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NOTES TO THE UNCONSOLIDATED

FINANCIAL STATEMENTS

For the year ended June 30, 2020

– Amendment to IFRS 3 ‘Business Combinations’ – Definition of a Business (effective for business
combinations for which the acquisition date is on or after the beginning of annual period beginning
on or after 1 January 2020):
The IASB has issued amendment aiming to resolve the difficulties that arise when an entity determines
whether it has acquired a business or a group of assets. The amendment clarify that to be considered a
business, an acquired set of activities and assets must include, at a minimum, an input and a substantive
process that together significantly contribute to the ability to create outputs. The amendment include an
election to use a concentration test. The standard is effective for transactions in the future and therefore
would not have an impact on past financial statements.

– Annual Improvements to IFRS Standards 2018–2020 Cycle. The new cycle of improvements
addresses improvements to following approved accounting standards (effective for annual period
beginning on or after January 01, 2022):
– IFRS 1 First–time Adoption of International Financial Reporting Standards. This amendment simplifies
the application of IFRS 1 for a subsidiary that becomes a first–time adopter of IFRS Standards later than
its parent – i.e. if a subsidiary adopts IFRS Standards later than its parent and applies IFRS 1.D16(a),
then a subsidiary may elect to measure cumulative translation differences for all foreign operations at
amounts included in the consolidated financial statements of the parent, based on the parent’s date of
transition to IFRS Standards.
– IFRS 9 Financial Instruments. The amendment clarifies which fees an entity includes when it applies the
‘10 percent’ test in assessing whether to derecognize a financial liability. An entity includes only fees
paid or received between the entity (the borrower) and the lender, including fees paid or received by
either the entity or the lender on the other’s behalf.

– IAS 41 Agriculture. The amendment removes the requirement for entities to exclude taxation cash flows
when measuring the fair value of a biological asset using a present value technique. This will ensure
consistency with the requirements in IFRS 13 – Fair Value Measurement.

There are other amendments and interpretations to the approved accounting standards that are not yet
effective and are also not relevant to the Company and therefore, have not been presented here.

Further, the following standards have been issued by the International Accounting Standards
Board (IASB), which are yet to be notified by the Securities and Exchange Commission of Pakistan
(SECP), for the purposes of their applicability in Pakistan:
IFRS – 1 ‘First time adoption of International Financial Reporting Standards’.
IFRS – 17 ‘Insurance Contracts’.

5. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The preparation of financial statements in conformity with the approved accounting standards require management
to make judgments, estimates and assumptions that affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be reasonable under the circumstances, the results
of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimates are revised if the revision affects only that period, or in the period of the
revision and future periods. Judgments made by management in application of the approved accounting standards
that have significant effect on the unconsolidated financial statements and estimates with a significant risk of material
adjustments in the next year are discussed in respective policy notes. The areas where various assumptions and
estimates are significant to the Company’s financial statements or where judgment was exercised in application of
accounting policies are as follows:

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