BSEC team to inspect Premier Cement's loans, capital work in progress

Infographic: TBS

The Bangladesh Securities and Exchange Commission (BSEC) has recently formed a two-member team to examine capital work in progress and the utilisation of loans by Premier Cement Mills Limited.

The team – comprised of BSEC Deputy Director Mohammad Asif Iqbal and Assistant Director Md Sakil Ahmed as its members – has 30 working days to complete the inspection and submit its findings to the commission.

Premier Cement's Company Secretary Kazi Md Shafiqur Rahman told The Business Standard that they have received the BSEC's letter and they are working on the commission order.

The inspection team will review the cement maker's capital work in progress from 2017 to 2022, and inspect the utilisation of loans over those years. 

Capital work in progress represents the cost spent on under-construction fixed assets like building and machinery to the date of preparation of the balance sheet.

In simple words, capital work in progress is the work that is not yet complete but the amount has already been paid. And, these assets cannot be recognised as fixed assets as they are not operational yet. 

A senior official at the BSEC, on condition of anonymity, said the commission observed that Premier Cement's capital work in progress is gradually increasing every year and the maximum portion goes to the vertical roller mills (VRM) project. But the company did not convert it into a fixed asset.

From July to December 2022, the company's capital work in progress stood at Tk202.12 crore. It was Tk1,134 crore in fiscal 2021-22, Tk955 crore in FY21, and Tk820 crore in FY20.

Although the company has adjusted its capital work in progress in the first half of the current fiscal year, its short-term loans are still on the rise.  

From July to December 2022, its short-term bank loans stood at Tk1,635.75 crore, which was Tk1,374.77 crore at the end of FY22. 

The BSEC official also said that the commission has sought an explanation for Premier Cement's late submission of its quarterly financial statement for the July to September quarter of 2022. 

In the July to December quarter of 2022, the company's consolidated revenue stood at Tk887.50 crore and consolidated net loss at Tk25.92 crore.

In FY22, the company recommended a 10% cash dividend for its shareholders.

The last trading price of each share of the company was Tk44.50 on Thursday at the Dhaka Stock Exchange.

The company's cement manufacturing plant is located at West Muktarpur in Munshiganj. It sells its products both in the local and foreign markets.