Aramit Cement declares a sudden interim cash dividend

Aramit Cement Limited — a sister concern of Aramit Group — has suddenly declared a 5% interim cash dividend only for its general shareholders for the current 2021-22 fiscal year.

But the company did not pay any dividend for its shareholders in the last fiscal year because of its negative retained earnings.

Earlier, the company had paid a 12% cash dividend in FY16. After that, it failed to pay any dividend to its shareholders.

According to market insiders, Aramit Cement has broken the listing regulations while declaring the dividend.

As per the listing regulations, the listed companies shall notify the bourses and the regulator before 3 working days of holding a board of directors meeting - especially if the meeting is called for consideration or adaptation of the quarterly financial statements or any entitlement (interim dividend) for shareholders.

But the company shall not notify the concerned entities as well as the shareholders through the websites of the stock exchanges.

Officials of the DSE said Aramit's interim dividend declaration did not comply with this rule. But the company said to the DSE that the meeting was previously fixed.

When contacted, the officials of Aramit Cement did not respond over the phone regarding this matter.

Rezaul Karim, executive director and spokesperson of the Bangladesh Securities and Exchange Commission, told The Business Standard, "If there is any violation of rules while declaring an interim dividend, the commission will take necessary steps."

Meanwhile, based on the sudden declaration of interim cash dividend excluding the sponsor and directors of the company, Aramit's share price increased by 18.50% to Tk41 each on Monday at the DSE from Tk34.60 as there was no circuit breaker.

According to the company's financials, in the four fiscal years from FY17 up to FY20, it had incurred losses. But it returned to profit by making Tk2.02 crore in FY21.

After adjustment of the profit, its retained earnings or accumulated profit/loss became a negative Tk59.87 crore as of 30 September 2021.

In the July to September quarter of the current fiscal year, the company incurred a loss of Tk6.64 crore as its revenue fell by 54%, compared to the same period of the previous fiscal year.