Nisar Spinning Mills (Private) Limited (the Company or “NSMPL”) was incorporated on June 14, 2005 under the Companies Ordinance, 1984 (now the Companies Act, 2017) as a private company limited by shares.

The Company originated as part of the ATS Group (the Group), a diversified industrial conglomerate established in 1968 by the late Mian Nisar Elahi. Spanning more than five decades, the Group has cultivated a well-entrenched reputation and a significant presence across both domestic and international markets, with interests spanning chemicals, plastics, metals, spinning, and synthetic leather.

NSMPL has operated as a distinct textile entity since 2006, with its state-of-the-art spinning facility located at 3-KM, Raiwind Sundar Road, Lahore. The Company operates two spinning units with a combined installed capacity of ~52,800 spindles, meeting both local and international demand for high-quality, contamination-free yarn. In addition, the Company operates two non-woven fabric plants with a combined installed capacity of ~15 MT/day, supporting a degree of product diversification alongside its core spinning operations.

The Company remains exclusively owned by the sponsoring family (~100%), with Mr. Anjum Nisar holding ~81.89% and Mr. Tariq Nisar holding ~18.10% of the shareholding.

Ownership has remained stable over the years, with full control retained within the sponsoring family. A formal shareholder agreement — including a clearly defined exit mechanism — reinforces succession planning and lends further stability to the ownership framework.

The Nisar family's cumulative industry presence of over five decades reflects a deep-rooted understanding of the business landscape. The sponsors' sustained and active involvement in strategic decision-making underscores their capacity to steer the Company effectively through evolving market conditions.

The sponsors maintain a diversified portfolio of businesses, including Nimir Chemicals Pakistan Limited and ATS Synthetics (Private) Limited, both of which demonstrate solid financial footing and access to diverse markets. This diversification underpins the sponsors' capacity to extend financial support to NSMPL, should the need arise.

The Board comprises two members — Mr. Anjum Nisar (CEO and Group Chairman) and Mr. Tariq Nisar (Executive Director) — both drawn from the sponsoring family. The absence of independent representation limits the Board's oversight function; the induction of independent directors would meaningfully strengthen the Company's overall governance profile.

Mr. Anjum Nisar, the Company's Chairman, is a former President of the Lahore Chamber of Commerce and Industry (LCCI) and of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), bringing over 47 years of diversified experience across artificial leather and petrochemical industries. Mr. Tariq Nisar, Executive Director, brings more than four decades of chemical sector experience and has substantially contributed to the Company's operations across textile spinning, chemicals, and petrochemical business segments.

The Board functions primarily in an advisory capacity, with day-to-day operational authority delegated to professional management under respective departmental heads. While this delegated structure has functioned adequately to date, formalizing Board oversight mechanisms would enhance the Company's long-term governance resilience.

ShineWing Hameed Chaudhri & Co., Chartered Accountants — categorized under the State Bank of Pakistan's 'Category-B' panel of auditors — serves as the Company's external auditor. The auditors expressed a qualified audit opinion for the financial statements for the year ended June 30, 2025.

The Company maintains a lean organizational structure, divided across four functional divisions — Finance, Sales & Marketing Services, Production, and Administration — each reporting to the CEO and Executive Director.

Mr. Anjum Nisar, the Company's CEO, brings a career spanning over 47 years, including prestigious positions as President of both the LCCI and FPCCI. His expertise spans a wide range of industrial sectors, with particular depth in artificial leather and petrochemicals. Mr. Shaukat Hussain Ch. (FCA, CPFA, FPFA, CFC) serves as the Company's Chief Financial Officer. A Fellow Member of the Institute of Chartered Accountants of Pakistan, he brings considerable experience in financial management, corporate reporting, and strategic financial planning within the textile sector, including a senior financial leadership role at Din Textile Mills Limited prior to joining NSMPL.

The current management committee functions adequately across duties, delegation, and decision-making. Nonetheless, there remains room for incremental improvement to more fully align execution with the Company's strategic objectives.

The Company has implemented SAP Business One 9.3 PL: 11, its latest ERP iteration, and maintains a contractual arrangement with Abacus Consulting (Private) Limited for ongoing maintenance and future upgrades.

An in-house internal audit function, operating under Board supervision, supports the Company's control environment. For quality assurance, the Company has installed VI spectrographs, Tensojet 4, Uster Tester 5, and Quantum yarn clearers, sourced from Uster Technologies of Switzerland.

Pakistan's textile exports reached USD 16.665bln during 11MFY26, compared to USD 16.365bln in the corresponding period last year, reflecting a 1.83% YoY increase, according to the Pakistan Bureau of Statistics (PBS). Growth was primarily driven by the composite and garments segment, led by higher exports of knitwear, readymade garments, bedwear, cotton yarn, and other textile products, while exports of cotton cloth, synthetic textiles, tents & canvas, and non-cotton yarn declined. During May FY26, textile exports stood at USD 1.64bln, registering a 7.13% YoY and 10.80% MoM increase. Despite the positive export momentum, the industry remains vulnerable to rising geopolitical tensions, which have increased uncertainty in global energy and freight markets. According to APTMA, higher energy, freight, insurance, and financing costs could pressure exporters' margins, underscoring the importance of competitive energy tariffs and policy stability to sustain the sector's export competitiveness.

NSMPL's relative position is considered adequate, supported by its installed capacity of ~52,800 spindles across two spinning units. This positions the Company as a small-to-mid-sized participant within a sector undergoing significant capacity rationalization; sector-wide utilization fell to ~42.5% in 8MFY26 (FY25: ~70.8%) amid the closure of more than 100 spinning mills. The Company's continued operation of both spinning units through this period of sector-wide contraction reflects a degree of operational resilience relative to peers.

During 9MFY26, the Company's revenue was recorded at ~PKR10,615mln, marginally higher than ~PKR10,354mln in 9MFY25, reflecting broad topline stability despite the sharp sector-wide contraction in capacity utilization and yarn production. This follows a decline to ~PKR12,963mln for full-year FY25 (FY24: ~PKR14,966mln), a fall of ~13.4% for the year, driven at the time by constrained availability and elevated cost of imported raw material amid subdued global demand. Export revenue contributed ~PKR2,239mln in 9MFY26 (9MFY25: ~PKR2,106mln), broadly stable at ~21.1% of sales (9MFY25: ~20.3%), with China and Hong Kong remaining the Company's primary export destinations.

Gross margins improved to ~6.6% in 9MFY26, compared to ~3.2% in 9MFY25 and ~3.0% for full-year FY25, though they remained below the broader sector's gross margin of ~8.2% recorded in 1HFY26, indicating comparatively higher cost pressures at the Company level. Operating margin recovered to ~5.2% in 9MFY26 (9MFY25: ~1.7%; FY25: ~1.4%), broadly in line with the sector's operating margin of ~4.6% in 1HFY26. Net margin turned positive at ~0.7% in 9MFY26, compared to ~(3.3)% in 9MFY25 and ~(3.4)% in FY25, with the Company posting a net profit of ~PKR78mln during the period versus net losses of ~PKR337mln in 9MFY25 and ~PKR445mln in FY25 — a turnaround that also compares favorably to the sector's modest net margin of ~0.4% recorded in 1HFY26.

The Company continues to pursue enhanced vertical integration across both upstream and downstream segments of its production value chain, alongside a planned expansion into the weaving and knitting segments to broaden its business sustainability profile. On the energy front, NSMPL has already installed ~8.5MW of solar power capacity, with a further ~1.5MW currently in the pipeline, which would bring total installed solar capacity to ~10.0MW against the Company's own energy requirement of ~4.2MW — positioning NSMPL to comfortably meet its energy needs from renewable sources and potentially insulate it from grid tariff volatility. This represents a strategic response to Pakistan's structurally elevated energy tariffs — a challenge facing the sector broadly, with domestic industrial rates at ~USD12.5 cents/kWh against ~5.0–9.0 cents in regional competing markets — and is expected to meaningfully strengthen the Company's cost structure and long-term resilience.

The Company's working capital requirements — driven primarily by inventory and receivables — continue to be funded through a combination of internal cash generation and short-term borrowings. Net working capital days stood at ~171 in 9MFY26, broadly consistent with ~168 in 9MFY25 and ~172 in FY25, reflecting a structurally long working capital cycle that is characteristic of the spinning sub-sector. Notably, the Company's working capital cycle remains materially more efficient than the broader sector average of ~256 days recorded in 1HFY26 (1HFY25: ~200 days), suggesting comparatively disciplined inventory and receivables management relative to peers.

Coverage metrics improved meaningfully in 9MFY26, supported by the recovery in profitability. Interest coverage (EBITDA/Finance Cost) rose to ~2.5x, compared to ~1.0x in 9MFY25 and ~0.8x in FY25. Free Cash Flow from Operations (FCFO) increased to ~PKR628mln in 9MFY26 (9MFY25: ~PKR243mln; FY25: ~PKR298mln), while FCFO-based debt coverage strengthened correspondingly to ~1.9x (9MFY25: ~0.6x; FY25: ~0.6x).

As at end-Mar'26, the Company's capital structure remains highly leveraged, with the debt-to-capital ratio at ~73.8%, broadly unchanged from ~74.8% in 9MFY25 and ~73.8% in FY25, but up materially from ~56.7% in FY24, reflecting a structurally higher leverage base than in prior years. The Company's borrowing book stood at ~PKR3,928mln in 9MFY26 (9MFY25: ~PKR2,261mln; FY25: ~PKR1,801mln), with short-term borrowings comprising a markedly higher ~76.7% of total borrowings (9MFY25: ~30.3%; FY25: ~23.6%), consistent with elevated working capital funding needs during the period. This compares with a sector-wide borrowing base of ~PKR604.8bn as at end-February 2026 (down ~5.0% YoY), where short-term facilities similarly remain the dominant funding source. Shareholders' equity stood at ~PKR1,462mln (9MFY25: ~PKR1,499mln; FY25: ~PKR1,384mln).