B Mirror Report: Listed company Fine Foods Ltd has come under scrutiny over the reliability of its reported profits after posting earnings per share (EPS) of Tk 11.81 for the 2025-26 financial year, while its net operating cash flow per share stood at only Tk 1.90.
The significant gap between reported earnings and operating cash flow has raised questions about whether the company’s profit growth reflects its actual business performance.
Fine Foods has declared a 40.50% cash dividend for general shareholders and a 5% cash dividend for sponsors and directors, according to the report. The company’s share price currently stands at Tk 471.40.
The company reported net asset value (NAV) per share of Tk 25.20 for FY2025-26, while its EPS increased from Tk 4.18 in the previous financial year to Tk 11.81.
Concerns over the company’s financial reporting have persisted for several years, with auditors raising questions about the validity of various transactions and the existence and valuation of assets.
In its report on the 2024-25 financial statements, the auditor said Fine Foods reported revenue of Tk 11.89 crore, outstanding credit sales of Tk 2.86 crore, raw material purchases of Tk 3.79 crore and fingerprint scanner purchases worth Tk 2.62 crore.
However, company management said almost all these transactions were conducted in cash. The auditor was unable to verify their authenticity due to insufficient reliable evidence and also raised concerns about the possibility of misstatements in the reported figures.
The auditor also questioned the existence of inventory worth Tk 11.45 crore reported in the 2024-25 financial statements. Despite on-site inspections and alternative audit procedures, the auditor could not verify the inventory because of inadequate cooperation from the company.
The auditor warned that errors or misstatements in inventory figures and the cost of goods sold could affect the accuracy of the company’s reported profits. Understating the cost of goods sold, in particular, can inflate reported net earnings.
Against this backdrop, the sharp rise in Fine Foods’ EPS and its latest dividend declaration have prompted renewed questions about the sustainability and reliability of its earnings. The substantial difference between EPS and operating cash flow has further intensified concerns among market participants.
Analysts and investors may need to examine the company’s financial statements, cash flows and audit observations carefully to assess whether its reported earnings are supported by actual business operations.
The company’s annual general meeting (AGM) is scheduled for December 26, where shareholders will consider the declared dividend and other agenda items. The record date has been set for November 12.
The concerns outlined in the report do not, by themselves, establish that the company’s financial statements are fraudulent. Further verification and regulatory scrutiny would be needed to determine whether any financial reporting violations occurred. Make the allegations more neutralClarify the dividend comparison
