Honda Atlas Cars Pakistan : Transmission of Quarter Report for the Period Ended June 30, 2023

Cover Concept

As a futuristic Company we continue to map our 2023 journey towards driving innovation, pushing boundaries, and embracing change. Our team is devotedly taking up the forward-thinking approach, that will help continue us to achieve the goal to drive towards a prosperous and cutting-edge future.

Contents		Management / Company's Structure
01	Company Information

Review Report

02 Chairman's Review

Condensed Interim Financial Statements

1. Condensed Interim Statement of Financial Position
2. Condensed Interim Statement of Profit or Loss
3. Condensed Interim Statement of Comprehensive Income
4. Condensed Interim Statement of Changes in Equity

1. Condensed Interim Statement of Cash Flows
2. Notes to and Forming Part of the Condensed Interim Financial Statements

21 Chairman's Review (Urdu)

22 Honda Dealers' Network

Driving towards the Future

Management /	2 Review Report	3	Condensed Interim
1 Company's Structure	Financial Statements

Company Information

Board of Directors

Mr. Aamir H. Shirazi

Chairman

Mr. Takafumi Koike

President & CEO

Mr. Saquib H. Shirazi

Director & Senior Advisor

Mr. Shinobu Nakamura

Executive Director & VP (P)

Mr. Nobuyoshi Noda

Director

Mr. Gaku Nakanishi

Director

Mr. Muhammad Naeem Khan

Independent Director

Mr. Ariful Islam

Independent Director

Ms. Rie Mihara

Independent Director

Audit Committee

Mr. Muhammad Naeem Khan

Chairman

Mr. Saquib H. Shirazi

Member

Mr. Nobuyoshi Noda

Member

Mr. Gaku Nakanishi

Member

Executive Committee

Mr. Takafumi Koike

Mr. Maqsood-ur-Rehman Rehmani Mr. Shinobu Nakamura

Human Resource and Remuneration Committee

Mr. Muhammad Naeem Khan

Chairman

Mr. Saquib H. Shirazi

Member

Mr. Takafumi Koike

Member

Mr. Shinobu Nakamura

Member

Mr. Nobuyoshi Noda

Member

Company Secretary & Vice President

Mr. Maqsood-ur-Rehman Rehmani

Chief Financial Officer

Mr. Hamood-ur-Rahman Qaddafi

Head of Internal Audit

Mr. Imran Farooq

Bankers

Allied Bank Limited

Citibank N.A.

Deutsche Bank AG

Faysal Bank Limited

Habib Bank Limited

MCB Bank Limited

Meezan Bank Limited

National Bank of Pakistan

Soneri Bank Limited

Standard Chartered Bank (Pakistan) Limited United Bank Limited

1

First Quarter Report June 2023

Management /	2 Review Report	3	Condensed Interim
1 Company's Structure	Financial Statements

Chairman's Review

I am pleased to present the condensed interim

financial statements of the Company for the

quarter ended June 30, 2023.

MACROECONOMIC OVERVIEW

The country is experiencing severe challenges

r e fl e c t i n g l o n g - s t a n d i n g s t r u c t u r a l

weaknesses. The macroeconomic imbalances, high inflation, domestic supply shocks and international economic slowdown led to a fall in GDP growth rate to 0.3% in FY 23 as compared to 6.1% of last year. To address the challenges and sustain macroeconomic stability, the Government of Pakistan recently reached a 9-month Staff Level Agreement (SLA) with IMF. While the SLA will give the country much needed relief in the short-term, however, the nation needs a long-term sustainable plan to meet its extensive financing needs in the years ahead.

On the external front, policy tightening, and adoption of stabilization strategies has yielded positive results. The current account deficit (CAD) has narrowed by 85% to USD 2.6 billion in FY23. The improvement in CAD was mainly driven through the reduction in import bill from USD 135 billion to USD 55.3 billion. However, due to slowdown in global demand and an exchange rate peg, exports and workers' remittances declined by 13% and 14% respectively. Despite positive development in CAD, foreign exchange reserves held by the Central Bank dipped below USD 5 billion for the first time in ten years . However, improvements are expected in the coming months with the receipt of bailout funds from IMF and substantial deposits from multilateral countries. The low level of forex reserves, put extraordinary pressure on the local currency, which breached the Rupees 285 against the

U S d o l l a r. A c c o r d i n g l y, t o m a i n t a i n

macroeconomic stability and regulate

aggregate demand, the Central Bank increased the benchmark interest rate to 22%, representing 600 bps increase since December 2022. On the fiscal front, due to the slowdown in economic activity, revenue collection remained short of target. PKR 7,000 billion was collected against the projection of PKR 7,600 billion. Going forward, in order to narrow the fiscal deficit, the Government has recently passed the Finance Act, 2023 which has proposed imposition of further taxes on targeted segments and withdrawal of certain tax credits. The PSX 100 index was also i m p a c t e d b y t h e o n g o i n g e c o n o m i c challenges. However, it remained resilient and improved significantly to over 45,000 points in early July because of improving market sentiment.

The agriculture sector recorded a growth of 1.55% in FY 23 as compared to 4.27% of last year. This is due to a heavy monsoon spell and floods which caused massive damage to the standing crops. To support the sector, the agriculture financial institutions disbursed PKR 1,222 billion as compared to PKR 958 billion last year. Further, with better input situation and water supply, Rabi crops performed better. This helped to improve farm incomes. As a result, demand for consumer durables remained stable in rural areas.

The Large-Scale Manufacturing (LSM) index contracted by 9.9% in FY 23. The sector's contraction is mainly due to import restrictions, rupee devaluation, higher financing costs, expensive energy, and local economic and political instability. Resultantly, most demand indicators including sales of cement, POL, automobiles, and textiles reflected a downward trend. However, the recent development under SLA with IMF ensuring unrestricted import movement and uplifting of

Driving towards the Future

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