The firm, a unit of the Hayleys conglomerate, said gross sales rose 13 percent to 13.3 million US dollars in the quarter from a year ago.
It had made a net profit of 197,422 dollars in the December quarter of the year before.
Fitch Ratings had placed Hayleys MGT Knitting Mills on 'Rating Watch Negative' in December after the fabric manufacturer warned of losses when an inquiry revealed discrepancies in inventory and accounts receivables.
The Hayleys MGT Knitting Mills stock exchange filing said a special audit verification had been done by B R De Silva , Chartered Accountants and S J M S Charted Accountants on trade receivables and inventories.
The probe had revealed "there were discrepancies between the value of physical balance of inventories and that of financial statements", it said.
"Net realizable value of certain categories of inventories could be lower than that of weighted average cost. Trade receivables were over stated as some credit notes due have not been recorded."
The company said the discrepancies forced it to make an additional provision of almost 1.2 million US dollars for trade receivables and of just over two million dollars for inventories.
source - www.lbo.lk
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