Lotte Chemical Pakistan : Transmission of Annual Report for the year ended 31 December 2023.

25 Years of Excellence

Annual Report 2023

Table of Contents

About Us

Stakeholders Information

Corporate Governance

Business Review

About Us 02

Mission 04

Vision 05

Key Strategic Objectives 06

Code of Conduct 07

Management Principles 08

Core Values 09

About LOTTE 10

About LOTTE Chemical

Corporation 11

Company Information 14

Chief Executive's Message 15

SWOT Analysis 16

Awards & Accreditations 17

Financial Calendar 18

Share Price Analysis 19

Pattern of Shareholding 20

Board of Directors 26

Board Committees 28

Executive Management Team 29

Management Committees 30

Organisational Structure 31

Corporate Governance &

Compliance 32

Business Risks & Challenges 37

Chairman's Review Report 40

Directors' Report 41

Statement of Compliance 47

Review Report to the Members

on Statement of Compliance 49

Functional & Operational Excellence

Human Resources 52

Information Technology 55

Manufacturing Excellence 57

Technical Training Centre 61

Total Productive

Management 62

Health, Safety and

Environment 63

Energy Conservation 67

Environmental Protection 68

Societal Responsibility 70

Labour Relations 72

Product Stewardship 72

Economic Contribution 73

Financial Summary

Statement of Value Addition 76

Key Operational and

Financial Data 77

Vertical Analysis 78

Horizontal Analysis 79

Graphical Presentation 80

DuPont Chart Analysis 82

Variation Analysis in

Quarterly Results 83

Financial Statements

Auditors' Report to the Members

Statement of Financial Position Statement of Profit or Loss

Statement of Comprehensive Income

Statement of Changes in Equity

Statement of Cash Flows

Notes to the Financial Statements

Glossary

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Form of Proxy (مر� �ا�)

86 90 92 93 94 95 96 142 143 151

0011

About Us

Lotte Chemical Pakistan Limited (LCPL) is the only world-class manufacturer and supplier of Purified Terephthalic Acid (PTA) in Pakistan. The Company has the capacity to produce 500,000 tonnes of PTA per year through its state-of-the-art plant located at Port Qasim, Karachi.

Our Journey

• • Construction phase carried out by renowned engineering and consultancy firms under ICI's supervision

• • PTA Plant commissioned

• • PTA business demerged from ICI Pakistan Ltd into Pakistan PTA Ltd (PPTA)

• • AkzoNobel acquires

  • • KP Chemical (subsidiary of LOTTE) acquired PPTA, making PPTA part of LOTTE

• ICI globally, making PPTA part of AkzoNobel

• • Name changed to

• Lotte Pakistan PTA Ltd

• • KP Chemical's identity changed to

• • Name changed to Lotte Chemical Pakistan Ltd

(LCPL)

• • Production & Sales volume crossed 515K tonnes for the first time since commencement of plant operation in 1998

• • HSE milestone of 69 million plus man-hours without a Lost Time Case (LTC) to any Company and contractor employees

• • Co-Generation Plant commissioned

02

Purified Terephthalic Acid (PTA)

LCPL holds the foundation of the polyester chain in Pakistan and retains its edge by being a local PTA manufacturer and major supplier for the domestic Polyester and PET industries. We maintain major share of the domestic market, and remain the supplier of choice based on our short delivery time, consistent quality and excellent customer service.

For producing PTA we import our feedstock (Paraxylene) from reputable suppliers based in Asia and Middle-East region. Our plant operates under a technology license with IPT (Invista Performance Technologies) which is currently the leading global supplier of PTA technology.

Crude

Oil

Heavy Naptha

Paraxylene

PTA

Polyester Polymer

Our Customers

Since its inception, the Company has focused on meeting

Pakistan's PTA demand. However, if domestic demand slows down, the Company is well placed to export to other countries. Our product meets all international quality standards and is well accepted by Customers in Asia and Middle-East region. Our domestic Customers are located across Pakistan.

Lotte Chemical Plant at Port Qasim

LCPL

Our Vision

The Spirit to Make a Difference through Value, Quality and Excellence

At Lotte Chemical Pakistan Limited, our customer's satisfaction is the driving force behind our spirit to meet challenges and achieve excellence in everything we do. We maximise operating efficiencies and demonstrate best practices in Safety, Health and Environment that add value to our quality product and make a difference in letter and in spirit.

Our Key Strategic Objectives

Maintain a high standard of HSE performance.

Develop and retain talent and

improve employee

engagement.

Deliver business improvement plan targets.

Achieve more than 95% availability of PTA plant and Cogeneration plant.

Maximize domestic sales and market share.

Optimize raw material

procurement.

Our Code of Conduct

From the inception of the Company it has been and continues to be a policy that the Company and all its employees maintain the highest ethical standards in the conduct of the Company's business. Our Code of Conduct constitutes a set of standards and rules which form an integral part of our corporate culture and is a statement of who we are and how we work. They highlight business principles, the Company's responsibilities towards its employees, and employee responsibilities towards your Company. All standards ensure both management and staff work in cohesion towards the smooth functioning of the organisation.

Business Principles

These define our management principles, core values and other specific policy areas which help in creating long-term value with all stakeholders. Specific policy areas include supporting the principles of free enterprise, ethics, integrity and fairness in all aspects of operations, supporting community activities as a socially responsible corporate citizen, communications in an open, factual and timely manner, compliance with the laws in which we operate and protecting the environment with the commitment to contribute to sustainable development. It is the responsibility of the Board through the Chief Executive to ensure that the business principles are communicated to all employees and to oversee implementation thereof.

Company Responsibilities

These define specific policy areas which include adopting a spirit of open communication, providing equal opportunities, a healthy, safe and secure environment, ensuring employee rights are exercised such as freedom to join unions and associations, protecting employees' personal data and engaging in an active performance management system.

Employee Responsibilities

The Code provides guidance to employees on their responsibilities towards media relations, disclosures, inside information, protecting intellectual property, information technology, code of conduct, compliance with business policies which ensure highest ethical standards in the conduct of the Company's business.