Page 110 - CCL AR 2017 Final

Notes to the Financial Statements

for the year ended June 30, 2017

1. THE COMPANY AND ITS OPERATIONS

Cherat Cement Company Limited (the Company) was incorporated in Pakistan as a public company
limited in the year 1981. Its main business activity is manufacturing, marketing and sale of cement. The
Company is listed on Pakistan Stock Exchange Limited. The registered office of the Company is situated
at Village Lakrai, District Nowshera, Khyber Pakhtunkhwa province.

2. BASIS OF PREPARATION

2.1 Statement of compliance

During the year, the Companies Act, 2017 has been promulgated, however, Securities and Exchange
Commission of Pakistan (SECP) vide its circular No. 17 of 2017 dated July 20, 2017 communicated
its decision that companies whose financial year closes on or before June 30, 2017 shall prepare their
financial statements in accordance with the provisions of the repealed Companies Ordinance, 1984.
Accordingly, the Company’s financial statements for the year ended June 30, 2017 have been prepared in
accordance with the requirements of the repealed Companies Ordinance, 1984 and approved accounting
standards as applicable in Pakistan. Approved accounting standards comprise of such International
Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB), as
are notified under the repealed Companies Ordinance, 1984, provisions of and directives issued under
the repealed Companies Ordinance, 1984. In case requirements differ, the provisions or directives of the
repealed Companies Ordinance, 1984 shall prevail.

2.2 Accounting convention

These financial statements have been prepared on the basis of historical cost convention except for
certain investments that have been measured at fair value.

2.3 New standards, interpretation and amendments

The accounting policies adopted in the preparation of these financial statements are consistent with those
of the previous financial year except that the Company has adopted the following accounting standards
and the amendments and interpretation of IFRSs which became effective for the current year:

IFRS 10 - Consolidated Financial Statements, IFRS 12 Disclosure of Interests in Other Entities and
IAS 27 Separate Financial Statements – Investment Entities: Applying the Consolidation
Exception (Amendment)

IFRS 11 - Joint Arrangements - Accounting for Acquisition of Interest in Joint Operation (Amendment)

IAS 1 - Presentation of Financial Statements - Disclosure Initiative (Amendment)

IAS 16 - Property, Plant and Equipment and IAS 38 Intangible Assets - Clarification of Acceptable
Method of Depreciation and Amortization (Amendment)

IAS 16 - Property, Plant and Equipment and IAS 41 Agriculture - Agriculture: Bearer Plants
(Amendment)

IAS 27 - Separate Financial Statements – Equity Method in Separate Financial Statements
(Amendment)

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