Mekotex (Pvt.) Limited ("MPL" or "the Company") was incorporated in Pakistan on August 21, 1991 as a private limited Company and registered under the Companies Ordinance, 1984 (Repealed with the enactment of the Companies Act, 2017).

The foundation of the Mekotex group was laid by Mr. Abdul Majid Qasim (late) in 1979, and it has since evolved into one of the leading denim manufacturers. Mekotex, the group’s flagship Company, was pioneered by Mr. Abdul Majid’s sons: Mr. Ebrahim Qasim and his elder brother, Mr. Abdul Majeed. Mr. Ebrahim Qasim exited the Company in 2001 after the family decided to split the family wealth among family members. Incorporated in 1971, Mekotex (Pvt). Limited began as a modest fabric trading operation and has since evolved into a prominent player in the textile sector. The Group’s sustained growth and diversification have been driven by the entrepreneurial leadership of the three brothers, with increasing involvement from the next generation.

The operational infrastructure of the Company comprises weaving, processing, and stitching of textile products. Its head office is located at Deh Landhi, Main National Highway, Karachi. The Company is self-sufficient in power production with a total capacity of ~29MW. The Company uses natural gas as fuel for its power generation. The Company is also self-sufficient in terms of water supply and has installed an RO (river osmosis) plant in Karachi. 

The Company is wholly owned by members of the Majeed family through individual shareholdings. A majority stake (~48%) is held by Mr. Ashraf's immediate family, comprising his spouse, Ms. Almas (~21%), his son, Mr. Rayyan (~21%), and his daughter, Ms. Rabia (~6%). The remaining stake is held by Mr. Khalid (~36%) and Mr. Shoaib (~16%).

The Company’s ownership structure is expected to remain stable in the foreseeable future, supported by a clearly defined family constitution and the strategic transfer of shareholding to the next generation following the passing of Mr. Ashraf Majeed. This transition is guided by the Group’s long-term vision for continuity and strong governance within the family enterprise.

With an operational legacy spanning over five decades since its inception in 1971, the sponsors have established a considerable presence in the textile industry. Over the years, the Group has demonstrated resilience and adaptability through various economic cycles and market fluctuations, consistently expanding and diversifying its business portfolio. Strategic investments and gradual penetration into high-potential segments, such as denim, home textiles, and value-added fabric processing have significantly enhanced the Group’s overall market positioning.

The financial strength of MPL stems from the Group’s notable presence across multiple segments of the textile value chain. Beyond MPL, the Group actively operates within the local textile industry through two additional companies: Meko Fabrics (Pvt.) Limited engaged in the sale of unstitched dresses for women, and Meko Denim Mills (Pvt.) Limited, focusing on denim manufacturing.

The overall control of the board vests in a five-member Board of Directors, three sponsors, and two non-executive independent directors. However, the Company's board is still dominated by the sponsoring family. The inclusion of an independent director will strengthen the governance framework of the Company.

Mr. Khalid Majeed started his business and industrial career after completing his Master’s in Business Administration from Clayton State University. During his studies, he was already involved with the family’s industrial ventures, gaining practical experience in reputable textile spinning and weaving units. He initially joined Arif Industries, where he continues to serve as a Partner. In 1991, he founded a textile spinning unit named Mekotex (Private) Limited and has since been serving as its Managing Director. In this role, he has overseen the company’s expansions and managed marketing, human resources, procurement, finance, and technical operations. Additionally, he supervises the development of quality standards to meet ISO 9002 certification requirements and is currently working towards ISO 14000 and SA 8000 certifications. Mr. Shoaib Majeed graduated with a degree in Business Administration in 1994 and promptly joined the family business. His initial role involved managing and establishing the home textile division, Kam International, founded in the same year. Since 1995, he has also overseen procurement and finance operations at Arif Industries. He joined the Board of Directors of Mekotex in 2002, where he manages the purchasing department and oversees the Group’s finances. Beyond his corporate responsibilities, Mr. Shoaib is actively involved in various social and industry organizations. Notably, he served as Vice Chairman of All Pakistan Textile Processing Mills Association (APTMA), Zonal Chairman of the All Pakistan Bedware and Upholstery Manufacturers Association, and holds executive committee memberships in the Landhi Association of Trade and Industry, Karachi Chamber of Commerce, and S.I.T.E Association. The board members bring with them diversified experience and knowledge of the respective industry at local and international levels, which assists in providing useful insight for the development of an effective business strategy. Mr. Rayyan Ashraf holds a Bachelor's degree in Arts from the University of Toronto. He possesses over 10 years of experience in the textile industry. Mr. Farhan Ahmed and Mr. Imran Motiwala have been associated with the Company for approximately eight years, bringing with them diverse business expertise and valuable insights to the Board.

The Company does not have formal board committees to support its oversight functions. While the Board meets regularly, financial performance is reviewed through Excel-based reports and the progress toward the strategic goals is evaluated during these discussions. Board attendance remained strong throughout FY25, and draft minutes were documented. To strengthen oversight and align with best corporate governance practices, the establishment of formal board committees is essential.

To maintain high standards of transparency, Crowe Hussain Chaudhary & Co. Chartered Accountants have been appointed as the external auditors of the Company. They expressed an unqualified opinion on the financial statements of the Company for the period ended June 30th, 2025. The firm is QCR-rated by the Institute of Chartered Accountants of Pakistan (ICAP) and is classified in Category 'A' by the State Bank of Pakistan (SBP) panel of auditors.

The Company's organizational layout is structured into seven key departments, each led by a departmental head classified as a “strategic manager,” all of whom report directly to the Board of Directors. These core departments include Finance (back-office function) and six business operations units: Marketing, Processing, Spinning, Weaving, Power, and Ginning. 

The CEO, Mr. Khalid Majeed, an MBA graduate, has around 35 years of experience in the respective industry and serves as the Managing Director. He is responsible for driving key areas such as business expansion, marketing, human resources, and other critical operations. Mr. Ismail Qaiser, the Chief Financial Officer & Company Secretary, is a qualified member of ICMA. He is well-versed in the textile sector and has been associated with the Mekotex group for over twenty-two years.

The Company currently does not have formal management committees in place. Management meetings are held on an ad-hoc basis, as and when required. The effectiveness of management could be improved through the establishment of formal committees with clearly defined roles and responsibilities.

The Company’s IT infrastructure is anchored by an in-house Oracle-based ERP system, which enables comprehensive reporting and operational efficiency. This system is fully integrated across all major departments, including Finance, Supply Chain, Sales, and Human Resources, ensuring seamless data flow and coordination. It has been meticulously designed in alignment with the strategic directives and specific reporting requirements of the Board, thereby facilitating informed decision-making.

The Company has adequate quality control procedures in place to enhance operational efficiency and minimize wastage. These measures ensure product consistency and adherence to industry standards. Additionally, the Company operates with an independent internal audit function to regularly assess internal controls and compliance, supporting transparency and governance.

The textile sector continues to operate in a challenging environment characterized by volatile cotton prices, elevated utility tariffs, exchange rate fluctuations, and subdued global demand. Nevertheless, Pakistan's export-oriented textile industry continues to benefit from its established manufacturing base and strong contribution to the country's exports. The Company's vertically integrated operations provide operational flexibility and partially mitigate external supply chain disruptions. However, profitability remains susceptible to fluctuations in raw material costs, energy prices, and international demand conditions.

MPL holds an adequate market positioning on a standalone basis and is considered a mid-tier player within the respective industry.

The Company's topline remained broadly stable during FY25, declining marginally by 3.9% to PKR 26.4bln (FY24: PKR 27.5bln). The decrease was primarily attributable to lower local sales, which fell to PKR 19.6bln (FY24: PKR 24.5bln). However, this was partially offset by a notable increase in export sales to PKR 9.7bln (FY24: PKR 5.9bln), resulting in an improved and more diversified revenue mix. The Company had maintained a healthy three-year average revenue growth of 15.5% up to FY24, reflecting the strength of its business profile. During 9MFY26, the topline stood at PKR 19.9bln, indicating stable operating performance. Home textiles remained the leading export segment, supported by a well-established global customer base and a diversified geographic footprint, which limits geographic concentration risk across key export markets.

During FY25, the Company's gross profit improved to PKR 3.2bln (FY24: PKR 3.1bln), with the gross profit margin increasing to 12.5% (FY24: 11.6%), supported by improved cost efficiencies. Despite higher operating expenses of PKR 1.1bln (FY24: PKR 821mln), the operating profit margin remained largely stable at 8.5% (FY24: 8.6%). Finance costs declined significantly to PKR 1.5bln (FY24: PKR 2.5bln), driven by the easing interest rate environment and a relatively lower financing burden. Consequently, the Company reported a net profit of PKR 243mln (FY24: PKR 279mln), translating into a net profit margin of 0.9% (FY24: 1.0%). During 9MFY26, profitability remained satisfactory. Gross profit stood at PKR 2.1bln, with the gross profit margin at 11.0%. Continued reduction in finance costs to PKR 753mln further supported earnings, resulting in a higher net profit of PKR 501mln and an improved net profit margin of 2.5%. Overall, the Company's profitability profile strengthened during the period, underpinned by lower financing costs and sustained operational performance.

The Company's business profile continues to demonstrate resilience, as reflected by its ability to maintain a stable revenue base despite the strategic segregation of its unstitched business during the review period. The shift in the revenue mix, characterized by a meaningful increase in export sales, underscores the Company's adaptability and focus on strengthening higher-value business segments.

During FY25, the Company's working capital requirements remained elevated, primarily due to sizeable inventory and trade receivable balances. Inventory increased to PKR 6.5bln (FY24: PKR 5.4bln), while trade receivables rose to PKR 5.5bln (FY24: PKR 4.5bln). Despite higher working capital requirements, the Company's liquidity profile remained strong, supported by adequate financial flexibility. The net working capital cycle improved to 91 days from 99 days in FY24, reflecting more efficient working capital management. These requirements continued to be primarily financed through short-term borrowings. During 9MFY26, the net working capital cycle improved further to 88 days, mainly driven by optimization of the trade receivables cycle. The Company continued to maintain a strong liquidity profile, as reflected by a current ratio of 5.4x.

The Company's cash flow generation remained adequate, with free cash flow from operations (FCFO) improving to PKR 986mln in FY25 (FY24: PKR 950mln). Finance cost obligations moderated, as reflected by a decline in markup payable to PKR 212mln (FY24: PKR 400mln), benefiting from the lower interest rate environment. Although the total debt book recorded a marginal decline, the borrowing profile remained predominantly short-term in nature, constraining the overall coverage profile. During 9MFY26, total borrowings increased to PKR 10.2bln to support working capital requirements; however, the coverage metrics improved modestly on the back of lower finance costs and stable cash flow generation.

The Company's capital structure remained moderately leveraged during FY25. Total borrowings declined to PKR 9.1bln (FY24: PKR 9.5bln), while the equity base strengthened to PKR 10.5bln (FY24: PKR 10.2bln) on the back of retained earnings. Consequently, the debt-to-equity mix remained adequate, with a reasonable equity cushion supporting the Company's funding profile. During 9MFY26, the equity base moderated slightly to PKR 9.3bln, while total borrowings increased to support working capital requirements, resulting in a leverage ratio of 52.4%, which remained within a manageable range.