Transmission of Annual Report for the Year Ended 30 June 2025

Innovating for a Better Tomorrow

About this Report

W

e are pleased to present the Annual Report for the year ended June 30,

2025. This report aims to provide our stakeholders with a fair, transparent, and comprehensive account of the significant developments, opportunities, and challenges encountered during the year. It is intended to be read alongside the audited financial statements for a complete understanding of the Company's performance and position.

Scope and Limitation of this Report

This annual report is for the period from July 1, 2024 to June 30, 2025 and provides an account

of the Company's operational, financial, social, economic and environmental performance as well as corporate governance.

Annual Financial Statements

These financial statements are also available on our website (https://www.spelgroup.com) and provide a detailed insight into the financial position of the Company for the period under review.

Forward-Looking Statements

This report contains certain 'forward-looking statements' which are related to the future. These statements include known and unknown risks and opportunities, uncertainties and important factors that could turn

out to be materially different from current expectations following the publication of these results. These statements are as of the date

of this document. The Company undertakes no obligation to update publicly or release any provisions pertaining to these forward-looking statements.

Feedback

We value the feedback of our stakeholders and use it to continuously improve our reporting and to ensure that we are sharing information

about matters relevant to them. Your emails are welcomed at corporate@spelgroup.com

Cover Story

Growing Responsibly, Together

With more than 43 years of experience, we have established a strong presence in manufacturing high-quality products, driven by our commitment to excellence. Our focus has always been on delivering superior products and services, powered by advanced technologies and a skilled workforce. We remain dedicated to developing innovative, sustainable, and efficient solutions that create value for our customers and stakeholders.

SPEL Limited (formerly Synthetic Products Enterprises Limited) • Annual Report 2025

Innovating for a Better Tomorrow

Contents

Management Report

04 Corporate Information

06 Vision and Mission

08 Organizational Overview and External Environment 09 Business Locations

10 Code of Conduct, Culture and Ethical Principles

11 Core Values

12 Food Packaging

14 Personal Care Products / FMCG Packaging

16 Automobile Parts and Accessories

1. Ownership Structure

2. Organizational Chart

3. General Review of the Performance of the Company

4. Description of Performance of the Segments of the Company

5. Position within the Value Chain

6. Significant Factors Affecting the External Environment

7. Key Performance Indicators

8. Awards and Recognitions

9. The Effect of Seasonality on Business in Terms of Production and Sales

10. The Legitimate Needs and Interests of Key Stakeholders and Industry Trends

11. Competitive Landscape and Market Positioning

12. The Political Environment and Company's Strategy

13. History of Major Events

14. Details of Significant Events

15. Strategy and Resource Allocation

36 Key Performance Indicators (KPIs)

38 Risks and Opportunities

44 Trainings and Social Activities

46 Sustainability and Corporate Social Responsibility

56 Director's Profile

60 Governance

64 Significant Policies

74 DuPont Analysis

75 Analysis of Financial Information

77 Comments on Financial Analysis

78 Future Outlook

80 IT Governance and Cybersecurity

84 Stakeholders Relationship and Engagement

87 SPEL's Business Model

88 Report of the Board Audit Committee

90 Chairman's Review Report

92 Directors' Report to the Shareholders

99 Six Years Financial Information

1. Cash Flow Statement - Direct Method

2. Graphic Presentation

1. Horizontal Financial Analysis

2. Vertical Financial Analysis

3. Statement of Value Added and its Distribution with Graphical Presentation

4. Independent Auditor's Review Report

5. Statement of Compliance with Listed Companies

Financial Statements

04 SPEL Limited (formerly Synthetic Products Enterprises Limited) • Annual Report 2025

Innovating for a Better Tomorrow 05

Corporate Information

Board of Directors

Mr. Almas Hyder

Chairman/Non-Executive Director

Mr. Zia Hyder Naqi

Chief Executive Officer / Executive Director

Mr. Haroon Sharif

Independent Non-Executive Director

Dr. Syed Sohail Hussain Naqvi

Independent Non-Executive Director

Mr. Ameen Ahsan

Independent Non-Executive Director

Dr. Nighat Arshad

Non-Executive Director

Mr. Abid Saleem Khan

Chief Operating Officer / Executive Director

CFO & Company Secretary

Mr. Khalil Ahmad Hashmi, FCA

Audit Committee

Mr. Haroon Sharif

Committee Chairman

Mr. Almas Hyder

Member

Mr. Ameen Ahsan

Member

Dr. Nighat Arshad

Member

Human Resource & Remuneration Committee

Mr. Ameen Ahsan

Committee Chairman

Mr. Almas Hyder

Member

Mr. Zia Hyder Naqi

Member

Dr. Syed Sohail Hussain Naqvi

Member

Mr. Abid Saleem Khan

Member

Finance Committee

Mr. Almas Hyder

Committee Chairman

Mr. Haroon Sharif

Member

Mr. Zia Hyder Naqi

Member

Dr. Syed Sohail Hussain Naqvi

Member

Mr. Abid Saleem Khan

Member

Risk Management and Sustainability Committee

Dr. Syed Sohail Hussain Naqvi

Committee Chairman

Mr. Zia Hyder Naqi

Member

Mr. Haroon Sharif

Member

Dr. Nighat Arshad

Member

Nomination Committee

Mr. Almas Hyder

Committee Chairman

Mr. Zia Hyder Naqi

Member

Dr. Syed Sohail Hussain Naqvi

Member

Registered Office

127-S, Quaid-e-Azam Industrial Estate, Township, Kot Lakhpat, Lahore.

Ph: 042-111-005-005

Fax: 042-35118507

Factories

Pandoki Plant

4-KM, Off Ferozpur Road, Raiwind Lilliani Link Road, Pandoki, Lahore.

RYK Plant

41 - Rahim Yar Khan Industrial Estate, KLP Road, Rahim Yar Khan.

Karachi Plant

12-A, Down Stream Industrial Unit, Pakistan Steel, Karachi.

Lahore Plant

127-S, Quaid-e-Azam Industrial Estate, Township, Kot Lakhpat, Lahore.

Share Registrar

THK Associates (Pvt) Limited

32-C, Jami Commercial St# 2 DHA, Phase VII, Karachi.

Statutory Auditors

KPMG Taseer Hadi and Co.

Chartered Accountants

Head of Internal Audit

Mr. Abu Bakar, FCA

Tax Consultant

A.F. Ferguson & Co.

Chartered Accountants

(A member firm of the PWC network)

Legal Advisors

Cornelius, Lane and Mufti

Advocates & Solicitors

Bankers

Allied Bank Limited Askari Bank Limited

Bank Islami Pakistan Limited Faysal Bank Limited

Habib Bank Limited

Habib Metropolitan Bank Limited MCB Bank Limited

Meezan Bank Limited United Bank Limited

Website

https://www.spelgroup.com

Stock Symbol

SPEL

06 SPEL Limited (formerly Synthetic Products Enterprises Limited) • Annual Report 2025

Innovating for a Better Tomorrow 07

Vision & Mission

Vision

To become a premium player in the market by building a professional organization, having state-of-the-art technology and expanding

product range. Become the most progressive and profitable company in the sector.

Mission

At SPEL Group of Companies, our mission is to continuously strive for excellence in all aspects of our operations. We are committed to leveraging cutting-edge technology, fostering a culture of professionalism, and diversifying our product range to exceed customer expectations. Our aim is to emerge as the foremost leader in the industry, driving progress and profitability while maintaining our commitment to innovation and customer satisfaction.

08 SPEL Limited (formerly Synthetic Products Enterprises Limited) • Annual Report 2025

Innovating for a Better Tomorrow 09

Organizational Overview and External Environment

A brief about the Company

Business Locations

SPEL

S

PEL is one of the leading manufacturers of technology-intensive engineering and

plastic products in Pakistan. Established initially as a partnership firm in 1978, SPEL transitioned to

a private limited company in 1982. Building on its growth, the company became a public limited entity in 2008 and listed its shares on the Pakistan Stock Exchange in 2015. On 13 March 2025, the Company's name was changed from Synthetic Products Enterprises Limited to SPEL Limited.

Distinguished for its end-to-end solutions, SPEL excels in various phases of product development, ranging from initial design to the finished product. The company adheres to rigorous quality and environmental standards, and its operational capabilities span a wide range of processes including Product Designing, Molds & Dies

Making, Injection Molding, Extrusion, Thermoforming and Blow Molding.

In addition, SPEL offers value-added services like Printing, Labeling, Shrink Sleeve Labeling, and Stickering.

Committed to quality excellence, SPEL has integrated a series of quality management initiatives such as Quality Control Circles, Total Quality Management, 6S, Kaizen, and Toyota Production System. These initiatives affirm SPEL's steadfast commitment to quality, efficiency, and environmental sustainability, making it a dependable partner for both domestic and international stakeholders.

operates through

4

Locations

along with its dealers' network all over the country

LAHORE

RAHIM YAR KHAN

KARACHI

SPEL

operates with a workforce of approximately

626

employees out

of which

538

employees are

working in its factories

10 SPEL Limited (formerly Synthetic Products Enterprises Limited) • Annual Report 2025

Innovating for a Better Tomorrow 11

Code of Conduct, Culture and Ethical Principles Core Values

Act with integrity and truthfully

Work together as a team

Disclose personal interest, if any,

in any Company's matter

Respect each other

Inform

any misconduct observed immediately

Follow rules and regulations of the Company

The following are core values embedded within the culture of SPEL:

Empowerment Punctuality Value time Capability Responsibility with

Respect

On-time delivery

Quality Quick response Relationships Service and support

Integrity

authority Delegation

Train people for growth and continuous improvement Prepare leaders

Safe

Environment

SPEL is committed to conduct its business with honesty, integrity and in an ethical manner. For this purpose, the Company has developed a

Comply with all applicable laws and regulations

Maintain work environment as free from any type of harassment

Respect for customers, employees and all stakeholders, Business is about human beings, who want to be treated well. CSR is one way to respect our society

Customer Satisfaction

Building trust Honoring commitments Dependability Staying within ethical and legal boundaries Rewarding honesty

Ownership

Eliminate waste Save energy, water, air and natural resources

code of conduct to manage the Company's affairs.

The code is intended to set out principles relating to the behavior that should be

observed in SPEL. This Code includes the following aspects:

Never involve in any activity which leads to insider trading

Principal Business Activities

SPEL is a manufacturing company and has B2B (business-to-business) relations with most of its customers. It is principally engaged in the manufacturing and sale of plastic packaging for the food & FMCG industry, plastic parts for the automotive industry, and molds & dies. The products of SPEL can broadly be categorized into the following sectors:

• Food and Personal Care Products Sector - Packaging

• Automobile Parts & Accessories Sector

12 SPEL Limited (formerly Synthetic Products Enterprises Limited) • Annual Report 2025

Innovating for a Better Tomorrow 13

Food Packaging

P

ackaging products for food items need to be safe for human health and such

products should not release elements into food products. It is a wider concept that covers the

processes involved in the production, processing and even storage of the packaging products.

To cater to the above objectives, SPEL has established clean-shop floors and the Company makes sure that the packaging for food industry meets all the requirements of its customers besides ensuring that food packaging is produced by

following the international standards

for food safety. In addition to ISO Certifications, SPEL is also compliant with the requirements of FSSC 22000 (Food Safety System Certification) as assessed and certified by an independent certification agency. The company has also obtained Hilal Certificate for its food packaging products.

The major products for food industry include 19-litre water bottles, yogurt cups, ice-cream tubs, plastic glasses, disposable containers etc. and our customers in this sector include Nestle, Unilever, Pepsi, KFC, Baskin Robbins, Subway, Qarshi Industries, Sufi, Gourmet, Cakes & Bakes, etc.

14 SPEL Limited (formerly Synthetic Products Enterprises Limited) • Annual Report 2025

Innovating for a Better Tomorrow 15

Personal Care Products /FMCG Packaging

F

or the Personal Care Products

/ FMCG industry, packaging plays an integral role in

grabbing the buyer's attention. SPEL's customers have a great need for world-class packaging for its products which builds customers' brand, provides protection to their products, enhances convenience for transportation and reflects good aesthetics.

In order to cater to the demands of its FMCG Customers, SPEL has installed state-of-the-art plant and machinery, developed GMPs and implemented all the required

processes. Besides conforming to ISO 9001 standards, SPEL is also compliant with its customer's specific requirements e.g., it is compliant with

Unilever's Responsible Sourcing Policy (URSP), Pakistan Tobacco Company's Supplier Quality Performance and Workplace Compliance Requirements.

The products for FMCG industry include shampoo bottles, packaging for detergents, caps for skincare products, etc. and the customers in this sector include Unilever Pakistan Limited, Colgate Palmolive Pakistan Limited, Pakistan Tobacco Company Limited, etc.

16 SPEL Limited (formerly Synthetic Products Enterprises Limited) • Annual Report 2025

Innovating for a Better Tomorrow 17

Automobile Parts and Accessories

T

he requirements of the Auto Industry are significantly different from the above two

sectors as it requires durable, high precision and long-lasting products so that the components do not get reshaped or lose their color and remained functionally fit over a long period and the component get fit with other adjacent components of the vehicle.

SPEL, being a pioneer in the auto-parts industry understands these requirements and can serve these needs to the satisfaction of the customers. SPEL has implemented Toyota Production System for providing required quality within the required time frame.

Major customers of the company in the automotive sector include Indus Motors Company Limited, Honda Atlas Cars (Pakistan) Limited, Pak Suzuki Motor Company Limited, Millat Tractors Limited, etc. The auto parts being supplied by the Company include door trims, door handles, garnishes, grills, steering wheels, etc.

18 SPEL Limited (formerly Synthetic Products Enterprises Limited) • Annual Report 2025

Innovating for a Better Tomorrow 19

Ownership Structure Organizational Chart

S

PEL operates as a publicly-listed entity. Aside from our sponsors, who hold a majority

of the shares, our shareholder base comprises a mix of general public investors and institutional

stakeholders. Importantly, SPEL has not made strategic investments in any other businesses or companies. All of our operations are conducted under the single corporate umbrella

of SPEL Limited. The Company operates exclusively in Pakistan and has a wide customer base, both domestically and internationally.

Board of Directors

Nomination Committee

Risk Management

& Sustainability Committee

Audit Committee

HR & R

Committee

Finance Committee

Chief Executive Officer

Chief Financial Officer

Chief Operating Officer

GM

Marketing & Development

Head of

I dit

nternal Au

Head of Marketing

Plant Head (Unit 4)

Head of

Pr

ocurement

Head of IT

Head of Admin/HR

Company Secretary

Disclosure of Beneficial Ownership and Group Shareholding Relationships

For the sake of transparency, it's essential to clarify that SPEL does not have direct investments in any affiliated or subsidiary companies nor does it have any holding company. Any associations we have with other businesses exist only due to shared directorships and do not involve any form of financial investments.

Plant Head (Unit 1)

Plant Head (Unit 2)

Plant Head (Unit 3)

Plant Head (Unit 5)

Plant Head (Unit 6)

Plant Head (Unit 7)

Plant Head (Unit 8)

Plant Head (Unit 9)

Head of Taxation

Head of Accounts

Functional Reporting Administrative Reporting

20 SPEL Limited (formerly Synthetic Products Enterprises Limited) • Annual Report 2025

Innovating for a Better Tomorrow 21

General Review of the Performance of the Company

For the Year and Major Improvements from Last Year

Description of Performance of the Segments of the Company

D

uring the year, the Company delivered strong financial performance with net sales

38%

increasing by 38% to Rs. 9.63 billion compared to Rs. 6.97 billion in the previous year. This growth translated into a significant improvement in gross profit, which nearly doubled to Rs. 2.59 billion from Rs. 1.32 billion in 2024. Operating profit increased to Rs. 2.10 billion, reflecting improved operating efficiency. Consequently, earnings per share increased to

Net Sales

(Rs. in billion)

Gross Profit

(Rs. in billion)

Earnings Per Share

6.

(Rupees)

he Company's operations are diversified across various business segments. In accordance with the requirements of International Financial Reporting Standards (IFRS), detailed information regarding the Company's operating segments, including revenue, assets, and results, is presented

96%

96%

T

in Notes to the Financial Statements.

Rs. 6.60 from Rs. 3.36 in the prior year, highlighting the Company's ability to generate enhanced shareholder value.

2023-24

2024-25

2023-24

2024-25

2023-24

2024-25

22 SPEL Limited (formerly Synthetic Products Enterprises Limited) • Annual Report 2025

Innovating for a Better Tomorrow 23

Position within the Value Chain Significant Factors Affecting the External Environment

Conversion, Manufacturing & Printing

Raw Material

The Company procures the finest quality raw material from world renowned suppliers and converts into finished goods based on customer demand and specifications.

The Packaging business is also conducted on the same norms so as to maintain a high product quality.

Customers

Food

Personal Care

Automotive

Market

Final Products

Food Packaging, Personal Care Products / FMCG Packaging, Automobile Parts & Accessories

24 SPEL Limited (formerly Synthetic Products Enterprises Limited) • Annual Report 2025

Innovating for a Better Tomorrow 25

Key Performance Indicators Awards and Recognitions

Profit

(Rs. in million)

Equity

(Rs. in million)

Sales Revenue

(Rs. in million)

2024

2024

2024

1,322

938

7,303

2024

5,122

Current Ratio

(Times)

2024

6,965

2025

2,588

2025

2,098

2025

8,253

2025

6,110

2024

2.35

2025

9,633

2025

3.27

2025

1,991

2025

11.28

2024

908

2025

2025

1,253

32.20

2025

6.60

2025

20%

2024

18.82

2024

2024

Profit before Tax

(Rs. in million)

641

27.00

2024

3.36

2024

16%

Debt to Equity

(Percentage)

Profit after Tax

Breakup Value Per Share

Gross

Operating Profit

(Rs. in million)

Total Assets

(Rs. in million)

Shareholders

(Rs. in million)

Earnings Per Share

(Rupees)

Cash Dividend

(Percentage)

(Rupees)

SPEL received the Certificate of Merit Award for Best Presented Annual Report 2023 from SAFA at a ceremony held

in November 2024 in Colombo, Sri Lanka.

SPEL won the Best Corporate Report Award 2023 from ICAP & ICMA

in October 2024.

In 2024, SPEL

received the 'Timely Development Award' from Indus Motor Company.

SPEL was honored with the 'Supplier Excellence Award' in recognition of its extraordinary performance at a ceremony held in June 2025 in Bali, Indonesia.

SPEL was registered with the Environmental Protection Agency, Government of the Punjab, in June 2025.

26 SPEL Limited (formerly Synthetic Products Enterprises Limited) • Annual Report 2025

Innovating for a Better Tomorrow 27

The effect of Seasonality on Business in terms of Production and Sales The Legitimate Needs and Interests of Key Stakeholders and Industry Trends

A

t SPEL, seasonality has a moderate impact on our business performance,

particularly in terms of sales and production. Generally, we observe a pattern where the first two quarters of the fiscal year experience marginally lower sales volumes. This is followed by an uptick in the latter two quarters, where sales figures tend to improve.

This seasonal trend is largely influenced by consumer behavior in the food and personal care sectors. Typically, consumers in these industries demonstrate increased purchasing activity in the latter half of the year, resulting in a corresponding boost in our sales. Consequently, we

adjust our production schedules and inventory management strategies

to align with these seasonal shifts, ensuring that we are adequately prepared to meet the elevated demand in the later quarters.

This understanding of seasonality allows us to plan effectively, optimizing resources to meet market demand.

The Legislative and Regulatory Environment

SPEL Limited operates within a well-defined legislative and

regulatory framework governed by the Companies Act, 2017, the

Listed Companies (Code of Corporate Governance) Regulations, SECP directives, and the rules of the Pakistan Stock Exchange. The Company remains committed to full compliance with all applicable laws, including tax regulations, environmental standards, labor laws, and industry-specific requirements. Continuous monitoring of changes in legislation and regulatory guidelines enables SPEL to ensure timely alignment of its policies and practices with evolving obligations.

This proactive approach not only safeguards the Company against compliance risks but also reinforces stakeholders' confidence in its governance standards and sustainable business operations.

PEL places strong emphasis on meeting the legitimate needs and interests of its diverse

S

stakeholders, including shareholders, regulators, customers, employees, suppliers, and the wider community.

In the automotive sector, where the Company supplies auto parts to leading vehicle manufacturers,

STRENGTHS

Strong relationships with blue-chip customers and OEMs.

Enhanced corporate governance, transparency, and access to capital.

Established reputation for quality, innovation, and reliability.

Investment in advanced plastic molding technologies and

in-house design capabilities.

WEAKNESSES

Seasonality in food and Unorganized sector personal care demand competition. affects sales flow.

Good ranking in customer's database.

Diversified business segments.

S

W

SWOT

OPPORTUNITIES

Rising demand for packaging driven by growth of FMCG.

O

T

THREATS

Increasing trend toward Growing demand for localization in automotive sustainable and eco-friendly

industry supported by government policies.

packaging solutions.

Global supply chain

disruptions affecting raw Political situation. material imports.

Technological advancement

Potential entry into export (automation) to drive markets for packaging and efficiencies.

auto parts.

Government policies.

industry trends such as localization, efficiency enhancement, and potential transition towards electric vehicles

are shaping demand patterns. Similarly, in the food and personal care packaging segment, growing consumer preference for high-quality, sustainable, and innovative packaging solutions are driving change, particularly among blue-chip customers and retail markets. The Company actively responds to these dynamics by strengthening its governance and compliance practices, investing in advanced

manufacturing technologies, enhancing its design and R&D capabilities, and maintaining strong customer relationships. Through this balanced approach, SPEL ensures alignment with stakeholder

expectations, regulatory frameworks, and evolving industry trends, thereby reinforcing its position as a trusted partner to both industrial and market customers while creating long-term sustainable value.

28 SPEL Limited (formerly Synthetic Products Enterprises Limited) • Annual Report 2025

Innovating for a Better Tomorrow 29

Competitive Landscape and Market Positioning The Political Environment and Company's Strategy

Industrial Rivalry

Low

Because of low competition

Bargaining

Bargaining Power of Suppliers

Moderate

Because more than one option is available to us in some cases

Threat

Threat of New Entrants

Low

Because of huge investment required & others don't have established customer relations

he political environment in Pakistan, characterized by greater stability and sustained

T

policymaking, has been instrumental in fostering the current favorable macroeconomic conditions.

Consistent policy implementation has contributed to inflation rates remaining in the single digits,

a steady exchange rate, and a reasonable interest rate structure. This stability, achieved through cohesive government policies, provides a reliable foundation for our

long-term business strategy, enabling

Continuous Improvement

We are committed to the constant refinement of our systems and processes to enhance efficiency, reduce costs, and improve the quality of our products and services.

Resource Optimization

By leveraging our resources efficiently and effectively, we ensure operational excellence and a strong competitive edge.

Our strategic objectives are aligned

In summary, despite the prevailing political uncertainties, SPEL is steadfast in its commitment to meeting customer expectations through innovation, continuous improvement, and resource optimization. Our agile strategy positions us well to navigate challenges while seizing opportunities for sustainable growth.

Significant Changes in the Organization and External Environment

Power of Buyers

Moderate

Because of interdependence

of Substitutes

Low

Because of specific product design

confident planning and execution for the future.

Strategic Focus

Innovation: We continuously invest in research and development to introduce innovative solutions

that meet our customers' evolving needs, thereby adding value to their operations.

to mitigate the risks presented by the political landscape. We employ a proactive approach to monitoring

policy changes and economic trends, enabling us to adapt swiftly and maintain business continuity.

There are no significant changes in the organization, however, the external environment has been affected due to changes in the political scenario and recent economic conditions.

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History of Major Events Details of Significant Events

Occurred during the year and after the Reporting Period

2021

Factory at Karachi established

2020

SPEL

won Top 25 Companies Award

1996

Supply of auto parts to Honda (HACPL) started

2022

Supply to Pakistan Tobacco Company started

2017

Factory at Rahim Yar Khan established

2002

Major expansion took place, and a new

plant was

2023

Share Buy-back: A liquidity option for shareholders

2015

Initial Public Offering

2005

Major expansion took place in tool manufacturing facility

2024

SPEL's Head Office and a production plant became carbon neutral.

Exports started to British American Tobacco

2012

Supply of shampoo bottles to Unilever started activity based costing implemented in all manufacturing units

2008

Diversification into water bottles for Nestlé and crates for Coke

2025

Company's Name changed to

SPEL Limited

2010

Merger of group companies to a single entity

2009

ISO 14001

achieved

February 2025

QCC convention

was held

February 2025

Installed

solar generation

May 2025

Interim dividend

was paid

10

9

8

June 2025

Registration

with EPA (Environmental

Protection Agency)

11

SPEL witnessed

significant events

August 2024

Annual accounts

TY 2024 were approved by the

1 Board

2

3

October

2024

Annual General Meeting held

October

2024

Election of

established supply of yogurt cups to Nestlé started

facility of 1MW at Rahim Yar Khan Plant

during the financial year, marking progress, resilience, innovation, and value creation across

diverse operations.

7 4

Directors held

1993

Supply of auto parts to Toyota (IMC) started

1989

SPEL

Packaging established

1986

Supply of auto parts to Pak Suzuki started

1983

Supply of steering wheels started to Millat Tractors

1982

SPEL

converted to a Private Limited Company

February 2025

Interim dividend

was paid

6

February 2025

Half-yearly

accounts were approved

5

November 2024

Annual

dividend paid

October 2024

Corporate

Briefing Session held

32 SPEL Limited (formerly Synthetic Products Enterprises Limited) • Annual Report 2025

Innovating for a Better Tomorrow 33

Strategy and Resource Allocation

STRATEGIES IN PLACE TO ACHIEVE OBJECTIVES

The objectives of the management are well aligned and synchronized with the overall strategic objectives of the Company. The following strategies were adopted by the management to achieve its objectives:

The results of these objectives are reflected in our increased profitability and controlled costs.

We are also committed to build a robust leadership pipeline through succession planning and fostering a culture of innovation and continuous learning, thereby ensuring that our workforce remains agile, future-ready, and aligned with strategic growth objectives.

Manufactured Capital Manufactured capital includes buildings, equipment and

infrastructure. The management has a

deliberate focus to utilize its available manufacturing resources optimally to achieve the strategic objectives. The resources are allocated to different parts of business keeping in view their linkage with the objective. The unevenness, if any, created due to changing business environment, is balance out by filling the gap in the relevant resource.

Intellectual Capital

Intellectual Capital is a cornerstone

A

STRATEGIC OBJECTIVES

t SPEL, we are committed to being a reliable supplier for our customers by meeting their

expectations through innovation, continuous improvement and by utilizing the economic and human resources effectively.

In order to achieve the above our Short, Medium and Long-Term Objectives are as follows:

Short-Term Objective

• Sustain sales growth and profitability through operational efficiency.

• Strengthen export base by targeting regional markets and compliance with international standards.

• Manage procurement and foreign exchange risks through cost optimization.

• Diversify customer portfolio across auto OEMs and FMCGs

  Medium-Term Objective

• Expand production capacity and invest in modern technologies.

• Introduce sustainable and innovative packaging solutions.

• Enhance brand positioning through service quality and technical support.

  Long-Term Objectives

• Achieve market leadership in auto parts and packaging solutions.

• Transition towards recyclable and biodegradable product lines

  in line with global sustainability standards.

• Invest in digital transformation and automation to enhance competitiveness.

• Capital expenditure on capacity enhancement and plant modernization.

• Long-term partnerships with OEMs, FMCGs, and export distributors.

• Strengthened research and development focus on sustainable products.

• Risk management framework for exchange rate, raw material and regulatory risks.

• Human capital development and workforce upskilling.

  RESOURCES ALLOCATION PLAN TO IMPLEMENT THE STRATEGIES AND CAPITAL STRUCTURE

  SPEL deploys its resources and relationships in the optimal way to implement its strategies. The Company has different types of resources and has categorized its resources into financial,

  manufactured, intellectual, human, social & relationship and natural capital.

  Financial Capital

  The Company has a policy to finance the capital expenditure necessary

  to achieve the strategic objectives through equity or long-term loans. The management continuously monitors its cash flows on daily basis and keeps in view its future needs.

  It re-aligns the financing facilities to optimize the company's operations constantly.

  The Company observes a self-defined formula for sustainable growth which requires that the amount invested in expansion plans should approximate the amount of profits earned in the year, plus depreciation. This has greatly helped in managing a strong liquidity position.

  Human Capital

  Human capital is integral to achieving our strategic objectives, and we invest significantly in talent acquisition, development, and retention. Our approach to human capital is data-driven and performance-oriented, ensuring alignment with company goals and optimized outcomes. The management continually assesses the skill sets needed for our evolving business environment and adapts training programs to fill any gaps.

  This strategic focus on human capital has been pivotal in driving innovation, enhancing productivity, and maintaining a competitive edge.

  in achieving our long-term strategic goals and sustaining competitive advantage. The company actively invests in research and development, intellectual property rights, and knowledge management systems

  to foster innovation and improve operational efficiencies.

  Social and Relationship Capital Social and relationship capital includes relationships within and

  between communities, groups of

  stakeholders and other networks, and the ability to enhance individual and collective well-being. SPEL gives equal importance to social and relationship capital and manages this capital by following the cultural norms of the areas in which it operates.

  Natural Capital

  Natural capital includes all renewable and non-renewable environmental resources e.g., air, water, sunlight

  etc. We are constantly working to

  
  
  

  34 SPEL Limited (formerly Synthetic Products Enterprises Limited) • Annual Report 2025

  Innovating for a Better Tomorrow 35

  Strategy and Resource Allocation

  reduce and optimize the use of natural resources while having a great focus on environment conservation. SPEL

  is compliant with the requirements of ISO 14001 - Environmental Management System and is also a certified company.

  CAPABILITIES AND RESOURCES WHICH PROVIDE SUSTAINABLE COMPETITIVE ADVANTAGE

  SPEL manufacturing facilities and has trained human resources,

  in addition the sponsors of the company have in-depth knowledge, experience and skills for managing a manufacturing business. SPEL has long-term business relations with blue chip companies who rely on SPEL and have confidence in Company's capabilities and these relations are reciprocal. All these factors contribute toward a sustainable competitive advantage for SPEL.

  SPEL is equipped with state-of-the-art manufacturing facilities complemented by a highly skilled workforce, creating a robust

  foundation for operational excellence. Our company's leadership brings unparalleled expertise, deep-

  rooted experience, and specialized skills in managing sophisticated manufacturing enterprises. We have fostered enduring partnerships with blue-chip organizations that not only trust SPEL's capabilities but also engage in mutually beneficial relationships with us. These synergistic elements collectively confer a sustainable competitive advantage, fortifying SPEL's market position and long-term business prospects.

  CAPABILITIES AND RESOURCES DRIVING SUSTAINABLE COMPETITIVE ADVANTAGE

  SPEL Limited's competitive strength is built upon its integrated

  capabilities, advanced manufacturing facilities, skilled workforce, and strong relationships with leading customers across diverse industries. The Company's commitment to innovation, quality, and operational excellence enables it to consistently

  deliver value-added products and services. Investments in

  
  
  

  modern technology, research and development, and process automation strengthen efficiency and cost competitiveness, while adherence

  to international quality and safety standards enhances market credibility. Furthermore, SPEL's financial stability, experienced management team,

  and long-standing reputation in the plastics and packaging industry ensure resilience against market challenges and support long-term sustainable value creation for shareholders and stakeholders alike.

  COMPANY'S STRATEGY ON MARKET DEVELOPMENT AND PRODUCT DEVELOPMENT

  The company remains focused on expanding its market reach and strengthening its position in key sectors through adopting following strategies:

• Offering and enhancing our distribution networks

• Participating in trade shows and exhibitions

• Positioning our products as premium quality among the prestigious customers

• Customer satisfaction through state-of-the-art quality products.

• Advanced manufacturing technologies

  In terms of product development, the Company is committed to innovation:

• By adopting advanced manufacturing techniques

• By quality control circles

• Through arranging brainstorming sessions

• Customer feedback

• Staying updated with global trends in plastic manufacturing.

  THE EFFECT OF TECHNOLOGICAL CHANGE, ESG REPORTING & CHALLENGES, INITIATIVES TAKEN

  BY THE COMPANY IN PROMOTING & ENABLING INNOVATION AND RESOURCE SHORTAGES

  The Effect of Technological Change

  Technological advancements present both opportunities and

  challenges for SPEL. On one side, they enable us to automate processes, enhance efficiency, and improve product quality. Conversely, the

  rapid pace of technological change necessitates investments in upskilling our workforce and updating our equipment. To effectively respond

  to these dynamics, SPEL adopts a proactive approach, monitoring

  technological trends and strategically integrating beneficial innovations into our operations.

  ESG Reporting & Challenges SPEL recognizes the increasing importance of Environmental, Social,

  and Governance (ESG) considerations

  in today's business landscape. We are committed to transparent and comprehensive ESG reporting to meet stakeholder expectations and regulatory requirements. However, balancing short-term financial goals with long-term sustainability targets poses a unique set of challenges. We are actively developing frameworks to align our ESG objectives with our strategic goals, ensuring responsible corporate behavior.

  Initiatives Taken by the Company in Promoting & Enabling Innovation

  Innovation is an integral part of our corporate ethos and strategic planning. One of our key initiatives

  is the Quality Control Circle (QCC), designed to tap into the collective intelligence of our workforce. Through the QCC, employees from various departments collaborate to identify areas for improvement and propose innovative solutions, thereby fostering a culture of continuous improvement and collective problem-solving.

  Additionally, we have allocated a dedicated budget specifically for Research & Development (R&D). This financial commitment enables us to invest in new technologies. We also collaborate with universities to

  promote innovation and to encourage initiatives. Together, these initiatives not only promote a culture of innovation but also position SPEL as a forward-thinking leader in our industry

  Resource Shortages

  The global market has seen increased volatility, leading to occasional shortages in key resources. SPEL has developed a multi-faceted strategy

  
  
  

  to mitigate this risk. This includes diversifying supplier networks, maintaining strategic stockpiles, and implementing resource-efficient manufacturing processes.

  36 SPEL Limited (formerly Synthetic Products Enterprises Limited) • Annual Report 2025

  Innovating for a Better Tomorrow 37

  Key Performance Indicators (KPIs)

  T

  he comprehensive set of Key Performance Indicators outlined on page 24

  serves as a robust framework for monitoring SPEL's financial health and operational efficiency. These indicators, ranging from Sales Revenue to Book Value of Share, have been carefully chosen for their enduring relevance and universal applicability in assessing financial performance. Looking ahead, we anticipate that these KPIs will continue to remain relevant.

  THE COMPANY'S SUSTAINABILITY STRATEGY WITH OBJECTIVES

  At SPEL, sustainability is embedded in our business model. Our commitment to sustainable practices aligns with our broader business goals of delivering value to our shareholders, empowering our workforce, and making a positive impact on communities and the environment.

  Below are our key sustainability objectives:

  Environmental Sustainability

  • Reduce Carbon Footprint

  • Waste Management

  • Energy Efficiency

    Social Responsibility

  • Employee Wellbeing

  • Community Investment

    Economic Sustainability

  • Supply Chain Responsibility

  • Sustainable Products

  • Transparency

  • Ethical Conduct

  • Board Diversity

Each of these objectives is periodically reviewed and updated

to ensure alignment with global sustainability standards and best practices. By putting these

measurable objectives into action, we aim to achieve long-term sustainability that harmonizes with our financial and operational goals, thereby creating a lasting legacy for generations to come.

THE LINKAGE OF STRATEGIC OBJECTIVES WITH THE COMPANY'S OVERALL MISSION, VISION AND OBJECTIVES

SPEL's strategic objectives are designed to align with its mission and vision. To achieve operational excellence, the company focuses on enhancing efficiency and effectiveness. Leveraging state-of-the-art technology supports the goal of becoming a premium market player. Building a culture of professionalism aligns with the vision of creating a professional

organization. Expanding the product range through new launches strengthens market position, while driving industry leadership through innovation supports both the mission of leadership and the vision of

being progressive and profitable. Enhancing customer satisfaction through continuous innovation aligns with the mission's commitment to innovation. Detailed action plans

and KPIs will guide and measure progress, ensuring alignment with the company's long-term goals.

BOARD'S STATEMENT ON THE INTERNAL CONTROLS INCLUDING IT CONTROLS OF THE COMPANY

The Directors have given their statement on maintaining a robust system of internal controls

covering all key areas of operations, including risk management, financial

discipline, governance, and IT security. Investments in modern infrastructure, cybersecurity, and regular internal audits ensure the safeguarding of assets, reliability of financial reporting, and compliance with regulatory requirements. Further details are provided in the Directors' Report.

BOARD'S STATEMENT ON THE SIGNIFICANT PLANS AND DECISIONS SUCH AS CORPORATE RESTRUCTURING, BUSINESS EXPANSION, MAJOR CAPITAL EXPENDITURE OR DISCONTINUANCE OF OPERATIONS

During the reporting period, the Board of Directors undertook and implemented key strategic

initiatives to propel the company's growth and fortify its resilience. This included expanding into new markets and authorizing significant capital expenditures that align with our long-term vision. These actions were aimed at strengthening our competitive advantage, fostering sustainable growth, and maximizing stakeholder value. Throughout this

process, the Board remained steadfast in its commitment to rigorous risk management, establishing clear risk tolerance policies and assessing principal risks, including potential threats to our business model, future performance, solvency, and liquidity.

NO DEFAULTS IN ANY PAYMENT OF ANY DEBTS

We are pleased to report that SPEL has consistently honored all of its debt payment obligations. Our record in this regard stands as a reflection of our fiscal discipline, operational

efficiency, and steadfast commitment to our financial responsibilities. This track record not only enhances our standing in the credit markets but also

reinforces our reputation for financial reliability among investors, suppliers, and other key stakeholders.

STRATEGY TO OVERCOME LIQUIDITY PROBLEMS

SPEL has fully repaid its short-term finances and now maintains a net cash surplus position, with short-term investments exceeding the outstanding short-term borrowings.

In addition, the aggregate of short-term investments and bank

balances is higher than the combined short- and long-term loan balances,

reflecting a solid liquidity profile. Building on this strength, the Board's strategy is to preserve financial flexibility by effectively managing cash surpluses, ensuring that operational requirements and debt servicing obligations are comfortably met.

SPEL operates as a consistently profitable organization, a factor that has substantially bolstered our liquidity position and enabled healthy cash flows. Management places a high emphasis on the

judicious allocation of these financial

resources, aligning fund deployment with both short-term needs and longterm strategic objectives.

Our financial health has been instrumental in fostering sustainable growth, managing profitability, and ensuring overall business stability. We actively manage our financial leverage, or gearing, to keep it in sync with our broader business goals. This proactive approach ensures timely payments on all financial obligations, including lease installments, longterm loans, musharika finance and markup, among others.