Page 252 - InterloopAnnualReport2020

NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTS

For the year ended June 30, 2020

26.1 These loans have been obtained under diminishing musharika arrangements from various banks on different
dates. The repayment of the loans is to be made in quarterly installments within a maximum period of 06
years including maximum grace period of one and a half years from the date when financing was availed.
These are secured against 1st joint pari passu charge - JPP of Rs. 6,468 million (2019: 6,468 million), ranking
charge of Rs. 5,052 million (2019: 718 million) over fixed assets and specific charge of Rs. 992 million (2019:
1,992 million) on plant and machinery of the Holding company. These loans carry mark-up ranging from 03
months KIBOR plus 0.10% to 0.50% per annum (2019: 03 months KIBOR plus 0.10% to 0.50% per annum).
Due to Covid 19 global outbreak, MCB Islamic and HBL deferred the loan installments for the period of one
year and ABL for 06 months on different loans as a relief to the Holding company.

26.2 The Holding company has entered into a syndicated long term finance facility arrangement for Rs. 1,900
million with a consortium of local banks, lead by ABL, for acquisition of certain assets from Kohinoor Mills
Limited, disbursed on April 09, 2011. The repayment of this loan is to be made in quarterly installments
in 10 years including 03 years of grace period and the loan is secured against the 1st specific charge of
Rs. 2,933.34 million (2019: 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 (2019: 5% per annum). Due to Covid 19 global
outbreak, consortium banks deferred the loan installments for the period of one year as a relief to the Parent
company.

26.3 The Holding company has also entered into syndicated long term finance facility arrangement for Rs. 300
million with a consortium of local banks, lead by ABL, for Balancing, Modernization and Replacement (BMR)
of assets purchased from Kohinoor Mills Limited, disbursed on October 29, 2011. The repayment of loan is
to be made in quarterly installments in 10 years including 03 years of grace period and securities are same
as mentioned in 26.2 above. Markup is charged at the rate of 03 months KIBOR plus 1.3% per annum (2019:
03 months KIBOR plus 1.3% per annum). Due to Covid 19 global outbreak, consortium banks deferred the
loan installments for the period of one year as a relief to the Holding company.

26.4 The Holding company has obtained Islamic Long Term Finance Facility – ILTFF for purchase of plant and
machinery, in different tranches. Repayment of loan is to be made in quarterly installments in 10 years
including a grace period of 02 years when financing was availed and is secured against 1st JPP charge
of Rs. 3,734 million (2019: Rs. 3,734 million) over land, building and plant and machinery of the Holding
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 26.1 above. Markup is charged at SBP
ILTFF rate plus 0.75% per annum (2019: SBP ILTFF rate plus 0.75% per annum). Due to Covid 19 global
outbreak, bank deferred the loan installments of different tranches for the period of one year as a relief to the
Holding company.

26.5 Due to the effects of Covid-19 pandemic, State Bank of Pakistan took various steps to support the economy.
SBP introduced a refinance scheme for payment of salaries and wages at subsidized rate of borrowing.
The group has obtained Rs. 735.565 million of the said borrowing from Bank Alfalah Limited, first tranche
disbursed on May 05, 2020 and May 21, 2020. It is secured against EM First charge of Rs. 146 million
(2019:Nil) over land and a ranking charge of Rs. 1,334 million over the land of the group. It is repayable in 8
quarterly installments in 2.5 years including a grace period of 06 months starting from July 2020. Markup is
charged at subsidized SBP rate i.e. zero percent plus 0.90% to 1% per annum.

The group has availed this facility at concessional rate of markup with the undertaking not to lay off its workers/
employees at least during three months from the date of first disbursement. The group has recognised its
liability under SBP refinance scheme at its fair value and Rs. 48.404 million is recorded as deferred income
- government grant vide note 28.2.

26.6 The Holding Company has obtained Long Term Finance Facility – LTFF for the expansion of Hosiery Division
– V, Active wear unit, dyeing unit and Energy unit, on different dates from various banks. Repayment of loans
is to be made in quarterly installments in 10 years including 02 years grace period and is secured against
exclusive charge of Rs. 4,000 million (2019: Nil) and ranking charge of Rs. 2,400 million (2019: Nil) over land,
building and plant & machinery of the Company. Markup is charged at SBP LTFF rate plus 0.75 % per annum
(2019: Nil).
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