A. Rahim Foods (Pvt.) Limited (‘A. Rahim Foods’ or ‘the Company’) is an unlisted Private Limited Company, incorporated in 1987, under the Companies Ordinance, 1984 (now the Companies Act, 2017). The Company’s registered office is located in Lahore.

The first Dawn plant was set up and commissioned in Karachi in October 1981 with the purpose of creating awareness and demand for a variety of bread products. It was not long before the name became synonymous with ‘Vitamin Enriched Bread’ and a second plant was commissioned in Islamabad in 1985. Since then, Dawn has done many accomplishments; It has managed to capture 35% of the consolidated market share of all bread products in Pakistan within a decade of inception. Operating for nearly 4 decades, Dawn Bread is the only brand in Pakistan that delivers freshly baked bread in its 3 provinces. The group has further diversified with Dawn Foods (a frozen foods manufacturer), ATA Bakery Solutions (a producer of premium bakery products) and the recently established international brand, Doughstory (a manufacturer and exporter of frozen food and bakery products). AB Mauri Pakistan (Private) Limited (Manufacturer of Yeast) is a joint venture of AB Foods International and A Rahim Foods, devoted to the baking industry engaged in yeast and bakery ingredients.

The Company's operations are primarily focused in the Punjab region, and it boasts one of the largest delivery fleets in Pakistan, with over 1,000 vehicles. Serving more than 150 cities nationwide, the company efficiently reaches every retail store that wishes to carry its products. The production plants are located in Lahore (Kot Lakpat) and Muridke. The total annual production capacities for each product are as follows: 336 million units for buns and burgers, 125 million units for bread, 10 million units for rusks, 20 million units for muffins and cakes, and 80 million units for shawarma.

The Company’s ownership is split between two members, Mr. Anwaar Hussain and his brother Mr. Noman Hussain, constituting 50% each.

A. Rahim Foods is family owned. Both brothers hold strong ties, as they have jointly led the Company to its present stage. Further, family engagement under a well designed integrated plan may be needed.

The sponsors bring extensive experience and expertise in the food and bakery industry. Their sound business acumen has been instrumental in driving the Company’s sustained success over the years. With deep industryspecific knowledge, hands-on experience, and strategic foresight, the sponsors have played a key role in shaping the Company’s growth and long-term achievements.

The Company has successfully diversified into various food segments. Additionally, the Company draws its financial strength from its group entities, including Dawn Frozen Food, ATA Bakery, and ARF itself.

The Board is not truly independent of the management. The Board of the Company is composed of two members, including the Chief Executive Officer (CEO). Both members serve as Executive Directors, actively involved in the day-to-day management and strategic decision-making of the Company.

Mr. Anwaar Hussain- CEO and Director has been managing the affairs of Dawn Foods Group for the last 20 years. With his expertise and diversified experience, he successfully expanded the Group into multiple industries with success stories in frozen food and ambient carbohydrate businesses, including the largest distribution network in Pakistan that consists of a country-wide network of 30 warehouses. Mr. Noman Hussain, has been managing the affairs of Dawn Group for last 18 years as a Group Director. Mr. Noman holds a MBA in Business Administration and Management, from the University of Connecticut, USA.

The Board of Directors convenes on a regular basis to conduct comprehensive reviews of current performance and deliberate on future strategic initiatives. While there are currently no specialized Board committees in place, the establishment of such bodies presents a clear opportunity to further strengthen the company’s overarching governance framework.

The External Auditors of the Company M/S Crowe Hussain Chaudhry & Co. Chartered Accountant a QCR-rated firm expressed an unqualified opinion of Financial Statements for the period ended Jun’25. The Firm is Category ‘A’ on SBP panel.

The Company employs a horizontal organizational structure, with each department managed by department heads reporting directly to the Executive Directors. The Company functions across 9 key areas: (i) Admin, (ii) Sales, (iii) Marketing, (iv) Supply chain, (v) Finance, (vi) R & D, (vi) Quality, (vii) Human Resource and (viii) Technical & (ix) Quality. Mr. Anwaar Hussain, the CEO, oversees the Sales, Finance, Human Resource, Supply Chain, and Marketing departments. Mr. Noman, on the other hand, leads the R&D, Quality, Technical, Administration, and Information Technology departments.

Mr. Anwaar Hussain serves as the Chief Executive Officer (CEO) of the Company. A seasoned professional and a distinguished member of the Young Presidents' Organization (YPO), Mr. Anwaar brings a proactive and dynamic approach to his role. With extensive industry experience and a deep understanding of the sector, he effectively inspires and leads the team. The CEO is supported by a team of highly experienced professionals. Mr. Noman Hussain has been overseeing the operations of the Dawn Group for the past 18 years in his role as Group Director. He holds an MBA in Business Administration and Management from the University of Connecticut, USA. Mr. Harris Mahmood, FCA, serves as the Group Chief Financial Officer, overseeing the Strategy, Finance, Legal, Internal Audit, and Information Technology functions across the group. This includes 100% owned legal entities in multiple countries, as well as global and local joint ventures. Mr. Harris brings over 20 years of overall experience.

There are currently no formal management committees in place. However, the management team convenes its meeting on monthly basis to ensure the efficiency and effectiveness of the Company's operations.

The Company utilizes SAP software, a specialized ERP solution designed for manufacturers and tool producers. The software is continuously monitored and maintained by the vendor to ensure optimal performance.

The Company has a robust internal audit function outsourced to EY Ford Rhodes, which enhances risk management, control, and governance processes, while driving continuous business improvements through the development of Standard Operating Procedures (SOPs). Additionally, the Company holds several prestigious certifications, including HACCP, Halal, FDA, ISO 9001, ISO 22000, and Kosher, demonstrating its strong commitment to adhering to the highest industry standards of quality, safety, and compliance.

The food products industry in Pakistan, spanning biscuits, confectionery, snacks, and condiments, is characterized by a high degree of competition and sensitivity to macroeconomic shifts. As of FY25, total production across these segments stood at approximately 5.8 million metric tons, representing a 14.3% year-on-year decline primarily attributed to high inflation suppressing discretionary spending. The industry is highly dependent on domestic raw materials—including wheat, sugar, edible oil, and potatoes—which collectively account for over 70% of the cost of production. While established players like Ismail Industries ("Candyland") and PepsiCo maintain strong market positions, the sector faces challenges from a large unorganized market and low entry barriers. Despite a recent dip in domestic production, the sector maintains a stable outlook with growing export potential in the Middle East, Central Asian States, and Europe. However, profitability remains volatile; for instance, while condiments have recently seen improved margins due to effective pricing leverage, the biscuits and confectionery segments have faced margin contraction due to rising costs for key ingredients like sugar and milk.

The Company has established strong brand recognition in the bread and buns industry, with its flagship products, "Dawn Bread" and "Dawn Burger Buns," becoming widely recognized for their quality and reliability. The Company has managed to capture ~35% of the consolidated market share of all bread products in Pakistan within a decade of inception.

A. Rahim Foods, a prominent player in the food processing and distribution sector, has consistently demonstrated revenue growth and successfully navigated market fluctuations, maintaining a strong financial position. The Company's revenue is derived from seven product segments, including bread, buns, burgers, flatbread, frozen paratha, rusk, and sweet cakes/ muffins. Bread constitutes ~48% of the Company’s total revenue, with burgers contributing ~36%, cakes/ muffins contributing ~9% followed by rusk ~4 and others ~3%, reflecting their essential role in the Company’s overall financial performance. The Company saw a positive trend in its topline, driven by higher sales volumes and increased prices. In FY25, the Company achieved total revenue of PKR 16,838mln (FY24: PKR 12,145mln), representing an impressive increase of ~41.2%.

The company reported a strengthened financial performance during FY25, underpinned by a notable increase in revenue. This growth contributed to a gross profit margin of 30.7%, an improvement compared to the 19.7% recorded in the previous year. The impressive top-line growth, coupled with effective cost management, was reflected in the operating profit margin, which increased to 10.4% from 6.2%. The combined effect of improved operational efficiency and a slight reduction in finance costs led to an increase in net profit, which was reported at PKR 884 million up from PKR 282 million, elevating the net profit margin from 2.3% to 5.2%. Overall, the company's profitability and margins have significantly improved, indicating a financially robust and well-managed operations.

The Company has shown growth trajectory since its inception and now the drive towards the future is stronger.

A. Rahim Foods manages its working capital through a combination of inventory, trade receivables, and trade payables, primarily funded by short-term borrowings and free cash flow from operations (FCFO). In FY25, the company maintained an efficient inventory holding period of 8 days, reflecting optimized stock levels that balance market demand with minimal carrying costs. A significant improvement was noted in the receivables cycle, which shortened to 15 days from 24 days in FY24, driving a reduction in gross working capital days to 22 days (FY24: 31 days). While trade payables also decreased to 20 days (FY24: 23 days), the cumulative effect of these shifts resulted in a streamlined net working capital cycle of just 2 days, down from 9 days in the previous year. Although the current ratio adjusted to 1.1 from 1.6, the overall results indicate a strengthened liquidity position and a more agile operational framework, even as the company continues to refine its management of payables and collections.

The company’s interest-servicing capacity saw a significant boost in FY25, with the EBITDA-to-Finance Cost ratio rising to 9x from 3.6x in FY24, reflecting much stronger operational coverage. This improvement was driven by a substantial increase in Free Cash Flow from Operations (FCFO), which climbed to PKR 1,982 million (FY24: PKR 1,084 million), coupled with a reduction in finance costs to PKR 313 million (FY24: PKR 391 million). Consequently, the overall debt service coverage ratio improved to 6.5x from 2.9x in the previous year.

A. Rahim Foods maintained a disciplined capital structure in FY25, significantly reducing its reliance on debt. The debt-to-equity ratio improved to 31.3%, a sharp decline from 49.3% in FY24, supported by a strong equity base of PKR 4.8 billion. Total borrowings were reduced to PKR 2,211 million (FY24: PKR 2,682 million), with the share of short-term borrowings dropping to 17.6% (FY24: 29.4%). This shift toward a more conservative leverage profile, provides a substantial financial cushion and enhances the company’s overall credit stability.