Transmission of Annual Report for the year ended September 30, 2023

Contents

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VISION STATEMENT

We aim to be a leading manufacturer and supplier of quality sugar, ethanol, liquidified carbon dioxide (CO2) and household textiles in local and international markets. We aspire to be known for the quality of our products and intend to play a pivotal role in the economic and social development of Pakistan.

MISSION STATEMENT

As a prominent producer and supplier of sugar, ethanol, liquidified carbon dioxide (CO2) and household textiles, we shall continue to strive to achieve excellence in performance and aim to exceed the expectations of all stakeholders. We target to achieve technological advancements to inculcate the most efficient, ethical and time tested business practices in our management.

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Code of Conduct

The founders of Habib Sugar Mills Limited were visionaries who established the company on very sound principles and envisioned its development and growth on the basis of making no compromises in any aspects of business practices. The company takes pride in adherence to its principles and continues to serve its customers, stakeholders and society based on the following guidelines:

Products

• To produce refined, high-grade sugar that is edible and hygienic and provides all the nutrition and food value at standards determined by the company, which would exceed industry norms and averages.
• To produce by-products and allied products including molasses, ethanol and liquidified carbon dioxide (CO2).
• To diversify into other products such as home textiles thus consuming indigenous raw material and generating export earnings.

Systems & Processes

• To regularly update and upgrade manufacturing systems and processes so as to keep abreast with technological advancements, achieve economies of production and transfer knowledge and skill to workers.
• To develop and maintain the technical and professional standards, standard operating procedures and stringent quality control measures with on-line quality assurance at every stage of manufacture.
• To continuously conduct product research and develop new products, while improving upon the existing products, using ideal additives and packaging material.
• To regularly maintain, replace and upgrade all machinery and equipment for smooth working, optimum output and ensure safe working in all production units.
• To maintain a smooth work-flow in all departments with an effective communication system contained within the framework of principles yet allowing the required degree of autonomy for efficient functioning.

Management & Employees

• To employ only the appropriately suited human resource through the selection and recruitment process based on the commensurate qualifications and experience criteria without any non-professional considerations, without any bias or prejudice of race, cast, colour, creed or religious beliefs.
• To ensure that all management personnel are adequately qualified to perform management functions as assigned.
• To guide, direct and motivate employees to perform functions and to recognize and reward employees based on their performance outputs.
• To measure employee's performance by a pre-determined criteria so as to be fair and equitable towards every single employee.
• To ensure that all employees work towards achievement of corporate objectives, individually and collectively as a team and conduct themselves at work and in society as respectable employees and responsible citizens.

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• To regularly train all employees at all levels to improve their knowledge and skill and provide employees with a career path whereby they can seek a planned betterment in their professional and personal life.
• To ensure that all employees and management personnel strictly adhere to the company rules and regulations and observe the best codes of conduct and abide by all laws of Pakistan.
• To make timely payment of salaries, wages and all allowances and benefits to all employees in line with their terms.
• To ensure all directors and employees of the company shall undertake such activities, whether personal or professional, that in no way conflicts with the interests of the company but contributes towards the betterment, development and growth of the organization in particular and the industry in general.

Financial

• To implement an effective, transparent and secure financial reporting and internal control system so as to ensure compliance with regulatory factors as well as meet all obligations of payable and receivables and keep investors, shareholders and management fully aware.
• To ensure effective utilization of all company resources and plan and operate resource utilization in order to produce better results and generate better yields and facilitate timely decisions.
• To place a strict Internal Audit system to study, analyze, review and report all company earning and spending and enhance reliability of all financial information and build shareholders confidence.
• To regularly prepare, as per pre-determined schedules, all financial reports and present accounts to the Board for review and analysis and show trends based on company income, revenues and expenses and industry trends.
• To ensure cost effectiveness and purchase goods and services based on developed criteria, vendor assessment and market competitiveness and evaluate options on prices, terms, products/services, substitute available, prior to purchase.
• To ensure timely and proper payments as per negotiated terms to all suppliers and deduct applicable taxes so as to enhance corporate credibility and image.
• To maintain an excellent relationship with bankers and utilize banking facilities in a manner to benefit company whilst making proper use of funding and facilities available and ensuring no defaults.

Adherence to Law

• The company shall at all times strictly adhere to all laws of the country and fulfill all statutory requirements and ensure timely, proper and full payment of all applicable taxes, rates, duties and/or any other levies as may be imposed from time to time.

Environment

• The company shall use all means to ensure a clean, safe, healthy and pollution free environment not only for its workers and employees but for the well being of all people who live in and around any of the production and manufacturing units and employ such technology as may be beneficial in maintaining a healthy and hygienic working and living environment.

Planning

• The company shall prepare an annual plan with clearly defined objectives, goals and strategies and implement those plans with a close watch on achievements and monitor and control measures shall be built in to ensure achievement of objectives and enhancement of corporate image.

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Notice of Annual General Meeting

Notice is hereby given that the 62nd Annual General Meeting of Habib Sugar Mills Limited will be held on Wednesday, January 24, 2024 at 11:00 a.m. at Auditorium Hall - The Institute of Chartered Accountants of Pakistan (ICAP), Chartered Accountants Avenue, Clifton, Karachi to transact the following business:

Ordinary Business

1. To receive and consider the audited financial statements, the Directors' report and the Auditors' report for the year ended September 30, 2023.
2. To approve payment of cash dividend @ 120 % i.e. Rs. 6 per share of Rs. 5 each for the year ended September 30, 2023 as recommended by the Board of Directors.
3. To appoint auditors of the Company for the year ending September 30, 2024 and fix their remuneration.

Special Business

1. To consider and approve the circulation of Company's Annual Report including Audited Financial Statements to the shareholders through QR enabled Code and weblink in light of the S.R.O 389(I)/2023 dated March 21, 2023 issued by the Securities & Exchange Commission of Pakistan (SECP) instead of transmitting the same through CD/DVD/USB and to pass the following resolution as ordinary resolution:
   RESOLVED THAT the shareholders of the Company do hereby consent and authorize the Company for transmission of the Annual Report of the Company including audited financial statements to its shareholders through QR-enabled code and web-link as required under the S.R.O 389(1)/2023 dated March 21, 2023 issued by the SECP instead of transmitting the same through CD/DVD/USB.
2. To consider and if deemed fit, to pass with or without modifications(s), the following Special Resolution(s) under Section 88 of the Companies Act, 2017 read with Listed Companies (Buy-Back of Shares) Regulations, 2019 for the purchase/buy-back by the Company up to an aggregate number of 15,000,000 (Fifteen Million) paid-up ordinary shares of the Company, having face value of PKR 5/- (Pak Rupees Five) each, through the Pakistan
   Stock Exchange Limited at the spot/current price acceptable to the Company prevailing during the purchase period, as recommended by the Board of Directors of the Company:
   "RESOLVED THAT, subject to compliance with applicable laws (as may be further amended), approval of the members of Habib Sugar Mills Limited be and is hereby accorded under Section 88 of the Companies Act, 2017 read with Listed Companies (Buy-Back of Shares) Regulations, 2019, for the following acts by the Company:
3. 1. purchase/buy-backof up to an aggregate number of 15,000,000 (Fifteen Million) paid-up ordinary shares of the Company, having paid-up/face value of PKR 5/- (Pak Rupees Five Only) each, representing 10% of the total issued and paid-up ordinary shares of the Company (the "Purchase");
   2. the Purchased shares be cancelled by the Company;
   3. the Purchase be commenced not later than 7 (seven) calendar days of the public announcement of the Purchase and to end not later than 180 (one hundred and eighty) days from the date of the special resolution;
   4. the Purchase to be conducted through the Pakistan Stock Exchange Limited in accordance with the Companies Act, 2017 read with Listed Companies (Buy-Back of Shares) Regulations, 2019";
   5. that the Company maintain sufficient funds in the designated clearing bank account (s) from time to time during the Purchase period for the timely settlements of the daily purchases;
   6. that the Authorized Person(s) as appointed by the Board of Directors of the Company take all necessary, ancillary and incidental steps and to do or cause to be done all such acts, deeds and things that may be required for the purpose of carrying out and giving effect to the aforementioned resolutions, and for the purpose of implementing, procuring, and completing the Purchase; and
   7. the aforesaid resolutions, as deemed appropriate and necessary, may be revised by the Authorized Person(s) in accordance with any amendments in applicable law, or as directed in writing by any Competent Authority, which revision shall then be deemed to be part of the resolutions without the need for the shareholders/members of the Company to pass fresh resolutions.

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A statement under section 134(3) of the Companies Act, 2017 in respect of the special business as per the agenda Item No. 4 & 5 to be considered at the meeting is being sent to the members alongwith a copy of this notice.

By order of the Board

Notes:

1. Closure of Share Transfer Books
   The Share Transfer Books of the Company will remain closed from Monday, January 15, 2024 to Wednesday, January 24, 2024 both days inclusive.
2. Proxy
   A member entitled to attend and vote at this meeting is entitled to appoint another member of the Company as a proxy to attend and vote on his / her behalf. Proxies in order to be effective must be received at the Registered Office of the Company duly stamped and signed at least 48 hours before the time of meeting.
   In case of corporate entity, the Board of Directors' resolution/power of attorney with specimen signature of the nominee shall be provided at least 48 hours before the time of the meeting. The Proxy Form in English and Urdu is enclosed with the CD of Annual Report and also available on the Company's website
   (www.habibsugar.com).
3. For Identification
   Owners of the physical shares and CDC account holder should present Computerized National Identity Card (CNIC) along with participant ID number and CDC account number. In case of appointment of proxy by such account holder(s), the guidelines as contained in the SECP's circular of 26th January 2000 are to be followed.
4. Change of address
   Members are requested to notify any change in their addresses and their contact numbers immediately to our Share Registrar, THK Associates (Pvt.) Limited, Karachi.
5. Submission of Copies of Valid CNIC
   Pursuant to the directives of the Securities and Exchange Commission of Pakistan, CNIC number is mandatorily required for payment of dividend. Shareholders holding physical share certificate are therefore requested to submit a copy of their valid CNIC, if not already provided to THK Associates (Pvt.) Limited, Plot No. 32-C, Jami Commercial Street - 2, D.H.A., Phase VII, Karachi (the Share Registrar). In case of non-receipt of the copy of valid CNIC, Habib Sugar Mills Limited would be unable to comply with SRO 831(1)/2012 dated July 5, 2012 of SECP and therefore will be constrained under Regulation No. 6 of the companies (Distribution of dividend) Regulations, 2017 and section 243(2) of the Companies Act 2017 to pay dividend to such shareholder.
6. Withholding Tax on Dividend

As per Income Tax Ordinance 2001, different rates are prescribed for deduction of withholding tax on the amount of dividend paid by the companies. These rates are as follows:

Shareholders are advised to make sure that their names are entered into Active Tax-payers List (ATL) provided on the website of FBR before the book closure of the Company, otherwise tax on their cash dividend will be deducted @ 30% instead of 15 %.

For shareholders holding their shares jointly, as per the clarification issued by the Federal Board of Revenue, withholding tax will be determined separately on 'Filer/Non-Filer' status of Principle shareholder as well as joint-holder(s) based on their shareholding proportions. Therefore, all shareholders who hold shares jointly are required to provide shareholding proportions of Principle shareholder and Joint-holder(s) in respect of shares held by them to our share registrar, in writing as follows:

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The Corporate shareholders having CDC account are required to have their National Tax number (NTN) updated with their respective participants, whereas physical shareholders should send a copy of their NTN certificate to the company or Company's Share Registrar M/s THK Associates (Pvt.) Limited. The shareholders while sending NTN or NTN certificate, as the case may be, must quote company name and their respective Folio numbers.

1. Valid tax Exemption Certificate for Exemption from Withholding Tax
   Withholding Tax exemption from the dividend income shall only be allowed if copy of valid tax exemption certificate is made available to Share Registrar before the Book Closure of the Company.
2. Mandatory requirement of Bank details for payment of dividend
   Section 242 of the Companies Act, 2017 provides that in case of a listed company, any cash dividend declared by the company must be paid electronically directly into the bank accounts of the shareholders. In order to receive dividends directly into their bank account, shareholders in case of physical shares, are requested to fill in E-Dividend Mandate Form available on the Company's website i.e. www.habibsugar.com and send it duly signed along with a copy of CNIC to the Registrar of the Company M/s. THK Associates
   (Pvt.) Limited. In case shares are held in CDC, E-Dividend Mandate Form must be submitted directly to shareholder's broker/participant/CDC investor account services. In-case of non-submission of IBAN, the
   Company will withhold the payment of dividends under the Companies (Distribution of Dividends) Regulations,
   2017. Further, the information regarding gross dividend, tax/zakat deduction and net amount of dividend will be provided through the Centralized Cash Dividend Register (CCDR), therefore, shareholders should register themselves to CDC's eServices Portal at https://eservices.cdcaccess.com.pk.
3. Participation in the Annual General Meeting via Video Conference Facility
   In terms of section 134(1)(b) of the Companies Act, 2017, members holding in aggregate 10% or more shareholding can also avail video conference facility to attend the Annual General Meeting. In this regard, please fill the following information and share at companysecretary@habibsugar.com seven (7) days before holding the Annual General Meeting. If the Company receives consent from members residing at a geographical location, to participate in the meeting through video conference atleast seven (7) days prior to date of meeting, the Company will arrange video conference facility in the city subject to availability of such facility in the city.

"I/We_______________of __________________, being a member of Habib Sugar Mills Limited, holder of

_______ordinary shares(s) as per Registered Folio No. ____________hereby opt for video conference

facility at __________________".

Video conference link details and login credentials will be e-mailed to the registered members/proxies who have provided all the requested information. Shareholders can also provide their comments and questions for the agenda items of the AGM on companysecretary@habibsugar.com at least 48 hours before the time of the meeting.

10. E-Voting and Postal Ballot

It is hereby notified that pursuant to the Companies (Postal Ballot) Regulations, 2018 and its amendments notified by SRO 2192(1)/2022 dated December 5, 2022, members will be allowed to exercise their right to vote for the special business(es) in the AGM, in accordance with the conditions mentioned in the aforesaid Regulations. The Company shall provide its members with the following options for voting:

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Procedure for E‐Voting

1. Details of the e‐voting facility will be shared through an e‐mail with those members of the Company who have their valid CNIC numbers, cell numbers, and e‐mail addresses available in the register of members of the Company by the close of business on January 12, 2024.
2. The web address, login details, and password, will be communicated to members via email. The security codes will be communicated to members through SMS from the web portal of THK Associates (Private)
   Limited (being the e‐voting service provider).
3. Identity of the Members intending to cast vote through e‐voting shall be authenticated through electronic signature or authentication for login.
4. E‐Voting lines will start from January 19, 2024, 09:15 a.m. and shall close on January 23, 2024- at 5:00 p.m. Members can cast their votes any time during this period. Once the vote on a resolution is cast by a Member, he / she shall not be allowed to change it subsequently.

Procedure for Voting Through Postal Ballot

1. Members may alternatively opt for voting through postal ballot. For the convenience of the members, Ballot Paper is annexed to this notice and the same is also available on the Company's website www.habibsugar.com

b) The members must ensure that the duly filled and signed ballot paper, along with a copy of Computerized National Identity Card (CNIC) should reach the Chairman of the meeting through post at the Company's Registered Office, Habib Sugar Mills Limited, 3rd Floor, Imperial Court, Dr. Ziauddind Ahmed Road, Karachi or email at companysecretary@habibsugar.com one day before the AGM, i.e., on January 23, 2024 before 5:00 p.m. A postal ballot received after this time / date shall not be considered for voting. The signature on the Ballot Paper shall match with signature on the CNIC

1. Conversion of Physical Shares into Book Entry Form
   As per Section 72 of the Companies Act, 2017 all existing companies are required to convert their physical shares into book-entry form within a period not exceeding four years from the date of commencement of Companies Act, 2017.
   The Securities and Exchange Commission of Pakistan through its circular No. CSD/ED/Misc/2016- 639-640 dated March 26, 2021 has advised the listed companies to pursue their such members who still hold shares in physical form to convert their shares into book entry form.
   We hereby request all members who are holding shares in physical form to convert their shares into book-entry form at the earliest.
2. Transmission of Financial Statements & Notices through email
   Members are hereby informed that the Annual Financial Statements of the Company for the year ended September 30, 2023 can be downloaded from the Company's website www.habibsugar.com. Further, the
   Securities and Exchange Commission of Pakistan (SECP) through its Notification S.R.O. 787(I)/2014 dated
   September 8, 2014 has permitted companies to circulate Audited Financial Statements along with Notice of Annual General Meeting to its members through e-mail. Accordingly, members are requested to send their consent and e-mail addresses for receiving Audited Financial Statements and Notices through e-mail. In order to avail this facility, a standard request form is available at the Company's website.
   For any query / clarification / information, the shareholder may contact the company, and /or the share registrar at the following addresses;

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