Page 210 - 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
No. of options ‘000 Rupees in ‘000

Options outstanding at the beginning of the year 1,399 1,341 25. LIABILITIES AGAINST ASSETS
Options granted during the year - 933 SUBJECT TO FINANCE LEASE
Options declined/lapsed but subsequently offered 426 -
Options exercised during the year (790) (172) Future minimum lease payments - 1,146
Options expired/lapsed during the year (465) (703) Less: Un-amortized finance charges - (61)
Options outstanding at the end of the year 570 1,399 Present value of future minimum lease payments - 1,085
Less: Current portion shown under current liabilities - (470)
The Company’s management is of the view that no further options would be exercised from the outstanding balance as the same has already been - 615
declined by the eligible employees and management does not intend to reoffer the same. Therefore, no further expense or employee share option
compensation reserve is created in these financial statements.
25.1 During the year the Company has paid off all its lease liability.
Further, it is pertinent to mention here that the scheme is not in operation since listing of the Company on PSX primarily due to the fact that the terms of
the scheme require to be consistent with the increased legal compliance for a listed entity. The proposal for subject updation in the Existing scheme is 25.2 The amount of future payments of the lease and the period in which these payments will become due are as follows:
under review and pending approval from shareholders of the Company and SECP respectively.
2018
2019 2018 Not later than one Later than one year
Note Rupees in ‘000 year and not later than
five years
24. LONG TERM FINANCING Rupees in ‘000
From financial institutions - secured Future minimum lease payments 519 627
Less: Un-amortized finance charges (49) (12)
Diminishing musharika 24.1 2,140,117 2,263,222
Syndicated finance facility 24.2 542,857 814,286 Present value of future minimum lease payments 470 615
Syndicated finance facility (BMR) 24.3 96,208 138,968
Islamic long term finance facility - ILTFF 24.4 696,754 - 2019 2018
3,475,936 3,216,476 Note Rupees in ‘000
From related party - unsecured
Interloop Holdings (Pvt) Limited - associated company 24.5 1,400,000 - 26. DEFERRED LIABILITIES
4,875,936 3,216,476
Less: Current portion of long term financing (1,247,191) (968,540) Staff retirement benefits 26.1 2,497,894 1,925,612
3,628,745 2,247,936
26.1 Staff retirement benefits
24.1 These loans have been obtained under diminishing musharika arrangements and are repayable in quarterly installments. These are secured against Gratuity 26.1.2 2,497,894 1,925,612
1st joint pari passu charge - JPP of Rs. 6,468 million (2018: 1,474 million) over fixed assets, specific/exclusive charge of Rs. 1,992 million (2018: 3,015
million) on fixed assets (plant and machinery) and ranking charge of Rs. 718 million (2018: 1,978 million) on fixed assets of the Company. Mark up is 26.1.1 General description
charged at the rate of 3 months KIBOR plus 0.10% to 0.50% per annum (2018: 3 months KIBOR plus 0.10% to 0.75% per annum).
This represents an unfunded gratuity scheme which provides termination benefits for all employees of the Company who attain the minimum
24.2 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 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)
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 Actuarial Cost Method. Details of the defined benefit plan are as follows:
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 at
the fixed rate of 5% per annum (2018: 5% per annum). 26.1.2 Movement in the present value of defined benefit obligation
24.3 The Company has also entered into syndicated long term finance facility arrangement for Rs. 300 million with a consortium of local banks for Balancing, Opening balance 1,925,612 1,580,325
Modernization and Replacement (BMR) of assets purchased from Kohinoor Mills Limited. The repayment of loan is to be made in quarterly installments
and securities are same as mentioned in note 24.2 above. Markup is charged at the rate of 03 months KIBOR plus 1.3% per annum (2018: 03 months Expenses recognized in the statement of profit or loss 26.1.3 527,598 417,798
KIBOR plus 1.3% per annum). Remeasurement changes chargeable to other comprehensive income 26.1.5 192,825 91,719
Paid during the year (131,021) (153,266)
Balance transferred to Interloop Holdings (Pvt) Limited (17,120) (503)
24.4 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 years Disposal of Interloop Dairies Limited - (10,461)
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 plus 0.75% per Closing balance 2,497,894 1,925,612
annum (2018: nil).
26.1.3 Expenses recognized in the statement of profit or loss
24.5 The Company “Interloop Limited” has entered into loan agreement with Interloop Holdings (Pvt) Limited upto an amount of Rs. 3 billion 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 end Current service cost 341,588 301,334
of every quarter. Upon lapse of payment date, the Company shall pay late payment charges equivalent to 2% of the monthly mark up installment due Interest cost 186,010 116,464 2018 - 19
for each day of late payment, which may be considered to waive off at the discretion of management of Interloop Holdings (Pvt) Limited. The loan is
Interloop Limited unsecured but is made with full recourse against the Company and its successors. 26.1.4 Amounts charged in the statement of profit or loss are as follows: Annual Report
527,598
417,798
Cost of sales
11,498
Distribution expenses 444,633 354,187
14,787
Administrative expenses 68,178 52,113
208 527,598 417,798 209