Packages : Half yearly accounts for the period ended June 30, 2023

Condensed InterimFinancialStatements

fortheSixMonthsPeriodEnded

June30,2023(Unaudited)

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DIRECTORS' REVIEW REPORT ON UNCONSOLIDATED CONDENSED INTERIM UN-AUDITED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED JUNE 30, 2023

The Directors of Packages Limited are pleased to submit to its shareholders the six monthly report along with the unconsolidated condensed interim un-audited financial statements of the Company for the half year ended June 30, 2023.

FINANCIAL AND OPERATIONAL PERFORMANCE

A comparison of the un-audited financial results for the half year ended June 30, 2023 as against June 30, 2022 is as follows:

Packages Limited is operating as a holding company and its performance is determined by the financial performance of its group companies located within & outside Pakistan, which in turn, would be influenced by the general economic environment. Dividend income constitutes the major source of income of Packages Limited. As a result, its income pattern will follow the dividend distribution pattern of the group companies. The management believes that this corporate structure is conducive to focused management of the group companies and leading to better operating performance.

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The Company has earned dividend income from its group companies amounting to Rs. 2,710 million during the six-month period ended June 30, 2023 as compared to Rs. 2,781 million during the corresponding period of 2022. The earnings after tax have decreased to Rs. 687 million as compared to Rs. 2,218 million earned during corresponding period of 2022. The decrease is predominantly attributed to an impairment loss of Rs. 1,202 million that was recognized on the investment made in Anemone Holdings Limited, Mauritius as detailed below. The finance cost of the Company has increased by Rs. 310 million during the current period due to utilization of long- term loans for acquisition of shares of Sanofi Aventis Pakistan Limited and the increase in interest rates.

COMPLETION OF ACQUISITION OF SHAREHOLDING IN SANOFI AVENTIS PAKISTAN LIMITED ('SAPL')

Pursuant to the share purchase agreement with Sanofi Foreign Participations B.V., the Company has completed the acquisition of 35% shareholding in Sanofi Aventis Pakistan Limited ('SAPL') on April 28, 2023, at a negotiated purchase price of Rs 940 per share. The Company now has a total shareholding of 41.07% in SAPL. The management of the Company has made a detailed assessment under IFRS 10 and considers SAPL to be its subsidiary as it has de facto control over it.

IMPAIRMENT LOSS ON EQUITY INSTRUMENTS OF ANEMONE HOLDINGS LIMITED, MAURITIUS ('AHL')

Flexible Packages Convertors (Proprietary) Limited, South Africa ('FPC') is an entity based in South Africa which is principally engaged in the manufacture & sale of flexible packaging material. Packages Limited, through its wholly owned subsidiary, Anemone Holdings Limited, Mauritius ('AHL'), controls 63.5% of the shareholding of FPC. FPC recorded an unaudited loss before tax of ZAR 99 million in 2022 which tightened its already constrained working capital. As also disclosed in note 19.1.1 of the audited unconsolidated financial statements of the Company for the year ended December 31, 2022; the deteriorating financial performance and tough economic conditions coupled with low sales to key customers, unfavorable product mix and higher than anticipated variable and fixed costs furthered the cash burden on the working capital of FPC which started restraining the production capacity. Resultantly, Packages Limited carried out an estimate of the recoverable amount of the net assets and determined it to be lower than the carrying amount, therefore, an impairment loss of PKR 687 million was recognized in the audited unconsolidated financial statements for the year ended December 31, 2022.

During the six months period ended June 30, 2023, FPC recorded a further unaudited loss before tax of ZAR 38 million which coupled with the capping of outflow of remittances outside Pakistan on account of national economic scenario and hence non-remittance of investment proceeds to FPC, pushed it into further financial distress. Consequently, FPC was put under a legally mandated restructuring process to assess its profitability prospects and viability of operations. This restructuring assessment has been completed recently whereby the legally appointed

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