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GQ Ball Pen Industries Limited, the listed manufacturer of Econo ballpoint pens, has returned to profit after nine years, but its latest audited financial statements have raised concerns over investment valuation, unpaid taxes and provisions for doubtful debts.
The auditor flagged three issues, including the pending fair valuation of the company's Tk2.17 crore investment in an associate company and Tk14.61 lakh in source-deducted VAT and income tax that remained unpaid as of 30 June, 2026.
According to information published by the Dhaka Stock Exchange (DSE), the company reported earnings per share (EPS) of Tk0.12 for the 2025-26 financial year, reversing a loss per share of Tk1.83 in the previous year.
The company also recommended a 12.5% cash dividend for shareholders.
Auditor flags three concerns
The auditor raised questions over the valuation of GQ Ball Pen's investment in Maladesh International (Pvt) Ltd, which stood at Tk2.17 crore as of June 30, 2026.
According to the audit report, the fair value assessment of the investment was still underway.
The company expected a positive outcome from the valuation based on the estimated value of the associate company's underlying properties, including land, as disclosed in the financial statements.
However, the final valuation remains uncertain, and any adjustment could affect the carrying value of the investment in the company's financial statements.
The auditor also identified outstanding source-deducted VAT and income tax totalling Tk14.61 lakh as of 30 June, 2026.
Of the amount, Tk6.20 lakh was VAT and Tk8.41 lakh was income tax that had not been deposited with the government exchequer.
The company subsequently made partial payments, depositing Tk94,770 in income tax on 26 July and Tk1.19 lakh in VAT on 15 September.
After these payments, Tk12.47 lakh remained outstanding, comprising Tk7.46 lakh in income tax and Tk5.02 lakh in VAT, according to the figures provided in the audit report.
The auditor's third observation concerned the company's provision for doubtful debts against trade and other receivables.
Although GQ Ball Pen had set aside Tk10.20 lakh against potentially uncollectible receivables, the auditor found that the provision had been made without a formal policy or an ageing analysis.
An ageing analysis assesses outstanding receivables based on how long they have remained unpaid, helping companies determine the likelihood of recovery and the appropriate level of provisioning.
The auditor recommended adopting a specific policy and conducting an ageing analysis to strengthen the company's assessment of doubtful debts.
Rental income supports turnaround
GQ Ball Pen Company Secretary K M Ershad said the company had reduced production because of ageing machinery as part of efforts to cut operating costs.
He said rental income from the company's 14-storey commercial building in Uttara, along with returns from investments, had contributed to its improved financial performance.
Responding to questions about the auditor's observations, Ershad said the company was addressing the issues in phases.
He said the management was aware of the concerns and would resolve them as soon as possible.
The company's return to profit comes after a prolonged period of losses and declining sales in its core manufacturing business.
According to a report published in February 2026, GQ Ball Pen's sales plunged to Tk1.85 crore in the 2024-25 financial year (FY25) from Tk5.43 crore a year earlier.
The company incurred a net loss of Tk1.63 crore in FY25.
Although the latest financial results indicate a turnaround, the contribution of rental and investment income suggests that the recovery may not have been driven primarily by its core pen manufacturing operations.
Meanwhile, the auditor's observations underscore the need to complete the investment valuation, settle outstanding tax liabilities and strengthen financial reporting practices.
Share price surges over 250%
GQ Ball Pen's share price has also recorded a sharp increase, drawing investors' attention despite concerns over its underlying business performance.
The company's shares rose from Tk169.60 on 30 June, 2025, to Tk608 on 25 October, 2026, representing a gain of more than 250% over the nearly 16-month period.
According to the DSE company profile, GQ Ball Pen has paid-up capital of approximately Tk8.93 crore, comprising 89.28 lakh shares.
As of 30 September, 2026, sponsor-directors held 37.77% of the company's shares, while institutional investors owned 1.47% and foreign investors 0.05%.
General investors accounted for the remaining 60.71%.