Dhaka bourse goes tough against questioned quarterly disclosures

The country's premier bourse has sought clarifications from a dozen of companies about their profit declines, earnings fluctuations and improper financial reports in the final three months of 2021. 

"If any anomalies are found, the Dhaka Stock Exchange (DSE) will forward the companies to the Bangladesh Securities and Exchange Commission (BSEC) with recommendations for legal action," a DSE official told The Business Standard.

Among the companies in question, Atlas Bangladesh Ltd widened its loss by a staggering 67%. The state-run two-wheeler seller posed a Tk1.89 crore loss in the October-December quarter compared to Tk1.13 crore in the previous three months.

In the July-September quarter, its net sale was Tk7.30 crore but the figure dropped to Tk4.90 crore in the following quarter.

The stock exchange has recently issued a letter asking the company to explain why its business declined even after the country's economic activity got back to almost normal.

Savar Refractories Ltd, engaged in producing bricks for the local market, posted a per-share loss of Tk0.20 despite earning a revenue of Tk79 lakh during the period.

Its auditor said the company was unable to achieve sufficient gross profit to absorb the non-production overhead cost due to poor sales, and the intensity of competition from imports and declining local demand.

In the October-December quarter, the revenue of Fine Foods Limited stood at Tk1.60 crore compared to Tk1.62 crore a year earlier. 

But the company made a net profit of Tk5 lakh, a jump from a loss of Tk4 lakh a year ago.

Mozaffar Hossain Spinning Mills Ltd posted a net profit of Tk7.34 crore, which is 200% higher than Tk2.44 crore in the first quarter. The stock exchange asked the company to explain such a big fluctuation.

The company attributed the increase in the profit to the production and sales of the new ring spinning unit and full capacity utilisation at the rotor unit.

Market insiders said investors design their investment plans considering the revenue and profit of the listed companies.  That is, proper disclosure is very important for investors to make the right decision.

Sometimes, investors suffer massively due to overstated and misleading information. So, more transparency regarding disclosures by listed firms is necessary.

The stock exchange has also sought explanation regarding related parties' transactions of the listed companies that did not disclose their statements properly.

The stock exchange also issued letters to the Hwa Well Textiles (BD) Limited, Prime Textile Spinning Mills Limited, and Walton Hi-Tech Industries PLC in this regard.