MS AR 2018 (1)

Rupees Note 2018 2017
25. ACCRUED PROFIT / INTEREST / MARK-UP
Payable in respect of:
- Long-term financing 547,140 703,665
- Short-term loans from banking companies 100,775,783 65,843,205
101,322,923 66,546,870
26. SHORT-TERM LOANS FROM BANKING
COMPANIES - SECURED
Short-term loans from banking companies comprise of: 26.1
- Murabaha finance 502,128,525 1,360,703,635
- Other short-term loans 7,038,247,297 6,616,207,491
7,540,375,822 7,976,911,126
Temporary bank overdraft 26.2 – 91,098
7,540,375,822 7,977,002,224
26.1 Short-term loans have been obtained from various conventional and Islamic banks under mark-up / profit
arrangements for meeting various working capital requirements. The aggregate credit facilities available to
the Company other than trade credit amounted to Rs. 19,705.000 million (2017: Rs. 15,580.000 million) which
represent the aggregate of all facility agreements between the Company and respective banks in respect of
funded and non-funded facilities. Out of the total available facilities, Rs. 8,429.186 million remained unavailed as
at June 30, 2018 (2017: Rs. 3,578.667 million). Funded facilities include various facilities comprising of running
finance, cash finance, karobar finance, running musharika, istisna, wakala and other import credit facilities which
can be used interchangeably. Unfunded facilities represent facilities for opening letters of credit and guarantees.
Majority of the funded facilities are sublimits of unfunded facilities. The facilities are secured by ranking / pari
passu / joint pari passu charges over present and future current assets of the Company, pledge of stocks, lien
over documents and title of ownership of goods imported under letters of credit, lien over EE statements, against
trust receipts duly executed in favour of banks and personal guarantees of the Directors except for Independent
Directors and carry mark-up at the rates ranging from SBP / 1MK / 3MK rate + 0.65% to 1.00% (2017: SBP / 1MK
/ 3MK rate + 0.65% to + 1.00%) per annum.
26.2 This represents temporary overdraft due to cheques issued by the Company at the reporting date to be met with
subsequent deposits.
27. SHORT-TERM LOANS FROM DIRECTORS AND THEIR RELATIVES - UNSECURED
This represents interest-free and unsecured loan from Directors and their relatives and are repayable upon
demand. These loans were provided and utilized for meeting working capital requirements.
28. CONTINGENCIES AND COMMITMENTS
Contingencies:
i) Writ petition dated May 25, 2016 has been filed before the Honourable Lahore High Court against
demand of Rs. 18.324 million raised by the Customs Authorities which was created by treating wastage
incurred during manufacturing process of M.S Products as sale of recoverable waste, whereas the
contention of the Company was that the wastage was burning loss and not recoverable waste. The
Company has temporarily deposited Rs. 4.717 million under protest against the above demand.
However, no provision has been made in these financial statements in respect of the matter as the
management and the Company’s legal advisor are confident that the ultimate outcome of this case will
be in favour of the Company.
Annual Report 2018
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