Sonali Paper to undergo a special audit

FY22 H1 Financials

• Gross sales: Tk106cr 
• Net profit: Tk26cr
• Investment income: Tk18cr
• Paid-up capital: Tk21.96cr
• Declared right shares at 1R:2

The Bangladesh Securities and Exchange Commission (BSEC) has appointed a special auditor to probe the financial statements of Sonali Paper and Board Mills, a concern of Younus Group of Industries, for the 2019-20 and 2020-21 fiscal years.

The BSEC issued a letter in this regard on Wednesday.

Aziz Halim Khair Choudhury & Co Chartered Accountants will conduct the special audit and submit its findings to the BSEC within a month.

Earlier in 2016, Sonali Paper had its assets revalued by SH Khan & Co Chartered Accountants, according to sources.

The value of a 1,150 decimal land at Tarabo area in Rupganj Upazila, Narayanganj, which the company bought several years ago, was Tk1.13 crore.

But the auditor estimated Tk45 lakh per decimal for the land and revalued it to Tk517.5 crore.

BSEC deems that this valuation might be overstated and influence shareholders' equity and net asset value of Sonali Paper.

Thus, it appointed the special auditor to look into the balance sheets and other parts of the financial statements including assets, liabilities, and equity of the company as per International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA). 

Earlier, Sonali Paper had applied to the BSEC seeking exemption from the regulatory prohibition for issuing the right shares to comply with the Tk30 crore paid-up capital requirement.

Currently, its paid-up capital is Tk21.96 crore.

On 30 December last year, the share price of the company reached Tk958 per share.

From July to December 2021, the company's net sales increased by 47% to Tk106 crore, compared to the same period of the previous year.

During the period, the company invested Tk45.37 crore in the capital market, but it only has inventories worth Tk32 crore.

The company generated a big portion of revenue through capital market investments.

Its net profit in the first half of the current fiscal stood at Tk26 crore, of which Tk18 crore was from capital market investments.

Sonali Paper & Board Mills was incorporated in 1977 and got listed on the Dhaka Stock Exchange in 1985 and Chittagong Stock Exchange in 1996.

Younus Group took over the company after buying all of its shares in 2006.

Its business is to manufacture and market media, liner, simplex, duplex paperboards, and quality papers such as newsprints.