POWERGRID Qualified Opinion - Share market analysis of dhaka stock exchange, Bangladesh

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05 December, 2018 03:04 PM Source: Dhaka Stock Exchange

The auditor of the company has given the following "Qualified Opinion" Paragraphs in the audit report of the company for the year ended on 30 June 2018. Basis for Qualified Opinion: 1. As disclosed in Note # 4, the carrying amount of property, plant and equipment (PPE) was reported at BDT 115,120,606,842. No fixed asset register with the required information was available. Some items of PPE have been received from Bangladesh Power Development Board (BPDB) and Dhaka Power Distribution Company (DPDC) by Power Grid Company of Bangladesh Ltd. (PGCB) without conducting physical verification and valuation thereon. It is also noted that, no physical verification of PPE was conducted either at the year-end or any time during the period under audit, as we are unable to confirm the authenticity of the physical existence of PPE as of 30 June 2018. Out of total assets of the Company,PPE is 57.52% which remained unverified as to its quantity. Moreover, the Company has never performed impairment test of its PPE which is also a non-compliance with BAS 36 paragraph 9. 2. As disclosed in Note # 7, the Company has reported an amount of BDT 1,011,360,681.00 as inventories. There are 31 offices and we have visited 20 Grid Maintenance Division (GMD) offices involving inventories amounting to BDT 1,591,043,489 from transmission/wheeling and optical fiber charges. It includes receivables from DPDC, DESCO, RPC, PBS Munshigonj, PBS Gazipur, M/S Abul Khair Steel Products, PBS- 1, Natore and BWDB GK Project (Bheramara, Kushtia) amounting to BDT 744,404,649, 276,067,172, 5,439,000, 1,282,548, 4,172,361, 6,433,733, 3,755,757 and 1,560,621 respectively. The amount of BDT 5,439,000 receivable from RPC is being carried forward since FY 2004-05. The above stated amounts are increasing year by year till to date. It includes disputed amounts with DPDC, RPC, DESCO, PBS - Munshigonj, PBS Gazipur, M/S Abul Khair Steel Products, PBS - I Natore and BWDB GK Project (Bheramara, Kushtia) amounting to BDT 531,785,735; 5,439,000; 3,106,230; 1,282,548; 4,172,361; 6,433,733; 3,755,757 and 1,560,621 respectively. In our opinion, the Company is very unlikely to recover the amounts in full If provisions were made for the above, the earnings per share (EPS) and net asset value (NAV) for the year 2017-2018 would have adversely been affected to that extent. 4. As disclosed in Note # 2.1, the Company has reported an amount of BDT 2,027,402,595 as addition to PPE resulted from exchange rate fluctuation related with the outstanding principal amount of loan for the year ended 30 June 2018. As per Para 28 of BAS 21: Effects of Changes in Foreign Exchange Rates, the said amount should be recognized as a loss in the Statement of Profit or Loss and Other Comprehensive Income. However, this exchange loss is capitalized with the relevant assets in line with the Companies Act, 1994 as the said loan was obtained for those assets.5. The Company has reported an amount of BDT 2,791,709,375 including addition during the year amounting to BDT 909,116,456 as provision for gratuity (Note # 16). The Company carries an unfunded gratuity scheme for its employees and provision is being made as per the Company's gratuity policy for which no actuarial valuation was done as required by BAS 19.


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