Auditors ‘qualify’ Gulfa Mineral Water accounts

Name change moved, but yet to be approved by DFM

Amit Chettupuzha

DUBAI/November 14-2020: The auditors have ‘qualified’ the financial accounts of the three-month period ending September 30, 2020, of Gulfa Mineral Water and Processing Industries Co for not furnishing the relevant details with regard to the sale of a business segment of the company during this period.

The auditors have also done an ‘emphasis of matter’ on the company’s move to change its name to Gulf General Investments Company, though has not yet been approved by Dubai Financial Market (DFM) where the company’s shares are listed.

Key business segment sold

The Group said it has sold the business related to its main activity of producing and selling mineral water and other related activities along with all related assets and liabilities to a third party and the deal has resulted in a loss amounting to AED2.60 million

But the auditors have flagged that the group has not performed any impairment review as at the date of disposal, nor has it provided any fair valuation report to them as of the date of their review of the financials.

“We were unable to obtain sufficient and appropriate evidence to satisfy ourselves regarding the sale of business segment. Consequently, we were unable to determine whether any adjustments to the interim condensed consolidated financial statements were necessary,” the auditors noted while explaining the ‘basis for qualified conclusion’.

Name change still pending

The auditors have also drawn the attention to the steps taken by the company to change its name to Gulfa General Investments Company and thereby change its business activities too.

The change in name and business activities though were approved by the Emirates Securities and Commodities Authority (ESCA), the approval from the side of DFM was pending as of the date of the auditors’ review.

Sale of investment property

The Group said it has sold its investment property amounting to AED25.20 million with a loss of AED15.20. The group collected the proceeds amounting to AED10 million as per the initial sale and purchase agreement.

The company said the final formal agreement was not yet signed by both parties as at the date of the review of the company’s accounts, but the management is expecting to finalise it before the year end.

Accumulated losses

The company with a share capital of AED30 million has an accumulated losses to the tune of AED8.11 million as of September 30, 2020, and a total assets of AED42.41 million

The company also said it has collected AED10 million through the issue of additional shares. As of the date of this report, the additional paid up capital has not yet been authorised and confirmed by DFM and ESCA, and hence has been classified as ‘under additional paid-up capital’.

 

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