Transmission of Annual Report for the year Ended 30.6.2025 (OMISSION CORRECTED)

ANNUAL

NAHV00 D GROUP

MAHMOOD TEXTILE MILLS LIMITED

CONTENTS

Business Review

Vision & Core Values 04

Corporate Information 05

Honours & Achievements 06

Notice of Annual General Meeting 07

Chairman's Review 11

Directors' Report 12

Financial Summary 21

Board Human Resource Committee 23

Board Audit Committee 24

Corporate Governance

Statement of Compliance with Listed Companies

(Code of Corporate Governance) Regulations, 2017 26

Pattern of Shareholding 27

Directors Attendance at Board Meetings 29

Unconsolidated Financial Statements

Independent Auditors' Review Report to the Members on The Statement of Compliance

contained in Listed Companies (Code of Corporate Governance) Regulations, 2017 32

Independent Auditors' Report to the Members 33

Statement of Financial Position 38

Statement of Profit or Loss 40

Statement of Other Comprehensive Income 41

Statement of Changes in Equity 42

Statement of Cash Flows 43

Notes to the Financial Statements 44

Consolidated Financial Statements

Directors' Report 88

Independent Auditors' Report to the Members Statement of Financial Position

Statement of Profit or Loss

Statement of Other Comprehensive Income Statement of Changes in Equity

Statement of Cash Flows

Notes to the Financial Statements

Legal Forms

Form of Proxy

Dividend Mandate Form Income Tax Return Filing Status

89

94

95

96

97

98

99

144

147

148

VISION

To continue to be recognized globally as a dynamic business group specialized in multiple modern diversified businesses with its credibility of value creation for all stakeholders and the society through its strategically align innovation and sustainability framework.

CORE VALUES

Integrity &

Respect

Innovation

Empowerment

Excellence

Responsibility

CORPORATE INFORMATION

Board of Directors:

Khawaja Muhammad Ilyas Chairman

Khawaja Muhammad Younus Chief Executive Officer

Mrs. Farah Ilyas Female Director Khawaja Muhammad Muzaffar Iqbal Director Khawaja Muhammad Anees Director

Abdul Rehman Qureshi Independent Director

Muhammad Asghar Independent Director

Chief Financial Officer

Yasir Ghaffar

Company Secretary

Liaqat Ali Dolla

Auditors

Crowe Hussain Chaudhary & Co. Chartered Accountants

Masood Metro Mall, Second Floor Near BZU, Multan.

Stock Exchange Listing

Mahmood Textile Mills Limited is a listed Company and its shares are traded on Pakistan Stock Exchange in Pakistan.

Share Registrar

Hameed Majeed Associates (Pvt.) Ltd. H M House, 7-Bank Square, Lahore.

Bankers

MCB Bank Limited United Bank Limited Habib Bank Limited Allied Bank Limited Bank Al-Habib Limited Meezan Bank Limited

National Bank of Pakistan Limited Bank Alfalah Limited

Bank Islami Limited

Habib Metropolitan Bank Limited The Bank of Khyber

The Bank of Punjab Askari Bank Limited Soneri Bank Limited ICBC Bank Limited

Al Baraka Bank Limited

National Bank of Pakistan (Aitmad)

Pak Brunei Investment Company Limited

Mills

Mahmoodabad, Multan Road, Muzaffargarh.

Masoodabad, D.G. Khan Road, Muzaffargarh.

Chowk Sarwar Shaheed, District Muzaffargarh.

Industrail Estate, Multan.

Registered Office

Mehr Manzil, Lohari Gate, Multan.

Tel.: 061-111-181-181 Fax: 061-4511262

E-mail: info@mahmoodgroup.com https://www.mahmoodtextile.com

Regional Office

2nd Floor, Cotton Exchange Building, I.I. Chundrigarh Road, Karachi.

HONOURS AND ACHIEVEMENTS

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NET ZERO

CO EMISSIONS

2050

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that 55th Annual General Meeting (AGM) of "Mahmood Textile Mills Limited" (the Company) will be held on Tuesday 28th October, 2025 at 11 am, at Registered Office of the company, Mehr Manzil, Lohari Gate, Multan a to transact the following business:

1. To confirm the minutes of the Extraordinary General Meeting of the company held on 30-06-2025.

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

   As required under section 223 of the companies Act, 2017 and in term of SRO No. 389 (1)/2023 dated March 21,2023 the financial Statements of the company has been uploaded on the website of the company which can be viewed using the following link, and QR enabled Code.

3. To appoint Auditors for the year 2025-26 and to fix their remuneration. The present Auditors M/S Crowe Hussain Chaudhry & company, Chartered Accountants, Lahore being eligible have offered themselves for their re-appointment.

4. To transact any other business as may be placed before the meeting with the permission of the Chair.

By order of The Board of Directors

Liaqat Ali Dolla Multan. Company Secretary Date: 7th October, 2025.

NOTES:

1. Book Closure.

   The Share transfer books of the company will remain closed from Monday 20th October 2025 to Tuesday 28th October.2025 (both days inclusive). Transfers received in order at the office of the company's Share Registrar, M/s Hameed Majeed Associates (Pvt) Limited, HM House 7 Bank Square, Lahore by the close of business hours (5:00 P.M) on 20th October.2025 will be treated in time for the purposes of attending and voting at the AGM. Proxy forms, in English and in Urdu languages are available on the Company's website.

2. Instrument of Proxy.

   A member entitled to attend and vote at the meeting may appoint any other member as his/her proxy to attend and vote instead of him/her. The instrument appointing a proxy and the power of attorney or other authority under which it is signed or a notarized attested copy of power of attorney must be deposited at the registered office of the company at least 48 hours before the time of the meeting. A proxy must be a member of the company. A company or a corporation being a member of the company may appoint a representative through a resolution of the Board of directors for attending and voting at the meeting.

3. Participation in the AGM through video link.

   At least seven days prior to the date of meeting, on the demand of members residing in a city who hold at least ten percent of the total paid up capital of the company , the facility of video-link will be provided to such members of that city enabling them to participate in the annual general meeting through video-link facility to attend the meeting through video link, the members and their proxies are requested to register themselves by providing the following information along with their Name, Folio Number, Number of shares held in their name, a valid copy of CNIC (both sides) or passport attested copy of board resolution/power of attorney (in case of corporate s h a r e h o l d e r ) t h r o u g h e m a i l a t liaqat.cs@mahmoodgroup.com. After necessary verification these people shall be provided with a video link facility by the company. The login facility will remain open from the start of the meeting till its proceedings are concluded. The facility will be provided keeping in view of the provisions of section 132 of the Companies Act 2017 and the person asking the said facility shall provide the following information/documents to the company.

   Name of Member/ proxy holders	CNIC	Folio No./ participant id/ Account No.	Cell No./ WhatsApp No.	Email ID

4. Members who have deposited their shares into Central Depository Company of Pakistan Limited ("CDC") will further have to follow the applicable guidelines as laid down by the Securities and Exchange Commission of Pakistan in Circular No.1 of 2000.

5. Members are requested to notify in adequate time of any change in their addresses to the Share Registrar of the company. Name and address of the Share Registrar has been mentioned at serial no. 1 of the Notes.

6. Notice to Shareholder who have not provided CNIC:

   The shareholders who have not yet provided their CNICs are once again advised to provide attested copies (both sides) of their CNIC's (if not already provided) directly to the Share Registrar at the address given in Note No.1. The shareholders are further requested to furnished their IBAN bank account number containing 24 digits directly our share registrar so that the dividend if any may be sent into their bank accounts. It is further clarified that tax deduction as presently applicable will be applicable on the dividend amount.

7. Unclaimed dividend /shares under section 244 of The Companies Act, 2017

   The shareholders who for any reason, could not claimed their dividends for the previous years are advised to contact our Share Registrar M/S Hameed Majeed Associated (private) Limited 7-Bank Square Lahore to enquire/claim their dividend immediately. List of unclaimed dividends is av ailable o n t he co mpany ' s w ebsit e, w w w . m a h m o o d e x t i l e . c o m . https://www.mahmoodgroup.com

8. Conversion of physical shares in to Book Entry Form

   As per section 72 of The Companies Act,2017 all the members of listed companies are required to convert their physical shares in to Book Entry form with in a period not exceeding four years from the commencement of The Companies Act, 2017. The SECP vide its circular No. CSD/ED/misc/2016-639-640 dated March 26, 2021 has advised the listed companies to pursue their members who still hold shares in physical form to convert their shares in to Book Entry Form.

   Therefore, the company hereby requests all such members who hold physical shares to convert the shares in to book entry form at the earliest. For the purpose they may contact "Central Depository Company of Pakistan Limited" or any active member of the Pakistan Stock Exchange to open an

   account with the "Central Depository Company of Pakistan Limited "at the earliest possible.

9. Electronic Voting.

   In accordance with section 143-145 of The Companies Act 2017 and Companies (Postal Ballot) Regulations, 2018, the right to vote through electronic voting facility and voting by postal ballot shall be provided to members of every listed company for, inter alia, all business classified as special business under "The Companies Act, 2017" in the manner and subject to conditions contained in the Regulations. Accordingly, members of "MAHMOOD TEXTILE MILLLS LIMITED" will be

   allowed to vote through electronic voting or voting by post for the special business whenever needed in accordance with the requirements and subject to the conditions contained in the said Regulations.

10. Prohibition of Distribution of Gifts

    In accordance with the company's policy and regulatory guidelines, no gifts or incentive shall be distributed at the AGM. Shareholders are requested to refrain from bringing or presenting any gifts during the meeting.

11. Electronic Transmission of Annual Reports and Notices

The Annual Audited Financial Statements/Annual Report and Notice of Meeting for the year ended June, 30,2025 have been placed on the company's website, which can be downloaded from the following link and QR enabled code:-

The Securities and Exchange Commission of Pakistan has allowed the listed companies through its SRO No. 389 (1) dated March 21 2023 to circulate the annual audited financial statements to their members through QR enabled code and web link. The company shall circulate Annual Financial Statements through email address in case it has been provided by the member to the company and upon demand, supply hard copies of the Annual Financial Statements to the shareholders free of cost on receipt of a dully completed request Form which may be obtained from the company's W e b s i t e w w w . m a h m o o d t e x t i l e . c o m . https://www.mahmoodgroup.com

Liaqat Ali Dolla Multan. Company Secretary Date: 7th October, 2025.

07

CHAIRMAN'S REVIEW

Introduction:

FY 2025 was a year of resilience, strategic agility, and transformation for Mahmood Textile Mills Limited. Amid domestic challenges and shifting global markets, the Company leveraged innovation, operational excellence, and targeted investments to reinforce its leadership in the textile industry, strengthen financial discipline, and position itself for sustainable long-term growth.

Market and Economic Overview:

Pakistan's textile sector faced challenges such as rising energy tariffs and global market uncertainties. Mahmood Textile Mills mitigated these pressures through business diversification, operational efficiency, and increased reliance on renewable energy, particularly solar power. Focus on high-quality, value-added products strengthened global buyer relationships and expanded presence in key export destinations including Europe, Turkey, China and U.S.A.

Operational Performance:

The Company delivered strong results across spinning, weaving, fabrics, and apparel divisions. By optimizing its integrated value chain̶from cotton cultivation to finished products̶and investing in modernization, automation, and process efficiency, Mahmood Textile Mills enhanced productivity, cost management, and profitability.

Financial Performance:

The Company demonstrated strong financial discipline and resilience. Mahmood Textile Mills delivered improved net profit and earnings per share, reflecting effective cost management and prudent capital allocation. Robust liquidity supported growth opportunities, innovation, and sustainable expansion.

Sustainability and Innovation:

Sustainability remains central to the Company's strategy. FY 2025 saw progress in water conservation, waste reduction, circular economy practices, and renewable energy expansion. Investments in digital transformation, automation, and product development enhanced competitiveness, especially in Eco-innovative textiles and premium apparel.

Outlook for FY 2026:

The Company remains cautiously optimistic. Focused on new markets, high-value products, R&D, workforce development, and process automation, Mahmood Textile Mills aims to drive operational excellence and growth while advancing sustainability and global ESG compliance.

Acknowledgment:

On behalf of the Board, I thank our employees, customers, and shareholders for their trust and dedication. Together, we will continue to pursue excellence, enhance competitiveness, and create long-term value.

Khawaja Muhammad Ilyas Chairman

DIRECTORS' REPORT TO THE MEMBERS

Introductio: n

For and on behalf of the Board of Directors of Mahmood Textile Mills Limited, we present the financial statements for the year ended June 30, 2025, along with a review of Pakistanʼs economy, the textile sectorʼs performance, and the key challenges and initiatives that shaped the Companyʼs operations during the year.

Global Economic Overview:

The fiscal year ending June 30, 2025, was characterized by a gradual moderation in global economic growth and persistent, albeit easing, inflationary pressures. According to projections from the International Monetary Fund (IMF), global growth is expected to slow to 3.0%, a slight deceleration from the previous year, driven primarily by continued trade tensions and policy uncertainties. Major economies, including the United States and the Eurozone, have experienced a subdued growth trajectory, while several emerging markets, particularly in Asia, have shown greater resilience.

For the textile sector, this environment presented a mixed outlook. While consumer spending on discretionary items like apparel has shown signs of softening in some developed markets, the industry as a whole is projected to continue its growth, driven by a global shift towards sustainable and technical textiles.

Furthermore, supply chain diversification and nearshoring strategies, spurred by geopolitical shifts, have become a focal point, reshaping production and sourcing decisions across the industry.

Pakistan Economic Review:

During FY 2024-25, Pakistanʼs economy showed signs of gradual recovery from earlier turbulence, although growth remained modest and challenges persisted. Real GDP expanded by approximately 2.7%, up from about 2.4% in FY 2023-24, reflecting improving macroeconomic

management. Inflation eased significantly, with the annual CPI inflation rate reducing to about 3.23% in June 2025 (Year on Year) from much higher levels in the previous year. The State Bank of Pakistan responded by cutting the policy rate gradually as inflation declined and foreign exchange conditions stabilized. On the external front, export performance improved, particularly driven by textiles and value- added goods, while remittances also saw strong growth, helping to cushion current account pressures.

The textile industry, a key pillar of Pakistanʼs exports, delivered a mixed performance during FY 2025. Sector exports grew by 7.39% to USD 17.88 billion, reflecting resilience despite high energy costs, shifting global demand, and supply-side constraints. The agricultural sector, however, faced setbacks as cotton output declined due to reduced cultivation and adverse weather conditions, leading to higher reliance on imports to meet demand. Elevated energy and borrowing costs, along with policy uncertainty, continued to weigh on competitiveness. Nevertheless, the stabilization of foreign reserves, relative currency stability, and improved fiscal discipline provided a platform for cautious optimism going forward.

Major Challenges Faced by the Te xtile Industry: of Pakistan

The textile sector is the backbone of Pakistan's export economy, accounting for over 50% of its total export earnings and employing a significant portion of the

industrial workforce. However, despite its immense potential, the sector is grappling with a multitude of challenges in the fiscal year 2025 that threaten its sustainability and global competitiveness.

High Energy Costs: The textile industry continued to face high electricity and gas tariffs, among the highest in the region. Frequent energy price revisions, supply interruptions, and inconsistent availability of subsidized packages hindered competitiveness in global markets. Given that energy forms a significant portion of costs in spinning, weaving, and processing, maintaining cost efficiency remained a major challenge for the sector.

Volatility in Cotton Production: Domestic cotton production fell below target levels due to pest attacks, heavy rains in some regions, and a reduction in acreage under cultivation. Pakistan had to rely heavily on imported cotton, particularly from Brazil and the US, which not only increased input costs but also exposed the sector to global price fluctuations and supply chain risks. This dependence on imports also placed pressure on foreign exchange reserves.

Global Demand Slowdown: Export demand in key markets, especially the United States and the European Union, stayed low because of slower global growth and ongoing inflation. Demand for discretionary products such as apparel and home textiles remained weak, leading to lower order volumes and greater competition among suppliers in the international market.

Exchange rate Fluctuations: While the Pakistani rupee stabilized in the latter part of FY 2025, earlier months were marked by sharp fluctuations, making it difficult for exporters to price contracts and hedge effectively. Such volatility not only created uncertainty in export planning but also increased the cost of imported raw materials, machinery, and chemicals used in textile production.

High Borrowing Cost: Although the State Bank of Pakistan began easing its policy rate in response to falling inflation, the cost of borrowing remained high

through most of FY 2025. Expensive financing limited the availability of affordable credit for working capital, modernization of machinery, and capacity expansion, making it harder for textile businesses to plan long-term investments.

Compliance & Sustainability pressures: Global buyers increasingly demanded compliance with environmental, social, and governance (ESG) standards, including the use of sustainable raw materials, renewable energy, and traceable supply chains. Meeting these standards required significant capital investments in wastewater treatment, energy- efficient equipment, and certification processes. Although these investments are important to keep access to global markets in the long run, they increased costs for manufacturers in the short term.

Logistics & Supply Chain Disruptions: The sector also faced higher freight charges anldogistical disruptions due to geopolitical tensions, particularly in the Red Sea and surrounding regions. Shipping delays and container shortages not only increased costs but also disrupted timely deliveries to key markets, damaging Pakistanʼs reputation for reliability among international buyers.

Policy & Regulatory Uncertainty: Frequent changes in government policies, including adjustments to export incentives, sales tax rebates, and energy subsidy schemes - created uncertainty for long-term investment decisions. Inconsistent enforcement of trade policies and delays in refund processing further strained exportersʼ cash flows. This lack of a predictable policy framework remained a major barrier to sustained growth in the sector.

Overall, these challenges created serious pressure on Pakistanʼs textile sector during FY 2025. High costs, supply issues, and weak global demand limited the industryʼs growth potential. To stay competitive, the sector will need consistent government support, stable policies, and greater focus on efficiency and value -added products in the years ahead.

Key Financial Res:ults

The financial year ended June 30, 2025, was marked by a challenging operating environment, both globally and domestically. Despite pressures from high input costs, fluctuating demand in export markets, and rising operational

challenges, the Company continued to demonstrate resilience. Through effective cost management and efficiency improvements, the company was able to sustain its performance. The key financial highlights for the year are presented below.

------ Rupees in Million ------

Key Financial Results

70,000

60,000

50,000

Millions

40,000

30,000

20,000

10,000

-

30-Jun-25 30-Jun-24

A concise analysis of the key financial results for the year ended 30th June 2025 is given on the next page:

• Profit Growth:
  Profit after tax increased significantly from 249.54 million in 2024 to 978.07 million in 2025.
  
  
  This represents a nearly 4-fold increase, highlighting improved operational efficiency and financial management.
  
  
• Earnings Per Share (EPS) Surge:
  EPS rose sharply from 8.32 to 32.60, reflecting enhanced shareholder value and strong profitability.
  
  
• Reduced Costs:
  Distribution costs decreased from 1,681.79 million to 1,410.80 million.
  
  
  Other expenses were reduced significantly from 398.05 million to 182.05 million.
  
  
  Finance cost declined from 5,631.38 million to 4,110.53 million, improving the companyʼs financial leverage.
  
  
• Sustained Gross Profit:

Despite challenging market conditions, the company maintained a strong gross profit of 7,963.52 million, ensuring operational stability.

Overall Insig:ht

Mahmood Textile Mills delivered exceptional profitability growth in FY 2025, supported by effective cost management, reduced finance expenses, and enhanced operational efficiency. Earnings per share increased substantially, highlighting strong financial performance and significant value creation for shareholders.

Corporate Social Responsibility (CSR) & Sustainability

Mahmood Textile Mills integrates social, environmental, and ethical considerations into its operations, balancing the interests of all stakeholders, particularly the communities in which it operates. As a leading textile company, the Company is committed to sustainable and ethical practices, embedding CSR and sustainability into its core operations. Management ensures that all initiatives align with the Companyʼs long-term objectives of inclusivity, environmental stewardship, and community development.

CSR Initiatives

During FY 2024-25, the Company undertook several initiatives demonstrating its commitment to health, education, inclusivity, and sustainability. In support of womenʼs health, awareness sessions and in-house health checkups were organized for female employees and their families, emphasizing early detection, self-examination, and proactive care, while highlighting the latest treatment advancements. Gender diversity and empowerment were further promoted through the celebration of International Womenʼs Day, recognizing the achievements of women across professions and

social backgrounds and fostering an inclusive workplace culture.

Environmental sustainability remained a priority, with large-scale tree plantation drives conducted at the Multan and Muzaffargarh factory sites, enhancing green cover and promoting environmental awareness among employees.

Education support initiatives provided learning resources and opportunities for underprivileged children, fostering human capital development and social progress. Healthcare access was improved through a partnership with Nishtar Hospital, Multan, providing quality medicines at discounted rates for vulnerable community members.

Commitment to Sustainability

Mahmood Group is committed to embedding sustainability in every aspect of its operations, emphasizing responsible resource utilization, employee well-being, transparent governance, and community development. These initiatives align with international sustainability standards and are designed to create longterm value for all stakeholders.

Environmental Stewardship: In line with its green energy strategy, the Company expanded renewable energy capacity to 16 MW, with an additional 3.5 MW planned, significantly reducing reliance on fossil fuels and lowering greenhouse gas emissions. Water recycling exceeded 30% of total usage through advanced treatment plants, while waste management practices focused on recycling and safe disposal of hazardous materials, minimizing environmental impact.

Social Responsibility: Employee health and safety remained a top priority, with no major accidents reported during the year. Community programs continued to focus on education, healthcare, and women empowerment, reflecting the Companyʼs commitment to social welfare and development.

Diversity, Equity & Inclusion (DE&I): DE&I is a core principle of the Companyʼs operations, with strategies in place to increase gender and ethnic diversity at all levels, including measurable targets for female representation on the Board and workforce within the next three years. Policies such as maternity leave and non-discrimination practices ensure merit-based opportunities and fair treatment in hiring, promotions, and salary reviews.

Sustainability-Related Risks: The Company recognizes sustainability-related risks, including climate change, water scarcity, and evolving global supply chain standards, and continues to adopt proactive measures to mitigate these challenges and maintain competitiveness.

Future Plans: Mahmood Textile Mills aims to expand solar energy capacity to 20 MW by 2026, increase water recycling to at least 50% of total usage, and further align supply chain operations with international ESG benchmarks.

Through these initiatives, Mahmood Textile Mills demonstrates that corporate success is closely linked with social and environmental responsibility, creating lasting value for stakeholders while positively impacting society and the environment.

Corporate and Financial Reporting Framework:

The Directors confirm compliance with Corporate and Financial Reporting Framework of the Securities and Exchange Commission of Pakistan and Listed Companies (Code of Corporate Governance) Regulations, 2019 (CCG

Regulations) for the following matters:

The financial statements, prepared by the management of Mahmood Textile Mills Ltd., present fairly its state of affairs, the results of its operations, cash flows and changes in equity.

Appropriate accounting policies have been consistently applied in preparation of these financial statements and accounting estimates are based on reasonable and prudent judgments.

The Company has maintained proper books of account.

International accounting standards, as applicable in Pakistan, have been followed in preparation of these financial statements.

The system of internal control is sound in design and has been effectively implemented and monitored. The process of monitoring internal controls will continue as on-going process with objective to strengthen the controls and bring improvements in the system.

There are no doubts about the Company's ability to continue as a going concern.

There has been no material departure from the best practices of the CCG Regulations 2019.

There are no statutory payments on account of taxes, duties levies and charges which are outstanding as at June 30, 2025, except for those disclosed in the financial statements.

Strategic Expansion:

During the year, the Company acquired a wholly owned subsidiary, MG Apparel Limited, which is engaged in the manufacturing and stitching of garments, made-ups, clothing, knitwear, and other allied textile products, as well as in trading, importing, and exporting these goods both locally and internationally. In line with its strategic focus on operational specialization and business streamlining, the Board of Directors approved a Scheme of Arrangement under which the assets and liabilities of the Apparel segment will be transferred to MG Apparel Limited.

This restructuring initiative aims to enhance efficiency, improve management focus, and strengthen the Company's position in the value-added textile segment. The application for approval of the Scheme has been filed before the Honorable Lahore High Court, Multan Bench, and the process of obtaining the Court's approval is currently underway.

Future Outlook:

Looking ahead, the Company remains hopeful that easing inflation and expected reductions in interest rates will support business growth in the coming year. We plan to continue focusing on cost savings, energy efficiency, and sustainability projects to strengthen our operations. Investments in technology and cleaner production processes will also help us stay competitive in changing global markets.

For the textile sector worldwide, demand in major markets like the China and EU may stay soft in the short term, but new opportunities are expected in emerging economies. The recent U.S. tariff reductions on select

textile imports create a particularly favorable environment for Pakistanʼs textile sector. Mahmood Textile Mills Limited is strategically positioned to benefit through its diversified product portfolio, robust compliance standards, and established U.S. relationships. In line with its growth strategy, the Mahmood Group is extending value addition initiatives across its product lines to enhance quality and margin potential.

The global shift towards sustainable, organic, and technical textiles will also create fresh avenues for growth. In Pakistan, the textile industry is expected to benefit from government support for exports, lower energy costs, and rising demand for value-added and eco-friendly products, although challenges such as high competition and compliance requirements will remain.

Acknowledgement:

Mahmood Textile Mills will build on these trends by expanding exports, improving product quality, and adopting eco-friendly practices, with the aim of delivering long-term value for shareholders, supporting sustainable revenue growth, optimizing capacity utilization, and strengthening foreign exchange contributions, thereby underpinning both corporate performance and the national economy.

Conclusion

The growth and resilience of Pakistanʼs textile industry depend on strong collaboration between the government and industry stakeholders. Consistent and supportive policies, uninterrupted and affordable energy supply, and measures to improve ease of doing business are essential to strengthen the sector. Greater focus on infrastructure development, technological upgradation, and skill enhancement will help improve efficiency and meet the changing demands of global markets.

At the same time, sustainability has become a key requirement, and the industry must continue to invest in renewable energy, waste management, and environmentally friendly production processes to remain competitive. By supporting these initiatives, the government can enable the textile sector to secure a stronger position in the global supply chain.

Such efforts wilnl ot only increase Pakistanʼs textile exports but also drive industrial growth, generate employment, attract foreign investment, and contribute to the countryʼs long-term economic stability and social progress.

We extend our heartfelt appreciation to our employees, customers, suppliers, and shareholders for their continued trust and support throughout the year ended June 30, 2025. Despite economic challenges and a demanding global environment, their commitment has enabled the Company to sustain performance and pursue new opportunities.

We also recognize the hard work of our management and staff, whose dedication to efficiency, innovation, and sustainability has strengthened our resilience. Moving forward, Mahmood Textile Mills remains committed to responsible growth, enhanced competitiveness, and creating long-term value for all stakeholders.

For and on behalf of the Board

Khawaja Muhammad Ilyas Khawaja Muhammad Younus

(Chairman) (Chief Executive Officer)

Multan:

Dated: October 11, 2025

11

FINANCIAL SUMMARY

SIX YEARS REVIEW AT A GLANCE

Rupees in Million

GRAPHICAL PRESENTATION

25,000

20,000

15,000

10,000

5,000

-

2020

2021

2022

2023

2024

2025

3.82

2020

2025 2024 2023 2022 2021

8.32

40.06

32.60

60.00

40.00

20.00

-

180.00 169.50

160.00

140.00

120.00

100.00

80.00 71.50

2020

2021

2022

2023

2024

2025

3,500

3,000

2,500

2,000

1,500

1,000

500

-

Sales (Rs. in million) Profit after Taxation (Rs. in million)

70,000

60,000

50,000

40,000

30,000

20,000

10,000

-

2025 2024 2023 2022 2021 2020

Dividends (Rupees) Earning per Share (Rupees)

120%

100%

80%

60%

40%

20%

0%

2025 2024 2023 2022 2021 2020

Fixed Assets (Rs. in million) Equity (Rs. in million)

20,000

18,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

-

2025 2024 2023 2022 2021 2020

BOARD HUMAN RESOURCE COMMITTEE

Composition:

Mr. Abdul Rehman Qureshi Chairman of the Committee

Khawaja Muhammad Younus Member of the Committee

Khawaja Muhammad Muzaffar Iqbal Member of the Committee

Terms of Reference

The Committee makes recommendations to the Board for maintaining (i) a sound organizational plan of the Company, (ii) an effective employee development programme and (iii) sound compensation and benefit plans, policies and practices designed to attract and retain high caliber personnel for effective management of business with a view to achieve said objectives.

The Terms of Reference of the Board Human Resource Committee include review and recommendations for the Board's approval, matters relating to:

1. Changes in organization, functions and relationships affecting management positions.

2. Establishment of Human Resource plans and procedures.

3. Determination of appropriate limits of authority and approval procedures for personnel matters.

4. Review of employee development system and procedures, early identification and development of key personnel and specific succession plans for senior management positions.

5. Review and evaluation of compensation policies, practices and procedures.

BOARD AUDIT COMMITTEE

Composition:

The Board Audit Committee is composed of the following Directors:

Mr. Muhammad Asghar Chairman of the Committee

Khawaja Muhammad Muzaffar Iqbal Member of the Committee

Khawaja Muhammad Anees Member of the Committee

Terms of Reference

The Committee reviews the periodic financial statements and examines the adequacy of financial policies and practices to ensure that an efficient and strong system of internal control is in place. The Committee also reviews the audit reports issued by the Internal Audit Department and compliance status of audit observations.

The Audit Committee is also responsible for recommending to the Board of Directors the appointment of external auditors by the Company's shareholders and considers any question of resignation or removal of external auditors, audit fees and provision of any service to the Company by its external auditors in addition to the audit of its financial statements.

The Terms of Reference of the Audit Committee are consistent with those stated in the Code of Corporate Governance and broadly include the following:

1. Review of the interim and annual financial statements of the Company prior to approval by the Board of Directors.

2. Discussions with the external auditors of major observations arising from interim and final audits; review of management letter issued by the external auditors and management's response thereto.

3. Review of scope and extent of internal audit ensuring that the internal audit function has adequate resources and is appropriately placed within the Company.

4. Ascertain adequacy and effectiveness of the internal control system including financial and operational controls, accounting system and reporting structure.

5. Determination of compliance with relevant statutory requirements and monitoring compliance with the best practices of corporate governance.

6. Institute special projects or other investigations on any matters specified by the Board of Directors.

   The Board Audit Committee met four (4) times during the year with an average participation of all members

   CORPORATE GOVERNANCE

   
   
   

   STATEMENT OF COMPLIANCE WITH LISTED COMPANIES

   (Code of Corporate Governance) Regulations, 2019

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

   1. The total number of directors are 7 as per the following:

      1. Male: 6

      2. Female: 1

   2. The composition of board is as follows:

      Category	Name
      Independent Director	Mr. Abdul Rehman Qureshi Mr. Muhammad Asghar
      Executive Directors	Mr. Khawaja Muhammad Younus Mrs. Farah Ilyas (Female Director)
      Non-Executive Directors	Mr. Khawaja Muhammad Ilyas Mr. Muhammad Anees Mr. Khawaja Muhammad Muzaffar Iqbal

      *The Board comprised of minimum number of members which is seven (7) hence it fulfills the requirement of minimum two (2) independent directors. Further, the existing independent directors have the requisite skills and knowledge to take independent decisions and the company do not need to engage further independent director however; the Board may consider to fraction up in next election of directors.

   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 the significant policies along with their date of approval or updating is 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 Companies Act, 2017 (Act) and the Listed Companies (Code of Corporate Governance) Regulations, 2019 (Regulations);

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

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

   9. Five out of seven directors are exempt from Directors' Training Program, and remaining two Directors have acquired the prescribed certifications under Directors' Training Program offered by institutions that meet the criteria specified by the Commission;

   10. The board has approved appointment of Chief Financial Officer, Company Secretary and Head of Internal Audit, including their remuneration and terms and conditions of employment and complied with relevant requirements of the Regulations;

   11. Chief Executive Officer and Chief Financial Officer duly endorsed the financial statements before approval of the Board;

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

       AUDIT COMMITTEE

       1. Mr. Mohammad Asghar Chairman

       2. Khawaja Muhammad Muzaffar Iqbal Member

       3. Mr. Muhammad Anees Member

       HUMAN RESOURCE & REMUNERATION COMMITTEE

       1. Mr. Abdul Rehman Qureshi Chairman

       2. Khawaja Muhammad Younus Member

       3. Khawaja Muhammad Muzaffar Iqbal Member

       NOMINATION COMMITTEE

       1. Khawaja Muhammad Younus Chairman

       2. Mr. Muhammad Muzaffar Iqbal Member

       3. Mr. Mohammad Asghar Member

       RISK MANAGEMENT COMMITTEE

       1. Khawaja Muhammad Younus Chairman

       2. Mr. Muhammad Muzaffar Iqbal Member

       3. Mr. Muhammad Anees Member

   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: 5

       2. HR and R Committee: 1

   15. The board has set up an effective internal audit function.

   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 of their partners are in 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 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 the requirements of regulation 3, 6, 7, 8, 27, 32, 33 and 36 of the Regulations have been complied with; and

   19. Explanation for non-compliance with requirements, other than regulations 3, 6, 7, 8, 27, 32, 33 and 36 are below: (Not applicable)

For and on behalf of the Board of Directors.

Khawaja Muhammad Ilyas

Multan.

Dated: 7th October, 2025

PATTERN OF SHAREHOLDING

AS AT JUNE 30, 2025

NUMBER OF SHAREHOLDERS

SHAREHOLDING FROM TO

TOTAL SHARES HELD

CATEGORIES OF SHAREHOLDERS

Directors,Chief Executive

NUMBER SHARE HELD PERCENTAGE %

The above two statements include (345) Shareholders holding 25,698,104 Shares through Central Depository Company of Pakistan Limited (CDC)

ANNUAL REPORT 2025 27

INFORMATION REQUIRED AS PER CODE OF CORPORATE GOVERNANCE

As At June 30, 2025

SHARE HOLDER'S CATEGORY Number of Shares Held Percentage of Shareholding

i) Associated Companies, undertaking &

Central Depository Company of Pakistan Limited (CDC)