Jauss Polymers Reports Profit Amid Zero Revenue, Auditor Raises Going Concern Issues

Jauss Polymers Limited, a manufacturer of plastic bottles, jars, and caps, has reported a profit of ₹32.35 lakh for the quarter ended June 30, despite having no revenue from operations. The company's financial results, approved by its Board of Directors on August 14, reveal a unique situation that has raised concerns about its future operations.

Profit from Subsidiary Sale

The company's profit was entirely driven by other income of ₹39.44 lakh, which came from the sale of its subsidiary, Innovative Containers Pvt Ltd. Jauss Polymers had previously invested ₹355.00 lakh in this subsidiary and sold it for a total consideration of ₹394.44 lakh during the quarter. This sale was conducted as per board resolution and approved by shareholders in an EGM, based on valuation reports as per norms.

Financial Highlights

Auditor's Concerns

The company's auditor, Mahesh Yadav & Co., has issued an adverse conclusion in their review report, raising significant doubts about Jauss Polymers' ability to continue as a going concern. The auditors cited several reasons for their concerns:

1. Zero turnover for the financial year
2. Significant losses in previous financial years
3. Sale of plant and machinery in FY 2020-21
4. Lack of management assessment for future operations
5. Missing bank statements for multiple accounts
6. Unconfirmed fixed deposit documents worth ₹2.00 lakh
7. No internal audit conducted during the quarter

Other Notable Points

• The company's paid-up equity share capital stands at ₹462.56 lakh (face value ₹10 per share).
• Jauss Polymers has written off fixed assets with a Written Down Value (WDV) of ₹9.88 lakh during the year ending March 31, 2024, due to their non-existence as confirmed by management.
• The company's financial statements are prepared on a going concern basis, despite the auditor's reservations.

Management Response

The company's management has not yet performed an assessment of its ability to continue as a going concern, despite requests from the auditors. No plans for future actions or cash flow forecasts have been provided to address the ongoing concerns.

As Jauss Polymers navigates through these challenging times, investors and stakeholders will be closely watching the company's next steps and its ability to address the auditor's concerns about its operational viability.