Kohat Cement Company Limited ("KCCL" or “the Company”) is a public limited company incorporated in Pakistan under the Companies Act, 1913 (now “Companies Act, 2017”) and is listed on the Pakistan Stock Exchange.

State Cement Corporation of Pakistan was established in Kohat in the early 1980s with the commissioning of a 1,000 TPD cement line and was privatized by the Government of Pakistan through open bidding in 1992, following which it was acquired by its present shareholders. The Company was listed on the Pakistan Stock Exchange in 1994, after which the new management, led by Mr. Aizaz Mansoor Sheikh, undertook an extensive expansion and BMR program that enhanced the original plant capacity to 1,800 TPD. Over time, the Company expanded its footprint by adding a 450 TPD white cement line in 2005, followed by a brownfield expansion in 2008 with the installation of a 6,700 TPD grey cement line. Further strengthening its market position, the Company commissioned Line 4 in 2020 with a capacity of 7,428 TPD and recently completed the BMR of Line 3 in 2024, increasing its capacity to 7,064 TPD. In parallel with capacity expansion, the Company has invested in energy efficiency by developing coal-fired and renewable power projects, including a 17.66MW solar power portfolio, with a target of reaching 20MW. To support future growth, the Company is also developing a greenfield cement plant in Khushab, Punjab, where infrastructure development is underway, while import of plant and machinery will be finalized upon sustained improvement in domestic cement demand.

KCCL is engaged in the production and sale of cement. It is an ISO 9001-2015 certified company with an installed capacity of ~4.89 million tons per annum of Grey Clinker and 135 thousand tons of White Clinker from 4 lines operating in Kohat. The Company's products include grey cement and white cement. It has a significant presence in the local market, especially in the North region, along with minor exports to Afghanistan. The head office of the Company is situated at 36-37 P, Gulberg-II, Lahore; further, the registered office and production facility are situated at Rawalpindi Road, Kohat, Pakistan.

KCCL is predominantly owned by the sponsor family through ANS Capital (Pvt.) Limited, which holds approximately 60.09% of the Company’s shareholding, with ownership of ANS Capital entirely residing within the family. Another significant shareholder is Mrs. Hijab Tariq, holding approximately 18.02% as of 1 January 2026, while the remaining shareholding is dispersed among the general public and other investors along with Mutual funds having 9.84% of Company shareholding. In October 2024, shareholders approved a buy-back of 12 million ordinary shares, which was completed and cancelled in April 2025, resulting in a reduction of the Company’s paid-up capital to 183.86 million shares. Subsequent to the year-end, the Board of Directors, in its meeting held on July 10, 2025, recommended a 5:1 stock split, which was approved by shareholders at the Extraordinary General Meeting held on August 07, 2025. The stock split was executed on August 23, 2025, reducing the face value per share from PKR 10 to PKR 2 and increasing the total number of issued shares to 919.31 million. The initiative was aimed at improving share liquidity and enhancing accessibility for a broader investor base.

The majority ownership of the Company has been held with the sponsoring family and has remained stable over the years. Furthermore, being the flagship company of the sponsors, the ownership is expected to remain stable. Additionally, the sponsors vision to stay ahead of the competition by adopting the latest technology with efficient and progressive teamwork shows the commitment of the owners towards the Company.

The sponsors have a proven history of over 33 years of operating in the local cement sector, which is a testimony to their expertise. Furthermore, being a business-oriented family, the sponsors have other business interests belonging to different sectors, including Real Estate, Food and Entertainment.

The sponsors other business interests, along with substantial investment property holdings, provide a stable stream of income that is consolidated at the group level, which derives their financial strength. Therefore, the sponsor's ability to financially support the Company is considered adequate.

The control of the Company vests in an eight-member Board of Directors, including the CEO. The Board comprises five non-executive directors (including one female director), one executive director, and two independent non-executive directors.

Mr. Aizaz Mansoor Sheikh serves as the Chairman of the Board and has been associated with the Company since 1992. He possesses extensive experience in the cement industry and is a seasoned developer with a successful track record in residential and commercial real estate projects. He is supported by a team of qualified professionals with diverse expertise and long-standing association with the Board. Mr. Nadeem Atta Sheikh has been serving as a Executive Director of Kohat Cement Company Limited since 1992. He is a graduate in Economics from Boston University, USA, and brings over 33 years of experience in the cement industry. He also holds directorships and chief executive roles in various group companies. Mrs. Hijab Tariq serves on the Board as a major shareholder. Mr. Muhammad Rehman Sheikh has been associated with the Board since 2013 and represents the interests of the sponsoring family. He is also responsible for overseeing other business interests of the family and serves as a director on the Board of ANS Capital (Pvt.) Limited, and is a member of the Human Resource and Remuneration (HR&R) Committee. Mr. Muhammad Atta Tanseer Sheikh has been a Board member since 2011, representing the sponsoring family. He is actively involved in the Company’s strategic decision-making. Mr. Ahmad Sajjad Khan has been serving as an independent director since 2019. He is a qualified engineer with over 42 years of experience, specializing in design and engineering of waste heat recovery systems for cement plants, coal-fired power plants, and high-pressure boilers. He is a member of the Pakistan Engineering Council and holds affiliations with other professional bodies.  Mr. Talha Saeed Ahmed has been an independent director on the Board since 2019. He holds a postgraduate degree in economics and has extensive experience in senior management roles with local and multinational banks. He has also served as a director on the boards of several institutions, including the Lahore Stock Exchange, Silk Bank, and Agritech Limited. Mr. Hamza Atta Sheikh has been serving as a Director at Nutribel (Pvt.) Limited since 2019. He holds a Bachelor’s degree in Economics from the University of Waterloo, Canada, brings international professional experience, supports the Board in effective oversight, and is also a member of the Audit Committee.

KCCL's board has formulated two committees: 1) the audit committee and 2) the Human Resource & Remuneration Committee (HR&R) to assist the management in related matters. Furthermore, the board conducts regular meetings as needed during the year to discuss and advise on matters relating to the Company's financial and operational performance.

Being a listed entity, the Company abides by the Code of Corporate Governance. The quarterly, half-yearly, and annual financial statements, along with necessary operational information and details, are timely prepared and made available to the shareholders. KPMG Taseer Hadi & Co., Chartered Accountants, conducts the external audit for Kohat Cement. "KPMG" is a QCR rated firm and is also in the "A" category of the SBP list of external auditors. They have expressed an unqualified opinion on the financial statements for the year ended June 30th, 2025. For FY26, the Company has appointed A.F. Ferguson & Co. (PwC Pakistan) as its auditors, which is a QCR-rated firm and is also included in the ‘A’ category of the SBP’s list of external auditors.

The Company’s organizational structure comprises six key functional divisions. The following functions report directly to the Chief Executive Officer: (i) GM Works, (ii) Chief Financial Officer, (iii) Head of Planning & Development, (iv) Head of Human Resource, (v) Head of IT, and (vi) Head of Sales & Marketing.

The management team is headed by Mr. Nadeem Atta Sheikh, appointed as the CEO. He has been associated with the Company for 33 years and thus holds vast experience and knowledge of the local cement sector. He is also actively involved in the other business interests of the family and simultaneously holds the position of director on the board of associated companies. Mr. Nadeem is also present on the board of KCCL as an executive director. Mr. Khurram Shahzad is currently the CFO of KCCL. He has been associated with the Company since 2006 and was subsequently appointed as the head of finance. A qualified Chartered Accountant by profession, Mr. Khurram has expertise in finance, accounts, tax, corporate planning, budgeting, costing, and other related matters.

The senior management has a ‘hands-on’ approach and thus involved in the day-to-day activities of the Company. The proper hierarchical structure and reporting lines ensure smooth and effective decision-making. The carefully designed organization structure ensures a flow of information along with efficient communication across divisions to provide feedback that can be incorporated to increase overall efficiency of the operations.

Kohat Cement has strong technology infrastructure with reasonably defined policies and procedures. The Company’s current operational modules include marketing, supply chain, and financial modules with comprehensive MIS quality. Various system-generated reports, including the cash flow/investment portfolio, daily management report, daily production summary and sale variance report, are reviewed by top management.

The Company has outsourced its internal audit function to BDO Ebrahim & Co., Chartered Accountants, for FY26; this function was previously carried out by M/s Crowe Hussain Chaudhury & Co., Chartered Accountants. Both firms are considered suitably qualified and experienced. The internal audit function takes both regular and ad hoc services of risk management controls and procedures, the results of which are reported to the Audit Committee. Furthermore, the internal audit function is responsible for monitoring control systems and ensuring compliance with external and internal guidelines.

Pakistan’s cement industry is showing clear signs of recovery after a prolonged slowdown, supported by stabilization under the IMF program. Inflation has eased, the Rupee has remained largely stable, and interest rates have been maintained, although fiscal pressures and a widening trade deficit continue to constrain development spending. Despite these challenges, industry demand has strengthened, with overall dispatches rising notably in the first quarter. Domestic sales increased by 17% due to revived private construction activity, improved project execution, and gradually returning consumer confidence. Exports grew by 21%, driven by stronger sea-based shipments and higher dispatches to Afghanistan, though border tensions pose a risk. Five-month industry offtake rose 12% year-on-year, with domestic volumes up 15%, signaling improving construction momentum. Policy measures, including the Mera Ghar Mera Ashiana housing scheme and tax incentives, are supporting residential demand and may stimulate urban property markets. Export performance remains a crucial buffer, contributing approximately one-fifth of the sales mix. However, capacity utilization remains low at approximately 61%, reflecting the mismatch between installed capacity and combined domestic and export demand. South-based producers continue to benefit from better export access, while North-based players face higher logistics costs. Looking ahead, FY26 volumes are expected to reach 51–52 million tons, indicating steady progress toward recovery. Continued private-sector construction, post-flood rehabilitation, and resilient exports are likely to support demand growth and gradually improve utilization levels. Overall, the sector is stabilizing and moving toward a more sustainable growth path.

During FY25, the Company recorded local dispatches of approximately 2.307 million MT, compared to 2.544 million MT in FY24, resulting in a market share of around 4.96%, down from 5.72% in FY23. The plant’s capacity utilization declined to 47% in FY25 from 53% in the previous year, reflecting subdued demand. The Company maintains a strong market presence primarily in the North and Central Punjab regions through its extensive distribution network. The overall decrease in sales volume was primarily driven by weaker domestic demand in the residential and commercial sectors, compounded by reduced export volumes due to heightened competition in the regional markets.

The Company reported Net Revenues of PKR ~37,536mln during FY25, witnessing a decline of ~2.9% on the back of fall in sale volumes of ~10.0% (FY25: ~2.328mln MT, FY24: ~2.586mln MT) which was somewhat compensated by an increase in sale prices. A recovery was witnessed during 1QFY26 with Net Revenues reporting an increase of ~2.0% as compared to the same period the previous year (1QFY26: PKR ~10,287mln, 1QFY25: PKR ~10,084mln) where total dispatches increased by ~18.8% during the period (1QFY26: ~0.703mln MT, 1QFY25: ~0.592mln MT). The local dispatches of the Company reported a decline of ~9.3% as compared to the industry's local dispatches decline of ~2.7% in FY25.

KCCL has been successfully improving its margins since FY21 owing to efficient cost optimization. During FY25, the Company witnessed a further improvement in reported Gross Profit Margin from 29.1% during FY24 to 39.2% during FY25 on the back of cost optimization measures. Similarly, during 1QFY26, Gross Profit Margins stood at 33.9% as compared to ~42% during 1QFY25. The reported Net Profit Margins have stood at 28.6% during 1QFY26 lower than the SPLY which was reported at ~34%. Supplementary income from the Company's short-term investment portfolio provided further benefit during period of high interest rates.

The Company continues to focus on cost efficiency and sustainable growth through capacity expansion and energy optimization initiatives. A greenfield cement project with a planned capacity of 7,800 TPD in Khushab, Punjab has been announced, positioning the Company to capture additional market share once domestic demand strengthens. The successful completion of BMR (pyro-process optimization) on the existing 6,700 TPD grey cement line has increased capacity by 5.43% to 7,064 TPD while reducing coal consumption. On the energy front, the Company has commissioned a 10MW solar power plant and brought an additional 7.66MW online at its Kohat site, lowering reliance on the national grid and improving cost competitiveness. Solar capacity now stands at 17.66MW, with a target of reaching 20MW. To further enhance energy security, the Board has approved an approximately 28.5MW coal-fired power plant at Kohat, with contractors engaged.

As of Sep 2025, the Company's Gross working capital days stood at 32 days (June 2025: 39 days, June 2024: 36 days) in line with the industry average, reflecting efficient working capital management. The Company finances its operations through equity, borrowings, and working capital with a view to maintaining an appropriate mix between various sources of finance to minimize risk. The management aims to maintain flexibility in funding by keeping regular committed credit lines. The Company has aggregate Running Finance / FATR facilities to finance working capital requirements.

Owing to low reliance on borrowings coupled with improving financial performance backed by cost optimization measures, the Company's Interest Coverage (FCFO/Finance Cost +CMLTB +Excess STB) has improved continuously to 11.4x during 1QFY26 from 10.3x during 1QFY25. Improved profitability during the period has resulted in strong FCFO of the Company reported at PKR 8,399mln during FY25.

Total borrowings of the Company stood at PKR 2,641mln as of the end of September 2025. As a result, leveraging stood at 4.9%. Going forward, the Company’s leveraging is expected to increase in pursuit of expansion. However, it is expected to be comfortably managed through healthy cash flows.