Faisalabad: In a significant development, Sitara Peroxide Limited has reported substantial financial difficulties for the fiscal year ended June 30, 2023. The company's board of directors, through a virtual and in-person meeting on September 24, 2024, approved the financial results, revealing a stark operational and financial situation.
The audited financial statements show that Sitara Peroxide incurred a gross loss of Rs. 273.39 million and a net loss of Rs. 792.78 million for the year. These figures come as the company's current liabilities overwhelmingly exceed its assets by Rs. 792.79 million, illustrating severe financial distress.
According to information available from the Pakistan Stock Exchange (PSX), the company's operational challenges were compounded by a series of shutdowns. The Sitara Peroxide plant ceased operations from October 20, 2022, to March 02, 2023, and again from June 12, 2023, to date. These interruptions significantly impacted the company's production and financial health.
The auditor's report expressed a disclaimer of opinion, highlighting the absence of sufficient audit evidence to support the going concern assumption. The report detailed significant doubts about the company's ability to continue operating. Notably, the auditors could not obtain necessary evidence regarding the company’s potential recovery plans, including the sale of assets and additional funding measures, which are critical to Sitara Peroxide’s survival.
Sitara Peroxide has outlined plans for a Balancing, Modernization, and Rehabilitation (BMR) strategy to revitalize its operations. However, the feasibility of these plans hinges on securing substantial external financing and successful asset liquidation.
The company's property, plant, and equipment, valued at Rs. 2.56 billion, have not been reassessed for impairment, despite prolonged operational halts, adding another layer of uncertainty to the financial statements.
The Annual General Meeting is scheduled for October 10, 2024, in Karachi, following the SECP's directions. During this period, the company’s share transfer books will be closed from October 03, 2024, to October 10, 2024.
This report underscores the critical challenges facing Sitara Peroxide as it navigates severe operational disruptions and financial instability.