WAVES | Waves Corporation Limited (Formerly: Waves Singer Pakistan Limited) Transmission of Quarterly Report for 1st Quarter Ended September 30, 2023

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:[e-mail]
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:	[e-mail]
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