MEDIUM-SIZED ENTITIES ILLUSTRATIVE FINANCIAL STATEMENTS SEPTEMBER 2009

The Institute of Chartered Accountants of Pakistan

INDEX
Introduction Balance Sheet Income Statement Cash Flow Statement Statement of Changes in Equity Notes to the Financial Statements 1 Status and Nature of Business 2 Statement of Compliance 3 Summary of Significant Accounting Policies 3.1 Basis of Preparation 3.2 Revenue 3.3 Borrowing Costs 3.4 Foreign Exchange 3.5 Retirement Benefits 3.6 Taxation 3.7 Property, Plant and Equipment 3.8 Intangible Assets 3.9 Investments 3.10 Impairment of Assets 3.10 Leases 3.12 Stores, Spares and Loose Tools 3.13 Stock in Trade 3.14 Trade and other receivables 3.15 Provisions 3.16 Dividend 3.17 Cash and Cash Equivalents 3.18 Related party transactions 3.19 Offsetting 3.20 Financial instruments 4 Property, Plant & Equipment 5 Intangible Asset 6 Long-term Investment 7 Long-term Loans and Advances 8 Long term Derposits and Prepayments 9 Stores, Spares and Loose Tools 10 Stock in Trade 11 Trade Receivable 12 Short Term Loans and Aadvances 13 Short Term Deposits and Prepayments 14 Short Term Investments 15 Other Receivables 16 Cash and Bank Balances

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INDEX
17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 Share Capital Capital Reserve Revenue Reserve Surplus on Revaluation of Fixed Assets Long Term Borrowing-Secured Liabilities against assets subject to Finance Leases Deferred Liabilities Trade and Other Payables Interest and Markup Accrued Short Term Borrowings - Secured Current Portion of Long term Liabilities Contingencies and Commitments Revenue Cost of Sales General and Administration Expenses Finance Costs Other Income Taxation Related Party Transactions Cash Generated from Operations Cash and Cash Equivalent Corresponding Figures General

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i . 2007 and the requirements of the Companies Ordinance. It does not aim at interpreting the statutory disclosure requirements set out in the Fifth Schedule and the MSE Standard of ICAP. wherever applicable. The specimen disclosures should not be considered as the only acceptable form of presentation. Users may need to modify the financial statements when further accounting standards are issued or made applicable subsequently. is denoted by relevant reference of the Accounting and Financial Reporting Standards for Medium Sized Entities (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. 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. 06/2007 dated November 02.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. The illustrative is merely a technical practice aid and in no way represents the authoritative pronouncements of the Institute. The form and content of each reporting entity’s financial statements are the responsibility of the entity’s management. 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. 1984. Each disclosure requirement listed in the illustrative.

Secured Liabilities against assets subject to Finance Leases Deferred Liabilities 20 21 22 23 (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) 4.21b Surplus on Revaluation of Fixed Assets Non-current liabilities Long term Borrowing .1 15.14 Non-current assets Property. 1.16 9 10 11 12 13 14 15 16 Share capital & Reserves Authorised: xxxx ordinary shares of Rs.10 each Issued.9 Contingencies and Commitments The annexed notes 1 to 39 from an integral part of these financial statements.19 1. Para # 1. 20X7 Rs.4 25 26 27 4.MSE illustrative Financial Statements MSE LIMITED BALANCE SHEET As at 31 December 20X8 Note 20X8 Rs.21b 1.17 24 (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) 11.26 1.1. 28 XXX XXX ____________________ Chairman The Institute of Chartered Accountants of Pakistan Chief Executive Director 1 . plant and equipment Intangible assets Long-term investments Long Term Loans and Advances Long term Deposits and prepayments Current assets Stores.21a 1. subscribed & paid up capital Capital Reserve Revenue Reserve 17 17 18 19 XXX XXX XXX XXX (XXX) XXX XXX XXX XXX XXX (XXX) XXX 1.9 11.12 Current liabilities Trade and other payables Income tax payable Due to related parties Interest and Mark up Accrued Short term Borrowings . Spares and Loose Tools Stock in Trade Trade Receivable Short term Loans and Advances Short term Deposits and Prepayments Short term investments Current portion of long term investments Other Receivables Cash and bank balances 4 5 6 7 8 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX 5.Secured Current portion of long term liabilities 1.

1. 20X7 Rs.22 Revenue Cost of sales Gross Profit General and Administrative Expenses Other operating expenses Profit /Loss from Operating Activities Finance costs 31 29 30 XXX (XXX) XXX (XXX) (XXX) XXX (XXX) XXX Other income Profit before tax Taxation Profit after tax 34 33 XXX XXX (XXX) XXX XXX (XXX) XXX (XXX) (XXX) XXX (XXX) XXX XXX XXX (XXX) XXX 11. Para # 1.MSE Illustrative Financial Statements MSE LIMITED INCOME STATEMENT For the year ended December 31. ____________________ Chairman ____________________ Chief Executive ____________________ Director The Institute of Chartered Accountants of Pakistan 2 . 1.20X8 Note 20X8 Rs.14 32 The annexed notes 1 to 39 form an integral part of these financial statements. 11.9.

4 2.12 2.1.MSE Illustrative Financial Statements MSE LIMITED CASH FLOW STATEMENT For the year ended December 31. 2.8 The annexed notes 1 to 39 form an integral part of these financial statements.11 2.5(b) 2. 2.3 2.1.11 2.2 2. ____________________ Chairman _______________ Chief Executive ______________ Director The Institute of Chartered Accountants of Pakistan 3 .proceeds . Para# 1.repayments Long term loans . 20X8 Note 20X8 Rs.repayments Increase / (decrease) in short term borrowings Dividend paid Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Effect of exchange rate changes Cash and cash equivalents at end of the year 37 XXX (XXX) (XXX) (XXX) XXX (XXX) (XXX) XXX XXX XXX XXX XXX (XXX) (XXX) (XXX) (XXX) (XXX) (XXX) XXX XXX XXX XXX (XXX) XXX XXX XXX XXX XXX (XXX) XXX XXX XXX XXX XXX 36 XXX (XXX) (XXX) (XXX) XXX XXX (XXX) (XXX) (XXX) XXX 20X7 Rs. plant and equipment Interest received Increase /Decrease in Investment Dividend received Net cash generated from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Long term financing .repayments Long term murabaha .11 2. CASH FLOWS FROM OPERATING ACTIVITIES Cash generated from operations Finance cost paid Income tax paid Payment to gratuity fund Net cash from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Fixed capital expenditure Proceeds from sale of property.

30(a) (XXX) XXX 1.net of tax Gain / (loss) recognised directly in equity Dividends Final dividend 2007: Rs XXX per share Interim dividend 2008: Rs XXX per share Balance at December 31. ____________________ Chairman ____________________ Chief Executive __________________ Director The Institute of Chartered Accountants of Pakistan 4 . 2007 Net profit for the year ended Dec 31. 20X8 Share Capital Capital Reserve Other Reserve General Reserve Unappropriated profit Total Para# (Rupees) Balance at December 31. 2006 XXX Net profit for the year ended Dec 31.3 (XXX) (XXX) XXX XXX XXX XXX (XXX) (XXX) XXX XXX XXX XXX XXX 1.30(b) (XXX) (XXX) XXX (XXX) (XXX) XXX The annexed notes 1 to 39 form an integral part of these financial statements.1. 2008 Transfer from general reserve Current year incremental depreciation. 1. 2007 Transfer from general reserve Current year incremental depreciation. 2008 XXX XXX XXX XXX XXX XXX XXX XXX XXX (XXX) XXX XXX XXX XXX XXX XXX XXX XXX 1.MSE Illustrative Financial Statements MSE LIMITED STATEMENT OF CHANGES IN EQUITY For the year ended December 31.net of tax Dividends Final dividend 2006: Rs XXX per share Interim dividend 2007 : Rs XXX per share Balance at December 31.

12 1.35 9. 3. income and expenses. These accounting standards are notified by the Securities and Exchange Commission of Pakistan.3 1. The estimates and underlying assumptions are reviewed on an ongoing basis. 1. Actual results may differ from these estimates. Revisions to accounting estimates are recognised in the period in which the estimates are revised. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. 2008 MSE Illustrative Financial Statements MSE Para # 1.2 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. 3. Significant areas requiring the use of management estimates in these financial statements relate to the useful life of depreciable assets. 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.31(a) 1. The company’s registered office is located at xxxx Karachi.1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. 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. In case requirements differ.36 MSE Limited is a medium size company incorporated in Pakistan under the Companies Ordinance 1984.10 9. STATUS AND NATURE OF BUSINESS 1. 2. (i) sale of goods is recognised when the goods are delivered and the risks and rewards of ownership have passed to the customer. 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.MSE LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended December 31. 1984 shall prevail. the provisions or directives of the Companies Ordinance. The principal activity of the company is trading of toys. The Company is a subsidiary of ABC Ltd (the holding company) with shareholding of xxx%.11(a) 9. rental income is recognised on a time proportion basis over the lease terms. 3. provision for doubtful receivables and slow moving inventory.3 1. 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. 1984.3(a) (ii) The Institute of Chartered Accountants of Pakistan 5 . However. estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities. The company has adopted a trade name (Registered) “xxx” for its business. Pakistan.34 1.

4 3. Actuarial gains / losses in excess of corridor limit (10% of the higher of fair value of assets and present value of 17. All contributions are charged to profit and loss account for the year. and dividend income is recognised when the shareholder’s right to receive payment is established.MSE LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended December 31. 13.3 13. If the liability for retirement benefits is funded through creation of a trust These funds are administered by trustees. construction or production of a qualifying assets. The difference between the current and the previous liability is charged to profit and loss account as expense for the year. Monetary assets and liabilities are translated into rupees using exchange rates applicable at the balance sheet date. Pension Scheme Defined benefit pension for all eligible employees who complete qualifying period of service and age. All gains and losses on settlement and translation at year end are recognised in the income statement.4 Foreign exchange Foreign currency transactions are recorded at the exchange rate applicable at the transaction date.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. 20XX using the “Projected Unit Credit Method”. 10.4 3. Such borrowing costs. 9.2 13. The charge for the year is based on actuarial valuation conducted on December 31. if any are capitalized as part of the cost of the asset.1 17.8(b) 17.13a 10. 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 amount recognized in the balance sheet represents the present value of defined benefit obligation as adjusted for unrecognized actuarial gains and losses. OR The entity operates a funded/unfunded gratuity scheme for its employees who have completed the qualifying period as defined under the respective scheme.9(c) (iv) 3. 2008 (iii) MSE Illustrative Financial Statements MSE Para # interest income is recognised on a time proportion basis taking into account the principal outstanding and the interest applicable.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.2 to 10. Annual contributions to the gratuity and management staff pension funds are based on actuarial valuation using Projected Unit Credit Method.12 The Institute of Chartered Accountants of Pakistan 6 .

based on tax rates that have been enacted. related expected cost thereof has been included in the financial statements. 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.7 Property. 3. The assets’ residual values and useful lives are reviewed at each financial year end and adjusted if impact on depreciation is significant. 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.8(a) 17. plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses except freehold land and capital work in progress. 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.MSE LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended December 31. 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. Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse. 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. Depreciation on additions to property.6 Taxation Income tax expense represents current tax expense. 2008 MSE Illustrative Financial Statements MSE Para # obligation) are recognised over the average remaining service life of the employees. 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. which are stated at cost. unused tax losses and tax credits can be utilized. The accruing liability shall be calculated according to actuarial valuation Provident Fund Defined contributory provident fund for all eligible employees for which contributions are charged to profit and loss account. Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences. 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 Institute of Chartered Accountants of Pakistan 17.3 3. plant and equipment Property. the excess treated as a prepayment. 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.38(b) 3.13 3. the shortfall charged to the statement of profit and loss for the year. 3.15 7 .33 3. Cost comprises acquisition and other directly attributable costs.6 3.

if any.19(ii) 16.3 16.17 5. Investments held to maturity Investments with fixed or determinable payments and fixed maturity.11 16. are carried at amortised cost. 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.16. To the extent of the incremental depreciation charged on the revalued assets the related surplus on revaluation of property. 2008 MSE Illustrative Financial Statements MSE Para # 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. The depreciable amount of intangible asset is amortised on a systematic basis over the estimated useful lives using the straight-line method.12 5. 3. which the Company has the positive intent and ability to hold to maturity.8 Intangible assets Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses. Surplus on revaluation of Property. Full year's depreciation is charged on normal additions. if any.12 The Institute of Chartered Accountants of Pakistan 8 . except that the related surplus on revaluation of fixed assets (net of deferred tax) is transferred directly to unappropriated profit.3 16. are included in profit and loss account currently.36 3. using the effective interest rate method less impairment losses. Revaluation is carried out with sufficient regularity to ensure that the carrying amount of assets does not differ materially from the fair value. The fair value of such investments representing listed equity securities are determined on the basis of prevailing market prices.20 3.MSE LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended December 31. These are stated at fair values with any resulting gains or losses recognized directly in the profit and loss account. 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. plant and equipment (net of deferred tax) is transferred directly to unappropriated profit. 16. 3. Major renewals and improvements are capitalised and the assets so replaced. Maintenance and repairs are charged to profit and loss account as and when incurred.19(ii) 16.19 5.1 3. Gains and losses on disposal of assets. are written off.11 3. if so determined.26(b) 16. plant and equipment is credited to the surplus on revaluation account. Gains and losses on disposal of fixed assets are included in income currently. 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.3.9 Investments Investments available for sale These are recognized at fair value.

4 Net realisable value signifies the estimated selling price in the ordinary course of business less net of estimated cost of completion and selling expenses. plant and equipment. costs of conversion and other costs incurred in bringing the inventories to their present location and condition. at the present value of the minimum lease payments. had no impairment losses been recognised for the asset in prior years. Cost is determined as follows: Raw materials Work in process Finished goods at weighted average cost at weighted average cost and applicable manufacturing expenses 3.14. the carrying amount is reduced to recoverable amount and an impairment loss is recognised in the income statement. 4.1116. any excess of sales proceeds over the carrying amount is deferred and amortised over the lease term. including items of property.MSE LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended December 31. If a sale and leaseback transaction results in an operating lease and the transaction is established at fair value.10 Impairment of assets MSE Illustrative Financial Statements MSE Para # An assessment is made at each balance sheet date to determine whether there is any indication of impairment or reversal of previous impairment.12 Stores. At the inception of a finance lease. Reversal of impairment loss is restricted to the original cost of the asset.6 4. The cost of inventories comprises all costs of purchase. which are valued at invoice price and related expenses incurred upto the balance sheet date.34 16. The Institute of Chartered Accountants of Pakistan 6. For items which are slow moving and / or identified as surplus to the Company's requirement.11 Leases Leases that transfer substantially all the rewards and risks of ownership of assets to the company are accounted for as finance leases.17 4. however not to an amount higher than the carrying amount that would have been determined (net of amortisation or depreciation). 3. a profit or loss is recognised immediately. 3. spares and loose tools These are valued at the lower of cost and net realisable value except for items in transit. Finance charges are charged to the income statement.15 6. Sale and leaseback transaction If a sale and leaseback transaction results in a finance lease. The lessor gives an option to purchase assets at the end of lease term.1 6.4 4. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the recoverable amount. In the event that an asset’s carrying amount exceeds its recoverable amount.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. 2008 3. a provision is made for excess of book value over estimated realisable value. if lower.2 6. 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. intangible assets and long-term investments. the cost of the leased asset is capitalised at the fair value of the leased asset or.2 4.6 9 . 3.

subject to the approval of the Board of Directors.15 Provisions Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events. The Company recognises the regular way purchase or sale of financial assets using settlement date accounting.19 Offsetting Financial assets and liabilities are offset and the net amount is reported in the balance sheet.14 1. 16. 3. The Company derecognizes the financial assets and liabilities when it ceases to be a party to such contractual provisions of the instruments. the particular recognition methods adopted are disclosed in the individual policy statements associated with each item.31(d) 8. as admissible.20 Financial instruments Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.18 1. cash and cash equivalents comprise cash in hand. For the purpose of cash flow statement. 3. 3.6 2.MSE LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended December 31.14 Trade and other receivables MSE Illustrative Financial Statements MSE Para # Trade and other receivables are stated at estimated realisable value after each debt has been considered individually.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. cash with banks on current. except in extremely rare circumstances where. Where the payment of a debt becomes doubtful a provision is made and charged to the income statement.1 The Institute of Chartered Accountants of Pakistan 10 . 3.17 Cash and cash equivalents Cash and cash equivalents are carried in the balance sheet at cost. 2008 3. it is in the interest of the Company to do so. 3.13 -2. 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. 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.16 Dividend Dividend is recognized as a liability in the period in which it is approved. 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. 3.10 15.1 16. 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.

MSE LIMITED NOTES TO THE FINANCIAL STATEMENTS For the year ended December 31. 2008 b) MSE Illustrative Financial Statements MSE Para # 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) d) The Institute of Chartered Accountants of Pakistan 11 . 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. Cash and cash equivalents Cash in hand and at banks are carried at fair value. Derivative financial instruments Any gain or loss from re-measuring the hedging instrument at fair value is recognised in the profit and loss account.

20X7 Cost Accumulated depreciation Net book amount Year ended December 20X7 Opening net book amount Additions Disposals Depreciation charge Exchange rate adjustments Closing net book amount At December 31. Rupees …………………………………. 20X8 Cost Accumulated depreciation Net book amount The net carrying amount of assets under finance lease included in 'Property and Equipment' was: 20X8 20X7 CWIP includes net carrying values at: 20X8 20X7 XXX (XXX) XXX XXX (XXX) XXX XXX (XXX) XXX XXX (XXX) XXX XXX (XXX) XXX XXX XXX (XXX) (XXX) XXX XXX XXX XXX (XXX) (XXX) XXX XXX XXX XXX (XXX) (XXX) XXX XXX XXX XXX (XXX) (XXX) XXX XXX XXX XXX (XXX) (XXX) XXX XXX XXX (XXX) XXX XXX (XXX) XXX XXX (XXX) XXX XXX (XXX) XXX XXX (XXX) XXX XXX XXX (XXX) (XXX) XXX XXX XXX XXX (XXX) (XXX) XXX XXX XXX XXX (XXX) (XXX) XXX XXX XXX XXX (XXX) (XXX) XXX XXX XXX XXX (XXX) (XXX) XXX XXX XXX (XXX) XXX XXX (XXX) XXX XXX (XXX) XXX XXX (XXX) XXX XXX (XXX) XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX The Institute of Chartered Accountants of Pakistan 12 . Property. Plant & Equipment Land & Buildings Vehicles Furniture & Equipment CWIP Total ………………………….MSE Limited Notes to the Financial Statements For the Year Ended December 31. 2008 MSE Illustrative Financial Statements 4. 20X7 Cost Accumulated depreciation Net book amount Year ended December 20X8 Opening net book amount Additions Disposals Depreciation charge Exchange rate adjustments Closing net book amount At December 31. At January 1.

1 Depreciation charge has been allocated as follows: Cost of sales General & Administrative Expenses XXX XXX XXX 5. Intangible assets Software Others (brands etc) 5.38(e) XXX XXX XXX 5. 20X8 Balance as on January 1. 20X7 Acquisition Internal development Transfer (to)/ from held for sale under IFRS 5 Surplus / (deficit) on revaluation of intangibles Exchange difference on foreign currency translation Balance as at December 31. 20X7 Balance as at December 31.1 XXX XXX XXX Outside purchased software ----------------Internal development software Rupees XXX XXX XXX 3. 20X7 Balance as at December 31.MSE Limited Notes to the Financial Statements For the Year Ended December 31.1 Cost model / Revaluation model Total ------------------ Balance as at January 1. 20X8 Balance as at January 1. 20X8 Amortisation for the period Impairment loss recognised / (reversed) Incremental amortisation charge to revaluation Balance as at December 31. 20X7 Amortisation and Impairment Balance as at January 1. 20X7 Rs. 20X7 Carrying Amount Balance as at January 1. 20X8 Acquisition Internal development Transfer (to)/ from held for sale under IFRS 5 Surplus / (deficit) on revaluation of intangibles Exchange difference on foreign currency translation Balance as at December 31. 4. 20X8 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX Total XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX Amortisation Impairment XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX The Institute of Chartered Accountants of Pakistan 13 . 20X7 Amortisation for the period Impairment loss recognised / (reversed) Incremental amortisation charge to revaluation Balance as at December 31. 2008 Note MSE Illustrative Financial Statements 20X8 Rs.

Government of Pakistan Special US Dollar Bonds were issued for a period of three years. Investments available for sale include Rs. Monthly profit was payable on these certificates at the rate of xxx% per annum. These were fully encashed during the year. XXX) under lien of financial institutions against long term loans and short term loans.2 XXX XXX XXX XXX XXX (XXX ) XXX Investments in Associate XYZ Company Limited Investments at cost Less: Provision for impairment in value of investment 6.MSE Limited Notes to the Financial Statements For the Year Ended December 31. Profit was payable on these bonds at a rate of xxx% above six months' LIBOR.1 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. These were fully encashed during the year. 16. 5. Nil (2007: Rs. 1984.1 Investments available for sale The Company has placements in certificates of investment of a financial institution for periods ranging from one and a half to five years at profit rates ranging from 6% to 15% per annum. Long-term investments Listed equity securities.1 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX 16. 6. National Saving Certificates were issued for 5 years. 2008 Note MSE Illustrative Financial Statements 20X8 Rs.2 The amortization charge for the year has been allocated as follows: Cost of sales General & Administrative Expenses XXX XXX XXX XXX XXX XXX 6. 20X7 Rs.19 The Institute of Chartered Accountants of Pakistan 14 .3 XXX XXX (XXX ) XXX XXX XXX XXX XXX XXX (XXX ) XXX XXX XXX (XXX ) XXX 6. at cost Investments available for sale Certificates of investment Government of Pakistan Special US Dollar Bonds National Savings Certificates Investment in related parties Investment in listed companies and modarabas Investment in unlisted companies Investments held to maturity Pakistan Investment Bonds (PIBs) Government of Pakistan Sukuk Bonds Term Finance Certificates Investment in related parties Other investments Less: current portion shown in current assets 6.

MSE Limited Notes to the Financial Statements For the Year Ended December 31.. Half yearly profit is payable on these TFCs at the rate of six months' KIBOR + 1.3 Investments in Associate Investment in Associate represent xxx%(2007:xx) investment in equity of XYZ company Limited (market value as at December 31 2008:xxx .xxx) under lien of a bank. Long Term Loans and Advances Loans and advances. Fair value of the outstanding TFCs as at December 31. XXX .Rupees………………………….2 Investments held to maturity MSE Illustrative Financial Statements PIBs have been issued for 10 years (2007: 5 to 10 years). These include Rs. Half-yearly profit is payable on these bonds at rates ranging from xxx% to xxx% per anum. xxx) Investment in TFC represents XXX certificates of Rs XXX each of ABC Commercial Bank Limited. 6. xxx thousand (2007: Rs. 2007:xxx) Note 7.……………………………. 2007 is Rs. The Institute of Chartered Accountants of Pakistan 15 . 20X7 Rs.5% per annum. 16. 2008 Disbursements Repayments Closing balance as at December 31.. considered good.. shown under current loans and advances XXX XXX XXX (XXX) XXX 7. to: Executives Other employees Suppliers Less: Amount due within twelve months.1 Reconciliation of carrying amount of loans to executives and other employees: XXX XXX XXX (XXX) XXX 20X8 Rs.xxx thousand (2007: Rs.19 5th schedule part II cl 3 Opening balance as at January 1. 2008 is Rs. Mark-up at xx% per annum (2005: xx% per annum) was charged on loans for house building and vehicle during the year. 2008 ………………… …….……. The maximum amount of advances to executives outstanding at the end of any month during the year was Rs xxx (2007: Rs xxx). Fair value of these PIBs as at December 31. 2008 6. Executives Other employee 2008 2007 xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx These represent secured loans for house building and vehicle which are repayable within one to ten and one to five years respectively..

-------. Short Term Loans and Advances Secured and Considered good Current portion of long term loans and advances : Executives Other employees Suppliers XXX XXX XXX XXX XXX XXX XXX XXX Considered Doubtful Suppliers Provision for Doubtful Advances XXX (XXX) XXX XXX (XXX) XXX 13. Short Term Deposits and Prepayments Deposits Prepayments XXX XXX XXX XXX XXX XXX The Institute of Chartered Accountants of Pakistan 16 .6 11.----------) for the doubtful debts 12.(20X7: recognised a provision of Rs. 20X7 Rs.1 10. 8.1 The Company has reversed a provision of Rs. Trade Receivable Considered good Considered doubtful Provision for doubtful debts XXX XXX (XXX) XXX XXX XXX (XXX) XXX 11. Stores. Stock In Trade Raw materials Work in process Finished goods XXX XXX XXX XXX XXX XXX XXX XXX 6.1 8.MSE Limited Notes to the Financial Statements For the Year Ended December 31. 2008 Note MSE Illustrative Financial Statements 20X8 Rs. Spares and Loose Tools Stores Spares Provision for slow moving and surplus items Loose tools Items in transit XXX XXX (XXX) XXX XXX XXX XXX XXX XXX (XXX) XXX XXX XXX XXX 8. Long Term Deposits and Prepayments Deposits Prepayments XXX XXX XXX XXX XXX XXX 9.1 11.

XXX XXX XXX XXX XXX XXX XXX XXX Investments available for sale Investment in related parties Investment in listed companies and modarbas XXX XXX XXX XXX XXX XXX Investments held to maturity Current portion of held to maturity investments Pakistan Investment Bonds Term Finance Certificates Murabaha finance Musharika finance 14. 20X7 Rs. These are secured against hypothecation of stock. Expected rate of profit ranges between _____% to ____% (2007 : _____% to _____%) per annum.1 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX 14. 2008 Note 14. Other Receivables Accrued income on investments and bank deposits Advance tax Sales Tax refund Other receivables – considered good – considered doubtful XXX XXX XXX XXX XXX XXX (XXX) XXX XXX XXX XXX XXX XXX XXX (XXX) XXX 8. 15.1 Provision for doubtful receivables 16.1 14. Cash and Bank Balances At banks: Deposit accounts Local currency Foreign currency XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX Current accounts Local currency Foreign currency Cash in hand The Institute of Chartered Accountants of Pakistan 17 . Short Term Investments Investment at fair value through profit or loss: Investment in related parties Investment in listed companies and madarbas Investment in unlisted companies MSE Illustrative Financial Statements 20X8 Rs. demand promissory notes and personal guarantee of the directors.MSE Limited Notes to the Financial Statements For the Year Ended December 31.1 These represent investments under murabaha and musharika basis for working capital.

This has been adjusted by surplus realized on disposal of revalued assets and incremental depreciation arising due to revaluation net of deferred tax. Subscribed and Paid Up Capital xxx shares (2007: xxx) Ordinary shares of Rs. building on freehold land. 17.1 MSE Illustrative Financial Statements 20X8 Rs.21b 20.21b XXX XXX XXX XXX XXX XXX 1. Capital Reserve Capital gain on sale of building 19. 2008 Note 17. Note 20X8 Rs. 10 17.21(a) (ii) XXX XXX XXX XXX 17. XXX XXX 20X7 Rs. Issued.2 Reconciliation of issued. Share Capital Authorised Share Capital This represents XXX (2007: XXX) ordinary shares of Rs 10 each amounting to Rs. 20X7 Rs.10 each issued for consideration other than cash xxx shares (2007: xxx) Ordinary shares as fully paid bonus shares of Rs. Surplus on Revaluation of Fixed Assets This represents surplus arising on revaluation of freehold land. XXX.10 each fully paid in cash xxx shares (2007: xxx) Ordinary shares of Rs.MSE Limited Notes to the Financial Statements For the Year Ended December 31. machinery and other assets.1 This represent the issuance of shares against the purchase of plant.21 (a) iv 18. XXX XXX XXX XXX 1. Revenue Reserves General reserve Unappropriated profit XXX XXX 1. plant and machinery both owned and leased carried out in the year 1 2004 . Subscribed and Paid Up Capital Opening balance Issued fully paid bonus shares XXX XXX XXX XXX XXX XXX 1. XXX XXX Surplus on revaluation assets as at 01 January Surplus arising on revaluation of assets during the period Surplus relating to incremental depreciation charged on related assetstransferred to inappropriated profit Net of deferred tax Related deferred tax liability XXX XXX XXX XXX The Institute of Chartered Accountants of Pakistan 18 .

2008 is to be repaid in 4 half-yearly installments in arrears. 2008 Note MSE Illustrative Financial Statements 20X8 Rs.1 xxx xxx xxx xxx 3.a. XXX Surplus on revaluation of assets as at 31 December Less : Related deferred tax liability on Balance at the beginning of the year Transferred to profit and loss account incremental depreciation charged during the year 21.1.5% with a floor of 11% and cap of 16%. machinery.2 3.2 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX 21.1.1.MSE Limited Notes to the Financial Statements For the Year Ended December 31. machinery.3 21. (%) No of halfyearly installments Outstanding xx xx Date of final repayment ABC XYZ 21.1. Finance is secured by an equitable mortgage on the assets of the Company and hypothecation of all assets including plant.1 Long term financing – secured Loans from banking companies i) ABC Bank i) XYZ Bank Other loans Term Finance Certificates (TFCs) Government of Pakistan loan Less: Current portion shown under current liabilities 21.1 21. 21. tools and spares. and all other moveable properties situated at xxx stocks and book debts ranking pari passu with each other.1. These are secured by an equitable mortgage on the assets of the Company and hypothecation of all assets including plant. Long Term Borrowing .1.1. tools and spares. The balance amount of principal of TFCs at December 31. Finance has been obtained to meet the permanent working capital requirements of the Company.1. machinery.39 Finance are secured by an equitable mortgage on the assets of the Company and hypothecation of all assets including plant. tools and spares. and all other moveable properties situated at xxx including stocks and book debts ranking pari passu with each other.2 21.1 21.1. These loans have been obtained for the acquisition of plant and machinery. Finance is secured against lien on Pakistan Investment Bonds Term Finance Certificates (TFC's) represent private placement with 2 institutional investors (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 discount rate plus 1. and all other moveable properties situated at xxxx including stocks and book debts ranking pari passu with each other.39 The Institute of Chartered Accountants of Pakistan 19 .1.secured Long term murabaha .1 Terms and conditions of long term finances from banking companies are given below: Lender Mark-up rate p. XXX 20X7 Rs.1.secured Loan from Related party 21.Secured Long term financing .2 21.2 XXX XXX XXX XXX XXX XXX XXX (XXX) XXX XXX XXX XXX XXX XXX XXX XXX (XXX) XXX 21.1.

3. other receivables and short term investments XXX (XXX) (XXX) XXX XXX (XXX) (XXX) XXX 11. This is secured by a registered charge on all present and future fixed and current moveable assets of the Company Note 20X8 Rs.1.a.MSE Limited Notes to the Financial Statements For the Year Ended December 31. 2010. Principal and mark-up are repayable in half yearly installments upto May 31.1 XXX XXX 23. plant and equipment Provision for slow moving / surplus spares Provision for doubtful debts. This loan was secured by a mortgage in favour of the Government of Pakistan over the Company's fixed assets.39 21. 22.2 Long term murabaha – secured Faysal Bank Limited Less: Current portion shown under current liabilities XXX (XXX) XXX XXX (XXX) XXX 3. 2008 21.5% p.9(b) 23. Interest on loan also include included the Government's exchange risk commission. This loan was disbursed in foreign currency and was repayable in local currency. 20X7 Rs. Disbursements were determined for repayment in Rupees by translation at the rates of exchange prevailed on the respective dates of disbursement.3 XXX XXX XXX XXX XXX XXX 23.3 Government of Pakistan loan – secured MSE Illustrative Financial Statements This loan represented the on lent proceeds of credit obtained by the Government of Pakistan from an international agency.2 23. Note 20X8 Rs.4 The Institute of Chartered Accountants of Pakistan 20 .39 The above murabaha financing carries mark-up at 4.1 Deferred Taxation The balance of deferred tax is in respect of the following major temporary differences: Accelerated depreciation on property. Liabilities against assets subject to Finance Leases The present value of lease payments under finance leases are as follows: Not later than one year Later than one year and later than five years Less: Financial charges allocated to the Future period Net Lease Obligation Less: Current portion shown under current liabilities XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX 4. 20X7 Rs. Deferred Liabilities Deferred Taxation Employee benefits Post retirement medical benefits Compensated absences 23.

9 17. Trade and Other Payables Creditors Accrued liabilities Sales tax payable Murabaha Deposits Retention money Advances from customers Workers' Profit Participation Fund Workers' Welfare Fund Unclaimed dividend Other liabilities XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX 1. XXX% (2007: XXX%) and XXX% (2007: XXX%) per annum respectively. 23.1 24.17 24. 23. 2008.3 Compensated absences XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX 17.1 Workers' Profit Participation Fund Balance at beginning of the year Interest on funds utilised in Company's business Allocation for the year Payment to the fund during the year XXX XXX XXX (XXX) XXX XXX XXX XXX (XXX) XXX The Institute of Chartered Accountants of Pakistan 21 . 2008 Note MSE Illustrative Financial Statements 20X8 Rs.8 Particulars of charge for the year Current service cost Interest cost Actuarial gains recognized XXX XXX (XXX) XXX XXX XXX (XXX) XXX The latest actuarial valuation was carried out as at June 30. medical cost increase and expected inflation were assumed at XXX% (2007: XXX%).3 Present value of defined benefit obligation Charge for the year Liability at end of the year Payable to officers transferred to current liabilities 24.2 Post retirement medical benefits Movements in the liability recognized in the balance sheet Balance at beginning of the year Charge for the year Benefits paid during the year Net liability at end of the year Reconciliation of the liability recognized in the balance sheet Present value of defined benefit obligation Net actuarial gains not recognized Net liability at end of the year XXX XXX XXX XXX XXX XXX XXX XXX (XXX) XXX XXX XXX (XXX) XXX 17. The rates of discount.MSE Limited Notes to the Financial Statements For the Year Ended December 31. 20X7 Rs.

2008 Note 25.1 26. This facility carries mark-up at the rate of Rs. xxx (2007: Rs. iii) Income tax demands. 3.1 21. have been challenged by the Company and are currently in appeal.39 27.2 XXX XXX XXX XXX XXX XXX XXX XXX 26. XXX (2007: Rs xxx).2 Short term running finances -secured Short term running finance facilities available from various banks under mark-up arrangements amounting to Rs.secured Long term murabaha .2 22 XXX XXX XXX XXX XXX XXX XXX XXX 28. XXX XXX XXX XXX 8. to three months 'xxx% p. This is secured by first pari passu charge on the current assets of the Company. 1. the Company expects favourable outcome of appeal. 26.MSE Limited Notes to the Financial Statements For the Year Ended December 31. Current portion of Long term Liabilities Long term financing .a. xxx which represent the aggregate of sale prices of all mark-up agreements between the Company and the banks.26 XXX XXX The Institute of Chartered Accountants of Pakistan 22 . Interest and Mark-Up Accrued On long term financing On murabaha financing On short term borrowings MSE Illustrative Financial Statements 20X8 Rs.). 20X7 Rs.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. 20X7 Rs.xxx) per Rs. Contingencies and Commitments a) Contingencies i) Guarantees issued by banks on behalf of the Company. to three months' xxx% p.39 3.000 per day. Note 20X8 Rs. (2007: one month xxx% p. 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.a. The rates of mark-up range from one month xxx% p. ii) Disputed demands for Income tax decided in favour of the Company by the Income Tax Appellate authorities.a.secured Lliabilities against assets subject to Finance Leases 21. The Company is confident that there are reasonable grounds for a favorable decision.25 8. are currently in appeal by the department. Short Term Borrowings – Secured From banking companies Short term loan -secured Short term import credit Short term running finance 26.a. not acknowledged as debt. XXX XXX XXX XXX XXX XXX XXX XXX 26.

6d 3. 30.3.11 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX 1.xxx thousand. establishment and other expenses Provision for doubtful trade debts Provision for obsolete and slow moving inventory Provision / (reversal of provision) for doubtful advances Opening stock . XXX iv) Claims against the Company and / or potential exposure not acknowledged as debt. 17.11b(i) 3. XXX 20X7 Rs. 2005: Rs xxx thousand) Amortization of intangible assets Depreciation Communication.7 9.9 29. b) Commitments in respect of: i) Capital expenditure XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX 4. Revenue Revenue include Rs xxxx million (2007: Rs xxxx) in respect of sale of purchased of goods and are exclusive of commission.27.1 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX 1.2 1. wages and benefits Rent. 2008 Note MSE Illustrative Financial Statements 20X8 Rs.work in process Cost of goods manufactured 30.later than one year and not later than five years 2010 2011 2012 2013 2014 .not later than one year .117.later than five years Vehicles .27. Cost of Sales Raw materials consumed Fuel and power Stores and supplies Salaries.17 3.later than one year and not later than five years 2010 2011 2012 2013 2014 . 17.later than five years XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX 4. rates and taxes Insurance Travel and conveyance Repairs and maintenance (includes stores and spares consumed of Rs.not later than one year .26 6.6d The Institute of Chartered Accountants of Pakistan 23 .27.MSE Limited Notes to the Financial Statements For the Year Ended December 31.9 ii) Rentals under lease agreements: Premises . 5. trade allowances and sales tax of Rs xxxx and Rs xxxx respectively (2007: Rs xxxx and Rs xxxx).work in process Closing stock .6.

3.11 1. XXX XXX XXX 17.MSE Limited Notes to the Financial Statements For the Year Ended December 31.27.1 31.1 Inclusive of provision for gratuity Rs. 17.27. General and Administration Expenses 1. 31.6 13.2 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX 17.1- Salaries.8 Opening stock of Finished goods Closing stock of Finished goods 30.17 31.8 32. wages and benefits Travelling and transportation Repairs and maintenance Rent and taxes Communication Utilities Training Legal services Contract services Auditors' remuneration Advertising Insurance Donations Depreciation Amortisation of Intangible assets Travel and conveyance Sale promotion and advertising Warehousing expenses Other expenses 31. 2008 Note MSE Illustrative Financial Statements 20X8 Rs.1 These include amount in respect of provision for gratuity of Rs XXX (2007: Rs XXX ). XXX XXX XXX 20X7 Rs.5 The Institute of Chartered Accountants of Pakistan 24 . Finance costs Interest on bank loan and overdraft Interest on finance leases Mark up on short term borrowings Exchange loss Interest on Workers' Profit Participation Fund Bank charges XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX 4. 5.(20X7---------) 31.3.7 3.-------------. 13.2 Auditors' remuneration: Annual audit fee Out of pocket expenses XXX XXX XXX XXX XXX XXX 17. 17.

36. Related party transactions The Company had the following transactions with related parties: Goods sold to related companies Goods purchased from related companies XXX XXX XXX XXX XXX XXX 15. plant and equipment written off Provision for gratuity Provision for pension Exchange (gain) / loss Loss / (gain) on remeasurement of investment at fair value through profit or loss Old liabilities written back XXX XXX XXX (XXX) XXX XXX (XXX) (XXX) XXX XXX XXX (XXX) XXX (XXX) XXX XXX XXX XXX XXX (XXX) (XXX) XXX (XXX) (XXX) XXX XXX XXX XXX (XXX) (XXX) XXX XXX 15. deposits and investments Gain on sale of property.36 XXX XXX (XXX) (XXX) XXX XXX XXX (XXX) (XXX) XXX 11.10 9. interest-free and have no fixed terms of repayment. plant and equipment Other income Old liabilities written back Scrap sales Others 34.11(b) 3. Cash Generated From Operations Net profit before taxation Adjustments for: Depreciation Amortisation of goodwill and intangible asset Provision for slow moving and surplus spares Provision / (reversal of provision) for doubtful advances Finance cost Income on loans. Other Income Income from financial assets Income on loans. 16. deposits and investments Income on tax-exempt investments (Loss) / gain on re-measurement of investments at fair value through profit or loss Gain on sale of NIT units Exchange gain on financial instruments Dividend Income Income from non-financial assets Gain on sale of property. XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX 9.current year .9.4(b)(i) The Institute of Chartered Accountants of Pakistan 25 .4(a) The amounts due to related parties are unsecured.11(b) 16.4(a) 15.14 35. 20X7 Rs. plant and equipment Property. Taxation Provision for taxation . 2008 Note 33.prior year Deferred Overprovision in prior years MSE Illustrative Financial Statements 20X8 Rs.11(b) 9.MSE Limited Notes to the Financial Statements For the Year Ended December 31.

Corresponding Figures 38. Major changes in the financial statements are as follows: 38.MSE Limited Notes to the Financial Statements For the Year Ended December 31. 2008 Note Changes in working capital (Increase) / decrease in current assets: Stores and spares Stock in trade Trade debts Loans and advances Deposits and prepayments Other receivables Increase in current liabilities: Trade and other payables MSE Illustrative Financial Statements 20X8 Rs. 20X7 Rs. General 39.1 Figures have been rounded to the nearest thousand of rupees. (XXX) (XXX) XXX XXX (XXX) XXX XXX XXX XXX XXX XXX XXX (XXX) XXX XXX (XXX) (XXX) XXX XXX XXX XXX XXX XXX XXX Changes in long term loans and advances Changes in long term deposits and prepayments 37.3 These financial statements were authorized for issue by the Board of Directors in their meeting held on xxx.2 The Board of Directors proposed final dividend at the rate of Rs xxx per share in their meeting held on xxx 39. for the purpose of comparison in the financial statements.31 (d) 1.1 The comparative figures have been rearranged and/or reclassified. wherever necessary. 39. xxx which were previously included in Others have now been reclassified and included as a separate line.10 2. 39.14 38. Cash and Cash Equivalents Cash and bank balances Short term highly liquid investments XXX XXX XXX XXX XXX XXX 2.2 Traveling and conveyance amounting to Rs. unless otherwise stated. 1.11 ____________________ Chairman ____________________ Chief Executive ____________________ Director The Institute of Chartered Accountants of Pakistan 26 .

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