WAVES | Waves Corporation Limited (Formerly: Waves Singer Pakistan Limited) Transmission of Quarterly Report for the Period Ended 2023-09-30

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

Lahore

______________________

Chief Executive Officer

Net increase in cash and cash equivalents

Cash and cash equivalents - at beginning of the period Cash and cash equivalents - at end of the period

10

The annexed notes 1 to 16 form an integral part of these condensed interim consolidated financial statements.

Waves Corporation Limited

Condensed Interim Consolidated Statement of Cash Flow (Un-audited)For the nine months period ended 30 September 2023

Cash flows from operating activitiesProfit before taxation

Adjustments for non-cashand other items: Depreciation on property, plant and equipment Amortisation of intangible assets

Finance cost

Gain on sale of property, plant and equipment Amortisation of deferred income

Effect on cash flow due to working capital changes

(Increase) / decrease in current assets: Stores, spares and loose tools Stock-in-trade

Trade debts and other receivables

Advances, deposits, prepayments and other receivables Increase in current liabilities:

Trade and other payables

Cash used in operations

Income tax received / (paid) Employee retirement benefits paid Long term deposits - net

Net cash used in operating activities

Cash flow from investing activities

Capital expenditure -net

Proceeds from disposal of property, plant and equipment

Net cash generated from investing activities

Cash flow from financing activities

Long term loan received/repaid Loan from sponsors

Finance costs paid

Short term borrowing - net Lease rentals paid

Net cash generated from financing activities

	Nine months ended
	(Un-audited)	(Un-audited)
	30 September	30 September
	2023	2022
Note	--------- (Rupees in '000) ---------
	253,252	580,689

8.1	246,579
	26,170
	217,197
	(25,631)
	(581)
	716,987
	4,517
	238,282
	1,387,437
	29,907
	193,524
	1,853,667
	2,570,654
	(37,366)
	(2,768)
	-
	2,530,520
	(1,807,496)
	35,838
	(1,771,658)
	212,099
	8,320
	(217,197)
	(630,184)
	(8,798)
	(635,760)
	123,102
	(2,749,056)
	(2,625,954)

246,865

30,101

395,752

(12,113)

998

1,242,291

(6,552)

520,595

699,910

(162,530)

1,201,609

2,253,032

3,495,323

(130,276)

(1,068)

(7,719)

3,356,260

(2,328,583)

23,464

(2,305,119)

(990,237)

2,167

(243,238)

(1,289,108)

(52,058)

(2,572,474)

(1,521,333)

(1,190,686)

(2,712,019)

_______________	_____________________
Director	Chief Financial Officer

Waves Corporation Limited

Notes to the Condensed Interim Consolidated Financial Information (Un-audited) For the nine months period ended 30 September 2023

1 Status and nature of business
The Group comprises of:
Holding Company
- Waves Corporation Limited
(formerly, Waves Singer Pakistan Limited)
	2023	2022
	(Holding percentage)
Subsidiary Companies
		100.00
- Waves Builders & Developers (Private) Limited	100.00
(formerly, Waves Marketing (Private) Limited)
- Waves Marketplace Limited	100.00	100.00
(formerly, Electronics Marketing Company (Private) Limited)
- Waves Home Appliances Limited	74.56	74.56
(formerly, Samin Textiles Limited)

Waves Corporation Limited (formerly, Waves Singer Pakistan Limited) (the Holding Company) was incorporated in Pakistan under the repealed Companies Ordinance, 1984 (now Companies Act, 2017) as a public company limited by shares and is quoted on the Pakistan Stock Exchange. The company is principally engaged in the manufacturing and assembly of domestic consumer appliances alongwith retailing and trading of the same and other light engineering products. The registered office of the company is located at 9-K.M, Hanjarwal, Multan Road, Lahore.

Geographical locations of the manufacturing facilities of the Group are located at:

• 9-K.M,Hanjarwal, Multan Road, Lahore.
• Dina Nath, Mouza Rakh Serai Cheenba, Tehsil Pattoki, District Kasur.
• Mouza Mustafabad, 41-KM Ferozepur Road, Off 2-KM Rohi Nala Road, Tehsil & District Kasur

Waves Builders and Developers (Private) Limited

(formerly, Waves Marketing (Private) Limited) - Subsidiary Company

Waves Builders and Developers (Private) Limited (formerly, Waves Marketing (Private) Limited) is a private limited company which was incorporated on 10 April 2017 under the repealed Companies Ordinance, 1984 (now Companies Act, 2017). The registered office of the company is located at 15/3 A Model Town, Lahore. The principal activity of the company is the sale, distribution and marketing of consumer appliances being a trading concern.

Waves Marketplace Limited

(formerly, Electronics Marketing Company (Private) Limited) - Subsidiary Company

Waves Marketplace Limited (formerly, Electronics Marketing Company (Private) Limited) is a private limited company which was incorporated on 09 September 2016 under the repealed Companies Ordinance, 1984 (now Companies Act, 2017). The principal activity of the company is to carry out distribution / wholesales / retail business of all kinds of electronic appliances, its components and accessories, etc.

Waves Home Appliances Limited

(formerly Samin Textiles Limited)- Subsidiary Company

Waves Home Appliances Limited (WHAL) (formerly as Samin Textiles Limited) was incorporated in Pakistan on November 27, 1989 as a public limited company under the Companies Ordinance, 1984 (now Companies Act, 2017). The registered office of the Company is situated at 8.7 KM Hanjarwal, Multan Road, Lahore. The Company is currently listed on Pakistan Stock Exchange. The principal business of the Company previously was trading, import and export of textile products. Consequent to approval of scheme of arrangement, the principal line of business shall be amended to include manufacturing, assembly and wholesale of domestic consumer appliances and other light engineering products.

1.1 The Holding Company, Waves Corporation Limited (WCL), acquired WHAL (formerly Samin Textiles Limited) as a subsidiary Company through a scheme of arrangement. As per the term of the scheme, WCL 'Carved out / seperated home appliances business by transferring certain assets, liabilities, obligations, contracts and undertakings to the subsidiary Company as of the effective date of 01 September 2021.

The Honourable Lahore High Court (the Court) through its Order dated 22 June 2022, has approved the Scheme of Arrangement as proposed and granted sanction order for the carving out of home appliances business from the Holding Company and amalgamation of the same into the subsidiary Company, WHAL.

The Board of Directors of the Holding Company and subsidiary Company, in their meetings held on 23 December 2021, approved and resolved to present the Scheme of Arrangement before the shareholders of the Company for their approval.

After approval by the BOD, the said scheme was submitted to Court for approval. As per requirments, the Holding Company subsequently obtained approval of the Scheme of Arrangement from its shareholders and secured creditors of the Holding Company.

On account of consideration under the scheme of arrangement, 56,281,240 shares of the subsidiary company were issued and allotted to shareholders of Holding Compnay in the swap ratio of 20 shares for every 100 shares held in parent compnay at the date of acquisition. The consideration also included issue of 199,724,956 shares to WCL and Rs. 2 billion in cash (interest free) payable over the period of 2 years but these have no impact on these consolidated financial statements.

The Group expects several benefits after this merger including the synergies of operations, allowing them to become leading suppliers / service providers, resulting in greater revenue. Furthermore, by separating the business segments (as contemplated in this Scheme), the individual companies shall have unique identities, a more focussed business and customer base.

If the acquisition of WHAL had occurred on 01 January 2021, the management estimates that there would not have been any material changes to the revenue and profits of the Group as WHAL was a dormant entity.

However, this scheme of arrangement/group restructuring does not have any material impact on these consolidated financial statements.

2 Basis of preparation Statement of compliance

2.1 These condensed interim Consolidated financial statements of the Company have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan for interim financial reporting. The accounting and reporting standards as applicable in Pakistan for interim financial reporting comprise of:

• International Financial Reporting Standards (IFRS Standards) issued by the International Accounting Standards Board (IASB) as notified under the Companies Act, 2017;
• Provisions of and directives issued under the Companies Act, 2017; and
• Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan as notified under the Companies Act, 2017.

Where the provisions of and directives issued under the Companies Act, 2017 differ with the requirements of IFRS standards , the provisions of and directives issued under the Companies Act, 2017 have been followed.

1. These condensed interim consolidated financial statements comprise the condensed interim consolidated statement of financial position of the Company as at 31 December 2022 and the related condensed interim consolidated statement of profit or loss account, condensed interim consolidated statement of comprehensive income, condensed interim consolidated statement of changes in equity and condensed interim consolidated statement of cash flow and notes to the financial information for the three month period then ended.
2. These condensed interim consolidated financial statements do not include all of the information required for annual financial statements and should be read in conjunction with the annual financial statements as at and for the year ended 31 December 2022. Selected explanatory notes are included to explain events and transactions that are significant to and understanding of the changes in the Company's financial position and performance since the last annual financial statements.
3. Comparative consolidated statement of financial position's numbers are extracted from the annual audited consolidated financial statements of the Company for the year ended 31 December 2022, whereas comparative Consolidated statement of profit or loss account, statement of comprehensive income, cash flow statement and statement of changes in equity are stated from unaudited condensed interim Consolidated financial statement of the Company for the nine months period ended 30 September 2023.

1. Use of estimates and judgments
   The preparation of condensed interim consolidated financial statements requires management to make judgments, estimates and assumptions for the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
   In preparing these condensed interim consolidated financial statements, the significant judgments made by the management in applying accounting policies and key sources of estimation are the same as those applied in the preparation of annual audited financial statements for the year ended 31 December 2022.
2. Statement of consistency in accounting policies
   The accounting policies and the methods of computation adopted in the preparation of these condensed interim consolidated financial statements are same as those applied in the preparation of annual audited financial statements for the year ended 31 December 2022.
   4.1 During the period, the management identified that the amount of Rs. 18.834 million and Rs. 17.394 million which was payable against SBP Salary Refinance Scheme out of Rs. 197.466 million and Rs. 182.371 million to The Bank of Khyber and Pak Lybia Holding Company respectively wahich were received in the year 2020. Rs. 18.834 million and Rs. 17.394 million was adjusted to deferred income against loan account and amortised in the financial years 2021 and 2022. Accordingly, now this impact is recognized retrospectively. The comparative amounts have been restated as per the requirement of IAS 8 "Changes in accounting policy, estimates and errors". The following are the effects on Financial Position and Changes in Equity.

	As at 31 December 2022
	As	Adjustment	Previously
	Restated	Reported
Effect on statement of Changes in Equity
Un-appropriated Profit	680,528	(36,228)	716,756
Effect on statement of Financial Position
Current portion of long term liabilities	560,640	36,228	524,412

5 Issued, subscribed and paid up capital
			(Un-audited)			(Audited)	(Un-audited)		(Audited)
			30 September			31 December	30 September		31 December
			2023	2022		2023		2022
			---------- Number of shares ----------	---------- (Rupees in '000) ----------
Issued for cash	105,263,597	105,263,597		1,052,636		1,052,636
Issued for consideration other than cash	703,733	703,733		7,037		7,037
Issued as paid bonus shares	78,988,759	78,988,759		789,888		789,888
Issued under scheme of amalgamation	96,450,000		96,450,000		964,500			964,500
			281,406,089		281,406,089		2,814,061			2,814,061
5.1	Ordinary shares of the Company held by associated persons and undertaking are as follows:
			(Un-audited)			(Audited)	(Un-audited)			(Audited)
			30 September			31 December	30 September			31 December
			2023	2022		2023		2022
	Chief Executive Officer and	---------- Percent	a	ge held ----------	---------- Number	of shares ----------
	his spouse
	- Haroon Ahmad Khan (CEO)	38.32%	38.32%		107,840,286		107,840,286
	- Nighat Haroon Khan (Wife of CEO)	9.92%		9.92%		27,925,911			27,925,911
			48.25%	48.25%		135,766,197		135,766,197

5.2 The holders of ordinary shares are entitled to receive dividends as declared (if any), and are entitled to one vote per share at meetings of the Holding Company.

				(Un-audited)	(Audited)
					31 December
				30 September
				2023	2022
			Note	---------- (Rupees in '000) ----------
6 Short term borrowings - secured
	Running finance under mark-up arrangements	6.1	2,758,507	2,863,400
	Finance against trust receipt	6.1	1,169,440	1,796,224
	Short term borrowings under 'Murahaba' arrangement	6.1	292,941	296,341
				4,220,888	4,955,965

1. This includes amount of bridge finance facility under markup arrangement availed from National Bank of Pakistan amounting to Rs.1,500 million during the period (2022: Rs. 1,500 million).This facility is secured against 1st charge over land & building with 25% margin and carry markup from 19.25% per annum, payable quarterly in arrears.
2. These facilities are secured against charge over current assets of the company and personal guarantees of the sponsors of the company and carries markup rate of three month KIBOR + 2% per annum payable monthly in arrears and KIBOR + 2.5% per annum.

7 Contingencies and commitments

1. Contingencies
   There has been no significant changes in contingencies as reported in the annual audited financial statements of the Company for the year ended 31 December 2022.
2. Commitments
   The Company has the following commitments in respect of:
3. 1. Commitments for the import of stock in trade outstanding at period end were for Rs. Nill (31 December 2022: Rs. Nill).
   2. Commitments for capital expenditure against irrevocable letters of credit outstanding at the period end were Rs. Nill (31 December 2022: Rs. 6.50 million).

	(Un-audited)	(Audited)
	30 September	31 December
	2023	2022
Note	---------- (Rupees in '000) ----------

8 Property, plant and equipment

Operating fixed assets	8.1	7,210,322	6,473,916
Right of-use asset	8.2	103,127	161,105
Capital work-in-progress	8.3	3,092,582		2,220,905
		10,406,031		8,855,926

8.1 Operating fixed assets

	Opening balance - as at 01 January			6,473,916	5,760,285
	Additions / (deletion) during the period / year			934,782	985,776
	Revaluation gain / (loss)			-	7,000
	Transfers from right to use to owned assets			33,085		48,588
					7,441,783	6,801,649
	Book value of property, plant and equipment
	disposed off during the period / year			(11,505)	(41,085)
	Depreciation charged during the period / year			(219,955)	(286,648)
	Closing balance			7,210,322	6,473,916
8.2	Right of-use asset
	Balance as at 01 January			161,105	231,931
	Additions / (deletion) during the period / year			1,731	77,755
	Transfers to owned assets			(33,085)	(48,588)
	Book value of property, plant and equipment
	disposed off during the period / year			-	(47,047)
	Depreciation charge for the period / year			(26,624)		(52,946)
	Closing balance			103,127	161,105
8.3	Capital work-in-progress
	Building - Kasur factory			1,522,114	1,247,631
	Plant and machinery			1,425,035	844,601
	Plant and machinery - in Transit			144,074	127,358
	Electric installation			1,359	1,315
					3,092,582	2,220,905
9 Intangible assets and goodwill
Software			38,914	42,026
Goodwill		9.1	1,070,207	1,070,206
Brand value		9.1	1,582,147	1,582,147
Customer relationships		9.1	130,695		153,754
					2,821,963	2,848,133
10 Cash and cash equivalents
Cash and bank balances			128,351	114,344
Short term running finance - secured			(2,758,507)	(2,863,400)
					(2,630,156)			(2,749,056)
					(Un-audited)				(Un-audited)
		30 June		30 September				30 September
					2023	2022
					---------- (Rupees in '000) ----------
11 Sales - net
Gross sales:
- Local	617,857		5,023,664			11,163,703
Sales return				(5,985)			(49,249)
			617,857		5,017,679	11,114,454
Sales tax	(78,557)		(762,568)			(1,596,026)
Trade discounts	(7,384)		(75,460)			(319,848)
			(85,941)		(838,028)		(1,915,874)
			531,916		4,179,651		9,198,579

12 Taxation

The Company has opted for group taxation and the Group falls under the normal tax regime. Provision for taxation has been calculated as group taxation.