Stocks
BSEC Approves Desco’s Tk607.69 Crore Preference Shares Issuance
The Bangladesh Securities and Exchange Commission (BSEC) has granted approval for the state-owned power distributor, Dhaka Electric Supply Company (Desco) Limited, to issue 60.76 crore preference shares at Tk10 each to the government against a share money deposit.
This decision was finalized in a BSEC meeting on Sunday.
According to Desco’s financial statement up to June 2023, the company received Tk607.69 crore from the government as a share money deposit for its annual development plan. Against this fund, Desco will now issue irredeemable non-cumulative preference shares to the secretary of the Power Division under the Ministry of Power, Energy, and Mineral Resources.
On March 2, 2020, the Financial Reporting Council (FRC) mandated that capital received as a share money deposit, or by any other designation, must be included in a company’s equity. This amount cannot be refunded and must be converted into share capital within six months from receipt.
Such share money deposits are also considered in the calculation of earnings per share (EPS).
Desco has decided to issue preference shares more than three years after the FRC directive.
Preference shares are a type of company stock where dividends are paid to shareholders before ordinary shareholders. In the event of bankruptcy, preference shareholders have priority in receiving payments from company assets over common stockholders.
The irredeemable nature of these preference shares means they will not increase Desco’s paid-up or common share capital. Consequently, the company is not obligated to pay any unpaid preference share dividends from previous years due to the “non-cumulative” nature of these shares.
The proposed conditions imply that if Desco achieves higher profits, the government will receive substantial dividends against the preference shares, whereas in the case of annual losses, no dividends will be distributed.
Since the new shares will not be included in EPS calculations, there will be no direct impact on the company’s financials. However, as preference shareholders, the government will receive dividends before ordinary shareholders, which might ultimately reduce the net profit available for common shareholders.
One of the Listed companies, National Polymer Limited has recommended 10.50% Cash Dividend for the year ended June 30, 2024.
It has reported Consolidated EPS of Tk 2.27 paisa, and Consolidated NAV per share of Tk 30.63 for the year ended March 31, 2024.
The Annual General Meeting (AGM) of the company will be held on December 18, through the digital platform. The record date for this has been fixed at October 22.
The Company also discloses its financial reports for the second quarter, (April – June 24).
As per the company’s consolidated life revenue account for April to June 2024, the excess of total income over total expenses, including claims (surplus), stood at Tk 1,394.24 million. This marks a significant increase from the surplus of Tk 823.68 million during the same period in 2023.
For the first half of 2024, from January to June, the company reported a surplus of Tk 2,177.57 million, compared to Tk 1,290.39 million in the corresponding period of the previous year.
Additionally, the Life Insurance Fund balance as of June 30, 2024, reached Tk 55,188.62 million, showing a net increase of Tk 5,892.25 million from Tk 49,296.37 million on June 30, 2023.
One of the Listed companies, Beacon Pharmaceuticals PLC has recommended 20% Cash dividend and 10% Cash Dividend to Sponsor Shareholder and Directors for the year ended June 30, 2024.
It has reported EPS of Tk 2.26 paisa, and NAV per share of Tk. 26.37 for the year ended June 30, 2024.
The Annual General Meeting (AGM) of the company will be held on December 23, through the digital platform. The record date for this has been fixed at October 27.
The Bangladesh Securities and Exchange Commission (BSEC) has removed three audit firms from its panel for their failure to secure enlistment with the Financial Reporting Council (FRC), according to a notice issued today.
The firms—A Hoque & Company, FAMES & R, and SK Barua & Company Chartered Accountants—were delisted following the FRC’s request. In December last year, the FRC published a list of enlisted audit firms and subsequently, in February, requested the BSEC to remove any firms that were not included on that list.
BSEC regulations mandate that financial statements signed by auditors outside its approved panel will not be accepted. With the removal of these three firms, the total number of audit firms on the BSEC panel has been reduced from 48 to 45.
Sources from the FRC revealed that 15-20 audit firms failed to secure enlistment last year, and approximately 45 chartered accountants are currently under restrictions imposed by the Institute of Chartered Accountants.
Although the delisted firms can no longer audit issuer companies or listed securities, they are allowed to complete audit and assurance services that were initiated before their removal, the BSEC clarified.
