Tufail Multichem Industries (Private) Limited ('TMIL' or the Company) is a private limited company incorporated in Pakistan and registered with the Securities and Exchange Commission of Pakistan.. The Company is unlisted and its shares are not traded on any exchange. Its registered office and head office are both located at Office No. 4B, 4th Floor, Dolmen Executive Tower, Block 4, Clifton, Karachi, Sindh. The Company is engaged in chemical manufacturing. Within the group, TMIL is a wholly owned subsidiary of Tufail Multichem Holding Industries (Private) Limited, which acts as the parent and holding company and also holds a 97.5% stake in Tufail Starchem Industries (Private) Limited and a 100% stake in Tufail Chemicals UK Limited, a company domiciled in the United Kingdom. The present structure of the Company is the outcome of a restructuring of the wider Tufail family business undertaken in FY24 through a legal scheme of arrangement, under which the family business was divided between two branches of the sponsoring family and TMIL was established as the operating vehicle of the branch led by Mr. Pervez Tanveer Tufail, with its business processes, departments, teams and product marketplace segregated from the other branch.

The roots of the Company lie in a chemical trading business established in 1953 by the late Mr. Mohammad Tufail, which was later carried forward through the family partnership M. Tufail & Brothers, in which Mr. Pervez Tufail served as a partner from 1975 to 1993. In 1993 the family moved from trading into manufacturing through Tufail Chemical Industries Limited, which commissioned its first plants for formic acid and sodium sulphate in 1995 using process technology sourced from China. In FY24 the two brothers who controlled the family business divided it, and a comprehensive legal scheme of arrangement was designed and executed to establish TMIL as the independent business of the Pervez Tufail family. The programme covered the deployment of a dedicated ERP system and IT infrastructure, the separation of critical business processes, departments and teams, and the division of the product marketplace between the two resulting businesses. The current board was elected on 5 August 2024 following the completion of the arrangement, and a holding structure was put in place with Tufail Multichem Holding Industries (Private) Limited at the apex, owning TMIL alongside Tufail Starchem Industries (Private) Limited and the United Kingdom based Tufail Chemicals UK Limited. The growth trajectory of the family business has been predominantly organic, built through successive greenfield plant additions rather than acquisitions, with the principal inorganic event being the division of the business in FY24, which was a reorganisation of existing assets between family branches rather than an acquisition. Funding for the early trading and manufacturing phases was drawn from sponsor capital and internally generated profits of the family enterprise. Since the restructuring,

TMIL manufactures anionic and non-anionic surfactants that serve as the principal active ingredients in laundry detergents, dishwashing products, shampoos and other personal care and household cleaning formulations. Its product range comprises Linear Alkyl Benzene Sulphonic Acid in 96% and 90% grades (LABSA), Sodium Lauryl Ether Sulphate (SLES), Cocamidopropyl Betaine (CAPB), and a small basket of other chemicals. The Company has an installed production capacity of 50,000 metric tons per annum. Production stood at 37,778 metric tons in FY26 (FY25: 36,230 MT ; FY24: 35,991 MT), translating into capacity utilisation of 72.0% (FY25: ~72.5%, FY24: ~75.6%), which leaves roughly a quarter of the installed base available to absorb incremental demand without additional capital expenditure. In the industry value chain, TMIL occupies the intermediate conversion stage between upstream petrochemical producers and downstream consumer goods formulators. It sulphonates imported linear alkyl benzene (LAB) using sulphur to produce LABSA, and sulphates imported fatty alcohol ethoxylates to produce SLES, selling these intermediates to detergent and personal care manufacturers who formulate and brand the finished products. The raw material base is predominantly imported. LAB is procured from Saudi Arabia while sulphur is procured locally from Pak Arab Refinery Limited and Oil and Gas Development Company Limited, while a smaller volume of inputs is sourced from the sister concern Tufail Starchem Industries (Private) Limited. Procurement is therefore anchored on a single principal LAB supplier supplemented by a rotating set of Middle Eastern. Distribution is conducted on a business to business basis through direct supply to multinational consumer goods companies and a broad network of domestic detergent and soap manufacturers and chemical traders, supported by a sales and marketing department organised around a country head and regional sales leadership. The customer base is anchored by Unilever Pakistan Limited, followed by Colgate Palmolive Pakistan. The remainder of sales is spread across regional detergent and soap manufacturers and chemical dealers.

Tufail Multichem Holding Industries (Private) Limited is the parent company of TMIL and also holds a 97.5% stake in Tufail Starchem Industries (Private) Limited and a 100% stake in Tufail Chemicals UK Limited, domiciled in the United Kingdom. TMIL is wholly owned by the holding company, with Mr. Pervez Tanveer Tufail and Mr. Adeel Shahid each holding one qualifying share. Mr. Pervez Tanveer Tufail, Chairman and Chief Executive Officer of TMIL, heads the branch of the Pervez Tufail family that assumed ownership of the Company following the division of the family business in FY24. He exercises effective control over the Company's strategic direction, while ultimate beneficial ownership rests with the Pervez Tufail family through its control of the holding company. The shareholding is entirely promoter-held, with no institutional, foreign or public shareholding.

The ownership of TMIL reflects a deliberate and recent reorganisation. In FY24, the two brothers who controlled the Tufail family business divided it, and the scheme of arrangement executed between January 2023- June 2024 ring fenced TMIL as the business of the Pervez Tufail family, removing the shared ownership that previously existed across the combined enterprise. This separation has reduced the potential for intra family disputes over control and strategic direction, since each branch now owns and manages its business independently. The insertion of a holding company above TMIL, Tufail Starchem Industries (Private) Limited and Tufail Chemicals UK Limited consolidates the family's interests under a single vehicle and provides a structure through which ownership can be passed to the next generation without disturbing the operating companies. The sponsor's commitment to the Company is evident in the full retention of earnings, with shareholders' equity increasing in line with or ahead of reported profit in FY25 and FY26, indicating that no dividends were withdrawn in either year while the business was expanding.

The sponsor brings more than five decades of experience in the chemical trade and manufacturing. Mr. Pervez Tufail began his career in 1975 as a partner in the family trading concern, M. Tufail & Brothers, and from 1993 served as Co Chairman and Senior Executive Director of Tufail Chemical Industries Limited and Tufail Chemicals and Surfactants (Private) Limited, the family's manufacturing businesses, before heading TMIL as Chairman and Chief Executive from 2016. He also serves as Chief Executive of Advance Minerals & Chemicals Co since 2016 and was a director of Interplas (Private) Limited from 1983 to 2023. The manufacturing projects executed under his involvement span formic acid, sodium sulphate, sulphuric acid, LABSA and SLES plants built between 1995 and 2021, sourced from Chinese, Indian, Italian and other technology providers, which demonstrates repeated execution of greenfield chemical projects over successive economic cycles, including the high interest rate and currency depreciation phases experienced in Pakistan. The sponsor is supported by Mr. Mubashir Ahmed, a director with over 30 years in chemical manufacturing who has managed key multinational accounts including Unilever, Procter & Gamble, Engro and K Electric, and who serves as Senior Vice Chairman of the Pakistan Chemical Manufacturers Association since 2021, reflecting the standing of the sponsoring family in the business community. The family's surfactant business was historically recognised as a leader in the domestic surfactant segment and among the largest chemical manufacturers in Pakistan by revenue, a franchise that TMIL now shares following the division.

TMIL is the principal operating company of the group, which also includes Tufail Starchem Industries (Private) Limited (TSIL) and Tufail Chemicals UK Limited, with the latter primarily serving as a sourcing channel for the group. The Company's equity base increased to PKR 3,153mln in FY26 (FY25: PKR 2,390mln; FY24: PKR 2,306mln), reflecting an increase of PKR 763mln during the year, entirely attributable to retained earnings, compared to growth of PKR 84mln in FY25. In comparison, TSIL, the sister company, reported total assets of PKR 1,799mln and equity of PKR 461mln in FY26, indicating a smaller asset and capital base relative to TMIL.

The Board comprises six members, including three executive directors and three female directors, of whom two serve as non-executive directors. The Board's composition reflects a strong executive presence, with half of its members directly involved in executive roles. However, none of the directors is designated as independent, limiting the representation of independent oversight at the Board level. While female representation is evident, the absence of independent directors remains a limitation in the overall composition of the Board.

Mr. Pervez Tanveer Tufail, serves as chairman and Chief Executive, and has over five decades of experience in chemical trading and manufacturing. He has been associated with the family business since 1975 and has led TMIL since 2016, with expertise spanning project execution and plant development across formic acid, sodium sulphate, sulphuric acid, LABSA and SLES. Mr. Mubashir Ahmed ,has over 30 years of experience in the chemical manufacturing industry. He has been associated with Tufail Chemical Industries Limited since 1995 and TMIL since 2021, with experience in marketing, operations, process optimisation, capacity expansion and distribution. He has also served as Senior Vice Chairman of the Pakistan Chemical Manufacturers Association since 2021. Mr. Adeel Shahid is a qualified accountant with over 20 years of experience in finance transformation and ERP implementation, including experience with Deloitte and PwC in the UK. He has been associated with the Tufail Group since 2018 and joined TMIL in 2023 to lead its restructuring and carve-out programme. He currently serves as Director Digital Applications and Automation. Ms. Ayesha Pervez, Ms. Beenish and Ms. Saira Yasin were elected to the Board on August 5, 2024, with Ms. Ayesha Pervez also serving as Company Secretary. The Board comprises experienced members with strong sector, commercial, finance and technology backgrounds; however, the non-executive directors are not designated as independent, resulting in no independent representation on the Board.

With four of the six directors holding executive or officer roles and the Chairman also acting as Chief Executive, the board's capacity to provide critical and impartial oversight of management performance is structurally constrained, since the individuals responsible for execution constitute the majority of the body responsible for oversight. Alignment between shareholder and management objectives is, however, inherently strong, given that the sponsor family both owns and manages the Company through the holding structure.

The external auditor, Naveed Zafar Ashfaq Jaffery & Co., Chartered Accountants, is in Category A of the State Bank of Pakistan’s panel of auditors and holds a satisfactory Quality Control Review rating from the Institute of Chartered Accountants of Pakistan. The firm is also a member of an international association of independent accounting firms. The auditor expressed an unqualified opinion on the Company’s financial statements for the year FY25.

The Company follows a centralized organizational structure, with the Chairman and Chief Executive at the apex. Two key reporting lines operate under the top management: the Senior Executive Director, Finance and Transformation oversees Finance, IT, HR and Administration, while the Chief Operating Officer oversees Operations, Sales & Marketing and Supply Chain. Plant operations, including production, maintenance and quality functions, are managed by the Chief of Plant Operations, while Finance is headed by the Chief Financial Officer. Research & Development also reports at the senior management level. Overall, the structure provides clear functional reporting, with key strategic, commercial and financial decisions concentrated at the senior management level.

The management team is led by Mr. Pervez Tanveer Tufail as Chairman and Chief Executive, whose five decades in the family chemical business and oversight of plant projects from 1995 to 2021 give the Company deep technical and industry experience at the top. Mr. Mubashir Ahmed, Chief Operating Officer and head of sales, marketing and supply chain, brings over 30 years of commercial and operational experience in chemicals, with a track record of building distribution networks, managing multinational key accounts and establishing export operations. Mr. Adeel Shahid, an ACCA qualified finance and technology professional with international consulting experience at Deloitte and PwC, led the carve out and ERP deployment and oversaw finance, IT and HR. The finance function is led by a Chief Financial Officer reporting through the finance line.

Management undertook a complex restructuring between January 2023 and June 2024, separating processes, departments, teams and the product marketplace from the other branch of the family business and establishing an independent ERP and IT environment, ensuring operational continuity through the transition. Since then, the product portfolio has been expanded marginally through CAPB, targeting the personal care segment, while commercial efforts have focused on strengthening relationships with multinational formulators and broadening domestic regional coverage. Since January 2026, management has also initiated digital projects focused on SAP-driven solutions, smart factory initiatives and management dashboards and reporting.

The Company operates an SAP based ERP system that was deployed, together with its supporting IT infrastructure, as part of the carve out programme between January 2023 and June 2024, so that the Company commenced independent operations on a dedicated system tailored to its own processes. Since January 2026, a Director Digital Applications and Automation has been leading SAP driven solutions, smart factory initiatives and advanced dashboard and reporting systems intended to use automation and data analytics in operational decision making. The finance function includes dedicated reporting positions, namely a Lead Reporting and a Manager Reporting, supporting management reporting from the ERP. The IT department is small, comprising a Lead Information Technology and an IT Support Officer, with the Digital Media Specialist position currently vacant, which suggests limited in house depth for IT infrastructure governance relative to the digital agenda being pursued.

The Company’s control environment is supported by its SAP-based ERP, which integrates transaction workflows, approval mechanisms and a single ledger across procurement, production, sales and finance, enabling a process-driven operating framework. The finance function is structured across separate treasury, reporting, taxation and accounts roles, providing segregation between cash handling, recording and reporting. At the senior management level, however, segregation is relatively limited, with the Chairman and Chief Executive roles combined, while the Chief Operating Officer also oversees sales, marketing and supply chain, and a director concurrently serves as Company Secretary.

Pakistan's Linear Alkyl Benzene Sulphonic Acid (LABSA) and Sodium Lauryl Ether Sulphate (SLES) industry is characterised by a concentrated market structure, with four organized manufacturers; (53,838 MT) Tufail Chemical Industries Limited (TCIL), (50,000 MT) Tufail Multichem Industries Limited (TMIL), (70,000 MT) Ittehad Chemicals, and (30,000 MT) Colgate-Palmolive's. Domestic SLES production is led primarily by TCIL and TMIL. Industry capacity utilisation is estimated at 75%–90%, translating into annual LABSA production of around 133,000 MT, reflecting adequate domestic manufacturing capacity with moderate spare headroom. Demand for LABSA and SLES is primarily driven by the detergent, household cleaning, and personal care industries, while textile processing represents a secondary end-use segment. The industry remains heavily dependent on imported Linear Alkyl Benzene (LAB), the principal feedstock for LABSA, exposing manufacturers to foreign exchange volatility, fluctuations in global petrochemical prices, and changes in freight costs. During FY26, disruptions to Middle Eastern supply chains and elevated shipping costs resulted in higher landed costs for domestic producers, placing pressure on input costs and margins. Furthermore, the expiry of anti dumping duties on imported LABSA in January 2026 is expected to increase competitive intensity, particularly from regional suppliers including China, India, Indonesia, Iran, and South Korea. While SLES is relatively less exposed to import competition due to domestic production capabilities and customer-specific formulations, pricing across both products remains closely linked to international feedstock prices and exchange rate movements. Going forward, industry growth is expected to remain underpinned by favourable demographic trends and sustained demand from downstream consumer sectors. Nevertheless, manufacturers' profitability is likely to remain sensitive to raw material price volatility, currency depreciation, import competition, and the industry's continued reliance on imported feedstock.

The Company operates in a competitive market alongside independent chemical manufacturers, imported products, and its former sister concern, Tufail Chemicals Industries Limited, which now operates independently under the ownership of the Zubair family. Before the restructuring of the family business, the combined operations had an installed capacity of 100,000MT, which was subsequently divided equally between TMIL and Tufail Chemicals Industries Limited, with each retaining 50,000MT. The domestic industry has an estimated installed capacity exceeding 250,000MT. TMIL remains one of Pakistan’s principal organised producers of LABSA and SLES, with an installed capacity of 50,000MT. Other established participants include Ittehad Chemicals Limited, with an installed capacity of 70,000MT, Colgate-Palmolive Pakistan Limited (30,000MT), and Akbari Chemical Industries (18,000MT).

The Company reported revenue of PKR 18,492mln in FY26 (FY25: PKR 12,907mln; FY24: PKR 10,010mln), reflecting growth of 43.3% in FY26 (FY25: 28.9%), driven by higher LABSA volumes and realised prices. LABSA 96% remained the key revenue contributor, accounting for 75.4% of sales in FY26 (FY25: 64.3%; FY24: 68.6%). SLES contributed 22.5% of sales in FY26 (FY25: 32.4%; FY24: 24.9%), with revenue largely stable as higher prices offset lower volumes. Product concentration remained high, with LABSA and SLES together accounting for over 98% of sales in FY26 (FY25: 96.8%; FY24: 93.5%). Geographically, the Central region remained the largest market, contributing 53.2% of sales in FY26 (FY25: 56.3%; FY24: 53.5%), followed by the North at 20.2% (FY25: 21.5%; FY24: 8.1%) and the South at 19.8% (FY25: 13.3%; FY24: 20.6%). Exports accounted for the remaining 6.8% of sales in FY26 (FY25: 8.9%; FY24: 17.8%), amounting to PKR 1,261mln (FY25: PKR 1,143mln; FY24: PKR 1,729mln). The revenue base remains predominantly domestic, with the limited export contribution providing only a partial natural hedge against foreign currency exposure.

Gross margin improved to 13.0% in FY26 (FY25: 9.8%; FY24: 14.5%), as realised prices outpaced input costs. Operating margin also improved to ~8.1% (3.8%; 6.9%), supported by lower operating expenses. Net margin improved to 4.1% (0.5%; 2.9%), with net profit rising to PKR 763mln (PKR 68mln; PKR 292mln). The improvement in FY26 followed a margin squeeze in FY25, when cost of sales rose 35.8% against revenue growth of 28.9%, reflecting higher raw material costs that could not be fully passed through and limited volume growth. Finance cost declined 2.8% to PKR 473mln in FY26 (FY25: PKR 486mln), further supporting the improvement in bottom-line profitability. The recovery in FY26 profitability indicates improved cost absorption and pricing discipline, although margins remain below FY24 levels.

The long term viability of TMIL's positioning rests on its established role as a supplier of commodity surfactants to multinational and domestic formulators, supported by the sponsor's operating heritage, available spare capacity of about a quarter of the installed base and steady consumer led demand for detergents and personal care products. Management's strategy centres on deepening multinational relationships, as reflected in the addition of Colgate Palmolive Pakistan, widening regional coverage, gradually extending the product range into personal care surfactants such as CAPB, and improving efficiency through digital and smart factory initiatives. The durability of this strategy depends on the Company's ability to maintain its approved supplier status.

Gross working capital days were 100 days in FY26, against 98 days in FY25 (FY24: 74 days), as the cycle remained broadly stable at its elevated level. Receivable days extended to 60 days from 55 days (FY24: 48 days), while inventory days eased to 40 days from 43 days (FY24: 27 days). The lower inventory days were therefore offset by slower collections. Payable days rose to 39 days from 23 days (FY24: 20 days) as the Company made greater use of supplier and letter of credit based credit, and net working capital days consequently declined to 61 days from 74 days (FY24: 55 days). Because gross working capital days did not improve, the reduction in net days reflects higher supplier and LC funding rather than a shorter operating cycle.

EBITDA-to-Finance cost coverage for the Company improved to stand at 4.1x from 1.9x in FY25, while FCFO/Finance Cost stood at 3.6x (FY26: (0.8)).

The Company’s leveraging ratio stood at 43.1% at FY26, down from 65.9% in FY25 and ~49.6.0% in FY24. The increase in leverage during FY25 was driven by a more than twofold rise in short-term borrowings to PKR 4,581mln, utilized to finance inventory, receivables, and related-party exposure, while equity increased only marginally to PKR 2,390mln. During FY26, borrowings declined to PKR 2,339mln, while equity increased to PKR 3,153mln, resulting in a notable improvement in the capital structure. The reduction in leverage reflects lower reliance on short-term debt alongside a strengthening equity base.