Allah Tawaqal Metals (Private) Limited (“ATM” or “the Company”) is a private limited company incorporated in Pakistan on September 11, 2019, under the Companies Act, 2017. The Company is engaged in the recycling of copper and aluminium ingots, utilizing sourced materials such as dismantled compressors and imported scrap. Its registered office is situated at Opposite Kotli Shahan, G.T. Road, Gujranwala, Punjab, Pakistan.

The business traces its origins to the 1980s, when it was founded as a sole proprietorship by the father of Mr. Muneeb Arif. Initially focused on the import and local trade of raw metals, along with basic metal melting operations, the enterprise underwent formal incorporation in 2019 under the leadership of Mr. Mubeen Arif, the eldest son. This transition marked a strategic expansion into scrap recycling and export activities, complemented by operational streamlining to enhance overall efficiency.

The Company specializes in the import and procurement of scrap metal for the production of alloy ingots, which are primarily destined for export markets. Additionally, it engages in the local trade of secondary and semi-finished non-ferrous and ferrous metals. Its primary export market is China’s automotive sector. Raw materials are sourced globally, with key suppliers based in the USA and Europe, supporting an annual processing capacity of up to 60,000 metric tons.

ATM’s shareholding is concentrated among three family members. Mr. Muhammad Sameer Arif, the Chief Executive Officer, holds a 34% stake. The remaining shares are equally divided between Mr. Muhammad Muneeb Arif (younger brother) and Mr. Muhammad Umair (brother-in-law), each holding 33%.

Founded in the 1980s, the business is now under the second generation’s stewardship, which is focused on formalizing the corporate structure to support sustained growth. Shareholding remains wholly within the family, with no imminent changes expected. A formalized succession plan has yet to be established, which remains an area for future governance development.

The founding family possesses decades of operational experience in the industry, demonstrating strong market insight and resilience through business cycles. The current generation of shareholders benefits from the founder’s continued guidance, which supports the management team’s ongoing development in leading the business through its growth phase and evolving market dynamics.

The sponsors' financial strength is considered adequate.

The Company is governed by a three-member Board of Directors (BoD), which includes the Chief Executive, Mr. Muhammad Sameer Arif. All directors are members of the sponsoring family and hold executive roles within the organization. The board currently operates without independent or non-executive representation.

Mr. Sameer Arif, the Chief Executive Officer, holds a Bachelor of Laws (LLB) with Honours from the University of Bedfordshire and is currently pursuing an LLM in International Commercial Law from City, St George's, University of London. Mr. Muneeb Arif is currently completing a Bachelor’s degree in Business Management at Regent University London, alongside four years of industry experience. Mr. Umair contributes five years of professional expertise and holds a Master’s degree in Mass Communication.

As a closely held, family-owned enterprise, ATM’s governance structure integrates ownership and management functions. The governance framework is evolving and presents an opportunity for further formalization to align with established corporate best practices.

The Company’s financial statements for the year ended June 30, 2025, were audited by Hassan Farooq & Co., an external audit firm rated by the Quality Control Review (QCR). The auditors issued an unqualified opinion on the financial statements.

The Company’s organizational structure is organized into five functional departments: Sales, Production, Finance & Taxation, Import, and Export. Each department is overseen by a member of the Board of Directors and supported by a dedicated operational team.

Mr. Sameer Arif serves as the Chief Executive Officer, overseeing the Company’s strategic direction, finance, and compliance functions. He is supported by Mr. Muhammad Amin Arif, General Manager of Finance, who coordinates financial reporting and operational oversight across all departments. The Import and Export divisions continue to be led by Mr. Muhammad Irfan.

ATM operates with a lean organizational structure under the direct oversight of its sponsors. The establishment of formal management committees would strengthen governance by enhancing performance monitoring and reinforcing adherence to established policies and procedures.

The Company currently relies on QuickBooks Enterprise Solutions – Accountant Edition 18.0 for financial reporting, though the inventory module is not in use due to operational incompatibility. Inventory management remains a manual process. To enhance system integration and operational efficiency, ATM is implementing a customized ERP system – Business Management System – in partnership with Crox Avenue Solutions.

The Company’s internal control framework is currently under development, with the internal audit function yet to be formally established. In parallel, ATM has instituted a dedicated Quality Department to uphold export quality standards and is actively pursuing ISO certification for Quality Management during the current fiscal year. The Company has also secured environmental compliance clearance from the Punjab Environmental Protection Agency (EPA).

The scrap metal recycling industry in Pakistan has seen significant growth since 2017, driven by China’s restrictions on foreign scrap imports and domestic waste enforcement. This regulatory shift redirected global scrap flows toward several countries, including Pakistan, India, Malaysia, Indonesia, and Vietnam. Pakistan’s supportive policy environment, characterized by scrap import duties of only 2–3% and tax credits under Section 65D of the Income Tax Ordinance for newly established industrial entities, further bolsters industry competitiveness.

The Company operates within a fragmented and largely unregulated industry, where market sizing remains challenging due to the prevalence of small-scale participants. ATM competes not only domestically but also faces international pressure from recycling hubs in India, Malaysia, and Vietnam. However, its formal corporate structure distinguishes it from many competitors, who typically operate as sole proprietorships. Furthermore, ATM has invested in environmental sustainability, including the installation of a baghouse filtration system attached to its furnace, which captures carbon emissions for resale as a commercial by-product.

In FY24, the Company expanded its production capacity through the installation of an additional furnace, raising total capacity from 38,000 to 43,000 metric tons. Capacity utilization remained consistent at approximately 73% in FY24 (FY23: ~72%). According to the 6MFY25 management accounts, the Company recorded revenue of PKR 4.79 billion, of which PKR 3.61 billion (approximately 75%) was derived from exports and PKR 1.40 billion from domestic sales. This compares to PKR 5.01 billion in the same period of the prior year (6MFY24), reflecting a period-on-period decline of approximately 4.4%, with export sales decreasing by 7.5% and domestic sales increasing by 14.0%. Copper and aluminum alloy ingots are exported exclusively to China, while ferrous scrap by-products are sold domestically to traders in Gujranwala and Lahore.

In 6MFY25, the Company achieved a gross profit margin of 10.8%, an improvement from 10.3% in FY24. The net profit margin, however, declined to 3.2% from 4.7% in FY24. Finance charges for 6MFY25 stood at PKR 91 million, a significant reduction from PKR 161 million in the full FY24. Consequently, the Company reported a net profit of PKR 153 million for 6MFY25, down from PKR 302 million in the same half-year period of the prior year (6MFY24) and PKR 390 million for the full FY24.

Copper’s superior electrical conductivity underpins its structural demand from the electric vehicle sector, a long-term trend supportive of the scrap recycling industry. For ATM, this demand backdrop aligns with its core product mix and provides a stable revenue channel. Operationally, the Company is enhancing its competitive position through incremental capacity expansion; it recently increased its aluminum furnace capacity by approximately 6,000 MT per annum (to an estimated 14,000–16,000 MT), supported by upgrades to its holding furnace to improve production efficiency. The industry's landscape has been reshaped by China’s scrap import restrictions, which have redirected recycling activity toward developing economies like Pakistan. This shift has created a sustained export opportunity for compliant, established players such as ATM. Together, these factors favorably end-market demand, operational scaling, and a supportive trade dynamic contribute to the sustainability of ATM’s business model and its ability to generate stable cash flows.

The Company finances its working capital needs through internally generated cash flows and short-term borrowings. As of December 2024 (6MFY25), short-term borrowings stood at PKR 722 million, marginally higher than the PKR 618 million recorded at the end of FY24 (June 2024). These credit facilities are primarily used to fund scrap imports, with utilization levels tied to procurement activity. The Company’s working capital efficiency improved, with net working capital days reducing to 86 days in 6MFY25 from 89 days in FY24, indicating a quicker conversion cycle.

In the first half of FY25 (6MFY25), ATM’s Free Cash Flow from Operations (FCFO) was PKR 216 million. This represents an increase from the PKR 243 million generated in the full FY24, but a decline from the PKR 285 million recorded in the comparable half-year period of the prior year (6MFY24). The Company's interest coverage ratio, measured as FCFO to Finance Cost, improved to 3.4x in 6MFY25 from 1.5x in FY24, reflecting stronger cash-based debt servicing capacity.

The Company maintains a moderately leveraged capital structure. Its debt-to-capital ratio stood at 26.4% as of December 2024 (6MFY25), a reduction from 33.6% as of December 2023. The Company has no long-term borrowings and relies on short-term credit facilities primarily Financing Against Trust Receipts (FATR), Export Refinance, and FE-25 to fund its working capital cycle.