Aziz Pipes has been out of production since May due to a shortage of working capital, with losses piled up in the four years to FY24.
Currently, its liability is more than its assets, which is why the auditor said the company is at risk of going out of business.
The listed uPVC pipe producer’s accumulated losses amounted to Tk 322.48 million as of June this year. Its equity turned Tk 199.4 million in the negative in FY24, according to the auditor.
Moreover, the company has a huge amount of unpaid loans that will be difficult to pay off with its inadequate assets.
The auditor said it did not find any plan to address the financial problem.
“No management plan was provided to support the assumption that the company can continue as a going concern…. We believe that there are material uncertainties that cast significant doubt on the company’s ability to continue as a going concern,” said the auditor.
Unpaid loans
Uttara Bank has filed lawsuits claiming dues of Tk 725.05 million including interest up until August 2018, according to the auditor.
Also, Dutch Bangla Bank Ltd. claims a total of Tk. 340.57 million in a case filed against Aziz Pipes.
The aggregate payment to be made is more than Tk 1 billion but the company has assets worth only Tk 334 million.
So, the company will not be able to pay back its loans by selling its assets.
The auditor is also skeptical about the value of the assets of the company.
The company’s financial statement showed properties, plant, and equipment of Tk. 233.12 million, inventories Tk 55.09 million, trade receivables Tk 28.87 million, and advances, deposits & prepayments of Tk 17.72 million.
The auditor said it was unable to verify or confirm the existence of some of the assets mentioned in the company documents.
During the audit, the auditor also found that most of the inventories were “slow-moving” items.
Despite this poor state of the company, the stock of Aziz Pipes increased 1.56 per cent to Tk 52.10 per share on Tuesday on the Dhaka Stock Exchange.
