⚡ Flash Summary

Al-Abid Silk Mills Limited’s 57th Annual Report for the year ended June 30, 2025, reveals a company facing significant financial headwinds. The company has accumulated losses of Rs. 2,314 million, and current liabilities exceed current assets by Rs. 1,902 million, raising doubts about its ability to continue as a going concern. The Directors’ Report indicates that the textile industry remains under pressure due to increased taxes and duties. The company is negotiating with buyers for production and processing, but no dividend is planned due to prevailing financial constraints. The auditors have expressed an adverse opinion on the financial statements.

📌 Key Takeaways

• ❌ Accumulated losses stand at a negative Rs. 2,314 million, indicating severe financial distress.
• ⚠️ Current liabilities exceed current assets by Rs. 1,902 million, highlighting liquidity concerns.
• 📉 No production or sales during the year, reflecting operational challenges.
• 🚫 No dividend declared for the year ended June 30, 2025, due to financial constraints.
• 🏦 Company engaged in litigation with certain banks, preventing direct balance confirmations.
• 💼 One Non-Executive Director resigned; the Board intends to appoint a new director.
• 📜 Auditors issued an adverse opinion on the financial statements.
• 🏭 The company is negotiating production and processing deals with buyers, awaiting approval for bulk production to commence.
• 📈 Revaluation surplus on property, plant, and equipment increased from Rs. 1,905.75 million to Rs. 2,400.54 million.
• 💰 Cash and bank balances decreased from Rs. 103.43 million to Rs. 50.47 million.
• 📉 Loss per share is negative, reflecting losses for shareholders, (-10.36).
• ⛔ No material departure from corporate governance practices, according to the listing regulations.
• 📅 Next AGM scheduled for October 28, 2025.
• 🚫 No internal audit function due to company not operational.

🎯 Investment Thesis

Given the precarious financial condition and operational stagnation, a SELL recommendation is warranted. The company has high risk and low to no potential for return, and potentially a risk for bankruptcy. Price target 0.00 (near zero).