By Ishara Gamage
Ceylon Finance Today: Four independent directors of the Troubled Central Investments and Finance PLC (CIFL) yesterday alleged that there had been many manipulated figures in the financial statements of the company since 2004.
The numbers presented to the board meetings we attended as independent directors from end 2012 have been completely distorted, these four independent Directors told Ceylon FT yesterday on the basis of anonymity.
These were submitted by fully qualified professional accountants and we as non executive directors had no way of getting the correct picture other than believing them. In fact the accounts presented to the Board from the time we served on the Board were showing positive bottom lines and even the audited accounts showed a small net profit, they said in disdain.
When the CBSL directed us to remove the former CEO on 23 December 2012, and wanted us to act for the CEO, we went into the accounting records and found that they were really messed up. We found that the values of properties mortgaged to CIFL by Aspic Homes against their dues were heavily inflated.
When we made further inquiries we found that the actual value of net assets were covering only about 33 per cent of the deposit base. Based on this information, we immediately stopped the interest accrual on the Homagama investment with immediate effect and started providing for the actual interest liability. Then, we noted that the company was making a loss about Rs 60 Million a month, they said. The situation shown in the KPMG audited accounts indicate the most prudent position of the assets. All uncertain values are provided including around Rs 1.6 billion due from Aspic Homes (capital and interest). That is the reason for the huge loss of Rs 4.3 billion shown in the current years' accounts.
The possible realizable values of properties mortgaged to CIFL by Aspic Homes against these due amounts were totally ignored in these accounts because we have no faith in the valuations given by previous valuers
With regard to liabilities, we have ensured all known liabilities are recorded.
The incurred net loss of Rs 4.3 billion during the year ended 31st March 2014 and as of the date has a net liability position of Rs 3.9 billion, latest audited accounts show.
"These conditions cast significant doubt on the company's ability to continue as a going concern and therefore its abilities to realize assets and discharge liabilities in the normal course of business," KPMG, auditors stated in their audit report of the company. During the previous year ended 31st March 2013 the company has reported a net loss of Rs 332 million.
The company does not meet the regulatory requirements for capital, the losses mainly due to large number of written off's, the accounts stated.
The company last Wednesday releases their latest audited accounts to the Colombo Stock Exchange almost after a year's time.
"We have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the financial statements ", KPMG, auditors further stated.
They also highlighted the company's non compliances with certain provisions of the Finance Act and the Companies Act. The company's total asset value has reduced to Rs 216 million from Rs 3.8 billion during the year.
www.ceylontoday.lk
Ceylon Finance Today: Four independent directors of the Troubled Central Investments and Finance PLC (CIFL) yesterday alleged that there had been many manipulated figures in the financial statements of the company since 2004.
The numbers presented to the board meetings we attended as independent directors from end 2012 have been completely distorted, these four independent Directors told Ceylon FT yesterday on the basis of anonymity.
These were submitted by fully qualified professional accountants and we as non executive directors had no way of getting the correct picture other than believing them. In fact the accounts presented to the Board from the time we served on the Board were showing positive bottom lines and even the audited accounts showed a small net profit, they said in disdain.
When the CBSL directed us to remove the former CEO on 23 December 2012, and wanted us to act for the CEO, we went into the accounting records and found that they were really messed up. We found that the values of properties mortgaged to CIFL by Aspic Homes against their dues were heavily inflated.
When we made further inquiries we found that the actual value of net assets were covering only about 33 per cent of the deposit base. Based on this information, we immediately stopped the interest accrual on the Homagama investment with immediate effect and started providing for the actual interest liability. Then, we noted that the company was making a loss about Rs 60 Million a month, they said. The situation shown in the KPMG audited accounts indicate the most prudent position of the assets. All uncertain values are provided including around Rs 1.6 billion due from Aspic Homes (capital and interest). That is the reason for the huge loss of Rs 4.3 billion shown in the current years' accounts.
The possible realizable values of properties mortgaged to CIFL by Aspic Homes against these due amounts were totally ignored in these accounts because we have no faith in the valuations given by previous valuers
With regard to liabilities, we have ensured all known liabilities are recorded.
The incurred net loss of Rs 4.3 billion during the year ended 31st March 2014 and as of the date has a net liability position of Rs 3.9 billion, latest audited accounts show.
"These conditions cast significant doubt on the company's ability to continue as a going concern and therefore its abilities to realize assets and discharge liabilities in the normal course of business," KPMG, auditors stated in their audit report of the company. During the previous year ended 31st March 2013 the company has reported a net loss of Rs 332 million.
The company does not meet the regulatory requirements for capital, the losses mainly due to large number of written off's, the accounts stated.
The company last Wednesday releases their latest audited accounts to the Colombo Stock Exchange almost after a year's time.
"We have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the financial statements ", KPMG, auditors further stated.
They also highlighted the company's non compliances with certain provisions of the Finance Act and the Companies Act. The company's total asset value has reduced to Rs 216 million from Rs 3.8 billion during the year.
www.ceylontoday.lk
No comments:
Post a Comment