The company expects that the adoption of the above

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The Company expects that the adoption of the above revisions, amendments and interpretations of the standards will not affect the Company’s financial statements in the period of initial application. In addition to the above, the following new standards have been issued by IASB which are yet to be notified by the Securities and Exchange Commission of Pakistan for the purpose of applicability in Pakistan. Standard or Interpretation IASB Effective date (Annual periods beginning on or after) IFRS 9 Financial Instruments: Classification and Measurement 01 January 2015 IFRS 10 Consolidated Financial Statements 01 January 2013 IFRS 11 Joint Arrangements 01 January 2013 IFRS 12 Disclosure of Interests in Other Entities 01 January 2013 IFRS 13 Fair Value Measurement 01 January 2013
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25 Notes to the Financial Statements for the year ended 30 June 2013 3 BASIS OF PREPARATION 3.1 Basis of Measurement These financial statements have been prepared under historical cost convention, except for investments classified as “available for sale” which are stated at fair value. 3.2 Presentation Currency These financial statements are presented in Pak Rupee, which is the Company’s functional currency. Figures have been rounded off to the nearest thousand of rupees, unless otherwise stated. 4 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS The preparation of financial statements in conformity with approved accounting standards, as applicable in Pakistan, requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company’s accounting policies. Estimates and judgments are continually evaluated and are based on historical experience, including expectations of future events that are believed to be reasonable under the circumstances. These estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. The areas involving a higher degree of judgments or complexity or areas where assumptions and estimates are significant to the financial statements are as follows: 4.1 Provision for taxation In making the estimate for income tax payable by the Company, the Company takes into account the applicable tax laws and the decision by appellate authorities on certain issues in the past. 4.2 Provision for doubtful receivables The Company reviews its doubtful trade debts at each reporting date to assess whether provision should be recorded in the profit and loss account. In particular, judgment by management is required in the estimation of the amount and timing of future cash flows when determining the level of provision required. Such estimates are based on assumptions about a number of factors and actual results may differ, resulting in future changes to the provisions.
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