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WATACHEM

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WATACHEM 19-Nov-2019

(Continuation news of WATACHEM): Emphasis of Matter: (a) We draw attention to Note 1.33 restatement" of notes to the financial statements which describes the effects of restatement of the last year?s comparative figures in the financial statements. Our opinion is not modified in this respect. (cont.8)

WATACHEM 19-Nov-2019

(Continuation news of WATACHEM): During the year, the Company has not made tax provisions on new addition in Workers' Profit Participation Fund (WPPF) amounting Tk. 9,367,626 tax charge on which comes at Tk. 2,341,906. Resultantly net Profit after tax has been overstated by Tk. 2,341,906 and EPS has been overstated by 0.19 (cont. 7)

WATACHEM 19-Nov-2019

(Continuation news of WATACHEM): 4. Difference of tax provision on final assessment of previous years has been treated as deduction from Reserve & Surplus as presented in Note 21.00 "Reserve & Surplus" in the year 2017-2018. (cont. 6)

WATACHEM 19-Nov-2019

(Continuation news of WATACHEM): An amount of Tk. 26,662,839 has been shown under the head of "Workers Profit Participation Fund" as current liabilities. However, no amount has been disbursed as employees' benefits to the workers. This indicates the violation of the provision of Labor Act 2006 section 242(1) as amended in 2013. (cont. 5)

WATACHEM 19-Nov-2019

(Continuation news of WATACHEM): 3. The company has utilized WPPF fund in its operation as internal source of financing but did not provide interest for such usage as per section 240 (3) of Labor Act 2006 as amended in 2013. Moreover, the company to manage WPPF has not constituted Board of Trustees, which is a violation of section 235 of the said Act. (cont. 4)

WATACHEM 19-Nov-2019

(Continuation news of WATACHEM): As such consistency was not maintained as per paragraph 34 of IAS 16 "Property, Plant & Equipment". Therefore, retained earnings has been understated and Revaluation reserve has been overstated to the same extent. Moreover, the company has not maintained fixed asset register properly. (cont. 3)

WATACHEM 19-Nov-2019

(Continuation news of WATACHEM): 2. The company has revalued its Plant & Machinery and Factory Building in 2008 but has not transferred depreciation on revaluation from Reserves & Surplus to Revaluation Reserve for 04 (four) years from 2008 to 2011. (cont.2)

WATACHEM 19-Nov-2019

Qualified Opinion: 1. No depreciation was charged on LABSA plant and BCP plant. The management reported that these plants are not in use since 2008. According to IAS 16 (paragraph 55), a company should not cease the depreciation when the assets become idle or is retired from active use unless the asset is fully depreciated. As a result, depreciation was undercharged by Tk. 8,307,613 for this year. (cont.1)

WATACHEM 19-Nov-2019

Trading of the Shares of the Company will resume on 20.11.2019 after record date.

WATACHEM 18-Nov-2019

Trading of the shares of the Company will remain suspended on record date i.e., 19.11.2019.

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