Karachi: Dadabhoy Construction Technology Limited, a once-prominent player in the construction industry, is currently embroiled in significant financial and operational turmoil, with auditors issuing a disclaimer of opinion on its financial statements for the year ended June 30, 2020. The report, penned by independent auditors, highlights the company's inability to sustain operations due to a substantial financial deficit and ongoing legal challenges.
According to information available from the Pakistan Stock Exchange (PSX), the company's financial statements reveal a troubling scenario. As of June 30, 2020, Dadabhoy Construction Technology reported an after-tax loss of Rs. 1.396 million, compounding to accumulated losses of Rs. 31.517 million. This financial strain has wiped out the company’s equity, which stands at a meager Rs. 8.289 million. The situation has deteriorated to the extent that current liabilities exceed assets by the same amount, underscoring the severe liquidity crisis facing the company.
The company has been non-operational since 2016, primarily due to unresolved legal issues regarding the title of properties intended for development. These properties, although acquired through loans from related parties, have become a central point of contention and uncertainty, as approximately Rs. 60 million advanced for property purchases remains in jeopardy.
Management has disclosed tentative plans to restart operations, but these have yet to materialize. The ongoing socio-economic conditions in the country further exacerbate the company's ability to finalize any concrete business or financial plans. Without a viable operational and financial strategy, the auditors have expressed significant doubts about the company's ability to continue as a going concern.
Furthermore, the auditors noted that they were denied access to essential books of account and records, hindering their ability to audit thoroughly and ascertain the need for potential adjustments. This lack of transparency raises concerns about the accuracy and completeness of the financial reporting.
In light of these findings, the Securities and Exchange Commission of Pakistan (SECP) authorized the Registrar, Company Registration Office, Karachi, to petition for the winding up of the company, a decision that was formalized on October 28, 2019. This development signals a likely end to the company’s struggles through a formal dissolution process, marking a significant downturn from its previous industry standing.