Hinopak AnnualReport 2020

Contents
02 Vision / Mission Statement / Corporate Strategy

03 Basic Principles of Hinopak Code of Conduct
04 Company Information
05 Board of Directors
07 Board Committees
08 Functional Committees
09 Chairman’s Review
11 Directors’ Report
17 Financial Highlights
21 Statement of Compliance
24 Review Report on Statement of Compliance
30 Financial Statements
76 Pattern of Shareholding
78 Notice of Annual General Meeting
84 Proxy Form
01 Annual Report 2020

Vision
The vision of Hinopak Motors Limited is to provide the society
with safe, economical, comfortable and environment friendly means
of transportation by manufacturing and supplying commercial
vehicles and services.
Mission Statement / Corporate Strategy

TO PURSUE OUR VISION, WE COMMIT OURSELVES:
• To our individual, institutional and international customers: to deliver high

quality, safe, durable, reliable, comfortable, environment friendly and
economical products and services to their total satisfaction;
• To our employees: to foster corporate culture of mutual trust, respect for

fundamental human rights at work, opportunities for professional growth
and personal welfare so that they are proud of being a member of the
"Hinopak Family";
• To the community and our nation: to contribute to economic and social

development by providing means of transportation and by progressive
localization of the vehicles; and
• To the shareholders: to act in compliance with the norms expected of a

subsidiary of the Toyota Group of Companies and make a meaningful
financial return to the shareholders.
Hinopak Motors Limited 02

Basic Principles of Hinopak
Code of Conduct
1. We develop and provide outstanding products and services that fulfill the demands of
customers with sufficient attention given to safety and the environment and we aim to be
an enterprise which has a significant presence in the commercial vehicle market.
2. We undertake open and fair corporate activities in conformity with the spirit and letter of
laws. We maintain sound and transparent relationships with governmental and
administrative entities.
3. We build and maintain good communications with society as well as our stakeholders, and
we are committed to accurate and timely disclosure of information.
4. We recognize that an environmental preservation activity is an integral part of our

business, and we voluntarily and actively promote and engage in environmental
preservation activities as an indispensable condition for Hinopak's corporate existence and
activities.
5. We recognize the inherent dignity and fundamental human rights of all members of the
Hino family and therefore respect and support the practice of human rights.
6. We actively promote and engage in philanthropic activities as a member of Hino Motors

Ltd. and the Toyota Group, and as a good corporate citizen.
7. We respect the right of workers at the workplace and their right of freedom of association
and the right to organize and bargain collectively. We believe in transparency, mutual trust
and respect for each others' rights and obligations and need for bilateral dialogue and
cooperation between employees and management for achieving decent work with safe
and healthy work environment, growth and excellence in business performance.
8. We take a resolute stand against antisocial power and organizations, and we act in
compliance with ethical standards and sound social values.
9. We respect and abide the law of the land and applicable rules and the diversity of customs
and culture and we contribute to development in the communities through our business
activities.
10. We support the principles of Global Compact and expect our employees to embrace them
in the work culture of our enterprise for sustainable growth and development.
11. We pledge to comply and enforce the basic principles of Hinopak's Code of Conduct and
prevent its violation through the mechanism already in place from enforcing discipline,
Company wide. Any member of Hinopak family observing any violation or abuse of this
code of conduct may bring the same to the notice of the Management Committee or the
Audit Committee in writing directly or through the suggestion boxes for necessary
consideration and action.

Company Information
Tel: 091 - 2322530

Fax: 091 - 2322550
Kayan Pur, Tehsil Multan,

Union Council No. 73,
Near: Multan, Bypass, Multan

Board of Directors
Muhammad Aslam Sanjrani Yoshihiko Nanami

Chairman President & Chief Executive Officer
Mr. Muhammad Aslam Sanjrani was Mr. Yoshihiko Nanami was appointed as
appointed in November 2013 as President & Chief Executive Officer of the
non-executive director of the Company and Company and member of Human
Chairman of the board of directors. Resource and Remuneration Committee in
March 2019. He has diversified working
He joined the Civil Service of Pakistan in 1971 experience of over 22 years at various
and served 35 years in a variety of posts positions. Mr. Nanami has completed his
that included Administration assignments studies from Keio University, Japan with
like District Magistrate, Commissioner (of major in Economics.
Hyderabad and Larkana divisions),
Secretary to the Government of Sindh and Shigeru Tsuchiya
Balochistan, Autonomous and regulatory Director & Executive Vice President
Bodies. He has worked in the Ministries of
Commerce, Political affairs, Industries and Mr. Shigeru Tsuchiya was appointed as the
Production and Foreign Affairs besides Executive Vice President of the Company
being the Secretary to the Government of in July 2018. He worked in the versatile roles
Pakistan for Overseas Pakistanis. He was in Tomen Corporation Japan from 1988 to
also the Chief Secretary of Sindh Province. 2006. He has diversified working
Presently, he is enrolled as an Advocate experience in different leadership roles
of the High Court. mainly in the Asian Markets.
During the service, he has represented Mushtaq Malik

Pakistan at International Forums including Independent Non-Executive Director
the World International Tourism
Conference, World Bank, Asian Mr. Mushtaq Malik is the independent
Development Bank. He has enjoyed a very non-executive director, Chairman of the
credible status amongst the international Audit Committee and Human Resource and
Donor Agencies with whom he Remuneration Committee of the Company.
successfully negotiated Loan agreement. Currently he is also the Director of Askari
He has been a sportsman having had the Bank Limited and Chairman of MM
distinction of representing Pakistan Management Consultants.
cricket at all levels except test cricket. He
has very successfully organized World He has served on the boards of Habib
Squash Championship in Karachi. Further, Bank Limited and Eco Bank, Istanbul. He has
he has played badminton and table tennis also Chaired Pakistan Electronic and Media
at national level. Regulatory Authority (PEMRA) and worked
as Federal Secretary to the Board of
Investment Pakistan. He holds Master’s
degree in Economics and Business
Administration with specialization in
International Business Management and
Finance.

Nargis Ali Akbar Ghaloo Shuichi Kaneko
Independent Non-Executive Director Non-Executive Director
Ms. Nargis Ghaloo is an Independent Mr. Shuichi Kaneko was appointed in

non-executive director and member of April 2017 as non-executive director of the
the Board’s Audit Committee of the Company, member of the Audit
Company. She is also serving in the same Committee and Human Resource and
capacity with JS bank Limited in addition Remuneration Committee. He joined
to Risk Management Committee of the Hino Motors Limited Japan in 1982.
Bank.
Hitoshi Otomo
Ms. Ghaloo is a retired senior civil servant Non-Executive Director
having served the Government of
Pakistan in various capacities for 36 years. Mr. Hitoshi Otomo was appointed in
She retired as the Managing Director February 2020 as non-executive director
Public Procurement Regulatory of the Company, member of the Audit
Authority, Government of Pakistan. Ms. Committee and Human Resource and
Ghaloo was Chairperson of State Life Remuneration Committee. He joined Hino
Insurance Corporation of Pakistan, Motors Limited Japan in 1981.
Pakistan’s largest life assurer, from 2014
to 2016. She is also the Chairperson of Syed Junaid Ali
Alpha Insurance Company Limited. Company Secretary
Ms. Ghaloo joined the Civil Services of Mr. Junaid is a Chartered Accountant from
Pakistan in 1982, has many years of Institute of Chartered Accountants of
professional experience serving in senior Pakistan and a certified director from
management positions with provincial as Institute of Business Administration
well as federal government departments Karachi. He joined Hinopak Motors
in diversified fields such as public sector Limited in 2011. In addition to the role of
management, administration, financial, Company Secretary he is responsible for
judicial, health, insurance and planning. Financial Reporting, Taxation, Treasury
and Legal Affairs of the Company. Before
Ms. Ghaloo did her Masters in English from joining Hinopak Motors Limited he has
University of Sindh in 1981 and is a worked with KPMG Taseer Hadi and Co
Certified Director from The Pakistan & Dawood Family Takaful Limited.
Institute of Corporate Governance (PICG)
and holds Certificate of Corporate
Governance from INSEAD and also holds a
Certificate in Company Direction from
Institute of Directors, UK.

Board Committees
Audit Committee Terms of Reference
- Mushtaq Malik – Chairman • Determination of appropriate measures to safeguard Company's assets;

(Independent Director)
• Review of quarterly, half-yearly and annual financial statements of the
- Nargis Ali Akbar Ghaloo Company, prior to the approval by the Board of Directors;
• Review of management letter issued by external auditors and
management's response thereto and monitor the action plan to
- Shuichi Kaneko improve the control environment;
(Non - Executive Director)
• Review of the scope and extent of internal audit and ensuring that the
- Hitoshi Otomo internal audit function has adequate resources and is appropriately
(Non - Executive Director) placed within the Company;
- Nasir Manzoor • Ascertaining that the internal control system including financial and
operational controls, accounting system and reporting structure are
(Secretary)
adequate and effective;
• Instituting special projects, other investigations on any matter

specified by the Board of Directors, and to refer any matter to the
external auditors or to any other external body;
• Monitoring compliance with relevant statutes and best practices of

Corporate Governance; and
• Review arrangement for staff and management to report to audit

committee in confidence, concerns, if any, about actual or potential
improprieties in financial and other matters and recommend instituting
remedial and mitigating measures.
Human Resource &

Remuneration Committee Terms of Reference
- Mushtaq Malik – Chairman • Recommending human resource management policies to the board;
• Recommending to the board the selection, evaluation, compensation
- Yoshihiko Nanami (including retirement benefits) and succession planning of the CEO;
• Recommending to the board the selection, evaluation, compensation

- Shigeru Tsuchiya
(including retirement benefits) of CFO, Company Secretary and Head of
Internal Audit;
- Shuichi Kaneko
(Non - Executive Director) • Recommending to the board for consideration and approval of policy
framework for determining the remuneration of directors and Senior
- Hitoshi Otomo Management personnel (first layer of management below the chief
(Non - Executive Director) executive officer level);
- Fahim Aijaz Sabzwari • Considering and approving on recommendations of CEO on such

matters for key management positions who report directly to CEO;
(Secretary)
• Ensure annual evaluation of members of the board and board
committees; and
• Recommending to the Chairman of the board the performance

evaluation of the board as whole.

Functional Committees
Management Committee Terms of Reference
- Yoshihiko Nanami • Managing the day to day operations of the Company;

(Chairman)
• Developing the business and marketing strategy of the Company;
- Shigeru Tsuchiya
• Reviewing budgetary proposals and the necessary actions to
implement the business plan;
- Masahiko Kondo
• Monitoring profitability and deviations from business plan; and
- Fahim Aijaz Sabzwari
• Handling the major business issues and other urgent matters on behalf
- Naushad Riaz of the Board.
- Adil Mohiuddin Shah
- Mehmood Ahmed Khan
- Syed Samad Siraj
- Muhammad Zahid Hasan
- Ahsan Waseem Akhtar
- Salman Abdul Wahab
- Misbah Uddin Khan Akozai
- Abdul Basit
(Secretary)
Whistle Blowing Committee Terms of Reference
- Yoshihiko Nanami • Establishing, implementing and maintaining the Whistle Blowing

(Chairman) Mechanism;
- Shigeru Tsuchiya • Monitoring and ensuring the transparency of the Whistle Blowing
Process;
- Fahim Aijaz Sabzwari • Reviewing and analyzing periodically the feedback and complains
obtained through the mechanism;
- Abdul Basit
• Designating and supervising the officer investigating with regards to
- Ahsan Waseem Akhtar any matter reported through the Whistle Blowing Mechanism; and
(Secretary)
• Initiating steps to ensure compliance with the Hinopak Code of
Conduct, transparency in financial reporting and safeguard of
Company's assets.

Chairman’s Review
The unprecedented coronavirus pandemic is causing confounding global turmoil with an
uncertain outlook everywhere. In such a distressful situation, on behalf of the Board, I hope that
you and your beloved ones are in good health. Since March this year, globally inclusive of state of
Pakistan, it’s “STAY SAFE, STAY HOME / INDOORS”.
Given the magnitude of the damage caused by the virus and public health concern looping across
the globe, we have decided to assist members of Hinopak Motors Limited by providing them a
video link facility for attending the 35th Annual General Meeting of the Company. On behalf of the
Board of Directors, I welcome you and hereby share with you the performance for the year ended
March 31, 2020.
This has been a tough year for not only the Company but for the automotive sector and
businesses across the Country. Since our Company is operating in an import oriented sector it
was significantly impacted due to continued devaluation of Pak Rupee against US Dollar, from US
Dollar 140.7 on March 31, 2019 to reach as high as US Dollar 168.75 during the year and closing at
US Dollar 166.75 on March 31, 2020 resulting in higher input cost. This situation further
deteriorated due to contraction of economy resulting in decrease in market size from 8810 units
to 4934 units and double figure inflation. THE GROWTH RATE OF -0.4% IN THE COUNTRY PUT THE
ECONOMY TO VIRTUALLY A KIND OF STANDSTILL.
The external factors that were showing some improvements with reduction of current account
deficit during early part of the FY20 and consequent decrease in interest rates towards the end of
current financial year was balancing that little activity; however, outbreak of COVID-19 pandemic
brought down all economies across the globe including Pakistan in almost a state of halt.
HINOPAK BUSINESS Distribution and Administrative Expenses

The management remained committed to
Market Share and Sales controlling the cost and accordingly meticulous
In the period of economic commotion, the cost cutting initiatives were taken in the areas
commercial vehicle industry of Pakistan of distribution and administrative expenses
showed downward trend and the total market which led to reduction of expenses to Rs. 707
size decreased by 44% approximately. Overall million as compared to Rs. 738 million in
economic downturn remains major contributor previous year.
in reduction of sales volume of the Company.
Interest Cost
The Company’s market share stands at 31.5% During the year, short term borrowings reduced
and 41.5% in the truck and bus segment by over Rs. 2.6 billion through stringent
respectively. measures of management for liquidating
inventories. However, for most of the year
Gross (Loss) / Profit borrowing rate prevailed around 14% resulting
The gross loss stood at Rs. 170 million as against in interest cost of Rs. 836 million.
the gross profit of Rs. 1,113 million in the prior
year. Drop in sales volume and rising import Loss after tax
cost were main contributors in the incurrence The Company posted a loss after tax of Rs. 2.05
of gross loss during the year. billion as compared to previous year after tax
loss of Rs. 873.3 million. Loss per share stood at
Rs. 165.71 as compared to Rs. 70.42 of last year.

Capital Expenditure of the Company’s Performance towards
The management is constantly monitoring the achievement of its objectives.
Capex and only such Capex is allowed which is
very essential for the business however, On the basis of each Individual Director’s
considering the needs of its customers, the feedback and thereby consolidated evaluated
Company established a 3S model (Sales, Service results, average rating of the Board, Individual
& Support) facility in the strategic location of Directors & Committees performance has been
Multan to improve after sales services of found satisfactory & effective.
approximately Rs. 356 million.
FUTURE OUTLOOK
Dividend With little progress on development of vaccine
Considering the financial position of the for COVID-19, uncertainty in overall economic
Company, the directors of the Company have outlook seems a new normal. Projections for
decided not to pay any divided, cash or GDP growth rate remain around 2% for FY21 and
otherwise. no real incentive was provided for automotive
sector in the budget for FY21 posting a
CONTRIBUTION TO NATIONAL EXCHEQUER challenging outlook for the business going
The Company paid Rs. 1.8 billion approximately forward but the good news is that the
in taxes, duties, levies and cess to the Government decision to open the construction
Government. sector, with no question asked which in the
coming months may mitigate the downward
CORPORATE GOVERNANCE slide of the economy and improve the demand
Board Performance & Role in achieving in the allied industries such as cement, steel and
Company’s Objectives others resulting in somewhat an increase in the
In pursuant to the requirements of Listed demand in the automotive sector.
Companies (Code of Corporate Governance)
Regulations, 2019, a formal & effective It remains of paramount importance for the
mechanism is put in place for an annual Government to assess possible economic
evaluation of performance of the Board, scenarios and promptly respond to
Members of Board & its Sub-Committees. The developments unfolding rapidly. Despite the
mechanism has been duly established, apprehensions, the Company remains
approved and successfully implemented by the committed to turn current challenges into
Board. business opportunities to revive its profitability.
There were changes in the Board during the VOTE OF THANKS

year due to elections of directors held in Lastly, on behalf of the Board of Directors, I
November 2019 and filling of casual vacancies would like to thank all the shareholders for their
with well-versed individuals as detailed in continued trust and confidence in the Company
Directors’ Report. The Board comprise of despite the difficult times.
adequate number of Independent and
Non-Executive Directors with highly qualified
members from diversified backgrounds. The
Board played an indispensable role in achieving ___________________________________
the Company’s objectives by providing Muhammad Aslam Sanjrani
oversight, guidance, strategic direction, Chairman
assessing strategy & underlying purpose of Date: July 27, 2020
actions taken by Management and monitoring

Directors' Report
The Directors take pleasure in presenting this report, together with the Audited Financial
Statements of the Company for the year ended March 31, 2020.
The Board of Directors of the Company as at March 31, 2020 consists of:
Total number of Directors:

a) Male 06
b) Female 01
Composition:
a) Independent Directors
– Male 01
– Female 01
b) Non- Executive Directors 03
c) Executive Directors 02
Changes in Board during the year
Casual Vacancies:
During the year, following two casual vacancies occurred in the Board:
Outgoing Directors New Directors Appointment Date of New Directors

a) Mr. Takehito Sasaki Mr. Masahiko Kondo August 01, 2019
b) Mr. Masato Nishihara Mr. Hitoshi Otomo February 01, 2020
Election of Directors:
The composition of the Board is revised from nine to seven directors in the elections of directors
held on November 28, 2019, in the Extraordinary General Meeting of the Company for the next
term effective from December 03, 2019. Accordingly, as at March 31, 2020, the Board comprised
of the following directors:
1. Mr. Muhammad Aslam Sanjrani

2. Mr. Yoshihiko Nanami
3. Mr. Shigeru Tsuchiya
4. Mr. Mushtaq Malik
5. Ms. Nargis Ali Akbar Ghaloo
6. Mr. Hitoshi Otomo
7. Mr. Shuichi Kaneko

Board Meetings
During the year four meetings of the Board were held in which the attendance by each Director
is as follows:
Name of Directors Number of meetings attended
Mr. Muhammad Aslam Sanjrani 2

Mr. Yoshihiko Nanami 4
Mr. Shigeru Tsuchiya 4
Mr. Takehito Sasaki* 1
Mr. Shuichi Kaneko 4
Mr. Mushtaq Malik 3
Mr. Koji Nagata** 1
Mr. Masato Nishihara* 3
Mr. Satoshi Sase** 3
Mr. Masahiko Kondo** 1
Ms. Nargis Ali Akbar Ghaloo 1
Mr. Hitoshi Otomo*** 0
Leave of absence was granted to the members who did not attend the Board meetings.
* The above directors resigned during the year and the casual vacancies were filled as
mentioned above.
** The above directors are not part of the revised composition of the Board after the election of
directors held on November 28, 2019.
***Mr. Hitoshi Otomo was appointed on the Board on February 01, 2020, since then no meeting of
the Board was held till year end.
Committees of the Board

The Board has formed two sub committees namely Audit Committee and Human Resource and
Remuneration Committee. The Board has formed committees comprising of members given
below: -
a) Audit Committee
• Mushtaq Malik - Chairman
• Nargis Ali Akbar Ghaloo
• Shuichi Kaneko
• Hitoshi Otomo
b) HR and Remuneration Committee

• Yoshihiko Nanami
• Shigeru Tsuchiya
• Shuichi Kaneko
• Hitoshi Otomo
During the year four meetings of Audit Committee were held in which the attendance by each
Director is as follows:

Name of Directors Number of meetings attended
Mr. Mushtaq Malik 3
Ms. Nargis Ali Akbar Ghaloo 1
Mr. Shuichi Kaneko 4
Mr. Koji Nagata** 1
Mr. Masato Nishihara* 3
Mr. Satoshi Sase** 3
Mr. Hitoshi Otomo*** 0
Leave of absence was granted to the members who did not attend the audit committee meetings.
* The above director resigned during the year and the casual vacancy was duly filled as mentioned
above.
** The above directors are not part of the revised composition of the Audit Committee after the
election of directors held on November 28, 2019.
***Mr. Hitoshi Otomo was appointed in the Audit Committee on February 01, 2020, since then no
meeting of the Audit Committee was held till year end.
Principal Activities of the Company and Changes concerning the nature of the Business
Hinopak Motors Limited (the Company) is incorporated in Pakistan as a public limited Company and
is listed on the Pakistan Stock Exchange. The Company's principal activity is the assembly,
progressive manufacturing and sale of Hino buses and trucks.
The Company is striving to create a framework for long-term customer satisfaction, from vehicle
sale to its final usage, through various efforts including supplying parts in a timely manner and
enhancing the quality of after sales services. To accomplish this objective, the company expands its
business by establishing a state of the art 3S Dealership in Multan for it’s customers.
Appropriation of Loss
Following are the details of appropriations:
Year ended Year ended

March 31, March 31,
2020 2019
Rupees in ‘000
Loss before taxation (1,843,998) (520,174)

Taxation (210,978) (353,123)
Loss after taxation (2,054,976) (873,297)

Transferred from surplus on revaluation of fixed assets on account
of Incremental depreciation and disposal of fixed assets 47,981 47,235
Other comprehensive (loss) for the year (9,526) (4,855)
Unappropriated profit brought forward 1,335,362 3,028,366
Available for appropriation (681,159) 2,197,449

Final cash dividend paid during the year - (862,087)
Unappropriated (loss) / profit carried forward (681,159) 1,335,362
Loss per share Rs. (165.71) Rs. (70.42)

Development & Performance of the Company’s Business, Reasons for the Loss and Future Prospects
of Profit
Overall economic slowdown, rising inflation, deterioration of Pak Rupee against US Dollar and finally
the rapid spread of the COVID-19 virus since February 2020 brought economic activity to a near-halt
throughout Pakistan. All these factors alongside the increasing competitiveness of the heavy
vehicles market in Pakistan impacted the Company’s sales, profitability and liquidity throughout the
year. The managements’ rigorous efforts including but not limited to timely initiatives of cost
reduction and price increase curb the impact of these adversities to a great extent, still the current
fiscal year sadly ended with a loss of Rs. 2.05 billion.
Amid this slow economic growth trajectory and expectation of further deterioration of Pak Rupee
against US Dollar in the long run the Company initially aims to maintain stability and establish a
sound platform to foster growth.
Principal Risks and Uncertainties

The Pakistan economy slowed significantly, as the coronavirus outbreak weigh heavily on activity.
Economic growth is set to fall to a multi-decade low as private consumption shrinks considerably
amid widespread containment measures from March onwards by the government. For the fiscal year
ending June 2021, the government itself set a very marginal economic growth target of around 2%,
which means very less amount will be allocated to public sector development programs and
accordingly, the demand for commercial vehicles will also be affected along with exchange rate
fluctuations particularly of Pakistani Rupee and Japanese Yen against US Dollar.
Appointment of Auditors
The present auditors, Messrs. A. F. Ferguson & Co., Chartered Accountants, retire and being eligible,
offer themselves for re-appointment. The directors endorse recommendation of the Audit
Committee for the re-appointment of Messrs. A. F. Ferguson & Co. as the auditors for the financial
year ending March 31, 2021 on such terms and conditions and remuneration as to be decided.
Pattern of Shareholding
The pattern of shareholding as at March 31, 2020 and additional information thereabout required
under Listed Companies (Code of Corporate Governance) Regulations, 2019 are disclosed on page 76
and page 77 respectively.
Holding Company
Since October 19, 1998, Hino Motors Ltd. Japan, is the Holding Company of Hinopak Motors Limited,
by virtue of its 59.33% shareholding in the Company.
Adequacy of Internal Control

The Board of the Company is responsible for the establishment and maintenance of the Company's
system of internal control in order to identify and manage risks faced by the Company.
The Board is confident that the system of internal control is sound in design and has been effectively
implemented and monitored.
Dividend
Considering the financial position of the Company, the directors of the Company have decided not to
pay any dividend, cash or otherwise.

Subsequent Events
No material changes or commitments affecting the financial position of the Company have taken
place between the end of the financial year and the date of the report.
Compliance with the Best Practices of Corporate Governance

The Board is pleased to state that the management of the Company is compliant with the best
practices of corporate governance. The Board acknowledges its responsibility in respect of the
corporate and financial reporting framework and thus states that:
• The financial statements prepared by the management of the Company, present fairly its state of
affairs, the result of its operations, cash flows and changes in equity;
• Proper books of account of the Company have been maintained;
• Appropriate accounting policies have been consistently applied in preparation of financial
statements except as disclosed and accounting estimates are based on reasonable and prudent
judgment;
• International Accounting Standards, as applicable in Pakistan, have been followed in preparation
of financial statements;
• The system of internal control is sound in design and has been effectively implemented and
monitored;
• There are no significant doubts upon the Company's ability to continue as a going concern;
• There has been no material departure from the best practices of corporate governance, as
detailed in the regulations of Rule Book of Pakistan Stock Exchange;
• The highlights of operating and financial data for the last six years are given on page 17 ; and
• The value of investments of the Company's Provident, Gratuity and Pension Funds as on March 31,
2020 were as follows:
Rupees in thousand
Hinopak Motors Limited Employees' Provident Fund 254,201
Hinopak Motors Limited Employees' Gratuity Fund 269,454
Hinopak Motors Limited Employees' Pension Fund 428,556
Trading of Shares of the Company

During the year ended March 31, 2020, the directors, executives and their spouses and minor children
have not traded in the shares of the Company. The threshold set by the Fourth schedule of the
Companies Act, 2017, for disclosure of the term “executive”, in annual report, constitutes employee
whose annual basic salary exceeds Rs. 1.2 million in a year.
Corporate Social Responsibility / Impact on environment

Over the years our Company has contributed significantly towards the welfare of the society in the
shape of various socially responsible activities. However, due to current financial position of the
Company the CSR activities also remained limited.
During the year, various 'Education for All' programs were carried out whereby scholarships were
granted to 10 engineering students, books were distributed in SITE Model Govt. School and free
Computer Training was launched for Govt. School students. Additionally, 60 students from various
universities were engaged in HPML Paid Internship Program.
In healthcare, the Company joined hands with Pakistan Eye Bank Society to arrange Free Eye &
Dental Camps in various spots of Karachi including one at DEWA Academy of Deaf & Dumb Children.

With the hope of reviving its profitability, the Company remains fully committed to further enhance
its contribution towards society.
Significant features of remuneration policy of Non-Executive Directors

Chairman of the Board of Directors is entitled for consultancy fee along with fee for attending the
meetings.
Non-executive directors including the independent director are entitled only for fee for attending the
meetings (except foreign directors).
The remuneration of the President / Chief Executive Officer during the year amounts to Rs. 3.14
million (2019: Rs. 10.26 million).
The remuneration of Chairman for attending Board meetings during the year amounts to Rs. 0.33
million (2019: Rs. 0.38 million) and consultancy fee paid to the Chairman amounts to Rs. 3.6 million
(2019: Rs. 3.52 million).
Further details of the remuneration of directors including Chief Executive Officer is detailed in the
note no. 31 on page no. 69 in annexed financial statements’ notes.
Chairman's Review
The accompanied Chairman's Review covers the performance of the Company, significant deviations
from last year in operating results, significant plans and future outlook. The Board endorses the
contents of the review.
By order of the Board
Director Chief Executive Officer

Dated: July 27, 2020

Financial Highlights
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
Profit or Loss & Other Comprehensive Income

(Rs. in Million)
Revenue from contracts with customers 12,636.29 18,086.85 22,477.50 26,615.07 19,130.84 13,191.06
Gross Profit / (Loss) 1,973.38 2,762.08 2,466.10 3,034.44 1,113.31 (170.41)
Operating Profit / (Loss) 1,434.42 2,031.75 1,776.93 2,348.55 501.62 (809.22)
Profit / (Loss) before Tax 1,552.59 1,727.04 1,696.71 1,669.55 (520.18) (1,844.00)
Taxation 479.37 613.67 576.81 520.17 353.12 210.98
Profit / (Loss) after Tax 1,073.22 1,113.38 1,119.90 1,149.38 (873.30) (2,054.98)
Other comprehensive loss 2.60 20.51 19.07 16.61 4.86 9.53
Transfer from surplus on revaluation of fixed assets 33.43 31.10 32.25 42.00 47.24 47.98
Dividend 468.00 804.92 1,113.32 839.89 862.09 -
Unappropriated Profit / (Loss) carried forward 2,354.69 2,673.73 2,693.49 3,028.37 1,335.36 (681.16)
Financial Position (Rs. in Million)
Fixed Assets 2,006.19 2,207.72 2,841.70 3,109.37 3,135.51 3,641.95

Other Long Term Assets 34.01 20.59 32.62 29.29 49.98 44.04
Current Assets 6,181.54 7,436.02 7,188.42 11,330.87 11,105.19 5,770.77
Less: Current Liabilities 4,054.27 5,134.31 5,013.91 8,885.62 10,431.95 7,444.44
Total 4,167.47 4,530.02 5,048.83 5,583.91 3,858.73 2,012.32
Financed By
Issued, Subscribed & Paid up Capital 124.01 124.01 124.01 124.01 124.01 124.01
Reserves / Accumulated Profit / (Loss) 2,645.92 2,964.73 2,984.49 3,319.37 1,626.36 (390.16)
Surplus on Revaluation of Fixed Assets 1,216.15 1,199.56 1,659.14 1,848.73 1,810.04 1,975.24
Long Term / Deferred tax Liabilities 181.39 241.72 281.19 291.81 298.32 303.23
Total 4,167.47 4,530.02 5,048.83 5,583.91 3,858.73 2,012.32
Cash Flow (Rs. in Million)
Cash flows from / (used in) operating activities 1,876.13 2,144.21 586.94 2,866.99 (10,259.46) 3,229.20
Cash flows used in investing activities (163.17) (343.55) (269.49) (239.60) (258.04) (489.22)
Cash flows used in financing activities (466.45) (801.95) (1,110.09) (660.58) (1,037.77) (0.22)
Turnover (Rs. in Million)
Hino Chassis 9,555.82 16,179.82 20,382.37 23,831.54 15,185.18 10154.14

Bus & Other Bodies 1,077.54 960.56 933.31 682.27 981.69 502.52
Spare Parts 248.79 353.90 463.22 783.22 1,360.75 1374.70
Others 1,754.14 592.57 698.60 1,318.04 1,603.22 1159.70
Total 12,636.29 18,086.85 22,477.50 26,615.07 19,130.84 13,191.06
Production (Units)
Hino Chassis 1714 2999 3750 4198 2880 1592

Bus & Other Bodies 1517 470 474 498 802 342
Hilux Frame 4496 5304 6656 10229 10310 5978

Financial Highlights
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
Sales (Units)
Hino Chassis 1771 2962 3817 4310 2850 1639

Bus & Other Bodies 1547 461 501 478 822 345
Hilux Frame 4455 5360 6451 10328 10377 5897
No. of Employees 323 318 341 354 376 372
Investor Information
Financial Ratios
Gross profit / (loss) ratio 15.62% 15.27% 10.97% 11.40% 5.82% (1.29%)
Net profit / (loss) margin 8.49% 6.16% 4.98% 4.32% (4.56%) (15.58%)
Return on assets (after tax) 13.05% 11.52% 11.13% 7.94% (6.11%) (21.73%)
Return on equity (after tax) 26.92% 25.96% 23.49% 21.72% (24.53%) (120.24%)
Debt equity ratio* 0.05 0.06 0.06 0.06 0.08 0.18
Current Ratio 1.52 1.45 1.43 1.28 1.06 0.78
Quick Ratio 1.07 0.91 0.78 0.72 0.29 0.26
Interest cover ratio - - - - (1.77) (1.21)
Dividend payout ratio** 75.00% 100.00% 75.00% 75.01% 0.00% 0.00%
Dividend yield ratio** 7.63% 9.16% 4.23% 5.99% 0.00% 0.00%
Dividend cover ratio** 133% 100% 133% 133% 0.00% 0.00%
Other Ratios
Price earning ratio 9.83 10.92 17.72 12.52 (5.61) (1.84)

Earning / (loss) before interest, taxes, depreciation and amortization (EBITDA) 1,567.43 2,183.74 1,962.63 2,569.97 739.05 (578.42)
EBITDA Margin to sales 12.40% 12.07% 8.73% 9.66% 3.86% (4.38%)
Total assets turnover ratio 1.54 1.87 2.23 1.84 1.34 1.39
Fixed assets turnover ratio 6.30 8.19 7.91 8.56 6.10 3.62
Return on capital employed 25.75% 24.58% 22.18% 20.58% (22.63%) (102.12%)
Inventory turnover ratio 4.77 6.69 6.64 5.77 2.79 2.26
Number of days inventory 77 55 55 63 131 162
Debtors turnover ratio 12.52 20.20 59.66 55.19 22.85 19.85
Number of days debtors 29 18 6 7 16 18
Creditors turnover ratio 2.65 3.34 3.94 3.39 2.90 3.95
Number of days creditors 138 109 93 108 126 93
Operating cycle (days) (32) (36) (31) (38) 21 87
Per Share Amounts (in Rupees)
Cash dividend** 64.91 89.78 67.73 69.52 - -

Breakup value with surplus on revaluation of fixed assets 321.44 345.81 384.47 426.76 287.12 137.82
Breakup value without surplus on revaluation of fixed assets 223.37 249.08 250.67 277.68 141.15 (21.46)
Earning / (Loss) per share 86.54 89.78 90.31 92.69 (70.42) (165.71)
Share Price (High) 999.35 1,265.31 1,852.30 1,708.13 1,221.81 511.33
Share Price (Low) 397.36 836.59 880.21 970.00 394.20 245.5
Share Price (Closing) 850.73 980.00 1,600.00 1,160.31 395.10 305
One US$ = Rupee as at period end 101.70 104.80 104.70 115.40 140.70 166.75
One JPY = Rupee as at period end 0.8459 0.9331 0.9421 1.0851 1.2702 1.5376
* Debt Equity Ratio takes into consideration non current liabilites.

** Based on final dividend proposed by the Board of Directors subsequent to the year ends.

Vertical Analysis
2019-20 2018-19 2017-18
Operating Results (Rs. in million) % (Rs. in million) % (Rs. in million) %
Revenue from contracts with customers 13,191.06 100.00 19,130.84 100.00 26,615.07 100.00
Cost of sales 13,361.47 101.29 18,017.53 94.18 23,580.63 88.60
Gross (loss) / profit (170.41) (1.29) 1,113.31 5.82 3,034.44 11.40
Distribution cost 351.11 2.66 359.60 1.88 437.44 1.64
Administration expenses 355.67 2.70 378.83 1.98 420.59 1.58
Other income 82.89 0.63 147.64 0.77 300.79 1.13
Other expenses 14.92 0.11 20.90 0.11 128.65 0.48
(Loss) / profit from operations (809.22) (6.13) 501.62 2.62 2,348.55 8.82
Finance cost 1,034.78 7.84 1,021.80 5.34 679.00 2.55
(Loss) / profit before taxation (1,844.00) (13.98) (520.18) (2.72) 1,669.55 6.27
Taxation 210.98 1.60 353.12 1.85 520.17 1.95
(Loss) / profit after taxation (2,054.98) (15.58) (873.30) (4.57) 1,149.38 4.32
Financial Position
Property, plant and equipment 3,638.79 38.48 3,127.74 21.89 3,096.03 21.40
Other non current assets 3.16 0.03 7.77 0.05 13.34 0.09
Long-term investments - 0.00 - 0.00 0.07 0.00
Long-term deposits 7.23 0.08 8.11 0.06 7.77 0.05
Long-term loans and advances 25.06 0.26 24.68 0.17 21.45 0.15
Employee benefit prepayment 11.75 0.12 17.19 0.12 - 0.00
Current assets 5,770.77 61.03 11,105.19 77.71 11,330.87 78.31
Total assets 9,456.76 100.00 14,290.68 100.00 14,469.53 100.00
Shareholders' equity 1,709.09 18.07 3,560.41 24.91 5,292.10 36.57

Deferred taxation 135.21 1.43 116.93 0.82 123.44 0.85
Other non-current liabilites 168.02 1.78 181.39 1.27 168.38 1.16
Short term debt 4,115.24 43.52 6,766.07 47.35 - 0.00
Other current liabilities 3,329.20 35.20 3,665.88 25.65 8,885.62 61.42
Total equity and liabilities 9,456.76 100.00 14,290.68 100.00 14,469.53 100.00
Cash Flows
Cash flows from / (used in) operating activities 3,229.20 117.86 (10,259.46) 88.79 2,866.99 145.77
Cash flows used in investing activities (489.22) (17.85) (258.04) 2.23 (239.60) (12.18)
Cash flows used in financing activities (0.22) (0.01) (1,037.77) 8.98 (660.58) (33.59)
Net increase / (decrease) in cash and cash equivalents 2,739.76 100.00 (11,555.27) 100.00 1,966.81 100.00

Horizontal Analysis
2019-20 2018-19 2017-18
Variance vs Last Variance vs Last Variance vs Last
(Rs. in million) Year Increase (Rs. in million) Year Increase (Rs. in million) Year Increase
Operating Results / (Decrease) / (Decrease) / (Decrease)
% % %
Revenue from contracts with customers 13,191.06 (31.05) 19,130.84 (28.12) 26,615.07 18.41
Cost of sales 13,361.47 (25.84) 18,017.53 (23.59) 23,580.63 17.84
Gross (Loss) / profit (170.41) (115.31) 1,113.31 (63.31) 3,034.44 23.05
Distribution cost 351.11 (7.39) 379.13 (13.86) 440.15 3.01
Administration expenses 355.67 (6.11) 378.83 (9.93) 420.59 9.06
Other income 82.89 (43.86) 147.64 (50.92) 300.79 18.19
Other expenses 14.92 989.05 1.37 (98.91) 125.95 (3.65)
(Loss) / profit from operations (809.22) (261.32) 501.62 (78.64) 2,348.55 32.17
Finance cost 1,034.78 1.27 1,021.80 50.49 679.00 746.38
(Loss) / profit before taxation (1,844.00) (254.49) (520.18) (131.16) 1,669.55 (1.60)
Taxation 210.98 (40.25) 353.12 (32.11) 520.17 (9.82)
(Loss) / profit after taxation (2,054.98) (135.31) (873.30) (175.98) 1,149.38 2.63
Financial Position
Property, plant and equipment 3,638.79 16.34 3,127.74 1.02 3,096.03 9.63
Other non current assets 3.16 (59.33) 7.77 (41.73) 13.34 (24.80)
Long-term investments - 0.00 - (100.00) 0.07 0.00
Long-term deposits 7.23 (10.85) 8.11 4.38 7.77 12.27
Long-term loans and advances 25.06 1.54 24.68 15.05 21.45 (9.33)
Employee benefit prepayment 11.75 (31.65) 17.19 0.00 - (100.00)
Current assets 5,770.77 (48.04) 11,105.19 (1.99) 11,330.87 57.63
Total assets 9,456.76 (33.83) 14,290.68 (1.24) 14,469.53 43.79
Shareholders' equity 1,709.09 (52.00) 3,560.41 (32.72) 5,292.10 11.00

Deferred taxation 135.21 15.63 116.93 (5.27) 123.44 (2.24)
Other non-current liabilites 168.02 (7.37) 181.39 7.73 168.38 8.69
Short term debt 4,115.24 (39.18) 6,766.07 0.00 - 0.00
Other current liabilities 3,329.20 (9.18) 3,665.88 (58.74) 8,885.62 77.22
Total equity and liabilities 9,456.76 (33.83) 14,290.68 (1.24) 14,469.53 43.79
Cash Flows
Cash flows from / (used in) operating activities 3,229.20 131.48 (10,259.46) (457.85) 2,866.99 388.47
Cash flows used in investing activities (489.22) (89.59) (258.04) (7.70) (239.60) 11.09
Cash flows used in financing activities (0.22) 99.98 (1,037.77) (57.10) (660.58) 40.49
Net increase / (decrease) in cash and cash equivalents 2,739.76 123.71 (11,555.27) (687.51) 1,966.81 348.14

Statement of Compliance with Listed Companies
(Code of Corporate Governance)
Regulations, 2019 of Hinopak Motors Limited
For the Year Ended March 31, 2020
The company has complied with the requirements of the Regulations in the following manner:
1. The total number of directors are seven as per the following:
a) Male 06
b) Female 01
2. The composition of the Board is as follows:
Composition Numbers Names

a) Independent Directors
– Male 01 Mr. Mushtaq Malik
– Female 01 Ms. Nargis Ali Akbar Ghaloo
b) Non-Executive Directors 03 Mr. Muhammad Aslam Sanjrani
Mr. Shuichi Kaneko
Mr. Hitoshi Otomo
c) Executive Directors 02 Mr. Yoshihiko Nanami
Mr. Shigeru Tsuchiya
3. The directors have confirmed that none of them is serving as a director on more than seven
listed companies, including this company;
4. The company has prepared a code of conduct and has ensured that appropriate steps have
been taken to disseminate it throughout the company along with its supporting policies and
procedures;
5. The Board has developed a vision / mission statement, overall corporate strategy and
significant policies of the company. The Board has ensured that complete record of particulars
of the significant policies along with their date of approval or updating is maintained by the
company;
6. All the powers of the Board have been duly exercised and decisions on relevant matters have
been taken by the Board / shareholders as empowered by the relevant provisions of the Act
and these Regulations;
7. The meetings of the Board were presided over by the Chairman and, in his absence, by a
director elected by the Board for this purpose. The Board has complied with the requirements
of Act and the Regulations with respect to frequency, recording and circulating minutes of
meeting of the Board;
8. The Board has a formal policy and transparent procedures for remuneration of directors in
accordance with the Act and these Regulations;

9. The Board has arranged Directors’ Training program for the following:
a. Directors
b. Executives
• Fahim Aijaz Sabzwari CFO & Vice President Finance, IT, HR & Admin
• Naushad Riaz Vice President Production Operations & Business Planning
• Syed Samad Siraj General Manager BMD, QAD, SCD, MMP
• Mehmood Ahmed Khan General Manager National Sales
• Adil Mohiuddin Shah General Manager Total Support
• Ahsan Waseem Akhtar General Manager HR & Admin
• Muhammad Zahid Hasan General Manager Finance & IT
• Abdul Basit Asst. General Manager Business Planning & Cost Control
• Syed Junaid Ali Company Secretary & Asst. General Manager Corporate &
Financial Operations
10. The Board has approved appointment of Chief Financial Officer, Company Secretary and Head of
Internal Audit, including their remuneration and terms and conditions of employment and
complied with relevant requirements of the Regulations;
11. Chief Financial Officer and Chief Executive Officer duly endorsed the financial statements before
approval of the Board;
12. The Board has formed committees comprising of members given below:
a) Audit Committee
• Nargis Ali Akbar Ghaloo
• Shuichi Kaneko
• Hitoshi Otomo
b) HR and Remuneration Committee

• Shuichi Kaneko
• Hitoshi Otomo
13. The terms of reference of the aforesaid committees have been formed, documented and advised
to the committee for compliance;

14. The frequency of meetings of the committees were as per following:
Audit Committee Four quarterly meetings during the financial year ended
March 31, 2020
HR and Remuneration Committee One meeting during the financial year ended March 31, 2020
15. The Board has set up an effective internal audit function who is considered suitably qualified and
experienced for the purpose and is conversant with the policies and procedures of the company;
16. The statutory auditors of the company have confirmed that they have been given a satisfactory
rating under the Quality Control Review program of the Institute of Chartered Accountants of
Pakistan and registered with Audit Oversight Board of Pakistan, that they and all their partners
are in compliance with International Federation of Accountants (IFAC) guidelines on code of
ethics as adopted by the Institute of Chartered Accountants of Pakistan and that they and the
partners of the firm involved in the audit are not a close relative (spouse, parent, dependent and
non-dependent children) of the Chief Executive Officer, Chief Financial Officer, Head of Internal
Audit, Company Secretary or Director of the company;
17. The statutory auditors or the persons associated with them have not been appointed to provide
other services except in accordance with the Act, these Regulations or any other regulatory
requirement and the auditors have confirmed that they have observed IFAC guidelines in this
regard;
18. We confirm that all requirements of regulations 3, 6, 7, 8, 27, 32, 33 and 36 of the Regulations have
been complied with.
MUHAMMAD ASLAM SANJRANI YOSHIHIKO NANAMI

CHAIRMAN CHIEF EXECUTIVE OFFICER
July 27, 2020

August 04, 2020

INDEPENDENT AUDITOR’S REPORT
To the members of Hinopak Motors Limited
Report on the Audit of the Financial Statements
Opinion
We have audited the annexed financial statements of Hinopak Motors Limited (the Company),
which comprise the statement of financial position as at March 31, 2020, and the statement of
profit or loss and other 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 and other 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, 2020 and of the loss 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.

Following is the key audit matter:
(i) Impact of COVID-19 Our audit procedures amongst others

(Refer notes 1 & 39) included the following:
Due to COVID-19 pandemic and resulting  Obtained an overall understanding of

lockdown in the country since March 2020, the changes in financial reporting
the business activities in the country have process and underlying controls in
been adversely affected. In March 2020 order to determine the appropriate
Company’s factory and offices were audit strategy;
closed. Further, due to this closure, various
year-end activities relating to financial  Utilised technology for communication
closing were impacted. This situation and evidence gathering;
affected the overall audit strategy. In  Utilised audit software for review and
relation to the accounting and reporting supervision of audit work;
obligations, management assessed the
following significant areas for incorporating  Obtained management's plan
any potential impact of COVID-19 in the regarding execution of physical
financial statements: inventory check at a date subsequent
to the year-end;
 expected credit losses (ECL) under  Observed physical inventory check
IFRS 9, ‘Financial Instruments’; carried out by management
 the impairment of tangible and subsequent to year-end and tested the
intangible assets under IAS 36, roll-back of the inventory quantities
‘Impairment of assets’; prepared by management on a sample
basis;
 the net realisable value (NRV) of
inventory under IAS 2, 'Inventories';  For information/record provided by
management in scanned form, the
 provisions and contingent liabilities original record was checked
under IAS 37 ‘Provisions, Contingent subsequently when the lockdown was
Liabilities and Contingent Assets’, relaxed;
including onerous contracts; and
 For confirmation received through
 going concern assumption used for the email, the authenticity of the
preparation of the financial statements. confirmations was ensured by
performing alternate procedure such
The COVID-19 pandemic is a significant as making telephone calls to
development during the year having the confirming parties;
most significant impact on audit strategy
and its execution and involved assessment  Assessed the reasonableness of
of significant management judgements in forward-looking factors under the
the preparation of financial statements. COVID-19 situation used by
Therefore, we considered it to be a key management in preparing ECL model;
audit matter.  Evaluated whether any impairment
indicators exist that could trigger
impairment for tangible and intangible
assets;
 Obtained the computation of NRV and
checked its reasonableness;

Impact of COVID-19  Evaluated management's assessment
as to whether any provisions were
(Refer notes 1 & 39) – contd…
required to be recorded as a result of
COVID-19;
 Evaluated management's going
concern assessment by reviewing the
approved budget/future cash flow
forecast and management plans and
assessed whether going concern
assumption is appropriate;
 Obtained letter of financial support
from the Parent; and
 Reviewed the adequacy of the
disclosures made by the Company
under applicable accounting and
reporting standards.
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.
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 the 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.
27 Annual
Page 3 ofReport
5 2020 Independent Auditor’s Report
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

judgment and maintain professional skepticism throughout the audit. We also:
 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.
 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.
 Evaluate the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by management.
 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.
 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.
Page 4 of 5
Hinopak Motors Limited
Independent Auditor’s Report
28
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);
(b) the statement of financial position, the statement of profit or loss and other
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
Syed Fahim ul Hasan.
A. F. Ferguson & Co.

Chartered Accountants
Karachi
Date: August 04, 2020
29 Annual
Page 5 ofReport
5 2020 Independent Auditor’s Report
FINANCIAL
STATEMENTS
Statement of Financial Position
At March 31, 2020

Statement of Profit or Loss and Other
Comprehensive Income
For the year ended March 31, 2020

Statement of Changes in Equity

Statement Of Cash Flows

Notes to and Forming Part of the
Financial Statements








































July 27, 2020.

As at March 31, 2020
No of Shareholders Shareholdings Total Shares Held

From To
814 1 100 25,550

625 101 500 119,602
71 501 1000 54,919
55 1001 5000 122,741
10 5001 10000 71,190
14 10001 100000 533,818
1 100001 1000000 436,242
1 3000001 4000000 3,678,833
1 7000001 8000000 7,357,665
1592 12,400,560
Shareholders' Category No. of Shareholders No. of Shares Held Percentage of holding
Foreign Investors 5 11,064,158 89.22%

Directors 2 10 0.00%
Financial Institutions 5 436,758 3.52%
Insurance Companies 2 3,650 0.03%
Joint Stock Companies 15 136,724 1.10%
Individuals 1561 711,078 5.73%
Others 2 48,182 0.40%
Grand Total 1592 12,400,560 100%
Foreign Investors
Directors
Financial Institutions
Insurance Companies
Joint Stock Companies
Individuals
Others

As at March 31, 2020
Shareholders' Category No. of Shareholders No. of Shares Held
Directors, Chief Executive Officer, and their spouse and minor children
Mr. Mushtaq Malik 1 5
Ms. Nargis Ali Akbar Ghaloo 1 5
Associated Companies, undertakings and related parties
Hino Motors Ltd. (Hinopak Motors Limited is Toyota Group Company and subsidiary of 1 7,357,665
Hino Motors Ltd., Japan. Toyota Motors Corporation is the ultimate parent of the group)
Toyota Tsusho Corporation, Japan 1 3,678,833
NIT and ICP

CDC - Trustee National Investment (Unit) Trust 1 436,242
N.B.P. Trustee Dept. Head Office 1 200
Executives
Mr. Muzaffar Anjum 1 120

Mr. Naushad Riaz 1 100
Banks, Development Financial Institutions, Non-Banking Financial Institutions 1 286
Insurance Companies
Dawood Family Takaful Limited 2 3,650
Modarabas and Mutual Funds
AFC Umbrella Fund 1 17,560

First Al-Noor Modaraba 1 10
First Tri-Star Modaraba 1 20
Share holders holding 10% or more voting interest
Hino Motors Ltd., Japan 1 7,357,665

Toyota Tsusho Corporation 1 3,678,833
General Public (Individuals)
A. Local 1559 710,858

B. Foreign 1 100
Others
Amin Tai (Private) Limited 1 54,450

Azee Securities (Private) Limited 1 20
Eleven Stars Securities (Pvt) Ltd 1 49,500
Fawad Yusuf Securities (Pvt.) Limited 1 29,800
Fikrees (Private) Limited 1 1,250
Hermez and Company (Pvt) Ltd 1 20
Loads Limited 1 150
M. M. Securities (Pvt.) Limited 1 420
Maple Leaf Capital Limited 1 1
Margalla Financial (Private) Limited 1 160
Muhammad Bashir Kasmani (Private) Limited 1 500
S.Z. Securities (Private) Limited 1 2
Sherman Securities (Private) Limited 1 1
Sofcom (Private) Limited 1 50
Tencore II Partners LP 1 10,000
Trustee National Bank of Pakistan Emp Benevolent Fund Trust 1 1,633
Trustee National Bank of Pakistan Employees Pension Fund 1 46,549
UHF Consulting (Private) Limited 1 400
1592 12,400,560

Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN that the 35th Annual General Meeting (AGM) of the Shareholders of Hinopak
Motors Limited (the Company) will be held at the Registered Office of the Company situated at D-2,
S.I.T.E., Manghopir Road, Karachi on Wednesday, August 26, 2020 at 10:30 a.m.
Due to ongoing pandemic of COVID-19, the Company has also arranged participation of shareholders
through video facility. The detail procedure is mentioned later in the notes. Following businesses will
be transacted during the meeting:
ORDINARY BUSINESSES
1. To receive, consider and adopt the Audited Financial statements of the Company for the year
ended March 31, 2020, together with the Reports of the Directors and Auditors.
2. To appoint auditors for the ensuing year and fix their remuneration.
3. Any other business with the permission of the Chair.
SPECIAL BUSINESS
1. To consider and if thought fit pass, with or without modification(s), the following Resolutions as
Special Resolutions for increase in Authorized Share Capital of the Company from Rs.
200,000,000 to Rs. 1,000,000,000 and necessary alterations in Memorandum and Articles of
Association of the Company:
“RESOLVED THAT as and by the Special Resolution that the Authorized Capital of the Company
be and is hereby increased from Rs. 200,000,000 (Rupees Two hundred million) divided into
20,000,000 (Twenty million) shares of Rs. 10/- (Rupees Ten) each to Rs. 1,000,000,000 (Rupees
One billion) divided into 100,000,000 (Hundred million) shares of Rs. 10/- (Rupees Ten) each with
the rights, privileges and conditions attaching thereto provided by the regulations of the
Company for the time being with power to increase and reduce the capital of the Company and
to divide the shares in the capital for the time being into several classes and to attach thereto
respectively such deferred, qualified or special rights, privileges or conditions as may be
determined by or in accordance with the regulations of the Company and to vary, modify or
abrogate any such rights or conditions in such manner as may for the time being be provided by
the Regulations of the Company.”
FURTHER RESOLVED THAT Clause V of the Memorandum of Association and Article 6 of the
Articles of Association of the Company is accordingly deleted and replaced with the following
new Clause V and Article 6 respectively:
New Clause V of Memorandum of Association
“The Authorized Capital of the Company is Rs. 1,000,000,000 (Rupees One billion) divided into
100,000,000 (Hundred million) shares of Rs. 10/- (Rupees Ten) each, with the rights, privileges and
conditions attaching thereto provided by the regulations of the Company for the time being with
power to increase and reduce the capital of the Company and to divide the shares in the capital
for the time being into several classes and to attach thereto respectively such deferred, qualified
or special rights, privileges or conditions as may be determined by or in accordance with the
regulations of the Company and to vary, modify or abrogate any such rights or conditions in such
manner as may for the time being be provided by the Regulations of the Company.”
New Article 6 of Articles of Association
“The authorized share capital of the Company is Rs. 1,000,000,000/- (Rupees One billion) divided
into 100,000,000 (Hundred million) shares of Rs. 10/- each.”

“FURTHER RESOLVED THAT the Chief Financial Officer and the Company Secretary, be and is hereby singly
authorized to take all steps necessary, ancillary and incidental for increase in Authorized Capital but not
limited to execute such documents as may be required in relations to increase in the Authorized Capital
and obtaining all requisite regulatory approvals, engaging legal advisor(s) and consultant(s) for the
purposes of the above, filing of the requisite application(s), statutory forms and all other documents as may
be required to be filed with SECP and any other authority, submitting all such documents as may be
required, executing all such amendments or substitutions to any of the foregoing as may be required in
respect of the increase in Authorized Capital and all other matters incidental or ancillary thereto.”
A statement of material facts as required under Section 134(3) of the Companies Act, 2017, covering the above
mentioned special business is annexed with this notice of annual general meeting.
By order of the Board

SYED JUNAID ALI
Company Secretary
Karachi:
August 05, 2020

Notes
i. Online Participation in the Annual General Meeting

Considering the evolving situation on the spread of the COVID-19 the Company has decided to
facilitate its shareholders by also allowing the shareholders to attend the meeting through
video link for the safety and in the best interest of the shareholders. Therefore, shareholders
who are interested in attending the AGM proceedings through video link are required to
update their valid e-mail ID with the Share Registrar, latest by August 17, 2020. A detailed
procedure shall be communicated through e-mail directly to the shareholders who have
provided their valid e-mail IDs and same shall be placed at the Company’s website
https://www.hinopak.com in the investor relations section.
The shareholders who have already updated their valid e-mail IDs with the Company or its
Share Registrar and are interested to attend AGM online may send below information along
with valid copy of both sides of CNIC with the subject “Registration for Hinopak Motors Limited
AGM” at info@hinopak.com for their / their appointed proxy’s verification. Such information
should be sent from their duly registered valid e-mail ID for the registration purposes latest by
August 21, 2020.
Shareholder Folio / CDC No. of shares CNIC No. Cell No. Registered Email
Name No. held ID
Shareholders can also provide their comments / suggestions for the agenda items of the AGM
at the email address info@hinopak.com.
Members are therefore, encouraged to attend the AGM through video link or by consolidating
their attendance through proxies.
ii. Closure of Share Transfer Books

The Share Transfer Books of the Company will remain closed from August 19, 2020 to August
26, 2020 (both days inclusive). No transfer will be accepted for registration during this period.
Transfers received at Share Registrar Office M/s FAMCO Associates (Pvt.) Limited, at the close
of business on August 18, 2020, will be treated in time to attend and vote at the meeting.
iii. For Attending the Meeting

In case of individuals, the Account Holders or sub-account holders and/or the persons whose
securities are in group account and their registration details are uploaded as per the
Regulations, shall authenticate their identity by showing original Computerized National
Identity Cards (CNIC) or original passport at the time of attending the meeting.
In case of a corporate entity, the Board of Directors’ Resolution / Power of Attorney with the
specimen signature of the nominee shall be produced (if it has not been provided earlier) at the
time of attending the meeting.
iv. Proxy
A member entitled to attend and vote at this General Meeting is entitled to appoint a Proxy to
attend, speak and vote in his place at the meeting. Instrument appointing a proxy must be
deposited at the Registered Office of the Company at least forty-eight hours before the time
of the meeting.
To facilitate identification for right to attend the Annual General Meeting, shareholder whose
holdings are on the Central Depository System (CDS) or his Proxy should authenticate his
identity by showing his original CNIC or original passport at the time of attending the meeting;
along with the Participant's Identity Number and Shareholder's account number allocated by
the Central Depository Company.

In case of corporate entity, the Board of Directors' Resolution / Power of Attorney with
specimen signature of the nominee shall be produced at the time of the meeting.
v. Notice to Shareholders who have not provided their CNIC

The Individual Members who have not yet submitted photocopy of their valid Computerized
National Identity Card (CNIC) to the Company / Share Registrar, are once again reminded to
send the same at the earliest directly to Company’s Share Registrar, M/s FAMCO Associates
(Pvt.) Limited. In case of non-receipt of the copy of a valid CNIC, the Company would be
constrained under section 243(3) of the Companies Act, 2017, to withhold dividend (if any) of
such shareholders.
vi. Change of Address

The Shareholders are requested to intimate any changes in their addresses to the Share
Registrar, M/s FAMCO Associates (Pvt.) Limited.
vii. Circulation of Annual Audited Accounts through CD

The Securities and Exchange Commission of Pakistan vide SRO 470(I)/2016 dated May 31st,
2016, has allowed companies to circulate the annual audited accounts together with reports
thereon to its members through CD/DVD/USB at their registered addresses instead of
transmitting the same in hard copies. In view of the above, the Company has dispatched its
Annual Report for the year ended March 31, 2020, to its shareholders in the form of CD. Any
member requiring printed copy of Annual Report may submit the duly filled request form
placed on the Company’s website to our Share Registrar, M/s FAMCO Associates (Pvt.) Limited.
viii. Video-link Facility to Members

If the Company receives consent from the members holding at least 10% shareholding residing
in a city, to participate in the meeting through video-link at least 07 days prior to date of the
meeting, the Company will arrange facility of video-link in that city subject to availability of
such facility in that city.
To avail this facility please provide the following information to our Share Registrar, M/s
FAMCO Associates (Pvt.) Limited.
I/We, _______________________________________ of _________________, being a member of Hinopak
Motors Limited, holder of __________________________ ordinary share(s) as per Registered
Folio/CDC Account No. _____________________________________ hereby opt for video conference
facility at _____________________________________.
_________________________
Signature of Member(s)
ix. Placement of Financial Statements on Website:

The Financial Statements of the Company for the year ended March 31, 2020 along with reports
have been placed on the website of the Company: https://www.hinopak.com/finance.htm

STATEMENT OF MATERIAL FACTS UNDER SECTION 134(3) OF THE COMPANIES ACT, 2017
PERTAINING TO THE SPECIAL BUSINESS
This statement sets forth the material facts concerning the special business listed hereinabove,
to be transacted at the 35th Annual General Meeting to be held on August 26, 2020.
The amendments in the Memorandum and Articles of Association of the Company to increase
the Authorized Share Capital are being carried out to offer more flexibility for any possible
increase in the paid-up capital of the Company in future. Accordingly, the Board of the
Directors of the Company have recommended to increase the Authorized Share Capital from
Rs. 200,000,000 (Rupees Two hundred million) divided into 20,000,000 (Twenty million)
ordinary shares of Rs. 10/- each to Rs. 1,000,000,000 (Rupees One billion) divided into
100,000,000 (Hundred million) ordinary shares of Rs. 10/- each. The new ordinary shares when
issued shall rank pari passu with the existing ordinary shares in all respects.
None of the directors of the Company have any direct or indirect interest in the above said
special business except to the extent of their shareholdings.

PROXY FORM
I/We________________________________________________ of _______________________________________________________
being a Shareholder of HINOPAK MOTORS LIMITED and holding ____________Ordinary Shares as per
Register Folio No. ______ or "CDC" Participant's I.D. No. ________________ A/c No. _______________ hereby
appoint Mr. / Ms. __________________________ of ____________________________ or failing him/her Mr. / Ms.
_____________________ of ______________________________ as my/our Proxy in my/our absence to attend and
vote for me/us and on my/our behalf at the 35th Annual General Meeting of the Company to be held on
Wednesday, August 26, 2020 and at any adjournment thereof.
Signature______________________________
Affix Revenue
(Signature must be agreed with the Specimen
Stamp of five
signature registered with the Company)
rupees
Witness 1 Witness 2
Signature Signature
Name Name
Address Address
CNIC or Passport No. CNIC or Passport No.
NOTES:
1. A shareholder entitled to attend and vote at the Annual General Meeting of the Company may
appoint any person as his/her proxy to attend and vote instead of him/her. The proxy shall have the
right to attend, speak and vote in place of the shareholder appointing him/her at the meeting.
A proxy need not be a member of the Company.
2. The instrument appointing a proxy should be signed by the Shareholder or by his/her Attorney, duly
authorised in writing and person appointed proxy. In case of corporate entity, the Board of Directors
resolution/power of attorney with specimen signature shall be submitted along with proxy form to
the company.
3. The Proxy Form duly completed must be deposited at the Company's Registered Office at D-2,
S.I.T.E., Manghopir Road, P.O. Box No. 10714, Karachi - 75700 not less than 48 hours before the time of
holding the meeting.
4. Shareholders whose holdings are in the Central Depository System (CDS) and their proxies both
should attach with this form, attested copies of their Computerised National Identity Card or
(attested copies of first four pages of their passport). To facilitate identification at the AGM, the proxy
should bring his/her original Computerised National Identity Card or passport. In case of corporate
entity, the Board of Directors resolution/power of attorney with specimen signature of the nominee
shall be produced at the time of the meeting.
The Company Secretary
D-2, S.I.T.E., Manghopir Road,
P. O. Box No. 10714,
Karachi - 75700
69 , 31

17

77 76

836

Design & Concept by: Crayons, Printed by: Firefly 34300786
Annual Report 2020
D- 2, S .I .T.E., Mang hopir Road,

P. O . Box No . 10714 , Karachi.
UAN: 111-25-25-25
Website: www.hinopak.com

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Contents

02 Vision / Mission Statement / Corporate Strategy

01 Annual Report 2020

Mission Statement / Corporate Strategy

• To our individual, institutional and international customers: to deliver high

• To our employees: to foster corporate culture of mutual trust, respect for

• To the community and our nation: to contribute to economic and social

• To the shareholders: to act in compliance with the norms expected of a

Hinopak Motors Limited 02

4. We recognize that an environmental preservation activity is an integral part of our

6. We actively promote and engage in philanthropic activities as a member of Hino Motors

03 Annual Report 2020

Tel: 091 - 2322530

Kayan Pur, Tehsil Multan,

Hinopak Motors Limited 04

Muhammad Aslam Sanjrani Yoshihiko Nanami

During the service, he has represented Mushtaq Malik

05 Annual Report 2020

Ms. Nargis Ghaloo is an Independent Mr. Shuichi Kaneko was appointed in

Hinopak Motors Limited 06

- Mushtaq Malik – Chairman • Determination of appropriate measures to safeguard Company's assets;

• Instituting special projects, other investigations on any matter

• Monitoring compliance with relevant statutes and best practices of

• Review arrangement for staff and management to report to audit

Human Resource &

• Recommending to the board the selection, evaluation, compensation

- Fahim Aijaz Sabzwari • Considering and approving on recommendations of CEO on such

• Recommending to the Chairman of the board the performance

07 Annual Report 2020

- Yoshihiko Nanami • Managing the day to day operations of the Company;

- Adil Mohiuddin Shah

- Mehmood Ahmed Khan

- Syed Samad Siraj

- Muhammad Zahid Hasan

- Ahsan Waseem Akhtar

- Salman Abdul Wahab

- Misbah Uddin Khan Akozai

Whistle Blowing Committee Terms of Reference

- Yoshihiko Nanami • Establishing, implementing and maintaining the Whistle Blowing

Hinopak Motors Limited 08

HINOPAK BUSINESS Distribution and Administrative Expenses

09 Annual Report 2020

There were changes in the Board during the VOTE OF THANKS

Hinopak Motors Limited 10

Total number of Directors:

Changes in Board during the year

Outgoing Directors New Directors Appointment Date of New Directors

1. Mr. Muhammad Aslam Sanjrani

11 Annual Report 2020

Name of Directors Number of meetings attended

Mr. Muhammad Aslam Sanjrani 2

Committees of the Board

b) HR and Remuneration Committee

Hinopak Motors Limited 12

Year ended Year ended

Loss before taxation (1,843,998) (520,174)

Loss after taxation (2,054,976) (873,297)

Available for appropriation (681,159) 2,197,449

Unappropriated (loss) / proﬁt carried forward (681,159) 1,335,362