MS AR 2018 (1)

NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2018
14.1 These represent interest-free loans and advances provided to employees in accordance with Company Policy.
These are secured against gratuity and are repayable within twelve months. The maximum amount of loans and
advances to the key management personnel outstanding at the end of any month during the year ended June 30,
2018 was Rs. 2.490 million (2017: Rs. 3.200 million). There were no loans and advances which were past due. No
amount was provided to the Chief Executive Officer or any of the Directors during the year ended June 30, 2018
(2017: Rs. Nil)
Rupees Note 2018 2017
15. DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES
Letters of credit 2,574,130 2,323,240
Prepayments 9,227,182 1,936,588
Interest accrued on term deposit receipts 194,862 2,634,343
Security deposits 15.1 14,949,019 47,916,874
Other receivables - considered good – 3,027,007
26,945,193 57,838,052
15.1 These represent payorders issued to Collector of Customs as security against custom duty on import of alloy
billets. Custom duty is not applicable in case of import of alloy billets, however, the said material is subject to
inspection for confirmation of alloy component upon which the payorders are refunded.
Rupees Note 2018 2017
16. DUE FROM THE GOVERNMENT
Sales tax 16.1 1,139,133,192 897,102,362
Advance income tax - net 16.2 1,104,820,293 919,631,797
Export regulatory duty 16.3 54,148,408 54,148,408
2,298,101,893 1,870,882,567
16.1 This includes Rs. 108.455 million on account of alleged sales tax liability recovered against order of the Additional
Commissioner Punjab Revenue Authority (PRA) on the basis of non-withholding of sales tax in respect of various
taxable services against which appeal dated May 09, 2018 has been filed before the Commissioner (Appeals)
Punjab Revenue Authority. The management and the Company’s legal advisor are strongly of the opinion that
there was no non-compliance of any provisions of the PRA or rules made there under and that the said order
and recovery is illegal and violative of the fundamental rights, against the factual position and without the support
of law and that the charges therein were based on the misconception of the department. The management
is rigorously contesting the case and along with the Company’s legal advisor are confident that the ultimate
outcome of this case will be in favour of the Company.
Rupees 2018 2017
16.2 Advance income tax - net
Opening balance 919,631,797 846,760,024
Payments during the year 437,312,304 224,664,034
1,356,944,101 1,071,424,058
Adjustments:
- Provision for taxation - prior year (7,824,143) (29,700,156)
- Provision for workers welfare fund - prior year (18,483,538) (14,929,449)
- Provision for taxation - current year (225,816,127) (107,162,656)
(252,123,808) (151,792,261)
Closing balance 1,104,820,293 919,631,797
110 MUGHAL IRON & STEEL INDUSTRIES LIMITED