Sitara chemicals

Notes definition
 The Notes to the the financial statements are somewhat like footnotes
 They give additional information in instances where you wouldn't be able to understand
what the numbers meant with just the description offered.
 Notes section explains the non-self-explanatory line items

Note #01
 Discloses general information such as:
 Location of the company’s office
 Company’s main operations
 And the operations on which the financial reports are prepared

Note #02
Consists of statement of compliance and adoption of new and revised laws, interpretation and
standards.

2.1 Statement of compliance

 Just discloses that financial reports are prepared according to the IFRS, requirements of
companies’ ordinance, 1984, and the directives from the SECP.
 Also mentions that wherever IFRS differs from requirements of Companies ordinance or
directives from company follows companies’ ordinance and directives from SECP.
2.1.1 Revised Adoption of new and revised laws, standards and interpretations
 Notifies that in 2017 new company act (the Companies Act, 2017) was enacted by the
SECP.
 Also, let’s know of the circular no. 17 of July 2017, which states that the companies
who’s year end before June 30 shall prepare the financial statements according to
previous ordinance (the companies’ ordinance, 1984)

2.2 Standards, interpretation and amendment adopted during the year

 List the amendments to the existing standards that are applicable to company’s
financial reports covering the annual period on or after the dates mentioned.
2.2.1 lists the standards, amendments and interpretations which are effective for the year ended
June 2017
1. IFRS 10-Consolidated financial statements
 Objective of IFRS 10 is to establish principles for the presentation and preparation of
the consolidated financial statements when an entity controls one or more other Commented [as1]: The financial statements of a group in
entities which the assets, liabilities, equity, income, expenses and
cash flows of the parent and its subsidiaries are presented
as those of a single economic entity
  Amendment was added to define the investment entity and to set an exception to Commented [as2]: An entity that:
1.obtains funds from one or more investors for providing
consolidating particular subsidiaries of investment entity. those investor(s) with investment management services

2.commits to its investor(s) that its business purpose is to

invest funds solely for returns from capital appreciation,
investment income, or both, and

3.measures and evaluates the performance of

2. IFRS 11-Joint Arrangements
 A joint arrangement is an arrangement of which two or more parties have joint
control.
 The core principle of IFRS 11 is that a party to a joint arrangement determines the
type of joint arrangement in which it is involved by assessing its rights and
obligations and accounts for those rights and obligations in accordance with that
type of joint arrangement.
 There are two types of joint arrangements: Joint Operations and Joint Ventures
 Amendment was made to clarify the acquisition of an interest in a joint operation
when the operation constitutes a business.
3. IAS 1-Presentation of Financial Statements’- Disclosure Initiative
substantially all of its investments on a fair value basis.
Commented [as3]: A joint arrangement has the following
characteristics: [IFRS 11:5]
the parties are bound by a contractual arrangement, and
the contractual arrangement gives two or more of those
parties joint control of the arrangement.
Commented [as4]: Joint operation
A joint arrangement whereby the parties that have joint
control of the arrangement have rights to the assets, and
obligations for the liabilities, relating to the arrangement
Joint venture
A joint arrangement whereby the parties that have joint
control of the arrangement have rights to the net assets of
the arrangement

 IAS 1 sets out the overall requirements for financial statements

 including how they should be structured, the minimum requirements for their
content and overriding concepts such as going concern, the accrual basis of
accounting and the current/non-current distinction.
 The standard requires a complete set of financial statements to comprise a
statement of financial position, a statement of profit or loss and other
comprehensive income, a statement of changes in equity and a statement of cash
flows.
 The amendments clarify some IAS 1 requirements relating to materiality, order of
the notes, subtotals, accounting policies and disaggregation.

4. IAS 16-properrty plant and equipment and IAS 38 Intangible Assets-clarification of

acceptable methods of depreciation and amortization
 IAS 16 outlines the accounting treatment for most types of property, plant and
equipment (PPE).
 PPE is initially measured at its cost, subsequently measured either using a cost or
revaluation model, and depreciated so that its depreciable amount is allocated on a
systematic basis over its useful life.
  Amendments provide additional guidance on how the depreciation or amortization
of property, plant and equipment and intangible assets should be calculated.

5. IAS 16- Property Plant and Equipment and IAS 41 Agriculture Measurement of bearer
plants
 the amendments bring bearer plants, which are used solely to grow produce, into
the scope of IAS 16 so that they are accounted for in the same way as property,
plant and equipment.

6. IAS 27 – Separate Financial Statements' – Equity method in separate financial

statements
 outlines the accounting and disclosure requirements for 'separate financial
statements' Commented [as5]: Financial statements presented by a
 those financial statements are prepared by a parent, or an investor in a joint venture parent (i.e. an investor with control of a subsidiary), an
investor with joint control of, or significant influence over,
or associate an investee, in which the investments are accounted for at
 amendments to IAS 27 will allow entities to use the equity method to account for cost or in accordance with IFRS 9 Financial Instruments

investments in subsidiaries, joint ventures and associates in their separate financial

statements.