Fecto Cement Limited ("the Company") is a public limited company, incorporated on February 28, 1981, under the erstwhile Companies Act, 1913 (subsequently replaced by the Companies Ordinance, 1984, and later by the Companies Act, 2017). The Company's shares are listed on the Pakistan Stock Exchange Limited under the ticker symbol "FECTC."

Fecto Cement Limited traces its origins to Coronation Footwear, founded by Ghulam Muhammad A. Fecto in Mumbai, later transitioning into a trading business in Dhaka in 1952. The group pioneered Pakistan’s first technical collaboration with Japan for radio manufacturing before diversifying into industrial sectors like cement, sugar, and tractors in 1975. Fecto Cement Limited was incorporated in 1981, with production commencing on January 1, 1990. In the mid-1990s, the business was segmented among the founder’s eight children, with Mr. Mohammed Yasin Fecto and Mr. Asad Fecto taking charge of Fecto Cement. Since then, they have actively led the company’s operations and strategic direction.

Fecto Cement Limited is engaged in the production and sale of ordinary Portland cement. The Company’s manufacturing facility is situated at Sangjani village, Islamabad. The Company has an installed capacity producing clinker of 3,000 TPD (900,000 tons per annum based on 300 operating days a year). By virtue of being located in the North, the company caters to the needs of Islamabad, Pindi, Azad Jammu & Kashmir, and Mansehra in the local market and Afghanistan in the export market. The company has recently completed BMR of its plant and expects to achieve operational efficiency through it, thus generating savings.

As of the latest disclosure, 75% of Fecto Cement Limited’s shares are held by Mr. Yasin Fecto, who exercises effective control over the Company. The remaining 25% constitutes the free float, available for public trading and widely held by institutional investors and the general public. Overall, governance remains closely aligned with the Fecto family, with strategic decisions centrally directed by Mr. Yasin Fecto.

The ownership structure is expected to remain stable in the future with Mr. Yasin as the ultimate majority shareholder.

The Fecto Group traces its origins to Ghulam Muhammad A. Fecto, who initially engaged in the trading of electrical goods, wires, and appliances before the Partition. Following migration, the Group gradually expanded its business portfolio from trading to industrial manufacturing. Over time, it established a diversified presence in key sectors including cement, sugar, tractors, paper sack, and medium-density fiberboard. As the business landscape evolved and corporate complexities increased, the founder strategically segmented the group’s operations among his children to ensure focused management and continuity. The responsibility of managing Fecto Cement Limited (FCL) was entrusted to Mr. Mohammed Yasin Fecto and Mr. Asad Fecto, who have since been actively overseeing its operations and strategic direction.

The sponsors have built a strong financial muscle through profitable business including the Company. Furthermore, being the flagship company of the group, the sponsors have a strong commitment to support the Company financially.

The overall control of the Company rests with a seven-member Board of Directors (BoD), including the CEO. The Board comprises two independent directors and three non-executive directors, including Ms. Lubna Yasin Fecto (spouse of the CEO), and two executive directors including the CEO and Mr. Juwad Saboor (Director Plant, Fecto Group). The inclusion of family representation on the Board indicates a gradual transition towards increased family involvement in the business. The Board maintains oversight of strategic decisions.

Fecto Cement Limited’s Board of Directors comprises experienced professionals with strong technical expertise and diverse business backgrounds, supporting effective governance and strategic decision-making. Until January 14, 2026, the Board included Mr. Aamir Ghani and Mr. Mohammad Anwar Habib as Independent Directors, who also held the respective chairmanships of the Board and its Committees. Both directors resigned from their positions with effect from January 14, 2026. Mr. Aamir Ghani brought over 25 years of leadership experience in the textile industry, notably transforming Ghani Dyings into a leading name in school uniforms, while Mr. Mohammad Anwar Habib contributed extensive expertise in trading polyester filament yarn and textiles, along with diversified business partnerships in telecommunications and electrical equipment. Consequent upon these resignations, the Board appointed Mr. Safdar Abbas Morawala and Mr. Ahmed Mujtaba Memon as Independent Directors with effect from January 14, 2026, ensuring continuity of independent oversight and compliance with corporate governance requirements. Banking veteran Mr. Jamil Ahmed Khan has been appointed as the Chairman of the Board, with more than 38 years of experience, strengthens the Board’s financial oversight through his expertise in retail and Islamic banking, credit, agricultural financing, and international operations. Director Mr. Juwad Saboor is an accomplished engineering professional with a Bachelor’s degree in Electronics Engineering from NED University and over 44 years of experience, including 37 years in cement plants and project management. Since joining Fecto Cement in 1987, he has played a pivotal role in greenfield project commissioning and major upgrades, including a 6 MW Waste Heat Recovery Power project, a 5 MW solar power project, and packaging innovations. His career progression culminated in his role as Director Plant at Fecto Cement Limited and associated group companies. Ms. Lubna Yasin Fecto, spouse of the CEO, appointment reflects increased family involvement. The sponsoring family retains approximately 75% shareholding, consolidating control, with recent share transfers completed in October 2024. Mr. Mohammed Yasin Fecto, Director and Chief Executive Officer, holds an MBA from Quaid-e-Azam University and is a seasoned industrialist who joined the group as a director and was appointed CEO in 1993. Under his leadership, the cement plant’s capacity expanded from 1,000 MT to 3,000 MT per day. He has spearheaded key initiatives such as the conversion from furnace oil to coal, installation of waste heat recovery and solar power plants, and the establishment of polypropylene bag manufacturing for packaging. His international exposure includes evaluating advanced cement technologies and exploring joint ventures in the oil and gas sector. Overall, the Board continues to actively steer the Company’s strategic direction, with a focus on renewable energy adoption, operational efficiency, market expansion, and prudent capital allocation amid prevailing economic challenges.

To enhance governance effectiveness, the Board of Directors has constituted two key committees: the Audit Committee and the Human Resource and Remuneration Committee. These committees function in accordance with the applicable laws and assist the Board in fulfilling its oversight responsibilities. The Board convenes meetings regularly throughout the fiscal year to deliberate on strategic, operational, and compliance-related matters. The Company maintains a complete and accurate record of all meeting proceedings. Furthermore, the Board complies with the requirements of the Companies Act, 2017, the Listed Companies (Code of Corporate Governance) Regulations, 2019, and the Rule Book of the Pakistan Stock Exchange, ensuring adherence to prescribed standards for the composition, procedures, and functioning of the Board and its committees.

As a publicly listed entity, Fecto Cement Limited adheres to the Code of Corporate Governance, which requires the timely preparation, accuracy, and transparent disclosure of financial statements and all material information concerning the Company's operations. The statutory audit for the year ended June 30, 2025, was conducted by M/s. Rahman Sarfaraz Rahim Iqbal Rafiq Chartered Accountants, a Category ‘A’ audit firm recognized by the State Bank of Pakistan. The auditors issued an unqualified opinion, confirming that the financial statements fairly present the f inancial position of the Company in accordance with the applicable financial reporting framework.

Fecto Cement has a lean organization structure with the company’s operations grouped under eight key functions. These include 1) Procurement, 2) Production, 3) Sales & Marketing, 4) Information Technology, 5) Finance, 6) Corporate Affairs, 7) Human Resources, and 8) Internal Audit. All departments, except internal audit, are headed by Executive Directors/General Managers (GMs), who, in turn, directly report to the CEO, while Internal Audit reports to the Board Audit Committee in line with the requirements of the Code of Corporate Governance.

The CEO, Mr. Yasin Fecto, is the son of Mr. Ghulam Muhammad Fecto. He was appointed as CEO of Fecto Cement Limited in 1993, a position he holds till now. Under his able leadership, the cement plant, having an initial capacity of 1,000 MT per day, increased to 3,000 MT per day. He spearheaded many initiatives to improve the efficiency of the cement plant, which included the conversion of the plant from furnace oil to coal, the installation of a waste heat recovery power plant, and a 5 MW solar power plant. He has been instrumental in the installation of a polypropylene bag plant for the packaging of cement in one of the group companies. The remaining senior team members hold requisite experience in the industry and qualifications.

The CEO is supported by a team of experienced individuals having long association with the Company who are involved in the day-to-day decision making and operations. All departments, except internal audit, are headed by Executive Directors/General Managers (GMs), who, in turn, directly report to the CEO. Multiple hierarchal levels ensure close monitoring and a redundancy structure in case of need.

The Company has a core operating software. The implemented modules are integrated and include financial, purchase, inventory, sales, and payroll. Fecto Cement generates comprehensive MIS reports that include production, dispatches, power and fuel consumption (with year-to-date comparisons), and receivable and payable status on a monthly basis. Also, on a monthly basis, a division-wise sales report is generated. Variance analysis is conducted on a quarterly basis, with comparisons of corresponding quarters.

The board has set up an effective internal financial control system to ensure effective conduct of the Company's operations, safeguarding of all assets, compliance with applicable laws and regulations, and reliable and timely financial reporting. The in-house internal audit function is equipped with suitable and qualified staff to continuously review the internal control system and its effectiveness.

Pakistan’s cement industry is showing a measured recovery after a prolonged slowdown, supported by macroeconomic stabilization under the IMF program. Easing inflation, a largely stable Rupee, and a relatively supportive interest rate environment have improved business sentiment, although fiscal pressures continue to restrict public development spending. Industry demand has strengthened, with total cement dispatches recording double-digit growth, led by a 13% increase in domestic sales in 1HFY26 driven by revived private construction activity and improving project execution. Export volumes have although contracted by 4% to 4.58 MT. On a cumulative basis, for 1HFY26 industry offtake has risen by approximately 10% year-on-year. Policy initiatives such as the Mera Ghar Mera Ashiana housing scheme and selective tax incentives are supporting residential demand and urban property markets and the effects of increased demand after flood have also start to be realized. However, sector-wide capacity utilization remains low at around 61%, reflecting structural overcapacity. South-based producers benefit from lower logistics costs and better export access, while northern players face cost disadvantages. Looking ahead, FY26 cement volumes are projected at 51–52 million tons, indicating a gradual but steady recovery trajectory.

Fecto Cement Limited is amongst the small players in the local cement industry. Based on FCL’s annual cement dispatches of 713,644 Tons during FY25 and 243,108 Tons of dispatches for 1QFY26, it occupies ~1.6% market share.

During FY25, the Company recorded total volumetric sales of approximately 713,644 tons, compared to 724,209 tons in FY24, comprising both local and export sales. Despite the decline in dispatch volumes, net sales revenue increased to PKR 11,096 million from PKR 10,908 million in the previous fiscal year. This growth was primarily driven by an improvement in average retention prices, which more than offset the impact of lower sales volumes. In 1QFY26, the Company’s performance further strengthened, with total sales revenue increasing by 23.87% to PKR 3,561 million, compared to PKR 2,875 million in the same period last year, reflecting higher dispatch volumes and improved operational efficiency.

The Company’s gross profit margin stood to 18.76% in 1QFY26. This reduction from SPLY's 23.78% was witnessed due to a fall in average retention prices. The Net profit margins reduced from PKR 228 million in 1QFY25 to PKR 208 million in 1QFY26 due to a fall in the average selling price and increase in levies and taxation. In comparison to the last year the company margins had improved in FY25, because of a reduction in finance cost by 37.65%.

Pakistan’s economic outlook for FY 2025-26 remains broadly stable under the IMF-supported reform program, supported by fiscal consolidation, easing inflation, a stable exchange rate, and a consistent monetary stance. The continuation of a low interest rate environment is expected to improve liquidity, strengthen business confidence, and stimulate investment, particularly in the construction and manufacturing sectors. Within this context, the cement industry is projected to benefit from a gradual recovery in domestic demand driven by infrastructure development and improving private-sector sentiment. However, the sector continues to face challenges including rising input costs, limited public development spending, and intense competition, especially in the northern region due to surplus capacity. In response, the company remains focused on operational excellence through process optimization, energy efficiency initiatives, strict cost management, diversified supply sourcing, and strengthened logistics planning to ensure optimal capacity utilization.

The Company manages its working capital requirements through a balanced mix of internal cash generation and short-term borrowing facilities obtained from various financial institutions. During 1QFY26, the Company’s gross working capital cycle improved to 73 days (1QFY25: 84 days). However, on a full-year basis, gross working capital days increased to 84 days in FY25, compared to 74 days in the same period last year (SPLY). This movement was largely offset by a significant increase in trade payable days, which rose to 46 days as of September 2025, from 23 days in the corresponding period last year. As a result, net working capital days stood at 46 days as of end-September 2025, remaining stable compared to June 2025 (46 days), though higher than June 2024 and June 2023 (both 38 days). The Company continues to maintain adequate working capital lines to meet short-term liquidity needs, with total short-term borrowings amounting to PKR 107 million as of September 2025.

Interest Coverage (EBITDA/Finance Cost) witnessed improvement during FY25 as a result of continuous decline in policy rates along with positive profitability of the Company. The ratio was recorded at 7.7x, up from 3.1x during FY24. Further improvement was witnessed in the 1QFY26, which is expected to continue in the remaining fiscal year as a result of significant decline in policy rate, and payment of debt liabilities leading to a reduction in finance cost.

The Company has a moderately leveraged structure with its leveraging ratio recorded at 15.1% as at end Sep2025. With timely repayment of Long term debt obtained previously for BMR along with installation of the Solar Power Plant, along with positive profitability adding to the equity, currently standing at PKR 4,757mln, the leveraging ratio is expected to improve in the future.