TCBO 2019-20_Signed

Independent Auditor's Report and Financial Statements of TOACORPORATION: Bangladesh Office For the period ended 31 March 2020 ACNABIN Chartered Accountants BDBL Bhaban (Level-13 & 15), 12 Kawran Bazar Commercial Area, Dhaka-1215, Bangladesh. Tel: (+88-02) 410 20030 to 35 (1Level-13), (+88-02) 8189428 to 29 (Level-15) Fax: (+88-02) 410 20036, E-mail: sacnabin@bangla.ner>, Web: www.acnabin.com Branch Office Jahan Building No.7 (1st Fl), 59 Agrabad Commercial Area, Chattogram-4100, Bangladesh Tel: (+88-031) 2517352, Fax: (+88-031) 2517353, E-mail: sacnabin.cug@acnabin-bd.com> Web: www.acnabin.com bakertilly NETWORK MEMBER @ ACNABIN Cbartered Accountdnts BDBL Bhaban (Level-13 & 15) 12Kawrat Bazar Comme rcia| Area Dhaka-1215, Bangladesh. Telephone: (+88-02) 410 20030 to 35 (Level-1.3) (+88-02) 8189428 to 29 (Level-15) Facsimile: (+88 02) 410 20036 E-mail: (acnabin@bangla.net>, Web: ws'w.acnabin.com IN DEPEN DENT AU DITOR'S REPORT To the General Manager of TOA CORPORATION : Bangladesh Office REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS Opinion We have audited the financial statements of 'TOA CORPORAnON : Bangladesh Office' (the Branch), which comprise the statement of financial position as at 31 March 2020, and the statement of profit or loss and other comprehensive income and statement of cash flows for the period then ended, and notes to the financial statements, including a summary of signifi cant accounting policies. In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of 'TOA CORPORATION : Bangladesh Office' as at 31 March 2020, and its financial performance and its cash flows for the period then ended in accordance with International Financial Reporting Standards (IFRSs) as explained in note # 2to the financial statements. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). 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 Branch in accordance with the International Ethics Standards Board for Accountants'Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Bangladesh, and we have fulfilled our other ethical responsibilities in accordance with these ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of Matters Without modifying our opinion, we draw attention to- 1. Note # 2.02 to the financial statements, where the Branch disclosed the basis of reporting and preparation of the financial statements; G bakertitty Branch Office:Jahan Buiiding No.7 (1st Floor, North Side), 59 Agrabad Commercial Area, Chattogram-4100, Bangladesh. Tel: (+Sg-931; 333317352,Far (+33-6311 333317353, E-mail <acnabin.ctg@acnabin-bd.com>, Web: wwwacnabin.com NETWORK MEMBER @ ACNABIN Cbartered Accoilntdnts 2. Note # 2.L2 to the financial statements, where the Branch disclosed the accounting policy of recognizing Propefi, plant and equipment which is not in line with IA5-16: Property, plant and equipment, 3. Note # 2.24 to the financial statements disclosed the status of work permits/visa of the foreigners at on 31 March 2020; 4. Note # 13.1.1 and 13.1.2 to the financial statements, where the Branch disclosed the basis for computation of the contract revenue; and 5. Note # 18.1to the financial statements, where the Branch disclosed the issues related to non-submission of income tax return. Other Information Management is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the financial statements and our auditor's report thereon. The Branch Office is not required to publish a separate Annual Report and does not publish any Annual Report. As such, our opinion on the financial statements does not cover the other information, and we do not express any form of assurance conclusion thereon since we have not been provided with any such information. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRSs and other applicable laws and regulations, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Branch'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 Branch or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Branch's financial repofting process. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives 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 ISAs will always detect a bakertil,ty 2 G NETWORK MEI.,4BER @ ACNABIN Chartered Accot ntdnts 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 ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also: . Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances; Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management; Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Branch's ability to continue as a going concern. If we conclude that a material unceftainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's repoft. However, future events or conditions may cause the Branch to cease to continue as a going concern; and Evaluate the overall presentation, structure and content of the Branch' financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS We also repoft that: We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit and made due veriflcation thereof; In our opinion, proper books of accounts as required by law have been kept by 'TOA CORPORATION : Bangladesh Office'in its office in Dhaka; and bakertitty a a a a a a 3 G NFTWORK MET4EER @ ACNABIN Cbartered Accountdnts Dated, Dhaka t 1 APR 20n bakertitty a 'TOA CORPORATION : Bangladesh Office's Statement of Financial Position and Statement of Profit or Loss and Other Comprehensive Income dealt with by the report are in agreement with the books of accounts. ACNABIN, Chaftered Accountants Muhammad Aminul Hoque, FCA Paftner ICAB Enrolment Number: 1129 DVC : 2204LLLL29 AS51 7 806 4 G NETWORK MET4BER @ ACNABIN Cbartered Accountants Assets Non-current assets Property, plant and equipment Right-of-use assets Current Assets Contract asset Advances, deposits and prepayments Other receivable Cash and cash equivalents Tota! assets Equity and liabilities Equity Non-current liabilities Non-current lease liability Current Liabilities Current lease liability Head office current account Provision for income tax Other payables TOA CORPORATION : Bangladesh Office Statement of Financial Position As at 31 March 2020 Notes BDT 7,385,951 14,991,626 22,377,577 48,692,845 t,l5B,27o 28,t54 3,581,104 53,460,373 --75,931,95o 9.1 10,197,690 3 4 5 6 7 8 9.1 10 11 L2 4,599,181 58,553,399 2,054,933 442,747 65,640,260 Total equity and liabilities 7 .950 The accompanying notes and annexures to the financial statements are an integral paft of these financial statemenb. h,,T ILTL Administration Manager Manager ACNABIN, ChA Accountants Muhammad Aminul Hoque, FCA Partner ICAB Enrolment Number: 1129 DVC : 2204t111 29AS 5 1 7 806 Dated: Dhaka 0 6 APR 2022 bakertitty 5 G NETWORK MEMBER @ ACNABIN Cbartered Accountdnts Contract revenue Cost of contract Gross profit General and administrative expenses Operating profit / (loss) Finance expense Foreign exchange loss Profit / (loss) before tax Income tax expenses Net profit / (loss) after tax TOA CORPORATION : Bangladesh Office Statement of Profit or Loss and Other Comprehensive Income For the period from 14 November 2019 to 31 March 2020 BDT 13 t4 48,692,845 (44,082,05t) 4, 6LO,793 Gq5lqo 4,5O4,9O9 15 (220,784) (202,sq8) 4,081,6L7 18 (2,054,933) 2,026,68,4 The accompanying notes and annexures to the financial statements are an integral paft of these financial statements. 16 t7 ri+ 1+TL- Administration Manager / Manager ACNABIN, Accountants Muhammad Aminul Hoque, FCA Paftner ICAB Enrolment Number: 1129 DVC : 2204LttL29 AS5 1 7 806 Dated: Dhaka 0 6 APR 2022 bakertitty 6 G NETWORK IVEMBER I-Notdl @ ACNABIN Cbartered Accotmtants TOA CORPORATION : Bangladesh Office Statement of Cash Flows For the period from 14 November 2019 to 31 March 2020 Notes BDT Cash flows from operating activities Net profit / (loss) before tax Depreciation expense (added back) Interest not paid in cash (Increase)/decrease in accounts receivables (Increase)/decrease in advances, deposits and prepayments (Increase)/decrease in contract asset Increase/(decrease) in other payables Increase/(decrease) in provision for income tax Net cash used by operating activities (A) Cash flows from investing activities Purchase of non-current assets Net cash used in investing activities (B) Cash flows from financing activities Fund received from Head office Lease liability payment Net increase in cash and cash equivalents D=(A+B+C) Cash and cash equivalents at the end of the period Administration Manager Dated: Dhaka 0 0 APR 2022 G bakertitty 14&15 16 2,026,684 1,015,909 220,784 (28,154) (1,158,270) (48,692,845) 442,747 054 44,1 56,526,7L5 (1,307,400) 55,219,315 3,581,104 _3,58L,LO4 3 10 9 The accompanying notes and annexures to the financial statements are an integral part of these financial statements. rt-r ffiT* fur;dh General Manager 7 NETWORK t!EMBER ACNABIN Chartered Accountdnts 1.OO 1.O1 1.02 1.03 2.OO 2.01 bakertil,l,y TOA CORPORATION : BANGLADESH OFFICE Notes to the Financial Statements For the period from 14 November 2019 to 31 March 2020 Legal status and nature of the Branch Background of the Branch TOA CORPORATION is a company incorporated in Japan and engaged in the business of contracting, planning, designing, execution and supervision of civil engineering and architectural works; including consulting services. Head office of the company is located at3-7-1, Nishi-Shinjuku, Shinjuku-ku, Tokyo 163-1031, Japan. It started its business in Bangladesh by opening a Branch office namely TOA CORPORATION : Bangladesh Office (hereinafter mentioned as TOA' or 'the Branch'). It obtained permission for opening and operating Branch office in Bangladesh from the Bangladesh Investment Development Authority (BIDA) vide Ref. No. OPN-03Nov2019-00001 dated 05 January 2020 for a period of three years with effect from 14 November 2019. Registered office The registered office of the Branch is located at Concord Colosseum, 156/E Kemal Ataturk Ave, Dhaka 1213, Bangladesh. Activities of the Branch The Branch office is currently undertaking the project namely 'Procurement of Land Development Works for Bangladesh Special Economic Zone Development under Foreign Direct Investment Promotion Project', The Branch Office was appointed by Bangladesh Economic Zones Authority (BEZA) to develop 650 acres of land in Narayanganj's Araihazar to set up a dedicated industrial park for Japanese investors. The project is jointly financed by the Government of Bangladesh and Japan International Cooperation Agency (IICA). Basis of preparaUon & presentation of, and disclosure in, financial statements Statement of compliance The financial statements have been prepared on going concern basis following the accrual basis of accounting (except for Statement of Cash Flows) in accordance with the International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs) except for the International Accounting Standard (IAS) 16: Property, Plant & Equipmenf which was not followed properly. 2.O2 Basis of repofting The Branch prepares the financial statements in compliance with the requirements of International Accounting Standard (IAS) 1: Presentation of Financial Statements. It maintains the ledgers on the cash basis of accounting instead of the accrual basis of accounting. The accounts are then converted into accrual basis of accounting by manually passing the adjusting journal entres without ledger posting for the same. The financial statements of the Branch are then prepared and presented in accordance with IAS 1. 2.03 Components of the financial statements The financial statements referred to here comprise: a) The statement of financial position; b) The statement of profit or loss and other comprehensive income; c) The statement of cash flows; and d) The notes to the financial statements. 2.O4 Repoding period The financial statements have been prepared from 14 November 2019 to 31 March 2020 to be in line with the reportinq period of the parent company. The accounting period ends on 31 March each year' 8 G NETWORK MEI','IBER @ ACNABIN Cbartered Accotffitants 2.05 2.06 2.O7 bakertilty Date of authorization These financial statements have been authorised for issue by the management of the Branch on 6 April 2022. Application of standards The following IASs and IFRSS are applicable for the preparation and presentation of financial statements: Regulatory compliances The Branch Office is required to comply with the following major laws and regulations along with others as applicable: i. The Companies Act, 1994; ii. The Bangladesh Investment Development Authority (BIDA) regulations and guidelines; iii. The Income Tax Ordinance, 1984 and its Rules thereto; and iv. The VAT and Supplementary Duty Act, 2012 and VAT and Supplementary Duty Rules, 2016. Sl. No. Name of IAS/IFRS IAS / IFRS Status 1 Presentation of Financial Statements IAS 1 Comolied 2 Inventories IAS 2 N/A 3 Statements of Cash Flows IAS 7 Complied 4 Accountinq Policies, Chanqes in Accountinq Estimates and Errors IAS 8 Complied 5 Events after the Reoortinq Period IAS 10 Complied 6 Income Taxes IAS 12 Complied 7 Property, Plant and Equipment IAS 16 Partially Complied Complied 8 9 Accountinq for Govt. Grants and disclosures of Govt, Assistances IAS 20 N/A 10 The EffecG of Chanqes in Foreiqn Exchanqe Rates IAS 21 Comolied 11 Borrowinq Costs IAS 23 N/A t2 Related Party Disclosures IAS 24 Complied 13 Accountinq and Reportinq by Retirement Benefit Plan IAS 26 N/A t4 Consolidated and Separate Financial Statements tAs 27 NiA 15 nvestments in Associates IAS 28 N/A 16 Financial Instruments: Presentation IAS 32 N/A t7 Earninqs Per Share IAS 33 N/A 18 m IAS 34 19 ImDairment of Assets IAS 36 Complied 20 Provisions, Contingent Liabilities and Contingent Assets IAS 37 Complied 2t Intanqible Assets IAS 38 N/A 22 Financial Instrument: Recognition and Measurement IAS 39 N/A 23 Investment Property IAS 40 N/A 24 Aqriculture IAS 41 N/A 25 First-time Adoption of International Financial Reporting Standards IFRS 1 N/A 26 Share-based Payment IFRS 2 N/A 27 Business Combinations IFRS 3 N/A 28 Insurance Contracts IFRS 4 N/A 29 ffile and Discontinued operations IFRS 5 N/A 30 Exploration for and Evaluation of Mineral Resources IFRS 6 N/A 31 ffisures IFRS 7 N/A 32 Operatinq Seqments IFRS 8 Complied 33 Financial Instruments IFRS 9 N/A 34 ffi IFRS 10 N/A 35 Joint Arranqements IFRS 11 N/A 36 ffiEntities IFRS 12 N/A 37 Fair Value Measurement IFRS 13 Complied 38 Requlatory Deferral Accounts IFRS 14 N/A 39 ffi IFRS 15 Comolied 40 Leases IFRS 16 Complied 9 G NETWORK t4EMBER @ ACNABIN Ch art ere d Ac c ottnt ant s 2.LL 2.t2 2.08 Functional and reporting currency These financial statements are presented in Bangladeshi Taka (BDT). All financial information presented has been rounded off to the nearest integer. 2.09 Foreign currency transation The balance sheet items of the Branch are translated into BDT at the rates of exchange in effect at the balance sheet date. The income statement items for the each current month are translated and accumulated into BDT using the rates of exchange in effect at the preceding month end date. 2.10 Use of es6mates and judgments The preparation of financial statements require management to make judgment, estimates and assumptions that affect the application of accounting policies and the reported amounts of its assets, liabilities, income, expenses and disclosure of the contingent assets and liabilities at the date of the financial statements. Actual results may differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Cash and cash equivalents Cash and cash equivalents include notes and coins in hand and cash at bank. Property, plant and equipment Items of property, plant and equipment are stated at cost less accumulated depreciation, and accumulated impairment losses, if any. The cost of an item of property, plant and equipment comprises its purchase price, import duties and non-refundable taxes, after deducting trade discount and rebates, and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the intended manner. Depreciation is charged on all the assets in straight line method from the date of acquisition. The rates of depreciation are as follows: Name of Assets Rate of Depreciation Motor Vehicle 20.00o/o Moreover, the Branch does not follow International Accounting Standard (IAS)-16 for recognition of Propefi, plant & Equipment properly. The Branch follows the poliry of recognizing assets as non-current assets whose value exceeds Japanese Yen 2OO,OOO (equivalent to BDT 140,000 approx.). Assets which cost below the stated threshold have been charged as expense. The Branch has determined the minimum amount to be shown as non- current assets in order to ensure consistencf with head office accounting policy. 2.13 Right-of-use assets TOA CORPORATION : Bangladesh Office assesses whether a contract is or contains a lease based on the definition of a lease according to IFRS 16.. Leases. During the period, TOA CORPORATION : Bangladesh Office evaluated all types of contracts to assess whether a contract is or contains a lease at the date of initial application. According to IFRS 16, TOA CORPORATION : Bangladesh Office recognizes right-of-use assets and lease liabilities for all leases. At recognition, right-of-use assets were measured at the present value of the lease payments and advance deposits, discounted at the Branch's incremental borrowing rate (i.e. 9%) from the commencement dates of respective agreements. Lease liabilities were measured at an amount equal to the right-of-use assets, adjusted by the amount of any prepaid or accrued lease payments (if any). bakertitLy G NETWORK ME14BER 10 @ ACNABIN Cbartered Accountants bakertil,ty At inception of a contract, TOA CORPORATION : Bangladesh Office assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The contract involves the use of an identified asseU the Branch has the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use; and the Branch has the right to direct the use of the asset, if either the Branch has the right to operate the asset or the Branch designed the asset in a way that predetermines how and for what purpose it will be used. TOA CORPORATION : Bangladesh Office being a Lessee TOA CORPORATION : Bangladesh Office recognizes a right-of-use asset and a lease liability from the beginning of the Branch. The right-of-use asset iS initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received and present value of lease payments and advance deposits, discounted at TOA CORPORATION : Bangladesh Office's incremental borrowing rate (i'e. 9olo)' The right-of-use asset is depreciated using the straight line methods from the commencement dates of respective agreements to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement dates of respective agreements, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Branch's incremental borrowing rate. The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Branch's estimate of the amount expected to be payable under a residual value guarantee, or if the Branch changes its assessment of whether it will exercise purchase, eltension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. 2.L4 Contract revenue Contract value is the amount specified in the contract, subject to variations in the contract wor( incentive payments and claims. The contract revenue is measured at the fair value of the consideration receivable' The percentage of completion method is an application of the accruals assumption. Contract revenue is matched to the contract cost incurred in reaching the stage of completion. Revenue is attributed to the proportion of work completed, which is calculated in the following manner: Percentage of work comPletion = 2,15 Contract cost Contract costs consist of: i. Cost relates directly to the contract ii. Cost attributable to general contract activity which can be allocated to the contract iii. Any other cost which can be charged to the customer under the contract The contract cost is recognized as expense in the repofting period in which the work to which they relate is performed. G NETWORK MEN,IBER 11 Contract cost to date ACNABIN Cb artere d Accottntdnts bakertitty 2.LO Contract assets Contract assets represents the right to receive the payment in exchange for performance obligation that has been transferred to the customer and that right is conditioned on something other than the passage of time. The Branch is entitled to raise the invoice for payment when the specified criteria as mentioned in the Contract Agreement are met. 2.L7 Contract receivable/amount due from customer Contract receivable is the right to payment from the customer that is unconditional except for the passage of time, Contracts receivable represent the uncollected amounts on construction contract in progress. 2.18 Advances, deposits and prepayments Advances are initially measured at cost. After initial recognition, advances are carried at cost less adjustments or charges to other account heads. Deposits are measured at payment value. Prepayments are initially measured at cost. After initial recognition, prepayments are carried at cost less charges to profit or loss and other comprehensive income. 2.19 Provisions Provisions are recognized when the Branch has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If a transfer of economic benefit is no longer probable the provision is reversed. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditure required to settle the obligation. 2.20 Events after the repofting period Events after the reporting date that provide additional information about TOA CORPORATION: Bangladesh Office's financial position at the reporting date are reflected in the financial statements. Events after the reporting period that are non-adjusting events are disclosed in the notes when material. 2.2L Correction of errors If any error is identified to have taken place in previous years, management corrects the same as per IAS 8: Accounting Policies, Changes in Accounting Estimates and Enors. 2.22 Related party disclosure The entity has entered into transactions with other entities in normal course of business that fall within the definition of related party as per Interntaional Accounting Standard 24: Related Party Disclosures. 2.23 Statement of cash flows 2.24 Statement of Cash Flows is prepared principally in accordance with IAS 7 i Statement of Cash Flows . The statement shows the pattern of changes in cash and cash equivalents during the reporting period. Statement of cash flows has been prepared under indirect method. Status of work permits/visa of the foreigners at on 31 March 2020 Foreign employees involved in TOA Corporation had A3 visas as at 31 March 2020. These VISAs were recommended by Bangladesh Economic Zones Authority (BEZA). In Bangladesh, A3 visa is issued to experts / advisers / officials / staff members / labors working in any project under the bilateral / multilateral agreement between Bangladesh Government and development patner agencies. * * o ,r. G NETWORK l..4Et!4BER L2 @ ACNABIN Chartued Accountdnts bakertitty 3 Propefi, plant and equipment Cost Opening balance Add: Addition during the period Less: Disposal during the period Closing balance B. Accumulated depreciation Opening balance Add: Charged during the period Less: Depreciation of disposed assets Closing balance C. Written Down Value (A-B) A schedule of non-current assets is presented in Annexure - A 4 Right-of-use assets A. Cost Opening balance Add: Addition during the period Less: Disposal during the period Closing balance B. Accumulated depreciation Opening balance Add: Charged during the period Less: Depreciation of disposed assets Closing balance C. Written Down Value (A-B) A schedule of right-of-use asset is presented in Annexure - B 5 Contract asset Contract revenue for the period Adjustments during the period Closing balance 6 Advances, deposits and prepayments Advance and prepayments Security deposit Closing balance 5.1 Advance and prepayments Advance against office rent Closing balance 6.2 Security deposit Security deposit against office rent Closing balance A. 31 March 2020 BDT 71385a9E L4,99L,626 Note 6.1 6.2 o 'a 7,520,000 t34,049 75,873,487 BB1,860 45,870 1 G NETWORK ME14BER 13 @ ACNABIN C b art er e d A c c o u ttt d nt s 31 March 2O2O BDT 7 Other receivable Jamuna Site Fund Closing balance 8 Cash and cash equivalents Cash in hand Cash at bank Closing balance 8.1 Cash at bank Standard Chartered Bank 9 Lease liability Opening balance Add: Addition during the period Add: Interest expense Less: Payment during the period Closing balance 9.1 Classification of lease liability Current lease liabilitiy Non-current lease liabilitiy Closing balance 10 Head office current account Opening balance Operational fund borrowed from head office Costs incurred by head office in connection with the projects and Bangladesh Branch Office Profit / (Loss) for the period Closing balance 11 Provision for income tax Add: Provision for the year Less: Payment during the period Closing balance L2 Other payables Withholding VAT payable Withholding tax payable Welfare expense payable Power, fuel and utilities payable Salary payable bakertilty Note 8.1 444,664 L5,873,487 220,784 181 1 t97 24,6L5,385 31,91 1,331 186, 163,850 15,919 34,820 G NETWORK I.4E14BER t4 ACNABIN Cbartered Accountants 13 13.1 bakertitty 14 November 2019 to 31 March 2020 BDT .692.845 Contract revenue Contract revenue Computation of contract revenue Total project contract revenue (excluding VAT) Less: AIT Less: Contingent consideration Net project contract revenue Total budgeted contract cost Actual project expenditure incurred up to the reporting period Stage of work completaon Total revenue (Total contract revenue x stage of work completion) Revenue for the previous period Revenue for the current year Note 13.1 13.1.1 t3.t.2 48,692,845 _____48,fP2,845_ 13.1.1 Bangladesh Economic Zones Authority (the Employer) notified the acceptance of the Bid vide letter # 03.07.0000.053.11.016.2019-115 dated 31 December 2019 amounting to equivalent BDT 10,814,524,32t (BDT 7,728,797,682 and JPY 4,809,297,638) inclusive of AIT and VAT (equivalent BDT 10,145,194,320 excluding VAT). The individual prices and rates quoted in the Bid by the Branch were excluding of local income tax and VAT, and the appropriate allowance for the same were added in the Grand Summary page of the Bills of Quantities which then will be deducted by the Employer according to paragraph 4.25,3 of the Contract Agreement. However, at the time of determining the base for AIT and VAT, the Employer calculated the AIT and VAT on the Bid price without grossing up the base value and eventually finalized the Contract value. Since the AIT (and VAT as well) will be borne by the Employer ultimately and the management of the Branch is confident that the Branch will be able to avail the exemption of income tax on this project, the AIT amounting to BDT 705,295,055 is excluded in determining the Net project contract revenue. 13.1.2 The contingent consideration amounting to BDT 2,885,752,677 comprises the Price contingency, Physical contingency, Total Daywork and Specified Provisional Sum amounting to BDT983,121,988, BDT858,172,659, BDT 727,066,757 and BDT 917,391,273 respectively as stated in the Grand Summary page of the Bills of Quantities. It has been subtracted in determining the Net project contract revenue for being the contingent consideration amounts. L4 Cost of contract Design cost Duties and taxes Entertainment expenses Freight House rent and maintenance expense Insurance Miscellaneous Office supplies Performance guarantee fee Postage and telecommunication Power, fuel and utilities Salary and wages Subcontract Subscription fee Tools, hardware and fixtures Travelling expenses Vehicle rent and maintenance expense Welfare expenses Depreciation expense 10,t45,194,320 (705,295,055) 44,408,719 O.74o/o 209,125 248,938 74,829 377,28t 736 7,977,575 440,L76 9,924,891 57,822 28,1 10 17,212,330 4,140,000 2,000 1,563,L44 4,508,398 284,288 1,467,458 ,764 G NETWORK I'4EMBER 15 15 18.1 Income tax expenses Income tax expenses 16 L7 18 General and administrative expenses Power, fuel and utilities Welfare expenses Depreciation expense The general and administrative expenses include inter alia indirect costs of contract attributable to the construction of civil works for soil improvement, land development and retaining wall etc. as well as Branch Finance Expense Interest expense on lease liability 220,784 220,784 Foreign exchange (gain)/loss Foreign currency exchange Loss Note 18.1 National Board of Revenue (NBR) served the notice on 16 January 2022 under section 93 mentioning that, NBR has reason to believe that it escaped tax payable for the assessment year 2020-21 as the income tax return was not submitted on time for income year 2019-20, and under section 130 for hearing, showing the causes that why the penalty under section 124 shall not be imposed. However, under the existing circumstances, the outcome/consequence of the above-mentioned issue is remote. As such, the Branch did not recognize any provision on the same. 19 Related party transactions (Amount in BDT) G bakertitty 14 November 2019 to 31 March 2020 15,919 745 Name of the related parties Relationship with the entiW Nature of transaction Transaction during the period Balance as at 31 March 2O2O TOA CORPORANON Head Office Ooerational fund borrowed 24.615.385 24,615,385 TOA CORPORATION Head Office Ooeratino exDenses 31.911.331 NETWORK t'4El{BER 16 @ ACNABIN Cbartered Accountants S> *o N"Z F> Str :.r $z 6\ ET o o =. @ z : o = TOA CORPORATIOI{ : Bangladesh Office Schedule of Property, plant and equipment As at 31 March 2O2O Annexure-A Amount in BDT PARTICULARS cosr DEPRECIATION Written down value Opening balance Addition during the year Disposal during the year Closing balance Rate Opening balance Charged during the year Depreciation of disposed assets Closing balance Motor Vehicle 7,520,000 7,s20,000 20o/o t34,049 L34,049 7,395,951 7,52O,OOO 7,S2O,OOO L34,O49 L34,O49 7,38s,951 t- t7 e> to N.Z t> 3tr S.r *z 6 ET o o =. @ z e o 3 TOA CORPORATION : Bangladesh Office Schedule of Right-of-use Assets As at 31 March 2O2O Annexure-B Amount in BDT PARTICUI.ARS cosr DEPRECIATION Written down value Opening balance Addition during the vear Disposal during the vear Closing balance Rate Opening balance Charged during the year Depreciation of disposed assets Closing balance Right-of-use assets L5,873,487 t5,873,487 881,860 881,860 L4,99t,626 18