Page 127 - InterloopAnnualReport2021

NOTES TO THE

FINANCIAL STATEMENTS

For the year ended June 30, 2021

24.1 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 year from the date when financing was
availed. These are secured against 1st joint pari passu charge - JPP of Rs. 10,269 million (2020: Rs. 6,468
million), ranking charge of Rs. 50 million (2020: Rs. 5,052 million) over fixed assets and specific charge of
Rs. 150 million (2020: Rs. 992 million) on plant and machinery of the Company. These loans carry mark-
up ranging from 03 months KIBOR plus 0.10% to 0.25% per annum (2020: 03 months KIBOR plus 0.10%
to 0.50% per annum). During last financial year, the Company has availed the loan deferment for period
of one year.

24.2 The Company was entered into a syndicated long term finance facility arrangement of 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 was 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. 433.33 million (2020: Rs. 2,933.34 million) over the acquired assets of KML Hosiery Division (ILP- HD-
III). The mark up was charged at the fixed rate of 5% per annum (2020: 5% per annum).

24.3 The Company has 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 the securities
are same as mentioned in 24.2 above. The markup is charged at the rate of 03 months KIBOR plus 1.3%
per annum (2020: 03 months KIBOR plus 1.3% per annum). During last financial year the Company has
availed the loan deferment for period of one year.

24.4 The 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. 5,734 million (2020 : Rs. 3,734 million) and ranking charge of Rs. 1200 million (2020: Rs. 2,000 million)
over land, building and plant and machinery of the Company. These charges are same on both ILTFF and
diminishing musharika facilities from HBL and is included in aggregate charge mentioned in note 24.1
above. Markup is charged at SBP ILTFF rate plus 0.75% per annum (2020: SBP ILTFF rate plus 0.75% per
annum).

24.5 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 Company has obtained Rs. 2,188.36 million (2020 : Rs. 666.67 million) which includes
transfer of Rs. 188.36 million from IL Apparel (Pvt) Limited of the said borrowing from Bank Alfalah
Limited, first tranche disbursed on May 21, 2020. It is secured against a ranking charge of Rs. 2,667
million (2020: Rs. 1,334 million) over the fixed assets of the Company. 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 rate ranging from SBP rate i.e. zero percent plus 0.9 % to 1% per annum (2020 :
SBP rate i.e. zero percent plus 0.90 % per annum).

The Company 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 Company
has recognised its liability under SBP refinance scheme at its fair value and Rs. 113.010 million (2020 :
Rs. 42.09 million) is recorded as deferred income - government grant vide note 26.2.

24.6 The Company has obtained Long Term Finance Facility - LTFF for the establishment of Hosiery Division -
V, Fabric Dye House unit and expansion of Active Wear, Energy Unit, and Spinning 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 (2020: Rs. 4,000 million)
over land, building, plant and machinery of Hosiery Division-V, ranking charge of Nil (2020: Rs. 2,400
million) and exclusive charge of Rs. 2,400 million (2020: Nil) over financed assets of Active Wear, Fabric
Dye House, Energy Unit - Hosiery Division-III and Spinning Unit of the Company. Markup is charged at
SBP LTFF rate plus 0.75 % per annum (2020: SBP LTFF rate plus 0.75 % per annum).

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