Annual Report for the Year Ended 30 June 2022

A.1

OUR MISSION STATEMENT

To maintain our pioneer status in the agricultural textiles sector of Pakistan by continuing to play an effective and positive role in the economic development of our country through provision of finest quality products at most reasonable rates to our clients and sustained investment in research and development.

OUR VISION STATEMENT

Our vision is an economically strong and prosperous agricultural sector of Pakistan, capable of meeting all of our country's food and agri-based raw material needs from its own land, and contributing to country's socio-economic development.

STATEMENT OF VALUES

Our Company is committed to conducting all its operations ethically, transparently and in strict compliance with all laws, ensuring to maintain a healthy balance between the interest of all of its stakeholders, including shareholders, employees, business associates and the society at large

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A.2

MESSAGE FROM THE CHAIRMAN

Alhamdulillah, your Company has completed its first financial year since it gained the listed company status in November 2021. Due to several reasons which are enumerated by the CEO in his message as well in Directors Report, the pace of development in these months has been less than expected. However, the things have finally settled in and we are confident of achieving our operational financial targets in the coming financial years.

Your Company was the first company to be listed on the GEM Board of PSX. We will always cherish this honor and strive to prove ourselves worthy of it. We believe the success of your Company will encourage other smaller companies to seek listing at the GEM Board and play a positive role in the economic development of our nation.

Our journey of progress has begun and we are confident that in the coming years your Company will not only prosper in financial terms but also help the agricultural sector of the country to attain greater self-sufficiency through reduction in reliance on imported agricultural produce.

I take this opportunity to thank all our suppliers, customer, employees, associates and professional consultants who have helped us reach thus far - and look forward to their continued support in years to come.

Dr Safdar A Butt

Chairman

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A.3

MESSAGE FROM CHIEF EXECUTIVE OFFICER

I feel honored to present this first Annual Report since attaining the status of a listed company in November 2021.

Following the successful initial public offering which raised a total of Rs 198 million rupees, we have been occupied with implementing the development program as outlined in our Information Memorandum. Due to the disturbances in the economic environment of the country, the pace of work has not been as brisk as we would have liked. For example, the major machinery import was delayed for considerable period and the machines arrived only during the last month of the year under review (June 2022). The machinery had not been commissioned by the end of the financial year, significantly affecting the turnover and operational forecasts for the year. However, I am pleased to state that all necessary steps have since been taken, our operational capacity and efficiency has been heightened and we are confident that your Company will be able to meet all its production and marketing targets in the coming financial year.

Production of fishing nets, the focus of our expansion program, did not start in the year under review but it has since started and we are pleased to state that your Company has started moving towards meeting all the fishing net requirements of the country. Our product has been well received by the market and its demand is steadily rising.

The year under review saw considerable increase in prices of our raw materials (which are petroleum based) due to changes in oil prices as well as unprecedented drop in the value of our currency. We were able to withstand this onslaught by improving our operational efficiency and seeking economies in all our functions.

We reiterate our commitment to providing quality products to our agricultural sector at competitive prices - thereby playing an effective role in economic development of the country. Your Company continues to occupy its leader status in production and marketing of agricultural textiles. We are confident that our efforts towards maintaining the high quality and standards of production will keep bearing fruits for us in foreseeable future.

Khalid Butt

Chief Executive Officer

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A.4

COMPANY PROFILE - OUR JOURNEY SO FAR

The Company

Pak Agro Packaging Private Ltd. started its operations in May 2001 as the first company to provide agricultural textiles to the local market.

The Company's corporate head office is in Islamabad, the capital city of Pakistan while its factory is at Hattar Industrial Estate, Haripur in the Frontier Province.

The Head Office houses the administration, finance and marketing functions. The company also maintains presence in some provincial towns through placement of marketing representatives.

The factory in Hattar manufactures most of the products handled by the Company. The Company also gets some of the products partly processed by specially contracted vendors.

The factory is ideally located to serve the agricultural belt of the country. It is well connected by excellent all-weather tarmac roads to all major agricultural centres of Punjab and Frontier provinces, and indeed all the provinces.

The Company maintains a network of Authorised Distributors throughout the country. As far as possible, all local sales are made only through authorized distributors. Authorised Distributors are permitted to appoint sub-dealers in consultation with the Company.

Company History

The Company was originally incorporated in February 1989 under the name and style of Kohsar Tyres Ltd. It acquired a two-acre plot in Phase IV of Hattar Industrial Estate, Haripur, NWFP.

Kohsar Tyres Ltd. never commenced operations and was subsequently acquired by another group of shareholders who renamed the company as Mian and Khan Industries (Private) Ltd. This group did not use the plot or carried out any business either. The present Management of the Company acquired the entire share capital of the company, principally to get ownership

and possession of the two-acre piece of land, which was company's only asset. The company

was renamed as Pak Agro Packaging (Private) Ltd. (PAPPL). This change of name was

achieved on 24 August 2000, along with an appropriate amendment in company's

Memorandum of Association to allow for change in nature of its business, namely to undertake the business of manufacturing net bags and other agricultural related textiles, mainly packaging materials and protective / support products for agricultural sector of the country.

The company commenced its commercial production towards the end of 2000, with only two machines: a stretch bags making machines and a Raschel machine for making net bags. At that stage, it was getting its flat yarn manufactured by an outside vendor. It was soon discovered that in order to maintain the quality and reliability of supply, the company will have to acquire its own flat yarn making machine. This was done in 2001. With products gaining visibility and recognition in the market, the company soon found it necessary to add another Raschel Machine to enhance its production of net bags and greenhouse shades. In late 2002 this was done. A continuous market study revealed that there is a much larger market for greenhouse shades prepared with round yarn and having a width of 3 meters (as opposed to our flat yarn and under 12 feet width). Therefore, in July 2004, the company imported a

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