As the organised private sector mulls how to overcome the challenges imposed on businesses by the Nigeria’s economic environment, John Holt Plc has been handed a damning report questioning its capacity and those of its subsidiary companies to continue in business.
John Holt Plc is one of Nigeria’s legacy companies transformed from trading in primary commodities during the colonial era into a manufacturing and trading conglomerate.
But, a report of an audit of its business operations by BDO Professional Services, a firm of Chartered Accountants, on Friday raised serious doubts about the capacity of the Group to remain in business.
The report, which followed a comprehensive audit of John Holt Plc consolidated and separate financial statements for the year ended on September 30, 2015, said that the basis of their opinion followed the huge losses incurred by the company and the group.
The auditors noted in the report that their fears were predicated on the massive erosion of the company’s shareholders fund and the fact that John Holt’s current liabilities far outstrip current assets.
The auditors however noted that while the group’s current liabilities exceeded current assets, the shareholders fund remained very strong.
Specifically, the auditor stated that John Holt Plc audited annual account signed off by Ebenezer Olabisi, with FRC/2012/ICAN/00000000104 registration number, and dated December 30, 2015, made the revelations under “Emphasis of Matter”.
A close review of the financial statement revealed that the company incurred a loss before taxation of N311 million.
Overall, the Group lost a total of N171milion as at September 30, 2015, compared with a profit of N266 million and N427 million earned by the company and group respectively in 2014.
In the period under review, the company’s current liabilities exceeded the assets by N4.2 million, with N3.6 billion as shareholders funds.
In the same period, the group’s current liabilities exceeded current assets by N1.2 billion, while the group also had positive shareholders’ funds of N3.2 billion.
In spite of the group’s positive shareholders’ funds, the auditors said that the financial conditions in the group were “worrisome”.
“These conditions indicated the existence of a material uncertainty, which may cast significant doubt about the company’s ability to continue as a going concern,” the auditors stated in the report.