WAVES
Quarterly Report
30 September 2023
Waves Corporation Limited
CORPORATION INFORMATION
BOARD OF DIRECTORS
1. | Mr. Muhammad Zafar Hussain | Chairman/Independent Director |
2. | Mr. Tajammal Hussain Bokharee | Independent Director |
3. | Mr. Khalid Azeem | Non-Executive Director |
4. | Mr. Moazzam Ahmad Khan | Non-Executive Director |
5. | Mrs. Nighat Haroon Khan | Non-Executive Director |
6. | Mr. Hamza Ahmad Khan | Executive Director |
7. | Mr. Haroon Ahmad Khan | Chief Executive Officer |
AUDIT COMMITTEE | ||
1. | Mr. Tajammal Hussain Bokharee | Chairman/Independent Director |
2. | Mr. Moazzam Ahmad Khan | Member/Non-Executive Director |
3. | Mrs. Nighat Haroon Khan | Member/Non-Executive Director |
4. | Mr. Ahmad Bilal Zulfiqar | Secretary |
HR & REMUNERATION COMMITTEE | ||
1. | Mr. Muhammad Zafar Hussain | Chairman/Independent Director |
2. | Mr. Khalid Azeem | Member/Non-Executive Director |
3. | Mr. Moazzam Ahmad Khan | Member/Non-Executive Director |
4. | Mr. Haroon Ahmad Khan | Member/ Executive Director |
5. | Mr. Ahmad Bilal Zulfiqar | Secretary |
CHIEF FINANCIAL OFFICER | COMPANY SECRETARY | |
Mr. Arslan Shahid Butt | Mr. Ahmad Bilal Zulfiqar | |
HEAD OF INTERNAL AUDITOR | LEGAL ADVISOR | |
Mr. Usman Khalid | Law Wings Advocates & Solicitors | |
EXTERNAL AUDITORS | SHARE REGISTRAR | |
RSM Avais Hyder Liaquat Nauman | Corplink (Private) Limited | |
Chartered Accountants | ||
RESISTERED OFFICE/PLANT | COMPANY REGISTRATION NO. | |
Factory: 9-KM Multan Road, Lahore | CUIN 0001286 | |
PH. No. 042-35415421-5,35421502-4 | Email:cs@waves.net.pk | |
UAN: 042-111-31-32-33 | Website:www.waves.net.pk |
BANKERS | |
Al Baraka Bank (Pakistan) Limited | National Bank of Pakistan |
Askari Bank Limited | Pak Brunei Investment Company Limited |
Bank AlFalah Limited | Pak Libya Holding Company Limited |
Dubai Islamic Bank Pakistan Limited | Pak Oman Investment Company Limited |
Faysal Bank Limited | Samba Bank Limited |
First Prudential Modaraba | Silk Bank Limited |
Habib Bank Limited | Sindh Bank Limited |
Habib Metropolitan Bank Limited | The Bank of Khyber |
Industrial & Commercial Bank of China | The Bank of Punjab |
Contact Information: | |
Registered Office: | 042-35415421-5,042-35421502-4 |
Email: | cs@waves.net.pk |
Web Site: | www.waves.net.pk |
Directors Report to Shareholders
Overview
On behalf of the Board of Directors of Waves Corporation Limited, previously Waves Singer Pakistan Limited (WAVES or the Company), we submit the Directors' Review Report on the condensed interim consolidated and standalone financial statements for the period ending on 30 September 2023 (un- audited).
Globally, the economy is showing signs of improvement, but challenges in core inflation, and geopolitical uncertainties persist. The Asian Development Bank (ADB) and the World Bank have different growth projections for Pakistan's economy, with ADB forecasting 1.9% growth for the current fiscal year, while the World Bank estimates 1.7% for FY 24 and 2.4% for FY 25. However, Pakistan faces significant risks, including rising energy tariffs, inflation, and political uncertainty due to upcoming elections. The country's commitment to the IMF program is crucial for macroeconomic stability.
Pakistan's economy is rebounding in FY2024, with increased exports and relaxed import restrictions. Foreign Direct Investment (FDI) has grown, driven by Chinese investments. The agriculture sector is seeing substantial growth in cotton production. Large-scale manufacturing is recovering, with select sectors showing positive growth. Pakistan has tackled economic challenges through policy measures, and the government has established the Special Investment and Facilitation Council (SIFC) to attract investments in various sectors, signaling a commitment to economic recovery.
The wholly owned subsidiary Waves Marketplace Limited (WAVES Plus) continued facing challenges owing to the tough economic and financial environment. The business model for real estate development was improved to include sizeable commercial portion, that increases its top and bottom line. The home appliances business undertaken by the Company's subsidiary Waves Home Appliances Limited (WHALE) faces challenges as the whole appliances industry was under pressure due to restriction on import of raw material. However, WHALE was able to position itself to substantially rely on locally manufactured material vis-à-vis its competitors thus reducing production risks.
The financial highlights for the nine months period ended are presented as hereunder for consolidated financial statements, wherein financial results of standalone financial statements are also provided in this report:
Consolidated Operating Results
9 Months | 9 Months | |
Rs. in '000 | Rs. in '000 | |
Sales (Net) | 4,179,651 | 9,198,580 |
Gross Profit | 1,106,713 | 1,903,561 |
Profit from Operations | 255,906 | 720,394 |
Profit before taxation | 254,682 | 580,689 |
Profit after taxation | 199,391 | 465,422 |
Earnings Per Share (Rupees) | 0.71 | 1.65 |
The Board has considered and is providing operating results and business performance for consolidated financial results as it better reflects the performance of the Company as a holding entity. The individual standalone operating results of the Company (after demerger of the home appliances
business to WHALE) are also given. Please refer to the complete set of quarterly financial statements for complete 9 months results. The variance of the current results with the previous period is primarily due to the challenging economic and financial environment, where supply was constrained and demand was restricted.
Standalone Results of the Company
The standalone results of the Company are given hereunder (after demerger of home appliances business to WHALE):
9 Months | 9 Months | |
Rs. in '000 | Rs. in '000 | |
Other Income | 137,595 | 126,325 |
Profit before Taxation | 73,188 | 86,158 |
Profit after Taxation | 69,938 | 67,203 |
Earnings Per Share | 0.25 | 0.24 |
Based on the financial results in view of the tough current economic and political conditions the Board of Directors do not recommend any pay-out to the shareholders of the Company.
The standalone financial statements of the Company in which investments in subsidiaries are accounted for on the basis of direct equity interest rather than on the basis of reported results and net assets of the investees. The Consolidated financial statements of the Company are prepared and presented separately. The Company has following subsidiary/wholly-owned subsidiaries, whose further information can be reviewed in the notes to the consolidated financial statements of the Company:
Waves Home Appliances Limited (WHALE) | Subsidiary |
Waves Marketplace Limited (WML) | Wholly Owned Subsidiary |
Waves Builders & Developers (Private) Limited (WBDL) | Wholly Owned Subsidiary |
The Sales (net) of WHALE for the 9 months period ended were PKR 4,068 million as compared to PKR 8,403 million previous peirod, whereas net profit was PKR 97 million as compared to PKR 310 million in the previous period. The Sales (net) of WML were PKR 1,165 million as compared to PKR 2,805 million, whereas net profit was PKR 32 million as compared to PKR 87 million in the previous period. WBDL is still in the development phase, whereas all real estate project planning activities are carried out in the holding Company. Hence it is carried on going concern basis. The quarterly financial results of WHALE can be reviewed at the Company's website www.waves.net.pk.
In view of recent policy changes in allowing import of materials/components by the home appliances industry, the L/C opening process by the commercial banks is expected to go slow. Consequently, dependence on foreign sources of materials is continuing to be challenging, therefore, WHALE has been making arrangements for achieving major import substitution in order to ensure uninterrupted continuity of operations. In these circumstances market sizes of domestic appliances may not reach the expected levels. Accordingly, WHALE has substantially switched to local source of materials, which will ensure less dependence on imports and inhouse development of certain imported components through WHALE's vendors. There is a huge potential of deep freezers and vizi-coolers corporate sales not only to Coca Cola but for the whole frozen food and beverages industry. Insha Allah, continuity of operations shall be fully focused during ongoing difficult times.
Going forward is a challenging year for the country however, it has observed fiscal and current account balance improvements. The decisions and stabilization measures by the Government has navigated the
country towards a sustainable path. Moreover, administrative and regulative action for curbing illegal activities in the foreign exchange market have started to yield desired results. On external front current account deficit and aligned indicators show developments. Similarly, fiscal performance has also shown improvement during the period. It is expected that the economic revival plan and prudent actions - policies including SIFC and IT policy- will attract new investments to create a multiplier effect in the economy for higher and inclusive economic growth in FY2024 and further in the medium term.
Looking ahead we remain optimistic and confident about the future of the Company. We have a coherent team of management, staff & workforce, brand name, excellent product line, and a nationwide distribution and after sales service network which allows us to reach customers and provide them service both in urban & rural areas at the best possible terms. We would like to thank all our Shareholders and the Board of Directors for their immense support.
ACKNOWLEDGEMENTS
We extend our deepest appreciation to all our stakeholders, including our valued customers, suppliers, business partners, financial institutions, regulators, for their trust and support. The Company's achievements and current standing are a demonstration to the solid commitment, hard work, and tremendous support from our management team and employees. We are confident in our ability to meet and exceed stakeholders' expectations.
For and on behalf of the Board:
-Sd- | -Sd- |
___________________ | ____________________ |
Chief Executive Officer | Director |
Lahore |
Waves Corporation Limited
Condensed Interim Consolidated Statement of Financial Position (Un-audited) As at 30 September 2023
(Un-audited) | (Audited) |
30 September | 31 December |
2023 | 2022 |
(Un-audited) | (Audited) |
30 September | 31 December |
2023 | 2022 |
EQUITY AND LIABILITIES
Share capital and reserves
Authorised capital 300,000,000
(2022: 300,000,000) ordinary shares of Rs. 10 each
Issued, subscribed and paid up capital Capital reserve
Revenue reserve - unappropriated profit Surplus on revaluation of property,
plant and equipment - net of tax
Non-contolling interest
Non-current liabilities
Long term loans - secured Lease liabilities
-Assets under right of use - secured
-Building under right of use - unsecured Employee retirement benefits - obligation Deferred tax liability - net
Deferred income
Note | ---------- (Rupees in '000) ---------- | |||
Restated | ||||
3,000,000 | 3,000,000 | |||
5 | 2,814,062 | 2,814,062 | ||
5,010,048 | 5,014,250 | |||
840,284 | 680,528 | |||
544,233528,895
9,208,626 9,037,735
1,586,917 1,563,509
10,795,543 10,601,244
1,085,894 | 789,415 |
34,62655,189
53,45241,687
10,78513,553
426,839434,546
5,8966,477
1,617,493 1,340,867
ASSETS
Non-current assets
Property, plant and equipment Intangible assets and goodwill Long term deposits
Current assets
Stores, spares and loose tools Stock-in-trade
Trade debts - Retail
-Whole Sales
Advances, deposits, prepayments and other receivables
Taxation - net
Cash and bank balances
Note ---------- | (Rupees in '000) ---------- |
Restated |
8 | 10,406,031 | 8,855,926 | |
2,822,567 | 2,848,133 | ||
22,926 | 25,669 | ||
13,251,524 | 11,729,728 | ||
39,626 | 44,143 | ||
3,049,866 | 3,288,148 | ||
1,323,598 | 1,457,687 | ||
2,868,023 | 4,118,627 | ||
70,874 | 100,781 | ||
12 | 360,032 | 385,124 | |
10 | 128,351 | 114,344 | |
7,840,370 | 9,508,854 |
Current liabilities
Trade and other payables
Short term borrowings - secured6 Loan from sponsors - unsecured
Current portion of long term liabilities
Contingencies and commitments | 7 |
3,855,363
4,220,888
127,817
476,260
8,680,328
-
21,093,364
3,661,839
4,955,965
119,497
560,640
9,297,941
-
21,240,052
Non-current assets held for sale
1,470 | 1,470 | |
7,841,840 | 9,510,324 | |
21,093,364 | 21,240,052 | |
The annexed notes 1 to 16 form an integral part of these condensed interim consolidated financial statements.
____________________ | ________________ | |
Lahore | Chief Executive Officer | Director |
____________________
Chief Financial Officer
Waves Corporation Limited
Condensed Interim Consolidated Statement of Profit or Loss Account (Un-audited) For the nine months period ended 30 September 2023
30 June | 2023 |
Note
Nine months ended | Three months ended | |||
30 September | 30 September | 30 September | 30 September | |
2023 | 2022 | 2023 | 2022 |
-------------------------------- (Rupees in '000) --------------------------------
Sales - net of sales return
Sales tax and trade discount on invoices
Sales - net11 Cost of sales
Gross profit
Marketing, selling and distribution costs Administrative expenses
Other expenses
Other income
Profit from operations
Earned carrying charges
Finance cost
Profit before taxation
Taxation
Profit for the period
Attributable to:
Owners of the Group
Non-controlling interests
5,017,679
(838,028)
4,179,651
(3,072,939)
1,106,713
(521,901)
(355,819)
(65,143)
92,056
(850,806)
255,906
215,973
(217,197)
(1,224)
254,682
(54,751)
199,931
175,094
24,838
199,931
11,114,454
(1,915,874)
9,198,580
(7,295,018)
1,903,561
(771,931)
(434,568)
(72,411)
95,743
(1,183,167)
720,394
256,046
(395,752)
(139,706)
580,689
(115,266)
465,422
386,514
78,908
465,422
1,432,784
(197,671)
1,235,113
(889,350)
345,764
(176,046)
(136,128)
(14,783)
8,369
(318,587)
27,176
74,639
(56,052)
18,587
45,763
(14,843)
30,920
24,387
6,534
30,920
2,401,473
(345,114)
2,056,360
(1,631,502)
424,856.76
(236,951)
(140,035)
(1,278)
21,165
(357,100)
67,759
93,757
(118,395)
(24,638)
43,121
(16,370)
26,751
21,530
5,221
26,751
Earnings per share - basic and diluted (Rupees) | 0.71 | 1.65 | 0.11 | 0.10 | |||
The annexed notes 1 to 16 form an integral part of these condensed interim consolidated financial statements.
____________________ | ________________ | ____________________ | |
Lahore | Chief Executive Officer | Director | Chief Financial Officer |
Waves Corporation Limited
Condensed Interim Consolidated Statement of Comprehensive Income (Un-audited)
For the nine months period ended 30 September 2023
Nine months ended | Three months ended | ||||||
30 September | 30 September | 30 September | 30 September | ||||
2023 | 2022 | 2023 | 2022 | ||||
-------------------------------- | (Rupees in '000) -------------------------------- | ||||||
465,422 | 26,751 | ||||||
Profit for the period | 199,931 | 30,920 | |||||
Other comprehensive income for the period | |||||||
Items that will not be reclassified to profit or loss account: | - | - | - | - | |||
Total comprehensive income for the period | 199,931 | 465,422 | 30,920 | 26,751 |
The annexed notes 1 to 16 form an integral part of these condensed interim consolidated financial statements.
_____________________ | ____________________ | _______________________ | |
Lahore | Chief Executive Officer | Director | Chief Financial Officer |
Waves Corporation Limited
Condensed Interim Consolidated Statement of Changes In Equity (Un-audited) For the nine months period ended 30 September 2023
Balance at 01 January 2022
Total comprehensive income for the period
Capital reserves | Revenue reserve | ||||||||||||||
Issued, | |||||||||||||||
Surplus on | |||||||||||||||
subscribed | Share | Total | Non controling | Total | |||||||||||
Other capital | revaluation of | Unappropriated | |||||||||||||
and paid-up | premium | interest | |||||||||||||
reserve | land and | profits | |||||||||||||
capital | reserve | ||||||||||||||
building | |||||||||||||||
- - - - | - | - - - - - - - - - - - | - | - - - - - - - - - - - | - | - | - - - - - - - - - Rupees in '000 - - - - - - - - - | - - - - - - - - - - - - | - | - - - - - - - - - - - | - | - - - - - | |||
2,814,062 | 5,025,661 | 5,000 | 561,698 | 318,322 | 8,724,742 | 1,549,553 | 10,274,295 |
Profit for the period
Other comprehensive income for the period
Surplus transferred to accumulated profits
Incremental depreciation relating to surplus on revaluation - net of tax
Shares capital issuance expenses
Related deferred tax on revaluation surplus Effect of change in tax rate
Balance as at 31 December 2022 (Audited)
Prior year adjustment
Balance as at 31 December 2022 (Restated) Total comprehensive income for the period
Profit for the period
Other comprehensive income for the period
Surplus transferred to accumulated profits
Incremental depreciation relating to surplus on revaluation - net of tax
Shares capital issuance expenses
-
-
-
-
-
2,814,062
2,814,062
-
-
-
-
-
-
-
-
(16,411)
-
5,009,250
5,009,250
-
-
-
-
(4,202)
-
-
-
-
-
5,000
5,000
-
-
-
-
-
-
-
(32,803)
528,895
-
528,895
-
-
-
15,338
-
351,391
14,241
365,632
32,803
-
716,756
(36,228)
680,528
175,094
-
175,094
(15,338)
351,391
14,241
365,632
-
-
(16,411)
-
-
9,073,963
(36,228)
9,037,735
175,094
-
175,094
-
(4,202)
14,697
4,859
19,556
(5,600)
1,563,509
1,563,509
24,838
24,838
(1,430)
366,088
19,099
385,188
-
(22,011)
-
-
10,637,472
(36,228)
10,601,244
199,931
-
199,931
-
(5,632)
Balance as at 30 September 2023 | 2,814,062 | 5,005,048 | 5,000 | 544,233 | 840,284 | 9,208,626 | 1,586,917 | 10,795,543 |
The annexed notes 1 to 16 form an integral part of these condensed interim consolidated financial statements.
____________________ | _______________ | _______________________ | |
Lahore | Chief Executive Officer | Director | Chief Financial Officer |
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Waves Singer Pakistan Ltd. published this content on 31 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 October 2023 11:01:44 UTC.