Ex pack Corrugated Cartons : Annual Report 2023/2024

EX-PACK CORRUGATED CARTONS PLC	1
Annual Report 2023 / 24

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BALANCED

FUTURE

EX-PACK CORRUGATED CARTONS PLC

ANNUAL REPORT 2023/24

Scan this QR Code with your smart device to view this Annual Report online or to download visit www.expack.lk

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BALANCED

FUTURE

As pioneers and leaders in the industry of corrugated carton manufacturing, today we at Ex-Pack are on a transformative era. We have refreshed our journey with fresh perspectives, focusing on redefining the industry with innovation and collaboration; sustainability lying at the core of it all. From eco- friendly materials to energy-efficient processes, we are expanding our capacity

to make our company future-proof.

Fostering a culture of continuous improvement, today we are actively contributing to a circular economy with environmental stewardship and social responsibility. Through formidable collaborations, we are strengthening our internal capabilities

while also building partnerships that will

shape the future of our industry.

Contents

Overview

About This Report 4

Who We Are 7

Financial and Non Financial Highlights 8

Our Corporate Journey 10

Awards and Accolades 12

Year in A Snapshot 14

Leadership

Chairman's Message 17 Managing Director's Review 21 Message from the Managing Director (Neptune ) 25

Board of Directors 27

Corporate Management Team 31

Strategy

Value Creation Model 38 Stakeholder engagements 40

Stakeholder Engagement Initiatives During the Financial Year 42

Operating Environment Review 46 Material Matters 49

Strategic Focus 52

Management Discussion

& Analysis

Financial Capital 56

Manufactured Capital 60

Human Capital 64

Social and Relationship Capital 73

Intellectual Capital 84

Natural Capital 88

Independent Practitioner's

Assurance Report 93

Governance & Risk

Risk Management 96 Corporate Governance 103

Annual Report on the Board of Directors Affairs on the Company 128

Report of the Board Audit Committee 131 Report of the Board Remuneration Committee 134

Report of the Board Related Party Transactions Review Committee 135

The Statement of Directors' Responsibility 137

Managing Director's, Chief Executive Officer's

and Chief Financial Officer's Statement 0f

Responsibility 138

Share Information 139

Financial Statements

Independent Auditor's Report 144 Statement of Financial Position 148 Statement of Profit or Loss 149 Statement of Comprehensive Income 150 Statement of Changes in Equity 151 Statement of Cash Flows 152

Notes to the Financial Statements 154 GRI Content index 196

SASB Index 202 Notice of Meeting 204 Form of Proxy 205 Registration Form 207 Corporate Information 208

OurVision

To be the most preferred corrugated cartons supplier in Sri Lanka

Our Mission

To lead the way in Corrugated Cartons manufacturing and add value to the stakeholders through operational excellence

OurValues

Be caring

We take pride in what we do and we care about our customers, our people and the world around us

Be challenging

We are not afraid to constructively challenge each other and ourselves to find a better way forward

Be responsive

We seek new ideas and understanding and are quick to react to opportunities

Be trusted

We can always be trusted to deliver on our promises

Be tenacious

We get things done

EX-PACK CORRUGATED CARTONS PLC	3
Annual Report 2023 / 24

About This Report

Welcome to our first ever integrated annual report

Driven by its strategic growth agenda, Ex-pack Corrugated Cartons PLC (the Company) is forging ahead as one of Sri Lanka's leading corrugated cartons package manufacturing companies in Sri Lanka. The rapid evolution of the Company following it being listed in the Colombo Stock Exchange

in November 2021, the changing dynamics of the operating environment and emerging needs of our key stakeholders have collectively incentivised us to enhance our annual corporate reporting and align same to international best practice reporting frameworks. Accordingly, we are pleased to present our first ever Integrated Report prepared in accordance with the International Integrated Reporting Framework of the IFRS Foundation. With this Report, we embark on a continually enhancing journey of corporate reporting dedicated to communicating our value creation process with clarity and conciseness whilst striking a deeper connection with our stakeholders.

What this Report presents

This Report is a coherent and concise communication of how the Company

has deployed its resources in making progress towards its strategic objectives. Multiple aspects that affect this journey, such as the operating environment, Company governance structure, vision, mission, values and prospects among others have been encapsulated in the discussions.

The Report covers the operations of Ex-pack Corrugated Cartons PLC and its fully owned subsidiary Neptune papers Pvt Ltd and includes material information up to the date of Board approval on 04th June 2024. The financial data contained in this Report is consolidated data, unless otherwise specified.

Sustainability reporting

Prior annual reports of the Company featured a dedicated chapter on sustainability. From this Report on, sustainability aspects are seamlessly integrated in to the rest of the Reporting to better depict our value creation process and the outputs and outcomes we generate trough such process.

Reporting boundary

There were no changes to the Company's organisational structure, size, or supply chain during the financial year 2023/24. Annual

reporting cycle for both financial and sustainability reporting cover the twelve months' period from 01 April 2023 to 31 March 2024. There are no major restatements of non-financial information reported in the prior financial year ended 31 March 2023. The integrated reporting boundary is as depicted below.

		Integrated reporting boundary
		Financial reporting boundary
	Ex-pack Corrugated Cartons PLC		Neptune Papers (Pvt) Ltd
Corporate	Operating	Stakeholders		Risk	Material	Sustainability	Value
Strategy	Context	Management	Matters	Creation

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EX-PACK CORRUGATED CARTONS PLC

Annual Report 2023 / 24

Overview

Leadership

Strategy

Management Discussion & Analysis

Governance & Risk

Financial Statements

Reporting frameworks

This Report is structured and presented using a set of mandatory and voluntary reporting frameworks, key ones being the requirements of the Sri Lanka Financial Reporting Standards (SLFRS), the International Integrated Reporting Framework and the Global Reporting Initiative's (GRI) Reporting Standards. We embark on the journey of enhanced non-financial reporting at a pivotal movement. As Sri Lanka gears up for the mandatory adoption of SLFRS S1: General Requirements for Disclosure of Sustainability-related Financial Information and SLFRS S2: Climate-related Disclosures issued by the Institute of Chartered Accountants of Sri Lanka, from 01 January 2025, we at Ex-pack are also making every effort to aligning our reporting towards same. A critical step towards this is disclosures made under SASB Standards - Industry Sustainability Accounting Standard for Multiline and Specialty Retailers & Distributors.

Key frameworks and assurances shaping this Report

Financial Statements and related disclosures

Reporting frameworks

• Sri Lanka Accounting Standards issued by the Institute of Chartered Accountants of Sri Lanka
• Companies Act No. 7 of 2007 (as amended)
• Listing Rules of Colombo Stock Exchange

Internal Assurance

• Independent Auditors' Report by Messrs KPMG - Charted Accountants

• Internal controls mechanisms
• Oversight of the Board Audit Committee and the Board of Directors

External Assurance

• Independent Auditors' Report by Messrs. Ernst and Young - Chartered Accountants

Non-financial reporting

Reporting frameworks

• Integrated Reporting Framework of the IFRS Foundation
• "Guidelines for Presentation of Annual Reports" issued by the Institute of Chartered Accountants of Sri Lanka
• Non-FinancialReporting Guideline issued by the Institute of Chartered Accountants of Sri Lanka
• Global Reporting Initiative (GRI) Standards - 2023

• SASB Standards - Industry Sustainability Accounting Standard for Multiline and Specialty Retailers & Distributors

• Sustainable Development Goals (SDGs)

Internal Assurance

• Review of the Board of Directors

External Assurance

• Independent Assurance on GRI Reporting by Messrs. Ernst and Young - Chartered Accountants

Corporate governance

Reporting frameworks

• Listing Requirements of the Colombo Stock Exchange.

• Code of Best Practices on Corporate Governance compiled by the Securities and Exchange Commission of Sri Lanka in collaboration with the Institute of Chartered Accountants of Sri Lanka

Internal Assurance

• Company governance framework built on applicable regulations and internal best practices

EX-PACK CORRUGATED CARTONS PLC

Annual Report 2023 / 24

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About This Report

Navigating our Report

The Management Discussion and Analysis of this Report is built on the six capitals as prescribed in the International Integrated Reporting Framework. Matters identified as "material" to the business and operations of the Company serve as the basis on which disclosures are made. Where possible, the Company's key strategic pillars are linked to the discussions to established the link between strategy and performance.

Operating environment (Page 96 to 127)

Key inputs (56 - 92 Pages )	Stakeholders (Pages 40-83)	Strategic pillars (Pages 53 - 94)
Financial capital	Shareholders	Market position
Manufactured capital	Employees	Partner of choice
Human capital	Customers	Operational excellence
Intellectual capital	Business partners	Investment in human
capital
Social and relationship	Government and	Capital allocation
capital	regulatory bodies
Natural capital	Communities	ESG considerations

Corporate governance and risk management (Page 96 to 127)

Outputs &

Outcomes Page 56 to 92

Forward looking statements

Where possible and as an improvement in disclosures, certain forward looking statements are included in the discussions under the "Way Forward" sections found across the non-financial disclosures as follows.

Reflections from the Chairman	Page 17
Managing Director's Review	Page 21
Management Discussion and Analysis	Page 56

These forward-looking statements can provide greater insights into the Company's expectations and strategic plans, and should be interpreted with caution, given the uncertainty inherent in predicting future outcomes, and the potential that actual results may differ from projections. These forward-looking statements have not been reviewed by the Company's auditors.

Board responsibility statement

Ex-pack Corrugated Cartons PLC's Board of Directors is ultimately responsible for ensuring the integrity of this Report. We hereby confirm that this Annual Report for the financial year ended 31 March 2024 addresses all relevant material matters and fairly represents the Company's performance. The Board also confirms that the Report has been prepared in accordance with the requirements of the International Framework.

Signed on behalf of the Board

Mr.Zulficar Ghouse 4th June 2024

Accessibility of this Report In PDF

Colombo Stock Exchange - https://www. cse.lk/ - CSE Stock Code - PACK.N0000 ISIN : LK0473N00005

Corporate website - Ex-pack Corrugated Cartons PLC - https://www.expack.lk/ reports/

Scan and read

In print - For all securities holders of Ex-pack Corrugated Cartons PLC are eligible to receive a printed version of this Report via the submission of the Request Letter

Feedback

We like to hear from you about our first integrated annual report and on how we can further enhance

the readability and relevance of it. Please direct your feedback to Mr. Abdul Latiff Ahamed - Head Of Finance (Email - [e-mail]

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EX-PACK CORRUGATED CARTONS PLC

Annual Report 2023 / 24

Overview

Leadership

Strategy

Management Discussion & Analysis

Governance & Risk

Financial Statements

Who We Are

Ex-pack Corrugated Cartons PLC specialises in custom manufacture of printed corrugated cartons of the highest quality, tailor-making to an endless range of specification. Our inception dates back to 1994 and hence we now count close to thirty years of empowering service to our clientele. As a subsidiary of the Aberdeen Group, one of Sri Lanka's most diversified and dynamic conglomerates, we are focused on a clearly articulated growth strategy centred on excellence and underpinned by high quality and customer satisfaction

Our Core Strengths

• Close liaison with the customer from project conception, design and proto- typing to high volume production
• Timely deliveries powered by comprehensive computerised manufacturing and stock managing systems linked with our own extensive storage facilities
• Wide coverage across the island in product distribution carried out through our own fleet of vehicles with complete control in transit, assuring prompt delivery
• Empowered staff with sustained tenures and a wide pool of tacit knowledge

Our Dynamic Sector Penetration

•	FMCG	•	Garments &		Manufacturers
•	Home & Appliance		Accessory suppliers	•	Rubber & Coir
•	Fruits/ Vegetables	•	Boards	•	Others
	exporters	•	Seafood Exporters
•	Tea Exporters	•	Bicycle

Our Mission

To lead the way in Corrugated Cartons manufacturing and add value to the stakeholders through operational excellence

Our Vision

To be the most preferred corrugated cartons supplier in Sri Lanka

	Our Values
•	Be caring	•	Be responsive	• Be tenacious
•	Be challenging	•	Be trusted

Our Innovative Product Portfolio

• Corrugated Cartons
• Storage solutions covering the garment industry
• Paper based environmental and eco- friendly warehousing accessories

65.02%		Ex-pack	100%	Neptune Papers
direct		Corrugated		direct
		(Pvt) Limited
holding		Cartons PLC		holding

Aberdeen Holdings

(Pvt) Limited

EX-PACK CORRUGATED CARTONS PLC

Annual Report 2023 / 24

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Financial and Non Financial Highlights

Group	2023/24	2022/23	YoY % INC /
	(LKR' 000)	(LKR' 000)	(DEC)
FINANCIAL PERFORMANCE
Revenue	9,875,059	13,451,044	(-26)
Gross Profit	2,155,721	3,509,082	(-39)
EBIT	1,016,884	2,365,001	(-57)
Profit Before Tax	810,616	1,895,202	(-57)
Net Profit for the year	580,489	1,412,959	(-59)
Total Comprehensive Income	570,953	1,753,963	(-68)
FINANCIAL POSITION
Non - Current Assets	2,735,406	2,732,595	-
Total Current Assets	4,002,924	4,131,028	(-3)
Total Assets	6,738,329	6,863,623	(-2)
Stated Capital	1,200,000	1,200,000	-
Total Equity	3,178,831	2,831,211	12
Total Non- Current Liabilities	599,032	606,327	(-1)
Total Current Liabilities	2,960,467	3,426,085	(-14)
Total Liabilities	3,559,498	4,032,412	(-12)
Total Equity & Liabilities	6,738,329	6,863,623	(-2)
CASHFLOW
Net Cash Flow from / (used in) Operating activities	802,638	1,011,877	(-21)
Net Cash Flow from / (used in) Investing activities	(127,978)	260,920	(-149)
Net Cash Flow from / (used in) Financial activities	(633,650)	(1,559,191)	60
Cash and Cash Flow Equivalents at the end of the year	717,798	676,788	6
KEY INDICATORS
PROFITABILITY RATIOS
Revenue Growth Rate	(-27%)	58%	(147)
GP Margin	22%	26%	6
NP Margin	6%	11%	(15)
ROA	15%	34%	(85)
ROE	18%	50%	(64)
ROCE	19%	45%	(58)
LIQUIDITY RATIOS
Current Ratios (Times)	1.35	1.21	12
Debt/Equity Ratios (Times)	0.72	0.93	(23)
INVESTOR RATIOS
Earnings Per Share (Rs)	1.74	4.24	(-59%)
Net Asset Per Share (Rs)	9.54	8.49	12%
Market Price Per Share (Rs)	14.30	14.60	(-2%)
P/E Ratio	8.21	3.44	139
Float Adjusted Market Capitalisation	1,645,072	1,680,606	(-2%)

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EX-PACK CORRUGATED CARTONS PLC

Annual Report 2023 / 24