CORPORATE BRIEFING SESSION- NINE MONTHS FOR THE PERIOD ENDED

MARCH 31, 2021

LIMITED

Security Papers

DISCLAIMERTHIS PRESENTATION IS NOT AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SELL ANY SECURITIES OR ANYINVESTMENT

▪This presentation has been prepared by Security Papers Limited (SPL) solely for information purposes.

▪No representation or warranty express or implied is made thereto, and no reliance should be placed on, the fairness,accuracy, sufficiency, completeness or correctness of the information or any opinion contained herein or any opinionrendered thereto except for the information derived from financial statements for the year ended June 30, 2020.

▪The information contained in this presentation should be considered in the context of the circumstances prevailing at thetime and will not be updated to reflect any developments that may occur after the date of the presentation.

▪Neither SPL nor any of its officials, advisors, associates, employees or any person working for, under or on behalf, shall haveany responsibility and/or liability of any nature whatsoever (in contract or otherwise) for any loss whatsoever arising fromany use of this presentation or its contents or otherwise arising in connection with this presentation.

▪The presentation may contain statements that reflect SPL’s own beliefs and expectations about the future. These forward-looking statements are based on a number of assumptions about the future, which are beyond SPL’s control. Such forward-looking statements represent, in each case, only one of many possible scenarios and should not be viewed as the most likelyor standard scenario. Such forward looking statements are subject to certain risks and uncertainties that could cause actualresults to differ materially from those contemplated by the relevant forward-looking statements.

▪SPL does not undertake any obligation to update any forward-looking statements to reflect events that occur orcircumstances that arise after the date of this presentation and it does not make any representation, warranty (whetherexpress or implied) or prediction that the results anticipated by such forward-looking statements will be achieved. Inaddition, past performance should not be taken as an indication or guarantee of future results.

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Sequence of Presentation

Organizational Overview and Governance

Shareholding Pattern

Awards & Certifications

CSR Initiatives

COVID-19 Management Init iatives

Operational Performance

Financial Highlights

Strategic/Operational Developments

Future Outlook / Challenges

ORGANIZATIONAL OVERVIEW AND GOVERNANCE

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COMPANY PROFILE

• Security Papers Limited is a national strategic industrial organization engaged in thebusiness of manufacturing security paper for Banknotes and Other Security Paperproducts.

• Due to its strategic nature of operations, the Company has been classified as Category 1A(KPID) Key Point Installation by the Government of Pakistan.

• The geographical presence of the Company is in Karachi, Pakistan, while its customersare located in Karachi, Lahore, Gujranwala, Faisalabad, Islamabad, Peshawar and othermajor cities of the country.

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BOARD OF DIRECTORS

Non-Executive / Independent Directors

Chairman Mr. Muhammad Haroon Rasheed

Directors Mr. Jamal Nasim

Mr. Muhammad Sualeh Ahmad Faruqui (Independent)

Dr. Abolghassem Jamshidi

Mr. Rauf Ahmad

Mrs. Uzma Aijaz * (Independent)*Shaikh Muhammad Aijaz Akhtar (Alternate Director)

Ms. Figen Caliskan

Hafiz Muhammad Yousaf

Mr. Munir Ahmed (Independent)

Executive Director

Chief Executive Officer Dr. Mohammad Ashraf Butt

STRATEGIC PLANNING PROCESS

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VISION STATEMENT

“TO BE A NATIONALLY AND INTERNATIONALLY RECOGNIZED AND ACCEPTED SECURITY PAPER

PRODUCING ORGANIZATION, PROVIDING HIGHEST QUALITY PAPER TO OUR CUSTOMERS,

BOTH IN PAKISTAN AND ABROAD”.

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MISSION STATEMENT

“OUR MISSION IS TO EXCEED THE EXPECTATION OF OUR CUSTOMERS IN PRODUCING, WITH SECURITY AND EFFICIENCY, HIGHEST QUALITY PAPER

PRODUCTS, EMPLOYING INTERNATIONAL BEST PRACTICES AND APPLYING AN INTEGRATED APPROACH TO PRODUCT RESEARCH AND DEVELOPMENT,

MANUFACTURING TECHNOLOGY, OPERATIONS MANAGEMENT, COUNTERFEIT DETERRENCE, MATERIALS PROCUREMENT, HUMAN RESOURCE

MANAGEMENT, FINANCIAL MANAGEMENT AND INFORMATION SYSTEMS”.

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Board of Directors

Board Audit Committee

Board Human Resource and Remuneration

Committee

Board Investment and Risk

Management Committee

Board Strategic Committee

Board Procurement Committee

BOARD COMMITTEES

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1965• Incorporated as Private Limited Company.

1967

• Listed on the Karachi Stock Exchange (now Pakistan Stock Exchange - PSX)

1969• Started commercial production

2004• New Paper Machine commissioned and inaugurated by Prime

Minister of Pakistan.

2006• Reverse Osmosis (RO) Plant installed and commissioned

Historical Milestones

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2009• Captive Power Plant installed

2011• Modification and Upgradation of Rewinder and Sheeter

Machines

2012• New Mould Cover manufacturing facility installed

2014• Automated Cotton (Comber) Dry Cleaning Plant installed

2015• A new Thread Unwinding System installed

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2016• Paper for National Passport developed and produced

2018

• Production capacity enhanced from 2500 tons to 3500 tons per annum through expansion of Pulp making Plant and enhancing operational speed of paper machine

2019

• Capacity enhancement of Paper Machine completed by utilizing in house resources for rehabilitation of “Short Former”. (From 3500 tons to 5000 tons per annum)

2020

• Commissioning of Waste Water Recycling Plant in August’20

20202021• Upgrade Fire Alarm System, New Fire Hydrant, and Sprinkler System

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OUR BUSINESS MODEL

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Customers’ satisfaction

Employees’ empowerment

Enterprise Risk Management and

Business Continuity Planning

Continuous improvement

(KAIZEN)

Operational Efficiency Maximum Return on Investment

Corporate Social Responsibility

STRATEGIC GOALS

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STRATEGIC OBJECTIVES

- Increase focus on efficiency in theproduction process, reduce cost andimproved product quality;

- Generating superior returns to stakeholders, sustainable performance exceeding market and shareholder expectations;

- To be a top stakeholder value generatorin the Country’s security paper productswhile remaining a socio environmentallyconscious citizen, ensuring that allactivities meet high standards of QHSE;

- To increase its share in the non-bank /other security paper products;

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Banknote Paper Prize Bond

Paper Non Judicial Stamp Paper

E – Stamp Paper (Govt. of Punjab)

Educational Certificates and

Degree Paper

Parchment Paper

Passport Paper CBS – 1

(Cheque Paper)

NADRA CRC Paper

OUR PRODUCTS

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PAKISTAN SECURITY PRINTING CORPORATION

NATIONAL SECURITY PRINTING COMPANY

GOVERNMENT OF PUNJAB

NADRA

UNIVERSITIES, BOARDS AND

OTHER INSTITUTIONS

OUR CUSTOMERS

•Executive Committee

•Corporate Social Responsibility (CSR) Committee

•IT Steering Committee

•Enterprise Risk Management Committee

•Business Continuity Plan Committee

•Health & Safety Committee

•Worker’s Welfare Fund Committee

•Worker’s Profit Participation Fund (WPPF) Committee

•Prevention of Sexual Harassment Committee

•Whistle Blowing Committee

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Management Committees

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Board’s Approved Policies

1) Corporate Social Responsibility Policy

2) Sexual Harassment Policy3) Investment Policy

Guidelines 4) Risk Management Policy 5) Insider Trading Policy6) Directors’ Remuneration

Policy 7) Whistle Blowing Policy8) Policy for Record and

Archives Management 9) Reward & Recognition

Policy10)Succession Planning Policy

11) Training & Development Policy

12) Employee Welfare Fund (EWF) Policy

13) Related Party Transactions Policy

14) Communication & Disclosure Policy

15) Environmental Policy 16) Occupational Health & Safety

Policy 17) Quality Policy 18) Information Technology Policy 19) Corporate Email Etiquettes

Policy

SHAREHOLDING PATTERN

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PSPC40%

Foreign Companies

20%

Institutions 30%

General Public10%

PSPC Foreign Companies Institutions General Public

SHAREHOLDING PATTERNAs at 30 June 2020

AWARDS & CERTIFICATIONS

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Top Companies Award:

• Won Top 25 Companies Award of PSX for the years 2000 to 2007 and 2009 to 2016 & 2018-2019.

Corporate Excellence Award:

• Won 35th Corporate Excellence Award of the Management Association of Pakistan (MAP);

• Holds 24th to 29th Awards (6 times in a row) as well as 31st to 35th (5 times in a row).

Best Corporate Award:

• Won Best Corporate Report Award in 2003 and 2006 to 2012 – awarded by ICAP.

Best Sustainability Report Award:

• Received “Certificate of Appreciation” in 2010 – awarded by ICAP & ICMAP.

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Corporate Awards

Fire & Safety Award:

• Won Fire & Safety Award 2011, 2012, and 2013 for 3 consecutive years – awarded by Fire Protection Association of Pakistan and National Forum for Environmental & Health.

Environmental Excellence Award:

• Received the 17th Annual Environmental Excellence Award 2020 in recognition of Company’s effective implementation of environment management system.

• Had received 11th, 15th and 16th Annual Environmental Excellence Award in 2014, 2018, and 2019, respectively.

Commitment to Environmental Reporting:

• Received commendation for commitment to Environmental Reporting in 2010 from ACCA – WWF Pakistan.

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Corporate Awards

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ISO Certifications

Quality Management System (ISO 9001:2015)

Environmental Management System (ISO

14001:2015)

Occupational Health &

Safety Management System (ISO

45001: 2018)

CSR INITIATIVES

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S U STA I NA B I L I T Y A N D C S R

CSR Activities

Allocated Rs. 12.6 MN Budget FY 2020-21

▪ Corporate Social Responsibility (CSR) is concerned with achieving economic success through responsible corporate governance in a company's core business. CSR motivates organizations to improve because their actions affect customers, suppliers, employees, shareholders, and the community as a whole. Partnerships with communities, particularly those that have been disadvantaged, can assist businesses in developing productive relationships and stimulating economic growth in disadvantaged areas.

▪ SPL is also involved in various activities, few of these activities are listed below .

▪ Education ▪ Environment ▪ Health▪ Vocational Training

SPL Supported following Organizations; FY20-21

• SOS Children’s Villages • DOW University of Health Sciences –

OJHA campus• The Indus Hospital • RLCC-Rana Liaquat Craftsmen’s Colony • HASWA-Healthcare and Social Welfare

Association (Artificial Limb Centre)

COVID-19 PANDEMIC MANAGEMENT INITIATIVES

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COV I D - 1 9 Pa n d e m i c M a n a g e m e n t I n i t i a t ive s

▪ With the advent of COVID-19 in the Country, SPL went into strict implementation of variouschecks & SOPs to ensure safety and protection of all its employees.

▪ The third COVID-19 pandemic had a significant impact on the entire business sector. Despite thesechallenges, the company continued to operate, often with a small staff, and successfullyimplemented business continuity and incident management plans to address the crisis.

▪ The Pandemic had unprecedented consequences, including supply chain disruptions and anumerous strategic and operational issues affecting both short and long-term plans. The Company,on the other hand, had proactively managed relationships with key suppliers and customers,ensuring no supply chain disruptions during the lockdown period.

▪ Safety initiatives include:• Board and Committee meetings held through video conference.• All arrangements made to help employees be flexible to work from home as necessary.• Series of COVID sessions facilitated by our Medical Consultant.• Medical/Security Staff also has to monitor each employee's temperature.• Handwash/Sanitizers & PPEs and their availability throughout the premises.• Installation of disinfection Walkthrough Tunnel & purposed pedestal mist fan.• Advised and maintained social distancing in Canteen and Masjid through flexible timings.

OPERATIONAL PERFORMANCE

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F O R T H E P E R I O D E N D E DM a r c h 3 1 , 2 0 2 1

1,420 1,564 2,064

2,489

1,774

630 908

948

1,204

1,606

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2017 2018 2019 2020 2021

July to Dec Jan to Mar

Revenue-PKR (Million)July - March

SECURITY PAPERS LIMITED

3,012

2,472

2,050

3,6933,380

FINANCIAL HIGHLIGHTS

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F O R T H E P E R I O D E N D E DM a r c h 3 1 , 2 0 2 1

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S P L’ S F I N A N C I A L P E R F O R M A N C E F R O M 2 0 1 7 T O 2 0 2 1

PARTICULARS

JULY - MARCH

2021 2020 2019 2018 2017

SALES – RS ’000 3,379,914 3,693,315 3,012,247 2,472,119 2,050,260

PROFIT AFTER TAXATION –RS ’000

967,768 766,879 637,756 439,586 676,428

OTHER INCOME – RS ’000 478,328 227,433 117,297 94,295 372,251

EARNING PER SHARE – RS 16.33 12.94 10.76 7.42 11.42

Profitability

37.06% 36.42%

39.93%

36.27%34.33%

32.99%

17.78%

21.17% 20.76%

28.63%

2016-17 2017-18 2018-19 2019-20 2020-21

GP Margin NP Margin

SECURITY PAPERS LIMITEDRATIOS ANALYSIS

PARTICULARS

JULY – MARCH

2021 2020 2019 2018 2017

PROFITABILITY RATIOS

GROSS PROFIT TO SALES % 34% 36% 40% 36% 37%

NET PROFIT TO SALES % 29% 21% 21% 18% 33%

RETURN ON EQUITY % 16% 15% 13% 10% 15%

SECURITY PAPERS LIMITEDRATIOS ANALYSIS

PARTICULARSJULY – MARCH

2021 2020 2019 2018 2017

ASSET MANAGEMENT

TOTAL ASSETS TURNOVER %

44% 57% 50% 44% 37%

INVENTORY TURN OVER RATIO-DAYS

66 52 54 85 99

DEBTORS TURNOVER RATIO-DAYS

34 42 59 52 38

CREDITOR TURNOVER RATIO –DAYS

23 25 23 26 17

SECURITY PAPERS LIMITEDRATIOS ANALYSIS

PARTICULARSJULY – MARCH

2021 2020 2019 2018 2017

LIQUIDITY RATIOS

CURRENT RATIO 3.89:1 3.22:1 3.31:1 4.66:1 3.75:1

QUICK RATIO 3.30:1 2.13:1 2.83:1 3.98:1 2.98:1

DEBT MANAGEMENT

DEBT EQUITY RATIO 0.00:1 0.00:1 0.00:1 0.00:1 0.00:1

MARKET RATIO

EARNING PER SHARE –(RS)

16.33 12.94 10.76 7.42 11.42

PRICE EARNING RATIO -(RS)

8.11 9.62 8.18 16.50 12.53

STRATEGIC/OPERATIONALDEVELOPMENTS

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Waste Water Recycling plant (commissioned

in Aug’20)

Energy Conservation

Project

completed

New Chiller Installed

Development of New RO Bore

Gas Generator

1.4 MW

Fire Alarm Up-

Gradation, New Fire

Hydrant & Fire Sprinkler

System

Projects Completed during FY 2020-21

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Pilot Project on Renewable Energy

New Refiners

Construction of building for Cotton Comber Storage

Up-gradation of Winder machines

Diesel Generator 100KW

Projects under Progress

FUTURE OUTLOOK / CHALLENGES

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FUTURE OUTLOOK / CHALLENGES

The COVID shock has highlighted the significance of developing a stronger and more resilient business, as well as strengthening local and

regional supply chains.

The current fiscal year is expected to continue to be difficult for the business due to inflationary

conditions.

The government is implementing smart lockdowns to combat the third wave of Covid-19 outbreaks.

However, with the starting of COVID vaccination in the Country, the future looks a bit more optimistic. We expect COVID-19 to have a minor impact on our business because demand for banknotes and other

security paper will continue to rise. If the virus spreads further across the country, then this

outlook may change.

Demand of SPL products is steadily growing.

We are taking all necessary precautions to ensure business continuity in light of the evolving developments resulting from the

COVID-19 outbreak.

The Company is continuously working on capacity enhancement and plant upgrade in order to boost operational innovation and the quality of security

papers.

QUESTION & ANSWERS

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THANK YOU