Denim-E (Pvt.) Limited ("Denim-E" or "the Company") was incorporated in Pakistan on August 13, 2018, as a Private Limited Company, under the Companies Act 2017.

Denim-E (Private) Limited is a family-owned private Company established in 2018, marking the sponsoring family's strategic entry into Pakistan's textile sector. The Company operates within the broader context of a diversified family business portfolio that encompasses real estate development and biogas/renewable energy ventures.

The Company is principally engaged in the manufacturing and export of garments, made-ups, clothing, knitwear, and woven apparel. Denim-E operates a comprehensive cut-to-pack facility with substantial production capacity of 15,000 pieces per day, accumulating to 450,000 pieces per month and 5.4mln pieces annually. The Company's total energy requirement stands at 600KW, which is met through a diversified energy mix. This includes captive power generation utilizing coal, gas, and furnace oil, supplemented by grid supply from K-Electric. The Company's registered office is located at Plot 100, Sector 27, Korangi Industrial Area, Karachi.

The ownership of the Company rests with Mr. Azhar Khalid and his wife, Ms. Laila. Mr. Azhar Khalid holds the major shareholding stake of around 95%, while Mrs. Laila holds the remaining ~5% stake in the Company.

Mr. Azhar Khalid, the founder and principal shareholder of the Company, holds a dominant 95% ownership stake, ensuring a high degree of stability in the Company's ownership structure. However, there is no formal succession planning in place and its establishment will augment the ownership profile of the Company.

Mr. Azhar Khalid holds a BSc (Hons) degree from the Textile Institute of Pakistan (TIP) and brings over ten years of experience in the textile industry. H e has developed substantial expertise and credentials over time, providing him with sufficient business acumen to navigate and sustain the Company through upcoming challenges. His educational background combined with extensive industry experience positions him well to lead Denim-E's strategic direction and operational management.

The Sponsors possess an extensive business history spanning over two decades across multiple industries. Currently, their holding group maintains active operations in the Real Estate and Biogas sectors. This diversified experience and established presence provide a strong, proven track record, indicating a solid capacity to extend financial and strategic support to the company should the need arise.

The Board is comprised of two members, both belonging to the sponsor’s family, with no independent directors. The position of CEO is vested in Mr. M. Azhar Khalid. Ms. Laila, wife of Mr. Azhar, serves on the Board in the capacity of Director. The inclusion of independent oversight would improve the Company’s governance framework.

Mr. Azhar, the founder and CEO of Denim-E (Pvt.) Ltd brings strong business acumen and industry expertise, backed by a BSC (Hons) from the Textile Institute of Pakistan (TIP). Before establishing his own venture, he gained valuable experience in marketing leadership and product development at top textile firms. His deep understanding of market dynamics, consumer trends, and supply chain operations has been instrumental in driving Denim-E’s growth and success.

There are no formal board committees to assit the board on different mattters. The board members are the primary sponsors of the Company.They ensure their availability and provide valuable insights and guidance whenever need in the day to day operations of the business.

The Company has appointed Reanda Haroon Zakaria & Company, Chartered Accountants, as its external auditor. The firm is listed in the “B” category of the SBP Panel of Auditors. The auditor expressed a qualified opinion on the audited financial statements for FY25. The qualification arose due to the Company’s non-compliance with the requirements of the Sindh Terms of Employment (Standing Orders) Act, 2015, as the Company does not offer any post-employment benefits (either provident fund or gratuity) to its employees. In the absence of any such benefit plan, the auditor was unable to determine the amount of any liability relating to staff retirement benefits required to be recognized in the financial statements.

The Company maintains a lean organizational structure with all Heads of Departments (HODs) reporting directly to the CEO. The key departments are: (i) Production, (ii) Marketing, (iii) Administration, Information Technology, Utilities & Maintenance, (iv) Finance & Audit, (v) Human Resources & Compliance, (vi) Import/Export & Logistics, (vii) Procurement, and (viii) Quality Assurance.

Mr. Azhar Khalid, the Chief Executive Officer, holds a BSc (Hons.) from the Textile Institute of Pakistan and brings 17 years of industry experience, including over six years with Denim-E in his current capacity. He is supported by a team of seasoned professionals and skilled management personnel. Mr. Rizwan serves as Director of Administration & IT, overseeing IT and administrative functions with 20 years of professional experience. The commercial operations are managed by Mr. Mohsin Anwaar, GM Marketing, a textile science graduate with 11 years of industry experience. Operational execution is led by Mr. Tanveer Hussain, Director Operations, who contributes 28 years of industry expertise to the organization.

The management meetings are held periodically with follow-up points to resolve or proactively address operational issues, if any, eventually ensuring a smooth flow of operations. Four management committees are in place to assist the management teams; namely, Workers Management Committee (to promote the development of social and stable labor-management relations), Environmental Health & Safety Committee ( to enhance and develop the safety policies and procedures for the workplace), Audit Committee ( to review financial and compliance risk), and Remuneration & Human Resource Committee (reviews compensation and reward policies.)

The Company has implemented odoo ERP as its Management Information System (MIS) to enhance operational efficiency, data integrity, and managerial decision-making. The system integrates key business functions including finance, inventory, production planning, sales, and human resources onto a unified platform, facilitating seamless information flow across departments. Through built-in automation, standardized processes, and real-time dashboards, Odoo minimizes manual intervention, reduces errors, strengthens internal controls, and improves reporting quality, thereby supporting timely decision-making and enhancing overall productivity.

Denim-E employs formal management systems to ensure effective operational control across the organization. The Company holds multiple internationally recognized certifications, including RCS (Recycled Claim Standard), BSCI, GOTS, Oeko-Tex, GRS, WRAP, C-TPAT, and OCS, demonstrating compliance with global quality, sustainability, and social standards through regular external audits. Moreover, the Company maintains an in-house internal audit function reporting to the Head of Finance. This department is responsible for evaluating risk management practices, governance frameworks, and control processes, while ensuring the adequacy and effectiveness of internal controls throughout the organization.

During MY25, approximately 24.4mln MT of cotton was produced globally, compared to about 24.2mln MT in MY24. Throughout the year, low cotton production was observed in India and Pakistan. However, this was partly offset by increases in cotton production in China, the United States, and Brazil by roughly 9.7%, 19.4%, and 15.7%, respectively. The sector's rising dependence on imported cotton poses a supply-side risk. During the FY25, imports accounted for approximately 35% of the cotton supply (~11% in FY24), adding about USD 1.27bln (USD 448mln in FY24) to the country's import bill. Textile exports reached USD 17.9bln in FY25, a modest rise from USD 16.7bln the previous year, reflecting a 7.2% year-over-year growth. The largest contribution came from the composite and garments segment, at USD 14bln, which included the weaving segment at USD 1.8bln and the spinning segment at USD 0.7bln. The country's fabric exports fell by approximately 4.4% on YoY basis in FY25 (FY24: up about 5.8% on YoY basis), with approximately 23.4% of Pakistan's cotton cloth exports going to Bangladesh (compared to about 19.9% in FY24), followed by the USA with about 8.1% of cotton cloth exports (approximately 7.8% in FY24). The transition from the final tax regime to the normal tax regime is expected to affect the profitability of export-oriented units, with a 29% tax on profits and a super tax of up to 10%. Energy and finance costs are expected to stay within a range, given the projected reduction in interest rates and the absence of any major energy tariff increases. The textile & apparel sector recorded ~USD 3.21bln in exports in July–August 2025, up ~10% year-on-year. August 2025 alone saw a 7% YoY decline and a 9% month-on-month fall in exports of value-added textiles. The current trend is shifting from unstitched to ready-to-wear (Pret) collection.

Founded with the ambition to be Pakistan's first fully sustainable denim manufacturer, Denim-E has established a meaningful operational presence in the country's textile sector. The Company currently operates 1,200 stitching machines and is positioned in the lower tier of the market. Planned capacity enhancements are expected to strengthen its market footprint and support continued business growth.

The Company demonstrated strong and consistent revenue growth over the years. In FY25, topline revenue increased to PKR 7.6bln (FY24: PKR 5.6bln), marking a robust growth of 36.5%. This growth underscores the Company’s sustained business expansion and strengthening customer relationships. Export revenue remains geographically concentrated, with Europe accounting for approximately 95.6% of total exports, followed by North America at 4.1% and the UAE at 0.3%. The Company’s product portfolio primarily comprises knit denim, sweat-wear denim, swim-wear denim, and chinos (cotton twill).

The Company's profitability profile reflected mixed trends as of FY25. Gross margins declined to 15.6% (FY24:17.6%), primarily due to elevated input costs and upward revisions in wage rates. Despite this pressure at the gross level, the Company demonstrated effective cost management, with operating margins improving to 5.0% from 2.9% in FY24, and net margins rising to 2.5% from 1.5% in FY24. This improvement was supported by cost rationalization measures and the recognition of export rebate income. Meanwhile, finance costs increased to PKR 93mln in FY25 (FY24: PKR 83mln), mainly driven by higher short-term borrowings undertaken to support working capital requirements.

The Company has demonstrated strong volumetric growth despite inflationary pressures, with sales reaching 4.1 million pieces in FY25 (FY24: 3.1 million). Management targets USD 32 million in annual exports by June 2026 to rank among Pakistan's top 100 exporters, supported by investments in an eco-friendly washing laundry line and available banking credit lines. The Company is diversifying its geographic footprint by exploring opportunities in the United States, Canada, Australia, and Middle Eastern markets, while deepening its product assortment to enhance value addition. The strategy includes attracting financially stable customers to strengthen order visibility and mitigate counterparty risk. To support growth, management plans to expand laundry and stitching facilities, address capacity imbalances, and improve operational efficiency. Additional investments include ERP implementation for stronger internal controls and human resource development to build organizational capability for sustainable growth.

The Company's working capital position showed moderate improvement during FY25, with net working capital days increasing to 4 days (FY24: -3days). The gross working capital cycle extended to 79 days from 69 days, driven by inventory levels of 62 days (FY24: 66days) and trade receivables stretching to 17 days (FY24: 3 days), partially offset by trade payables of 75 days. The current ratio improved to 1.2x from 0.8x, reflecting enhanced liquidity. However, working capital expansion absorbed significant cash of PKR 695mln as of FY25, primarily due to inventory buildup (PKR 1,364mln) and higher trade receivables (PKR 635mln). This was managed through increased short-term borrowings, which rose to PKR 979mln from PKR 223mln in FY24.

During FY25, EBITDA to finance cost coverage strengthened significantly to 13.5x from 4.9x in FY24, supported by robust EBITDA growth to PKR 601mln (FY24: PKR 372mln) while finance costs remained relatively stable at PKR 93mln. Free cash flow from operations (FCFO) grew by 44.7% to PKR 451mln, translating into an improved FCFO to finance cost coverage of 10.1x (FY24: 4.1x). However, the debt servicing coverage including current maturities and excess short-term borrowings remained modest at 0.7x, constrained by elevated working capital requirements and increased short-term debt levels. The debt payback period improved to 2.0 years from 3.3 years, while liquid cover strengthened to 2.1x from 0.7x, benefiting from higher unutilized credit lines.

In FY25, the Company maintained a highly leveraged capital structure, with total borrowings rising to PKR 1,247mln (FY24: PKR 411mln), primarily driven by working capital financing requirements. The leveraging ratio increased to 66.0% from 46.9%, indicating a higher reliance on debt funding relative to equity. Short-term borrowings dominated the debt mix, accounting for 78.6% of total borrowings and increasing substantially to PKR 979mln (FY24: PKR 223mln). Long-term borrowings stood at PKR 176mln, with current maturities of PKR 91 mln. Shareholders’ equity grew to PKR 643 mln from PKR 466 mln, supported by retained earnings of PKR 188mln during the year.