Karachi October 11 2021: Amtex limited drop 19 percent as the auditors has provided observation regarding AMTEX ability to continue as going concern due to accumulated losses, liquidity issue, curtailed operational activities, pending litigations, closed operations of spinning division, curtailment of employees and lease of its certain properties (land and buildings) situated at addresses provided in the audit report. Directors of the company explain that the management is making all efforts to continue operations and to run the entity as a going concern. Company’s continuity of operations since last couple of years and increased sales volume despite global pandemic of Covid-19 clearly indicate that management’s efforts and plans are effective. Moreover, the company is in process of selling certain properties and machinery, mortgaged with the banks, the entire such sale proceeds will be paid to relevant charge holder banks to reduce the debt burden and to settle the litigation with these banks. The management of the company has already taken steps for extension and restructuring of loans from certain banks and negotiations with other banks of the company are in process. In view of steps mentioned above, the management is confident that it will be successful in its efforts and hence the company will be able to continue as a going concern.
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The auditors have provided observation that markup expense has not been fully charged. In this regard it is explained that certain banks / financial institutions have filed suit against the company for recovery of their financing and mark up so company has not provided any markup / cost of funds on the outstanding amount as stated in notes to the accounts. Based on the legal opinion, the company feels that, after institution of the suit, bank/financial institution is only entitled to cost of funds if so awarded by the Court in case the suit is awarded against the company. The levy of cost of funds and the quantum thereof shall be contingent on passing of the decree and rate prescribed by the State Bank of Pakistan during the period of pendency of the claim and discharge of decree, if passed by the Court.
During financial year ended June 30, 2021, company earned gross profit of Rupees 9.76 million on sales of Rupees 1,074.98 million as compared to Rupees 241.18 million gross loss on sales of Rupees 544.83 million for the previous financial year. During the FY 2021 Company incurred net loss after tax of Rupees 147.90 million as compared to net loss after tax of Rupees 670.96 million during the previous financial year. The company received fresh export orders from across the globe due to which sales volume doubled in the financial year under review but overall increase in input cost, adverse economic factors, under-utilization of manufacturing capacities and increasing fuel and energy prices culminated in after tax loss of rupees 147.90 million .
The COVID 19 global pandemic had significant effects on world economy resulting into negative GDP growth rate of many countries. However the government has made consistent efforts not only to deal with the effects of pandemic by providing free vaccination on one hand but also kept the industry running by giving incentives on the second hand. The government stressed on implementing SOPs and by vaccinating the people above the age of 18 years. Unlike the last year, the government avoided complete locked down and dealt with the situation by adopting smart locked down strategy. These measures helped the economy to achieve the growth rate of 3.94 % in the year ended June 2021 as compared to a negative growth rate in the year 2020. The government has set a target of achieving growth rate of 4.80 % in the year 2021-22 and tax revenue collection of 5.829 trillion as compared to 4.691 trillion in 2020-21.