Pakka Ltd

43:49 Siddhant Chhabra: Okay, got that, got that. Thank you for that. Now, my second question would be related to the compostable metalized Packaging. Now, I want to understand from your point of view, what do you think the viability of—I’m sorry for the disturbance—but what the viability of this kind of Packaging would be?

Because we know that for compostable Packaging, you need a circular economy, and in India, we don’t have a circular economy. So could you comment on what you think the viability could be? 44:22 Ved Krishna: Yeah. So first things first, let’s talk about the circularity part of it.

So any product that Pakka creates has to follow four broad principles. The first is that it has to be home compostable. So that comes from the idea that we cannot control people’s behavior. People might throw it here and there, and it has to be beneficial to the soil wherever it is thrown. So that’s the first rule that we have. The second one is it has to be able to be recycled in the paper stream because paper is collected 70 to 80%. Polymers, the petroleum-based, are collected seven to eight percent. Paper can be converted back to paper. Petroleum polymers are typically, they become fiber, and they become your polyester shirts. So, and then, you know, and that’s also seven to eight percent. So that's the second rule. The third is marine safe, and the fourth is terrestrial safe. So we want to make sure the toxicity level is such that it doesn’t harm either marine life or terrestrial life. A cow consumes it, a fish consumes it, it should not be harmful for life. We feel, as humans, that is our responsibility. So those are absolutes for us. We don’t compromise on it when we launch any product.

So any product that Pakka has will adhere to these four ideas, and they are not easy to achieve. The second part, in terms of competence, it all depends on what the customer is willing to accept. So of course, in an ideal world, the customer wants the product to be better and cheaper. That’s obvious. But there is a lot of other value that a sustainable product creates in terms of brand value and in terms of customer, the benefits for the consumer, in terms of their acceptability of the product. What we are finding is there are always people who are ready to take the jump and come into this segment for their own kind of desire. And we’ve had that with the first customer that we’ve had, and now significant tea players are coming in who are very, very clear that they want to go for this. The first product that we are selling in the US is almost 5x of our paper sales, the cost, and the customer is happily taking that. So as we grow forward, we know that the price and the cost is going to change, but we do find enough acceptability from the first customers who want to take the step. I hope that helps. 46:57 Siddhant Chhabra: Okay. Thank you for that. I’ll rejoin the queue for more questions. 47:02 Pranay Pasricha: Thank you. Mr. Hiren, you can ask your question. 47:07 Hiren Patel: Hi. Thank you for the opportunity. Pakka is always a great company to track because every month there are some exciting developments. So my question is, the first question is on the flexible Packaging. I was listening to your Good Garbage podcast, and the J&J Green Paper owner, he said that they have also developed the rice bran-based product, and they are also going to be with the 23 manufacturing locations across the US, China, India. And I think they have also Page 13 of 22

planned to come with the product in 2025, which, what they are boasting, that can replace the polyethylene Packaging. And also, the scale is also very good, I think 0.3 million, something they are saying. So my question is that, because we are also going, all the growth strategies also, on the flexible Packaging, and specifically in the US market, so now coming up with these competitive products also, and based on the other raw materials also, are our manufacturing, supply chain, and business model going to be such that, based on the recent development in R&D, we would be able to, if required, switch our Packaging or our product solution? And how are we going to position our product? And what is that first feedback from the US market?

How our product has been? That feedback we have received. 48:44 Ved Krishna: So the first range of products that we have launched commercially has got a little layer of 2 nanometers of metallization. But we knew that that’s an interim product; it's not the final product because when we are producing at scale in Guatemala, we are going to be producing over 330 tons a day of flexible Packaging. In Ayodhya, we're going to be producing over 125 tons a day. So metallizing at that scale creates a lot of challenges. Apart from that, the consumer may not see it, but we see it, that all transfer metallization happens through a polyethylene sheet. So there’s a lot of waste that gets created. And we, again, we are a little utopian in our thinking. We also feel bauxite mining for that metal is not a great idea. So we kind of go back to the whole life cycle of the product. So that was the first range, and there is enough acceptability that is coming there. So we are slowly, we are doing a lot of trials. We have a leader for the flexible Packaging side who is kind of putting that out there. Numerous trials in India, numerous trials in the US that are lined up now, and those trials are going to start happening in the next quarter for the metallized product. You’re right, there’s a lot of development that is happening, not just J&J, but there’s a lot of other companies that we are directly working with today on the non-metallized side. So in fact, the next three days, Satish, me, our Guatemala team, we are all in Portland with our technology guides, where eight of us are just putting ourselves in a singular place and just brainstorming for the next three days on how the product, as well as the technology, will be kind of developed in the next phase. So there’s a lot of development that is happening.

Fundamentally, if you look at Packaging and its dharma, ultimately our dharma is to protect what is inside. That’s the first part. We cannot compromise on that because of the ecological damage that it creates if you falter on that. You can imagine if there’s potato chips packed, and the potato chips get spoiled. So there’s a huge ecological damage from that. So first and foremost, we don’t compromise on that.

And the second part is that of the cost. The third part is that of making sure that it runs at the converters’ part because, again, if you don’t, you cannot disrupt everything. You cannot disrupt the product and the supply chain. So then you use the same supply chain and make sure that it—for example, we just did, Satish and the team just did, some trials for tea bags. And they were running petroleum polymers at 4,000 bags a minute. They ran ours in the first shot at 3,600 bags a minute. This is a great thing for us. If they can run it at the first shot at 3,600, that means they can meet 4,000. So we can run parallel to the petroleum polymers. So it’s a step-by-step kind of development. We have put ourselves out there, and we are, of course, part Page 14 of 22

of—good garbage is also—to build these relationships. And we are working with lots of suppliers like J&J to develop numerous products today. Hope that helps. 51:57 Hiren Patel: Yeah, thank you. And the second question is on the molded products. So for the last two, three years, the sales have been stagnant, like between 13 to 15 crore. And as already there is a lot of market potential, but I just wanted to understand because at present, I think we are utilizing 55% of the capacity, and 20 TPD, which is the production capacity. And I think after Jagriti also, because it would be mainly on the flexible Packaging, so that molded product capacity would even still remain 20 TPD. So because, considering the huge market, the main concern is whether there is a particular demand issue, that consumers are not willing to switch from the plastic disposable or these tableware products. Or is it that, because of the other means, people are not able to get the price benefit from those types of Packaging? So what would be the trigger point where we can see a significant impact on the bottom line through molded products? 53:08 Jagdeep Hira: Mr. Hiren, I think the market is growing, and the market has grown to a greater extent. Having said that, there is slow movement as per demand and the productivity. So if we have to see, over the last four years, there were hardly 20 players in the market for the molded products. Right now there are 69 players in the market who are producing similar stuff, on a lower, unorganized sector, and lower stuff. The market is going slow, for sure. That's why, as we presented earlier, that we are going global now. The Middle East is one where we have seen a much quantum jump. We have started exporting also to the Middle East, and we are looking at Australia also as a second area of operation. Thirdly, we were confined to majorly tier-one metro cities as of now. Now, as a strategy, we are expanding our horizons to tier-two cities for growth. 54:21 Hiren Patel: Okay, but we are not planning to expand capacity beyond 20 TPD, I think, after… 54:26 Jagdeep Hira: As of now, no, but we are looking at outsourced facilities.

Infrastructure-wise, we won’t be expanding much here, so it will remain the same as of now. But the outsourcing model, which we started last year, we would be expanding on that. 54:43 Hiren Patel: Okay, okay. Thank you.

54:47 Pranay Pasricha: Thank you. Mr. Jeet, your question please. 54:52 Jeet Gala: Thank you for the opportunity, Sir. On the similar line on the molded segment, I wanted to ask a couple of questions. One is, if at all, we were to crack, say, a delivery container, kind of a product, and if you were able to get someone like us on board, wouldn't that lead to increasing utilization at Aydhya plant or, I mean, as a matter of fact or as a matter? Of principle for the moulded segment to really do well where we are have to be near to the market. Which is why the concept of you know asset light model comes into picture.I'm asking this because Page 15 of 22

Zomato is spread across India, you'll have demand coming from Hyderabad, Chennai, Mumbai, etc.. So is it viable to produce at Ayodhya and move the products across the country? Or the only answer is going to asset light and be near to the market?

55:44 Ved Krishna: Can I step in? 55:44 Jagdeep Hira: Let's see this week? Yeah, sure. Please what?

55:49 Ved Krishna: Yes, a couple of conceptual ideas. One is in terms of Zomato.

So Zomato has been extremely keen to build this with us. The the challenge has been the efficacy of products. So even 2-3 years back we had deep discussions with Zomato, but the products did not perform. So ultimately the fault lied with us.That you know, there is a challenge that we could not fulfill. So Zomato went to the extent where they even said that they're going to offer. Because ultimately they don't govern what the restaurants are going to use, but they influence what the restaurants are going to use. So they were even thinking about, you know, give becoming sustainability partners. They sort of make us becoming sustainability partners and then giving certain green points to. People who used our products, so there were various explorations that happened, but we have cut a sorry figure in that case where we have not lived up to their expectations. So we only want to go back to them and we are very clear about our performance of the products that took us back to the drawing board. We spent the last year, year and a half trying to rebuild the whole thinking around the delivery space, again experimenting in Various directions.

Now we feel that we can come in with another kind of range, which kind of is. Close closer to the goal. Ultimately your second part of the question and I think Jagdeep will address it a little better than me, but I'll take the first shot at it. Ultimately, we have to look at it. It is not the same as a, say, a polystyrene product. Here, you know, you have to be near the raw material anytime that we produce any product for Agri residue, the raw material has 50% moisture. I need 5 tons of bagasse to produce one ton of material, right? So it's simple as that. So you have to be near the raw material. You cannot transport 5X to produce 1X, nor can you transport pulp. That also becomes a challenge. So the outsourcing model is, yes, partially based on the market, but more based upon you know where the capacity is available and the quality. You know we've we've probably gone through 10 different outsourcing partnerships. Where most have failed in terms of quality, so that's a challenge that we face today. Yeah, but over to Jagdeep.

Jagdeep if you want to add anything to that.

58:21 Jagdeep Hira: It was right. Now that development is as as RIT mentioned, a development. Is it over and innovation is happening at our end for the delivery, so the experimentation is somewhere near the Innovation Center. So once this product is.

There for a commercialization that will be brought down to Ayodhya for distribution Page 16 of 22

along with other because we are also looking for associated product along with delivery for Zomato, swiggy. So translate that.

58:58 Jeet Gala: So this will lead to sweating of the old large automatic machine, right?

But we had ordered in 2008, which probably are not sweating as much today.

59:05 Jagdeep Hira: Oh, no, no, no, no. So but it will be both combination of both where we get a higher productivity on the bigger machines. We we go there on the bigger machine automating machine and the rest so that that configuration is already on to which machine will produce what product.

59:27 Jeet Gala: So my second question is what are the?

59:27 Ved Krishna: A lot of the product right now, the lot of the products of the delivery side are on our outsource side right now. We are not shifting any yet any production of Chuck on delivery side.

59:35 Jagdeep Hira: Hey.

59:41 Jeet Gala: And So what would the NSR or something like a grease proof paper be right now today market rate as compared to your normal paper segment NSR?

59:52 Jagdeep Hira: This is almost double.

59:56 Jeet Gala: OK, so base case is going to be double, if at all coding happens or does not happen. I mean at least in the base case model. 1:00:01 Jagdeep Hira: Biscuit biscuits won't go double because you also incur some infection costs, but delta is higher.

1:00:15 Jeet Gala: Understood. Understood.Thank you so much. 54:47 Pranay Pasricha: Thank you. Mr. Shreyash, your question please. 1:00:26 Shreyas Dhanuka: Mr. Shreyash… Am I audible? 1:00:30 Pranay Pasricha: Yeah, you are audible. 1:00:31 Ved Krishna: Yes, you are audible. 1:00:32 Shreyas Dhanuka: Yeah. 1:00:34 Shreyas Dhanuka: Yeah. First of all, congratulations for the great results.

So I would like to know in this year, we have, till now, we have done 215 crore, and Page 17 of 22

last year, we closed on 414 crore. So can we see that this year we... (Audio cuts out, then returns) ...Your voice is not clear. Yes. 1:00:47 Jagdeep Hira: Your voice is not clear. 1:00:53 Shreyas Dhanuka: Hello. Is it clear? Is it better? 1:00:56 Jagdeep Hira: Yeah, yeah, much better. 1:00:58 Shreyas Dhanuka: Yeah. So this year, till now, we have done 215 crore.

And last year, we closed around 414 crore. So can we see a growth of 25% roughly?

Can we see closing this year around 515 or 520 crore? 1:01:19 Jagdeep Hira: The target is to be there, but it seems a bit difficult to go onto those percentage levels. 1:01:29 Shreyas Dhanuka: Okay, as well as… 1:01:29 Ved Krishna: Just adding to Jagdeep, the big jumps will happen when the projects come into play. And just now, the team is totally focused and stretched on making sure that the projects go well. So, of course, we want to keep the ship afloat and keep working towards growth, but the big growth numbers really get into play once the project gets commissioned. 1:01:56 Shreyas Dhanuka: Correct, correct. And this year, right now, for this quarter, we have seen a 74 lakh profit for Chuck, again, the molded products. So last year, we closed somewhere around 1 crore 70 lakhs. So can we see this year closing at the same figure, at least? 1:02:22 Jagdeep Hira: Hopefully, yes, but we have to see the third quarter and then go forward. 1:02:34 Shreyas Dhanuka: So right now, also, the Chuck product is not going… 1:02:40 Pranay Pasricha: Hello. 1:02:42 Pranay Pasricha: Yeah, go ahead. 1:02:45 Shreyas Dhanuka: So right now, we see the Chuck product not going very well compared to last year. 1:02:54 Jagdeep Hira: Shreyash, the market is not supporting that high, that’s why we are looking for Middle East territories and Australia territories to expand the business there and make good top line and bottom line. 1:03:13 Shreyas Dhanuka: Thank you, thank you so much. 1:03:15 Pranay Pasricha: Thank you. Mr. Shrot, your question please. 1:03:23 Shrot: Yeah, hi. Am I audible? 1:03:26 Pranay Pasricha: Yeah, you’re audible. 1:03:28 Shrot: Yeah. First of all, thank you so much for the opportunity to ask this question, and also to hear the minds of the management team here. My question is, I Page 18 of 22

first want to verify, on the plant that is coming live, you mentioned the Ayodhya plant.

That is for flexible Packaging, or is it for molding? If you can just confirm that, and also, you mentioned it’s coming in Q4 FY25. Is that correct? 1:03:55 Jagdeep Hira: So it will be more on the flexible, 100% on flexible. 1:04:00 Shrot: Okay, got it. And if you could just shed some light on what has been the CAPEX that we’ve put into the plant and the kind of asset turns that we’re expecting at optimum capacity, and by when could we have some sort of timeline for that? 1:04:17 Jagdeep Hira: So the total CAPEX cost is 675 crore. And 2027, we are looking for substantial growth on the figures. 1:04:29 Shrot: Got it. And any indication on the kind of asset turns that we’re expecting for the plant? 1:04:37 Jagdeep Hira: So I think we indicated earlier also. Probably you might have missed that. So it will be a multiple growth on the top and the bottom line, both. In 2027. 1:04:50 Shreyas Dhanuka: Okay, great. Thank you so much. All the best. 1:04:53 Jagdeep Hira: Thank you. 1:04:58 Pranay Pasricha: Thank you. So we have repeat questions now. Maybe you would want to question, continue? 1:05:07 Ved Krishna: Let’s do another 10 minutes and then close. 1:05:11 Pranay Pasricha: Okay. Yeah, Miss Manali, your question, please. 1:05:17 Manali Gala: Hi. So my question is, now we have the Middle East, where we’re looking at a business partnership, or sorry, not a business partnership, but for business. So how are we going to cater over here? Is it through an asset-light model, or the products are going to be made over here and then exported? How is this entire thing going around? 1:05:39 Ved Krishna: It’s all production in India; this is exports. 1:05:42 Manali Gala: Okay, so while we transfer these products over there, doesn’t that lead to an increase in your cost? Or how does the economics sit over there? 1:05:56 Ved Krishna: Or it’s like… Okay. So that ultimately, if a buyer buys and pays us good money, we sell. If they don’t pay us good money, we don’t sell. But Jagdeep, maybe you can answer it better. 1:06:06 Jagdeep Hira: So Manali, it's a balance of the equation. So where you get more value for your products, you operate there. 1:06:16 Manali Gala: Okay. And the second is, I just want to understand, so this… right now, we’ve achieved around 13,606 MT. So your end units can be what at similar rates? And is this the effect of PM3 expansion from 70 to 80 TPD? Page 19 of 22

1:06:49 Jagdeep Hira: No, that has not happened yet. The ramp-up is again in two phases. One will get commissioned in May, or something, May end, or something like that, which will generate more tonnage and value. So this is from the efficiencies. 1:07:09 Manali Gala: Okay, okay. Thank you. 1:07:13 Pranay Pasricha: Thank you. Mr. Paras, your question, please. (Pause, no response from Mr. Paras) 1:07:37 Pranay Pasricha: Mr. Paras, if you can hear us, you can unmute and ask.

Okay, I’ll move on. Mr. Prabhakar, your question. 1:07:37 Prabhakar: Yeah, hi. My question regarding molded products. So in previous quarters, we were seeing negative numbers; now we are seeing positive numbers. So what change made us to positive? I want to understand: will it sustain further quarters or not? 1:07:56 Jagdeep Hira: Two changes always come through, Mr. Prabhakar. One is efficiency of the plant, which is continuously getting increased. We had some forced shutdown for maintenance purposes in the plant in Q2 over Q1. Again, the second is cost of manufacturing. 1:08:18 Prabhakar: Okay, thank you. 1:08:21 Pranay Pasricha: Thank you. Mr. Sanyam, your question. 1:08:26 Sanyam Jain: Yeah. Thank you for the opportunity again. My question is to Ved; just two basic questions. First is regarding Pakka Inc. How much we are looking to dilute, at what valuation, and how much debt will we take? Basically, I want to understand how will the balance sheet of Pakka Inc. look like? And second is around the carbon credits. Since we are working towards the environment, and there are rules and regulations in India and America also regarding the carbon trade policy, are we looking for that? How much carbon credits we can get out of these plants and the sales we are doing to protect the environment, and what would be the monetary effect of that in the coming future regarding carbon credits? Thank you. 1:09:06 Ved Krishna: Yes. The total cost of the project for Kawok, that is what we call the project there, is about $340 million. Out of which $140 million is coming as debt—sorry, as equity—and the remainder $200 million as debt. The debt is more or less spoken for. Rolando is, of course, trying to bring in DFCs instead of banks right now to lower the cost of capital. And the idea is to be able to wrap it up that much.

Sorry, I missed out on the second part; maybe Rolando can add to that. As far as carbon credits go, we are not actively looking for that. It will be a cherry on the cake, but yes, we will look into it in the future. But right now, the focus is to secure the equity and then the debt. And then, after that, we can look at what the possibilities are for additional benefits. Rolando, do you want to answer the second part of it? I’ve kind of missed out on that one. 1:10:04 Rolando Yon: Sure. I think the question was in terms of dilution. And for Kawok, we are aiming for no more than 33% dilution on the project. Page 20 of 22

1:10:19 Sanyam Jain: And what is the valuation we are targeting for the fundraising, post-money valuation? 1:10:26 Rolando Yon: The valuation… Give me one second… The valuation of the total project should be around… a present value of around $400 million. 1:10:56 Sanyam Jain: Sorry, can you come again? How much? 1:10:59 Rolando Yon: A present value of the cash flows of around $400 million. 1:11:11 Pranay Pasricha: Thank you. Mr. Siddhant, your question. I think we’ll take this as the last question. 1:11:15 Siddhant Chhabra: Yeah, hi. Ved, just a follow-up as to a question I had last time. So you had mentioned the home compostable, marine safe, terrestrial safe values for the metalized compostable Packaging. So I just wanted to confirm, so this Packaging of yours, the metalized compostable one that you’ve developed, that is actually compostable in the pit, right? That the metal can be demineralized. And however, I don’t know much about the science, but it is actually the use case is there, right? In the compostable, in the pit, it can actually be composted. Right? 1:11:55 Ved Krishna: Absolutely. You’ve used the exact term “demineralized.” It actually, the metal becomes demineralized, and it breaks down into the, these softer components again and becomes environmentally benign, not beneficial. And the metal itself is less than 5% anyway, of the product. 1:12:08 Siddhant Chhabra: Okay, less than 5%. And then, on that Packaging only, could you give us a cost differential between that Packaging and right now, the alternatives in the market for flexi-pack, like normal metalized, which is not compostable, and maybe plastic film? So can you give us a cost differential? 1:12:32 Ved Krishna: Yeah, so right now on the M3, so we have two products in the market. M1 is a little bit of a glossy substance with a different structure. That’s almost double of the current substrates in terms of pricing. In terms of M3 that we are now kind of pushing, it's a little less glossy, more organic-looking product and a different chemistry on the barrier side. That's about 30 to 40% higher than the current petroleum-based substrates. 1:13:04 Siddhant Chhabra: Okay, got that. And just my final question would be on Guatemala. It was being discussed right now, but if you could give me an update regarding the fundraising, as to what’s happening, what the update on that is, the equity versus the debt; like where we are in the process? And secondly, could you reconfirm the amount paid for the land acquisition in Guatemala? That’s all. 1:13:32 Ved Krishna: So the land itself is about $1.7 million. We haven’t paid anything yet, but next week is when we expect to pay ideally the entire amount to transfer the land to our name. The equity raise, as I said in the beginning, is ongoing.

The investors have raised some concerns on the risk side of the project. So we are securing that, and it's mainly around more detailed engineering, ordering of equipment, or finalizing of the actual costs, and on offtakes. Those are the big ones, and also something, some on the IP side they wanted. Our IPs that are currently Page 21 of 22

resting in the Indian holding company, they wanted to rest in the US company where they would invest. So that’s something we are also exploring. In terms of the debt, banks have already committed to the debt, Guatemalan banks and the local Colombian banks there. But that said, with Rolando coming in, we are looking to lower the cost of debt itself as well. And we’ve started talking to a lot of DFCs to come in, and they are being very positive, too. So we are looking at about a March timeline for the equity, and then subsequently the debt will come very quickly because that's already committed. 1:14:54 Siddhant Chhabra: Okay, thank you. I just want to confirm, Rolando had given the figure for $400 million; that was for the Guatemala valuation only, right? 1:15:02 Ved Krishna: Yeah, that’s… 1:15:02 Rolando Yon: That’s the net present… 1:15:04 Siddhant Chhabra: …net present… yeah, net present value basis. 1:15:06 Rolando Yon: Net present value, and it doesn’t include the terminal value. If we include the terminal value, then it will come up to around $600 million present value, something like that. 1:15:16 Siddhant Chhabra: Okay, okay. Thank you, thank you so much. 1:15:21 Pranay Pasricha: Thank you. 1:15:21 Ved Krishna: Back to you, Pranay, please. 1:15:23 Pranay Pasricha: Yeah, thank you. Thank you, everyone. I know we have some more questions. You can send those to us, and we'll get back to you individually. And just a closing note from you, Ved. 1:15:38 Ved Krishna: Yeah, thank you all so much. It’s always a joy to connect with you. Thank you again for all your support that is coming our way, and we will, as we say each time, leave no stone unturned from our side to make sure that the trust that you’ve bestowed on us is worked on, and we make sure that we live up to your expectations. So thank you all. Namaste, good night. 1:16:03 Pranay Pasricha: Thank you. 1:16:04 Rolando Yon: Thank you. Page 22 of 22