Balance at December 31, 2008 XXX XXX XXX XXX XXX XXX
The annexed notes 1 to 39 form an integral part of these financial statements.
____________________ ____________________ __________________ Chairman Director Chief Executive
(Rupees)
The Institute of Chartered Accountants of Pakistan 4
MSE LIMITED MSE Illustrative Financial NOTES TO THE FINANCIAL STATEMENTS Statements For the year ended December 31, 2008 MSE Para #
The Institute of Chartered Accountants of Pakistan 5
1. STATUS AND NATURE OF BUSINESS MSE Limited is a medium size company incorporated in Pakistan under the Companies Ordinance 1984. The company’s registered office is located at xxxx Karachi, Pakistan. The principal activity of the company is trading of toys. The company has adopted a trade name (Registered) “xxx” for its business. The Company is a subsidiary of ABC Ltd (the holding company) with shareholding of xxx%.
1.12 1.36
2. STATEMENT OF COMPLIANCE These financial statements have been prepared in accordance with the Accounting and Financial Reporting Standards for Medium-Sized Entities as applicable in Pakistan and the requirements of the Companies Ordinance, 1984. These accounting standards are notified by the Securities and Exchange Commission of Pakistan. In case requirements differ, the provisions or directives of the Companies Ordinance, 1984 shall prevail.
1.3
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 3.1 Basis of preparation
These financial statements have been prepared under the historical cost convention except as other wise stated in the respective policies and notes given hereunder.
1.31(a)
The preparation of financial statements is in conformity with the Accounting and Financial Reporting Standards for Medium-Sized Entities issued by the Institute of Chartered Accountants of Pakistan require management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
1.3 1.34 1.35
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised.
Significant areas requiring the use of management estimates in these financial statements relate to the useful life of depreciable assets, provision for doubtful receivables and slow moving inventory. However, assumptions and judgments made by management in the application of accounting policies that have significant effect on the financial statements are not expected to result in material adjustment to the carrying amounts of assets and liabilities in the next year.
3.2 Revenue
Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the company and the amount of revenue and the associated cost incurred or to be incurred can be measured reliably.
9.10 9.11(a)
(i) sale of goods is recognised when the goods are delivered and the risks and rewards of ownership have passed to the customer;
9.3(a)
(ii) rental income is recognised on a time proportion basis over the lease terms;
MSE LIMITED MSE Illustrative Financial NOTES TO THE FINANCIAL STATEMENTS Statements For the year ended December 31, 2008 MSE Para #
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(iii) interest income is recognised on a time proportion basis taking into account the principal outstanding and the interest applicable; and
(iv) dividend income is recognised when the shareholder’s right to receive payment
is established. 9.9(c)
3.3 Borrowing costs
Borrowing costs are recognised as an expense in the period in which these are incurred except to the extent of borrowing cost that are directly attributable to the acquisition, construction or production of a qualifying assets. Such borrowing costs, if any are capitalized as part of the cost of the asset.
10.13a 10.2 to 10.4
3.4 Foreign exchange
Foreign currency transactions are recorded at the exchange rate applicable at the transaction date. Monetary assets and liabilities are translated into rupees using exchange rates applicable at the balance sheet date. All gains and losses on settlement and translation at year end are recognised in the income statement.
13.2 13.3 13.4
3.5 Retirement benefits
a) The Company has the following plans for its employees:
Gratuity Scheme
The company operates an funded/unfunded gratuity scheme for its employees who have completed the qualifying period as defined under the respective scheme. The amount of liability of each employee at year end is computed by number of years completed multiplied by the last drawn monthly gross salary. The difference between the current and the previous liability is charged to profit and loss account as expense for the year.
17.1 17.12
OR The entity operates a funded/unfunded gratuity scheme for its employees who
have completed the qualifying period as defined under the respective scheme. The charge for the year is based on actuarial valuation conducted on December 31, 20XX using the “Projected Unit Credit Method”.
The amount recognized in the balance sheet represents the present value of defined benefit obligation as adjusted for unrecognized actuarial gains and losses.
Pension Scheme
Defined benefit pension for all eligible employees who complete qualifying period of service and age.
If the liability for retirement benefits is funded through creation of a trust These funds are administered by trustees. Annual contributions to the gratuity and management staff pension funds are based on actuarial valuation using Projected Unit Credit Method. All contributions are charged to profit and loss account for the year. Actuarial gains / losses in excess of corridor limit (10% of the higher of fair value of assets and present value of
17.8(b)
MSE LIMITED MSE Illustrative Financial NOTES TO THE FINANCIAL STATEMENTS Statements For the year ended December 31, 2008 MSE Para #
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obligation) are recognised over the average remaining service life of the employees. Where the contribution paid during a year is lower than the amount required to be contributed during the year to meet the accrued liability as certified by the actuary, the shortfall charged to the statement of profit and loss for the year. If the contribution paid during a year is in excess of the amount required to be contributed during the year to meet the accrued liability as certified by the actuary, the excess treated as a prepayment. If the employer has chosen to make payment for retirement benefits out of his own funds An appropriate charge to the statement of profit and loss for the year shall be made through a provision for the accruing liability. The accruing liability shall be calculated according to actuarial valuation
17.8(a)
Provident Fund
Defined contributory provident fund for all eligible employees for which contributions are charged to profit and loss account.
17.6
b) Compensated absences
The Company has the policy to provide for encashable compensated absences of its employees in accordance with respective entitlement on cessation of service; related expected cost thereof has been included in the financial statements.
3.6 Taxation
Income tax expense represents current tax expense. Provision for current taxation is based on taxable income at the current rates of taxation after taking into account tax credits and tax rebates, if any.
Deferred tax is accounted for using the liability method in respect of all taxable temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences, unused tax losses and tax credits can be utilized.
Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse, based on tax rates that have been enacted.
3.7 Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses except freehold land and capital work in progress, which are stated at cost. Cost comprises acquisition and other directly attributable costs.
3.3 3.13
Depreciation is charged to income on straight line basis or reducing balance basis or cost of asset is written off over its estimated useful life. Depreciation on additions to property, plant and equipment is charged from the month in which an item is put to use while no depreciation is charged for the month in which the item is derecognized /disposed off. The assets’ residual values and useful lives are reviewed at each financial year end and adjusted if impact on depreciation is significant.
3.33 3.38(b)
3.15
MSE LIMITED MSE Illustrative Financial NOTES TO THE FINANCIAL STATEMENTS Statements For the year ended December 31, 2008 MSE Para #
The Institute of Chartered Accountants of Pakistan 8
Depreciation is calculated on a straight-line or reducing balance basis or to write off the cost of an asset over its estimated useful life without taking into account any residual value. Full year's depreciation is charged on normal additions, while no depreciation is charged on items deleted during the year. Surplus on revaluation of fixed assets relating to incremental depreciation (net of deferred tax) is transferred directly to unappropriated profit.
Surplus on revaluation of Property, plant and equipment is credited to the surplus on
revaluation account. Revaluation is carried out with sufficient regularity to ensure that the carrying amount of assets does not differ materially from the fair value. To the extent of the incremental depreciation charged on the revalued assets the related surplus on revaluation of property, plant and equipment (net of deferred tax) is transferred directly to unappropriated profit.
3.20
Gains and losses on disposal of fixed assets are included in income currently, except that the related surplus on revaluation of fixed assets (net of deferred tax) is transferred directly to unappropriated profit.
3.36
Maintenance and repairs are charged to profit and loss account as and when incurred. Major renewals and improvements are capitalised and the assets so replaced, if any, are written off. Gains and losses on disposal of assets, if any, are included in profit and loss account currently.
3.11 3.12
3.8 Intangible assets
Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses. The depreciable amount of intangible asset is amortised on a systematic basis over the estimated useful lives using the straight-line method.
5.12 5.17
5.26(b) 3.9 Investments 16.1
Investments available for sale
These are recognized at fair value. Gains or losses from changes in fair values are taken to equity until disposal at which time these are recycled to profit and loss account.
16.3,16.19
Investments held to maturity
Investments with fixed or determinable payments and fixed maturity, which the Company has the positive intent and ability to hold to maturity, are carried at amortised cost, using the effective interest rate method less impairment losses, if so determined.
16.3 16.11
16.19(ii)
Investments at fair value through profit or loss
Investments which are acquired principally for the purpose of selling in the near term or the investments that are part of a portfolio of financial instruments exhibiting short term profit taking are classified as investments at fair value through profit or loss. These are stated at fair values with any resulting gains or losses recognized directly in the profit and loss account. The fair value of such investments representing listed equity securities are determined on the basis of prevailing market prices.
16.3 16.19(ii)
MSE LIMITED MSE Illustrative Financial NOTES TO THE FINANCIAL STATEMENTS Statements For the year ended December 31, 2008 MSE Para #
The Institute of Chartered Accountants of Pakistan 9
3.10 Impairment of assets
An assessment is made at each balance sheet date to determine whether there is any indication of impairment or reversal of previous impairment, including items of property, plant and equipment, intangible assets and long-term investments. In the event that an asset’s carrying amount exceeds its recoverable amount, the carrying amount is reduced to recoverable amount and an impairment loss is recognised in the income statement. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the recoverable amount, however not to an amount higher than the carrying amount that would have been determined (net of amortisation or depreciation), had no impairment losses been recognised for the asset in prior years. Reversal of impairment loss is restricted to the original cost of the asset.
3.34 16.11-16.17
3.11 Leases
Leases that transfer substantially all the rewards and risks of ownership of assets to the company are accounted for as finance leases. At the inception of a finance lease, the cost of the leased asset is capitalised at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to the income statement. The lessor gives an option to purchase assets at the end of lease term. Sale and leaseback transaction
If a sale and leaseback transaction results in a finance lease, any excess of sales proceeds over the carrying amount is deferred and amortised over the lease term. If a sale and leaseback transaction results in an operating lease and the transaction is established at fair value, a profit or loss is recognised immediately.
4.2 4.4
4.6
4.14, 4.15
3.12 Stores, spares and loose tools
These are valued at the lower of cost and net realisable value except for items in transit, which are valued at invoice price and related expenses incurred upto the balance sheet date. For items which are slow moving and / or identified as surplus to the Company's requirement, a provision is made for excess of book value over estimated realisable value.
3.13 Stock in Trade
Stocks are valued at the lower of cost and net realisable value except for stock in transit which is valued at invoice price and related expenses incurred upto the balance sheet date. The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.
6.1 6.2
Cost is determined as follows:
Raw materials at weighted average cost Work in process at weighted average cost and 6.4 Finished goods applicable manufacturing expenses
Net realisable value signifies the estimated selling price in the ordinary course of business less net of estimated cost of completion and selling expenses.
6.6
MSE LIMITED MSE Illustrative Financial NOTES TO THE FINANCIAL STATEMENTS Statements For the year ended December 31, 2008 MSE Para #
The Institute of Chartered Accountants of Pakistan 10
3.14 Trade and other receivables
Trade and other receivables are stated at estimated realisable value after each debt has been considered individually. Where the payment of a debt becomes doubtful a provision is made and charged to the income statement.
3.15 Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an out flow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation.
8.1
3.16 Dividend
Dividend is recognized as a liability in the period in which it is approved. 1.31(d) 3.17 Cash and cash equivalents
Cash and cash equivalents are carried in the balance sheet at cost. For the purpose of cash flow statement, cash and cash equivalents comprise cash in hand, cash with banks on current, saving and deposit accounts, short term running finance and other short term highly liquid investments that are readily convertible to known amounts of cash and which are subject to insignificant risk of change in value.
2.13 -2.14
3.18 Related party transactions
All transactions involving related parties arising in the normal course of business are conducted at arm's length at normal commercial rates on the same terms and conditions as third party transactions using valuation modes, as admissible, except in extremely rare circumstances where, subject to the approval of the Board of Directors, it is in the interest of the Company to do so.
15.6
3.19 Offsetting
Financial assets and liabilities are offset and the net amount is reported in the balance sheet, if the Company has a legally enforceable right to setoff the recognised amounts and the Company intends to settle either on a net basis or realise the asset and settle the liability simultaneously.
1.10
3.20 Financial instruments
Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument, the particular recognition methods adopted are disclosed in the individual policy statements associated with each item. The Company derecognizes the financial assets and liabilities when it ceases to be a party to such contractual provisions of the instruments. The Company recognises the regular way purchase or sale of financial assets using settlement date accounting.
16.1 16.18
a) Trade and other payables
Liabilities for trade and other payables are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received.
MSE LIMITED MSE Illustrative Financial NOTES TO THE FINANCIAL STATEMENTS Statements For the year ended December 31, 2008 MSE Para #
The Institute of Chartered Accountants of Pakistan 11
b) Trade and other receivables
Trade and other receivables are recognized and carried at original invoice amount / cost less an allowance for any uncollectible amounts.
c) Derivative financial instruments
Any gain or loss from re-measuring the hedging instrument at fair value is recognised in the profit and loss account.
d) Cash and cash equivalents
Cash in hand and at banks are carried at fair value. For the purpose of cash flow statement, Cash and cash equivalents consist of cash in hand, balances in bank and highly liquid short term investments.
MSE LimitedNotes to the Financial StatementsFor the Year Ended December 31, 2008
MSE Illustrative Financial Statements
4. Property, Plant & Equipment
Land & Buildings
VehiclesFurniture & Equipment
CWIP Total
…………………………. Rupees ………………………………….At January 1, 20X7Cost XXX XXX XXX XXX XXXAccumulated depreciation (XXX) (XXX) (XXX) (XXX) (XXX)Net book amount XXX XXX XXX XXX XXX
Year ended December 20X7Opening net book amount XXX XXX XXX XXX XXXAdditions XXX XXX XXX XXX XXXDisposals (XXX) (XXX) (XXX) (XXX) (XXX)Depreciation charge (XXX) (XXX) (XXX) (XXX) (XXX)Exchange rate adjustments XXX XXX XXX XXX XXXClosing net book amount XXX XXX XXX XXX XXX
At December 31, 20X7Cost XXX XXX XXX XXX XXXAccumulated depreciation (XXX) (XXX) (XXX) (XXX) (XXX)Net book amount XXX XXX XXX XXX XXX
Year ended December 20X8Opening net book amount XXX XXX XXX XXX XXXAdditions XXX XXX XXX XXX XXXDisposals (XXX) (XXX) (XXX) (XXX) (XXX)Depreciation charge (XXX) (XXX) (XXX) (XXX) (XXX)Exchange rate adjustments XXX XXX XXX XXX XXXClosing net book amount XXX XXX XXX XXX XXX
At December 31, 20X8Cost XXX XXX XXX XXX XXXAccumulated depreciation (XXX) (XXX) (XXX) (XXX) (XXX)Net book amount XXX XXX XXX XXX XXX
20X8 XXX XXX XXX XXX20X7 XXX XXX XXX XXX
CWIP includes net carrying values at:20X8 XXX XXX XXX XXX
20X7 XXX XXX XXX XXX
The net carrying amount of assets under finance lease included in 'Property and Equipment' was:
The Institute of Chartered Accountants of Pakistan 12
MSE LimitedNotes to the Financial StatementsFor the Year Ended December 31, 2008
MSE Illustrative Financial Statements
Note 20X8 20X7Rs. Rs.
4.1 Depreciation charge has been allocated as follows:
Cost of sales XXX XXX 3.38(e)
General & Administrative Expenses XXX XXX
XXX XXX
5. Intangible assets
Software 5.1 XXX XXXOthers (brands etc) XXX XXX
XXX XXX
Outside purchased software
Internal development
softwareTotal
----------------- Rupees ------------------
Balance as at January 1, 20X8 XXX XXX XXXAcquisition XXX XXX XXXInternal development XXX XXX XXXTransfer (to)/ from held for sale under IFRS 5 XXX XXX XXXSurplus / (deficit) on revaluation of intangibles XXX XXX XXXExchange difference on foreign currency translation XXX XXX XXXBalance as at December 31, 20X8 XXX XXX XXX
Balance as on January 1, 20X7 XXX XXX XXXAcquisition XXX XXX XXXInternal development XXX XXX XXXTransfer (to)/ from held for sale under IFRS 5 XXX XXX XXXSurplus / (deficit) on revaluation of intangibles XXX XXX XXXExchange difference on foreign currency translation XXX XXX XXXBalance as at December 31, 20X7 XXX XXX XXX
Amortisation and Impairment Amortisation Impairment TotalBalance as at January 1, 20X8 XXX XXX XXXAmortisation for the period XXX XXX XXXImpairment loss recognised / (reversed) XXX XXX XXXIncremental amortisation charge to revaluation XXX XXX XXXBalance as at December 31, 20X8 XXX XXX XXX
Balance as at January 1, 20X7 XXX XXX XXXAmortisation for the period XXX XXX XXXImpairment loss recognised / (reversed) XXX XXX XXXIncremental amortisation charge to revaluation XXX XXX XXXBalance as at December 31, 20X7 XXX XXX XXX
Carrying AmountBalance as at January 1, 20X7 XXX XXX XXX
Balance as at December 31, 20X7 XXX XXX XXX
Balance as at December 31, 20X8 XXX XXX XXX
5.1 Cost model / Revaluation model
The Institute of Chartered Accountants of Pakistan 13
MSE LimitedNotes to the Financial StatementsFor the Year Ended December 31, 2008
MSE Illustrative Financial Statements
Note 20X8 20X7Rs. Rs.
5.2 The amortization charge for the year has been allocated as follows:
Cost of sales XXX XXX General & Administrative Expenses XXX XXX
XXX XXX
6. Long-term investments
Listed equity securities, at cost XXX XXX 16.1
Investments available for sale 6.1
Certificates of investment XXX XXX Government of Pakistan Special US Dollar Bonds XXX XXX National Savings Certificates XXX XXX Investment in related parties XXX XXX Investment in listed companies and modarabas XXX XXX Investment in unlisted companies XXX XXX
XXX XXX Investments held to maturity 6.2
Pakistan Investment Bonds (PIBs) XXX XXX Government of Pakistan Sukuk Bonds XXX XXX
Term Finance Certificates XXX XXX Investment in related parties XXX XXX
Other investments XXX XXX(XXX ) (XXX )
XXX XXX Investments in Associate XYZ Company Limited 6.3 XXX XXX
Investments at cost XXX XXX Less: Provision for impairment in value of investment (XXX ) (XXX )
XXX XXX
6.1 Investments available for sale
The Company has placements in certificates of investment of a financial institution for periods ranging from one and a 16.19
half to five years at profit rates ranging from 6% to 15% per annum.
Government of Pakistan Special US Dollar Bonds were issued for a period of three years. Profit was payable on thesebonds at a rate of xxx% above six months' LIBOR. These were fully encashed during the year.
National Saving Certificates were issued for 5 years. Monthly profit was payable on these certificates at the rate of xxx% per annum. These were fully encashed during the year. Investments available for sale include Rs. Nil (2007: Rs. XXX)under lien of financial institutions against long term loans and short term loans.
Note: Market value of listed securities and book value of unlisted securities are also required to be disclosed under Paragraph 2(B)(c) of P-II of 5th Schedule to the Companies Ordinance, 1984.
Less: current portion shown in current assets
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MSE LimitedNotes to the Financial StatementsFor the Year Ended December 31, 2008
MSE Illustrative Financial Statements
6.2 Investments held to maturity
PIBs have been issued for 10 years (2007: 5 to 10 years). Half-yearly profit is payable on these bonds at rates ranging 16.19
from xxx% to xxx% per anum. These include Rs. xxx thousand (2007: Rs.xxx) under lien of a bank. Fair value of these
Investment in TFC represents XXX certificates of Rs XXX each of ABC Commercial Bank Limited. Half yearly profit is payableon these TFCs at the rate of six months' KIBOR + 1.5% per annum. Fair value of the outstanding TFCs as at December 31, 2007 is Rs. XXX .
6.3 Investments in Associate
Note 20X8 20X7Rs. Rs.
7. Long Term Loans and Advances 5th schedule
part II cl 3
Loans and advances, considered good, to:
Executives XXX XXX Other employees XXX XXX Suppliers XXX XXX
Less: Amount due within twelve months, shown under (XXX) (XXX) current loans and advances
XXX XXX
7.1 Reconciliation of carrying amount of loans to executives and other employees:
ExecutivesOther employee
2008
2007
These represent secured loans for house building and vehicle which are repayable within one to ten and one to five years respectively. Mark-up at xx% per annum (2005: xx% per annum) was charged on loans for house building and vehicle during the year.
The maximum amount of advances to executives outstanding at the end of any month during the year was Rs xxx (2007: Rs xxx).
………………… ……..……..Rupees…………………………...…………………………….
xxx
Disbursements Repayments Closing balance as at December 31, 2008
xxx
xxx xxx xxx
xxx
xxx xxx xxx xxx
xxx
xxx
xxx xxx
Opening balance as at January 1, 2008
xxx
xxx
xxx
xxx
xxx
xxx
Investment in Associate represent xxx%(2007:xx) investment in equity of XYZ company Limited (market value as at December 31 2008:xxx ; 2007:xxx)
PIBs as at December 31, 2008 is Rs.xxx thousand (2007: Rs. xxx)
The Institute of Chartered Accountants of Pakistan 15
MSE LimitedNotes to the Financial StatementsFor the Year Ended December 31, 2008
MSE Illustrative Financial Statements
Note 20X8 20X7Rs. Rs.
8. Long Term Deposits and Prepayments
Deposits XXX XXX Prepayments XXX XXX
XXX XXX
9. Stores, Spares and Loose Tools
Stores XXX XXX Spares XXX XXX Provision for slow moving and surplus items (XXX) (XXX) 8.1
XXX XXX Loose tools XXX XXX Items in transit XXX XXX
XXX XXX
10. Stock In Trade 6.6
Raw materials XXX XXX Work in process XXX XXX Finished goods XXX XXX
XXX XXX
11. Trade Receivable
Considered good XXX XXX Considered doubtful XXX XXX Provision for doubtful debts 11.1 (XXX) (XXX) 8.1
XXX XXX
12. Short Term Loans and Advances
Secured and Considered good Current portion of long term loans and advances : Executives XXX XXX Other employees XXX XXX Suppliers XXX XXX
XXX XXX
Considered Doubtful Suppliers XXX XXX
Provision for Doubtful Advances (XXX) (XXX)
XXX XXX
13. Short Term Deposits and Prepayments
Deposits XXX XXX Prepayments XXX XXX
XXX XXX
11.1 The Company has reversed a provision of Rs.-------- (20X7: recognised a provision of Rs.----------) for the doubtful debts
The Institute of Chartered Accountants of Pakistan 16
MSE LimitedNotes to the Financial StatementsFor the Year Ended December 31, 2008
MSE Illustrative Financial Statements
Note 20X8 20X7Rs. Rs.
14. Short Term Investments
Investment at fair value through profit or loss:Investment in related parties XXX XXXInvestment in listed companies and madarbas XXX XXXInvestment in unlisted companies XXX XXX
XXX XXX
Investments available for saleInvestment in related parties XXX XXXInvestment in listed companies and modarbas XXX XXX
XXX XXX
Investments held to maturity Current portion of held to maturity investments XXX XXX Pakistan Investment Bonds XXX XXX Term Finance Certificates XXX XXX Murabaha finance 14.1 XXX XXX Musharika finance 14.1 XXX XXX
XXX XXX
15. Other Receivables
Accrued income on investments and bank deposits XXX XXX Advance tax XXX XXX Sales Tax refund XXX XXX Other receivables – considered good XXX XXX – considered doubtful XXX XXX XXX XXX
Provision for doubtful receivables (XXX) (XXX) 8.1
XXX XXX
16. Cash and Bank Balances
At banks: Deposit accounts Local currency XXX XXX Foreign currency XXX XXX
XXX XXX
Current accounts XXX XXX Local currency XXX XXX Foreign currency XXX XXX
XXX XXX Cash in hand XXX XXX
XXX XXX
14.1 These represent investments under murabaha and musharika basis for working capital. These are secured against hypothecation of stock, demand promissory notes and personal guarantee of the directors. Expected rate of profit ranges between _____% to ____% (2007 : _____% to _____%) per annum.
The Institute of Chartered Accountants of Pakistan 17
MSE LimitedNotes to the Financial StatementsFor the Year Ended December 31, 2008
MSE Illustrative Financial Statements
Note 20X8 20X7Rs. Rs.
17. Share Capital
Authorised Share Capital
This represents XXX (2007: XXX) ordinary shares of Rs 10 each amounting to Rs. XXX.
Issued, Subscribed and Paid Up Capital
xxx shares (2007: xxx) Ordinary shares of Rs.10 each fully paid in cash XXX XXX 1.21(a) (ii)
xxx shares (2007: xxx) Ordinary shares of Rs.10 each issued 17.1 XXX XXX for consideration other than cash
XXX XXX
XXX XXX
17.1 This represent the issuance of shares against the purchase of plant, machinery and other assets.
17.2 Reconciliation of issued, Subscribed and Paid Up Capital
Opening balance XXX XXX 1.21 (a) iv
Issued fully paid bonus shares XXX XXXXXX XXX
18. Capital Reserve Capital gain on sale of building XXX XXX 1.21b
19. Revenue Reserves
General reserve XXX XXX 1.21b
Unappropriated profit XXX XXXXXX XXX
20. Surplus on Revaluation of Fixed Assets
This represents surplus arising on revaluation of freehold land, building on freehold land, plant and machinery both owned and leased carried out in the year 1 2004 . This has been adjusted by surplus realized on disposal of revalued assets and incremental depreciation arising due to revaluation net of deferred tax.
Note 20X8 20X7Rs. Rs.
Surplus on revaluation assets as at 01 January XXX XXX
Surplus arising on revaluation of assets during the period XXX XXX
Surplus relating to incremental depreciation charged on related assets- transferred to inappropriated profit
Net of deferred tax XXX XXXRelated deferred tax liability XXX XXX
xxx shares (2007: xxx) Ordinary shares as fully paid bonus shares of Rs. 10
The Institute of Chartered Accountants of Pakistan 18
MSE LimitedNotes to the Financial StatementsFor the Year Ended December 31, 2008
MSE Illustrative Financial Statements
Note 20X8 20X7Rs. Rs.
Surplus on revaluation of assets as at 31 December XXX XXX
Less : Related deferred tax liability on Balance at the beginning of the year XXX XXX
Transferred to profit and loss account XXX XXX incremental depreciation charged during the year XXX XXX
XXX XXX
21. Long Term Borrowing - Secured
Long term financing - secured 21.1 XXX XXX Long term murabaha - secured 21.2 XXX XXX Loan from Related party XXX XXX
XXX XXX
21.1 Long term financing – secured
Loans from banking companies
i) ABC Bank 21.1.1.1 XXX XXX i) XYZ Bank 21.1.1.2 XXX XXX
XXX XXX Other loans XXX XXX Term Finance Certificates (TFCs) 21.1.2 XXX XXX Government of Pakistan loan 21.1.3 XXX XXX
XXX XXX Less: Current portion shown under current liabilities (XXX) (XXX)
XXX XXX
21.1.1 Terms and conditions of long term finances from banking companies are given below:
Mark-up No of half- Date of finalrate p.a. yearly repayment(%) installments
Outstanding
ABC xxx xx xxx XYZ xxx xx xxx
21.1.1.1 Finance are secured by an equitable mortgage on the assets of the Company and hypothecation of 3.39
all assets including plant, machinery, tools and spares, and all other moveable properties situated at xxxx including stocks and book debts ranking pari passu with each other. These loans have been obtained for the acquisition of plant and machinery.
21.1.1.2 Finance has been obtained to meet the permanent working capital requirements of the Company. Finance is secured by an equitable mortgage on the assets of the Company and hypothecation of all assets including plant, machinery, tools and spares, and all other moveable properties situatedat xxx stocks and book debts ranking pari passu with each other. Finance is secured against lien on Pakistan Investment Bonds
21.1.2 Term Finance Certificates (TFC's) represent private placement with 2 institutional investors 3.39
(2007: 3 institutional investors) for a period of 5 years (2007: periods ranging from 3 to 5 years)The annual rate of profit is State Bank of Pakistan discount rate plus is State Bank of Pakistan
Lender
discount rate plus 1.5% with a floor of 11% and cap of 16%. The balance amount of principal of TFCs at December 31, 2008 is to be repaid in 4 half-yearly installments in arrears. These are secured by an equitable mortgage on the assets of the Company and hypothecation of all assets including plant, machinery, tools and spares, and all other moveable properties situated at xxx including stocks and book debts ranking pari passu with each other.
The Institute of Chartered Accountants of Pakistan 19
MSE LimitedNotes to the Financial StatementsFor the Year Ended December 31, 2008
MSE Illustrative Financial Statements
21.1.3 Government of Pakistan loan – secured
This loan represented the on lent proceeds of credit obtained by the Government of Pakistan from an international agency.
This loan was disbursed in foreign currency and was repayable in local currency. Disbursements 3.39
were determined for repayment in Rupees by translation at the rates of exchange prevailed on the respective dates of disbursement. Interest on loan also include included the Government's exchange risk commission. This loan was secured by a mortgage in favour of the Government of Pakistan over
Note 20X8 20X7Rs. Rs.
21.2 Long term murabaha – secured
Faysal Bank Limited XXX XXX Less: Current portion shown under current liabilities (XXX) (XXX)
XXX XXX
The above murabaha financing carries mark-up at 4.5% p.a. Principal and mark-up are repayable in half yearly installments 3.39
upto May 31, 2010. This is secured by a registered charge on all present and future fixed and current moveable assets of the Company
Note 20X8 20X7Rs. Rs.
22. Liabilities against assets subject to Finance Leases
The present value of lease payments under finance leases are as follows:
Not later than one year XXX XXX 4.9(b)
Later than one year and later than five years XXX XXXXXX XXX
Less: Financial charges allocated to the Future period XXX XXX Net Lease Obligation XXX XXX Less: Current portion shown under current liabilities XXX XXX XXX XXX
23. Deferred Liabilities
Deferred Taxation 23.1 XXX XXX
Employee benefits23.2 XXX XXX
Compensated absences 23.3 XXX XXXXXX XXX
23.1 Deferred Taxation
The balance of deferred tax is in respect of the following major temporary differences:
Accelerated depreciation on property, plant and equipment XXX XXX 11.4
Provision for slow moving / surplus spares (XXX) (XXX) Provision for doubtful debts, other receivables and short term investments (XXX) (XXX)
XXX XXX
Post retirement medical benefits
the Company's fixed assets.
The Institute of Chartered Accountants of Pakistan 20
MSE LimitedNotes to the Financial StatementsFor the Year Ended December 31, 2008
MSE Illustrative Financial Statements
Note 20X8 20X7Rs. Rs.
23.2 Post retirement medical benefits
Movements in the liability recognized in the balance sheet Balance at beginning of the year XXX XXX 17.8
Charge for the year XXX XXX Benefits paid during the year (XXX) (XXX) Net liability at end of the year XXX XXX
Reconciliation of the liability recognized in the balance sheet
Present value of defined benefit obligation XXX XXX Net actuarial gains not recognized XXX XXX Net liability at end of the year XXX XXX
Particulars of charge for the yearXXX XXX
Current service cost XXX XXX Interest cost (XXX) (XXX) Actuarial gains recognized XXX XXX
The latest actuarial valuation was carried out as at June 30, 2008. The rates of discount, medical cost increase andexpected inflation were assumed at XXX% (2007: XXX%), XXX% (2007: XXX%) and XXX% (2007: XXX%) per annum 17.9
respectively.
23.3 Compensated absences 17.3
Present value of defined benefit obligation XXX XXX Charge for the year XXX XXX Liability at end of the year XXX XXX Payable to officers transferred to current liabilities XXX XXX
XXX XXX
24. Trade and Other Payables 1.17
Creditors XXX XXX Accrued liabilities XXX XXX Sales tax payable XXX XXX Murabaha XXX XXX Deposits XXX XXX Retention money XXX XXX Advances from customers XXX XXX Workers' Profit Participation Fund 24.1 XXX XXX Workers' Welfare Fund XXX XXX Unclaimed dividend XXX XXX
Other liabilities XXX XXXXXX XXX
24.1 Workers' Profit Participation Fund
Balance at beginning of the year XXX XXX Interest on funds utilised in Company's business XXX XXX Allocation for the year XXX XXX Payment to the fund during the year (XXX) (XXX)
XXX XXX
The Institute of Chartered Accountants of Pakistan 21
MSE LimitedNotes to the Financial StatementsFor the Year Ended December 31, 2008
MSE Illustrative Financial Statements
Note 20X8 20X7Rs. Rs.
25. Interest and Mark-Up Accrued
On long term financing XXX XXX On murabaha financing XXX XXX On short term borrowings XXX XXX
XXX XXX
26. Short Term Borrowings – Secured
From banking companies
Short term loan -secured 26.1 XXX XXX Short term import credit XXX XXX Short term running finance 26.2 XXX XXX
XXX XXX
26.1 Short term loan -secured
This represents short term loan facility available from a bank by partial conversion of Running Finance line amounting to Rs. XXX 3.39
(2007: Rs xxx). This is secured by first pari passu charge on the current assets of the Company. This facility carries mark-upat the rate of Rs. xxx (2007: Rs.xxx) per Rs. 1,000 per day.
26.2 Short term running finances -secured
Short term running finance facilities available from various banks under mark-up arrangements amounting to Rs. xxx which represent the aggregate of sale prices of all mark-up agreements between the Company and the banks.
These facilities are secured by hypothecation of present and future current assets and fixed assets of the Company 3.39
ranking pari passu in all respects with the first charge holders. The rates of mark-up range from one month xxx% p.a. to three months 'xxx% p.a. (2007: one month xxx% p.a. to three months' xxx% p.a.).
Note 20X8 20X7Rs. Rs.
27. Current portion of Long term Liabilities
Long term financing - secured 21.1 XXX XXX Long term murabaha - secured 21.2 XXX XXX Lliabilities against assets subject to Finance Leases 22 XXX XXX
XXX XXX
28. Contingencies and Commitments
a) Contingencies
i) Guarantees issued by banks on behalf of the Company. XXX XXX 8.25
8.26
ii) Disputed demands for Income tax decided XXX XXX in favour of the Company by the Income Tax Appellate authorities, are currently in appeal by the department. The Company is confident that there are reasonable grounds for a favorable decision.
iii) Income tax demands, not acknowledged as debt, have been XXX XXX challenged by the Company and are currently in appeal; the Company expects favourable outcome of appeal.
The Institute of Chartered Accountants of Pakistan 22
MSE LimitedNotes to the Financial StatementsFor the Year Ended December 31, 2008
MSE Illustrative Financial Statements
Note 20X8 20X7Rs. Rs.
iv) Claims against the Company and / or potential exposure XXX XXX not acknowledged as debt.
b) Commitments in respect of:
i) Capital expenditure XXX XXX
ii) Rentals under lease agreements: XXX XXX
Premises - not later than one year XXX XXX - later than one year and not later than five years
2010 XXX XXX 4.9
2011 XXX XXX2012 XXX XXX2013 XXX XXX2014 XXX XXX
- later than five years XXX XXX
Vehicles - not later than one year - later than one year and not later than five years
2010 XXX XXX 4.9
2011 XXX XXX2012 XXX XXX2013 XXX XXX2014 XXX XXX
- later than five years XXX XXXXXX XXX
29. Revenue
Revenue include Rs xxxx million (2007: Rs xxxx) in respect of sale of purchased of goods and are exclusive of commission, trade 9.11b(i)
allowances and sales tax of Rs xxxx and Rs xxxx respectively (2007: Rs xxxx and Rs xxxx).
30. Cost of Sales
Raw materials consumed XXX XXX 1.27,6.6d
Fuel and power XXX XXX Stores and supplies XXX XXX 3.2
Salaries, wages and benefits 30.1 XXX XXX1.27, 17.1- 17.3, 17.7
Rent, rates and taxes XXX XXX Insurance XXX XXX Travel and conveyance XXX XXX Repairs and maintenance XXX XXX 3.11
(includes stores and spares consumed of Rs.xxx thousand; 2005: Rs xxx thousand) Amortization of intangible assets XXX XXX 1.27, 5.17
Depreciation XXX XXX 3.26
Communication, establishment and other expenses XXX XXX Provision for doubtful trade debts XXX XXX Provision for obsolete and slow moving inventory XXX XXX Provision / (reversal of provision) for doubtful advances XXX XXX Opening stock - work in process XXX XXX 6.6d
Closing stock - work in process XXX XXX Cost of goods manufactured XXX XXX
The Institute of Chartered Accountants of Pakistan 23
MSE LimitedNotes to the Financial StatementsFor the Year Ended December 31, 2008
MSE Illustrative Financial Statements
Note 20X8 20X7Rs. Rs.
Opening stock of Finished goods XXX XXX Closing stock of Finished goods XXX XXX
XXX XXX
30.1 Inclusive of provision for gratuity Rs.-------------- (20X7---------) 17.8
31. General and Administration Expenses
Salaries, wages and benefits 31.1 XXX XXX1.27, 17.1-
17.3, 17.7
Travelling and transportation XXX XXX Repairs and maintenance XXX XXX 3.11
Rent and taxes XXX XXX Communication XXX XXX Utilities XXX XXX Training XXX XXX Legal services XXX XXX Contract services XXX XXX Auditors' remuneration 31.2 XXX XXX Advertising XXX XXX Insurance XXX XXX Donations XXX XXX Depreciation XXX XXX 1.27, 5.17
Amortisation of Intangible assets XXX XXX Travel and conveyance XXX XXX Sale promotion and advertising XXX XXX Warehousing expenses XXX XXX Other expenses XXX XXX
XXX XXX
31.1 These include amount in respect of provision for gratuity of Rs XXX (2007: Rs XXX ). 17.8
31.2 Auditors' remuneration:
Annual audit fee XXX XXX Out of pocket expenses XXX XXX
XXX XXX
32. Finance costs
Interest on bank loan and overdraft XXX XXX Interest on finance leases XXX XXX 4.6
Mark up on short term borrowings XXX XXX Exchange loss XXX XXX 13.3, 13.5
Interest on Workers' Profit Participation Fund XXX XXX Bank charges XXX XXX
XXX XXX
The Institute of Chartered Accountants of Pakistan 24
MSE LimitedNotes to the Financial StatementsFor the Year Ended December 31, 2008
MSE Illustrative Financial Statements
Note 20X8 20X7Rs. Rs.
33. Other Income
Income from financial assets Income on loans, deposits and investments XXX XXX 9.11(b)
Income on tax-exempt investments XXX XXX 9.11(b)
(Loss) / gain on re-measurement of investments XXX XXX 16.9, 16.10
at fair value through profit or loss Gain on sale of NIT units XXX XXX Exchange gain on financial instruments XXX XXX
XXX XXX Dividend Income XXX XXX 9.11(b)
Income from non-financial assets Gain on sale of property, plant and equipment XXX XXX 3.36
Other income Old liabilities written back XXX XXX Scrap sales XXX XXX Others XXX XXX
XXX XXX
34. Taxation
Provision for taxation - current year XXX XXX 11.14
- prior year XXX XXX
Deferred (XXX) (XXX) Overprovision in prior years (XXX) (XXX)
XXX XXX
35. Related party transactions
The Company had the following transactions with related parties:
Goods sold to related companies XXX XXX 15.4(a)
Goods purchased from related companies XXX XXX 15.4(a)
XXX XXX
The amounts due to related parties are unsecured, interest-free and have no fixed terms of repayment. 15.4(b)(i)
36. Cash Generated From Operations
Net profit before taxation XXX XXX Adjustments for:
Depreciation XXX XXX Amortisation of goodwill and intangible asset XXX XXX Provision for slow moving and surplus spares (XXX) (XXX) Provision / (reversal of provision) for doubtful advances XXX (XXX) Finance cost XXX XXX Income on loans, deposits and investments (XXX) (XXX) Gain on sale of property, plant and equipment (XXX) (XXX) Property, plant and equipment written off XXX XXX Provision for gratuity XXX XXX Provision for pension XXX XXX Exchange (gain) / loss (XXX) XXX Loss / (gain) on remeasurement of XXX (XXX) investment at fair value through profit or loss Old liabilities written back (XXX) (XXX)
XXX XXXXXX XXX
The Institute of Chartered Accountants of Pakistan 25
MSE LimitedNotes to the Financial StatementsFor the Year Ended December 31, 2008
MSE Illustrative Financial Statements
Note 20X8 20X7Rs. Rs.
Changes in working capital (Increase) / decrease in current assets: Stores and spares (XXX) (XXX) Stock in trade (XXX) XXX Trade debts XXX XXX Loans and advances XXX (XXX) Deposits and prepayments (XXX) (XXX) Other receivables XXX XXX Increase in current liabilities: XXX XXX Trade and other payables XXX XXX
XXX XXX
Changes in long term loans and advances XXX XXX Changes in long term deposits and prepayments XXX XXX
XXX XXX
37. Cash and Cash Equivalents
Cash and bank balances XXX XXX 2.10
Short term highly liquid investments XXX XXX 2.14
XXX XXX
38. Corresponding Figures
38.1 The comparative figures have been rearranged and/or reclassified, wherever necessary, for the purpose of 1.11
comparison in the financial statements. Major changes in the financial statements are as follows:
38.2 Traveling and conveyance amounting to Rs. xxx which were previously included in Others have now been
39. General
39.1 Figures have been rounded to the nearest thousand of rupees, unless otherwise stated.
39.2 The Board of Directors proposed final dividend at the rate of Rs xxx per share in their meeting 1.31 (d)
held on xxx
39.3 These financial statements were authorized for issue by the Board of Directors in their meeting held on xxx.
____________________ ____________________Chairman Chief Executive Director
____________________
reclassified and included as a separate line.
The Institute of Chartered Accountants of Pakistan 26