Finance

Question: Your comments require in this regard whether sitara textile would disclose this financial information while pr?

(Posted by: waqar a on 2010-04-29 11:00:10)

“Disclosure Requirements for Long Term Loans & Advances� Scenario Sitara Textile is one of the renowned textile companies in Pakistan. It has a strong supply chain network of raw material since its establishment in order to fulfill its customers demand on time. ABC Co. one of the raw material suppliers of Sitara Textile is in short financing and need Rs. 500, 000 to enhance its production facility. ABC Co. requests Sitara Textile to lend the required amount for the period of 3 years. Sitara Textile agrees and guaranteed ABC Co. the loan on certain basis for the said period. Question Your comments require in this regard whether Sitara Textile would disclose this financial information while preparing financial statements which will publish later? Your answer must be confined in two to three lines.

Posted by: €duardo on 2010-05-01, 22:11:19

I think that by one side it could be hurtful for the company because some people might think that this could compromise the behavior of the company favoring this supplier. However, they would do it because they must follow the rules of financial regulation and if they hide this loan for Rs 500 K (I do not know how much is in Dollars) they could bring a lot of problems to the company. What they could do is to reveal at least some of the conditions of the loan to make it as clear as possible. EDIT: 500K Rupees is like 6000 USD. Not a big loan but I still think they would reveal this information.