Auditors express ‘Adverse Opinion’ on BILDCO FY20 accounts

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Negative cash flow, large current liabilities raise concerns’

ABU DHABI/March 30-2021: The auditors of Abu Dhabi National Company for Building Materials (Bildco) Group, Mazars, have made ‘Adverse Opinion; about the company’s 2020 accounts in the wake of the company’s substantial loss, negative cash flow, unsustainable liabilities, etc.

The auditors pointed out that the Bildco Group has incurred a total comprehensive loss of AED98.10 million for the year ended December 31, 2020 and has a negative cash flow from operating activities of AED37.30 million as of December 31, 2020.

Moreover, the Group’s current liabilities have exceeded its current assets by AED113.94 million as of December 31, 2020. “These conditions indicate the existence of a material uncertainty, which may cast significant doubt about the Group’s ability to continue as a going concern,” the auditors noted while explaining the basis for Adverse Opinion.

Making Adverse Opinion about a company’s accounts by its auditors is viewed seriously by investors, who follow a particular company.

The shareholders’ equity of the Group dropped from AED222.45 million to AED124.36 million (including non-controlling interests), whereas the total assets contracted fromAED598.73 million to AED457.34 million during the period.

Going Concern

Despite the financial challenges the company face, the consolidated financial statements have been prepared on a going concern basis, based on strategic plans of the management in relation to new business strategies.

The auditors noted that the Group’s going concern assumptions are highly dependent on the successful outcome of such plans and new strategies and approvals by the relevant stakeholders. “We have not been able to obtain sufficient and corroborative evidences about the Group’s management plans and new strategies. Accordingly, we are unable to comment on the appropriateness of the going concern assumption of the consolidated financial statements and their consequential impact on the financial results of the Group,” the auditors noted.

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