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BIFC's financial indicators suffer setback: Auditor

FE Report | July 21, 2019 00:00:00


The auditor has given 'qualified' opinion on the financial statement of the Bangladesh Industrial Finance Company Limited (BIFC), saying the company's financial indicators have suffered a serious setback.

A qualified opinion is a statement issued after an audit is completed by a professional auditor, suggesting that the information provided is limited in scope or the company being audited has not maintained generally accepted accounting principles.

According to basis of the auditor's qualified opinion, the BIFC had continuous shortfalls in provision during the years from 2015 to 2018.

In 2018, the company made a provision of Tk 578.44 million against the required amount of Tk 801.73 million. As a result, the provision shortfall stood at over Tk 223.29 million.

The auditor observed that the company's total equity becomes negative because of net loss incurred during the last three years and investment made in shares as of 31 December 2018.

"We found that BIFC did not compute the deferred tax on the asset revaluation reserve amount of Tk 403.42 million," the auditor said.

The auditor also said a huge amount of loans and leases are classified as 'bad and loss' and there was only 1.30 per cent recovery in 2018, although legal processes are underway to recover the amount.

According to the auditor's qualified opinion, they could not verify an amount of bank balance as the management of the BIFC was unable to provide them with bank statements.

The auditor also could not confirm actual liability position of some loan balances worth Tk 2.32 billion as the company was unable to provide them with 14 loan statements from different banks.

Mentioning the net loss incurred for last three years, the auditor cast significant doubt over the company's ability to continue as a going concern.

"… therefore the company may be unable to realise its assets and repay its liabilities in the normal course of business," said the auditor's opinion.

The BIFC invested an amount of Tk 117.50 million in unquoted shares in the Banglalion Communication and GMG Airlines, and made 100 per cent provision against those investments, the auditor found.

The BIFC, presently a 'Z' category company, was listed on the stock exchanges in 2006.

The company's sponsor-directors hold 34.73 per cent shares, institutions 48.32 per cent and general shareholders 16.95 per cent as of June 30, 2019.

The company's shares presently are being traded below the face value of Tk 10 each. The share price closed at Tk 2.90 each on the Dhaka Stock Exchange (DSE) on Thursday.

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