Page 108 - Interloop Annual Report 2018-2019

NOTES TO THE UNCONSOLIDATED NOTES TO THE UNCONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2019
1. LEGAL STATUS AND OPERATIONS
1.1 Interloop Limited (the Company) was incorporated in Pakistan on 25th April, 1992 as a private limited company and
subsequently it was converted into public limited company on 18th July, 2008. The Company was listed on Pakistan
Stock Exchange on 5th April, 2019. The Company is engaged in the business of manufacturing and selling of
socks, leggies, denim and yarn, providing yarn dyeing services and to generate electricity for its own use.
The geographical locations and addresses of the Company’s business units, including production facilities are as
under:
- Registered office: Al-Sadiq Plaza, P-157, Railway Road, Faisalabad.
- Corporate office & Plant 1: 1-KM, Khurrianwala – Jaranwala Road, Khurrianwala, Faisalabad-Pakistan.
- Plant 2, Plant 4 & Spinning: 7-KM, Khurrianwala – Jaranwala Road, Khurrianwala, Faisalabad-Pakistan.
- Plant 5: 6-KM, Khurrianwala – Jaranwala Road, Khurrianwala, Faisalabad-Pakistan.
- Plant 3 & Denim: 8-KM, Manga- Raiwind Road, Raiwind, Dist. Kasur, Lahore-Pakistan.
1.2 The Board of Directors of the Company decided to initiate the proceedings for enlisting of the Company on the
Pakistan Stock Exchange Limited to finance hosiery division - V and denim projects. Hence, the Company issued
the prospectus for Initial Public Offer (IPO) of 109 million ordinary shares of Rupees 10 each at a floor price of
Rupees 45 per share including share premium of Rupees 35 per share as on 05 March 2019. Details regarding
utilization of IPO proceeds for denim project and plant expansion have been fully explained in the prospectus.
Before the date of the reporting period, 81.750 million ordinary shares were offered and successfully subscribed
through book building process by Institutional Investors and High Net Worth Individuals (HNWI) at a strike price
of Rupees 46.10 per share while the remaining 27.250 million ordinary shares were offered to general public
for subscription at strike price of Rupees 46.10 per share. Ordinary shares offered to general public were fully
subscribed and shares have been duly allotted to all shareholders. As on 05 April 2019, Pakistan Stock Exchange
Limited has approved the Company’s application for formal listing and quotation of the shares on Pakistan Stock
Exchange.
2. BASIS OF PREPARATION
2.1 Statement of compliance
These unconsolidated financial statements have been prepared in accordance with the accounting and reporting
standards as applicable in Pakistan. The accounting and reporting standards applicable in Pakistan comprise of:
- International Financial Reporting Standards (IFRS Standards) issued by the International Accounting Standards
Board (IASB) as notified under the Companies Act, 2017; and
- Provisions of and directives issued under the Companies Act, 2017.
Interloop Limited Where the provisions of and directives issued under the Companies Act, 2017 differ from the IFRS Standards,
the provisions of and directives issued under the Companies Act, 2017 have been followed.
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FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2019
2.2 Basis of measurement
These unconsolidated financial statements have been prepared under the historical cost convention except as
otherwise stated in respective policy notes.
2.3 Functional and presentation currency
These unconsolidated financial statements are presented in Pakistani Rupee which is also the Company’s functional
currency.
3. NEW AND REVISED STANDARDS, INTERPRETATIONS AND PRONOUNCEMENTS
3.1 Standards, interpretations and amendments to approved accounting standards which became effective
during the year
- Amendment to IAS 40 ‘Investment Property’:
Transfers of investment property clarifies that an entity shall transfer a property to, or from, investment property
when, and only when there is a change in use. A change in use occurs when the property meets, or ceases to
meet, the definition of investment property and there is evidence of the change in use. In isolation, a change in
management’s intentions for the use of a property does not provide evidence of a change in use. The amendment
does not have any impact on Company’s financial statements.
- Amendments to IFRS 2 ‘Share-based Payment’ - Clarifying how to account for certain types of share-
based payments:
The amendments are intended to eliminate diversity in practice in three main areas:
- The effects of vesting conditions on the measurement of a cash-settled share-based payment transaction;
- The classification of a share-based payment transaction with net settlement features for withholding tax
obligations;
- The accounting where a modification to the terms and conditions of a share-based payment transaction
changes its classification from cash-settled to equity-settled.
The amendment does not have a significant impact on these unconsolidated financial statements.
- Amendment to IFRS 4 ‘Insurance Contract’- Applying IFRS 9 ‘Financial Instruments’ with IFRS 4:
The amendment address issue arising from the different effective dates of IFRS 9 and the forthcoming new
insurance contract standard IFRS 17 ‘Insurance Contracts’. The amendments introduce two alternative
options for entities issuing contracts within the scope of IFRS 4, notably a temporary exemption and an overlay 2018 - 19
approach. The temporary exemption enables eligible entities to defer the implementation date of IFRS 9. The
overlay approach allows an entity applying IFRS 9 from July 01, 2018 onwards to remove from profit or loss the Annual Report
effects of some of the accounting mismatches that may occur from applying IFRS 9 before IFRS 17 is applied.
The amendment does not have any impact on the Company’s financial statements.
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