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TITASGAS

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TITASGAS 27-Nov-2019

(Continuation news of TITASGAS): But the Company did not make any adjustment in the accounts for the said items. It indicates that the inventories as on 30 June 2019 may include huge quantities of dead and obsolete items which could not be identified including determination values thereof due to lack of information. Thus the carrying amount of inventories of the Company as on 30 June 2019 appears to overstated. (end)

TITASGAS 27-Nov-2019

(Continuation news of TITASGAS): valuation of inventories at the lower of cost and net realizable value. The Company did not conduct physical verification of inventories as on 30 June 2019. Last physical verification of inventories was done for the year ended 30 June 2013. As per the said verification, dead stock worth Tk. 10.44 crore and obsolete stock worth Tk. 3.33 crore were identified by the inventory committee at that time. (cont.13)

TITASGAS 27-Nov-2019

(Continuation news of TITASGAS): distribution related gas line pipe, disconnection & reduction of system loss, publicity of reduction of system loss and operational advertisement. e. The carrying amount of inventories as shown in the statement of financial position as on 30 June 2019 is Tk. 199.72 crore. But the accounting policies of the Company state that inventories are valued at cost which is a non-compliance with International Accounting Standard (IAS) 2: Inventories. IAS 2 requires (cont.12)

TITASGAS 27-Nov-2019

(Continuation news of TITASGAS): which indicates that the Company has illegal gas connections for which the Company is losing substantial amount of revenue every year. Note: 33: Transmission & Distribution Expenses: Transmissions & Distribution expenses for the year ended on 30.06.2019 was Tk.102,251,394 and for the year ended on 30.06.2018 was Tk.98,385,470. Transmission & distribution expenses include repair and maintenance of property, plant & equipments, transmission and (cont.11)

TITASGAS 27-Nov-2019

(Continuation news of TITASGAS): This excess loss of gas/revenue might be caused due to unlawful consumption of gas through connection of unrecorded/illegal gas lines. Moreover, as disclosed in Note # 33 to the financial statements, the Company has occurred 'Disconnection & Reduction of system loss cost' for an amount of Tk. 0.955 crore. This expense was incurred for disconnection & reduction of illegal gas connections during the year under audit, (cont.10)

TITASGAS 27-Nov-2019

(Continuation news of TITASGAS): and Gas Transmission Company Limited (GTCL) are 2% and 2.25% respectively as per order # 2018/03 dated 16 October 2018 of Bangladesh Energy Regulatory Commission (BERC). As such the allowable system loss of gas for the year under audit should have been 310,833,899 CM against the value of Tk. 238.38 crore. As a result, the Company has incurred a loss of revenue of Tk. 531.47 crore due to excess system loss of gas for the year ended 30.06.2019. (cont.9)

TITASGAS 27-Nov-2019

(Continuation news of TITASGAS): receivables as on 30.06.2019 was Tk. 41,717,329,898 and as on 30.06.2018 was Tk. 36,395,306,588. d. During the year under audit the Company has incurred system loss of gas for a quantity of 1,003,834,042 CM equivalent to the value of Tk. 769.85 crore. But the allowable rates of system loss for distributable quantity of gas transmitting through the pipelines of Titas Gas Transmission and Distribution Company Limited (TGTDCL) (cont. 8)

TITASGAS 27-Nov-2019

(Continuation news of TITASGAS): Out of the said aggregated amount of Tk. 94.44 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 charges which remain unrealized for long. As a result, there is a substantial doubt as regards realization of the said penal interest and meter rent receivable which require full provision in the accounts. Note: 11: Trade & other receivables: Trade & other (cont. 7)

TITASGAS 27-Nov-2019

(Continuation news of TITASGAS): charges penal interest on the bill amounts of the respective customers. As such a total amount of Tk. 51.36 crore has been recognized as interest income up to 30 June 2019 and included in Trade & other-receivables shown under Note # 11. On the other hand, the company accounted for meter rent charges on its customer namely, PDB for Tk.43.08 crore up to the year 2018-19. The Company has been recognizing these income and receivables since the year 2002. (cont. 6)

TITASGAS 27-Nov-2019

(Continuation news of TITASGAS): and thereafter will further review the provision amount for the subsequent years. Accordingly, the Company has provided only Tk. 62.00 crore in the year 2018-19 against the deficit up to 30 June 2018 and further Tk. 24.84 crore for the current year. As a result, the provision for pension fund has remained short by Tk. 740.94 crore in the accounts as on 30 June 2019. c. Due to delay in payment of bills by the bulk customers (Power- PDB) the Company calculates and (cont. 5)

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