DEWAN FAROOQUE MOTORS LIMITED DEWAN FAROOQUE MOTORS LIMITED
HALF YEARLY REPORT
DECEMBER 31, 2023
COMPANY INFORMATION
BOARD OF DIRECTORS
Non-Executive Directors
Mr. Mehmood-ul-Hassan Asghar
Mr. Abdul Basit
Mr. Muhammad Hanif German
Mr. Ghazanfar Baber Siddiqi
Mrs. Nida Jamil
Executive Director
Mr. Waseem-ul- Haque Ansari
Independent Director
Mr. Aziz-ul-Haque
CHIEF EXECUTIVE OFFICER
Mr. Waseem-ul- Haque Ansari
COMPANY SECRETARY
Mr. Muhammad Hanif German
CHIEF FINANCIAL OFFICER
Mr. Muhsin Ali
AUDIT COMMITTEE
Mr. Aziz-ul-Haque
Mr. Ghazanfar Baber Siddiqi
Mr. Abdul Basit
HUMAN RESOURCE & REMUNERATION COMMITTEE
Mr. Aziz-ul-Haque
Mr. Waseem-ul- Haque Ansari
Mr. Abdul Basit
BANKERS
Allied Bank of Pakistan Limited
Askari Bank Limited
Faysal Bank Limited
Habib Bank Limited
Meezan Bank Limited
National Bank of Pakistan
Silk Bank Limited
Saudi Pak Industrial and Agricultural
Investment Co. (Pvt.) Limited
Standard Chartered Bank
Summit Bank Limited
The Bank of Khyber
The Bank of Punjab
United Bank Limited
Chairman Board of Directors
Female Director
Chairman
Member
Member
Chairman
Member
Member
AUDITORS
Feroze Sharif Tariq & Co. Chartered Accountants 4/N/4, Block 6, P.E.C.H.S., Karachi.
LEGAL ADVISORS
A.K. Brohi & Co.
TAX ADVISOR
Sharif & Co. (Advocates) 3rd Floor, Uni Plaza,
I.I. Chundrigar Road, Karachi.
SHARES REGISTRAR / TRANSFER AGENT BMF Consultants Pakistan (Pvt.) Limited
Anum Estate Building, Room No. 310 & 311, 3rd Floor, 49, Darul Aman Society,
Main Shahrah-e-Faisal,
Adjacent to Baloch Colony Bridge, Karachi, Pakistan.
REGISTERED OFFICE
Dewan Centre, 3-A,
Lalazar, Beach Luxury Hotel Road, Karachi, Pakistan
FACTORY
Jilaniabad, Budhu Talpur,
District Sajawal,
Sindh.
DIRECTORS' REPORT
The Board of Directors of your Company takes pleasure in presenting the un-audited condensed interim financial statements of the Company for the half year ended December 31, 2023.
Industry Overview
The automobile sector in Pakistan is grappling with the impact of the current economic crisis, characterized by balance of payments, political instability and other challenges causing to an economic slowdown. Sales of automobiles have been adversely affected for unplanned shutdowns due to import problems, further exacerbating challenges for the sector.
With a new government soon to take charge, the industry awaits policy direction and stability to navigate the road ahead, anticipating an upswing in economic activity and recovery. Negotiations with the International Monetary Fund (IMF), potential easing of imports and new incentives for auto manufacturers under the new government could provide impetus for growth.
Company's performance
During the period under review the gross sales is Rs. 0.03 (Dec 2022: Rs. 0.055) million, gross loss
is Rs. 94.372 (Dec 2022: Rs. 80.187) million and the after-tax loss is Rs. 140.256 (Dec 2022: Rs. 185.335) million attributed to minimal sales, unabsorbed overhead costs and other expenses for non-production of vehicles.
Management is confident that production at the plant will resume very soon as the necessary arrangement and pre-requisite steps precedent to the start of assembly operations of the Company has been completed. Company has undertaken maintenance of production facilities, recruitment of technical & other required employees and installation of body-line welding jigs & other equipment's.
For the production of vehicles, the shipment of CKD kits, A-max & other parts by the principal have been done. Management has already completed test and trial process of CBU KIA Commercial Trucks and got the positive feed-back from potential dealers and customers.
Nationwide dealership network has been established and Letters of Intent (LOIs) have also been issued for engaging further required dealerships. We're thrilled to report a fantastic response from dealers, reflecting their excitement about our offerings. We have undertaken the process of certification by Engineering Development Board of Pakistan (EDB) for assembling & manufacturing products in-house. With these preparations underway, we anticipate a swift return to production, by the grace of Almighty Allah.
In conclusion, we bow, beg and pray to Almighty Allah, Al-Rahman,Al-Rahim, in the name of his beloved Prophet, Muhammad, peace be upon him, for continued showering of His blessings, guidance, strength, health and prosperity to us, our Company, country and nation and also pray to Almighty Allah to bestow peace, harmony, brotherhood and unity in true Islamic spirit upon whole of Muslim Ummah, Ameen, Summa Ameen.
LO-MY LORD IS INDEED HEARER OF PRAYER (AL-QURAN)
Under / By Authority of the Board of Directors
Waseem-ul-Haque Ansari | Mehmood-ul-Hassan Asghar |
Chief Executive Officer | Chairman & Board of Directors |
Karachi: February 26, 2024
REVIEW REPORT ON REVIEW OF INTERIM FINANCIAL STATEMENTS
INDEPENDENT AUDITORS' REVIEW REPORT
TO THE MEMBERS OF DEWAN FAROOQUE MOTORS LIMITED
Introduction
We have reviewed the accompanying Condensed interim Statement of financial Position of Dewan Farooque Motors Limited ("the company") as at December 31, 2023 and the related Condensed interim statement of profit or loss and Condensed interim statement of comprehensive income, Condensed interim Statement of cash flow, Condensed interim statement of changes in equity and notes to the Condensed interim financial statement for the six months period then ended (hereinafter referred to as the "interim financial statements"). Management is responsible for the preparation and Presentation of these Condensed interim financial statements in accordance with approved accounting and reporting standards as applicable in Pakistan for interim financial reporting. Our responsibility is to express a conclusion on these interim financial statements based on our review.
Scope of Review
We conducted our review in accordance with the International Standard on review engagements 2410, "Review of interim financial Information performed by the independent Auditor of the Entity". A review of interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Basis of qualified conclusion
The company defaulted in repayment of instalments of restructured liabilities of financial institutions. Following course, certain lenders have gone into litigation amounting to Rs. 6.884 billion for repayment of liabilities through attachment and sale of company's hypothecated / mortgaged properties. The company has not made provision of markup for the period amounting to Rs. 572.705 million (refer note 11) on account of restructuring proposal offered to the lenders as described in note 2 to the financial statements. Non-provisioning of markup is based on management's hope that the restructuring proposal will be accepted by lenders in the proposed manner. In our opinion, since the proposal has not been accepted by the lenders so far and the lenders, instead of accepting the restructuring proposal, have preferred filing suits against the company, therefore the provision of markup should be made in these financial statements. Had the provision of markup been made in the financial statements, the loss after taxation for the year would have been higher by Rs.8.766 billion and markup payable would have been higher and shareholders' equity would have been lower by Rs. 8.766 billion.
Qualified Conclusion
Our review indicates that, except for the matter discussed in preceding paragraph, these accompanying condensed interim financial Statements as of and for the six months period ended December 31, 2023 is prepared, in all material respects, in accordance with approved accounting and reporting standards as applicable in Pakistan for interim financial Reporting.
Other matter
The figures of the condensed interim statement of profit or loss and condensed interim statement of other comprehensive income and the notes forming part thereof for the quarters ended December 31, 2023 and December 31, 2022 have not been reviewed and we do not express a conclusion on them, we are required to review only the cumulative figures for the Six month ended December 31, 2023.
Matter of emphasis
Without further qualifying our review report we draw attention of the members to note 2 to the condensed interim financial statements of the company for the period ended December 31, 2023 as disclosed in note 2 to the condensed interim financial Statements reflect loss after taxation of Rs. 140.256 (December 31, 2022: Rs. 185.335) million and as of that date it has accumulated losses of Rs. 4.770 (June 30, 2023: Rs. 4.629) billion which resulted in net capital deficiency of Rs. 3.382 (June 30, 2023: Rs. 3.242) billion and its current liabilities exceeded its current assets by Rs. 5.165 (June 30, 2023: Rs. 4.801) billion and total assets by Rs. 3.366 (June 30, 2023: Rs. 3.226) Billion without providing the mark up as refer in below para (b). The operations of the company were closed in intervals between the periods from November 2010 to November 2013 and reclose since February 2014 due to working capital constraints. Furthermore, the company has been unable to ensure timely repayments of debts owing to financial institutions due to liquidity problems and short-term finance facilities have expired and not been renewed by banks. Following course, certain lenders have gone into litigation to recover amounts through attachment and sale of company's hypothecated / mortgaged properties. These conditions, along with other matters as set forth in note 2 indicate the existence of material uncertainty which may cast significant doubt about Company's ability to Continue as going concern therefore the company may be unable to realize its assets and discharge its liabilities in normal Course of Business. The amounts of the current liabilities and Loss reported in said note do not include the effect of matters discussed in Basis for Qualified opinion. Our opinion is not modified in respect of this matter. The going concern assumption used in preparation of these condensed interim financial statements is dependent on resumption of operations, for which management has taken significant steps as disclosed in note 2 to the financial statements.
The engagement partner on the review resulting in this independent auditor's review report is Mohammad Ghalib.
CHARTERED ACCOUNTANTS
Place: Karachi
Date: February 29, 2024
UDIN: RR202310161lpjX35tK7
DEWAN FAROOQUE MOTORS LIMITED
CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION
As at December 31, 2023
Note December 31, | June 30, | ||
2023 | 2023 | ||
Unaudited | Audited | ||
ASSETS | ( Rs. In '000) | ||
NON-CURRENT ASSETS | |||
Property, Plant and Equipment | 6 | 1,014,246 | 744,984 |
Investment | 7 | 784,192 | 830,332 |
CURRENT ASSETS
Stores and spares | 55,879 | ||
Stock-in-trade | 95,796 | ||
Trade debts - considered good | 672 | ||
Short term loan to associated undertaking - considered good | 154,879 | ||
Advances, deposits, prepayments and other receivables - Considered good | 926,474 | ||
Taxation - net | 24,642 | ||
Cash and bank balances | 138,522 | ||
1,396,864 | |||
TOTAL ASSETS | 3,195,302 | ||
EQUITY AND LIABILITIES | |||
SHARE CAPITAL AND RESERVES | |||
Share Capital | |||
Authorized | |||
150,000,000 (June 30, 2023: 150,000,000) Ordinary shares of Rs.10 each | 1,500,000 | ||
Issued, subscribed and paid-up | |||
Issued, subscribed and paid-up | 1,387,353 | ||
Revenue Reserve | |||
Accumulated loss | (4,769,649) | ||
(3,382,296) | |||
NON-CURRENT LIABILITIES | |||
Long term security deposits | 11,700 | ||
Deferred Liabilities | 4,231 | ||
CURRENT LIABILITIES | |||
Short term loan from related parties | 641,666 | ||
Trade and other payables | 725,357 | ||
Unclaimed Dividend | 1,802 | ||
Short term finances-secured | 8 | 4,095,913 | |
Current maturity of long term loans | 1,096,929 | ||
6,561,667 | |||
CONTINGENCIES AND COMMITMENTS | 9 | ||
TOTAL EQUITY AND LIABILITIES | 3,195,302 | ||
55,093
22,972
672
154,879
907,744
23,927
138,710
1,303,997
2,879,313
1,500,000
1,387,353
(4,629,393)
(3,242,040)
11,700
4,231
469,022
441,756
1,802
4,095,913
1,096,929
6,105,422
2,879,313
The annexed notes from 1 to 17 form an integral part of these condensed interim Financial Statements.
Muhsin Ali | Waseem-ul-Haque Ansari | Mehmood-ul-Hassan Asghar |
Chief Financial Officer | Chief Executive Officer | Chairman & Board of Directors |
DEWAN FAROOQUE MOTORS LIMITED
CONDENSED INTERIM STATEMENT OF PROFIT OR LOSS ACCOUNT
FOR THE HALF YEAR AND QUARTER ENDED DECEMBER 31, 2023
Half Year Ended | Quarter Ended | ||||
December 31, | December 31, | December 31, | December 31, | ||
Note | 2023 | 2022 | 2023 | 2022 | |
------------Unaudited------------ | |||||
(Rs. in '000) | |||||
Gross Sales | 30 | 55 | 10 | 2 | |
Sales tax | (5) | (8) | (2) | - | |
Net Sales | |||||
25 | 47 | 8 | 2 | ||
Cost of sales | (94,397) | (80,234) ## | (50,461) | (62,411) | |
Gross Loss | (94,372) | (80,187) ## | (50,453) | (62,409) |
Operating expenses
Marketing & Distribution Expenses Administration & General Expenses
Operating loss | |
Other income/(loss) | 10 |
Finance Cost | 11 |
(Loss) before taxation | |
Taxation | |
(Loss) after tax | |
Basic / diluted (Loss) per share (Rupee) | 13 |
(12,537) | (8,180) | ## |
(13,281) | (14,090) | ## |
(25,818) | (22,270) | |
(120,190) | (102,457) | ## |
(19,987) | (82,874) | ## |
(79) | (3) | |
(140,256) | (185,334) | ## |
- | (1) | ## |
(140,256) | (185,335) | ## |
## | ||
(1.01) | (1.34) | |
(5,958) | (8,180) |
(6,391) | (10,323) |
(12,349) | (18,503) |
(62,802) | (80,912) |
(22,049) | 663 |
(32) | (3) |
(84,883) | (80,252) |
- | - |
(84,883) | (80,252) |
(0.61) | (0.58) |
##
The annexed notes from 1 to 17 form an integral part of these condensed interim Financial Statements.
Muhsin Ali | Waseem-ul-Haque Ansari | Mehmood-ul-Hassan Asghar |
Chief Financial Officer | Chief Executive Officer | Chairman & Board of Directors |
DEWAN FAROOQUE MOTORS LIMITED
CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME
FOR THE HALF YEAR AND QUARTER ENDED DECEMBER 31, 2023
Half Year Ended | Quarter Ended | ||||
December 31, | December 31, | December 31, | December 31, | ||
2023 | 2022 | 2023 | 2022 | ||
------- Unaudited -------- | |||||
(Rs. in '000) | |||||
Income(Loss) for the period | (140,256) | (185,335) | (84,883) | (80,252) | |
Other comprehensive Income(Loss) for the period: | - | - | - | ||
Total comprehensive Income(Loss) for the period | (140,256) | (185,335) | (84,883) | (80,252) | |
The annexed notes from 1 to 17 form an integral part of these condensed interim Financial Statements.
Muhsin Ali | Waseem-ul-Haque Ansari | Mehmood-ul-Hassan Asghar |
Chief Financial Officer | Chief Executive Officer | Chairman & Board of Directors |
DEWAN FAROOQUE MOTORS LIMITED
CONDENSED INTERIM STATEMENT OF CASH FLOWS
FOR THE HALF YEAR ENDED DECEMBER 31, 2023
CASH FLOW FROM OPERATING ACTIVITIES
(Loss) before taxation
Adjustment for non-Cash charges and other items:
Depreciation
Amortization of intangible assets
Loss due to Change in valuation of investment in associates
Financial charges
Short term loans to associated undertakings - considered good
Movement in Working Capital:
(Increase) in stores & spares (Increase)/Decrease in stock in trade
(Increase) in advances, deposits, pre-payments & other receivables Increase in trade & other payables
Net Changes in Working Capital
Cash generated from operation
Tax paid
Financial charges paid
Net cash flow from operating activities
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditure incurred
Net cash flow from investing activities
CASH FLOW FROM FINANCING ACTIVITIES
Short term loan from related parties
Net cash flow from financing activities
NET INCREASE/(DECREASE) IN CASH & CASH EQUIVALENTS
CASH & CASH EQUIVALENTS AT BEGINNING OF THE PERIOD
CASH & CASH EQUIVALENTS AT END OF THE PERIOD | 12 |
December 31, | December 31, | |
2023 | 2022 | |
-------------Unaudited------------ | ||
(Rs. in ' 000) | ||
(140,256) | (185,334) | |
23,966 | 24,267 | |
697 | - | |
46,140 | 98,602 | |
79 | 3 | |
70,882 | 122,872 | |
(69,374) | (62,462) |
- (7,145)
(72,824)34
(18,730) (107,153)
283,60119,118
191,261(95,146)
121,887(157,608)
(715) | (93) | |
(79) | (3) | |
121,093 | (157,704) | |
(293,925) | (487) | |
(293,925) | (487) | |
172,644 | 162,450 | |
172,644 | 162,450 |
- 4,259
(1,839,314) (1,849,309)
(1,839,502) (1,845,050)
The annexed notes from 1 to 17 form an integral part of these condensed interim Financial Statements.
Muhsin Ali | Waseem-ul-Haque Ansari | Mehmood-ul-Hassan Asghar |
Chief Financial Officer | Chief Executive Officer | Chairman & Board of Directors |
DEWAN FAROOQUE MOTORS LIMITED
CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY
FOR THE HALF YEAR ENDED DECEMBER 31, 2023
Share Capital | Accumulated | Total | |||
(Loss) | |||||
-------------Unaudited------------ | |||||
(Rupees in '000') | |||||
Balance as on July 01, 2022 | 1,387,353 | (4,398,588) | (3,011,235) | ||
Total comprehensive (Loss) for the period | -- | (185,335) | (185,335) |
Balance as on December 31, 2022 | 1,387,353 | (4,583,923) | (3,196,570) |
Balance as on July 01, 2023 | 1,387,353 | (4,629,393) | (3,242,040) |
Total comprehensive (loss) for the period | - | (140,256) | (140,256) |
Balance as on December 31, 2023 | 1,387,353 | (4,769,649) | (3,382,296) | |
Short term loans to associated undertakings - considered good |
The annexed notes from 1 to 17 form an integral part of these condensed interim Financial Statements.
Muhsin Ali | Waseem-ul-Haque Ansari | Mehmood-ul-Hassan Asghar |
Chief Financial Officer | Chief Executive Officer | Chairman & Board of Directors |
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Dewan Farooque Motors Ltd. published this content on 19 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 March 2024 05:18:05 UTC.
