Lahore: In a recently published annual report for the fiscal year ending June 30, 2026, Sally Textile Mills Limited revealed ongoing financial distress and operational stagnation. The 58th Annual General Meeting is scheduled to take place on October 23, 2026, at the company's registered office in Lahore, aiming to address key issues, including the appointment of auditors and the election of directors.
The company's operations remain at a standstill due to severe liquidity constraints and unresolved legal disputes with financial institutions, maintaining a status quo of zero commercial production or turnover. The report highlights an operating loss of Rs. 38.67 million and a loss after taxation of Rs. 30.57 million, marking a very large or significant move of +4.72% from the previous year's Rs. 29.20 million loss. According to information available from the Pakistan Stock Exchange (PSX), Sally Textile Mills continues to face a challenging market environment in the designated textile sector.
The financial position of Sally Textile Mills reflects a total asset base of Rs. 1.439 billion, a decrease from Rs. 1.467 billion in the previous year. The company reports cumulative unappropriated losses amounting to Rs. 1.671 billion, resulting in a net negative equity of Rs. 512.87 million. Current liabilities surpass current assets by Rs. 1,078.78 million, raising questions about the company's going concern status. However, the board remains optimistic, working on a comprehensive debt restructuring strategy and engaging in legal negotiations to secure the company's financial future.
The board has also addressed the auditors' disclaimer of opinion on the financial accounts, detailing administrative barriers, delays in presenting books of account, and ongoing legal challenges. To mitigate these issues, the board proposes appointing M/s Sarwars Chartered Accountants as the new statutory auditors for the financial year 2026-27, pending shareholder approval.
Despite the operational freeze, the company maintains compliance with corporate governance standards, as evidenced by regular board and committee meetings. The board's efforts to uphold governance include the strategic appointment of new auditors and a focus on resolving outstanding legal and financial challenges.
The annual report underscores the need for corporate restructuring and strategic partnerships to revive operations and safeguard stakeholder interests in the face of continued adversity.