adminconclusion in the financial statement.
Moreover, the external auditors said they had highlighted significant uncertainties on the financial accounts of the Zimbabwe Stock Exchange-listed company, which may cast doubt on its capacity to continue as a going concern.
The external auditors’ reservations emerge as the firm reported a US$1,1 million loss in the 12 months to December 31, 2012, which was, however, an improved performance compared with the US$2,3 million loss registered the previous year.
Ernst & Young said their conclusion was modified as the external auditors were not able to obtain appropriate evidence on the possibility of recovering a deferred tax asset amounting to US$462 355 for 2012 (2011: US$480 575).
“Had management not recognised the deferred tax asset, the overall assets, net income and shareholder’s equity would have been reduced by US$462 355,” Ernst & Young said in a commentary given under audit opinion.
“We also draw attention to the existence of significant uncertainties that cast doubt on the ability of the company to continue as a going concern,” the auditors said.
Chemco said it registered a 47 percent decline in turnover to US$3,48 million, from continuing operations, against US$65 million the previous year, but the turnover for 2012 was after the disposal of TS Timber, which resulted in a US$266 710 profit.
Discontinued operations contributed US$285 413 to the group loss in the period under review. The ZSE-listed group attributed the loss for the year to December to liquidity constraints and the absence of adequate alternative financing instruments, which it said affected the company’s capacity to fund operations.
The continued non-performance of the winter cropping and price impasse between cotton farmers and merchants also had a negative impact on demand.
“Despite these challenges, the business managed to secure limited supplier credit, which helped to consolidate market position in the retail distribution sector while making inroads contract input supply schemes,” Chemco said.
But Chemco directors remain upbeat about future prospects and believe Agricura is set to benefit from the strategic alliances developed in the past financial period.
“The distribution business model, while taking advantage of the repacking facility, will improve the range of products offered to the market.
“Introduction of new products for tobacco, sugarcane and horticulture will present new space for business growth in 2013.
“The new initiatives for business growth through a leaner and more efficient organisation, following the restructuring and staff rationalisation that was completed in 2012,” Chemco said it its 2012 year-end financial statements.
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