Auditor detects mismatches in PGCB annual report
FE Report | Monday, 19 February 2018
The auditor has identified mismatches in the financial statement of Power Grid Company of Bangladesh (PGCB) for the year ended on June 30, 2017.
Following the mismatches, the auditor said on the basis of qualified opinion no detailed information regarding carrying amount of property, plant and equipment (PPE) was found.
The carrying amount of PPE was reported at above Tk 113.39 billion, according to the basis of qualified opinion posted on the website of Dhaka Stock Exchange (DSE).
"No register has been found by us for PPE, which in need to be implemented by PGCB incorporating detailed information like original cost, accumulated depreciation, rate of depreciation, year of acquisition, identification number etc," the auditor said.
Some items of PPE have been transferred from Bangladesh Power Development Board (BPDB) and Dhaka Power Distribution Company (DPDC) to PGCB without conducting physical verification and valuation thereon.
The auditor said: “On the basis of qualified opinion that no physical verification of PPE was conducted either at the year-end or any time during the period under audit, as we are unable to confirm the authenticity of the physical existence of PPE as of 30 June 2017.”
"This item represents 71.74 per cent of total assets which remained unverified as to its quantity," the auditor mentioned, further mentioned that the company has never performed impairment test of its PPE which is also a non-compliance with accounting standard.
The company has reported an amount of above Tk 807.34 million as inventories.
The auditor said they have visited 20 Grid Maintenance Division (GMD) offices involving the inventories value amounting to above Tk 900.51 million resulting unrecorded inventories of Tk. 93.16 million which indicates incomplete reporting in the financial statements.
"We also found that inventory register was not maintained properly. As a result, we are unable to confirm the physical existence of the items of inventories and thereby its value as on 30 June 2017," the auditor said.
The company has reported an amount of above Tk 2.70 billion as receivable from transmission/wheeling and optical fiber charges.
It includes receivable from DPDC and DESCO, M/S Abul Khair Steel Products and BWDB GK Project, Bheramara, Kushtia amounting to above Tk 615.83 million, above Tk 279.08 million, above Tk 6.43 million and above Tk 1.56 million respectively.
The above stated amounts are carried forward from FY 2005 and increasing year by year till to date. It includes disputed amounts with DPDC above Tk 414.87 million, DSECO above Tk 3.10 million, M/S Abul Khair Steel Products above Tk 6.43 million and BWDB GK Project Bheramara, Kushtia, above Tk 1.56 million.
"In our opinion, the company is very unlikely to recover the amounts in full," the auditor said.
It said if provisions were made for the above, the earnings per share (EPS) and net asset value (NAV) for the year 2016-2017 would have adversely been affected to that extent.
The PGCB was listed with the stock exchanges in 2006. According to DSE information, the government holds 76.25 per cent shares, institutes 18.66 per cent, foreign shareholders 0.20 per cent and general public 4.89 per cent shares as on November 30, 2017.