Atlas Pearls : Annual Report 2022

A T L A S P E A R L S L T D - A S X A T P - A N N U A L R E P O R T 2 0 2 2

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Atlas Pearls - Banyu Biru pearl farm

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Producing the world's finest South Sea pearls sustainably and respectfully whilst caring for our environment, people, communities and shareholders.

CONTENTS

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CHAIRMAN ADDRESS	6
ABOUT ATLAS PEARLS	9
FINANCIAL REPORT HIGHLIGHTS	10
DIRECTOR'S REPORT	12
FINANCIALS	25
ADDITIONAL ASX	61

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onlyCHAIRMAN ADDRESS

Dear Fellow Shareholders, on behalf of the Board of Directors of Atlas Pearls Limited I am pleased to present to you the Company's 2022 Annual Report.

useFor the first time in the Company's history revenue exceeded $20m and the share price increased by 140% from 1.5 cents to 3.6 cents at 30 June 2022. Operationally, it was a record production year with the number of pearls harvested exceeding 629,000.

Additionally, debt reduced from $4.2m to $1.125m with the balance of the shareholder loan scheduled for full repayment in September 2022. Pleasingly there is no material uncertainty of going concern in this year's accounts.

Atlas' performance over the year is largely attributable to the introduction of the multi-faceted distribution strategy combined with strong international demand for pearls.

Atlas remains focused on a multi-channel sales strategy and has embraced all distribution channels including the newly developed online personaltechnology platform. Pearls continue to be available for purchase online, which has increased customer reach and created competitive

tension, as products are opened to new markets and customers.

The quality of goods produced in the second half of the year was below that in the first half and this is thought to be related to genetic issues of a cohort of shell that should all be harvested by the end of Q1 FY22/23.

Over the year, progress has been made with several important initiatives aimed at achieving consistency in pearl quality and improving

	perating efficiency and productivity. These include:
•	Scoping a genetics programme to introduce advanced sequencing and tagging techniques to greatly increase the functional population
	size of broodstock and assess crosses on an individual basis. This is a long-term project that will set the business up for the improvement
	in our pearl genetics understanding and improvement and will see benefits over the period of five to ten years,
•	Identifying new techniques for better gamete conditioning at spawning,
•	Renewing the power fleet for work vessels and moving toward a cyclical replacement / preventative maintenance fleet management policy,
•	Implementation of trials aimed at shortening both time-to-seeding cycles and grow-out post seeding to release working capital from
	the business,
•	Market development initiatives aimed at increasing sales beyond the now well-established Asian markets of China and Japan.

This is my last report as Executive Chair and I would like to acknowledge the unwavering support of my fellow Directors during the challenging COVID years and the subsequent reinvention of the sales and distribution strategy.

I also want to separately acknowledge the hard work and dedication from our committed management team that executed the strategy and managed change during very uncertain times. I am extremely proud of what our team has achieved over the last two years and I am Forconfident that their commitment and dedication will continue under the leadership of Michael Ricci who has joined us in the role of Chief

Executive Officer. Mr. Ricci brings with him extensive experience and is excited by the opportunities that the Company presents.

Finally, I would like to thank the Company's loyal and dedicated shareholders, employees, customers and stakeholders for their continued support and commitment during the year. We remain focused on the production and distribution of the highest quality, safely and sustainably produced, luxurious pearls in the world.