Auditors have found discrepancy in the dividend account of listed Hami Industries PLC. At the same time, the financial report mentions that the company has received income from floor rent, but the auditor says that no information about the assets invested by the company has been found.
The latest auditor’s report on the company for the period that ended on March 31, 2024, has drawn significant attention with the issuance of a “Qualified Opinion,” “Matter of Emphasis,” and “Conclusions Relating to Going Concern” paragraph.
The reports were recently published on the Dhaka Stock Exchange website.
One of the primary concerns highlighted in the report pertains to the discrepancy in the amount of Dividend Payable (unclaimed) as per Note 23 of the financial statements. According to a BSEC directive dated January 14, 2021, the figures do not align with the corresponding Agrani Bank account and related directives.
The company failed to reconcile the Dividend Payable (unclaimed) and the distribution of dividend with the bank balance, which has been stagnant at Tk 23.78 lakh for a prolonged period.
Additionally, the auditors pointed out that an advance of Tk 10 lakh -- received against floor space rent and recorded under "Advance received" in the financial statements -- does not correspond with any investment property as mandated by IAS 40. This amount has also been carried forward without resolution for an extended time.
Inventory verification posed another issue, with the auditors unable to physically verify inventories reported at Tk 81.10 lakh and "Livestock" valued at Tk 6.94 lakh. This lack of verification raises questions about the accuracy and completeness of the company’s reported assets.
The auditors also noted discrepancies in the financial statements concerning a "Loan to Ex-Managing Director" amounting to Tk 4.37 crore. This figure could not be corroborated with the balances and transactions associated with the "Long Term Loan" from Prime Finance Investment Limited.
Furthermore, the company’s short-term loan from the same financier, reported at Tk 45.82 lakh, has remained unadjusted for a long period without any settlement, and the auditors did not verify this balance either.
Despite these significant findings, the auditors’ review procedures, though less extensive than those of a full audit, did not reveal any additional issues suggesting that management has inappropriately adopted the going concern basis of accounting. However, the report cautions that future events or conditions could impact the entity’s ability to continue as a going concern.
The auditor’s report casts a shadow over Hami Industries, highlighting crucial areas of financial management that require immediate attention and rectification to ensure regulatory compliance and maintain investor confidence. The management’s response and subsequent actions will be critical in addressing these concerns and securing the company’s financial stability moving forward.
Imam Button, previously inactive since FY2018-19, reconstituted its board in January 2023 under the supervision of the exchange commission. ASM Hasib Hasan took over as managing director after acquiring company shares.
Later, in August, Imam Button, a producer of buttons for readymade garment products, resumed its operation as it expanded its footprint in agro-projects. In December, it entered into a tannery business on its factory premises in Chattogram.
A subsidiary of Chattogram-based Imam Group, the company changed its name to Hami Industries PLC with the trade code "HAMI" on March 24. Its sector was also changed to "Miscellaneous" instead of "Pharmaceuticals and Chemicals".
It is also in the process of changing its category from Z to B. To approve the category change process, the Dhaka bourse inspected Imam Button's shoe factory and fisheries project last month. The inspection report was submitted to the securities regulator on March 26.
