Page 208 - Interloop Annual Report 2018-2019

NOTES TO THE CONSOLIDATED NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTS FINANCIAL STATEMENTS

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

2019 2018 2019 2018
Rupees in ‘000 Note Rupees in ‘000
19. TAX REFUNDS DUE FROM GOVERNMENT
23. RESERVES
Duty drawback 647,238 1,054,370
Sales tax refundable 418,427 532,070 Capital reserve
Income tax refundable 883,453 865,372
1,949,118 2,451,812 Share premium 23.1 3,791,602 30,255
Revenue reserve
20. CASH AND BANK BALANCES
Translation reserves 10.1 52,620 16,051
Cash in hand Employee share option compensation reserve 23.2 - 8,608
Cash at banks 27,837 12,051
In current accounts 3,844,223 54,914
In foreign currency accounts 1,443,807 151,470
71,263 32,418 23.1 This represents premium received over and above face value of the shares issued to institutional investors, high net worth individuals and general public
1,515,070 183,888 through initial public offering (IPO) and employees of the Company through employees stock option scheme (ESOS). This reserve can be utilized by the
Company only for the purposes specified in section 81 of the Companies Act, 2017.
1,542,907 195,939
23.2 EMPLOYEES SHARE OPTION SCHEME (ESOS)
21. AUTHORIZED SHARE CAPITAL The shareholders of the Company has approved Interloop Limited - Employee Stock Options Scheme, 2016 (“the scheme”) for grant of options to
certain eligible employees to purchase ordinary shares (non-voting) of the Company, to be determined by the Compensation Committee constituted by
2019 2018 2019 2018 the Board of directors of the Company.
Number of shares in '000 Rupees in ‘000
Under the Scheme, the Company may grant options to eligible employees selected by the Compensation Committee, from time to time, which shall not
965,000 265,000 Ordinary shares of Rs. 10 each 9,650,000 2,650,000 at any time exceed 15% of the paid up capital (ordinary and voting) of the Company (as increased from time to time). The option entitles an employee to
purchase shares at an exercise price determined in accordance with the mechanism defined in the scheme at the date of grant. The aggregate number
35,000 35,000 Non-voting ordinary shares of Rs. 10 each 350,000 350,000 of shares for all options to be granted under the scheme to any single eligible employee shall not, at any time, exceed 3% of the paid up capital (ordinary
and voting) of the Company (as increased from time to time). Further the grant of options in any one calendar year exceeding 3% of the paid up capital
(ordinary and voting) shall require approval of the shareholders. However, once the number of shares issued under this scheme equal fifteen percent
1,000,000 300,000 10,000,000 3,000,000 (15%) of the paid up capital (ordinary and voting) of the Company, the entitlement pool shall be exhausted and this Scheme shall cease to operate,
notwithstanding any subsequent increase in the paid up capital.
22. ISSUED, SUBSCRIBED AND PAID UP CAPITAL The options will have a vesting period of one year and an exercise period of one year from the date options are vested as laid down in the scheme.
Option price shall be payable by the employee on the exercise of options in full or part. The options will lapse after completion of one year from the date
2019 2018 options are vested if not exercised.
Number of shares in '000
Shares issued in response to exercise of options shall be Non-Voting Ordinary Shares, hereinafter called “Class B Shares” and shall not;
130,900 21,400 Ordinary shares of Rs. 10 each fully paid in cash 1,309,000 214,000
(i) have voting rights or right to receive notice, attend and vote at the general meeting of the Company, except and otherwise provided by
Ordinary shares of Rs. 10 each issued as fully paid the Companies Act, 2017; and
738,500 168,200 7,385,000 1,682,000
bonus shares
(ii) be entitled for right shares (Ordinary and Voting).
Non-voting ordinary shares of Rs. 10 each fully
1,266 510 12,662 5,104 Shares issues under this scheme will convert into ordinary shares after 3 years from the date of listing of the Company or after completion of 3 years
paid in cash from the date of issue, whichever is later. The Company will not be obliged to buy back the shares. However, if the employees wishes to sell the shares,
the Company may buy back the shares at the lesser of the prevailing price on the securities exchange or at the break up value of the shares determined
Non-voting ordinary shares of Rs. 10 each issued
1,531 - 15,313 - as per the latest audited financial statements of the Company.
as fully paid bonus shares
Before listing of the Company fair value of the options was determined based on the break up value of shares and exercise price at the date of each
872,197 190,110 8,721,975 1,901,104 grant of options. Exercise price was determined based on latest available audited financial statements of the Company. After listing of the Company
the exercise price shall be the weighted average of the closing market price of shares of the Company for the last 30 days prior to the date of grant of
options.
22.1 Movement in issued, subscribed and paid up capital
Due to issuance of bonus shares of 300% of the existing paid up capital of the Company in current year and demerger of the investment segment of the
Ordinary Shares of Rs. 10 each fully Ordinary Shares of Rs. 10 each fully paid Company into Interloop Holdings (Pvt) Limited in last year, the break up value of the shares had been reduced to Rs. 11.91 per share. This necessitated
paid in cash bonus shares the repricing of the existing options outstanding during the year. Moreover, the existing exercise price of Rs. 76.04 per share was also not attractive at
the moment due to the floor price of Rs. 45 per share set in the draft prospectus for the proposed IPO duly approved by the Securities and Exchange
Note Voting Non-Voting Voting Non-Voting Commission of Pakistan (SECP) and the Pakistan Stock Exchange (PSX) till date. Accordingly it was proposed to offer exercise price for outstanding
options at Rs. 35 per share to make it more lucrative for the proposed eligible employees.
Number of shares in ‘000
The shareholders of the Company in their meeting held on March 5, 2019 resolved to reprice the options already granted and pending for exercise un-
Opening balance 21,400 510 168,200 - der the Company’s Employees Stock Option Scheme, from initial exercise price of Rs. 76.04 per share to the revised price of Rs. 35 per share, without 2018 - 19
any change or modification in any other specific terms and conditions under which such options have been granted in accordance with rule 7(ii)of the
Interloop Limited Issued during the year 22.1.1 130,900 1,266 738,500 1,531 Public Companies (Employees Stock Option Scheme) Rules, 2001 read with sub clause 3 of clause 6 of Chapter III of the Guidelines for Structuring and Annual Report
756
109,500
1,531
570,300
Offering of the Employees Stock Option Schemes approved by Securities and Exchange Commission of Pakistan.
Information about outstanding number of options at the end of the year is as follows:
Closing balance
206 22.1.1 During the year the Company has issued 109 million ordinary shares of Rs. 10 each in Initial Public Offerings (IPO). (Note. 1.1.2) 207