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Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
C K Prusty& Associates Chartered Accountants
Audited Financial Statements for Bhutan Board Products Limited for the year
ended 31st December 2019
Page 1 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
BHUTAN BOARD PRODUCTS LIMITED, PHUENTSHOLING, BHUTAN
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
BHUTAN BOARD PRODUCTS LIMITED, PHUENTSHOLING, BHUTAN
Report on the Audit of the Financial Statements Opinion We have audited the Financial Statements of Bhutan Board Products Limited which
comprises of the statement of Financial position as on December 31, 2019 and the statement of comprehensive income , statement of changes in equity and statement
of cash flows for the year then ended and notes to the financial statements including a summary of significant accounting policies.
In our opinion, the accompanying financial statements presents fairly, in all material respects, the financial position of Bhutan Board Products Limited, as on December 31, 2019 and its financial performance and its cash flows for the year then ended in
accordance with Bhutanese Accounting Standards (BAS).
Basis for Opinion We have conducted our audit in accordance with International Standards on Auditing (ISA‟s). Our responsibilities under those standards are further described in
the “Auditors Responsibilities for the Audit of the Financial Statements” section of our report. We are independent of the company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in Bhutan and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Key Audit Matters Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These
matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion
on these matters.
Page 2 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
Responsibilities of Management and the Board of Directors for the Financial Statements Management is responsible for the preparation and fair presentation of these
financial statements in accordance with Bhutanese Accounting Standards (BAS) and for such internal control as management determines is necessary to enable the
preparation of financial statement that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the company‟s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the
company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company‟s financial reporting process.
Auditors Responsibilities for the audit of the Financial Statements The objectives of our audit are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor‟s report that includes our opinion. Reasonable
assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISA‟s will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if
individually or in the aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISA‟s, we have exercised professional judgment and maintained professional skepticism throughout the planning and
performance of the audit. We have also adhered to the below mentioned points:
• Identified and assessed the risks of material misstatement of the financial statements, whether due to fraud or error, designed and performed audit procedures
responsive to those risks and obtained audit evidence that are sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations or the overriding of internal control.
Page 3 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
• Obtained an understanding of internal controls relevant to the audit in order to
design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity‟s internal control.
• Evaluated the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Evaluated the overall presentation, structure and content of the financial
statements, including the disclosures and whether the financial statements represent the underlying transactions and events in a manner that results fair presentation. We are required to communicate with the management regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we have identified during our
audit. We have to provide to the management with a statement that we have complied with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, related safeguards.
Report on Other Legal and Regulatory Requirements As required by Section 266 of The Companies Act of Bhutan 2016 (Minimum Audit Examination and Reporting Requirements), we enclose in the annexure a statement
on the matters specified therein to the extent applicable.
1. Further, to our comments in the annexure as referred above, as per Section 265 of The Companies Act of Bhutan 2016 , we report that:
a. Our examination was made in accordance with the Bhutanese Accounting Standards and accordingly included such tests of accounting records and such
other auditing procedures as we considered appropriate for the purpose of our audit.
b. We have obtained all information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.
c. In our opinion, proper books of accounts as required by law have been kept by the company, in so far as it appears from our examination of those books.
Page 4 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
d. The Statements of Financial position, Statement of Comprehensive Income,
Statement of Changes in Equity and Cash Flow Statement dealt with in this report are in agreement with the books of accounts and have been compiled on the basis of Bhutanese Accounting Standards, provisions of the Companies Act of Bhutan 2016
and other applicable legal and regulatory requirements.
The engagement partner on the audit resulting in this Independent Auditor's Report
is CA Tiruvengadam Kannan.
For C. K. PRUSTY & ASSOCIATES Chartered Accountants (FRN: 323220E)
(CA. TiruvengadamKannan) PARTNER FCA: 055803
Page 5 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
ANNEXURE TO THE AUDIT REPORT (REFERRED TO IN OUR REPORT OF EVEN DATE)
MINIMUM AUDIT EXAMINATION AND REPORTING REQUIREMENTS ___________________________________________________________________________
Points relevant for Manufacturing Concern:
1) The company has not conducted Physical Verification of Fixed Assets during the year under review.
2) Physical Verification and quantitative reconciliation of inventories including finished goods, raw materials, stores and spares, consumables and work in progress have been conducted by the management at the year end and
differences between physical balance and book balance have been reconciled and accounted for.
3) In our opinion , the valuation of inventories including finished goods, raw
materials, stores and spares, consumables and work in progress is appropriate and in accordance with the BAS 2 . Weighted average method of valuation of inventories was followed during the year under revenue.
4) The company has not taken any loans secured or unsecured from companies,
firms or other parties and / or from companies under the same management except an overdraft facility of Nu 10.00 million from Bank of Bhutan and Nu 35.00 million from DRUK PNB Bank Limited for meeting its working capital
requirements . Prima facie, the interest rate and other terms and conditions of the said overdraft facility are not prejudicial to the interest of the company.
5) The company has not granted any loans secured or unsecured to other
companies , firms or other parties and /or to companies under the same management except interest free advances to the staff which is being recovered within a period of one year.
6) The advances granted to officers are in keeping with the provision of service
rule and no excessive and frequent advances are given by the company.
Page 6 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
7) The company does not have Internal Audit system commensurate with the size of the company and nature of its business. Except for the above, the company has a well established system of internal
controls to ensure completeness, accuracy and reliability of accounting and other records for carrying out the business in an orderly and efficient manner
to safeguard the assets of the company as well as to ensure adherence to the rules/ regulations and systems and procedures.
8) As observed by us , from the verification of purchase records, there is a reasonable system of obtaining competitive quotations and bidding from
vendors in respect of purchase of stores, plant and machinery, equipments and other assets commensurate with the size of the company and nature of its business.
9) a) As explained to us there are no transactions for purchase and sale of goods
and services made in pursuance of contracts and agreements entered into with the directors or any other parties related to directors or with the
company or firms in which directors are directly or indirectly interested.
b) Prima facie, the records of the company do not reveal any transactions
entered into by the company, wherein the directors are directly or indirectly interested.
10) As found during audit unserviceable or damaged stock of inventories are
disposed off as and when ascertained and recorded in books of accounts .During the year under review , Nu. 0.43 million was recovered from auction of scraps.
11) It has been explained to us during the course of audit , the company has a
reasonable system of ascertaining and identifying point of the occurrence of breakage, damages of stores, spares and capital goods , while in transit,
during loading/unloading in storage and during handling , so that responsibility could be fixed and compensation sought from those responsible.
12) The company is maintaining necessary production records and adequate
physical safeguards have been deployed to prevent unauthorized movement of goods.
Page 7 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
13) Scrap generation during production is as per the prevailing norms in the industry .If any sale of scrap arises ,the same is accounted in separate account
head .
14) According to the records, the company is regular in depositing statutory dues
with the appropriate authorities.
15) For the year under review, the company has made no provision as there is a loss on operations reported in the financial statements .Necessary adjustments
have been made by the company for revising the excess provision made during the last financial years.
16) There are no disputed amounts payable in respect of statutory dues and other statutory deductions payable as on 31st December 2019.
17) During our examination of the books of accounts, we have not come across
any instances of personal expenses which have been charged to the
company‟s accounts other than those payable under contractual obligations in accordance with the generally accepted business practices and neither have
we been reported of any such instances by the management.
18) On verification of records, we are of opinion that the company has a reasonable system of recording receipts, issues & consumption of raw materials, stores and allocating materials consumed to the respective jobs
commensurate with its size and nature of its business.
19) No write off on account of material loss, discrepancies in physical or book balances of inventories have taken place during the year under review.
20) The company has a reasonable system of allocating man hours utilized to the
respective jobs commensurate with the size and nature of its business except
that there has been an increase in overtime hours due to o of the plant.As also we observed that some of the key managerial personnel who has presently
looking after multiple responsibilities which may result in conflict of interest and also in our opinion is not appropriate from internal control point of view.
Page 8 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
21) System of authorization and internal control regarding issue of stores and allocation of materials and labour are commensurate with the size of the
company and nature of its business.
22) It was observed during the course of audit that the company has recently
undertaken a study on the costing of products and the resultant price fixation. The company has not taken into cognisance the report of the study though in
our opinion the company has reasonably acceptable system to fix the prices of the products given the internal and external environment.
23) The company has not engaged any commission agents except distributors.
24) The balances of sundry debtors are not fully confirmed by all of them and in our opinion appropriate letters with a time limitation for such confirmations
should be communicated to all the credit customers it is suggested to write appropriate letters for such confirmations .As also appropriate legislations for recovery may be initiated by the company for its export sales.
25) The management of current assets particularly balances of cash/bank are
reasonably adequate, considering the nature and size of the business. Funds generally found are not lying idle in bank accounts.
26) According to information and explanations given to us and on the basis of
examination of books and records on test check basis, the activities carried out
by the company are in our opinion lawful and intra vires to the Article of incorporation of the company.
27) According to information and explanations given to us, the company has a
system to obtain approval from the board of directors for all capital investments.
28) The company has an established budgetary control system to verify the actual expenditure vs. budget.
29) The details of remuneration to the managing director and sitting fees paid to
all other directors & observers have been indicated in notes to accounts.
Page 9 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
30) According to information and explanations given to us, the directives of the
board given to the company from time to time have duly complied with.
31) According to information and explanations given to us , the officials , their
relatives/friends/associates or close persons of the company have not been communicated any price sensitive information which are not publicly
available or not authorized by the management which would directly or indirectly benefit them.
Points relevant for trading concerns
1) As per the reports prepared by the management and produced to us, the
company is holding damaged or slow moving goods which are reasonable to the size of operations.
Information Technology
The company has implemented Tally ERP Accounting Software from the year 2020 for accounting including inventories which is expected to be integrated with the plant.
General Points :
1) Going concern: Based on the company‟s Audited Financial statements, we are of opinion that the company is a Going concern.
Page 10 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
2) Ratio Analysis : Financial and Operational Ratios in respect of the company are given in the statement below :
Sl Ratio Details of Calculation 2019 2018
A Ratios for Assessing Financial Health 1 Capital Turnover Ratio (Sales / Capital Employed ) 0.34 1.11
2 Current Ratio (Current Assets/ Current Liabilities )
3.20 3.92
3 Acid Test Ratio (Current Assets other than inventories/Current Liabilities)
0.61 0.83
4 Inventory Turnover Ratio (Sales/ Average Inventories ) 1.48 1.62
5 Fixed Assets Turnover Ratio (Sales / Fixed Assets ) 6.55 5.82
6 Debtors Turnover Ratio (Gross Debtors/ Sales ) X 365 29 Days 23 Days
B Ratios for Assessing Profitability
1 Return on Investment
(Profit After Tax/ Capital
Employed) X 100 (19.45)%*
(22.60)%
2 Net Profit Ratio ( Net Profit / Sales ) X 100 202.87% (12.64)%
3 Operating Ratios ( All expenses excluding Finance Cost )/ sales X 100
109.68% 112.05%
*Profit After Tax does not include income recognised towards valuation of Biological Assets as per BAS 41.This for one to one comparison with previous year figures.
3) Compliance with the Companies Act of The Kingdom of Bhutan The company has complied with the requirements of the Companies Act of Bhutan
2016 concerning conducting of meetings, filing requirements, maintenance of records and all other matter specified in the said act .
Page 11 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
4) Adherence to Laws , Rules and Regulations Audit of the corporation is governed by the Companies Act of Bhutan 2016, and the scope of audit is limited to examination and review of the financial statement as
produced to us by the management. In the course of audit, we have considered the compliance of provision of the said Companies Act and its Article of Incorporation. As per information and explanations given to us by the management , the Company
has been complying with applicable laws , rules and regulations, systems , procedures and practices except our observations made in the Auditor‟s Report to
the members for the year 2019 and our detailed observations .
For C. K. PRUSTY & ASSOCIATES Chartered Accountants (FRN: 323220E)
(CA. Tiruvengadam Kannan) PARTNER
FCA: 055803 Place : Date :
Page 12 of 78
Bhutan Board Products Limited
Statement of Financial Position
(Amount in Nu.)
Particulars Note 31-Dec-19 31-Dec-18
Assets:
Property, Plants & Equipments 1 385,36,188 426,91,876
Trade & Other Receivables 2 24,49,621 19,67,337
Investment in subsidiary company 3 5,00,000 5,00,000
Other bank balances 4 5,68,429 5,68,429
Deferred Tax Assets 5 - 181,78,942
Biological Asset Recognition as per BAS 41 31 5607,90,000 -
Other non current assets 6 1,50,687 1,50,688
Total Non-Current Assets - 6029,94,924 640,57,272
Inventories 14 1687,54,404 1722,11,289
Trade & Other Receivables 2 129,13,035 79,22,172
Prepayments 7 235,70,274 322,89,569
Cash & Cash Equivalents 8 22,22,056 52,12,853
Current Tax Assets 9 12,64,319 9,54,826
Total Current Assets - 2087,24,088 2185,90,709
TOTAL ASSETS 8117,19,012 2826,47,980
Equity:
Share Capital 15 1400,01,400 1400,01,400
Reserves 691,35,663 691,35,663
Retained Earnings 5276,58,625 156,49,692
Total Equities - 7367,95,688 2247,86,755
Liabilities:
Employee Benefit Liabilities 10 85,31,506 19,68,314
Trade & Other Payables 11 11,56,301 1,50,671
Total Non-Current Liabilities - 96,87,807 21,18,985
Trade & Other Payables 11 258,46,895 165,74,434
Borrowings 12 340,75,754 374,02,160
Other current liabilities 13 53,12,867 17,65,646
Total Current Liabilities - 652,35,517 557,42,240
Total Liabilities - 749,23,324 578,61,225
TOTAL EQUITY AND LIABILITIES 8117,19,012 2826,47,980
In terms of our Report of even date-For C K PRUSTY & ASSOCIATESChartered Accountants Chencho Dorji Sangay WangdiFRN: 323220E Chairman Managing Director
TIRUVENGADAM KANNAN Aita Raj RaiPartner Director Head - FinanceMembership No.: 055803
Place: Kolkata
Date:
Page 13 of 78
Bhutan Board Products LimitedSTATEMENT OF COMPREHENSIVE INCOME
(Amount in Nu.)
Particulars Note 31-Dec-19 31-Dec-18
Continuing Operations:
Revenue 16 2523,80,791 2486,06,372
Cost of Sales 17 (2486,73,535) (2487,41,919)
Gross Profit/(Loss) - 37,07,256 (1,35,547)
Other Incomes 18 18,97,969 26,63,546
Selling & Distribution Expenses 19 (211,60,438) (203,13,506)
Administrative Expenses 20 (69,24,642) (68,58,763)
Other Expenses 21 (47,563) (26,57,494)
Results from Operating Activities - (225,27,418) (273,01,763)
Finance Cost 22 (47,03,984) (16,74,950)
Net Finance (Costs)/Income - (47,03,984) (16,74,950)
Profit Before Tax - (272,31,402) (289,76,713)
Tax Expenses 23 - (26,59,055)
Profit from Continuing Operations - (272,31,402) (316,35,768)
Profit/(Loss) For the Year - (272,31,402) (316,35,768)
Other Comprehensive Income:
Other Comprehensive Income/(Expense) 24 5392,40,336 2,17,090
Other Comprehensive Income/(Expense) For the Year(Net of Tax)
5392,40,336 2,17,090
Total Comprehensive Income/(Loss) For the Year
5120,08,934 (314,18,678)
Earning per Share:
Basic Earning per Share - 25 36.57 -
Diluted Earning per Share - 25 36.57 -
In terms of our Report of even date-
For C K PRUSTY & ASSOCIATESChartered Accountants Chencho Dorji Sangay WangdiFRN: 323220E Chairman Managing Director
TIRUVENGADAM KANNAN Aita Raj RaiPartner Director GM - FinanceMembership No.: 055803
Place: KolkataDate:
Page 14 of 78
Bhutan Board Products Limited
STATEMENT OF CASH FLOW
(Amount in Nu.)
Particulars Note 31-Dec-19 31-Dec-18
Cash Flows from Operating Activities:
Profit/(Loss) for the Year 5120,08,934 (287,59,623)
Adjustment for:
- Profit on sale of fixed assets - (4,06,000)
- Depreciation 17 66,85,586 82,16,894
- Impairment Loss on Trade Receivables 30 (1,57,686) 25,85,002
- Net Finance Costs 22 47,03,984 16,74,950
- Provision for Leave Encashment 11 1,21,154 2,266
5233,61,972 (166,86,511)
Changes in:
- Inventories 7 34,56,885 (174,16,509)
- Trade & Other Receivables 2 (53,15,461) 53,63,682
- Other non current assets 6 (5607,90,000) -
- Prepayments 8 87,19,295 1,47,468
- Current Tax Assets 10 (3,09,493) (3,15,367)
- Employee Benefits (Excluding Acturial Gain/Loss) 11 (64,42,038) (35,40,970)
- Trade & Other Payables 12 102,78,091 81,62,976
- Other current liabilities 14 (27,91,920) (22,54,366)
Cash Generated from Operating Activities - (298,32,669) (265,39,597)
Income Tax Paid 24 - (26,59,055)
Net Cash from Operating Activities - (298,32,669) (291,98,652)
Cash Flows from Investing Activities:
Proceeds from Sale of Property, Plant & Equipment - 4,06,000
Development Expenditure 1 (25,29,898) (47,88,331)
Net Cash from/(used) in Investing Activities - (25,29,898) (43,82,331)
Cash Flows from Financing Activities:
Interest Paid 23 (47,03,984) (16,74,950)
Proceeds from Loans & Borrowings 13 340,75,754 374,02,160
Net Cash from/(used) in Financing Activities - 293,71,771 357,27,210
Net Increase/(Decrease) in Cash & Cash Equivalent - (29,90,796) 21,46,227
Opening Balance of Cash & Cash Equivalent 52,12,852 30,66,625
CLOSING BALANCE OF CASH & CASH EQUIVALENT 22,22,056 52,12,852
In terms of our Report of even date-For C K PRUSTY & ASSOCIATESChartered Accountants Chencho Dorji Sangay WangdiFRN: 323220E Chairman Managing Director
TIRUVENGADAM KANNAN Aita Raj RaiPartner Director GM - FinanceMembership No.: 055803
Place: Kolkata
Date:
Page 15 of 78
A. Equity share capital (Amount in Nu.)
Description Notes AmountAs at 01 January 2018 140,001,400 Changes in equity share capital -
As at 31 December 2018 140,001,400
Changes in equity share capital -
As at 31 December 2019 140,001,400
B. Other equity (Amount in Nu.)
Reserves Reserves Reserves Retained Earnings
General ReserveDividend Equilisation
ReserveReplacement &
Maintenance ReserveRetained earnings
Balance at 01 January 2018 29,149,212 12,000,000 27,986,451 47,068,369 116,204,032 Profit for the year - - - (31,635,768) (31,635,768) Other comprehensive income - - - 217,090 217,090 Fixed Asset Impairment - - - - - Balance at 31 December 2018 29,149,212 12,000,000 27,986,451 15,649,691 84,785,354
Reserves Reserves Reserves Reserve and surplus
General ReserveDividend Equilisation
ReserveReplacement &
Maintenance ReserveRetained earnings
Balance at 01 January 2019 29,149,212 12,000,000 27,986,451 15,649,691 84,785,354 Profit for the year - - - (27,231,402) (27,231,402) Other comprehensive expense - - - 539,240,336 539,240,336 Fixed Asset Impairment - - - - - Balance as at 31 December 2019 29,149,212 12,000,000 27,986,451 527,658,625 596,794,288
Bhutan Board Products LimitedStatement of Changes in Equity
Description Notes Total other equity
Description Notes Total other equity
Page 16 of 78
Bhutan Board Products Limited
NOTES FORMING INTEGRAL PART OF THE FINANCIAL STATEMENTS
1. Property, Plants & Equipments: (Amount in Nu.)
As on 31-12-2018
Additions in the Year
Deletions in the Year
As on 31-12-2019
As on 31-12-2018
Depreciation for the Year
Adjustments in the Year
As on 31-12-2019
As on 31-12-2019
As on 31-12-2018
A B C D = A + B - C E F G H = E + F - G I = D - H J = A - E
Land and Development 4,894,211 - - 4,894,211 - - - - 4,894,211 4,894,211
Roads and Culverts 49,790,085 - - 49,790,085 26,019,456 1,244,752 - 27,264,208 22,525,877 23,770,629
Factory Building 32,902,632 - - 32,902,632 32,902,630 - - 32,902,630 2 2
Housing Colony 7,153,374 - - 7,153,374 6,037,481 178,834 - 6,216,316 937,058 1,115,893
Office Bldg/Warehouse 10,306,187 - - 10,306,187 7,010,035 257,655 - 7,267,690 3,038,497 3,296,151
Plant and Machinery 359,080,771 2,463,278 - 361,544,048 349,995,098 4,408,425 - 354,403,523 7,140,525 9,085,673
Electrical Installation 2,635,473 - - 2,635,473 2,635,471 - - 2,635,471 2 2
Generator 434,640 - - 434,640 434,639 - - 434,639 1 1
Laboratory Equipments 694,783 - - 694,783 694,782 - - 694,782 1 1
Tools and Implements 2,444,536 - - 2,444,536 2,444,534 - - 2,444,534 2 2
Semi Permanent Structure 2,913,216 - - 2,913,216 2,913,214 - - 2,913,214 2 2
Furniture and Fixture 7,457,768 - - 7,457,768 7,457,766 - - 7,457,766 2 2
Office Equipments 15,177,322 66,620 - 15,243,942 15,146,398 97,542 - 15,243,940 2 30,924
Water Works 845,338 - - 845,338 845,336 - - 845,336 2 2 Motor Vehicles 15,326,271 - 15,326,271 14,827,891 498,378 - 15,326,269 2 498,380 Software 511,326 - - 511,326 511,325 - - 511,325 1 1
A. Total Fixed Assets - 512,567,933 2,529,898 - 515,097,830 469,876,056 6,685,586 - 476,561,643 38,536,188 42,691,876
GRAND TOTAL 512,567,933 2,529,898 - 515,097,830 469,876,056 455,400,414 - 476,561,643 38,536,188 42,691,876
PREVIOUS YEAR - 517,885,997 7,699,402 15,883,550 509,701,850 455,400,414 9,050,999 870,000 463,581,413 46,120,437 62,485,584
a. Depreciation has been computed on Straight Line Method on the salvage value of the assets.b. Depreciation rates have been determined based on Useful Life of an asset.
Particulars
Gross Carrying Amount (in Nu.) Depreciation/Amortisation (in Nu.) Net Carrying Amount (in Nu.)
Page 17 of 78
Bhutan Board Products Limited
NOTES FORMING INTEGRAL PART OF THE FINANCIAL STATEMENTS
2. Trade & Other Receivables: (Amount in Nu.)
31-Dec-19 31-Dec-18
Other Deposits 7,664 156,290
Other Receivables 2,441,957 1,811,047
2,449,621 1,967,337
Trade Receivables (Subject to Confirmation)
Due for more than 6 months
- Considered Good 5,200,928 5,699,178
- Considered Doubtful 2,951,797 1,435,490
Others - Considered Good - 2,317,434
8,152,725 9,452,102
Less: Allowance of Impairment Loss 2,325,231 2,937,996
a. Total Debts Considered Good - 5,827,494 6,514,106
Trade Receivables (Subject to Confirmation) on A/c of BBEL
Due for more than 6 months
- Considered Good 10,411,655 312,886 - Considered Doubtful 1 359 256 4 723 592
A. Total Non-Current Assets -
Particulars
Considered Doubtful 1,359,256 4,723,592
Others - Considered Good - 1,095,180
11,770,911 6,131,658
Less: Allowance of Impairment Loss 4,685,370 4,723,592
b. Total Debts Considered Good for BBEL - 7,085,541 1,408,066 Total Trade Receivables (a+b) - 12,913,035 7,922,172
12,913,035 7,922,172
31-Dec-19 31-Dec-18
500,000 500,000
- (5000 Eq. Shares @ 100/- each)
500,000 500,000
3. Investment in subsidiary company:
TOTAL -
Particulars
In Equity Shares of Bhutan Board Exports Limited, the wholly ownedsubsidiary company.
B. Total Current Assets -
Page 18 of 78
31-Dec-19 31-Dec-18
Balances with Banks in
- Earmarked Dividend Account 568,429 568,429
568,429 568,429
31-Dec-19 31-Dec-18
Deferred Tax Assets/(Liabilities) [Note-29]
- On Allowance of Impairment Loss - 18,002,956
- On Employee Benefit Expenses - 175,986
- 18,178,942
6. Other non current assets:31-Dec-19 31-Dec-18
Sales Tax Deposits 150,687 150,687
150,687 150,688 Total Other non current assets -
Particulars
TOTAL -
Particulars
5. Deferred Tax Assets:
CLOSING BALANCE -
Particulars
4. Other Bank balances:
31-Dec-19 31-Dec-18
Advance to Party 12,196,303 23,338,832
Advance for Customs Duty 8,412,161 5,888,778
Advance to Staffs 824,385 545,065
Advance for Company Expenses 407,998 289,556
Tour Advance 62,359 108,323
Margin Money Balances 600,787 1,183,786
Prepaid Expenses 1,066,282 935,229
23,570,274 32,289,569 TOTAL -
Particulars7. Prepayments:
Page 19 of 78
31-Dec-19 31-Dec-18
Balances with Banks in Current Accounts 1,502,375 4,038,426
Cash in Hand 719,681 1,174,427
2,222,056 5,212,853
31-Dec-19 31-Dec-18
Advance Tax - Opening Balance
- TDS Credit 850,304 534,937
- Advance Corporate Tax 1,655,497 1,655,497
2,505,801 2,190,434
Add: TDS Credit during the Year 309,494 315,367
2,815,294 2,505,801
2,815,294 2,505,801
Provision for Corporate Tax - Opening Balance 1,550,975 1,550,975
1,550,975 1,550,975
1,550,975 1,550,975
1,550,975 1,550,975
1,264,319 954,826
B. Closing Balance of Provision -
CASH & CASH EQUIVALENTS AS PER CASH FLOW (A+B) -
Particulars
9. Current Tax Assets:
8. Cash & Cash Equivalents:
Particulars
A. Closing Balance of Advance Tax -
Net Curent tax assets
31-Dec-19 31-Dec-18
Defined Benefit Obligation - Gratuity Liability (Note-28) 42,840,087 42,644,518
Less: Fair Value of Plan Assets - Gratuity Fund (Note-28) 35,018,621 41,265,090
Net Defined Benefit (Assets)/Liabilities - 7,821,466 1,379,428
Provision for Leave Encashment 710,040 588,886
8,531,506 1,968,314
Particulars
NET EMPLOYEE BENEFIT (ASSETS)/LIABILITIES -
10. Employee Benefits liabilities:
Page 20 of 78
31-Dec-19 31-Dec-18
Deposits
- Security Deposits 964,022 33,918
- Performance Bonds 192,279 116,753
1,156,301 150,671
Sundry Creditors 22,965,086 13,692,556
Liabilities for Purchase 59,827 59,841
Liabilities for Expenses 1,986,368 1,960,013
Deposits
- Earnest Money 353,789 292,449
- Others 280,576 280,576
Unclaimed Dividend 153,988 153,988
Unpaid Salary 17,560 14,880
BBEL Current A/c 29,702 120,131
25,846,895 16,574,434
31-Dec-19 31-Dec-18
12. Borrowings :
Particulars
Particulars11. Trade & Other Payables:
A. Total Non-Current Liabilities -
B. Total Current Liabilities -
Bank Overdraft with DPNBL - Hypothecation of Stocks & Land) 28,881,519 32,780,502
Bank Overdraft with BOBL - Hypothecation of Stocks & Book Debts) 5,194,236 4,621,658
34,075,754 37,402,160
31-Dec-19 31-Dec-18
Advance from Customers 9,778 15,071
Other Advances Received 486,039 373,689
PF Settlement 2,549,698 416,220
GIS Contribution 738,342 224,160
TDS Payable - 4,115
Health Contribution - 5,507
BBPL/BBEL Employees Welfare Scheme 11,295 20,714
Gratuity Fund Payable 1,517,715 706,170
5,312,867 1,765,646
Total Borrowings
Particulars
B. Total Current Liabilities -
13. Other current liabilities:
Page 21 of 78
Bhutan Board Products Limited
NOTES FORMING INTEGRAL PART OF THE FINANCIAL STATEMENTS
14. Inventory
As on 31-12-2018
Purchases in the Year
Issuea/
Adjustmentsb
Consumption/Change
As on 31-12-2019
As on 31-12-2017
Purchases in the Year
Issuea/
Adjustmentsb
Consumption/Change
As on 31-12-2018
Wood 21,730,896 40,879,754 - 50,928,632 11,682,018 26,117,140 47,822,861 - 52,209,105 21,730,896
Chemicals 6,437,985 50,038,513 - 47,830,561 8,645,937 5,708,012 51,823,815 - 51,093,842 6,437,985
Decorative Paper 13,223,929 22,526,142 - 25,961,281 9,788,790 16,404,220 35,321,751 - 38,502,041 13,223,929
Board 4,861,119 - - 764,163 4,096,956 4,075,649 - - (785,470) 4,861,119
Fittings 9,715,496 4,928,839 - 5,276,701 9,367,634 10,142,093 5,912,274 - 6,338,871 9,715,496
A. Raw Materials - 55,969,426 118,373,248 - 130,761,339 43,581,334 62,447,114 140,880,702 - 147,358,390 55,969,426
Imported 23,993,243 14,732,933 10,941,484 1,005,449 26,779,243 23,117,140 6,965,768 5,949,029 140,636 23,993,243
Indigenious 16,206,789 5,295,739 6,827,623 1,499,010 13,175,895 15,540,462 14,902,609 11,392,661 2,843,621 16,206,789
POL 692,128 4,308,642 3,817,703 371,014 812,053 1,195,847 5,376,302 5,452,953 427,068 692,128
B. Stores & Spares - 40,892,160 24,337,315 21,586,810 2,875,474 40,767,191 39,853,449 27,244,679 22,794,643 3,411,325 40,892,160
C. Packing Materials 502,281 2,591,106 - 1,914,340 1,179,047 950,784 2,854,346 - 3,302,849 502,281
Raw Materials and Consumables(A+B+C)- 97,363,866 145,301,668 21,586,810 135,551,152 85,527,572 103,251,347 170,979,727 22,794,643 154,072,564 97,363,866
Work-in-Progress 10,388,654 - - (2,683,317) 13,071,971 4,592,815 - - (5,795,839) 10,388,654
Finished Goods 64,458,769 - - (5,696,092) 70,154,861 46,950,618 - - (17,508,151) 64,458,769
GRAND TOTAL - 172,211,289 145,301,668 21,586,810 127,171,743 168,754,404 154,794,780 170,979,727 22,794,643 130,768,574 172,211,289
a). Issue of Stores & Spares was for Repairs of Machineries.b). Adjustment of Finished Goods is for Opening stock.
Particulars
For the Year 2019 (in Nu.) For the Year 2018(in Nu.)
Page 22 of 78
Bhutan Board Products Limited
NOTES FORMING INTEGRAL PART OF THE FINANCIAL STATEMENTS
Authorised Share Capital
No. of Shares Amount in Nu. No. of Shares Amount in Nu. No. of Shares Amount in Nu.
Equity Shares 15,000,000 150,000,000 15,000,000 150,000,000 15,000,000 150,000,000
Issued, Subscribed and Paid-up Share Capital
No. of Shares Amount in Nu. No. of Shares Amount in Nu. No. of Shares Amount in Nu.
Fully paid up Equity Shares 14,000,140 140,001,400 14,000,140 140,001,400 14,000,140 140,001,400
14,000,140 140,001,400 14,000,140 140,001,400 14,000,140 140,001,400
a. The reconciliation of the number of shares outstanding and the amount of share capital as on 31-12-2018 is set out as below,
No. of Shares Amount in Nu. No. of Shares Amount in Nu. No. of Shares Amount in Nu.14,000,140 140,001,400 14,000,140 140,001,400 14,000,140 140,001,400
- - - - - -
14,000,140 140,001,400 14,000,140 140,001,400 14,000,140 140,001,400
b.
c.
As on 31-Dec-19 As on 31-Dec-18 As on 31-Dec-17
1 Druk Holding & Investment Ltd. 668,334 668,334 668,334
2 Bank of Bhutan Ltd. 172,400 172,400 172,400
3 Royal Insurance Corporation of Bhutan ltd. 11,830 11,830 11,830
4 Bhutan National Bank Ltd. 1,400 1,400 1,400
853,964 853,964 853,964
d. The company has not reserved any of it's shares for issue under Options and Contracts for the Sale of Shares including Terms & Amounts.
15. Share Capital:
ParticularsAs on 31-Dec-19 As on 31-Dec-18
Opening Balance
TOTAL -
Particulars
TOTAL -
Name of the ShareholdersSl. No.No. of Shares
List of shares in the company held by it's associates are as follows,
The Co. has not distributed dividends during the reporting year year 2019.
As on 31-Dec-17
As on 31-Dec-17
Clsoing
ParticularsAs on 31-Dec-19 As on 31-Dec-18 As on 31-Dec-17
Add: Issued during the year
As on 31-12-2019 As on 31-Dec-18
Page 23 of 78
Bhutan Board Products Limited
NOTES FORMING INTEGRAL PART OF THE FINANCIAL STATEMENTS
(Amount in Nu.)
31-Dec-19 31-Dec-18
Sale of Boards 230,377,187 223,516,477
Less: Discounts Allowed 15,766,985 12,265,052
214,610,202 211,251,425
Sale of RTAFs 51,959,604 47,891,445
Less: Discounts Allowed 15,048,801 11,229,557
36,910,803 36,661,888
Total Net Sales of Finished Goods (A+B) - 251,521,005 247,913,313
Sale - Others 859,786 693,059
252,380,791 248,606,372
31-Dec-19 31-Dec-18Changes in Inventories
- (Increase)/Decrease in Work-in-Progress (2,683,317) (5,795,839)
- (Increase)/Decrease in Finished Goods (5,696,092) (17,508,151)
Particulars
TOTAL -
16. Revenue:
Particulars
17. Cost of Sales:
A. Net Sales of Boards -
B. Net Sales of RTAFs -
Raw Materials and Consumables Used - Raw Materials Consumed 130,761,339 147,358,390
- Stores & Spares Consumed 2,875,474 3,411,325
- Packing Material Consumed 1,914,340 3,302,849
Employee Benefit Expenses (Note - 27) 60,995,776 55,250,125
Depreciation & Amortisation Expenses 6,685,586 8,216,894
Other Direct Expenses (Note - 28) 53,820,430 54,506,326 248,673,535 248,741,919
31-Dec-19 31-Dec-18BSBMiscellaneous Receipt 1,894,463 2,663,546
Liability no longer required Written Back 3,506 -
1,897,969 2,663,546
31-Dec-19 31-Dec-18Advertisement and Publicity 334,008 1,049,710
Business Promotion 67,556 199,796
Marketing Expenses (BBEL) 20,758,874 19,064,000
21,160,438 20,313,506 TOTAL -
TOTAL -
TOTAL -
18. Other Incomes:
Particulars
19. Selling & Distribution Expenses:
Particulars
Page 24 of 78
31-Dec-19 31-Dec-18Rent, Rates and Taxes 719,877 814,843
Office Rent 626,800 572,000
Repairs & Maintenance - Others 540,032 761,464
Audit Fees and Expenses 214,537 264,716
Board Meeting Expenses 22,130 83,460
Communication Expenses 528,592 579,111
Consultancy Charges 756,342 -
General Expenses 541,206 739,726
Insurance 656,198 1,228,982
Bank Charges 118,439 185,067
Membership Fees 200,000 200,000
Printing and Stationery 492,387 487,254
Recruitment and Training Expenses 13,623 -
Travelling Expenses 1,494,480 942,140
6,924,642 6,858,763
31-Dec-19 31-Dec-18
Particulars
20. Administrative Expenses:
Particulars
21. Other Expenses:
TOTAL -
Miscellaneous Expenses 205,249 72,492
Impairment Loss on Trade Receivables (157,686) 2,585,002
47,563 2,657,494
31-Dec-19 31-Dec-18Interest on Bank OD A/c 4,703,984 1,674,950
4,703,984 1,674,950 TOTAL -
Particulars
22. Finance Costs:
TOTAL -
Page 25 of 78
31-Dec-19 31-Dec-18Earlier Year's Tax Adjustments - (2,659,055)
- (2,659,055)
- (2,659,055)
31-Dec-19 31-Dec-18Actuarial Gain/(Loss) on Net Defined Plan (Note-28) (3,370,722) (188,910)
Profit/(Loss) on disposal of Property, Plants & Equipments - 406,000
Adjustment on account of deferred Tax Asset (18,178,942) -
Income on Biological Asset Recognition as per BAS 41 560,790,000 -
539,240,336 217,090
31-Dec-19 31-Dec-18A. Absolute No. of Shares 14,000,140 14,000,140
B. Diluted No. of Shares 14,000,140 14,000,140
C. Comprehensive Income for the Year 512,008,934 -
D. Income from Continuing Operation for the Year (27,231,402) -
Basic Earning per Share (C/A) - 36.57 0.00
Tax Expenses on Continuing Operations -
Particulars
TOTAL -
Particulars
23. Tax Expenses:
25. Earning Per Share:
Particulars
24. Other Comprehensive Incomes:
TOTAL -
Basic Earning per Share (C/A) 36.57 0.00
Diluted Earning per Share (C/B) - 36.57 0.00
Basic Continuing Earning per Share (D/A) - (1.95) 0.00
Diluted Continuing Earning per Share (D/B) - (1.95) 0.00
31-Dec-19 31-Dec-18Salary and Wages 41,271,720 35,579,824
Extra Time Allowance 4,013,973 4,017,769
Medical Expenses 7,022 128,541
Gratuity 3,071,316 2,540,130
Leave Encashment 2,219,639 1,947,421
Leave Travel Concession 2,652,730 2,727,758
Contribution to Providend Fund 4,159,037 4,279,622
Directors' Remuneration, Perks and Sitting Fees 2,286,304 2,321,860
Staff Welfare 1,314,035 1,707,200
60,995,776 55,250,125 TOTAL -
Particulars
26. Employee Benefit Expenses:
Page 26 of 78
31-Dec-19 31-Dec-18Power and Fuel (Electricity) 16,949,256 17,690,858
Repairs & Maintenance:
- Building 1,472,128 6,880
- Machinery 17,905,490 16,178,998
- Vehicle 1,282,448 1,760,356
Road - 37,500
Loading and Unloading Charges 750,984 719,371
Packing and Forwarding 156,739 138,999
POL Expenses for Vehicles 3,983,827 4,331,486
Purchase (Others) 916,324 1,763,576
Transportation Charges 770,525 878,479
Afforestation Expenses 897,233 1,767,892
Forestry Expenses 8,735,474 9,231,931
53,820,430 54,506,326 TOTAL -
Particulars
27. Other Direct Expenses:
Page 27 of 78
a.
As per BAS As per IT Act Temporary Timing Diff.
Deferred Tax Liabilities
As on 31.12.2018:-1 WDV of Fixed Assets 46,120,437 46,120,437 - - 2 (586,620) - 586,620 175,986
3 (60,009,855) - 60,009,855 18,002,956
A. Deferred Tax Assets/(Liabilities) - 18,178,942 As on 31.12.2019:-
1 WDV of Fixed Assets 38,536,188 38,536,188 - - B. Deferred Tax Assets/(Liabilities) - - Increase/(Decrease) in DTA [B-A] - (18,178,942)
a.
Year 2019 Year 2018Balance at the beginning of the Year 7,661,588 60,009,855 Add: Charge for the Year (157,686) 2,585,002
7,503,902 62,594,857 Less: Amount written off during the Year - 54,933,269 Balance at the end of the Year - 7,503,902 7,661,588
BHUTAN BOARD PRODUCTS LIMITED
Impairment Loss on Debtors
28. Calculation of Deferred Tax:Detail calculation for Deferred Tax are as follows:
Particulars
Provision for Leave Encashment
29. Impairment Loss on Trade Receivables:Movements in the Allowance for Impairment Loss were as follows:
ParticularsAmount in Nu.
Page 28 of 78
a.Year 2019 Year 2018
Actuarial Gain/(Loss) due to Liability Experience 750,292 (2,495,810) Actuarial Gain/(Loss) due to Liability assumption charges - 1,321,690 Return on Plan Assets greater/(lesser) than Discount Rate 2,620,430 1,363,030 Actuarial Gain/(Loss) recognised as OCI - 3,370,722 188,910
Less: Employee Benefit Cost charged to Profit & Loss Statement
- Service Cost (2,704,396) (2,287,390) Net interest on net defined benefit liability/asset (366,920) (252,740) -acturial gain /loss cecognized in ociet Interest on (Liability)/Assets (3,370,722) (188,910)
Net Gain/(Expenses) for the Year - (6,442,038) (2,729,040)
b.As on 31-12-2019 As on 31-12-2018
Opening Balance 41,265,090 35,748,330 Interest Income on Fund Assets 2,788,078 3,038,610 Employer Contributions - 6,270,010 Return on Plan Assets greater/(lesser) than Discount Rate (2,620,430) (1,363,030) Paid into Gratuity Fund by Company - - Benefits paid during the year (6,414,117) (2,428,830) A. Gratuity Fund Assets at the Year end - 35,018,621 41,265,090 Opening Balance 42,644,518 40,668,728 Service Cost 2,704,396 2,287,390 Interest Cost on Obligation 3,154,998 3,291,350
Net Actuarial Gain during the year in Nu.,Particulars
Balance Position at year end in Nu.,Particulars
30. Employee Benefits:
Actuarial Gain due to Liabity Experience 750,292 (2,495,810) Actuarial gain/(loss) - Financial Assumption - 1,321,690 Benefits paid from Plan Assets (6,414,117) (2,428,830) B. Defined Benefit Obligation at the Year end - 42,840,087 42,644,518 Net Employee Benefit Assets/(Liabilities)[A-B] (7,821,466) (1,379,428)
c. Other Informations:i. Discount Rate as at 31st December, 2019 8.00% 8.00%ii. Effect of 1% increase in Discount Rate on Obligation in Nu. (1,377,334) (2,566,380) iii. Effect of 1% decrease in Discount Rate on Obligation in Nu. 1,468,774 2,900,860 iv. Salary Escalation Rate 6.00% 6.00%v.Effect of 1% increase in Salary Escalaration Rate on Obligation in Nu 1,609,452 2,656,830 vi.Effect of 1% decrease in Salary Escalaration Rate on Obligation in Nu (1,521,591) (2,455,130) vii. Type of Investments for Fund Assets Fixed Deposit RICB Bond
As on 31-12-2019 As on 31-12-2018Biological Asset Recognised as per BAS 41 560,790,000 -
Particulars31. Income on Biological Asset Recognition as per BAS 41:
Page 29 of 78
a. Identification of Reportable Segments:-
b. Type of Products:-i.
ii.iii.
c. Accounting Policies:-
d. Primary Segment Informations(Business Segment):-
Board RTAF Unallocated TOTAL Board RTAF Unallocated TOTAL
Total Revenue 225,552,470.11 36,910,803.00 - 262,463,273.11 222,470,736.04 36,661,888.00 - 259,132,624.04 Inter-Segment Transfer (10,942,268.11) - - (10,942,268.11) (11,219,311.04) - - (11,219,311.04) External Revenue 214,610,202.00 36,910,803.00 - 251,521,005.00 211,251,425.00 36,661,888.00 - 247,913,313.00
External Sales 214,610,202.00 36,910,803.00 - 251,521,005.00 211,251,425.00 36,661,888.00 - 247,913,313.00 Add: Other Incomes 859,786.00 562.80 - 860,348.80 3,762,605.00 3,762,605.00 Less: Operating Expenses (241,402,991.63) (23,906,564.17) - (265,309,555.80) (230,496,554.74) (41,203,689.25) - (271,700,243.99) EBITDA (25 933 003 63) 13 004 801 63 (12 928 202 00) (19 245 129 74) (4 541 801 25) 3 762 605 00 (20 024 325 99)
B. Segment Result:-
Unallocated - Represents other corporate support services which can not be allocated to any particular products.
The accounting policies used by the company in reporting segments are the same as those contained in Pt.-IV of Note-33 of the Financial Statements. The Chief Executive assesses the performance of the operating segments on a measure ofEBITDA. Segment EBITDA represents profit earned by each segment exclusive of any allocation of Depreciation & Amortisation, Impairment Loss on Trade Receivables, Finance Costs and Income Tax Expense.
Particulars Amount for the year ended 2019 in Nu. Amount for the year ended 2018 in Nu.
A. Segment Revenue:-
BHUTAN BOARD PRODUCTS LIMITEDNOTES FORMING INTEGRAL PART OF THE FINANCIAL STATEMENTS
32. Operating Segments:
The operational segments are identified by the Management based on the nature of activities. Financial information about each of the operating activities segments is sent to the board on quarterly basis.
Particle Board - The particle board segment encompasses activity associated with the production and sale.Ready to Assamble Furniture (RTAF) - The furniture segment encompasses activity associated with the production, sale and trading of related items and services.
EBITDA - (25,933,003.63) 13,004,801.63 - (12,928,202.00) (19,245,129.74) (4,541,801.25) 3,762,605.00 (20,024,325.99) Less: Depreciation (5,214,859.52) (1,412,718.48) - (6,627,578.00) (5,162,784.19) (1,521,482.81) - (6,684,267.00)
Impairment Loss - - - - - - - Finance Costs (4,013,672.56) (690,311.44) - (4,703,984.00) (1,674,950.00) - - (1,674,950.00) Tax Expenses - - - - - - -
Profit after Tax (35,161,535.71) 10,901,771.71 - (24,259,764.00) (26,082,863.93) (6,063,284.06) 3,762,605.00 (28,383,542.99)
Non-Current Assets 595884922.6 7110001.39 - 602,994,924.00 58,463,684.61 8,310,001.39 - 66,773,686.00 Current Assets 141660910.4 67063177.62 - 208,724,088.00 150,409,473.38 68,499,954.62 - 218,909,428.00 Total Assets 737,545,832.99 74,173,179.01 - 811,719,012.00 208,873,157.99 76,809,956.01 - 285,683,114.00
Non-Current Liabilities 9687807 - - 9687807 2,311,280.00 - - 2,311,280.00 Current Liabilities 64246828 988689 - 65235517 54,761,145.61 981,094.39 - 55,742,240.00 Total Liabilities 73,934,635.00 988,689.00 - 74,923,324.00 57,072,425.61 981,094.39 - 58,053,520.00
d. Secondary Segment Informations(Geographical Segment):-The Geographical Segments considered for disclosure are, a). Sales within Bhutan and b). Sales within India.
For the Year 2019 For the Year 2018 As on 31-12-2019 As on 31-12-2018Sales within India 215,772,009 206,389,156 206,389,156 195,848,522 Sales within Bhutan 36,608,782 42,217,216 42,217,216 90,563,371
252,380,791 248,606,372 248,606,372 286,411,893 Total
C. Segment Assets:-
D. Segment Liabilities:-
Particulars Segment Revenue in Nu. Segment Assets in Nu.
Page 30 of 78
BHUTAN BOARD PRODUCTS LIMITED
a. List of Related Parties of the company are as follows:-
1. Druk Holding & Investments Limited 11.Bank of Bhutan securities Ltd.2. CDCL 12. Thimphu Tech park Ltd.3. Dagachu Hydro Power Corporation 13.Tangsibji hydro energy Ltd.4. Bank of Bhutan Limited 14.State Mining Corporation Ltd.5. Bhutan Power Corporation Limited 15.Wood Craft centre Ltd.6. Bhutan Telecom Limited 16. Druk Air Corporation Limited7. Bhutan Board Exports Ltd. 17. Druk Green Power Corporation
18. Natural Resources Development Corporation Ltd.9.Bhutan hydropower service Corporation ltd. 19. State Trading Corporation of Bhutan Limited
20. Dungsam Polymers Limited
d. Transactions with the Related Parties are as follows:-
Associate Subsidiary KMP TOTAL Associate Subsidiary KMP TOTAL1. Sale of Finished Products 3,582,700.12 162,819,182.00 - 166,401,882.12 5,192,064.10 165,108,659.00 - 170,300,723.10 2. Purchase of Wood - - - - - - - - 3. Running and Maintenance Vehicles 244,939.65 - - 244,939.65 - - - - 3. Expenses
- Electricity Charges 16,949,256.29 - - 16,949,256.29 17,690,858.00 - - 17,690,858.00 - Telephone Charges 468,051.90 - - 468,051.90 511,918.24 - - 511,918.24
10. Dungsam Cement Corporation Limited Group Associate Co. Group Associate Co.
Particulars Amount for the year ended 2019 in Nu. Amount for the year ended 2018 in Nu.
Wholly Owned Subsidiary Co. Group Associate Co.8. Mr. Sangay Wangdi (Managing Director) Key Management Personel(KMP) Group Associate Co.
Group Associate Co. Group Associate Co.
Group Associate Co. Group Associate Co.Group Associate Co. Group Associate Co.Group Associate Co. Group Associate Co.
Associate Co. Group Associate Co.Group Associate Co. Group Associate Co.Group Associate Co. Group Associate Co.
Name of the Related Parties Nature of Relation Name of the Related Parties Nature of Relation
- Travelling Exp. - - - - - - - - Interest on OD A/c 988,818.18 - 988,818.18 182,116.20 - - 182,116.20 - Exp. Reimbursed - 20,758,873.95 - 20,758,873.95 - 19,064,000.00 - 19,064,000.00
4. Payment to Directors 114,639.18 - - - Salary to MD 1,847,604.00 - - 1,847,604.00 - - 1,010,664.00 1,010,664.00 - Other benefits to MD 158,700.00 - - 158,700.00 - - 836,940.00 836,940.00 - Sitting Fees 280,000.00 - - 280,000.00 - - 118,256.00 118,256.00
5. Balance at Year end - Amount Receivable 59,484.00 - - 59,484.00 292,392.00 - - 292,392.00 - Amount Payable 1,421,176.00 - - 1,421,176.00 1,137,283.90 - - 1,137,283.90
Page 31 of 78
Quantity Value in Nu. Quantity Value in Nu.Raw Material Consumed:Urea M.T. 545.64 9,330,290.00 630.29 8,495,423.30 Formaline M.T. 1,137.64 21,849,926.30 1,279.84 25,650,157.55 Melamine "A" M.T. 102.57 10,050,298.50 104.90 9,897,419.50 Parafin Wax M.T. 27.90 2,945,416.00 39.10 3,322,426.00 Amonium Hydro-Oxide M.T. 10.44 313,051.20 13.12 393,690.00 Amonium Chloride M.T. 22.20 666,000.00 26.70 801,000.00 Stearic Acid M.T. 3.35 318,060.00 4.72 448,020.00 Rhodomine "B" M.T. 1.10 776,750.00 0.93 585,125.10 Di-Ethyle Glycol (DEG) M.T. 5.35 632,362.00 5.26 621,152.00 Normal Butanol M.T. 3.48 435,875.00 3.27 408,250.00 Sodium Hydroxide M.T. 0.35 17,150.00 0.45 22,050.00 Sodium Carbonate M.T. 0.90 33,300.00 1.15 42,550.00 Formic Acid M.T. 0.66 42,900.00 0.67 43,550.00 Ammonium Accetate M.T. 0.20 22,000.00 0.15 16,500.00 Triethanolamine M.T. 0.93 137,640.00 0.88 130,240.00 Releasing Agent (India) M.T. 0.60 259,542.00 0.50 216,289.00
47,830,561.00 51,093,842.45 Wood M.T. 24,556.25 50,928,632.00 23,823.62 52,209,104.78 Decorative Paper M.T. 104.57 25,961,281.00 119.55 26,864,028.83 Fittings 6,040,864.00 Assorted 6,338,871.47 TOTAL - 130,761,338.00 136,505,847.53
Opening Stock:Plain Particle Board Sq. Mtr. 74,863.200 18,518,415.66 16,154.020 5,639,816.90 Laminated Particle Board Sq. Mtr. 79,081.930 24,901,555.14 19,955.460 8,918,158.75 Ready-to-Assemble Furniture Pcs. 7,275 21,038,796.00 6,087 32,596,699.70 A. Finished Goods - 64,458,766.80 47,154,675.35 Raw Board (Unsanded) Sq. Mtr. 26,591.75 6,177,320.00 98.28 49,947.52 Furniture Pcs. 1,323 4,211,333.75 2,495 4,542,868.44 B. Work in Progress - 10,388,653.75 4,592,815.96 GRAND TOTAL (A+B) - 74,847,420.55 51,747,491.31
Closing Stock:Plain Particle Board Sq. Mtr. 64,619.45 16,391,652.56 74,863.20 18,518,415.66 Laminated Particle Board Sq. Mtr. 90,048.22 30,543,925.05 79,081.93 24,901,555.14 Ready-to-Assemble Furniture Pcs. 6,524.00 23,764,119.60 7,275.00 21,038,796.00 A. Finished Goods - 70,699,697.21 64,458,766.80 Raw Board (Unsanded) Sq. Mtr. 32,829.80 8,466,102.48 26,591.75 6,177,320.00 Furniture Pcs. 965 4,605,868.50 1,323 4,211,333.75 B. Work in Progress - 13,071,970.98 10,388,653.75 GRAND TOTAL (A+B) - 83,771,668.19 65,133,022.38
Sales:Plain Particle Board Sq. Mtr. 24,738.710 10,219,887.30 21,298.730 9,409,691.07 Laminated Particle Board Sq. Mtr. 583,621.72 205,250,100.70 573,437.90 201,841,753.93 Ready-to-Assemble Furniture Pcs. 9,220 36,910,803.00 10,396 36,661,868.00 TOTAL - 252,380,791.00 247,913,313.00
Total Chemicals -
BHUTAN BOARD PRODUCTS LIMITEDANNEXURE - A : QUANTITATIVE INFORMATIONS
Particulars Units For the Year 2019 For the Year 2018
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NOTES TO ACCOUNTS AND ACCOUNTING POLICIES
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33. SIGNIFICANT ACCOUNTING POLICIES
I. Reporting Entity
The principal activities of Bhutan Board Products Limited (the “Company” or “BBPL.”) cover all significant operations that have taken place in Bhutan and the
Zonal Offices in India . The ultimate parent is the Royal Government of Bhutan. The Company is a limited liability company incorporated and domiciled in Bhutan.
The address of its principal place of business is Phuentsholing , Bhutan. These financial statements relate to the year ended 31 December 2019.
II. Basis of preparation
The financial statements of the Company have been prepared in accordance with
Bhutanese Accounting Standards. The statements have been prepared under the accrual, historical cost and going concern conventions. The preparation of financial statements in conformity with BAS requires the use of
certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the group‟s accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are:
1 Fixed assets: critical judgments are expected period of use, condition of the asset, technological advances, regulation, and residual values.
2 Actuarial valuation of employee benefits: expected uptake of the gratuities
and the discount rate used in the valuation. The functional currency of preparation is the Bhutanese Ngultrum.
III. Application of Bhutanese Accounting Standards
The Financial Statements have been prepared in line with Bhutanese Accounting
Standards. The summarised impact of the introduction of BAS are :
a) The company has presented Statements of Comprehensive Income and Changes in Equity as required by BAS 1. These statements show information that was previously disclosed in the schedules to the financial statements.
Generally the disclosure norms adopted by the company is as per function which is in confirmation with group accounting policies.
b) Depreciation has been calculated using an assumed useful life of Fixed Assets
including additions during the year using the rates applicable as per DHI Group Accounting Policy and which are in line with BAS 16.
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c) Employee retirement benefits are valued on an actuarial basis which reflects
the estimated liability at balance sheet date.
d) The company has recognised Biological Assets this year as a first time recognition in accordance with BAS 41.
IV. Segment reporting
Operating segments are reported in a manner consistent with the internal reporting
provided to the chief operating decision-maker. The chief operating decision-maker, who are responsible for allocating resources and assessing performance of the
operating segments has been identified as the Board of Directors.
V. Consolidation The Company has control over and owns all the shares in subsidiary company Bhutan Board Exports Ltd. Consolidated financial statements have not been
prepared as the Company itself is a subsidiary of Druk Holdings and Investments Ltd.(DHIL). DHIL is understood to prepare consolidated financial accounts which will include the results of BBPL and BBEL .
VI. Foreign currency translation
a) Foreign currency transactions that are completed within the accounting period are translated into Bhutan Ngultrum using the exchange rates prevailing at the date of settlement. Monetary assets and liabilities in foreign currencies at
balance sheet date are translated at the rates of exchange ruling at balance sheet date.
b) Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Income.
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VII. Property, plant and equipment
All property, plant and equipment is stated at historical cost less depreciation and
impairment, if any. Costs includes purchase price, taxes and duties, labour cost, direct financing costs, direct overheads for self-constructed assets, borrowing costs, other direct costs incurred up to the date the asset is ready for its intended use
including initial estimate of dismantling and site restoration cost. Subsequent costs are included in the assets carrying amount of assets or recognised
as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All
other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.
a) Land is not depreciated. Depreciation on other Assets has been calculated
using an assumed useful life of Fixed Assets including additions during the year using the rates applicable as per DHI Group Accounting Policy which in line with BAS 16. Gains and losses on disposals are determined by comparing
the proceeds with the carrying amount and are recognised within „Other Income‟ or „Other expenses‟ as the case may be, in the income statement.
VIII. Intangible assets
a) Costs associated with maintaining computer software programmes are
recognised as an expense incurred. b) The Company does not recognize the internally generated technical knowhow
and hence recognition criteria and amortisation policy is not defined by the entity.
IX. Research and Development costs
Research costs are recognised as an expense in the year in which they are incurred.
Development costs are only capitalised if a potentially profitable product has been found and management has given approval to further develop the product. If the company decides to proceed and market the product, development costs will
be amortised over the expected profitable period of marketing the product, not exceeding 5 years. Other development costs are expensed immediately if the
decision is made not to proceed to market the product.
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X. Receivables and advances .
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting
period. These are classified as non-current assets. The group‟s loans and receivables comprise „loans to customers‟, „trade and other receivables‟ and „cash & cash equivalents‟ in the Statement of Financial Position (notes 5, 3 ).
XI. Inventories
Inventories are stated at costor net realisable value whichever is lower. Cost are
determined using the weighted average method. The cost of finished goods and work in progress comprises design costs, raw materials, direct labour, other direct
costs and related production overheads (based on normal operating capacity).
XII. Trade and other receivables Trade and other receivables are initially recognised at the fair value of the amounts to be received. If collection is expected in one year or less (or in the normal
operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets. Receivables are reviewed regularly for impairment.
The company has been consistently been adopting policy for impairment of trade
receivables as follows:
1) Outstanding more than one year but less than two years : 20% 2) Outstanding more than two years but less than three years : 40% 3) Outstanding more than three years : 100%
XIII. Cash and cash equivalents
In the Statement of Cash Flows, cash and cash equivalents includes cash in hand,
deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts.
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XIV. Trade and other payables
Trade and other payables are initially recognised at the fair value of the amounts to
be paid. Accounts payable are classified as current liabilities if payment are due within one year or less (or in the normal operating cycle of the business if longer). If
not, they are presented as non-current liabilities.
XV. Current and deferred income tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in Other Comprehensive Income and in this case, the tax is also
recognised in other comprehensive income. The current income tax charge is calculated on the basis of the tax laws enacted at the balance sheet date in Bhutan.
Management periodically evaluates computation made in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It
establishes provisions wherever appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is recognised using the liability method on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted at the balance
sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that
future taxable profit will be available against which the temporary differences can be utilised.
XVI. Employee benefits
a. Retirement Benefits
Defined Contribution Scheme Employees belong to a defined contribution benefit plan managed by a separate entity. The company has no legal or constructive obligations to pay further
contributions if the fund does not hold sufficient assets to pay all employees, the benefits relating to employee service in the current and prior periods.
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Defined Benefit Scheme The company makes retirement payments based on the final salary and years of
service. The gratuity is accrued on the basis of actuarial valuation. Changes in service and
interest are charged to the Profit and Loss Account. Changes to actuarial valuation are charged to the Statement of Comprehensive Income.
b. Other benefits Other benefits such as leave encashment and bonus are accrued and are provided for.
XVII.Revenue recognition Revenue is measured at the amount entity expects to be entitled in exchange for transferring promised goods or services to a customer, and represents amounts receivable for goods supplied, stated net of discounts, returns and taxes and royalty
collected on behalf of government.The Company recognises revenue when the entity satisfies a performance obligation identified in the contract by transferring a
promised goods (i.e., an asset) to a customer and the amount of revenue can be reliably measured and it is probable that future economic benefits will flow to the group. An asset is assumed to be transferred to a customer when (or as) the
customer obtains control of that asset. Incremental cost incurred by the company for obtaining as contract with customer is recognised as assets if the recovery of such
cost is expected. Such assets are amortised on a systematic basis that is consistent with the transfer to the customer of the goods to which the asset relates.
XVIII. Interest income Interest income is recognised using the effective interest method. When a loan and
receivable is impaired, the company reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument. Interest income on impaired loan and receivables is
recognised using the original effective interest rate.
XIX. Comparative information Where necessary certain comparative information has been reclassified in order to
provide a more appropriate basis for comparison , comparative information has been updated to comply with the introduction of Bhutanese Accounting Standards.
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34. Notes on Accounts:
a. Consumption of raw materials is ascertained by adding purchases during the year to the opening stock and by deducting closing stock there from (Note-5) .
b. Quantitative Information in respect of Opening Stock, Purchases, Closing Stock, Sales
and Consumption of Raw Materials (As Certified by Management) is given in Annexure-A.
c. As per MOU, all expenses of Bhutan Board Exports Ltd, wholly owned subsidiary Company, have been reimbursed on actual basis.
d. Sundry Debtors A/c BBEL represents balance on Current Account with the
subsidiary company, net of expenses reimbursed to them and other adjustments.
e. Confirmation of balances although obtained from some of the Trade Debtors as on
31.12.2019 remains to be obtained from majority of the customers.
f. Lease rents amounting to Nu.1.08 million have been provided in the accounts under the head Raw Material Consumed (Wood) as per ( Note– 5).
g. As per para 12 of BAS-41 (BAS 2015 page 1199) a Biological Asset shall be measured
on initial recognition and at the end of each reporting period at its fair value less costs
to sell, except in those cases where the fair value cannot be measured reliably. Accordingly, the management has estimated the biological asset at Nu 560.79 million.
The company has recognized the same in profit and loss account as this is the first time measurement. It was opined by the consultant that the income recognised in
financial statement under BAS-41 will not be subject to income tax under the local laws.
Page 40 of 78
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Fair value/Cost to Sell is calculated as under
a) Total hectares where living trees are presently standing= 2100.66 Hectares b) Volume per hectare= 91.714 Cubic Meter c) Therefore total volume of plantation= 91.714 Cubic MeterX2100.66 Hectare= 1,92,659.93 Cubic Meters c) Present market value per cubic meter excluding felling, cross cutting, craning manual rolling, toll fees and loading & transportation cost= Nu 4238.40per cubic meter e) Fair value of the plantation= 1,92,659.93 cubic meter X Nu 4238.40 per cubic meter= Nu 816.57 million f. Cost to sell = 1,92,659.93 cubic meter X Nu 1332.82 per cubic meter= Nu 256.78 million g. Therefore amount recognized is Nu.816.57 million - Nu.256.78 million = Nu 560.79 million.
h. Deferred Tax assets over provided in last year now reversed .
i. It was decided by the Board of Directors of the company to merge of Bhutan Board Exports Limited a wholly owned subsidiary of this company.
j. The performance of the company has been adversely affected in the last few years
due to changes in policy like GST, Demonetisation etc in India to which the company
majorly exports. Despite the above hostile environment, the company could sustain its performance at the current level due to proper utilisation of available resources.
k. During the previous year the Net Worth of company was Nu. 282 Million which
increased during the currently year to Nu. 811 million due to recognition of Biological Asset of Nu. 560.79 million as per BAS 41.
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g. Payments to Auditors:
Particulars Year 2019
(Nu.)
Year 2018
(Nu.)
Statutory Audit Fees 1,54,350.00 1,54,350.00
Out of Pocket Audit Expenses 79,444.00 1,10,366.00
TOTAL -
For C. K. PRUSTY & ASSOCIATES Chairman Managing Director Chartered Accountants (FRN: 323220E)
(CA.Tiruvengadam Kannan) PARTNER FCA: 055803
Place : Kolkata Date :
Page 42 of 78
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COMPLIANCE CALENDAR AND
COMPLIANCE CHECKLIST
Page 43 of 78
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BHUTAN BOARD PRODUCTS LIMITED
COMPLIANCE CALENDAR
Sl. No. ACTIVITY SECTION TIMING REMARKS
1
a)
b)
Submission of Annual Return
Companies listed with Royal Securities Exchange of Bhutan
Limited All unlisted companies includes:
i) Duly filled form as per Schedule XII
ii) Balance Sheet iii)Profit & Account iv)Cash Flow Statement
v)Auditors Report vi)Director‟s Report
267
NA
On 27/04/201
9
a) As per Annual Return Form for a period relating
to financial year ended on 31st December.
b) Should be duly authenticated by at least
one director and the Chief Executive Officer.
2
a) b)
c)
Annual General Meeting
Listed Companies Unlisted Companies
Government Companies
177
NA NA
On 28-03-
2019
To be conducted once a year besides other meetings Board Cum
AGM
3 Notice Calling General Meetings 185 On 06-03-
2019
NA to PVT. Ltd.
4 Payment of Dividend 204 - Company has not declared during the year.
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Sl. No. ACTIVITY SECTION TIMING REMARKS
5 Presentation of B/S,P&L A/c and Cash Flow Statement at every
AGM
244 On 28-03-2019
BY BoD
6 Filing of Documents with Registrar 267 On 05-07-2019
As per Section 267
7 Appointment of Auditor
GCC & GC Reappointment Removal
Resignation
251
260-262
Every AGM
Notify the Registrar
within 15 Days from
passing the resolution.
Convene
the EGM within 14
Days to discuss resignatio
n.
Every year at AGM from panel of Auditors
– RAA AG of Bhutan .Not more than 3 years.
8 Consent to act as Director 140 Within 30 Days of
appointment or reappoint
ment with the
registrar.
Complied
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Sl. No. ACTIVITY SECTION TIMING REMARKS
9 Board Meetings 138th BM
139th BM 140th BM
146 & 149 On 28th
March,2019
On 22nd July,2019 On 30th
September,2019
Quorum :2/3 of total strength or 2 directors
whichever is higher.
10 Appointment of CEO 210 Every 5
Years
At AGM
11 Power of Regulatory Authority to
accord approval
412 Approval
of Regulator
y Authority
Prescribing
Forms,Payments of fees ,generally for the purpose
of this Act.
12 Appointment of Company Secretary
213 As prescribed
by MTI
Listed companies and Companies with more
than Nu.100,000,000/- as paid up capital.
13 Statutory Record and Inspection 228 All Times
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No. Ss. INCORPORATION OF A COMPANY & SECURITIES YES NO NA REMARKS
1 28 Changes to Articles/Approval
2 47 Change of name/Approval
3 123 Increase or consolidation of share capital
4 124 Reduction of share capital
5 82 License Copy and Share Certificate filing
The company's shares are not in dematerialised
form despite being offered to public.
6 107 Public offer of shares & Debentures-ROC Approval No public offer was made during the period
MANAGEMENT & ADMINISTRATION
7 217 Registered Office of Company
(Postal Address & Contact Number)
8 221 Publication of name by Company
(Letter Head, Seals and Sign Board)
9 241 Financial Year of Companies as of 31st Dec.
242 Extension upto 15 months - ROC approval
243 Extension upto 18 months - Authority's approval
10 245 Financial Statements to follow BAS BAS for Public Cos/BAS for SMEs for Pvt
Should Consult AASBB & AS Regulations,''12
11 267 Annual Return Submission
On/before 31st May for listed; others 31st July
12 177 Annual General Meeting (Minutes)
13 180 Extraordinary General Meeting (Minutes)
DATE:15.02.2020
NAME OF COMPANY : BHUTAN BOARD PRODUCTS LIMITED
REGISTERED NO:
COMPLIANCE CHECKLIST
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14 185 Notice for calling general meeting
Notice for calling 07th March,2019 AGM held on
28/03/2019 was published in Kuensel on
07/03/2019 which is in violation to section 185
which calls for not less than 21 days notice in
writing.
15 187 listed Co. - written as well as in media
Public Co/Private Co. - Written Notice
16 190 Chairman of meeting
(CEO cannot chair)
17 192 Representation of corporations at meetings
(appointed by Board Directors)
18 193 Ordinary and special resolutions (Minutes)
There is no practice of passing ordinary and
special resolutions.
19 195 Minutes of Annual General Meeting and AGM was held on ......., was signed.
Board Meetings (maintained ss.195-198)
20 199 Declaration and payment of dividend(199-209)
No Dividend declared during this year, 2019
21 232 Books of account to be kept by company Intimation with ROC within 7 days
(location & time period )
22 Board's report (signed by Chairman) to contain CG&CSR practices report
23 252 Appointment and removal of Auditors Non-appoint within7 days of AGM have to
Need to re-appoint annually(251-259) intimate with Registrar of Companies
24 260 Resignation of Auditors from office
(Annual Resignation)
25 266 Auditing standards
(Audit using Auditing Standards issued by AASBB)
26 133 Number of directors
27 134 One third of all Public Companies shall be independent Includes FIs, listed, U-Public Co & SOEs
28 138 (Minimum No. & retirement on rotation)
2 in Pvt. & 3 in Public Co./rotation for Public Co
only
29 139 Additional directors
30 140 Consent to act as directors
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31 141 Certain persons not to be appointed as Directors
32 142 Resignation by a director
33 143 Removal of directors
Either in EGM or AGM
34 146 Board meetings
(3 Meetings for Public Cos & 2 Meetings for Pvt )
35 152 General powers of the board
36 156 Restriction on powers of Board
37 210 Appointment of Chief Executive Officer
(Max 5 years terms& 2 consecutive terms only)
38 213 Company Secretary required in all Public Companies Comply with sections 10(c), 213 & 214
39 414 Appointment of selling or buying agents
(govt. Approval obtained or not)
40 157 No loans to directors (only for Public Co.) only exempt if provided by other law
41 53 Inter-corporate investments
(investments to be disclosed) apply old rule
42 158 Conflict of Interest Transactions by Board
Need to disclose & approved by board directors
43 161 Standard of care rquired by directors Section 162 duty is complied with
(Reckless decision) whilst making decisions by the Board
No. Ss. INCORPORATION OF A COMPANY & SECURITIES YES NO NA REMARKS
44 228 Statutory record and inspection Maintaining properly
(a) Register of buy-back of shares No instance of buyback of shares.
(b) Register of transfers
(c) Register of charges
STATUTORY RECORD AND INSPECTION
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(d) Register of inter-corporate loans
(e) Register of inter-corporate investments
(f) Register of contracts in which directors are
interested
(g) Register of directors Updated till 2019
(h) Register of directors' shareholding
OTHERS
SIGNATURE/SEAL SIGN NAME
NAME OF INSPECTOR/AUDITOR COMPANY REPRESENTATIVE
NOTE: THIS COMPLIANCE CHECKLIST IS TO BE USED BY ALL CONCERNED UNTIL NEW ONE IS ADOPTED BY REGISTRAR OF COMPANIES
Page 50 of 78
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MANAGEMENT REPORT AND
COMPLIANCE ON PREVIOUS
AUDIT REPORT
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BHUTAN BOARD PRODUCTS LTD.
MANAGEMENT REPORT FOR THE YEAR 2019 Auditor’s observation : Non follow-up of debtors & advances (AIMS Category No. 5.7.4) : We observed that there is a credit policy in vogue for the company and sometimes the same results in default. This results in accumulation of debtors during the past
years particularly in export sales. We have also suggested in our previous reports that the system followed by the company regarding the credit policy needs
modification. The customers who are entitled for a credit transaction needs to have an agreement with the company, which will ensure recovery from the customers
appropriately. For the old debtors who have availed the credit facilities of the company and have not made payments , our suggestion was, to send legal letters to the customers informing the consequences for breach of credit facility.
Management’s Response
Accumulation of debtors in export market was due to extension of credit facilities to the loyal customers. Efforts are being made to collect all the past debts.
Auditor’s further comments
We suggest to adopt the newly implemented Insolvency and Bankruptcy Code 2016
for recovery of old debtors in India as the same is effective , takes lesser time and
does not entail unreasonable legal expense.
Accountability
DIRECT ACCOUNTABILITY NAME - Mr.Nagendra Sharma NAME - Mr.L.B.Subba DESIGNATION- Dy.General Manager(Debtor) DESIGNATION- Dy.General Manager (Board))
CITIZEN ID NO – 11201002801 CITIZEN ID NO – 11804000363
SUPERVISORY ACCOUNTABILITY NAME – Mr. Sonam Wangchuk DESIGNATION – General Manager (Mktg) CITIZEN ID NO.11410001377
Page 52 of 78
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Auditor’s observation : Non Follow-up of debtors & advances (AIMS Category No. 5.7.4):
It was observed that the company could not obtain confirmations from most of the trade debtors .It is suggested that such confirmations should be obtained in all cases for prudent policy norms.
Management’s Response
Confirmations can be obtained. F&A Dept.will initiate the confirmation process with immediate effect..
Auditor’s further comments
It is suggested to appropriately frame the debtors confirmation letter with a disclaimer that if the same is not confirmed within a reasonable time the same will
taken as confirmed by company. The format is available in Tally Accounting Package which is under implementation.
Accountability DIRECT ACCOUNTABILITY NAME - Mr.Jambay Dorji
DESIGNATION – Dy.Manager (Finance)
CITIZEN ID NO- 11407001132
SUPERVISORY ACCOUNTABILITY NAME – Mr.Aita Raj Rai
DESIGNATION- Head (Finance & Accounts)
CITIZEN ID NO - 10201000464
Page 53 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
Auditor’s observation: Other inadequate internal controls(AIMS Category No. 5.15.5):
The company does not have proper Internal Audit System commensurate with the volume, size and nature of its business. Since there are multiple responsibilities for
internal audit head, it was suggested to have an independent Internal audit department.
Management’s Response The company will outsource internal audit for proper internal audit system so that the
present head of Internal Audit can fully look after the administrative functions.
Auditor’s further comments
The management decision is acceptable and this decision will not lead to conflict of interest.
Accountability
DIRECT ACCOUNTABILITY NAME – Mr.Vinod Moktan DESIGNATION- Internal Auditor
CITIZEN ID NO- 11215003192
SUPERVISORY ACCOUNTABILITY NAME – Mr.Sangay Wangdi
DESIGNATION- Managing Director
CITIZEN ID NO- 10503000366
Page 54 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
Auditor’s observation: Non-determination of obsolete, slow moving, surplus stores (AIMS Category No. 5.9.14):
It was observed that some decorative papers are lying unutilised in Tala Factory. No action was taken on these non-moving stocks of decorative papers.
Management’s Response These decorative papers are procured long time back. It was not used since these
shades are outdated not in tune with current market requirement .The papers will be put to use as a balancing paper as in the past.
Auditor’s further comments There are no further comments to offer.
Accountability
DIRECT ACCOUNTABILITY NAME – Mr.L.B.Subba DESIGNATION- Dy.General Manager (Board)
CITIZEN ID NO- 11804000363
SUPERVISORY ACCOUNTABILITY
NAME – Mr. Sonam Wangchuk
DESIGNATION – General Manager (Mktg)
CITIZEN ID NO.11410001377
Page 55 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
Auditor’s observation : Non-conducting of Physical Verification (AIMS Category No. 5.9.8):
Fixed asset register has been updated but no further verification was done since
2017.We also observed that appropriate tag numbers are not affixed on the fixed assets. We also observed that the Internal Auditor does not conduct physical
verification of assets. Management’s Response It is decided to include Fixed Asset Verification as a part of scope of Internal Audit to be
carried out from 2020.
Auditor’s further comments There are no further comments to offer.
Accountability DIRECT ACCOUNTABILITY NAME – Mr.Vinod Moktan
DESIGNATION- Internal Auditor
CITIZEN ID NO- 11215003192
SUPERVISORY ACCOUNTABILITY NAME – Mr.Sangay Wangdi
DESIGNATION- Managing Director
CITIZEN ID NO- 10503000366
Page 56 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
Auditor’s Observation : Non-determination of obsolete ,slow moving, surplus stores
(AIMS Category No. 5.9.14 ): There are non-moving items and unusable spare parts lying but the company is
neither taking proper steps for sale/disposal of the same, neither adequate provisions are being made.
Management’s Response
The existing non-moving & unusable spares were procured long time back. Over the
period of years, the spares were replaced with latest brands/make which has resulted in redundancy of these items. For instances, all electrical contractors of TB series were replaced by TH series. These items will be segregated into usable & non-
usable separately and the non-usable would be disposed off through auction.
Auditor’s further comments
There are no further comments to offer. Accountability
DIRECT ACCOUNTABILITY NAME – Mr.Letho Dorji
DESIGNATION- Store Keeper
CITIZEN ID NO- 11101001187
SUPERVISORY ACCOUNTABILITY NAME – Mr.D.B.Gurung
DESIGNATION – Offtg.General Manager(Forestry) CITIZEN ID NO- 31306000057
Page 57 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
BHUTAN BOARD PRODUCTS LTD. MANAGEMENT REPORT RECOMMENDATORY IN NATURE WITHOUT
ACCOUNTABILITY FOR THE YEAR 2019
Auditor’s observation : Use of Outdated Technologies (AIMS Category No. 5.12.6)
The plant & machineries at TALA Factory are old and outdated. In our opinion, the management needs phase wise capital investments and modernisation of the plant.
This needs to be implemented by the management immediately, else , the company may lose heavily in the near future. Despite these conditions , the company perform
at the capacity utilisation of 50% due to optimum utilisation of resources and proactive breakdown maintenance.
Management’s Response The company has been able to maintain the capacity utilization of 50 % even in this
condition because of frequent repair and maintenance carried out by its dedicated
maintenance team.
The Company has already initiated the revamping process by awarding a Consultant for
study.
(a)Revamping of particle board factory at Tala.
(b) Way forward regarding RTAF Pasakha.
Depending upon the report submitted by the Consultant to the shareholders, the factories
would be revamped which would enhance production capacity and the plant capacity
utilization.
Auditor’s further comments
Agreed. It is felt that capital expenditure and modernisation will any way needs to
be carried out to sustain in this competitive market.
Page 58 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
Auditor’s observation: Non-conducting of Physical Verification (AIMS Category No. 5.9.8)
We observed that CCTV are not installed in any of the premises of the company.
Proper surveillance is not only important part of security but also helps in optimum utilisation of the resources of the company.
Management’s Response It is suggested to CCTV cameras at least inside the premise in order to have internal control.
Auditor’s further comments Agreed. It should be under proper supervision and monitoring.
Page 59 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
Auditor’s Recommendation : Non-Management of Property (AIMS Category No. 5.9.1)
During our visit to Pasakha factory, we found that the condition of RTAF godown is not in a good condition. We were informed by the supervisor that since the interior
and exterior of the factory is not maintained properly, during rainy season the workers are facing problems in working. The materials are susceptible due to such
seepage of water. It is suggested that the company should have a capital budget to be implemented in a phased manner .
Management’s Response
Maintenance is being carried out in phases due to huge financial implications to the company.
Auditor’s further comments Water damage may entail losses to the company and hence it is advisable to
prioritise the maintenance exercise.
Page 60 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
Auditor’s Recommendation : Other Mismanagement of Revenue & Taxes (AIMS Category No. 3.4.27)
It was suggested that liaison offices in India needs to maintain all records pertaining to GST regulations which will be helpful in recovery of debtors at the time of
defaults because ,once the customer accepts that they have purchased goods through imports from Bhutan in their GST Returns , the sale becomes legally binding under
court of law. Management’s Response The company has only liaison offices and not commercial branch offices. And hence it is not
required to comply as per GST Regulations.
Auditor’s further comments There are no further comments to offer.
Page 61 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
Auditor’s Recommendation: Non Maintenance of Other Records (AIMS Category No. 5.2.19)
We observed that the system for filing customer complaints are not at desired level and needs up gradation. For addressing the customer complaints properly, the concerned department should record the complaints appropriately.
Management’s Response Very few complaints were received during the year and the same was addressed. It will be
complied in future.
Auditor’s further comments It is felt that improvements are needed with proper computerisation of redressing customer
complaints.
Page 62 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
Auditor’s Recommendation: Advance from Customers (AIMS Category No. 5.6.8) It was observed that the company is not opting for advances from the customers and
in future after completion of the orders, in many cases the customers tends to reject the material which results for huge loss for the company. It is suggested that before
the any order is accepted sufficient advances may be taken. Management’s Response
There were no issues as of now. However, it is unpredictable and can occur. As such, we will comply and implement the valuable suggestions of the auditors on an
immediate basis for the customized items.
Auditor’s further comments There are no further comments to offer.
Page 63 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
BHUTAN BOARD PRODUCTS LTD.
FOLLOW-UP REPORT FOR THE YEAR -2018 A. Follow-up Report on the Previous Year’s Audit Qualification on the
Financial Statements:-
Accounting Year
Total No. of Audit Qualifications
No. of Qualifications Implemented
No. of Qualifications Partly Implemented
Balance Qualifications to be Implemented
2016 2 1 1 0
2017 2 0 1 0
2018 5 5 0 0
B. DETAILED FOLLOW-UP REPORT ON THE AUDIT QUALIFICATION
FOR THE YEAR ENDED 31-12-2018:-
Para No.
Audit Qualification on the Financial Statement in brief
Management’s Response – Current Status
Status of Compliances
1 Deferred Tax Asset: The Company is carrying Deferred
Tax Asset in the statement of financial position at Nu. 1,81,78,942/-. The Company has
not charged the same to statement
of Comprehensive Income, which constitutes a departure from Bhutanese Accounting
Standard 12. The Company‟s records indicate that, had the
Company charged the same, Deferred Tax Expense would
have been increased by Nu 1,81,78,942/-and net income and shareholders‟ equity would have
been reduced by Nu 1,81,78,942/-.
We will comply at the year ending.
Necessary adjustment has been done as on 31.12.2019
Implemented
Page 64 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
Para
No.
Audit Qualification on the
Financial Statement in brief
Management’s
Response – Current Status
Status of
Compliances
2 Inventories: The Company‟s inventories are carried in the
financial statements at Nu 17,22,11,289/-, We have not been
able to obtain sufficient appropriate audit evidence in
terms of basis of valuation of the following inventories, to ascertain the appropriateness
and the basis in accordance with BAS
2 – “Inventories”, as the Management has not stated the
inventories at the “lower of cost and net realizable value”, but has valued the same as follows:
a) Stock of Ready to Assemble furniture has been valued at
Selling prices, instead of actual cost incurred during the year, which constitutes a departure
from “Bhutanese Accounting Standard 2-
Inventories”. b) Board Stock has been valued
based on the cost determined in the year 2013, and not the actual cost incurred during the
year. Since the costs of all components used for arriving
at the cost in 2013 has increased, valuing and carrying the stock at
2013 prices may impact the profitability, which constitutes a departure from
Bhutanese Accounting
Valuation of inventories as per
BFRS 2: This Standard
prescribes the basis of accounting treatment
of inventories which states that inventories need to be measured
at lower of cost and net realizable value
and the cost and to be determined using first
in first out or weighted average method. However,
DHI group accounting policy
prescribes to follow the weighted average method and it is
complied with effect from 2019 onwards.
Costing has been done
by J.P & Company cost accountants in 2019 and the
valuation of inventories has been
done in weighted average method
which is as per BAS-2 and as per group accounting policy of
DHI.
Implemented
Page 65 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
Para
No.
Audit Qualification on the
Financial Statement in brief
Management’s
Response – Current Status
Status of
Compliances
Standard 2- Inventories. c) Other Inventories has been
valued based on the cost incurred for the last purchase for
the year. Had the company valued the inventory based on
“weighted average Cost” the carrying value of inventory may have an impact on the
profitability, which constitutes a departure from Bhutanese
Accounting Standard 2- Inventories.
Therefore, we are unable to comment on possible adjustments of these, if any, on
the carrying value of inventories as
at 31st December 2018.
3 The Company carries out
activities of Planting and afforestation, of components covered
under “Biological Assets” and “Agricultural Produce”, as per
“BAS 41- Agriculture”. The Company has not valued such
“Biological assets” and hence have not recognised the same as asset, in the accompanying
financial statements as at 31st December 2018, which
constitutes a departure from Bhutanese Accounting Standard 41- Agriculture.
Complied as per BFRS 41, we have hired the consultant from
Kolkata and done the valuation.
Implemented.
Page 66 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
Para
No.
Audit Qualification on the
Financial Statement in brief
Management’s
Response – Current Status
Status of
Compliances
Therefore, we are unable to comment on possible
adjustments of the “Biological Assets”, if
any, on the carrying value of assets as at 31st December 2018
4 Investment in subsidiaries are carried at cost in the
accompanying individual financial statements as at 31st
December 2018. The Company has not carried out the Impairments testing for its
Investment in Subsidiary, as to the recoverability of the
investment, to ascertain the carrying amount of the investment, which constitutes a
departure from Bhutanese Accounting Standard -36-
Impairment of Assets. Therefore, we are unable to
comment on possible adjustments, if any, on the carrying value of investments as
at 31st December 2018.
We are going to
merge the BBEL with BBPL; Hence the
qualification may be dropped.
Court verdict and
board resolution has been passed and the company act
formalities in under process which will be
done with in 30.3.2020.
Partially
Implemented.
5
Consolidated Financial Statements: As stated in note 2.17
to the financial statements, the Company has not prepared consolidated financial statements
as required by the Bhutanese Financial Reporting Standard 10
We are going to merge the BBEL with
BBPL Hence, the qualification may be dropped.
Partially Implemented.
Page 67 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
Para
No.
Audit Qualification on the
Financial Statement in brief
Management’s
Response – Current Status
Status of
Compliances
“Consolidated Financial Statements”.
In our opinion, the presentation of consolidated information is
necessary for a proper understanding of the financial
position, the financial performance and the cash flows of the
Company and its subsidiary.
Page 68 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
C. FOLLOW-REPORT ON THE Previous Year’s Management Reports:-
Accounting Year
Total No. of Audit Qualifications
No. of Qualifications Implemented
No. of Qualifications Partly
Implement
Balance Qualifications to be
Implemented
2016 44 38 1 5
2017 19 11 2 6
2018 18 18 0 0
BHUTAN BOARD PRODUCTS LTD.
D. Detailed Follow-up Report on the Management Report for the year - 2018.
Sl.No.
Observation Auditee’s Comments Auditor’s
Comments
Current Status
1 On verification of the
balances of BBEL in the books of BBPL, it was noticed that there was difference in
the balances, as compared to the balance as per BBEL,
books.
It has been rectified
and reconciled in the current year.
Reconciliation
has been carried out by management
during the year..
Reconciliation has
been carried out by management during the year.
The balance in BBEL is Nu
29701.78(Dr.) and balance in BBPL
Nu.29701.78(Cr.) after reconciliation.
Page 69 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
2 On review of fixed assets register of the company, it
was observed that the FA register was not updated with the assets purchased
and sold in the period. It was also noted that the FA
register is an independent excel spreadsheet that is maintained by the company
and not integrated to the accounting system. it was
noticed the following were information was not
available in the FA Register:· Invoice details of assets · Year of
Purchase · Expected useful life· Others
As suggested by auditors, Physical
verification of assets will be carried out annually hereafter.
Fixed Asset Register has been
updated. However ,Physical
Verification of Fixed Assets was
not conducted since 2017.
Fixed Assets register has been
updated. Book Value Nu.515097830.00
FAR value nu.515097830.00
Partially Complied with.
3
It was observed that the
company has not carried out physical verification of assets in last 2 Financial year
i.e.2017 and 2018
Physical verification
of assets pertaining to 2017 & 2018 was done in 2019
Being complied
with.
Being Complied
with.
4 On review of balance with the debtors outstanding at the end of the period, it was
noticed that confirmations from the debtors have not
been received by the Company, for the balance
carried in the books.
Follow up with the Regional Heads in India being carried
out to get the outstanding balances
confirmation from the major parties. The
balance confirmation received from the parties has been
submitted to the auditors for
verification.
Partially Complied with.
Trade Debtors confirmations for the recent
customers has been received.
Page 70 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
5 Sales Tax Deposits of Nu.150, 688.07 has been carried in the
books for more than 3 accounting periods. In the absence of Specific
information/documents supporting such deposits as
refundable in nature, the auditors were unable to comment on the
recoverability of such amount and carrying the
same as an asset in the books.
Since it was an old case, we could not
trace out the details. However, we shall seek an approver of
the Board for write-off.
Not complied with.
Not complied with.
6 It was observed that “Board” stocks were valued on the
“cost” arrived in 2013.Valuation of such stock
is not based on the cost incurred by the company in
procurement/manufacturing the said component in2018
A cost Accountant from Kolkata has
been hired for the standard costing of
particle board. From 2019 onwards, we are
doing valuation of all inventories in Weighted Average
Method as per DHI Group Accounting
Policies.
Cost Analysis of particle board
during the financial year
2019 by the company.
Cost Analysis of particle board
during the financial year 2019
by the company.
7 It was noticed that the
inventories are insured by the company for protection
against losses. However, we noticed that the total value of
FG and WIP was Nu.7.44 crore but insured only 3.1 crore and the total value of
wood was Nu.2.17 lakhs, resulting in shortage of
insurance cover.
We are working on
the same and comply accordingly.
On assessment of
the ground level situation we are
opinion that the Inventories are
adequate insured.
Agreed with no
further comments.
Page 71 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
8 During the review it was observed that there were no
approved minimum stock levels for each product. If such ROL is fixed, unwanted
purchases can be prevented resulting in savings in
interest on working Capital.
No further reply after the issue of the
report.
Being complied with.
Being complied with.
9 Slow moving RTA furniture
stock of RTAF identified totaling to Nu.2;
486,517.00.The said furniture is included in the stock
valuation at the same values of 2018.
No further reply after
the issue of the report.
Being complied
with.
Slow moving RTA
furniture of 2018 has been sold
during the discount sale in
2019.
10 Issues Relating to Financial Management System:
The automated links
between the branches of operating units is not possible in the
existing ERP.However; we
will study the system and implement the same.
ERP Financial
Package (Tally Accounting )implemented
from 2020 financial year.
ERP Financial
Package (Tally Accounting )implemented
from 2020 financial year.
a. INVENTORY: The company does not have an automated inventory system
integrated with all the Branches in Relation to the
size of the company, and the nature of its business Movement of stock between
the factories and branches should be tracked and
reconciled through this system. Even the manual
records are not maintained for the dispatch and receipt of goods at the other
location. In the absence of the inventory status, purchases
could not be made based on information provided by the
department and not by independent evaluation.
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Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
b. Accounting software is not integrated with branches,
inventories and sales.
The current ERP programme has
become quite old., the application and database running has
become outdated which needs to be
replaced with latest features. Redesigning and modification are
not possible in the existing ERP.
Therefore, initial feasibility studies on
SRS (system Requirement Specification) from
respective user departments are
under process. Once the total system
documentation and studies for the new integrated software
are all complete, this software will take
care of all computer related issues and we
are in the phase of implementing the same as soon as
possible.
ERP Financial Package (Tally
Accounting )implemented from 2020
financial year.
ERP Financial Package (Tally
Accounting )implemented from 2020
financial year.
Page 73 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
c. In the accounting software maintained by the company,
it‟s not able to extract the required reports like:
The list of sale, purchase and
advance are taken care of once the new integrated software is
implemented.
ERP Financial Package (Tally
Accounting )implemented from 2020
financial year.
ERP Financial Package (Tally
Accounting )implemented from 2020
financial year. i) list of Sales with Customer
name and Invoice No.
ii) List of purchase with vendor name and invoice
No.
iii) List of advances paid to parties
11
As per the policy of the company, cash holding limit
is Nu. 3 Lakh.
As noted by the
auditors, we shall comply with the
maximum cash holding limit of Nu. 300,000/-
Complied. Complied .
12 However, during the period it was noticed the average
holding was Nu. 9 Lakh, with maximum of Nu.45
Lakh and minimum of Nu. 4 Lakh in the period.
13 It was observed that the sales
of BBEL was accounted in BBPL books on a quarterly basis, as a cumulative entry,
based on the Sales accounted in BBEL books. The sale is
not accounted for all individual transaction of
inventory movement for sale to BBEL.
The management
will seek approval of the Board for the merger of BBPL and
BBEL .The above problem will not
occur once the merger is complete.
Merger of BBPL
and BBEL is under process which is
expected to be completed within
current year.
Partly done.
Page 74 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
14 It was observed that outward register or DC register along
with Invoice details was not maintained by the company, that were used to track and
monitor movement of goods outside the Head office.
As pointed out by the auditors, the
incoming and Outgoing vehicle movement register at
the security gate with invoice details for
tracking and record purpose shall be maintained. It will be
strictly monitored by Administrative
Department.
Being monitored by
Administrative department strictly.
Complied.
15
During the review of purchases, it was noticed that all purchases are received at Head Office, Goods Receipt Notice and Vehicle Inward register is not maintained at Head Office gate authorizing vehicle inward and tracking of material received. The GRN is
prepared at the factory for receipt of goods from the
Head Office. In the absence of vehicle details and inward dates, we are unable to
comment of actual receipt of material to the Head office,
further when the material is dispatched from Head Office to the Factory, Transit
challan prepared and materials are dispatched to
the factory. However, it was noticed that issuance in the
system recorded based on the GRN recorded at the Factory.
As pointed out by the auditors we shall
maintain Incoming and Outgoing vehicle
movement at the Security Gate along
with Invoice details for tracking and record purpose. It
would be strictly monitored by
Administrative Department.
Being monitored by
administrative department
strictly.
Complied
Page 75 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
16 As per service rule advance paid to staff are to be
recovered from them within the financial year. A few cases where advances are not
recovered within the FY and outstanding for more than 1
year are detailed as follows:
The same will be submitted to the
Board for directors.
Partially Complied with.
Adjusted with the settlement except
Mr.SonamNorbu of Nu.38200.00 as he did not turn up
for the settlement.
i) A K Roy-
Nu. 264,515.00 2016
ii) PemaChopel- Nu. 6,581.00 old O/S
iii) KenchoTshering –
Nu.3,368.00 “
iv) GyempoDorji- Nu.1,500.00 “
v) KinzangDorji - Nu. 2,345.00 “
vi) SonamNorbu- Nu. 38,200.00 “
17 The company has not
received the letter authorizing the shareholder‟s
representatives, where the shareholder is a body corporate to attend the
annual general meeting held on 13th March 2018, which is
violation of section 192 of the Companies Act of
Bhutan, 2016.
Henceforth, the
management will request the holding
company/other institutional shareholders to
authorize its representatives for
attending company‟s AGM in writing in
compliance to section 195 of Companies Act 2016.
Complied. Complied.
Page 76 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
18 Company has availed the Overdraft facility from Druk
PNB Ltd. To the extent of Nu. 35 million on 26th June 2018. As per section 154 of
the Company Act of Bhutan 2016. Company should
obtain the prior approval from the Board. In the Board meeting held on 25th June.
Board has directed the management to obtain the
competitive rates from other banks and seek approval of
has received the loan from the Bank on 26th June 2018. The said loan was approval
by the Board in the Board meeting held on 27th
September 2018.
The management has verbally sought the
approval of the board before OD was sanctioned/released
by the bank.
Complied. Complied
Page 77 of 78
Address: “Netaji Subhash Villa”, 18 Karunamoyee Ghat Road, Flat 3C, 3rd Floor, Kolkata-700082
Ratio Analysis Financial and Operational Ratios in respect of the company are given in the statement below:
Sl Ratio Details of Calculation 2019 2018
A Ratios for Assessing Financial Health
1 Capital Turnover Ratio (Sales / Capital Employed ) 0.34 1.11
2 Current Ratio (Current Assets/ Current Liabilities )
3.20 3.92
3 Acid Test Ratio (Current Assets other than inventories/Current Liabilities)
0.61 0.83
4 Inventory Turnover Ratio (Sales/ Average Inventories ) 1.48 1.62
5 Fixed Assets Turnover Ratio (Sales / Fixed Assets )
6.55 5.82
6 Debtors Turnover Ratio (Gross Debtors/ Sales ) X 365 29 Days
23 Days
B Ratios for Assessing Profitability
1 Return on Investment
(Profit After Tax/ Capital
Employed) X 100 (19.45)%*
(21.60)%
2 Net Profit Ratio ( Net Profit / Sales ) X 100 202.87% (12.64)%
3 Operating Ratios ( All expenses excluding Finance Cost )/ sales X 100
109.68% 112.05%
*Profit After Tax does not include income recognised towards valuation of Biological Assets as per BAS 41.This for one to one comparison with previous year figures.
Page 78 of 78