Service Global Footwear : Corporate Briefing Session

SERVICE GLOBAL FOOTWEAR LIMITED

CORPORATE BRIEFING SESSION

FOR THE YEAR ENDED

DECEMBER 31, 2023

CONTENTS

COMPANY PROFILE

03

CORPORATE SOCIAL RESPONSIBILITY

08

FINANCIAL HIGHLIGHTS

09

FUTURE OUTLOOK

18

COMPANY PROFILE

• SERVICE GLOBAL FOOTWEAR LIMITED (SGFL) is a subsidiary of SERVICE INDUSTRIES LIMITED - SERVIS GROUP.
• SGFL has incorporated a wholly owned subsidiary by the name of DONGGUAN SERVICE GLOBAL LIMITED (DSGL) to undertake procurement, marketing and product development activities.
• SGFL was operating as an integrated unit of Service Industries Limited ("SIL") since 1988 which was demerged in 2019 into a separate entity.

Manufacturing & Selling

of Footwear

• Export oriented unit.
• Largest footwear exporter of Pakistan accounting over 40% of the total leather footwear exports. SGFL exports almost 98% of its total sales to 20+ countries over 5 continents.
• First solar powered shoe manufacturer in Asia with a total solar electricity generation capacity of 2 MW.
• Listed on Pakistan Stock Exchange in 2021.

Largest footwear

exporter of Pakistan

Export to more than 20+

countries over the

5 continents

• Total market capitalization as on May 20, 2024 is around PKR 15 billion.

COMPANY PROFILE (CONT.)

DETAILS OF SUBSIDARY - DONGGUAN SERVICE GLOBAL LIMITED (DSGL)

DSGL has become an important hub for SGFL to perform following function for SGFL :

• All order booking and product development discussion happens in this office with regard to majority of US customers.
• All procurement of SGFL from China is routed now through this office.
• New technology transfer from China to Pakistan is carried out through this office.
• To develop new customers, there is a strong sales wing sitting in this office to visit new customers time to time.
• This office serves as SGFL international face for all clients who visit China or they have offices in China.

COMPANY PROFILE (CONT.)

• Total revenue of around PKR 15.06 Billion (US$ 55M) comes from the following streams:
• • Exports - 98% of total sales
  • Local - 2% of total sales

• • Export sales amounted to PKR 14.78 Billion (US$ 54M) in the year 2023.
  • Domestic Footwear sales amounted to PKR 282 Million (US$ 1M) in the year 2023.
• Total production during the year 2023 is 3.5 million pairs.

Export Sales	Local Sales
2%

98%

Exported - 3.3 Million Pairs Domestic - 0.24 Million Pairs

COMPANY PROFILE (CONT.)

• Free float shares are 39,185,480 out of total paid up share capital of 205,917,500 which make up 19%.

Free float

Directors, Sponsors	19%
and Associates

81%

COMPANYCOR ORATEPROFILESOCIAL (CONTRESPONSIBILITY.)

SGFL has been formed with the vision to become a socially conscious business following its Parent Group's tradition of corporate giving.

The newly established SGFL envisions to take forward the Group's CSR activities within its current factory catchment i.e., Muridke, Sheikhupura.

• Environment
• Industrial Relations
• Equal opportunity employment
• Consumer protection measures
• Contribution to national exchequer

Company contributed PKR 267 million to the Government's nation building efforts in FY 2023.

CORPORATECORP TE SOCIALSOCIALRESPONSIBILITYRESPONSIBILITY

ENVIRONMENT

SGFL houses Asia's first solar powered footwear manufacturing facility. It is spread over four acres of land, consisting of 3,125 solar panels with an annual power generation of 2 MW, becoming the first solar powered footwear factory in Asia. The initiative is equivalent to planting 100 trees daily, reducing carbon dioxide emissions by 730 tons annually.

INDUSTRIAL RELATIONS

SGFL is Business Social Compliance Initiative (BSCI) certified, promoting workplace conditions in accordance with human rights, ILO conventions and national labor law. Additionally, SGFL is a member of SEDEX, ensuring our dedication to driving improvements in responsible and ethical business practices in the global supply chain, providing our family the best working conditions for increased productivity

INCLUSION AND DIVERSITY

SGFL is proud to be an equal opportunity employer and encourages the participation of females and persons with special needs in the workforce. SGFL has taken steps to create a work environment conducive to females by dedicating separate production lines employing ~135 females.

SOCIAL

SGFL is endeavoring to ensuring a Quality

Management System focused on consistently providing products that meet the requirements of customers and applicable statutory and regulatory rules. We are certified by various government bodies like SEDEX (Supplier Ethical Data

Exchange), BSCI (Business Social Compliance Initiative), SLCP (Social & Labor Convergence Program), HIGG FSLM (Facility Social & Labor module).

Apart from these, we are certified by stringent COC (Code of Conduct) of various international brands. We always welcome all kinds of audits related to social compliance and keeps open door policy for suggestions on areas of improvement whereby we can safeguard interests and safety of our workforce.

FINANCIAL HIGHLIGHTS

		2023	2022	2021	2020	2019 *
EXPORT SALES	Rs. (millions)	14,780	11,496	6,521	6,597	3,531
LOCAL SALES	Rs. (millions)	282	257	519	298	120
REVENUE	Rs. (millions)	15,062	11,753	7,040	6,895	3,651
GROSS PROFIT	Rs. (millions)	3,301	2,186	1,238	1,369	816
NET PROFIT	Rs. (millions)	1,182	342	403	709	493
GROSS PROFIT RAT IO	%	22%	19%	18%	20%	22%
NET PROFIT RAT IO	%	8%	3%	6%	10%	14%
CASH DIVIDEND	Rs. Per Share	5**	3.5	2	-	-
PAID UP SHARE CAPIT AL	No.	205,917,500	205,087,500	204,437,500	163,550,000	5,050,000
EARNING PER SHARE	Rs.	5.75	1.67	2.10	8.25	46.75
INT EREST COVER	T imes	2.58	2.47	4.11	6.54	9.48
CURRENT RAT IO		1.04	1.01	1.16	1.45	1.41
GEARING RAT IO	%	05 : 95	06 : 94	04 : 96	09 : 91	11 : 89
SHAREHOLDER'S EQUIT Y	Rs. (millions)	6,501	6,165	6,729	4,231	2,512
RET URN ON EQUIT Y	%	18%	6%	6%	17%	20%
MARKET PRICE	Rs.	60.32	33.14	46.36	-	-
T OT AL ASSET S	Rs. (millions)	18,955	14,365	12,562	10,522	7,402

• SGFL was incorporated on July 19, 2019 and figures of FY 2019 represents six months results.
• Interim cash dividend of Rs. 3 per shares has been approved in the December 2023 and Final cash dividend of Rs.2 per share was approved in the AGM meeting held on April 26, 2024.