Jute Spinners incurred a net loss of Tk 102.90 million during the year ended on June 30, 2018 and the accumulated loss of the company stood at Tk 454.52 million.
The company's liabilities stood Tk 468.48 million which exceeded its total assets worth Tk 300.48 million by Tk 168 million as on June 30, 2018, according to an audit report posted on Dhaka Stock Exchange (DSE) website on Tuesday.
"We also drew attention to the labour difficulties, inability to pay creditors on due dates, inefficiency of key management and negative operating cash flows indicated by financial statements of the company," said the audit report.
The report gave an opinion that these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern.
The property plant and equipment of Jute Spinners were affected in 1990 and subsequently no other machinery has been installed till the date of reporting, said the report.
The company has not disclosed write down policy of inventories in the notes to the financial statements since the factory remained closed from 2016, either the quality of the inventories is obsolete or unusable condition raw jute, finished goods, work in progress & stores and spares.
The company has taken loan about Tk 14 million from the managing director. But no board resolution or agreement was made between the managing director and the company, it said.
Therefore, no interest was charged by the company against the loan amount.
The company has taken loan from Ayesha Kadir amounting to Tk 3.50 million which remained unpaid and no interest has been provided in the accounts resulting understatement of liability, the audit report added.
The carrying amount of property, plant, and equipment (PPE) comes to Tk 29.78 million.
"We were not provided with any document regarding checking of physical existence as a part of internal control as of balance sheet date," opined the auditor's report.
The company also failed to maintain workers profit participation fund (WPPF) and did not provide for gratuity fund (GF) and provident fund (PF) during the year.
Production of the company has been stopped for more than two years but the related expenses e.g. factory and administrative expenses has been provided in the accounts which only increased the loss of the company, said the report.
Major portion of transaction with directors have been made by cash.
Each share of the Jute Spinners, which was listed on the Dhaka bourse in 1984, closed at Tk 119 on Tuesday, soaring 9.98 per cent.
The company also failed to declare dividend over the years. Its paid-up capital is Tk 17 million and authorised capital is Tk 35 million while total number of securities is 1.70 million.
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