Summit Alliance Port Ltd, which is listed with the stock exchanges, overstated its net assets by Tk 102.38 crore in its financial statements for the last two years (2011 and 2012), a Chittagong Stock Exchange report said. The report said the concern of the Summit Group set its revaluation reserve without deducting its deferred tax liability in the last two years, deviating from Bangladesh Accounting Standards.
The CSE prepared the report on the annual financial statements of Summit Alliance Port for the year ended on 2012 and the port city bourse submitted it to the Bangladesh Securities and Exchange Commission.
In 2011, Summit Alliance Port conducted its revaluation.
After the revaluation the net asset value of the company increased by Tk 372.31 crore to Tk 650.78 crore as the company did the revaluation without deducting its deferred tax liability of Tk 102.38 crore.
As per the article 20 of the BAS 12, deferred taxes on revaluation reserve have to be recognised in the financial statements presenting in different components of financial statements like profit and loss account, statement of other comprehensive income and statement of changes of equity.
As Summit Alliance Port neither mentioned nor deducted the deferred tax from the revaluation reserve, the company’s net asset value per share increased by Tk 7.70 to Tk 42.78, the CSE report said.
The deferred tax was 27.50 per cent of the revaluation reserve.
If the company had deducted the deferred tax of Tk 102.38 crore from its revaluation reserve, the company’s NAV per share would be reduced to Tk 35.08, it said.
The NAV of the company was Tk 33.31 in 2010 which increased to Tk 44.29 after the revaluation.
A BSEC senior official told New Age that each and every company should provide the actual financial information as investors follow the information in taking their investment decisions.
Manipulation or misrepresentation of financial information may mislead investors and may cause financial losses for them, he said.
-With New Age input
