Page 140 - Interloop Annual Report 2018-2019

NOTES TO THE UNCONSOLIDATED NOTES TO THE UNCONSOLIDATED

FINANCIAL STATEMENTS FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2019 FOR THE YEAR ENDED JUNE 30, 2019

23.2 The company has entered into a syndicated long term finance facility arrangement for Rs. 1,900 million with a consortium of local banks for acquisition 2019 2018
of certain assets from Kohinoor Mills Limited. The repayment of this loan is to be made in quarterly installments and the loan is secured against the 1st Note Rupees in ‘000
specific charge of Rs. 2,933.34 million (2018: 2,933.34 million) over the fixed assets of Interloop Limited (Hosiery Division III). The mark up is charged 25.2 Movement in the present value of defined benefit obligation
at the fixed rate of 5% per annum (2018: 5% per annum).
Opening balance 1,925,612 1,572,461
23.3 The Company has also entered into syndicated long term finance facility arrangement for Rs. 300 million with a consortium of local banks for Bal-
ancing, Modernization and Replacement (BMR) of assets purchased from Kohinoor Mills Limited. The repayment of loan is to be made in quarterly Expenses recognized in the statement of profit or loss 25.3 522,833 414,543
installments and securities are same as mentioned in note 23.2 above. Markup is charged at the rate of 03 months KIBOR plus 1.3% per annum Remeasurement of plan obligation chargeable to other comprehensive income 25.5 192,825 91,305
(2018: 03 months KIBOR plus 1.3% per annum). Balance transferred to Interloop Holdings (Pvt) Limited (17,120) (503)
Balance transferred to IL Apparel (Pvt) Limited (10,506) -
23.4 The Company has obtained Islamic Long Term Finance Facility - ILTFF of Rs. 1,500 million for purchase of plant and machinery for a period of 10 Paid during the year (131,021) (152,194)
years including 2 year grace period. Repayment of loan is to be made in quarterly installments and is secured against 1st JPP charge of Rs. 3,734
million (2018: nil) over land, building and plant and machinery of the Company. This 1st JPP charge of Rs. 3,734 million is same on both ILTFF and
diminishing musharika facilities from HBL and is included in aggregate charge mentioned in note 23.1 above. Markup is charged at SBP ILTFF rate Closing balance 2,482,623 1,925,612
plus 0.75% per annum (2018: nil).
25.3 Expenses recognized in the statement of profit or loss
23.5 The Company "Interloop Limited" has entered into loan agreement with Interloop Holdings (Pvt) Limited upto an amount of Rs. 3,000 million for period
of three years including one year grace period. Mark up is charged at the rate of 5% per annum and will be paid till 15th of every month, following the Current service cost 336,823 298,575
end of every quarter. Upon lapse of payment date, the Company shall pay late payment charges equivalent to 2% of the monthly mark up installment Interest cost 186,010 115,968
due for each day of late payment, which may be considered to waive off at the discretion of management of Interloop Holdings (Pvt) Limited. The 25.4 522,833 414,543
loan is unsecured but is made with full recourse against the Company and its successors.
25.4 Amounts charged in the statement of profit or loss are as follows:
2019 2018
Rupees in ‘000 Cost of sales 440,739 352,125
Distribution expenses 14,368 11,498
Administrative expenses 67,726 50,920
24. LIABILITIES AGAINST ASSETS
SUBJECT TO FINANCE LEASE 522,833 414,543
Future minimum lease payments - 1,146 25.5 Total remeasurement chargeable to other comprehensive income
Less: Un-amortized finance charges - (61)
Present value of future minimum lease payments - 1,085 Remeasurement of plan obligation:
Less: Current portion shown under current liabilities - (470) Actuarial gain from changes in demographic assumptions - (75,521)
Actuarial losses from changes in financial assumptions 97,569 67,778
- 615 Experience adjustments 95,256 99,048
192,825 91,305
24.1 During the year the Company has paid off all its lease liability.
24.2 The amount of future payments of the lease and the period in which these payments will become due are as follows: 25.6 Principal actuarial assumptions used 2019 2018
Discount rate used for profit and loss charge 10.00% 7.75%
2018 Discount rate for year end obligation 14.50% 10.00%
Later than one year
Not later than one and not later than Salary increase used for year end obligation
year Salary increase for FY 2019 N/A 9.25%
five years Salary increase for FY 2020 14.00% 9.25%
Salary increase for FY 2021 14.00% 9.25%
Rupees in ‘000
Salary increase for FY 2022 14.00% 9.25%
Salary increase for FY 2023 14.00% 9.25%
Future minimum lease payments 519 627 Salary increase for FY 2024 14.00% 9.25%
Less: Un-amortized finance charges (49) (12) Salary increase for FY 2025 onward 14.00% 9.25%
Present value of future minimum lease payments 470 615
Demographic assumption
Mortality rates (for deaths in service) SLIC SLIC
2019 2018 2001-2005 2001-2005
Note Rupees in ‘000 Setback 1 year Setback 1 year
Staff retirement gratuity 60 years 60 years
25. DEFERRED LIABILITIES
Staff retirement gratuity 25.2 2,482,623 1,925,612 25.7 The expected contribution to defined benefit obligation for the year ending June 30, 2020 will be Rs. 733.96 million.
25.1 General description 25.8 Sensitivity analysis
This represents an unfunded gratuity scheme which provides termination benefits for all employees of the Company who attain the minimum qualifying
period. The latest actuarial valuation of the defined benefit plan was carried out as at June 30, 2019 using the Projected Unit Credit (PUC) Actuarial The calculation of the defined benefit obligation is sensitive to assumptions set out above. The following table summarizes how the impact on the
Cost Method. Details of the defined benefit plan are as follows: definedbenefit obligation at the end of the reporting period would have increased / (decreased) as a result of a change in respective assumptions 2018 - 19
Interloop Limited Annual Report
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