Turnall in FY14 $11,9 million loss, restates 2012 and 2013 financials on fears of fraud

Turnall in FY14 $11,9 million loss, restates 2012 and 2013 financials on fears of fraud

HARARE, March 30 (The Source) – Building materials manufacturer Turnall Holdings loss widened to $11,9 million in the full year to December from $4,3 million previously on weakening sales and poor export performance, but discrepancies raised by an external audit has led to the company to restate its financials from two previous years.

Revenue fell by 20 percent to $32 million while export sales contribution fell to 2.7 percent compared to four percent in the prior year.

Presenting the company’s results on Monday managing director Caleb Musodza said the company failed to meet demand for the export market.

“On the export market we had challenges with remaining competitive as the Zambian Kwacha and South African Rand weakened against the US dollar but we have managed to bring down the cost of production for our exports so we should be in better position,” he said.

Musodza said an external audit carried out in the second half of last year by financial services firm -Deloitte had shown deficiencies in the company’s internal control systems with a number of errors being detected in the 2012 and 2013 financial reports.

“The audit revealed disturbing issues, ranging from compromised system controls and financial reports to governance issues. For instance we had our pallets supplier charging us twice above the market price.”

Following the audit findings the company has since restated its consolidated financial statements for the two years.

Asked whether the errors were fraudulent, Musodza said the matter was still being assessed by the company’s chairperson.

There has been an increase in loss after tax for 2013 to $1,7million as well as that of 2012 to $4,6million.

Some of the items revealed by the audit include duplication in the process of purchasing of raw materials as well as duplication of inventory values.

There were also deficiencies in the processes around investigation of sales returns and processing of related credit notes.