The Public Investments Committee on Social Services, Administration and Agriculture (PIC-SSAA), chaired by Hon. Emmanuel Wangwe (Navakholo) met with officials of Agro-Chemicals and Food Company Limited to examine the Auditor General’s report for Financial Years 2015/2016 to 2016/2017.

For the FY 2015/2016, the Auditor General’s financial statement on the company indicated that they made a profit of Kshs.227,711,344, which reduced the deficit from Kshs.6,802,260,465 as of June 2015 to Kshs.6,574 549,121.30 by June 2016. It was, however, noted that the current liabilities of Kshs.904, 297,816 exceeded the current assets of Kshs.193, 009,620 as of 30 June 2016.

The Committee noted that the Company faces financial challenges and the statements were prepared on a going concern basis on the assumption that the company will continue to receive financial support from the Government, creditors and bankers.

According to the Company’s Chief Executive Officers (CEO), Mr. Ashok Agrawal, the accumulated negative equity arose due to the loan interest and the exchange losses on the GOK loans which were beyond the control of the management board.

He insisted that the company had always met its financial obligations when they fell due to the repayment of the GOK loan which was beyond their control.

“The company is currently under the privatization process. Due diligence has been done as we wait for the approval. It is expected that once privatization is completed and the Government loan is restricted, the financial position will improve and the accumulated losses wiped out, bringing the company back to profitability,” Mr. Agrawal said.

For the FY 2016/2017, the Company was asked to explain why projects worth Kshs.13, 469,200 were terminated for being unviable. According to the report, it was also not possible to confirm the carrying value of property, plant and equipment balance of Kshs.2, 525,268,847.

The CEO told the lawmakers that while carrying out the feasibility studies on the three projects; construction of a new molasses preparation station, river pump project and construction of water clarifier, they found out that the cost of implementing them was way above the budget and could not be implemented thus it was viable to terminate them.