Karachi: Dadabhoy Construction Technology Limited has been unable to provide sufficient audit evidence to support its financial statements for the year ending June 30, 2022, leading to a disclaimer of opinion from its auditors. This marks a continuation of the company's financial turmoil, which has persisted since its operations ceased in 2016.
According to the independent auditor's report released to the members of Dadabhoy Construction Technology Limited, the company's financial challenges are severe, with a reported after-tax loss of Rs. 2.173 million in the current year, compared to Rs. 3.2 million in 2021. As of the reporting date, accumulated losses amounted to Rs. 36.890 million, completely eroding the company's equity which now stands at a mere Rs. 13.662 million. The company's current liabilities have overwhelmed its assets by the same amount, reflecting a dire liquidity crisis.
Despite receiving financial aid in the form of loans from related parties intended for land acquisition, the company has been unable to make necessary payments due to legal complications surrounding the property titles, further entangling its operational capabilities. The auditors emphasized the absence of a reliable financial and operational plan as a key concern, with ongoing socioeconomic challenges in the country further complicating recovery efforts. According to information available from the Pakistan Stock Exchange (PSX), the absence of any new inflow of funds from directors or sponsors this year has also been noted, underscoring the company's reliance on external support for survival.
Furthermore, on October 28, 2019, the Securities and Exchange Commission of Pakistan (SECP) authorized the Registrar, Company Registration Office in Karachi, to file a petition for the winding up of the company at the Sindh High Court, signaling potential closure if the company cannot navigate through its crises.
The audit report also noted that due to restricted access to the company's financial records, auditors could not verify if adjustments were necessary for the financial statements, casting significant doubt on the accuracy and completeness of the financial reporting.
Management remains responsible for the preparation and presentation of the financial statements in accordance with local standards and for maintaining effective internal controls that prevent misstatements due to fraud or error.