Ahmed Fine Weaving Limited ("AFWL" or "the Company") was incorporated on July 6th, 2012, as a public unlisted limited company and registered under the Companies Ordinance, 1984 (Repealed with the enactment of the Companies Act, 2017).

Following the demerger from Ahmed Fine Textile Mills Limited (AFTML), AFWL acquired the weaving business in July 2012 through a scheme of arrangement. Under this scheme, all assets, liabilities, agreements and other matters related to the weaving segment were transferred to and vested in the Company, as approved by the High Court of Sindh.

The Company’s production facilities comprise two weaving units, equipped with a total of 283 Air Jet looms. Weaving Unit I is located at Basti Malook, Multan, while Weaving Unit II is situated at Qadir Pur Rawan, Multan. The Company has total power requirement of 13MW, which is wholly met through gas-fired generators. While, the Company has diesel generators and NTDC as alternative sources.

The ownership of AFWL rests with the family of Mr. Ashar Fazal. Mr. Rayed Fazal, s/o Mr. Ashar Fazal, holds the majority stake at 48.28%, while Ms. Laraib, D/o Mr. Ashar Fazal, and Mr. Amin Fazal, s/o Mr. Ashar Fazal, hold 13.25% and 36.24% of the Company's shares, respectively.

It is a family-owned business, with Mr. Ashar Fazal acting as guardian, as all his children are minors. The distribution of shareholding among family members reflects a structured line of succession; however, the transfer of ownership to the next generation has not yet been realized.

Mr. Ashar is the grandson of Mr. Fazal-ur-Rehman. The Fazal family is among the pioneers of the modern textile industry in Pakistan. The family's decades-long presence in the industry, coupled with the expertise developed over time, provides the necessary business acumen to sustain itself in this volatile sector. Mr. Ashar is considered the man of the last mile.

The financial strength of the sponsors is primarily vested in a single line of business, reflecting their commmittment to support the Company in times of need.

The Company’s board of directors comprises three members, comprising two male directors and one female director. Two members belong to the sponsoring family, while one is the executive director. AFWL has a sponsor-dominated board, and the inclusion of independent oversight would improve the governance framework.

All board members have been associated with the board for the last 15 years and possess over three decades of experience in the textile sector. Mr. Ashar Fazal, the Chairman of the board, also serves as the Company’s CEO. He is a management graduate from the Wharton School of Business, USA. Mrs. Maha Fazal, wife of Mr. Ashar Fazal, is a homemaker by profession.

During FY25, four board meetings were held, and board members ensured their availability and participation. The recent board meetings discussed the shift in the Company's sales policy and progress in the Company's performance. The board has established both an audit committee and an HR committee to assist with relevant matters.

M/s. Yousaf Adil, Chartered Accountants, is the Company's external auditor, categorized under category "A" of SBP’s panel of auditors. The auditor has expressed an unqualified opinion on the financial reports for the year ending 30th June 2025.

Management control rests with Mr. Ashar Fazal, with a defined reporting line to ensure smooth operations and efficiency. Moreover, the Company has five functional departments: (i) Finance & Commercial, (ii) Marketing, (iii) Weaving, (iv) IT, and (v) Internal Audit. All Heads of Departments (HODs) report directly to the CEO. This reflects an adequate delegation of authority matrix.

Mr. Ashar Fazal - the CEO, has been associated with the Company since its inception. He is supported by a team of seasoned professionals, supplementing his expertise. Mr. Afzal Mujahid, the Company's CFO, has a master's in Commerce and has been associated with the Company since 2014.

The Company has no formal management committees, and need-based management meetings are held to resolve or proactively address operational issues, if any, ensuring a smooth flow of operations. The formation of management committees would enhance oversight of key areas such as risk management, financial controls, and operational efficiency.

AFWL has implemented an Oracle-based Enterprise Resource Planning (ERP) system, designed to deliver comprehensive MIS reporting. The reports are periodically fetched from the system and presented in the management meetings.

The Company has availed ISO 9001:2008 certification to primarily ensure compliance, product quality, process improvement and effective risk management. In addition, the Company’s plant is connected to the head office through a VPN, thereby reporting on a real-time basis.

During MY25, approximately 24.4mln MT of cotton was produced globally, compared to about 24.2 million MT in MY24. 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 production of cotton cloth in FY25 declined by approximately 0.7% year over year, reaching around 877.1mln square meters. The renewable energy as input costs play a vital role in the cost dynamics.

During FY25, about 25.3% of the cotton cloth produced was exported (compared to roughly 27.2% in FY24), with the rest used for the domestic market. 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 weaving segment is highly fragmented and the relative position of the Company is considered adequate with a fabric production capacity of 48.3mln meters.

During FY25, the Company’s topline exhibited a marginal decline of 4.8%, with total sales recorded at PKR 7.23bln (FY24: PKR 7.60bln. The reduction primarily stemmed from a notable drop in local sales to PKR 1.87bln (FY24: PKR 5.27bln), partially offset by strong export performance, which increased to PKR 6.36bln (FY24: PKR 3.14bln).

The margins demonstrated relative stability during FY25. Gross profit margin stood at 10.2% (FY24: 10.7%), reflecting sustained cost controls despite a decline in revenue. Operating margin registered at 4.5% (FY24: 4.9%), indicating moderate efficiency in managing overheads. Meanwhile, the net margin improved slightly to 0.3% (FY24: 0.2%) on the back of reduced finance costs and controlled administrative expenses.

AFWL has installed a 5MW solar power plant. The Company's management is committed to aligning its financial performance with projections, both in terms of top-line growth and profitability.

During FY25, the Company maintained a stable working capital cycle, supported by prudent management of receivables and inventories, which contributed to sustaining operational liquidity. Inventory and receivable days stood at 92 and 37 days (FY24: 91days & 52days), respectively, showing efficient inventory turnover and timely collection practices. The current ratio improved to 2.1x (FY24: 1.9x), indicating an adequate cushion to meet short-term obligations.

As of FY25, the Company’s cash flow generation remained moderate.  The net cash generated from operating activities stood at PKR 258mln (FY24: PKR 681mln), reflecting a decline mainly due to higher working capital requirements. Free cash flow coverage metrics remained adequate, with FCFO/Finance Cost at 1.9x (FY24: 1.8x) and EBITDA/Finance Cost improving to 2.6x (FY24: 2.0x), supported by lower finance costs and stable profitability. The Debt Payback Ratio also strengthened to 4.0x (FY24: 4.5x), reflecting a gradual improvement in repayment capacity.

The Company maintains a highly leveraged capital structure. During FY25, the total borrowings decreased to PKR 1.9bln (FY24: PKR 2.1bln), resulting in a debt-to-equity ratio of 53.4% (FY24: 56.4%). The short-term portion accounted for 53.7% of total debt (FY24: 52.6%), indicating reliance on working capital financing. The equity base stood at PKR 1.69bln, primarily comprising unappropriated profits of PKR 1.29bln.