Stylers International Limited ("the Company" or "SIL") is a public limited Company.

SIL was incorporated as a private limited Company under the repealed Companies Ordinance 1984 (now the Companies Act 2017) on November 27, 1991. During the BOD meeting held on June 07, 2023, the BOD approved the Scheme of Arrangement for the merger of AEL Textile Limited with Stylers International Limited. After filing the requisite documents with the PSX, the shares of SIL were listed on the PSX on January 22, 2024.

The Company is engaged in the manufacturing and marketing of ready-made garments, as well as providing textile processing services. Its registered office is located at 20 km Ferozepur Road, Anum Road, Glaxo Town, Lahore, Punjab. The Company operates three manufacturing facilities in Lahore: one at 20 km, Glaxo Town, Ferozepur Road; and another at Village Bhuchoki Mahja, Tehsil Raiwind, Raiwind Road. Collectively, these facilities achieved an estimated annual production capacity of approximately 8.95 million pieces in FY25, based on a 296 working-day calendar.

SIL is a prominent business venture of two sponsoring families (Mr. Mian Muhammad Ahsan & Mr. Javed Arshad Bhatti) of the US (UmerSiddique) Group. The Company’s major stake is owned by sponsors through Individuals (69.68%) and Associate Companies (29.77%). The remaining stake rests with the General public (0.41%) and Others (0.14%).

The Company has a family constitution in place, which serves as a guiding framework for governance, succession planning, and conflict resolution within the family business. This constitution outlines a formal and transparent succession plan, ensuring a smooth transition of leadership across generations. The second generation is already actively engaged in the business, holding key managerial and strategic roles, which reinforces continuity within the organization. The ownership structure remains clearly defined and consolidated within the family. This stability in ownership and leadership ensures sustained strategic direction and positions the Company for continued growth in future.

US Group stands as Pakistan’s leading exporter of denim and twill fabrics, backed by decades of experience and a strong legacy in the textile sector. The Group’s deep-rooted expertise, coupled with a commitment to innovation and quality, has enabled it to maintain a dominant position in the market. Over the years, US Group grappled with several economic cycles but the growth and operational excellence remained intact. In SIL, the strategic oversight is provided by Mr. Muhammad Umer and Mr. Muhammad Saqib, who serve as directors. Both individuals bring valuable insight and experience, contributing to SIL’s alignment with the Group’s broader vision and long-term objectives.

The Company’s affiliation with the US group demonstrates the strong financial muscle of the sponsors. According to the US Group Sustainability Report CY23, the group size was estimated at USD 356mln. The group includes four additional companies within the industry: (i) US Apparel & Textile, (ii) US Denim, (iii) US Workwear and (iv) US Dyeing & Finishing. The sponsors have shown a willingness to support the Company if needed.

The board comprises seven members (six male directors & one female director), including the CEO. The composition includes four non-executive directors, two independent directors and one executive director, reflecting a sound governance structure. This demonstrates the Comapny's commitment to the best corporate governance practices.

The BOD members have diverse experiences and possess all the requisite skills and competencies necessary for growth. The two founders of the US group, Mr. Javed Arshad Bhatti, the Chairman of the board, and Mr. Mian Muhammad Ahsan, a non-executive director, have both been associated with the business since 1975. Other board members, Mr. Muhammad Umer and Mr. Muhammad Saqib, each possess approximately two decades of experience in the textile industry. Furthermore, Ms. Samar Masood Soofi, a lawyer by profession, and Mr. Syed Muhammad Irfan Aqueel serve as the independent directors.

To ensure compliance with regulatory requirements, the Company has established three board committees to assist the board on operational and strategic matters. The Audit Committee is chaired by Mr. Syed Muhammad Irfan Aqueel, while the Human Resource & Remuneration Committee and the Sustainability Committee are chaired by Ms. Samar Masood Soofi. In FY25, five Board of Directors (BOD) meetings were convened to evaluate the Company’s overall performance and progress toward its targets. Attendance by BOD members remained strong during these meetings, reflecting their commitment to the Company’s growth. Furthermore, four meetings of the Human Resource & Remuneration Committee and one meeting of the Sustainability Committee were held. The minutes of these meetings have been formally documented.

BDO Ebrahim & Co., Chartered Accountants, have been appointed as the external auditors of the Company. They are rated in "Category A" by the SBP panel of auditors, ensuring adherence to high standards of transparency. The auditors expressed an unqualified opinion on the Company’s financial statements for the period ended June 30, 2025. The Company has an internal audit function in place, which reviews the internal control environment and provides independent assurance on the effectiveness of risk management. The internal audit department conducts both regular and ad hoc reviews of risk management controls and procedures, with the results reported to the Audit Committee.

The Company has a well-structured organizational layout divided into six key departments: Finance, Marketing, Technical Production, Supply Chain, Information Technology, and Human Resource & Administration. All departments report directly to the CEO/Managing Director.

The CEO, Mr. Hafiz Mustansar Ahmed, holds a Master’s degree in Business Administration and brings over 26 years of extensive experience in the textile sector. The CFO, Mr. Sharjeel, is a Fellow Chartered Accountant with several years of experience and is supported by a team of highly qualified and seasoned professionals.

The Company has no formal management committees in place; however, management meetings are held on a monthly basis. These meetings, led by the CEO, include follow-up points to resolve or proactively address any operational issues, ensuring a smooth flow of operations.

The Company’s daily and monthly MIS comprises comprehensive performance reports which are reviewed frequently by senior management. Recognizing the need for quality information systems to control and maintain the efficiency of operations, the Company has implemented an Oracle-based ERP solution - Oracle E-business Suite, Harmony version 12.2.11, along with an internal web and mobile portal for internal approvals and reporting.

Stylers International utilizes management systems as their mechanism for ensuring control. There is clear evidence of these systems being audited and certified externally. The Company has attained C-TPAT, WRAP, SMETA (SEDEX), amfori BSCI, ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018, Oeko-Tex, REACH, GOTS, OCS, GRS, RCS, Higg Index (FEM), ZDHC and BCI certification.

During FY25, imports accounted for about 35% of total cotton supply, up from roughly 11% in FY24, underscoring the industry’s growing dependence on foreign cotton. Arrivals during FY25 totaled 5.5mln bales, well below the FY26 production target of 10.2mln bales, which now appears ambitious amid climatic uncertainty and shifting crop patterns. Despite supply pressures, Pakistan’s textile and apparel exports registered a 7.2% growth in FY25, reaching USD 17.9bln (FY24: USD 16.7bln). The composite and garments segment remained the sector’s growth engine, contributing nearly USD 14bln, followed by weaving (USD 1.8bln) and spinning (USD 0.7bln). Within garments, denim apparel exports continued to demonstrate resilience—supported by strong orders from the EU and North American buyers. However, higher raw material costs driven by elevated international cotton prices (about 9.8 cents per pound above domestic rates as of July 18, 2025) added to import costs. On the production front, cotton cloth output in FY25 dipped by 0.7% YoY, to around 877.1mln square meters. Roughly 25.3% of this output was exported (FY24: 27.2%), reflecting subdued demand from key markets. Fabric exports fell by 4.4% in FY25 (FY24: up 5.8% YoY), with Bangladesh and the United States absorbing 23.4% and 8.1% of Pakistan’s cotton fabric exports, respectively. From a policy perspective, the transition from the final tax regime to the normal tax regime (29% corporate tax + up to 10% super tax) is expected to weigh on the profitability of export-oriented apparel units. Meanwhile, the removal of GST exemptions on textile inputs for exporters under the Export Facilitation Scheme (EFS) aims to create a more level playing field for domestic cotton and yarn producers, indirectly supporting local denim and apparel manufacturing. Energy and finance costs are expected to remain within manageable ranges due to the anticipated monetary easing and absence of major energy tariff hikes.

SIL has a strong relative positioning with an overall production capacity of ~8.95 million pieces per annum and it falls in the mid-tier of the respective industry.

A major chunk of the Company’s revenue base is generated from export sales. Over the years, the Company’s top line has experienced a robust increase reaching PKR 20.7bln (FY24: PKR 14.4bln), reflecting a 3-year CAGR of 15.5% from 2023 to 2025. The significant expansion in business volumes and enhanced production capacity were key factors contributing to a 43.6% year-on-year growth. Despite several challanges, the growth trajectory continued due to strong business fundamentals. Exports accounted for approximately 97.6% of the Company’s topline of PKR 20.3bln (FY24: PKR 14.0bln), driven by considerable market presence. Local sales contributed minimally to total revenue, amounting to PKR 292mln (FY24: PKR 297mln). The Company's exports have been concentrated in a single region, Europe, exposing it to geographic concentration risk. However, the Company’s long-term relationships with top international clientele provide some comfort.

In FY25, the Company secured a GP margin of 18.4% (FY24: 20.6%) following the unavailability of raw material and revison in minimum wage rate. The elevated operating expenses remained in line with inflationary trends. Non-core income from investments in bank deposits and term deposit receipts provided a buffer to the bottom line. The taxation expense increased manifold (FY25: PKR 657mln; FY24: PKR 254mln) following the transition in the taxation regime. The Comapny achieved the net profitability of PKR 1.2bln (FY24: PKR 1.4bln) with the net profit margin of 6.1% (FY24: 10.2%).

To clinch the future demand of the denim industry, SIL's "Sunshine" project is in its final stages of completion and is expected to be fully operational by end of FY26, with a project cost of ~ PKR 10bln; financed through the right issue and internally generated cashflows. This unit is expected to achieve the target capacity of ~6 million pieces (subject to market demand and final commissioning). SIL has also invested in a ~1.6 MW Solar power plant to mitigate the energy cost risk and reduce emission. The Company successfully coverted its steam generation to biomass across both plants from fossil fuels. Additionally, the Company achieved substantial reduction in water usage through optimization, reuse, rainwater harvesting, and conservation initiatives. SIL also contributed 5,000 saplings to the Parks & Horticulture Authority (PHA) to support urban greening in Lahore.

The Company prefers to meet its working capital requirments through inetranlly generated cash flows. As of end-Jun25, the Company’s working capital cycle contracted to 43 days (end-Jun24: 45 days) primarily due to a optimization of both, inventory cycle and trade receivable cycle. This trend is driven by the nature of the retail business. The Company has a sufficient room to borrow, as evidenced by the short-term trade leverage of 67.0% (end-Jun24: 69.4%).

As of end-Jun25, the Company’s free cash flows from operations illustrated an improvement at PKR 2.1bln (end-Jun24: PKR 1.8bln), underscoring improved operational efficiency and strong cash generation capabilities. Despite this, interest coverage and core operating coverage ratios remained within a comfortable range, supported by the Company’s reliance on internal cash flows and interest-free loans from directors. The debt payback period stood at 0.8 years (end-Jun4: 0.6 years), reflecting strong capacity to meet debt obligations.

The Company has maintained a low-leveraged capital structure. As of end-Jun25, the leveraging ratio remained largely stable at 10.3% (end-Jun24: 10.0%), despite the execution of a CAPEX initiative aimed at enhancing overall production capacity to approximately 12 million pieces per annum. The debt profile primarily comprises unsecured diminishing Musharakah financing obtained from Musharakah participants (related parties). The Company’s total equity further strengthened to PKR 13.7bln (end-Jun24: PKR 10.2bln), supported by profit plowback from previous years.