Awan Trading Company (Pvt.) Limited was incorporated in Pakistan under the Companies Ordinance, '2015. The Company is engaged in import and trading of coal.

Awan Trading after establishment in October 1992, remained dormant for several years till 2002. In 2003, the first coal vessel which reached at Karachi Port brought coal for Awan Trading. The Company is also first among the industry players to enter into a ten-year agreement with Pakistan Railway for transportation of coal to northern areas of the country.

Awan Trading is actively engaged in business with a diverse portfolio of clients across the IPP, cement, steel, and textile sectors. To efficiently meet customer requirements, the company maintains strategically located stockpiles at four key sites: Port Qasim and near PIBTL in Sindh, and Taxila and Chicho Ki Maliyan in Punjab. Awan Trading brings extensive experience in the import and trade of coal from key international markets, including Indonesia, South Africa, and the United States. The company has established long-term agreements with leading global suppliers such as Glencore International AG, Mercuria Energy Trading PTE Limited, Swiss Singapore Overseas Enterprises PTE Limited, Itochu Corporation (Japan), London Commodity Brokers, and IMR Metallurgical Resources AG (IMR).

The current shareholding of Awan Trading is divided between two families: the Tekwani family and the Awan family. Over time, the ownership structure has seen minor adjustments. Mr. Mohammad Aslam (Late) holds a 3.99% stake, which remains under his name but is available for transfer. Similarly, an additional 3% stake held by Mr. Lal Chand is also open for transfer. Mr. Aslam’s grandsons, Mr. Syed Mustafa Ahmed and Mr. Syed Murtaza Ahmed, currently hold 14.34% and 8.43%, respectively. Furthermore, Mr. Govind Ram has transferred a portion of his shares, 11.54%, to his son, Mr. Nikhil Narind Kumar. Based on the current structure, the Tekwani family collectively holds 74.26% of the company, while the Awan family holds the remaining 25.74%.

Considering the strategic importance of the Company in coal industry, stability is considered adequate.

Company's sponsors have an extensive industry experience with major concentration in energy, coal, logistics and tyre industry. Majority shareholder Mr. Bhool Chand & Mr. Govind Ram, both have almost 20 years of experience in coal trading sector.

The sponsors exhibit strong financial capacity, primarily supported by their profitable offshore venture, International Energy Resource FZCO, a Dubai-based associated entity engaged in coal procurement. With an estimated revenue of AED 850 million for FY25, the entity plays a vital role in supporting the group's core operations. Backed by significant industry experience, the sponsors possess the business acumen and strategic insight required to effectively identify and manage risks arising from unforeseen circumstances.

The overall control of the company vests in four-member board of directors (BoD) including the Chief Executive – Mr. Govind Ram. All board members are also shareholders. Mr. Kamlesh Kumar and Mr. Govind Ram hold executive position on board. The board members’ have adequate business acumen on the back of local industry exposure. The board meetings minutes are maintained reflecting adequate participation by the members.

All board members are qualified and competent enough for effective leadership. They have long standing experience and knowledge of coal industry.

The experiences of board will help in providing useful insight into coal, energy & logistic sector guiding the management in developing effective operational and financial policies.

Hashmi & Co., Chartered Accountants conduct the external audit services for the company. The aforementioned audit firm is not in the list of SBP pertaining names of audit firms defining categories of external audit firms. They have expressed unqualified opinion on the financial statements for the year ended 30th June, 2024.

The company follows a lean organizational structure, with each department led by a competent professional who reports directly to the CEO. The structure is organized into five core functional areas: (1) Finance, (2) Marketing, (3) Operations, (4) Procurement, and (5) Shipping & Chartering.

Mr. Govind Ram, the CEO, is associated with the company since its inception. Each function is headed by senior individual having designation of director. The senior management has long association with the company. The overall control of management vests with the CEO, who is supported by a team of experienced professionals at key management positions.

To oversee the management of the company, Company has constituted three committees comprising various members of the management team. The committees include i) Audit Committee, ii) Purchase Committee and iii) Sales Committee.

The company utilizes a customized ERP-based Management Information System (MIS) to efficiently manage its import operations and support various internal control functions. Monthly and weekly reports, covering aging analysis, inventory management, budgetary controls, and key performance indicators, are generated through this system and reviewed by top management, ensuring effective oversight and optimal operational monitoring.

Awan Trading has adequate technology infrastructure with defined policies and procedures. The company has developed a software for operational modules include marketing, purchase and financial modules.

Pakistan holds an estimated ~186bln MT of coal reserves as of FY25, with nearly 99% located in Sindh, particularly in the Thar region. However, domestic coal supply faces structural limitations including security concerns in Balochistan, underdeveloped mines in Dera, and immature lignite reserves in Sindh, restricting its effective use in industries requiring higher calorific value. As a result, a blend of 70:30 (imported: local) coal is often necessary, as noted by Awan Trading, especially in the cement sector, which currently absorbs ~16% of total coal imports. During 9MFY25, coal imports increased to ~4.4mln MT (9MFY24: ~3.4mln MT), reversing a prior downward trend due to improved exchange rates and reduced global prices (averaging ~USD 109/MT). Total coal consumption stood at ~16.2mln MT, down ~6.4% YoY as of 9MFY25, mainly due to decreased demand from the power (~11.2mln MT) and cement sectors. The shift to local coal is primarily policy-driven and economic; however, reliance on imported coal remains due to quality, reliability, and global supply chains involving firms like Glencore, Mercuria, and Itochu. Key import sources for Pakistan have included South Africa (~54%), Afghanistan (~20%), and Indonesia (~12%). Technological alternatives like solar panels and Tire-Derived Fuels (TDFs) have limited substitution potential in heavy industries due to energy intensity and environmental concerns, respectively.

During the first nine months of FY25, Pakistan’s total coal imports amounted to approximately 4.4 million metric tons (MT). For the full fiscal year FY25, Awan Trading Company is projected to import around 1.8 million MT of coal. This volume would constitute a significant share of the estimated 2.5 million MT of non-Afghan coal imports in Pakistan. These figures highlight Awan Trading’s dominant position in the country’s coal import market, with the company responsible for approximately 72% of Pakistan’s coal imports.

During the first ten months of FY25, net revenue reached PKR 58,246 million (FY24: PKR 66,885 million; FY23: PKR 59,958 million), representing a 16.1% increase compared to 9MFY24, when sales were PKR 50,210 million. This growth in revenue is attributed to increased imports and sales by Awan Trading during the period, as well as the revival of the construction industry supported by falling interest rates and increase in PSDP spending, which is expected to ultimately increase the demand further by cement industry.

During FY24, the company’s gross profit margin declined to 9.9%, compared to 14.5% in the same period last year. This decline was primarily driven by an decline in coal prices. Nonetheless, the gross margin for 10MFY25 improved slightly to 8.0%, as compared to 7.9% reported in 9MFY24. On the profitability front, net margins also experienced a marginal decline to 2.3% in FY24 (FY23: 2.6%), and further declined to 1.3% as of April 2025.

Awan Trading Company (Pvt.) Limited maintains a sustainable and resilient operating model, supported by its leading market share in coal imports, expected to account for ~1.8mln MT of the total ~2.5mln MT (excluding Afghan coal) imported into Pakistan during FY25. The company’s ability to cater to diversified industrial demand—across cement, textile, and steel sectors—positions it well in a shifting energy landscape. Pakistan’s indigenous coal continues to face challenges including low calorific value, security risks in Balochistan, and immature mining infrastructure in Sindh and Dera. The expected recovery in construction and industrial activity, combined with increased blending of Afghan coal, is likely to revive market demand, creating room for Awan Trading to recapture lost volumes. On the financial front, the company demonstrates prudent capital allocation, reflected in its steadily growing investment portfolio, which stood at PKR 199.939mln at end-April 2025 (FY24: PKR 199.913mln), primarily parked in Term Deposit Receipts (TDRs). This provides a stable liquidity buffer and enhances financial sustainability. Backed by long-term relationships with global suppliers such as Glencore and Itochu, efficient ERP-based MIS systems, and strategic storage infrastructure across Sindh and Punjab, Awan Trading remains well-equipped to navigate external shocks and sustain its operational performance in the medium to long term.

Awan Trading manages its working capital cycle through a mix of internal cash flows and short-term borrowings. During FY24, the Company’s reliance on short-term borrowings increased to PKR 5,330 million (FY23: PKR 3,908 million), further rising to PKR 6,114 million as of 10MFY25. Net working capital days decreased to 49 days in FY24 (FY23: 53 days), and further improved to 42 days as of 10MFY25, which indicates enhanced working capital efficiency and faster cash conversion cycles.

The Company’s Free Cash Flows from Operations (FCFO) have declined over the period, primarily due to a reduction in coal prices, which negatively impacted gross margins. FCFO stood at PKR 2,445 million in FY24, down from PKR 3,674 million in FY23, and further declined to PKR 1,286 million in 10MFY25. The decline in operational cash flows, coupled with increased reliance on short-term borrowings (STB), has led to a weakening in debt servicing metrics. Consequently, the Interest Coverage Ratio (EBITDA/Finance Cost) declined to 3.4x in 10MFY25, compared to 4.1x in FY24. While still higher than the 2.8x recorded in FY23, the recent downward trend reflects a weakening in the company’s debt servicing capacity.

Over the past few years, the company’s equity base has been consistently supported by sustained profitability, reaching PKR 8,785 million in 10MFY25 (FY24: PKR 8,143 million; FY23: PKR 7,254 million), compared to PKR 7,971 million in 9MFY24. Meanwhile, the company’s total debt stood at PKR 6,114 million in 10MFY25 (FY24: PKR 5,330 million; FY23: PKR 3,986 million). Consequently, the debt-to-capital ratio increased to 41.0% as of 10MFY25 (FY24: 39.6%; FY23: 35.5%).