Texo Poly Industries (Pvt.) Limited ("Texo Poly" or "the Company") was incorporated in Pakistan on June 2, 2015 as a Private Limited Company under the Companies Act, 2017. The registered office of the Company is situated at 0.5 KM, Off Kahna Kacha Road, Islam Pura Road, Lahore.

The Company was established to manufacture polypropylene and other plastic packaging material, building on the founding group's extensive experience in the plastic industry. Since incorporation, the Company has demonstrated consistent growth, expanding its production capacity and customer base to become one of Pakistan's fastest-growing plastic packaging manufacturers. The Company's evolution reflects a strategic approach to capturing market share in the growing FMCG and industrial packaging segments.

The Company's product portfolio comprises five major product lines: Woven Polypropylene (WPP) Bags, Shrink Film, Stretch Film, Polythene Rolls and Bags, and Printed Wrappers. The Company serves a diversified client base across the FMCG, fertilizer, textile, and industrial sectors. Operations are entirely domestic, with no export presence. The Company's distribution strategy combines direct sales to key industrial customers with a focus on long-term relationships, consistent product quality, and reliable delivery schedules.

The Company is a family-owned business, with ownership concentrated among the founding family members. A formal Shareholding Agreement, executed on May 15, 2015, governs the ownership structure and shareholders' rights. The current shareholding comprises Mr. Malik Ahsan Younas, Chief Executive Officer, as the largest shareholder, and Mr. Usman Malik, Managing Director, as the second-largest shareholder, while the remaining shares are held by other members of the family. As per the Shareholding Agreement, there are no planned changes to the existing ownership structure. Any transfer of shares or induction of a new shareholder is subject to the unanimous consent of the existing shareholders, ensuring continuity in ownership and control.

The sponsors also maintain business interests through their associated entities, including Global Petrochem Zone, reflecting their long-term commitment to the plastic and packaging industry. Their continued involvement across the packaging value chain supports continuity of business relationships and reinforces the sponsors' commitment to the Company's long-term growth.

The sponsors possess sound industry expertise, which has enabled the Company to develop a diversified product portfolio and cater to a broad customer base across multiple industries. Their strategic oversight and focus on operational excellence continue to support the Company's competitive positioning and long-term business growth.

The sponsors have demonstrated their financial commitment to the Company through their continued support. The sponsors remain committed to supporting the Company's funding requirements, if needed, through additional equity contributions.

The Board comprises two directors with representation in proportion to shareholding. One director serves as the Chief Executive Officer, while the other serves as Director of Operations, Sales and Marketing. It is noted that the Board does not currently include any independent director.

The Board comprises members of the sponsoring family, which has over forty years of experience in the plastic and packaging business and has remained actively involved in the Company since its inception. The Board maintains oversight of key areas through relevant committees, including Investment, Management, Risk Management, and IT Steering Committees, covering strategic, operational, risk, and technology-related matters.

The Board's effectiveness is demonstrated through regular oversight and active participation in strategic decision-making. During FY26, the Board held four meetings, focusing on the Company's strategic direction, operational performance, enhancement of IT infrastructure, and strengthening of the compliance framework. These discussions reflect the Board's commitment to improving governance practices, operational resilience, and long-term business sustainability.

The audited financial statements as of June 30, 2025, prepared under IFRS and audited by M/s Amin, Muddasar & Co., a Category 'B' firm on the SBP panel of auditors, reflect a true and fair view of the Company's affairs, supported by an unqualified audit opinion.

The organizational structure is well-defined with functional heads reporting directly to the Board of Directors. Key functions include Finance, Audit, Accounts, Supply Chain, Human Resources, Marketing, Information Technology, Quality Control, and Production. The reporting lines are clearly established with each functional head reporting to the Board, ensuring effective oversight and accountability.

The Company's management team comprises experienced professionals overseeing key functional areas. The management is led by the Chief Executive Officer, Mr. Malik Ahsan Younas, responsible for the overall strategic and operational direction of the Company. The finance function is headed by Mr. Irfan Ali, responsible for financial planning, reporting, treasury, and compliance. The sales and marketing function is led by Mr. Fayaz Hussain, responsible for business development, customer relationship management, and market expansion. Production operations are headed by Mr. Ahmad Khan, responsible for manufacturing activities, production planning, and operational efficiency. The management team provides adequate support to the Company's day-to-day operations and execution of its strategic objectives.

The effectiveness of the Company's management is underpinned by a well-structured governance framework, a seasoned leadership team, and robust oversight mechanisms that ensure strategic objectives are achieved with operational excellence.

SAP Business One was implemented in July 2024, with regular updates maintained. The system provides real-time information for operational reporting and decision-making, enhancing management effectiveness.

The internal audit function has conducted reviews of key operational, financial, and compliance areas, with the control environment found to be generally satisfactory. Improvements are required in documentation, reconciliation procedures, and monitoring controls, which management has committed to implementing.

Polyethylene, polypropylene, PVC, nylon, and PET constitute the primary raw materials for the plastic packaging industry. Being petroleum-based products, these inputs remain highly sensitive to fluctuations in international crude oil prices and exchange rate movements. During FY25, global crude oil prices softened, averaging around USD 70.2/bbl (FY24: USD 83.9/bbl), as increased OPEC+ production outpaced the recovery in global demand. Consequently, polymer prices also eased, with average PET import prices declining to approximately USD 1,014/MT in FY25 (FY24: USD 1,116/MT), reflecting lower global crude oil prices and improved supply conditions. However, the benefit of lower international prices was partially offset by exchange rate volatility, as the industry's heavy reliance on imported raw materials continues to expose manufacturers to foreign currency risk and input cost fluctuations.

Texo Poly enjoys a pre‑dominant market position within the flexible packaging sector, underscored by its extensive operational footprint, established clientele, and strong brand recognition. The Company has successfully carved out a leading role in the industry, backed by decades of experience, a diversified product portfolio, and a reputation for quality and reliability.

The Company's revenue increased by approximately 11% in FY25, supported by higher sales volumes and sustained demand across its key product segments, while the growth momentum continued into 9MFY26. Revenue is generated entirely from domestic operations, with Woven Polypropylene (WPP) Bags remaining the largest revenue contributor, followed by Shrink Film, Polythene Rolls & Bags, and Stretch Film, reflecting a reasonably diversified product portfolio. The customer base remains moderately concentrated; however, the top customers comprise well-established corporates operating across multiple industries, partially mitigating concentration risk.

Margins have experienced significant compression, with gross profit margin declining from 10.7% in FY23 to 3.9% in FY24 and further to 2.3% in FY25, reflecting raw material price inflation, currency depreciation, and limited ability to pass through costs to customers. Net profit margin stood at 1.4% in 9MFY26 (-0.8% in FY25). However, 9MFY26 shows a notable recovery, with gross profit margin improving to 4.2%, operating profit margin rising to 3.7%, and net profit margin rebounding to 1.4%, reflecting improved cost management and operational efficiencies.

The Company's sustainability is underpinned by its long-standing relationships with blue-chip customers, many of whom have been associated with the Company for over 15 years, ensuring recurring business and customer retention. Additionally, the presence of its associated company, Global Petrochem Zone, strengthens the procurement of imported raw materials, supporting supply chain continuity and operational sustainability.

Working capital metrics remained largely stable as of Mar'26, with inventory days improving to 47 days (Jun'25: 48 days) and receivable days increasing marginally to 20 days (Jun'25: 19 days). Consequently, the net working capital cycle stood at 65 days (Jun'25: 64 days; Jun'24: 67 days). The current ratio remained stable at 1.0x, while short-term trade leverage declined to 21.4% (Jun'25: 40.3%). Overall, the Company's working capital profile remains adequate, supported by efficient funding through customer advances.

Interest coverage was 6.5x in FY25, declining from 13.1x in FY24 due to compressed EBITDA, though annualized 9MFY26 shows significant improvement to 54.8x due to reduced finance costs. Funded cash flow from operations to finance cost was 1.9x in FY25, declining from 8.7x in FY24, indicating reduced cash generation relative to finance costs.

The Company's capitalization profile is considered adequate, supported by a moderate equity base, which improved to PKR1,234mln as of Mar'26 from PKR1,054mln as of Jun'25 (Jun'24: PKR1,374mln), reflecting improved profitability and internal capital generation during the period. The leverage profile also strengthened, improving to 3.3% as of Mar'26 from 20.7% as of Jun'25 (Jun'24: 6.8%), primarily driven by a reduction in short-term borrowings. The Company's debt portfolio remains predominantly short-term in nature, aligned with its working capital financing requirements. Going forward, maintaining a moderate equity base and prudent management of working capital borrowings will remain important to sustain the capitalization profile.