Interwood Mobel (Private) Limited, hereinafter referred to as ‘Interwood Mobel’ or ‘the Company’, is a private limited company incorporated under the Companies Ordinance, 1984 (now the Companies Act, 2017). The Company’s registered office is located at Building No.43-C, Bukhari Commercial Lane No.11, Phase-VI, DHA, Karachi.

Interwood Mobel (Private) Limited was founded by Mr. Farooq Ahmed Malik and began operations in 1974 with a modest workshop in Lahore. Over the years, the Company has significantly expanded its operations by investing in state-of-the-art machinery and automating production lines, ensuring high-quality manufacturing processes and efficiency. Initially, the Company’s primary focus was on accepting and executing contractual jobs, which helped establish its reputation for reliability and excellence in the industry. However, since 2002, Interwood Mobel has successfully diversified its business profile by entering the retail market. This strategic shift has allowed the Company to reach a broader customer base, strengthen its brand presence, and drive sustained growth. Today, Interwood Mobel stands as a leader in the furniture and interior solutions industry, known for its innovative designs, quality craftsmanship, and customer-centric approach.

Interwood Mobel is actively engaged in the manufacture and sale of high-quality furniture and allied furnishing solutions. The Company’s head office and its primary production facility are consolidated at 56 Sultan Mehmood Road, Shalimar Town, Lahore. In Lahore, the Company operates a purpose-built manufacturing campus of approximately 600,000 sq. ft., equipped with over 300 of Europe’s most advanced machines, including fully-automated, digitally driven robotic machinery such as a 5-axis machining centre, robotic welding arms, and robotic polishing arms. The manufacturing facility is structured into specialist production zones: wood-processing (CNC routers, planing, drilling), board processing and pressing (veneering, laminate mounting), polishing & assembly (UV coater line, robotic polishing), metal-shop/powder-coating (for metal components such as chairs/doors), upholstery (foam cutting, fabric/leather cutting & stitching), season-ing of timber to control moisture content and warehousing/logistics with sophisticated packing and SAP-driven supply chain systems. This integrated set-up supports flexible production: from single customised pieces to full range batches, enabling the Company to fulfil both retail and large-scale contract furnishing projects. On the sales & distribution front, Interwood Mobel operates a network of company-owned retail showrooms across major Pakistani cities. In addition to showrooms, the Company maintains an extensive authorised-dealer network in other cities (for example, Multan, Quetta, etc.), enabling it to broaden its geographic reach and enhance brand penetration. Interwood’s operations also cover both the contract & project-furnishing business (for airports, hospitals, corporate offices) and the consumer-retail business, thereby providing diversification in end-markets. Operational efficiencies are emphasized; the use of automated manufacturing processes reduces manual variability and improves consistency. For example, in wood processing,  the Company uses cutting and drying/seasoning machines to ensure low moisture content in wood-core, preventing expansion/deformation, which the Company cites as a competitive advantage. Moreover, warehousing logistics are optimised with four warehouses in Pakistan (Lahore, Karachi, and Islamabad ) sized between 5,000 and 43,000 sq. ft, and packaging uses high-density materials and SAP-enabled tracking of goods to maintain quality while in transit.  Through this integrated manufacturing, retail–dealer network model, Interwood Mobel seeks to ensure supply-chain efficiency, brand visibility, and scalability of operations. The strategic consolidation of production and management in one location in Lahore helps streamline decision-making and logistics. The wider showroom and dealer footprint across Pakistan enables direct consumer engagement, stronger brand presence, and geographic diversification.

The majority shareholding of Interwood Mobel (Private) Limited, approximately 99.9%, is held by the Farooq family. Mr. Farooq Ahmed, the founder, owns around 17%, while his wife, Ms. Ghazala Farooq, holds approximately 16%. Their sons, Mr. Omar Farooq and Mr. Ali Farooq, each own around 33% of the company. The remaining shareholding, roughly 0.1%, is distributed among other close relatives of the family.

The ownership structure of Interwood Mobel (Pvt.) Limited is regarded as stable, with no anticipated changes in the near future. This stability is a result of the significant involvement of the Farooq family, who hold nearly all of the company's shares. The family's deep-rooted commitment to the business ensures that the strategic vision and operational goals remain consistent.

The sponsors of Interwood Mobel (Private) Limited are recognized for their strong business acumen, backed by more than fifty years of extensive industry knowledge. Their long-standing presence and remarkable positioning in the furniture and interior solutions industry have been pivotal to the company's success.

Given that Interwood Mobel is a standalone entity, its financial strength is primarily evaluated based on the financial profiles of its sponsors and their demonstrated willingness to support the business. The sponsors are considered to possess adequate financial resources and have consistently shown a strong commitment to underpinning the company's financial stability.

The Board of Directors of the Company comprises five members, including the Chairman, three executive directors, and one independent director, Mr. Waseem Akhtar. The inclusion of an independent director adds an element of independent oversight and objectivity to the Board’s deliberations. However, the Board continues to be predominantly represented by the sponsoring family, given the concentration of executive roles, which may influence the overall balance of decision-making at the Board level.

The Company’s board members possess strong professional profiles, supported by extensive technical expertise and specialization across key areas, including production, retail operations, and furniture manufacturing. Mr. Ali Farooq has been associated with Interwood since 1997 and currently serves as Director Sales and Marketing. He holds a Bachelor’s degree in Mechanical Engineering from the Ghulam Ishaq Khan Institute of Engineering Sciences and Technology and is also affiliated with the Young Presidents’ Organization (YPO). Ms. Madiha Jalal serves as Director Design and oversees the Company’s R&D function. She joined Interwood in April 2001 as Chief Designer and was appointed Director Design in 2013. She holds a Bachelor’s degree in Fine Arts with a major in Miniature Painting from the National College of Arts. Their combined experience and domain knowledge support effective operations and contribute to maintaining consistent quality standards across the organization.

The Board has established an Audit Committee to enhance governance and oversight. This committee comprises four members who bring diverse expertise and perspectives to their roles and is headed by the Independent Director, Mr. Waseem Akhtar, which strengthens objectivity in its functioning. The Audit Committee meets bi-annually to review the Company’s financial reporting, internal controls, and risk management processes. To further enhance board effectiveness and governance practices, the presence of an independent director in a leadership role on the committee supports impartial oversight and the incorporation of varied expertise. Such an arrangement strengthens the governance framework and contributes to improved decision-making processes, risk management, and strategic planning, ultimately supporting enhanced accountability and sustainable growth for the Company.

M/s Reanda Haroon Zakaria Amir Salman Rizwan & Co. serves as the external auditors for the company. This esteemed firm holds a QCR rating from ICAP and is classified under the category 'B' by the State Bank of Pakistan (SBP), reflecting its compliance with the applicable regulatory and professional requirements. For the period ended June 30th, 2024, the auditors expressed an unqualified audit opinion on the company's financial statements. This signifies that the financial statements fairly and accurately represent the company's financial position in accordance with the applicable accounting standards. The audit for FY25 is currently in progress.

The organizational structure of Interwood Mobel (Private) Limited is meticulously defined across eight key departments, namely Operations, Sales and Marketing, Accounts, Internal Audit, and others. All departments report to their respective functional heads, while the Audit Committee, headed by the Independent Director, Mr. Waseem Akhtar, provides direct oversight on financial reporting, internal controls, and risk management matters. The Internal Audit department operates independently, providing unbiased oversight and ensuring compliance with internal controls and regulations. The General Manager of Operations oversees several critical functions, including supply chain management, pre-production, production, plant maintenance, and information technology. This centralized leadership within the operations domain enhances efficiency and ensures that all production-related activities are well-coordinated and aligned with the company's strategic objectives.

The management team at Interwood Mobel (Private) Limited comprises highly experienced professionals with diverse and well-rounded skill sets. The Chief Executive Officer, Mr. Omar Farooq, holds a BSc in Furniture Design and Manufacturing and has been associated with the Company for over 25 years, bringing extensive expertise in furniture design and manufacturing that has supported innovation and long-term growth. He is supported by a professional management team with significant experience across key functional areas, including operations, finance, marketing, and human resources, ensuring effective oversight of day-to-day operations and strategic execution. Recently, Mr. Amir Naveed Siddiqi joined the Company as Chief Financial Officer. He brings over 27 years of industry experience and holds a Bachelor’s degree in Arts with a specialization in Economics and Statistics from Government College Lahore. In addition, he possesses professional qualifications, including CISA, ACCA, and CIA, and is a Fellow Member of ICAP, further strengthening the Company’s financial management, governance, and control environment. The collective expertise, collaborative approach, and operational focus of the management team have contributed to the Company’s ability to maintain stability and adapt to evolving market conditions.

To ensure efficient operations, Interwood Mobel (Private) Limited has established three key management committees: the Procurement Committee, the Supply Chain Committee, and the Human Resources Committee. Each of these committees is chaired by the Chief Executive Officer, ensuring strategic alignment and cohesive decision-making across all surfaces of the organization. The committees are composed of relevant department heads, bringing together specialized expertise and fostering collaborative leadership.

In 2017, the company implemented SAP Business One as its Enterprise Resource Planning (ERP) system. This advanced ERP solution significantly enhances the flow of information across the organization, ensuring seamless communication and data integration. Additionally, it facilitates the efficient generation of reports required by management, enabling informed decision-making and strategic planning. The deployment of SAP Business One underscores the company's commitment to leveraging cutting-edge technology to drive operational excellence and continuous improvement.

The company has established a robust control environment facilitated by its internal audit department. This department is tasked with conducting various tests and activities to identify potential vulnerabilities and implement corrective measures. These activities are performed on a monthly basis across the company’s factory and showrooms located throughout Pakistan. The internal audit department's comprehensive approach ensures continuous monitoring and enhancement of operational processes, thereby safeguarding the company's assets and maintaining high standards of compliance and governance.

The furniture and fixtures industry in Pakistan is characterized by a highly fragmented and largely unorganized structure, comprising numerous small- to medium-sized workshops that cater primarily to the domestic market. The segment contributed approximately 0.7% to Pakistan’s Gross Value Added (GVA) within the large-scale manufacturing (LSM) sector in FY24. Despite its modest industrial share, the industry holds strong socio-economic relevance, supporting extensive employment and linkages with the construction, interior design, and retail sectors. In FY24, total national furniture production increased by ~14.9% YoY to ~1.9mln units but slowed sharply in 1HFY25 to ~0.5mln units (~61% YoY decline) due to tightening liquidity and subdued consumer demand. The domestic market continues to dominate sector activity, while exports remain limited at USD ~8.4mln in FY24, down ~6.7% YoY, with key destinations including Germany (~26%), the USA (~24%), the UK, and the UAE. Imports, conversely, have remained low (USD ~3.0mln in FY24) owing to rupee depreciation, which has made imported furniture less competitive compared to local substitutes.  Competition within the sector remains intense due to the large number of informal manufacturers offering customized, low-priced products to middle-income consumers. In contrast, the organized segment, comprising brands such as Interwood Mobel, Habitt Furniture, National Furniture, and ChenOne, targets premium urban customers through branded outlets and standardized designs. These formal players collectively command a limited but steadily growing share of the total market and typically enjoy higher gross margins (~36% – 38%) due to superior product quality, scale efficiencies, and established brand equity. Key sectoral constraints include Pakistan’s limited forest cover (~4.9%) and reduced availability of domestic hardwood, forcing reliance on imported raw materials such as particleboard, MDF, and veneers. This structural limitation increases cost sensitivity to exchange-rate fluctuations. Furthermore, much of the industry continues to rely on traditional craftsmanship and low automation, resulting in productivity gaps compared to global standards. Nevertheless, increasing urbanization, a rising middle class, and the cultural shift toward modular and branded home décor continue to support long-term domestic demand growth. From a macroeconomic perspective, easing inflation (from ~23.9% in FY24 to ~6% in 8MFY25) and a significant reduction in the monetary policy rate (to ~12% as of Jan 2025) are expected to support consumption recovery and improve margins across formal manufacturers. Policy support through protective import duties (up to ~71%) and membership under the All Pakistan Furniture Makers Association (APFMA) and All Pakistan Furniture Exporters Association (APFEA) also provides a regulatory cushion for local players.

Interwood Mobel (Private) Limited holds a distinctive market standing within Pakistan’s furniture and interior-solutions industry, characterized by its strong brand equity, diversified client portfolio, and superior financial and operational discipline. While the broader industry remains fragmented and price-sensitive, Interwood’s long-standing reputation for reliability and design innovation has positioned it as a trusted premium brand, commanding customer loyalty across both residential and institutional segments. The Company’s competitive strength lies not merely in scale but in its ability to integrate craftsmanship with contemporary design trends, enabling consistent adaptation to evolving consumer preferences. Interwood’s product range; spanning home, office, and project furniture, reflects an understanding of shifting urban lifestyle needs, allowing it to sustain demand even during economic slowdowns. This adaptability and continuous design renewal provide a competitive moat that smaller regional players often lack. In the premium segment, Interwood has cultivated a perception of quality and brand assurance that allows it to command higher margins relative to market averages. Its emphasis on customized solutions, brand-led marketing, and after-sales service differentiates it from peers who primarily compete on price. Furthermore, the Company’s deep institutional relationships, including long-term contracts for office and commercial furnishing, strengthen revenue visibility and reduce dependence on cyclical retail demand. From a credit-assessment perspective, Interwood’s brand-driven pricing power, broad distribution reach, and diversified revenue streams collectively underpin a strong business-risk profile. Despite increasing competition from emerging organized brands and imported furniture, the Company’s established domestic presence, consistent product quality, and strategic focus on customer experience enable it to retain leadership status and sustain its competitive edge within Pakistan’s evolving furniture industry.

Due to fluctuations in consumer demand and ongoing macroeconomic challenges affecting the domestic market, Interwood Mobel (Pvt.) Limited’s topline performance has reflected measured growth. For FY25, the Company’s sales stood at ~PKR 5,413 mln, depicting an increase of ~9.7% over ~PKR 4,932 mln recorded in FY24. The growth was primarily driven by continued demand in the retail and corporate segments, as well as modest expansion in regional markets. Despite topline growth, profitability experienced a slight contraction, with net profit declining to ~PKR 179 mln in FY25 from ~PKR 204 mln in FY24, largely due to rising input costs, inflationary pressures, and higher operational expenses. Margins were slightly diluted during the period, reflecting increased cost pressures and the absence of any significant enhancement in product offerings, which collectively impacted the overall profitability.

Despite revenue growth, the Company’s margin structure in FY25 witnessed mild pressure, reflecting higher input costs and operating expenditures amidst a challenging business environment. The gross profit margin slightly declined to ~37.5% from ~38.3% in FY24, primarily due to inflationary pressure on key input materials and higher utility costs, which constrained cost absorption despite pricing revisions. Similarly, the operating profit margin decreased to ~19.3% in FY25 from ~22.9% in FY24, reflecting the impact of increased administrative and distribution expenses linked to business expansion and higher marketing outlays. On the positive side, the finance cost reduced to ~PKR 770mln in FY25 from ~PKR 980mln in FY24, attributable to improved cash flow management and partial repayment of short-term borrowings. Consequently, the net profit margin moderated to ~3.3% in FY25 compared to ~4.1% in FY24, with the decline largely stemming from margin compression at the operational level rather than financing inefficiencies.

Interwood is Pakistan’s leading furniture store, specializing in producing modern furniture using high-tech manufacturing techniques that make it affordable for all segments of society. The Company is dedicated to continuously raising the standards of design, durability, and quality, ensuring it delivers optimal products. With decades of experience in the furniture industry, Interwood provides affordable wooden furniture at the best prices in Pakistan. Looking ahead, Interwood will continue to focus on large-scale projects for luxury buildings and corporate clients to drive revenue growth. Additionally, the Company is consistently working to enhance its e-commerce capabilities to better serve the growing online market

Interwood Mobel’s working capital cycle remains primarily influenced by its inventory management, given the nature of its operations and the need to maintain sufficient stock levels to meet customer demand. In FY25, the Company’s inventory days slightly improved to ~328 days from ~333 days in FY24, reflecting better inventory control and efficient stock turnover. The trade receivable days increased marginally to ~58 days in FY25 from ~54 days in FY24, attributable to higher sales to institutional clients and extended credit terms. Conversely, trade payable days declined to ~57 days in FY25 compared to ~67 days in FY24, indicating relatively faster supplier payments during the period. Consequently, the net working capital days rose to ~330 days in FY25 from ~320 days in FY24, suggesting slightly higher liquidity tied up in operations. Furthermore, the Company’s short-term trade leverage increased to ~22.9% in FY25 from ~18.0% in FY24, reflecting greater reliance on short-term borrowings to support working capital needs. Overall, the Company continues to maintain an adequate liquidity position, supported by effective inventory management and stable customer advances.

Interwood Mobel’s cash flow generation remained stable, though Free Cash Flow from Operations (FCFO) declined to ~PKR 1,217 million in FY25 from ~PKR 1,435 million in FY24, mainly due to higher working capital requirements and ongoing investment activities. The increase in inventory levels and marginally extended receivable realizations, resulting from larger institutional orders and the company’s focus on maintaining adequate stock for premium product lines; led to greater cash utilization within operations. Meanwhile, the rise in long-term borrowings during FY25 indicates continued capital expenditure to support expansion and infrastructure improvements, which, while strategic for future growth, temporarily constrained free cash generation. Despite the reduction in FCFO, the interest coverage ratio improved to 1.7x in FY25 from 1.5x in FY24, supported by lower finance costs and sustained operating earnings. The decline in short-term borrowings and a shift toward longer-tenure financing helped reduce interest outflows, thereby strengthening the company’s debt-servicing capacity. The debt coverage ratio remained stable at ~0.9x across both fiscal years, reflecting consistent ability to meet financial obligations. Overall, while cash generation slightly weakened due to increased working capital pressures, Interwood Mobel maintained adequate financial flexibility, supported by improved interest coverage, a balanced funding mix, and prudent management of its capital structure.

Interwood Mobel’s capital structure remains moderately leveraged, reflecting a balanced approach between debt and equity financing to support its operational and expansion needs. In FY25, the Company’s leverage ratio declined to ~31.4% from ~35.3% in FY24, indicating a slight improvement in financial flexibility and capitalization strength. The total borrowings stood at ~PKR 4,349mln in FY25, marginally higher than ~PKR 4,301mln in FY24. Within this, short-term borrowings decreased to ~PKR 2,764mln in FY25 from ~PKR 2,930mln in FY24, reflecting efficient cash flow utilization and reduced reliance on short-term funding. In contrast, long-term borrowings increased to ~PKR 1,008mln in FY25 from ~PKR 725mln in FY24, indicating a strategic shift toward longer-term financing to support capital expenditure and ensure stability in the funding mix. Overall, the Company maintains a sound and well-managed capital structure, supported by prudent financial planning and effective debt management practices.