Kohat Textile Mills Limited is a public limited company incorporated in Pakistan in 1967, with its shares listed on the Pakistan Stock Exchange. The company commenced operations in the first quarter of 1970, and its early success served as a catalyst for the growth and diversification of the Saif Group in the years that followed.

Kohat Textile Mills Limited was founded in 1967 by the late Begum Kulsum Saifullah Khan, a distinguished figure known for her contributions to the corporate, social, and political spheres. With her strategic vision and entrepreneurial insight, she laid the foundation for what later evolved into the renowned Saif Group. Serving as Chairperson of the Saif Group of Companies from 1964 to 1990, she guided its growth into one of the leading business conglomerates with diversified interests in textiles, power generation, healthcare, real estate, oil and gas exploration, and software development.

The Company operates a single spinning facility with an installed capacity of ~46,908 spindles following the completion of a Balancing, Modernization and Replacement (BMR) initiative during FY26. Kohat Textile manufactures specialized yarn comprising polyester, viscose, acrylic, and blended varieties. The Company has also strengthened its energy profile through continued investment in renewable energy infrastructure. Following the commissioning of an additional 3MW solar project during FY25, total solar generation capacity increased to approximately ~5.1MW, exceeding average operating power requirements. The current energy mix comprises solar generation, grid electricity (PESCO), and limited natural gas based backup generation, reducing exposure to energy cost volatility and supporting operational continuity.

As at end of 9MFY26, Kohat Textile's (~73.17%) ownership vests with Saif Group through Saif Holdings, followed by the general public (~15.24%), the financial institutions (~9.83%), and others (~1.76%).

Kohat Textile Mills Limited is a venture of the Saif Group, and the financial backing and business acumen of the sponser provides strength to the businesss. Majority of the ownership vestes with the Saif Group through the holding company (Saif Holdings). The group (Saif Group) has a defined structure in place that ensures stability of the Company.

Saif Group is one of the oldest medium-sized business conglomerates in Pakistan with considerable interests in textiles. The sponsors have a presence of  decades in the local Spinning industry, eventually developing expertise. However, the Group’s growth in the textile sector was limited, but it has sustained through the volatility of the textile industry. The group has other texile venuters as well such as Saif Textile Mills which is uniquely positioned towards various segments of the market offering a diverse product line to fulfill demands of customers worldwide for multiple end-uses including Denim, Apparel, Shirting, Home Textile and Technical Fabrics. Another venture, Mediterranean Textile which is engaged in the manufacture of and sale of high quality yarn which is synthesized using Egyptian longstaple cottons while being engaged in the manufacture of and sale of high quality yarn which is synthesized using Egyptian longstaple cottons.

Saif Group holds an interest in oil and gas exploration, power generation, textiles manufacturing, real estate development, and health care services, through 7 subsidiaries and 4 associated companies across different sectors. Saif Group holds stable nancial muscle, and the Sponsors are willing to support the Company, if needed.

The Board comprises eight members with a major concentration of Saif family members. The Board consists of four non-executive directors, one executive director, one female and two independent directors.

The Board is chaired by Javed Saifullah Khan. He has been serving as the Chairman of the Group (Saif Group) for over three decades and is also the Chairman of the Board aand non-executive director for Kohat Textile Mills Limited, Saif Power Limited(SPL), Saif Textile Mills Limited, and Saif Energy Limited. He is credited with launching Mobilink(Jazz) and establishing Mediterranean Textile Company. His experience spans over various industries such as telecom, power generation, health care and textile. He has an MBA from University of Pittsburgh  and BA in Economis from Carnegie Mellon University. Anwar Saifullah Khan is the Co-Chairman of Saif Group annd the Chairman for Saif Energy Ltd.  He holds an MA in Political Science from the University of Peshawar, an MA in Politics, Philosophy and Economics from Christ Church, the University of Oxford and a master’s in Public Administration from the University of Southern California, USA. Mr. Anwar joined Civil Service of Pakistan in 1970 and was the Deputy Commisioner of Koht and Mardan districts. Ms. Hoor Yousafzai serves as the Director on the Board. She serves as the CEO of Saif Holdings, which is the holding company of Kohat Textile Mills Limited. She also serves as the Chairperson of the Board for Saif  Power Ltd and Saif Healthcare Ltd. Barrister Assad Saifullah Khan is the CEO and director on the Board.

The evaluation of Board’s role of oversight and its effectiveness is continual process, which is appraised by the Board itself. The board has adopted a highly structured process to evaluate its own performance, as well as individual performances of every member. Comprehensive questionnaires are developed in the conformity with Code of Corporate Governance and International best Practices.The Company has two committees in place; Audit Committee, and HR & Remuneration Committee.

The Company's external auditors, M/s Shinewing Hameed Chaudhri & Co Chartered accountants have expressed an unqualified opinion on the financial statements of the Company for FY25.

The Company is managed through Operations, Sales, After Sales, Production, Production Planning and Control, Supply Chain, Commercial and Planning, Engineering and Projects, Accounts, Finance, Information Technology, and HR & Administration. These departments report to the Chief Executive Officer (CEO), who subsequently reports to the Board of Directors (BoD).

The CEO of the Company, Barrister Asad Saifullah Khan graduated from Unieristy of Pennsylvania in 2004 and  Common Professional Examination/ Graduate Diploma in Law from the College of Law in 2005, and certification in the Bar Vocational Course from the Inns of Court School of Law (ICSL) in 2007.  Mr. Asad brings considerable experience gained from working in Pakistan and in the UK. He is accompnied with a seasoned team of professionals. Mr. Abid Hussain serves as the CFO of the Company, leveraging over 39 years of experience in finance. He previously managed the financial and operational affairs of Mediterranean Textile Company in Alexandria, Egypt. Mr. Umar Shehzad is the Company Secretary and holds an LLB and a Master’s degree from the University of the Punjab and is a Certified Director from the Pakistan Institute of Corporate Governance (PICG). With over 28 years of professional experience in national and multinational organizations, he has extensive expertise in Accounting, Financial Controls, Investment Management, Corporate Compliance, and Legal Affairs.

All deliberations are held at meetings conducted by department heads as required. Though no formal meeting schedule exists at Kohat Textile, daily and weekly meetings are held to manage affairs. The daily and weekly reports are generated for top management with a main focus on production and liquidity position, whereas P&L is discussed on a need basis in the meetings.

Kohat Textile has in place a Microsoft Dynamics-based Enterprise Resource Planning (ERP) system that provides comprehensive MIS reporting.

The Company maintains an in-house internal audit function, which enhances risk management, control, and governance processes. Additionally, the Company's plant is connected to the head ofce through VPN, thereby reporting on a real-time basis.

Pakistan’s textile exports improved during FY25, supported by gradual normalization in global demand and easing domestic financial conditions. Sector exports increased to USD ~17.3bln in FY25 (FY24: USD 16.7bln), reflecting a recovery led primarily by value-added segments, including garments and home textiles, while the spinning segment continued to operate under a highly competitive and margin-sensitive environment. Despite the improvement in export volumes, the operating landscape remained structurally constrained by elevated energy tariffs and the full-year impact of the Normal Tax Regime (NTR), which has materially altered post-tax profitability for export-oriented units. The imposition of corporate income tax and super tax under NTR has continued to compress net margins, particularly for low- to mid-tier spinning entities with limited pricing power and scale efficiencies. However, the progressive decline in policy rates during FY25 provided partial relief to financing costs, improving cash-flow dynamics and offering some cushion to debt-servicing metrics across the sector. In parallel, energy efficiency initiatives, particularly solarization, have emerged as a key structural differentiator, enabling relatively stronger cost positioning and margin resilience for companies with early investments in renewable energy. At the global level, evolving trade policies, shifting tariff regimes, and ongoing realignment of supply chains are expected to reshape competitive dynamics within major textile markets, particularly Europe and North America. These developments introduce both risks and selective opportunities for Pakistani exporters. While heightened competition and regulatory compliance requirements may intensify pressure on conventional suppliers, efficient spinning units aligned with quality, traceability, and sustainability standards stand to benefit from supply-chain diversification and buyer risk rebalancing. Overall, industry conditions during FY25 reflected a gradual shift toward stabilization, with future performance increasingly dependent on product mix optimization, export orientation, energy efficiency, regulatory adaptability, and financial discipline.

Kohat Textile maintains an established presence within Pakistan's spinning sector, supported by its longstanding operating history and affiliation with the Saif Group. Following the recent BMR initiative, the Company's installed capacity increased to ~46,908 spindles, further strengthening its operating profile. The Company operates in the specialized yarn segment, catering to diverse customer requirements across polyester, viscose, acrylic, and blended yarn categories. While the industry comprises participants of varying scale and business models, Kohat Textile continues to maintain a stable market presence through its focused product offering, operational experience, and emphasis on efficiency enhancements. The Company's ongoing investments in modernization and renewable energy infrastructure are expected to support its competitive positioning over the medium term.

The Company maintains a diversified product offering within a single reportable segment comprising cotton yarn, synthetic yarn, cotton blends, and man-made fiber products. Yarn sales continue to dominate the revenue mix, contributing approximately ~97% of total revenue. During 9MFY26, revenue increased by ~3.3% to ~PKR 6,313mln (9MFY25: ~PKR 6,109mln), supported by stable demand and relatively improved yarn realizations. Despite ongoing challenges within the spinning sector, including competitive pricing dynamics and fluctuating raw material costs, the Company has maintained a stable topline trajectory. Own manufactured products continue to constitute the overwhelming majority of sales, while trading activities remain immaterial. Management has also indicated an increasing focus on higher value-added specialized yarn categories, including mélange and surgical yarn, to support profitability and product differentiation.

Profitability indicators exhibited further improvement during 9MFY26. Gross margin increased to ~16.1% (9MFY25: ~14.3%), while operating margin improved to ~11.7% (9MFY25: ~10.6%). Net margin strengthened to ~4.1% compared to ~3.8% during the corresponding period last year. Margin expansion was supported by improved operating efficiencies, better product mix optimization, lower borrowing costs, and continued benefits from energy cost rationalization initiatives. Finance costs declined in relative terms due to the lower interest rate environment, while enhanced solar utilization contributed to greater cost predictability. Consequently, net profitability increased to ~PKR 258mln during 9MFY26 (9MFY25: ~PKR 230mln).

The Company's sustainability profile is supported by ongoing efforts to improve operational efficiency, optimize energy consumption, and enhance product competitiveness. During FY25, Kohat Textile commissioned an additional 3MW solar project, increasing total solar capacity to approximately ~5.1MW and materially reducing dependence on external energy sources. Furthermore, the recently completed BMR initiative increased installed spindle capacity to ~46,908 spindles and introduced modern imported machinery aimed at improving productivity, reducing wastage, and enhancing operational flexibility. Management also continues to pursue a gradual shift toward higher value-added yarn segments, which may support earnings resilience amid the cyclical nature of the spinning industry.

Net Working Capital (Average Days) increased to ~137 days during 9MFY26 (9MFY25: ~111 days), reflecting a comparatively longer operating cycle. The increase was primarily driven by higher trade receivables and inventory levels associated with business expansion and sales growth. Inventory days increased to ~67 days (9MFY25: ~59 days), while receivable days rose to ~100 days (9MFY25: ~72 days). Despite the elongated working capital cycle, liquidity indicators remained adequate, with the current ratio improving to ~4.6x (9MFY25: ~2.9x).

Coverage indicators continued to improve during 9MFY26, supported by stronger earnings generation and lower financing costs. EBITDA coverage improved to ~2.8x (9MFY25: ~2.3x), while FCFO coverage remained adequate at ~1.4x (9MFY25: ~1.4x). FCFO increased to ~PKR 787mln (9MFY25: ~724mln), reflecting improved operating cash flow generation. The reduction in the entity's average borrowing cost, coupled with stronger profitability, has enhanced debt servicing capacity and provided cushion against earnings volatility.

The Company maintained a stable capitalization profile during the review period. Leverage stood at ~43.5% as of Mar-26 (9MFY25: ~41.7%), reflecting a moderate increase in borrowings primarily to support working capital requirements and ongoing capital expenditure initiatives. Total borrowings increased to ~PKR 3,723mln (9MFY25: ~2,950mln), while shareholders' equity strengthened to ~PKR 4,844mln (9MFY25: ~4,119mln), supported by profit retention and internal capital generation. Despite higher borrowings, the strengthened equity base has helped maintain capitalization metrics within an acceptable range for the assigned rating level.