MS AR 2018 (1)

45.2 Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The
Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Company’s reputation. The Company uses different methods which assists it
in monitoring cash flow requirements. Typically the Company ensures that it has sufficient cash on demand to
meet expected operational expenses for a reasonable period, including the servicing of financial obligation; this
excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural
disasters by maintaining adequate reserves, banking facilities and reserve borrowing facilities and continuously
monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
Included in note. 26.1 to the financial statements is a detail of additional undrawn facilities that the Company has
at its disposal to further reduce liquidity risk.
The following are the contractual maturities of financial liabilities including estimated interest payments and
excluding the impact of netting agreements.
June 30, 2018
Carrying Contractual Within 1 More than 1 but After 5
Rupees amount cash flows year less than 5 years years
Financial liabilities
At amortized cost
- Long-term financing 829,000,000 1,044,320,883 – 1,044,320,883 –
- Trade and other payables 231,169,350 231,169,350 231,169,350 – –
- Unclaimed dividend 3,303,075 3,303,075 3,303,075 – –
- Accrued profit / interest / mark-up 101,322,923 101,322,923 101,322,923 – –
- Short-term loans from banking companies 7,540,375,822 7,540,375,822 7,540,375,822 – –
- Short-term loans from Directors and their relatives 300,000,000 300,000,000 300,000,000 – –
June 30, 2018 9,005,171,170 9,220,492,053 8,176,171,170 1,044,320,883 –
June 30, 2017
Carrying Contractual Within 1 More than 1 but After 5
Rupees amount cash flows year less than 5 years years
Financial liabilities
At amortized cost
- Long-term financing 31,712,571 36,747,958 36,747,958 – –
- Trade and other payables 422,755,821 422,755,821 422,755,821 – –
- Unclaimed dividend 16,127,596 16,127,596 16,127,596 – –
- Accrued profit / interest / mark-up 66,546,870 66,546,870 66,546,870 – –
- Short-term loans from banking companies 7,977,002,224 7,977,002,224 7,977,002,224 – –
- Short-term loans from Directors and their relatives 37,082,301 37,082,301 37,082,301 – –
June 30, 2017 8,551,227,383 8,556,262,770 8,556,262,770 – –
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier or at
significantly different amounts. The contractual cash flow relating to long-term financing have been determined
on the basis of expected interest / mark-up rates. These rates have been disclosed in note. 22 to the financial
statements.
Annual Report 2018
129