KARACHI: Service Fabr­ics Ltd (SFL) expects that the Pakistan Stock Exchange (PSX) will remove its name from the defaulters’ segment on Friday.

Speaking to Dawn on Thursday, SFL company secretary Farzand Ali said the reversal is expected as soon as the company submits to the exchange its auditor’s certificate listing all the measures it’s taken so far to begin the firm’s revival.

The PSX had placed SFL in the defaulters’ segment with effect from Nov 10 on the violation of two clauses of the PSX Regulations: suspension of commercial production/business operations in its principle line of business for a continuous period of one year and the adverse opinion of the auditor in the latest annual report. The company contested the regulatory move, saying it has duly been informing shareholders through material notices on the stock exchange about its revival process.

“We told the exchange the company has resumed commercial activities. But it wanted our auditor to say the same thing in the form of a formal certificate. We’re in touch with our auditor. The matter will be sorted out soon,” said Mr Ali.

SFL switched its principle line of business from weaving to “technological projects, products, related know-how and research and development and to invest directly and indirectly in the manufacturing, trade, import, export and related consultancy and to provide infrastructural projects” in an extraordinary general meeting on May 29.

As for the adverse opinion expressed by its auditor Crowe Hussain Chaudhury and Company in the latest annual report, SFL released a letter by the auditing firm on Thursday. The auditor said in the letter the adverse opinion was expressed owing to certain factors that created uncertainty about the use of going concern assumption of the company.

Published in Dawn, November 12th, 2021