Transmission of Annual Report for year ended June 30, 2025

ALLA AYA

TEXTILE AND FINISHING MILLS LIMITED

0005

SGS

0005

SGS

MAN AGEMENT

U KAS

68thAnnual Report of

for the year ended June 30, 2025

CONTENTS

• VISION & MISSION STATEMENT 3

• COMPANY PROFILE 4

• NOTICE OF ANNUAL GENERAL MEETING 5

• CHAIRPERSON'S REVIEW REPORT U/S 192 OF COMPANIES ACT, 2017 15

• DIRECTORS' REPORT (ENGLISH) 16

• SIX YEARS KEY OPERATING AND FINANCIAL DATA 23

• STATEMENT OF COMPLIANCE WITH CODE OF CORPORATE GOVERNANCE 24

• INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS

  ON THE STATEMENT OF COMPLIANCE 27

• INDEPENDENT AUDITORS' REPORT TO THE MEMBERS 28

• STATEMENT OF FINANCIAL POSITION 32

• STATEMENT OF PROFIT OR LOSS 33

• STATEMENT OF COMPREHENSIVE INCOME 34

• STATEMENT OF CHANGES IN EQUITY 35

• STATEMENT OF CASH FLOWS 36

• NOTES TO THE FINANCIAL STATEMENTS 38

• PATTERN OF SHAREHOLDING 68

• PATTERN OF SHAREHOLDING (ADDITIONAL INFORMATION) 69

• CDC PAKISTAN LIMITED PATTERN OF SHAREHOLDING 70

• DIRECTORS' REPORT (URDU) 75

• NOTICE OF ANNUAL GENERAL MEETING (URDU) 79

• FORM OF PROXY (URDU) 80

• FORM OF PROXY (ENGLISH) 81

VISION STATEMENT

The vision of Allawasaya Textile and Finishing Mills Limited is to contribute positively to the Socio -Economic growth of Pakistan through business and industrial pursuits endeavoring to achieve excellence in all spheres of such activity with effective and efficient management.

MISSION STATEMENT

Allawasaya Textile and Finishing Mills Limited becomes a truly professional organization, achieve higher quality standards, utilize maximum capacity, capture expansion opportunities and becomes a least cost operator amongst its competitors.

We will strive to continue as a successful Company, make profit and thus create value for our shareholders, customers, suppliers and employees.

QUALITY AND ENVIRONMENTAL POLICY

Our aim is to achieve the leadership of textile and spinning industry through quality prod ucts according to customer satisfaction. We thrive to achieve the above through the following measures:

1. Acquisition of quality raw material.

2. Manufacturing of high quality yarn as per customer satisfaction.

3. Continuous training and guidance to employees regarding quality and environment.

4. Continuous improvement, close watch and control in production process and environment.

5. Follow up of the system, regarding international quality and environmental laws.

6. Control of pollution discharge from industrial process.

   COMPANY PROFILE

   BOARD OF DIRECTORS

   1. Mrs. Nusrat Jamil - Chairperson

   2. Mian Muhammad Jamil

   3. Mr. Mohammad Alamgir Jamil Khan - Chief Executive Officer

   4. Mian Idrees Ahmed Sheikh

   5. Mian Tauqir Ahmed Sheikh

   6. Mrs. Bushra Tauqir

   7. Mrs. Misbah Idrees Sheikh

   8. Mr. Abdul Rehman Qureshi

   9. Mr. Nazir Ahmad Khan

   10. Mr. Muhammad Ashraf Khan Durrani

   11. Mr. Imran Hussain

AUDIT COMMITTEE

Mr. Nazir Ahmad Khan (Independent Director)- Chairman Mr. Abdul Rehman Qureshi (Independent Director)- Member Mrs. Nusrat Jamil (Non-Executive Director)- Member

HUMAN RESOURCE & REMUNERATION COMMITTEE (HR&R)

Mr. Abdul Rehman Qureshi (Independent Director)- Chairman

Mr. Muhammad Ashraf Khan Durrani (Independent Director)- Member Mrs. Misbah Idrees Sheikh (Non-Executive Director)- Member

CHIEF FINANCIAL OFFICER

Sohail Nadeem

COMPANY SECRETARY

Muhammad Ismail

HEAD OF INTERNAL AUDIT

Ch. Javed Akhtar

AUDITORS

Yousuf Adil Chartered Accountants

4thFloor, Mehr Fatima Tower Opposite High Court, Multan.

LEGAL ADVISOR

Mr. Khalil-ur-Rehman- Advocate

3rdFloor, Hameed Law Chambers, 1- Turner Road, Lahore.

BANKERS

M/s Bank AL Habib Limited

M/s Habib Metropolitan Bank Limited M/s Samba Bank Limited

M/s United Bank Limited M/s Askari Bank Limited M/s Habib Bank Limited

REGISTERED OFFICE

Allawasaya Square, Mumtazabad Industrial Area, Vehari Road, Multan, Pakistan Ph: (061)4233624-26

E-Mail: atm@allawasaya.com

SHARES REGISTRAR

M/s Hameed Majeed Associates (Pvt.) Limited

H.M. House, 7-Bank Square, Lahore, Pakistan Ph: (042)37235081-82

E-Mail: shares@hmaconsultants.com

NOTICE OF 68THANNUAL GENERAL MEETING

Notice is hereby given that the 68thAnnual General Meeting of the Company will be held on Monday October 27, 2025 at 11:30 a.m. at its registered office, Allawasaya Square, Vehari Road, Multan, to transact the following business:

ORDINARY BUSINESS:

1. To confirm minutes of the Extra Ordinary General Meeting (EOGM) of the Company held on November 11, 2024.

2. To receive, consider and adopt the annual audited Financial Statements of the Company together with the Chairman's' Review Report, Directors' and Auditors' Reports thereon for the year ended June 30, 2025.

   As required under Section 223 of the Companies Act, 2017 and pursuant to SRO. 389(I)/2023 dated March 21, 2023, the annual Financial Statements of the Company have been posted on the company's website, which can be viewed/ downloaded using the following web link and QR enabled code:

   https://www.allawasaya.com/annual_reports.html

3. To appoint, auditors and fix their remuneration for the financial year ending June 30, 2026. A notice pursuant to the provisions of sub-section (2) of section

   246 of the Companies Act, 2017 is hereby given that the Board, upon recommendation of the Audit Committee, has proposed the name of M/s Yousuf Adil Chartered Accountants, Lahore after obtaining their consent for appointment as external auditors of the Company. The retiring auditors being eligible, have offered themselves for re-appointment.

   SPECIAL BUSINESS

4. To consider and approve the sale of land of the Company located at Dunya Pur Road, Basti Dogran & Suigas Road, Multan and pass the following Ordinary Resolution(s), with or without modifications, additions or deletions, in terms of the provisions of section 183(3)(a) of the Companies Act, 2017:

   "RESOLVED THAT the consent of the members be and is hereby accorded for the disposal and sale of company's land measuring 121 Kanals 12 Marlas 21 Yards located at Dunya Pur Road, Basti Dogran & Suigas Road, Multan.

   RESOLVED FURTHER THAT the Board of Directors be and is hereby authorized and empowered to delegate its powers to the Chief Executive Officer (CEO) and/or the Executive Directors on such terms and conditions, they may deem fit and to act on behalf of the company to handle all matters and perform all the acts, in this regard in order to implement and in connection with the disposal of the above mentioned property and to undertake all the related transactions contemplated, which shall include, but not be limited to:

   1. conducting negotiations, obtaining quotations etc., with interested parties in such manner and on such terms and conditions as are in the best interest of the company and its shareholders and which secure the best available market price;

   2. selling the concerned property to any individual, firm(s)/ partnership, bank(s) or private/ public limited companies or organization(s) or to any other person and, for that purpose, negotiating with financial institution(s) for vacating lien/ charges against assets if any, entering into an agreement to sell, sale deed or any other agreement with the buyer(s) or any other person, receiving the sale consideration, executing, preparing and signing any sale deed, conveyance deed and/ or transfer documents in favour of the buyer(s) or any other person by representing the same before all parties and authorities concerned and admitting execution thereof;

   3. representing before the Sub-Registrar or any other competent authority and getting any sale deed or other document(s) registered and collecting consideration amount in respect of the concerned property, and

   4. generally performing and executing in respect of the subject matter all lawful deeds, agreements, acts and things as they may think fit and proper in order to implement and complete the transaction(s).

      FURTHER RESOLVED THAT Chief Executive Officer and/ or any Executive Directors be and are hereby jointly or severally, authorized and empowered to take all necessary steps, make the requisite decisions from time to time, do all such acts, deeds and things, obtain necessary approvals, and to execute and deliver all such deeds, agreements, declarations, undertakings and guarantees, including any ancillary document thereto or provide any such documentation for and on behalf and in the name of the company as may be necessary or required or as they or any of them may think fit for or in connection with or incidental for the purposes of carrying out the proposed Ordinary Resolution(s).

      FURTHER RESOLVED THAT the Chief Executive Officer of the company be and is hereby authorized to take all actions incidental or ancillary thereto with regard to the contemplated sale transaction.

      FURTHER RESOLVED THAT the Board be and is hereby empowered to agree upon modification in these resolutions that may be directed/ required by the SECP/ PSX or any other competent authority/ regulator without the need for any further approval of the shareholders.

      FURTHER RESOLVED THAT the Chief Executive Officer and/ or any the Executive Directors be and is hereby jointly or severally authorized to comply with the statutory requirements with the SECP, PSX and/ or any other relevant regulatory body and do all such acts, deeds and things as may be necessary under the law in this regard.

      ALSO RESOLVED THAT certified copies of resolutions be communicated to the concerned authorities and shall remain in force until notice in writing to the contrary be given."

      (A Statement of material facts under Section 134(3) of the Companies Act, 2017 relating to this Special Business to be transacted at the AGM is annexed with this Notice of AGM.)

      OTHER BUSINESS:

5. To transact any other business with the permission of the Chair.

BY ORDER OF THE BOARD

Multan, October 06, 2025

Sd/-(MUHAMMAD ISMAIL) COMPANY SECRETARY

NOTES:

1. The Shares Transfer Books of the Company will remain closed from 21-10-2025 to 27-10-2025 (both days inclusive) transfers received in order at the office of the Company's Shares Registrar, M/s Hameed Majeed Associates (Pvt.) Limited, H.M. House, 7-Bank Square, Lahore by the close of business on October 20, 2025 will be treated in time.

2. A member entitled to attend and vote at the meeting, may appoint any other member as a proxy to attend, speak and vote on behalf of him/her. A proxy must be a member. Proxy Forms along with copies of CNICs of the member, his/ her proxy and their witness duly stamped with Rs.50/- revenue stamp, signed and witnessed by one person; in order to be valid must be received at the Registered Office of the Company not later than 48 hours before the time of holding the meeting.

3. Any individual beneficial owners of CDC, entitled to attend and vote at the meeting must bring his/her CNIC or passport to prove his/her identity and the proxy shall produce his/ her original CNIC or passport. In case of corporate members, the Boards' resolution or power of attorney with specimen signatures of the nominee shall require to be produced at the time of meeting.

4. Members are requested to submit an attested photocopy of their valid Computerized National Identity Cards (CNICs) as per SECP's direction, if not provided earlier and also communicate to the Company immediately of any change in their addresses.

5. Securities and Exchange Commission of Pakistan through its Circular No.4 dated February 15, 2021 has directed the listed companies to ensure the participation of members in general meeting through electronic means as a regular feature in addition to hold physical meetings. Accordingly, shareholders and their proxies who are interested to participate in the meeting through video link are requested to email their Name, Folio Number/ CDC Account Number, Mobile Number, Computerized National Identity Card (CNIC) Number and Number of Shares held in their name with subject "Registration for AWTX AGM" along with valid copy of both sides of CNIC/ Passport, attested copy of Board Resolution/ Power of Attorney (in case of corporate shareholders) at secretary@allawasaya.com or shares@hmaconsultants.com. Video link and login credentials (ZOOM APPLICATION) will be shared with only those members and their proxies whose emails, containing all the required particulars, will be received at least 48 hours before the time of AGM. The Login facility will remain open from start of the meeting till its proceedings are concluded.

6. Pursuant to Section 132(2) and 134(b) of the Companies Act, 2017, members can also avail Video Conference facility in (name of cities where facility can be provided keeping in view geographical dispersal of members). In this regard please fill the following form and submit to the registered address of the Company within ten (10) days before holding of annual general meeting.

   I/ We, of , being a member of ALLAWASAYA TEXTILE AND FINISHING MILLS LIMITED, holder of Ordinary Shares as per Register Folio No./ CDC A/C No.. hereby opt for Video Conference Facility at

   Signature of member

   If the Company receives consent from members holding an aggregate 10% or more shareholding residing at a geographical location, to participate in the meeting through Video Conference at least 10 days prior to the date of meeting, the Company will arrange Video Conference facility in that city subject to availability of such facility in that city.

7. The SECP, vide Circular No. 2 of 2018 dated February 9, 2018, and S.R.O. 452(I)/2025 dated March 17, 2025, has strictly prohibited companies from offering or distributing gifts, incentives, or any similar benefits (including but not limited to tokens, coupons, meals, or takeaway packages) to Members at or in connection with general meetings. In accordance with Section 185 of the Companies Act, 2017, any non-compliance with these directives constitutes a punishable offence, and companies found in violation may be subject to enforcement actions and penalties.

8. Pursuant to the Companies (Postal Ballot) Regulations, 2018 read with Sections 143 and 144 of the Companies Act, 2017 and S.R.O. 451(I)/2025 dated March 13, 2025, Members voting on items falling under Special Business will be allowed to exercise their right to vote through postal ballot, that is voting by post or electronic mode, in accordance with the requirements and procedure contained in the aforesaid Regulations. Detailed procedures for voting by postal ballot are provided on the ballot paper, while instructions for electronic voting will be sent to the Members by the Company's Share Registrar. There shall be no voting by show of hands at the general meeting for items falling under Special Business and Members who do not cast their vote through electronic voting or postal ballot in advance for the said items shall only be permitted to cast their vote at the general meeting by way of ballot paper. The schedule and procedure of Postal Ballot/ Electronic Voting shall be placed on the Company's website i.e., https://www.allawasaya.com within seven (7) days before the meeting.

   Members are requested to update their details together with Name, Folio, Email Address, Contact Number to the Share Registrar and E-Voting Service Provider of the Company, M/s Hameed Majeed Associates (Pvt.) Limited, H.M. House, 7- Bank Square, Lahore by or before October 26, 2025.

   In accordance with Regulation No.11 of the Companies (Postal Ballot) Regulations, 2018, the Board of the Company has appointed M/s Yousuf Adil Chartered Accountants, a QCR rated audit firm who will act as the Scrutinizer of the Company for the purpose of observing voting procedures for conducting special business of the company and to undertake responsibilities as defined in Regulation No.11A.

   PROCEDURE FOR E-VOTING

9. Members who intend to exercise their right of vote through e-voting shall send email with subject "E-Voting Request" at shares@hmaconsultants.com and provide their valid CNIC Numbers, Cell Numbers and Email address on or after October 20, 2025.

10. The web address, login details, and password will be communicated to members via email and the security codes will be communicated to the members through Email/ SMS from the web portal of M/s Hameed Majeed Associates (Pvt.) Limited (E-Voting Service Provider). Those details will be shared with those members whose name will appear in the Register of Members of the Company by the close of business on October 20, 2025.

11. Identity of the Members intending to cast vote through e-voting shall be authenticated through electronic signature or authentication for login.

12. Members can cast their vote for all Agenda Items online at any time from October 21, 2025 09:00 a.m. to October 26, 2025 till 05:00 p.m.

13. Once the vote on a resolution is cast by a Member, he/ she shall not be allowed to change it subsequently.

    PROCEDURE FOR VOTING THROUGH BALLOT PAPER

14. Members must opt for voting through postal ballot for all businesses classified as special business under the Act. For convenience of the Members, Ballot Paper will be available on the Company's website https://www.allawasaya.com within stipulated time to download.

15. Members must ensure that the duly filled and signed Ballot Paper, alongwith a copy of valid Computerized National Identity Card (CNIC) should reach the Chairperson of the meeting through post at the Company's registered address, Allawasaya Square, Vehari Road, Multan or email at chairperson@allawasaya.com one day before the AGM i.e., October 26, 2025 before 05:00 p.m. A postal ballot received after this date and time shall not be considered for voting.

16. Please note that in case of any dispute in voting including the casting of more than one vote, the Chairperson shall be the deciding authority.

STATEMENT OF MATERIAL FACTS UNDER SECTION 134(3) OF THE COMPANIES ACT, 2017 REGARDING SPECIAL BUSINESS

This statement sets out the material facts concerning the Special Business to be transacted at the Annual General Meeting ("AGM") of Allawasaya Textile and Finishing Mills Limited (the "Company") to be held on Monday, October 27, 2025 at 11:30 a.m. The approval of the members of the Company will be sought for the following:

Item No.4 of the Agenda

The Board of Directors have proposed in its meeting held on October 03, 2025 to dispose 121 Kanals 12 Marlas & 21 Yards of Company's Freehold Land situated at Dunya Pur Road, Basti Dogran & Suigas Road, Multan. The sale proceeds / revenue generated would be used, for repayment of liabilities of the Company owed to its creditors as well as to fulfill the working capital requirements and upgradation / installation of plant / machinery. This will improve performance of the Company, inter alia, by providing additional liquidity to the Company for utilization of funds towards profitable business activities.

Purpose of the sale

The purpose of the sale of land is to pay the pressing liabilities and fulfill financial obligations and also to provide liquidity to the company in the form of working capital and upgradation of plant / machinery to operate at optimum level to achieve better results and add value for shareholders. This will reduce finance cost and allow the company to counter the multiple challenges being faced.

Details as per SRO 423(I)/2018

Special Business relating to members' approval for sale, lease or disposal of the undertaking or sizeable part thereof or sale / disposal of subsidiary that is to be transacted under clause (a) or (b) of sub-section (3) of section 183 of the Act.

The material facts required to be disclosed under S.R.O 423 (I) /2018 dated April 3, 2018 when the Board of Directors proposes to sell, lease or otherwise dispose of an 'undertaking' or a 'sizeable part" thereof are given hereunder:

Nature & Extent of Interest of Directors, directly or indirectly

None of the Directors have any direct or indirect interest in the sale/disposal of the said Properties of the Company.

Availability of Relevant Documents

Copies of the documents pertaining to foregoing Special Business are available for inspection at the Registered Office of the Company during normal office working hours from the date of publication of the Notice till the date of the AGM.

Undertaking by the Directors

The Board of Directors have carried out necessary due diligence for the proposed transaction.

Expected time of completion of the transaction

It is expected that transaction will be completed within one year from the date of passing of

Ordinary Resolution(s) at the General Meeting.

BALLOT PAPER FOR VOTING THROUGH POST

For voting through post for the Special Business Agenda Item No.4 at the Annual General Meeting of M/s Allawasaya Textile and Finishing Mills Limited ("the Company") to be held on Monday October 27, 2025 at 11:30 a.m. at its registered office situated at Allawasaya Square, Vehari Road, Multan.

Contact details of the Chairperson where Ballot Paper may be sent:

Business Address: The Chairperson, Allawasaya Textile and Finishing Mills Limited, Allawasaya Square, Vehari Road, Multan. Phone Nos.(061)4233624-26.

Email Address: chairperson@allawasaya.com

Resolution for Agenda Item No. 4:

To consider and approve the sale of land of the Company located at Dunya Pur Road, Basti Dogran & Suigas Road, Multan and pass the following Ordinary Resolution(s), with or without modifications, additions or deletions, in terms of Section 183(3)(a) of the Companies Act, 2017:

"RESOLVED THAT the consent of the members be and is hereby accorded for the disposal and sale of company's land measuring 121 Kanals 12 Marlas 21 Yards located at Dunya Pur Road, Basti Dogran & Suigas Road, Multan.

RESOLVED FURTHER THAT the Board of Directors be and is hereby authorized and empowered to delegate its powers to the Chief Executive Officer (CEO) and/or the Executive Directors on such terms and conditions, they may deem fit and to act on behalf of the company to handle all matters and perform all the acts, in this regard in order to implement and in connection with the disposal of the above mentioned property and to undertake all the related transactions contemplated, which shall include, but not be limited to:

1. conducting negotiations, obtaining quotations etc., with interested parties in such manner and on such terms and conditions as are in the best interest of the company and its shareholders and which secure the best available market price;

2. selling the concerned property to any individual, firm(s)/ partnership, bank(s) or private/ public limited companies or organization(s) or to any other person and, for that purpose, negotiating with financial institution(s) for vacating lien/ charges against assets if any, entering into an agreement to sell, sale deed or any other agreement with the buyer(s) or any other person, receiving the sale consideration, executing, preparing and signing any sale deed, conveyance deed and/ or transfer documents in favour of the buyer(s) or any other person by representing the same before all parties and authorities concerned and admitting execution thereof;

3. representing before the Sub-Registrar or any other competent authority and getting any sale deed or other document(s) registered and collecting consideration amount in respect of the concerned property, and

4. generally performing and executing in respect of the subject matter all lawful deeds, agreements, acts and things as they may think fit and proper in order to implement and complete the transaction(s).

FURTHER RESOLVED THAT Chief Executive Officer and/ or any Executive Directors be and are hereby jointly or severally, authorized and empowered to take all necessary steps, make the requisite decisions from time to time, do all such acts, deeds and things, obtain necessary approvals, and to execute and deliver all such deeds, agreements, declarations, undertakings and guarantees, including any ancillary document thereto or provide any such documentation for and on behalf and in the name of the company as may be necessary or required or as they or any of them may think fit for or in connection with or incidental for the purposes of carrying out the proposed Ordinary Resolution(s).

FURTHER RESOLVED THAT the Chief Executive Officer of the company be and is hereby authorized to take all actions incidental or ancillary thereto with regard to the contemplated sale transaction.

FURTHER RESOLVED THAT the Board be and is hereby empowered to agree upon modification in these resolutions that may be directed/ required by the SECP/ PSX or any other competent authority/ regulator without the need for any further approval of the shareholders.

FURTHER RESOLVED THAT the Chief Executive Officer and/ or any the Executive Directors be and is hereby jointly or severally authorized to comply with the statutory requirements with the SECP, PSX and/ or any other relevant regulatory body and do all such acts, deeds and things as may be necessary under the law in this regard.

ALSO RESOLVED THAT certified copies of resolutions be communicated to the concerned authorities and shall remain in force until notice in writing to the contrary be given."

I/we hereby exercise my/our vote in respect of the above resolution(s) through postal ballot by conveying my/our assent or dissent to the above resolution(s) by placing tick (✓) mark in the appropriate box below (delete as appropriate);

NOTES:

1. Dully filled postal ballot should be sent to the Chairperson of Allawasaya Textile and Finishing Mills Limited, Allawasaya Square, Vehari Road, Multan or scanned copy of the original Postal Ballot to be emailed at chairperson@allawasaya.com.

2. Copy of CNIC/ Passport (in case of foreigner) should be enclosed with the Postal Ballot Form.

3. Postal ballot forms should reach the Chairperson of the meeting on or before October 26, 2025, upto 05:00 p.m. (last date of receiving postal ballot). Any postal ballot received after this date, will not be considered for voting.

4. Signature on postal ballot should match with signature on CNIC / Passport (in case of foreigner).

5. Incomplete, unsigned, incorrect, defaced, torn, mutilated, over written ballot paper will be rejected.

6. This postal ballot paper is also available for download from the website of the Company at https://www.allawasaya.com. Shareholders may download the ballot paper from website or use the same ballot paper published in newspapers.

Signature of Shareholder(s)/ Proxy Holder(s)/ Authorized Signatory

(in case of corporate entity, please affix company stamp)

Place: Date:

CHAIRPERSON'S REVIEW REPORT U/S 192 OF THE COMPANIES ACT, 2017 FOR YEAR ENDED JUNE 30, 2025

I am pleased to present my review report on overall performance of the Board of the Company for the period ended June 30, 2025. I acknowledge the efforts of the management of the Company in these challenging times. The Board of Allawasaya Textile and Finishing Mills Limited carried out its duties in the best interests of the company and its members.

The Board being responsible for the management of the Company's affairs and determining the company's level of risk tolerance, formulates policies and strategies. The board is governed by relevant laws and regulations and its obligation, rights, responsibilities and duties as required and prescribed therein.

I would like to appreciate the overall performance of the Board during the year despite multiple challenges. They have provided strategic direction to the management and always remained available for guidance.

Board members are equipped with suitable knowledge, variety of expertise and experience which is required to successfully govern the business. Further the composition of the Board depicts reasonable balance of executive and non-executive directors including females and independent directors who possess the requisite skills and core competence. The Board and its committees are made up of members who have the expertise as required by the Listed Companies (Code of Corporate Governance) Regulations, 2019. The Board strictly monitored the performance of its sub-committees. Comprehensive and effective meetings of the Board resulted in conducive decisions for the Company. In addition to it, the Board also ensures compliance with all applicable rules and best practices of the Company.

This year has been most challenging for the Company as overall all economic conditions were very tough particularly for textile industry. For the very reason, there was a decline in sales revenue. However the loss after tax reduced significantly when compared with the after tax loss of last year.

Being Chairperson of the Board of Directors and on behalf of the Board, I express my gratitude to customers, vendors, dealers, investors, business associates and bankers for their continued support during the year. I place on record my appreciation of the commitments and contribution made by the employees at all levels. Our resilience to meet challenges was made possible by their hard work, solidarity, cooperation and support.

Multan, October 03, 2025

Sd/-

MRS. NUSRAT JAMIL CHAIRPERSON

DIRECTORS' REPORT TO THE MEMBERS

IN THE NAME OF ALLAH THE MOST BENEFICENT AND THE MERCIFUL

Dear Members,

On behalf of the Board of Directors of the Company, it is our privilege to present before you the 68th Annual Report on the affairs of your Company along with the audited Financial Statements and Auditors' Report thereon, for the year ended June 30, 2025.

GENERAL PERFORMANCE:

During the period under report, the performance of your Company remained low and slow due to global economic uncertainty, rising production costs involving raw material, labour and energy pricing. These factors have eroded the global competitiveness of Pakistan Textile Industry. Moreover, the EFS Policy served as the major threat and as a result huge quantity of high quality imported yarn was dumped at very low prices in the market. These factors pose serious challenge to the operations of spinning mills/ textile industry of Pakistan.

There is fierce competition from regional players like Bangladesh, Vietnam and India who are offering high quality products that too on much competitive prices.

In the face of these challenges, the management remains fully vigilant and committed to the members of the Company. We are actively addressing to these issues by strategic planning targeted at resolving these complicated problems being faced by the industry at large and by the Company in particular. The Company invested heavily into renewable energy and installed Solar Project to reduce the cost of production to bring viability to the operations.

OPERATIONS:

The Mills produced Polyester Viscose (PV), Pure Viscose (Staple Yarn) and Polyester-Cotton (PC) blended yarn throughout the year. The total production of yarn during the year under review at 20's count basis was 12,607,114.59 Kgs (actual production 7,159,350.24 Kgs) as compared to 16,183,417.90 Kgs (actual production 9,107,154 Kgs) last year.

The financial results for the year ended June 30, 2025 along with the comparative figures of the last year are summarized under the respective heads of Accounts below:

The future outlook of the textile sector is expected to remain tough in general. The sector faces medium term risk due to weak macroeconomic environment globally and locally due to inflation, ongoing energy crisis and global slump in demand. In this scenario, the whole industry is looking towards the Government to support the textile industry of Pakistan and help it to become competitive globally and continue to add its share in the export led growth of the country. Good corporate Governance, production efficiency and financial discipline will remain top focus by the management.

The management of the Company is actively addressing the issues and challenges being faced through strategic measures, aimed at optimizing operations and cost efficiency.

Keeping in view the current scenario of textile sector, management of your Company has been acting proactively to reduce the controllable costs. As a result, by the grace of Almighty Allah, 3.2 megawatt Solar Project has been commissioned and stands completed. The management is working tirelessly to further add One Megawatt to the system to further reduce cost.

DIVIDEND

Due to the losses suffered by the Company during the year under report, your Directors propose to pass over the Dividend this year.

CREDIT RATING

The Company's credit rating is maintained as A2 for short term and BBB- for long term with stable outlook by the Pakistan Credit Rating Agency (PACRA).

CERTIFICATIONS

Your Directors are pleased to report that your Company is quite successfully maintaining its following certifications:

ISO 9001:2015

Certification for Quality Management System is not just a piece of paper, it is a whole set of systems which serves as stepping stone to the wide world of Quality.

ISO 14001:2015

Certification for Environmental Management System which aims to ensure that our products have the least harmful impact on the environment during production, disposal and depletion of natural resources.

COMPLIANCE WITH CODE OF CORPORATE GOVERNANCE

The Board of Directors and management of the Company are aware of their responsibilities under the Listed Companies (Code of Corporate Governance) Regulations, 2019 and Rule Book of the Pakistan Stock Exchange Limited. The Company remains committed to the principle of good corporate management practices with emphasis on transparency and disclosures. Your Company is cognizant to monitor its performance to enhance the accuracy, comprehensiveness and transparency of financial and non-financial information. In compliance of corporate law, the various statements, as required by the code, are given below:

PRESENTATION OF FINANCIAL STATEMENTS:

The financial statements, prepared by the Company, fairly represent its state of affairs, the results of operations, cash flows, and changes in equity;

BOOKS OF ACCOUNTS:

The Company has maintained proper books of accounts;

ACCOUNTING POLICIES:

Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment;

DEBT REPAYMENT

The Company has adopted an effective cash flow strategy whereby cash flows are being monitored vigilantly. Efficient financial management has enabled the Company to meet its financial commitments.

COMPLIANCE WITH INTERNATIONAL ACCOUNTING STANDARDS (IAS):

International Accounting Standards, as applicable in Pakistan, have been followed in preparation of financial statements;

INTERNAL CONTROL SYSTEM:

The system of internal control is sound in design and has been effectively implemented and monitored;

ON GOING CONCERN:

The Company's financial position is sound enough to ensure its continuity as an on going concern;

NO OUTSTANDING STATUTORY DUES:

There are no outstanding statutory dues on account of taxes, levies and charges except of normal and routine nature;

FINANCIAL HIGHLIGHTS:

Key operating and financial data of the last six years is given in Annex 1.

BOARD MEETINGS:

During the year ended June 30, 2025 five (5) meetings of the Board of Directors were held. Attendance of each Director is given below:

The Audit Committee held four (4) meetings during the year. Attendance by each member was as follows:

Members Name Attendance

Mr. Nazir Ahmad Khan 4

Mr. Abdul Rehman Qureshi 4

Mrs. Nusrat Jamil 4

The HR & R Committee held one (1) meeting during the year. Attendance by each member was as follows:

Members Name Attendance

Mr. Abdul Rehman Qureshi 1

Mr. Muhammad Ashraf Khan Durrani 1

Mrs. Misbah Idrees Sheikh 1

COMPOSITION OF BOARD

During the year ended June 30, 2025, the Board consisted of 8 male and 3 female directors with following composition:

Independent Directors 4

Non-Executive Directors 1

Executive Directors 3

Female Non-Executive Directors 3

Total number of Directors 11

AUDITORS

Your Company's Auditors M/s Yousuf Adil Chartered Accountants, Multan retire and being eligible offer themselves for re-appointment for the next year.

The Audit Committee of the Company has recommended and proposed the re-appointment of M/s Yousuf Adil Chartered Accountants, Multan as Auditors of the Company for the year 2025-2026 with remuneration as per ICAP Standard, in the upcoming Annual General Meeting of the Company.

PATTERN OF SHAREHOLDING

A statement showing pattern of shareholdings of the Company and additional information as at June 30, 2025 is annexed to this report.

SUSTAINABILITY - RELATED RISKS

The sustainability -related risks involve the consideration of environment, social and governance (ESG) factors. By embracing operational practices, adopting renewable energy policies, and green initiatives, the Company aims to contribute to a sustainable future. The management has set specific and measurable ESG targets that align with the Company's strategic objective to achieve greater sustainable resilience and positive social impact. The Company has channeled significant capital into cutting- edge, eco-friendly technologies that embody the principles of responsible consumption and production. While such sustainable initiative might challenge short-term profits or margins, the Company believes that in the long run, it will enhance business value through customer acquisition and retention and a competitive edge. The Company performs a thorough analysis of current and potential risks, highlighting specific areas of concern by following recognized frameworks. Further, transparency is maintained through quarterly ESG reporting to the Board, ensuring stakeholders are informed and engaged.

DIVERSITY, EQUITY & INCLUSION (DE& I)

With the diverse workforce and communities, the Company stands as an advocate for diversity, equity and inclusion (DE& I). Promoting DE& I is key priority for the Company and is integral to its sustainability and ethical business practices. A comprehensive DE& I strategy with clear and measurable goals, targeting increased gender and ethnic diversity and inclusion at all levels, is in process. The Company implements inclusive recruitment practices, such as using diverse job boards, blind recruitment processes, and diverse interview panels. Multiple DE& I training sessions are provided for all employees, covering topics like unconscious bias, cultural competency, and inclusive leadership.

ACKNOWLEDGEMENT

Your Directors acknowledge the best cooperation as usual enjoyed by your Company from all relevant Financial Institutions, its Bankers, M/s Habib Bank Limited, M/s Bank AL Habib Limited, M/s Habib Metropolitan Bank Limited, M/s United Bank Limited, M/s Askari Bank Limited and M/s Samba Bank Limited and wish to record their appreciation for the same and hope their support to the Company will continue in future as well.

Your Directors also acknowledged the sincere efforts of the entire team of ALLAWASAYA TEXTILE AND FINISHING MILLS LIMITED for their role in the successful operations of the Mills during the year. We also thank all our valued customers, stakeholders for their commitment to the Company and look forward to sharing further successes with them in the coming years.

The dedicated hard work of all employees of the Company, working in these challenging circumstances, keeping the operations of the Company smooth is also acknowledged.

On behalf of the Board

Sd/- Sd/-

Mohammad Alamgir Jamil Khan Mian Idrees Ahmed Sheikh Chief Executive Officer Executive Director

Multan, October 03, 2025

STATEMENT OF COMPLIANCE WITH LISTED COMPANIES (CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2019

NAME OF COMPANY ALLAWASAYA TEXTILE AND FINISHING MILLS LIMITED YEAR ENDING JUNE 30, 2025

The company has complied with the requirements of the Regulations in the following manner:

1. The total number of directors are 11 as per the following:

   1. Male: 8

   2. Female: 3

2. The composition of Board is as follows:

   1. Independent Directors

      1. Mr. Abdul Rehman Qureshi Independent Director

      2. Mr. Nazir Ahmad Khan Independent Director

      3. Mr. Muhammad Ashraf Khan Durrani Independent Director

      4. Mr. Imran Hussain Independent Director

   2. Non-executive Directors

      1. MianTauqir Ahmed Sheikh Non-Executive Director

   3. Executive Directors

      1. Mian Muhammad Jamil Executive Director

      2. Mr. Mohammad AlamgirJamil Khan Executive Director (CEO)

      3. Mian Idrees Ahmed Sheikh Executive Director

   4. Female Directors

      1. Mrs. NusratJamil Non-Executive Director (Chairperson)

      2. Mrs. Bushra Tauqir Non-Executive Director

      3. Mrs. Misbah Idrees Sheikh Non-Executive Director

3. The directors have confirmed that none of them is serving as a director on more than seven listed companies, including this company.

4. The company has prepared a Code of Conduct and has ensured that appropriate steps have been taken to disseminate it throughout the company along with its supporting policies and procedures.

5. The Board has developed a vision/mission statement, overall corporate strategy and significant policies of the company. The Board has ensured that complete record of particulars of significant policies along with the dates of approval or updating has been maintained by the company.

6. All the powers of the Board have been duly exercised and decisions on relevant matters have been taken by Board/ shareholders as empowered by the relevant provisions of the Act and these Regulations.

7. The meetings of the Board were presided over by the Chairperson and, in her absence, by a director elected by the Board for this purpose. The Board has complied with the requirements of Act and the Regulations with respect to frequency, recording and circulating minutes of meeting of Board.

8. The Board have a formal policy and transparent procedures for remuneration of directors in accordance with the Act and these Regulations.

9. Five out of eleven Directors have already attended Directors' Training Program (DTP), two Independent Directors namely Mr. Abdul Rehman Qureshi and Mr. Nazir Ahmad Khan have gotten exemption from SECP in year 2019, four Directors are exempted from the requirement of DTP as per regulation No. 19(2) of the CCG Regulations, 2019. All the Directors are fully conversant with their duties and responsibilities as Directors of the Company.

10. There was no change with respect to appointment of CFO, Company Secretary and Head of Internal Audit during the year.

11. CFO and CEO duly endorsed the financial statements before approval of the Board.

12. The Board has formed committees comprising of members given below:

    1. Audit Committee: 1. Mr. Nazir Ahmad Khan- Independent Director- Chairman

       1. Mr. Abdul Rehman Qureshi- Independent Director- Member

       2. Mrs. Nusrat Jamil- Non-Executive Director- Member

    2. HR and Remuneration Committee: 1. Mr. Abdul Rehman Qureshi- Independent Director- Chairman

       1. Mr. Muhammad Ashraf Khan Durrani- Independent Director- Member

       2. Mrs. Misbah Idrees Sheikh- Non-Executive Director- Member

    3. Nomination Committee (not mandatory)

    4. Risk Management Committee (not mandatory)

13. The terms of reference of the aforesaid committees have been formed, documented and advised to the committee for compliance.

14. The frequency of meetings (quarterly/half yearly/ yearly) of the committee were as per following:

    1. Audit Committee 4 quarterly meetings

    2. HR and Remuneration Committee 1 annually meeting

    3. Nomination Committee

    4. Risk Management Committee

15. The Board has set up an effective internal audit function headed by the Head of Internal Audit. The staff is suitably qualified and experienced for the purpose and is conversant with the policies and procedures of the company and is involved in the internal audit function on a full time basis.

16. The statutory auditors of the company have confirmed that they have been given a satisfactory rating under the Quality Control Review program of the Institute of Chartered Accountants of Pakistan and registered with Audit Oversight Board of Pakistan, that they and all their partners arein compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by the Institute of Chartered Accountants of Pakistan and that they and the partners of the firm involved in the audit are not a close relative (spouse, parent, dependent and non-dependent children) of the chief executive officer, chief financial officer, head of internal audit, company secretary or director of the company.

17. The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance with the Act, these regulations or any other regulatory requirement and the auditors have confirmed that they have observed IFAC guidelines in this regard.

18. We confirm that all requirements of regulations 3,6,7,8,27,32,33 and 36 of the Regulations have been complied with.

19. Explanations for non-compliances with requirements, other than regulations 3,6,7,8,27,32,33 and 36 are given below:

On behalf of the Board

Sd/- Sd/-

Mohammad Alamgir Jamil Khan Mrs. Nusrat Jamil Chief Executive Officer Chairperson

Multan, October 03, 2025

INDEPENDENT AUDITOR'S REVIEW REPORT

TO THE MEMBERS OF ALLAWASAYA TEXTILE AND FINISHING MILLS LIMITED

Review Report on the Statement of Compliance contained in Listed Companies (Code of Corporate Governance) Regulations, 2019

We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate Governance) Regulations, 2019 (the Regulations) prepared by the Board of Directors of Allawasaya Textile and Finishing Mills Limited (the Company) for the year ended June 30, 2025 in accordance with the requirements of regulation 36 of the Regulations.

The responsibility for compliance with the Regulations is that of the Board of Directors of the Company. Our responsibility is to review whether the Statement of Compliance reflects the status of the Company's compliance with the provisions of the Regulations and report if it does not and to highlight any noncompliance with the requirements of the Regulations. A review is limited primarily to inquiries of the Company's personnel and review of various documents prepared by the Company to comply with the Regulations.

As a part of our audit of the financial statements we are required to obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach. We are not required to consider whether the Board of Directors' statement on internal control covers all risks and controls or to form an opinion on the effectiveness of such internal controls, the Company's corporate governance procedures and risks.

The Regulations require the Company to place before the Audit Committee, and upon recommendation of the Audit Committee, place before the Board of Directors for their review and approval, its related party transactions. We are only required and have ensured compliance of this requirement to the extent of the approval of the related party transactions by the Board of Directors upon recommendation of the Audit Committee.

Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Company's compliance, in all material respects, with the requirements contained in the Regulations as applicable to the Company for the year ended June 30, 2025.

YOUSUF ADIL

CHARTERED ACCOUNTANTS

Place: Multan

Date: October 06, 2025

UDIN Number: CR2025101805wumOFlov

INDEPENDENT AUDITOR'S REPORT

TO THE MEMBERS OF ALLAWASAYA TEXTILE & FINISHING MILLS LIMITED

Report on the Audit of the Financial Statements

Opinion

We have audited the annexed financial statements of Allawasaya Textile & Finishing Mills Limited (the Company) which comprise the statement of financial position as at June 30, 2025, and the statement of profit or loss, the statement of comprehensive income, the statement of changes in equity, the statement of cash flows for the year then ended, and notes to the financial statements including a summary of material accounting policies information and other explanatory information, and we state that we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of the audit.

In our opinion and to the best of our information and according to the explanations given to us, the statement of financial position, the statement of profit or loss , the statement of comprehensive income, the statement of changes in equity and the statement of cash flows together with the notes forming part thereof conform with the accounting and reporting standards as applicable in Pakistan and give the information required by the Companies Act, 2017 (XIX of 2017), in the manner so required and respectively give a true and fair view of the state of the Company's affairs as at June 30, 2024 and of the loss and other comprehensive income, the changes in equity and its cash flows for the year then ended.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants as adopted by the Institute of Chartered Accountants of Pakistan (the Code) and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Following is the key audit matter:

Information Other than the Financial Statements and Auditor's Report Thereon

Management is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

Responsibilities of Management and the Board of Directors for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting and reporting standards as applicable in Pakistan and the requirements of the Companies Act, 2017 (XIX of 2017) and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.