Review of Draft Offer Document for Right Shares-Observations and Required Compliance

‌Shadab Textile Mills Limited

Registered Office: A-601/A, City Towers, 6-K, Main Boulevard, Gulberg-II, Lahore.

Ph: (042) 35788714-16 Fax: (042) 35788718 E-mail: shadstm@brain.net.pk N.T.N.: 0657824-1

STML/PSX/CS/26

March 05, 2026

Mr. Akbar Ali,

Manager - Trading & TREC Affairs, Pakistan Stock Exchange Limited, Stock Exchange Building,

Stock Exchange Road, Karachi.

Subject: Review of Draft Offer Document for Right Share Issue - Observations & Required Compliance - Shadab Textile Mills Limited

Dear Sir,

This refers to your letter No. PSX/LD/C-542-222 dated February 16, 2026 regarding the captioned subject.

In this regard, we are pleased to submit herewith the Final Offer Document of the Company's Right Issue after incorporating and addressing all observations communicated by the Exchange.

For your kind review and consideration, the following documents are enclosed:

• Final Offer Document for the Right Issue duly revised in accordance with the observations of the Exchange.

• Detailed response to the observations in tabular form indicating compliance with each comment of the Exchange along with relevant supporting documents.

We would also like to inform you that the above documents have been uploaded on the Company's website for information of the shareholders and investors.

We shall be grateful if the Exchange may kindly review the submitted documents and accord its approval for issuance of the Right Shares by the Company.

Thanking you.

Yours faithfully,

For Shadab Textile Mills Limited

Compaq

Encl: As above.

Mills: Nasimabad, Shahkot, District Nankana Sahib. Ph: (056) 2550171-72 Fax: (056) 2550173 Mills: 1-km Chunian Road, Habibabad. Ph: (049) 4500633

Shadab Textile Mills Limited Right Share - Offer Document

Date and place of incorporation: Pakistan Incorporation number: 0007162

Registered Office: A-601/A, City Towers 6-K, Main Boulevard Gulberg-II, Lahore Pakistan Date & Place of Incorporation: 19thAugust, 1979, Karachi.

Contact Person: Tariq Javaid, Contact Details: +92 300 4650377 Email: shadstm@brain.net.pk Website: https://www.shadabtextile.com

Total Issue Size: The Right Issue consists of 6,250,000 Right Shares (i.e. 37.65% of the existing paid-up capital of Shadab Textile Mills Limited) at an offer price of PKR 40.00 per share (i.e. including a premium of PKR 30.00 per share) for an aggregate issue size of PKR 250,000,000 (Pak Rupees Two Hundred Fifty Million) at a ratio of 37.65 rights shares for every 100 shares held.

Details of the relevant contact persons:

Underwriters:

Bankers to the Issue:

Website: This offer document is available for downloaded at:www.shadabtextile.com. Web Link: https://www.shadabtextile.com/pdf/Final Offer Document.pdf.

Page 2 of 22

‌ID‌

Type Amount

PB-LHR-3666421E678901C4

Low Denomination Rs 100/-

Description : CERTIFICATE OR OTHEft DOCUMENT- 19

Applicant : Shadab Textile Mills Ltd [35201-7540786-1] Representahve From : Shadab Textile Mills Ltd

Agent : Sheraz Ali [35201-7540786-1]

Address : Lahore

Issue Date : 23-Feb-2026 12:39:06 PM

Delisted On/Validity : 2-Mar-2026

Amount in Words : One Hundred Rupees Only

Reason : Undertaking in favor of Pakistan Stock Exchange / SECP Vendor lnforma0on : Syed Ali Raza Bukhari | PB-LHR-1427 | Main Market Gulberg

UNDERTAKING OF CEO AND CFO

The following undertaking by the Issuer:

"WE, AAMIR NASEEM, THE CHIEF EXECUTIVE OFFICER AND MUHAMMAD ADEEL ANWAR

KHAN, THE CHIEF FINANCIAL OFFICER OF Shadab Textile Mills Limited CERTIFY THAT;

1. THE OFFER DOCUMENT CONTAINS ALL INFORMATION WITH REGARD TO THE ISSUER AND THE ISSUE, WHICH IS MATERIAL IN THE CONTEXT OF THE ISSUE AND NOTHING HAS BEEN CONCEALED IN THIS RESPECT;

2. THE INFORMATION CONTAINED IN THE OFFER DOCUMENT IS TRUE AND CORRECT TO THE BEST OF THEIR KNOWLEDGE AND BELIEF;

3. THE OPINIONS AND INTENTIONS EXPRESSED THEREIN ARE HONESTLY HELD;

4. THERE ARE NO OTHER FACTS, THE OMISSION OF WHICH MAKES THE OFFER DOCUMENT AS A WHOLE OR ANY PART THEREOF MISLEADING; AND

5. ALL REQUIREMENTS OF THE COMPANIES ACT, 2017, THE COMPANIES (FURTHER ISSUE OF SHARES) REGULATIONS, 2020, THE CENTRAL DEPOSITORY COMPANY AND THAT OF PSX PERTAINING TO THE RIGHT ISSUE HAVE BEEN FULFILLED."

For and on behalf of Shadab Textile Mills Limited

(Aamir Naseem) Chief Executive Officer

(Muhammad eel An ar Khan)

Chief Fin ncial Officer

‌ID

Type

Amount :

PB-LHR-AA6FF109872DD9E4

Low Denomination

Rs 100/-

Scan for online verification

Description : CERTIFICATE OR OTHER DOCUMENT- 19

Applicant : Shadab Texfile Mills Ltd [35201-7540786-1] Representative From : Shadab Textile Mills Ltd

Agent : Sheraz Ali [35201-7540786-1]

Address : Lahore

Issue Date : 23-Feb-2026 12:39:06 PM

Delisted On/Validity : 2-Mar-2026

Amount in Words : One Hundred Rupees OnIy

Reason : Undertaking in favor of Pakistan Stock Exchange / SECP Vendor lnforma0on : Syed Ali Raza Bukhari | PB-LHR-1427 | Main Market Gulberg

UNDERTAKING OF THE BOARD

Undertak'ng by the Board of Directors (Board) [or an officer of the Company authorized by them in this behaIfJ

WE, TFIE BOARD OF DIRECTORS OF Shadab Textile Mills Limited HEREBY CONFIRM THAT:

1. ALL MATERIAL INFORMATION AS REQUIRED UNDER THE COMPANIES ACT, 2017, THE SECURITIES ACT, 2015, COMPANIES (FURTHER ISSUE OF SHARES) REGULATIONS, 2020, THE LISTING OF COMPANIES AND SECURITIES REGULATIONS OF THE PAKISTAN STOCK EXCHANGE LIMITED HAS BEEN DISCLOSED IN THIS OFFER DOCUMENT AND THAT WHATEVER IS STATED IN OFFER DOCUMENT AND IN THE SUPPORTING DOCUMENTS IS TRUE AND CORRECT TO THE BEST OF OUR KNOWLEDGE AND BELIEF"AND THAT NOTHING HAS BEEN CONCEALED.

2. WE UNDERTAKE THAT ALL MATERIAL INFORMATION, INCLUDING RISKS THAT WOULD ENABLE THE INVESTOR TO MAKE AN INFORMED DECISION, HAS BEEN DISCLOSED IN THE OFFER DOCUMENT.

RIGHT ISSUE IS THE DISCRETION OF BOARD OF THE ISSUER AND IT NEITHER REQUIRE APPROVAL OF THE COMMISSION NOR THE SECURITIES EXCHANGE.

1. NO PUBLIC COMMENTS WERE SOUGHT FOR THE DRAFT OFFER DOCUMENT.

2. COMMENTS FROM SECURITIES EXCHANGE AND THE SECP WERE RECEIVED ON FEBRUARY 06 2026 AND FEBRUARY 19, 2026 RESPECTIVELY.

3. THE BOARD HAS ENSURED THAT DRAFT OFFER DOCUMENT IS UPDATED IN LIGHT OF THE PUBLIC COMMENTS (IF SOUGHT), SECURITIES EXCHANGE AND SECP COMMENTS.

4. THE BOARD HAS DISCLOSED ON PSX'S AND COMPANY'S WEBSITE, ALL THE COMMENTS RECEIVED ALONG WITH THE EXPLANATIONS AS TO HOW THEY ARE ADDRESSED.

5. THE FINAL OFFER DOCUMENT WAS SUBMITTED TO THE COMMISSION AND PLACED ON SECURITIES EXCHANGE WEBSITE ON FEBRUARY 24, 2026 ALONG WITH THE BOOK CLOSURE DATES AND RELEVANT RIGHT ISSUANCE TIMELINES. (I.E. WITHIN 5 DAYS FROM THE DATE OF RECEIPT OF COMMENTS OF PSX

   - AND SECP).

6. THE STATUATORY AUDITOR M/s. FAZAL MEHMOOD AND CO OF THE ISSUER SHALL SUBMIT HALF YEARLY REPORT TO THE ISSUER REGARDING UTILIZATION OF PROCEEDS IN THE MANNER REFERRED TO IN THE FINAL OFFER DOCUMENT. THE ISSUER WILL INCLUDE THE REPORT OF THE STATUTORY AUDITOR, ALONG WITH ITS COMMENTS THEREON, IF ANY, IN ITS HALF YEARLY AND ANNUAL FINANCIAL STATEMENTS.

7. NAMES OF THE DISSENTING DIRECTOR (IF ANY) ARE Nil.

8. THE COMPANY SHALL INDEMNIFY AND HOLD HARMLESS THE SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN, THE COMMISSION, AND THEIR RESPECTIVE DIRECTORS, MEMBERS, OFFICERS, EMPLOYEES, AND AGENTS AGAINST ANY CLAIMS, LOSSES, LIABILITIES, DAMAGES, COSTS, OR EXPENSES (INCLUDING LEGAL FEES) ARISING OUT OF OR IN CONNECTION WITH THE ISSUANCE OF RIGHT SHARES, INCLUDING ANY MISSTATEMENT, OMISSION, OR NON-COMPLIANCE BY THE COMPANY.

   FOR AND BEHALF OF SHADAB TEXTILE MILLS LIMITED

   
   
   

   Chief Executive Officer

   ‌DISCLAIMER:

   • In line with the Companies Act, 2017 and Companies (Further Issue of Shares) Regulations, 2020, this document does not require approval of the Securities Exchange and the Securities and Exchange Commission of Pakistan (SECP).

   • The Securities Exchange and the SECP disclaim:

     1. Any liability whatsoever for any loss however arising from or in reliance upon this document to anyone, arising from any reason, including, but not limited to, inaccuracies, incompleteness and/or mistakes, for decisions and/or actions taken, based on this document.

     2. Any responsibility for the financial soundness of the Company and any of its schemes/projects stated herein or for the correctness of any of the statements made or opinions expressed with regards to them by the Company in this Offer document.

     3. Any responsibility with respect to the quality of the issue.

   • It is clarified that information in this Offer document should not be construed as advice on any particular matter by the SECP and the Securities Exchange and must not be treated as a substitute for specific advice.

GLOSSARY OF TECHNICAL TERMS AND DEFINITION

DEFINITIONS

TABLE OF CONTENTS

1. SALIENT FEATURES OF THE RIGHT ISSUE 8

   1. Brief Terms of the Rights Issue 8

   2. Principal Purpose of the Issue and funding arrangements 11

   3. Total expenses to the issue: (i) banker's commission (ii) others, if any 14

      1. Details of Underwriters 14

      2. Commitments from substantial shareholders/directors 15

      3. Fractional Rights Shares: Fractional shares, if any, shall not be offered and all fractions less than a share shall be consolidated and disposed of by the company and the proceeds from such disposition shall be paid to such of the entitled shareholders as may have accepted such offer; 15

      4. Important Dates 15

2. SUBSCRIPTION AMOUNT PAYMENT PROCEDURE 16

3. PROFILE OF MANAGEMENT AND SPONSORS 16

   1. Profile of the Board of Directors of the company 16

      1. Other Directorships held (provide names of the company(ies) 18

   (iii) Profile of Sponsors 19

4. DETAILS OF THE ISSUER 19

   1. Financial highlights of Issuer for last three years 19

   2. Financial highlights for the preceding year of consolidated financial 19

   3. Detail of issue of capital in previous five years 19

   4. Average market price of the share of the Issuer during the last six months 20

   5. Share Capital and Related Matters 20

5. RISK FACTORS 22

13. SIGNATORIES TO THE OFFER DOCUMENT 22

1. ‌SALIENT FEATURES OF THE RIGHT ISSUE

   1. ‌Brief Terms of the Rights Issue:

1. ‌Principal Purpose of the Issue and funding arrangements:

   A. Details of the principal purpose of the issue. Proceeds from Right Subscription will be used as follows: Item Breakup Funds (Millions)	% of Funds
   a) Purchase of Plant & machinery 131.50	52.60%
   b) Installation of Solar System 47.50	19.00%
   c) Working capital requirements 71.00	28.40%
   Total 250.00	100.00%

   % Completion Status of Purchase Plant & Machinery and Solar System

   1. Plant & Machinery

      1. Drawing Machines

         L. C was established on December 10, 2025 Payment against L.C has been done on February 19,2026 and Shipment has been reached on port. Tentative date to complete the erection and to become fully operational is March 31, 2026.

      2. Saurer Cards

         The Letter of Credit was established on 01 December 2025 and Shipment and retirement of the L/C are expected by the end of March 2026. Tentative date to complete the erection and to be become fully operational is 31 May 2026.

      3. Compressor & High Speed Card

         The letter of credit for import of Compressor and card will be established after the receipts of proceeds of right share issue. Tentative date to complete the erection and fully operational is 31 December 2026.

   2. Solar System

      Contracts for installation of 730 KW Solar System has been finalized and will be completed by June 30, 2026.

      1. Additional disclosures relating to purpose of the issue shall be made in case of the following:

         1. If purpose of the issue is to finance working capital:

            The Company has been significantly reliant on short-term bank borrowings to meet its working capital requirements. As on June 30, 2025, short-term borrowings stood at PKR 505.469 million, which were reduced to PKR 460.401 million as of September 30, 2025. The Company further improved its position by bringing down short-term borrowings to 280.736 million as of December 31, 2025.

            While this reduction reflects improved liquidity management, the level of short-term borrowings still remains relatively high. Accordingly, the Company intends to raise additional working capital to further

            reduce its dependence on short-term bank borrowings, consequently lower finance cost and strengthen its overall financial stability.

            	Year (2025)	Year (2024)	Year (2023)
            Cash Conversion Cycle (in Days)	26.26	35.13	36.35

            If purposes of the issue are to purchase Plant/ Equipment/ Technology:

            Plant and machinery including solar system aggregating approximately PKR 179.00 million, to be financed out of the proceeds of the proposed Right Issue. Management informed the Board that, due to timing differences between the expected receipt of Right Issue proceeds and the payment schedules for the machinery, the Company may be required to make certain advance payments prior to the receipt of such proceeds. It was noted that any such interim payments shall be met through internal cash generation and/or short-term bank borrowings, which shall subsequently be adjusted against the proceeds of the Right Issue upon receipt.

            1. Import of Four (04) Sets of Saurer Card Machines

               Card machines are being imported from China Based Supplier M/s Saurer (Changzhou) Textile Machinery Company Limited. Cost of 04 sets card machines is USD 216,000, against which the Letter of Credit was established on 01 December 2025. The estimated landed cost is PKR 65.00 million. Shipment and retirement of the L/C are expected by the end of March 2026. Tentative date to complete the erection and to be become fully operational is 31 May 2026.

            2. Import of Three (03) Sets of Tianmen Drawing Machines

               Drawing machines are being imported from China Based supplier M/s Hubei Tianmen Textile Machinery Company Limited. Costing USD 54,000, against which the Letter of Credit was established on 10 December 2025. The estimated landed cost is PKR 16.50 million. L. C was established on December 10, 2025 Payment against L.C has been done on February 19, 2026 and Shipment has been reached on port. Tentative date to complete the erection and to become fully operational is March 31, 2026.

            3. Import of 250 kW Compressor & High Speed Card

               Compressor and High Speed Card will be imported from China. Estimated landed cost of 250 KW Compressor and High speed card is PKR 50.00 million for which L.C will be established after the

               receipts of proceeds of right share issue. Tentative date to complete the erection and fully operational is December 31, 2026.

               1. Where the issuer proposes to undertake more than one activity or project, such as diversification, modernization, expansion, etc., the total project cost activity-wise or project wise, as the case may be.

                  Installation of plant, machinery and solar system will be completed separately in one go as below mentioned tentative dates:

                  Item Breakup Cost (Millions) Tentative Date for Installation

                  1. Drawing Machines 16.50 31 March 2026

                  2. Saurer Cards 65.00 31 May 2026

                  3. Compressor & High Speed Card 50.00 31 December 2026

                  4. Solar System 47.50 30 June 2026

                     Total 179.00

               2. Where the issuer is implementing the project in a phased manner, the cost of each phase including the phase, if any, which has already been implemented.

                  Installation of plant, machinery and solar system will be completed separately in one go. The cost of the project is as under:

                  Item Breakup Cost (Millions) Tentative Date for Installation

                  1. Drawing Machines 16.50 31 March 2026

                  2. Saurer Cards 65.00 30 April 2026

                  3. Compressor & High Speed Card 50.00 31 December 2026

                  4. Solar System 47.50 30 June 2026

                     Total 179.00

               3. Details of all material existing or anticipated transactions in relation to the utilization of the issue proceeds or project cost with promoters, directors, key managerial personnel, associate companies.

                  There is no transaction in relation to the utilization of the issue proceeds or project cost with promoters, directors, key managerial personnel, associate companies.

                  Financial Effects Arising from Right Issue:

                  As at 30thJune 2025	Unit	Pre-Issue	Post-Issue	Increase in %
                  Authorized Share Capital	PKR	400,000,000	400,000,000	0.00%
                  Paid-up Capital	PKR	166,000,000	228,500,000	37.65%
                  Number of Shares	Unit	16,600,000	22,850,000	37.65%
                  Total Equity	PKR	1,757,072,000	2,007,072,000	14.22%
                  Net Asset/Breakup value per share*	PKR	105.85	87.83	(20.51%)
                  Gearing Ratio**	%	41.39%	32.70%	(20.99%)
                  Production Capacity	Unit	21,817,513	21,817,513	-
                  Market Share	%	0.36%	0.36%	-

                  * The break-up value is calculated as follows: Total Equity ÷ No. of Shares.

                  ** Gearing Ratio is calculated as follows: Net Debt (Total Borrowings - Cash & Bank Balances) ÷ Total Equity

                  GEARING RATIO CALCULATION:

                  Pre Issue Gearing (757,035,000-29,618,000) ÷ 1,757,072,000 = 41.39%

                  Post Issue Gearing (686,035,000-29,618,000) ÷ 2 007,072,000 = 32.70%

2. ‌Total expenses to the issue: (i) banker's commission (ii) others, if any.

1. ‌Details of Underwriters:

   Name of the Underwriter	Amount Underwritten (PKR)	Associated Company/ Associated undertaking of the Issuer (YES /NO)
   Muhammad Munir Muhammad Ahmed Khanani Securities Limited	108,725,000	NO

2. ‌Commitments from substantial shareholders/directors:

   Name of the Person	Status (Substantial Shareholder /Director)	No. of Existing Shares	Number of Shares Committed to be Subscribed*	Amount Committed to be Subscribed (PKR)*	Shareholding %pre-issuance	Shareholding %post issuance**
   Saad Naseem	Chairman / Director	955,215	359638	14,385,520	5.75	5.75
   Aamir Naseem	CEO / Substantial Shareholder	2,835,209	1067456	42,698,240	17.08	17.08
   Farrukh Naseem	Director	1,057,000	397960	15,918,400	6.37	6.37
   Yasir Naseem	Director	500,000	188250	7,530,000	3.01	3.01
   Hamza Naseem	Director	955,215	359638	14,385,520	5.75	5.75
   Fahad Shafiq	Director	2,766	1041	41,640	0.02	0.02
   Ghazanfer Feroz	Director	5,533	2083	83,320	0.03	0.03
   Mrs. Fatima Aamir	Director	614,545	231376	9,255,040	3.70	3.70
   Anam Omer	Family Member	477,607	179,819	7,192,760	2.88	2.88
   Ali Naseem	Family Member	500,000	188250	7,530,000	3.01	3.01
   Mrs. Hina Farrukh	Family Member	477,608	179,819	7,192,760	2.88	2.88
   Ahmad Naseem	Family Member	1,000,157	376,559	15,062,360	6.03	6.03

   *Subject to subscription of additional shares which may be unsubscribed, or disposal of shares otherwise held, or shares entitlement subscribed by persons arranged by such substantial shareholder/ director in accordance with the applicable laws

   ** Including through persons arranged by such substantial shareholders/ directors

3. ‌Fractional Rights Shares: Fractional shares, if any, shall not be offered and all fractions less than a share shall be consolidated and disposed of by the company and the proceeds from such disposition shall be paid to such of the entitled shareholders as may have accepted such offer;

   The Board of Directors of the Company have resolved in their meeting held on February 3, 2026 that all fractional entitlements, if any, will be consolidated in the name of the Company Secretary (under trust), and consolidated fraction shall be offered as advised by board.

4. ‌Important Dates:

1. ‌SUBSCRIPTION AMOUNT PAYMENT PROCEDURE:

   1. Payment as indicated above should be made by cash or crossed cheque or demand draft or pay order made out to the credit of "Shadab Textile Mills Limited-Right Shares Subscription Account" through any of the authorized branches of Meezan Bank Limited on or before April 1, 2026 along with this Right Subscription Request duly filled in and signed by the subscriber(s).

   2. Right Subscription Request can be downloaded from the Company website: https://www.shadabtextile.com.

      Web Link: https://www.shadabtextile.com/pdf.Right Subscription Request.pdf

   3. In case of Non-Resident Pakistani / Foreign shareholder, the demand draft of the equivalent amount in Pak Rupees should be sent to the Company Secretary, (Mr. Tariq Javaid) at the registered office of the issuer along with Right Subscription Request (both copies) duly filed and signed by the subscriber(s) with certified copy of NICOP / Passport well before the last date of payment.

   4. All cheques and drafts must be drawn on a bank situated in the same city where the Right Subscription Request is deposited. Cheque is subject to realization.

   5. The Banker(s) to the Issue will not accept Right Subscription Requests delivered by post which may reach after the closure of business on April 1, 2026 unless evidence is available that these have been posted before the last date of payment.

   6. Payment of the amount indicated above to the Issuer's Banker(s) to the Issue on or before April 1, 2026 shall be treated as acceptance of the Right offer.

   7. After payment has been received by the Banker(s) to the Issue, the Right Securities will be credited into respective CDS Accounts within 10 business days from the last payment date. Paid Right Subscription Request will not be traded or transferred.

2. ‌PROFILE OF MANAGEMENT AND SPONSORS

   ‌(e) Profile of the Board of Directors of the company

   Board of Directors
   Name	Position	Tenure of Directorship
   Saad Naseem	Chairman/Non-Executive Director	26-08-2025/28-03-2025
   Aamir Naseem	Chief Executive Officer	10-04-2025
   Farrukh Naseem	Executive Director	28-03-2025
   Yasir Naseem	Non-Executive Director	28-03-2025
   Hamza Naseem	Non-Executive Director	28-03-2025
   Fahad Shafiq	Independent Director	28-03-2025
   Ghazanfer Feroz	Independent Director	28-03-2025
   Mrs. Fatima Aamir	Non-Executive Director	28-03-2025

   Saad Naseem

   Chairman/Director/Sponsor

   Saad Naseem, is a graduate from City University, London, and has been a Director at Shadab Textile Mills Limited since 2013 and Chairman of Board since August 26, 2025. He is also a certified director under the Code of Corporate Governance, reflecting his commitment to best practices in corporate governance. His diverse experience in the textile industry, combined with his educational background, positions him as a valuable asset to the board and a contributor to the strategic direction of the organizations he is associated with.

   Aamir Naseem/Sponsor Chief Executive

   Aamir Naseem is the Chief Executive of Shadab Textile Mills Limited, where he has served as Director Incharge since January 1990. With an MBA in Finance from the USA, he brings over 35 years of extensive experience in the textile industry, demonstrating strong leadership and operational expertise. His managerial acumen and strategic vision have significantly contributed to the growth and development of the organizations he leads.

   Farrukh Naseem/Sponsor Executive Director

   Farrukh Naseem is an esteemed figure in the textile industry with an extensive career spanning over 45 years. An alumnus of Commerce College, Sargodha, he currently serves as the Chief Executive of Sargodha Spinning Mills Limited and has been a Director of Shadab Textile Mills Limited for nearly four decades. His vast experience and strategic oversight play a crucial role in driving the success and governance of the organizations he leads.

   Yasir Naseem

   Non-Executive Director

   Yasir Naseem holds a Bachelor of Science (Hons) Degree in Business Management from Queen Mary, University of London, graduating in 2016. His academic background has provided a strong foundation in strategic management, leadership, and business operations, equipping him with the expertise to drive innovation and growth in the industry. He is equipped with DTP certification under the Code of Corporate Governance, Regulations, 2019, highlighting his dedication to corporate governance standards.

   Hamza Naseem Director

   Hamza Naseem, a law graduate from Lahore Grammar University (LGU) through the University of London External Program, has served as a Director of Shadab Textile Mills Limited since April 2016. He is equipped with DTP certification under the Code of Corporate Governance, Regulations, 2019, highlighting his dedication to corporate governance standards. His legal background and governance expertise contribute significantly to the strategic management and compliance of the businesses he oversees.

   Fahad Shafiq

   Independent Director

   Mr. Fahad Shafiq, an Independent Director of Shadab Textile Mills Limited since 2019, brings a wealth of experience from the Pakistan Capital Market and the yarn and fabric industry. His freelance work in financial analysis and investment consultancy, combined with hands-on knowledge of the textile sector, provides valuable insights that enhance the company's strategic decision-making.

   Mr. Shafiq also holds a Directors' Certification, underscoring his commitment to corporate governance and effective leadership. His ability to foster transparency and accountability ensures that the interests of stakeholders are prioritized, making him a key asset to the board and integral to the company's growth and success.

   Ghazanfer Feroz

   Independent Director

   Ghazanfer Feroz is an independent director with a solid educational background, holding a Bachelor's degree in Chemical Engineering and Economics from the USA. With 26 years of diverse experience, he has progressed from grassroots operations to senior management roles in various sectors, including manufacturing, marketing and sales, new product development, research, and international trade.

   Mr. Feroz possesses extensive expertise in industrial specialty chemicals, fluids, and lubricants, specializing in their specifications for production and maintenance processes. He is proficient in specifying sensors and instrumentation for various industrial operations and has significant experience in designing process parameters and scaling up production to achieve economies of scale. His skill set includes project startup and feasibility evaluations aimed at long-run cost analyses to meet corporate strategic goals. Additionally, he has led reliability maintenance (RM) analysis programs focused on predictive maintenance solutions relevant to sectors such as polymer, textile processing, wood processing, and oil and gas production.

   Mrs. Fatima Aamir

   Female Non-Executive Director

   Mrs. Fatima Aamir is a prominent female director at Shadab Textile Mills Limited, a position she has held since March 2013. An alumna of Beacon House School, she brings valuable insights to the management team, leveraging her experience. Her contributions are instrumental in advancing the strategic objectives and governance of the organizations she is involved with.

   1. ‌Other Directorships held (provide names of the company(ies)

      Other Directorships
      Name	Designation	Name of The Company
      Farrukh Naseem	Executive Director	Sargodha Spinning Mills Ltd., (C/E)
      		Tariq Textile Mills Ltd.,
      Aamir Naseem	Chief Executive	Sargodha Spinning Mills Ltd.,
      		Tariq Textile Mills Ltd.,
      		Sargodha Textile Mills Ltd.,
      		Blue Star Enterprises (Pvt) Ltd.,
      Mr. Saad Naseem	Chairman/Non-Executive Director	Sargodha Spinning Mills Ltd.,
      		Tariq Textile Mills Ltd., (C/E)
      		Shadab Innovations (Pvt) Ltd.,(C/E)
      		Blue Star Enterprises (Pvt) Ltd.,
      Mr. Yasir Naseem	Non-Executive Director	Tariq Textile Mills Ltd.,
      		Shadab Innovations (Pvt) Ltd.,
      Mr. Hamza Naseem	Non-Executive Director	Sargodha Spinning Mills Limited
      Mr. Fahad Shafiq	Independent Director	None
      Mr. Ghazanfer Feroz	Independent Director	None
      Mrs. Fatima Aamir	Director	Tariq Textile Mills Ltd.,
      		Shadab Innovations (Pvt) Ltd.,

      1. ‌Profile of Sponsors

      2. If sponsor is company registered in Pakistan, date of incorporation, names of directors % age of shareholding

         Sponsors Company
         -	-	-

      3. If sponsor is foreign registered company, % age of shareholding, Form 43, form 45 be provided

3. DETAILS OF THE ISSUER:

   1. Financial highlights of Issuer for last three years

      (Pakistani Rupee IN Millions)	Audited Account	Audited Account	Audited Account
      	Year 2025	Year 2024	Year 2023
      Name of the Statutory Auditors	Fazal Mahmood and Company	Fazal Mahmood and Company	Fazal Mahmood and Company
      Gross sale	9,507.951	8,648.591	7,046.469
      Gross Profit	564.638	399.065	183.652
      Profit before Interest &Tax	382.152	248.818	44.473
      Profit / (loss) after Tax	185.025	98.466	(107.742)
      Net Profit / (loss)	185.025	98.466	(107.742)
      Accumulated Profit /(loss)	720.599	548.024	449.558
      Total Assets	3,215.029	3,089.043	2,849.311
      Total Liabilities	1457.072	1476.646	1396.650
      Net Equity	1,757.957	1,612.397	1,452.661
      Break-up value Per Share (PKR)	105.85	97.13	87.51
      Earnings / (loss) per share - PKR	11.15	5.93	(6.49)
      Dividend Announced	12.50%	7.50%	NIL
      Bonus Issue	NIL	NIL	NIL

   2. Financial highlights for the preceding year of consolidated financial:

      Not Applicable

   3. Detail of issue of capital in previous five years:

      Bonus Issue	FY2025	FY2024	FY2023	FY2022	FY2021
      Percentage	N/A	N/A	N/A	N/A	N/A
      Number of Shares	N/A	N/A	N/A	N/A	N/A

   4. ‌Average market price of the share of the Issuer during the last six months:‌

      Average market price of the share of the Company during the last six months (from August 11, 2025 to February 9, 2026 was Rs. 56.81 to Rs. 43.58.

   5. ‌Share Capital and Related Matters

      1. Pattern of shareholding of the issuer in both relative and absolute terms.

         Shareholders	Number of Shares	Shareholding %
         Aamir Naseem	2,835,209	17.08%
         Farrukh Naseem	1,057,000	6.37%
         Hamza Naseem	955,215	5.75%
         Saad Naseem	955,215	5.75%
         Yasir Naseem	500,000	3.01%
         Fahad Shafiq	2,766	0.02%
         Ghazanfer Feroz	5,533	0.03%
         Mrs. Fatima Aamir	614,545	3.70%
         Mrs. Hina Farrukh w/o Farrukh Naseem	477,608	2.88%
         Executives	0	0%
         Banks, Development Financial Institutions, Non-Banking Financial Institutions	53	0.00%
         NIT and ICP	521,878	3.14%
         General Public -Local	8,548,334	51.50%
         General Public -Foreign	0	0%
         Others	126,644	0.78%
         Total	16,600,000	100%

      2. Number of shares held by the directors, sponsors & substantial shareholders of the Issuer (both existing and post right issue).

         S. No.	Directors/Sponsors/Substantial Shareholder	No. of Existing Shares	No. of Shares after Right Shares1
         1	Aamir Naseem	2,835,209	3,902,665
         2	Farrukh Naseem	1,057,000	1,454,961
         3	Hamza Naseem	955,215	1,314,853
         4	Saad Naseem	955,215	1,314,853
         5	Yasir Naseem	500,000	688,250
         6	Fahad Shafiq	2,766	3,807
         7	Ghazanfer Feroz	5,533	7,616
         8	Mrs. Fatima Aamir	614,545	845,921

      3. Details and shareholding of the holding company, if any.

         Not Applicable

   6. Group structure along with respective shareholding in subsidiaries and associates

      Name of Concern	Name of Director	Shareholding (Shares)
      Sargodha Spinning Mills Limited	Farrukh Naseem	4,829,277
      	Aamir Naseem	4,333,652
      	Saad Naseem	122,500
      	Hamza Naseem	3,100
      Tariq Textile Mills limited	Farrukh Naseem	73,929
      	Aamir Naseem	71,929
      	Saad Naseem	500
      	Yasir Naseem	500
      	Mrs. Fatima Aamir	2,500
      Blue Star Enterprises (Pvt.) Ltd.	Aamir Naseem	609,350
      	Saad Naseem	123,500
      Shadab Innovations (Pvt.) Ltd.	Aamir Naseem	1,440,000
      	Yasir Naseem	30,000
      	Hamza Naseem	30,000
      	Saad Naseem	30,000
      	Mrs. Fatima Aamir	30,000

      A company shall disclose the following, if applicable:

      1. details of any defaults/overdue amount of principal and interest at the date of submission of offer document along with defaults/overdue amounts in last three financial years;

      2. the carrying amount of the loan's payable in default;

      3. whether the default was remedied, or the terms of the loan's payable were renegotiated;

      4. details and status of any debt restructuring;

      5. whether any part of right issue proceeds would be utilized towards over dues;

      6. NOC issued by the financial institution(s) in respect of whom the over dues or defaults of the issuing company, its sponsor(s), promoter(s), substantial shareholder(s) or directors appear in the report obtained from the Credit Information Bureau, in relation to right issue; and

      7. details of recovery proceedings, if any:

         1. proceedings initiated by the lenders against company;

         2. the company's actions in response; and

         3. the current status of such proceedings.

            Not Applicable

4. ‌RISK FACTORS

   There is no risk factor involved in this right issue due to 100% agreed take up by directors, Sponsors and balance is underwritten by underwriter.

   There is no PESTEL risk exist in our case because Company is in profitable operation and this right issue due to 100% agreed take up by directors, Sponsors and balance is underwritten by underwriter.

   To the best of our knowledge and belief all risk factors (if any) have been disclosed.

   Under subscription Risk

   There is no under subscription risk exist in our case because Company is in profitable operation and this right issue due to 100% agreed take up by directors, Sponsors and balance is underwritten by underwriter.

   NOTE: IT IS STATED THAT TO THE BEST OF OUR KNOWLEDGE AND BELIEF, ALL MATERIAL RISK FACTORS HAVE BEEN DISCLOSED AND THAT NOTHING HAS BEEN CONCEALED IN THIS RESPECT.

5. LEGAL PROCEEDINGS:

   1. Legal proceedings be summarized in the following format

      S. No.	Legal Order dated	Issuing Authority	Tax Period, if any	Order Amount/ Financial Impact (PKR Mn)	Current status	Management's Stance
      1	N/A	Sui Gas GIDC	Lahore High Court	42.330 million	Pending	Provision made in the Financial Accounts and no further financial impact
      2	N/A	Sui Gas RLNG	Lahore High Court	15.160 million	Pending	Provision made in the Financial Accounts and no further financial impact

   2. Action taken by the Securities and Exchange against the issuer on account of non-compliance of its regulations.

      N/A.

      
      
      
      
      

6. ‌SIGNATORIES TO THE OFFER DOCUMENT

Saad Naseem Yasir Naseem

Director Director

‌SECP Comments & Company's Response (Annexure-A)

‌Shadab Textile Mills Limited

Manufacturer, Importer & Exporter

Registered Office: A-601/A, City Towers, 6-K, Main Boulevard, Gulberg-II, Lahore.

Ph: (042) 35788714-16 Fax: (042) 35788718 E-mail: shadstm@brain.net.pk N.T.N.: 0657824-1

CERTIFIED COPY OF RESOLUTION PASSED BY THE BOARD OF DIRECTORS OF SHADAB TEXTILE MILLS LIMITED BY WAY OF CIRCULATION ON JANUARY 24, 2026

RESOLVED THAT pursuant to the provisions of the Companies Act, 2017 and other applicable laws, rules and regulations, consent of the Board be and is .hereby accorded for the purchase and addition of the following plant and equipment as part of the Company's approved capital expenditure program:

Plant and Equipment

Estimated cost of 250 Kw Compressor and High-speed card is PKR 50.00 million.

RESOLVED FURTHER THAT installation of solar power system of 730.00 KW of estimated cost of Rs. 47.50 million to enhance its existing solar capacity be and is hereby approved.

RESOLVED FURTHER THAT Mian Aamir Naseem Chief Executive Officer and Mr. Saad Naseem, Director, be and is hereby authorized to negotiate, finalize and execute all necessary agreements, purchase orders, delivery challans, invoices and other related documents and to do all acts, deeds and things necessary to give effect to this resolution.

RESOLVED FURTHER THAT the Company Secretary be and is hereby authorized to complete all the legal formalities in this regard.

Vertified to be true copy

For SHADAB TEXTILE MILLS LIMITED

Company Secre

Mills: Nasimabad, Shahkot, District Nankana Sahib. Ph: (056) 2550171-72 Fax: (056) 2550173 Mills: 1-km Chunian Road, Habibabad. Ph: (049) 4500633

‌rAzaL MAHMOOD & COMPANY

CHARTERED ACCOUNTANTS

AUDITORS' CONFIRMATION CERTIFICATE

To

The Board of Directors Shadab Textile Mills Limited, A-601/A, City Towers, 6-K, Main Boulevard, Gulberg-ll, Lahore.

March 03, 2026

We have audited the financial statements of Shadab Textile Mills Limited (the "Company") for the years ended:

1. June 30, 2023

2. June 30, 2024

3. June 30, 2025

and have issued our Independent Auditor's Reports thereon.

At the request of the Company, we have examined the "Financial Highlights of the Issuer" for the last three (3) years as disclosed in the Right Issue Offer Document dated 10 February, 2026 (the "Offer Document") prepared in connection with the proposed Right Issue of ordinary shares of the Company.

Based on our examination, we hereby confirm that:

1. The financial information relating to the years ended June 30, 2023, June 30, 2024 and June 30, 2025, as disclosed under the heading "Financial Highlights of the Issuer", including but not limited to:

   (Rakistoni Rupee in millions	Audited Account	Audited Account	Audited Account
   	Year 2025	Year 2024	Year 2023
   Gross sale	9,507.9S1	8,648.591	7,046.469
   Gross Profit	564.638	399.065	183.652
   Profit before Interest &Tax	382.152	248.818	44.473
   Profit / (loss) after Tax	185.025	98.466	(107.742)
   Net Profit / (loss)	185.025	98.466	(107. 742)
   Accumulated Profit	720.599	548.024	449.558
   Total Assets	3,215.029	3,089.043	2,849.311
   Total Liabilities	1,457.957	1,476.646	1,396.650
   Net Equity	1,757.072	1,612.397	1,452.661
   Break-up value Per Share (PKR)	105.85	97.13	87.51
   Earnings / (loss) per share - PKR	11.15	5.93	(6.49)
   Oividend Announced	12.50%	7.50%	NIL
   Bonus Issue	NIL	NIL	NIL

   
   
   

   147-SHADMAN-1, LAHORE-54000 (PAKISTAN)

   +92-42-37426771-3 +92-42-37426774 info@fmc.com.pk

   fazalm@live.com

   https://www.fmc.com.pk https://www.primegIobaI.net

   OTHER OFFICES: KARAGHI, ISLAMABAD, SIALKOT & USA

   
   
   

   FAZAL MAHMOOD & COMPANY

   CHARTERED ACCOUNTANTS

   
   
   

   The above figures have been correctly extracted from and are in agreement with the audited financial statements of the Company for the respective years.

2. The audited financial statements for the above-mentioned years were prepared in accordance with the applicable financial reporting framework as notified under the Companies Act, 2017 and were audited in accordance with International Standards on Auditing as applicable in Pakistan.

3. Our audit opinions on the financial statements for the aforesaid years were: [Unmodified)

This certificate is issued solely for submission to Pakistan Stock Exchange Limited in compliance with the requirements of the applicable Listing Regulations and Public Offering Regulations in connection with the Company's Right Issue and for no other purpose.

For and on behalf of

M/s. Fazal Mahmood & Company (Chartered Accountants)

147-SHADMAN-1, LAHORE-54000 (PAKISTAN)

+92-42-37426771-3 +92-42-37426774 info@fmc.com.pk

fazalm@live.com

https://www.fmc.com.pk https://www.primegIobaI.net