Sonali Paper and Board Mills reported an 89.15% year-on-year increase in net profit to Tk 23.61 crore in FY25, despite sales growth of just 1.66%, largely due to deferred tax income from previous financial years.

The company’s audited financial statements have raised concerns over its accounting practices, tax liabilities and capital market investments. Its statutory auditor, MABS & J Partners, issued a qualified opinion, citing accounting inconsistencies.

Net sales increased to Tk 282.66 crore from Tk 278.05 crore, while earnings per share (EPS) rose to Tk 7.17 from Tk 3.79.

The company recognised Tk 2.24 crore in deferred tax income in FY25 following changes in depreciation rates under the Income Tax Act, 2023. Of this amount, Tk 1.61 crore related to FY23 and FY24, effectively adding tax benefits from previous years to the current year’s profit.

The auditor also questioned the company’s tax calculation on revalued land worth Tk 517.50 crore. Although the Income Tax Act, 2023 raised the capital gains tax rate from 4% to 15%, the company continued using the previous rate.

Applying the 15% rate would have created an additional deferred tax liability of around Tk 56.92 crore, potentially affecting shareholders’ equity and net asset value (NAV), according to the report.

Sonali Paper also incurred substantial losses from capital market investments in FY25. Its realised loss from share transactions stood at Tk 7.11 crore, while the portfolio’s unrealised loss reached Tk 13.57 crore.

The portfolio’s purchase cost was Tk 20.44 crore, but its market value fell to Tk 6.87 crore by June 30, 2025.

Investment in IPDC Finance accounted for Tk 12.84 crore of the unrealised loss. The company held 29.17 lakh shares of the financial institution. It also paid around Tk 1.40 crore in interest and fees on margin loans during the year.

Chairman Mohammad Yunus, his wife and Managing Director Mahfuza Yunus, and their elder son and director Mohammad Javed Noman collectively own 67.49% of the company’s 3.29 crore shares.

Javed Noman has pledged 25.85 lakh shares with Madhumati Bank, NRB Bank and Midland Bank as collateral for personal loans.

The company also faces long-running legal disputes involving Tk 31.47 crore in potential liabilities, including Tk 19.09 crore in customs duty claims by the National Board of Revenue dating back to 1996 and Tk 12.38 crore in disputed gas bills claimed by Titas Gas since 2006. No financial provisions have been made against these claims.

Company Secretary Md Rashedul Hossain initially said he would comment later. He subsequently sought time to consult the chief financial officer but did not provide a response despite further follow-ups.