sse illustrative financial statements

8/8/2019 SSE Illustrative Financial Statements

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SMALL-SIZED ENTITIES

ILLUSTRATIVE FINANCIAL STATEMENTS

September 2009

of Pakistan

The Institute of

Chartered Accountants


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Introduction i

Balance Sheet 1

Income Statement 2

Cash Flow Statement 3

Notes to the Financial Statements 4

1 Status and Nature of Business

2 Statement of Compliance

3 Summary of Significant Accounting Policies

3.1 Basis of Preparation 4

3.2 Reserve 4

3.3 Borrowing Costs 5

3.4 Foreign Exchange 5

3.5 Staff Retirement Benefits 53.6 Taxation 5

3.7 Property, Plant and Equipment 5

3.8 Intangible Assets 6

3.9 Investments 6

3.10 Impairment of Assets 6

3.11 Stores, Spares and Loose Tools 7

3.12 Stock in Trade 7

3.13 Trade and other receivables 7

3.14 Provisions 7

3.15 Dividend 7

3.16 Cash and Cash Equivalents 7

4 Property, Plant & Equipment 8

5 Intangible Asset 8

6 Long-term Investment 9

7 Long-term Loans and Advances 10

8 Stores, Spares and Loose Tools 10

9 Stock in Trade 10

10 Trade Debts 10

11 Short Term Investments 10

12 Other Receivables 11

13 Cash & Bank Balance 11

14 Share Capital 11

15 Revenue Reserve 11

16 Long Term Borrowing-Secured 12

17 Deferred Liabilities 12

18 Trade and Other Payables 13

19 Short Term Borrowings - Secured 13

20 Current Portion of Long term Liabilities 14

21 Contingencies and Commitments 14

22 Revenue 14

23 Cost of Sales 14

24 General and Administration Expenses 15

25 Finance Costs 15

26 Other Income 15

27 Taxation 15

28 Cash Generated from Operations 16

29 Cash and Cash Equivalent 16

30 Related Party Transactions 16

31 Corresponding Figures 16

32 General 16

INDEX Page No.


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i

INTRODUCTION AND EXPLANATORY COMMENTS

This illustrative set of financial statements seeks to provide guidance to the reporting entities andtheir auditors with regard to the disclosures to be made in the financial statements prepared inaccordance with the Accounting and Financial Reporting Standards for Small Sized Entities(SSEs) as defined in the Institutes circular No. 06/2007 dated November 02, 2007 and therequirements of the Companies Ordinance, 1984.

The illustrative is merely a technical practice aid and in no way represents the authoritativepronouncements of the Institute. It does not aim at interpreting the statutory disclosurerequirements set out in the Fifth Schedule and the SSE Standard of ICAP.

This illustrative seeks to represent minimum requirements and does not purport to be all inclusiveand would need review in the light of changes in statutory requirements and accountingstandards from time to time. Users may need to modify the financial statements when furtheraccounting 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 entitys financial statements are the responsibility of theentitys management. Alternative presentations to those proposed in this illustrative may be

equally acceptable if they comply with the specific disclosure requirements prescribed in theaccounting standards for SSEs.

Use of the illustrative requires the exercise of individual professional judgment and may requiresome modification based on the circumstances of individual reporting entities.

Each disclosure requirement listed in the illustrative, wherever applicable, is denoted by relevantreference of the Accounting and Financial Reporting Standards for Small Sized Entities (SSEs).


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SME illustrative Financial Statements

SSE LIMITED

BALANCE SHEET

As at December 31, 20X8

Note 20X8 20X7 SSE Para #

Rs. Rs.

Non-current assets 29, 30

Property, plant and equipment 4 XXX XXX 32aIntangible assets 5 XXX XXX 32b

Long-term investments 6 XXX XXX 32c

Long Term Loans and Advances 7 XXX XXX 33

Long term Deposits and prepayments XXX XXX 33

XXX XXX

Current assets 29, 30

Store , Spare & Loose tools 8 XXX XXX 32d

Stock in Trade 9 XXX XXX 32d

Trade Receivables 10 XXX XXX 32e

Short Term Loans and Advances XXX XXX 33

Short Term Deposits and Prepayments XXX XXX 33

Short term investment 11 XXX XXX 33

Other Receivables 12 XXX XXX 33

Cash and bank balances 13 XXX XXX 32fXXX XXX

Share Capital & Reserves

Authorised: xxxx ordinary shares of Rs.10 each XXX XXX

Issued, subscribed & paid up capital 14 XXX XXX 32k

Reserves 15 XXX XXX 32k

(XXX) (XXX)

Non-current liabilities 29, 31

Long term Borrowing - Secured 16 (XXX) (XXX) 32j

Deferred Liabilities 17 (XXX) (XXX) 29

(XXX) (XXX)

Current liabilities 29, 31

Trade and other payables 18 (XXX) (XXX) 32gIncome tax payable (XXX) (XXX) 32h

Due to related parties (XXX) (XXX) 33

Interest and Markup Accrued (XXX) (XXX) 29,33

Short term Borrowing - Secured 19 (XXX) (XXX) 29,33

Current portion of long term liabilities 20 (XXX) (XXX)

(XXX) (XXX)

Contingencies & Commitments 21XXX XXX

The annexed notes 1 to 32 from an integral part of these financial statements.

____________________ ____________________ ________________

Chairman Chief Executive Director

The Institute of Chartered Accountants of Pakistan 1


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SME Illustrative Financial Statements

SSE LIMITED

INCOME STATEMENT

For the year ended December 31, 20X8

Note 20X8 20X7 SSE Para #

Rs. Rs. 23(b)

Revenue 22 XXX XXX 35(a)

Cost of sales 23 (XXX) (XXX)

Gross Profit XXX XXX

General and Administrative Expenses 24 (XXX) (XXX)

Other operating expenses (XXX) (XXX)

Profit /Loss from Operating Activities XXX XXX 35(b)

Finance costs 25 (XXX) (XXX) 35( c)

XXX XXX

Other income 26 XXX XXX

Profit before tax XXX XXX

Taxation 27 (XXX) (XXX) 35(d)

Profit after tax XXX XXX 35(e)

The annexed notes 1 to 32 form an integral part of these financial statements.

____________________ ____________________ ____________________


Institute of Chartered Accountants of Pakistan 2


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SSE LIMITED

CASH FLOW STATEMENT (Optional)

For the year ended December 31, 20X8

Note 20X8 20X7 SSE Para#

Rs. Rs.

24

CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from operations 28 XXX XXX

Finance cost paid (XXX) (XXX)

Income tax paid (XXX) (XXX)

Gratuity paid (XXX) (XXX)

Net cash from operating activities XXX XXX

CASH FLOWS FROM INVESTING ACTIVITIES

Fixed capital expenditure (XXX) (XXX)

Proceeds from sale of property, plant and equipment XXX XXX

Interest received XXX XXX

(Increase) /Decrease in Investment XXX XXX

Dividend received XXX XXXNet cash generated from investing activities XXX XXX

CASH FLOWS FROM FINANCING ACTIVITIES

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)

Net 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

Cash and cash equivalents at end of the year 29 XXX XXX

The annexed notes 1 to 32 form an integral part of these financial statements.

____________________ __ ____________ ______________


Institute of Chartered Accountants of Pakistan 3


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SSE LIMITED SSE Illustrative FinancialNOTES TO THE FINANCIAL STATEMENTS StatementsFor the year ended December 31, 2008 .

SSE Para No


1. STATUS AND NATURE OF BUSINESS

SSE Limited is a company incorporated in Pakistan under the Companies Ordinance

1984. The companys registered office is located at xxx Pakistan. The principal activityof the company is xxxx. The company has adopted a Registered trade name xxx forits business. The Company is a subsidiary of ABC Ltd (the holding company) withshareholding of xxx%.

27, 28

2. STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with the Accountingand Financial reporting standards for Small Sized Entities as applicable in Pakistanand the requirements of the Companies Ordinance, 1984. In case requirements differ,the provisions or directives of the Companies Ordinance, 1984 shall prevail.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1 Basis of preparation

These financial statements have been prepared under the historical cost conventionexcept as other wise stated in the respective policies and notes given hereunder.

Significant Accounting Estimates and Judgments

The preparation of financial statements in conformity with the Accounting andFinancial Reporting Standards for Small-Sized Entities issued by the Institute ofChartered Accountants of Pakistan requires management to make judgments,estimates and assumptions that affect the application of policies and reportedamounts of assets and liabilities, income and expenses. The estimates and

associated assumptions are based on historical experience and various other factorsthat are believed to be reasonable under the circumstances, the results of which formthe basis of making the judgments about carrying values of assets and liabilities thatare not readily apparent from other sources. Actual results may differ from theseestimates.

25, 26

The estimates and underlying assumptions are reviewed on an ongoing basis.Revisions to accounting estimates are recognised in the period in which the estimatesare revised.

Significant areas requiring the use of management estimates in these financialstatements relate to the useful life of depreciable assets, provision for doubtful

receivables and slow moving inventory. However, assumptions and judgments madeby management in the application of accounting policies that have significant effect onthe financial statements are not expected to result in material adjustment to thecarrying amounts of assets and liabilities in the next year.

3.2 Revenue

Revenue is recognised when it is probable that the economic benefits associated withthe transaction will flow to the company and the amount of revenue and theassociated cost incurred or to be incurred can be measured reliably, on the followingbases:

46


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SSE Para No


(i) sale of goods is recognised when the goods are delivered and the risks and

rewards of ownership have passed to the customer;47

(ii) interest income is recognised on a time proportion basis taking into accountthe principal outstanding and the interest applicable; and

(iii) dividend income is recognised when the shareholders right to receivepayment is established.

3.3 Borrowing costs

Borrowing costs are recognised as an expense in the period in which these areincurred except to the extent of borrowing cost that is directly attributable to theacquisition, construction or production of a qualifying asset. Such borrowing costs, ifany are capitalized as part of the cost of the asset.

3.4 Foreign exchange

Foreign currency transactions are recognised at the exchange rate applicable at thetransaction date. Monetary assets and liabilities are translated into rupees usingexchange rates applicable at the balance sheet date. Gains and losses onsettlement and translation at the year end are recognised in the income statement.

3.5 Staff Retirement benefits

Gratuity Scheme

The company operates a funded/ unfunded gratuity scheme for its employees whohave completed the qualifying period as defined under the respective scheme.

The amount of liability of each employee at year end is computed by number ofyears completed multiplied by the last drawn monthly gross salary. The differencebetween the current and the previous liability is charged to profit and loss accountas expense for the year.

ORThe entity operates a funded/ unfunded gratuity scheme for its employees who havecompleted the qualifying period as defined under the respective scheme. Thecharge for the year is based on actuarial valuation conducted on December 31,20XX using the Projected Unit Credit Method.

The amount recognized in the balances sheet represents the present value ofdefined benefit obligation as adjusted for unrecognized actuarial gains and losses.

3.6 Taxation

Income tax expense represents current tax expense. Provision for current taxationis based on taxable income at the current rates of taxation after taking into accounttax credits and tax rebates, if any.

Deferred tax where applicable is accounted for using the liability method.

3.7 Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation andaccumulated impairment losses except freehold land and capital work in progress,

36, 38


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which are stated at cost. Cost comprises acquisition and other directly attributablecosts.

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 additionsto property, plant and equipment is charged from the month in which an item is putto use while no depreciation is charged for the month in which the item isderecognized /disposed off.

37

Gains and losses on disposal of fixed assets are included in income currently.

Maintenance and repairs are charged to profit and loss account as and whenincurred. Major renewals and improvements are capitalised and the assets soreplaced, if any, are written off. Gains and losses on disposal of assets, if any, areincluded in profit and loss account currently.

3.8 Intangible assets

Intangible assets are stated at cost less accumulated amortisation and accumulatedimpairment losses and are amortised on a systematic basis over their estimateduseful lives using the straight-line method.

3.9 Investments

Investments available for sale

These are recorded at fair value. Gains or losses from changes in fair values aretaken to equity until disposal at which time these are written off to profit and lossaccount.

Investments held to maturity

Investments with fixed or determinable payments and fixed maturity, which theCompany has the positive intent and ability to hold to maturity, are carried atamortised cost, using the effective interest rate method less impairment losses, if sodetermined.

Investments at fair value through profit or loss

Investments which are acquired principally for the purpose of selling in the nearterm or the investments that are part of a portfolio of financial instruments exhibitingshort 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 recognizeddirectly in the profit and loss account. The fair value of such investmentsrepresenting listed equity securities is determined on the basis of prevailing marketprices.

3.10 Impairment of assets 38

An assessment is made at each balance sheet date to determine whether there isany indication of impairment or reversal of previous impairment, including items ofproperty, plant and equipment, intangible assets and long-term investments. In theevent that an assets carrying amount exceeds its recoverable amount, the carryingamount is reduced to recoverable amount and an impairment loss is recognised in


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SSE Para No


the income statement. A previously recognised impairment loss is reversed only ifthere has been a change in the estimates used to determine the recoverableamount, however not to an amount higher than the carrying amount that would havebeen determined (net of amortisation or depreciation), had no impairment losses

been recognised for the asset in prior years. Reversal of impairment loss isrestricted to the original cost of the asset.

3.11 Stores, spares and loose tools

These are valued at the lower of cost and net realisable value 43

3.12 Stock in Trade

Stocks are valued at the lower of cost and net realisable value except for stock intransit which is valued at invoice price and related expenses incurred upto thebalance sheet date. Cost includes applicable purchase cost and manufacturing

expenses. Cost is determined using weighted average/FIFO cost method.

43, 44

Net realisable value signifies the estimated selling price in the ordinary course ofbusiness less net of estimated cost of completion and selling expenses.

3.13 Trade and other receivables

Trade and other receivables are stated at estimated realisable value after each debthas been considered individually. Where the payment of a debt becomes doubtful aprovision is made and charged to the income statement.

49

3.14 Provisions

Provisions are recognised when the Company has a present legal or constructiveobligation as a result of past events, it is probable that an out flow of resourcesembodying economic benefits will be required to settle the obligation and a reliableestimate can be made of the amount of obligation.

49

3.15 Dividend

Dividend liability is recognized in the period in which it is approved.

3.16 Cash and cash equivalents

Cash and cash equivalents are carried in the balance sheet at cost. For the purposeof cash flow statement, cash and cash equivalents comprise cash in hand, cash

with banks on current, saving and deposit accounts and short term running finance


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SSE Limited

Notes to the Financial Statements

For the Year Ended December 31, 2008


4. Property, Plant & Equipment

Land &

BuildingsVehicles

Furniture &

EquipmentCWIP Total

Depreciation

rates

At January 1, 20X7

Cost XXX XXX XXX XXX XXXAccumulated depreciation (XXX) (XXX) (XXX) (XXX) (XXX)

Net book amount XXX XXX XXX XXX XXX

Year ended December 20X7

Opening net book amount XXX XXX XXX XXX XXX

Additions XXX XXX XXX XXX XXX

Disposals (XXX) (XXX) (XXX) (XXX) (XXX)

Depreciation charge (XXX) (XXX) (XXX) (XXX) (XXX)

Exchange rate adjustments XXX XXX XXX XXX XXX

Closing net book amount XXX XXX XXX XXX XXX

At December 31, 20X7

Cost XXX XXX XXX XXX XXX

Accumulated depreciation (XXX) (XXX) (XXX) (XXX) (XXX)

Net book amount

Year ended December 20X8

Opening net book amount XXX XXX XXX XXX XXX

Additions XXX XXX XXX XXX XXX

Disposals (XXX) (XXX) (XXX) (XXX) (XXX)

Depreciation charge (XXX) (XXX) (XXX) (XXX) (XXX)

Exchange rate adjustments XXX XXX XXX XXX XXX

Closing net book amount XXX XXX XXX XXX XXX

At December 31, 20X8

Cost XXX XXX XXX XXX XXX

Accumulated depreciation (XXX) (XXX) (XXX) (XXX) (XXX)

Net book amount XXX XXX XXX XXX XXX

CWIP includes net carrying values at:

20X8 XXX XXX XXX XXX XXX

20X7 XXX XXX XXX XXX XXX

Note 20X8 20X7

4.1 Depreciation charge has been allocated as follows:

Cost of sales XXX XXX

General & Administrative Expenses XXX XXX

XXX XXX

5. Intangible assets

Software 5.1 XXX XXX

Others (brands etc) XXX XXX

XXX XXX



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SSE Limited




5.1 Cost model / Revaluation model

Outside

purchased

software

Internal

development

software

Total

Balance as at January 1, 20X8 XXX XXX XXX

Acquisition XXX XXX XXX

Internal development XXX XXX XXX

Exchange difference on foreign currency translation XXX XXX XXX

Balance as at December 31, 20X8 XXX XXX XXX

Balance as on January 1, 20X7 XXX XXX XXX

Acquisition XXX XXX XXX

Internal development XXX XXX XXX

Exchange difference on foreign currency translation XXX XXX XXX


Amortisation and Impairment Amortisation Impairment Total


Amortisation for the period XXX XXX XXX

Impairment loss recognised / (reversed) XXX XXX XXX



Amortisation for the period XXX XXX XXXImpairment loss recognised / (reversed) XXX XXX XXX


Carrying Amount




Note 20X8 20X7

Rs. 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

Note 20X8 20X7

Rs. Rs.

6. Long-term investments


National Savings Certificates 6.1 XXX XXX


Term Finance Certificates 6.2 XXX XXX

(XXX ) (XXX )

XXX XXXXXX XXX

6.1 Investments available for sale

National Saving Certificates were issued for 5 years. Monthly profit accrues on these certificates at the rate of xx% per

annum. These were fully encashed during the year. Investments available for sale include Rs. xxx (2007: Rs. XXX ) under lien

of financial institutions against long term loans and short term loans.

Less: current portion shown in current assets



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SSE Limited




6.2 Investments held to maturity

Investment in TFC represents XXX certificates of Rs XXX each of ABC Commercial Bank Limited. Half yearly profit accrues

on these TFCs at the rate of six months' KIBOR + xx% per annum. Fair value of the TFCs as at December 31, 2008 is

Rs. XXX.

Note 20X8 20X7

Rs. Rs.

7. Long Term Loans and Advances

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

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 (2007: 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).

Note 20X8 20X7

Rs. Rs.

8. Stores, Spares and Loose Tools

Stores XXX XXX

Spares XXX XXX

Provision for slow moving and surplus items (XXX) (XXX)

XXX XXX

Loose tools XXX XXX

Items in transit XXX XXX

XXX XXX

9. Stock In Trade

Raw materials XXX XXX

Work in process XXX XXX

Finished goods XXX XXX

XXX XXX

10. Trade Debts

Considered good XXX XXX

Considered doubtful XXX XXX

Provision for doubtful debts (XXX) (XXX)

XXX XXX

11. Short Term Investments


National Savings Certificates XXX XXX


Term Finance Certificates XXX XXX

XXX XXX



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SSE Limited




Note 20X8 20X7

Rs. Rs.

12. Other Receivables

Accrued income on investments and bank deposits XXX XXX

Advance tax XXX XXX

Sales tax refundable XXX XXX

Other receivables considered good XXX XXX considered doubtful XXX XXX

XXX XXX

Provision for doubtful receivables (XXX) (XXX)

XXX XXX

13. Cash and Bank Balances

Cash at banks:

Deposit accounts XXX XXX

Current accounts XXX XXX

XXX XXX

Cash in hand XXX XXX

XXX XXX

14. Share Capital

Authorised Share Capital

This represents XXX (2007: XXX) ordinary shares of Rs 10 each.

Issued, Subscribed and Paid Up Capital

xxx shares (2007: xxx) Ordinary shares of Rs.10 each fully paid in cash XXX XXX

xxx shares (2007: xxx) Ordinary shares of Rs.10 each issued 14.1 XXX XXX

for consideration other than cash

XXX XXX

XXX XXX

14.1 This represent the issuance of shares against the purchase of plant, machinery and other assets.

14.2 Reconciliation of issued, Subscribed and Paid Up Capital

Opening balance XXX XXX

Issued fully paid bonus shares XXX XXX

XXX XXX

15. Revenue Reserves

General reserve XXX XXX

Unappropriated profit XXX XXX

XXX XXX

16. Long Term Borrowing - Secured

Long term financing - secured 16.1 XXX XXX

Long term murabaha - secured 16.2 XXX XXX

Loan from related party 16.3 XXX XXX

XXX XXX

xxx shares (2007: xxx) Ordinary shares as fully paid bonus shares of



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SSE Limited




Note 20X8 20X7

Rs. Rs.

16.1 Long term financing secured

Loans from banking companies

i) ABC Bank 16.1.1 XXX XXX

ii) XYZ Bank 16.1.2 XXX XXXXXX XXX

Other loans XXX XXX

XXX XXX

Less: Current Portion shown under current liabilities (XXX) (XXX)

XXX XXX

16.1.1 Finance 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 xxxx

including stocks and book debts ranking pari passu with each other. These loans have been obtained for

the acquisition of plant and machinery.

16.1.2 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 situated at xxx stocks

and book debts ranking pari passu with each other.

16.1.3 Terms and conditions of long term finances are given below:

Mark-up No of half- Date of final

rate p.a. yearly repayment

(%) installments

Outstanding

ABC xxx xxx xxx

XYZ xxx xxx xxx

16.2 Long term murabaha secured

Faysal Bank Limited 19.2.1 XXX XXX

Less: Current portion shown under current liabilities (XXX) (XXX)

XXX XXX

16.2.1 The above murabaha financing carries mark-up at xx% p.a. Principal and mark-up are repayable in half

yearly instalments. This is secured by a registered charge on all present and future fixed and current

moveable assets of the Company

16.3 The Company has obtained a loan from XYZ Ltd company. The loan is repayable in 10 equal installment

payable semiannually.

Note 20X8 20X7

Rs. Rs.

17. Deferred Liabilities

Gratuity Payable 17.1 XXX XXX

XXX XXX

17.1 Gratuity Payable

Movements in the liability recognized in the balance sheet

Balance at beginning of the year XXX XXX

Charge for the year XXX XXX

Benefits paid during the year (XXX) (XXX)

Net liability at end of the year XXX XXX

Lender



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SSE Limited




Note 20X8 20X7

Rs. Rs.

18. Trade and Other Payables

Creditors XXX XXX

Accrued liabilities XXX XXX

Sales tax payable XXX XXX

Murabaha XXX XXXDeposits XXX XXX

Advances from customers XXX XXX

Workers' Profit Participation Fund 18.1 XXX XXX

Workers' Welfare Fund XXX XXX

Other liabilities XXX XXX

XXX XXX

18.1 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

19. Short Term Borrowings Secured

From banking companies

Short term loan -secured 19.1 XXX XXX

Short term import credit XXX XXX

Short term running finance 19.2 XXX XXX

XXX XXX

19.1 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 (2007: Rs xxx). This is secured by first pari passu charge on the current assets of

the Company. This facility carries mark-up at the rate of Rs.xxx (2007: Rs.xxx) per Rs. 1,000 per day.

19.2 Short term running finances - secured

Short term running finance facilities available from various banks under mark-up arrangements amounting toRs.xxx (2007 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 ranking pari passu in all respects with the first charge holders. The rates of mark-up range from

one month to xxx p.a. to xxx p.a (2007: xxx p.a to xxx p.a )

Note 20X8 20X7

Rs. Rs.

20. Current portion of Long term Liabilities

Long term financing - secured 16 XXX XXX

Long term murabaha - secured 16 XXX XXX

Loan from Related party 16 XXX XXX

Liabilities against assets subject to Finance Leases XXX XXXXXX XXX



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SSE Limited




Note 20X8 20X7

Rs. Rs.

21. Contingencies and Commitments

a) Contingencies

i) Guarantees issued by banks on behalf of the Company. XXX XXX

ii) Disputed demands for Income tax decided in favour of the XXX XXXCompany 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.

b) Commitments in respect of:

i) Capital expenditure XXX XXX

ii) Rentals under lease agreements: XXX XXX

Vehicles - not later than one year XXX XXX

- later than one year and not later than five years2008 XXX XXX

2009 XXX XXX

2010 XXX XXX

2011 XXX XXX

2012 XXX XXX

- later than five years XXX XXX

XXX XXX

22. Revenue

Revenue include Rs xxxx million (2007: Rs xxxx) in respect of sale of goods inclusive of commission but exclusive of trade

allowances and sales tax of Rs xxxx and Rs xxxx respectively (2007: Rs xxxx and Rs xxxx).

23. Cost of Sales

Raw materials consumed XXX XXX

Fuel and power XXX XXX

Stores and supplies XXX XXXSalaries, wages and benefits 23.1 XXX XXX

Rent, rates and taxes XXX XXX

Lease rentals

Insurance XXX XXX

Travel and conveyance XXX XXX

Repairs and maintenance XXX XXX

(includes stores and spares consumed of Rs.xxx; 2005: Rs xxx)

Note 20X8 20X7

Rs. Rs.

Amortization of intangible assets XXX XXX

Depreciation XXX XXX

Communication, establishment and other expenses XXX XXX

Provision for doubtful trade debts XXX XXX

Provision for obsolete and slow moving inventory XXX XXXProvision / (reversal of provision) for doubtful advances XXX XXX

Opening stock - work in process XXX XXX

Closing stock - work in process XXX XXX

Cost of goods manufactured XXX XXX

Opening stock of Finished goods XXX XXX

Closing stock of Finished goods XXX XXX

XXX XXX

23.1 Inclusive provision for gratuity Rs.XXX (2007:XXX)



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SSE Limited




Note 20X8 20X7

Rs. Rs.

24. General and Administration Expenses

Salaries, wages and benefits 24.1 XXX XXX

Travelling and transportation XXX XXX

Repairs and maintenance XXX XXX

Rent and taxes XXX XXXLease rentals XXX XXX

Communication XXX XXX

Utilities XXX XXX

Legal services XXX XXX

Auditors' remuneration 24.2 XXX XXX

Insurance XXX XXX

Depreciation XXX XXX

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

24.1 These include amount in respect of employee retirement benefits of Rs XXX (2007: Rs XXX ).

25. Finance costs

Interest on bank loan and overdraft XXX XXX

Mark up on short term borrowings XXX XXX

Interest on Workers' Profit Participation Fund XXX XXX

Bank charges XXX XXX

XXX XXX

26. Other Income

Income from financial assets

Income on loans, deposits and investments XXX XXX

Dividend Income XXX XXX

Note 20X8 20X7

Rs. Rs.

Income from non-financial assets

Gain on sale of property, plant and equipment XXX XXX

Other income

Scrap sales XXX XXX

Others XXX XXX

XXX XXX

27. Taxation

Provision for taxation - current year XXX XXX

- prior year XXX XXX

XXX XXX



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sse illustrative financial statements

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