QUARTERLY REPORT 2020 Report to the Shareholders for three months period ended September 30, 2020 Moving towards the future Contents Vision and Mission Statement 02 Company Information 04 Directors' Report to the Shareholders (English) 06 Directors' Report to the Shareholders (Urdu) 09 Condensed Interim Unconsolidated Statement of Financial Position 10 Condensed Interim Unconsolidated Statement of Profit or Loss Account (Un-audited) 11 Condensed Interim Unconsolidated Statement of Comprehensive Income (Un-audited) 12 Condensed Interim Unconsolidated Statement of Cash Flows (Un-audited) 13 Condensed Interim Unconsolidated Statement of Changes in Equity (Un-audited) 14 Notes to the Condensed Interim Unconsolidated Financial Information (Un-audited) 15 Condensed Interim Consolidated Statement of Financial Position 25 Condensed Interim Consolidated Profit and Loss Account (Un-audited) 26 Condensed Interim Consolidated Statement of Comprehensive Income (Un-audited) 27 Condensed Interim Consolidated Cash Flow Statement (Un-audited) 28 Condensed Interim Consolidated Statement of Changes in Equity (Un-audited) 29 Notes to the Condensed Interim Consolidated Financial Information (Un-audited) 30 02 LOADS LIMITED Vision “Seek innovation in quality, productivity & technology to ensure sustainable growth of the group and all the stakeholders.” QUARTERLY REPORT 2020 03 Mission “Satisfy customers with timely supplies of products confirming to quality standards at competitive prices.” 04 LOADS LIMITED Company Information QUARTERLY REPORT 2020 05 Board of Directors Credit Rating Syed Shahid Ali – Chairman* A1 – Short term Mr. Saulat Said – Vice Chairman* A – Long Term Mr. Munir K. Bana – Chief Executive Dr. Muzzaffar Mahmood – Independent Director Exchange Mr. M. Z. Moin Mohajir – Independent Director Pakistan Stock Exchange Mrs. Rozina Muzammil – Independent Director Syed Sheharyar Ali – Non-Executive Director Bankers Mr. Muhammad Mohtashim Aftab – Non-Executive Director Al Baraka Bank (Pakistan) Limited Mr. Shamim A. Siddiqui – Executive Director Bank Al Habib Limited * Chairman and Vice Chairman are Non – Executive Directors Habib Bank Limited Habib Metropolitan Bank Limited Audit Committee JS Bank Limited Mr. M. Z. Moin Mohajir – Chairman MCB Bank Limited Mr. Saulat Said – Member Meezan Bank Limited Syed Sheharyar Ali – Member National Bank of Pakistan Limited Mr. Muhammad Mohtashim Aftab – Member Soneri Bank Limited Allied Bank Limited Human Resources & Remuneration Committee Askari Bank Limited Mrs. Rozina Muzammil – Chairperson Bank Islami Pakistan Ltd. Mr. Saulat Said – Member Mr. Munir K. Bana – Member Subsidiaries and Associates Syed Sheharyar Ali – Member – Specialized Autoparts Industries (Private) Limited Mr. Muhammad Mohtashim Aftab – Member – Multiple Autoparts Industries (Private) Limited Mr. Shamim A. Siddiqui – Member – Specialized Motorcycles (Private) Limited – Hi–Tech Alloy Wheels Limited Chief Financial Officer Mr. Shamim A. Siddiqui Registered Office Plot No. 23, Sector 19 Company Secretary Korangi Industrial Area, Karachi Mr. Babar Saleem Tel: +92-21-35065001-5, +92-302-8674683-9 Fax: +92-21-35057453-54 Head of Internal Audit E-mail: [email protected] Mr. Khawaja M. Akber Shares Registrar Auditors Central Depository Company of Pakistan Limited KPMG Taseer Hadi & Co., Chartered Accountants CDC House, 99-B, Block-B, S.M.C.H.S, Main Shahra-e-Faisal, Karachi Tel: Customer Support Services: 0800-23275 Legal Advisors Fax: +92-21-34326053 Altaf K. Allana & Co., Advocates E-mail: [email protected] Corporate Advisor Registration with Authorities Cornelius, Lane & Mufti, Advocates & Solicitors Company Registration Number: 0006620 National Tax Number: 0944311-8 Symbol Sales Tax Number: 0205870801264 Loads Website www.loads-group.pk 06 LOADS LIMITED DIRECTOR'S REVIEW The Directors of your Company present the Loads Group’s First Quarter Report together with the Un-Audited Financial Statements for the First Quarter ended September 30, 2020. SUMMARY OF COMPARATIVE FINANCIAL RESULTS Rupees in million First quarter ended September 30 Loads Consolidated 2020 2019 % Change 2020 2019 % Change Sales 916 970 -6% 916 970 -6% Gross Profit 114 121 -6% 103 119 -13% Operating Profit 114 105 9% 117 114 3% Share of Loss in associate - - - -43 -28 54% Profit/Loss before Taxation 55 27 104% -23 9 -355% Profit/Loss after Taxation 14 13 8% -66 -8 725% Earnings/Loss per share– basic & diluted (Rupees) 0.09 0.08 8% -0.32 -0.05 540% BUSINESS REVIEW Your group has recorded sales of Rs. 916 million for the first quarter ended September 30, 2020, registering a decline of Rs. 54 million (-6%) over the previous period. The decrease is mainly due to slow recovery of Suzuki after the impact of lock down on account of COVID-19 during March to June 2020; all other brands showed healthy growth in this quarter. Company Results Operating Profit of Loads Limited has improved due to product mix. However, Profit before Taxation has improved on account of reduction in mark-up rates on net borrowings. Therefore, Earnings per Share (EPS) reflect a marginal rise from a profit of 8 paisa per share to 9 paisa per share. Group Results Consolidated Operating Profit increased by 3%, whereas Profit before Taxation and Profit after Taxation declined by 355% & 725% respectively, due to increase in financial cost of subsidiary’s borrowings and share of loss of associated undertaking. Share of loss of associated undertaking, Treet Corporation Limited, has increased from Rs. 28 million to Rs. 43 million as compared to previous period. AUTOMOTIVE INDUSTRY REVIEW (a) Passenger Cars / Light Commercial Vehicles (LCVs) Overall car sales for the first quarter increased over previous year’s quarter by 8%, mainly due to growth in Toyota and Honda volumes by 75% and 67% respectively, partly offset by decline in volumes of Pak Suzuki by 24%. (b) Heavy Commercial Vehicles Heavy vehicle volumes declined by 14% from previous period’s 1,070 units to 924 units, due to decrease of 10% in trucks and 28% in buses. (c) Tractors The tractor industry’s sales is increased by 14% over previous period, registering sales of 10,713 units in 2020 (2019: 9,395 units), mainly on account of growth in Millat Tractor volumes by 50%. QUARTERLY REPORT 2020 07 COMPANY’S SALES PERFORMANCE The overall sales of the group decreased by 6%. The Company’s product-wise performance for the first quarter ended September 30, 2020, as compared with the corresponding period, is analyzed below: Rs. in million Products Sales in first quarter July to September 2020 2019 % Change Exhaust Systems 588 627 -6% Radiators 137 76 80% Sheet Metal Components 191 267 -28% Total 916 970 -6% Comments on performance of various product groups are given below: (a) Exhaust Systems : Sales of exhaust systems declined by 6% mainly on account of decline in sales of Pak Suzuki partly offset by Honda and Toyota Corolla with increase of 40% and 46% respectively. (b) Radiators : Increased reflects growth in aftermarket sales by 107% over the previous period. (c) Sheet Metal Components : Sales of Sheet Metal Components declined by 28% mainly on account of decline in sales of Pak Suzuki, partly offset by Honda with its increase of 44%. PROSPECTS Macroeconomic indicators of the country are challenging for auto industry due to significant impact of lockdown on the economy. Government has taken effective measures to return the country to normalcy and revival of economy will help in generating demand for vehicles. We continue to focus on innovations, increased customer focus and a strong performance culture within the organization. Our people remain crucial for the continued growth of the business. ACKNOWLEDGEMENTS The Board wishes to thank all the employees and our customers for their continued support. By order of the Board Munir K. Bana Dr. Muzzaffar Mahmood Chief Executive Director Karachi: October 28, 2020 08 LOADS LIMITED QUARTERLY REPORT 2020 09 10 LOADS LIMITED Condensed Interim Unconsolidated Statement of Financial Position As at 30th September 2020 30 September 30 June 2020 2020 Note (Unaudited) (Audited) (Rupees) ASSETS Non-current assets Property, plant and equipment 3 560,727,025 572,383,838 Intangible assets 258,597 344,797 Investments 4.1 1,370,426,845 1,318,698,930 Loans and receivables 9,219,839 7,261,530 Deferred tax assets 8,904,925 35,901,404 1,949,537,231 1,934,590,499 Current assets Stores, spares and loose tools 61,355,376 66,504,668 Stock-in-trade 5 1,057,152,534 1,381,183,851 Trade debts - net 388,553,347 328,704,079 Loans and advances 87,173,100 53,400,690 Deposits, prepayments and other receivables 6 143,993,143 137,879,444 Due from related parties 1,830,932,747 1,700,724,240 Taxation - net 125,895,399 109,164,230 Investments 4.2 720,342 551,787 Cash and bank balances 23,079,761 32,010,964 3,718,855,749 3,810,123,953 Total assets 5,668,392,980 5,744,714,452 EQUITY AND LIABILITIES Share capital and reserves 400,000,000 (30 June 2020: 400,000,000) ordinary shares of Rs.10/- each 4,000,000,000 4,000,000,000 Issued, subscribed and paid-up capital 9 1,512,500,000 1,512,500,000 Share premium 1,095,352,578 1,095,352,578 Fair value reserve (137,060,918) (185,546,462) Unappropriated profit 353,109,816 339,322,527 2,823,901,476 2,761,628,643 LIABILITIES Non-current liabilities Long term loans 407,453,031 395,759,100 Lease liabilities 663,416 663,416 Defined benefit obligation - net 15,774,179 16,149,322 Deferred grant 2,309,803 1,539,868 426,200,429 414,111,706 Current liabilities Current maturity of lease liabilities 792,709 1,077,125 Current portion of long term loans 40,549,952 31,770,597 Current portion of deferred grant 1,901,066 2,807,246 Short term borrowings 7 1,920,511,589 2,086,407,636 Due to related parties 40,000,000 40,000,000 Trade and other payables 8 336,168,979 323,849,923 Unclaimed dividend 3,527,781 3,526,379 Accrued mark-up 74,838,999 79,535,197 2,418,291,075 2,568,974,103 Total equity and liabilities 5,668,392,980 5,744,714,452 CONTINGENCIES AND COMMITMENTS 10 The annexed notes 1 to 14 form an integral part of this condensed interim unconsolidated financial information.