National Polymer disclosed ‘wrong EPS’ for three quarters

Three months into its financial disclosure for three quarters of FY21, plastic pipe and furniture producer National Polymer Industries Ltd has now admitted to have made a mistake in calculating the earnings per share (EPS).

The company on Tuesday disclosed the EPS with a correction, which is now much lower than the earlier figures.

The company in a post on the Dhaka Stock Exchange (DSE) website said the EPS disclosed on 11 May 2021 was not correct and now its revised EPS is Tk0.91 in January-March and Tk1.77 in July-March of FY21.

In the earlier disclosure, the plastic product manufacturer mentioned its EPS as Tk1.37 in the third quarter and Tk2.68 in the first three quarters. Following that, the company's share price rose by 27% to Tk70.

After the revised disclosure, the company's share was traded at Tk68.1 with a 2.16% fall at the DSE on Tuesday.

Riad Mahmud, managing director of National Polymer, told The Business Standard, "We earlier calculated our diluted EPS as per the international accounting standards, but the DSE did not agree to the process. That is why We again calculated EPS as per the DSE directive."

"Whatever we did was as per the law and we did not make any mistake intentionally," he added.

However, Rezaul Karim, spokesperson and executive director at the Bangladesh Securities and Exchange Commission (BSEC), said the correction of such a mistake three months after the financial statement's disclosure cannot be acceptable.

"We are now looking into whether there is any irregularity," he added.

Md Shawkat Ali Miah, chief financial officer at the company, told TBS, "We raised capital through issuing right shares at the beginning of 2021. We disclosed our EPS taking such additional stocks into calculation, but the DSE opposed it."

As per the international accounting standards, EPS is calculated as a company's profit divided by outstanding shares of its common stock. The resulting number serves as an indicator of a company's profitability.

To calculate diluted EPS, a company's net income is subtracted by any preferred dividends, then the result is divided by common and dilutive shares.

In 2020, the BSEC allowed National Polymer to raise a capital of Tk55 crore by issuing right shares at a face value of Tk10 plus a premium of Tk5 each. The issuance of right shares was completed in February this year.

Earlier in 2016, the BSEC fined the National Polymer Tk5 lakh and its sponsor Shamsul Abedin Akanda Tk1 lakh for transferring shares in violation of security laws.