Samad Rubber Works (Pvt.) Limited (‘SRW’ or ‘the Company’) is a private limited entity incorporated in 1962 under the Companies Act, 1913 (now the Companies Act, 2017). The Company’s registered office is located at 409-Ferozepur Road, Lahore.

Mr. Abdus Samad (Late) laid the foundation of “Samad Group of Industries” in 1948. He incorporated Pakistan Rubber Industries and started the production of industrial and commercial rubber hoses. By the 1950s, the group had launched Pakistan’s largest latex foam mattress manufacturing unit. In 1958, it established a shoe manufacturing unit in collaboration with an Austrian firm. After the family business split, Mr. Abdus Samad launched the adhesive brand SAMAD BOND in 1965. Between the 1970s and 1990s, the Company developed high-performance military products for the Pakistan Armed Forces. In the late 2000s, the Company began producing and selling technical textile products. In 2009, Samad Apparel was introduced, followed by the launch of Samad Outerwear and Personal Protective Equipment (PPEs) in 2020.

The Company is engaged in the manufacturing and sale of polymer-based and textile products, operating through multiple Strategic Business Units (SBUs) including Apparel, Foam, Adhesives, Defense, and Technical Textiles. Over time, the Samad Group has expanded its product portfolio across these SBUs to diversify revenue streams and strengthen its competitive positioning. The Main Unit, comprising the adhesive and foam divisions, reported a marginal increase in installed capacity to 9,768 tons in FY25 (FY24: 9,264 tons). Capacity utilization declined to ~73.2% in FY25 (FY24: ~83%), reflecting softer demand and a comparatively slower production ramp-up during the year. Conversely, the Denim Unit, which includes the apparel and outerwear segments, demonstrated strong operational performance. The installed capacity slightly increased to 3.22mln pieces in FY25 (FY24: 3.14mln pieces), capacity utilization improved to ~92% (FY24: ~77.5%), supported by enhanced production efficiencies and improved order flows. The Defense segment within the Main Unit continues to operate on a tender-based model, wherein production is aligned with confirmed orders, resulting in variable capacity utilization across periods.

SRW remains a wholly owned family enterprise. Previously, ownership was divided between Mr. Abdul Sami (~60%) and Mr. Fazal Haq (~40%). Following an internal restructuring, the shareholding composition shifted, with Mr. Abdul Sami now holding a majority stake of ~71%, Mr. Fazal Haq retaining ~6%, and Mr. Abdul Basit (Mr. Fazal Haq’s son) acquiring ~23%. The concentrated ownership structure underscores the family’s strong commitment to the business and its long-term value creation but, it also indicates potential biases in decision-making and a limited range of viewpoints.

Following the recent internal reorganization of shareholding, the Company’s ownership structure remains stable, with the sponsoring family continuing to hold full control (~100% ownership). No major changes in shareholding are anticipated in the near term. Nonetheless, formalizing a clear and well-documented succession plan, along with maintaining transparency in intra-family ownership arrangements, would further strengthen governance practices and ensure continuity in strategic direction.

The sponsoring family is renowned for its strong business acumen, backed by extensive industry knowledge and experience. With over 70 years of operational excellence in Pakistan, the group has diversified its portfolio by expanding into various SBUs. This long-standing presence and diversification underline their capability and commitment to sustained growth.

The Company’s prominent strategic business units (SBUs), including Samad Bond, Samad Foam, and Samad Apparel, maintain strong financial profiles and have substantial access to diversified markets. This reflects the sponsors’ robust capability to provide support when needed, showcasing their economic and financial resilience with strategic market positioning.

SRW’s board comprises two members, including Mr. Fazal Haq as the Chairman and Mr. Abdul Sami as the Chief Executive Officer (CEO). Notably, there are no independent directors, leading to a board dominated by the sponsoring family. This raises concerns about the lack of independent oversight and challenges to management, which could impede effective governance.

The business benefits significantly from the extensive experience and industry expertise of its key members. Mr. Abdul Sami, the CEO, boasts over 31 years of expertise in the defense and foam manufacturing industries. Mr. Fazal Haq, the Chairman, has over 41 years of experience managing one of the oldest and pioneering adhesive manufacturing industries, with substantial expertise in chemical formulations. Additionally, Mr. Arshian Mahboob, FCA, the Chief Financial Officer (CFO), brings over 31 years of relevant experience. Last year, he was also appointed as Deputy CEO, where he leads the committees and oversees the transition of the family business to the third generation. This leadership team is bolstered by a team of experienced professionals with significant industry exposure, ensuring robust governance and strategic direction.

The Company has established a dedicated board committee, comprising both BODs and 3rd Generation members, to independently address matters across all Strategic Business Units (SBUs) and to involve them more actively in the Company’s decision-making processes. Board meetings are held regularly, with satisfactory member attendance, and minutes are meticulously recorded, reflecting positively on the Company’s governance structure. Additionally, last year, the Company had formed a separate department specifically focused on corporate governance, further enhancing its commitment to robust governance practices and ensuring a smooth family transition phase.

M/s. Viqar A. Khan & Co., Chartered Accountants, serves as the Company’s external auditor. The firm is QCR-rated, reflecting adherence to quality control standards, though it is not included in the SBP’s panel of approved auditors. The auditors provided an unqualified audit opinion on the financial statements for the year ended June 30th, 2025, indicating their satisfaction with the Company’s financial reporting and adherence to accounting standards. While the current audit arrangement appears adequate, the appointment of an SBP-classified audit firm would further enhance the Company’s governance profile and align it with best practices.

The Company has a well-defined, multi-layered, and centralized organizational structure, with all key positions filled. At the first tier, the Chief Operating Officer (COO), Chief Financial Officer (CFO), and the Heads of all SBUs report directly to the CEO. In the second tier, functions such as Finance & Accounts, Human Resource Administration, Marketing & Sales, Material Sourcing, Production, Supply Chain, and Information Technology indirectly report to the Deputy CEO assisted by the Corporate Governance Department. Each SBU is led and monitored by a member of the 3rd Generation of the sponsoring family. To support the Heads of all SBUs, the COO functions as a professional liaison for all the divisions, providing strategic guidance and oversight. This structure ensures efficient decision-making, robust oversight across all business units, and strategic alignment of company objectives.

Mr. Abdul Sami, the CEO (MD), has been associated with the Company since its inception. He has played a significant role in contributing to the Company’s stability across various segments, including adhesives, foam, apparel, defense, and technical textiles. He is supported by a team of experienced professionals with extensive industry expertise. Key members include Mr. Waqar-ul-Haq (Head of Defense SBU), Ms. Hasna Sami (Head of Foam SBU), Mr. Abdul Basit (Head of Adhesives SBU), Ms. Izza Sami (Head of HR & Apparel SBU), Ms. Hajra Sami (Head of Puffer SBU), Mr. Arshian Mahboob, FCA (CFO & Deputy CEO), Mr. Manzoor Hussain Nadeem (COO), Mr. Muhammad Aslam (GM Production), Mr. Saqib Ali (VP Apparel), Mr. Waheed Afzal (VP Sales and Marketing) & Mr. Nouman Jehangir, ACA (DGM Finance). This robust team ensures strong leadership and operational continuity. 

With the support of an experienced team of professionals, SRW is building up its business strengths and increasing its footprint across different cities in Pakistan and abroad. The functions of the management are clear and well-documented to achieve its underlying goals and objectives. Further, three management committees; i) Fixed Assets, ii) Vendor Evaluation, and iii) Internal Audit, are in line to ensure effective management control.

The Company currently utilizes SAP B1 for Hanna version 9.2, in conjunction with Microsoft Power BI version 2.102.845.0. This combination of robust software solutions ensures efficient data management and insightful business analytics, supporting informed decision-making and operational efficiency. 

SRW has strengthened its control environment by outsourcing its internal audit function to PKF F.R.A.N.T.S., Chartered Accountants. This enables the Company to have an effective mechanism for the identification, assessment, and reporting of all types of risks arising out of the routine business operations. This strategic move ensures comprehensive compliance at all levels, enhancing the Company’s oversight, transparency, and governance framework.

During FY25, Pakistan’s nominal GDP was estimated at PKR ~114.7trn, reflecting a real GDP growth of ~2.7% YoY, marginally surpassing the IMF’s projection of ~2.6%. This indicates a moderate improvement in economic activity over the previous year. In comparison, FY24 recorded nominal GDP of PKR ~105.7trn (FY23: PKR ~83.9trn), with real GDP expanding by ~2.4% YoY. Looking ahead, the Government of Pakistan projects a more robust growth of ~4.2% YoY in FY26, underpinned by expectations of recovery across key economic sectors. Large-Scale Manufacturing (LSM) activity, as reflected by the Quantum Index of Manufacturing (QIM), continued to contract by ~1.5% in FY24, albeit at a significantly slower pace compared to the steep 10.3% decline recorded in FY23. The deceleration in contraction suggests early signs of stabilization, with selective indications of industrial revival emerging in FY25. Within the industrial sector, textiles remain a key component of LSM, with the “textile and wearing apparel” categories collectively accounting for ~31% of the QIM weight during 4MFY25. According to the Pakistan Bureau of Statistics (PBS), textile exports totaled USD 17.9 billion in FY25, up 7.4% from USD 16.7 billion in FY24. The export mix remains dominated by value-added segments, knitwear, bedwear, towels, and ready-made garments, contributing ~75% of total textile exports. Notably, ready-made garment exports rose by 19.1%, reaching 3.1 million pieces in 9MFY25, underscoring the sector’s strong performance in higher-margin categories. The domestic adhesive industry remains largely fragmented and unorganized, characterized by numerous small-scale producers serving diverse end-use sectors. This fragmented landscape influences SRW’s market positioning by limiting pricing uniformity and intensifying competition. Conversely, within the foam segment, Pakistan’s status as one of the world’s leading manufacturers and exporters of footballs continues to support steady demand for unicellular closed-cell foam, sustaining production activity in the segment.

SRW is a prominent player in Pakistan’s apparel export market, the industrial and consumer adhesives segment, and the unicellular closed-cell foams industry. The Company has pioneered the import substitution of several highly technical products. In the foam sector, SRW holds significant market share, making it one the largest supplier to Pakistan’s football manufacturing companies. Within the adhesives segment, the Company holds an estimated market share of ~20% as per the management, reflecting a strong foothold in both industrial and consumer applications. This leadership and diversification across multiple sectors underscore SRW’s strategic capabilities and robust market presence.

During FY25, the Company’s topline stood at ~PKR 10.7bln (FY24: ~PKR 10bln), reflecting a YoY growth of ~6.8%, The increase was primarily driven by higher sales volumes, particularly within the apparel and outerwear segments, supported by improved export performance. Exports improved in FY25, reaching at ~PKR 5.6bln compared to ~PKR 4.7bln in FY24, indicating continued traction in international markets. In FY25, the Company’s revenue mix was largely concentrated in the apparel segment, which contributed ~48.83% of total sales, followed by foam (29.15%), adhesives (16.65%), outerwear (3.90%), and defense/military projects (1.47%). The diversification across multiple business lines provides a degree of revenue stability, although earnings remain moderately exposed to demand variability in export-oriented textile products. 

During FY25, the Company experienced margin compression across key business segments, particularly within the apparel and outerwear divisions, reflecting a higher input cost environment. The gross margin declined to ~15.9% (FY24: ~20.3%, FY23: ~17.2%), while the operating margin contracted to ~3.4% (FY24: ~8.8%, FY23: ~7.4%), compared to the previous year, primarily due to an elevated cost structure and limited pricing flexibility. Similarly, the net profit reached ~PKR 341mln (FY24: ~PKR 360mln) and net margin moderated to 3.2% (FY24: ~3.6%). The overall margin trajectory indicates continued pressure on profitability, though sustained topline growth and a diversified business mix have provided partial support to earnings.

Market conditions are expected to improve further, supported by a recovery in macroeconomic indicators and growth in forward-linked industries. In response, the Company has undertaken comprehensive analysis and implemented strategies aimed at enhancing revenue streams and profitability across all business units, while also exploring new market opportunities. SRW’s sustainability profile is underpinned by its diversified operations, established market presence, and leadership positions in key segments such as foams, adhesives, and apparel exports. The Company’s ability to sustain growth despite a challenging economic environment reflects operational resilience and solid business fundamentals. That said, recent margin pressures, arising from higher input costs, underscore the importance of continued focus on cost efficiency and margin recovery to support long-term stability. The family’s concentrated ownership provides strategic continuity, although formalizing governance and succession frameworks would further strengthen institutional resilience. Overall, SRW’s sustainability outlook remains stable, anchored by strong fundamentals, with room for improvement in profitability and governance practices. 

The Company’s capital requirements mainly stemmed from financing inventories and trade receivables, for which it relies on internal cash flow generation and short-term borrowings (STBs). In FY25, SRW’s gross working capital days increased and reached ~131 days, compared to ~116 days in FY24. Consequently, net working capital days also increased from ~96 days in FY24 to ~117 days in FY25. This increase reflects a significant extension in the cash conversion cycle, attributed to longer inventory days and shorter payable days. 

In FY25, SRW’s free cash flow from operations (FCFO) decreased to ~PKR 379mln, compared to ~PKR 847mln in FY24, primarily due to a reduction in PBIT. Reflecting this, the Company’s interest coverage ratio decreased to 2.7x in FY25 from 6.1x in the prior year, while the core debt coverage ratio also moderated to 1.6x from 3.5x. These declines indicate increased pressure on the Company’s ability to service debt from operational cash flows, highlighting the importance of maintaining profitability and effective working capital management to support financial flexibility. 

The Company’s debt portfolio predominantly consists of short-term borrowings, which account for ~91.6% of the total borrowings. In FY25, SRW maintained a moderately leveraged capital structure, with a leverage ratio of ~30.5%, up from ~24.1% in FY24, reflecting an increase in short-term borrowings to support working capital requirements. Long-term borrowings were primarily deployed for the financing of operating fixed assets, while short-term borrowings were utilized to fund day-to-day operational needs. The capital structure indicates a reliance on short-term financing, emphasizing the importance of cash flow management and liquidity to meet debt obligations.