Alltex Industries, a listed company at the Dhaka Stock Exchange, has ‘fabricated’ its annual financial statements by stating losses as profits resulting in an abnormal hike in its share prices. On October 29, Alltex disclosed its financial statements for the year ended on June 30, 2014, stating earning per share Tk 2.56 and declaring 10 per cent stock dividend for the year. After the declarations, the share prices of the company increased by 140.81 per cent or Tk 13.80 to Tk 23.60 on Monday from Tk 9.80 on October 28.
The auditor of the company, however, in its opinion said that financing charges (interest expenses) of Tk 17.48 crore against Tk 172.27 crore outstanding bank loan had not been provided in the statement of comprehensive income for the year ended on June 30 this year, rather considered as contingent liabilities that resulted in overstatement of profit by Tk 17.48 crore and EPS of Tk 3.64 respectively, a DSE web site post said on Monday.
Once the interest expenses on outstanding loans are deducted, the losses on per share of the company will be Tk 1.08 instead of earning per shares of Tk 2.56, DSE officials said.
As the company is having a negative reserve of Tk 9.12 crore, so there is no scope of issuing stock dividend to its shareholders, they said.
DSE officials also said that it had already issued a letter to the company seeking clarification regarding the auditor’s opinion and issuance of 10 per cent dividend.
Asked, Bangladesh Securities and Exchange Commission executive director Saifur Rahman told New Age that the commission would take necessary steps in this regard.
There might have a correlation between the declaration of profit instead of losses and the recent hike in the share prices of the company, market operators said.
Now it’s the regulator’s duty to find out the actual fact and beneficiary of such misreporting, they said.
Meanwhile, the auditor of Imam Button Ltd in an observation on company’s 2013-14 fiscal year financial statement has said the going concern status of the
company will be affected in the future if the company fails to utilise the desired level of production capacity, according
to a DSE web site post on Monday.
It said that Imam Button had incurred Tk 1.38 crore operating losses in the year ended on June 14 due to high price of raw materials, global recession, frequent power failure and frequent breakdown of existing generator and machinery problem.
‘We have observed that the company utilised 21 per cent of its production capacity during the year under review. The production of the year has decreased due to machinery problem, market demand, frequent power failure and frequent breakdown of existing generator. In our opinion, approximately 70 per cent production capacity utilisation is needed to be achieved for viability of the company,’ said the auditor in the observation.
-With New Age input
