Gazi Anowar :
Hami Industries PLC, formerly known as Imam Button Industries, finds itself under scrutiny by the Bangladesh Securities And Exchange Commission (BSEC) following an audit objection issued on December 7, 2023.
Despite this, the company pushes forward with ambitious expansion plans.
The audit objection, raised after reviewing the period ending on December 31, 2023, pertains to discrepancies in the company’s financial statements.
Notably, the auditor’s opinion reveals a Tk 10 lakh receipt listed as floor space rent advance. However, it’s revealed that the company does not possess any investment property, contrary to International Accounting Standard (IAS) 40 guidelines.
IAS 40, which governs the accounting for property held for rentals or capital appreciation, has brought into question the accuracy and adherence of Hami Industries’ financial reporting.
Furthermore, despite ongoing audit concerns, the company announces plans to diversify its operations. Having previously transitioned to fisheries and tannery, Hami Industries now sets its sights on expanding into the agro business sector.
In a recent stock exchange filing, the company disclosed intentions to lease ponds on 23.5 bighas of land in Cumilla for a five-year period, at an expense of Tk 1.76 million.
Anticipating substantial growth, Hami Industries projects an increase in sales volume by approximately Tk 50 million annually.
This expansion is estimated to boost annual profits by Tk 10 million, as stated by ASM Hasib Hasan, the managing director of Hami Industries.
Hasan emphasized that the company already possesses 8 bighas of land and is poised to leverage this existing asset base alongside the newly leased ponds to drive its agro business expansion.
“We will cultivate fishes in these ponds as part of expanding our existing business as we are focusing more on agro business,” said Hasan.
Imam Button is a subsidiary of Imam Group.
The factory was shut in 2018 and its original owners fled the country in January 2020, after arrest warrants had been issued in cases filed by banks and financial institutions over default loans.
In January 2023, the Bangladesh Securities and Exchange Commission (BSEC) restructured its board. ASM Hasib Hasan took over as managing director of the company.
In August last year, Hami Industries declared an investment of Tk 14 million in agricultural projects, allocating Tk 10 million to fish and poultry farms and Tk 4 million to leasing ponds.
In January this year, it also set up a shoe-making unit on its factory premises in Chattogram at a cost of Tk 115.5 million and with a production capacity of 530 pairs of shoes per day.
The company cited an expected annual turnover of Tk 250 million and a profit of Tk 20 million from the tannery unit.
However, a DSE inspection team in March found that the projections were baseless. It said the projected profit of Tk 20 million per year ‘unrealistic’ given that the factory could produce only 15-20 pairs of shoes a day.
Hasan said he wondered how the inspection team estimated the capacity when on the day of the inspection there were around 30 workers in the factory making shoes.
He, however, acknowledged that they were yet to run the tannery unit fully.
About the fish business, the DSE team found no fish in the ponds. It also said the company had failed to produce any documents of its fish business.
Hasan claimed the company had sold fish in cash and deposited the money into a bank account.
The DSE team had not conducted the inspection properly and the company communicated the matter to the securities regulator, he said.
“The inspection team didn’t enter the water or use nets, so their findings might not be accurate,” added Hasan.
Hami Industries, which currently trades under the “Z” category on the bourses, saw its stock price jump almost 18 per cent last week. It slid 3.5 per cent to Tk 149 per share on Sunday on the Dhaka Stock Exchange (DSE).
The company reported a profit of Tk 1.62 million in the nine months through March this year as opposed to a loss of Tk 4.31 million in the same period of the previous year.
The company declared a 1 per cent interim cash dividend for general shareholders only, according to a stock exchange filing on Sunday.
“The running project generated profits that prompted the company to declare an interim dividend,” said Hasan.
This is the first dividend declaration since 2010.