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TITASGAS

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TITASGAS 27-Oct-2020

(Continuation news of TITASGAS): carrying amount of inventories of the Company as on 30 June 2020 appears to be overstated. f. As disclosed in Note no. 31 to the financial statements, the company has reported cost of sales at Tk. 15,877.46 crore against purchase of 15,416,777,365 CM gas from different gas supplying companies for the year ended 30 June 2020. This purchase volume of gas has been determined by adding allowable system loss (@2% on gas volume received (cont.13)

TITASGAS 27-Oct-2020

(Continuation news of TITASGAS): adjustment in the accounts for the said items. Further, the Company conducted physical verification of inventories as on 30 June 2019. It identified huge quantities of dead and obsolete items but could not determine the value of such inventories. As a result, the value of inventories as on 30 June 2020 may include huge quantities of dead and obsolete items which could not be quantified thereof due to lack of information. Thus the (cont.12)

TITASGAS 27-Oct-2020

(Continuation news of TITASGAS): state that inventories are valued at cost which is a non-compliance with International Accounting Standard (IAS) 2: Inventories. IAS 2 requires valuation of inventories at the lower of cost and net realizable value. Physical verification of inventories done at 30 June 2013 identified dead stock worth Tk. 10.44 crore and obsolete stock worth Tk. 3.33 crore by the inventory committee at that time. But the Company did not make any (cont.11)

TITASGAS 27-Oct-2020

(Continuation news of TITASGAS): ICB Islamic Bank Limited. Because of weak credit worthiness of the said banks there is a substantial doubt as regards realization of the said investment which require full provision in the accounts. But necessary provision in this regard has not been made in the accounts. e. The carrying amount of inventories as shown in the statement of financial position as on 30 June 2020 is Tk. 184.89 crore. But the accounting policies of the Company (cont.10)

TITASGAS 27-Oct-2020

(Continuation news of TITASGAS): remain unrealized for long. As a result, there is a substantial doubt as regards realization of the said penal interest, meter rent and high heating value receivable which require full provision in the accounts. d. Receivable from Encashment of FDR for Tk. 60.62 crore as disclosed in Note# 14 represents investment in Fixed Deposit Receipt (FDR) with Padma Bank Limited (formerly known as "The Farmers Bank Limited") and (cont.9)

TITASGAS 27-Oct-2020

(Continuation news of TITASGAS): Value (HHV) from its Private Power customers amounting to Tk. 39.52 crore up to the year 2019-20. The Company has been recognizing these income and receivables since the year 2002. Out of the said aggregated amount of Tk. 168.33 crore, there is no realization till date. On a query we came to know that the said customers are not interested to pay such penal interest as well as meter rent, demand charges and high heating value which (cont.8)

TITASGAS 27-Oct-2020

(Continuation news of TITASGAS): on the bill amounts of the respective customers. As such a total amount of Tk. 54.20 crore has been recognized as interest income up to 30 June 2020 and included in Trade & other receivables shown in Note # 11. On the other hand, the Company accounted for meter rent and demand charges on its customer namely, PDB for Tk. 74.61 crore up to the year 2019-20. Further, the Company accounted for another income of Higher Heating (cont.7)

TITASGAS 27-Oct-2020

(Continuation news of TITASGAS): Company has made provision of Tk. 124 crore only till 30 June 2020. A further provision of Tk. 24.84 crore for the year 2018-19 and Tk. 24.00 crore for the year 2019-20 has been kept in the accounts. As a result, the provision for pension fund has remained short by Tk. 736.08 crore in the accounts as on 30 June 2020. c. Due to delay in payment of bills by the bulk customers (Power- PDB) the Company calculates and charges penal interest (cont.6)

TITASGAS 27-Oct-2020

(Continuation news of TITASGAS): for the year 2018-19 and 2019-20 respectively. As such, the required provision for pension fund as on 30 June 2020 has stood at Tk. 838.05 crore. But the management of the Company on the ground of inadequacy of fund as well as insufficient yearly profit decided to initially provide Tk. 188.90 crore in three years commencing from 2018-19 and thereafter to review the provision amount for the subsequent years against which the (cont.5)

TITASGAS 27-Oct-2020

(Continuation news of TITASGAS): The actuary firm, M/S. Z Halim & Associates recommended to make an annual provision of Tk. 188.90 crore for next five years to make up the said deficit. In addition, the required provision for the said fund for the year 2018-19 and 2019-20 has increased by Tk. 59.62 crore and Tk. 59.55 core respectively. Further Tk. 51.58 crore and Tk. 49.28 crore have been paid by the Company to the outgoing employees as final settlement (cont.4)

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