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MJL Bangladesh Limited, the country’s one of the top lubricant manufacturers, owes over Tk 109 crore to its employees, according to an auditor’s report, as the firm failed to form a workers’ profit participation fund (WPPF) which is a must under the labour law.
The publicly traded firm’s contingent liability against WPPF stood at Tk 10.75 crore alone in the fiscal year 2021-22.
The company’s failure to form the profit sharing fund for workers led to a raise in its total liability against WPPF at Tk 109.39 till June this year which it needs to pay must, according to auditors who had inspected its financial books prepared for the fiscal year 2021-22.
The publicly traded company’s auditor said, “We are drawing attention to Note 2.18.iii and 38 of its financial statements, according to which the company took a legal opinion on the applicability of the workers’ profit participation fund for it.
The country’s labour law requires every company to share 5 per cent of its net profit with the employees under the WPPF scheme.
Its contingent liability against WPPF stood at Tk 10.75 crore in FY22, while its cumulative contingent liability rose to Tk 109.39 crore, its auditors said, at the end of the fiscal year 2021-22.
According to the auditor’s report, the firm did not keep any provisions for the profit-sharing fund which is a must under the Bangladesh Labour (Amendment) Act 2013, Chapter XV, and Section 232.
MJL Bangladesh posted a 15.53 per cent year-on-year decline in net profit to Tk 201.45 crore in FY22 against Tk 249 crore in the previous year.
The company’s consolidated earnings per share (EPS) stood at Tk 6.36 for FY22, against an EPS of Tk 7.53 a year earlier.
The rising costs of business in tandem with the devaluation of the taka against the dollar drained a substantial part of its earnings, leading it to log a decreased net profit in the fiscal year 2021-22, the company said.
The board of governors of MJL Bangladesh recommended a 50 per cent cash dividend for FY22.
It had paid a 55 per cent cash dividend in the previous fiscal year.
MJL Bangladesh is a joint venture of EC Securities Limited, a subsidiary of East Coast Group, and state-owned Jamuna Oil Company Ltd.
Mobil Corporation, later known as Exxon Mobil Corporation, decided to establish Mobil Jamuna Lubricants Limited in partnership with the state-owned Jamuna Oil Company Limited in 1998.
With its journey, the blending of international standard lubricants began in Bangladesh.
Earlier, the company’s board had approved the purchase of a newly-built AFRAMAX oil tanker for $75.00 million.
MJL Bangladesh reported a consolidated net operating cash flow per share of Tk 5.28 in fiscal 2021–22 which was Tk 8.24 in the previous fiscal year.
The company got listed on the stock exchanges in 2011.
Shares of MJL Bangladesh rose 0.22 per cent to Tk 89.1 on the Dhaka Stock Exchange on Thursday.
The company’s sponsors-directors hold a 71.52 per cent stake in the company, while institutes own 21.49 per cent, foreigners 0.15 per cent, and individual shareholders 6.84 per cent as on September 2022.
