Glamour Textile Mills Limited (‘Glamour’ or ‘the Company’) is a public limited company incorporated on 14-Sep-91 under the repealed Companies Ordinance, 1984 (now the Companies Act, 2017). The Company is governed by the Elahi family.

The Elahi family entered the business arena in 1956 through the establishment of Pakistan Tannery in Wazirabad, engaged in the manufacturing and export of leather jackets and other leather products. Subsequently, in 2004, the family acquired Glamour Textile Mills Limited, a listed spinning concern. In 2005, the family established Glamour Garments, a denim manufacturing and exporting unit. In May’18, Glamour was delisted from the Pakistan Stock Exchange in accordance with Regulation No. 5.13. Currently, the Company manufactures yarn, catering to a range of counts from coarse to super fine.

The Company is primarily engaged in the manufacturing and sale of cotton yarn, alongside trading in raw materials, including viscose man-made fibres (MMF). Its manufacturing operations comprise a single spinning unit with an installed capacity of 42,384 spindles. The Company manufactures carded yarn across coarse to super fine counts, with a total spinning production capacity of approximately 22.5 tons per day for cotton and blended yarn. The production facility and head office are located on Manga Raiwind Road, Kasur. The Company primarily caters to the domestic market.

Ownership of the Company remains concentrated within the Elahi family. Mr. Asad Elahi and Mr. Azhar Elahi, directly and through their respective families, collectively hold a significant shareholding of approximately 56.5% in the Company, while Mr. Ather Javed Elahi and his family hold approximately 28%. The remaining shareholding is held by Mr. Mansoor Elahi and his family.

The ownership structure is considered stable, with significant shareholding concentrated within the Elahi family and gradual induction of the second generation into the business. However, no formal succession plan has been documented and/or agreed upon among the family members, which remains an area for improvement.

The sponsors maintain business interests across the textile value chain through Glamour Textile Mills and Glamour Garments, a denim manufacturing and exporting concern, alongside their interests in Pakistan Tanneries. The Elahi family has longstanding experience in the textile and leather industries, having navigated multiple business cycles. This experience provides the sponsors with relevant industry knowledge and operational understanding.

The Elahi family maintains established business interests across the textile and leather segments, providing a potential source of financial support to the Company, if required. The sponsors have also demonstrated their involvement in supporting the Company's operational and financing requirements.

Overall control of the Company vests with a three-member Board of Directors (BoD), which remains dominated by members of the Elahi family. While the existing structure provides direct sponsor oversight, greater Board independence would strengthen the oversight and decision-making framework.

Mr. Asad Elahi chairs the BoD and possesses 30+ years of overall professional experience. The other Board members include Mr. Azhar Elahi (CEO), with 25+ years of experience, and Mr. Ather Javed Elahi (Director), with 22+ years of experience. All three members are associated with the textile and allied business segments, bringing relevant industry knowledge and experience to the Company's strategic oversight. Nevertheless, greater independent representation would contribute towards a more balanced governance structure.

The BoD convenes regularly to deliberate on pertinent operational and strategic matters, with meeting proceedings formally documented. However, the absence of dedicated Board-level committees limits the formalization of oversight across key areas. Establishment of relevant committees would further strengthen governance practices.

The Company has appointed PKF FRANTS & Co. as its external auditors. The firm is QCR-rated and falls within Category 'B' of the SBP panel of auditors. The auditors issued an unqualified opinion on the Company's FY25 financial statements. The FY26 audit is currently in process, and the financial figures for FY26 are based on management accounts.

The Company operates through five functional departments, including Procurement, Administration and IT, Marketing, and Technical operations. The respective departmental heads report directly to the CEO, who, in consultation with the BoD, oversees key operational and strategic decisions.

Mr. Azhar Elahi, the CEO, has been associated with the textile business since 2004 and possesses over two decades of industry experience. Other members of the management team are familiar with the Company's business strategy and possess relevant operational and industry knowledge. Mr. Tariq, CFO and Company Secretary, Fellow Member of ICMAP  (FCMA) and having Experience of more than 20 year in textile Sector (Spinning & Processing), oversees the Company's financial management and reporting functions.

The sponsors remain closely involved in the Company's day-to-day affairs, providing direct oversight of operational and financial matters. This involvement supports continuity in management and decision-making. However, the absence of formal management-level committees indicates scope for further institutionalization of the management framework.

The Company has developed an in-house Management Information System (MIS) to cater to its operational and reporting requirements. Senior management monitors business performance through key MIS reports generated periodically, supporting oversight of operational activities and financial performance.

The Company relies on its internal information systems and direct management oversight to monitor operational and financial activities. While these arrangements facilitate routine monitoring, further formalization of internal controls, reporting procedures and governance mechanisms would strengthen the overall control environment. MIS reports are generated periodically and as per need.

Pakistan's spinning sector witnessed a modest recovery during FY26, with cotton yarn production increasing by ~1.0% to 2.69mln MT (FY25: 2.67mln MT), following the recovery recorded in the preceding year. However, the sector continues to face structural profitability pressures, primarily arising from elevated energy costs, expensive raw material procurement and limited pricing power. Domestic cotton production remained subdued at ~5.6mln bales, marginally higher than the preceding year but significantly below the official target of 10.2mln bales, sustaining the industry's exposure to imported cotton. Meanwhile, regulatory amendments under the Finance Act 2025, particularly the exclusion of cotton and yarn imports from the Export Facilitation Scheme (EFS), contributed to a reduction in import dependence. Cotton yarn exports increased by ~12.4% during FY26, providing some support to demand. Nevertheless, the sector's recovery remains contingent upon improved domestic cotton availability, rationalization of energy costs, sustained yarn offtake and restoration of competitive operating margins.

The Company remains a relatively small player in the spinning industry, operating with an installed capacity of 42,384 spindles against the industry's total installed capacity of approximately 13.4mln spindles, representing less than 0.3% of the industry's capacity. Its operations are primarily focused on the domestic market, with a product portfolio comprising carded cotton and viscose blended yarn across various counts.

Glamour generates revenue primarily through the sale of yarn and trading of raw materials in the domestic market. During FY26, the Company reported net sales of PKR 3,259mln (FY25: PKR 4,551mln), reflecting a decline of approximately 28.4%. The reduction was primarily price-driven rather than volume-led, with sales volumes remaining resilient, as represented by management. Despite lower finance costs, reduced gross profitability and a higher taxation charge resulted in a net loss of PKR 33mln during FY26 (FY25: profit of PKR 18mln). Going forward, the Company's ability to sustain sales volumes, improve average selling prices and strengthen its market positioning remains important for revenue recovery.

During FY26, the Company's gross margin declined to 4.0% (FY25: 4.6%), reflecting continued pressure on operating profitability amid elevated input and energy costs. Fuel and power costs also increased to approximately 23% of sales (FY25: 20%), further constraining margins. Consequently, operating profit declined to PKR 89mln (FY25: PKR 163mln), translating into an operating margin of approximately 2.7% (FY25: 3.6%). Although lower finance costs provided some relief, the higher taxation charge of PKR 57mln resulted in a net loss of PKR 33mln, compared to a net profit of PKR 18mln in FY25. Going forward, profitability remains susceptible to raw material procurement costs, energy expenses and the Company's ability to maintain competitive selling prices.  

The Company's ability to rationalize energy-related costs remains critical to improving its operating margins and sustaining business performance. During FY26, the Company undertook initiatives to reduce its dependence on conventional energy sources, including the installation of a 2.7MW solar plant. Furthermore, the Company maintains 2.6MW of captive power generation capacity through gas generators, alongside its sanctioned grid capacity. Going forward, the realization of cost savings from these initiatives, coupled with improved operational efficiency and capacity utilization, remains important for the Company's financial sustainability.

During FY26, the Company's gross working capital days increased to 100 days (FY25: 73 days), primarily reflecting higher inventory requirements amid seasonal inventory build-up. Inventory increased to PKR 781mln (FY25: PKR 610mln), while trade receivables declined to PKR 88mln (FY25: PKR 306mln). On the payable side, trade payables increased to PKR 169mln (FY25: PKR 55mln), providing some offset to the higher working capital requirements. Consequently, net working capital days increased to 87 days (FY25: 68 days). The current ratio remained adequate at 3.9x (FY25: 5.8x), supported by a sizeable current asset base. Nevertheless, the higher working capital absorption requires effective inventory management and cash flow monitoring to contain reliance on external financing.

The Company's cash flow generation remained constrained during FY26, with Free Cash Flow from Operations (FCFO) declining to PKR 127mln (FY25: PKR 191mln). While EBITDA-to-finance cost coverage improved to 3.3x (FY25: 2.9x), reflecting lower finance costs, FCFO coverage against finance cost, current maturities and excess short-term borrowings remained thin at 0.3x (FY25: 0.4x). Furthermore, the debt payback period increased to 15.2 years (FY25: 12.2 years), indicating limited internally generated cash flows relative to the overall debt burden. Going forward, improvement in operating cash flows and maintenance of adequate coverage levels remain critical to the Company's financial risk profile.

The Company's capital structure remains supported by shareholders' equity, including retained earnings and revaluation gains. As of Jun-26, total debt, including related-party loans, declined to PKR 1,095mln (FY25: PKR 1,271mln), comprising borrowings of PKR 496mln (FY25: PKR 594mln) and related-party loans of PKR 599mln (FY25: PKR 677mln). Consequently, the leverage ratio improved to 37.5% (FY25: 40.6%). Shareholders' equity stood at PKR 1,828mln (FY25: PKR 1,861mln), reflecting a modest decline during the period. The reduction in debt indicates lower reliance on external financing; however, the Company's limited cash flow generation and elevated working capital requirements warrant continued monitoring. Going forward, maintaining a prudent capital structure, alongside adequate internally generated cash flows,

remains important.