Meghna Condensed Milk, a sister concern of the local conglomerate Meghna Group, risks going out of business as its liabilities have exceeded its assets, said auditors.
In the latest auditor's report, the auditor flagged multiple irregularities and limitations in audit evidence, including inadequate books of accounts, unsupported balances, and non-compliance with several Bangladesh Securities and Exchange Commission (BSEC) notifications and International Accounting Standards (IAS).
In a financial disclosure, the company stated that its factory had been closed and production halted for a long period of time, which severely impacted revenue generation.
The company received an adverse opinion from its auditor for the year ended June 2025, alongside a "material uncertainty related to going concern" warning.
It incurred a net loss of Tk 160.74 million in FY25. Its retained earnings stood at a negative Tk 1.49 billion, while net asset value per share was negative Tk 16. Earnings per share and net operating cash flow per share were also negative.
These conditions indicate a material uncertainty, auditors said, which may cast significant doubt on the company's ability to continue as a going concern.
Being a leader in the fast-moving consumer goods sector, Meghna Group has failed to reopen its condensed milk production business for several years.
Meanwhile, the auditor questioned the reliability of key balance-sheet items such as property, plant, and equipment worth Tk 1.11 billion, inventories of Tk 30.12 million, advances and prepayments of Tk 55.83 million, and sundry debtors of Tk 9.03 million due to a lack of proper documentation and supporting records.
Large loan balances from banks, including Sonali Bank, also could not be fully verified because of missing statements and documents.
The auditor's report also highlighted governance and compliance gaps, including the absence of proper disclosures on related parties, deferred tax, cash-flow reconciliation, and key management compensation, as required under IAS and BSEC rules.
Meanwhile, the stock of the company rose 1.13 per cent to Tk 26.90 per share on Monday on the Dhaka Stock Exchange (DSE).
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