Environmental Accounting

Environmental accounting provide data which highlight both the contribution of natural
resources to economic well-being and the costs imposed by pollution or resource degradation.
Environmental accounting- sometimes referred to as “green accounting”,”resource
accounting”or integrated economic and environmental accounting-refers to modification of
the system of national accountings to incorporate the use or depletion of natural resources.

Environmental accounting is a subset of accounting proper, its target being to incorporate

both economic and environmental information. It can be conducted at the corporate level or
at the level of a national economy through the System of Integrated Environmental and
Economic Accounting, a satellite system to the National Accounts of Countries. Among other
things, the National Accounts produce the estimates of Gross Domestic Product otherwise
known as GDP. Environmental accounting is a field that identifies resource use, measures
and communicates costs of a company’s or national economic impact on the environment.
Costs include costs to clean up or remediate contaminated sites, environmental fines,
penalties and taxes, purchase of pollution prevention technologies and waste management
costs. An environmental accounting system consists of environmentally differentiated
conventional accounting and ecological accounting. Environmentally differentiated
accounting measures effects of the natural environment on a company in monetary terms.
Ecological accounting measures the influence a company has on the environment, but in
physical measurements.

Environmental Accounting in TGTDCL

Global warming potential of Natural Gas (Methane) is 22 times that potential of carbon-di-
oxide. Taking this fact into consideration and with a view to reducing wastage of natural gas
sincere efforts are made to keep the emission of gas to a minimum level during any operation
and maintenance activities. The rules and regulations of the Department of Environment are
being strictly followed while implementing transmission and distribution projects of the
company. Special care is given so that damage to the environment remains low at the time of
gas route selection. Apart from this, gas venting to the atmosphere are kept at possible lowest
level during emergency 89 Annual Report 2016-17 Combat misuse of gas, pay gas bill
regularly and maintenance operations. Efforts are always made to ensure that no spillage of
condensate occurs during collection and handling. To preserve the environmental balance, a

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large no. of trees was planted at different installations of the company under “Tree Plantation
Programme” during the year under review.

Environmental Accounting in UPGDCL

The Government of Bangladesh has laws to keep the environmental impacts associated with
electricity production and transmission in check. Environmental laws in Bangladesh are
based on the guiding principles stated in the “Bangladesh Environmental Policy 1992”. The
government enforces environmental laws such as Bangladesh Environment Conservation Act
1995, Bangladesh Environment Conservation Rules 1997 etc. for the control of air pollutant
emissions and set emissions standards for power plants. UPGDCL is committed to
conducting its business in socially responsible and environmentally sustainable manner. All
the power plants of UPGDCL have acquired the necessary clearances from the Department of
Environment (DoE), Ministry of Environment and Forest, Bangladesh and ensure compliance
to the standards and limits set forth as conditions in the said clearances/licenses/permits. The
environmental parameters such as air, quality and noise are periodically monitored by
representatives of the DoE and EPZ authorities. Thus, UPGDCL’s power plants have been
operating keeping within the standard limits. UPGDCL’s power plants are designed such that
the pollution levels adhere to all environmental regulations and pollution norms of the
country. In addition, it is working closely with the community to minimize environmental
hazards. Furthermore, UPGDCL’s power plant uses natural gas, the cleanest of all fossil
fuels, as its primary fuel thus keeping carbon emissions at minimum. The plants also employ
best-in-class; high efficiency engines that ensure complete combustion of the fuel
contributing further in reducing carbon emissions. To increase efficiency levels further
several of the engines at the power plants in Dhaka & Chittagong EPZs have exhaust gas
boilers fitted with them so that the exhaust gas can be used to produce quality steam that can
be commercially sold to export processing industries with a demand for steam. This ensures
fossil fuel saving that otherwise would have been needed to produce the steam and further
reduces carbon emission to the environment as burning of that additional fossil fuel would
have led to far greater concentration of greenhouse gases as exhaust

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Reports and Disclosure 2015 to 2016 and 2016-2017 of TGTDCL
Recognition of property, plant and equipment

Items of property, plant and equipment are stated at cost in accordance with BAS 16 :
Property, Plant and Equipment. The cost of self-constructed assets includes the cost of
materials, direct labor and other directly attributable costs. The purchase price of an asset will
include the fair value of the consideration paid to acquire the asset.

Capital work-in-progress

These expenditures will be capitalized and recognized as items of PPE when they will be
ready for intended use.

Depreciation

Depreciation has been charged on straight line method. Depreciation is charged from the date
of acquisition on the assets which is acquired within first three quarters of the year. But no
depreciation is charged on assets acquired in the last quarter of the year. No depreciation has
been charged on land and land development.

Trade receivables

Trade receivables are valued at their book value. Provision for bad debt is made at the rate of
5% on the increased amount of non-bulk Accounts Receivable during the year as per the
approval of 724th Board of Directors meeting held on 27.10.2016. But no allowance is made
on Trade receivables of bulk customers.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits

Reports and Disclosure 2015 to 2016 and 2016-2017 of UPGDCL

Capacity and production

Name of the lnstalled capacity (mwh) Actual Production (mwh) Capacity utilization (%)
Dhaka EPZ 688,000 1,032,000 465,232 749,355 68% 73% Chittagong EPZ 516,0Q0 864,000
485,'134 686,977 840/o 80% Total 1,264,000 1,896,00q 950,366 1, 436, 33.

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Number of employees

The Company has no employees an operation and maintenance activity of the Company is
managed by 168 employees of United Engineering and Power Services Limited under an
O&M contract.

Comparatives and rearrangement

Comparatives and rearrangement Previous year's figures have been rearranged, whenever
considered necessary to conform to the current year's presentation. Events after the reporting
period Events after the reporting period that provide additional information about the
Company's position at the reporting date or those that indicate the financial statement is
necessary to adjust in order to reflect true and fair view. There are no such events that
indicate that financial statement for the year ended 30 June 2017 is needed to be adjusted
except followings.

The Board of Directors in its 81st meeting held on 27 November 2017 have recommended
cash dividend @ 90Yo per share of Taka 10 each aggregating to Taka 3,266,502,282 and
stock dividend @ 10% i.e. 1 (one) bonus share for every 10 (ten) ordinary shares of Taka 1 0
each aggregating to Taka 3,629,446,980 for the year ended 30 June 2017. In accordance with
BAS 10- Events after the Reporting Period, the proposed final dividend is not recognized in
the statement of financial position.

Data Analysis

Titas Gas Transmission and Distribution Company Limited

Particulars 2012-13 2013-14 2014-15 2015-16 2016-17

Current ratio 1.46:1 1.45:1 1.40:1 1.57:1 1.35:1
Liquidity ratio 1.14:1 1.24:1 1.19:1 1.14:1 1.25:1
Return on Fixed Assets (%) 84.05 96.82 87.23 62.38 55.00
Debt equity ratio 03.97 02.98 02.98 02.98 02.98
Debt service ratio 22.67:1 43.08:1 39.12:1 27.65:1 23.94:1
Return on Capital employed (%) 26.04 25.88 20.58 13.02 10.24

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United Power Generation and Distribution Company Limited

2016-17 2015-16 2014-15 2013-14 2012-13

Current Ratio (Times) 48.99 7.08 1.29 2.41 6.47

Return on Asset (%) 29.73 44.39 20.59 18.23 29.88
Return on Equity (%) 27.91 45.14 25.98 25.27 38.51
Gross Margin Ratio (%) 70.01 69.05 64.54 69.42 72.98
Net Income Ratio (%) 72.49 70.95 55.22 52.25 61.72