Novacare Hospitals (Private) Limited (NHPL or the Company) was incorporated in Islamabad on 21 March 2023 as a private limited company under the Companies Act, 2017. As the Company remains in the pre-operational phase, healthcare-specific licensing and registration for its Islamabad facility with the Islamabad Healthcare Regulatory Authority (IHRA) will be in place before commencing operations. The Company’s registered corporate office is at Plot 11-12, Central Commercial C, DHA Phase V, Islamabad and project site is a 50-kanal plot in DHA Phase V, Islamabad.

Novacare Hospitals (Private) Limited is a wholly-owned subsidiary of Maple Leaf Cement Factory Limited (MLCF). Andalus Holdings (ADGM) Limited, a healthcare investment and management-advisory firm registered in Abu Dhabi Global Market, has been engaged to build and set up systems for the hospital and, over time, to operate it on Maple Leaf's behalf. MLCF is in turn part of the Kohinoor Maple Leaf Group (KMLG), whose ultimate parent is Kohinoor Textile Mills Limited (KTML). Novacare represents KMLG's first venture into the healthcare sector in Pakistan, following a multi-decade track record in cement, textiles and related industrial and financial businesses across the Group, and is described as part of the Group's diversification into an underserved premium healthcare segment. As per the management, the International Finance Corporation (IFC), a member of the World Bank Group, is also expected to make an equity investment near future, the terms of which remain undisclosed pending finalization. Novacare additionally maintains a long-term clinical-governance and knowledge-sharing affiliation with Imperial College Healthcare NHS Trust (UK), signed in March 2024.

Novacare is developing a 250-bed greenfield tertiary care hospital, including 68 critical care beds, on its DHA Phase V site, comprising 28 clinical services organized across 13 Integrated Practice Units, targeting the Islamabad-Rawalpindi corridor together with northern Punjab. As at the date, the Company remains pre-operational and pre-revenue, with the project under construction. As per the management, the overall project completion stood at ~53% as of September 30th, 2026, with civil and grey structure works and construction almost completed, while the mechanical, electrical and plumbing works, HVAC, and external development still in progress. No accreditation has yet been obtained, consistent with the project’s pre-operational status.

Project Status:

The originally envisaged opening timeline has been delayed for 3 months, with management now targeting June, 2027 (FY27) for commencement of operations. As of June 2026, roughly one quarter of the approved project cost had been capitalized, and contracted capital commitments not yet recognized in the accounts represented a further amount close to one third of approved cost. The project’s funding structure envisages a 50:50 debt-to-equity mix, including operating losses. Debt drawdowns under the syndicated facility began in July 2026, so construction to date has been financed almost entirely by shareholder capital.

Novacare is a wholly-owned by Maple Leaf Cement Factory Limited (MLCF), which holds ~99.99 of the Company’s issued ordinary shares and the remaining two shares are held by two individuals. MLCF is a Pakistan Stock Exchange listed flagship company of the Kohinoor Maple Leaf Group (KMLG), incorporated in 1960 and engaged in integrated cement production at Iskanderabad, Punjab; the Group's ultimate parent is Kohinoor Textile Mills Limited (KTML). KMLG is a family controlled industrial group of the Saigol family with interests in textiles (KTML), cement (MLCF and Pioneer Cement Limited), power (Maple Leaf Power Limited), investment and finance (Maple Leaf Capital Limited) and fertilizer (Agritech Limited).

Ownership has remained stable since incorporation, with MLCF serving as a sponsor and supporting the project through successive increases in paid-up capital, backed by its longstanding operational presence in Pakistan. The principal source of prospective ownership change is the anticipated, but not yet finalized, entry of the International Finance Corporation (IFC) as equity participant, which remains to be confirmed, and the resulting post-IFC ownership structure has not yet been settled.

Novacare is the Kohinoor Maple Leaf Group's first venture into the healthcare sector in Pakistan, following a multi-decade track record in cement, textiles and related industrial and financial businesses through MLCF, KTML, Maple Leaf Power, Maple Leaf Capital and Pioneer Cement. KMLG has an established record in capital intensive manufacturing, including capacity expansions and captive power development at MLCF, and its senior executives bring project funding and treasury discipline. However, the Group has sought to compensate the direct healthcare operating experience with the directors’ prior experience in this sector and by engaging Andalus Holdings, whose principals bring an adequate track record in healthcare, and maintaining a long-term clinical-governance and knowledge-sharing affiliation with Imperial College Healthcare NHS Trust (UK).

MLCF’s reported asset base of ~PKR 242bln, equity of ~PKR 94bln, revenue of ~PKR 85bln and profit of ~PKR 12.6bln in FY26 on a consolidated basis. Sponsor commitment to the Novacare Hospital project is demonstrated by ~PKR 11.3bln in equity (including PKR 2.5bln in sub-debt), further backed by corporate guarantees, sponsor loans, and binding funding undertakings. Any equity, cost overrun or completion funding obligation is on the sponsors. The International Finance Corporation's proposed equity injection remains at a proposed rather than committed stage, with terms not finalized yet.

Novacare's Board comprises six directors, all of whom are Nominee Directors of Maple Leaf Cement Factory Limited and also serve as directors of other Kohinoor Maple Leaf Group companies. The appointed management advisory firm Andalus Holding is represented by Faraz Mehmood Minai and Ghalib Hafiz. The induction of independent directors following commencement of hospital operations would be viewed positively to strengthen board oversight and governance.

The Board’s membership is dominated by serving executives of the Kohinoor Maple Leaf Group's principal operating companies, providing strong linkage between Novacare's governance and the sponsor group's own strategic and financial oversight. Mr. Taufique Sayeed Saigol serves as Chairman of Novacare, he is also Chief Executive Officer of Kohinoor Textile Mills Limited and brings approximately 30 years of industrial and export-business experience, holding a degree in Industrial Engineering from Cornell University. Mr. Sayeed Tariq Saigol (a Director), having approximately 20 years of experience, serves concurrently as Chief Executive Officer and Executive Director of MLCF, with a background in International Business and Finance from McGill University. Mr. Waleed Saigol (a Director), having approximately 20 years of experience, serves as Chief Executive Officer and Director of Maple Leaf Capital, and was educated at Aitchison College and the London School of Economics. Mr. Mohsin Raza Naqvi (a Director), having approximately 30 years of experience, serves as Group Chief Financial Officer and Executive Director of KTML, and holds FCA and CFA qualifications together with certified director status from the Pakistan Institute of Corporate Governance. Mr. Faraz Mehmood Minai (a Director) with approximately 20 years of experience in investment banking, and Mr. Ghalib Hafiz (a Director) with around 10 years of experience in strategy and healthcare development, both represent Andalus Holdings, a management advisory firm. Taken together, the Board brings strong financial, industrial, and corporate governance expertise, complemented by healthcare sector experience through Andalus Holdings as healthcare management advisor, as well as relevant expertise within the Board and senior management team.

The Board’s composition, comprising senior executives and family members of the Saigol family who collectively hold significant governance roles across the Kohinoor Maple Leaf Group, including the Group’s Chairman, and the CEOs of KTML, MLCF and Maple Leaf Capital, provides direct alignment between Novacare’s Board and the sponsor group’s strategic decision-making. On board-level, two committees are formed and meetings are held fortnightly to review the project completion status for which the minutes are documented properly. An Executive Committee chaired by the Chief Executive Officer meets weekly, tracks opening readiness, hiring, spending and vendor performance, and keeps minutes with action trackers. A Procurement Committee meets monthly, approves capital and operating budgets and has three sub-committees.

A.F. Ferguson & Co., Chartered Accountants, categorized in Category ‘A’ of the SBP’s panel of auditors, serves as the Company’s external auditor and issued unqualified audit opinions on the financial statements for the years ended June 30, 2024, June 30, 2025, and June 30, 2026.

Novacare’s senior management team reports functionally to the Chief Executive Officer, who in turn reports to the Board. His direct reports include the Chief Operating Officer, Chief Medical Officer, Chief Nursing Officer, Chief People Officer, Chief Information Officer, Chief Strategy and Business Development Officer, and heads of regulatory affairs, protocol and government relations, clinical governance and quality, and internal audit. Project development, supply chain and procurement and biomedical engineering report through the Chief Operating Officer, with a director Projects supervising civil, electrical and mechanical execution. A project management office and a Chief of Staff are planned. The Company maintains separate organizational structures for Accounts and Finance, Nursing, Digital Technology and Information Technology (DTIT), People, Organization and Corporate Admin, and an overall Leadership and COO-consolidated structure; detailed reporting lines and departmental headcounts under these structures are maintained. Chief Financial Officer and Chief Legal Officer positions are currently vacant.

Novacare’s senior management team combines substantial international hospital operating experience. Mr. Johannes Theodorus (Hans) Kedzierski serves as Chief Executive Officer, bringing over 40 years of international hospital leadership experience across six countries; he holds an MBA from the Kellogg School of Management at Northwestern University and was previously Chief Executive Officer of Aga Khan University Hospital Karachi, with Novacare stated to be his seventh hospital venture. Dr. Javed Ahmed Raza serves as Chief Medical Officer; Director of Bariatric and Metabolic Surgery at Cleveland Clinic Abu Dhabi. Mr. Bazal Nasir, Chief Operating Officer with 30 years of experience, is a Mechanical Engineer and Certified Six Sigma Black Belt who received Aga Khan University Hospital's Best Quality Project Award in 2009. Mr. Syed Ali Imran Rizvi, Chief People Officer with 30 years of experience, holds a B. Com from the University of the Punjab and brings multinational human resources leadership experience including Levi Strauss, Novartis, Shell and GSK, most recently serving as Executive Director, People and Organization, at PureHealth. Ms. Zehra Habib, Chief Nursing Officer with 25 years of experience, holds a Bachelors in Nursing from the Aga Khan School of Nursing and brings a clinical practice and nursing leadership focus to the role. Collectively, they bring decades of relevant experience and evidence direct exposure to hospital operations, quality management and multinational human resources practice, which is viewed as a genuine strength ahead of opening; current headcount stood at approximately 80 to 85 staff.

The management team possesses relevant experience in hospital leadership and has established a functional organizational structure, committees, and systems commensurate with the scale and complexity of the project. The Executive Committee provides structured oversight of project readiness, while procurement is governed through defined committees and sub-committees. Clearly delineated roles and responsibilities, with department heads accountable for their respective functions, support organizational coordination and operational oversight. The hospital plans to operate clinical and ancillary services, including laboratory, radiology, and pharmacy, in-house, with department heads already recruited. Physician recruitment is being led jointly by the Chief Medical Officer and Chief Executive Officer, in coordination with Andalus. However, management effectiveness remains to be demonstrated through execution. The recruitment of remaining senior personnel, consultants, nursing, and allied staff will be critical to operational readiness, particularly given the competitive market for specialist doctors and the importance of physician affiliation in attracting and retaining clinical talent. Accordingly, the assessment of management effectiveness will increasingly depend on timely execution of the revised opening plan and the ability to mobilize and retain the required clinical workforce.

The Company is in process of implementing an integrated Management Information System (MIS), comprising Oracle Fusion Cloud for core enterprise functions, including finance, human resources, procurement, and performance management, alongside IQVIA’s Hospital Information System for clinical and patient-facing workflows. The Company aims to establish a digitally enabled hospital environment to enhance management visibility, support data-driven operational decision-making, and strengthen patient care quality and safety. In this regard, the Company aspires to achieve HIMSS EMRAM Stage 7 within three years of commencing operations. Successful attainment of this level of digital maturity could position the Company as a pioneer in Pakistan and the wider region, differentiating its MIS and broader digital capabilities and potentially providing a competitive advantage that may be difficult to replicate. However, realizing these benefits will depend on effective implementation and integration of the systems. While the proposed MIS framework appears adequate for the scale and complexity of the project, its operational effectiveness remains to be established. Timely implementation and seamless integration of the hospital information system will be important for operational readiness, with PACRA assessing the systems’ functionality and effectiveness following go-live.

The Company has established key elements of its control environment, primarily covering construction-phase risk mitigation, procurement oversight, and clinical governance. Construction-related risks are covered through a Contractor’s All Risk insurance policy placed with EFU and Jubilee, alongside vehicle and terrorism insurance, while fire-fighting systems have been installed as confirmed by management. The building foundation has also been designed to accommodate potential vertical expansion beyond the initial 250-bed capacity. Procurement is governed through a dedicated committee, supported by further sub-committees. The appointment of a Director of Clinical Governance and Quality and engagement of an external auditor from Big 4 firms further support the control framework. Additionally, a dedicated internal audit function has been in place since early 2025, with reporting to the Board in line with best practices. Healthcare-related licenses and accreditations are yet to be obtained, consistent with the project's pre-operational stage. The effectiveness and comprehensiveness of the overall control environment will be further assessed as the hospital transitions to operations.

Pakistan’s healthcare sector continues to evolve, supported by gradual improvements in health indicators and ongoing public- and private-sector investment. However, the distribution of healthcare facilities, hospital infrastructure, and availability of skilled healthcare professionals remain areas requiring continued development. According to the Pakistan Economic Survey 2025–26, consolidated federal and provincial health expenditure increased by 1.9% to approximately PKR 942.2bln in FY25 from PKR 924.9bln in FY24, while expenditure stood at 0.8% of GDP compared with 0.9% in FY24. The public sector continues to play a central role in preventive and primary healthcare, complemented by private-sector providers in curative and specialized services. Development efforts are also reflected in the FY26 Public Sector Development Programme (PSDP), which allocated PKR 19.4bln (~5.3%) to health-related projects, including hospital infrastructure and specialized healthcare facilities. Against the backdrop of a growing population and evolving healthcare needs, these factors continue to support the role of private healthcare providers in expanding access to specialized medical services.

The sector’s demand profile is supported by population growth, urbanization, increasing prevalence of chronic diseases and greater need for specialized medical treatment. Pakistan’s healthcare workforce remains constrained relative to its population, although the number of registered doctors increased by 5.3% to 336,582 in CY25 from 319,572 in CY24. The number of registered nurses stood at 138,391 in CY25, indicating a continuing need to strengthen healthcare staffing capacity. The sector also faces high capital requirements, lengthy project gestation and breakeven periods, dependence on imported medical equipment and exposure to foreign currency movements. Furthermore, limited insurance penetration and a payer mix weighted towards out-of-pocket payments constrain affordability, while the availability of suitably qualified specialists and nurses remains an important operational consideration for tertiary-care hospitals.

The regulatory framework includes the Islamabad Healthcare Regulatory Authority (IHRA) for healthcare-facility regulation, the Pakistan Medical and Dental Council for professional registration and the Drug Regulatory Authority of Pakistan for pharmaceutical regulation. Compliance with applicable licensing, clinical governance, infection-control, fire-safety and patient-safety requirements remains important for hospital operators. While the sector benefits from sustained underlying demand and continued public-sector development initiatives, the realization of growth opportunities remains dependent on execution capability, affordability, availability of skilled personnel and the ability to manage capital and operating costs.

Novacare Hospitals planned capacity of 250 beds, including 68 critical care beds, would position it among the larger private tertiary-care hospitals in the Islamabad–Rawalpindi corridor. The facility would add capacity to an established competitive landscape, where patient acquisition will depend on addressing unmet demand and attracting patients from existing providers. The relatively high proportion of critical care beds (~27%) and 42 specialized private beds indicates a focus on higher-acuity services, with corresponding requirements for specialist staffing and clinical infrastructure. The planned positioning is supported by a purpose-built facility, an institution-led care model, the Imperial College Healthcare affiliation, and an advanced digital platform. Management also envisages positioning the hospital as a referral hub for Northern Pakistan, with potential expansion into other major cities over time. In line with this longer-term growth strategy, the Company has already acquired land in Lahore for the development of a future hospital. However, these advantages remain prospective and will depend on effective implementation, specialist recruitment, and the development of a sustainable patient base. Novacare is also targeting Joint Commission International (JCI) accreditation and others, which typically follow the commencement of operations. The project’s commissioning timeline has been revised for 3 months due to ongoing supply chain disruptions caused by the situation in the Middle East.

The relevant competitive market for Novacare Hospitals is the Islamabad–Rawalpindi tertiary healthcare segment. While aggregate hospital bed availability in the twin cities is estimated at approximately 9,200 beds (comprising ~5,400 public-sector and ~3,800 private and welfare-sector beds), this headline number masks a structural supply deficit rather than a true surplus. Across the overall market, low bed-per-capita ratios reflect an absolute shortage of functional healthcare capacity. This creates severe access barriers for lower-income segments, while driving systemic overcrowding, over-utilization, deferred care, and heightened safety and quality risks across both public and premium private facilities. Management and consultant estimates indicate only ~1,200 high-quality, international-standard tertiary beds against an estimated demand of ~2,400 beds. Existing premium providers operate at elevated occupancy levels exceeding 80%, resulting in extended waiting periods for elective procedures. The presence of established providers, including Shifa International Hospital, Quaid-e-Azam International Hospital, PAF Hospital, Kulsum International Hospital, Maroof International Hospital and Ali Medical Centre, reflects an established competitive landscape. The lack of accessible, quality capacity in lower-tier and public facilities diverts spillover demand toward tertiary centers, further compromising clinical outcomes and quality of care twin-city wide. Consequently, Novacare Hospitals addresses both the macro bed capacity deficit in the region and the critical acute shortage of specialized, high-standard tertiary infrastructure. Novacare Hospitals’ location in DHA Phase V, Islamabad, at the junction of DHA Expressway and 2nd Avenue. This location provides connectivity to southern Islamabad and Rawalpindi, while surrounding residential developments expand its catchment potential well beyond the immediate DHA community. To mitigate potential traffic congestion as the DHA area density grows, and to ensure seamless accessibility for patients in central Islamabad, Novacare is leasing a multi-specialty medical center in the New Blue Area. Operating under an integrated hub-and-spoke model, this outpost will serve as an accessible urban gateway, delivering outpatient and diagnostic services in central Islamabad while referring complex tertiary cases to the main hospital and maintaining unified electronic health records across the network. Ultimately, realizing the full value of this locational advantage will depend on execution. Novacare’s competitive position and long-term operating performance will rely on timely commissioning, successful recruitment and retention of top medical professionals, and the fast establishment of specialized clinical services and a reputation for high-quality care.

As NHPL remains in its pre-operational construction phase, management projects commercial operations to commence in FY2027, with initial revenue generation beginning shortly thereafter and accelerating into FY2028 as operations ramp up.

Revenue is expected to be derived from inpatient services across the three bed categories, outpatient clinics, emergency care, diagnostics, pharmacy and procedures. Realization of projected revenue will depend on consultant recruitment, patient case mix, payer mix and occupancy levels. Management expects occupancy to build gradually over five to six years, with revenue projected to increase more than fourfold between the first year of operations and stabilization. The stabilized occupancy assumption exceeds 80%, as per management projections, making the pace of patient acquisition and capacity utilization key determinants of revenue realization.

As a pre-revenue entity, Novacare’s reported costs comprise mainly administrative and general expenses, alongside financing and exchange-related charges. Administrative and pre-operating expenses increased in FY26 compared with FY25 and FY24, reflecting organizational build-out, hiring and office expansion ahead of commissioning. In the absence of revenue, the net loss widened since inception and was recorded at ~PKR 354mln in FY26 (FY25: ~PKR 247mln, ~PKR 113mln). Following commencement of operations, margin drivers will be occupancy and acuity mix, consultant productivity, energy costs, imported consumables and equipment servicing costs, and the management fee structure.

Novacare’s medium-term sustainability is supported by the scale and specialization of its planned facility, comprising 28 clinical services across 13 Integrated Practice Units, alongside its clinical-governance affiliation with Imperial College Healthcare NHS Trust. The building foundation also allows for future vertical expansion. The Company is targeting LEED, EDGE certifications, while JCI accreditation and HIMSS digital maturity targets form part of its post-commissioning plans. Key sustainability risks include further commissioning delays, cost overruns, slower-than-projected occupancy ramp-up, and challenges in recruiting and retaining qualified medical professionals. Long-term sustainability will depend on maintaining regulatory compliance, achieving relevant healthcare accreditations, managing financing costs, and adapting to the evolving competitive landscape. The planned expansion into Lahore will further require disciplined capital allocation and effective execution to maintain financial flexibility and support sustainable growth over the longer term.

The completed debt financial close reduces funding uncertainty, while the first-ranking pari passu security package, MLCF corporate guarantee, controlled project accounts and cash flow distribution covenants provide lender protection. Sponsor equity contributions, management’s hospital-opening experience and the Imperial College Healthcare NHS Trust affiliation further support execution. However, these mitigants provide greater support against funding and recovery risks than against operational delays or weaker-than-projected performance, which remain the key determinants of the Company’s standalone credit profile.

Working capital requirements are minimal at the pre-operational stage, as the Company carries no trade receivables, inventory or trade payables ahead of commissioning. Liquidity during ramp-up is supported structurally. Ramp-up losses and working capital are included in the approved project budget. The Sponsor has undertaken to fund 100% of ramp-up costs and cost overruns under the Sponsor Support Agreement. Non-funded lines of ~35% of the facility are available for letters of credit. The current ratio stood at 2.3x at Jun-26, down from 4.4x at Jun-25 but above 1.3x at Jun-24. Pre-operational funding has primarily relied on equity, supplemented by a short-term sponsor loan obtained by Jun-26 to manage cash flows ahead of drawdown under the long-term syndicated facility in Sep-26. Following commissioning, working capital requirements are expected to increase with the buildup of insurer and corporate receivables, pharmacy and medical consumable inventories, and equipment-related letters of credit. Effective cash flow management will remain important during the operational ramp-up.

Coverage metrics are assessed in the context of the project’s pre-operational phase, during which the absence of revenue results in negative earnings and cash flows before working capital changes. Accordingly, conventional debt-servicing and coverage indicators remain constrained and are not yet reflective of the project’s expected operating capacity. The assessment will increasingly depend on timely commissioning, the pace of occupancy ramp-up, revenue generation, debt drawdown, and the subsequent ability to generate sustainable operating cash flows to meet debt obligations.

Novacare’s capital structure remained largely unleveraged through Jun-24 and Jun-25, with gearing increasing to 23.6% at Jun-26 following the drawdown of a short-term sponsor loan from MLCF. Shareholders’ equity increased to PKR 8,086 million at Jun-26 from PKR 4,685 million at Jun-25 and PKR 1,175 million at Jun-24, primarily supported by ordinary share issuances. The project’s funding structure envisages a 50:50 debt-to-equity mix, including operating losses. The Common Terms and Accounts Agreement (CTAA) govern the funding arrangements, with the equity component supported by sponsor equity contributions under the Sponsor Support Agreement and corporate guarantees, while the debt component is being funded through a long-term syndicated Diminishing Musharaka facility arranged by a six-institution consortium led by BOP. The initial drawdown in Sep-26 marks the transition towards a more leveraged capital structure, with further phased utilization expected to increase debt levels. Going forward, the assessment will focus on the pace of debt drawdown, repayment capacity, sponsor equity commitments, overall leverage and the project’s ability to support the resulting debt obligations through operating cash flows as operations commence.