Friday, May 03, 2024
Even though one year has already passed, products worth Tk 1.37 crore are still in transit, listed textile-sector company Anlima Yarn Dyeing Ltd said in its latest financial report for FY23.
This issue came to light through the auditor's qualified opinion, published on the Dhaka Stock Exchange (DSE) recently in a review of Anlima Yarn Dyeing's financial report for the year ended June 30, 2023.
A qualified opinion, typical after a professional audit, indicates that the information provided may be limited in scope or that the company's adherence to generally accepted accounting principles may be questionable.
As the products were not stored even after one year, the auditor expressed doubts about their availability. And the company has been cited as exaggerating its financial reporting by not reconciling goods worth Tk 1.37 crore.
The auditor says the company recorded inventories of Tk 5.86 crore, which include goods in transit worth Tk 1.37 crore. Tk 1.37 out of total goods in transit amount remains unadjusted for more than one year.
Therefore, net profit and net assets reported in the statement of profit or loss and other comprehensive income and statement of financial position are likely to be overstated to that extent, the auditor added.
When contacted, Arif Hossain, chief financial officer of Anlima Yarn Dyeing, told The Business Post that the matter is true.
“We ordered goods worth Tk 5.86 crore. Out of this, Tk 4.49 crore worth of goods have been received. Since goods were ordered from one party, the entire amount is reported in the financial statement.”
He said they could not pay the money due to their weak financial condition. “As we are a listed company and have a good reputation, it was not possible to cancel the order at will.”
“Our higher authorities have discussed the matter. We are trying to resolve this issue as soon as possible,” he added.
Not only goods have been bought and left in transit for over a year, but the company has also showed Tk 11.05 crore as trade receivables in their financial statement as of June 30, 2023. The auditor raised the question about it.
The auditor says that in the financial statement, trade receivables amounting to Tk 11.05 crore were reported by the company in the statement of financial position.
Out of those balances, Tk 86 lakh remained overdue for a longer period of time, raising significant uncertainty and doubt regarding their realisation and increasing the risk of default at the reporting date, she added.
In this regard, Arif Hossain said the auditor has been taking notes on the matter for less than a year. “We are trying to reduce that too.”
The company posted a net profit of Tk 14 lakh in FY23. The company had made a loss of Tk 32 lakh in the previous fiscal year.
Capital market analyst Abu Ahmed said that investors lose the most by investing in the weak companies. A company that makes a profit of Tk 14 crore per annum and sells Tk 86 lakh worth of goods in advance, all of which is inconsistent.
He thinks that the regulatory body, BSEC, should be stricter about these companies.
In the first quarter (July-September) of FY24, the losses of the company stood at Tk 28 lakh, which made a profit of Tk 1.76 lakh in the same period of the previous year.
The company owns and operates a 100 per cent export-oriented yarn and sewing thread dyeing facility. It markets sewing thread and provides yarn dyeing services to different knitting, weaving, and garment factories. The company employed 205 employees as of 30 June 2023.
The company did not recommend any dividend for its shareholders in the last fiscal year. Its share price stood at Tk 0.08.
As of 30 November 2023, sponsors and directors jointly held 44.43 per cent, institutions 4.73 per cent, and public investors 50.84 per cent shares in the company.
