Listed company Legacy Footwear PLC has come under scrutiny after its audit report for the financial year ended 30 June 2025 revealed major inconsistencies in internal accounting practices and multiple violations of legal obligations. The company’s external auditor raised three significant concerns under the “Emphasis of Matter” section, drawing the attention of investors and regulators.

According to the report, Legacy Footwear has no fixed asset register or detailed documentation for its Property, Plant and Equipment (PPE). Despite this gap, the company transferred Tk 4.16 crore from capital work-in-progress to the PPE account during the year. While bills and vouchers were provided as supporting documents, the auditor noted that no third-party verification was carried out. However, physical inspection confirmed that the additional work had indeed been completed.

Serious questions have also emerged regarding the company’s sales revenue reporting. Legacy Footwear reported Tk 4.59 crore in sales for FY2024-25, but the auditor could not reconcile this figure with the VAT returns submitted by the company. No reconciliation statement was prepared, which the auditor flagged as a violation of the VAT and Supplementary Duty Act, 2012. Despite this discrepancy, sales transactions were found to be reflected in the company’s bank statements.

The audit further uncovered significant breaches of labour law compliance, particularly regarding the Workers’ Profit Participation Fund (WPPF). The company reported a liability of Tk 4.25 lakh, including Tk 2.58 lakh outstanding from the previous year. As required under Section 234(b) of the Bangladesh Labour Act, 2006, the payable amount must be transferred to the WPPF within nine months after the end of the financial year  an obligation the company failed to meet. Additionally, no provision was made for interest on unpaid dues as required by Section 240(2) of the Act.

While the auditor stated that these concerns did not alter their overall audit opinion, they emphasized the issues due to their seriousness and potential implications for stakeholders.