Karachi: In a significant development for Dadabhoy Construction Technology Limited, an independent auditor's report has expressed a disclaimer of opinion on the company's financial statements for the year ended June 30, 2022.

The audit firm cited severe limitations in accessing necessary financial data and evidence as the basis for their inability to form an opinion. According to information available from the Pakistan Stock Exchange (PSX), the auditors highlighted that they could not obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. This issue was compounded by a lack of access to the company’s books and records, which are essential for verifying financial transactions and statuses.

The financial statements in question include the company's statement of financial position, profit or loss, changes in equity, and cash flows. The auditor drew attention to several critical issues in their report:

- Dadabhoy Construction Technology reported a net loss after tax of Rs. 2.173 million in 2022, increasing its accumulated losses to Rs. 36.890 million and wiping out its equity, which stood at Rs. 13.662 million by year-end.

- The company's current liabilities exceeded its assets by the same margin, raising doubts about its ability to continue as a going concern. Operations have been halted since 2016, adding to the financial instability.

- Legal disputes over property titles have prevented the company from confirming the ownership of assets worth Rs. 59.80 million.

The report also mentioned that the company's survival depends heavily on financial support from its directors and sponsors, which has not been forthcoming in the current year. The auditors were unable to verify the appropriateness of the going concern assumption used in preparing the financial statements, leading to significant uncertainty about the company's future operations.

Furthermore, the Securities and Exchange Commission of Pakistan (SECP) had authorized the winding up of the company, to be presented before the High Court as of October 28, 2019, due to the company's inability to meet its obligations and continue operations.

The responsibilities of management and the board of directors in this context include ensuring accurate financial reporting and compliance with the Companies Act, 2017. However, the disclaimer issued by the auditors puts into question the efficacy of these measures in the current fiscal environment.