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POWERGRID

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POWERGRID 27-Nov-2019

(Continuation news of POWERGRID): Note. 7: Inventories: Inventories is Tk. 1,137,052,392 for the year ended on 30 June 2019 and Tk. 1,011,360,681 for the year ended on 30 June 2018.These represent the closing inventory of electrical goods as at 30 June 2019. The electrical goods include spare parts which were received from Bangladesh Power Development Board (BPDB) along with the substations and transmission lines mentioned in note 4. (cont. 13)

POWERGRID 27-Nov-2019

(Continuation news of POWERGRID): During our visit to 5 GMDs, we observed that the physical store statement showed the inventory of BDT 365,739,960 as against BDT 350,555,591 as per the accounts ledger, the difference being BDT 15,184,369. As a result, the physical existence and value of the inventory could not be confirmed. We had no other practical alternative auditing procedure that we could apply to confirm the physical existence as well as the value thereof as on 30 June 2019. (cont. 12)

POWERGRID 27-Nov-2019

(Continuation news of POWERGRID): inventory in transit. Note. 5: Capital Work- in-progress: Capital Work- in-progress is Tk.68,590,309,163 as on 30 June 2019 and Tk.63,269,033,237 as on 30 June 2018. 4. in note # 7 to the financial statements, the Company disclosed BDT 1,137,052,392 as inventories. Movement of inventories was not properly recorded, and mismatches were found between store ledger and accounts ledger balances at the cost centers we visited. (cont. 11)

POWERGRID 27-Nov-2019

(Continuation news of POWERGRID): during the year 2013-2016, one lot for BDT 86,618,334 was delivered during the year 2015-2016 and one lot for BDT 64,064,397 was delivered during the year 2017-2018. But the Company has not yet transferred such inventory in transit to inventory. The management could not provide us any documents related to inventory in transit amounting to BDT 118,580,523. As a result, we could not confirm the same. The remaining amount of BDT 9,495,000 was found to be in (cont. 10)

POWERGRID 27-Nov-2019

(Continuation news of POWERGRID): 3. Note # 5 to the financial statements includes inter-alia inventory in transit (under capital work in progress) amounting to BDT 2,063,539,050 out of which we have checked, on a sample basis, inventory in transit amounting to BDT 362,696,086 (18% of the total inventory in transit) and found that 3 lots having carrying value of BDT 234,620,563 in total were delivered to respective GMDs during the prior years. One lot for BDT 83,937,832 was delivered (cont. 9)

POWERGRID 27-Nov-2019

(Continuation news of POWERGRID): physical existence of PPE as of 30 June 2019. Out of the total assets of the Company, PPE is 58.76% 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 IAS 36: Impairment of Assets. Note. 4: The carrying amount of PPE was reported at BDT 144,494,665,501 as on 30 June 2019. (cont. 8)

POWERGRID 27-Nov-2019

(Continuation news of POWERGRID): Some items of PPE have been received by the Company from Bangladesh Power Development Board (BPDB, previously PDB) and Dhaka Power Development Company (DPDC, previously DESA) without conducting physical verification and valuation thereof. It is also noted that no physical verification of PPE was conducted either at the year-end or any time during the year under audit. As such we are unable to confirm the authenticity of the (cont. 7)

POWERGRID 27-Nov-2019

(Continuation news of POWERGRID): The Company carries an unfunded gratuity scheme for its employees and provision is made as per the Company's gratuity policy for which no actuarial valuation has been done though required under IAS 19: Employee Benefits. 2. As disclosed in Note # 4 to the financial statements, the carrying amount of PPE was reported at BDT 144,494,665,501. No fixed assets register with the required information was available. (cont. 6)

POWERGRID 27-Nov-2019

(Continuation news of POWERGRID): that were accounted for in capital works in progress. While IAS 21: The Effects of Changes in Foreign Exchange Rates does not allow capitalization of foreign exchange difference, the company recognized the foreign exchange loss/(gain) as part of its property, plant and equipment as allowed under the Companies Act, 1994. (cont. 5)

POWERGRID 27-Nov-2019

(Continuation news of POWERGRID): Foreign currency exchange difference of BDT 489,606,950 arising from foreign currency denominated loans and borrowings taken by the Company for acquisition of property, plant and equipment has been added with the carrying amount of capital works-in-progress and property, plant and equipment as required under the provision of Section 185, read with, Part-1, Schedule XI of the Companies Act 1994 since the loans were used in the projects (cont. 4)

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