Honda Atlas Cars (Pakistan) Limited 31 March 2021

ANNUAL REPORT 2021
Honda Atlas Cars (Pakistan) Limited
EMPOWERING
THE GREEN DREAM
UNLEASH THE POWER

COVER CONCEPT
ANNUAL REPORT 2021

EMPOWERING
THE GREEN DREAM
Honda Atlas Cars (Pakistan) Limited.

43-KM Multan Road, Manga Mandi, Lahore.
www.honda.com.pk
UNLEASH THE POWER
EMPOWERING THE GREEN DREAM:

Honda believes in working towards
empowering our dream of a cleaner,
greener planet. Being environmentally
responsible is our core mission. Honda is
evolving with time and taking initiatives
for a sustainable future by adopting
latest technologies which are resulting
in reduced carbon emissions. Moreover,
Honda has been actively participating
in various CSR initiatives by planting
trees in order to achieve a sustainable
future for the next generation. We are
strengthening our dream of building a
sustainable future by reducing our carbon
footprint and making our way towards a
cleaner and greener planet.
COMPANY PROFILE
Honda Atlas Cars (Pakistan) Limited is a joint venture demand. A major plant expansion was done in 2006 and
between Honda Motor, Japan and the Atlas Group, the production capacity was increased to 50,000 units/
Pakistan. The Company is a public limited and listed on year.
Pakistan Stock Exchange Limited.
Percentage of local parts conforms to the Government’s
The Company was incorporated on November 04, 1992 policy. Local vendors are continuously patronized
and joint venture agreement was signed on August to develop parts locally. The quality of local parts is
05, 1993. The ground breaking ceremony was held on thoroughly checked to meet stringent international
April 17, 1993 and within a record time of 11 months, standards.
construction and erection of machinery was completed.
The first car rolled off the assembly line on May 26, 1994. We always strive to give outstanding service to our valued
Official inauguration was done by the then President customers. In addition to providing regular service to
of Pakistan, Sardar Farooq Ahmad Khan Leghari. Mr. customers, the Company also regularly conducts Service
Nobuhiko Kawamoto, President of Honda Motor, Japan Campaigns to facilitate customer’s need for service. This
and late Mr. Yusuf H. Shirazi; Founder of Atlas Group has given our customers absolute confidence in our cars
were also present to grace the occasion. The Company which is clearly evident from the ever increasing sale
enlisted on then Karachi & Lahore Stock Exchanges volumes.
(now Pakistan Stock Exchanges) and Initial Public Offer
(IPO) was made in November 1994. It is the constant endeavor of Honda Atlas Cars (Pakistan)
Limited to achieve No.1 Customer satisfaction. The
On July 14, 1994, car bookings started at six dealerships Company is committed to meet customer expectations
in Karachi, Lahore and Islamabad. Since then the and to provide good value for money.
dealerships network has expanded and now the
Company has thirty-five 3S (Sales, Service and Spare The Company believes that human beings are born to
Parts), eighteen 2S (Service and Spare Parts) and six 1S think, create and express their individuality, thus realizing
(Spare Parts) authorized dealerships network in all major their hopes and dreams. We strive to attract individuals
cities of Pakistan. All dealerships are constructed in who share this belief and who will respect one another’s
accordance with the standards defined by Honda world individuality. We pursue to foster an atmosphere of
over. mutual trust & fairness in which our associates are able to
realize their potential and creating new value for society
We started production in 1994, with the launch of 5th by following the Honda Philosophy.
generation of Honda Civic model in Pakistan. Later on,
the Company enriched the product line with the launch Currently, we are offering imported models of Honda
of Honda City in 1997 and Honda BR-V in 2017. Since Accord & Honda CR-V and locally manufactured Honda
the start of production, the Company has produced and Civic, Honda BR-V and Honda City in different variants
sold more than 467,000 cars in Pakistan. The Company and wide range of colors with advanced technological
consistently increased the production with the progress features.
of car market and to meet the growing customer
Annual Report 2021 1 Empowering The Green Dream

2 Annual Report 2021
CONTENTS
Management / Company’s Structure Auditor’s Report & Financial Statements

Vision Statement 04 Independent Auditor’s Report 57
Company Information 06 Statement of Financial Position 62
Board of Directors 08 Statement of Profit or Loss 64
Key Management 12 Statement of Comprehensive Income 65
Organization Chart 14 Statement of Changes in Equity 66
Corporate Governance (Organization Structure) 16 Statement of Cash Flows 67
Business Principles 18 Notes to and Forming Part of the
Honda Philosophy 20 Financial Statements 68
Chronicle of Events 22
Notice of Meeting / Reports
Information & Review Reports Notice of Annual General Meeting 125
Pattern of Shareholding 24 Honda Dealers’ Network 126
Investor Relations Information 26 Directors’ Report (Urdu) 134
Significant Events and Highlights 28 Chairman’s Review (Urdu) 141
Chairman’s Review 30 Form of Proxy 143
Directors’ Report 39
Statement of Compliance
with Listed Companies (Code of
Corporate Governance) Regulations, 2019 45
Independent Auditor’s Review Report 49
Financial Analysis
Revenue Application 50
Value Added and its Distribution 51
Financial Highlights 52
Horizontal and Vertical Analysis 54

Vision Statement
Striving to be a Company that society
wants to exist by sharing joys with people
throughout the world.
Creating products that maximize the joy

of customers with speed, affordability and
low CO2.

COMPANY INFORMATION
BOARD OF DIRECTORS AUDIT COMMITTEE EXECUTIVE COMMITTEE
Mr. Aamir H. Shirazi Mr. Feroz Rizvi Mr. Hironobu Yoshimura
Chairman Chairman Mr. Katsumi Kasai
Mr. Hironobu Yoshimura Mr. Saquib H. Shirazi Mr. Maqsood-ur-Rehman Rehmani
President & CEO Member
COMPANY SECRETARY
Mr. Saquib H. Shirazi Mr. Eihiko Sato Mr. Maqsood-ur-Rehman Rehmani
Director & Senior Advisor Member
Mr. Katsumi Kasai Mr. Kazunori Shibayama CHIEF FINANCIAL OFFICER
Executive Director & VP (P) Member Mr. Hamood ur Rahman Qaddafi
Mr. Eihiko Sato
HUMAN RESOURCE AND HEAD OF INTERNAL AUDIT
Director
REMUNERATION COMMITTEE Mr. Imran Farooq
Mr. Kazunori Shibayama Mr. Feroz Rizvi
Director Chairman
Mr. Feroz Rizvi Mr. Saquib H. Shirazi
Independent Director Member
Mr. Ariful Islam Mr. Hironobu Yoshimura
Ms. Rie Mihara Mr. Katsumi Kasai
Mr. Eihiko Sato
Member

BANKERS LEGAL ADVISOR REGIONAL OFFICES
Allied Bank Limited Cornelius, Lane & Mufti LAHORE
Citibank N.A. Bokhari Aziz & Karim Asia House,19-C&D,
Deutsche Bank AG Block L, Gulberg III,
Faysal Bank Limited REGISTERED OFFICE Main Ferozepur Road.
Habib Bank Limited 1-Mcleod Road, Lahore, Pakistan. Tel: +92 42 35694851-53
MCB Bank Limited Tel: +92 42 37225015-17 Fax: +92 42 35694854
Meezan Bank Limited Fax: +92 42 37233518
National Bank of Pakistan KARACHI
Soneri Bank Limited FACTORY 5th floor, Tower-A,
Standard Chartered Bank (Pakistan) Limited 43 Km, Multan Road, Technology Park,
United Bank Limited Manga Mandi, Lahore, Pakistan. Shahrah-e-Faisal,
Tel: +92 42 35384671-80 Tel: +92 21 32785411-14
AUDITORS Fax: +92 42 35384691-92
M/s A. F. Ferguson & Co. E-mail: info@honda.com.pk
Chartered Accountants

Management / Information & Auditor’s Report
1 Company’s Structure 2 Review Reports 3 Financial Analysis 4 & Financial Statements 5 Notice of Meeting /
Reports
BOARD OF DIRECTORS
Mr. Aamir H. Shirazi

Chairman
Mr. Aamir H. Shirazi is the President of Atlas Group.
He has over 36 years of corporate management experience. He has to his credit, work
experience in Honda – America. Besides working at various positions in Atlas Group,
he also served as the Chief Executive of Atlas Honda.
He is currently the Chairman of Honda Atlas Cars (Pakistan) Limited, Atlas Honda,
Atlas Battery, Atlas Engineering, and Atlas Autos. He serves on the Boards of Shirazi
Investments, Shirazi Trading and Murree Brewery. He was appointed as a Director on
the Board of Lahore Stock Exchange for two consecutive terms by the Securities &
Exchange Commission of Pakistan.
He is currently a member of the Board of Governors of Lahore University of

Management Science and University of Engineering & Technology, Lahore. He serves
as an Honorary Consul General of Japan and is the Patron-in-Chief of Pakistan Japan
Cultural Association in Lahore.
He graduated from the Claremont Mckenna College and completed his OPM from the
Harvard Business School.

Reports
Mr. Hironobu Yoshimura Mr. Saquib H. Shirazi Mr. Katsumi Kasai

President & CEO Director & Senior Advisor Executive Director & VP (P)
Mr. Hironobu Yoshimura has been Mr. Saquib H. Shirazi is the Chief Mr. Katsumi Kasai has been
associated with Honda Motor Co., Executive Officer of Atlas Honda. associated with Honda Motor
Limited, Japan for more than 33 years. Co., for last 35 years.
He joined Honda in 1988 and began his He is currently the Chairman of
career in Service Technology Division, Pakistan Business Council and a He started his career as Engineer
Honda Motor Co., Japan. Board member of Pakistan Mobile in Automobile Assembly, Honda
Communications and Tri-Pack Motor, Japan and he has vast
Mr. Hironobu Yoshimura has extensive Limited. He also serves on the experience of Automobile
experience in the automobile industry, Advisory Boards of the Harvard Assembly and Business Planning
having worked in several planning Business School, Commonwealth Operations.
divisions. Development Corporation (Pakistan)
and National School of Public Policy. He has worked as Asia Oceania
In his previous assignment, he has Business Planning Manager at
worked as Department Manager at In the past, he has served as Aoyama Head Office for two
Automobile Marketing Planning Office Chairman of the Pakistan Auto years.
in Honda Motor Co., Japan and General Manufacturers Association and
Manager Asian Honda Motor Co. Ltd., as a Board member of Pakistan He has worked as Business
Thailand. He has been on the Board of Petroleum, National Refinery, Planning Manager of Honda
Honda Atlas Cars (Pakistan) Limited Sui Southern Gas Company, Prospect Motor for three
as President & Chief Executive Officer Pakistan Cables, Cherat Cement, years. He has been Executive
from November 2017. Cherat Packaging, Privatisation Vice President of Honda Cars
Commission and Prime Minister’s Philippines for three years before
Mr. Yoshimura is graduate from Sophia Business Council. He was President moving to Pakistan.
University, Japan. of HBS Global Alumni Board for the
years 2006-2008. He has been on the Board of
Honda Atlas Cars (Pakistan)
He is a graduate of the Wharton Limited on December 07, 2020
School of Finance and did his MBA as Director & Vice President
from the Harvard Business School. Production.

Reports
Mr. Eihiko Sato Mr. Kazunori Shibayama Mr. Ariful Islam

Director Director Independent Director
Mr. Eihiko Sato has been associated Mr. Shibayama has been associated Mr. Ariful Islam is a senior banker with
with Honda Motor Co., Japan for with Honda Motor Co., Japan for 36 years experience with various
last 32 years. last 29 years. He has vast experience banks in Bahrain and Pakistan.
of Automobile Business, Product
He has vast experience of Financial Planning & Marketing, working on He is a Chartered Accountant from
Management and Business Planning different Honda ventures, around England and Wales and a Fellow
Operations. the globe. member of the Institute of Chartered
Accountants of Pakistan. He worked
He has been working at Honda Mr. Shibayama has also served with Peat, Marwick, Mitchell & Co.
Motor, Japan and different Honda for two years in American Honda (now KPMG) in their main London
subsidiaries in Europe for six years, Motor, US and has been associated Office from 1982 – 1985.
the United States for three years and with Marketing Division of Honda
Mexico for three years. Automobile (Thailand) Co., Limited He started his banking career with
for two years. He has also experience Faysal Islamic Bank of Bahrain,
He has worked as General Manager of working with PT Honda Prospect Bahrain in 1985 and after a short
for five years in Mexico and Japan Motor, Indonesia and Automobile stint in Bahrain, he was moved to
before appointment of the current Business Planning Division of Asian Pakistan and was a key member
position. Honda Motor Co., Limited. of the team that set-up Faysal
Islamic Bank of Bahrain in Pakistan
He joined as Director and CFO Mr. Shibayama has been on the (presently known as Faysal Bank).
of Asian Honda Motor Company Board of Honda Atlas Cars (Pakistan) In 1992 he moved to MCB and
Limited, Thailand. Limited since April 2019. held various senior positions, lastly
as SEVP & Head of Investment
Mr. Sato has been elected on the Banking. He joined Meezan Bank in
Board of Honda Atlas Cars (Pakistan) April 1999 as the Bank’s first Chief
Limited from May 2021. Operating Officer.
Currently, Mr. Islam is Deputy CEO &

Executive Director of Meezan Bank
Limited. He is a ‘Certified Director’
from IBA, Karachi. He is also the
Chairman of the Board of Al Meezan
Investment Management Limited
- the Bank’s asset management
subsidiary. He has been on
the Board of Honda Atlas Cars
(Pakistan) Limited since March 2020
as an Independent Director.

Reports
Mr. Feroz Rizvi Ms. Rie Mihara Mr. Maqsood-ur-Rehman Rehmani

Independent Director Independent Director Vice President & Company Secretary
Mr. Feroz Rizvi is a Chartered Ms. Mihara is Chief Executive Mr. Rehmani has done MBA
Accountant, having qualified Officer & Founder of Makotoya Co., Marketing, a Law graduate from
from England & Wales. Limited, Japan since 2008. She University of Karachi and Advance
is graduate from Tohoku Fukushi Management Course from INSEAD,
In Pakistan he started his career with University, Miyagi JAPAN in Social France.
ICI Pakistan Ltd. He also spent a Welfare. After study, she joined
period of time in ICI’s headquarters M/s Recruit Staffing Co., Limited in He has vast experience of
in London, where he was involved in 2001 as Customer Centre Manager Administration, Industrial Relations,
ICI’s strategic shift from industrial to and worked as Director Human Human Resource, Logistics &
consumer & specialized chemicals, Resource Development in Welcome Supply Chain Operations, Vendor
leading to a major acquisition Co., Limited, Japan. Development and Corporate Affairs.
of four companies from Unilever He joined Atlas Honda Limited in
PLC for USD 8 bln, as part of In 2008 she laid the foundation of 1989 and was transferred to Honda
the group’s major strategic move. Makotoya Co., Limited in Japan Atlas Cars (Pakistan) Limited in 2008
and worked as CEO & Founder of as GM Logistics.
He retired from ICI Pakistan Ltd as the Company. In 2016, Ms. Mihara
CFO & Finance Director. He has also established Makotoya Pakistan He was appointed as Vice President
been President and Chief Executive (Pvt) Limited and start working as and Company Secretary in
of Pakistan Institute of Corporate CEO. She has vast experience of November 2014.
Governance. Marketing, Human Resources and
entrepreneurship. She has been
He is an alumnus of INSEAD on the Board of Honda Atlas Cars
France and Wharton Business (Pakistan) Limited since May 2018.
School. He is also on the Boards
of Engro Chemicals and Polymers
Ltd, Pakistan Oxygen Ltd and Al-
Meezan Investment Management
Ltd. He lectures on corporate
governance, business strategy and
related topics to board members
and other senior executives.
Mr. Rizvi has been on the board of

the Company since 2018.

Reports
KEY MANAGEMENT
MR. MUHAMMAD ASHRAF

Assistant Vice President
Model Planning & Production
Mr. Ashraf has more than 39 years experience of automobile production operations and new model
development. He started his career with Awami Autos Limited in 1982 and has also worked with
Pak Suzuki Motor Co for nine years. He joined Honda Atlas Cars (Pakistan) Limited in 1993 and has
qualified Management Courses from AOTS Japan. He has worked in different management capacities
and currently he is the Head of Model Planning & Production Division.
MR. IQBAL AHMAD

Senior General Manager
After Sales
Mr. Iqbal has BSc in Mechanical Engineering from UET, Lahore and Executive MBA from LUMS. He has
more than 29 years experience of production, quality, manufacturing operations, stores and project
management. He started his career as trainee engineer with Atlas Honda Limited and served in different
management positions. He joined Honda Atlas Cars (Pakistan) Limited in November 2014 as Head of
Import Purchase & Logistics Division. Since August 2017, he has been working as Head of After Sales.
MR. ASIF MAHMOOD

Senior General Manager
Purchasing
Mr. Asif is Mechanical Engineer, graduated from UET Lahore. Later he did Executive MBA from LUMS.
Since joining the Company in 1994, he has held numerous managerial positions in Material Service,
Production Planning & Control, ISO, New Model Center and Spec Control. He has successfully
accomplished a number of management courses offered by HIDA Japan and ASH Thailand. In 2012,
he was assigned the responsibilities in Purchasing and Quality Development departments. In 2015,
he was appointed as the Head of Purchasing Division.
MR. AMIR NAZIR

General Manager
Sales & Marketing
Mr. Amir is associated with the Company for 20 years. He is graduate from UET Lahore and an Executive
MBA from LUMS. He started his career in Technical Purchasing and worked on sourcing, budgeting
and costing. In addition, he added his valuable input to, much needed, localization and new model
development. His efforts helped in controlling the cost and maintaining a strong brand image.
He has qualified management course from HIDA, Japan. Currently, he is working as General Manager
Sales and Marketing.
MR. SHINOBU NAKAMURA
General Manager
Production
Mr. Nakamura has been associated with Honda Motor since 1989. He has experience of Welding and
Production Process management. He started his career as Process Associate in Honda Suzuka Plant,
Japan and served for more than twenty years in different positions. He has also worked in Honda
Manufacturing of Alabama., LLC, USA for four years. He has also served as Welding BUKAI Head in
Honda Tochigi Plant, Japan.
He has been working with Honda Atlas Cars (Pakistan) Limited since November 2019 as GM
Production.
MR. MUHAMMAD AJMAL

General Manager
Chief Engineer Quality (CEQ)
Mr. Ajmal has been associated with the Company for last 27 years. He has vast experience of
working in Frame Assembly, Vehicle Quality, Market Quality & Quality Control Department. He has
qualified Management course from AOTS, Japan in “Automobile-New Model Development” in 1999,
from HIDA, Japan in Production Management in 2017 and Senior Leadership training program from
Thailand in 2018. He also did Diploma in Business Management (DBM) from FCCU in 2019. Currently,
he is working as Chief Engineer Quality (CEQ) since April 2018.
MR. BASHARAT ALI RANA

General Manager
Quality Control
Mr. Rana has more than 36 years experience of automobile production operations. He has been
associated with Honda Atlas Cars (Pakistan) Ltd since 1993. He has qualified management courses
on Quality, Production Operations & New Model Development from Japan. He has worked for all
production & quality control operations. He has also served for more than 3 years as Head of Plant
Maintenance Facilities and Engineering department. Currently he is working as Head of Quality
Control Division.

Reports
MR. SOHAIL QAISAR

General Manager
HR & Administration
Mr. Sohail holds BE Mechanical Engineering from UET, Executive MBA & DBM from LUMS, Lahore. He
has more than 27 years experience of Production, Project Management, Supply Chain and Production
Planning & Control Operations. He has also attended various management courses from ILO & AOTS,
Japan.
He started his career as trainee engineer with Atlas Honda Limited and was transferred to Honda Atlas
Cars (Pakistan) Limited in April 2019 as General Manager HR & Administration.
MR. MUHAMMAD AKMAL DAR

General Manager
Import, Purchase & Logistics
Mr. Dar has been associated with Atlas Group for last 26 Years. He joined Atlas Honda
Limited in 1995 and started his carrier in Production Planning & Control Department. He is an
Executive MBA from Punjab University and having Post Graduate Diploma from LUMS. He
has vast experience of working in Supply Chain Area at National level, Production, Quality and
Project Management. He has qualified Management Courses from HIDA Japan, LUMS and
other renowned institutes. In 2016, he became the Management Committee Member of Atlas
Honda Limited as GM Production Planning & Control. He was transferred to Honda Atlas Cars
(Pakistan) Limited in 2018 as General Manager Import, Purchase and Logistics.
MR. IMRAN FAROOQ

General Manager
Head of Internal Audit
Mr. Imran did M. Com from Hailey College of Commerce and Diploma in HR from Punjab University,
Lahore. He has been associated with Company for last 26 years and joined as Executive Shares. He
has served in Shares Dept., HR & Admin, and Health Safety & Corporate Governance Divisions. He
has experience of planning & organizing Secretarial matters, compliance with stock exchanges, SECP,
CDC and other regulatory bodies.
He has also attended Executive Program on Corporate Management from AOTS, Japan in 2019.
From August 2020, he has been assigned responsibilities of Head of Internal Audit Division.
MR. MUHAMMAD ALI

General Manager
Information Technology
Mr. Ali is associated with the Company for last 6 years. He has previously worked with IBM and
other IT companies mainly in the field of SAP implementations, both local & abroad. He has a diverse
experience of working in the industry like Chemical, Petrochemical, FMCG, Auto, Textile etc. He is
SAP certified consultant and has attended course from AOTS Japan in addition to other Management/
Leadership training programs.
He has been involved in the transformation of ERP systems with SAP and integration of different
business operations.
MR. SYED WASEEM HASSAN

General Manager
Safety, Health & Corporate Governance
Mr. Waseem has been associated with the Company for the last 21 years. He has done his MBA
in Banking & Finance and started his career with Packages Ltd in the field of (Import/Export). In
1999, he joined Honda Atlas Cars (Pak) Ltd. in Logistic Division, he has worked in Import, Sales
tax, Local Purchase, Dispatches, and Corporate Affairs (Regional Office Islamabad). He has also
experience of handling Custom matters, Tariff Based System and have been involved in dealings and
necessary approvals from the Govt. He has also attended a Management Training course from AOTS
Japan. From April 2021, he has been assigned the responsibilities of Safety, Health, and Corporate
Governance Division.
MR. HAMOOD UR RAHMAN QADDAFI

General Manager / CFO
Finance
Mr. Hamood is a Fellow Member of Institute of Cost & Management Accountants of Pakistan and an
Executive MBA from LUMS. He joined Honda in 2009 and was involved in establishing and running
the Internal Audit division at the Company for over 11 years. He was appointed CFO in August 2020.
He has a diversified experience in costing and budgeting, business planning, financial management
and internal audit.
Mr. Hamood started his career in the year 2000 with Haleeb Foods Ltd and served in Finance and
Budgeting & Planning departments for 5 years. He also served in Finance Department of Beaconhouse
National University for 2 years. Before joining Honda in 2009, he worked as Manager Costing &
Planning in Nimir Chemicals Pakistan Ltd.

Reports
President & CEO Vice President Divisions Assistant Senior

Vice President General Manager
Import, Purchase
& Logistics
Safety, Health
& Corporate
Governance
Maqsood
ur Rehman Legal, IPR & CRM
(Compliance
Officer)
Human Resources
& Administration
Information
Technology
ORGANIZATION CHART
After Sales Iqbal Ahmad
Hironobu Sales &

Yoshimura Marketing
Finance
Internal Audit
Purchasing Asif Mahmood

Purchasing
Katsumi
Kasai Muhammad
(Risk
Model Ashraf
Planning Model Planning
Management
& Production
Officer)
Production
Quality Control

Reports
General Manager Senior Manager Manager

M. Shahbaz Hassan
Purchase
Muhammad Akmal Dar
Rana Usman Abid
Import
Dr. Muhammad Imran

Medical
Rao Arshad Javed
Syed Waseem Hassan Safety
Sh. Wajid Subhani
Muhammad Nauman Ali Corporate Governance
Corporate Affairs (Islamabad)
Imran Haider Rathore Muhammad Javed Khan

Legal, IPR & CRM.
Sohail Qaisar Farhat Yasmeen - HR

Muhammad Zafar Iqbal
Administration Services
Muhammad Ali Qazi Wasif - SAP / ABAP

Muhammad Zaman Khan
Networking
Sami Shafi Muhammad Nauman

Technical Support, Warranty Warehouse
and Training
Bushra Waseem
Service Planning &
Service Operations North
M. Muneeb ul Hassan
Service Operations South
Farhan Saleem
Parts Sales
Mumtaz Ahmad
Corporate Sales
Muhammad Naeem
Sales
Masahiro Niikura
Sales Coordinator
Amir Nazir
Amna Tahir
PP / Sales Promotion
Arif Ali Shah
SAP (Operations & CRM)
Waqas Tariq
Sales, Import & Taxation
Hamood ur Rahman Qaddafi Muhammad Aamer

Finance & Treasury
Imran Farooq
Ghafoor Ahmad M. Shahid
Quality Development Quality Development
Shinji Shinozawa
Farrukh Navid ul Hassan
Purchase (Costing & NMC)
Mawiz Akhtar Waseem Akhtar

Production Control / MS Production Control
Mirza Mahtab Baig
Material Supply
Jamshaid Tahir Asia Saif Ali
NMC Spec
Mujahid Yasin
Business Planing Riaz Ahmad - PE
Abdul Waheed
Engine Assembly
Shahid Latif Khattak

Assembly Final
Shinobu Nakamura Aneel Anwar Fayyaz Ahmad

Production Body & Frame Welding
Majid Rashid
Paint
Muhammad Nauman Abdul Quddos Abbasi

Press / PO Injection Press Shop
Zulfiqar Ali
Maintainance
Muhammad Khalid
Maintainance
Ayaz Liaqat
Vehicle Quality
Basharat Ali Rana Muhammad Rafi
Quality Control
Muhammad Aslam Khan
Quality Control
Muhammad Ajmal Hidenori Hayashi
CEQ A-CEQ

Reports
CORPORATE GOVERNANCE
(ORGANIZATION STRUCTURE)
Board of Directors
Code of
Conduct
President / CEO
Audit HR & Remuneration

Committee Committee
Executive Committee
CEO & President, VP(P), VP(A)
Internal
Audit
Director
Level Policy Honda Corporate
Governance
Secretary
Syed Waseem Hassan
Effective
Risk Information Operation / Internal
Compliance Management System Governance Audit
Sales & Marketing VP (HR & Admin) VP (Production) GM (IT) VP (HR & Admin) GM (IA)
Mr. Amir Nazir
HR & Admin
Mr. Sohail Qaisar
After Sales
Mr. Iqbal Ahmad
Information Technology
Mr. Muhammad Ali
Quality Control
Mr. Basharat Ali Rana
Logistics & Import

Mr. M. Akmal Dar
Divisional/
Functional
Level Policy Internal Audit
Mr. Imran Farooq
Purchasing
Mr. Asif Mahmood
Finance
Mr. Hamood ur Rahman
Model Planning
Mr. Muhammad Ashraf
Production
Mr. Shinobu Nakamura
Health, Safety &

Corporate Governance
Syed Waseem Hassan
Legal, IPR & CRM
Imran Haider Rathore
Individual
Level Code
of Conduct Individual Front Division for Corporate Governance Improvement
Associates and Suggestions

Reports

Reports
L to R:
Front Row: Mr. Akmal Dar, Mr. Sohail Qaiser, Mr. Iqbal Ahmed, Mr. Muhammad Ashraf, Mr. Asif Mahmood and Mr. Shinobu Nakamura
Back Row: Mr. Amir Nazir, Mr. Syed Waseem Hassan, Mr. Basharat Ali Rana, Mr. Imran Farooq, Mr. Muhammad Ali and Mr. Hamood ur Rahman Qaddafi
BUSINESS PRINCIPLES
HONDA MOTOR CO., LIMITED, JAPAN Management Policy
1. Respect for all – man has priority over machine.
Corporate Philosophy
2. Man is the key in controlling i.e. machines, methods and
Maintaining a global viewpoint, we are dedicated to supplying
materials.
products of the highest quality, yet at a reasonable price for
3. Follow 3S spirit i.e. small, smart and speed.
worldwide customer satisfaction.
4. Believe in 3A “Hands on Approach” i.e. be on Actual
Spot, look at the Actual Spot and confront the Actual
Management Policy
Situation.
1. Proceed always with ambition and youthfulness.
5. Be a good corporate citizen; assume a responsible role
2. Respect sound theory, develop fresh ideas and make
in the community.
the most effective use of time.
3. Enjoy your work and encourage open communications.
Priority Standards of Conduct
4. Strive constantly for a harmonious flow of work.
1. Safety: There can be no production without safety.
5. Be ever mindful of the value of research and endeavor.
2. Quality: To achieve complete customers satisfaction by
HONDA ATLAS CARS (PAKISTAN) LIMITED focusing on smart teamwork, meeting all applicable legal
and regulatory requirements & continually improving our
Corporate Philosophy
strategies and goals.
1. Dynamic manufacturing and marketing of prestigious
3. Productivity: With safety and quality, each of us
products to the entire satisfaction of customers.
will strive to excel the performance in all fields of our
2. Create ideal working environment for continuous
activities i.e Production, Model Planning, Quality
development of products and personnel.
Control, Purchasing, Sales & Marketing, After Sales,
3. Provide adequate return to shareholders and fulfill
Finance, Import, Purchase & Logistics, Information
corporate civic obligations.
Technology, Internal Audit, Health Safety & Corporate
Governance, Legal, IPR & CRM and Human Resources
& Administration Division.

Reports
Human Resources and Succession Plan resource conservation as far as technically feasible;
Human Resources Policy is to hire young, fresh, energetic and 3. Operate in compliance with applicable legal and other
active associates to meet the existing and future workforce requirements with the commitment to preserve global
requirements and providing its associates maximum environment;
opportunities for internal mobility through personal training 4. Create awareness and understanding about
and development to enable them to take higher positions. environmental issues amongst our associates;
5. Commitment to continual improvement of the
Human Resource Division has succession plan for each environmental performance and review of the
key job/area to make sure the continuity of operations in environmental management system to ensure its
the relevant division and to fill the temporary/permanent suitability, adequacy and effectiveness;
vacancy. 6. Keep public and other interested parties informed on
our environmental performance, if deemed necessary.
Quality Policy
We at Honda Atlas Cars (Pakistan) Limited, strive for Safety, Health and Environment
supplying top quality Honda cars to get ultimate customers Honda Atlas Cars (Pakistan) Limited conducts its business
satisfaction accomplished by focusing on: responsibly and in a way to make sure health, safety and
protection from environmental aspects of its associates and
l Smart team work
the society. We implement and maintain the programs that
l Meeting all applicable legal and regulatory requirements provide responsible assurance that the business will do the
l Continually improving our strategies and goals following:
1. To comply with all applicable Government and internal
Environment Policy health, safety and environmental requirements;
Honda Atlas Cars (Pakistan) Ltd; being responsible 2. Design facilities and conduct operations in a way that
member of society, considers the preservation of the global avoids risk to human health, safety and the environment;
environment as a crucial concern. 3. To examine and communicate the known hazards of
operations with relevant health safety and environmental
Our environmental philosophy is firmly based on the protection information to potentially affected persons.
following principles:
1. Recognize the impact of our activities, products and Operating Principles
services on environment; 1. Always keep the deadline
2. Formulate objectives and targets for pollution 2. Never make excuses
prevention, environmental impacts mitigation and 3. Team work
L to R:
Front Row: Mr. Farhan Saleem, Mr. Sami Shafi, Mr. Muhammad Naeem, Mr. Mawiz Akhtar, Mr. Jamshaid Tahir and Mr. Mujahid Yasin
Back Row: Mr. Imran Haider Rathore, Mr. Muhammad Aamer, Mr. Muhammad Arshad Javed, Mr. Aneel Anwar, Mr. Mirza Mahtab Baig,
Mr. Muhammad Nauman and Mr. Shinji Shinozawa

Reports
HONDA PHILOSOPHY
The Honda Philosophy, handed down to the Company by its founders Mr. Soichiro Honda and Mr. Takeo Fujisawa,
is composed of Fundamental Beliefs (Respect for the Individual and The Three Joys), the Company Principle and
Management Policies. The Philosophy forms the values shared by all Honda Group companies and all of their
associates and is the basis for Honda’s corporate activities and the associates’ behavior and decision-making.
Honda incorporates the Philosophy into educational programs for its associates and gives it life by turning it into
action, from everyday business activities to management decision-making, so that every person in the Company can
responsibly continue putting the Philosophy into practice.
Additionally, Honda engages in corporate activities under the concept of “Free and Open, Challenge, Co-evolution”.
Specifically, this concept puts into practice Honda’s corporate culture of “taking up the challenge without fear of
failure, free from the prejudice of preconceived ideas, and with a foundation of teamwork based on trust”.
Society’s expectations toward Honda continues to evolve with times. As a responsible company, Honda will resolve
problems while listening to the voices of its diverse stakeholders so as to meet their expectations and earn their trust.
Fundamental Beliefs
RESPECT FOR THE INDIVIDUAL
Initiative
Initiative means not to be bound by preconceived ideas but to think creatively and act on your own initiative and
01
judgment, while understanding that you must take responsibility for the results of those actions.
Equality
Equality is at the heart of everything we do. Our people are not employees, they are associates and they all have
exactly the same opportunities to progress. We recognize and respect the individual differences in one another
02
and treat each other fairly. An individual’s race, gender, age, religion, national origin, educational background,
social or economic status has no bearing on the individual’s opportunities.
Trust
The relationship among associates at Honda should be based on mutual trust. Trust is created by recognizing
03
each other as individuals, helping out where others are deficient, accepting help where we are deficient, sharing
our knowledge and making a sincere effort to fulfill our responsibilities.
THE THREE JOYS
The Joy of Buying

The joy of buying is achieved through providing products and services that exceed the needs and expectations
01
of each customer.
The Joy of Selling

The joy of selling occurs when those who are engaged in selling and servicing Honda products develop
02
relationships with a customer based on mutual trust. Through this relationship, Honda associates, dealers and
distributors experience pride and joy in satisfying the customer and in representing Honda to the customer.
The Joy of Creating

The joy of creating occurs when Honda associates and suppliers involved in the design, development, engineering
03
and manufacturing of Honda products recognize a sense of joy in our customers and dealers. The joy of creating
occurs when quality products exceed expectations and we experience pride in a job well done.

Reports
Stakeholders’ Engagement
To be a “Company that society wants to exist”, Honda have heightened the impact of companies on society,
must put into practice a communication cycle. This and vice-versa. As this process continues to accelerate,
means appropriately and accurately conveying to Honda considers that stakeholder dialogue is a beneficial
society the value that it seeks to provide. It also means tool that leads to a proper understanding of stakeholders
to engage in dialogue with diverse stakeholders to grasp regarding the Company’s initiatives while also giving the
and understand the demands and expectations placed Company an understanding of changes and risks in the
on the Company, translate these into concrete measures social environment.
and implement them and finally listen to stakeholders’
evaluations of its activities. Based on this understanding, the company directly
engages with key stakeholders in the diagram and
Especially in recent years, the growing scale of the respective divisions within the Company.
companies in Pakistan, along with the proliferation of IT,
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Reports
CHRONICLE OF EVENTS 2016

11th January
Launch of HR-V
(CBU) Model
2013
17th April
Launch of Honda City
Aspire 1.5 2014
16th October
15th June Launch of 22nd July
Launch of New Evolved Honda Launch of all New
Honda Accord City Model Honda Civic
2013 2015
10th December 6th November
Celebration of 20th Achieved Best
Anniversary Quality Award
2012
1st March
Launch of New
Honda CRV
29th April
Rolling Out of
100,000th
2008
20th July
2012 Honda City
Launch of
18th September 2nd July New Honda
Launch of New Honda Civic Launch of Honda City Aspire 1.3 Accord & CRV
2012 2009
12th July 31st January
Rolling Out of 200,000th Car Launch of 3rd Generation
Honda City
1994
13th July
1993 Inauguration by President of 1996
17th April Pakistan and visit of 10th January
Ground Breaking Mr. N. Kawamoto, President Honda New Civic 96
Ceremony held Motor, Japan Launched
1992 1994 1994

5th August 31st March 16th July
Joint Venture Completion of Civil Work and Commercial Production
Agreement Signed Installation of Plant & Equipment Commenced
with Honda Motor
Co. Ltd., Japan 26th May
First Car Rolling Out Ceremony
held
4th November
Incorporation of
Honda Atlas Cars
(Pakistan) Limited 10th October
Public Issue of
Shares

Reports
2017 2018
31st March 4th February
Achieved record 25th Anniversary
2019
9th April
production & sale celebrated
Launch of
Honda RS Turbo
21st April 31st March

Launch of Honda Achieved 50,000 Added seven new
BR-V Model production & sales target 3S Dealerships
2016 2017 2018

20th October 17th December 10th October
Rolling Out of First Honda Celebrated 400,000th
300,000th Car Marathon held unit Production
2006
29th July
New Honda
Civic Launched
in 1800 CC
2005
11th August
Launch of CBU
Honda Accord
31st December
Capacity 21st December
Enhancement to Rolling Out of
50,000 Units per 100,000th
annum achieved Car
2007 2006 2003

27th August 14th January 23rd August
Issue of 100% Launch of New New Honda City
Right Shares Model of Honda Launched
City
2000
1998 20th January
1st October Launch of New
Honda Motor City Model
Company’s 50th with PGM-Fi
Anniversary Technology
1997 1999 2001

22nd January 28th January 22nd March
Honda City Civic Vti Oriel Launch of New
Launched Launched - First Sunroof Car Honda Civic
in Pakistan

Information & Auditor’s Report
1 Management /
Company’s Structure 2 Review Reports 3 Financial Analysis 4 & Financial Statements 5 Notice of Meeting /
Reports
PATTERN OF SHAREHOLDING
AS ON MARCH 31, 2021
Number of Shareholdings Total Number of Percentage

Shareholders From To Shares Held of Total Capital
2528 1 - 100 130,248 0.09
1523 101 - 500 512,436 0.36
2382 501 - 15000 5,018,151 3.51
73 15001 - 40000 1,887,412 1.32
20 40001 - 80000 1,197,100 0.84
18 85001 - 245000 2,450,300 1.72
1 295001 - 300000 298,200 0.21
1 310001 - 315000 313,300 0.22
2 360001 - 365000 725,705 0.51
1 445001 - 450000 446,200 0.31
1 650001 - 655000 651,400 0.46
1 825001 - 830000 829,466 0.58
1 845001 - 850000 850,000 0.60
1 875001 - 880000 875,643 0.61
1 1375001 - 1380000 1,378,489 0.97
1 1960001 - 1965000 1,961,500 1.37
1 2245001 - 2250000 2,250,000 1.58
1 2345001 - 2350000 2,347,600 1.64
1 2725001 - 2730000 2,729,200 1.91
1 43115001 - 43120000 43,119,650 30.20
1 72825001 - 72830000 72,828,000 51.00
6,560 142,800,000 100.00
CATEGORIES OF SHAREHOLDERS
Number of Shares Percentage
Sr. No. Description Shareholders Held of Total Capital
1 Individuals 6,402 9,364,295 6.56

2 Foreign Company 1 72,828,000 51.00
3 Associated Undertakings/Companies 1 43,119,650 30.20
4 Joint Stock Companies 71 1,898,601 1.33
5 Financial Institutions 11 3,188,243 2.23
6 Insurance Companies 8 4,273,900 2.99
7 Investment Companies 10 2,960,920 2.07
8 Mutual Funds 23 2,230,729 1.56
9 Funds 19 738,902 0.52
10 Others 14 2,196,760 1.54
6,560 142,800,000 100.00

1 Management /
Reports
SHAREHOLDING INFORMATION
Number of
Catagories Shares Held
Shares Held
Associated Companies
+ M/s. Honda Motor Company Ltd. 1 72,828,000
# M/s. Shirazi Investments (Pvt) Limited 1 43,119,650
M/s. Atlas Insurance Limited 1 850,000
Mutual Funds
M/S FIRST CAPITAL MUTUAL FUND 1 170
CDC - TRUSTEE PICIC INVESTMENT FUND 1 25,200
CDC - TRUSTEE PICIC GROWTH FUND 1 33,900
CDC - TRUSTEE AKD INDEX TRACKER FUND 1 6,770

CDC - TRUSTEE NBP STOCK FUND 1 135,400
CDC - TRUSTEE NBP BALANCED FUND 1 3,600
CDC - TRUSTEE HBL - STOCK FUND 1 41,500
CDC - TRUSTEE NBP ISLAMIC SARMAYA IZAFA FUND 1 41,500
CDC - TRUSTEE NIT-EQUITY MARKET OPPORTUNITY FUND 1 50,350
CDC - TRUSTEE HBL IPF EQUITY SUB FUND 1 2,200
CDC - TRUSTEE KSE MEEZAN INDEX FUND 1 89,000
CDC - TRUSTEE AL-AMEEN ISLAMIC RET. SAV. FUND-EQUITY SUB FUND 1 300
CDC - TRUSTEE UBL RETIREMENT SAVINGS FUND - EQUITY SUB FUND 1 900
CDC - TRUSTEE NATIONAL INVESTMENT (UNIT) TRUST 1 1,378,489
CDC - TRUSTEE NBP ISLAMIC STOCK FUND 1 78,100
CDC - TRUSTEE NIT ISLAMIC EQUITY FUND 1 72,900
CDC - TRUSTEE NITIPF EQUITY SUB-FUND 1 3,000
CDC - TRUSTEE NITPF EQUITY SUB-FUND 1 1,500
CDC - TRUSTEE NBP ISLAMIC ACTIVE ALLOCATION EQUITY FUND 1 8,300
CDC - TRUSTEE HBL ISLAMIC ASSET ALLOCATION FUND 1 3,500
CDC - TRUSTEE NBP ISLAMIC REGULAR INCOME FUND 1 1,400
CDC - TRUSTEE NIT ASSET ALLOCATION FUND 1 10,000

M/S. GLOBAL X FUNDS-GLOBAL X MSCI PAKISTAN ETF 1 242,750
Directors, CEO, Their Spouse and Minor Children
Mr. Aamir H. Shirazi 1 #
Mr. Saquib H. Shirazi 1 #
Mr. Katsumi Kasai 1 *
Mr. Eikiho Sato 1 *
Mr. Hironobu Yoshimura 1 *
Mr. Kazunori Shibayama 1 *
Ms. Rie Mihara 1 500
Mr. Ariful Islam 1 500
Mr. Feroz Rizvi 1 500
Executives 6 4,243
Public Sector Companies & Corporations (Joint Stock Companies) 71 1,898,601
Banks, Development Finance Institutions, Non-Banking Finance Companies,
Insurance Companies, Takaful, Modarabas and Pension/Other Funds 61 12,508,725
Others, Individuals 6,387 9,358,552
TOTAL: 6,560 142,800,000
Note: + The above mentioned associated companies have 5% or more voting rights.
# Mr. Aamir H. Shirazi and Mr. Saquib H. Shirazi holding 500 qualification shares each. The ultimate ownership remains with M/s. Shirazi Investments (Pvt) Limited.
* The shareholding of Honda Motor Co. Limited, Japan include 3 directors holding 525 shares each and 1 director holding 500 shares (Total 2,075) in the name
Mr. Hironobu Yoshimura, Mr. Katsumi Kasai, Mr. Eikiho Sato and Mr. Kazunori Shibayama in the capacity of its nominee directors. The ultimate ownership
remains with Honda Motor Co., Limited, Japan.


1 Management /
Reports
INVESTOR RELATIONS INFORMATION
COMPANY INFORMATION
Established on November 4,1992

Line of Business Manufacturing of Honda Vehicles
Fiscal Year-End March-31
Auditors M/s. A.F. Ferguson & Co.
Share Registrar M/s. Hameed Majeed Associates (Pvt.) Ltd.
H.M. House, 7 - Bank Square, Lahore
Phone: +92-42-3723 5081-82
Email: info@hmconsultants.com
Web Site www.honda.com.pk
www.facebook.com/hacpl
STOCK INFORMATION
Security Code HCAR

Number of Shares Authorized 200,000,000
Number of Shares Issued 142,800,000
Number of Shareholders 6,560 (March 31, 2021)
Number of Shares per Trading Unit 100 Shares
Stock Exchange Listing Pakistan Stock Exchange Limited
General Meeting of Shareholders June 29, 2021
Book Closing June 18, 2021 to June 29, 2021 (both days inclusive)
SHARE
Next PRICE
Election MOVEMENT
of Directors April-2024
Dividend Rs. 4.52 per share
Dividend Payment July 2021
325.46 328.11
315.93 313.08
300.87
292.90 281.62 272.78
258.94
SHARE TRANSFER SYSTEM COPY OF COMPUTERIZED NATIONAL
Physical share transfers received by the Company’s IDENTIFICATION NUMBER (CNIC)
193.68
Share Registrar 182.20
are registered within 15 days from the OR NATIONAL TAX NUMBER (NTN)
date of receipt, provided the documents are completed The shareholders are informed that as per sub Clause 9(i)
171.20
in all respects. of Regulation 4 of Companies (Distribution of Dividends)
Regulations 2017, the identification of the registered
shareholder or its authorized person should be made
available with the Company. Therefore, it is requested that
Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 shareholders
Oct-20 Nov-20mustDec-20
provide Jan-21
copy of their
Feb-21 Computerized
Mar-21
BREAKUP VALUE PER SHARE

127
120 123
116
91
56
36
2015 2016 2017 2018 2019 2020 2021

1 Management /
Reports
INVESTOR RELATIONS INFORMATION
National Identity Card (in case of individual) or National Tax earlier) in the “Dividend Mandate Form”, available on
Number (in case of other than individual) or Passport (in Company’s website to enable the Company to transfer
case of foreign individual) shareholder. The shareholders your cash dividend into your bank account. Shareholders
are requested to provide the above documents by mail maintaining shareholding under Central Depository
to the Company Secretary, unless it has already been System (CDS) are advised to submit their bank mandate
provided. The members while sending above documents information directly to the relevant participant / CDC
must quote their respective folio number. Shareholders Investor Account Service.
are also requested to immediately notify the change of
address, if any. WEBSITE
Updated information regarding the Company can be
DIVIDEND MANDATE (MANDATORY) accessed at www.honda.com.pk. The website contains
As per Section 242 of Companies Act, 2017 the payment latest financial results of the Company together with
of cash dividend through electronic mode has become Company’s profile and product range, etc.
mandatory. Therefore, all shareholders are advised to
provide valid bank account details (if it is not provided
SHARE PRICE MOVEMENT
325.46 328.11
315.93 313.08
300.87
292.90 281.62 272.78
258.94
193.68
182.20
171.20
Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21
BREAKUP VALUE PER SHARE

127
120 123
116
91
56
36
2015 2016 2017 2018 2019 2020 2021

1 Management /
Reports
SIGNIFICANT EVENTS & HIGHLIGHTS

DURING 2020-21
Associates completed
Jun one year DBM Nov Eid-Milad-un-Nabi
2020 program from FCCU 2020 was celebrated
Lahore.
Jun Board of Directors Nov Lucky Draw among

2020 Meeting held on minorities of
2020
Jun 02, 2020 HACPL
Jul AGM of shareholders Nov

held. 10% cash Two Days Cricket
2020 dividend approved. 2020 Tournament
Board of Directors
Jul meeting held for Dec Long Service Awards
2020 approval of 1st 2020 were distributed to
Quarter Accounts associates
Four associates
Jul completed one year Dec CSR: Arranged one
2020 Executive MBA from 2020 day blood donation
FCCU camp at factory
Independence day CSR: Associates

Aug celebrations were Dec donated used
2020 observed at factory 2020 clothes to underpriv-
and all Dealerships ileged community
New dealer’s Board of Directors

Aug operations started at Jan meetings held for
2020 Honda Ring Road 2021 approval of 3rd
Lahore Quarter accounts
Sep CSR: Arranged one Feb CSR: One day free

day free medical medical camp was
2020 camp.
2021 held
New dealership Sponsored Air Staff

Sep operations started at Feb Open Golf
2020 Honda Carwan, 2021 Championship 2021
Quetta at Karachi
Board of Director Sponsored Golf

Nov meeting held for Mar Championship at
2020 approval of 2021 Multan
2nd Quarter Accounts

1 Management /
Reports
Sales Revenue
22.4% Rs. 67,362 million
Earning Per Share

162.5% Rs. 12.6
Production
23,479 Units 3.3%
Sales
24,050
Units
7.3%
Profit After Tax
Rs. 1,793 million 162.9%
Shareholders' Equity Dividend

Rs. 18,196 million 9.9% Rs. 645 million 352%
1 Management /
Reports
CHAIRMAN’S REVIEW
I am pleased to present the 29th Annual Report of the crisis smoothly, manifesting a surplus of USD 959 million
Company for the year ended March 31, 2021. during the 9M FY21 as compared to a deficit of USD
4.1 billion during the corresponding period last year.
THE ECONOMY The surplus is primarily attributed to a healthy increase
The COVID-19 pandemic has led to a global crisis of in remittances, which remained above USD 2 billion per
unprecedented reach and proportion. While the global month for the last nine months, growing by 26% year on
economic growth remained under pressure, Pakistan’s year. Travel restrictions and supportive policy measures
economy has regained momentum as COVID-19 related have resulted in increased use of official channels. This
impacts were largely well managed. This was supported has more than offset the impact of rising trade deficit. The
by an accommodative monetary policy, introduction of country’s import stood at USD 39.5 billion for 9M FY21,
refinancing facilities, targeted fiscal support and other growing by 13%, while exports stood at USD 18.7 billion,
financial initiatives. These created extra impetus for the up by 2%.
resumption of economic activity post-lockdown and
contraction phase was short-lived. While still modest, at Following the revival of Extended Fund Facility, IMF
around 3%, growth in FY21 is now projected to be higher released its third tranche of USD 500 million. Further,
due to improved prospects. Pakistan secured debt repayment relief of USD 3.5 billion
for the period May 2020 – June 2021 from G-20 creditors
During 6M FY21, the fiscal deficit stood at 2.5% of and expects another sizable relief from the international
GDP, broadly unchanged from the same period last year community. These favorable developments along with a
despite higher interest and COVID-19 related payments. Eurobond issue of USD 2.5 billion contributed to 8.9%
This mainly reflects healthy growth in revenues, with appreciation in the Pak Rupee against US dollar since
FBR net tax revenue provisionally growing by 6.0%. The August 2020. Pursuant to a progressing balance of
external sector continued to steer through the COVID-19 payments position, State Bank of Pakistan’s (SBP) foreign

1 Management /
Reports
exchange reserves closed at USD 13.7 billion by end of LARGE SCALE MANUFACTURING
March 2021, levels last seen over three years ago. The Large Scale Manufacturing (LSM) represents nearly 80%
positive momentum also echoed in the country’s capital of the country’s total manufacturing and accounts for
markets, as the PSX-100 index improved from 34,422 nearly 11% of national output. During 8M FY21, LSM
points in June 2020 to 44,587 points in March 2021, an grew by 7.5% in comparison to a contraction of 3.0%
increase of 30%. during the same period last year. Nevertheless, capacity
utilization in number of industries is still lagging. A
AGRICULTURE wide range of high-frequency indicators signal robust
Agriculture is by far Pakistan’s largest sector which progress, including sales of fast-moving consumer
absorbs most of the country’s labor force, directly or goods, automobiles and cement. This was on account
indirectly. The sector is targeted to grow by 2.7% in FY21. of an encouraging pick-up in economic activity driven
All major Kharif crops except cotton have surpassed by various supportive policy measures introduced by
production levels in FY20 and targets for FY21. Also, the Government and SBP. However, on account of
indicators of input variables — such as tractor sales, global supply chain disruptions, raw material supply has
fertilizer usage, water availability, and weather—suggest become increasingly constrained, and prices are on the
strong prospects, especially for wheat. Moreover, the rise. Thus, forcing businesses to resort to price increases
surge in prices of agricultural products and timely to maintain profitability.
subsidies on fertilizer and pesticides have contributed
to surplus liquidity with improved farm income. Thus, AUTOMOBILE INDUSTRY
demand for consumer durables remained upbeat in rural The Pakistan automobile industry has shown encouraging
areas. performance in FY21 and is heading towards path of
recovery. The significant progress on the economic front
served as a catalyst in steering the automobile industry to
its normal levels. Availability of cheaper financing options

1 Management /
Reports
CHAIRMAN’S REVIEW
and effect of pent-up demand after lockdown provided much SALES REVENUE
anticipated boost to the industry. (Rupees in million)
95,128
91,523
With a range of new entrants, the automobile industry is well
positioned for a noteworthy expansion. Lately, a visible shift of
67,362
customer preferences towards SUVs has been observed due to 62,803
55,046
competitive price offerings by different manufacturers. The shift
in customer choice is both a challenge and an opportunity for
the sedan segment.
Overall, during the financial year under review, industry 2017 2018 2019 2020 2021
production declined by 9.2% to 120,588 units as compared to
132,835 units last year. Likewise, sale of cars also witnessed a DIVIDEND PAYOUT RATIO
(Percentage)
drop of 4.3% to 131,778 units from 137,707 units in the last year.
This was due to the effect of countrywide lockdown during most
59.2
of the first quarter. In the 1300CC and above segment, in which
the Company operates, sales improved by 6.9%, SUV being a 45.1
36.0
major contributor. However, sales in 1000CC & below segment 30.3
dropped by 11.8% as compared to the last year. Amidst the 20.9
reasons stated above, new order inflows continue to pour in
with several automakers increasing and utilizing their available
production capacities to meet the surge in demand.
2017 2018 2019 2020 2021
On the other hand, the industry is facing diversified challenges

on the supply chain front. Resumption of post-lockdown CONTRIBUTION TO NATIONAL EXCHEQUER
(Rupees in million)
business activities has over-run the global suppliers with instant
demand of products. This has significantly disrupted the global
33,913 32,227
shipping schedules. Further, due to port congestions and limited 28,236
25,130
availability of containers / shipping lines, the industry is struggling
23,407
in receiving timely deliveries. Also, the sudden increase in raw
material prices has posed new challenges. All these factors are
causing constraints to the automobile production in the country.
THE COMPANY
The Company continued to conduct business with agility and 2017 2018 2019 2020 2021
manage challenges and change. Given the change in social

norms with limited public interactions and gatherings, the sales volume reflected an encouraging increase of
Company made a shift towards a framework which focuses on 7.28% at 24,050 units against 22,418 units of last
maximum digitalization and differentiation. The Company stayed year.
connected with its customers, business partners, employees,
communities, and all other stakeholders to help them cope Following are the key highlights for the year ended
with the situation and eventually proceed forward with a clear March 2021:
roadmap.
• MOUs with various banks
During the current financial year, despite the challenges of The Company, partnered with leading banks
lockdown and supply chain issue, the Company managed to of the country to offer attractive auto-
register an increase of 3.3% in production at 23,479 units as financing schemes at concessional rates to
compared to 22,729 units produced last year. Consequently, its customers. Through MOUs with different

1 Management /
Reports
3S Dealership - Honda Carwan, Quetta.
leading banks of Pakistan, all those customers who opted PRODUCTION

for auto-financing through these banks enjoyed exciting (Units)
incentives that were never offered before. These were
complemented with attractive schemes including waivers 50,177
48,608
in various fees and priority deliveries to provide added
benefits to customers.
34,560
23,479
• Addition of New Dealerships 22,729
During the year, two new dealerships were added - one
each in Quetta and Lahore. With the addition of dealership
in Quetta, the Company has established its presence
2017 2018 2019 2020 2021
in the largest province of Pakistan. The latest addition
has brought the total number of 3S dealers to 35, with SALES
coverage in almost all the major consumer markets of the (Units)
country. The Company believed that enhanced coverage

50,100
of dealership network will not only provide convenience to 48,648
the existing customers, but will also tap new customers to
Honda fraternity. 35,381
24,050
22,418
FINANCIAL RESULTS
The current financial year started off with a challenge for the
Company due to lockdown and suspension of business activities
for nearly first two months. As a result, the Company had to 2017 2018 2019 2020 2021
suffer loss in the first quarter. The Company addressed these
challenges through an effective and agile business strategy PKR TO USD MOVEMENT
(Rupees)
for ensuring business continuity in order to achieve improved
performance throughout the remaining part of the year. As a 167.68 167.75
166.60
165.97
result, the Company managed to achieve sales revenue of Rs
163.49
67.36 billion in the year under review, representing an increase 160.56 160.31
159.77
of 22% as compared to Rs 55.05 billion in the previous year. 160.77
158.28
159.56
Although the PKR-USD parity declined towards the end of the
year, high fluctuations throughout the year escalated input costs.
In addition, incurring of fixed costs at the start of the year where 152.78
there was no production coupled with underutilization of the

production capacity lead to relatively higher cost of sales during Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21

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CHAIRMAN’S REVIEW
the current year. Consequently, There was one change on the Board during the year, however, the statutory
gross profit dipped by 8% to Rs composition of the Board was maintained.
3.78 billion, representing a gross
margin of only 6%. Selling & General BOARD OF DIRECTORS
Administrative (SGA) expenses In order to respond to the mandate of the shareholders to achieve sustainable
increased by 11% to Rs 1.56 growth and enhance the corporate value of the Company over the medium
billion against Rs 1.41 billion of to long term, the duties of the Board of Directors include making decisions
last year. Other income witnessed concerning key business matters and strategic guidance. In addition, the
a substantial increase of 46% and Board of Directors discusses and makes decisions concerning matters
was recorded at Rs 0.92 billion. The specified in the Articles of Association of the company and Code of Corporate
increase in other income was mainly Governance.
due to improved liquidity on account
of influx in new car bookings and In order to fulfill these roles, the Company focuses on considering the balance
exchange gain on foreign currency in the diverse knowledge and experience of the Board of Directors as a whole.
balances. Financial & other charges Accordingly, the Company has members on the Board that have diverse
were recorded at Rs 0.35 billion, knowledge & insight, with high expertise and abundant experience.
representing a substantial decline of
80% as compared to the last year. BOARD MEETINGS
This was primarily due to reduction During the year, four meetings of the Board of Directors were held. The
in interest rates, repayment of attendance of the Board members was as follows:
borrowings and favorable currency
appreciations. Resultantly, the Sr. No. Name of Director Attendance
profit before tax increased by 80% 1. Mr. Aamir H. Shirazi 4
to Rs 2.78 billion against Rs 1.55 2. Mr. Hironobu Yoshimura 4
billion achieved last year. Likewise, 3. Mr. Saquib H. Shirazi 4
net profit after tax registered a 4. Mr. Kenichi Matsuo 3
healthy increase of 163% to Rs Mr. Katsumi Kasai (replaced Mr. Kenichi Matsuo) 1
1.79 billion, from Rs 0.68 billion of 5. Mr. Feroz Rizvi 4
the corresponding last year. This 6. Mr. Akira Murayama 4
translated into earnings per share of 7. Mr. Kazunori Shibayama 4
Rs 12.56 against Rs 4.77 of the last 8. Ms. Rie Mihara 3
year. 9. Mr. Ariful Islam 4
Mr. Maqsood ur Rehman (Company Secretary) 4
COMPOSITION OF THE BOARD
Late Ahmad Umair Wajid (CFO) 2
The following is the composition of
Mr. Hamood ur Rahman (CFO) 2
the Board of Directors: (replaced Late Ahmad Umair Wajid)
Leave of absence was granted to the members who did not attend the Board meetings
Total Number of Directors: 9
AUDIT COMMITTEE
a) Male 8 There are four members on the Audit Committee, comprising of three non-
b) Female 1 executive directors and one independent director. The Chairman of the Audit
Committee is an independent director. The Audit Committee was reconstituted
in May 2021 after election of Directors. The primary purpose of Audit Committee
Composition of the Board: is to provide oversight of the financial reporting process, the audit process,
a) Independent Directors 3 review internal audit reports, the system of internal controls and compliance
b) Non-Executive Directors 4 with laws and regulations. The committee also meets separately with internal
c) Executive Directors 2 auditor and external auditors to discuss matters that the committee believe
should be discussed separately.

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During the year under review, four (4) meetings of the Audit Committee were
held to review and discuss the financial statements, internal audit reports,
compliance with the relevant laws and regulations and other associated
matters.
The attendance of the Audit Committee members was as under:
Sr. No. Name of Committee Member Attendance

1. Mr. Feroz Rizvi Chairman 4
2. Mr. Saquib H. Shirazi Member 4
3. Mr. Akira Murayama Member 4
4. Mr. Kazunori Shibayama Member 4
HUMAN RESOURCE & REMUNERATION COMMITTEE

The Human Resource & Remuneration (HR&R) Committee comprises of five
directors, including two executive directors, two non-executive directors
and one independent director. The Chairman of the HR&R Committee is an
independent director. The HR&R Committee was reconstituted in May 2021
after election of the Board of Directors.
The purpose of the Committee is to provide oversight on the human resource’s

strategy & policy framework; recommending to the Board the evaluation &
compensation of personnel on key management positions and assessing the
efficiency of the Company’s HR policy.
During the year under review, one meeting of the HR&R Committee was held
to discuss & approve the matters falling under the terms of reference of the
Committee. The attendance of the HR&R Committee members was as follow:
Sr. No. Name of Committee Member Attendance

1. Mr. Feroz Rizvi Chairman 1
2. Mr. Saquib H. Shirazi Member 1
3. Mr. Hironobu Yoshimura Member 1
4. Mr. Kenichi Matsuo Member -
Mr. Katsumi Kasai (replaced Mr. Kenichi Member 1
Matsuo)
5. Mr. Akira Murayama Member -
Leave of absence was granted to the members who did not attend the HR&R meetings
CHANGES ON THE BOARD

On December 07, 2020, Mr. Kenichi Matsuo, Director and Vice President
Production was replaced by Mr. Katsumi Kasai. Mr. Eihiko Sato was elected as
part of the Board in place of Mr. Akira Murayama. The Board acknowledges the
valuable contributions made by the outgoing directors and welcomes the new
members onto the Board.

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CHAIRMAN’S REVIEW
FUTURE OUTLOOK
The COVID-19 pandemic has had a significant impact The Company believes that the fundamental attributes
on the domestic as well as the global economy. The of business operations – sustainability and leadership –
country has dealt reasonably well with the aftermath but have attained more relevance than ever before. While the
maintaining the positive momentum remains critical in the pandemic shook the world, the Company successfully
immediate term. On the growth front, risks remain due to steered through the uncertain times and adopted the new
the emergence of a third, more virulent wave of COVID-19 “normal” with emphasis on health & safety yet ensuring
even though the vaccine roll-out has begun. Inflation business continuity. This was achieved on the back of
may continue to remain elevated. The path of domestic the Company’s ability to deliver efficient and accessible
energy prices and international commodity prices may mobility solutions to the present and future generations.
have an important bearing on the inflation trajectory. The
resumption of the IMF program has boosted prospects
and guaranteed that external financing needs will be
comfortably met. This together with expected private and
official inflows should continue to keep Pakistan’s external
position stable. On the other hand, austerity measures
under IMF program may limit Government’s ability to ACKNOWLEDGEMENT
expand fiscal support and spending. Accordingly, there I would like to thank our valued customers for their trust
is a need to strike an appropriate balance between and confidence in the Company products. I also thank
supporting the economy, ensuring debt sustainability, our dealers, vendors, bankers, government institutions
and advancing structural reforms while maintaining and shareholders for their support and Honda Motor
social cohesion. As the economic activity normalizes and Company and Atlas Group for their always guidance.
effects of the pandemic subside, the country is projected Mr. Hironobu Yoshimura & his team deserve appreciation
to experience a broad-based recovery. As the economy for their untiring efforts in steering the company through
returns to its full capacity and recovery becomes durable, tough times amidst a challenging business environment.
the automobile industry is expected to grow further. I wish the Company all the success in the coming years.
Aamir H. Shirazi
Chairman
May 25, 2021

Lahore

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DIRECTORS’ REPORT
The Directors of the Company

are pleased to present their
report together with the 29th
Annual Report of the Company
along with Audited Financial
Statements for the year ended
March 31, 2021.

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DIRECTORS’ REPORT
FINANCIAL RESULTS:
Key financial results for the year are as follows:
Year ended Year ended

Rupees in million
March 31, 2021 March 31, 2020
Profit before tax for the year 2,780.63 1,547.20
Taxation (987.42) (865.45)
Other comprehensive loss for the year (11.50) (16.13)
Un-appropriated profit 1,781.71 665.62
Opening retained earnings 30.45 157.63
Total balance available for appropriation 1,812.16 823.25
Appropriations: *
Transfer to general reserves (1,000.00) (650.00)
Proposed dividend 45.2% (2020: 10%) (645.47) (142.80)
(1,645.47) (792.80)
Earnings per share – basic & diluted (Rs.) 12.56 4.77
* The Board of Directors has proposed these appropriations, which are not reflected in the financial statements in
compliance with the Fourth schedule of the Companies Act 2017.
BUSINESS ENVIRONMENT
The year started under the clouds of uncertainty due to two months long Covid-19 lockdown. Post lockdown, the
economy started a gradual recovery which restored customers’ confidence and the industry witnessed over 30% growth
in first 9M of FY21. Your Company achieved 7% growth in unit sales, despite the global supply chain challenges in the
last quarter of the year. The Company closed the financial year with profit before tax of Rs 2,780.63 million and net
profit after tax of Rs 1,793.21 million, as compared to Rs 1,547.20 million and Rs 681.75 million respectively, in the
corresponding last year.
EARNINGS PER SHARE

The basic and diluted earnings per share after tax was Rs.12.56 (2020: Rs. 4.77).
DIVIDEND
The Board of Directors following the policy of fair distribution of profits amongst the shareholders, strengthening the
balance sheet and future capital needs, have recommended a dividend of Rs.4.52/- (45.2%) per share for the year ended
March 31, 2021, as compared with Re.1/- per share (10%) declared last year.
INTERNAL AUDIT
The Company has an independent Internal Audit function which regularly monitors the internal business transactions
based on Company policy and approvals. The primary function of the internal audit is to review the internal controls and
risk management system of the Company and critically analysis the accuracy of announcements relating to Company’s
financial statements. Further any escape in the policy or process are duly identified and recommended for policy
improvement. Internal audit reports are reviewed by Audit Committee in its quarterly meetings.

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DIRECTORS' REPORT
DIRECTORS’ REMUNERATION: the evaluation criteria to identify the division priority risks.
The remuneration of the Board members is approved by The Company-wide priority risks are identified by the Risk
the Board itself. However, in accordance with the Code of Management Officer, after giving due consideration to the
Corporate Governance, it is ensured that no Director takes risk status of each operations. The concerned division then
part in deciding his own remuneration. The Company does include such risk items in its business plan for continuous
not pay remuneration to non-executive directors except monitoring, improvement and risk mitigation.
advisory fee for attending the meetings. The remuneration
policy has been designed to attract and retain the suitable COMPLIANCE
candidate on the Board. For information on remuneration To improve compliance culture, the Company has
and meeting fee of directors & CEO in 2020-21, please nominated a Compliance Officer, designated by the
refer notes to the Financial Statements. Board of Directors. The Compliance Officer makes
decisions regarding important internal control system
DIRECTORS’ TRAINING PROGRAM (DTP) measures, which include formulating and amending of
The Board has ensured the compliance of the requirement compliance policies. In addition, the responsibilities of
of Code of Corporate Governance in respect of directors’ the Compliance Officer encompass from confirming
training program of the Board members. Currently, the the status of establishment and operation of internal
Board fulfills the required condition of the Code through control systems to ensure the appropriate management
directors’ training program and possessing the minimum of the Kaizen (continuous improvement) Proposal Line
qualification & experience criteria for the exemption of and deciding measures to prevent recurrences when
DTP as stipulated in the Code. The Company intends to serious compliance-related matters occur. For matters
arrange the DTP for the newly appointed directors on the of compliance that are of particularly high importance,
Board. deliberation or reporting at a meeting of the Executive
Committee is carried out depending on the details of the
HONDA CODE OF CONDUCT matter. There were no such violations of laws or regulations
To earn the trust of the customers & society and grow in the year under review.
sustainably, the Company must not only comply with laws
and regulations but go beyond those legal structures by BUSINESS ETHICS PROPOSAL LINE (BEPL)
practicing ethical corporate conduct. Recognizing this, The Company has established the Business Ethics
we have adopted the Honda Code of Conduct, which Proposal Line (BEPL) as a structure for improving
summarizes the sincere behavior to be practiced by corporate ethics issues. The hotline addresses the issues
associates working at Honda. The Company works to instill involving corporate ethics in cases of actions that violate
the Honda Code of Conduct in each and every associate laws or internal rules. This allows the Company to accept
through actions such as orientations, the distribution of proposals and provide consultation, from a fair and
leaflets, posting of information on its intranet and through neutral standpoint, for associates who face barriers in
training sessions. improving or resolving issues in the workplace for reasons
such as difficulties in consulting with seniors. In order to
RISK MANAGEMENT STRUCTURE raise internal awareness of the points of contact, Honda
The Company’s risk management policy drives from the provides notice on its intranet, display information cards in
strategical guidelines from the Board of Directors and all conference rooms and creating awareness amongst the
from following the risk management structure based associates through training sessions. These tools clearly
on Honda Philosophy. The Company has developed a state that the Business Ethics proposers are protected.
risk management framework, which is headed by Risk Through BEPL, we encourage our vendors, dealers and
Management Officer. The risk assessment activities are suppliers to raise any concern that may affect the best
carried out by each Business Operations and Functional practices of Honda.
Operations. The purpose of these activities is to foresee
potential risks surrounding the business and to respond INITIATIVES TO PREVENT BRIBERY
beforehand to minimize these risks. Each department The Company always complies with laws and regulations
performs risk evaluation using the common risk items and and believe that as an independent corporate entity, it

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Two Days Cricket Tournament
must maintains appropriate relationships with political partners. From this perspective, the Company adopts
entities and governmental agencies and officials; and Respect for the Individual, consisting of the three elements
interact with political and administrative entities in an of initiative, equality and trust, as one of the Company’s
appropriate manner in compliance with laws, regulations Fundamental Beliefs. The Company follows the Three
and the Company policies and will not offer Government Principles of Personnel Management, specifically
officials entertainment or gifts (both monetary and non- respecting Initiative, ensuring fairness and encouraging
monetary) that are prohibited by laws or policies of the mutual trust, when managing its human resources in areas
Company. In addition, the Company has also established such as recruitment, training, assignment, evaluation and
the Honda Policy on the Prevention of Bribery, it stipulates treatment. At Honda, we seek to create an environment
basic Honda Guideline for the Prevention of Bribery, which in which each associate’s ambitions and abilities can be
specifies compliance items and prohibited items to curb developed, as well as a workplace where an individual’s
the menace of bribery. potential can be actively exercised.
INFORMATION MANAGEMENT During the year, the company continued to impart

The Company carrys out activities to ensure the safe quality education to our future leaders and 19 associates
handling of information generated in business activities completed one-year Diploma and 4 associates
such as personal information of its customers and accomplished one year Executive MBA from Foreman
associates, important management information as Christian College University (FCCU). One associate from
well as blueprint data of products and facilities. To senior management also completed Executive MBA from
appropriately supervise the information secrecy activities, LUMS.
a Confidentiality Committee has been set up, comprising
of Executive Committee, Head of IT, Human Resource and OCCUPATIONAL HEALTH AND SAFETY
Production as its members. The Committee has developed The Company always efforts to build a safe and
and approved an ‘Information Secrecy Policy’ which have secure work environment for associates, based on the
been implemented in each business operations. Fundamental Beliefs of “Respect for the Individual” and
“The Three Joys”. Under the fundamental safety principle
HUMAN RESOURCE MANAGEMENT of “no safety, no production”, the Company seeks to realize
Honda believes that human beings are born as free and a work environment that brings the joy that all people can
unique individuals with the capacity to think, reason and work with a true sense of safety & security. Based on this
create – and the ability to dream. The Company’s aims to principle, the Health & Safety Division has established
nurture and promote these characteristics by respecting basic policies for preventing industrial accidents and their
individual differences and trusting each other as equal recurrence, as well as ensuring the health of associates.

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DIRECTORS' REPORT
During the year, the Company gave

paramount importance to associates’
health in the ongoing pandemic
environment. The social distancing,
temperature check, walk-through
sanitizing gate and basic awareness
tips from Covid-19 safety were
displayed throughout the Company.
All workstations and lunch tables
were separated by plastic shields.
Wherever possible, the work from
home protocols were implemented
and e-meetings were preferred
instead of face to face meetings to
control the spread.
CSR ACTIVITIES
During the year, the Company
continued to undertake the different
social contribution activities, aiming
to share joy with people and to
‘become a Company that the society
wants to exist’.
Free Medical Camps

The first free medical camp
was arranged in 2014 for the
Manga Mandi village and since
Akhuwat Foundation. An awareness campaign was run in the factory and
then, it has been a hallmark for
associates contributed 1,500 number of used clothes. These donations
the Company’s CSR activities.
were then cleaned and packed with care and distributed to the needy
During the year, the Company
families through Akhuwat’s network.
organized free medical camps
at remote unfortunate areas and
Blood Donation Camp
more than 1,900 patients were
The company also took initiative to arrange a blood donation camp to
given free medical treatment
facilitate the patients of thalassemia in the wake of prevailing lockdown and
and medicines. Now since the
coronavirus spread. In the prevailing Covid-19 environment, the patients
beginning of this activity in 2014,
of thalassemia were facing acute shortage of blood, after reduced blood
the Company has arranged 38
donations were being observed from donors. The Company arranged
medical camps, wherein more
one-day blood donation camp at its factory premises, in which associates
than 23,000 patients have been
voluntarily donated blood bottles for thalassemia patients.
provided free medical assistance.
CORPORATE AND FINANCIAL REPORTING FRAMEWORK

Donation of Used Clothes
In compliance with the provisions of the listing regulations of the Pakistan Stock
The Company associates
Exchange, the Board members are pleased to place the following statements
took initiative to contribute
on record:
their used/new clothes for the
underprivileged with the help of

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a. The financial statements for

the year ended March 31, 2021
present fairly its state of affairs,
the results of its operations, cash
flow and changes in equity;
b. Proper books of accounts have
been maintained;
c. Appropriate accounting policies
have been consistently applied
in preparation of financial
statements for the year
ended March 31, 2021 and
Free Medical Camp
accounting estimates are based
on reasonable and prudent
judgment;
d. International Financial Reporting
Standards, as applicable in
Pakistan, have been followed
in preparation of financial
statements;
e. The systems of internal control
are sound in design and have Distribution of used clothes to deserving people of society
been effectively implemented
and monitored;
f. There are no doubts about the
Company’s ability to continue as
a going concern;
g. There has been no material
departure from the best practices
of corporate governance, as
detailed in listing regulations;
h. The book value of investments
held by Employees Provident
Fund and Employees Gratuity Blood Donation Camp
Fund as on March 31, 2021
MATERIAL CHANGES
were Rs. 546 million and Rs. 604
There have been no material changes since March 31, 2021 to date of the report
million respectively.
and the Company has not entered into any commitment during this period,
i. The key operating and financial
which would have an adverse impact on the financial position of the Company.
data for last ten years are given in
this report.
SHARE TRANSFER
During the year, 525 qualification shares were transferred in the name of Mr.
Katsumi Kasai from Mr. Kenichi Matsuo who was transferred to Japan on
December 07, 2020. There was no other transaction of sale or purchase of
shares of the Company by Directors, Company Secretary, Chief Financial
Officer and their spouses or minor children during the year under review.

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DIRECTORS' REPORT
CHAIRMAN’S REVIEW HOLDING COMPANY

The Chairman’s review included in the Annual Report deals M/s Honda Motor Company Limited, incorporated in
inter alia with the performance of the Company for the Japan, is the holding company with 51% shares.
year ended March 31, 2021 and the future outlook. The
directors endorse the contents of the review. PATTERN OF SHAREHOLDING
The pattern of shareholding as on March 31, 2021 and its
STATEMENT OF COMPLIANCE WITH THE CODE OF disclosure is annexed with this report.
CORPORATE GOVERNANCE
The Company has fully complied with the requirements of AUDITORS
the Listed Companies (Code of Corporate Governance) M/s A. F. Ferguson & Co., Chartered Accountants, retire
Regulations, 2019. A statement to this effect is annexed and being eligible, offer themselves for re-appointment for
the year ending March 31, 2022. The Audit Committee has
with this report.
recommended their reappointment to the Board.
For and on behalf of

The Board of Directors
Aamir H. Shirazi Hironobu Yoshimura

Chairman President/CEO
Lahore, May 25, 2021

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STATEMENT OF COMPLIANCE
WITH LISTED COMPANIES (CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2019
Executive Committee: (L to R) Mr. Maqsood ur Rehman, Mr. Hironobu Yoshimura and Mr. Katsumi Kasai
Name of Company: Honda Atlas Cars (Pakistan) Limited

Year ended: March 31, 2021
The company has Complied with the requirements of the 3. The directors have confirmed that none of them
Regulations in the following manner: is serving as a director on more than seven listed
companies, including this company.
1. The total number of directors are 9 as per the
following: 4. The company has prepared a Code of Conduct and
a. Male 8 has ensured that appropriate steps have been taken
b. Female 1 to disseminate it throughout the company along
with its supporting policies and procedures.
2. The composition of Board of Directors is as follows:
5. The Board has developed a vision/mission
Sr
No
Catagory Names statement, overall corporate strategy and significant
1. Mr. Feroz Rizvi policies of the company. A complete record of
2. Independent Directors Mr. Ariful Islam particulars of significant policies along with the
dates on which they were approved or amended has
3. Ms. Rie Mihara
been maintained.
4. Mr. Aamir H. Shirazi
5. Mr. Saquib H. Shirazi
6. All the powers of the Board have been duly exercised
6. Other Non-Executive Directors Mr. Akira Murayama
and decisions on relevant matters have been taken
7. Mr. Kazunori Shibayama
by Board/shareholders as empowered by the
8. Mr. Hironobu Yoshimura relevant provisions of the Act and these Regulations.
Executive Directors
9. Mr. Katsumi Kasai
The independent director meets the criteria of independence under

the Companies Act, 2017

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7. The meetings of the Board were presided over by 14. The frequency of meetings (quarterly/half yearly/
the Chairman. The Board has complied with the yearly) of the committee were as per following:
requirements of the Act and the Regulations with a) Audit Committee
respect to frequency, recording and circulating Four quarterly meetings were held during the
minutes of meeting of Board. financial year ended March 31, 2021.
8. The Board has a formal policy and transparent b) HR & Remuneration Committee
procedures for remuneration of directors in One meeting was held during the financial year
accordance with the Act and these Regulations. ended March 31, 2021.
9. Out of the nine, six Directors have either obtained 15. The Board has set up an effective internal audit
certificate of Directors’ Training Program or are function who are considered suitably qualified and
exempted from the requirement of Directors’ Training experienced for the purpose and are conversant with
Program as per the Listed Companies (Code of the policies and procedures of the Company.
Corporate Governance) Regulations, 2019. However,
during the year, No Directors’ Training Program was 16. The statutory auditors of the company have confirmed
arranged. that they have been given a satisfactory rating under
the Quality Control Review program of the Institute
10. The board has approved appointment of the Chief of Chartered Accountants of Pakistan and registered
Financial Officer, Company Secretary and Head of with Audit Oversight Board of Pakistan, that they and
Internal Audit, including their remuneration and terms all their partners are in compliance with International
and conditions of employment and complied with Federation of Accountants (IFAC) guidelines on code
relevant requirements of the Regulations. of ethics as adopted by the Institute of Chartered
Accountants of Pakistan and that they and the
11. Chief Financial Officer and the Chief Executive partners of the firm involved in the audit are not a
Officer duly endorsed the financial statements before close relative (spouse, parent, dependent and non-
approval of the Board. dependent children) of the chief executive officer,
chief financial officer, head of internal audit, company
12. The Board has formed committees comprising of secretary or director of the company;
members given below:
17. The statutory auditors or the persons associated
with them have not been appointed to provide other
1. Mr. Feroz Rizvi Chairman services except in accordance with the Act, these
2. Mr. Saquib H. Shirazi Regulations or any other regulatory requirement and
the auditors have confirmed that they have observed
a) Audit Committee 3. Mr. Akira Murayama
IFAC guidelines in this regard.
4. Mr. Kazunori Shibayama
18. We confirm that all requirements of the Regulations

1. Mr. Feroz Rizvi Chairman
3, 6, 7, 8, 27, 32, 33 and 36 of the Regulations have
b) Human Resource 2. Mr. Saquib H. Shirazi
been complied with.
& Remuneration 3. Mr. Hironobu Yoshimura
Committee 4. Mr. Katsumi Kasai
5. Mr. Akira Murayama
13. The terms of reference of the aforesaid committees
have been formed, documented and advised to the
committees for compliance.

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19. Explanation for non-compliance with requirements, other than regulations 3, 6, 7, 8, 27, 32, 33 and 36 are below
(if applicable):
Non-Mandatory Requirement Reg. No. Explanation

Representation of Minority shareholders: 5 No one intended to contest election as
The minority members as a class shall be facilitated by the director representing minority shareholders.
Board to contest election of directors by proxy
solicitation.
Responsibilities of the Board and its members: 10(1) Non-mandatory provisions of the CCG
Adoption of the corporate governance practices Regulations are partially complied
Nomination Committee: 29(1) Currently, the Board has not constituted

The Board may constitute a separate committee, designat- a separate Nomination Committee and
ed as the nomination committee, of such number and the functions are being performed by the
class of directors, as it may deem appropriate in its circum- Executive Committee.
stances.
Risk Management Committee: 30(1) Currently, the Board has not constituted
The Board may constitute the risk management committee, a Risk Management Committee and the
of such number and class of directors, as it may deem Company’s Risk Management Officer
appropriate in its circumstances, to carry out a review of performs the requisite functions and
effectiveness of risk management procedures and present apprises the board accordingly.
a report to the Board.
Aamir H. Shirazi
Chairman
Date: May 25, 2021

Lahore.

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INDEPENDENT AUDITOR’S
REVIEW REPORT
TO THE MEMBERS OF HONDA ATLAS CARS (PAKISTAN) LIMITED
REVIEW REPORT ON THE STATEMENT OF COMPLIANCE

CONTAINED IN LISTED COMPANIES (CODE OF CORPORATE GOVERNANCE)
REGULATIONS, 2019
We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate Governance)
Regulations, 2019 (the Regulations) prepared by the Board of Directors of Honda Atlas Cars (Pakistan) Limited for the
year ended March 31, 2021 in accordance with the requirements of regulation 36 of the Regulations.
The responsibility for compliance with the Regulations is that of the Board of Directors of the Company. Our
responsibility is to review whether the Statement of Compliance reflects the status of the Company’s compliance with
the provisions of the Regulations and report if it does not and to highlight any non-compliance with the requirements of
the Regulations. A review is limited primarily to inquiries of the Company’s personnel and review of various documents
prepared by the Company to comply with the Regulations.
As a part of our audit of the financial statements, we are required to obtain an understanding of the accounting and
internal control systems sufficient to plan the audit and develop an effective audit approach. We are not required to
consider whether the Board of Directors’ statement on internal control covers all risks and controls or to form an
opinion on the effectiveness of such internal controls, the Company’s corporate governance procedures and risks.
The Regulations require the Company to place before the Audit Committee and upon recommendation of the Audit
Committee, place before the Board of Directors for their review and approval, its related party transactions. We are
only required and have ensured compliance of this requirement to the extent of the approval of the related party
transactions by the Board of Directors upon recommendation of the Audit Committee.
Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance
does not appropriately reflect the Company’s compliance, in all material respects, with the requirements contained in
the Regulations as applicable to the Company for the year ended March 31, 2021.
A. F. FERGUSON & CO.

Place: Lahore
Date : May 25, 2021

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REVENUE APPLICATION
1% 72% Rupees in thousand 2021 2020

1% Revenue
Gross sales 84,208,088 68,384,452
Other income 918,484 638,618
March 31, 2021 Total 85,126,572 69,023,070
Application
20%
3% Product Cost
3%
Cost of sales 62,236,414 40,093,256
Product cost Other costs Employees
Government Shareholders Profit retained (excluding employees’ remuneration
and government levies)
Other Costs
58%
1% Operating expenses 874,248 1,698,495
(excluding employees’ remuneration)
Dealers’ commission 1,282,062 978,910
Financial charges 116,159 727,444
March 31, 2020
2,272,469 3,404,849
Employees
5%
Workers’ profit participation fund 149,647 83,296
Employees’ remuneration 2,072,529 1,866,032
33%
3% 2,222,176 1,949,328
Product cost Other costs Employees
Government
Government Shareholders Profit retained
Workers’ welfare fund 62,663 35,423
Sales tax 15,563,719 12,359,278
Custom duties - 9,649,866
Income tax 987,422 865,448
16,613,804 22,910,015
Shareholders
Dividend 645,456 142,800
Retained in Business
Profit retained 1,136,253 522,822
Total 85,126,572 69,023,070
Percentage 2021 2020

Application
Product cost 72% 58%
Other costs 3% 5%
Employees 3% 3%
Government 20% 33%
Shareholders 1% 0%
Profit retained 1% 1%
Total 100% 100%

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VALUE ADDED AND ITS DISTRIBUTION
Retained in Government
Rupees in thousand 2021 2020 business 22%
Value Added 22%
Net sales 67,362,307 55,046,264

Other income 918,484 638,618
Cost of sales (62,236,414) (49,743,122) March 31, 2021

Operating expenses (874,248) (1,698,495)
Finance cost (116,159) (727,444) Shareholders Employees
13% 43%
Total 5,053,970 3,515,821
Government Shareholders
Employees Retained in business
Distribution
To Government
Workers’ welfare fund 62,663 35,423
Income tax 987,422 865,448
Retained in Government
1,050,085 900,871 business 26%
15%
To Employees
Workers’ profit participation fund 149,647 83,296
Employees’ remuneration 2,072,529 1,866,032 March 31, 2020
2,222,176 1,949,328
To Shareholders
Dividend 645,456 142,800
Shareholders Employees
4% 55%
Retained In Business
Government Shareholders
Profit retained 1,136,253 522,822 Employees Retained in business
Total 5,053,970 3,515,821

Distribution
Government 21% 26%
Employees 44% 55%
Shareholders 13% 4%
Retained in business 22% 15%
Total 100% 100%

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FINANCIAL HIGHLIGHTS
2021 2020 2019 2018

STATEMENT OF PROFIT OR LOSS
Sales Rs in million 67,362 55,046 95,128 91,523
Gross profit / (loss) Rs in million 3,776 4,091 7,304 10,449
Operating profit / (loss) Rs in million 2,897 2,275 5,605 9,493
Profit / (loss) before tax Rs in million 2,781 1,547 5,594 9,479
Profit / (loss) after tax Rs in million 1,793 682 3,851 6,494
Proposed dividend Rs in million 645 143 1,735 3,846
STATEMENT OF FINANCIAL POSITION
Share capital Rs in million 1,428 1,428 1,428 1,428
Shareholders’ equity Rs in million 18,196 16,557 17,627 17,073
Capital expenditure Rs in million 3,895 724 961 1,266
Fixed assets - at cost Rs in million 16,613 13,129 12,621 11,961
Fixed assets - net Rs in million 7,974 4,905 5,245 5,373
Non current liabilities Rs in million 3,053 474 465 540
Total assets Rs in million 45,155 31,842 32,101 58,809
Working capital Rs in million 13,045 11,792 12,286 12,047
Capital employed Rs in million 21,213 18,890 17,627 17,073
SIGNIFICANT RATIOS
Profitability
Gross profit / (loss) margin % 5.6 7.4 7.7 11.4
Operating profit / (loss) margin % 4.3 4.1 5.9 10.3
Profit / (loss) before tax % 4.1 2.9 5.9 10.4
Profit / (loss) after tax % 2.7 1.2 4.0 7.1
Liquidity
Current ratio Times 1.5 1.8 1.9 1.3
Quick ratio Times 1.1 1.0 1.2 1.1
Long term debt to equity Times 0.2 - - -
Total liabilities to equity Times 2.5 1.9 1.8 3.4
Activity
Total assets turnover Times 1.5 1.7 3.0 1.6
Fixed assets turnover Times 8.4 11.2 18.1 17.0
Stock turnover ratio Times 5.5 5.1 10.4 10.9
Interest cover (BT) Times 24.9 3.1 500.9 655.8
Interest cover (AT) Times 16.4 1.9 345.2 449.6
Number of days stock Days 66 72 35 33
Earning
Return on capital employed % 8.9 3.7 22.2 43.1
Return on equity (BT) % 16.0 9.1 32.2 62.9
Return on equity (AT) % 10.3 4.0 22.2 43.1
Earning / (loss) per share (BT) Rs. 19.5 10.8 39.2 66.4
Earning / (loss) per share (AT) Rs. 12.6 4.8 27.0 45.5
Price earning ratio (AT) Times 21.7 27.7 8.9 10.5
Dividend per ordinary share Rs. 4.5 1.0 12.1 26.9
Dividend pay out ratio % 36.0 21.0 45.1 59.2
OTHER INFORMATION
Break up value per share Rs. 127 116 123 120
Market value per share Rs. 273 133 240 477
Contribution to national exchequer Rs in million 28,236 23,407 32,227 33,913
Units produced Units 23,479 22,729 48,608 50,177
Units sold Units 24,050 22,418 48,648 50,100
Manpower (permanent+contractual) Nos. 1,498 1,483 2,284 2,278
Exchange rates at year end date
¥ to $ ¥ 110.82 108.29 110.64 106.06
Rs to $ Rs. 152.79 166.59 140.51 115.60
Rs to ¥ Rs. 1.38 1.54 1.27 1.09

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2017 2016 2015 2014 2013 2012
62,803 40,086 37,764 39,153 30,275 16,600

9,122 6,047 4,773 2,857 1,447 (44)
8,660 5,186 3,786 2,135 716 (347)
8,636 5,179 3,767 2,097 525 (499)
6,135 3,556 3,162 1,074 244 (532)
1,856 1,000 714 428 43 -
1,428 1,428 1,428 1,428 1,428 1,428

13,065 7,941 5,120 2,391 1,365 1,128
1,812 1,346 662 239 466 397
11,454 9,844 8,531 8,150 7,957 8,202
4,974 3,781 2,933 3,041 3,503 3,668
440 226 64 56 43 110
51,497 16,205 13,926 12,317 15,146 9,489
8,419 4,300 1,806 (1,043) (3,180) (3,622)
13,065 7,941 5,120 2,391 1,365 1,294
14.5 15.1 12.6 7.3 4.8 (0.3)

13.8 12.9 10.0 5.5 2.4 (2.1)
13.8 12.9 9.9 5.4 1.7 (3.0)
9.8 8.9 8.4 2.7 0.8 (3.2)
1.2 1.5 1.2 0.9 0.8 0.6

1.0 1.0 0.6 0.5 0.4 0.2
- - - - - 0.2
3.9 2.0 2.7 5.2 11.1 8.4
1.2 2.5 2.7 3.2 2.0 1.7

12.6 10.6 12.9 12.9 8.6 4.5
10.1 7.1 7.0 8.9 8.0 5.3
369.4 741.8 202.8 56.1 3.7 (2.3)
262.7 509.6 170.4 29.2 2.3 (2.5)
36 51 52 41 45 69
58.4 54.5 84.2 57.2 18.4 (28.0)

82.2 79.3 100.3 111.7 42.1 (35.6)
58.4 54.5 84.2 57.2 19.6 (37.9)
60.5 36.3 26.4 14.7 3.7 (3.5)
43.0 24.9 22.1 7.5 1.7 (3.7)
17.5 10.1 8.3 7.3 17.1 (3.0)
13.0 7.0 5.0 3.0 0.3 -
30.3 28.1 22.6 39.9 17.6 -
91 56 36 17 10 8
752 252 183 55 29 11
25,130 12,488 11,758 13,750 10,664 6,281
34,560 25,939 23,320 23,223 19,387 11,040
35,381 25,800 23,311 23,310 18,915 11,406
2,033 1,256 1,160 1,122 1,003 934
111.65 112.74 119.93 104.00 93.97 82 .10

104.95 104.85 101.94 98.53 98.57 90.75
0.94 0.93 0.85 0.95 1.05 1.11

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HORIZONTAL ANALYSIS
2021 2020 2019 2018 2017
2021 2020 2019 2018 2017 2016 vs vs vs vs vs
2020 2019 2018 2017 2016
Rupees in thousand Percentage

EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Issued, subscribed and paid up capital 1,428,000 1,428,000 1,428,000 1,428,000 1,428,000 1,428,000 - - - - -
Reserves 14,956,000 14,306,000 12,306,000 9,706,000 5,506,000 2,956,000 4.54 16.25 26.79 76.28 86.27
Revenue reserve: Unappropriated profit 1,812,163 823,254 3,892,652 5,939,492 6,130,847 3,556,949 120.12 (78.85) (34.46) (3.12) 72.36
NON-CURRENT LIABILITIES
Long-term finances - secured 2,068,693 - - - - - 100.00 - - - -
Deferred government grant 595,838 - - - - - 100.00 - - - -
Employee retirment benefits 173,374 187,484 164,766 93,385 61,645 82,824 (7.53) 13.79 76.44 51.49 (25.57)
Deferred taxation 201,780 270,510 288,058 433,591 367,144 134,108 (25.41) (6.09) (33.56) 18.10 173.77
Deferred revenue 13,535 16,438 11,829 12,838 10,842 8,835 (17.66) 38.96 (7.86) 18.41 22.72
CURRENT LIABILITIES
Current portion of non-current liabilities 361,713 20,498 5,232 3,026 4,480 6,194 1,664.63 291.78 72.90 (32.46) (27.67)
Short term borrowings - secured - - - - - - - - - - -
Short term loan from related party - Unsecured - 2,332,246 - - - - (100) 100 - - -
Accrued mark-up 6,120 75,547 17 782 14,218 669 (91.90) 444,294.12 (97.83) (94.50) 2,025.26
Trade, dividend and other payables 23,538,010 12,381,837 14,004,637 41,191,665 37,973,858 8,031,319 90.10 (11.59) (66.00) 8.47 372.82
45,155,226 31,841,814 32,101,191 58,808,779 51,497,034 16,204,898 41.81 (0.81) (45.41) 14.20 217.79
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 4,000,261 4,518,634 4,905,667 4,991,899 4,402,000 2,511,897 (11.47) (7.89) (1.73) 13.40 75.25
Intangible assets 186,188 289,015 215,951 305,124 373,092 71,035 (35.58) 33.83 (29.23) (18.22) 425.22
Capital work-in-progress 3,788,001 97,062 123,487 76,348 199,194 1,198,229 3,802.66 (21.40) 61.74 (61.67) (83.38)
Long term trade debts 56,157 117,080 208,959 - - - (52.04) (43.97) 100.00 - -
Long term loans to employees 170,209 213,814 346,959 189,023 107,251 81,547 (20.39) (38.37) 83.55 76.24 31.52
Long term deposits 4,042 4,042 4,042 4,042 4,042 4,042 - - - - -
CURRENT ASSETS
Stores and spares 185,370 194,479 169,004 138,779 134,569 122,954 (4.68) 15.07 21.78 3.13 9.45
Stock-in-trade 11,648,838 11,268,644 8,670,614 8,208,043 6,658,735 4,009,825 3.37 29.96 5.64 23.27 66.06
Trade debts 845,765 868,505 1,122,986 92,441 49,536 86,242 (2.62) (22.66) 1,114.81 86.61 (42.56)
Loans, advances, deposits, prepayments and
9,349,859 8,653,570 10,173,428 13,135,180 9,088,890 1,006,233 8.05 (14.94) (22.55) 44.52 803.26
other receivables
Derivative finacial instrunments - 42,205 - - - - (100.00) 100.00 - - -
Short term investments - 4,053,057 4,768,252 20,674,900 20,943,345 1,149,777 (100.00) (15.00) (76.94) (1.28) 1,721.51
Cash and bank balances 14,920,536 1,521,707 1,391,842 10,993,000 9,536,380 5,963,117 880.51 9.33 (87.34) 15.27 59.92
45,155,226 31,841,814 32,101,191 58,808,779 51,497,034 16,204,898 41.81 (0.81) (45.41) 14.20 217.79

Sales 67,362,307 55,046,264 95,128,289 91,522,872 62,802,753 40,085,521 22.37 (42.13) 3.94 45.73 56.67
Cost of sales (63,586,363) (50,955,042) (87,824,215) (81,073,777) (53,681,061) (34,038,741) 24.79 (41.98) 8.33 51.03 57.71
Gross profit 3,775,944 4,091,222 7,304,074 10,449,095 9,121,692 6,046,780 (7.71) (43.99) (30.10) 14.55 50.85
Distribution and marketing costs (736,974) (667,901) (931,787) (916,906) (542,321) (333,046) 10.34 (28.32) 1.62 69.07 62.84
Administrative expenses (823,588) (738,757) (800,040) (677,602) (497,269) (351,863) 11.48 (7.66) 18.07 36.26 41.32
Other income 918,484 638,618 1,313,522 1,883,025 1,115,189 309,777 43.82 (51.38) (30.24) 68.85 260.00
Other expenses (237,080) (1,048,538) (1,281,007) (1,244,569) (537,523) (485,775) (77.39) (18.15) 2.93 131.54 10.65
Profit from operations 2,896,786 2,274,644 5,604,762 9,493,043 8,659,768 5,185,873 27.35 (59.42) (40.96) 9.62 66.99
Finance cost (116,159) (727,444) (11,189) (14,476) (23,443) (6,991) (84.03) 6,401.42 (22.71) (38.25) 235.33
Profit before taxation 2,780,627 1,547,200 5,593,573 9,478,567 8,636,325 5,178,882 79.72 (72.34) (40.99) 9.75 66.76
Taxation (987,422) (865,448) (1,742,460) (2,984,117) (2,501,335) (1,623,100) 14.09 (50.33) (41.61) 19.30 54.11
Profit after taxation 1,793,205 681,752 3,851,113 6,494,450 6,134,990 3,555,782 163.03 (82.30) (40.70) 5.86 72.54

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VERTICAL ANALYSIS
2021 2020 2019 2018 2017 2021 2020 2019 2018 2017
Rupees in thousand Percentage

Issued, subscribed and paid up capital 1,428,000 1,428,000 1,428,000 1,428,000 1,428,000 3.16 4.48 4.45 2.43 2.77
Reserves 14,956,000 14,306,000 12,306,000 9,706,000 5,506,000 33.12 44.93 38.34 16.50 10.69
Revenue reserve: Unappropriated profit 1,812,163 823,254 3,892,652 5,939,492 6,130,847 4.01 2.59 12.13 10.10 11.91
Long-term finances - secured 2,068,693 - - - - 4.58 - - - -
Deferred government grant 595,838 - - - - 1.32 - - - -
Employee retirment benefits 173,374 187,484 164,766 93,385 61,645 0.38 0.59 0.51 0.16 0.12
Deferred taxation 201,780 270,510 288,058 433,591 367,144 0.45 0.85 0.90 0.74 0.71
Deferred revenue 13,535 16,438 11,829 12,838 10,842 0.03 0.05 0.04 0.02 0.02
CURRENT LIABILITIES
Current portion of non-current liabilities 361,713 20,498 5,232 3,026 4,480 0.80 0.06 0.02 0.01 0.01
Short term borrowings - secured - - - - - - - - - -
Short term loan from related party - Unsecured - 2,332,246 - - - - 7.32 - - -
Accrued markup 6,120 75,547 17 782 14,218 0.01 0.24 - - 0.03
Trade, dividend and other payables 23,538,010 12,381,837 14,004,637 41,191,665 37,973,858 52.13 38.89 43.63 70.04 73.74
45,155,226 31,841,814 32,101,191 58,808,779 51,497,034 100.00 100.00 100.00 100.00 100.00
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 4,000,261 4,518,634 4,905,667 4,991,899 4,402,000 8.86 14.19 15.28 8.49 8.54
Intangible assets 186,188 289,015 215,951 305,124 373,092 0.41 0.91 0.67 0.52 0.72
Capital work-in-progress 3,788,001 97,062 123,487 76,348 199,194 8.39 0.30 0.38 0.13 0.38
Long term trade debts 56,157 117,080 208,959 - - 0.12 0.37 0.65 - -
Long term loans to employees 170,209 213,814 346,959 189,023 107,251 0.38 0.67 1.08 0.32 0.20
Long term deposits 4,042 4,042 4,042 4,042 4,042 0.01 0.01 0.01 0.01 0.00
CURRENT ASSETS
Stores and spares 185,370 194,479 169,004 138,779 134,569 0.41 0.61 0.53 0.24 0.26
Stock-in-trade 11,648,838 11,268,644 8,670,614 8,208,043 6,658,735 25.80 35.39 27.01 13.96 12.93
Trade debts 845,765 868,505 1,122,986 92,441 49,536 1.87 2.73 3.50 0.16 0.09
Loans, advances, deposits, prepayments
9,349,859 8,653,570 10,173,428 13,135,180 9,088,890 20.71 27.18 31.69 22.34 17.64
and other receivables
Derivative financial instruments - 42,205 - - - - 0.13 - - -
Short term investments - 4,053,057 4,768,252 20,674,900 20,943,345 - 12.73 14.85 35.16 40.66
Cash and bank balances 14,920,536 1,521,707 1,391,842 10,993,000 9,536,380 33.04 4.78 4.34 18.69 18.51
45,155,226 31,841,814 32,101,191 58,808,779 51,497,034 100.00 100.00 100.00 100.00 100.00

Sales 67,362,307 55,046,264 95,128,289 91,522,872 62,802,753 100.00 100.00 100.00 100.00 100.00
Cost of sales (63,586,363) (50,955,042) (87,824,215) (81,073,777) (53,681,061) (94.39) (92.57) (92.32) (88.58) (85.48)
Gross profit 3,775,944 4,091,222 7,304,074 10,449,095 9,121,692 5.61 7.43 7.68 11.42 14.52
Distribution and marketing costs (736,974) (667,901) (931,787) (916,906) (542,321) (1.09) (1.21) (0.98) (1.00) (0.86)
Administrative expenses (823,588) (738,757) (800,040) (677,602) (497,269) (1.22) (1.34) (0.84) (0.74) (0.79)
Other income 918,484 638,618 1,313,522 1,883,025 1,115,189 1.36 1.16 1.38 2.06 1.78
Other expenses (237,080) (1,048,538) (1,281,007) (1,244,569) (537,523) (0.35) (1.90) (1.35) (1.36) (0.86)
Profit from operations 2,896,786 2,274,644 5,604,762 9,493,043 8,659,768 4.30 4.13 5.89 10.37 13.79
Finance cost (116,159) (727,444) (11,189) (14,476) (23,443) (0.17) (1.32) (0.01) (0.02) (0.04)
Profit before taxation 2,780,627 1,547,200 5,593,573 9,478,567 8,636,325 4.13 2.81 5.88 10.36 13.75
Taxation (987,422) (865,448) (1,742,460) (2,984,117) (2,501,335) (1.47) (1.57) (1.83) (3.26) (3.98)
Profit after taxation 1,793,205 681,752 3,851,113 6,494,450 6,134,990 2.66 1.24 4.05 7.10 9.77

FINANCIAL STATEMENTS
For the year ended March 31, 2021

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INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF HONDA ATLAS CARS (PAKISTAN) LIMITED
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
OPINION
We have audited the annexed financial statements of Honda Atlas Cars (Pakistan) Limited (the Company), which comprise
the statement of financial position as at March 31, 2021, and the statement of profit or loss, the statement of comprehensive
income, the statement of changes in equity, the statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies and other explanatory information, and we state that
we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for
the purposes of the audit.
In our opinion and to the best of our information and according to the explanations given to us, the statement of financial
position, the statement of profit or loss, the statement of comprehensive income, the statement of changes in equity
and the statement of cash flows together with the notes forming part thereof conform with the accounting and reporting
standards as applicable in Pakistan and give the information required by the Companies Act, 2017 (XIX of 2017), in the
manner so required and respectively give a true and fair view of the state of the Company’s affairs as at March 31, 2021
and of the profit and other comprehensive loss, the changes in equity and its cash flows for the year then ended.
BASIS FOR OPINION

We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the Company in accordance with the International Ethics
Standards Board for Accountants’ Code of Ethics for Professional Accountants as adopted by the Institute of Chartered
Accountants of Pakistan (the Code) and we have fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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Following is a Key audit matter:
S. Key audit matter How the matter was addressed in our audit
No.
1 Revenue recognition Our audit procedures in relation to the matter,
(Refer notes 4.21 and 29 to the annexed financial amongst others, included the following:
statements)
– Assessed the design, implementation and
Revenue is recognized when control of the operating effectiveness of the relevant key
underlying products has been transferred to internal controls over the Company’s system
the customers. The Company is engaged in the which governs revenue recognition;
assembling and progressive manufacturing and – Understood and evaluated the accounting
sale of Honda vehicles and spare parts. The policies with respect to revenue recognition
Company recognized revenue from the sales including those related to discounts and
of own manufactured goods measured net of commissions and its compliance with IFRS
discounts and commissions. 15: ‘Revenue from Contracts with Customers’;
– Performed testing of sample of revenue
We consider revenue recognition as a key audit transactions with underlying documentation
matter due to revenue being one of the key including dispatch documents and sales
performance indicators of the Company, large invoices;
number of revenue transactions with a large – Tested on a sample basis, specific revenue
number of customers, inherent risk of material transactions recorded before and after the
misstatement and significant increase in revenue reporting date with underlying documentation
from last year despite the lockdown due to to assess whether revenue has been
COVID-19 during the year. recognized in the correct period;
– Checked on a sample basis, approval of sales
prices and commissions by the appropriate
authority;
– Performed recalculation of discounts and
commission as per Company’s policy on test
basis;
– Performed audit procedures to analyze
variation in the price and quantity sold during
the year; and
– Assessed the adequacy of disclosures made
in the financial statements related to revenue.
INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR’S REPORT THEREON
Management is responsible for the other information. The other information comprises the information included
in the annual report, but does not include the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon.

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In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
RESPONSIBILITIES OF MANAGEMENT AND BOARD OF DIRECTORS FOR THE FINANCIAL STATEMENTS
Management is responsible for the preparation and fair presentation of the financial statements in accordance
with the accounting and reporting standards as applicable in Pakistan and the requirements of Companies
Act, 2017 (XIX of 2017) and for such internal control as management determines is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless management either intends to liquidate the Company or to cease operations, or has
no realistic alternative but to do so.
The Board of directors are responsible for overseeing the Company’s financial reporting process.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with ISAs as applicable in Pakistan will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgement and
maintain professional skepticism throughout the audit. We also:
l Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.

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l Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Company’s internal control.
l Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.
l Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Company to cease to continue as a going concern.
l Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
We communicate with the board of directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the board of directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the board of directors, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
Based on our audit, we further report that in our opinion:

a) proper books of account have been kept by the Company as required by the Companies Act, 2017 (XIX of
2017);

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b) the statement of financial position, the statement of profit or loss, the statement of comprehensive income,
the statement of changes in equity and the statement of cash flows together with the notes thereon have
been drawn up in conformity with the Companies Act, 2017 (XIX of 2017) and are in agreement with the
books of account and returns;
c) investments made, expenditure incurred and guarantees extended during the year were for the purpose
of the Company’s business; and
d) zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by
the Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance.
The engagement partner on the audit resulting in this independent auditor’s report is Khurram Akbar Khan.
A. F. Ferguson & Co.

Lahore
Date: May 25, 2021

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AS AT MARCH 31, 2021
Rupees in thousand Note 2021 2020

Authorized share capital
200,000,000 (2020: 200,000,000)
ordinary shares of Rs 10 each 2,000,000 2,000,000
Issued, subscribed and paid up share capital

142,800,000 (2020: 142,800,000)
ordinary shares of Rs 10 each 5 1,428,000 1,428,000
Reserves 6 14,956,000 14,306,000
Revenue reserve: Un-appropriated profits 1,812,163 823,254
18,196,163 16,557,254
Long term finances - secured 7 2,068,693 -
Deferred government grant 8 595,838 -
Employee retirement benefits 9 173,374 187,484
Deferred taxation 10 201,780 270,510
Deferred revenue 13,535 16,438
3,053,220 474,432
CURRENT LIABILITIES
Current portion of non-current liabilities 11 361,713 20,498
Short term borrowings - secured 12 - -
Short term loan from related party - unsecured 13 - 2,332,246
Accrued markup 14 6,120 75,547
Unclaimed dividend 47,141 48,038
Trade and other payables 15 23,490,869 12,333,799
23,905,843 14,810,128
CONTINGENCIES AND COMMITMENTS 16
45,155,226 31,841,814
The annexed notes 1 to 50 form an integral part of these financial statements.
Aamir H. Shirazi Hironobu Yoshimura Hamood ur Rahman Qaddafi

Chairman Chief Executive Chief Financial Officer

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ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 17 4,000,261 4,518,634
Intangible assets 18 186,188 289,015
Capital work-in-progress 19 3,788,001 97,062
Long term trade debts 20 56,157 117,080
Long term loans to employees 21 170,209 213,814
Long term deposits 4,042 4,042
8,204,858 5,239,647
CURRENT ASSETS
Stores and spares 22 185,370 194,479
Stock-in-trade 23 11,648,838 11,268,644
Trade debts 24 845,765 868,505
Loans, advances, deposits, prepayments
and other receivables 25 9,349,859 8,653,570
Derivative financial instruments 26 - 42,205
Short term investments 27 - 4,053,057
Cash and bank balances 28 14,920,536 1,521,707
36,950,368 26,602,167
45,155,226 31,841,814


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FOR THE YEAR ENDED MARCH 31, 2021
Sales 29 67,362,307 55,046,264

Cost of sales 30 (63,586,363) (50,955,042)
Gross profit 3,775,944 4,091,222
Distribution and marketing costs 31 (736,974) (667,901)
Administrative expenses 32 (823,588) (738,757)
Other income 33 918,484 638,618
Other expenses 34 (237,080) (1,048,538)
Finance cost 35 (116,159) (727,444)

Profit before taxation 2,780,627 1,547,200
Taxation 36 (987,422) (865,448)

Profit for the year 1,793,205 681,752
Earnings per share - basic and diluted (in Rupees) 12.56 4.77


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STATEMENT OF COMPREHENSIVE INCOME

Other comprehensive loss for the year:
Items that may be reclassified subsequently to profit or loss - -
Items that will not be subsequently reclassified to profit or loss:

- Remeasurement of post retirement benefits obligation 9 (16,192) (22,718)
- Income tax on remeasurement of post retirement benefits obligation 4,696 6,588
(11,496) (16,130)
Total comprehensive income for the year 1,781,709 665,622


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STATEMENT OF CHANGES IN EQUITY

Capital reserve Revenue reserves

Share Share General Un-appropri-
Total
Rupees in thousand capital premium reserve ated profits
Balance as on April 1, 2019 1,428,000 76,000 12,230,000 3,892,652 17,626,652
Appropriation of reserves
Transfer to general reserve - - 2,000,000 (2,000,000) -
Total comprehensive income for the year

Profit for the year - - - 681,752 681,752
Other comprehensive loss for the year - - - (16,130) (16,130)
- - - 665,622 665,622
Transactions with owners in their capacity as
owners recognised directly in equity
Final dividend for the year ended March 31, 2019
@ Rs 12.15 per share - - - (1,735,020) (1,735,020)
Balance as on March 31, 2020 1,428,000 76,000 14,230,000 823,254 16,557,254
Appropriation of reserves
Transfer to general reserve - - 650,000 (650,000) -
Total comprehensive income for the year

Profit for the year - - - 1,793,205 1,793,205
Other comprehensive loss for the year - - - (11,496) (11,496)
- - - 1,781,709 1,781,709
Transactions with owners in their capacity as

owners recognised directly in equity
Final dividend for the year ended March 31, 2020
@ Re 1 per share - - - (142,800) (142,800)
Balance as on March 31, 2021 1,428,000 76,000 14,880,000 1,812,163 18,196,163


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STATEMENT OF CASH FLOWS

Cash flows from operating activities
Cash generated from operations 37 16,085,694 1,697,630

Finance cost paid (156,060) (517,318)
Employees' retirement benefits and other obligations paid (226,929) (113,128)
Net decrease in loans to employees 53,575 72,155
Income tax paid (2,305,437) (645,814)
Royalty paid (1,348,681) (1,054,689)
Net (decrease)/increase in deferred revenue (7,600) 25,681
Net cash inflow/(outflow) from operating activities 12,094,562 (535,483)
Cash flows from investing activities

Purchase of property, plant and equipment (3,823,355) (556,363)
Purchase of intangible assets (71,173) (168,029)
Proceeds from disposal of property, plant and equipment 22,744 104,652
Proceeds from disposal of short term investments 324,576 332,446
Dividend received - 4,354
Interest received 496,821 121,894
Net cash outflow from investing activities (3,050,387) (161,046)
Cash flows from financing activities

Short term loan from related party acquired 13 - 2,172,940
Short term loan from related party repaid 13 (2,334,267) -
Long term finances acquired 7 3,078,852 -
Long term finances repaid 7 (62,490) -
Dividends paid (143,697) (1,733,645)
Net cash inflow from financing activities 538,398 439,295
Net increase/(decrease) in cash and cash equivalents 9,582,573 (257,234)
Cash and cash equivalents at the beginning of the year 5,337,963 5,595,197
Cash and cash equivalents at the end of the year 38 14,920,536 5,337,963
Refer notes 7 and 13 for reconciliation of liabilities arising from financing activities.


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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

1. LEGAL STATUS AND NATURE OF BUSINESS

Honda Atlas Cars (Pakistan) Limited (the ‘Company’) is a public company limited by shares incorporated in Pakistan on
November 4, 1992 under the repealed Companies Ordinance, 1984 (now, the Companies Act, 2017). It is a subsidiary
of Honda Motor Co., Ltd., Japan, (the ‘holding company’). The Company’s ordinary shares are listed on the Pakistan
Stock Exchange Limited.

The registered office of the Company is situated at 1-Mcleod Road, Lahore, and its manufacturing facility is located
at 43 km, Multan Road, Manga Mandi, Lahore. The Company also has regional offices situated at Asia House,
19-C&D, Block L, Gulberg III, Main Ferozepur Road, Lahore and Tower-A, Technology Park, Shahrah-e-Faisal,
Karachi.

The Company’s principal activities are assembling and progressive manufacturing and sale of Honda vehicles and
spare parts. The Company commenced commercial production from July 1994.

2. BASIS OF PREPARATION
2.1 Statement of compliance
These financial statements have been prepared in accordance with the accounting and reporting standards as
applicable in Pakistan. The accounting and reporting standards applicable in Pakistan comprise of:

i) International Financial Reporting Standards (‘IFRS’) issued by the International Accounting Standards
Board (‘IASB’) as notified under the Companies Act, 2017 (the ‘Act’); and
ii) Provisions of and directives issued under the Act.

Where provisions of and directives issued under the Act differ from the IFRS, the provisions of and directives issued
under the Act have been followed.

2.2 Initial application of standards, amendments or interpretations to existing standards
The following amendments to existing standards have been published that are applicable to the Company’s financial
statements covering annual periods, beginning on or after the following dates:

2.2.1 Standards, amendments to published standards and interpretations that are effective in the current
year
Certain standards, amendments and interpretations to IFRS are effective for accounting periods beginning on April 1,
2020 but are considered not to be relevant or to have any significant effect on the Company’s operations (although
they may affect the accounting for future transactions and events) and are, therefore, not detailed in these financial
statements.

2.2.2 Standards, amendments and interpretations to existing standards that are not yet effective and have not been
early adopted by the Company
There are certain standards, amendments to the IFRS and interpretations that are mandatory for companies having
accounting periods beginning on or after April 1, 2021 but are considered not to be relevant or to have any significant
effect on the Company’s operations and are, therefore, not detailed in these financial statements, except for the
following:
(a) Classification of liabilities - Amendment to IAS 1: (effective for period beginning on April 01, 2021)
The IASB issued a narrow-scope amendment to IAS 1, ‘Presentation of Financial Statements’, to clarify
that liabilities are classified as either current or non-current, depending on the rights that exist at the end
of the reporting period. Classification is unaffected by the expectations of the entity or events after the
reporting date. The amendment also clarifies what IAS 1 means when it refers to the ‘settlement’ of a
liability.

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In particular, the amendment clarifies that:

- liabilities are classified as non-current if the entity has a substantive right to defer settlement for at least
12 months at the end of the reporting period. The amendment no longer refers to unconditional rights;
- the assessment determines whether a right exists, but it does not consider whether the entity will exercise
the right. So, management’s expectations do not affect the classification;
- the right to defer only exists if the entity complies with any relevant conditions at the reporting date. A
liability is classified as current if a condition is breached at or before the reporting date and a waiver is
obtained after the reporting date; and
- Settlement is defined as the extinguishment of a liability with cash, other economic resources or an
entity’s own equity instruments.
The Company has assessed that the impact of this amendment is not expected to be significant.
(b) Disclosure of accounting policies and definition of accounting estimates - Amendment to IAS 1
and IAS 8: (effective for period beginning on April 01, 2021)
The IASB amended IAS 1, ‘Presentation of Financial Statements’, to require companies to disclose their
material accounting policy information rather than their significant accounting policies. The amendment
also clarifies that accounting policy information is expected to be material if, without it, the users of the
financial statements would be unable to understand other material information in the financial statements.
Further, the amendment to IAS 1 clarifies that immaterial accounting policy information need not be
disclosed. However, if it is disclosed, it should not obscure material accounting policy information.
The amendment to IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, clarifies
how companies should distinguish changes in accounting policies from changes in accounting estimates.
The distinction is important, because changes in accounting estimates are applied prospectively to
future transactions and other future events, but changes in accounting policies are generally applied
retrospectively to past transactions and other past events as well as the current period.
The Company has assessed that the impact of this amendment is not expected to be significant.
3. BASIS OF MEASUREMENT
3.1 These financial statements have been prepared under the historical cost convention except for the recognition of
certain employee retirement benefits at present value and certain financial instruments at fair value.

3.2 Critical accounting estimates and judgements
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal
the actual results. Management also needs to exercise judgement in applying the Company’s accounting policies.

This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items
which are more likely to be materially adjusted due to the estimates and assumptions turning out to be wrong. Detailed
information about each of these estimates and judgements is included in other notes together with information about
the basis of calculation for each affected line item in the financial statements.

a) Employees’ retirement benefits - gratuity - note 4.1
b) Provision for taxation - notes 4.2 and 36
c) Useful lives and residual values of property, plant and equipment and intangible assets - notes 4.3, 4.4, 17 and 18
d) Impairment of financial assets - note 4.8.4
e) Provision from warranty claims - notes 4.16.1

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f) Contingent liabilities - notes 4.27 and 16

g) Provision for obsolescence of stock-in-trade - notes 4.13 and 23.5
h) Provision for net realizable value of stock-in-trade - notes 4.13 and 23.4

Estimates and judgements are continually evaluated. They are based on historical experience and other factors,
including expectations of future events that may have a financial impact on the Company and that are believed to be
reasonable under the circumstances.

3.3 Change in accounting estimate
During the year, as a result of annual assessment of the review of remaining useful lives of the Company’s property,
plant and equipment and intangible assets, management identified that certain plant and machinery and license fees
and drawings require an upward revision in their useful lives. Hence, the remaining useful lives of such plant and
machinery and license fees and drawings have been increased. Such change has been accounted for as a change in
an accounting estimate in accordance with IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’.
Had there been no change in the accounting estimate, the profit before tax for the year ended March 31, 2021 would
have been lower by Rs 118.273 million and carrying values of property, plant and equipment and intangible assets as
at that date would have been lower by Rs 88.954 million and Rs 29.318 million respectively. Consequently, due to the
above change in accounting estimate, future profits before tax would decrease by Rs 118.273 million.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies adopted in the preparation of these financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.

4.1 Employee benefits
4.1.1 Short term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within twelve
months after the end of the period in which the employees render the related service are recognised in respect of
employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid
when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the statement of
financial position.

4.1.2 Post employment benefits
The main features of the schemes operated by the Company for its employees are as follows:

(a) Defined benefit plan - Gratuity
The Company operates a funded defined benefit gratuity scheme for all its local permanent employees having
a service period of more than 5 years. Gratuity is payable based on last drawn basic salary multiplied by length
of years of service and gratuity factors which increase with completed service. Provisions are made in the
financial statements to cover obligations on the basis of actuarial valuations carried out annually. The most
recent valuation was carried out as at March 31, 2021 using the “Projected Unit Credit Method”. Under the
scheme, gratuity is payable on the basis of last drawn basic salary at the following rates:

Service in the Company Gratuity factor per completed year of service
0 - 4 years and 364 days Nil
5 - 9 years and 364 days 15 days
10 years or more 30 days


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Contributions under the scheme are made to this fund on the basis of actuarial recommendation at the rate of
7.20% (2020: 6.80%) per annum of basic salary.
The actual return on plan assets represents the difference between the fair value of plan assets at the beginning
of the year and as at the end of the year after adjustments for contributions made by the Company as reduced
by benefits paid during the year.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are
charged or credited to equity in other comprehensive income in the period in which they arise. Past service
costs are recognised immediately in the statement of profit or loss.

The amount recognized in the statement of financial position represents the present value of the defined benefit
obligation as reduced by the fair value of the plan assets.

The future contribution rate of the plan includes allowances for deficit and surplus. Projected Unit Credit
Method, using the following significant assumptions, is used for valuation of this scheme:

Per annum 2021 2020
Discount rate 10.25% 10.25%
Expected increase in eligible pay 9.25 to 12.00% 9.25 to 12.00%
Expected rate of return on plan assets 10.87% 10.25%
The expected mortality rates assumed are based on the SLIC (2001-05) mortality table.

The Company is expected to contribute Rs 74.98 million to the gratuity fund in the next year.

(b) Defined contribution plan
The Company operates a defined contributory provident fund for all its local permanent employees. Obligations
for contributions to defined contribution plan are recognised as an employee benefit expense in the statement
of profit or loss when they are due. Prepaid contributions are recognised as an asset to the extent that a cash
refund or a reduction in future payments is available. Contributions are made equally by the Company and the
employees at the rate of 10% per annum of the basic salary plus cost of living allowance subject to completion
of minimum qualifying period of service as determined under the rules of the fund.

4.2 Taxation
Income tax comprises current and deferred tax. Income tax is recognised in the statement of profit or loss except
to the extent that relates to items recognised directly in equity or other comprehensive income, in which case it is
recognised directly in equity or other comprehensive income.

4.2.1 Current
The charge for current tax is calculated using prevailing tax rates or tax rates expected to apply to profit for the year if
enacted or substantively enacted at the end of the reporting period in accordance with the prevailing law for taxation
of income, after taking into account tax credits, rebates and exemptions, if any. Management periodically evaluates
position taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and
considers whether it is probable that the tax authorities will accept an uncertain tax treatment. The charge for current
tax also includes adjustments, where considered necessary, to provision for tax made in previous years arising from
assessments framed during the year for such years. The company measures its tax balances either based on the most
likely amount or the expected value, depending on which method provides a better prediction of the resolution of the
uncertainty. Current tax assets and tax liabilities are offset where the company has a legally enforceable right to offset
and intends either to settle on a net basis, or to realise the asset and settle the liability


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4.2.2 Deferred
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is not accounted
for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that, at
the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred income tax is determined
using tax rates (and laws) that have been enacted or substantively enacted by the end of the reporting period and are
expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary
differences, unused tax losses and tax credits can be utilised. Deferred tax assets and liabilities are offset where there
is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax balances relate to
the same taxation authority.
Deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive
income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity,
respectively.
4.3 Property, plant and equipment

4.3.1 Operating fixed assets
Operating fixed assets, except for freehold land, are stated at cost less accumulated depreciation and any identified
impairment loss. Freehold land is stated at cost less any identified impairment loss.

Depreciation on all items of operating fixed assets, except for freehold land and model specific plant and machinery,
is charged to profit or loss by applying the diminishing balance method so as to write off the depreciable amount of
an asset over its useful life. Depreciation on model specific plant and machinery is provided on a straight line basis
so as to write off the depreciable amount of an asset over the life of the model. Depreciation is charged at the annual
rates given below:

Rate
Buildings on freehold land 5%

Plant and machinery 7.95% to 34.30%
Furniture and office equipment 20%
Vehicles 20%
Tools and equipment 20%
Computers 35%
Depreciation on additions to operating fixed assets is charged when an asset is available for use while no depreciation
is charged when the asset is derecognised.
The assets’ residual values and useful lives are continually reviewed by the Company and adjusted if impact on
depreciation is significant. The Company’s estimate of the residual values and useful lives of its property, plant and
equipment during the year has been adjusted as explained in note 3.3.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount (note 4.6).

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only

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when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the
item can be measured reliably. All other repair and maintenance costs are charged to profit or loss during the period
in which they are incurred.

The gain or loss on disposal or retirement of an asset represented by the difference between the sale proceeds and
the carrying amount of the asset is recognized as an income or expense.

4.3.2 Major spare parts and stand-by equipment
Major spare parts and stand-by equipment qualify as property, plant and equipment when the Company expects to
use them for more than one year. Transfers are made to operating fixed assets category as and when such items are
available for use.

4.4 Intangible assets
Intangible assets, which are stated at cost less accumulated amortisation and any identified impairment loss, mainly
represent the cost of licenses for the right to manufacture Company’s vehicles in Pakistan, technical drawings of
certain components and software licenses.

Costs associated with maintaining intangible assets are recognised as an expense as incurred. Development costs
that are directly attributable to the design and testing of identifiable and unique software products controlled by the
Company are recognised as intangible assets when the following criteria are met:

- it is technically feasible to complete the intangible asset so that it will be available for use;
- management intends to complete the intangible asset and use or sell it;
- there is an ability to use or sell the intangible asset;
- it can be demonstrated how the intangible asset will generate probable future economic beneﬁts;
- adequate technical, ﬁnancial and other resources to complete the development and to use or sell the intangible
asset are available; and
- the expenditure attributable to the intangible asset during its development can be reliably measured.

Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development
costs previously recognised as an expense are not recognised as an asset in a subsequent period.

Amortisation is charged to profit or loss on a straight line basis so as to write off the cost of an asset over its estimated
useful life. Amortisation on additions is charged when an asset is available for use while no amortisation is charged
when the asset is derecognised. Amortisation is charged at the annual rates given below:

Rate
License fees and drawings 11% to 48%

Computer software 20% to 32%
The assets’ useful lives are continually reviewed by the Company and adjusted if impact on amortisation is significant.
The Company’s estimate of the useful lives of its intangible assets during the year has been adjusted as explained in
note 3.3.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount (note 4.6).

4.5 Capital work-in-progress
Capital work-in-progress is stated at cost less any identified impairment loss. All expenditure connected with specific
assets incurred during installation and construction period are carried under capital work-in-progress. These are

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transferred to property, plant and equipment or intangible assets as and when these are available for use.

4.6 Impairment of non-financial assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually
for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other
assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in
use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets
(cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible
reversal of the impairment at the end of each reporting period.
4.7 Leases
The Company is a lessee.

At inception of a contract, the Company assesses whether a contract is, or contains, a lease based on whether the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.

Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is
available for use by the Company.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease, or if that rate cannot be readily determined, the Company’s
incremental borrowing rate.

Lease payments include fixed payments, variable lease payments that are based on an index or a rate amounts
expected to be payable by the lessee under residual value guarantees, the exercise price of a purchase option if the
lessee is reasonably certain to exercise that option, payments of penalties for terminating the lease, if the lease term
reflects the lessee exercising that option, less any lease incentives receivable. The extension and termination options
are incorporated in determination of lease term only when the Company is reasonably certain to exercise these
options.
The lease liability is subsequently measured at amortised cost using the effective interest rate method. It is remeasured
when there is a change in future lease payments arising from a change in fixed lease payments or an index or rate,
change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, or if
the Company changes its assessment of whether it will exercise a purchase, extension or termination option. The
corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in the statement of
profit or loss if the carrying amount of right-of-use asset has been reduced to zero.

The right-of-use asset is initially measured based on the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs
to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located,
less any lease incentive received. The right-of-use asset is depreciated on a straight line method over the lease term
as this method most closely reflects the expected pattern of consumption of future economic benefits. In case of
warehouses, security deposits are made part of the cost of right of use assets and treated as residual value of the
warehouses. The right-of-use asset is reduced by impairment losses, if any, and adjusted for certain remeasurements
of the lease liability.

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Payments associated with short-term leases and all leases of low-value assets are recognised on a straight-line basis
as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less without a purchase
option.

4.8 Financial assets
4.8.1 Classification
The Company classifies its financial assets in the following measurement categories:

- those to be measured subsequently at fair value [either through other comprehensive income (‘OCI’) or through
profit or loss]; and
- those to be measured at amortised cost.

The classification depends on the Company’s business model for managing the financial assets and the contractual
terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in
equity instruments that are not held for trading, this will depend on whether the Company has made an irrevocable
election at the time of initial recognition to account for the equity investment at fair value through other comprehensive
income.

The Company reclassifies debt investments when and only when its business model for managing those assets
changes.

4.8.2 Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade date, being the date on which the
Company commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash
flows from the financial assets have expired or have been transferred and the Company has transferred substantially
all the risks and rewards of ownership.

4.8.3 Measurement
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at
fair value through profit or loss (‘FVPL’), transaction costs that are directly attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows
are solely payments of principal and interest.

Debt instruments
Subsequent measurement of debt instruments depends on the Company’s business model for managing the asset
and the cash flow characteristics of the asset. There are three measurement categories into which the Company
classifies its debt instruments:

i) Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows represent
solely payments of principal and interest, are measured at amortised cost. Interest income from these financial
assets is included in other income using the effective interest rate method. Any gain or loss arising on
derecognition is recognised directly in profit or loss. Impairment losses are presented as a separate line item in
the statement of profit or loss.


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ii) Fair value through other comprehensive income (‘FVOCI’): Assets that are held for collection of contractual
cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of
principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI,
except for the recognition of impairment gains or losses, interest income and foreign exchange gains and
losses, which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain
or loss previously recognised in OCI is reclassified from equity to profit or loss. Interest income from these
financial assets is included in other income using the effective interest rate method. Impairment expenses are
presented as a separate line item in the statement of profit or loss.

iii) FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on
a debt investment that is subsequently measured at FVPL is recognised in profit or loss in the period in which
it arises.

Equity instruments
The Company subsequently measures all equity investments at fair value. Where the Company’s management has
elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification
of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such
investments continue to be recognised in profit or loss as other income when the Company’s right to receive payments
is established.

Changes in the fair value of financial assets at FVPL are recognised in the statement of profit or loss. Impairment
losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from
other changes in fair value.

4.8.4 Impairment of financial assets other than those due from the Government of Pakistan and investment in equity
instruments
The Company assesses on a forward-looking basis, the expected credit losses (‘ECL’) associated with its financial
assets. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
For trade debts, the Company applies IFRS 9 simplified approach to measure the ECL (‘loss allowance’) which uses
a life time expected loss allowance to be recognised from initial recognition of the receivables and contract assets,
while general 3-stage approach for long term loans, deposits, other receivables and bank balances i.e. to measure
ECL through loss allowance at an amount equal to 12-month ECL if credit risk on a financial instrument or a group of
financial instruments has not increased significantly since initial recognition.

Following are the financial assets that are subject to the ECL model:

- Long term trade debts
- Long term loans
- Long term deposits
- Trade debts
- Loans, deposits and other receivables
- Derivative financial instruments
- Bank balances.

The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the
magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default
and loss given default is based on historical data adjusted by forward-looking information (adjusted for factors that
are specific to the counterparty, general economic conditions and an assessment of both the current as well as the
forecast direction of conditions at the reporting date, including time value of money where appropriate). As for the
exposure at default for financial assets, this is represented by the assets’ gross carrying amount at the reporting
date. Loss allowances are forward looking, based on 12 month expected credit losses where there has not been a

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significant increase in credit risk rating, otherwise allowances are based on lifetime expected losses.
Expected credit losses are a probability weighted estimate of credit losses. The probability is determined by the risk of
default which is applied to the cash flow estimates. The expected cash flows will include cash flows from the sale of
collateral held or other credit enhancements that are integral to the contractual terms. In the absence of a change in
credit rating, allowances are recognised when there is reduction in the net present value of expected cash flows. On
a significant increase in credit risk, allowances are recognised without a change in the expected cash flows, although
typically expected cash flows do also change; and expected credit losses are rebased from 12 month to lifetime
expectations.

The Company considers the probability of default upon initial recognition of asset and whether there has been a
significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is
a significant increase in credit risk, the Company compares the risk of a default occurring on the instrument as at
the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and
supportable forward-looking information.

The following indicators are considered while assessing credit risk:
- actual or expected significant adverse changes in business, financial or economic conditions that are expected
to cause a significant change to the debtor’s ability to meet its obligations;
- actual or expected significant changes in the operating results of the debtor;
- significant increase in credit risk on other financial instruments of the same debtor; and
- significant changes in the value of the collateral supporting the obligation or in the quality of third-party guarantees,
if applicable.

The Company considers the following as constituting an event of default for internal credit risk management
purposes as historical experience indicates that receivables that meet either of the following criteria are generally not
recoverable:
- when there is a breach of financial covenants by the counterparty; or
- information developed internally or obtained from external sources indicates that the debtor is unlikely to
pay its creditors, including the Company, in full (without taking into account any collaterals held by the
Company).

Irrespective of the above analysis, in case of trade debts, the Company considers that default has occurred when a
debt is more than 180 days past due, unless the Company has reasonable and supportable information to demonstrate
that a more lagging default criterion is more appropriate.

A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future
cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired includes observable
data about the following events:
- significant financial difficulty of the issuer or the borrower;
- a breach of contract, such as a default or past due event;
- the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty,
having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;
- it is becoming probable that the borrower will enter bankruptcy or other financial reorganization; or
- the disappearance of an active market for that financial asset because of financial difficulties.

The Company recognises life time ECL on trade debts, using the simplified approach. The measurement of ECL
reflects:
- an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes;
- reasonable and supportable information that is available at the reporting date about past events, current
conditions and forecasts of future economic conditions.

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Trade debts with individually significant balance are separately assessed for ECL measurement. All other receivables
are grouped and assessed collectively based on shared credit risk characteristics and the days past due. The expected
credit losses on these financial assets are estimated using a provision matrix approach based on the company’s
historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and
an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time
value of money where appropriate.

Where lifetime ECL is measured on a collective basis to cater for cases where evidence of significant increases in
credit risk at the individual instrument level may not yet be available, the financial instruments are grouped on the
following basis:
- Nature of financial instruments;
- Past-due status;
- Nature, size and industry of debtors; and
- external credit ratings where available.

The grouping is regularly reviewed by management to ensure the constituents of each group continue to share similar
credit risk characteristics.

The Company recognises an impairment gain or loss in the statement of profit or loss for financial assets with a
corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt
instruments that are measured at FVOCI, for which the loss allowance is recognised in other comprehensive income
and accumulated in the investment revaluation reserve, and does not reduce the carrying amount of the financial asset
in the statement of financial position.

The Company writes off financial assets, in whole or in part, when it has exhausted all practical recovery efforts and
has concluded that there is no reasonable expectation of recovery. The assessment of no reasonable expectation
of recovery is based on unavailability of debtor’s sources of income or assets to generate sufficient future cash
flows to repay the amount. The Company may write-off financial assets that are still subject to enforcement activity.
Subsequent recoveries of amounts previously written off will result in impairment gains.
4.8.5 Impairment of financial assets due from Government of Pakistan

Financial assets include trade debts due from government departments. SECP through SRO 985(I)/2019 dated
September 2, 2019 has notified that, in respect of companies holding financial assets due from the Government of
Pakistan, the requirements contained in IFRS 9 with respect to application of Expected Credit Losses method shall
not be applicable till June 30, 2021 and that such companies shall follow relevant requirements of IAS 39 in respect
of above referred financial assets during the exemption period. Accordingly, the same continue to be reported as per
the following accounting policy:
A provision for impairment is established when there is objective evidence that the Company will not be able to collect
all the amount due according to the original terms of the receivable.
The Company assesses at the end of each reporting period whether there is objective evidence that the financial
asset is impaired. The financial asset is impaired and impairment losses are incurred only if there is objective evidence
of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’)
and that loss event (or events) has an impact on the estimated future cash flows of the financial asset that can be
reliably estimated. Evidence of impairment may include indications that the debtor is experiencing significant financial
difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other
financial reorganisation, and where observable data indicates that there is a measurable decrease in the estimated
future cash flows, such as changes in arrears or economic conditions that correlate with defaults. The amount of the
loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash
flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective

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interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the statement of
profit or loss. When the financial asset is uncollectible, it is written off against the provision. Subsequent recoveries of
amounts previously written off are credited to the statement of profit or loss. If, in a subsequent period, the amount of
the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment
was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised
impairment loss is recognised in the statement of profit or loss.

4.9 Financial liabilities
All financial liabilities are recognized at the time when the Company becomes a party to the contractual provisions of
the instrument. Financial liabilities at amortised cost are initially measured at fair value less transaction costs. Financial
liabilities at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed on
profit or loss.
Financial liabilities, other than those at fair value through profit or loss, are subsequently measured at amortised cost
using the effective interest method.
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expired. Where
an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the
original liability and the recognition of a new liability, and the difference in respective carrying amounts is recognized
in the statement of profit or loss.

4.10 Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are offset and the net amount is reported in the financial statements only when
there is a legally enforceable right to set off the recognised amount and the Company intends either to settle on a net
basis or to realise the assets and to settle the liabilities simultaneously.
4.11 Derivative financial instruments

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-
measured at their fair values. The method of recognizing the resulting gain or loss depends on whether the derivative is
designated as a hedging instrument, and if so, the nature of the item being hedged. The Company has not designated
any derivatives as hedging instruments and accordingly, the changes in fair value re-measurement are recognised in
the statement of profit or loss. Trading derivatives are classified as a current asset or liability.

4.12 Stores and spares
Usable stores and spares are valued principally at weighted average cost, while items considered obsolete are carried
at nil value. Items in transit are valued at cost comprising of invoice value and other incidental charges paid thereon.

4.13 Stock-in-trade
Stock of raw materials, except for those in transit, work-in-process and finished goods are valued at the lower of
weighted average cost and net realisable value. Items in transit are valued at cost comprising of invoice value and
other incidental charges paid thereon. Cost of raw materials and trading stock comprises of the invoice value plus
other charges paid thereon. Cost of work-in-process and finished goods includes cost of direct materials, labour and
appropriate portion of manufacturing overheads.

Net realisable value is determined on the basis of estimated selling price of the product in the ordinary course of
business less estimated costs of completion and the estimated costs necessary to make the sale.


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If the expected net realisable value is lower than the carrying amount, a write-down is recognised for the amount by
which the carrying amount exceeds its net realisable value. Provision is made in the financial statements for obsolete
and slow moving stock-in-trade based on management estimate.

4.14 Borrowings
Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently
stated at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption value
is recognized in the statement of profit or loss over the period of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the
liability for at least twelve months after the statement of financial position date.

4.15 Borrowing costs
General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale,
are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or
sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying
assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in the
statement of profit or loss in the period in which they are incurred.

4.16 Provisions
Provisions for legal claims and make good obligations are recognised when the Company has a present legal or
constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle
the obligation, and the amount can be reliably estimated.
Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the
likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a
whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same
class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the
present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-
tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The
increase in the provision due to the passage of time is recognised as interest expense.
4.16.1 Provision for service warranties

Provision is made for estimated warranty claims in respect of products sold which are still under warranty at the end
of the reporting period and for which the management does not expect to receive a warranty claim from the respective
vendors. Management estimates the related provision for future warranty claims based on historical warranty claim
information, as well as recent trends that might suggest that past cost information may differ from future claims. The
assumptions made in relation to the current period are consistent with those in the prior year. Factors that could
impact the estimated claim information include the success of the Company’s productivity and quality initiatives, as
well as parts and labour costs.
4.17 Trade debts

Trade debts are amounts due from customers for goods sold or services performed in the ordinary course of business.
Trade debts are recognised initially at the amount of consideration that is unconditional, unless they contain significant

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financing component in which case such are recognised at fair value. The Company holds the trade debts with the
objective of collecting the contractual cash flows and therefore measures the trade debts subsequently at amortised
cost using the effective interest rate method.

4.18 Trade and other payables
Trade and other payables are obligations to pay for goods or services that have been acquired in the ordinary course of
business from suppliers. Trade and other payables are presented as current liabilities unless payment is not due within
12 months after the reporting period. Trade and other payables are recognized initially at fair value and subsequently
measured at amortised cost using the effective interest method.

4.19 Cash and cash equivalents
For the purpose of presentation in the statement of cashflows, cash and cash equivalents include cash in hand,
deposits held at calls with banks, other short term highly liquid investments with original maturities of three months or
less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes
in value, bank overdrafts and short term borrowings. Bank overdrafts and short term borrowings are shown in current
liabilities on the statement of financial position.

4.20 Investments
Investments intended to be held for less than twelve months from the reporting date or to be sold to raise operating
capital, are included in current assets, all other investments are classified as non-current assets. Management
determines the appropriate classification of its investments into categories of financial assets at the time of the
purchase and re-evaluates such designation on a regular basis.

4.21 Revenue recognition
Revenue is recognised when (or as) the Company satisfies a performance obligation by transferring a promised good
or service to a customer, and control either transfers over time or at a point of time. An asset is transferred when (or
as) the customer obtains control of that asset and thus has the ability to direct the use and obtain the benefits from
the good or service.

In case of vehicles and spare parts, revenue is recognised when goods are dispatched and invoiced to the customers.
Revenue is measured at the transaction price agreed under the contract, adjusted for variable consideration such
as discount, if any. In most cases, the consideration is received before the goods are dispatched/invoiced. Deferred
payment terms may also be agreed in case of sales to certain categories of customers. Transaction price is adjusted
for time value of money in case of significant financing component.

The Company’s contracts with customers include promises to transfer goods or services without charges such as free
inspections. Such promised goods or services are generally considered performance obligations and related sales
revenue is deferred under IFRS 15, if it is deemed material.

The Company also has a performance obligation to arrange for delivery of goods at locations specified by the
customers. However, the Company acts as an agent in satisfaction of this performance obligation and net income/
(expense) in this respect is recognised in the statement of profit or loss.
Amount received on account of sale of extended warranty is recognised initially as deferred revenue and is credited to
the statement of profit or loss in the relevant period covered by the warranty.

4.22 Contract asset and contract liability
A contract asset is recognised for the Company’s right to consideration in exchange for goods or services that it
has transferred to a customer. If the Company performs by transferring goods or services to a customer before the
customer pays consideration or before payment is due, the Company presents the amount as a contract asset,
excluding any amounts presented as a receivable.

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A contract liability is recognised for the Company’s obligation to transfer goods or services to a customer for which
the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays
consideration, or the Company has a right to an amount of consideration that is unconditional (i.e. a receivable), before
the Company transfers a good or service to the customer, the entity shall present the contract as a contract liability
when the payment is made or the payment is due (whichever is earlier).

4.23 Dividend and other appropriations
Dividend distribution to the Company’s shareholders is recognised as a liability in the period in which the dividends are
approved and other appropriations are recognised in the period in which these are approved by the Board of Directors
of the Company (‘BOD’).

4.24 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker (‘CODM’). The CODM, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as BOD that makes strategic decisions.

4.25 Share capital
Ordinary shares are classified as equity and recognised at their face value. Incremental costs directly attributable to
the issue of new shares are shown in equity as a deduction, net of tax.

4.26 Earnings per share
The Company presents basic and diluted earnings per share (‘EPS’) data for its ordinary shares. Basic EPS is calculated
by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of
ordinary shares outstanding during the year. Diluted EPS is determined by adjusting the profit or loss attributable to
ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive
potential ordinary shares.

4.27 Contingent liabilities
Contingent liability is disclosed when:
- there is a possible obligation that arises from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the
Company; or
- there is present obligation that arises from past events but it is not probable that an outflow of resources
embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be
measured with sufficient reliability.
4.28 Government grants

Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant
will be received and the Company will comply with all attached conditions. Government grants relating to costs are
deferred and recognised in the profit or loss over the period necessary to match them with the costs that they are
intended to compensate.

4.29 Foreign currency transactions and translation
a) Functional and presentation currency
Items included in the financial statements of the Company are measured using the currency of the primary
economic environment in which the Company operates (the functional currency). The financial statements are
presented in Pak Rupees, which is the Company’s functional and presentation currency.


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b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and
from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange
rates, are generally recognised in profit or loss.
Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss,
within finance costs. All other foreign exchange gains and losses are presented in the statement of profit or loss
on a net basis within other gains/(losses).
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was determined. Translation differences on assets and liabilities carried
at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-
monetary assets and liabilities such as equities held at fair value through profit or loss are recognised in profit
or loss as part of the fair value gain or loss, and translation differences on non-monetary assets such as equities
classified as at fair value through other comprehensive income are recognised in other comprehensive income.
4.30 Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest thousand Rupees
unless otherwise stated.
5. ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL
2021 2020 2021 2020

Number of shares Number of shares
111,400,000 111,400,000 Ordinary shares of Rs 10 each fully paid

in cash 1,114,000 1,114,000
31,400,000 31,400,000 Ordinary shares of Rs 10 each issued as
fully paid bonus shares 314,000 314,000
142,800,000 142,800,000 1,428,000 1,428,000
5.1 72,828,000 (2020: 72,828,000) ordinary shares of the Company which represent 51% (2020: 51%) of the issued,
subscribed and paid up share capital of the Company are held by Honda Motor Co., Ltd., Japan, the holding company
which is incorporated in Japan. The registered address of the holding company is 1-1, Minami-Aoyama, 2-Chome,
Minato-ku, Tokyo, 107-8556, Japan.
5.2 Ordinary shares of the Company held by related parties (other than the holding company) as at year end are as follows:
Number of shares Note 2021 2020
Directors
Mr. Ariful Islam 500 500
Mr. Feroz Rizvi 500 500
Ms. Rie Mihara 500 500
5.2.1 1,500 1,500
Other related parties
Atlas Insurance Limited 850,000 850,000
Shirazi Investments (Private) Limited 43,119,650 43,119,650
43,971,150 43,971,150

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5.2.1 These represent qualification shares held by the independent directors of the Company.
6. RESERVES
Composition of reserves is as follows:
Capital
Share premium 6.1 76,000 76,000
Revenue
General reserve 14,880,000 14,230,000
14,956,000 14,306,000
6.1 This reserve can be utilised by the Company only for the purposes specified in section 81 of the Act.
7. LONG TERM FINANCES - SECURED

Loan under refinance scheme - Conventional loan 7.1 417,399 -
Loan under refinance scheme - Islamic mode of financing 7.2 1,883,959 -
2,301,358 -
Current portion shown under current liabilities (232,665) -
7.1 & 7.2 2,068,693 -
7.1 This represents long term financing facility obtained from Standard Chartered Bank (Pakistan) Limited under the State
Bank of Pakistan’s (SBP) Refinance Scheme for Payment of Wages and Salaries to the Workers and Employees of
Business Concerns, recognised initially at fair value. The total facility amounted to Rs 500 million. As of March 31,
2021, the balance is repayable in seven equal quarterly instalments of Rs 62.49 million each ending in October 2022.
The facility is secured against current assets of the Company. The markup on the facility is payable quarterly and the
base rate applicable during the year was 1.25% per annum. The effective interest rate during the year was 7.5% per
annum. The reconciliation of the carrying amount is as follows:
Balance as at beginning of the year - -

Disbursements during the year 499,918 -
Repayments during the year (62,490) -
437,428 -
Discounting adjustment for recognition at fair value - deferred
government grant 8 (39,208) -
Unwinding of discount on liability 19,179 -
Balance as at end of the year 417,399 -
Current portion shown under current liabilities 11 (232,665) -
184,734 -

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7.2 This represents long term Islamic financing facility (Diminishing Musharakah) obtained from Faysal Bank Limited under
State Bank of Pakistan’s (SBP) Refinance Scheme for Temporary Economic Refinance Facility (‘TERF’), recognised
initially at fair value. The total facility available amounts to Rs 5,000 million. The balance is repayable in 32 equal
quarterly instalments after a grace period of two years from the date of each disbursement. The facility is secured
against a lien over the Company’s import documents and first hypothecation charge over its fixed assets, excluding
land and buildings, amounting to Rs 6,667 million. The markup on the facility is payable quarterly and the base rate
applicable during the year was 1.6% per annum. The effective interest rate during the year was 7.5% per annum. The
reconciliation of the carrying amount is as follows:

Disbursements during the year 2,578,934 -
Repayments during the year - -
2,578,934 -
Discounting adjustment for recognition at fair value - deferred
government grant 8 (710,424) -
Unwinding of discount on liability 15,449 -
Balance as at end of the year 1,883,959 -
Current portion shown under current liabilities - -
1,883,959 -
8. DEFERRED GOVERNMENT GRANT

This represents deferred government grant recognised in respect of the benefit of below-market interest rate on long
term finances as referred to in note 7. The benefit has been measured as the difference between the fair value of the
loan and the proceeds received. The Company has used the prevailing market rate of mark-up for similar instruments
to calculate fair values of respective loans. The discount rate used is 7.5% per annum. The reconciliation of the
carrying amount is as follows:
8.1 The reconciliation of the carrying amount is as follows:

Deferred government grant recognised during the year 749,632 -
Credited to profit or loss - amortised during the year (34,628) -
715,004 -
Current portion shown under current liabilities 11 (119,166) -

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9. EMPLOYEE RETIREMENT BENEFITS

This represents gratuity. The amounts recognised in the statement of financial position are as follows:
Present value of defined benefit obligation 777,037 670,361

Fair value of plan assets (603,663) (482,877)
Liability as at March 31 173,374 187,484
9.1 Movement in net liability of defined benefit obligation
Net liability as at beginning of the year 187,484 164,766

Charged to statement of profit or loss 9.5 70,660 69,060
Total remeasurements for the year charged to OCI: 9.6 16,192 22,718
Contributions made by the Company during the year (100,962) (69,060)
Net liability as at end of the year 173,374 187,484
9.2 Movement in the present value of defined benefit obligation
Present value of defined benefit obligation as at beginning of the year 670,361 581,862
Current service cost 51,443 47,229
Interest cost 67,125 74,244
Benefits paid during the year (30,972) (43,059)
Remeasurements on obligation recognised in OCI:
- Actuarial losses from changes in financial assumptions 19,079 12,033
- Experience adjustments 1 (1,948)
Present value of defined benefit obligation as at end of the year 777,037 670,361
9.3 Movement in the fair value of plan assets
Fair value of plan assets as at beginning of the year 482,877 417,096

Interest income on plan assets 47,908 52,413
Contributions made during the year 100,962 69,060
Benefits paid during the year (30,972) (43,059)
Remeasurements on fair value of plan assets recognised in OCI 2,888 (12,633)
Fair value of plan assets as at end of the year 603,663 482,877
9.4 Plan assets are comprised as follows:
Debt 3,156 305,467

Mutual funds 442,057 64,158
Cash 158,450 113,252
603,663 482,877

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Rupees in thousand 2021 2020
9.5 Amounts recognised in the statement of profit or loss

Interest cost 67,125 74,244
Interest income on plan assets (47,908) (52,413)
Net expense charged in the statement of profit or loss 70,660 69,060
9.6 Remeasurements charged to other comprehensive income (OCI)
Actuarial losses from changes in financial assumptions 19,079 12,033

Experience adjustments 1 (1,948)
Remeasurements on fair value of plan assets (2,888) 12,633
Total remeasurements charged to OCI 16,192 22,718
9.7 The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:
Impact on defined benefit obligation
Rupees in thousand Change in assumption Increase in assumption Decrease in assumption

Discount rate 1.00% 706,618 858,669
Salary growth rate 1.00% 859,582 704,588
The average duration of the defined benefit obligation is 10 years.
9.8 Risks faced by the Company on account of gratuity obligation

- Final salary risks - The risk that the final salary at the time of cessation of service is greater than what was
assumed. Since the benefit is calculated on the final salary, the benefit amount would also increase proportionately.
- Asset volatility - Investments in units of mutual funds are subject to adverse fluctuations as a result of change in
the market price.
- Discount rate fluctuation - The plan liabilities are calculated using a discount rate set with reference to corporate
bond yields. A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset
by an increase in the value of the current plan’s bond holdings.
- Investment risks - The risk of the investments underperforming and not being sufficient to meet the liabilities.
This risk is mitigated by closely monitoring the performance of investments.
- Risk of insufficiency of assets - This is managed by making regular contribution to the fund as advised by the
actuary.

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10. DEFERRED TAXATION

The gross movement in net deferred tax liability during the year
is as follows:
Opening deferred tax liability 270,510 288,058
Credited to statement of profit or loss 36 (68,730) (17,548)
Closing deferred tax liability 201,780 270,510
The liability for deferred taxation comprises of taxable/(deductible)

temporary differences relating to:
Accelerated tax depreciation 227,567 279,932
Unrealised gain on short term investments - 4,620
Minimum tax available for carry forward 10.1 - -
Provision for custom duties and warranties (25,787) (14,042)
201,780 270,510
10.1 Deferred tax asset on deductible temporary differences arising due to discounting of long term loans, long term trade
debts and provision in respect of stock obsolescence aggregating Rs 71.477 million (2020: Rs 28.733 million) and
deferred tax asset on tax credit representing minimum tax available for carry forward under section 113 of the Income
Tax Ordinance, 2001 has not been recognised as sufficient taxable profits would not be available for adjustment/
utilisation in the foreseeable future. The minimum tax would expire as follows:
Accounting year to which Amount of minimum tax Accounting year in which

minimum tax relates (Rupees in thousand) minimum tax will expire
2019 33,621 2024
2020 338,100 2025
2021 145,399 2026
517,120
11. CURRENT PORTION OF NON-CURRENT LIABILITIES

Current portion of long term finances - secured 7 232,665 -
Current portion of deferred government grant 8 119,166 -
Current portion of deferred revenue 9,882 20,498
361,713 20,498

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12. SHORT TERM BORROWINGS - SECURED

12.1 Running finances - secured
Short term borrowings available from commercial banks under mark up arrangements amount to Rs 14,860 million
(2020: Rs 13,860 million). These arrangements carry mark up ranging from 7.29% to 12.26% (2020: 11.54% to
14.85%) per annum. The aggregate short term borrowings are secured by first pari passu hypothecation charge over
current assets of the Company.
12.2 Letters of credit and guarantees

Of the aggregate facility of Rs 2,205 million (2020: Rs 2,267 million) for opening letters of credit, the amount utilized at
March 31, 2021 was Rs 190 million (2020: Rs 122 million). The aggregate facility for opening letters of credit is secured
by lien over import documents.
Of the aggregate facility of Rs 7,200 million (2020: Rs 3,200 million) for bank guarantees, out of which Rs 4,700 million
is available as a sub-limit of the above mentioned facilities for short term borrowings, the amount utilized at March 31,
2021 was Rs 5,739 million (2020: Rs 2,430 million).
13. SHORT TERM LOAN FROM RELATED PARTY - UNSECURED

This represented a short term loan of 14 million United States Dollars (‘USD’) obtained from Asian Honda Motor
Co., Ltd., Thailand (a related party) to meet the working capital requirements of the company and has been repaid
during the year as per the terms of the agreement. The loan carried fixed mark up at the rate of 3.2% per annum. The
reconciliation of the carrying amount is as follows:
Balance as at beginning of the year 2,332,246 -

Receipts during the year - 2,172,940
Repayments during the year (2,334,267) -
Exchange loss 2,021 159,306
Balance as at end of the year - 2,332,246
14. ACCRUED MARKUP
Accrued mark up on:

- Short term loan from related party - unsecured 13 - 23,427
- Short term borrowings - secured 12 15 52,119
- long term finances - secured 7 6,105 -
6,120 75,546

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15. TRADE AND OTHER PAYABLES

Creditors 15.1 1,460,589 821,700
Accrued liabilities 704,901 551,873
Bills payable 15.2 2,324,255 3,848,587
Deposits against display cars 15.3 2,154,510 2,074,097
Accumulating compensated absences 15.4 84,733 116,091
Contract liabilities 15.5 10,814,600 1,972,510
License fee, technical fee and royalties 15.6 801,605 542,004
Provision for custom duties 32,169 32,169
Punjab sales tax payable 137,114 84,335
Withholding income tax payable 154,537 90,316
Punjab infrastructure development cess payable 631,275 628,188
Sindh development and maintenance of infrastructure cess payable 1,322,666 1,072,332
Workers' Welfare Fund 15.7 63,843 35,587
Custom duty payable 2,563,734 266,422
Payable to provident fund 15,781 14,817
Security deposits 15.8 144,448 139,052
Others 80,109 43,719
23,490,869 12,333,799
15.1 Includes amounts due to the following related parties:
Holding company - 1,278

Other related parties 39,957 30,380
39,957 31,658
Holding company 199,268 322,693

Other related parties 2,085,179 3,476,943
2,284,447 3,799,636
15.3 These represent interest free deposits from dealers against display of Company cars at their premises and are
repayable on demand. These deposits have been utilised for the purpose of business in accordance with the terms
of written agreements with the dealers.

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15.4 Accumulating compensated absences

Balance as at beginning of the year 116,091 68,956
Provision for the year 94,609 91,203
210,700 160,159
Payments made during the year (125,967) (44,068)

Balance as at end of the year 84,733 116,091
15.5 This represents contract liabilities of the Company towards customers against the sale of vehicles. Customers who
have given these advances, are entitled to discount at the rate of Karachi Inter Bank Offered Rate (‘KIBOR’) plus 2%
per annum, from the date of advance payment to the date of delivery in case the delivery is delayed over two months
from the date of advance payment, subject to certain other conditions.

Holding company 507,589 520,174
Other related parties 73,887 8,400
581,476 528,574
15.7 Workers’ Welfare Fund
Balance as at beginning of the year 35,587 82,401

Provision for the year 34 62,663 35,423
98,250 117,824
Payments during the year (34,407) (82,237)

Balance as at end of the year 63,843 35,587
15.8 These represent interest free deposits from dealers and customers of scrap amounting to Rs 135.64 million (2020:
Rs 124.59 million) and Rs 8.80 million (2020: Rs 10.40 million) against spare parts sales and scrap sales respectively.
These are repayable on demand and cannot be utilised for the purpose of business in accordance with the terms
of written agreements with these parties. These have been kept in a separate bank account in accordance with the
requirements of section 217 of the Act.
16. CONTINGENCIES AND COMMITMENTS

16.1 Contingencies
(i) In the previous years, the Company received various notices from custom authorities for payment of custom duty
and sales tax in respect of certain components of Honda Cars imported during prior years. Custom authorities
interpreted that Completely Built Unit (‘CBU’) rate of duty was applicable on such components and thus raised a
demand of Rs 110 million. It included Rs 96 million on account of custom duty and Rs 14 million on account of
sales tax.

The Company approached custom authorities on the grounds that the components specified in the above
mentioned notices included certain components which were duly appearing in the indigenization program of the
Company for the relevant period. Hence, CBU rate of duty was not applicable on import of these components.
However, the Customs Appellate Tribunal, Lahore (‘CAT’), vide its order dated November 30, 2007, decided the
matter against the Company against which references were filed in the Honourable Lahore High Court. The
Honourable Lahore High Court remanded back the cases to CAT on December 16, 2016. CAT decided these
cases in favour of the Company on July 13, 2017 and consequently, Customs Department filed an appeal against

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judgment of CAT which is pending adjudication in Honourable Lahore High Court. The Company has made a
provision of Rs 32 million against the total demand of Rs 110 million. As the management is confident that the
matter would be settled in its favour, consequently, no provision for the balance amount has been made in these
financial statements in respect of the above mentioned notices.

(ii) The Collector of Customs (Appeals) had endorsed demands aggregating to Rs 3,194.55 million raised against
the Company by the Customs Department in respect of imports affected during the period from April 2011 to
December 2016, on account of custom duty, sales tax and income tax on the grounds that ‘license fee’ and
‘royalty’ paid to M/s Honda Motor Co., Ltd., Japan was includable in the ‘import value’ of ‘Completely Knocked
Down’ kits of vehicles assembled by the Company and parts thereof. The Company has filed an appeal against the
decision of Collector of Customs (Appeals) before the Customs Appellate Tribunal which is pending adjudication.
Also, the Collector of Customs (Adjudication) has endorsed the demand of Rs 1,049.28 million on similar grounds
in respect of imports affected during the period from April 2017 to December 2017 taking the total amount
involved in the matter to Rs 4,243.83 million.

In this respect, it is the Company’s contention that subject amount of ‘royalty’ and ‘license fee’ were relatable to
the Company’s manufacturing facilities and not the goods imported by it and hence, such amounts cannot be
considered as part and parcel of import value. No provision on this account has been made in these financial
statements as the management considers that its stance is founded on meritorious grounds which have been
settled in the Company’s favour by the Customs Appellate Tribunal in earlier years.
(iii) The Deputy Commissioner Inland Revenue (‘DCIR’), through his order dated October 9, 2015, disallowed input
tax credit amounting to Rs 63.60 million claimed by the Company during the sales tax periods from July 2012
to June 2014 on the basis that such input tax related to supply of exempt goods and thus was not recoverable.
The Company being aggrieved of the said order filed an appeal before Commissioner Inland Revenue (Appeals)
[‘CIR(A)’] who upheld the DCIR’s decision through his order dated January 28, 2016. The Company further filed an
appeal against the CIR(A)’s order before Appellate Tribunal Inland Revenue (‘ATIR’) which also upheld the original
decision against the Company through its order dated January 10, 2019. The Company has now filed an appeal
against ATIR’s decision before Lahore High Court on February 18, 2019. Lahore High Court, through order dated
February 25, 2019 has granted a stay against ATIR’s decision while the main appeal is pending adjudication. The
Company has not made any provision against the above disallowance as the management is confident that the
ultimate outcome of the appeal would be in favour of the Company, inter alia on the basis of the advice of the legal
counsel and the relevant law and facts.

(iv) Bank guarantees of Rs 5,738.79 million (2020: Rs 2,430 million) have been issued in favour of third parties.
16.2 Commitments in respect of

(i) Letters of credit and purchase orders for capital expenditure aggregating Rs 1,893.86 million (2020: Rs 98.57
million).
(ii) Letters of credit and purchase orders for other than capital expenditure aggregating Rs 1,285.55 million (2020: Rs
1,089.71 million).

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17. PROPERTY, PLANT AND EQUIPMENT - OPERATING FIXED ASSETS
Rupees in thousand 2021

Depreciation Accumulated
Accumulated Book value as
Cost as at April Additions / Cost as at charge / depreciation
depreciation as at at March 31,
01, 2020 (deletions) March 31, 2021 (deletions) for as at March
April 01, 2020 2021
the year 31, 2021
Freehold land 417,319 - 417,319 - - - 417,319

Buildings on freehold land 2,402,027 988 2,403,015 1,165,004 61,864 1,226,868 1,176,147
Plant and machinery 8,247,630 44,786 7,925,097 6,048,788 479,921 6,161,529 1,763,568
(367,319) (367,180)
Furniture and office equipment 274,562 9,288 283,729 140,860 27,295 168,049 115,680
(121) (106)
Vehicles 578,725 47,743 593,287 189,806 83,571 257,122 336,165

(33,181) (16,255)
Tools and equipment 206,797 4,280 209,771 123,249 16,911 138,992 70,779
(1,306) (1,168)
Computers 205,604 96,504 292,982 146,324 34,111 172,379 120,603

(9,126) (8,056)
Total 12,332,664 203,589 12,125,200 7,814,031 703,673 8,124,939 4,000,261
(411,053) (392,765)

Depreciation Accumulated
Cost as at April Additions / Cost as at charge / depreciation
depreciation as at at March 31,
April 01, 2019 2020
the year 31, 2020
Freehold land 417,319 - 417,319 - - - 417,319

Buildings on freehold land 2,396,615 5,412 2,402,027 1,100,018 64,986 1,165,004 1,237,023
Plant and machinery 7,922,245 342,844 8,247,630 5,464,682 584,106 6,048,788 2,198,842
(17,459)
Furniture and office equipment 257,338 17,343 274,562 109,554 31,409 140,860 133,702
(119) (103)
Vehicles 608,305 148,806 578,725 188,773 96,406 189,806 388,919
(178,386) (95,373)
Tools and equipment 196,311 10,787 206,797 103,923 19,611 123,249 83,548
(301) (285)
Computers 209,454 16,044 205,604 134,971 30,026 146,324 59,280
(19,894) (18,673)
Total 12,007,587 541,236 12,332,664 7,101,921 826,544 7,814,031 4,518,633
(216,159) (114,434)

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17.1 Plant and machinery includes dies and moulds having book value of Rs 3.91 million (2020: Rs 12.11 million) which are
in possession of various vendors of the Company as these dies and moulds are used by the vendors for producing
certain parts for supply to the Company.
17.2 Freehold land represents 184,000 square meters of land situated at 43 km, Multan Road, Manga Mandi, Lahore out
of which approximately 86,000 square meters represents covered area.
17.3 The depreciation charge has been allocated as follows:
Cost of sales - own manufactured 30 595,171 713,429

Distribution and marketing costs 31 32,799 40,708
Administrative expenses 32 75,703 72,407
703,673 826,544
17.4 Property, plant and equipment, excluding land and buildings, amounting to Rs 6,667 million is pledged as security
against long term loan as referred to in note 7.2.
17.5 Sale of operating fixed assets

Net Gain /(loss) Mode of
Particulars of assets Sold to Cost Sale price
book value on sale disposal
Vehicles Employees
Qazi Wasif Ali 1,438 522 589 67 As per Company policy

Sh.Wajid Subhani 2,357 1,974 2,245 271 -do-
Bushra Waseem 1,472 729 810 81 -do-
Employees - Key management

personnel
Ahmad Umair Wajid (ex-employee) 2,895 2,088 2,201 113 As per Company policy
Related Party
Atlas Insurance Limited 2,185 1,799 2,038 239 Total loss-insurance claim
Outsiders
Khalid Ali 2,311 1,545 2,411 866 Auction
Shahrukh Nabi 11,599 4,540 2,700 (1,840) Sale
Augmentec Business Solutions 1,319 646 1,985 1,339 Auction
Augmentec Business Solutions 1,946 1,125 2,355 1,230 Auction
Farhan Makhdoom Khan 2,211 1,428 2,351 923 Auction

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Net Gain /(loss) Mode of
Particulars of assets Sold to Cost Sale price
book value on sale disposal
Vehicles Employees
Abdul Quddus Abbasi 1,596 514 547 33 As per Company policy
Waseem Akhter 1,488 508 558 50 -do-
Muhammad Shahid 1,488 508 558 50 -do-
Muhammad Nauman Butt 1,488 508 558 50 -do-
Majid Rashid 1,495 651 706 55 -do-
Muhammad Imran 1,569 1,213 1,323 110 -do-
Syed Awais Ahmed Shah 1,425 912 912 - -do-
Ahmad Butt 1,475 554 554 - -do-
Khurram Shamim 1,475 554 554 - -do-
Muhammad Fahad 1,425 912 912 - -do-
Muhammad Aleem 1,364 829 829 - -do-
Muhammad Attique Tariq
(ex-employee) 1,567 1,212 1,355 143 -do-
Dr. Mehboob Ur Rehman
(ex-employee) 1,732 1,533 1,694 161 -do-
Mati Ur Rahman 1,495 618 664 46 -do-
Javed Iqbal 1,475 517 592 75 -do-
Imran Naseem 1,475 517 592 75 -do-
Muhammad Idrees 1,491 475 533 58 -do-
Sh. Wajid Subhani 1,477 518 592 74 -do-
Muhammad Mumtaz Hussain 1,475 517 517 - -do-
Muhammad Munir Malik 1,475 517 517 - -do-
Muhammad Tanveer 1,475 517 517 - -do-
Maqbool Ahmad 1,475 517 517 - -do-
Subah Sadiq 1,475 517 517 - -do-
Imtiaz Hussain Khan 1,475 517 517 - -do-
Sher Dil Khan 1,475 517 517 - -do-
Muhammad Scheraz (ex-employee) 2,867 2,444 2,513 69 -do-
Employees - Key management

personnel
Zia Ul Hassan Khan (ex-employee) 2,472 1,582 1,929 347 As per Company policy
Outsiders
Adnan Naseer Ahmed 2,088 946 2,063 1,117 Auction
Augmentec Business Solutions 110,603 51,933 56,505 4,572 -do-
Bilal Nazeer 11,146 5,350 2,151 (3,199) -do-
Plant and machinery
Outsiders
Asian Parts Manufacturing 17,459 17,459 12,837 (4,622) Negotiation

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18. INTANGIBLE ASSETS

Amortisation Accumulated
Cost as at April Additions / Cost as at charge / amortisation
amortisation as at at March 31,
April 01, 2020 2021
the year 31, 2021
License fees and drawings 631,895 - 631,895 350,432 98,434 448,866 183,029
Computer softwares 67,454 - 67,454 59,902 4,393 64,295 3,159
Total 699,349 - 699,349 410,334 102,827 513,161 186,188

Amortisation Accumulated
Cost as at April Additions / Cost as at charge / amortisation
amortisation as at at March 31,
April 01, 2019 2020
the year 31, 20220
License fees and drawings 422,314 209,581 631,895 227,709 122,723 350,432 281,463
Computer softwares 67,454 - 67,454 46,108 13,794 59,902 7,552
Total 489,768 209,581 699,349 273,817 136,517 410,334 289,015
18.1 The amortisation charge has been allocated as follows:
Cost of sales - own manufactured 30 98,434 122,723

Administrative expenses 32 4,393 13,794
102,827 136,517
19. CAPITAL WORK-IN-PROGRESS
Plant and machinery [including in transit

Rs 532.247 million (2020: Rs 21.674 million)] 3,704,264 84,498
Intangible assets under development 83,737 12,564
3,788,001 97,062
19.1 The reconciliation of the carrying amount is as follows:
Opening balance 97,062 123,487

Additions during the year 19.1.1 3,916,203 761,300
4,013,265 884,787
Transfers during the year (225,264) (787,725)
Closing balance 3,788,001 97,062
19.1.1 Includes borrowing cost capitalised of Rs 7.602 million (2020: Nil).

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20. LONG TERM TRADE DEBTS
Considered good 116,404 213,055

Discounting of long term trade debts 35 - (51,851)
Unwinding of discount 33 16,902 19,445
133,306 180,649
Current portion shown under current assets 24 (77,149) (63,569)
56,157 117,080
20.1 These represent interest free receivables in respect of vehicles sold on monthly instalments in accordance with the
Company’s policy and are recoverable within a period of 3 to 5 years. Included in these receivables is an amount ag-
gregating to Rs 80.39 million (2020: Rs 105.41 million) which is due from employees of related parties (on the basis of
common directorship). Long term trade debts have been carried at amortised cost by discounting future cash flows
at a rate of 11.5% per annum.
21. LONG TERM LOANS TO EMPLOYEES
Loans to employees - considered good

- Key management personnel 21.1 6,587 10,779
- Others 335,989 400,368
342,576 411,147
Discounting of long term loans 35 (73,724) (66,673)
Unwinding of discount 33 29,098 -
297,950 344,474
Current portion shown under current assets
- Key management personnel (3,616) (4,571)
- Others (124,125) (126,089)
25 (127,741) (130,660)
170,209 213,814
Loans to employees mainly comprise of staff welfare loan, associate loan, car loan and house rent loan.
Staff welfare loans carry interest at the rate of 8.3% per annum (2020: 14% per annum) and are recoverable within a
period of 7 years commencing from the date of disbursement through monthly deductions from salaries.
Associate loans are interest free and are repayable between 2 to 4 years.
Car loans are interest free and are recoverable within a maximum period of 6 years commencing from the date of
disbursement through monthly deductions from salaries.
House rent loans are interest free and are recoverable within a period of 3 years from the date of disbursement
through monthly deduction from salaries. Loans other than staff welfare loans, which are interest free have been car-
ried at amortised cost by discounting future cash flows at the market rate prevailing on the date of disbursement of
loan which ranges from 7.18% to 12.63% per annum.
All of these loans are secured against retirement benefits of employees and their guarantors, and are granted to the
employees of the Company in accordance with the Company’s policies.

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21.1 These comprise loans to the following key management personnel: Iqbal Ahmad, Muhammad Ali, Basharat Ali Rana,
Asif Mehmood, Imran Farooq and Amir Nazir.
The maximum amount of loan outstanding at the end of any month during the year was Rs 6.25 million (2020: Rs
17.17 million)
The loans to key management personnel of the Company have been granted under the same terms as explained
above.
22. STORES AND SPARES

Most of the items of stores and spares are of interchangeable nature and can be used as machine spares or con-
sumed as stores. Accordingly, it is not practicable to distinguish stores from spares until their actual usage. Further,
stores and spares include items which may result in fixed capital expenditure but are not distinguishable.
Spares amounting to Rs 12.40 million (2020: Rs 12.40 million) are in the possession of various vendors which relate
to the dies and moulds.
23. STOCK-IN-TRADE
Raw materials [including in transit Rs 4,888.82 million

(2020: Rs 3,405.37 million)] 23.1 10,495,368 8,348,583
Work-in-process 619,984 577,187
Finished goods
- Own manufactured 23.2 63,602 1,467,376
- Trading stock [including in transit Rs 170.87 million
(2020: Rs 209.89 million)] 23.3 691,726 875,498
11,870,680 11,268,644
Provision for net realizable value 23.4 (82,367) -

Provision for obsolescence 23.5 (139,475) -
11,648,838 11,268,644
23.1 Raw materials amounting to Rs 235.2 million (2020: Rs 173.68 million) are in the possession of various vendors of the
Company for further processing into parts to be supplied to the Company.

23.2 Own manufactured finished goods amounting to Rs 30.44 million (2020: Rs 861.76 million) are in the possession of
various dealers as consignment stock for display at dealerships.
23.3 Trading stock amounting to Rs 23 million (2020: Rs 13.91 million) is in possession of various dealers as consignment
stock for display at dealerships.

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23.4 The movement in provision for net realisable value is as follows:

Provision for the year 23.6 82,367 -
23.5 The movement in provision for obsolescence is as follows:

Provision for the year 23.6 139,475 -
23.6 These have been charged to Cost of Sales.
24. TRADE DEBTS
Considered good
- Current portion of long term trade debts 20 77,149 63,569
- Others 24.1 768,616 804,936
845,765 868,505
Considered doubtful 16,142 16,142

Loss allowance (16,142) (16,142)
- -
845,765 868,505
24.1 Includes balance receivable from the following related parties:
Honda Access Asia Oceania Co. Limited - 326

Honda Trading Asia Co. Limited 46 -
46 326
The maximum amount receivable from the related parties at the end of any month during the year was Rs 0.046 million
(2020: Rs 1.37 million). The receivables are neither past due, nor impaired.

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25. LOAN, ADVANCES, DEPOSITS, PREPAYMENTS AND

OTHER RECEIVABLES
Current portion of loans to employees 21 127,741 130,660

Advances - considered good:
- to employees - 60
- to suppliers and contractors 25.1 1,006,167 656,010
1,006,167 656,070
Due from related parties 25.2 72,069 190,349

Recoverable from government authorities:
- Income tax 2,210,858 991,282
- Sales tax 4,730,987 5,635,708
- Custom duty 39,152 39,152
6,980,997 6,666,142
Prepayments 25.3 246,106 169,057

Margin held against imports 796,278 789,651
Profit receivable on bank deposits 65,482 14,839
Workers’ Profit Participation Fund 25.4 353 1,704
Other receivables 25.5 54,666 35,098
9,349,859 8,653,570
25.1 Includes interest bearing advances to suppliers and contractors aggregating Rs 680.378 million (2020: Rs 10.16
million). Such advances carry markup at the rate of 3 months KIBOR plus 1.25%. Markup rate charged during the year
on the outstanding balances ranged from 8.50% to 8.85% (2020: 12.38% to 15.17%) per annum.
25.2 Due from related parties
Holding company
Honda Motor Co., Ltd., Japan 1,056 1,867
Other related parties

Honda Automobile (Thailand) Co., Ltd. 68,099 158,205
Honda Malaysia SDN. BHD. Malaysia - 28,263
PT Honda Prospect Motor Indonesia 1,709 1,088
PT Honda Precision Parts Mfg 1,157 702
Honda Trading Asia Co., Ltd 48 208
American Honda Motor Co., Inc. - 16
25.2.1 72,069 190,349
25.2.1 These are in the normal course of business and are interest free.

25.2.2 The maximum aggregate amount due from these related parties at the end of any month during the year was Rs 166
million (2020: Rs 386.79 million). These are neither past due nor impaired.


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25.3 This includes prepaid insurance to Atlas Insurance Limited, a related party, amounting to Rs 180.95 million (2020: Rs
145.63 million).
25.4 Workers’ Profit Participation Fund
Balance (recoverable)/payable as at beginning of the year (1,704) 2,929
Provision for the year 34 149,647 83,296

Interest for the year - 570
147,943 86,795
Payments during the year (148,296) (88,499)

Balance recoverable as at end of the year (353) (1,704)
25.5 Other receivables include an amount of Rs 0.117 million (2020: Rs 3.15 million) due from Atlas Insurance Limited, a
related party. It is in the normal course of business and is interest free. The maximum aggregate amount due from the
related party at the end of any month during the year was Rs 0.696 million (2020: Rs 3.15 million). It is neither past
due nor impaired.
26. This represented cross currency forward contracts entered into with a commercial bank for the purchase of USD
4.667 million on June 02, 2020 at a rate of PKR 161.91 per USD and USD 2.333 million on July 02, 2020 at a rate of
PKR 163.31 per USD.
27. This represented investment in 3 and 6 months Government Treasury Bills which bore markup ranging from 7.10% to
13.30% (2020: 10.52% to 13.30%) per annum.
28. CASH AND BANK BALANCES
At banks on:
- Current accounts 25,129 10,163
- Deposit accounts 28.1 2,893,081 1,508,719
2,918,210 1,518,882
Cash in hand 2,326 2,825

Term deposit receipts 28.2 12,000,000 -
14,920,536 1,521,707
28.1 Balances in deposit accounts bear mark up which ranges from 5.50% to 6.90% (2020: 8.75% to 12.5%) per annum.
28.2 This represents term deposit receipts having maturity of one month from the date of purchase. These bear mark up
which ranges from 6.75% to 7.25% (2020: Nil) per annum.

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29. SALES
Sales - own manufactured goods 29.1 & 29.2 80,919,787 65,068,216

Sales tax (11,757,536) (9,441,641)
Federal excise duty (3,275,168) (2,440,980)
Commission to dealers 29.3 (1,280,162) (978,395)
Discount to customers 29.4 (17,442) (8,500)
64,589,479 52,198,700
Sales - trading goods 3,305,743 3,324,736

Sales tax (531,015) (476,657)
Commission to dealers (1,900) (515)
2,772,828 2,847,564
67,362,307 55,046,264
29.1 Contract liabilities as at the beginning of the year, aggregating to Rs 1,972.510 million (2020: Rs 3,931.107 million),
have been recognized as sales upon dispatch of vehicles against such advances.

29.2 Includes amortization of deferred revenue amounting to Rs 15.82 million (2020: Rs 5.81 million) that has been
recognised in respect of deferred revenue outstanding as at the beginning of the year.

29.3 This includes reversal of provision for commission amounting to Rs 7.70 million (2020: Rs 107.71 million) in respect
of prior year.

29.4 This represents discount to customers as explained in note 15.5 to these financial statements.

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30. COST OF SALES
Raw material consumed 56,011,474 46,185,802

Stores and spares consumed 108,616 107,800
Salaries, wages and benefits 30.1 1,349,949 1,211,920
Fuel and power 195,605 172,137
Insurance 139,653 112,486
Travelling and vehicle running 129,055 187,343
Freight and handling 126,936 133,351
Repairs and maintenance 36,671 46,176
Technical assistance 11,542 32,429
Depreciation on property, plant and equipment 17.3 595,171 713,429
Amortisation on intangible assets 18.1 98,434 122,723
Royalty 30.2 1,310,029 1,057,479
Canteen subsidy 39,562 47,789
Cost of providing free goods and services 30.3 140,674 128,037
Provision for net realisable value 72,367 -
Other expenses 30.4 42,149 61,038
60,407,887 50,319,939
Opening stock of work-in-process 577,187 482,331

Closing stock of work-in-process (619,984) (577,187)
(42,797) (94,856)
Cost of goods manufactured 60,365,090 50,225,083
Own work capitalized (36,532) (100,421)

Cost of damaged cars (2,762) (1,788)
60,325,796 50,122,874
Opening stock of finished goods 1,467,376 449,644

Closing stock of finished goods (63,602) (1,467,376)
1,403,774 (1,017,732)
Cost of sales - Own manufactured goods 61,729,570 49,105,142
Cost of sales - Trading goods 30.5 1,856,793 1,849,900

63,586,363 50,955,042
30.1 Salaries, wages and benefits include following amounts in

respect of gratuity:

Net interest on defined benefit obligation 13,534 15,701
49,763 49,668
In addition to above, salaries, wages and benefits include Rs 48.67 million (2020: Rs 45.19 million) on account of
provident fund contributions.

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30.2 Royalty, excluding Punjab Sales Tax on services, includes amounts in respect of the following parties:
Relationship
Company name Address 2021 2020
with Company
Rupees in thousand
Honda Motor Co., Ltd., Japan 1-1, Minami-Aoyama, 2-Chome, Holding company 1,292,419 1,043,521
Minato-ku,Tokyo,107-8556,Japan
Honda Lock Mfg. Co. Japan 3700, Shimonaka Sadowara-Cho Miyazaki Group company 3,053 2,277
City Miyazaki Pref, 880-0293 Japan
Honda Access Asia Oceania 2754/1 Soi Sukhumvit 66/1, Sukhumvit Rd; Group company 8,253 173
Co. Limited Kwaeng Bangna, Bangkok 10260 Thailand
Yutaka Giken Co., Ltd. 508-1, Yutaka-cho, Higashi-ku Group company 9 5,728
Hamamatsu-Shi SZK 431-3194
Other parties Various None 4,379 3,823
1,308,113 1,055,522
30.3 This represents cost of various promotional schemes and incentives in relation to cars sold to customers.

30.4 Includes expense in respect of short term leases as per IFRS 16 amounting to Rs 43.61 million (2020: Rs 52.57
million).

30.5 Includes provision for net realisable value amounting to Rs 10 million (2020: Nil).
31. DISTRIBUTION AND MARKETING COSTS
Salaries, wages and benefits 31.1 265,668 233,877

Insurance 17,985 16,730
Freight and handling 17,745 31,080
Printing and stationery 8,174 8,403
Warranty costs - net of claims 66,507 (99,317)
Advertising and sales promotion 178,293 294,725
Training expenses 3,262 175
Free service claims 5,200 8,091
Rent, rates and taxes 31.2 25,525 23,368
Fees and subscriptions 71,191 29,696
Others 4,373 8,085
736,974 667,901

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31.1 Salaries, wages and benefits include following amounts in respect of gratuity:

8,926 8,321
31.2 This represents expense in respect of short term leases as per IFRS 16.
32. ADMINISTRATIVE EXPENSES
Salaries, wages and benefits 32.1 445,417 404,104

Insurance 17,114 14,553
Printing and stationery 9,179 10,425
Communications 41,939 39,613
Postage 913 734
Auditors' remuneration 32.2 9,866 12,009
Legal and professional charges 18,419 20,284
Fees and subscriptions 5,411 5,079
Security expenses 49 295
Training expenses 2,118 16,460
Others 32.3 51,891 12,778
823,588 738,757
32.1 Salaries, wages and benefits include following amounts

in respect of gratuity:

11,971 11,071

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32.2 Auditors’ remuneration
The charges for professional services (excluding sales tax)

consist of the following in respect of auditors’ services for:
Statutory audit 2,182 1,984
Half yearly review 644 586
Taxation services 3,800 6,660
Certifications and audits required by various regulations 950 925
Assistance in preparation of statutory documentation 1,597 1,116
Out of pocket expenses 693 738
9,866 12,009
32.3 Includes expense in respect of short term leases as per IFRS 16 of Rs 2.78 million (2020: Rs 1.62 million). It also
includes expense in respect of advisory fee of a non-executive Director aggregating Rs 28.472 million (2020: Nil).
33. OTHER INCOME
Profit on bank deposits 518,229 116,444

Interest on loans to employees 3,973 6,564
Unwinding of discount on long term trade debts 20 16,902 19,445
Unwinding of discount on long term loans to employees 21 29,098 -
Dividend income - 4,354
Fair value gain on financial assets at fair value through profit or loss:
- Realised 87,775 79,901
- Unrealised - 30,801
87,775 110,702
Net gain on disposal of property, plant and equipment 4,456 2,926
Markup on advances to suppliers 25,262 3,532
Unclaimed liabilities written back 33.1 - 290,264
Gain on derivative financial instruments - 42,205
Exchange gain - net 37 227,995 -
Others 4,794 42,182
918,484 638,618
33.1 This primarily includes Nil (2020: Rs 283.634 million) write back of unclaimed discount payable to customers on late
deliveries of vehicles.

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34. OTHER EXPENSES
Workers' Welfare Fund 15.7 62,663 35,423

Workers' Profit Participation Fund 25.4 149,647 83,296
Exchange loss - net - 928,501
Freight loss - net 8,863 1,318
Loss on derivative financial instruments 15,907 -
237,080 1,048,538
35. FINANCE COST
Interest/mark up on:
- Short term borrowing from related party - unsecured 18,812 23,427
- Short term borrowings - secured 64,079 569,421
- Long term finances - secured 3,742 -
- Workers' Profit Participation Fund - 570
Discounting of long term trade debts 20 - 51,851
Discounting of long term loans to employees 21 7,051 66,673
Bank charges 22,475 15,502
116,159 727,444
36. TAXATION
Current
- For the year 1,056,152 873,259
- Prior years - 9,737
1,056,152 882,996
Deferred 10 (68,730) (17,548)
987,422 865,448
36.1 Tax charge reconciliation
Numerical reconciliation between the average effective tax rate and

the applicable tax rate
Applicable tax rate as per Income Tax Ordinance, 2001 29.00 29.00
Tax effect of:
- change in prior years' tax - 0.71
- change in tax rate - 0.69
- deferred tax asset on tax credit derecognised - 2.17
- permanent differences 0.12 0.71
- deferred tax asset not recognised 6.83 23.70
- lower tax rates and final tax regime (0.44) (1.04)
6.51 26.94
Average effective tax rate charged to statement of profit or loss 35.51 55.94

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36.2 During the year ended March 31, 2021, the Appellate Tribunal Inland Revenue (‘ATIR’) through its order dated October
21, 2020 has dismissed an appeal made by the Company in favour of the tax authorities in respect of Tax Year 2017,
whereby, the ATIR has upheld the disallowance of ‘discount to customers’, amounting to Rs 179.274 million as an
admissible deduction for the purpose of computation of taxable income, under section 21(c) of the Income Tax
Ordinance, 2001 (‘Ordinance’), as the Company had not withheld income tax while making payments of discount to
the customers. Similar order was passed by the Commissioner Inland Revenue (Appeals) [‘CIR(A)’] on January 24,
2020 in respect of Tax Year 2018 upon appeal by the Company against the order of the Additional Commissioner
Inland Revenue (‘ACIR’) dated November 05, 2019, whereby, ‘discount to customers’ amounting to Rs 1,047.986
million was disallowed. Further, another order was passed by the CIR(A) on January 7, 2021 in respect of Tax Year
2019 upon appeal by the Company against the order of the ACIR dated September 30, 2020, whereby, ‘discount to
customers’ amounting to Rs 657.025 million was again disallowed as a deduction. The Company has filed appeals
before ATIR against the orders of CIR(A) for Tax Year 2018 and Tax Year 2019. The tax involved in the matter of such
discount to customers for all the above mentioned Tax Years aggregates Rs 560.682 million.
Against the judgement of the ATIR in respect of Tax Year 2017, the Company filed a reference before the Lahore
High Court (‘LHC’), whereby, the LHC has ordered that no coercive action shall be taken, till the next date, which has
not yet been set. Further, the Company has also filed a rectification application under section 221 of the Ordinance
before the ATIR in respect its aforesaid order which is pending for disposal. Based on the advice of the legal counsel,
management strongly believes that there are multiple and substantial questions of law which require determination
and that there is every likelihood that the appeal will be decided in favor of the Company and the tax demands
that have been raised or will be raised in this respect, shall be finally set aside based on the relevant law and facts,
therefore, the Company has not recognised a provision for the abovementioned amount of Rs 560.682 million.
37. CASH GENERATED FROM OPERATIONS

Adjustments for:
Net gain on disposal of property, plant and equipment 33 (4,456) (2,926)
Profit on bank deposits 33 (518,229) (116,444)
Markup on advances to suppliers 33 (25,262) (3,532)
Interest on loans to employees 33 (3,973) (6,564)
Gain on short term investments 33 (87,775) (4,350)
Unclaimed liabilities written back 33 - (290,264)
Discounting of trade receivables 35 - 51,851
Discounting of long term loans 35 7,051 66,673
Finance cost 116,159 608,920
Provision for employees' retirement benefits and other obligations 165,269 160,263
Provision for net realizable value 23 82,367 -
Provision for obsolete stock 23 139,475 -
Amortisation of deferred revenue (5,919) (5,806)
Royalty 30 1,310,029 1,055,521
Dividend income - (4,354)
Exchange (gain) / loss - net 33 (227,995) 928,501
Loss / (gain) on derivative financial instruments 34 15,907 (42,205)
Working capital changes 37.1 11,535,919 (3,207,915)
16,085,694 1,697,630

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37.1 Working capital changes

(Increase)/decrease in current assets
- Stores and spares 9,109 (25,475)

- Stock-in-trade (602,036) (2,598,030)
- Trade debts 83,663 294,509
- Loans, advances, deposits, prepayments and other receivables 555,104 1,205,991
45,840 (1,123,005)
Increase/(decrease) in current liabilities
- Trade and other payables 11,490,079 (2,084,910)

11,535,919 (3,207,915)
38. CASH AND CASH EQUIVALENTS
Cash and cash equivalents included in the statement of

cash flows comprise of the following:
- Cash and bank balances 28 14,920,536 1,521,707
- Short term investments - Treasury bills 27 - 3,816,256
14,920,536 5,337,963
39. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES
The aggregate amount charged in the financial statements for the year for remuneration, including certain benefits to
the chief executive, certain directors and other executives of the Company is as follows:
Chief Executive Executive Director Non-Executive Directors Executives

Rupees in thousand 2021 2020 2021 2020 2021 2020 2021 2020
Short term employee benefits

Managerial remuneration 1,081 987 1,407 1,374 - 18,516 244,226 212,607
House rent and utilities 3,890 3,537 6,307 3,758 - 10,181 133,946 120,695
Bonus - - - - - 3,581 103,080 54,229
Reimbursement of medical
expenses 7 - 19 - - 11 6,602 4,865
Meeting fee - - - - 850 780 - -
Advisory fee - - - - 37,227 - - -
Other allowances 11,517 9,939 8,710 9,346 - 2,548 38,653 41,536
Post employment benefits

Contributions to Provident
and Gratuity Funds - - - - - 2,791 40,336 41,488
16,495 14,463 16,443 14,478 38,077 38,408 566,843 475,420
Number of persons 1 1 1 1 4 4 105 95
39.1 The Chief Executive, certain directors and executives of the Company are provided with Company maintained cars
and furnished accommodation.

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39.2 Total number of directors of the Company (excluding Chief Executive) is 8 (2020: 8). No remuneration was paid to any
of the other directors.
2021 2020
40. EARNINGS PER SHARE (EPS)
40.1 Basic earnings per share
Profit for the year Rupees in thousand 1,793,205 681,752

Weighted average number of ordinary shares Number in thousand 142,800 142,800
Basic EPS Rupees 12.56 4.77
40.2 Diluted earnings per share

A diluted earnings per share has not been presented as the Company does not have any convertible instruments in
issue as at March 31, 2021 and March 31, 2020 which would have any effect on the earnings per share if the option
to convert is exercised.

41. OPERATING SEGMENTS
Management monitors the operating results of its business segments separately for the purpose of making decisions
about resource allocation and performance assessment. Operating segments are reported in a manner consistent
with internal reporting provided to the CODM. Segment performance is generally evaluated based on certain key
performance indicators including business volume and gross profit.

Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable
basis.

41.1 The management has determined the operating segments based on the reports reviewed by the CODM that are used
to make strategic and business decisions.

(a) Manufacturing
This segment relates to the sale of locally manufactured cars and parts.

(b) Trading
This segment relates to the trading of CBUs and parts.

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41.2 Segment information
Manufacturing Trading Total

Rupees in thousand 2021 2020 2021 2020 2021 2020
Segment revenue 64,589,479 52,198,700 2,772,828 2,847,564 67,362,307 55,046,264

Segment expenses
- Cost of sales (61,729,570) (49,105,142) (1,856,793) (1,849,900) (63,586,363) (50,955,042)
Gross profit 2,859,909 3,093,558 916,035 997,664 3,775,944 4,091,222
Distribution and marketing costs (736,974) (667,901)

Administrative expenses (823,588) (738,757)
Other income 918,484 638,618
Other expenses (237,080) (1,048,538)
Finance cost (116,159) (727,444)
Taxation (987,422) (865,448)
41.2.1 Segment wise assets and liabilities are not being reviewed by the CODM.
42. FINANCIAL RISK MANAGEMENT

42.1 Financial risk factors
The Company’s activities expose it to a variety of financial risks: market risk (including currency risk, other price risk
and interest rate risk), credit risk and liquidity risk. The Company’s overall risk management programme focuses on
the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s financial
performance.

Risk management is carried out by the Company’s finance department under policies approved by the BOD. The
Company’s finance department evaluates and hedges financial risks based on principles for overall risk management,
as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk and investment
of excess liquidity, provided by the BOD. All treasury related transactions are carried out within the parameters of
these policies.

The Company’s overall risk management procedures to minimise the potential adverse effects of financial market on
the Company’s performance are as follows:

(a) Market risk
(i) Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates. Currency risk arises mainly from future commercial transactions or receivables
and payables that exist due to transactions in foreign currencies.

The Company is exposed to currency risk arising from various currency exposures, primarily with respect to the USD,
Japanese Yen (‘JPY’) and Thai Baht (‘THB’). Currently, the Company’s foreign exchange risk exposure is restricted to
the amounts receivable from / payable to foreign entities. The Company’s exposure to currency risk is as follows:

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In thousand 2021 2020
In USD
Cash and bank balances 11 312
Other receivables 11 178
Trade and other payables (12,777) (20,108)
Short term loan from related party - unsecured - (14,000)
Net exposure (12,755) (33,618)
In JPY
Other receivables 1,795 1,899
Net exposure (371,009) (254,716)
In THB
Other receivables 13,138 31,104
Net exposure (17,480) 3,324
As at March 31, 2021, if the Rupee had weakened/strengthened by 5% against the USD with all other variables held
constant, the impact on post tax profit for the year would have been Rs 69.35 million (2020: Rs 198.59 million) lower/
higher, mainly as a result of exchange losses/gains on translation of USD denominated financial instruments.

As at March 31,2021, if the Rupee had weakened/strengthened by 5% against the JPY with all other variables held
constant, the impact on post tax profit for the year would have been Rs 18.18 million (2020: Rs 13.93 million) lower/
higher, mainly as a result of exchange losses/gains on translation of JPY denominated financial instruments.

As at March 31,2021, if the Rupee had weakened/strengthened by 5% against the THB with all other variables held
constant, the impact on post tax profit for the year would not have been material.

(ii) Other price risk
Other price risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those
changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar
financial instruments traded in the market. The Company is not exposed to equity price risk since there are no direct
investments in equity instruments traded in the market at the reporting date. The Company is also not exposed to
commodity price risk since it does not hold any financial instrument based on commodity prices.

(iii) Interest rate risk
Interest rate risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates.

As the Company has no floating interest rate assets, the Company’s income is independent of changes in market
interest rates. The Company’s interest rate risk mainly arises from short term borrowings obtained at variable rates
from various financial institutions. Borrowings obtained at variable rates expose the Company to cash flow interest
rate risk.

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The Company analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into
consideration refinancing, renewal of existing positions, alternative financing and hedging. Based on these scenarios,
the Company calculates the impact on profit or loss of a defined interest rate shift. The scenarios are run only for
liabilities that represent the major interest-bearing positions.
At the reporting date, the interest rate profile of the Company’s significant interest bearing financial instruments was:
Fixed rate instruments

Financial assets
Long term loans to employees 58,087 51,455

Short term investments - treasury bills 27 - 4,053,057
Bank balances - term deposit receipts 12,000,000 -
Bank balances - deposit accounts 2,893,081 1,508,719
14,951,168 5,613,231
Financial liabilities
Short term loan from related party - unsecured - (2,332,246)
Long term finances - secured 7 (2,301,358) -
Net exposure 12,649,810 3,280,985
Fair value sensitivity analysis for fixed rate instruments

The company does not account for any fixed rate financial assets and liabilities at fair value through profit or loss.
Therefore, a change in interest rate at the reporting date would not affect profit or loss of the Company.
Cash flow sensitivity analysis for variable rate instruments

As at March 31, 2021, the Company does not hold any variable rate financial instruments.
(b) Credit risk

Credit risk represents the risk that one party to a financial instrument will cause a financial loss for the other party by
failing to discharge an obligation.

The management assesses the credit quality of the customers, taking into account their financial position, past
experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with
limits set by the Board. The utilisation of these credit limits is regularly monitored. For banks and financial institutions,
only independently rated parties with a strong credit rating are accepted.

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(i) Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit
risk at the reporting date was as follows:
Long term loans to employees 170,209 213,814

Long term deposits 4,042 4,042
Long term trade debts 56,157 117,080
Trade debts 845,765 868,505
Loans, advances and other receivables 988,495 1,029,937
Short term investments - 4,053,057
Balances with banks 28 14,918,210 1,518,882
16,982,878 7,805,317
The credit risk on liquid funds is limited because the counter parties are banks with reasonably high credit ratings.
The Company believes that it is not exposed to major concentration of credit risk as its exposure is spread over a
significant number of counter parties.

(ii) Impairment of financial assets
The Company’s trade debts against sales of stock-in-trade are subject to the expected credit loss model. While bank
balances are also subject to the impairment requirements of IFRS 9, the identified impairment loss was immaterial.

In respect of trade debts, the Company applies the IFRS 9 simplified approach to measure expected credit losses
which uses a lifetime expected loss allowance.

To measure the expected credit losses, trade debts have been grouped based on shared credit risk characteristics
and the days past due.

The expected loss rates are based on the payment profiles of sales over a period of 24 months before March 31, 2021
and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted
to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers
to settle the trade debts. The Company has identified the Gross Domestic Product and the Consumer Price Index of
Pakistan i.e. where it sells its goods and services to be the most relevant factors, and accordingly adjusts the historical
loss rates based on expected changes in these factors. Security deposits pledged by the dealers to Company have
been regarded as collateral against trade receivables. These security deposits are in liquid form.

On that basis, the loss allowance as at March 31, 2021 was determined to be immaterial and hence has not been
accounted for.

(iii) Credit quality of financial assets
The credit quality of financial assets (mainly bank balances) that are neither past due nor impaired can be assessed
by reference to external credit ratings (if available) or to historical information about counterparty default rate:

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Rating Rating 2021 2020

Short term Long term Agency Rupees in thousand
Banks
Citibank N.A. P-1 AA3 Moody's 38,647 52,428
Deutsche Bank A.G. A-2 BBB+ S&P 3,629 267
Faysal Bank Limited A1+ AA PACRA 1,519,747 1,854
Habib Bank Limited A-1+ AAA JCR-VIS 76,863 1,343
MCB Bank Limited A1+ AAA PACRA 80,289 89,965
National Bank of Pakistan A-1+ AAA JCR-VIS 716 715
Meezan Bank Limited A-1+ AA+ JCR-VIS 1,710 15
Allied Bank Limited A-1+ AAA PACRA 742 47
Standard Chartered Bank
(Pakistan) Limited A1+ AAA PACRA 115,896 280,655
Soneri Bank Limited A1+ AA- PACRA 1,077,682 1,089,601
United Bank Limited A-1+ AAA JCR-VIS 2,289 1,992
2,918,210 1,518,882
Due to the Company’s long standing business relationships with these counterparties and after giving due consideration
to their strong financial standing, management does not expect non-performance by these counter parties on their
obligations to the Company. Treasury bills are issued by Government of Pakistan (‘GoP’) and are sold in the primary
market through auctions conducted by State Bank of Pakistan (‘SBP’). These are sovereign instruments and are
backed by credit of the GoP and hence are considered as risk-free securities i.e. without any credit risk. Accordingly,
the credit risk is minimal.
(c) Liquidity risk

Liquidity risk represents the risk that the Company shall encounter difficulties in meeting obligations associated with
financial liabilities.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of
funding through an adequate amount of committed credit facilities. Due to the dynamic nature of the Company’s
businesses, the Company’s finance department maintains flexibility in funding by maintaining availability under
committed credit lines. At March 31, 2021, the Company had Rs 14,860 million available borrowing limits from
financial institutions under mark up arrangements and Rs 14,920 million in cash and bank balances.
Management monitors the forecasts of the Company’s cash and cash equivalents (note 38 to these financial
statements) on the basis of expected cash flow. This is generally carried out in accordance with practice and limits
set by the Company. In addition, the Company’s liquidity management policy involves projecting cash flows in each
quarter and considering the level of liquid assets necessary to meet its liabilities, monitoring statement of financial
position liquidity ratios against regulatory requirements and maintaining debt financing plans.
The table below analyses the Company’s financial liabilities into relevant maturity groupings based on the remaining
period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual
undiscounted cash flows.

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Total con-
Less than One to five More than Carrying
tractual
Rupees in thousand one year years five years amount
cashflows
At March 31, 2021
Accrued markup 6,120 - - 6,120 6,120

Unclaimed dividend 47,141 - - 47,141 47,141
Trade and other payables 7,770,931 - - 7,770,931 7,770,931
Long term finances 594,233 1,799,303 622,826 3,016,362 2,301,358
8,418,425 1,799,303 622,826 10,840,554 10,125,550
At March 31, 2020
Accrued markup 75,547 - - 75,547 75,547

Unclaimed dividend 48,038 - - 48,038 48,038
Trade and other payables 8,151,940 - - 8,151,940 8,151,940
Short term loan from related party 2,332,246 - - 2,332,246 2,332,246
10,607,771 - - 10,607,771 10,607,771
42.2 Fair value estimation

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in
the principal (or most advantageous) market at the measurement date under current market conditions (i.e. an exit
price) regardless of whether that price is directly observable or estimated using another valuation technique.

The different levels for fair value estimation used by the Company have been explained as follows:

- Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is, derived from prices) (level 2).
- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level
3).
The following table presents the financial assets and liabilities that are measured at fair value at March 31, 2021:
Rupees in thousand Level 1 Level 2 Level 3 Total
Assets
Recurring fair value measurements
At fair value through profit or loss
Derivative financial instruments - - - -
Short term investments - - - -
- - - -
Liabilities - - - -

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The following table presents the financial assets and liabilities that are measured at fair value at March 31, 2020:
Rupees in thousand Level 1 Level 2 Level 3 Total
Assets
Recurring fair value measurements
At fair value through profit or loss
Derivative financial instruments - 42,205 - 42,205
Short term investments - 4,053,057 - 4,053,057
- 4,095,262 - 4,095,262
Liabilities - - - -
There were no transfers between Levels 1 and 2 & Levels 2 and 3 during the year and there were no changes in
valuation techniques during the year. The Company’s policy is to recognise transfers into and transfers out of fair
value hierarchy levels as at the end of the reporting period. Changes in level 2 and 3 fair values are analysed at the
end of each reporting period during the annual valuation discussion between the Chief Financial Officer and the
investment advisor.
The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date.
A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker,
industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market
transactions on an arm’s length basis. The quoted market price used for financial assets held by the Company is the
current bid price. These instruments are included in Level 1.
The fair value of financial instruments that are not traded in an active market is determined by using valuation
techniques. These valuation techniques maximise the use of observable market data where it is available and rely as
little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable,
the instrument is included in Level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
The Company has no such type of financial instruments as on March 31, 2021.
The carrying values of all financial assets and liabilities reflected in the financial statements approximate their fair
values. Fair value is determined on the basis of objective evidence at each reporting date.

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42.3 Financial instruments by categories
At fair value At
through amortised Total
Rupees in thousand profit or loss cost
As at March 31, 2021

Assets as per statement of financial position
Long term loans to employees - 170,209 170,209

Long term deposits - 4,042 4,042
Long term trade debts - 56,157 56,157
Trade debts - 845,765 845,765
Loans, advances and other receivables - 1,116,236 1,116,236
Cash and bank balances - 14,920,536 14,920,536
- 17,112,945 17,112,945
At fair value At
through amortised Total
Rupees in thousand profit or loss cost
As at March 31, 2020

Assets as per statement of financial position
Long term loans to employees - 213,814 213,814

Long term deposits - 4,042 4,042
Long term trade debts - 117,080 117,080
Trade debts - 868,505 868,505
Loans, deposits and other receivables - 1,160,597 1,160,597
Short term investments 4,053,057 - 4,053,057
Derivative financial instruments 42,205 - 42,205
Cash and bank balances - 1,521,707 1,521,707
4,095,262 3,885,745 7,981,007
Financial liabilities
at amortized cost
Liabilities as per statement of financial position
Accrued markup 6,120 75,547

Unclaimed dividend 47,141 48,038
Trade and other payables 7,770,931 8,151,940
Short term loan from related party - unsecured - 2,332,246
Long term finances - secured 2,301,358 -
10,125,550 10,607,771

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42.4 Offsetting financial assets and financial liabilities

There are no significant financial assets and financial liabilities that are subject to offsetting, enforceable master
netting arrangements and similar agreements.
42.5 Capital management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.

The Company manages its capital structure and makes adjustments to it in the light of changes in economic
conditions. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid
to shareholders or issue new shares.
Consistent with others in the industry and the requirements of the lenders, the Company monitors the capital structure
on the basis of gearing ratio. This ratio is calculated as net debt divided by total equity (as shown in the statement of
financial position). Net debt is calculated as total borrowings (including current and non-current borrowings) less cash
and bank balances and liquid investments.
Borrowings 7 &13 2,301,358 2,332,246

Less: Cash and cash equivalents 38 (14,920,536) (5,337,963)
Net debt (12,619,179) (3,005,717)
Total equity 18,196,163 16,557,254
The Company is not exposed to any externally imposed capital requirements.
43. Transactions with related parties

43.1 The related parties include the holding company, subsidiaries and associates of the holding company, group
companies, related parties on the basis of common directorship, key management personnel of the Company and
its holding company and post employment benefit plans (Gratuity Fund and Provident Fund). Key management
personnel are those persons having authority and responsibility for planning, directing and controlling the activities
of the Company, directly or indirectly, including any director (whether executive or otherwise) of that Company. The
Company in the normal course of business carries out transactions with various related parties. Amounts due from
and to related parties are shown under receivables and payables. Significant related party transactions have been
disclosed in respective notes in these financial statements other than the following:

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Key Entities with

Holding significant Other related
management
company influence over parties
Rupees in thousand personnel the Company

Purchase of goods 5,515,712 - - 29,704,505
Purchase of property, plant and equipment 37,355 - - 2,608,926
Purchase of intangible assets - - - -
Sale of goods - - 12,399 145,311
Insurance premium - - - 616,696
Insurance claims - - - 25,754
Technical assistance and training charges 6,239 - - 9,869
Sale of property, plant and equipment - - - -
Dividend paid 72,828 - 43,120 -
Recovery booked against warranty claims 3,963 - - 420,691
Short-term employment benefits - note 43.1.1 - 217,775 - -
Post-employment benefits - note 43.1.1 - 9,607 - -

Purchase of goods 4,378,676 - - 25,198,415
Purchase of property, plant and equipment 5,419 - - 265,645
Purchase of intangible assets 148,708 - - -
Sale of goods - - 19,668 225,399
Insurance premium - - - 382,805
Insurance claims - - - 59,489
Technical assistance and training charges 38,735 - - 46,148
Sale of property, plant and equipment - - - 12,837
Dividend paid 884,860 - 523,904 -
Recovery booked against warranty claims 5,037 - - 1,244,392
Short-term employment benefits - note 43.1.1 - 209,203 - -
Post-employment benefits - note 43.1.1 - 13,982 - -
43.1.1 These represent remuneration of the Chief Executive, directors and certain executives that are included in the
remuneration disclosed in note 39 to these financial statements.
43.2 Following are the related parties with whom the Company had entered into transactions or had arrangements/
agreements in place during the year:

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Aggregate % of
Name Basis of relationship shareholding in
the Company
Honda Motor Co. Ltd Japan Group Company 51%

Common directorship
Shirazi Investments (Private) Limited 30%
and Group Company
Atlas Insurance Limited Group Company 1%
American Honda Motor Company, Inc. Group Company None
Asian Honda Motor Co. Ltd., Thailand Group Company None
Atlas Asset Management Limited Group Company None
Atlas Autos (Private) Limited Common directorship None
Atlas Battery Limited Common directorship None
Atlas Engineering (Private) Limited Common directorship None
Atlas Foundation Group Company None
Atlas Hitec (Private) Limited Common directorship None
Atlas Honda Limited Common directorship None
Atlas Metals (Private) Limited Group Company None
Atlas Power Limited Common directorship None
Atlas Power Product (Private) Limited Common directorship None
Honda Access (Thailand) Co. Ltd Group Company None
Honda Access Asia & Oceania Co., Ltd Group Company None
Honda Assembly (Malaysia) Sdn. Bhd. Group Company None
Honda Automobile Thailand Co. Ltd Group Company None
Honda Autoparts Manufacturing M Sdn. Bhd - Malaysia Group Company None
Honda Cars Philippines, Inc. Group Company None
Honda Lock Mfg. Co Japan Group Company None
Honda Malaysia Sdn Bhd Group Company None
Honda Motor (China) Co., Ltd. Group Company None
Honda Parts Manufacturing Co Ltd Group Company None
Honda Trading (South China) Co., Ltd. Group Company None
Honda Trading America Corp. Group Company None
Honda Trading Asia Co. Ltd. Group Company None
Honda Trading Brazil Ltd Group Company None
Honda Trading China Co,.Ltd Group Company None
Honda Trading Corporation Japan Group Company None
Honda Trading Europe Ltd Group Company None
Honda Trading Malaysia Group Company None
Honda Trading Philippines Corp. Group Company None
Honda Trading Viet Nam Co., Ltd. Group Company None
P.T Honda Prospect Motor Indonesia Group Company None
P.T.Honda Precision Parts Group Company None
Pakistan Oxygen Limited Common directorship None
Pt. Honda Trading Indonesia Group Company None
Shanghai Honda Trading Co., Ltd. Group Company None
Shirazi Trading Company (Private) Limited Common directorship None
Taiwan Honda Trading Co., Ltd. Group Company None
Yutaka Giken Co. Ltd Group Company None

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Aggregate % of
Name Basis of relationship shareholding in
the Company
Maqsood Ur Rehman Key Management Personnel None

Muhammad Ashraf Key Management Personnel None
Iqbal Ahmad Key Management Personnel None
Asif Mahmood Key Management Personnel None
Ahmad Umair Wajid (late) Key Management Personnel None
Hamood Ur Rahman Qaddafi Key Management Personnel None
Basharat Ali Rana Key Management Personnel None
Muhammad Ajmal Key Management Personnel None
Muhammad Ali Key Management Personnel None
Muhammad Akmal Dar Key Management Personnel None
Sohail Qaisar Key Management Personnel None
Imran Farooq Key Management Personnel None
Shinobu Nakamura Key Management Personnel None
Mr. Aamir H. Shirazi Director None
Mr. Hironobu Yoshimura Director 0.0004%
Mr. Saquib H. Shirazi Director None
Mr. Katsumi Kasai Director 0.0004%
Mr. Kazunori Shibayama Director 0.0004%
Mr. Akira Murayama Director 0.0004%
Mr. Feroz Rizvi Director 0.0004%
Ms. Rie Mihara Director 0.0004%
Mr. Ariful Islam Director 0.0004%
Company's Employees Provident Fund Post Employment Benefit Plan None
Company's Employees Gratuity Fund Post Employment Benefit Plan None
44. PLANT CAPACITY AND ACTUAL PRODUCTION
Capacity Production
Number 2021 2020 2021 2020
Motor vehicles 50,000 50,000 23,479 22,729
The variance of actual production from capacity is primarily on account of production planned as per market demand.
Capacity of plant is mentioned after accounting for double shift.
45. NUMBER OF EMPLOYEES
2021 2020
Total number of employees (including contractual labour) as at March 31 1,498 1,483
Average number of employees during the year (including contractual labour) 1,480 1,749

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46. DISCLOSURES BY COMPANY LISTED ON ISLAMIC INDEX
Loans/advances obtained as per Islamic mode:

Loans obtained as per Islamic mode 1,883,959 -
Shariah compliant bank deposits/bank balances:

Bank balances 1,710 15
Term deposit receipts 3,500,000 -
Profit earned from shariah compliant bank deposits/bank balances

Profit on term deposit receipts 24,456 -
Mark-up paid on Islamic mode of financing 2,852 -
Profits earned or interest paid on any conventional loan or advance

Interest paid on loan from related party 23,427 -
Profit earned on deposits with banks 518,229 517,319
Interest paid on loans 118,571 116,444
Relationship with shariah compliant bank
The Company has obtained long term loans and has maintained bank balances and term deposits with shariah
compliant banks.
47. PROVIDENT FUND RELATED DISCLOSURE

The investments by the provident fund in collective investment schemes, listed equity and debt securities have been
made in accordance with the provisions of section 218 of the Act and the conditions specified thereunder.
48. DATE OF AUTHORISATION FOR ISSUE

These financial statements were authorised for issue on May 25, 2021 by the Board of Directors of the Company.
49. IMPACT OF COVID-19 (CORONA VIRUS)

The pandemic of COVID-19 that has rapidly spread all across the world has not only endangered human lives but
has also adversely impacted the global economy. On March 23, 2020, the Government of the Punjab announced
a temporary lock down as a measure to reduce the spread of the COVID–19. Complying with the lockdown, the
Company temporarily suspended its operations from March 24, 2020. In the Company’s case, the lockdown was
subsequently relaxed from May 18, 2020. After implementing all the necessary Standard Operating Procedures
(SOPs) to ensure safety of employees, the Company henceforth resumed its operations and has taken all necessary
steps to ensure smooth and adequate continuation of its business in order to maintain business performance despite
slowed down economic activity.

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Meeting

According to management’s assessment, there is no significant accounting impact of the effects of COVID-19 on
these financial statements.
50. EVENTS AFTER THE REPORTING PERIOD

The Board of Directors of the Company has proposed a final cash dividend for the year ended March 31, 2021 of
Rs 4.52 per share amounting to Rs 645.456 million and transfer of Rs 1,000 million from ‘Un-appropriated profit’ to
‘General reserve’ at their meeting held on May 25, 2021 for approval of the members at the Annual General Meeting
to be held on June 29, 2021. These financial statements do not include the effect of the above appropriations which
will be accounted for in the period in which they are approved.


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Company’s Structure Review Reports Financial Analysis Auditor’s Report
& Financial Statements Reports
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that 29th Annual General Meeting of shareholders of Honda Atlas Cars (Pakistan) Limited will be
held on Tuesday, June 29, 2021 at 10:30 a.m. at Faletti’s Hotel, 24-Egerton Road, The Mall, Lahore to transact the following
business:
1. To confirm the minutes of the Extraordinary General Meeting held on Tuesday, April 27th, 2021;
2. To approve and adopt the annual audited financial statements for the year ended March 31, 2021 together with the
Directors’ and Auditors’ reports thereon;
3. To approve cash dividend @ 45.2% (Rs.4.52/- per share) for the year ended March 31, 2021 as recommended by the
Board of Directors;
4. To appoint Auditors for the next financial year and fix their remuneration.
5. To transact any other business with permission of the Chairman.
By order of the Board
Lahore: June 08, 2021 Maqsood ur Rehman Rehmani

Company Secretary & Vice President (HR & Admin.)
NOTES:
1. The share transfer books of the company will remain closed from June 18, 2021 to June 29, 2021 (both days inclusive).
Transfers received at Share registrar M/s. Hameed Majeed Associates (Pvt) Ltd., HM House, 7 Bank Squre, Shahrah-e-
Quaid-e-Azam, Lahore at the close of business on June 17, 2021 will be treated in time for the purpose of entitlement
to the transferees.
2. A member entitled to attend, speak and vote at this Annual General Meeting shall be entitled to appoint another mem-
ber, as a proxy to attend and vote on his/her behalf. The instrument appointing Proxy must be received at the Registered
Office or Share Registrar of the Company not less than 48 hours before the time of the meeting. For the convenience of
the members a Proxy Application Form is dispatched with the Annual Report 2021.
3. Any individual Beneficial Owner of Central Depository Company of Pakistan Ltd. (CDC), entitled to attend and vote at
this meeting, must bring his/her CNIC or passport along with CDC account number to prove his/her identity and in case
of proxy must enclose attested copy of his/her CNIC or passport. Representatives of Corporate members should bring
the usual documents required for such purpose. CDC Account Holders will also have to follow the under mentioned
guidelines as laid down in Circular 1 dated January 26, 2000 issued by the Securities and Exchange Commission of
Pakistan (SECP).
4. Members are requested to immediately inform company’s share registrar “M/s Hameed Majeed Associates, HM-House,
7-Bank Square, Lahore” of any change in their address and provide copy of their CNIC or passport (in case of foreigner)
unless it has been provided earlier enabling the company to comply with the relevant laws.
5. The shareholders residing in a city and collectively holding at least 10% of the total paid up share capital may demand
the Company to provide the facility of video-link for participating in the meeting. The demand for video-link facility shall
be received by the company at the address given hereinabove at least 7 days prior to the date of the meeting.

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AUTHORIZED SALES, SERVICE & SPARE PARTS DEALERS

3S DEALERS
KARACHI SAHIWAL MARDAN

Honda Shahrah-e-Faisal Honda Sahiwal Honda Mardan (Pvt.) Ltd.
13-Banglore Town, Sahiwal Bypass Lahore Road near PSO Opposite Industrial Estate,
Main Shahrah-e-Faisal. Cell: 0300-0668791Tel: (040) 4502081-2 Surkh Dhery, Nowshera Road.
Tel: (021) 34547113-6, Tel: (0937) 881115
34527070, 34527373, LAHORE UAN: (0937) 111-627-326
34527474, 34527575 Honda Fort
Fax: (021) 34526758 32 Queens Road. FAISALABAD
Tel: (042) 36361076, 36313925, Honda Faisalabad
Honda Defence 0312-4520900 East Canal Road.
67/1, Korangi Road Fax: (042) 36361076 Tel: (041) 8731741-4
Near HINO Circle. Fax: (041) 8524029
Tel: (021) 35805291-4 Honda Point
Fax: (021) 35389648 Main Defence Road. Honda Chenab
Tel: (042) 35700994-5, 123 JB Raja Wala,
Honda SITE Cell: 0333-4087733 Green View Colony.
C-1, Main Manghopir Road, SITE. Tel: (041) 2603449, 2603549
Tel: (021) 32577411-2, 32564926, Honda Gateway Fax: (041) 2603549
32570301, 32569381 15 - Km, Multan Road,
Fax: (021) 32577412 Tel: (042) 111 333 789 Honda Lyallpur
Fax: (042) 37511075 Gattwala Toll Plaza,
Honda South Sheikhupura Road.
1-B/1, Sec. 23, Korangi Industrial Area. Honda Township Tel: (041) 2423774-9
Tel: (021) 35050251-4 Main Peco Road,
Fax: (021) 35064599 Kot Lakhpat. SARGODHA
Tel: (042) 111-07-08-06 Honda Citrus Fields
Honda Drive In Cell: 0300-8563978 7-Km Lahore Road.
118-C, Rashid Minhas Road. Tel: (048) 3225186-7
Tel: (021) 34992832-7, 34992824-5 Honda Ring Road (Pvt) Ltd. Fax: (048) 3225869
Fax: (021) 34992823 1-K.M, Off Ferozepur Road,
Bhullay Shah Interchange, GUJRANWALA
Honda Quaideen Ring Road, Lahore. Honda Gujranwala
233-A-2, PECHS. Tel : (042) 34510000 G.T. Road.
Tel: (021) 34556071-3, 34556510-12 Tel: (055) 3415401-3
Fax: (021) 34554644 ISLAMABAD Fax: (055) 3415407
Honda Classic
Honda Port Qasim (Pvt.) Ltd. Plot 179, I 10/3, SIALKOT
Plot No. 3B & 4B, Block-B, Industrial Area. Honda Falcon
Gulshan-e-Benazir Township Scheme, Tel: (051) 4438801-5 Pakki Kotli, Daska Road.
PQA, Bin Qasim. Cell: 0321-5170961 Tel: (052) 3252000, 3251251-4
Cell: 0223-6671789, 0333-1025840 Fax: (052) 3563203
Honda Avenue
Honda Khair 1-Km, Koral Chowk, MIRPUR
Plot 8B, Corridor Area, Islamabad Highway, Honda Empire
near Gulshan e Mayamar Mor, Opp. Judicial Colony. Mian Muhammad Road, Quaid-e-Azam
Main Super Highway. Tel: (051) 2326121-4, Chowk, Mirpur Azad Kashmir
UAN 03111-111-772, (021) 36881414-18, Cell: 0320 5007373 Tel: (05827) 451501-3
(0300) 2006735, (0321) 2005413, Fax: (05827) 451500
(0336) 2323602 RAWALPINDI
Honda Centre PESHAWAR
Honda United (Pvt.) Ltd. 300, Peshawar Road. Honda North
D-8, Block-B, North Nazimabad, Tel: (051) 5125181-5 Main University Road.
Karachi Central. UAN: (051) 111 300 123 Tel: (091) 5854901, 5700807, 5700808
Tel: (021) 36680551-55 Fax: (091) 5854753
HYDERABAD MULTAN ABBOTABAD

Honda Palace Honda Breeze Honda Abbott (Pvt.) Ltd.
Shahbaz Town, 63 Abdali Road. Kala Pull, Main Mansehra Road,
Jamshoro Road. Tel: (061) 4588871-3, 4547484 Musa Zai Colony.
Tel: (0223) 6671789, 667032 Fax: (061) 4588874 Tel: (0992) 406991-7
Fax: (0223) 667519
Honda Multan (Pvt.) Ltd. DERA GHAZI KHAN
RAHIM YAR KHAN Northern Bypass Road, Honda HiSun
Honda Rahim Yar Khan Near NCBA Institute. Multan Road, Dera Ghazi Khan
Shahbazpur Road, Near Naveena Tel: (061) 8023241-44 Tel: (064) 111-690-690
Textile Milss Cantt. Chowk. Fax: (064) 2689009
Tel: (068) 5674446-8 JHELUM
Fax: (068) 5674445 Honda Express (Pvt.) Ltd.
Main GT Road, Kala Gujran.
QUETTA Tel: (0544) 272081-83
Honda Carwan (Private) Limited Fax: (0544) 272086
Airport Road, Besides
Carwan Fuel Station, Sheikhmanda
Tel : (081) 2881001-3

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AUTHORIZED SERVICE & SPARE PARTS DEALERS

2S DEALERS
KARACHI FAISALABAD ISLAMABAD

Nazimabad Honda Jaranwala Honda Margalla Honda
1-J8/B Muslim League Quarter, Jaranwala Road. Service Road, E 11/4, Block B-2,
Main Road Nazimabad No.1, Tel: 041-8710616, 8541097 Near Aura Grand Marque.
Tel: 021-36603336-7 Tel: 051-2318051-52, 051-2318059
Civil Lines Honda
LAHORE 21/1, Jail Road, Civil Lines. AMX Honda
Johar Town Honda Tel: 041-2641925 Plot No 141,
892-R-1 Main Boulevard, Johar Town. Opposite Islamabad, Dry Port I-9/2.
Tel: 042-35291712 , 35291771 MIRPURKHAS Tel: (051) 5617683
Mirpurkhas Honda
Aabpara Honda Plots # A-3 & A-4, Mustafa Town, BAHAWALPUR
Aabpara Market. Hyderabad Ring Road. Horizon Honda
16-Wahdat Road, Tel: 0334-3301575 Bindra Pully, Multan Road.
Tel: 042-35866932, Tel: 0321-6817729
SUKKUR
Samanabad Honda Clock Tower Honda MULTAN
Plot No.29/30, Hussaini Road, Prime Honda
21 Acre Scheme Samanabad. Near Gurdwara. 1- Mushtaq Colony,
Tel: 042-37530563, 37530579 Tel: 071-5617683 Industria Estate Road, Near Nadirabad,
Tel: 061-6538112
Defence Honda RAWALPINDI
E-105, New Super Town, Royal Honda OKARA
Near Main Gate Defence Housing, CB-940/A, Meherabad, Modern Autos
Society, Main Boulevard, DHA Peshawar Road. Near Depalpur Chowk,
Tel: 0321-4466544 Tel: 051-5462464 Depalpur Road.
Tel: 044-2528335
Smart Honda Swan Honda
Lidhar adjacent to Shell Pump, Swan Camp G.T. Road, GUJRAT
Near Askari-11,Main Bedian Road, Opposite to SOS. River Edge Honda
Tel: 0323-4142008 Tel: 0300-5550569 Near Science College, G.T. Road.
Tel: 053-3523511
AUTHORIZED SPARE PARTS DEALERS

1S DEALERS
KARACHI LAHORE RAWALPINDI

Sugoi Parts Center Sugoi Parts Center Sugoi Potohar Parts Center
Shop No. 1&2 Amber Electronics Market, Shop No. 4-6, Shumail Center, State Life Building,
M.A Jinnah Road, Karachi No. 3, 4-Montgomery Road. Kashmir Road, Sadar
Tel: 021-32778211 & 2 Tel: 042-36370121 Tel: 051-5580263-64
Sugoi Sunset Parts Center Sugoi Defence Parts Center MULTAN

Plot No. 12-C, 12th Commercial Street, Shop No. 1 Corner 26/26 Sugoi Multan Parts Center
Phase II, Extension D.H.A. Main Walton Road. Lahore Cantt. 103/9 Iqbal Plaza Opp. RTO Office,
Tel: 021-35312766 Tel: 042-36626987 Near Feasta Garden, LMQ Road.
Tel: 061-4586160-61

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DIVIDEND MANDATE FORM

To:
The Registrar,
M/s. Hameed Majeed Associates (Pvt.) Limited.
H.M. House, 7-Bank Square,
Shahrah-e-Quaid-e-Azam
Lahore
1. Kindly direct credit the cash dividend declared, if any, in my below mentioned bank account:
(i) Shareholder’s Detail

Name of the shareholder
Folio No. /CDC Participants ID
A/c. No.
CNIC No.*
Passport No, (in case of foreign shareholder)**
Land Line Phone Number
Cell Number
Email address (if any)
(ii) Shareholder’s Bank Detail

Title of the Bank Account
Bank Account Number
Bank’s Name
Branch Name and Address
2. It is stated that the above-mentioned information is correct. Further, if there is any change I will intimate the registrar
immediately.
Signature of the Shareholder
Note: The shareholder who hold shares in physical form are requested to submit the above-mentioned Dividend Mandate
Form after duly filled in to Share Registrar concerned. The Shareholders who hold shares in Central Depository
Company are requested to submit the above mentioned Dividend Mandate Form after duly filled in to their Participants/
Investor Account Services of the Central Depository Company Limited.
*Please attach attested photocopy of CNIC

**Please attach attested photocopy of the Passport
142
Information &
2 3 4 5
Notice of Meeting /
1 Management /
FORM OF PROXY
Company Secretary,
Honda Atlas Cars (Pakistan) Ltd.,
1-Mcleod Road, Lahore.
I/We being member(s) of Honda Atlas Cars (Pakistan) Ltd., having
Folio No. / CDC Participant I.D No. ______________ and having _____________ number of shares, hereby appoint Mr./Ms.
_______________________ of ______________________________________________ who is also a member of the company
having Folio No. / CDC Participant I.D No ____________ and _____________ number of shares, as my/our proxy in my/
our absence to attend and vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held
on Tuesday, June 29, 2021 at 10:30 a.m. at Faletti’s Hotel, 24- Egerton Road, The Mall, Lahore and at any adjournment
thereof.
Signed on this day of 2021.
Witness 1: Signature of Shareholder

Signed:
Signature of shareholder should
Name: match the specimen signature
registered with the Company
Address:
CNIC / Passport No.

Witness 2:
Signed:
Name: Affix Rs. 5/-

Revenue
Address: Stamp here
CNIC / Passport No.
NOTES:
1. A member entitled to attend and vote at the Annual General Meeting of the Company is entitled to appoint a proxy
to attend and vote instead of his/her. No person shall act, as a proxy who is not a member of the Company except
that a corporation may appoint a person who is not a member of the Company.
2. The instrument appointing a proxy shall be in writing under the hand on the appointer or his constituted attorney or
if such appointer is a corporation or company, under the common seal of such corporation or company.
3. The Form of Proxy, duly completed, must be deposited at Company’s registered office, 1-Mcleod Road, Lahore not
less than 48 hours before the time of holding the meeting.

Information &
2 3 4 5
Notice of Meeting /
1 Management /
AFFIX
CORRECT
POSTAGE
Secretary,
1-Mcleod Road,
Lahore.

Information &
2 3 4 5
Notice of Meeting /
1 Management /
Honda Atlas Cars (Pakistan) Limited.
43-KM Multan Road, Manga Mandi, Lahore.
www.honda.com.pk

Honda Atlas Cars (Pakistan) Limited 31 March 2021

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ANNUAL REPORT 2021

Honda Atlas Cars (Pakistan) Limited

UNLEASH THE POWER

ANNUAL REPORT 2021

Honda Atlas Cars (Pakistan) Limited.

EMPOWERING THE GREEN DREAM:

Annual Report 2021 1 Empowering The Green Dream

Management / Company’s Structure Auditor’s Report & Financial Statements

Annual Report 2021 3 Empowering The Green Dream

Creating products that maximize the joy

4 Annual Report 2021

6 Annual Report 2021

Annual Report 2021 7 Empowering The Green Dream

Mr. Aamir H. Shirazi

Mr. Aamir H. Shirazi is the President of Atlas Group.

He is currently a member of the Board of Governors of Lahore University of

8 Annual Report 2021

Mr. Hironobu Yoshimura Mr. Saquib H. Shirazi Mr. Katsumi Kasai

Annual Report 2021 9 Empowering The Green Dream

Mr. Eihiko Sato Mr. Kazunori Shibayama Mr. Ariful Islam

Currently, Mr. Islam is Deputy CEO &

10 Annual Report 2021

Mr. Feroz Rizvi Ms. Rie Mihara Mr. Maqsood-ur-Rehman Rehmani

Mr. Rizvi has been on the board of

Annual Report 2021 11 Empowering The Green Dream

MR. MUHAMMAD ASHRAF

MR. IQBAL AHMAD

MR. ASIF MAHMOOD

MR. AMIR NAZIR

MR. MUHAMMAD AJMAL

MR. BASHARAT ALI RANA

12 Annual Report 2021

MR. SOHAIL QAISAR

MR. MUHAMMAD AKMAL DAR

MR. IMRAN FAROOQ

MR. MUHAMMAD ALI

MR. SYED WASEEM HASSAN

MR. HAMOOD UR RAHMAN QADDAFI

Annual Report 2021 13 Empowering The Green Dream

President & CEO Vice President Divisions Assistant Senior

After Sales Iqbal Ahmad

Hironobu Sales &

Purchasing Asif Mahmood

14 Annual Report 2021

General Manager Senior Manager Manager

Dr. Muhammad Imran

Imran Haider Rathore Muhammad Javed Khan

Sohail Qaisar Farhat Yasmeen - HR

Muhammad Ali Qazi Wasif - SAP / ABAP

Sami Shafi Muhammad Nauman

Hamood ur Rahman Qaddafi Muhammad Aamer

Mawiz Akhtar Waseem Akhtar

Shahid Latif Khattak

Shinobu Nakamura Aneel Anwar Fayyaz Ahmad

Muhammad Nauman Abdul Quddos Abbasi

Annual Report 2021 15 Empowering The Green Dream

Audit HR & Remuneration

Logistics & Import