BSEC to appoint special auditor for Active Fine
Sources said the commission deems that the company might not have provided correct information in last two years’ financial statements
To protect investors' interest, the stock market regulator has decided to appoint a special auditor to review the financial statements of Active Fine Chemicals Limited for the last two years.
The Bangladesh Securities and Exchange Commission (BSEC), however, has not yet offered quotations to the auditor, said Mohammad Rezaul Karim, executive director of the commission.
Sources said the commission deems that the company might not have provided correct information in last two years' financial statements.
The company, however, did not know anything in this regard, an official told this correspondent on phone.
The auditor of the company said in its qualified opinion that no provision was made in the financial statements for current income tax and deferred tax expecting tax waiver in the "National Active Pharmaceutical Ingredients (API) & Laboratory Reagents Production and Export Policy", although SRO was yet to be obtained from the National Board of Revenue (NBR) against that.
Moreover, the company provided Tk10.21 crore in excess tax in the statement of changes in equity for the year ended on 30 June 2019, which is not in line with income tax regulations.
Further, purchase of fixed assets during the year was made in cash violating the Income Tax Ordinance 1984.
Rules say sponsors and directors of any listed company will jointly hold a minimum of 30% shares, but the sponsors and directors of Active Fine Chemicals hold only 12.04% shares.
The company took necessary legal steps to obtain permission from the High Court Division of the Supreme Court for holding the annual general meeting (AGM) for the year 2020.
The company was established in 2004 with a vision to share in the local market for the supply of bulk drug materials.
The main objective of the company is to enter the fast-growing pharmaceutical local market by providing high quality products in the market at a competitive price.
According to the Chittagong Stock Exchange, sponsors and directors of the company hold 12.04%, institutional investors 29.1%, foreign investors 3.11%, and general investors 55.75% shares of the company as of 30 Jun 2021.
Active Fine Chemicals Ltd, a bulk drug supplier, registered a 6% growth in revenue amid pandemic but its net profit fell by 82% in the first nine months of the 2020-2021 fiscal year.
Even though its revenue increased over the previous year, the profit decreased due to higher raw material prices and overhead costing amid the pandemic, say its officials.
Earlier, for the pandemic and lockdown, the company fell into losses in the 2019-2020 fiscal as revenue decreased significantly.
In the July-March period of FY21, Active Fine's revenue stood at Tk127.34 crore and profit Tk4.18 crore.
The earnings per share (EPS) decreased by 82% to Tk0.17, which was Tk0.96 in the same period of the previous year.
In the January-March period of FY21, its revenue increased by 55% but its net profit fell by 87% compared to the same period of the previous year.
At the end of the Thursday trading session, its shares' closing price was Tk26 each at the DSE.