Meghna Condensed Milk’s liabilities exceed assets
Meghna Condensed Milk Industries incurred a net loss of Tk 132.17 million for the year ended on June 30, 2021 while the company’s current liabilities exceeded its total assets by Tk 442.14 million.
“We drew attention to the statement of profit or loss and other comprehensive income which indicates that the company incurred a net loss of Tk 132.17 million during the year ended June 30, 2021,” according to the auditor’s report posted on Dhaka Stock Exchange (DSE) website on Thursday.
“Meghna Condensed Milk for several months is recurring net loss and also showed negative shareholder’s equity, negative retained earnings, negative net asset value per share, negative net profit,” opined the auditor’s report.
The report gave an opinion that these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern.
Referring to the financial statements, bank loan shows Tk 642.77 million, the report said, “We did not find an updated bank statement to confirm the amounts as those loan accounts were classified. And also, the management did not present the current portion of the long term loan”.
The company management did not present any disclosures on reconciliation of the statement of cash flows. The company has not recognised deferred tax expense/income in the statement of profit or loss and other comprehensive income.
“The company has transferred depreciation on revaluation surplus of asset from revaluation reserve to retained earnings without adjustment of deferred tax on depreciation on revaluation surplus which is non-compliance of Income Taxes”.
The company has not provided required disclosure regarding compensation packages of key management personnel, who are the related parties of the company which is non-compliance.
Dividend payable amount of Tk 1.67 million has been presented which were declared and approved earlier year, as per the listing regulation declared dividend are supposed to be paid within 30 days of approval. Till now that amount is unpaid, according to the report.
“Cash credit & overdrafts” shows Tk 362.69 million out of which Tk 227.79 million for which did not find any bank statement to confirm the amount as those loan accounts were classified, said the report.
As per the financial statement “Liabilities for expenses & other finance” Tk 457.68 million out of which Tk 451.37 million is provision of bank interest included in the amount but that amount is not confirmed from the bank statement, said the report.
Financial expenses show Tk 99.55 million out of which Tk 90.27 million is against Sonali Bank Loan A /C. “We did not find any bank statement to confirm the amount due to those loan accounts was classified”.
“We are required to report if we have concluded that the use of the going concern basis of accounting is inappropriate or there is an undisclosed material uncertainty that may cast significant doubt over the use of that basis for a period of at least twelve months from the date of the financial statements”.
Senior executives of the company could not be reached over the telephone.
Despite this disclosure, the company’s share price rose 1.80 per cent to close at Tk 17 each on Thursday.
Meghna Condensed Milk, which was listed on the DSE in 2001, failed to declare dividends over the years.
Its paid-up capital is Tk 160 million and authorised capital is Tk 800 million while total number of securities is 16 million.