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Beach Hatchery Limited, a publicly traded company, is facing a possible delisting from the Dhaka Stock Exchange (DSE), as the company’s production has remained suspended for more than three years in a row.
The authorities of the DSE have been looking into the matter whether they delist the company from the bourse, as a listed company cannot remain out of production in three consecutive years, as per securities law.
A qualified opinion regarding the company was posted on the DSE website Tuesday. A qualified opinion is a statement issued after conducting an audit into a company by a professional auditor.
According to the DSE filing, the company’s factory building was removed by the government for the construction of Marine Drive road in Cox’s Bazar district.
Besides, some parts of its land constituting the hatchery plant were also acquired by government.
The company has been out of production since 2016 as the government had removed its factory for the construction of the much-awaited Marine Drive in the Southern district.
The auditor in his report said it has now become impossible for the firm to run its hatchery operation anymore.
As per the qualified opinion, the company later took initiatives to start operations but could not go for production since June 2019.
Furthermore, the company had incurred a significant net loss in 2019 compared to that in the previous year, with its retained earnings standing at Tk10.51 crore as of June 2019.
The company is currently at risk of being delisted as it remained non-operational for more than three consecutive years, the report said.
Beach Hatchery did not produce any assessment about its ability to continue as a going concern and it did not mention the material uncertainties related to the above conditions in its latest financial statement, it said.
The auditor also said its property, plant, and equipment (PPE) with a carrying value of Tk21.34 crore was recorded on the reporting date.
The company, however, did not provide us with detailed information showing individual items of that PPE like purchase date, cost of acquisition, purchase amount, asset identification number, and location, according to the qualified opinion. The auditor produced a note saying they were not able to determine the accuracy, existence, and valuation of the said carrying amount.
The auditor also said, despite the company management considered that some portions of those balances were good and subject to realisation or adjustment; we noted that some of these balances were older, and against which no such adjustment was made in the firm’s financial statements.
