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JUTESPINN

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JUTESPINN 16-Nov-2021

(Continuation news of JUTESPINN): quality and value of inventories has been provided to us by the management. Since the factory was closed down from 2016, physical existence of the inventories is completely doubtful as no valid evidence was provided to us confirming the existence of the stock other than some spare parts. The company has not disclosed write down policy of inventories in the notes to the financial statements about the quality of the inventories (cont.10)

JUTESPINN 16-Nov-2021

(Continuation news of JUTESPINN): absence of information related to the value of inventories. The company's policy note for valuation of inventories indicates that management stated the inventories at lower of cost and net realizable value but the company has not disclosed any fair market value except cost of inventory Tk. 243,791,989 which represents 84.33% of its total assets. No technical status report as on 30 June, 2020 on the quantity, (cont.9)

JUTESPINN 16-Nov-2021

(Continuation news of JUTESPINN): in depreciable asset. Due to lack of proper presentation, we are unable to identify the said assets and also unable to verify the accuracy of depreciation calculation. The Property Plant and Equipment of the company were carried at cost and no information related to any revaluation of the assets has been provided till the date of reporting so it is not understandable whether the Property, Plant and Equipment is presented at fair value. (cont.7)

JUTESPINN 16-Nov-2021

(Continuation news of JUTESPINN): The value of the assets may have significantly changed, the reflection of which was not demonstrated in the financial statements which led us to believe that the financial statements contain material misstatement. 3. Inventory (IAS-2): Inventories are being carried forward for the last three years at the same value at cost without considering the net realizable value. We were unable to determine the value of inventories reported in the financial statements due to (cont.8)

JUTESPINN 16-Nov-2021

(Continuation news of JUTESPINN): reporting assets without any impairment review shall overstate/understate the fixed assets value as of reporting date. Without proper documents/information/evidence, the physical existence and the rights and obligations could not be assessed or confirmed with the reported figure. In the fixed asset depreciation calculation schedule, some assets are fully depreciated and its nominal value comes to Tk. 1 and those asset's values are also included (cont.6)

JUTESPINN 16-Nov-2021

(Continuation news of JUTESPINN): We were provided with asset register regarding the type of assets but the current condition of the assets could not be assessed and matched with the register. The company has not reviewed any assets that could be impaired at the end of the year so this constitutes a departure from relevant IFRS. As the company is not in operation for more than 5 years, (cont.5)

JUTESPINN 16-Nov-2021

(Continuation news of JUTESPINN): indicated by financial statements of the company. 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 and that the financial statements do not adequately disclose this matter. 2. Property, Plant and Equipment (IAS-16): The carrying amount of property, plant, and equipment (PPE) stands at Tk. 18,465,040. (cont.4)

JUTESPINN 16-Nov-2021

(Continuation news of JUTESPINN): c) We also draw attention to the labor difficulties, inability to pay creditors on due dates, adverse key financial ratios, discontinuance of dividends, inability to obtain financing for essential new product development, discontinuance of production or other essential investments, inability to comply with terms of loan agreements, loss of market & customers, inefficiency of key management and negative net asset value and operating cash flows (cont.3)

JUTESPINN 16-Nov-2021

(Continuation news of JUTESPINN): As of that date, the Company's current liabilities stood Tk. 688,606,902 which exceeded its total assets of Tk. 289,076,943 by Tk. 399,529,959. b) Loan holders (Janata Bank Ltd.) and one of the suppliers namely West Zone Power Distribution Company Ltd has initiated legal proceedings against the company. The company's outstanding liabilities in accord to the Artha Rin Suit No. 125/2018 filed by the Janata Bank Ltd. stands at an amount Tk. 491,669,209. (cont.2)

JUTESPINN 16-Nov-2021

The auditor of the Jute Spinners Ltd has given the "Adverse Opinion & Other Matters" paragraphs in the Auditor's Report for the year ended on 30 June, 2021. Basis for Adverse Opinion: 1. Material Uncertainty Related to Going Concern (ISA-570): a) The Company incurred a net loss of Tk. 75,798,768 during the year ended 30 June, 2021 and the accumulated loss of the company as on 30 June, 2021 stands at Tk. 686,075,278. (cont.1)

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