Al Ghazi Tractors : Transmission of Quarterly Financial Statements for the Period Ended September 30, 2023

CONTENTS

COMPANY INFORMATION	02
DIRECTOR'S REVIEW	04
CONDENSED INTERIM STATEMENT	06
OF FINANCIAL POSITION
CONDENSED INTERIM STATEMENT OF	07
PROFIT OR LOSS
CONDENSED INTERIM STATEMENT	08
OF CHANGES IN EQUITY
CONDENSED INTERIM STATEMENT	09
OF CASH FLOWS
NOTES TO THE CONDENSED INTERIM	10
FINANCIAL INFORMATION

Company Information

BOARD OF DIRECTORS	TECHNICAL COMMITTEE
Mr. Robert Ian McAllister	Mr. Shahid Shahbaz Toor
Chairman, Non-Executive Director	Chairman, Independent Director
Mr. Dmitrii Bogatyrev	Mr. Robert Ian McAllister
Non- Executive Director	Member, Non-Executive Director
Mr. Malik Ehtisham Ikram	Mr. Matthieu Sejourné
Non- Executive Director	Member, Non-Executive Director
Mr. Marco Votta	Mr. Vincent Delassagne
Non-Executive Director	Member, Non-Executive Director
Mr. Matthieu Sejourné	Mr. Malik Ehtisham Ikram
Non-Executive Director	Member, Non-Executive Director
Mr. Vincent Delassagne	Mr. Marco Votta
Non-Executive Director	Member, Non-Executive Director
Ms. Farah Quresh	CHIEF FINANCIAL OFFICER
Independent Director	Mr. Javed Iqbal
Mr. Shahid Shahbaz Toor
COMPANY SECRETARY
Independent Director
CHIEF EXECUTIVE OFFICER	Mr. Mansoor Khan
Mr. Sakib Eltaff	CHIEF INTERNAL AUDITOR
AUDIT COMMITTEE	Mr. Muneeb Ahmed Khan
Ms. Farah Qureshi	AUDITORS
Chairperson, Independent Director	A.F. Ferguson & Co.
Mr. Marco Votta	Chartered Accountants
Member, Non-Executive Director	TAX ADVISORS
Mr. Malik Ehtisham Ikram
Member, Non-Executive Director	EY Ford Rhodes
HUMAN RESOURCE &	Chartered Accountants
REMUNERATION COMMITTEE	Tola Associates
Ms. Farah Qureshi	Chartered Accountants
Chairperson, Independent Director	KPMG Taseer Hadi & Co.
Mr. Marco Votta	Chartered Accountants
LEGAL ADVISORS
Member, Non-Executive Director
Mr. Malik Ehtisham Ikram	Orr, Dignam & Co.
Member, Non-Executive Director	Advocates

AL-GHAZI TRACTORS LTD | 02

SHARE REGISTRAR

FAMCO Associates (Private) Limited 8-F, Adjacent to Hotel Faran Block 6, P.E.C.H.S., Near Nursery Shahrah-e-Faisal

Karachi

Tel: [phone]

Fax: [phone]

REGISTERED OFFICE

Tractor House, 102 -B

16th East Street, DHA Phase I

Off. Korangi Road, Karachi.

Tel: [phone]

Fax: [phone]

Email: [e-mail]

Website: www.alghazitractors.com

CORPORATE OFFICE

9th Floor, Askari Corporate Tower 75/76 D-1, Main Boulevard Gulberg - lll, Lahore

PLANT

Sakhi Sarwar Road

P.O. Box 38

Dera Ghazi Khan

Tel: [phone]

MARKETING CENTRES

Dera Ghazi Khan

Lahore

Multan

Islamabad

Sukkur

3RD QUARTER REPORT 2023 | 03

DIRECTORS' REVIEW

The Directors are pleased to present the condensed interim review of Al-Ghazi Tractors Limited (the Company) for the nine months ended 30th September 2023.

Economic Environment

The global economy is displaying signs of an upturn, poised to outpace earlier projections for the first half of 2023. However, these improvements remain fragile due to a slower economic rebound in China, persistent core inflation, heightened interest rates, and ongoing geopolitical uncertainties, all of which continue to exert pressure on global economic activities.

Pakistan's economy, on the other hand, has shown positive strides towards recovery. This can be attributed to the broader global economic upswing and the easing of import restrictions. These measures have effectively alleviated disruptions in the supply of raw materials, providing crucial support to export-oriented industries. In the agriculture sector, the arrival of cotton in September 2023 has witnessed remarkable growth compared to the previous year. This surge underscores a concerted effort to enhance cotton production, which augurs well for both export prospects and the overall economic outlook in FY2024. Additionally, agricultural credit disbursements have registered growth compared to the same period last year, reflecting positive support for the agricultural sector. Lastly, the government's proactive measures against currency smuggling have led to a notable appreciation of the Pakistani currency against the US dollar.

Financial Review

The company has persevered through a challenging economic and business environment during the period under review and has managed to produce 10,503 units of tractors and achieve the sale of 12,011 units in the nine months period as compared to corresponding nine months period of last year where 19,008 units were produced and 18,891 units were sold.

During the nine-month period ended on September 30, 2023, the Company generated a net revenue of Rs. 26,130 million. This figure represents a slight decrease of 1% when compared to the Rs. 26,384 million earned during the same period last year. Conversely, the cost of sales for the current reporting period amounted to Rs. 21,737 million, which showed a marginal increase in comparison to the Rs. 21,703 million incurred during the corresponding period in the previous year. As a result, the gross profit for the nine-month period under review amounted to Rs. 4,393 million as against the gross profit of Rs. 4,680 million recorded during the nine-month period ended on September 30, 2022.

The distribution and administrative expenses amounted to Rs. 322 million and Rs. 749 million respectively for the nine months period ended September 30, 2023, as compared to Rs. 305 million and Rs 345 million recorded in the same period of last year. The profit before tax achieved during the period under review amounted to Rs. 3,302 million. In comparison to the profit before tax which stood at Rs. 3,853 million during the corresponding period last year, indicating a decrease of 14%.

AL-GHAZI TRACTORS LTD | 04

The after-tax profit for the reporting period was recorded at Rs. 1,783 million, marking an 18% decrease as compared to Rs. 2,183 million in the corresponding period of last year. This decline was primarily attributed to the government's imposition of a 10% super tax on profits from both the current and preceding year. The earnings per share for the nine-month period that concluded on September 30, 2023, amounted to Rs. 30.76, as opposed to Rs. 37.67 for the corresponding period in the previous year.

The Company's annexed financial statements have been recommended by the Audit Committee of the Board and are authorized by the Board for placement on Company's website.

Future Outlook

Pakistan's economy will remain susceptible to both domestic and external shocks until the general elections. Projected on the effective execution of the IMF Stand-By Arrangement, the infusion of new external financing, and the ongoing fiscal discipline, it is anticipated that real GDP growth will persist below its full potential in the medium term, albeit with some enhancements in investment and exports.

Nonetheless, the Board maintains a positive outlook regarding the future. The economy is showing signs of recovery, especially within the agriculture sector, which has demonstrated notable improvement. The Company is resolute in its commitment to enhancing product quality and is well-prepared to secure a larger market share.

Change in Board of Directors

Subsequent to issue of the Company's half yearly report for the period ended 30th June 2023 Mr. Sakib Eltaff was appointed as CEO of the Company.

Acknowledgment

The Board expresses its profound gratitude to all stakeholders, with special acknowledgment to our esteemed customers, dealers, vendors, and suppliers, for their resolute commitment and support to the Company.

The Board extends its sincere appreciation to management team of the Company for their exceptional contributions, dedication, diligence, and unwavering commitment which have played a pivotal role in upholding the Company's standards of excellence and resilience.

On behalf of the Board of Directors,

ROBERT MCALLISTER	SAKIB ELTAFF
Chairman of the Board	Chief Executive
October 13, 2023

3RD QUARTER REPORT 2023 | 05

CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION

AS AT SEP 30, 2023 (UN-AUDITED)

Note

ASSETS

NON-CURRENT ASSETS

(Unaudited) (Audited) Sept 30, December 31,

2023 2022 (Rupees in '000)

Fixed assets	5
Deferred tax asset
Long-term loans
Long-term deposits and prepayments
Employee benefit prepayments
CURRENT ASSETS
Inventories
Trade receivables
Loans and advances
Trade deposits and short-term prepayments
Interest accrued
Other receivables
Taxation - payments less provision
Refunds due from the Government
Other financial assets
Cash and bank balances
TOTAL ASSETS
SHARE CAPITAL AND RESERVES
Share capital
Unappropriated profit
NON-CURRENT LIABILITIES
Deferred staff benefits - compensated absences
Lease liability
Deferred tax liability
Employee benefit obligations
CURRENT LIABILITIES
Trade and other payables
Customers' and dealers' advances
Taxation - provision less payments
Unclaimed Dividend
Unpaid Dividend
Current portion of Lease Liability
Short term financing
TOTAL LIABILITIES
COMMITMENTS	6

1,457,694

142,359

1,427

13,460

-

1,614,940

4,606,128

694,315

364,803

310,808

23,451

2,819

-

4,201,317

-

5,598,867

15,802,508

17,417,448

289,821

4,625,372

4,915,193

78,027

49,948

-

43,512

171,487

5,786,948

3,746,156

304,896

67,096

2,416,858

8,814

-

12,330,768

12,502,255

1,331,267

101,819

2,666

17,807

-

1,453,559

5,263,574

161,820

91,105

372,903

1,550

4,833

-

4,203,395

-

727,990

10,827,170

12,280,729

289,821

2,842,264

3,132,085

73,605

57,723

-

26,770

158,098

0

2,651,918

111,157

18,435

75,351

2,416,858

7,455

3,709,372

8,990,546

9,148,644

TOTAL EQUITY AND LIABILITIES

17,417,448 12,280,729

The annexed notes 1 to 12 form an integral part of this condensed interim financial information.

Chief Executive

Director

Chief Financial Officer

3RD QUARTER REPORT 2023 | 06

CONDENSED INTERIM STATEMENT OF PROFIT OR LOSS

FOR THE THIRD QUARTER ENDED SEPT 30, 2023 (UN-AUDITED)

	Note	Quarter ended		Nine month ended
		Sept 30,		Sept 30,		Sept 30,		Sept 30,
		2023	2022	2023	2022
				(Rupees in '000)
Revenue from contracts	7	11,378,827		6,484,210		26,130,209		26,383,679
with customers
Cost of sales	8	(9,317,027)		(5,963,664)		(21,736,898)		(21,703,260)
Gross profit		2,061,800		520,546		4,393,311		4,680,419
Distribution expenses		(143,080)		(67,277)		(321,551)		(304,513)
Administrative expenses		(330,118)		(118,483)		(749,435)		(344,518)
		1,588,602		334,786		3,322,325		4,031,388
Other income		62,096		87,918		388,984		148,351
Other operating expenses		(122,303)		(40,242)		(294,638)		(303,767)
		1,528,395		382,462		3,416,671		3,875,972
Finance costs		110,353		(4,616)		(114,319)		(22,988)
Profit before income tax		1,638,748		377,846		3,302,352		3,852,984
Income tax expense		(657,966)		(125,009)		(1,519,244)		(1,669,489)
Profit after income tax		980,782		252,837		1,783,108		2,183,495
Basic and diluted earnings		16.92		4.36		30.76		37.67
per share - Rupees

The annexed notes 1 to 12 form an integral part of this condensed interim financial information.

Chief Executive

Director

Chief Financial Officer

AL-GHAZI TRACTORS LTD | 07

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY

FOR THE THIRD QUARTER ENDED SEPT 30, 2023 (UN-AUDITED)

Balance as at January 1, 2023

Transfer from General reserve to Unappropriated profit

Profit after tax for the nine months ended Sept 30, 2023

Other comprehensive income for the nine months ended Sept 30, 2023

Transactions with the owners recorded directly in equity

Final dividend @ Rs. Nil per share

for the year ended December 31, 2022

Balance as at Sept 30, 2023

Balance as at January 1, 2022

Transfer from General reserve to Unappropriated profit

Profit after tax for the nine months ended Sept 30, 2022

Other comprehensive income for the nine months ended Sept 30, 2022

Transactions with the owners recorded directly in equity

Share capital

289,821

-

-

-

-

289,821

289,821

-

Revenue reserves

	General	Unappropriated		Total
	reserve	profit
	(Rupees in '000)
	-			2,842,264	3,132,085
	-			-	-
	-			1,783,108		1,783,108
	-					-
				1,783,108	1,783,108
	-			-	-
	-			4,625,372		4,915,193
	-			3,683,446	3,973,267
	-			-	-
	-			2,183,495		2,183,495
	-			-		-
				2,183,495		2,183,495

Final dividend @ Rs. 51.03 per share for the year ended December 31, 2021

Balance as at Sept 30, 2022

-		-		(2,957,855)	(2,957,855)
289,821		-		2,909,086	3,198,907

The annexed notes 1 to 12 form an integral part of this condensed interim financial information.

Chief Executive

Director

Chief Financial Officer

AL-GHAZI TRACTORS LTD | 08