The auditors of the Khan Brothers PP Woven Bag Industries (KBPPWBI) failed to confirm its possession of a piece of land worth Tk 140.88 million.
The auditors, who visited the company, said in their qualified opinion on the company's financial statements for the FY22 that they had not been shown the original copies of the land ownership documents, charge document, and khazna receipts.
"During our visit to the factory, we observed that there is no separate periphery/demarcation of the factory premises," reads the qualified opinion.
During the visit, the auditors observed that three factories namely Khan Brothers PP Woven Bag Industries, Khan Brothers Bag Industries and Khan Brothers Marble & Granite were within one boundary.
The auditors also said Khan Brothers had been suffering from a severe working capital crises as well.
The company's secretary Tapan Kumar Sarker said the company had possession of 4.615-acre land mentioned in the financial statement.
The land ownership documents could not be showed to the auditor as the papers were with the bank since a loan had been taken out against the property, Mr. Sarker said.
To the best of the auditors' understanding, the company is running through subcontract works. The auditors have also said the recovery from the finished goods and raw materials as shown in the financial statements looked very remote and insignificant.
The working capital crisis forced the company to depend on subcontract works.
The company is also non-compliant with the VAT rules; the returns submitted show zero tax though the financial statement cites a turnover of more than Tk 91.06 million during the year, according to the qualified opinion.
The auditor emphasised the need for a proper management plan for the company.
The KBPPWBI, presently an 'A' category company, was listed with the stock exchanges in 2014.
The company's sponsor-directors hold 30.13 per cent shares, institutes 28.71 per cent and general shareholders 41.16 per cent as of August 31, 2022.