Overview on Bakhrabad Gas Systems Limited
Bakhrabad Gas
Systems Limited (BGSL) is a company of Petrobangla under the Ministry of Power,
Energy & Mineral Resources, Government of the People's Republic of Bangladesh , was
incorporated on 7th
June, 1980 . The registered
head office of the government-owned company is located at its own complex at
Comilla. The company commenced its operations as a model company with its core
responsibilities of gas production, transmission and distribution. The Company
was primarily entrusted with the responsibilities of drilling 4 (four) wells
including work over of one well, construction of 174.65 kilometers long
Bakhrabad-Chittagong Gas Transmission Pipeline and installation of gas
distribution network in South-East Bangladesh with a view to supplying gas to
the South-East region of the country. On successful completion of these
projects within the requisite time, the Company began its commercial trek in FY
1984-85 from Chittagong
on 20th May, 1984 .
It is noteworthy that the initial authorized capital of the Company was Tk. 300.00
crore which the government providing the total equity requirement of the
company. The paid up capital of the company is Tk. 122.62 crore and Tk. 248.07
crore retained in the company as share deposit.
2.1 Objectives
BGSL was established with three-fold responsibilities of production, transmission and distribution of natural gas to south-east
and gas supply to Titas system from
16 September, 1985 .
2.2 Present Status
The gas production activities of the company relating to Bakhrabad and Feni gas fields were transferred to Bangladesh Gas Fields Company Limited (BGFCL) in May, 1989 under a reorganization plan of Petrobangla. Since then the major activities of BGSL confined to transmission and distribution of gas. As per government decision BGSL has handed over its main transmission lines to Gas Transmission Company Limited (GTCL) in the month of November, 2003 and as a result BGSL is now engaged only with the gas distribution and marketing responsibilities
2.3 Information of Bakhrabad Gas Systems Limited at a glance
Fig - 2.1: Franchise Area of Bakhrabad Gas
Systems Limited
2.6 Vision, Mission
To be a best gas
distribution/marketing company in the country with best practices and highest
social commitment- this is the vision of BGSL.
2.6.1 Vision
Ø
To contribute to the socioeconomic development
of the country.
Ø
To attain highest level of customer satisfaction
through extension of services by dedicated and motivated team of
professionally.
Ø
To maintain continuous growth of Gas connection.
Ø
To maximize profits by ensuring its steady
growth.
Ø
To maintain the high moral and ethical
standards.
Ø
To ensure participative management system and
empowerment of Human Resources.
Ø
Nurture an enabling environment where
innovativeness and performance is rewarded.
2.6.2 BGSL Objective
Strategic Objectives
Ø
To achieve positive Economic Value Added (EVA)
each year.
Ø
To be one of the top two Financial Institutions
in Bangladesh
in terms of Gas Distribution under Petrobangla.
Ø
To be one of the top two Financial Institutions
in Bangladesh
in terms of marketing Gas in all significant franchises.
2.6.3 Financial Objectives
To achieve a return on equity of
100% or more on average.
Development Activities3.0 Annual
development Programme
The company has expanded its
network through implementation of new pipeline under the Annual Development
Programme (ADP).
3.1 Pipeline Construction
The gas distribution network of the
Company is extended up to chittagong South-East Bangladesh and also to Kasba
and Bancharampur Upazila under Brahmanbaria District. The Company’s target for
construction of distribution pipelines under development activities during the
financial year under review has been surpassed, like previous years. During FY
2009-10 the actual distribution pipeline construction was 181.37 km with pipes
diameters ranging from 3/4" to
6" as against a target of 80.00 km. It shows a 126.71 percent achievement
over the target. During the year under review construction of pipeline like
previous year was not possible due to shortage of gas though there was huge
demand of Gas in the franchise area. The total length of pipeline stood at
6427.99 km, after installation of the aforesaid pipeline which include
transmission pipeline of 67.46
km , lateral pipeline of 263.64 km and
distribution network pipeline of 6096.89 km. A comparative statement of
pipeline construction during FY 2007-08 and 2008-09 is appended below
|
Year
|
Target (Km)
|
Actual (Km)
|
Comment
|
|
2009-10
|
80.00
|
181.37
|
126.71%
higher than the target
|
|
2008-09
|
150.00
|
155.12
|
3.41%
higher than the target
|
Table- 3.1: A comparative statement
of pipeline construction (FY 2009-10 & 2008-09)
3.2 Construction of 8" dia Pipeline from 20" dia Bakhrabad - Demra Gas Transmission Pipeline at Kutumbapur Point
to inlet of Kutumbapur TBS
According to the decision of Petrobangla
for increasing the gas supply of Bakhrabad Franchise Area, the construction of
above mentioned pipeline was completed on 19 May 2009 at a cost of Tk. 197.84 lakh and
supply og gas started to Comilla region by this pipeline through Kutumbapur TBS
on 22 June 2009 .
3.3 Installation of 20" dia 1250 Meter Pipeline
under Karnaphuli River Chittagong Main by HDD Method
An incident took place in 20" dia pipeline of the Eastern leg of Ring-Main, Chittagong Karnaphuli River 84 A Jalan SG, 4/8, Taman Sri
Gombak, 69100, Batu Caves, Selangor Daru Ehsan, Malaysia was considered as
first lowest of the four Bidders, at their quoted price equivalent to foreign
currency USD 15,37,158.09. The evaluation report with the recommendation of
tender committee was placed at the 416th Board Meeting of BGSL held
on 13 September 2009
and the Board has given their kind approval to award the work in favour of the
first lowest bidder. According to the decision of the Board Notification of
Award was issued in favor of first lowest bidder on 19 October 2009 and the contract has
been signed on 15 November
2009 .
3.4 Other’s Development Activities
The Company’s success over the years has
resulted in more responsibility, i.e., three more projects have been
commissioned. Out of these, two projects are GOB financed “Gas Supply to
Chandpur 150 MW Combined Cycle Power Plant Project” and “Exploration and
Production Capacity Building of BAPEX (BGSL portion) Project” for Gas supply
from Samutang Gas Field to BKB-Chittagong Transmission Pipeline. BGSL’s own
financed Project is “Construction of 8" dia 6.00 Kilometer long
pipeline from Begumgonj Gas Field to Setubhanga of Maijdee lateral line.
The following is a brief narration of
the progress on the above metioned three project which are under
implementation:
3.4.1
Gas supply to Chandpur 150 MW
Combined Cycle Power Plant Project
This project was approved by ECNEC in a
meeting held on 12 July,
2006 , wherein it was decided to implement the project between July
2006 and June 2009 with GOB financing to the tune of Tk.80.03 crore. Out of the
total project cost, provision was kept for an amount of Tk.44.57 crore for
purchase of materials, Tk.1.70 crore for acquisition of land, Tk.9.88 crore for
construction of pipeline and Tk.23.88 for miscellaneous expenses. In order to
complete the project within the deadline, International Tenders were invited
for procurement of materials
in
6 groups
and tenders were opened in September and October 2007. However due to
non-allocation of fund as per requirement, the tenders were kept pending for
evaluation and, as a result, the validity of tenders and bid bonds expired
despite receiving a sufficient number of tenders. This situation was discussed
in the meeting held at Petrobangla on 24 April, 2008, and considering the
uncertainty of the installation of power plant(s) by PDB, a decision was taken
to cancel the tenders and at the same time to continue the activities of the
project in line with the physical progress of the power station. As per the
decision of the meeting, the Company was awaiting the progress of the power
station. The company’s three years project period expired on 30 June, 2009 due to the
stagnant state of the Power Station. It, therefore, became necessary to amend
the present DPP of prepare a new DPP, considering the above facts, a decision
was taken to prepare a new DPP at the meeting held on 17 August, 2009 at the administrative
Ministry and on 26 August,
2009 at Petrobangla. According to the decision, the new DPP for the
said project was prepared and sent of Ptrobangla showing a project cost of Tk.79.28
crore and the project implementation period between January 2010 and June 2012.
3.4.2
Exploration and Production Capacity
Building
This project was approved on 3 February, 2009 . Under this
project, 10" Æ
dia 65 Kilometer
long high pressure pipeline will be constructed from Semutang Gas Field to
Chandgaon of Chittagong Ring Main. The project will be implemented entirely
with GOB financing to the tune of Tk.140 crore which includes foreign currency of Tk.83.45
crore (the Company’s portion). The project period has been determined between
July 2008 and June 2011.
During FY 2008-09, Tk..05 crore was released against this project out of which
Tk..034 crore was spent for purchase of computers, scanners, photocopy machines
and furniture and remaining amount of Tk..47 crore was returned to GOB by
depositing it with the Government Treasury.
During FY 2009-10, Tk.7.25 crore has
been allocated against the Company’s portion of the project out of which
expenditure of Tk..0029 crore equivalent 0.0397% was made till September,2009.
At resent, collection of 156 Mouza map for acquisition of land and preparation
of tender documents for procurement of 10" Æ
dia pipeline, coat & wrap materials, valves, fittings, TBS components etc.
is undergoing.
3.4.3
Construction of 8" dia 6.00 Kilometer
Pipeline from Begumgonj Gas Field to Setubhanga of Maijdee Lateral Line Project
Petrobangla has given the decision to
construct a 8" dia 6.00
Kilometer long pipeline with related installations from
Begumgonj Gas Field to Setubhanga of Maijdee lateral line with the Company
financing between January 2010 and December 2011. As per the said decision, the
Company has prepared a DPP determining the project cost to the tune of Tk.10.38
crore, including foreign currency component of 5.19 crore and sent the same to
Petrobangla. Upon successful implementation of this project, an additional 5
MMSCFD gas is envisaged to be added to the Company’s system. But at present
some technical problems have arisen to convert the well of Begumgonj Gas Field
into production well. As a result BAPEX has taken a plan to acquire land in
another place to drill the well. Petrobangla has given verbal order to postpone
the construction work related to the pipeline until the plan of drilling of the
well is finalized.
3.5
Customer Connection
The Company was able to provide gas
connections to 44,673 new customers under its development activities during FY
2009-10 as against target of 25,000 customers, which includes 12 Captive Power,
12 industrial, 68 commercial, 14 CNG and 24,894 domestic customers. Hence, the
cumulative gas connection stands at a total of 5,10,954 including 10 power, 3 fertilizer, 1031
industrial, 182 captive power, 4,691 commercial, 1 tea garden, 136 CNG and 5,04,900
domestic connections. A comparative statement of customer connection of 2007-08
and 2008-09 is appended below:
|
Category of Customers
|
Target
|
2009-09
Actual
|
Target
|
2007-08
Actual
|
||||
|
|
Comilla
|
Total
|
|
Comilla
|
Total
|
|||
|
Power
|
-
|
1
|
-
|
1
|
4
|
1
|
3
|
4
|
|
Industrial
|
12
|
14
|
2
|
16
|
11
|
22
|
6
|
28
|
|
Captive Power
|
12
|
6
|
8
|
14
|
11
|
12
|
19
|
31
|
|
Commercial
|
68
|
72
|
61
|
133
|
183
|
162
|
189
|
351
|
|
Domestic
|
24,894
|
22,634
|
21,860
|
44,494
|
24,765
|
18,939
|
13,139
|
32,078
|
|
Seasonal
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Tea Garden
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
CNG
|
14
|
9
|
6
|
15
|
26
|
15
|
40
|
55
|
|
Total
|
25,000
|
22,736
|
21,937
|
44,673
|
25,000
|
19,151
|
13,396
|
32,547
|
Table- 3.2: Category wise Gas
Connection
The achievements of gas connection in FY
2008-09 and FY 2009-10 were 30.19 percent and 78.69 per cent higher than the
respective targets.
3.6 System Loss Reduction
Programme
The company has been implementing
different action plans to reduce overall system loss/unaccounted for gas. Actions include monitoring area wise gas
input-output and thereby fixing responsibilities for system loss. RMS sealing,
Calibration and replacement of old meters, intensive vigilance, disconnection
of unauthorized gas use by task force.
Installation of internal pipeline of industrial, commercial customers
etc above ground level. A programme is
being implemented by assigning officers to collect meter readings including
visit to customer premises. Meter sealing and testing programmes are being
implemented in time. The premises of the industrial & disconnected
customers are being inspected by special teams.
3.7 System Loss Reduction Project
The system (loss)/gain of BGSL in FY
2009-2010 is 1.15%. Due to reduction system loss BGSL,s takes some projects.
Such
Procurement and installation of Turbine
and Rotary Meters equipped with Electronic Volume Corrector (EVC) for improving
of area wise TBS/DRS inputs and gas measurement facilities at customers ends.
3.8 Gas Supply Efficiency
Improvement Project
Energy efficiency is a vital issue for gas
conservation. Most industrial, captive, commercial and domestic customers are
not quite aware of the efficient utilization of gas. Domestic customers of BGSL
use unmetered gas. They pay bill on a flat rate basis, irrespective of the
volume of gas consumed. Some unscrupulous customers also indulge in gas
pilferage, using gas in unauthorized appliances. This is one of the factors
which contribute to the wastage of gas resulting in system loss of this
non-renewable resource. Inefficient utilization of natural gas in different gas
in different boilers, generators, re-rolling furnaces and may other gas consuming
equipments and inefficient gas burners causes loss of a huge amount gas, posing
a visible threat to national energy security.
Inefficient gas use is an inevitable outcome of incomplete
combustion of gas.
These unburnt carbon and carbon monoxide
produced this way degrade our environment.
For gas supply efficiency improvement
efficiency BGSL takes some steps. Such Design, supply,installation, testing
& commissioning of Remote metering system on Turn-key basis including
procurement and installation of Turbine meters equipped with EVC.
Development of ICT for Building
Digital Bangladesh
4.0
Domestic Customer’s Ledger/Bill Computerization
With
a view to improving customer services, computerization of domestic customer’s
ledger of area/sub-area offices has been completed.
4.1
Modernization of IT System of the Company
The present Government has declared its
Vision 2021 to build Digital Bangladesh. With a view to modernization of IT
system of BGSL, Bangladesh
University
• All metered customers will be
able to check their usage accounts online.
• They can also apply online
for new connections.
4.2
Introduction of Bill Pay System
In order to remove consumer
sufferings associated with standing in long queues and various post-payment
hassles in payment of gas bills, Bakhrabad Gas and GrameenPhone have jointly
launched the Bill Pay Service from November,2009. Under this new system
domestic customers can pay their gas bills from anywhere at anytime through their
mobile phones or at any GP authorized Bill Pay Centers.
Marketing and Operational
Activities
5.0 Gas Purchase
The company
purchased 2990.40 million cubic meters (MMCM) of gas during FY 2009-10 as
compared to 2899.75 MMCM in the previous year. The purchase of gas during the
year under review has increased by 3.1344 percent. Out of the total purchase,
1326.45 MMCM, 788.31MMCM, 320.11 MMCM i.e. total 2434.87 MMCM was taken from
the government owned Companies i.e. Bangladesh Gas Fields Company Limited,
Sylhet Gas Fields Limited and BAPEX (Salda Gas Field) respectively. Another
555.53 MMCM was purchased from Sangu,Feni
and Vangura gas fields operated by International Oil Companies (IOC)
through Petrobangla. The gas purchase from government owned and International
companies during the year had been 2434.87 MMCM and 555.53 MMCM respectively,
the ratio being 81:19. During the previous year, a volume of 2368.04 MMCM of
gas purchased from the government-owned gas fields while the IOC-owned Gas
Field supplied 531.71 MMCM, the ratio being 82.18. The value of gas purchased
during the year under review was Tk.859.92 crore as compared to Tk.743.59 crore
in the previous year, which registered 15.64 percent annual increase.
A comparative
statement of gas purchase during FYs 2008-09 and 2009-10 is appended below:
|
Category of Customers
|
2009-10
|
2008-09
|
Growth
|
||||
|
Purchase Target (MMCM)
|
Actual Purchase (MMCM)
|
Value (Taka in crore)
|
Actual Purchase (MMCM)
|
Value (Taka in crore)
|
Taka in crore
|
%
|
|
|
Power
|
511.00
|
636.84
|
117.58
|
437.81
|
76.61
|
40.97
|
53.48
|
|
Fertilizer
|
807.00
|
659.96
|
111.30
|
963.17
|
147.09
|
(35.79)
|
(24.34)
|
|
Industrial
|
415.96
|
433.70
|
154.48
|
378.43
|
123.34
|
31.14
|
25.24
|
|
Captive Power
|
418.39
|
388.92
|
101.23
|
340.93
|
81.26
|
19.97
|
24.58
|
|
Commercial
|
60.91
|
63.33
|
35.57
|
58.51
|
29.26
|
6.31
|
21.56
|
|
Seasonal
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Tea Garden
|
0.05
|
0.06
|
0.02
|
0.03
|
0.01
|
0.21
|
100.00
|
|
CNG
|
245.06
|
257.97
|
164.89
|
221.25
|
141.21
|
23.68
|
16.77
|
|
Domestic
|
531.63
|
549.62
|
174.85
|
499.62
|
144.81
|
30.04
|
20.75
|
|
Total
|
2990.00
|
2990.40
|
859.92
|
2899.75
|
743.59
|
116.33
|
15.64
|
Table- 5.1: Comparative statements of Gas
purchase (FY 2009-10)
5.1 Gas Sales
The Company’s sale of gas during FY
2009-10 has been recorded at 3 008.93 MMCM as against the target of 2953.00
MMCM i.e. an increase of 55.93 MMCM from the target but 128.34 MMCM is higher
than the previous year’s actual sale of 2880.59 MMCM. The amount of revenue
earned from gas sales was Tk.1600.07 crore during the FY 2009-10. In the
previous year it was Tk.1792.52 crore. During the year under review the revenue
earning decreased by an amount of Tk.192.45 crore i.e. 10.74 percent in comparison with the preceding year. In spite
of receiving an amount of Tk. 264.04 crore from the additional gas sale of
128.34 MMCM than the preceding year and increased rate of gas price effective
from 1 August 2009, the total revenue earnings decreased by an amount of Tk.
192.45 crore due to the decrease of sale of KAFCO by an amount of Tk. 456.49
crore than the previous year as international market of fertilizer price has
come down on which basis KAFCO’s gas price determined as per contract signed
between KAFCO & BGSL.
A comparative statement of gas sales
during FYs 2008-09 and 2009-10 is given below:
|
Category of Customers
|
2009-10
|
Percentage of total Sales (%)
Quantity
|
2008-09
|
Growth
|
||||
|
Sales Target (MMCM)
|
Actual Sales (MMCM)
|
Value (Taka in crore)
|
Actual Sales (MMCM)
|
Value (Taka in crore)
|
Taka in crore
|
%
|
||
|
Power
|
507.00
|
645.45
|
11407.83
|
21.45
|
437.08
|
114.08
|
66.46
|
58.26
|
|
Fertilizer
Government
KAFCO
|
311.61
483.39
|
222.63
435.86
|
57.27
308.01
|
7.40
14.48
|
369.84
584.44
|
59.23
764.50
|
(1.96)
(456.49)
|
(3.31)
(59.71)
|
|
Industrial
|
411.03
|
436.67
|
277.30
|
14.51
|
375.92
|
219.72
|
57.58
|
26.21
|
|
Captive Power
|
413.11
|
390.76
|
170.24
|
12.99
|
338.98
|
133.74
|
36.50
|
27.29
|
|
Commercial
|
60.16
|
63.76
|
63.25
|
2.12
|
58.03
|
51.17
|
12.08
|
23.61
|
|
Seasonal
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Tea Garden
|
0.08
|
0.05
|
0.03
|
-
|
0.03
|
0.02
|
0.01
|
50.0
|
|
CNG
|
242.40
|
259.93
|
259.93
|
8.64
|
220.03
|
221.46
|
37.87
|
17.10
|
|
Domestic
|
524.22
|
553.82
|
553.82
|
18.41
|
496.24
|
228.60
|
55.50
|
24.28
|
|
Total
|
2953.00
|
3008.93
|
3008.93
|
100.00
|
2880.59
|
1792.52
|
(192.45)
|
(10.74)
|
Table- 5.2: Comparative statements of Gas
sales (FY 2009-10)
5.2 Operational & Marketing position
(FY 2009-10)
|
Constructed pipeline
|
:
|
Total- 6427.99 Km
i. Transmission Line 67.46 Km
ii. Distribution Line 6096.89 Km
iii. Lateral Line 263.64 Km
|
|
Number of Customers
|
:
|
Total- 510958
Power- 14
Fertilizer- 3
CNG- 136
Captive
power- 182
Industry- 1031
Tea
Garden- 1
Commercial- 4691
Domestic- 504900
|
Table- 5.3: Operational & Marketing
position (FY 2009-10)
5.3 Wheeling Charge
The company paid a
wheeling charge of Tk. 79.75 crore during the FY 209-1 as compared to Tk. 69.84
crore in the previous year for the gas transmitted to BGSL franchise area
through Transmission Pipeline of GTCL. The wheeling charge during the year
under review was increased by an amount of Tk. 9.91 crore due to higher amount
of gas supplied through the Transmission Pipeline of GTCL.
Financial and Commercial
Performance
6.0 Introduction
The company
performs some financial and commercial performance in FY 2009-10 are given
bellow:
6.1 Price Deficit Fund
In December
1998, a Price Deficit Fund (PDF) was created to cover the loss incurred by
Petrobangla by way of procuring gas from IOCs at higher prices and selling the
same to the customers at a lower rate. An amount of Tk.186.96 crore was
collected for PDF during FY 2009-10 as compared to Tk.175.38 crore in the
previous year. PDF is accumulated on the volume of gas supplied from the
government-owned gas fields. The Price Deficit Fund margin was increased by an
amount of Tk.11.58 crore during FY 2009-10 due to the increased amount of gas
supply of 66.83 MMCM from government-owned gas fields than the previous year.
6.2 Gas Development Fund
The Gas
Development Fund was created on 1
August 2009 for financing the companies to increases gas production
and discover/development of the new gas fields. During the FY 2009-10 total
amount of Tk. 48.82 crore was collected against this fund.
6.3 Company Margin
The Company’s
total revenue earning during FY 2009-10 stood at Tk.1600.07 crore. After deduction of a total amount of Tk.1194.34 crore (i.e.
Tk.859.92 crore for gas purchase, Tk.9.15 crore for BAPEX margin, Tk.79.75
crore for wheeling charge, Tk.186.96 crore for PDF ,Tk.9.74 crore for Deficit
well head margin and Tk. 48.82 crore for Gas development fund), the company’s
net margin stood at Tk.405.73 crore, showing a decrease of Tk.380.95 crore over
the margin of Tk.786.68 crore in the previous year. The Company’s margin has
been idecreased due to decrease of sales of KAFCO by an amount of Tk. 456.49
crore than the previous year as international price of fertilizer has come down
on which basis KAFCO’s gas price determined as per contract signed between
KAFCO & BGSL.It may be mentioned here that the net margin of the company
stood at Tk. 208.16 crore as against Tk. 405.73 crore since Tk. 197.57 crore
received from KAFCO in addition to government tariff was paid to Petrobangla
and other agencies.
6.4 Net Profit
The Company’s
pre-tax net profit during the FY 2009-10 has been recorded at Tk.345.94 crore
as compared to Tk. 735.54 crore of the previous year, showing a decrease of Tk.
389.60 crore or 52.97 percent. The net profit has been decreased mainly due to
decrease of sales of KAFCO by an amount of Tk. 456.49 crore than the previous
year as the international price of fertilizer has come down on which basis
KAFCO’s gas price determined as per contract signed between KAFCO & BGSL in
spite of receiving of Tk. 264.04 crore from the additional gas sale of 128.34
MMCM than the preceding year and the increased price rate effected from 1
August 2009.
6.5 Workers Profit Participation Fund (WPPF)
The Workers’
Profit Participation Fund (WPPF) during FY 2009-10 was created with an amount
of Tk.17.30 crore at the rate of 5% on net profit. In the preceding year, the
amount stood at Tk. 36.78 crore.
6.6 Rate of Return on Average Fixed Assets
The Company’s
Rate of Return (ROR) during FY 2009-10 was 136.92 percent as compared to 284.15
percent in the preceding year. The ROR during the year under review was
decreased by 147.23 percent as compared to the previous year due to the
decrease of net profit.
6.7 Debt-Equity Ratio
During FY
2009-10, the Debt-Equity Ratio of the Company was 1:99 as against 2:98 in the
previous year. The Debt-Equity Ratio during the year under review stood in this
position due to the payment of Tk.6.84 crore of long-term loan.
6.8 Debt-Service Ratio
The Company’s debt-service ratio
was 1:32.73 during the FY 2009-10 as
against 1:79.88 of the previous
year. The loan giving agencies have determined standard Debt-Service Ratio 1:1.5.
6.9 Payment to National Exchequer
Bakhrabad Gas Systems Limited is not only earning profit,
it is also playing an important role in the national economy by contributing
significantly to the National Exchequer through regular payment of CD/VAT,
Corporate Tax and DSL. The company pay to National Exchequer is Tk. 11.31 crore
in the FY 2009-10.
6.10 Accounts Receivable
The accounts
receivable of the Company during FY 2009-10 was Tk.277.55 crore or equivalent
to 1.98 month’s average sales excluding provision for bad debts as compared to
Tk.250.40 crore or equivalent to 1.94
months’ average sales of the previous year.
6.11 System (Loss)/ Gain
The Company
purchased 2990.40 MMCM of gas and sold 3008.93 MMCM of gas during FY 2009-10.
As a result, the company recorded a gain of 18.53 MMCM or 0.62 percent of gas.
6.12 Financial Position (FY 2009-2010)
|
Gas Sales
|
:
|
3008.93 MMCM |
|
Gas Sales in Tk.
|
:
|
Tk.. 1600.07 crore
|
|
Net Profit
|
:
|
Tk. 345.94 crore
|
|
Rate of Return (%)
|
:
|
136.92
|
|
Debt-Equity Ratio
|
:
|
1:99
|
|
Debt-Service Ratio
|
:
|
1:32.73
|
|
Payment to the national Exchequer
|
:
|
Tk. 11.31 crore
|
Table- 6.1: Financial Position (FY
2009-2010)
Administrative Activities of BGSL
7.0
Introduction
Company’s overall performance depends upon a strong and
efficient administrative system. BGSL, as the major gas marketing company attaches
due importance to the need of improved customer service and with this end, a
“Revised Organ gram” was introduced in the Company. Highlights of the company’s
administrative activities within the financial year are given below
7.1 Manpower and Human Resources Development
The development
of Manpower and Human Resources has been running satisfactorily keeping
coherence with overall development and financial activities. The total manpower
of the Company was 1222 as on 30
June 2009 . After the retirement and death of some employees, the
total manpower of the company as on 30 June 2009 stood at 1190 comprising of 501 officers and
689 staff. Among the total member of officers and staff, 31 are female officers
and 23 female staff respectively.
To ensure efficient
use of human resources of the company, and to bring dynamism and modernization
in the activities of human resources division, Bakhrabad Gas Human Resources
Information System (BHRIS) was introduced on 18 June 2009 as part of present
government’s dream of building Digital Bangladesh. Personal Data of the
employees of the company is being recorded by using this system.
A comparative
statement showing the year-wise manpower position of the company for FY 2009-10
and 2008-09 is given below:
|
Financial Years
|
Number of Officers
|
Number of Staffs
|
Officers
|
Total Other Staffs
|
Grand Total
|
||||
|
Male
|
Female
|
Total
|
Male
|
Female
|
Total
|
||||
|
2009-10
|
470
|
31
|
501
|
666
|
23
|
689
|
501
|
689
|
1190
|
|
2008-09
|
489
|
30
|
519
|
679
|
24
|
703
|
519
|
703
|
1222
|
Table- 7.1: Comparative statement of manpower position
of the company for FY 2009-10
An efficient
work force is the key to effective management and development of an
organization. HRD programs are underway to develop potentialities of existing
manpower and keeping them abreast of the latest developments in respective
fields of operation. Accordingly 129 Officers and staffs were sent for training
on various subjects in
different reputed training institutions like BPI, BIM, IRI, Planning and Development Academy Engineering Staff
College
During the year
2009-10 a
provision of Tk.0.40 crore has been kept for foreign training of the officers
of the company. Collection of course calendars from the foreign reputed
training institutions are going on for implementing the training programme.
7.3
Management- Employee Relations
Management- Employee
Relationship was quite satisfactory during the year under review and mutual
cooperation was prevalent. In a meeting held between the leaders of the existing
two registered Trade Unions of the company with BGSL management, the trade
union leaders vowed to work together for improvement of customer Services,
reduction of system loss and realizing accounts receivables, thereby upholding
the reputation of BGSL.
7.4 Employee
Welfare
The company undertakes various
motivational activities to improve human values, mutual understanding,
interpersonal relationship and loyalty among the offi cers and employees. In
the year 2009-10 the company arranged the following social, cultural, religious
and entertainment programmes on regular basis:
7.4.1
Education
Head Office
Complex of Bakhrabad Gas Systems Limited is about 3 to 4 kilometers away from
the Comilla main town. So to give the opportunity of education of the children
of the employees of the company within BGSL area, the BGSL authority
established primary school namely Bakhrabad Gas Adarsha Bidhyalaya in 1995.
Later on it was upgraded into Secondary School and no it is running as a High
School with Science, Commerce and Arts Groups from Children Class to ten.
Students are admitted to the school on merit basis through admission test for
both of the children of he employees of BGSL and the outsiders. Students
participated in SSC Examination for the first time in 2006.
During the FY
2009-10 the company awarded stipend to the tune of Tk. 0.10 crore to 282
children of the officers and staffs for their outstanding performance in
Primary and Junior Scholarship Examinations and SSC and HSC Examinations. The
officers and staffs observed various occasions of national importance with due
solemnity and participated in the Company’s annual picnic and sports
enthusiastically.
7.4.2 Loan
The welfare
programs are progressing ahead, keeping pace with physical, operational and
financial activities of the Company. As per approved policy of the Company a
total of Tk.5.66 crore was disbursed among the officers and staffs a s advance
for land purchase, house building and purchase of motor cycles and bicycles
during FY 2009-10. For execution of government policy for IT, 3 officers of the
Company have been provided with an advance of Tk. 0.024 crore for purchase of
personal computers. Besides, officers and staffs were given grant as per policy
of Company’s welfare fund.
7.4.3 Entertainment and Sports
Officers and
staffs of Bakhrabad Gas Systems Ltd also participated in Inter-Company sports
competition organized by Petrobangla. Besides this, Annual Sports
Competition-2010 of the company was organized by BGSL Club. In 16 events, all
levels of employees participated in this competition. Administration Division
became champion and Sales Division
became runner-up in this competition. Apart from this, BGSL Club and different
Divisions/Departments arranged picnic for entertainment of the employees during
the year.
7.4.4
Religious Programme
As in the previous year, Milad
Mehfil was arranged on the occasion of
‘Eid-E-Mildunnabi’ at BGSL Complex Mosque and Iftar pary also was arranged on
the occasion of ‘Mahe Ramadan’ at BGSL complex
during the year under review.
7.5 Health
Doctors and
ambulances including Government approved medicines are available in Head Office
for the treatment of the employees of the Company. The Retainer Doctor
including medicines are also available in other installations. During financial
year 2009-10 treatment was given to 10056 numbers employees and their
dependents in 13 installation of the company. During the year under review First Aid Box was given to
all the TBS & DRS for primary treatment. No. one became sick during the hazardous job in this
financial year due to the precautionary measures undertaken by the Company.
Doctors, medicines, ambulance and the experienced manpower are deployed at the
hazardous job site like pipeline pigging etc. so that necessary actions may be
taken in the event of any accident.
7.6 Environment
Before
connection of all types of customers excepting domestic customers, environment
clearance certificate issued from he Environment Directorate is obtained to
ensure good environmental conditions. Gas generators are pollution and sound
free. In addition, the cost of maintenance and generation of electricity of gas
generator is also less than the liquid fuel generator. Considering all of the
above facts, gas connections were made to 40 numbers of generators under
“Captive category” during this financial year. A Section named “Environment and
Safety” has been created in the company to monitor the environment. The Company
undertakes training programme from time to time on environment and safety
issues to train up the engineers and engineers train up the personnel working
for them. To ensure better environment, huge number of trees were planted in
the Head Office Complex which has enhanced the beauty of the complex as well. A
section name “Environment and Safety” has been created in the company to
monitor the environment.
7.8 Safety
The security of
the company is ensured by deployment of company’s own Security Guard and Ansars
in different installations. The activities of Security Guard and Ansars are
regularly monitored by the duty officer. The risers installed at the customers’
premises are kept under their own custody. The risers, specially for domestic
and commercial customers, are kept under open sky. As a result those may
damaged by rust, hit by vehicle, fall of trees and their branches during
cyclone and storm, corrosive, waste of drains etc. During this FY, 238 numbers
of domestic risers were out of order.157 numbers of risers were replaced by repairing the old ones.
Where it was not possible to repair the old risers, new risers were installed
for continuation of gas supply. The customers are advised to keep their risers
within a fence where they are in a hazardous location. To ensure safety CMS and DRS are always surrounded by
fence. The operators who are posted to the CMS & DRS are trained in the
operation of fire extinguishers to handle fires. As a precaution, signboards
have been installed at the CMS
and DRS and these stations are visited regularly be the officers. During this
FY no incidents have occurred. Technicians and emergency vehicles are kept on call 24 hours a day to
face this type of incidents. The technicians posted at the control room rush to
the place of incident upon receiving
complain. If they feel that the incident is beyond their control, they immediately
inform higher officials regarding the matter. Ring main pipeline, CMS, DRS,
& RMS are visited by our officers regularly and during 2009-10 the said
installations are visited 428 times. In addition, the CMS of bulk customers are
visited and examined to ensure proper functioning. During this FY bulk
customers’ CMS at Chittagong
has been physically visited 144 times by the concerned officers of the company.
During the FY 2009-10, 45 employees were given training
and two demonstrations were held for instant using of the fire fighting equipment
at the time of incident. The fire fighting equipment are examined regularly.
7.9
Emergency Response
The company has Emergency Gas
Control Rooms at BGSL Head Office Complex, All area offices the 24 hours
emergency gas control. All the emergency calls were promptly attended to ensure
safe and smooth supply of gas to the customers and to avoid probable
accident and loss.
Future Programs of BGSL
8.0 Introduction
The company
attempts some future programs as in the previous
year.
8.1 Pipeline Expansion/Rehabilitation Programme
8.1.1 Extension of pipeline network and gas connection
Almost all the
district headquarters and upazilas of South-East region of the country have
been brought under BGSL gas distribution network. Extension of gas distribution
network is progressing unhindered. During the FY 2009-10, target was fixed to
construct 150 km
pipeline and connect 25000 numbers of new customers in BGSL franchise area. But
recently Government has given instruction to suspend the new connection other than
domestic, commercial and the committed ones till the production of the gas
reach 2200 MMSCFD. Due to such embargo target of gas connection could not be
obtained during FY 2009-10.
8.1.2 Gas supply to Karnaphuli EPZ Area of Chittagong
After declaring
the Chittagong
steel Mill as abandoned, the Government of Bangladesh has decided to establish
Karnaphuli EPZ in the same place. The design and estimate for construction of
pipeline was submitted tot the concerned EPZ authority. As per the design and
estimate 3840 meter
(8”-270 meter ,
6”-510 meter ,
3”-1700 meter ,
2”-1360 meter )
pipeline was constructed in the first phase and a proposal for the construction
of 4440 meter
(6”-480 meter ,
4”-1850 meter ,
3”-1830 meter ,
2”-280 meter )
pipeline in the second phase is presently in the Company. Gas connection to
three industrial and two domestic customers has already been given. M/s.
Labiathon Global Corporation has applied for gas connection to their 50 MW
Power Plant targeting production of power by 2013. Present average monthly
demand of the said EPZ is 0.117 MMCM. But after setting up of industries and
Power Plant in the EPZ, the requirement of gas will be 81.885 million cubic
meter in 2014.
8.1.3 Gas supply to Chittagong Korea Export Processing Zone (KEPZ)
Chittagong
Korean EPZ authority has forwarded their estimated demand of 2.75 MMSCFD Gas in
2010, 6.10 MMSCFD in 2011, 10.05 MMSCFD in 2012, 13.20 MMSCFD in 2013 total
32.90 MMSCFD vide their letter dated 14 July 2009. They also mentioned in their
letter that a shoe Industry with the requirement of minimum 2.75 MSCFD gas will
go into operation at the end of this year. While it was communicated to
Petrobangla by the Company’s letter No.BGSL/MD/17/787 dated 27 August 2009 , Petrobangla
has informed on the same date by their letter No.41.06.01/77 that if gas is
available in BGSL franchise area by 2010 then a minimum of 2.75 MMCF gas can be
supplied daily to Korean EPZ. It is to be noted here that Petrobangla has not
mentioned anything in their letter about the supply of gas in 2011 and
subsequent years.
According to
Petrobangla’s instruction, steps are being taken for construction pipeline
including necessary infrastructure for supply of gas to Korean EPZ. At present,
no infrastructure is available in Korean EPZ for connection of gas.
8.1.4 Gas supply to Medium/Small Power Plants in Private Sector
In the last
year, Government has taken a decision to install some medium/small power plant
all over Bangladesh
through local/joint venture investment. According to the Government decision
some power plants was installed in BGSL franchise area and gas connection was
given to 33 MW power plant at Jangalia on 14 May 2009 .
8.1.5 Ensure gas supply in the Company’s franchise area
The present
demand of the Company franchise area is about 420 million cubic feet of gas per
day. But the Company is being provided with 290-300 million cubic feet of gas
per day which is less by 120-130 million cubic feet of gas demand per day. As a
result gas supply is being provided to bulk consumers like CUFL, KAFCO and
Rauzan 210 X 2 MW power plant through rationing system. The installation of
factories in Comilla EPZ is increasing day by day. The gas supply to Karnaphuli
EPZ have started. Korean EPZ in Chittagong
is in the implementation stage. Every year, new industries the increased
demand, the daily requirement of gas supply to the Company franchise area in
the next Government has given the instruction to suspend the new connection
except the committed connections till the production of gas reach 2200 MMSCFD. Due to such
instruction new connections except domestic, commercial and committed ones has
been suspended.
8.1.6
Gas Supply to The Proposed Chandpur
150 MW Combined Cycle Power Plant Project
This project was
approved by ECNEC in a meeting held on 12 July, 2006 , where in it was decided to implement the
project between July 2006 and June 2009 with GOB financing to the tune of
Tk.80.029 crore.
8.2
Improved Customer Services
In order to ensure improved customer
services, the number of offices under Comilla area and Regional Marketing areas will
be increased, steps will be taken to
recruit adequate number of suitable manpower, measures to be taken for construction of gas pipeline
network through the enlisted contractor
of the company. Steps are being
taken for installation of pipeline network,
installation/modification of CGS/TBS/DRS for ensuring the future gas demand of the customers and to
eradicate the low pressure problem prevailing in different parts of
Comilla/Chittagong City and adjoining areas, during winter season.
Audit Report and Statement of Accounts (FY 2009-2010)
9.0 Balance Sheet As on 30th
June, 2010
|
Sl. No.
|
Particulars
|
Notes No.
|
2009-10
in Tk.
|
|
2008-09
in Tk.
|
|
1.
|
CAPITAL AND RESERVES
|
|
|
|
|
|
|
Share Capital
|
1
|
1,226,180,000.00
|
|
1,226,180,000.00
|
|
|
Deposit for shares
|
2
|
2,240,689,599.91
|
|
2,442,548,811.97
|
|
|
Capital reserve
|
3
|
683,947,144.31
|
|
642,415,320.10
|
|
|
Revenue reserve
|
4
|
5,678,248,931.19
|
|
4,899,404,447.64
|
|
|
Total capital and reserves
|
|
10,069,065,675.41
|
|
9,210,548,579.71
|
|
|
|
|
|
|
|
|
2.
|
LONG TERM BORROWINGS
|
|
|
|
|
|
|
Unsecured loans-Local sources
|
5
|
21,666,032.33
|
|
48,033,798.55
|
|
|
Unsecured loans-Foreign sources
|
6
|
99,171,216.46
|
|
141,172,424.82
|
|
|
Total long term borrowings
|
|
120,837,248.79
|
|
189,206,223.37
|
|
|
|
|
|
|
|
|
3.
|
OTHER LONG TERM LIABILITIES
|
|
|
|
|
|
|
Customers’ security deposits
|
7
|
3,775,017,679.60
|
|
2,972,944,446.06
|
|
|
Liabilities for deferred tax
|
|
35,350,373.44
|
|
57,446,512.36
|
|
|
Total other long term liabilities
|
|
3,810,368,053.04
|
|
3,030,390,958.42
|
|
|
|
|
|
|
|
|
4.
|
Total Capital Employed (1+2+3)
|
|
14,000,270,977.24
|
|
12,430,145,761.50
|
|
|
|
|
|
|
|
|
|
REPRESENTED BY
|
|
|
|
|
|
5.
|
FIXED ASSETS
|
|
|
|
|
|
|
Fixed Assets at cost less
accumulated
|
|
|
|
|
|
|
Depreciation
|
8
|
2,617,577,601.77
|
|
2,738,210,156.68
|
|
|
Capital Work-in-progress
|
9
|
166,560,616.88
|
|
79,551,375.46
|
|
|
Total Fixed Assets
|
|
2,784,138,218.65
|
|
2,817,761,532.14
|
|
|
|
|
|
|
|
|
6.
|
INVESTMENT AND OTHER ASSETS
|
|
|
|
|
|
|
Fixed deposits
|
10
|
5,295,891,638.58
|
|
4,494,285,949.31
|
|
|
Loan to employee
|
|
248,711,846.81
|
|
226,751,630.06
|
|
|
Loan to Inter-company (KGDCL)
|
|
27,561,267.90
|
|
-
|
|
|
Investment (In shares of ICB
Islamic Bank)
|
|
2,812,000.00
|
|
2,812,000.00
|
|
|
Customers securities (BG and PSP)
|
|
1,911,019,792.18
|
|
1,296,927,607.35
|
|
|
Total investment and other assets
|
|
7,490,301,609.47
|
|
6,020,777,186.72
|
Balance Sheet As on 30th
June, 2010
|
Sl. No.
|
Particulars
|
Notes No.
|
2009-10
in Tk.
|
|
2008-09
in Tk.
|
|
7.
|
CURRENT ASSETS
|
|
|
|
|
|
|
Investors of stores and other
materials
|
12
|
535,349,095.04
|
|
470,294,040.62
|
|
|
Trade Accounts Receivable (Net)
|
13
|
2,773,646,607.15
|
|
2,503,962,400.51
|
|
|
Advance, deposit and pre-payments
|
14
|
1,951,153,457.87
|
|
5,502,668,039.66
|
|
|
Cash and bank balances
|
15
|
3,679,206,880.80
|
|
3,695,871,468.46
|
|
|
Other Current Assets
|
16
|
254,751,358.30
|
|
207,592,304.79
|
|
|
Total Current Assets
|
|
9,194,107,399.30
|
|
12,380,388,254.04
|
|
|
|
|
|
|
|
|
8.
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROUP COMPANY ACCOUNTS
|
|
|
|
|
|
|
Liabilities for Gas Purchase
|
17
|
1,994,614,842.60
|
|
1,719,545,842.81
|
|
|
Liabilities for transmission
charges
|
18
|
206,542,349.49
|
|
176,518,013.49
|
|
|
Liabilities for BAPEX Margin
|
19
|
27,324,247.19
|
|
22,908,103.66
|
|
|
Liabilities for price deficit fund
|
20
|
400,514,868.49
|
|
442,179,057.73
|
|
|
Liabilities for BAPEX wellhead
margin deficit fund
|
21
|
|
|
24,019,334.04
|
|
|
Payable to
Petrobangla against KAFCO’s additional bill
|
22
|
22,322,092.96
|
|
199,411,235.32
|
|
|
Liabilities
for Gas Development Fund Payable to
Petrobangla
|
23
|
130,186,636.00
|
|
-
|
|
|
Group Current Accounts
|
24
|
160,541,925.15
|
|
48,076,425.11
|
|
|
Total group company accounts
|
|
3,034,609,891.51
|
|
2,632,658,012.16
|
|
|
|
|
|
|
|
|
|
OTHER CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade creditors and accruals
|
25
|
879,919,919.73
|
|
737,344,970.58
|
|
|
Current portion of long term loans
|
26
|
73,094,812.61
|
|
70,399,472.20
|
|
|
Workers’ Profit Participation Fund
|
|
172,969,470.32
|
|
367,770,192.21
|
|
|
Interest payable on loans
|
|
(493,229.45)
|
|
808,649.94
|
|
|
Provision for taxation
|
27
|
1,308,175,385.32
|
|
4,979,799,914.32
|
|
|
Total other current liabilities
|
|
2,433,666,358.53
|
|
6,156,123,199.25
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
5,468,276,250.04
|
|
8,788,781,211.40
|
|
|
|
|
|
|
|
|
9
|
Net Current Assets (7 – 8)
|
|
3,725,831,149.12
|
|
3,591,607,042.64
|
|
|
|
|
|
|
|
|
10
|
Net Assets (5 + 6 + 9)
|
|
14,000,270,977.24
|
|
12,430,145,761.50
|
9.1 Income Statement For the year ended 30th June, 2010
|
Sl. No.
|
Particulars
|
Notes No.
|
2009-10
in Tk.
|
|
2008-09
in Tk.
|
|
|
|
|
|
|
|
|
1.
|
SALES
|
|
|
|
|
|
|
Gas sales revenue
|
28
|
16,000,658,636.37
|
|
17,925,145,917.84
|
|
|
Other operational income
|
29
|
197,073,418.06
|
|
169,390,124.01
|
|
|
Total sales
|
|
16,197,732,054.43
|
|
18,094,536,041.85
|
|
|
|
|
|
|
|
|
2.
|
COST OF SALES
|
|
|
|
|
|
|
Gas purchase including SD & VAT
|
30
|
8,599,240,549.74
|
|
7,435,930,298.36
|
|
|
BAPEX Margin
|
|
91,499,217.53
|
|
75,508,061.04
|
|
|
Gas Transmission charges
|
31
|
797,450,681.70
|
|
698,384,705.81
|
|
|
Price deficit fund charges
|
|
1,869,581,616.03
|
|
1,753,783,717.84
|
|
|
Deficit wellhead margin fund
charges
|
|
97,394,937.24
|
|
94,717,443.72
|
|
|
Gas Development Fund
|
|
488,230,200.77
|
|
-
|
|
|
Operating expenses
|
32
|
773,508,542.29
|
|
466,186,211.84
|
|
|
Depreciation charges
|
|
300,838,778.58
|
|
284,570,676.34
|
|
|
Amortization charges
|
|
44,161,398.41
|
|
43,958,277.72
|
|
|
Petrobangla service charges
|
33
|
40,919,000.00
|
|
64,4000,000.00
|
|
|
Bad debts expenses
|
34
|
69,916,155.92
|
|
58,619,085.72
|
|
|
Total Cost of Sales (2)
|
|
13,172,741,078.21
|
|
10,976,058,478.39
|
|
|
|
|
|
|
|
|
3.
|
OPERATING PROFIT ( 1-2)
|
|
3,024,990,976.22
|
|
7,118,477,563.46
|
|
|
|
|
|
|
|
|
4.
|
Other income (Non-operational)
|
35
|
108,022,583.30
|
|
176,177,943.71
|
|
5
|
Interest Income
|
36
|
506,815,437.87
|
|
438,029,550.74
|
|
6
|
Financial costs-Interest expenses
|
37
|
7,470,120.61
|
|
9,511,021.58
|
|
7
|
Net Profit Before Contribution to Worker’s Participation Profit
(3+4+5-6)
|
|
3,632,358,876.78
|
|
7,723,174,036.33
|
|
8
|
Contribution to
Workers’ participation in profit
|
|
172,969,470.32
|
|
367,770,192.21
|
|
9.
|
Net profit before taxation (7-8)
|
|
3,459,389,406.46
|
|
7,355,403,844.12
|
|
|
|
|
|
|
|
|
10
|
Provision for taxation
|
|
1,297,271,027.42
|
|
2,758,276,441.55
|
|
|
|
|
|
|
|
|
11
|
Net profit for the year after taxation (9-10)
|
|
2,162,118,379.04
|
|
4,597,127,402.57
|
|
|
|
|
|
|
|
9.2 Profit & Loss Appropriation For the year ended 30th June, 2010
|
|
|
|
2009-10
in Tk.
|
|
2008-09
in Tk.
|
|
|
Profit brought forward from
previous year
|
|
4,899,404,447.64
|
|
3,988,594,961.79
|
|
|
Prior years adjustment
|
|
255,167.78
|
|
228,590,279.70
|
|
|
Provision for deferred tax
|
|
(35,350,373.44)
|
|
(3,813,556.08)
|
|
|
|
|
|
|
|
|
|
DISTRIBUTABLE PROFIT
|
|
7,026,427,621.02
|
|
8,810,499,087.99
|
|
|
|
|
|
|
|
|
|
Interim dividend
|
|
(382,384,000.00)
|
|
(778,064,000.00)
|
|
|
Payable to Petrobangla against
KAFCO’s additional bill
|
|
(965,794,689.83)
|
|
(3,133,030,640.35)
|
|
|
|
|
|
|
|
|
|
Balance transferred to Balance Sheet
|
|
5,678,248,931.19
|
|
4,899,404,447.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9.3 Cash Flow Statement For the year ended 30th June, 2010
|
Sl.
|
Particulars
|
2009-10
in Tk.(Lakh)
|
|
2008-09
in Tk.(Lakh)
|
|
|
|
|
|
|
|
1.
|
CASH FLOW FROM OPERATING ACTIVITIES
|
|
|
|
|
|
Net profit before tax
|
34,593.89
|
|
73,554.04
|
|
|
|
|
|
|
|
|
Adjustment to reconcile net profit to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation charge
|
3,008.40
|
|
2,845.70
|
|
|
Amortization charges
|
441.61
|
|
439.58
|
|
|
Interest expenses
|
74.70
|
|
95.11
|
|
|
Bad debts expenses
|
699.16
|
|
586.19
|
|
|
Decrease/(increase) in inventories
of stores
|
(650.55)
|
|
260.32
|
|
|
Decrease/(increase) in advance,
deposit and pre-payments
|
(181.35)
|
|
(170.44)
|
|
|
Decrease/(increase) in Trade
Accounts receivable
|
(3,396.01)
|
|
5,809.70
|
|
|
Decrease/(increase) in other
current assets
|
(471.59)
|
|
(329.51)
|
|
|
Increase/(decrease) in group
current accounts
|
448.74
|
|
558.05
|
|
|
Increase/(decrease) in liabilities
for purchase
|
2,750.69
|
|
2,246.35
|
|
|
Increase/(decrease) in liabilities
for price deficit fund
|
(416.64)
|
|
2,212.44
|
|
|
Increase/(decrease) in liabilities
for transmission charges
|
300.24
|
|
(917.89)
|
|
|
Increase/(decrease) in liabilities
for BAPEX margin
|
44.16
|
|
126.89
|
|
|
Increase/(decrease) in liabilities
for BAPEX wellhead margin deficit fund
|
(16.97)
|
|
240.19
|
|
|
Increase/(decrease) in trade
creditors and accruals
|
159.18
|
|
4,891.24
|
|
|
Increase/(decrease) in workers’
profit participation fund
|
(1,948.01)
|
|
730.58
|
|
|
Cash security received from
customers
|
1,879.81
|
|
2,625.43
|
|
|
Income tax paid including source
tax
|
(14,564.37)
|
|
(30,564.50)
|
|
|
Increase/(decrease) for gas
development fund
|
1,301.87
|
|
-
|
|
|
Net cash provided by operating activities (1)
|
24,056.96
|
|
65,239.47
|
Cash Flow Statement For the year ended 30th June, 2010
|
Sl.
|
Particulars
|
2009-10
in Tk.(Lakh)
|
|
2008-09
in Tk.(Lakh)
|
|
|
|
|
|
|
|
2.
|
CASH FLOW FROM INVESTING ACTIVITIES
|
|
|
|
|
|
Investment in fixed deposits
|
(8,016.05)
|
|
(7,475.58)
|
|
|
Acquisition of fixed assets
|
(3,076.81)
|
|
(2,987.31)
|
|
|
Interest received from investment
of HCDF
|
415.31
|
|
386.33
|
|
|
Loan recovery from Inter-company
(BCMCL)
|
-
|
|
1,200.00
|
|
|
Loan given to employee
|
(219.60)
|
|
(306.48)
|
|
|
Loan to KGDCL
|
(275.61)
|
|
-
|
|
|
Loan to Exploration Production
capacity of BAPEX
|
(43.05)
|
|
-
|
|
|
Net Cash used by investing activities (3)
|
(11,215.81)
|
|
(9,183.04)
|
|
|
|
|
|
|
|
3.
|
CASH FLOW FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
Repayment of foreign loan
|
(423.29)
|
|
(238.73)
|
|
|
Repayment of ADP loan
|
(270.41)
|
|
(284.00)
|
|
|
Payment of interest on loans
|
(87.72)
|
|
(101.50)
|
|
|
Equity received from Government
|
377.54
|
|
25.03
|
|
|
Dividend Paid
|
(3,823.84)
|
|
(7,780.64)
|
|
|
Amount received from roads and
highway
|
1,266.57
|
|
-
|
|
|
Payment to Petrobangla against
additional bill received from KAFCO
|
(10,046.64)
|
|
(37,503.13)
|
|
|
Net cash used by financing activities (3)
|
(13,007.79)
|
|
(45,882.97)
|
|
|
|
|
|
|
|
4.
|
Net increase/(decrease) in cash
|
(166.64)
|
|
(241.80)
|
|
|
|
|
|
|
|
5.
|
Beginning cash and cash equivalents
|
36,958.71
|
|
27,027.05
|
|
|
|
|
|
|
|
6.
|
Ending cash and cash equivalents (4 + 5)
|
36,792.07
|
|
26,785.25
|
9.4 Comparative statement of the company’s financial position for the
financial year 2008-09 and 2009-10
|
Particulars
|
2008-2009
|
2009-2010
|
||
|
Budget
|
Actual
|
Budget
|
Actual
|
|
|
Gas Purchase (In MMCM)
|
2905.42
|
2899.75
|
2990.00
|
2990.40
|
|
Gas Sales (In MMCM)
|
2842.47
|
2880.59
|
2953.00
|
3008.93
|
|
Gas purchase (In Million Taka)
|
7351.87
|
7435.93
|
8408.06
|
8599.24
|
|
Gas Sales (In Million Taka)
|
16850.15
|
17925.15
|
15024.63
|
16000.66
|
|
Net Income (In Million Taka)
|
6286.65
|
7355.40
|
2165.62
|
3459.39
|
|
Debt Equity Ratio
|
N/A
|
2:98
|
N/A
|
1:99
|
|
Debt Service Coverage
|
N/A
|
1:79.88
|
N/A
|
1:32.73
|
|
Rate of Return on Average net Fixed
Assets
|
N/A
|
284.15%
|
N/A
|
136.92%
|
|
Accounts Receivable (In Month)
|
3.00
|
1.94
|
3.00
|
1.98
|
|
System (Loss)/Gain
|
|
-0.66%
|
|
0.62%
|
Table-9.1: Comparative statement of the
company’s financial position for the
FYs 2008-09 and 2009-10
Findings on Analysis
10.0 Findings on Analysis
Based on previous chapter analysis segments
and the brief description of financial management/performance of BGSL following
findings are originated
10.1 Business
Bakhrabad Gas
Systems limited carried out transmission and Distribution of natural gas within
the South-East of Bangladesh
covering greater Comilla (except Brahmanbaria), Noakhali, Chittagong and Chittagong Hill Tracts. As per
Government decision Bakhrabad-Demra and Bakhrabad-Chittagong Transmission Lines
were transferred to Gas Transmission Company Limited on September 2, 2004 and October 18, 2004
respectively. Since then, company’s activities are mainly confined to gas
distribution.
10.2 Accounting Conventions
The financial
statements of the company are prepared using the historical cost convention and
on a going concern basis. The financial statements are prepared in accordance
with applicable accounting standards of the Institute of Chartered Accountants
of Bangladesh which are consistent in al respects with international accounting
standards.
10.3 Capital Reserves
Capital reserves
consist of Hydro-carbon Development fund and grants from Government. Under a
Government order the Hydrocarbon Development fund has been made out of sales
revenue @2.5% on end users price for future development expenditure of the
company and other group operating companies engaged in gas production,
transmission and distribution. However, the creation of Hydrocarbon development
fund was discontinued from 1st
December, 1998 . Grant received from Government has been used for
extensions of the gas supply infrastructure.
10.4 Foreign Currencies
Foreign
currencies are recorded at the exchange rate at the date of the transactions.
Monetary assets and liabilities denominated in foreign currencies are
translated at the rate of closing dated and the resulting exchange fluctuation
gains and losses are added with or deducted from the actual asset value of
transmission and distribution pipe line.
10.5 Long Term Loans
Current portion
of long term local and foreign loans i,e. overdue and loans repayable during
the next financial year has been shown as current liability in the Balance
Sheet and the remaining balances are shown under the head “Long Term
Borrowings”.
10.6 Other Long Term Liabilities
Deposits by the
customers in cash and other than cash (Bank Guarantee and PSP) as security
against gas connection as required under gas supply contracts are shown as
“Other long term liabilities”. Such deposits are not repayable till gas supply
to the customers continues.
10.7 Fixed Assets
Freehold land
and other land interest are stated at historical cost and other fixed assets
are carried at depreciated historical cost.
10.8 Exchange Rate Fluctuation
Exchange rate
fluctuation against foreign currency loans has been accounted for separately
and merged with the carrying value of the assets acquired against the loans.
10.9 Fixed Deposits
Bank fixed
deposits are classified as “Investment and other assets” which were invested up
to the Balance Sheet date.
10.10 Loans And Advances To Employees
Loans and
advances to employee after adjustment of recovery are excluded from current
assets and included under the head “Investment and other assets”.
10.11 Inventories
Inventories are
valued at weighted average historical cost. Stores in transit are valued at
actual cost incurred thereon unto the closing date.
10.12 Trade Accounts Receivable
Trade accounts
receivable are shown at book value less provision for bad debts.
10.13 Revenue
The company’s
main source of income comes from sale of gas to different categories of
customers at the prices set by the Government of Bangladesh. Sales are valued
on an accrual basis except in respect of penalties for late payment by gas
customers which is shown as cash basis under the head other operational income.
10.14 Expenditure
All know
expenditure have been accounted for in the final accounts irrespective of
whether the same is paid or not upto 30th June, 2010 .
10.15 Depreciation
Freehold land
and other land interest are not depreciated. Other tangible fixed assets are
depreciated on a straight line basis at the rates sufficient to write off
historical cost over their estimated useful lives. Depreciation is charged on
assets acquired within first three quarters of the year and no depreciation is
charged on assets acquired in the last quarter of the year.
Depreciation
rates for the principal categories of assets are as follows:
|
Type of Assets
|
Rate of depreciation
|
|
Freehold
concrete and brick structure
|
2.50%
|
|
Transmission
Line
|
3.33%
|
|
Distribution
Line
|
5.00%
|
|
Transmission
and distribution plant
|
5.00%
|
|
Consumer
Metering
|
10.00%
|
|
Vehicle
|
20.00%
|
|
Other assets
|
2.50% to
30.00%
|
Table- 10.1: Depreciation rates for the
principal categories of assets
10.16 Amortization of Exchange Rate Fluctuation
Devaluation
effect on foreign currency loan i,e. exchange rate fluctuation has been
amortized on the basis of the life of the respective assets and charged to
income statement as amortization charge.
10.17 Provision for Tax
Provision has
been made for corporate tax amounting to Tk. 2,758,276,441.55 against net
profit earned during the period under review.
10.18 Provision for Bad Debts
Bad debts
provision has been made @ 3% on non-bulk customers accounts receivable.
Recommendation
For effective
financial management of BGSL, credit monitoring & judgmental decision after
efficient analysis is important that would result in good customer relationship
with greater profit earning for the organization with fulfilling target. Most
of the researchers have also drawn a sort of recommendations that should be
considered necessary for effective financial management. Such
- Creating better customer service than existing services.
- Build up better management – employee relationships.
- Try to reduce given loan to other organization.
- Follow-up and monitoring expenditures of various development programme.
- Try to finance in profitable/productivity tasks.
- Financial system should be better computerized than existing.
Bibliography
1. Annual Report Mannual-2010 of
Bakhrabad Gas Systems Limited.
2. Annual Report Mannual-2009 of
Bakhrabad Gas Systems Limited.
3. Annual Report Mannual-2008 of
Bakhrabad Gas Systems Limited.
4. Annual Report Mannual-2010 of Titas
Gas T&D Company Limited.
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