Selected Notes to the Condensed Interim Financial Information

1st Quarter Report June 30, 2012 11

for the quarter ended June 30, 2012 (Un-audited)

Honda Atlas Cars (Pakistan) Limited12

Selected Notes to the Condensed Interim Financial Informationfor the quarter ended June 30, 2012 (Un-audited)

5. Contingencies and commitments

June 30, March 31,2012 2012(Rupees in thousand)

4. Long-term finances - secured

Opening balance

Repayments during the period

Current portion shown under current liabilities

166,667

833,334

- (666,667)

(166,667)

(83,334)

(166,667) (750,001)

- 83,333

6. Property, plant and equipment

Opening book value 3,255,755 3,847,016

Additions during the period 6.1 5,520 51,304

3,261,275

3,898,320

Disposal during the period (book value) 6.2 (721)

(4,220)

Depreciation charged during the period (119,451) (638,345)

(120,172)

(642,565)

3,141,103

3,255,755

6.1 Following is the detail of additions during the period:

- Building on freehold land 1,562

-

- Plant and machinery -

14,016

- Furniture and office equipment 1,356

5,727

- Vehicles 1,558

22,825

- Tools and equipments -

5,020

- Computers 1,044

3,716

5,520

51,304

6.2 Following is the detail of disposals during the period:

- Furniture and office equipment 14 519

- Vehicles 707 3,596

- Computers - 105

721 4,220

Commitments in respect of

Letters of credit and purchases other than capital expenditure 294,207 732,548

Letters of credit and purchases for capital expenditure 1,042 52,310

Letters of guarantees issued to various parties 28,891 12,290

324,140 797,148

June 30, March 31,

2012 2012(Rupees in thousand)

ContingenciesThere is no significant change in contingencies from the preceding annual published statement of

the company for the year ended March 31, 2012.

Note

1st Quarter Report June 30, 2012 13

April - June

2012 2011

(Rupees in thousand)

7. Sales

Sales - Own manufactured goods 6,701,206 5,328,377

Sales tax (923,567)

(758,065)

Excise duty -

(111,480)

Commission to dealers (100,708) (85,671)

Discount to customers (28,950) -

5,647,981 4,373,161 Sales - Trading goods 369,313 279,410

Sales tax (50,949)

(40,730)

Commission to dealers (1,080)

(150)

317,284

238,530

5,965,265 4,611,691

8. Cost of sales

Raw material consumed 5,945,082 3,767,541

Stores and spares consumed 16,629 12,994Salaries, wages and benefits 64,757 57,135

Fuel and power 28,700

17,496

Insurance 9,158

8,213Traveling and vehicle running 13,892

12,337

Freight and handling 6,755

3,510

Repairs and maintenance 4,445

1,416

Technical assistance 4,392

6,296Depreciation on property, plant and equipment 114,626

150,938

Amortization on intangible assets 7,851

7,937Royalty 125,587 96,764Canteen Subsidy 5,280 3,592Other expenses 191 198

6,347,345 4,146,367

52,918

44,383

Cost of goods manufactured 6,400,263 4,190,750

Own work capitalized (1,304)

-

6,398,959

4,190,750

Opening stock of finished goods 334,006 674,739

Closing stock of finished goods (1,136,810)

(503,127)

(802,804) 171,612

Cost of sales - Own manufactured 5,596,155 4,362,362

Cost of sales - Trading goods 266,924 192,169

5,863,079 4,554,531

Opening stock of work-in-process 323,572 308,017

Closing stock of work-in-process (270,654) (263,634)

Honda Atlas Cars (Pakistan) Limited14

10. Cash generated from operations

Loss before taxation (249,534) (16,089)

Adjustment for:

-Depreciation on property, plant and equipment 119,451 158,249

-Loss / (profit) on disposal of property, plant and equipment 35 (249)

-Profit on bank deposits (6,758)

(53,414)

-Profit on loans to employees and advances to suppliers (1,109)

(1,687)

-Finance cost 74,428

31,934

-Provision for employees retirement benefits and other obligations 8,636

9,396

-Amortization on intangible assets 7,950

7,979

-Royalty 114,170

87,967

-Working capital changes 10.1 (2,227,471)

1,225,256

(2,160,202)

1,449,342

10.1 Working capital changes

(Increase) / decrease in current assets

-Stores and spares (1,146)

(718)

-Stock-in-trade (2,213,389)

684,946

-Loans, advances, prepayments and other receivables (309,160)

(79,656)

Increase in current liabilities

-Trade and other payables 296,224

620,684

(2,227,471)

1,225,256

April - June

2012 2011

(Rupees in thousand)

9. Transactions with related parties

Sale of goods 33,472 6,707

Purchase of goods 4,640,371

1,752,033

Purchase of property, plant and equipment 144,330

18,813

Insurance premium 87,862

69,948

Insurance claim 794

1,052

Technical assistance fee 7,756

4,972

Royalty 113,842 87,698

Contribution towards employees' post retirement funds 8,523 7,290

Remuneration to key management personnel 11,767 12,679

Related party balances at period / year end as follows:

Receivable from related parties 34,680 31,440

Payable to related parties 4,578,316 2,864,182

June 30, March 31,

2012 2012(Rupees in thousand)

April - June

2012 2011

(Rupees in thousand)Note

Selected Notes to the Condensed Interim Financial Informationfor the quarter ended June 30, 2012 (Un-audited)

Yusuf H. ShiraziChairman Chief Executive

Takeharu Aoki

1st Quarter Report June 30, 2012 15

11. Cash and cash equivalents

Cash and bank balances 22,159

2,018,875

Short term borrowings - secured (2,550,647) -

(2,528,488) 2,018,875

Cash and cash equivalents included in the condensed interim cash flow statement comprise of the following

balance sheet amounts: June 30, June 30,

2012 2011(Rupees in thousand)

13. Date of authorization for issue

14. Corresponding figures

This condensed interim financial information was authorized for issue on July 24, 2012 by the Board

of Directors of the company.

In order to comply with the requirements of International Accounting Standard 34 'Interim Financial

Reporting', the condensed interim balance sheet and condensed interim statement of changes in

equity have been compared with the balances of annual audited financial statements of preceding

financial year, whereas, the condensed interim profit and loss account, condensed interim statement

of comprehensive income and condensed interim cash flow statement have been compared with the

balances of comparable period of immediately preceding financial year.

Corresponding figures have been re-arranged, wherever necessary, for the purpose of comparison.

However, no such significant re-arrangements have been made in this condensed interim financial

information.

12. Segment information

Manufacturing Trading TotalApril - June April - June April - June

2012 2011 2012 2011 2012 2011(Rupees in thousand)

Segment revenue 5,647,981

4,373,161

317,284

238,530

5,965,265

4,611,691

Segment expenses

- Cost of sale (5,596,155)

(4,362,362)

(266,924)

(192,169)

(5,863,079)

(4,554,531)

Gross profit 51,826

10,799

50,360

46,361

102,186

57,160

Distribution and marketing costs (40,439)

(26,714)

Administrative expenses (40,946)

(37,088)

Other operating income 12,598

58,540

Other operating expenses (207,536) (36,053)

Finance cost (75,397) (31,934)

Loss before taxation (249,534) (16,089)

Taxation 28,509 (35,010)

Loss after taxation (221,025) (51,099)