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TITASGAS

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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)

TITASGAS 27-Nov-2019

(Continuation news of TITASGAS): for the said fund has increased by an amount of Tk. 59.62 crore and an amount of Tk. 51.58 crore has been paid by the Company to the outgoing employees as final settlement. As such, the required provision for pension fund as on 30 June 2019 has stood at Tk. 827.78 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 (cont. 4)

TITASGAS 27-Nov-2019

(Continuation news of TITASGAS): 30 June 2018 was Tk. 819.74 crore as per actuarial valuation done by M/S Z Halim & Associates. As on the said date the Company's provision for the pension fund was only Tk.30.00 crore resulting in a shortfall of provision of Tk. 789.74 crore for the said fund. 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. Further, for the year under audit the required provision(cont.3)

TITASGAS 27-Nov-2019

(Continuation news of TITASGAS): particulars of the parties could not be made available to us. As a result, we could not ensure by accuracy of the balances from the records of the zone offices as well as sending balance confirmation letters to the parties. Note: 24: Customers' security deposits: Customers' security deposits as on 30.06.2019 was Tk. 18,423,868,986 and as on 30.06.2018 was Tk. 15,197,892,280. b. Required provision for pension fund of the entitled employees of the Company as on (cont. 2)

TITASGAS 27-Nov-2019

Qualified Opinion: a. Long-term liabilities as disclosed under Note # 24 to the financial statements include customers' security deposit of Tk. 1,842.39 crore as on 30 June 2019. The Head Office of the Company maintains control ledgers with the information received from zone offices. But during our audit at zone offices we could not check and confirm such balances with the records of zone offices as the zone offices' general ledgers were not updated. Further, any list, address or any other (cont.1)

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