Transmission of Quarterly Report for the Period Ended 31-12-2025

Interim Financial

Report Half Year ended

December 31, 2025 (Un-audited)

• Company Information

• Directors' Report

• Independent Auditor's Review Report

• Condensed Interim Balance Sheet

• Condensed Interim Profit and Loss Account

• Condensed Interim Statement of Other Comprehensive Income

• Condensed Interim Cash Flow Statement

• Condensed Interim Statement of Changes in Equity

• Notes to the Condensed Interim Financial Information

  Company Information

  Mian Iqbal Salahuddin Chief Executive Officer

  Mr. Abid Ali Bajwa Chief Financial Officer

  Syed Abid Raza Zaidi Company Secretary

  Board of Directors Mian Iqbal Salahuddin Mst. Munira Salahuddin Mian Yousaf Salahuddin Mian Asad Salahuddin Mian Sohail Salahuddin Muhammad Khalil Latif Syed Abid Raza Zaidi

  Audit Committee

  Muhammad Khalil Latif (Chairman) Mian Asad Salahuddin (Member) Mian Sohail Salahuddin (Member)

  Human Resources & Remuneration Committee

  Mst. Munira Salahuddin (Chairperson) Mian Sohail Salahuddin (Member) Syed Abid Raza Zaidi (Secretary)

  Auditors

  H.A.M.D. & Co., Chartered Accountants

  Bankers

  National Bank of Pakistan The Bank of Punjab

  Silk Bank Limited Meezan Bank Limited Habib Bank Limited

  Registered Office

  2-S, Gulberg II, Lahore Phones: (042) 35759002

  Fax: (042) 35754394

  E-mail: sallytex@hotmail.com

  Mills

  Muzaffargarh Road, Joharabad, District Khushab

  Phones: (0454) 720645, 720546, 720311

  Directors' Report

  For the Half Year Ended 31 December 2025

  The Directors of Sally Textile Mills Limited present their report together with the condensed interim financial statements of the Company for the six-month period ended 31 December 2025.

  Financial Performance

  • The Company has incurred a loss after tax of Rs. 16.67 million during the half year (31-Dec-2024: Rs. 17.07 million).

  • Loss per share (basic and diluted) stood at Rs. (1.90) compared to Rs. (1.95) in the corresponding period last year.

  • Accumulated losses have increased to Rs. 1,659.95 million, resulting in negative equity of Rs. 507.00 million.

  • Current liabilities exceed current assets by Rs. 1,078.78 million, reflecting severe liquidity constraints.

    Financial Summary (Half Year Ended 31 December 2025)

    Particulars	31-Dec-25 (Rs.)	31-Dec-24 (Rs.)
    Revenue	Nil	Nil
    Gross Loss	(14,280,741)	(14,984,757)
    Administrative Expenses	(2,389,034)	(2,091,252)
    Operating Loss	(16,669,775)	(17,076,009)
    Loss Before Taxation	(16,669,775)	(17,076,009)
    Loss After Taxation	(16,669,775)	(17,076,009)
    Loss Per Share (Basic & Diluted)	(1.90)	(1.95)

    Operational Status

  • The Company has suspended its operations since July 2018 due to financial difficulties.

  • No revenue was recorded during the period, while fixed costs such as depreciation and administrative expenses continued to impact results.

  • The management has relied on interest-free loans from sponsors, which increased by Rs. 2.706 million during the half year, bringing the total sponsor loan to Rs.

    864.23 million.

    Going Concern

  • The auditors and directors have highlighted material uncertainty regarding the Company's ability to continue as a going concern.

  • The Board acknowledges that the Company is unable to meet its liabilities in the normal course of business and intends to liquidate assets to settle obligations.

  • Despite this, the financial statements have been prepared on a going concern basis in compliance with the Companies Act, 2017.

    Corporate Governance

  • The Board of Directors, Audit Committee, and HR & Remuneration Committee continued to perform their oversight functions.

  • The Company has complied with applicable provisions of the Companies Act, 2017 and IAS 34 for interim reporting.

    Future Outlook

  • The Board recognizes the challenges posed by accumulated losses, negative equity, and suspension of operations.

  • Efforts will be made to safeguard stakeholder interests through asset liquidation and settlement of liabilities.

  • The Directors remain committed to transparency and compliance with statutory requirements.

Acknowledgement

The Board places on record its appreciation for the continued support of sponsors, shareholders, and regulatory authorities during this difficult period.

For and on behalf of the Board

January 28, 2026 Mian Iqbal Salahuddin

Lahore. Chief Executive Officer

H.A.M.D & Co.

CHARTERED ACCOUNTANTS

INDEPENDENT AUDITOR'S REVIEW REPORT

To the members of SALLY TEXTILE MILLS LIMITED

Report on review of Interim Financial Statements

Introduction

R

a division of TAG Alliances

Globally Connected. Laa›lly Respected. *

We were engaged to review the accompanying condensed interim statement of financial position of SALLY TEXTILE MILLS LIMITED ['the Company'] as at 31 December 2025 and the related condensed interim statement of profit or loss, condensed interim statement of comprehensive income, condensed interim statement of cash flows, condensed interim statement of changes in equity and notes to the condensed interim financial statements for the six-month period then ended (here-in-after referred to as the "interim financial statements"). Management is responsible for the preparafion and presentation of these interim financial statements in accordance with accounting and reporting standards as applicable in Pakistan for interim financial reporting. Our responsibility is to express a conclusion on these interim financial statements based on our review. The figures for the three-month period ended 31 December 2025 of the condensed interim statement of profit or loss, condensed interim statement of comprehensive income have not been reviewed as we were required to review only cumulative figures for the six-month period ended on that date.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information performed by the Independent Auditor of the Entity." A review of interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. However, because of the matters described in the Disclaimer of Conclusion section of our report, we were unable to conduct significant review procedures that we considered necessary to express a conclusion on these interim financial statements.

Basis for Disclaimer of Conclusion

1. The Company has not provided us access to its books of account, records and other information which were necessary for the purpose of our review. Consequently, we were unable to determine whether any adjustments might have been found necessary in respect of recorded or unrecorded elements making up the condensed interim statement of financial position, condensed interim statement of profit or loss, condensed interim statement of comprehensive income, condensed interim statement of changes in equity and condensed interim statement of cash flows.

   
   
   

2. We draw attention to note 2.1 to the annexed financial statements, as more fully described in that note, the Company has incurred loss after tax of Rs. 16.669 million at the reporting date and its accumulated losses stood at Rs. 1,659.95 million at half year end which resulted in negative equity to Rs. 507.000 million. Its current liabilities exceeded its current assets by Rs. 1,200.03 million. The Company has also suspended its operations since August 2018. The company is also unable to pay its non-current liabilities. These conditions and events indicate material uncertainty that may cast significant doubt on the company's ability to continue as a going concern dnd therefore it may be unable to realize its assets and discharge its liabilifies in the normal course of business. The directors of the Company intend to liquidate its assets and the company in order to meet its obligations. However, as described in Note 2.1, these interim financial statements have been prepared under the going concern assumption basis which an inappropriate basis.

Office: 1s*Floor, 2 G (2/7), Mushtaq Ahmed Gurmani Road, Gulberg II, Lahore, Pakistan.

Phone: +92-42-35788341-2, E-mail: info@hamdca.com, Other Offices: Karachi, Islamabad & Worldwide

Chartered Accountants

TIAG•

Disclaimer of Conclusion

Due to the significance of the matters described in the 'Basis for Disclaimer of Conclusion' paragraph, we were unable to obtain sufficient appropriate evidence to form a conclusion on the accompanying interim financial statements. AccordingJy, we do not express a conclusion on these interim financial statements.

The engagement partner on the review resulhng in this independent auditor's review report is Waseem Ashfaq.

H.A.M.D & CO.

Chartered Accountants Lahore:

Date: 28-January-2026

UDIN: RR2025l0040r5fu1tqeD

CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION

FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2025

Chief Executive Chief Financial Officer Director

CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION

FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2025

Chief Executive Chief Financial Officer Director

CONDENSED INTERIM STATEMENT OF PROFIT OR LOSS (UN-AUDITED)

FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2025

Six month ended Three month ended

Chief Executive Chief Financial Officer Director

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)

FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2025

Six month ended Three month ended

Chief Executive Chief Financial Officer Director

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)

FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2025

Chief Executive Chief Financial Officer Director

CONDENSED INTERIM STATEMENT OF CASH FLOWS (UN-AUDITED)

FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2025

Chief Executive Chief Financial Officer Director

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)

FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2025

1. LEGAL STATUS AND OPERATIONS

   Sally Textile Mills Limited ['the Company'] is incorporated in Pakistan as a Public Limited Company under the Companies Ordinance, 1984 and is listed on Pakistan Stock Exchange Limited. The Company is a spinning unit engaged in the manufacture and sale of yarn. The registered office of the Company is situated at 4 F, Gulberg - II, Lahore. The manufacturing facility, including the power generation unit, is located at Joharabad District Khushab in the Province of Punjab.

2. BASIS OF PREPARATION

   The interim financial statements are un-audited and has been presented in condensed form and do not include all the information as is required to be provided in a full set of annual financial statements. These interim financial statements should be read in conjunction with the audited financial statements of the Company for the year ended 30 June 2025.

   This interim financial statements have been subjected to limited scope review by the auditors of the company, as required by the Companies Act, 2017 under section 237. The comparative condensed interim statement of financial position as at 30 June 2025 and the related notes to the interim financial statements are based on audited financial statements. The comparative condensed interim statement of profit or loss, condensed interim statement of comprehensive income, condensed interim statement of cash flows, condensed interim statement of changes in equity and related notes to the condensed interim financial statements for the six month period ended 31 December 2024 are based on unaudited, reviewed interim financial statements. The condensed interim statement of profit or loss and condensed interim statement of comprehensive income for the three months period ended 31 December 2025 and 31 December 2024 are neither audited nor reviewed.

   1. Going concern assumption

      The Company has incurred loss after tax of Rs. 16.669 million at the reporting date and its accumulated losses stood at Rs.1,659.95 million at half year end which resulted in negative equity to Rs. 507.00 million. Its current liabilities exceed its current assets by Rs. 1,078.78 million. The Company has also suspended its operations since July 2018. The company is also unable to pay its liabilities. These conditions and events indicate material uncertainty that may cast significant doubt on the company's ability to continue as a going concern and therefore it may be unable to realize its assets and discharge its liabilities in the normal course of business. The directors of the Company intend to liquidate its assets and the company in order to meet its obligations. However, the Company has prepared these interim financial statements using the going concern basis and no adjustments were made in these financial statements to bring its assets and liabilities at their realizable values.

   2. Statement of compliance

      These interim financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan for interim financial reporting. The accounting and reporting standards as applicable in Pakistan for interim financial reporting comprises of:

      • International Accounting Standard 34 - Interim Financial Reporting, issued by International Accounting Standards Board [IASB] as notified under the Companies Act, 2017; and

      • Provisions of and directives issued under the Companies Act, 2017

        Where the provisions of and directives issued under the Companies Act, 2017 differ with the requirements of IAS 34, the provisions of and directives issued under the Companies Act, 2017 have been followed.

   3. Basis of measurement

      These financial statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis as at the reporting date.

      Items Measurement basis

      Financial liabilities Amortized cost

      Financial assets Fair value/amortized cost

      Employee retirement benefits Present value

   4. Judgments, estimates and assumptions

      The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions and judgements are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the result of which forms the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

      Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected.

      NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)

      FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2025

   5. Functional currency

      These financial statements have been prepared in Pak Rupees which is the Company's functional currency. The amounts reported in these financial statements have been rounded to the nearest Rupees unless specified otherwise.

3. NEW AND REVISED STANDARDS, INTERPRETATIONS AND AMENDMENTS EFFECTIVE DURING THE PERIOD.

   There are certain new and revised standards, interpretations and amendments are effective in the current period but are either not relevant to the Company or their application does not have any material impact on the interim financial statements of the Company other than presentation and disclosures, except as stated otherwise.

4. NEW AND REVISED STANDARDS, INTERPRETATIONS AND AMENDMENTS NOT YET EFFECTIVE.

   Certain standards, interpretations and amendments are in issue which are not effective as at the reporting date and have not been early adopted by the Company. The Company intends to adopt these new and revised standards, interpretations and amendments on their effective dates, subject to, where required, notification by Securities and Exchange Commission of Pakistan under section 225 of the Companies Act, 2017 regarding their adoption. The management anticipates that the adoption of the above standards, amendments and interpretations in future periods, will not have a material impact on the Company's financial statements other than in presentation/disclosures.

5. ACCOUNTING POLICIES AND METHODS OF COMPUTATION

   The accounting policies and methods of computation adopted in the preparation of these interim financial statements are the same as those applied in the preparation of preceding annual financial statements of the Company for the year ended 30 June 2025.

   Note 31-Dec-25 30-Jun-25

   Rupees Rupees

   (Un-Audited) (Audited)

6. LOAN FROM SPONSORS

   Loan from sponsors 6.1 861,520,405 853,226,205 Add: Obtain during the year 2,706,000 8,294,200

   864,226,405 861,520,405

   1. This loan has been obtained from sponsors of the Company and is unsecured and interest free. During previous year, the Board approved to change the nature of the loan which is now repayable at the discretion of the Company and has been reclassified accordingly. This loan is subordinated to long term and short term borrowings obtained from various banking institutions.

7. CONTINGENCIES AND COMMITMENTS

   There is no significant changes in the status of contingencies and any commitments since 30 June 2025.

   Note 31-Dec-25 30-Jun-25

   Rupees Rupees

   (Un-Audited) (Audited)

8. PROPERTY, PLANT AND EQUIPMENT

Net book value at the beginning of the period/year 695,749,734 725,189,751

Depreciation for the period/year (13,963,775) (29,440,017)

Net book value at the end of the period/year 681,785,959 695,749,734

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)

FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2025

Six month ended Three month ended

11 TRANSACTIONS AND BALANCES WITH RELATED PARTIES

Related parties from the Company's perspective comprise key management personnel and sponsors of the Company. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, and includes the Chief Executive and Directors of the Company. The details of Company's related parties, with whom the Company had transactions during the period or has balances outstanding as at the reporting date are as follows:

Name of related party Nature of relationship Basis of relationship

Aggregate %age of shareholding in the Company

Mian Iqbal Salahuddin Key management personnel Ms. Munira Salahuddin Key management personnel Mian Asad Salahuddin Key management personnel

Chief executive officer 17.59%

Director 18.38%

Director 17.71%

Mian Yousaf Salahuddin

Key management personnel

Director 17.59%

Mian Sohail Salahuddin Key management personnel Syed Abid Raza Zaidi Key management personnel

Director 0.08%

Director 0.03%

Transactions with sponsors are limited to provision of interest free loans to the Company. Details of transactions and balances with related parties is as follows:

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)

FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2025

Six month ended

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)

FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2025

1. FAIR VALUE MEASUREMENTS

   1. Financial Instruments

      1. Financial instruments measured at fair value

         The Company measures some of its financial assets at fair value. Fair value measurements are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements and has the following levels.

         Level 1

         Level 2

         Level 3

         Quoted prices (unadjusted) in active markets for identical assets or liabilities.

         Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (i.e. derived from prices).

         Inputs for the asset or liability that are not based on observable market data (i.e. unobservable inputs).

         The fair value hierarchy of assets measured at fair value and the information about how the fair values of these financial instruments are determined are as follows:

         There are no recurring or non-recurring fair value measurements as at the reporting date. The management considers the carrying amount of all the financial instruments to approximate their fair values.

      2. Financial instruments not measured at fair value

         The management considers the carrying amount of all financial instruments not measured at fair value to approximate their carrying values.

2. EVENTS AFTER THE REPORTING PERIOD

   There are no significant events after the reporting period that may require adjustment of and/or disclosure in these interim financial statements.

3. RECOVERABLE AMOUNTS AND IMPAIRMENT

   As at the reporting date, recoverable amounts of all assets/cash generating units are equal to or exceed their carrying amounts, unless stated otherwise in these interim financial statements.

4. GENERAL

   1. There are no other significant activities since June 30, 2025 affecting the interim financial statements.

   2. Corresponding figures have been re-arranged where necessary to facilitate comparison. However, there are no significant reclassifications during the period.

5. Date of authorisation for issue

These interim financial statements have been approved by the Board of Directors of the Company and authorized for issue on 28-01-2026.

Chief Executive Chief Financial Officer Director

UNDER POSTAL CERTIFICATE

REGISTERED OFFICE :

2-S Gulberg II, Lahore. Phones : 042 - 35759002

Fax : 042 - 35754394

E-mail: sallytex@hotmail.com