Karachi: In a comprehensive report released by auditors on the financial health of Dadabhoy Construction Technology Limited, the independent auditors declared a disclaimer of opinion, emphasizing their inability to audit the company's financial statements for the year ended June 30, 2021. This decision reflects significant uncertainties and operational challenges faced by the company.
According to information available from the Pakistan Stock Exchange (PSX), the auditors' report highlighted several critical issues that hindered their ability to provide a clear audit opinion. The primary concerns include a substantial after-tax loss of Rs. 3.2 million in 2021, up from Rs. 1.397 million in 2020, and accumulated losses reaching Rs. 34.717 million, wiping out the company’s equity which stands at Rs. 11.489 million.
The company's operations have been halted since 2016, leading to severe financial and operational difficulties. Current liabilities have surpassed current assets by Rs. 11.489 million, mirroring the shortfall reported in 2020. The lack of operational revenue has forced the company to rely on financial injections from directors and related parties, which have been sporadic and insufficient to sustain business activities.
Legal complications concerning property acquisitions have further complicated matters. The company is entangled in legal disputes over the titles of properties intended for development, with Rs. 40.80 million pending confirmation due to these unresolved issues.
The auditors also noted that the company has been denied access to necessary financial records and information, which prevented them from verifying the financial statements fully. This lack of transparency raises questions about the potential need for adjustments to the financial statements.
On the regulatory front, the Securities and Exchange Commission of Pakistan (SECP) took a decisive step by authorizing the Registrar, Company Registration Office, Karachi, to petition for the winding up of the company at the High Court as of October 28, 2019. This action underscores the severe financial instability and ongoing challenges faced by Dadabhoy Construction Technology Limited.
The audit report concludes by casting significant doubt on the company's ability to continue as a going concern, suggesting that the financial statements should reflect realizable values rather than continuing operations.