Transmission of Annual Report for the Year Ended March 31, 2025

Pakistan's 1st Japanese

ANNUAL REPORT 2025

Vision / Mission Statement

05 06

/ Corporate Strategy

Basic Principles of Hinopak Code of Conduct

Contents

Company Information Board of Directors

Board Committees Functional Committees

Chairman's Review 10

Directors' Report 12

Gender Pay Gap Statement 17

Financial Highlights 18

Statement of Compliance 22

Review Report on Statement of Compliance 25

Financial Statements 27

Pattern of Shareholding 76

Notice of Annual General Meeting 78

Proxy Form 81

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.

Basic Principles of Hinopak

Code of Conduct

1. Comply with laws, regulations, and standards

   Safety, environment, and quality

   • We will comply with all laws and regulations regarding safety and environment when providing products and services.

   • We will ensure the quality of our products in good faith by following applicable standards as well as humbly listening to our customers.

   • We will properly record and store related data in accordance with the rules set forth in the applicable laws, regulations, and standards.

     Fair trade:

   • We will conduct our business in a fair and impartial manner without engaging in any cartel or collective bidding, based on free and fair competition.

   • We will Comply with all laws and procedures relating to imports and exports.

   • We will not engage in transactions with any organized criminal groups, or business partners related to organized criminal groups.

   • We will comply with applicable laws and regulations on anti-terrorism, money laundering, and other economic sanctions.

   • We will not trade in shares or other securities of Hinopak, Hino Group or other listed companies while knowing important non-public information.

     Respecting human rights and diversity:

   • We will respect basic human rights, and will not tolerate any inhumane acts such as forced labor and child labor.

   • We will not engage in discrimination or harassment of any kind.

   • We will respect the individuality and diversity of each person and treat everyone with respect, and respect the local history, culture, religion, and customs.

     Anti-bribery and corruption, and distinction between public and private interests:

   • We will comply with applicable laws concerning anti-corruption, and will not provide, offer, accept, or request bribes, inappropriate gifts, entertainment, or other benefits.

   • We will not engage in conduct that may invite suspicion that we have improper relationships with any public official.

   • We will not engage in any conduct that may lead to conflicts of interest with Hinopak or Hino Group, such as giving priority to our own interests or the interests of others over Hinopak's or Group's interests.

     Management of assets and protection of intellectual property and personal data:

   • We will carefully handle and properly manage Hinopak's or Hino Group's assets and confidential information, and will use such assets and information within the purpose permitted.

   • We will protect the intellectual property held by Hinopak and Hino Group and respect the intellectual property of others.

   • We will recognize the importance of protecting personal information and appropriately obtain, use, provide, and destroy personal information.

     Annual Report 2025 03

     
     
     

     Accurate and complete financial reporting:

     We will disclose information that is needed by the public in a timely and appropriate manner in all aspects of our corporate management such as our financial condition, business results, and the content of our business activities.

2. Contribution to Our Customers and Society

   Contribution to customers:

   • We will listen to customers' unvarnished opinions in the field, humbly accept their opinions, and act faithfully and in a timely manner.

   • We will think from the customer's point of view and continue to innovate and improve our operations to best serve them.

   • We will not be satisfied with the status quo and will make continuous efforts to achieve our goals.

     Contributing to society and local communities:

   • We will proactively take actions to resolve social issues and assist with emergencies such as natural disasters.

   • We will promote road safety by observing traffic rules and manners and driving/ riding in an exemplary manner as members of the automotive industry.

     Initiatives for the preservation of the global environment:

     We will be constantly aware of the links between our work and the environment and strive to reduce environmental impacts resulting from our operations.

3. Creation of a Healthy Workplace

   Safety and health:

   • We will conduct all of our operations by putting safety first.

   • We will ensure safety at our workplace and protect our mental and physical health.

   • We will create a safe and healthy workplace for all of our employees while complying with labor and employment laws and regulations in the country.

     Mutual respect and human resources development:

   • We will always stand by each colleague, empathize with colleagues' concerns, and aim to solve the problems together.

   • We will accept and make use of diverse perspectives so that every person in our workplace can work enthusiastically.

   • We will learn from outside the company, compete healthily with our colleagues, and strive for self-improvement so that we can grow as outstanding businesspersons and members of society.

     Dreams, goals, and driving forces for the future:

   • We will work together to achieve our own dreams and goals and those of our colleagues.

   • We will, from time to time, stop and take humble lessons from the past.

Company

Information

BANKERS

Allied Bank Limited Bank Alfalah Limited Bank Al-Habib Limited Citibank, N.A.

Habib Metropolitan Bank Limited Habib Bank Limited

JS Bank Limited MCB Bank Limited

National Bank of Pakistan

Standard Chartered Bank (Pakistan) Limited United Bank Limited

AUDITORS

A.F. Ferguson & Co. Chartered Accountants

LEGAL ADVISOR

Sayeed & Sayeed

REGISTERED OFFICE

D-2, S.I.T.E., Manghopir Road

P.O. Box No. 10714

Karachi-75700, Pakistan Tel: 111-25-25-25

Website: https://www.hinopak.com Email: info@hinopak.com

SHARE REGISTRAR

FAMCO Share Registration Services (Pvt.) Limited

8-F, Near Hotel Faran, Nursery, Block 6, P.E.C.H.S., Shahra-e-Faisal, Karachi

Tel: 021-34380101-5, 34384621-3

Fax: 021-34380106

E-mail: info.shares@famcosrs.com Website: https://www.famcosrs.com

AREA OFFICES

Lahore

19 KM, Multan Road, Lahore Tel: 042-37512003-6

Fax: 042-37512005

Email: hino-lahore@hinopak.com

Islamabad

1- D, Unit 14,

Rehmat Plaza, 2nd Floor Blue Area, Islamabad Tel: 051-2276234

Fax: 051-2272268

Email: hino-islamabad@hinopak.com

Quetta

Second Floor Room No. 31

Al Zain Center, Zarghoon Road, Quetta Tel: 081-2869174

Fax: 081-2869175

Email: hino-quetta@hinopak.com

Peshawar

2C, Second Floor, Al-Kout Tower, Near Sarhad University, Ring Road, Peshawar

Tel: 091-2640055

Email: hino-peshawar@hinopak.com

Annual Report 2025 05

Board of

Directors

Mr. Muhammad Aslam Sanjrani

Chairman

Mr. Muhammad Aslam Sanjrani was appointed in November 2013 as non-executive director of the Company and Chairman of the board of directors. He joined the Civil Service of Pakistan in 1971 and served 35 years in a variety of posts that included Administration assignments like District Magistrate, Commissioner of (Hyderabad and Larkana divisions), Secretary to the Government of Sindh and Balochistan, Autonomous and regulatory Bodies. He has worked in the Ministries of Commerce, Political affairs, Industries and Production and Foreign Affairs besides being the Secretary to the Government of Pakistan for Overseas Pakistanis. He was also the Chief Secretary of Sindh Province. He is also enrolled as an Advocate of the High Court. During the service, he has represented Pakistan at International Forums including the World International Tourism Conference, World Bank, Asian Development Bank. He has enjoyed a very credible status amongst their international Donor Agencies with whom he successfully negotiated Loan agreement. He has been a sportsman having had the distinction of representing Pakistan cricket at all levels except test cricket. He has very successfully organized World Squash Championship in Karachi. Further, he has played badminton and table tennis at national level.

Mr. Takayuki Kizawa

President & Chief Executive Officer

Mr .Takayuki Kizawa was appointed as the President & Chief Executive Officer of the Company and member of Human Resource and Remuneration Committee in February 2022. He joined Hino Motors Japan in April 2005 after he graduated from the university. First he worked in Overseas Parts Department for 6 years then he was transferred to North American Department. From 2014 to 2018, he was assigned abroad in Hino Motors Sales USA and returned again to North American Department. Since 2020 he worked in the Middle East Department and was in charge of the section leader of Russian market.

Mr. Ryota Hatakeyama

Director & Executive Vice President

Mr. Ryota Hatakeyama was appointed as the Director and Executive Vice President of the Company in April 2024. He has over 30 years of experience, including 20 years with Toyota Group. Since 2010, he is serving in various leadership roles with Toyota Group Companies operating in the Asian markets.

Mr. Mushtaq Malik

Independent Non-Executive Director

Mr. Mushtaq Malik is the independent non-executive director, Chairman of the Human Resource & Remuneration Committee and member of the Audit Committee of the Company. Currently he is also the Director of Sindh Insurance Limited and Chairman of MM Management Consultants. He has served on the boards of Habib Bank Limited and Eco Bank, Istanbul. He has also chaired Pakistan Electronic and Media 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.

Mr. Masato Uchida

Non-Executive Director

Mr. Masato Uchida was appointed in February 2023 as non-executive director of the Company and member of the Audit Committee. He joined Hino Motors Ltd., Japan in 2003 and held various leadership roles in Hino group companies mainly in Asian markets.

Mr. Takuji Umemura

Non-Executive Director

Mr. Takuji Umemura was appointed in February 2022 as a non-executive director of the Company and member of the Audit Committee. He joined Hino Motors Ltd., Japan in 1992 and held various leadership roles in Hino group companies mainly in the Asian and European markets.

Ms. Nargis Ali Akbar Ghaloo

Female Independent Non-Executive Director

Ms. Nargis Ali Akbar Ghaloo is an Independent non-executive director, Chairperson of the Audit Committee and member of the Human Resource & Remuneration Committee of the Company. She is currently serving as an Independent Director and Chairperson of Audit Committee in JS Bank Limited and also as a director on the Board of PPHI Sindh. Ms. Ghaloo is a retired senior civil servant having served the Government of Pakistan in various capacities for 36 years. She retired as the Managing Director Public Procurement Regulatory Authority, Government of Pakistan. Ms. Ghaloo was Chairperson of State Life Insurance Corporation of Pakistan, Pakistan's largest life assurer, from 2014 to 2016. Ms. Ghaloo joined the Civil Services of Pakistan in 1982, has many years of professional experience serving in senior management positions with provincial as well as federal government departments in diversified fields such as public sector management, administration, financial, judicial, health, insurance and planning. Ms. Ghaloo did her Masters in English from University of Sindh in 1981 and is a Certified Director from The Pakistan 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.

Mr. Muhammad Zahid Hassan

Company Secretary

Mr. Muhammad Zahid Hasan is a highly experienced person associated with Hinopak Motors Limited for over 20 years. With a distinguished career, he is Cost & Management Accountant by profession. Having extensive expertise in strategic financial planning, he has played a key role in the company's financial management and growth. In addition to his responsibilities as Company Secretary, Mr. Hasan currently leads the Finance, IT, HR & Admin and Logistics functions of the organization as Senior General Manager, contributing to the company's overall corporate strategy and decision-making.

Annual Report 2025 07

Board Committees

AUDIT COMMITTEE

TERMS OF REFERENCE

• Nargis Ali Akbar Ghaloo Chairperson (Independent Director)

• Mushtaq Malik (Independent Director)

• Masato Uchida

  (Non - Executive Director)

• Takuji Umemura

  (Non - Executive Director)

• Nasir Manzoor (Secretary)

  HUMAN RESOURCE & REMUNERATION COMMITTEE

  • Determination of appropriate measures to safeguard Company's assets;

  • Review of quarterly, half-yearly and annual financial statements of the 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 improve the control environment;

  • Review of the scope and extent of internal audit and ensuring that the internal audit function has adequate resources and is appropriately placed within the Company;

  • Ascertaining that the internal control system including financial and operational controls, accounting system and reporting structure are 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.

    TERMS OF REFERENCE

• Mushtaq Malik - Chairman (Independent Director)

• Nargis Ali Akbar Ghaloo (Independent Director)

• Takayuki Kizawa (Executive Director)

• Fahim Aijaz Sabzwari (Secretary)

• Recommending human resource management policies to the board;

• Recommending to the board the selection, evaluation, compensation (including retirement benefits) and succession planning of the CEO;

• Recommending to the board the selection, evaluation, compensation (including retirement benefits) of CFO, Company Secretary and Head of Internal Audit;

• Recommending to the board for consideration and approval of policy framework for determining the remuneration of directors and Senior Management personnel (first layer of management below the Chief Executive Officer level);

• Considering and approving on recommendations of CEO on such matters for key management positions who report directly to CEO;

• 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

• Takayuki Kizawa - Chairman

• Ryota Hatakeyama

• Hiroyuki Nitta

• Fahim Aijaz Sabzwari

• Syed Samad Siraj

• Mehmood Ahmed Khan

• Karima Sadiq (Secretary)

  • Managing the day to day operations of the Company;

  • Developing the business and marketing strategy of the Company;

  • Reviewing budgetary proposals and the necessary actions to implement the business plan;

  • Monitoring profitability, cost saving plans and deviations from business plan; and

  • Handling the major business issues and other urgent matters on behalf of the Board.

    WHISTLE BLOWING COMMITTEE TERMS OF REFERENCE

• Takayuki Kizawa - Chairman

• Ryota Hatakeyama

• Fahim Aijaz Sabzwari

• Syed Samad Siraj

• Muhammad Zahid Hasan (Secretary)

• Establishing, implementing and maintaining the Whistle Blowing Mechanism;

• Monitoring and ensuring the transparency of the Whistle Blowing Process;

• Reviewing and analyzing periodically the feedback and complains obtained through the mechanism;

• Designating and supervising the officer investigating with regards to any matter reported through the Whistle Blowing Mechanism; and

• Initiating steps to ensure compliance with the Hinopak Code of Conduct, transparency in financial reporting and safeguard of Company's assets.

Annual Report 2025 09

Chairman's

Review

On behalf of the Board of Directors, I welcome you to the 40th Annual General Meeting of the Company and present the performance of the Company for the year ended March 31, 2025.

The past year has been nothing short of extraordinary - a period marked by volatility, resilience, and transformation. On the national front, Pakistan witnessed a rare blend of contrasting developments: from achieving one of the lowest inflation rate in a fiscal year to navigating and emerging stronger from a limited border conflict. Amid these turbulent circumstances, I am pleased to report that Hinopak Motors Limited closed the financial year on a positive note, turning the tide from loss to profit. This turnaround reflects not only the unwavering commitment of our employees but also the effectiveness of our strategic direction and operational discipline.

Business Review

Disciplined Approach to Market Share

In the financial year ended March 2025, the Company adhered to a value-driven approach, selectively capitalizing on commercially viable opportunities. This approach resulted in maintaining a 9% presence in the market, reflecting prudent decision-making in a competitive landscape.

Improvement in Core Profitability

In 2025, Hinopak Motors delivered a gross profit of Rs. 1.29 billion, representing a notable 42% year-on-year growth. This performance reflects the Company's unwavering commitment to operational excellence, product integrity, and customer satisfaction.

Cost Discipline in Operating Expenses

Distribution and administrative expenses were prudently managed during the year, recording a slight reduction to Rs. 851.3 million from Rs. 873.8 million in the preceding year.

Financing Activity and Related Costs

Finance cost amounted to Rs. 281.93 million, up from Rs. 239.31 million in the previous year, primarily reflecting changes in the Company's funding strategy in response to operational requirements.

Return to Profitability

The Company recorded a profit after tax of Rs. 161.96 million, marking a turnaround from a loss after tax of Rs. 131.10 million in the preceding year

- a reflection of improved operational performance and financial discipline.

Improvement in EPS

The Company reported earnings per share of Rs. 6.53, compared to a loss per share of Rs. 5.29 in the preceding year, reflecting the overall improvement in financial performance.

Dividend Consideration and Financial Priorities

Although the Company recorded a profit after tax, no dividend has been declared for the year in view of the Company's focus on financial stability, including prudent cash flow management and reduced reliance on external borrowing.

Contribution to National Exchequer

The Company contributed to the government by paying taxes, duties, levies, and cess and also continued to provide direct and indirect business/employment opportunities to a broad range of stakeholders.

Essential Capital Improvements

During the year, Rs. 75.86 million was invested in capital improvements to support operational efficiency and future readiness.

Strategic Realignment at Group Level

During the year, notable progress was made at the group level on the planned collaboration between Hino Motors Ltd. (parent company of Hinopak), Toyota Motor Corporation (ultimate parent), Mitsubishi Fuso Truck and Bus Corporation (MFTBC), and Daimler Truck. Initially announced through a Memorandum of Understanding in May 2023, this initiative is focused on bundling forces to establish a new strong Japanese truck powerhouse to the benefit of all stakeholders.

In June 2025, this collaboration advanced further with the signing of a Definitive Agreement to integrate Hino and MFTBC under a newly established publicly listed holding company in Japan. Under this arrangement, both companies will become wholly owned subsidiaries of the new entity. Toyota Motor Corporation and Daimler Truck are expected to hold equal ownership stakes, alongside shares offered to the public.

The integration aims to fortify commercial vehicle business globally and address key challenges like carbon neutrality and logistics efficiency. The new holding company will aim to strengthen its global footprint through the advancement of CASE (Connected, Autonomous, Shared, Electric) technologies, including hydrogen, supporting a sustainable and prosperous mobility society.

Corporate Governance

Board's Role in Achieving Company Objectives

In line with the requirements of the Listed Companies (Code of Corporate Governance) Regulations, 2019, a formal and effective mechanism was established in the past for the annual evaluation of the Board, its members, and sub-committees. This mechanism, duly approved, has been successfully implemented and continues to be followed.

The Board comprises a balanced mix of Independent, Non-Executive and Executive Directors, bringing diverse and highly qualified expertise. It has played a vital role in overseeing strategy, guiding management actions, and monitoring progress toward the Company's objectives.

Based on consolidated feedback from individual Directors, the performance of the Board, its Committees, and individual members has been rated effective and strong.

Future Outlook

As we look ahead, the broader operating environment remains complex and fluid, shaped by evolving geopolitical dynamics, economic reform under the IMF program, and persistent regional tensions. Recent strains in regional cooperation frameworks and broader geopolitical sensitivities underscore the importance of adaptive strategy and risk management. At the same time, domestic recovery efforts and structural adjustments continue to present both challenges and opportunities for the industrial sector.

Within this landscape, Hinopak remains committed to operational resilience and strategic adaptability. The recent structural realignment at the group level reflects a forward-looking approach aimed at enhancing long-term value creation. The Company is actively pursuing a phased transition toward UN Regulation (WP-29) compliance. During the year, progress has been made through sourcing compliant models, and further steps are underway

- in close coordination with the parent company and regulatory stakeholders.

While visibility into the near term remains limited, Hinopak's disciplined execution, long-standing partnerships, and strong brand equity position it to navigate the evolving landscape with responsibility and resolve.

Vote of Thanks

My gratitude goes to all those who supported Hinopak during the year-from our employees and shareholders to our regulators and partners. We value your trust as we move forward with focus and care.

Muhammad Aslam Sanjrani Chairman

Date: June 26, 2025

Annual Report 2025 11

Directors'

Report

The Directors of the company take pleasure in presenting this report, together with the Audited Financial Statements of the Company for the year ended March 31, 2025.

The Board of Directors of the Company as at March 31, 2025 consists of:

Total number of Directors:

1. Male 06

2. Female 01

Composition:

1. Independent Directors

   • Male 01

   • Female 01

2. Non-Executive Directors 03

3. Executive Directors 02

Changes in Board Casual Vacancies:

During the year, the following casual vacancy occurred in the Board:

Outgoing Director New Director Appointment Date of New Director

Mr. Akira Uchida Mr. Ryota Hatakeyama April 15, 2024

Board Meetings

During the year four (4) meetings of the Board were held in which the attendance by each Director is as follows:

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:

1. Audit Committee

   • Ms. Nargis Ali Akbar Ghaloo - Chairperson

   • Mr. Mushtaq Malik

   • Mr. Masato Uchida

   • Mr. Takuji Umemura

2. HR and Remuneration Committee

• Mr. Mushtaq Malik - Chairman

• Ms. Nargis Ali Akbar Ghaloo

• Mr. Takayuki Kizawa

During the year four (4) meetings of Audit Committee were held in which the attendance by each Director is as follows:

Name of Directors Number of meetings attended

Ms. Nargis Ali Akbar Ghaloo 4

Mr. Mushtaq Malik 4

Mr. Takuji Umemura 4

Mr. Masato Uchida 3

Principal Activities of the Company and General Overview

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. There have been no change concerning the nature of business.

In the Current financial year, Pakistan's economy has continued its recovery, marked by greater stability after a past year's volatile phase. Inflation has eased significantly, monetary conditions have relaxed, and number of reforms have strengthened fiscal discipline and external balances. Key sectors like manufacturing and services have shown improved momentum.

The commercial vehicle segment, which had contracted sharply due to tight import controls, limited auto financing, and high costs has staged a notable rebound in line with the wider auto industry's recovery. Despite residual pressures from borrowing costs and regulatory restrictions, this revival signals increasing demand and improved market confidence.

Annual Report 2025 13

Appropriation of Profit / (Loss)

Following are the details of appropriations:

Year ended

March 31, 2025 March 31, 2024

Rupees '000

Development & Performance of the Company's Business and Future Prospects of Profit

The Company posted a net profit after tax of Rs. 161.957 million as against loss after tax of Rs. 131.098 million in the prior year. The Company faces a challenging yet potentially transformative future. Despite the challenges, the outlook remains cautiously optimistic, with an emphasis on sustainable growth.

Principal Risks and Uncertainties

Meeting the export growth objectives of the current auto policy continues to challenge all industry players. The Company's operations are influenced by several evolving policies. These include phased reductions in customs and regulatory duties on automotive inputs, a new levy applicable to commercial vehicles, and wider liberalization measures guided by IMF-aligned tariff reforms.

The business remains inherently exposed to exchange rate fluctuations-particularly in the USD/JPY and USD/PKR pairs-which can significantly impact input costs, pricing, and profitability. Despite recent stabilization efforts, the currency's vulnerability to global trade disruptions, commodity price fluctuations, and external economic pressures requires vigilant risk management.

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, 2026 on such terms and conditions and remuneration as to be decided.

Pattern of Shareholding

The pattern of shareholding as at March 31, 2025 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, presently holding 59.67% shares 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 not recommended 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 and International Financial Reporting 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 18.

The value of investments of the Company's Provident, Gratuity and Pension Funds as on March 31, 2025 were as follows:

Annual Report 2025 15

During the year ended March 31, 2025, the directors, executives and their spouses and minor children have not carried any trading of 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

Hinopak Motors continues its robust CSR initiatives, focusing on employee welfare, education, environmental conservation, and community engagement. This year's activities include employees' health screenings, awareness programs on road safety. The company has expanded its environmental efforts with tree plantations events at Schools. A dedicated communication channel keeps staff informed about CSR activities, fostering greater participation. These initiatives reflect the Company's ongoing commitment to social responsibility, balancing community support, environmental stewardship, and employee engagement in its CSR strategy.

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 directors 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. 4.5 million (2024: Rs. 3 million).

The remuneration of Chairman for attending meetings during the year amounts to Rs. 0.5 million (2024: Rs. 0.5 million) and consultancy fee paid to the Chairman amounts to Rs. 5.65 million (2024: Rs. 4.75 million).

The fee paid to two independent directors amount to Rs. 2 million (2024: Rs. 1.7 million).

Further details of the remuneration of directors including Chief Executive Officer is detailed in the note no. 34 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 Dated: June 26, 2025

Chief Executive Officer

Gender Pay Gap

Under SECP Circular 10 of 2024

Following is gender pay gap calculated for the year ended March 31, 2025:

1. Mean Gender Pay Gap: -17%

2. Median Gender Pay Gap: -51%

The above percentages reflect the gender pay gap of male versus female employees.

________________

Takayuki Kizawa

Chief Executive officer Date: June 26, 2025

Annual Report 2025 17

Financial

Highlights