B Mirror Report: There is a working capital constraint at publicly traded Zahin Spinning. In addition, the Company has suffered large cumulative losses and is no longer able to pay back debts and utilities payments. Auditors are worried about the company’s capacity to start up again.
According to auditors, Zahin Spinning has halted production since 16 December 2024 due to a fire accident. Considering the company’s financial and other conditions, resuming business operations remains under threat.
As of 30 June 2024, Zahin Spinning had outstanding receivables of BDT 15.38 crore from its customers. Of this amount, BDT 10.55 crore was written off in the 2024-25 fiscal year due to low probability of collection. In the previous fiscal year, BDT 25.50 crore had been written off.
Following the fire accident, the company applied to the insurance company for a claim. The financial statements show that BDT 17.90 crore could be receivable under this claim. However, the auditors were not shown the application letter.
The company also failed to submit its monthly VAT return for November 2024, preventing auditors from verifying sales during the 2024-25 fiscal year.
Notably, Zahin Spinning was listed on the stock exchange in 2015, with paid-up capital of BDT 113.83 crore. Of this, 68.90 percent is owned by various categories of investors (excluding promoters and directors). As of Monday, 2 February, the company’s share price stood at BDT 4.00.
