B Mirror Report: In the financial statements of Rangpur Dairy and Food Products Limited, commonly referred to as RD Food, a well-known listed dairy product Company, auditors have discovered serious financial irregularities and fraudulent acts. Serious accusations have been made in the company’s audit report, including instances of tax evasion and the lack of a significant sum of unclaimed dividends in bank accounts.

In a qualified opinion issued by Khan Wahab Shafiq Rahman & Co., Chartered Accountants, it was stated that the company failed to calculate deferred tax at the prescribed rate of 22.5 percent for the current year and instead used the previous rate of 15 percent. As a result, the company’s earnings per share (EPS) were misrepresented.

The company’s fragile financial health is also reflected in its declining profitability. In the current financial year, RD Food earned a profit of BDT 46.1 million, down nearly 40 percent from BDT 76.8 million in the previous year. The report attributes this decline to higher import costs, inflation, and high interest rates on bank loans. Moreover, BDT 5.737 million received from IPO subscriptions has yet to be adjusted, further presenting a misleading picture of the company’s capital position.

The audit report expressed serious concern over RD Food’s ability to repay its debts. The company’s net operating cash flow fell sharply from BDT 14.7 million in the previous year to just BDT 1.6 million. Due to this acute cash crunch, the company has been failing to repay bank loans and other liabilities. Such financial disorder in a listed company has created extreme anxiety among investors in the capital market.