Indus Motor: Transmission of the quarterly and half-yearly report for the period ended March 31, 2022



Directors’ report


Condensed Interim Statement of Financial Position


Condensed Interim Statement of Net Income


Condensed Interim Statement of Comprehensive Income


Intermediate summary statement of cash flows


Condensed Interim Statement of Changes in Equity


Notes to and Forming Part of the Condensed Interim Financial Statements


Company information

Directors’ report

For the three and nine months ended March 31, 2022

The directors of Indus Motor Company (IMC) Limited are pleased to present the unaudited accounts of the Company for the three and nine months ended March 31, 2022.

Pakistan’s automotive industry

During the nine-month period ended March 31, 2022, Pakistan’s automotive industry remained one of the fastest growing sectors in the country and witnessed an increase in demand mainly due to macroeconomic recovery, lower taxes and duties and lower auto finance rates in the first half of the current fiscal year, as well as the launch of new models and variants by existing and new auto players.

The automotive sector has also faced serious challenges in terms of rising input costs due to the sharp depreciation of the Pakistani rupee against the US dollar, customs duties, higher transport costs and the soaring international commodity prices. In addition, in January 2022, the government increased the Federal Excise Duty (FED) and Vehicle Sales Tax rates. All of these factors led to a significant increase in the cost of raw materials for the industry and manufacturers had no choice but to pass the burden on to customers. As a result, the industry experienced an increase in overall vehicle selling prices throughout the period.

Despite the challenges, the automotive sector struggled to meet strong demand for automobiles during the period and on a nine-month basis, PAMA member sales for locally manufactured PCs and LCVs increased by 52.5% to reach 205,381 units, compared to 134,718 units sold during the period. same period last year. Following the increase in demand, PAMA members recorded a 54.4% increase in production for locally manufactured PC and LCV vehicles to 199,036 units compared to 128,951 units produced in the same period last year latest.

Company Review

The Company’s combined Completely Knocked Down (CKD) and Completely Built-up Units (CBU) vehicle sales for the nine-month period ended March 31, 2022 increased 33.4% to 57,367 units from 42,988 units sold during the same period. Last year. The Company’s market share in the overall market was approximately 20.3% for the nine-month period ended March 31, 2022. In addition, sales for the quarter ended March 31, 2022 increased by 12 .7% to 18,735 units against 16,626 units sold. in the same quarter last year. In an attempt to meet the increase in demand, the Company produced 55,192 vehicles for the nine-month period, registering an increase of 29.1%, compared to 42,759 units produced in the same period last year. latest.

Net revenue for the nine months ended March 31, 2022 increased by 55.1% to Rs. 203.41 billion from Rs. 131.16 billion in the same period last year, while profit after tax also rose by 81.6% to Rs. 15.29 billion, from Rs. 8.42 billion achieved in the corresponding period last year. Net profit increased mainly due to higher CKD and CBU

Directors’ report

For the three and nine months ended March 31, 2022

sales volume and an increase in other income due to higher fund sizes due to increased customer advances.

During the quarter ended March 31, 2022, the Company launched two new variants, namely “Toyota Hilux Revo Rocco” and “Toyota Fortuner Legender”, which received an overwhelming response from customers. Toyota Corolla and Toyota Yaris continue with steady demand in Pakistan in their respective categories in Pakistan’s passenger car segment.

During the quarter ended March 31, 2022, the Company received various accolades, such as the “Corporate Social Responsibility Award 2022” from the National Forum for Environment & Health (NFEH) and the “Sustainability Innovation Award 2022” from the Professionals Network (TPN ) .

The company’s earnings per share for the nine-month period ended March 31, 2022 is Rs. 194.56 compared to Rs. 107.07 reported in the same period last year. Based on the above results, the Board is pleased to declare an interim cash dividend of Rs. 26 per share for the quarter, thus making the total dividend for the nine months ended 31 March 2022, Rs. 90, 50 per share. During the period, transactions with related parties, as described in the financial statements, were carried out in the normal course of business.

During the third quarter, the Board of Directors appointed Mr. Akihiro Murakami and Mr. Shigeki Furuya as Board Directors to fill the casual vacancy created upon the resignation of Mr.

Noriaki Kurokawa and Tetsuya Ezumi from the Board effective February 24, 2022 and April 1, 2022, respectively. The Board duly acknowledges the valuable contribution made by the outgoing directors and expresses its sincere gratitude on behalf of the Company. The Board of Directors warmly welcomes Mr. Akihiro Murakami and Mr. Shigeki Furuya as new Board members.

Short term business outlook

Continued growth in automotive industry sales and demand is unsustainable given the high taxes and duties introduced by the Finance (Supplementary) Act 2022 in January 2022, strict funding rules and restrictions automobile, higher interest rates and the continued rise in vehicle prices caused by an increase in world commodity prices, transportation costs and the continued devaluation of the Pak Rupee. Global supply chain and economic disruptions can also impact local industry. These challenges are likely to have an impact on the overall demand of the automotive sector and, consequently, the sales volume and profitability of the automotive sector could be affected for the periods to come.

The Society urges the government to design and promote coherent policies for the long-term economic growth of the automotive sector. We call on the government to reduce FED on vehicles and provide incentives for local suppliers to manufacture high-tech parts, to support continued demand in the automotive industry, to promote capacity utilization and the highest volumes in the industry. In addition, it will also generate additional tax revenue for the government from the automotive sector and also contribute to more job opportunities.

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About Frances R. Smith

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