Nagina Cotton Mills Limited ("NCML" or "the Company") was incorporated in 1967 under the Companies Ordinance, 1984 (repealed with the enactment of the Companies Act, 2017) as a public limited company.

The foundation of NCML was laid by Mr. Enam Shaikh Ellahi (late) in 1967, marking the origin of what has since grown into the Nagina Group. The Company commenced operations as a single spinning enterprise and has, over successive decades, expanded its footprint organically into a multi-entity textile group. NCML is regarded as the flagship entity within the Group, around which the broader Group structure has been developed. The Group has progressively grown from a standalone spinning concern into a constellation of spinning and weaving companies, comprising three publicly listed entities and six private limited companies.

Nagina Cotton Mills Ltd (NCML) is engaged in the manufacturing and sale of carded and combed cotton yarn, core-spun yarn, and blended yarn, catering to both knitting and weaving end uses. The Company operates 62,508 spindles, with a yarn production capacity of ~24 million kilograms based on 18/s count (coarse) yarn. The manufacturing facility is located at Kotri Industrial Trading Estate in Sindh. The Company's installed energy capacity stands at 21.62MW against a daily requirement of 6.26MW, comprising 6.71MW of gas-based generation, 7.5MW of HESCO grid supply, 5.41MW of solar power, and 2.0MW of Nagata furnace capacity.

NCML's shareholding is concentrated within the Ellahi family, who collectively hold 90.88% of the Company through a combination of direct personal stakes and group company holdings. Group companies account for 16.37% of the shareholding, while the sponsoring individuals hold 74.52%, with the principal stakeholders being Mr. Shaukat Ellahi Shaikh (17.47%), Mr. Shahzada Ellahi Shaikh (17.26%), and Mr. Shafqat Ellahi Shaikh (17.26%). Financial institutions hold 0.08% of the Company's shares. The free float available to the general public constitutes 9.04% of the total shareholding.

The ownership structure of NCML has remained stable and unchanged over the review period, with effective control firmly vested in the Ellahi family. The considerable positions across the Nagina Group are held by the same family, and no ownership disputes or material changes in the shareholding pattern have been reported. The Group maintains a structured line of succession; however, the formal transfer of ownership to the succeeding generation has not yet been executed. The sponsors have demonstrated a sustained commitment to the Company across multiple business and interest rate cycles, providing continuity to the entity's strategic direction.

The Ellahi family has been actively engaged in Pakistan's textile sector for over five decades, during which time they have navigated multiple economic downturns, policy shifts, and commodity price cycles. The Group's evolution from a single spinning mill to a diversified textile house encompassing spinning and weaving operations is reflective of the family's understanding of the industry value chain and their capacity to identify and execute growth opportunities. The management of three publicly listed entities alongside six private enterprises attests to the organizational and commercial depth of the sponsoring family. Their ability to sustain the Group's operations through periods of macroeconomic stress lends confidence to their continued stewardship of NCML.

The Nagina Group comprises three publicly listed entities, namely Ellcot Spinning Mills Limited, Prosperity Weaving Mills Limited, and NCML, in addition to six private limited companies: Monell (Pvt.) Limited, Icaro (Pvt.) Limited, Haroon Omer (Pvt.) Limited, Ellahi International (Pvt.) Limited, ARH (Pvt.) Limited, and Pacific Industries (Pvt.) Limited. The collective presence of the Group across multiple operating entities provides a degree of financial depth and support capacity that lends comfort in scenarios where extraordinary financial obligations may arise for any individual entity within the Group.

As at end-FY26, the Company's Board comprises ten members, of which five are non-executive, two occupy executive roles – including the CEO – and three directors are independent. During the year, the Board inducted Miss Zoe Khurshid Khan as an Independent Non-Executive Director, effective January 28, 2026, maintaining the Board's overall composition and independence.

Mr. Shahzada Ellahi Shaikh, the Chairman, possesses 48 years of experience in the textile industry and holds a bachelor's degree in Economics and International Relations. Mr. Shafqat Ellahi Shaikh has 44 years of industry-specific experience and holds a BA in Economics and Religion from Columbia University. Mr. Shaukat Ellahi Shaikh, an Executive Director, has 46 years of overall experience in the textile industry and holds a bachelor's degree in Economics and Political Science from Columbia University. Miss Zoe Khurshid Khan, the newly inducted Independent Non-Executive Director, holds an LLM qualification and carries approximately 20 years of overall experience; she serves as a member of the Audit Committee and the HR & Remuneration Committee.

Three committees – Audit, Executive, and Human Resource & Remuneration – are in place to assist the Board in relevant matters and ensure proper oversight. During FY26, the Board met four times to discuss the Company's performance and progress against projected targets, with meeting minutes documented properly. Most directors attended all four meetings, while Miss Zoe Khurshid Khan, who was inducted mid-year, attended two of the meetings held following her induction. The Sponsors continue to play an active role and provide guidance to management in the Company's operations.

M/s. Yousuf Adil, Chartered Accountants, continue to serve as the external auditors of the Company. The firm is listed in the A category on the State Bank of Pakistan's panel of auditors and has expressed an unqualified opinion on the financial statements of the Company for FY25.

The top-tier management positions across the Nagina Group's listed operating companies, including NCML, are occupied by members of the Ellahi family, with a clearly defined reporting line that supports operational continuity. The Company's organizational structure is broadly divided into seven functional departments: marketing, finance, accounts, administration and corporate affairs, commercial (covering fixed asset procurement), export, and internal audit. Decision-making within the Company is relatively centralized, with the sponsoring family providing strategic direction and the professional management cadre executing within those parameters.

The management team is led by Mr. Amin Ellahi Shaikh (Director/CEO), who holds a BBA and possesses 16 years of overall industry experience, including 11 years with the Company, supplemented by a team of seasoned professionals. Mr. Shaukat Ellahi Shaikh, an Executive Director associated with the Group for 42 years, brings strong business acumen in the textile business. Mr. Tariq Zafar Bajwa, the Chief Financial Officer, holds an MBA and has been associated with the Company for 23 years. The senior management bench is further strengthened by Mr. Syed Mohsin Gilani (FCA), Company Secretary/Director Finance, with 33 years of overall experience including 5 years with the Company, and Mr. Sajid Mehmood Haider, General Manager – Technical, a textile engineering graduate with 27 years of overall experience, including 7 years with the Company.

Management meetings are held on a daily basis, with follow-up points identified to resolve existing and proactively address potential operational issues, ensuring smooth and efficient business operations. The Company’s MIS reports are categorized into three reporting frequencies, namely daily, weekly, and monthly, facilitating timely monitoring, informed decision-making, and effective operational oversight.

The Company has transitioned its management information system from the legacy FOXPRO platform to an Oracle ERP solution. The Oracle ERP enables loom-wise packed production recording, BAM-wise recording of warping, sizing, loom, and folding processes, and supports the streamlining of core business operations. The system also enhances financial management capabilities and provides real-time operational insights for management decision-making. Management reporting is structured across three periodicities: daily, weekly, and monthly, with each tier designed to support different levels of operational oversight and strategic review.

NCML holds several quality and compliance certifications, including ISO 9001:2008, Standard 100 by OEKOTEX, Global Organic Textile Standards (GOTS), Organic Content Standard, Organic Content Standard 100, and Organic Content Standard Blended. These accreditations reflect the Company's commitment to product quality assurance and compliance with international supply chain standards. An internal audit function is in place as a distinct department within the Company's organizational structure, providing a layer of independent control over operational and financial processes.

Pakistan's textile manufacturing sector, which carries a substantial weight of 18.16% in the Large-Scale Manufacturing Index, exhibited a broad-based contraction during Jun-26, with the index declining 6.67% YoY and 4.18% MoM, extending a mild 0.63% cumulative decline for Jul-June 2025-26 compared to the corresponding period last year. The weakness was most pronounced in jute goods (down 69.00% YoY) and woollen blankets (down 95.06% YoY), reflecting sharp demand attrition in these niche segments, while terry towels & bath robes and woollen & carpet yarn also posted double-digit YoY declines of 27.35% and 13.45%, respectively. Core segments showed comparatively resilient, near-flat performance, with yarn output down a modest 1.85% YoY and cloth production essentially stable (up 0.17% YoY), underscoring continued, albeit subdued, demand for base textile inputs. In contrast, the manufacture of wearing apparel — with a weight of 6.08% — despite a 13.45% YoY decline in Jun-26, registered a healthier 5.49% cumulative growth over Jul-June 2025-26, suggesting relatively better resilience in value-added, export-oriented garment production compared to upstream textile manufacturing. Overall, the divergent trends highlight ongoing pressure on primary and niche textile categories, even as downstream apparel manufacturing continues to outperform on a cumulative basis.

The Nagina Group boasts a long operating history in Pakistan's local spinning industry. Although the Company's share of the spinning industry is minimal on a standalone basis, the Group's consolidated spinning capacity enhances the Company's market position.

During 9MFY26, the Company reported revenue of PKR15,444mln, reflecting a sales growth of 3.7% for the period (FY25: PKR19,858mln, a decline of 2.9% for the year). Of the 9MFY26 revenue, local sales contributed PKR12,278mln while export sales contributed PKR3,166mln (FY25: local PKR18,987mln, export PKR4,077mln). The Company continues to optimize its sales mix between local and international markets in line with prevailing price dynamics to sustain profitability.

During 9MFY26, the Company's gross margin was recorded at 7.9% (FY25: 8.1%, FY24: 7.9%), while the operating margin stood at 4.8% (FY25: 5.2%, FY24: 5.3%). Finance cost declined to PKR461mln during 9MFY26 (FY25: PKR721mln, FY24: PKR851mln), which supported an improvement in the net profit margin to 0.5% (FY25: 0.3%, FY24: 0.4%).

The Company's management remains focused on optimizing the sales mix, pursuing product differentiation, and consistently identifying cost-reduction opportunities to enhance profitability and drive market growth. However, the international market outlook remains uncertain, characterized by a rising cost structure due to higher energy prices, an increased tax burden, and political instability. In anticipation, the Company is installing a further 1.1MW solar power project at its mills, providing cheaper green energy while reducing its cost structure and supporting environmental sustainability. Upon commissioning of the additional solar project, the Company's total renewable energy capacity will increase to 6.51MW.

The Company continues to fund its working capital requirement through a mix of internal cash flows and short-term borrowings. Short-term borrowings from financial institutions declined to PKR1,126mln at end-Mar26 (FY25: PKR2,804mln), while the current maturity of long-term borrowings increased marginally to PKR791mln (FY25: PKR734mln). The Company's net working capital cycle stood at 109 days during 9MFY26 (FY25: 110 days), with trade receivable days at 50 days (FY25: 49 days) and inventory days at 63 days (FY25: 64 days). Trade assets (receivables and advances to suppliers) stood at PKR3,194mln at end-Mar26 (FY25: PKR3,398mln). The current ratio moderated to 3.6x at end-Mar26 (FY25: 5.2x), mainly on account of a reduction in current assets — particularly inventories, which declined to PKR2,456mln (FY25: PKR4,644mln) — during the period.

During 9MFY26, EBITDA was recorded at PKR1,237mln against a lower finance cost of PKR461mln (FY25: EBITDA of PKR1,687mln against finance cost of PKR721mln), resulting in an improved interest coverage of 2.8x (FY25: 2.4x). Free Cash Flow from Operations (FCFO) stood at PKR931mln during 9MFY26 (FY25: PKR1,273mln for the full year), translating into an improved FCFO/finance cost coverage of 2.1x (FY25: 1.8x). The debt payback ratio improved to 7.4x at end-Mar26 (FY25: 8.5x).

At end-Mar26, the Company's leverage improved to 55.1% (FY25: 61.9%) as total borrowings declined to PKR5,926mln (FY25: PKR7,720mln), while the equity base marginally increased to PKR4,820mln (FY25: PKR4,760mln). Short-term debt constituted 19.0% of total borrowings (FY25: 36.3%), reflecting a reduced reliance on short-term financing during the period.