Kohat Cement Company Limited (PSX: KOHC) has secured shareholder authorization to extend a short-term financing facility of up to Rs600 million to its associated entity, Ultra Kraft (Private) Limited. Approved during the company’s 47th annual general meeting held in Kohat on October 22, 2026, the loan is structurally designed to support the packaging affiliate in meeting its immediate liquidity requirements and optimizing its working capital.
The financial arrangement, sanctioned under Section 199 of the Companies Act, 2017, is set for a one-year term commencing October 29, 2026. The facility will carry a mark-up rate fixed at 1.5% above the prevailing three-month Karachi Interbank Offered Rate (KIBOR) or Kohat Cement’s own average borrowing cost, whichever is higher. To ensure strict corporate compliance and timely debt servicing, the passed resolution mandates that Ultra Kraft clear its mark-up obligations within 15 days following the conclusion of each quarter. Any delays in these scheduled payments will automatically trigger a default penalty, imposing an additional 5% per annum on the outstanding unpaid balance.
This capital injection arrives on the heels of a highly profitable fiscal cycle for the cement manufacturer. For the financial year ended June 30, 2026, Kohat Cement reported a robust unconsolidated profit after taxation of approximately Rs10.69 billion. To maintain the manufacturing momentum that drove these earnings, the company relies heavily on its associated entities for essential packaging infrastructure. Recognizing this supply chain dependency, shareholders at the general meeting ratified a series of related-party transactions executed during the 2026 financial year, which aggregated to approximately Rs2.22 billion.
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These historical transactions prominently featured the procurement of robust polypropylene cement bags worth Rs1.73 billion from Ultra Pack (Private) Limited, alongside corporate vehicle sales to the affiliate valued at Rs5.75 million. Furthermore, Kohat Cement acquired specialized paper packaging bags from Ultra Kraft amounting to Rs468.18 million. The ratified financial disclosures also included a Rs9.92 million philanthropic operational contribution to the Kohat Cement Educational Trust, an entity that manages a localized school facility situated adjacent to the company’s primary manufacturing plant on Rawalpindi Road.
Looking ahead to maintain operational continuity, the shareholders authorized the company’s chief executive and designated management to continue executing ordinary-course, arm’s-length transactions with these specific related parties for the ongoing financial year ending June 30, 2027. This forward-looking approval encompasses the continuous procurement of both polypropylene and paper bags, future bulk cement sales, and ongoing operational funding for the educational trust without enforcing strict monetary caps, provided the transactions remain strictly at arm’s length.
Concluding the regulatory and financial agenda of the 47th AGM, shareholders formally adopted the audited unconsolidated and consolidated financial statements for FY2026, accompanied by the respective reports from the board of directors, auditors, and the chairman’s corporate review. The shareholders also reappointed A.F. Ferguson & Co., Chartered Accountants, as the company’s external auditor to serve until the conclusion of the next annual general meeting, finalizing an agreed remuneration package of Rs8 million for the engagement.