2016 ANNUAL

REPORT

Dhaka Electric Supply Company Limited

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About us 2

Footsteps toward progress 4

Products and services 5

Performance at a glance 6

Corporate Information 7

Technical and commercial Highlights 9

Notice of AGM 11

Vision and Mission 13

Chairman’s Message 14

Directors’ Profile 18

Managment 22

Directors’ Report 25

Events Highlight 41

Moments with the shareholders 46

Award and recognition 47

Audit Report and Financial Statements 49

Corporate Governance Compliance Certificate 78

Electricity Tariff Rates 86

About Us
As a part of on-going Power Sector Reforms by
way of unbundling the power sector and increasing
efficiency in the area of generation, transmission
and distribution, Dhaka Electric Supply Co. Ltd.
(DESCO) was created as a distribution company
in November 1996 under the Companies Act 1994
as a Public Limited Company with an Authorized
Capital of Tk. 5.00 billion. However, the operational
activities of DESCO at field level commenced on
September 24, 1998 by taking over of the electric
distribution system of Mirpur area from erstwhile
Dhaka Electric Supply Authority (DESA). During
inception consumer strength was 71,161 and a
load demand 90 MW. In the subsequent years of
successful operation and better performance, the
operational area of DESCO was expanded through
inclusion of Gulshan Circle in April, 2003 and Tongi
Pourashava Area in March, 2007.
Brief History
The electricity supply industry in South Asia
started with the commissioning of the first power
station in the 1890s. The first effort to structure
a legal framework for the industry came in 1910
with the enactment of the Indian Electricity Act,
1910. In 1947, at the time of independence of India
& Pakistan, the installed generating capacity in
the then East Pakistan was only 21 MW.
In an effort to expeditiously augment generation
capacity to feed a developing economy, the then
Government of Pakistan issued an ordinance in
1959 creating the East Pakistan Water and Power
Development Authority (EWAPDA). Shortly after
the creation of an independent Bangladesh, in
1972, the first Government of Bangladesh, in an
effort to speed up the investment in the sector
issued an Ordinance creating the Bangladesh
Power Development Board (BPDB) as the
successor organization of the power side of
EWAPDA.
In order to intensify the pace of rural electrification,
the Government issued an ordinance in 1977
establishing the Rural Electrification Board (REB).
In 1990, another ordinance was issued, which
was subsequently enacted as an Act transferring
the 132 KV, 33 KV Transmission and distribution
system in the Greater Dhaka Area including the
Metropolitan City to a newly created Government
agency called the Dhaka Electric supply Authority
(DESA).
Although several ordinances amending the
Electricity Act, 1910 had been promulgated,
none of them addressed issues involving the
commercial nature of the sector, which continued
to be treated as an extension of the Government
providing social goods for the people. From
1986 onwards, the commercial performance of
the BPDB deteriorated and during 1991, BPDB,s
average gross systems loss was about 42 percent
and accounts receivables in excess of 6.5 months
of billing.
As part of the “Reforms-Funding” linkage agreed
between the development partners and the
Government, the implementation of Part (C)
of the Project has been linked to redefining
the franchise area of DESA and handing over
of distribution networks outside Metropolitan
Dhaka City to PBSs under REB, and formation
of a corporatized Dhaka Electric Supply company
(DESCO) which will initially take over part of the
distribution network of DESA and ultimately take
over all its assets.
The formation of this company is seen as an
essential step towards “corporatization and
commercialization” of the sector and to reduce the
excessive inefficiency in the distribution network
in the capital. Due to paucity of financial resources
with the Government, there is an urgent need to
induct private sector participation in the power
sector. This participation will not be forthcoming
unless the financial inflow to the sector enables
the sector to earn a positive return. Since cash
inflows to the sector come only from distribution
agencies. There is an urgent need to improve their
efficiencies, if private sector investments are to
be attracted in any part of the power system.
The Dhaka area is the largest single distribution
territory consuming about 50 percent of the total

electricity sold in Bangladesh. DESA, which is the
distribution agency for the Dhaka area has a
poor performance record with respect to system
losses and accounts receivables. Although the
performance has improved considerable since
1992 on account of intensive monitoring, there is
a limit to the gains that can be made and it is
felt that further progress can be achieved on a
sustainable basis only if there is a change in the
business environment, both external and internal
to the organization, which will enable introduction
of more sophisticated control and management
systems, and also organizational accountability.
ADB observed that the prevailed organizational
arrangements including management
structure, employee compensation, delegation
of authority, conduct, discipline and appeal
rules and promotion policies are based on the
civil service rules which was not well suited
to the functioning of a commercially oriented
sector such as the power sector. It is therefore
necessary to create new organization with its
own rules and regulation that is more suited to
the new business environment that is now being
created in the power sector.
The new company (DESCO) is being created as a
public sector company, incorporated under the
Companies Act 1994 as a subsidiary of DESA.
However, shares of the company offered to the
private sector, other power sector entities and the
general public to make the DESCO’s management
more responsive to its consumers.
Annual Report 2016 3
Service Territory
The company obtained license from Bangladesh
Energy Regulatory Commission (BERC) for
distribution of 850 MW of Electricity at the area
bounded by (i) Balu River including Purbachal New
Town in the East (ii) Turag and Balu River including
Tongi Pourashava in the North (iii) Turag River in
the West and (v) from Amin Bazar Bridge to Mirpur
Road, Agargaon Road, Agargaon-Old Airport link
Road, New Airport Road, Mymensing Road, Tongi
Diversion Road, Mohakhali Jheel, Rampura Jheel
connected with Balu River in the south. The total
area is around 400 square kilometers. As per the
License, DESCO can receive power at 132KV &
33KV voltage level sand distribute the power at
33KV, 11KV & 0.4KV voltage level.
Our shareholders
In 2006 we were listed with the Dhaka and
Chittagong Stock Exchanges. Government of
Peoples’ Republic of Bangladesh holds 75% of
the shares represented by Bangladesh Power
Development Board and abolished DESA. 17.11%
shares hold by the Institutional investors and rest
of the 7.89% shares owned by other shareholders.
Our People
More than 1500 people directly employed
and around 1700 people indirectly employed
(outsourced) for the services of Commercial
Operation Support, Line and Equipment
Maintenance, Substation Maintenance, Office
Security and Office up keeping. It’s the people who
brings the progress of the company every day.
 Footsteps toward progress
1996 2008
Journey Begins on November 3 through getting Inauguration of e-Governance System
Certificate of Incorporation.
Inauguration of Data Acquisition System
Held First Board Meeting
2010
1998 Introduction of electronic bill payment system
Takeover of Mirpur Circle from erstwhile DESA
and Commencement of operation 2012
Digitization of New Electric Connection
2003 Procedures
Takeover of Gulshan Circle from erstwhile DESA
2013
2004 Successful completion of ADB funded projects
Establishment of Sales and Distribution Divisions under SPSDP; 462 MVA distribution capacity
enhanced
2005
Establishment of Prepaid Meter Production Unit 2014
in collaboration with BUET Establishment of Live Payment Gateway
Inception of New ADB funded projects under
Inauguration of Prepaid Metering System
PSEEIIP; 1200 MVA Grid Capacity & 1988 MVA
distribution capacity will be enhanced.
2006
Company Listed in Dhaka Stock Exchange Ltd.
and Chittagong Stock Exchange Ltd.
2015
Introduction of foreign training of the employees
of the company
2007
Takeover of Tongi Pourashava area from
erstwhile DESA
2016
ISO 9001:2008 Certification of the Company for
Obtained Distribution License from Bangladesh Quality Management system.
Energy Regulatory Commission (BERC)
 Annual Report 2016 5
Products and Services
Post Paid connections
230 Volt Single Phase (up to 7kw load demand)
400 Volt Three Phase (above 7kw to 49kw load demand)
11 Kilo Volt High Tension (above 49kw - 5mw load demand)
33 Kilo Volt High Tension (above 5mw load demand)

Pre-Paid connections
230 Volt Single Phase (up to 7kw load demand)
400 Volt Three Phase (above 7kw to 49kw load demand)

Services
Providing Temporary and permanent electric connection
Customer requested shutdown
Customer requested Disconnection and Re-connection
Transformer Rental
Electric Line Accessories Supply
Electric Line and Substation related Services
Customers’ Meter Testing, Installation and Inspection Services
Feasibility Study for line expansion
Customer Solar Panel inspection
Tariff Change service
Electric Bill re-print and delivery
Delivery of Bill payment statements and Certificate
Prepaid Card issue and re-issue
Customer Service Cable Change
Customer Meter Change (with or without accessories)
Annual Inspection of Customers’ Transformers and associated equipment
Servicing of Customer Transformers and associated equipment (if required)
Rental of Trolley mounted transformers (for maximum 30 days)

Post Paid Bill Payment Services

Bill collection booths adjacent to the respective sales and distribution division
Almost every branches of every bank within the distribution territory of the Company
Online bill collection through Debit and Credit Cards
Payment through Mobile Banking
Bill payment through mobile phone operators
Bill payment through live payment gateway

Pre-paid meter Recharge Service

Pre-paid meter recharge through vending stations
6 Annual Report 2016

Performance at a glance

Revenue from Operation Commercial Others

10% 3%
31,890
27,966
35,000 24,993
22,242
30,000
Million Taka

Residential
25,000 16,251 Industrial 50%
37%
20,000

15,000
2011-12 2012-13 2013-14 2014-15 2015-16
Financial Year Consumption Pattern

Current Ratio Consumer Growth

4.00

Number of Cunsumer
3.49 760844
3.50 705234
3.02 641933
Percentage

3.00 2.73 573356

504723
2.40 2.31 2.41
2.50

2.00
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2011 -12 2012 -13 2013 -14 2014 -15 2015 -16

Financial Year Financial Year

Net Asset Value per Share Contribution to the Exchequer 1,961

1,773
2,000
50 45.98 1,561
1,800 1,515
45 40.54
38.89 1,600 1,370
MTk.

40 35.97
32.82 34.16 1,400
Taka

35
1,200
30
25 1,000
2011-12 2012-13 2013-14 2014-15 2015-16
20
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Financial Year
Financial Year

Consumer Number Net Profit

Commercial Others 1,800 1,635
Industrial 1,478
1% 7% 2% 1,600
1,400
Residential 1,200
1,000 839 805
MTk.

Industrial 669
800
Commercial 446
600
Others 400
200
Residential -
90% 2010 -11 2011 -12 2012 -13 2013 -14 2014 -15 2015 -16

Financial Year
 Corporate Information
Board of Directors Management
Chairman Brig. Gen. Md Shahid Sarwar, ndc, psc (Retd.)
Md. Mahbub-ul-Alam, ndc Managing Director
Md. Rofi Uddin
Directors Executive Director, Finance & Accounts
Brig. Gen. Md Shahid Sarwar, ndc, psc (Retd.)
Engr. A. K. M. Mostafa Kamal
Brig. Gen. (Retd.) Md. Nazrul Hasan Executive Director, Procurement
Selim Abed Engr. Noor Mohammad
Engr. Ataul Mahmud Executive Director, Operation
Dr. Ahsan Aktar Hasin Md. Abdullah Al Masud Chowdhury
Executive Director, Human Resources
Minhajuddin Ahmed
Engr. Jagadish Chandra Mandol
Md. Anisur Rahman
Executive Director, Engineering

Independent Directors
Head of Internal Audit
Kazi Rowshan Akhter
S. M. Zamil Hussain
A. K. M. Humayun Kabir
Engr. Md. Rabiul Hasnat Statutory Auditors
ARTISAN, Chartered Accountants
Company Secretary
Engr. Zulfiquar Tahmid Governance Auditors
Rahman Mostafa Alam & Co., Chartered Accountants
Board Audit Committee
Major Banking Partners
A. K. M. Humayun Kabir Dhaka Bank Ltd.
Engr. Md. Rabiul Hasnat Janata Bank Ltd.
Pubali Bank Ltd.
Md. Rofi Uddin Rupali Bank Ltd.
Engr. Zulfiquar Tahmid Agrani Bank Ltd
Standard Chartered Bank Ltd.

Registered Office
Dhaka Electric Supply Co. Ltd
22/B Faruk Sarani, Nikunja-2, Khilkhet, Dhaka – 1229, Bangladesh
Tel 88 02 8900110-11, 8900220-23 (PABX), 02 8900330 (Direct), Fax 88 02 8900100
e-mail csdesco@desco.org.bd, www.desco.org.bd
Technical and
Commercial
Highlights
 Annual Report 2016 9
Technical and Commercial Highlights
Technical
Particulars 2011-12 2012-13 2013-14 2014-15 2015-16

132/33 KV Grid Substations 2 2 2 2 2

33/11 KV Sub-station (No) 25 26 30 30 32

Capacity of 33/11 KV Sub-Station (MVA) 980/1,372 1,080/1,512 1,200/1,680 1,250/1,750 1,420/1,988

Maximum Demand (MW) 715 726 786 845 861

33KV Overhead Line (CKM) 83 83 83 89 108.80

33KV Underground Line (CKM) 295 316 322 327 348.89

11KV Overhead Line (KM) 1,084 1,122 1,204 1,266 1321.66

11KV Underground Line (KM) 390 434 438 456 480.58

LT Line (KM) 1,775 1,838 1,936 1,978 2033.24

Distribution Transformer (No.) 5,227 5,215 5,672 5,932 6315

Commercial

Particulars 2011-12 2012-13 2013-14 2014-15 2015-16

Energy Import (MKWh) 3,401.59 3,726.31 4,064.19 4,320.98 4,795.12

Energy Sales (MKWh) 3,111.12 3,411.91 3,722.23 3,959.46 4,410.20

Energy Import (MTk) 13,327.74 20,393.48 22,898.05 24,344.81 28,956.57

Energy Sales (MTk.) 15,961.96 21,951.48 24,431.03 27,358.15 31,478.24

System Loss (%) 8.54 8.44 8.41 8.37 8.03

Collection Ratio (%) 98.54 100.93 100.53 101.48 101.34

C.I. Ratio (%) 90.13 92.40 92.07 92.99 93.21

Consumer Nos. 504,723 573,356 641,933 705,234 7,60,844

Receivable/Sales (%) 18.54 14.49 13.60 12.79 12.79

Notice of the 20th
Annual General
Meeting
 Annual Report 2016 11

Registered Office:
POWER IS YOURS 22/B, Faruk Sarani, Nikunja-2,
Dhaka Electric Supply Company Limited Khilkhet, Dhaka-1229.
ISO 9001:2008 Certified Visit us at : www.desco.org.bd

Notice of the Annual General Meeting

This is for notification of all concerned that the 20th Annual General Meeting of Dhaka Electric Supply
Company Ltd will be held on Saturday, January 7, 2017 at 10 am at PSC Convention Hall, Police Staff
College, Mirpur 14, Dhaka 1216 to transact following business:
1. Consideration and adoption of the Directors’ Report and Audited Financial Statements of the
Company for the year ended June 30, 2016 together with the Auditors’ Report thereon.
2. Declaration of Dividend for the year ended June 30, 2016
3. Election/re-election of Directors
4. Appointment of Auditors for the year 2016-2017 and fixation of their remuneration.
Members of the company are requested to kindly make it convenient to attend the meeting.

By order of the Board

December 11, 2016

sd/-
Engr. Zulfiquar Tahmid
Company Secretary
Notes:
a) Shareholders whose names appear on the Depository Register on the ‘record date’ i.e.
November 17, 2016 shall be eligible to attend the Meeting;
b) Eligible shareholder wishing to appoint a proxy must deposit the proxy form, duly stamped, at
registered office of the company by January 5, 2017 during office hours;
c) If non-receipt of annual report, sent through courier service, shareholders may collect the
annual report from registered office or collect from the website of the company;
d) No children will be allowed in the AGM;
e) Registration counter will remain open from 8 am to 10 am on the meeting day.

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12 Annual Report 2016

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Vision
To be an enabler of economic development and
social progress by providing safe, reliable and
sustainable electricity.
Guiding Principles
Safety: Placing the safety of our communities,
Customers and employee first;
Customer Focus: Providing superior service to
help customers more effectively manage their
use of electricity;
Community Focus: Being an integral part of the
communities in which we live, work and serve;
Operational Excellence: Incorporating continuous
improvement to deliver safe and dependable
electricity at affordable prices;
Performance Driven Culture: Fostering a strong
values and performance based culture designed
to attract, develop and retain best talents.
Annual Report 2016 13
Mission
Bringing comfort to customers, supporting
business and commerce and building strong
communities. Achieving and maintaining the
highest degree of efficiency, reliability and
responsiveness for variety of customers.
Values
Integrity
Maintain honesty, transparency and strong moral
principles in all activities.
Respect
Admire the customers’ needs and provide service
to them in a way that suits best within the
regulatory framework.
Innovation
Drive to discover new ways to turn ideas into
tangible reality. Relentless pursuit of technical
excellence and willingness to adopt state of
art technology in quality power supply, energy
conservation and utilization of renewable energy.
Commitment to Sustainability
Always remain vigilant for growth and prosperity
with sustainability.
14 Annual Report 2016
Chairman’s Message
P
ower is the most essential element for the
development of a nation. It is the blood
line of industrialization, trade and social
development as well. Dhaka Electric Supply
Company Ltd. (DESCO) is one of the pioneering
company in power sector which is engaged to
supply power to the densely populated northern
part of the capital and its adjacent area. Our
efforts are centered in better customer service,
uninterrupted quality power supply and addition
of value to its different stakeholders.
You are aware of that Government of Bangladesh
has ‘Vision 2041’ to become a high-income
country by 2041. In order to achieve that goal
Power Division, Ministry of Power, Energy and
Mineral Resources prepared a Power System
Master Plan 2016 with the assistance of Japan
International Co-operation agency which will be
finalized soon. In line with the planning, Ministry
has taken variety of programs to improve power
production situation. There are short-term, mid-
term and long-term planning which are also
entangled to achieve Sustainable Development
Goals (SDGs) set by United Nations.
The company has 8% of market share of power
distribution business in the country. During last
financial year energy purchase and sale both
increased by 18.94% and 14.26% respectively
due to enhanced power generation in the
country. Although in last year the company
reduced the operating cost by 1.78% but due
to unfavorable tariff rate, that did not reflect
in the profitability. Net profit was Tk. 44.61
crore last year whereas the profit of previous
year was Tk. 163 crore The EPS is Tk. 1.12,
Net Asset Value per share Tk. 37.04 and Net

We are committed to our
customer to ensure better
service and bring positive
change in the society through
delivering values to the
stakeholders.
Md. Mahbub-ul-Alam
Chairman
Board of Directors
Operating Cash Flow perShare Tk. 8.23 for last
financial as against Tk. 4.11, Tk. 32.53 and Tk.
7.88 respectively for the previous financial year.
Reduction in operating income and interest
income are the main reason of fall in rate of
profit. Considering business performance,
future investment requirement and stability in
growth, the Board has recommended total 10%
cash dividend for the financial year 2015-16. In
last financial year DESCO contributed Tk. 195
crore to the Government Exchequer.
The company continued its investment in
infrastructure development, system stability,
capacity building, Safety and Security of people,
materials and equipment and the system as a
whole. There are several projects for construction
of Grid Substations, Distribution Substations,
Underground Grid Network, Renovation or up-
gradation of Distribution Network, Installation
of Supervisory Control and Data Acquisition
Annual Report 2016 15
System, Modernization of Grid Substations,
Modernization of Metering System, Application
of Geographical Information System,
Development of Human Resources, Adoption of
State of Art Information Technology etc.
Although the company has a monopoly
business but it faces several challenges. Tariff
of Electricity determines the profitability of the
company which is beyond our control. DESCO
could not made significant profit this year due
to unfavorable tariff rates. Other challenges
like timely implementation of the projects,
Construction of its own head office building,
maintaining high standard of ethics and
morale of the employee. In order to face the
challenge DESCO has already submitted tariff
enhancement proposal to BERC, follow the time
bounded action plan for project implementation,
engaged consulting firm for construction of
head office building and extensive training of
the employee in line with national integrity
strategy.
Board of Directors is comprised of eleven
members. There are three independent directors
among them. Most of the Directors are from the
Power Division, Ministry of Power, Energy and
Mineral Resources, Government of the Peoples’
Republic of Bangladesh. Managing Director of
DESCO is the only executive director in the
Board. Main role of the Board is to consider and
approve different business proposals and policy
support to ensure sustainable growth and
protect the greater interest of the company.
In this journey, we are thankful to Government
of the Peoples’ Republic of Bangladesh, our
development partners Asian Development Bank
(ADB), Asian Infrastructure and Investment
Bank (AIIB), Japan International Cooperation
Agency (JICA), Asian Institute of Technology
(AIT), Thailand for their heartfelt cooperation.
Our sincerest appreciation is extended to our
stakeholders and our people for their firm
commitment and dedication.

 Md. Mahbub-ul-Alam
 Chairman, DESCO Board
16 Annual Report 2016
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Directors’
Profile
18 Annual Report 2016
Directors’ Profile
Md. Mahbub-ul-Alam, ndc
appointed as Director and
Chairman of DESCO Board in
October 22, 2015. He is the
Additional Secretary
(Development) of Power
Division, Ministry of Power,
Energy and Mineral
Resources, Government of
the People’s Republic of
Bangladesh. Prior to his current responsibility he
was Joint Secretary (Admin.) of Power Division and
Director, Implementation Monitoring and Evaluation
Division, Ministry of Planning, GoB. At present he is
also working as Chairman of the Board of Directors
of North-West Zone Power Distribution Company
Limited. He is also nominated Director of the
Bangladesh-India Friendship Power Company Ltd.,
Coal Power Generation Company Bangladesh
Limited and Dhaka Metro Rail Company Ltd. He has
completed his Masters of Science Degree in Botany
in 1983. Soon after he joined Bangladesh Civil
Service in January, 1986. He has passed National
Defence Course from National Defence College,
Dhaka. He also participated a training program
titled Managing at the Top 2 (MATT-2) in Bradford
University, UK and Management course in Duke
University, USA. He also participated in different
courses in Asian Institute of Technology (AIT) and
Mahidal University in Thailand and BRAC University,
Bangladesh. He also participated in training course
on Public Procurement in Engineering Staff College,
Bangladesh. He has around 31 years of experience
in different capacity of government service.
Brig. Gen. Md Shahid Sarwar,
ndc, psc (Retd.) joined as
Managing Director of the
Company as well as ex-
officio Director of DESCO
Board on December 30,
2014. He is also a nominated
director of Dhaka Power
Distribution Company Ltd
(DPDC). He is a Graduate in
Electrical and Electronics Engineering from
Bangladesh University of Engineering and
Technology (BUET). Brig. Gen. Sarwar served
Bangladesh Army for 34 years in different
capacities of military and civil administration. He
passed National Defence Course from National
Defence College in 2010. He participated in
different Engineering courses in home and abroad.
He served as Director of Electrical and Mechanical
Engineers (DEME) under Army Headquarters. Brig.
Gen. Sarwar was the Deputy Managing Director of
Bangladesh Machine Tools Factory (BMTF); Deputy
Commandant of Bangladesh Ordnance Factories;
Director Administration in Directorate General of
Forces Intelligence (DGFI); Joint Secretary of
Defence Ministry of People’s Republic of
Bangladesh. He also served in United Nations
Peace Keeping Missions in 1994 (Mozambique)
and 2003 (East Timor). He is an alumni of Mirzapur
Cadet College.
Kazi Rowshan Akhter is
Director of DESCO Board since
June 16, 2016. She is Additional
Secretary, Power Division,
Ministry of Power, Energy and
Mineral Resources,
Government of Bangladesh.
She joined in Bangladesh Civil
Service (BCS) in early 1988.
She worked in the field
administration in Jessore and Brahmanbaria till
1992. Afterward she served in Cabinet Division,
Ministry of Education, Prime Ministers’ Office, Ministry
of Public Administration, NGO Affairs Bureau, BCS
Admin Academy, Bangladesh Chemical Industries
Corporation in different capacity for 28 years. She
obtained Hons and Master’s Degree in English from
Dhaka University in 1983. She also completed
Masters in Governance Studies from Northern
University, Bangladesh in 2008.
Brig. Gen. (Retd.) Md. Nazrul
Hasan was appointed as
Director DESCO Board on
March 8, 2012. Currently he
is the Managing Director of
Dhaka Power Distribution
Co. Ltd. (DPDC) and
nominated director of
Electricity Generation
Company of Bangladesh Ltd. (EGCB). Earlier he
was Chairman of Dhaka Electric Supply Authority

(DESA) as well as Chairman of DESCO Board from
2006 to 2008. After passing Higher Secondary
School Certificate from Rajshahi Cadet College he
was commissioned as officer of Bangladesh Army
in 1979 of 1st BMA Long course. Subsequently, in
1985 he got Bachelor of Science in Electrical and
Electronics Engineering from Bangladesh
University of Engineering and Technology (BUET).
After that he graduated in Chinese Language
from Beijing Language and Cultural University,
China in 1990. He completed his MBA Degree with
Gold Medal from American International University
Bangladesh in 2009. In his professional career he
served Bangladesh Army as workshop officer,
Instructor Class ‘B’, Deputy Assistant Adjutant &
Quarter Master General & Interpreter (Chinese) of
Project M-87, Group Officer, Officer Commanding,
Assistant Director (inspection and Technical
Development) , Commandant, Director welfare
and rehabilitation and Director Electrical and
Mechanical Engineering in Army Head Quarter. For
his outstanding performance in service and use of
indigenous method and local resource he received
Chief of Army Staff Commendation with Medal (A
Highest Award from Chief of Army Staff). He was
also served as General Manager (Planning and
Training) and acting Deputy Managing Director
Bangladesh Machine Tools Factory Ltd. He also
participated in United Nations Peace keeping
Mission in Mozambique as Workshop Platoon
Commander in 1993.He was also Director of Trust
Bank Ltd., Trust Technical Training institute,
Bangladesh Machine Tools factory Ltd.,
Bangladesh Diesel Plant Ltd., Trust Overseas
Recruiting Agency & Trust Bank Investment Ltd.
under Bangladesh Army. He has around 36 years
of experience in different organization of
Bangladesh Army & Power Sector of Bangladesh.
A.K. M. Humayun Kabir is a
Joint Secretary, Company
Affairs, Power Division,
Ministry of Power, Energy
and Mineral Resources of
the Government of the
People’s Republic of
Bangladesh. He is an
Independent Director of
DESCO Board and Chairman of the Audit
Committee. He joined in DESCO Board on
Annual Report 2016 19
September 12, 2012. He is also a nominated
director of North West Power Generation Company
Ltd (NWPGCL). He started his career in 1991 in the
BCS Administration Cadre. He has wide experience
in the area of management. He has attended a
good number of training at home and abroad.
Earlier in 1985 he completed his post-graduation
in Management from Dhaka University. He also
participated a training program titled Managing
at the top 2 (MATT-2) organized by Bangladesh
Civil Service Training Centre in collaboration with
Department of International Development (DFID),
UK in 2012. He has 25 years of exposure in
Government and Corporate Business environment.
Engr. Minhajuddin Ahmed is
Member (Company Affairs)
of Bangladesh Power
Development Board (BPDB).
He is a Graduate in Civil
Engineer from Bangladesh
University of Engineering
and Technology (BUET). He
also did his M.Sc. in Civil
Engineering from BUET and MBA in Finance from
Dhaka University. He has 36 years of experience.
He has specialization in project implementation in
BPDB. He is currently Nominated Director of West
Zone Power Distribution Company Limited,
Bangladesh-India Friendship Power Company
(Pvt.) Ltd and Member of Bangladesh Energy and
Power Research Council.
Engr. Selim Abed was
appointed as Director DESCO
Board on March 24, 2014. He
is Deputy Secretary of
Government of the People’s
Republic of Bangladesh.
Now he is Personal Secretary
to the Hon’ble State
Minister, Ministry of Power,
Energy and Mineral
Resource. He is also nominated Director of
Karnaphuli Gas Distribution Company Ltd. As a
BCS Cadre he served in field administration and
different Ministries for more than 23 years. He
got Post Graduate Degree in Business
Administration (MBA) from Institute of Business
Administration (IBA), Dhaka University in 1992.
20 Annual Report 2016
Prior to that he did his B.Sc. in Agricultural
Engineering from Bangladesh Agricultural
University in 1988.
Engr. Ataul Mahmud is Vice
President (Service and
Welfare) of Institute of
Engineers, Bangladesh (IEB).
He appointed in DESCO
Board on June 20, 2014. He
is also Chairman of M & M
Engineering Ltd and Director
of 3M (Pvt.) Ltd. He has
completed his Graduation in
Engineering in Electrical and Electronics
Engineering (EEE) from Bangladesh University of
Engineering (BUET) in 1997 and obtained MBA
Degree from Dhaka University in 2010.
Engr. Md. Rabiul Hasnat is a
Business Entrepreneur. He is
an Independent Director of
DESCO Board and member of
the Audit Committee. He is in
DESCO Board since June
20,2014. He is also the
Managing Director of
Standard Construction Ltd.
Rosh Ltd. Shorr Food and
Bakery Ltd. Ross Bohumukhi Firm Ltd. and
proprietor of STADCO.
He is the director of Real Estate and Housing
Association of Bangladesh (REHAB) and chairman
of Building Development Committee. He completed
his B.Sc. in Civil Engineering from Bangladesh
University of Engineering and Technology
(BUET). He holds the membership of BUET
Alumni Association, Kurmitola Golf Club, REHAB,
Bangladesh Agro & Sweetmeat association etc.
He has wide experience in the area of Government
and Corporate Event management. He has vast
exposure in Real Estate sector, International
Trading, Engineering and Food business.
Dr. Ahsan Akhtar Hasin is a
Professor, Department of
Industrial and Production
Engineering, Bangladesh
University of Engineering
and Technology (BUET). He
acted for four years as a
member of Board of
Directors of Bangladesh
Council of Scientific and
Industrial Research (BCSIR), Ministry of Science
and Technology. He has around 26 years of
experience in Education and Research in
Bangladesh, Thailand and Vietnam. He has
authored several books and chapters in books,
published from the USA and UK. His one of the
research papers was awarded “The Best Research
Paper” of that year in the world. He was the Head
of the Department and Director of Directorate of
Continuing Education, BUET. In 1988, he completed
his graduation in engineering in Electrical and
Electronics from Bangladesh University of
Engineering and Technology (BUET). There after
he completed M.Sc. in Industrial & Production
Engineering from Asian Institute of Technology,
Thailand. He also completed his PhD from the
same Institute in the same subject. He joined in
DESCO Board on June 20, 2014.
Md. Anisur Rahman joined
in DESCO Board on August
14, 2016. He is holding the
position of Chairman, ATCO
Limited for last five years.
He is ex-cadet of Barishal
Cadet College. He did his
B.A (1992) and M.A (1995)
from Dhaka University. He
was involved with
Bangladesh Students League since he was a
student of the university. Currently he is Assistant
Secretary of Bangladesh Awami League Central
Sub-Committee.
Management
22 Annual Report 2016
Management
Brig. Gen. Md Shahid Sarwar, ndc, psc (Retd.)
Managing Director
Joined as Managing Director of the Company
as well as ex-officio Director of DESCO Board
on December 30, 2014. He is also a nominated
director of Dhaka Power Distribution Company Ltd
(DPDC). He has obtained B.Sc. Engineering degree
in Electrical and Electronics from Bangladesh
University of Engineering and Technology
(BUET). He passed National Defence Course from
National Defence College in 2010. He participated
in different Engineering courses in Bangladesh,
India and Germany. He served Bangladesh Army
for 34 years in different capacities of military and
civil administration. He commanded various units
in the Army. He served as Director of Electrical
and Mechanical Engineers (DEME) under Army
Headquarters. He was the Deputy Managing
Director of Bangladesh Machine Tools Factory
(BMTF); Deputy Commandant of Bangladesh
Ordnance Factories; Director Administration in
Directorate General of Forces Intelligence (DGFI);
Joint Secretary of Defence Ministry of People’s
Republic of Bangladesh. He also served in
United Nations Peace Keeping Missions in 1994
(Mozambique) and 2003 (East Timor).
Md. Rofi Uddin
Executive Director, Finance & Accounts
Serving in the current positon since May 14,
2012. Before joining this post the incumbent was
General Manager (Finance & Accounts). He joined
in DESCO as Chief Accountant in 1997. Prior to
joining DESCO he worked for BCS Administration
Academy, Rangs Electronics Ltd., Burns Philip A
& B Ltd. (Multi-national Company) in different
capacity. He obtained Bachelor in Commerce
Degree from Rajshahi University in 1984, Masters
in Commerce Degree from Dhaka University in
1986 and MBA (Management) degree from Atish
Dipankar University of Science and Technology
in 2010. In 1997 he passed CA intermediate
Examination of The Institute of Chartered
Accountants of Bangladesh (ICAB). He also
received several training on diversified topics in
home and abroad.
Engr. A. K. M. Mostafa Kamal
Executive Director, Procurement
He joined this position on May 14, 2012. In 2003
he joined in DESCO as Deputy General Manager
(DGM) and before joining his current post he
was General Manager of the company. He was
head of different Sales and Distribution Division
of DESCO. Gulshan Sales and Distribution
Division achieved the Best Unit Award in 2010
under his leadership. He also served as head
of Administration, Planning and Design Division
of DESCO He has 31 years of experience in
Power Sector including 18 years of experience
in Palli Bidyut Samity (PBS) of Narsindhi,
Tangail, Jessore, Mymensing and Comilla under
Bangladesh Rural Electrification Board (REB).
He completed different professional training in
home and abroad among those Advance training
on Energy Technology in Germany was significant.
He completed his B.Sc. in Engineering (Electrical
and Electronics) from Chittagong University of
Engineering and Technology (CUET) (Formerly
Chittagong Engineering College/BIT Chittagong)
in 1984. He is a Fellow Member of Institute of
Engineers, Bangladesh (IEB).
Engr. Noor Mohammad
Executive Director, Operation
In 2003 he joined in DESCO as Deputy General
Manager (DGM) and before joining his current
post he was Chief Engineer of the company.
During his service tenure, he was responsible as
Head of Sales and Distribution Divisions, Head
of Administration, Head of Operational Zones.
As General Manager (presently Chief Engineer)
he looked after the charge of Procurement and
Stores, Development and Projects and Sales

and Distribution Operation. He has 33 years of
experience in Power Sector including 20 years
of experience in Palli Bidyut Samity (PBS) of
Jessore, Bagerhat, Shatkhira, Pabna, Sirajgonj,
Rangpur and Dhaka-2 under Bangladesh Rural
Electrification Board (REB). He completed different
professional training in home and abroad. He
completed his B.Sc. in Engineering (Electrical
and Electronics) from Bangladesh University of
Engineering and Technology (BUET) in 1983. He
joined this position on February 17, 2015.
Md. Abdullah Al Masud Chowdhury
Executive Director, Human Resource
The incumbent is in current position on deputation
since February 08, 2015. He is a Deputy Secretary
of the Government of the People’s Republic of
Bangladesh. Prior to his joining in DESCO, he was
the Economic Counsellor of Bangladesh Embassy
in Thailand. He joined Bangladesh Civil Service
(Economic Cadre) in 1993. He played important
role in different capacity in planning commission
of Planning Ministry, Ministry of Health and Family
Welfare, World Bank Funded National Nutrition
program, Ministry of Power, Energy and Mineral
Resources, Economic Relation Division, United
Nations Economic and Social Commission for Asia
and the Pacific (UNESCAP), Commercial Counsellor
to Thailand and Cambodia. He has worked as the
Bangladesh Alternate Permanent Representative
to the UNESCAP, Bangkok, Thailand from January
2010 to December 2014. He has also worked as the
Board Director of Sylhet Gas Fields Ltd., Eastern
Annual Report 2016 23
Refinery Ltd. and Maddhapara Granite Mining
Company Ltd. He has total 23 years of work
experience in home and abroad. He has completed
his Masters of Social Science in Economics from
Dhaka University and Post Graduate Diploma
in Ecologically Sustainable Development from
Murdoch University of Perth, Australia.
Engr. Jagadish Chandra Mandol
Executive Director, Engineering
He Joined this Position on December 27, 2015. In
2003 he joined in DESCO as Assistant Manager
(System Operation) and before joining his current
post he was Superintending Engineer (SE) of
the company. He took care of the functions of
Planning and Development, Head of Sales and
Distribution Divisions, Material Planning and
Stores, Zonal Operation during his service period
in DESCO. He has 27 year experience out of which
24 years in power sector, among this 14 years of
experience in DESCO and 10 years of experience in
Palli Bidyut Samity (PBS) of Dhaka, Rangpur and
Munshiganj under Bangladesh Rural Electrification
Board (REB). He completed different professional
training in home and abroad. He completed his
B.Sc. in Engineering (Electrical and Electronics)
from Chittagong University of Engineering and
Technology (CUET) (Formerly Bangladesh Institute
of Technology, Chittagong) in 1987 and did his MBA
from International Islamic University, Chittagong
in 2006. He is a fellow member of The Institution
of Engineers, Bangladesh (IEB) and member of
Bangladesh Computer Society.
Directors’
Report
 Annual Report 2016 25
Directors’ Report
Dear Shareholders, respective franchise area.
We are delighted to present the Directors’ Report
and Audited Financial Statements together with Load Growth
the Auditors’ Report thereon for the year ended Load Demand in the distribution area are gradually
on June 30, 2016. increasing. Growth trends are shown below:

Electricity in Bangladesh Load Growth

861
Electricity business in Bangladesh is dominated 800
786

by the Government Companies/ Authority. 640

600 505

Mega watt
Government has a vision to supply electricity 377
to all with a reasonable and affordable cost by 400

2021. According to Power Sector Master Plan, 200 118

generation of electricity will be enhanced to 24 0

thousand Megawatt by 2021 and 40 thousand

2007 -08
2004-05
2001 -02

2013 -14

2015 -16
2010 -11
megawatt by 2030. Government aims to erect
Financial Year
9,560 Circuit Kilometer transmission line and 1 lac
Kilometer distribution line in this regard.
Substation Erected
Currently power production capacity of Bangladesh Companytries to be consistent with load growth
is approximately 15 thousand megawatt with over and capacity enhancement. As such it took
100 numbers of power plants (including captive various projects for capacity building. In FY 2015-
power plants). Power production has been 16 the company has completed two nos. 33/11 kV
enhanced from 220 kW to 371 kW per head per new substations and upgraded two nos. 33/11
year which is 69% higher than that of in year kV substations, as a result of which capacity
2009. Now 70% of population is under electricity enhanced to 120/168 (~160 MW Max)
facility which was 47% in the year 2009.
Source: Annual Report 2014-15 of Power Division Sl. No. Name of the Substation Capacity (MVA)
01 Purbachal 2x20/28
Industry Outlook
Power Sector of Bangladesh are segregated in three 02 BIHS Mirpur 3x20/28
type of companies according to their functions. 03
Augmentation of Baridhara 33/11
1x20/28 (10/14)
Power Generation responsibility lays on Bangladesh KV Substation to 20/28MVA
Power Development Board (BPDB) and its subsidiary 04
Augmentation of Tongi 33/11 KV
1x20/28 (10/14)
companies. There are several Independent or Private Substation to 20/28MVA
or Rental Power Producers companies including REB 120/168 MVA (160
Total Capacity Enhanced
who sell electricity to BPDB. MW Max)

Power Grid Company of Bangladesh Ltd (PGCB) Substations Under Construction

has the sole responsibility to transmit the Construction of following 2 nos. of new 33/11
electricity from different power stations to kV substations on turnkey basis using DESCO’S
different distribution entities through High own fund is under process of completion. The
Voltage Grid Network. works are in progress and will be completed by
December, 2016.
The responsibility of distributing electricity across
Sl. No. Name of the Substation Capacity (MVA)
the country is shared by various public companies Mohakhali Health Complex,
like BPDB, Dhaka Electricity Supply Company 01 3x20/28
Mohakhali
(DESCO), Dhaka Power Distribution Company United City Centre, Gulshan
(DPDC), Rural Electrification Board through various 02 2x10/14
Avenue
Palli Biddut Samity (PBS), West Zone Power 80/112 (~106 MW
Capacity will be Enhanced
Distribution Company (WZPDCO) each having Max)
26 Annual Report 2016
Electric Line Construction
Every year DESCO expands its source line and
distribution network. The following table shows
a picture of electric line construction carried out
during the financial year 2013-14, 2014-15 and
2015-16.
Length
Type of Level
Sl. No 2014-15 2015-16
Line
Circuit KM Circuit KM
1 33 kV 6.00
O/H Line
2 11 kV 37.40
Construction
3 11/0.4 kV 24.19
4 0.4 kV 41.35
108.87
5 33 kV 5 21.89
U/G Line
Construction
6 11 kV 18
Sub Total 23
7 Renovation 62.20
Distribution Transformer
In order to cater the increasing load demand and
enhance distribution capacity, DESCO has installed
176 nos. of three phase 200 KVA11/0.4KV and 207
nos. Single phase 15 KVA transformers, in addition
to transformers installed by the consumers at
their own accord.
Looking Into The Future
DESCO has completed a study to ascertain the
load demand and consumer growth in DESCO
area upto the year 2030 with every 5 years
phasing. The report shows that the load demand
of DESCO will increase to 1,964 MVA, 3108 MVA,
and 4827 MVA by the year 2020,2025 and 2030
respectively. DESCO has taken up plan to cater
this increasing load demand accordingly. In this
regard, 72 nos. of new 33/11 kV Substations and
17 nos. of new 132/33 kV Grid Substations will be
required to construct along with up gradation of
some existing sub-stations.
Two new townships namely “Purbachal New
Town Project” and “Uttara Residential Model
Town (3rd Phase)” are being developed by Rajuk
in the DESCO area. These new townships have
already been added to DESCO’s operational area.
Electrical network development work for this area
has already been taken up by DESCO. The load
demand of “Purbacha Model Town” and “Uttara
Residential Model Town (3rd Phase)” are expected
to be about 500 MW and 352 MW respectively.
New Development Projects
Two projects namely “Augmentation and
Rehabilitation of Distribution System” and
“Construction of 132/33/11 KV Grid Substations
in DESCO Area” under “Power System Expansion
and Efficiency Improvement Investment Program,
Tranche-2”financed by Asian Development Bank
(ADB) to meet the load demand up to the year
2020. In addition above another two projects
namely, “Augmentation and Rehabilitation of
20.00
132/33/11 kV grid substation at Bashundhara and
Uttara”, “Installation, Upgradation and Conversion
38.75
of existing 33 kV overhead lines into underground
17.20 cables in DESCO area” under “Distribution System
38.04 Upgradation and Expansion Project”financed by
113.99 Asian Infrastructure and Investment Bank(AIIB).
These will enhance the DESCO’s whole
infrastructure capacity up to 2668 MVA, will cover
24.42
approximately 11,20,000 nos. of consumer and
46.31 will increase Power handling capacity to around
33.58 2135 MW. Moreover, another project namely
“Installation of Supervisory Control and Data
Acquisition (SCADA) System in DESCO areas”
under the finance of ADB introduced to improve
reliability and stability of power distribution
system and enhance operational efficiency of
power distribution network in DESCO area. The
cost of the said 05 (Five) projects have been
estimated at about Tk. 4000.00 crore. Major
components of these projects are:
i) Installation & commissioning 05 nos. of new
132/33/11 KV Grid Sub-stations and 42.7 Ckt
KM 132 kV source lines.
ii) Installation & commissioning of 14 nos. of
new 33/11 kV Sub-stations and Rehabilitation
of 10 nos. of 33/11 kV Sub-stations on turnkey
basis.
iii) Installation of 70 Circuit KM of 33kV and 200
Circuit KM of 11kV U/G XLPE Cable.
iv) Construction of 500 KM of 11kV, 11/0.4kV and
0.4kV overhead lines and installation of 1800
nos. of 11/0.4 kV distribution Transformers.
v) Capacity of existing 02 Grid Substation will
be increased from 250 MVA to 480 MVA at
132 kV level.
vi) Installation, Upgradation and Conversion of
existing 165 Ckt KM 33 kV overhead lines into
underground cables.
vii) Installation of Supervisory Control and Data
Acquisition (SCADA) System in DESCO Area.

Construction of DESCO Head Office
DESCO has taken an initiative to construct a 12
Storied (with Six basements) Head Office building
at Plot no: 49/A, Nikunja R/A beside Dhaka-
Mymensingh highway.
Annual Report 2016 27
271,114.62 sq. ft. Car parking and utility facilitiesin
basements, Bank, ATM, Vending station, waiting
room, Reception, Office Room for building
maintenance, convenience store, kiosk at the
ground floor.

An open Architectural Design competition was
arranged through IAB (Institute of Architects
Bangladesh) for selecting the design. Among 69
(sixty nine) participants in the competition, the best
design was selected by the jury board comprised
of renowned architects and expert members.
The Head office building will be “Iconic” and
prestigious one with the state of the art facilities.
Highly Energy efficient, sufficient natural light
usage provision, safe & secure, sustainable and
symbolic to electricity distribution business. The
Estimated cost of the project is Tk. 128 (One
Hundred and Twenty Eight) crore. And the project
is expected to be completed within 2020.
New Connections
52,021new connections have been added to our
system this year. With these new connections, the
total number of electric connections under DESCO
stands at 760,844at the end of the financial year.
Categorywise Consupmtion Growth
2015 -16 2185 1614 456 155

Complex shall be as per RAJUK approved layout 2014 -15 1993 1444 398 125
Financial Year
plan with well air ventilation system and there 2013 -14 1885 1351 383 103

shall be enough space to arrange comfortable 2012 -13 1714 1256 345 97

sitting arrangements for officers & staffs of 2011 -12 1563 1139 314 95

head office to carry out their official activities. 500 1000 1500 2000 2500 3000 3500 4000 4500
MKwh
Total land area of the building site is 40.25 katha Residential Industrial Commercial Others

(28,980 sq. ft.). The total buildable area would be

Design of Proposed Head Office Building of DESCO

28 Annual Report 2016
Disconnection / Reconnections
Disconnection of electric line has been considered
to be an effective tool to recover outstanding
bills/dues. By applying this tool a total number
of 46,838 defaulting consumers’ services were
disconnected during the financial year. Moreover,
13,120 illegal consumer services were traced and
disconnected during the financial year.
During the financial year, 39,083 consumers
were given re-connection on recovery of their
outstanding dues and realization of penalty bill as
applicable. An aggregate amount of Tk. 73.16 crore
was realized from the defaulting consumers and
Tk. 7.91 crore against penal/supplementary bills.
All those initiatives are implemented with the
help of outsourced contractors and Mobile Court.
Energy Saving & Use Of Alternative Energy
Power saving means Power generation. Aiming
this motto, DESCO has undertaken measures
through distributing leaf-lets, displaying posters
and festoons encouraging the consumers to use
energy efficient appliances in their homes/offices,
turning off lights and fans when not in use and
replacing the incandescent lamp by CFL (Compact
Florescent Lamp) etc.
To encourage the use of renewable energy, DESCO
ensured installation of eco-friendly Solar Panel of
capacity around 19,016.47 kwp By installing 11,525
nos. of solar panel atconsumers premises up to
June 30, 2016. Beside this DESCO installed solar
panel of capacity 62.77 kwp at its 405 nos. own
installations during the said period.
Metering
As meter is the ‘cash box’ of the Company, DESCO
has left no stone unturned to change defective
meters, sealing meters and inspecting meters
regularly. During the financial year, 32,192 nos. of
defective meters were changed and 45,523 nos.
of meters were inspected.
Annual Bill Clearance Certificate
In order to attain satisfaction of the consumers,
DESCO issues bill payment clearance certificates
to those consumers who do not have any dues.
Consumer Complaints
DESCO continuously strives to offer ‘service
excellence’ to its valued consumers. Consumer
complaints in terms of the billing errors,
rectification of names and addresses are seriously
attended. During the financial year, 19,037 nos of
bills were corrected. Names and addresses of
3,683 nos. of consumers were corrected upon
verification on the basis of consumer complaints.
One Point Service Center
Customer satisfaction is the key to success of any
company. Our customers are our prime focus and
we are to ensure satisfactory customer service as
deemed suitable. The issue is seriously considered
by DESCO, which led to the establishment of
Customers’ “One Point Service Center” in each
of the Sales and Distribution Divisions. Any
consumer coming to DESCO’s Sales & Distribution
Division office, may receive desired service and
solution from the staff of the “One Point Service
Centre”.The Customer Service Centers are under
continuous improvement in orderto raise its
performancestandard up to the desired level. For
this purpose, DESCO is giving emphasis on routine
training of the employees.
Billing/ Collection
The primary objective of maintaining the financial
potency of the company is achieved by constant
efforts to uphold a vigorous billing/collection ratio.
Considering sales at Tk. 31,478.24 million and
collection at Tk. 31,900.05 million, the billing
collection ratio works out at 101.34% and the
Collection/Import (C.I.) ratio to 93.21% this
financial year.
Sales and Collection
Accounts Receivable/ Sales
One of the indicators of efficient financial
management is to decrease the accounts
receivable/sales ratio. The Company maintains
a system of continuous monitoring of accounts
receivable by way of monthly reports and analysis.
 Annual Report 2016 29
The Accounts Receivable works out to 1.61 months valued consumers are enjoying Pre-Paid metering
equivalent to sales this year as against 1.85 in the facilities at DESCO area up to June 30, 2016. In
previous year. addition, in Fiscal year DESCO has installed total
5,623 nos of Pre-Paid Meters. In which 4,037 nos
6000 Power Import and Sales Meters in Uttara (East & West) Sales & Distribution
4795
Division, 1,387 nos of meters in Baridhara sales
5000 3421 4410 & Distribution and 199 nos meters in Uttarkhan
4064 3959
4000 3401
3726
3412
3722 Sales & Distribution were installed and integrated
3123
2848
3111 with Unified Pre-Paid metering Software to
MKWh

3000
enhance the Consumer service. An initiative has
2000 been taken to enhance the DESCO established
1000
Meter Plant as a full-fledged Manufacturing Plant
to meet up not only the DESCO’s demand but
0 also the whole Country with export possibility in
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
future.
Import Sales Fiscal Year

System Loss Information of Pre-Paid Meter

This is a key performance indicator of any
electricity distribution company and is determined 1-Phase 3-Phase Total
by the quantity of energy purchased and sold. The
system loss works out to 8.03% in this FY 2015-16 Production (nos.) as on
20,000 3000 23,000
30.06.2016
as against 8.37% in the previous year.
In service (nos.) as on
System Loss Trend 26,721 2234 28,955
30.06.2016

Purchase (nos.) for FY

4,360 465 4,825
ended on 30.06.2016

New Installed (nos.) for

5,155 468 5,623
FY ended on 30.06.2016

Purchase/Supply of Pre-Paid Meter underway

Prepaid Metering Telephone Shilpa

DESCO has introduced a modern consumer friendly Sangstha (TSS) (own 95,000 5,000 100,000
fund)
Pre-Paid metering system for its valued consumers
since 2005. Smart Card Base Pre-Paid Metering
system having both way communication facilities Telephone Shilpa
allowed the customers to pay their electricity bills Sangstha (TSS) (own 80,000 20,000 100,000
fund)
in advance through DESCO’s vending station.While
it enables thecompany tosynchronize the relevant
dataregarding consumer electricity usages. Under Deffered Payment 80,000 20,000 100,000

With a view to facilitating incessant supply of ADB funded Project 95,500 7,500 100,000
Pre-Paid meter in future, DESCO has set up a
“Meter Plant” at Mirpur on 2007. The company In this fiscal year DESCO has collected Tk.42.87
has manufactured 20,000 Single Phase and 3,000 crore under Uttara Sales & Distribution Tk.0.43
Three Phase Pre-Paid Meters. Around 29,000 crore under Uttarkhan Sales & Distribution
30 Annual Report 2016

and Tk.23.6 crore under Baridhara Sales &

Sl.
Distribution through prepaid meter and is going Indicators Units Target Achievement
No.
to enhance the capacity for introducing pre-
1 System Loss % <8.35 8.03
Paid Metering System among large scale of
consumers by procuring 1,00,000 nos of Smart 2
Accounts
Eqv. months <2.00 1.61
card base Pre-paid meters through Telephone Receivables

Shilpha Sangstha (TSS) Interfaced with Unified Collection Bill

Pre-Paid metering Software and around 6,000 3 % 99.50 101.34
Ratio (%)
meters are already supplied and installed in
Construction
consumer premises and rest of 94,000 meters 4 of new KM >100 204.07
are expected to be supplied within October, distribution line
2016. Procurement of another 80,000 Single 5 Current Ratio Ratio 2:1 2.41:1
phase and 20,000 three phase meters from
6 Quick Ratio Ratio 1:1 1.62:1
Telephone ShilphaSangstha (TSS) and 80,000
single phase and 20,000 three phase meters Debt Service
7 Ratio >2:1 1.49:1
under deferred payment are under process. Coverage Ratio

Apart from this procurement of another New

1,00,000 nos of Pre-Paid meters is in process 8 Connection to Nos. >45,000 63,898
the Households
under the scope the project ‘’Augmentation
and Rehabilitation of Distribution System’’ System
and ‘’Construction of 132/33/11 KV Substation’’ Average Minutes/
9 Interruption year/ <700 577.94
jointly funded by the Asian Development Bank Duration Index consumer
(ADB), Government of Bangladesh and DESCO (SAIDI)
under Power System Expansion and Efficiency
System
Improvement Investment Program, Tranche-2. Average Interruptions/
10 Interruption year/ <30 22.54
Frequency consumer
Uttara Baridhara Uttarkhan Total Index (SAIFI)

Pre-Paid Meter Minimum

22544 6212 199 28955 Annual Training
in use (nos) 11 Hours >66 75.62
hour per
Bill Collection Employee
42.87 23.06 0.43 66.70
(Crore Tk)
Construction/
Capacity
Key Performance Indicator (KPI) 12 enhancement MVA >140 168
Key Performance Indicator (KPI) is a set of of distribution
quantifiable measures that an organization uses Sub-station

to measure or compare performance in terms of

Implementation
meeting their strategic and operational goals. An
13 of ADP % 100 101.00
organization may use KPIs to evaluate its success, (Financial)
or to evaluate the success of a particular activity
Installation of
in which it is engaged. 14 Pre Payment Nos. >5,000 5,424
Meter
A Memorandum of Understanding (MOU), in this
regard, was signed between Power Division, Power Factor
15 at each billing % >90 95.6
Ministry of Power, Energy & Mineral Resources point
(MPEMR) and DESCO with a achieve sets of Key
Performance Targets for the Fiscal Year 2015-16. Percentage of
The following table shows DESCO’s success in 16 Over loaded % <5 0.14
Transformer
attaining all the targets.

Human Resource Development
As DESCO always focuses on quality service,
it has arranged training for all employeesto
improve the knowledge, skills and attitude of the
employees. In Order to achieve the company’s
vision and mission, the company recognizes and
emphasizes on productivity development of its
employees. Following this, DESCO developed 70
hours training on different topics round the year
for each employee. Targeted 1,514 employees
received 113885 man-hours of In-house and out-
house training under the supervision of Human
Resource Management Division. The training
achievement against the target was 108.02%
during the FY 2015-16.
Besides In-house trainings, employees also
participate in trainings/seminars/workshops
in external organizations namely Institution
of Engineers, Bangladesh, Engineering Staff
College of Bangladesh, Institute of Information
and Communication Technology (IICT) of
Bangladesh,
Bangladesh University of Engineering and
Technology (BUET), Bangladesh Power
Development Board (BPDB), Institute of
Chartered Secretaries of Bangladesh (ICSB),
Bangladesh Institute of Administration
Management (BIAM), Bangladesh Institute
of Management (BIM), TheInstitute of Cost
and Management Accountants of Bangladesh
(ICMAB) and abroad. Three foreign Trainings
held in the FY 2015-16 at AIT, Thailand, organized
by HRM Division are as under.
S.l. Topic No. of Held on
No. Participants
01 Human Resource 12 16 - 27 May, 2016
Management
02 Electricity Distribution 12 31 May 2016
System & Consumer 11 Jun, 2016
Services,
03 Human Resource 12 13 - 24 Jun, 2016
Management
e-Governance
It necessitates effcient use of electronic state
management system based on Information &
Communication Technology (ICT) including the
Internet Technology. The main purpose is to
ensure good governance in all functional areas
Annual Report 2016 31
of the establishment.
To keep it with the modern technological
advancement in IT (Information Technology)
sector and to make the utility management
more effcient, DESCO management decided
to launch e-governance program with a
unified approach. In this regard, Institute of
Information and Communication Technology
(IICT), BUET has provided utmost assistance
and support to DESCO. As a consequence One
Point Service Centre, Complaint Management,
New Connection, Monthly Bill Collection,
Miscellaneous Bill Collection, DESCO Website
and E-mail Communication, Inter Office Wide
Area Network (WAN) Connectivity has been
successfully developed and implemented.
e-GP (e-Tendering)
Since the Government has decided to
introduce e-Tender system to put an end to
tender manipulation, DESCO has introduced
e-Tendering system to facilitate its procurement
process. The main functions are online bidder
registration, email acknowledgement of new
tender according to bidder’s interest list, online
bid participation, edit submitted documents/
bids till closing date, online tender specification
with a comprehensive security. This system
prepares customized comparison sheet of the
submitted bids to accelerate the evaluation
process.
Digital Services
To achieve “Vision 2021” of digital Bangladesh,
DESCO has introduced internet based self-
services. Now DESCO provide following digital
Services:
Bill Payment through SMS (2009)
Online Bill Payment (2010)
On-Line Application for New Connection (2012)
Online Job Application (2012)
Mobile Banking Bill Payment (2014)
Payment through Live Payment Gateway (2014)
Mobile Application Service (2016)
32 Annual Report 2016

Corporate Social Responsibility (CSR) at a nominal rate from the Ijtema Committee,
The ethos of DESCO for pursuing its activities provides support to the freedom fighters& the
in social arena has got further momentum with family of the National Poet Late Kazi Nazrul
continuous enthusiasm and support of the Islam and alsocontribution to other social
stakeholders. Besides running on commercial activities as decided by the Board from time to
basis, DESCO also recognizes some social time.
responsibilities such as collects electricity bills
Financial Results And Appropriation
The synergy of technical and commercial activities is reflected in the improved financial results of the
Company year to year as under:
 Figures in Million Taka
Particulars 2015-16 2014-15 2013-14 2012-13 2011-12
Revenue from Operations 31,890 27,966 24,993 22,242 16,251
Cost of Sales 29,989 25,427 24,063 21,646 14,388
Gross Profit 1,901 254 931 595 1,863
Total Expenses (1960) (1,556) (1336) (1,090) (878)
Operating Profit/Loss (59) 983 (405) (495) 985
Financial Expenses (342) (333) (320) (325) (343)
Exchange Fluctuation (Gain/loss) 16 72 19 274 (758)
Non-Operating Income 985 1,268 1,633 1,674 1,282
Taxation (154) (356) (258) (323) (328)
Net Profit for the year 446 1635 669 805 839
Dividend (proposed) 39.8 568 688 748 650
Un appropriated profit carried 7,951 7,520 6,227 6146 6,324
forward

Analysis on Financial Results

Energy sales increased due to increase of retail tariff (2.93%) from 1st Sep 2015 and increase of
number of consumer and Energy purchase increased due to increase of bulk tariff (8.74%) from 1st
Sep 2015 and increase of number of consumer.

On the other hand reason for decrease of earnings are (1) Employee expense increase due to
increase of salary and implementation of pay structure and (2) Interest income decrease due to
decrease of interest rate and amount of FDR.

Contribution To The Exchequer

Since commencement of its operation, DESCO has been contributing substantial amount to the
National Exchequer by way of VAT and Taxes as shown in the table below:
 Figures in Million Taka
VAT and Income Tax 2015-16 2014-15 2013-14 2012-13 2011-12
VAT from Electricity Bills 1,504 1,362 1,184 1148 682
VAT from contractors / suppliers Bills 76 79 58 51 32
Income Tax deduction at Source 138 198 115 96 73
Corporate Income Tax 243 134 204 220 583

Total 1,961 1,773 1,561 1,515 1,370

 Annual Report 2016 33
Financial Ratios
Financial ratios are indicators of financial strength/weakness of an organization. Some of these
are presented below to reflect DESCO’s financial position:

Financial Ratio 2015-16 2014-15 2013-14 2012-13 2011-12

Current Ratio 2.42 2.31 2.40 2.73 3.02

Quick Ratio 1.62 1.78 2.17 2.24 2.60

Debt/Equity Ratio 56:44 53:47 56:44 58:42 59:41

Accounts Receivable
1.61 1.85 1.87 1.95 2.05
(Months Equivalent to Sales)
Cost of Sale to Operating Revenue 94.04 90.92 96.28 97.32 88.54

Gross Margin / Sales Ratio 6.08 9.08 3.72 2.71 11.46

Operating Margin / Sales Ratio (0.19) 3.51 (1.62) (2.26) 6.06

Net Income / Sales Ratio 1.43 5.85 2.68 3.67 5.16

Return on Asset 1.07 12.50 5.33 7.20 8.86

Return on Equity 2.42 12.64 5.92 7.47 7.95

Net Asset Value Per Share 37.05 34.16 32.82 35.97 40.54

Net Operating Cash Flow 8.23 8.27 7.65 10.76 14.04

Earnings Per Share (Tk.) 1.12 4.11 1.68 2.02 2.11

Capital Structure

Authorized Capital : Tk. 500 crore

Paid up Capital : Tk. 397.57 crore
Total Shares : 397,569,804 Nos.
Class of Share : Ordinary Shares of Tk.10/- each

Earning Per Share Net Asset Value Per Share

6
50 45.98
5 4.94 45
40.54
4.32 40
4 35.97 38.89
Taka

35
32.82 34.16
Taka

3 30
2.43 2.34 25
2 1.94
20
1.12 2010-11 2011-12
1 2012-13
2013-14
2014-15
2015-16
0
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Financial Year
Financial Year

Stock Exchange Listing

Dhaka Electric Supply Company Ltd. (DESCO) is listed with Dhaka Stock Exchange Ltd. (DSE) and
Chittagong Stock Exchange Ltd. (CSE).
34 Annual Report 2016

Distribution Of Shareholdings
Number of Shareholders on 30th June, 2016 stood at 7,509 nos.
Range of holding in numbers of Number of % of % of
Number of Shares
shares Shareholders Shareholders Share Capital
Share Capital 2,926 38.97 491,704 0.12
less than 501 Shares 2,926 38.97 491,704 0.12
501 to 5,000 shares 3,418 45.52 5,954,979 1.50
5,001 to 10,000 shares 482 6.42 3,389,628 0.85
10,001 to 20,000 shares 303 4.04 4,264,331 1.07
20,001 to 30,000 shares 101 1.35 2,476,334 0.62
30,001 to 40,000 shares 58 0.77 2,005,615 0.50
40,001 to 50,000 shares 38 0.51 1,731,310 0.44
50,001 to 100,000 shares 73 0.97 4,994,538 1.26
100,001 to 1,000,000 shares 94 1.25 23,828,500 5.99
Over 1,000,000 Shares 16 0.29 348,432,865 87.64
Total 7,509 100.00 397,569,804 100.00

Shareholding Composition as of 30th June, 2016

Category Number of Shareholder Number of Shares % of Total Shares
Government 2 298,177,213 75.00
Institute 281 67,690,905 17.03
Public 7,154 29,435,385 7.40
Foreign 72 2,266,301 0.57
Total 7,509 397,569,804 100.00

Directors’ Responsibilities assets of the Company, and in that context to

Section 181 of the Companies Act 1994 requires
Directors to ensure that the Company keeps
proper books of accounts of all transactions and
prepare financial statements that give a true and
fair view of the state of the Company’s affairs
and of the profit for the year.
The Directors are also required to ensure that
the financial statements have been prepared and
presented in accordance with the requirements
of the International Accounting Standards/
International Financial Reporting Standards
as adopted by the Institute of Chartered
Accountants of Bangladesh and provide the
information required by the Companies Act
1994, Securities and Exchange Ordinance 1969,
Securities and Exchange Commission Rules 1987
and the regulations of the Dhaka / Chittagong
Stock Exchanges. They are also responsible for
taking reasonable measures to safeguard the
establish appropriate systems of internal control
with a view to the prevention and detection of
any fraud and other irregularities.
The Directors have always recognized the
important role played by the honorable
Shareholders of the Company in assisting the
Board to implement proper corporate governance.
The Company also welcomes the active
participation of the Shareholders at the Annual
General Meetings and solicits their views at all
times, promoting healthy dialogue. Whenever
possible, the Company has also implemented
suggestions of the shareholders. The Board and
the Company Management constantly interacts
with the shareholders of the Company through
quarterly and annual publications of financial
statements, meetings and other forms of
communications.

Corporate Governance Compliance Report
The pattern of shareholding along with the
name-wise details of (i) Parent/Subsidiary/
Associated Companies and other related parties;
(ii) Shareholding of Directors; (iii) Shareholding
of Chief Executive Officer (CEO), Chief Financial
Officer (CFO), Company Secretary (CS) and Head
of Internal Audit (HIA); (iv) Shareholding of Senior
Executives (Top five salaried persons other than
CEO, CFO, CS, HIA) and (v) Shareholder(s) holding
10% or more voting interest in the company as on
30 June 2016 are shown at Annexure-1.
Dhaka Electric Supply Company Limited (DESCO)
to this end has complied with all the requirements
of Corporate Governance of Bangladesh Securities
and Exchange Commission. Accordingly, Corporate
Governance Compliance Report is shown at page-
81 with the compliance certificate.
Board Meetings, Attendance and Remuneration
During the financial year 22 (Twenty Two) Board
Meetings were held. As per corporate governance
guidelines the Company Secretary and CFO attended
all meetings. The attendance record of the Board
Meeting is shown at Annexure- 2 of this report.
Citizen Charter: by the Board of Directors.
This is an official document of the organization’s
commitment to its consumers. The Citizen Charter
makes it very clear that the services required
from DESCO by its customers are their rights
rather than considering that as favour to them.
The increasing demand by the public for time
bound services will bring qualitative improvement
in services by DESCO and the charter will help
DESCO to evaluate the delivery of services.
DESCO’s citizen Charter is kept displayed at its
Customer Service Centers for awareness of the
customers. There are also some printed leaflets
on different category of services available at the
Customer Service Centers of DESCO. DESCO’s
Citizen Charter is also available in DESCO website.
Dividend
Based on the performance of the Company, the
Board of Directors recommends 10% cash dividend
for the financial year 2015-16. Since listing with
the exchanges the company paid dividend to its
valued shareholders on regular basis.
Annual Report 2016 35
Dividend paid in last 5 years
35
30
25
20
15
10
5
0
2010-11 2011-12 2012-13 2013-14 2014-15
Stock (%) 25 15 15 10 5
Cash (%) 10 10 10 5 10
Election of Directors
As per nomination of the Power Division,
Ministry of Power, Energy and Mineral Resources
(MPEMR), Government of Bangladesh, (1) Kazi
Rowshan Akhter, Additional Secretary, Power
Division, MPEMR, (2) Mr. Minhajuddin Ahmed,
Member (Company Affairs), Bangladesh Power
Development Board (BPDB) in place of Mr. Md.
Rakib Hossain and Engr. Md. Shamsul Hassan
Miahrespectively and (3) Mr. Md. Anisur Rahman,
Chairman, ATCO Limited were appointed as
Director of DESCO Board. On the other hand, Md.
Israil Hossain, Addl. Secretary, Legislative and
Parliamentary Affairs Division, Ministry of Law,
Justice and Parliamentary Affairs was Released
In terms of Article 86 of the Articles of Association
of the Company, (i) Mr. Md. Mahbubul Alam, ndc,
Additional Secretary, Power Division, MPEMR, (ii)
Kazi Rowshan Akhter, Additional Secretary, Power
Division, MPEMR, (iii) Mr. A. K. M. Humayun Kabir,
Joint Secretary, Power Division, MPEMR, and (iv)
Mr. Selim Abed, PS to State Minister (Deputy
Secretary), Ministry of Power, Energy and Mineral
Resources, Government of the People’s Republic
of Bangladesh will retire by rotation. However, as
per article 87, the retiring Directors are eligible to
be re-elected as Directors of the Company.
On contrary, (1) Brig. Gen. (Retd.) Md. Nazrul
Hassan, Managing Director of Power Distribution
Company Ltd., (2) Brig Gen Md Shahid Sarwar,
ndc, psc (Retd), Managing Director, Dhaka
Electric Supply Company Ltd., (3) Engr. Ataul
Mahmud, Vice-President (Services & Welfare)
Institute of Engineers, Bangladesh (IEB), (4)
Engr. Rabiul Hasnat, Director, Real Estate &
Housing Association of Bangladesh (REHAB),
(5) Dr. Ahsan Aktar Hasin, Professor, Industrial
36 Annual Report 2016

and Production Engineering (IPE), BUET, (6) Mr.  Un-audited 3rd Quarter Statement of Accounts
Minhajuddin Ahmed, Member (Company Affairs), for the fiscal year 2015-16.
Bangladesh Power Development Board (BPDB), (7)  Review Revised Budget for the fiscal year
Mr. Md. Anisur Rahman, Chairman, ATCO Ltd. shall 2015-16.
continue to act as Directors of the Board.
 Review Draft Budget for the fiscal year 2016-17.
Auditors
Attendance of the Audit Committee Meeting shown
M/S Artisan, BSEC Bhaban (Level 10), 102, Kazi
at Annexure 3
Nazrul Islam Avenue, Kawran Bazar, Dhaka-1215,
the existing statutory auditors of the Company Acknowledgement
shall retire in the AGM upon accomplishment of On behalf of the Board of Directors, I would like
audit of the company. They have expressed their to express my sincere gratitude to all honorable
willingness vide letter received on 01/11/2016 shareholders, the Power Division, Ministry of
to be re-appointed as statutory auditors of Power, Energy & Mineral Resources, Economic
the company for the financial year 2016-17 with Relations Division, Ministry of Finance, Ministry
reasonable increase in fees. of Planning, Power Cell, Bangladesh Power
Development Board (BPDB), Dhaka Power
Audit Committee
Distribution Company Ltd. (DPDC), Bangladesh
As a measure of ensuring transparency and
Rural Electrification Board (BREB), Power Grid
good Governance in its functional area DESCO
Company of Bangladesh (PGCB), concerned
has formed a 4-member Audit Committee of
Government Departments, Asian Development
the Board headed by Mr. A.K.M. Humayun Kabir,
Bank, World Bank, Bangladesh Securities and
Joint Secretary (Company Affairs), Power Division,
Exchange Commission (BSEC), Dhaka Stock
Ministry of Power, Energy & Mineral Resources.
Exchange Ltd. (DSE), Chittagong Stock Exchange
The other members of the Committee are (i) Engr.
Limited (CSE), ICB Securities Trading Company
Md. Rabiul Hasnat, Director, Real Estate & Housing
Limited, and other development partners for
Association of Bangladesh (REHAB) (ii) Mr. Md. Rofi
their continuous assistance, guidance and advice.
Uddin, Executive Director, Finance and Accounts,
I would also like to express my heartfelt thanks
DESCO and (iii) Engr. Zulfiqur Tahmid, Company
to all the employees of the company on behalf
Secretary, DESCO. The attendance record of the
of the Board of Directors for their sincere and
Audit Committee is shown at Annexure-IV. During
relentless efforts in performing their duties and
the Financial Year 2015-2016, the Audit Committee
responsibilities for prosperity and development of
held 11 (Eleven) meetings in which, among other
the company.
things, reviewed the followings:
In the end, I pray to the Almighty Allah that may
 Draft Auditors Report & Audited Accounts of
the Company continue its performance gloriously
the Company for the fiscal year 2014-15.
throughout the years ahead.
 Review the activities of the Internal Audit
Department of the company. On behalf of the Board of Directors,
 Un-audited 1st Quarter Statement of Accounts
for the fiscal year 2015-16. 
 Un-audited half yearly Statement of Accounts
for the fiscal year 2015-16. Md. Mahbub-ul-Alam
Chairman, DESCO Board
 Annual Report 2016 37
ANNEXURE-1 : Corporate Governance Guidelines Compliance

i) Parent / Subsidiary / Associated Companies and other related parties:

% of shares as on
Sl. No. Name Number of Shares
June 30, 2016
01. Bangladesh Power Development Board 293,104,259 73.72
02. Dhaka Electric Supply Authority 5,072,954 1.28

ii) Directors’ Shareholding

% of shares as
Sl. No. Name Designation
on June 30, 2016
Md. Mahbub-ul-Alam, ndc
Additional Secretary, Power Division
01. Chairman Nil
Ministry of Power, Energy & Mineral Resources
Govt. of the People’s Republic of Bangladesh
Kazi Rowshan Akhter
Additional Secretary, Power Division
02. Director Nil
Ministry of Power, Energy & Mineral Resources
Govt. of the People’s Republic of Bangladesh
Mr. Md. Israil Hossain
Additional Secretary, Drafting Independent
03. Nil
Ministry of Law, Justice and Parliamentary Affairs Director
Govt. of the People’s Republic of Bangladesh
Brig Gen Md Shahid Sarwar, ndc, psc (Retd)
04. Managing Director Director Nil
Dhaka Electric Supply Company Ltd.
Brig. Gen. (Retd.) Md. Nazrul Hasan
05. Managing Director Director Nil
Dhaka Power Distribution Company Limited
Mr. A.K. M. Humayun Kabir
Joint Secretary, Power Division Independent
06. Nil
Ministry of Power, Energy & Mineral Resources Director
Govt. of the People’s Republic of Bangladesh.
Mr. Selim Abed
P.S to State Minister (Deputy Secretary)
07. Director Nil
Ministry of Power, Energy & Mineral Resources
Govt. of the People’s Republic of Bangladesh.
Engr. Md. Ataul Mahmud
08. Vice President (Services & Welfare) Director Nil
Institute of Engineers, Bangladesh.
Engr. Md. Rabiul Hasnat
Independent
09. Director Nil
Director
Real Estate & Housing Association of Bangladesh
Dr. Ahsan Aktar Hasin
Professor
10. Director Nil
Department of Industrial and Production Engineering
Bangladesh University of Engineering and Technology
Mr. Minhajuddin Ahmed
11. Member (Company Affairs) Director Nil
Bangladesh Power Development Board
38 Annual Report 2016

iii) Shareholding of CEO, CFO, Company Secretary and Head of Internal Audit
Number of % of shares as on
Sl. No. Name
Shares June 30, 2016
01. Chief Executive Officer and his spouse and minor children - -
02. Chief Financial Officer and his spouse and minor children 4,700 0.00118
03. Company Secretary and his spouse and minor children - -
04. Head of Internal Audit and his spouse and minor children - -

iv) Shareholding of Senior Executives

% of shares
Number of
Sl. No. Name Designation as on June 30,
Shares
2016
01. Engr. AKM Mostafa Kamal Executive Director (Procurement) 10,117 0.00254
02. Engr. Noor Mohammod Executive Director (Operation) - -
03. Engr. Jagodish Chandra Mandol Executive Director (Engineering) 704 0.00017
04. Engr. S.M. Habibur Rahman CE, Development and Projects 3,518 0.0006
05. Mr. A. H. M Nurul Huda General Manager (Administration) 4,581 0.0012
06. Engr. A.K.M Mahiuddin Superintending Engineer - -
07. Engr. Md. Zakir Hossain Superintending Engineer - -
08. Engr. Md. Mafizul Islam Bhuiyan Superintending Engineer 334 0.0001
09. Engr. Md. Shariful Islam Superintending Engineer 175 0.00004
10. Engr. Shamim Ahsan Chowdhury Superintending Engineer 486 0.0001
11. Engr. Md. Monjurul Hoque Superintending Engineer - -
12. Engr. Md. Rashidur Rahman Superintending Engineer - -
13. Engr. Jyotish Chandra Roy Superintending Engineer 11,739 0.00295
14. Engr. Abdus Salam Superintending Engineer - -
15. Mr. Md. Mominul Islam Deputy General Manager 23,739 0.00597
16. Engr. Md. Enamul Haque Superintending Engineer 4,095 0.0010
17. Engr. Md. Shofiqul Islam Superintending Engineer 292 0.0001
18. Engr. Md. Akharul Islam Executive Engineer 436 0.00011
19. Engr. Md. Golam Rabbani Executive Engineer - -
20. Engr. Md. Mustafizur Rahaman Executive Engineer - -
21. Engr. Md. Sadequl Islam Executive Engineer 100 0.00002
22. Engr. Md. Kamruzzaman Executive Engineer - -
23. Engr. Md. Nazrul Islam Executive Engineer - -
24. Mr. Md. Alamgir Hossain Manager 138 0.00003
 Annual Report 2016 39
v) Shareholders Holding 10% or more voting right
% of shares as on
Name Number of Shares
June 30, 2016
Bangladesh Power Development Board 293,104,259 73.72

vi) Twenty Largest Shareholders as on June 30, 2016

Serial Number of % of total Share
Name of the Shareholder Category
No. Shares held outstanding

1 Bangladesh Power Development Board Sponsor 293,104,259 73.72

3 Investment Corp. of Bangladesh Company 9,145,565 2.30

3 ICB Company 9,011,328 2.26

4 Bangladesh Fund Company 7,077,000 1.78

5 AB Bank Ltd. Company 7,023,759 1.76

6 Dhaka Electric Supply Authority (DESA) Sponsor 5,072,954 1.28

7 Shanta Holdings Limited Company 4,415,122 1.11

8 ICB Unit Fund Company 3,266,537 0.82

9 Sonali Bank Company 1,668,720 0.42

10 Prime Bank Invest Ltd. 2ND MKT Company 1,584,336 0.40

11 Premier Bank Ltd (Islamic Bank) Company 1,438,399 0.37

12 Agrani Equity & Invest. Ltd. Company 1,308,430 0.33

13 SSBT F SSB LX A/C PDF-FM Company 1,264,328 0.32

14 NCC Bank LTD. Company 1,036,616 0.26

15 Janata Bank Company 1,014,616 0.25

16 Pubali Bank Securities Limited Company 1,000,896 0.25

17 Prime Bank Invest Ltd P-1653 Company 844,200 0.21

18 Humaira Huq Public 800,000 0.20

19 PHP First Mutual Fund Company 656,819 0.17

20 Shahjalal islami bank ltd. Company 637,273 0.16

Total 351,371,157 88.38

40 Annual Report 2016

ANNEXURE 2 : Attendance of the Board Meeting

Board Meeting and attendance during the year ended on June 30, 2016. During that year total 22 Board meeting
were held.

Meeting No. of meeting

Total
Sl. no. Name of the Directors held while a attended in person/
Director Fee Received
member alternates

01. Dr. Ahmad Kaikaus (till 21.10.2015) 06 06 30,000.00

Md. Mahbub-ul-Alam (From

02. 16 16 1,07,500.00
22.10.2015)
Md. Rakib Hossain
03. 4 4 30,000.00
(From 11.4.2016 to Till 19.6.2016)

04. Mr. Md. Israil Hossain 22 6 30,000.00

Kazi Rowshan Akhter (From

05. 1 1 7,500.00
20.6.2016)

06. Brig. Gen. (Retd) Md. Nazrul Hasan 22 19 1,20,000.00

Brig. Gen. Md Shahid Sarwar, ndc,

07. 22 22 1,37,500.00
psc (Rtd.)

08. Mr. A.K. M. Humayun Kabir 22 20 1,25,000.00

09. Mr. Selim Abed 22 13 82,500.00

10. Mr. Md. Selim Uddin (Till 10.4.2016) 17 9 47,500.00

11. Mr. Ataul Mahmud 22 22 1,37,500.00

12. Engr. Md. Rabiul Hasnat 22 15 95,000.00

13. Dr. Ahsan Aktar Hasin 22 13 77,500.00

Mr. Md. Shamsul Hassan Miah

14. 15 11 60,000.00
(Till 03.03.2016)
Mr. Minhajuddin Ahmed
15. 7 6 45,000.00
(From 04.03.2016)

ANNEXURE 3 : Attendance of the Audit Committee Meeting

Audit Committee meeting and Attendance during the year ended on June 30, 2016.
Meeting held while a No. of meeting attended in
Sl. no. Name of the Directors
member person/alternates
01. Mr. A.K. M. Humayun Kabir 11 11
02. Engr. Md. Rabiul Hasnat 11 08
03. Mr. Md. Rofi uddin 11 10
04. Engr. Zulfiquar Tahmid 11 10
 Events
Highlight
42 Annual Report 2016

Hon’ble State Minister, Ministry of Power, Energy and Mineral Resources visited the exhibition on Design competition for
construction of DESCO Head office Building.
Location : Shilpakala Academy, Dhaka.

Ceremony for receiving ISO 9001:2008 Certificate for Quality Management System in DESCO from Bureau Veritas.
Location: Biddut Bhaban, Dhaka.

Monowar Islam, Secretary, Power Division, Ministry of Power Energy and Mineral Resources visited Baridhara S & D Division.
 Annual Report 2016 43

Customers review on DESCO Services.

ADB Country Director Mr. Kazuhiko Higuchi met the Management at DESCO Head Office.

Contract signing with LS system Ltd, Korea for high voltage Underground Inter Gride sub station Connectivity on Turnkey Basis.
44 Annual Report 2016

Contract signing with Hyosung Corporation, Korea for Construction of Grid Substations on Turnkey Basis.

Mr. Jonathan Shaw, Executive Director and Mr. Fazle Karim, Senior Program Specialist (Head of ITE), AIT Extension, Thailand
visited DESCO Head Office.

Best Customer of DESCO 2015 (Domestic) received the Award from Hon’ble State Minister. Ministry of Power, Energy and
Mineral Resources.
 Annual Report 2016 45

DESCO Executives are answering the queries of the visitors at Electricity Fair 2015 at BICC, Dhaka.

Training of DESCO Employees at AIT, Thailand

Prize Distribution Ceremony for Annual Indoor Games. Signing of MoU with Institute of Architect, Bangladesh for
conducting Design Competition for selecting potential
consultant for construction of DESCO Head Office Building.
46 Annual Report 2016

Moments with the hon’ble Shareholders

 Annual Report 2016 47
Award and Recognition

ISO 9001:2008 Certification for Quality Management System 12th National Award for Best published Accounts and Reports – 2011
Certification body Bureau Veritas Certification Holding SAS - UK (First Prize,Service Sector Category)
Awarded by Institute of Chartered Accountants

National Digital innovation Award – 2011

Best corporate award 2015 (Special Category) (e-Finance Category, Runner up)
Awarded by Institute of Cost and Management Accountants Awarded by Ministry of Science and ICT, Govt. of People’s
of Bangladesh (ICMAB) Republic of Bangladesh and D-Net.
 Audit
Report
 Annual Report 2016 49

BSEC Bhaban, Level-10 Tel: 8180185, 8189883

102 Kazi Nazrul Islam Avenue Kawran Bazar E-mail : Karim_mohammad@hotmail.cpm
Dhaka 1215, Bangladesh Website : www.artisan-ca.com

Auditors’ Report to the Shareholders

Of
Dhaka Electric Supply Company Limited
We have audited the accompanying financial statements of Dhaka Electric Supply Company Limited
(DESCO), which comprise the statement of financial position as at June 30, 2016, and the statement
of comprehensive income, statement of changes in equity and statement of cash flows for the year
then ended and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these financial statements in
accordance with Bangladesh Financial Reporting Standards (BFRSs)/ Bangladesh Accounting Standards
(BASs), the Companies Act 1994, the Securities and Exchange Rules 1987 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 misstatements whether due to fraud
and error.

Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with Bangladesh Standards on Auditing (BSAs).

Those standards require that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free from material
misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditors’ judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements 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. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our qualified audit opinion.
50 Annual Report 2016

Basis for Qualified Opinion

DESCO owned total non-current assets amount in the current financial statements as of 30th June,
2016, is Tk. 1663 crore. Out of which a material portion of assets valued at the 279 crore (17%) was
acquired from the predecessor entity DESA .

The valuation of those assets of Tk. 279 crore was not supported with any vendor agreement with
DESA .

Qualified Opinion
In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion
paragraph, the financial statements give a true and fair view of the financial position of Dhaka
Electric Supply Company Limited (DESCO) as at 30 June 2016 and its financial performance and cash
flows for the year then ended in accordance with Bangladesh Financial Reporting Standards (BFRSs)/
Bangladesh Accounting Standards (BASs) and comply with the applicable section of Companies Act
1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations.

We also report that:

1. 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
verification thereof;

2. In our opinion, proper books of account as required by law have been kept by the
Company so far as it appeared from our examination of those books;
3. The Company’s statement of financial position and comprehensive income along with
the annexed notes 1 to 44 dealt with by the report are in agreement with the
books of account ; and
4. The expenditure incurred and payments made were for the purposes of the Company’s
business.

ARTISAN
Chartered Accountants Dated: Dhaka, 23 October, 2016
 Annual Report 2016 51
Dhaka Electric Supply Company Limited
Statement of Financial Position
As at 30 June 2016
Particulars Note 30 June 2016 30 June 2015
Taka Taka
Assets  
Non Current Assets: 16,632,707,653 13,077,369,673
Property, Plant & Equipment 2 14,163,535,885 11,414,491,554
Capital Work -in- Progress 3 2,469,171,769 1,662,878,119
 
Current Assets: 28,096,500,621 25,465,786,914
Stores and Spares 4 7,622,034,713 3,683,150,440
Accounts Receivable 5 3,680,184,550 3,678,780,423
Advances & Security Deposits 6 623,388,963 2,106,756,139
Advance Income Tax 7 1,029,337,057 786,445,247
Cash and Cash Equivalents 8 15,141,555,339 15,210,654,665
 
Total Assets 44,729,208,274 38,543,156,587
 
Equity & Liabilities
Capital & Reserves: 14,724,191,733 12,933,033,214
Share Capital 17 3,975,698,044 3,786,379,090
Share Money Deposit 18 75,000,000 75,000,000
GOB Equity 19 2,722,140,000 1,552,140,000
Retained Earnings 20 7,951,353,689 7,519,514,123

Long Term Liabilities: 18,397,062,237 14,587,572,342

Long Term Loans (ADB & GOB) 21 10,534,771,718 7,087,317,660
Deferred Tax Liability 35.2 1,928,129,606 1,744,550,219
Due to DESA / DPDC (for assets taken over) 22 4,039,671,539 4,039,671,539
Consumer Security Deposits 23 1,894,489,374 1,716,032,924

Current Liabilities: 11,607,954,305 11,022,551,032

Accounts Payable 9 6,103,227,543 5,272,108,117
Creditors for Goods/Works 10 73,862,775 692,931,275
Creditors for Other Finance 11 1,736,963,946 1,526,417,657
Creditors for Expenses 12 623,383,474 284,210,647
Current Maturity of Long Term Loans 13 756,774,594 655,982,264
Accrued Interest on Loans 14 1,568,076,098 1,426,060,584
Short Term Loan 15 - 389,997,942
Provision for Income Tax 16 745,665,875 774,842,546
 
Total Equity & Liabilities 44,729,208,274 38,543,156,587

The accounting policies and other notes from 1 to 44 and Annexure-A form an integral part of these Financial Statements.

Company Secretary Executive Director (F&A) Director Managing Director
Signed in terms of our separate report of even date annexed.

ARTISAN
Dated: Dhaka, 23 October, 2016 Chartered Accountants
52 Annual Report 2016

Dhaka Electric Supply Company Limited

Statement of Comprehensive Income
For the year ended 30 June 2016

Particulars Note 2015-16 2014-15

Taka Taka

Operating Revenue: 31,890,488,152 27,965,629,581

Energy Sales (Net of VAT) 24 31,260,088,421 27,358,150,352
Other Operating Revenue 25 630,399,731 607,479,22
 
Cost of Energy Sales: 29,989,067,881 25,427,097,318
Energy Purchase (including wheeling charge) 26 28,956,565,428 24,344,811,425
Operating Expenses 27 375,509,078 382,325,650
Depreciation (Operating) 34 656,993,375 699,960,243
Gross Profit 1,901,420,272 2,538,532,263
 
Cost & Expenditure: 1,960,632,097 1,556,024,075
Administrative Expenses 28 332,560,327 277,836,378
Employee Expenses 29 1,583,004,707 1,216,810,826
Bad Debts Provision 5.2 - 17,615,689
Depreciation (Non Operating) 34 45,067,063 43,761,182
 
Operating Profit/(Loss) (59,211,825) 982,508,188
 
Non Operating Income/(Expense) 659,796,386 1,007,950,993
Interest Income 30 962,104,433 1,230,813,362
Interest Expenses 31 (341,524,780) (332,517,660)
Exchange Fluctuation Gain/ (Loss) 32 16,112,606 71,982,463
Miscellaneous Income 33 23,104,127 37,672,828
Net Profit Before Tax 600,584,561 1,990,459,182
 
Income Tax : 35 (154,402,716) (355,587,073)
Current Tax Provision 35.1 29,176,670 (424,858,698)
Deferred Tax Provision 35.2 (183,579,386) 69,271,625
Net Profit After Tax 446,181,845 1,634,872,109
   
Basic Earnings per Share (Adjusted) 36 1.12 4.11

The accounting policies and other notes from 1 to 44 and Annexure-A form an integral part of these Financial Statements.

Company Secretary Executive Director (F&A) Director Managing Director

Signed in terms of our separate report of even date annexed.

Dated: Dhaka, 23 October, 2016 ARTISAN
Chartered Accountants
 Annual Report 2016 53
Dhaka Electric Supply Company Limited
Statement of Cash Flows
For the year ended 30 June 2016
Particulars 30 June 2016 30 June 2015
Taka Taka

A. Cash Flows from Operating Activities:
Received from Energy Sales 31,791,577,110 27,763,557,716
Collection of Govt. Duty, VAT & Tax 1,798,081,240 1,620,108,451
Received from Other Operating & Non Operating Activities 1,032,357,533 890,583,078
Received against Financial Income 962,020,871 1,229,972,673
Payment for Energy Purchase (28,150,071,463) (24,069,293,346)
Payment for Employee Expenses (1,199,410,085) (1,216,810,826)
Payment for Administrative & Other Expenses (800,020,909) (1,241,469,781)
Payment for Interest on Long Term Loan (199,509,265) (91,863,540)
Income Tax Paid (242,879,318) (133,591,438)
Payment for Govt. Duty, VAT & Tax (1,716,994,164) (1,618,974,623)
Net Cash Flows from Operating Activities 3,275,151,550 3,132,218,365

B. Cash Flows from Investing Activities:

Acquisition of Property & Plant (2,098,381,603) (1,305,595,836)
Acquisition of Stores & Equipment (5,772,774,924) (2,776,969,354)
Net Cash used in Investing Activities (7,871,156,527) (4,082,565,190)

C. Cash Flows from Financing Activities:
Loan Received 5,444,720,893 778,944,726
Dividend Paid (501,453,400) (38,781,933)
Long Term Loan Paid (589,854,278) (380,235,201)
Consumer Security Deposits Received 173,492,435 208,233,941
Net Cash Flows from Financing Activities 4,526,905,650 568,161,533

D. Cash & Cash equivalents increase /(decrease) during the year (69,099,326) (382,185,293)
E. Cash & Cash equivalents at the beginning of the year 15,210,654,665 15,592,839,958
F. Cash & Cash Equivalents at the Ending of the Year 15,141,555,339 15,210,654,665

The accounting policies and other notes from 1 to 44 and Annexure-A form an integral part of these Financial Statements.





Company Secretary Executive Director (F &A) Director Managing Director

Signed in terms of our separate report of even date annexed.

Dated: Dhaka, 23 October, 2016 ARTISAN
Chartered Accountants
 54
Dhaka Electric Supply Company Limited
Statement of Changes in Equity
For the year ended 30 June 2016 Figures in Taka
Share Money
Particulars Note Share Capital GOB Equity Retained Earnings Total
Deposit
Balance at 01 July 2015   3,786,379,090 75,000,000 1,552,140,000 7,519,514,123 12,933,033,215
Net profit for the year   - - - 446,181,845 446,181,845
Priors year’s adjustment 37 - - - 553,614,584 553,614,584
Stock Dividend   189,318,955 - - (189,318,955) -
Cash Dividend   - - - (378,637,909) (378,637,909)
Annual Report 2016

Balance at 30 June 2016   3,975,698,045 75,000,000 1,552,140,000 7,951,353,677 13,554,191,735

For the year ended 30 June 2015

Figures in Taka
Share Money
Particulars Note Share Capital GOB Equity Retained Earnings Total
Deposit
Balance at 01 July 2014   3,442,162,820 75,000,000 1,552,140,000 6,226,949,770 11,296,252,580
Net profit for the year   - - - 1,634,872,109 1,634,872,109
Priors year’s adjustment   - - - 174,016,667 174,016,667
Stock Dividend paid   344,216,270 - - (344,216,270) -
Cash Dividend paid   - - - (172,108,153) (172,108,141)
Balance at 30 June 2015   3,786,379,090 75,000,000 1,552,140,000 7,519,514,123 12,933,033,215

The accounting policies and other notes from 1 to 44 and Annexure-A form an integral part of these Financial Statements.

Company Secretary Executive Director (F &A ) Director Managing Director
Signed in terms of our separate report of even date annexed.

Dated: Dhaka, 23 October, 2016 ARTISAN
Chartered Accountants
 Annual Report 2016 55
Dhaka Electric Supply Company Limited
Notes to the Financial Statements
For The Year Ended 30 June 2016

1. Legal Status & Nature of the Company, Significant Accounting Policies and other Relevant
Information:

1.1 Legal Status:

Dhaka Electric Supply Company Limited (DESCO) was incorporated as a Public Limited Company
by shares, on 03 November, 1996 with an Authorized Capital of TK.5, 000 million divided into
500 million ordinary shares of Tk.10 each as per SEC notification no SEC/CM RRCD/2009-
193/109, dated: 15/09/2011. The shares of the Company have been listed and are being traded
in Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) since 2006.

1.2 Principal Activities:

The main objective of the Company is to distribute electricity to its consumers effectively and
efficiently. DESCO started its operation from 24 September 1998 in Mirpur area and as per
Govt. decision the operation of greater Gulshan area was added from 09 April 2003. Further
on 04 March 2007 operation of Tongi Area was also handed over from DESA to the Company.

1.3 Basis of Accounting:

The Financial Statements have been prepared on historical cost convention in accordance with
Bangladesh Financial Reporting Standards (BFRSs), except where otherwise mentioned, and
are in compliance with the relevant requirements of the Companies Act, 1994, the Securities
and Exchange Rules 1987 and other applicable laws and regulations.

1.4 Property, Plant & Equipment:

1.4.1    Valuation of Property, Plant & Equipment Purchased by DESCO

All property, plant & equipment purchased by DESCO are recorded at cost considering
its purchase price and any directly attributable cost of bringing the assets to working
condition for intended use inclusive of inward freight, duties and non-refundable
taxes

1.4.2 Valuation of Assets taken over from DESA

1.4.2.1 Property, plant & equipment taken over from the Dhaka Electric Supply Authority
(DESA) in the Mirpur area have been valued at Tk.1, 271.194 million as per joint survey
report between DESA and DESCO, while those of Gulshan and Tongi areas have
been provisionally estimated by DESCO at Tk.1,998.92 million and Tk.795.04 million
respectively.

1.4.2.2 DESCO also took over two Grid Substations (Bashundhara and Uttara) from DESA at
provisional estimated cost of Tk.1, 245.71 million, including cost of land, as per Vendor
Agreement signed between DESCO and DESA.

1.4.2.3 Independent valuers had been appointed to physically verify and value the assets
56 Annual Report 2016

taken over by the company from DESA. The valuers have submitted their draft report
which has been placed by the management before the Board for finalization.

1.4.3 Depreciation:

1.4.3.1 Depreciation is charged at straight-line method at rates varying from 2% to 20%

depending on category and economic life of the assets as under:

Categories Rate (%)

Land & Land Development Nil
Building & other Constructions 2.5%
Distribution Equipment & Cables 3%-10%
Furniture & Fixtures 10%
Office Equipment 15%-20%
Motor Vehicles 15%

1.4.3.2 The company has acquired 0.1532 acres land from National Housing Authority (NHA)
at Tk. 7.45 lac on 99 years lease in the year 2005. The amortization of the cost of this
land would have been Tk. 7,529/- per year, which would not have any ‘material impact’
on the profitability of the company, hence no amortization has been considered.

1.4.3.3 Full year’s depreciation is charged on assets acquired during the year and put into use
for six months and over, while no depreciation is charged on assets acquired for less
than six months during the year.

1.1.1.4 Depreciation on the assets taken over in Gulshan and Tongi area has been charged on
the value and economic life as provisionally estimated by DESCO.

1.5 Stores and Spares:

Stores and spares have been stated at the lower of cost and net realizable value in accordance
with BAS 2 “Inventories”, after making due allowance for any obsolete or slow moving items.
The cost of inventories is assigned by using weighted average cost method.

1.6 Foreign Currency Translation:

Foreign currency transactions are translated into Taka at exchange rates prevailing on the
respective dates of transaction, while foreign currency monetary liabilities at the end of the
year are reported at the rate prevailing on the balance sheet date. Exchange losses/gain
arising out of the said conversion is recognized as expense/ income for the year in accordance
with BAS-21.

1.7 Revenue Recognition:

(a) The Company recognizes revenue of energy on issue of bills to the consumers for
consumption of energy, demand charge, service charge, meter and transformer rent.

(b) Other operating income arising from connection/disconnection fees, bills against
materials, meter-testing fees, LPC (Late Payment Charge) etc, are recognized on cash
basis.
 Annual Report 2016 57
(c) Interest on short-term deposits (STD) and on FDR’s with banks is recognized as income
on cash basis

1.8 Statement of Cash Flows:

Statement of Cash Flows is prepared principally in accordance with BAS 7 “Statement of
Cash Flows” and the cash flow from operating activities has been presented under the direct
method as required by the Securities and Exchange Rules 1987 and considering the provisions
that “Enterprises are encouraged to Report Cash Flows from Operating Activities using the
Direct Method”

1.9 Accounts Receivable:

Accounts Receivable for energy is stated at realizable amount less provision for doubtful debts.
The company provides for doubtful debts @ 0.5% of Accounts Receivable against consumers
balance standing at the balance sheet date, as decided by the Board of Directors at the
meeting held on 17.04.2005.

1.10 Related Party Transaction:

(a) The ‘related party’ as per BAS-24 is Bangladesh Power Development Board (BPDB), which
holds 75% of the total shares outstanding.
(b) The Company entered into contract with Bureau of Research, Testing & Consultation
(BRTC), and BUET for technical assistance in prepaid metering pilot project for production
of prepaid meters, e-governance and Data Acquisition System. BUET is represented on the
company’s Board.

1.11 Earnings per Share:

(a) Basic Earnings per Share (BEPS): Basic Earnings per share has been calculated by
dividing the earnings attributable to the number of shares (ordinary) outstanding
during the year. However, neither the “GOB Equity “nor the “Share Deposit” amounts
have been considered for determining BEPS and no shares have been allotted against
these receipts.
(b) Weighted average Number of shares Outstanding during the year: This represents
the number of ordinary shares Outstanding at the beginning of the year plus the
year the numbers of ordinary shares issued during the year multiplied by a time
weighting factor. The time weighting factor is the number of days the specific shares
are outstanding as a proportionate of the number of days in the year.

(c) Diluted Earnings Per Share: No diluted Earnings per share was required to be
calculated for the year under review as there is no scope for dilution of Earnings per
share for the year.

1.12 Retirement Benefit Plans:

(a) Contributory Provident Fund

The Company maintains a Contributory Provident Fund (CPF), recognized by the
National Board of Revenue (NBR), under which the employees contribute 10% of
their basic salary to the fund. The company contributes an equal amount. The fund
is managed and operated by a Board of Trustees. The net earnings of the fund are
apportioned to the Fund member’s accounts at the end of the year.

(b) Gratuity
The Company maintains a Gratuity Fund, approved by the NBR under Income Tax
Ordinance, 1984. Under the Gratuity Scheme, the company pays to a retired employee,
58 Annual Report 2016

having completed at least 3 (three) years of service, at the rate of two and half
months’ last drawn basic salary for every completed year of service. The company
pays to the fund for the liability at the end of each year considering the number of
years of service of employees eligible under the scheme.

The liability shown in the Balance Sheet does not reflect the present value of the
expected payments by the company’s retirement plan to existing and past employees
attributable to the service already rendered and is therefore not in compliance with
BAS 26.

(c) Group Insurance

The Company has taken Group Endowment policy for its employees and provision for
the premium on the coverage is made annually.

1.13 Taxation:
(a) Current Tax
The tax currently payable is based on taxable profit for the year. Taxable profit differ
from net profit as reported in the income statement because it excludes items of
income or expenses that are taxable or deductable in other years and it further
excludes items that are never taxable or deductable. The Company’s liability for current
tax is calculated using tax rates that have been enacted or substantively enacted by
the balance sheet date.

(b) Deferred Tax Liability

The Company accounts for deferred tax liability as per Bangladesh Accounting Standard
(BAS-12). Deferred Tax is provided using the liability method for all temporary timing
difference arising between the tax base of assets and liabilities and their carrying
value for financial reporting purposes. An appropriate proportion of provision has
been considered in calculating temporary timing difference. Tax rate prevailing at the
balance sheet date is used to determine deferred tax liability.

1.14 Borrowing Cost:

Interest on borrowed funds for ongoing projects is charged as expense.

1.15 Reporting Currencies:

The financial statements presented are stated in Bangladesh Taka and rounded off to the
nearest integer.

1.16 Reporting Period:

The accounting year of the company covers the year ended from 1 July 2015 to 30 June 2016.
 Annual Report 2016 59
2015-16 2014-15
Taka Taka
2.00 Property, Plant & Equipment:
Cost:
Opening Balance 18,514,035,354 17,657,038,550
Less: Disposal of distribution equipment (Note 02.01) (1,408,000) (95,882,460)
18,512,627,354 17,561,156,090
Additions during the year (02.01) 3,470,895,769 952,879,264
Closing Balance 21,983,523,123 18,514,035,354
Depreciation:
Opening Balance 7,099,543,799 6,406,437,347
Less: Adjustment for disposals (Note 02.01) (1,406,000) (50,614,973)
7,098,137,799 6,355,822,374
Charged for the year and including prior year adjustment. 721,849,438 743,721,425
Closing Balance 7,819,987,237 7,099,543,799
Written Down Value (WDV) 14,163,535,885 11,414,491,554

02.01 Detail of addition & disposals of assets are shown in Annexure-1 attached.
3.00 Capital Work -in- Progress:
33/11KV OH/UG Cable Line (Note 03.01) 31,164,708 22,036,587
33/11Kv Sub- Station - Turnkey Project (Note 03.02) 1,829,391,183 1,520,013,362
33/11Kv Sub- Station - Turnkey Project (Note 03.02) 35,162,789 60,687,013
33/11Kv Sub- Station - Turnkey Project (Note 03.03) 377,038,235 -
Construction of Workshop Building & Others (Note 03.04) 196,414,854 60,141,157
Total 2,469,171,769 1,662,878,119

03.01 33/11kv overhead & under ground cable works are in progress at Mirpur, Gulshan and Tongi circle
respectively. The total contract price of the works is Tk. 121.80 million.
3.02 The Company entered into an agreement with Ideal Enterprise and Energypac to implement 8(Eight)
nos. 33/11Kv Sub -Station & 4 (Four) nos 33/11Kv Sub -Station under DESCO Fund . The total contract
price are Tk 1,503.31 & 805.00 million respectively.
3.03 The Company entered into an agreement with Hysung Corporation to implement 05(Five) nos.
33/11Kv Grid Sub -Station & 04 (Four) nos 33/11Kv Sub -Station under ADB Fund . (Including local
fund Tk.779.04 million) . The total contract price are Tk 5,843.08 million
3.04 Civil work under work in process at DESCO Mirpur area (Central Store, Kafrul Sub Station) & Tongi office
Building. The total contract price of the works is Tk.248.82 million.
4.00 Stores & Spares :
Stores & Spares (Note-04.01) 4,287,696,171 3,681,656,839
Stores in Transit (Note-04.02) 3,334,338,542 1,493,601
Total 7,622,034,713 3,683,150,440
04.01 Cost of Stores & Spares
Cable & Accessories 2,093,862,611 2,218,489,094
Pole & Pole fittings 299,057,085 257,170,204
Distribution transformers 739,788,997 326,132,952
Meter & Meter accessories 111,240,696 450,588,890
Sub-station equipment & spares 935,050,228 325,690,846
Tools, equipment & others 108,696,554 103,584,853
Total: 4,287,696,171 3,681,656,839
60 Annual Report 2016

4.02 This presented cost of materials, including L/C charge and Pre -Shipment- Inspection (PSI) expenses,
paid against imported materials for which post landing inspection (PLI) has not been completed.
4.03 Stores & spares have been valued at weighted average cost method.
2015-16 2014-15
Taka Taka
5.00 Accounts Receivable:

Receivable from consumers -(Note 05.01) 3,601,211,858 3,622,226,362

Less: Provision for doubtful debts (Note 05.02) (101,045,045) (116,704,084)
3,500,166,813 3,505,522,279
Receivable from BPDB against materials & others (Notes 05.03) 57,462,286 57,693,075
Receivable from DPDC against materials & others (Notes 05.04) 15,881,133 8,720,300
Receivable from BREB against materials 86,754,041 86,754,041
Receivable from WZPDCL 1,197,161 1,197,161
Expenses recoverable from employees 1,497,215 604,087
Receivable from United Trade Int. 17,222,383 17,222,383
Advertisement cost recoverable from other utility organization 3,518 1,067,098
and others
Total: 3,680,184,550 3,678,780,423

05.01 Receivable from consumers are categorized as follows :

Government (Eqv. month 4.44 ,2014-15 : 5.92) 446,033,415 579,096,795

Semi- Government/Autonomous (Eqv. Month 2.02,2014-15 :2.21) 285,818,916 282,555,101
Private (Eqv. Month 1.44, 2014-15 :1.59) 2,869,570,842 2,760,574,466
Average ( Eqv. Month 1.61 , 2014-15: 1.85) 3,601,423,173 3,622,226,362

5.02 No provision has been arisen during this year, Companies provision policy is @ 0.5% of the receivable
amount outstanding at the balance sheet date,.
This balance has been arrived at as under:
Opening Balance 99,088,395 100% 99,088,395 116,704,084
Add: Adjustment 391,329,939 0.50% 1,956,650
Total Cumulative Provision 101,045,045 -
Opening Balance 116,704,084 -
Adjustment related to previous year (15,659,039) 116,704,084

5.03 This balance has been arrived at as under:

Receivable from BPDB against materials supplied 55,472,107 55,472,107

Receivable from BPDB against advertising 1,990,179 2,090,179
Receivable against advertisement during the year - 130,789
57,462,286 57,693,075
5.04 This balance has been arrived at as under:

Receivable from DPDC against Material supplies 10,652,328 2,686,187

Receivable against Advertisement 5,228,806 5,903,324
Receivable against advertisement during the year - 130,789
Closing Balance 15,881,133 8,720,300
 Annual Report 2016 61
2015-16 2014-15
Taka Taka
6.00 Advances & Security Deposits:
A) Advances:
Against goods and services (Note 06.01) 81,072,287 18,251,712
Against goods for imported materials - 369,316,238
Advance against office rent 14,749,986 14,037,776
Advance to Rajuk against Land purchase 300,326,889 1,598,771,400
Prepayment - Employee 4,965,502 42,963,981
Deferred/Prepaid Exp. & Others ( Note 06.02) 95,290,134.50 14,200,552
Sub-Total: 496,404,798 2,057,541,659

B) Security Deposits:
Telephone/ Mobile 708,621 706,621
Telephone Shilpha sangstha ltd against rent of store 5,000,000 -
Dhaka & Gazipur City Corporation (against road cutting) 114,030,365 46,663,298
Dhaka WASA 10,411 10,411
Central Depository of Bangladesh (CDBL) 500,000 500,000
Bangladesh Railway, Roads and Highway 4,300,000 300,000
Security Deposit - RDA Building 173,087.00
Security Deposit - Others 2,261,681 1,034,150
Sub-Total: 126,984,165 49,214,481
Total (A+B) 623,388,963 2,106,756,139

06.01 Advance against goods & services includes Tk. 8.01 million paid to Bangladesh Power Development
Board for (BPDB) against purchase of spun pre-stressed concrete (SPC) poles and Tk.72.67 million paid
to Telephone Shilpa Sangtha for purchase of Prepaid Meter.
6.02 Prepaid expenses include Tk. 13.26 million paid to Saju Enterprise and Tk. 32.73 million paid to Mars
Syndicate and 42.96 million paid to KDA & RDA for infrastructure development of office building .
7.00 Advance Income Tax:
Income Tax paid for 2011-12 229,237,646 229,237,646
Income Tax paid for 2012-13 219,823,570 219,823,570
Income Tax paid for 2013-14 204,168,639 204,168,639
Income Tax paid for 2014-15 133,215,392 133,215,392
Income Tax paid for 2015-16 (Note-07.01) 242,891,810 -
Closing Balance 1,029,337,057 786,445,247
07.01 Advance Income Tax paid during the year:
This arrived at as under:
Deducted at source (on interest on FDR & STD) 96,798,574 124,738,340
Deducted at source (on imported materials) 145,295,557 7,726,852
Income tax paid for FY 2015-16 797,679 750,200
242,891,810 133,215,392
8.00 Cash & Cash Equivalents:
Imprest cash with S&D divisions 1,842,333 1,842,333
Cash at banks (Note-08.01) 15,139,713,006 15,208,812,332
Total: 15,141,555,339 15,210,654,665
62 Annual Report 2016

2015-16 2014-15
Taka Taka
8.01 Cash at Banks:
Current account (revenue collection) (Note 08.01.01) 3,481,648,275 2,777,144,351
Current account (VAT) 252,423,001 179,066,731
STD accounts 1,505,056,405 2,260,829,742
Fixed Deposit Receipts (FDR) (Note 08.01.02) 9,900,585,325 9,991,771,508

Total: 15,139,713,006 15,208,812,332

This represents collection for the last one months, by the different collecting banks, which has been
08.01.01 transferred to the Company’s main account in the next month.
8.01.02 Fixed Deposit Receipts include Tk.37.41 million (2014-2015 :Tk 67.69) in ICB Islamic Bank Ltd. (former
Oriental Bank Ltd.) which is subject to phase wise withdrawal restriction imposed by Bangladesh Bank
under the reconstruction scheme. An amount of Tk 30.27 million has been realized during the year. As
per Bangladesh Bank reconstruction scheme balance amount will be realized by 2017.

09.00 Accounts Payable

Bangladesh Power Development Board (BPDB)- (Note 09.01) 5,551,657,351 4,806,296,534

Power Grid Company of Bangladesh (PGCB)- (Note 09.02) 265,182,165 204,049,017
Dhaka Electric Supply Authority (DESA/DPDC) - (Note 09.03) 286,058,838 261,433,377
REB - (Note 09.04) 329,188 329,188
Total: 6,103,227,543 5,272,108,117

09.01 Accounts Payable - BPDB

Opening Balance 4,806,296,534 4,542,167,050

Energy purchased during the year 27,662,003,845 23,354,875,803
32,468,300,379 27,897,042,853
Payment made during the year (26,916,643,028) (23,090,746,319)
Closing Balance 5,551,657,351 4,806,296,534

09.02 Accounts Payable - PGCB

Opening Balance 204,049,017 192,660,422

Wheeling charge during the year 1,294,561,583 989,935,622
1,498,610,600 1,182,596,044
Payment made during the year (1,233,428,435) (978,547,027)
Closing Balance 265,182,165 204,049,017

09.03 Accounts Payable - DESA/ DPDC

Opening Balance 261,433,377 186,361,419

Payable against Materials received from DPDC 24,250,000 64,012,223
Consumer bill collection 375,461 11,059,735
Closing Balance 286,058,838 261,433,377

09.04 Accounts Payable - REB

Payable against Material 329,188 329,188
Closing Balance 329,188 329,188
 Annual Report 2016 63
2015-16 2014-15
Taka Taka
10.00 Creditors for Goods/ Works :

Equipment & materials (Note-10.01) 73,862,775 104,313,684

Imported materials against ADB loan - 588,617,591
Total 73,862,775 692,931,275

10.01 This includes as payable Tk 60.69 million to M/S South China Electric Co. Ltd. against supply of
Transformer.

11.00 Creditors for Other Finance:

VAT collected against electricity bills 254,806,387 181,155,238

Tax / VAT deducted from contractors, suppliers & others 23,033,164 12,156,817
Retention money ( contractors & suppliers) 71,730,058 64,812,063
Receipts against deposit works 1,309,832,698 1,060,665,000
Unpaid dividend 52,217,877 174,890,550
Contribution to gratuity fund - 51,567
Others 25,343,763 32,686,423
Total 1,736,963,946 1,526,417,657
12.00 Creditors for Expenses:

Audit Fees 277,025 277,025

Creditor for Gratuity Fund 316,192,621 51,567
Line maintenance & commercial services and others 234,792,490 222,490,954
BERC sales charge (Note-12.01) 72,121,337 61,391,102
Total 623,383,474 284,210,647

12.01 This represents provision at 0.05% of net sales value as “annual system operating fees” payable to
Bangladesh Energy Regulatory Commission (BERC) as per BERC rules.

13.00 Current Maturity of Long Term Loans:

ADB Loan No-1505 (Note-13.01) 85,518,762 85,900,544

ADB Loan No-1731 (Note-13.02) 184,095,854 184,917,711
ADB Loan No-2332 (Note-13.03) 476,813,427 342,644,172
GOB Loan No 1505& 1731 (Note-13.04) 431,955 32,605,241
GOB Loan No 2332 (Note-13.05) 9,914,596 9,914,596
Total 756,774,594 655,982,264
13.01 ADB (Loan No. 1505)
2015-2016 2014-2015
US $ Taka US $ Taka
Opening Balance 1,090,801 85,900,544 1,636,201 130,077,967
“Transferred from long 1,090,801 85,518,764 545,400 2,950,272
term loan”
2,181,601 171,419,308 2,181,601 173,028,239
Paid during the year (1,090,801) (88,136,686) (1,090,801) (85,518,764)
1,090,801 83,282,622 1,090,801 87,509,475
Exchange loss/(gain) - 2,236,140 - (1,608,931)
Closing Balance 1,090,801 85,900,544 1,090,801 85,900,544
64 Annual Report 2016

13.02 ADB (Loan No. 1731) 2015-2016 2014-2015

US $ Taka US $ Taka

Opening Balance 2,348,161.38 184,917,710.69 2,348,161 186,678,831

“Transferred from long 2,348,161.85 184,095,853.66 2,348,162 184,917,710
term loan”
4,696,323.23 369,013,564.35 4,696,323 371,596,541
Paid during the year (2,348,161.39) (189,731,441.50) (2,348,161) (184,095,853)
2,348,161.84 179,282,122.85 2,348,162 187,500,688
Exchange loss/(gain) - 4,813,730.78 - (2,582,978)
Closing Balance 2,348,161.84 184,095,853.63 2,348,162 184,917,711

13.03 ADB (Loan No. 2332) 2015-2016 2014-2015

US $ Taka US $ Taka

Opening Balance 4,351,037 342,644,172 2,419,880 192,380,442

“Transferred from long 5,061,534 396,824,242 2,866,078 225,703,668
term loan”
9,412,571 739,468,414 5,285,958 418,084,110
Paid during the year 3,330,767 269,898,269 934,921 73,490,000
6,081,804 469,570,145 4,351,037 344,594,110
Exchange loss/(gain) - 7,243,283 - (1,949,939)
Closing Balance 6,081,804 476,813,427 4,351,037 342,644,172

2015-16 2014-15
Taka Taka
13.04 GOB Loan ( No: 1505 & 1731)
Opening Balance 32,605,241 64,778,527
Transferred from long term loan - -
32,605,241 64,778,527
Paid during the year 32,173,286 32,173,286
Closing Balance 431,955 32,605,241

13.05 GOB Loan (No: 2332)

Opening Balance 9,914,596 4,957,298

Transferred from long term loan 9,914,596 9,914,596
19,829,192 14,871,894
Paid during the year 9,914,596 4,957,298
Closing Balance 9,914,596 9,914,596
14.00 Accrued Interest on Loans

Interest payable on ADB Loan (14.01) 1,550,428,841 1,412,323,861

Interest payable on 40% (Debt Portion) of GOB Loan(14.02) 17,647,257 13,736,723
Total 1,568,076,098 1,426,060,584
14.01 Interest on ADB loan

Opening Balance 1,412,323,861 1,194,819,653

Interest accrued during the year 323,699,130 1,495,517,983
1,736,022,991 2,690,337,636
Paid during the year (185,594,150) (1,278,013,775)
Closing Balance 1,550,428,841 1,412,323,861
 Annual Report 2016 65
2015-16 2014-15
Taka Taka
14.02 Interest on GOB Loan

Opening Balance 13,736,723 19,202,382

Interest accrued during the year 12,261,154 9,496,467
25,997,877 28,698,849
Paid/ adjustment during the year (8,350,620) (14,962,126)
Closing Balance 17,647,257 13,736,723

15.00 Short Term Loan

Opening Balance 389,997,942 -

Paid/ addition during the year (Note: 15.01) (389,997,942) 389,997,942
Closing Balance - 389,997,942

15.01 This represent loan received from Rupali Bank ltd for lease payment and paid during this year against 19.5
biga land from RAJUK.

16.00 Provision for Income Tax:

Opening Balance 774,842,546 349,983,848

Add: Provided during the year (Note-35.01) (29,176,670) 424,858,698
Add: Prior year adjustment as per settlement of Appellate - -
745,665,875 774,842,546
Prior Year adjustment - -
Closing Balance (Note-16.01) 745,665,875 774,842,546

16.01 Details of Provision for Income Tax :

For FY 2011-12 41,988,409 41,988,409

For FY 2012-13 168,015,917 168,015,917
For FY 2013-14 139,979,522 139,979,522
For FY 2014-15 424,858,698 424,858,698
For FY 2015-16 (29,176,670) -
745,665,876 774,842,546
17.00 Share Capital:

Authorized:
500,000,000 No. ordinary shares @ Tk. 10 each 5,000,000,000 5,000,000,000

Issued , subscribed and paid up:

7,500,000 No. Ordinary shares @ Tk 10 each, fully paid up in cash 75,000,000 75,000,000

11,961,9400 No. Ordinary shares@ Tk.10 each for consideration 1,196,194,000 1,196,194,000
Against Mirpur area assets taken over from DESA/BPDB

217,096,881 Nos Ordinary shares @ Tk.10 each issued as Bonus 2,170,968,810 2,170,968,810
34,421,628 Nos Ordinary shares @ Tk.10 each issued as Bonus 344,216,280 344,216,280
18,931,895 Nos Ordinary shares @ Tk.10 each issued as Bonus 189,318,954
397,569,804 No. of shares ,Tk. 10 each 3,975,698,044 3,786,379,090
66 Annual Report 2016

17.01 Composition of shareholding:

The composition of Share holding position as of 30th June 2016 is as follows:

No. of share Number of share % of share

holders
Sponsors (GOB) 2 298,177,213 75.00%
General Public 7,154 29,435,385 7.40%
Mutual Fund 281 67,690,905 17.03%
Foreign Company 72 2,266,301 0.57%
7,509 397,569,804 100%
17.02 Distribution Schedule:
The distribution Schedule as at 30 June 2016 showing the number of shareholders and their shareholding in
percentages is disclosed below as a requirement of the “Listing Regulation” of Dhaka stock Exchange (DSE)
and Chittagong Stock Exchange (CSE).

Range of Holding in number of No of share % of Number of share % of share

Shares holders shareholders capital

1 to 500 2,926 38.97% 491,704 0.12%

501 to 5,000 3,418 45.52% 5,954,979 1.50%
5,001 to 10,000 482 6.42% 3,389,628 0.85%
10,001 to 20,000 303 4.04% 4,264,331 1.07%
20,001 to 30,000 101 1.35% 2,476,334 0.62%
30,001 to 40,000 58 0.77% 2,005,615 0.50%
40,001 to 50,000 38 0.51% 1,731,310 0.44%
50,001 to 100,000 73 0.97% 4,994,538 1.26%
100,001 to 1,000,000 94 1.25% 23,828,500 5.99%
Over 1,000,000 Shares 16 0.21% 348,432,865 87.64%
7,509 100% 397,569,804 100%

2015-16 2014-15
Taka Taka
18.00 Share Money Deposit:

Share Money Deposit 75,000,000 75,000,000

The amount was received from DESA against shares of the company which have not yet been issued.

19.00 GOB Equity

Opening Balance 1,552,140,000 1,552,140,000
Addition during the period 1,170,000,000 -
Closing Balance 2,722,140,000 1,552,140,000
This represents loan received from the Government from time to time under Annual Development
Program (ADP) of which 60% is “Govt. Equity” the balance 40% is soft loan. In the absence of any Govt.
directive, no share have been issued against such equity.
20.00 Retained Earnings
Opening Balance 7,519,514,123 6,226,949,770
Prior year’s adjustment ( Note-37) 553,614,584 174,016,667
Net Profit for the year 446,181,845 1,634,872,109
8,519,310,552 8,035,838,546
Dividend paid/ Bonus shares issued for FY 2014-2015 (567,956,863) (516,324,423)
Closing Balance 7,951,353,689 7,519,514,123
 Annual Report 2016 67
2015-16 2014-15
Taka Taka
21.00 Long Term Loans :

(a) Loan from Asian Development Bank (ADB)

Loan no. 1505 (Note 21.01) 427,593,841 515,403,286
Loan no. 1731 (Note 21.02) 459,283,252 646,251,334
Loan no. 2332 (Note 21.03) 4,880,313,821 5,300,696,716
Loan no. 3087 (Note 21.04) 3,751,473,802 378,944,725
Sub-Total: 9,518,664,716 6,841,296,062

(b) Loan from Government of Bangladesh (GOB )

Loan no. (1505 & 1731 ), (Note 21.05) 112,174,545 112,174,545

Loan no. 2332 (Note 21.06) 123,932,457 133,847,053
Loan no 3087 (Note 21.07) 780,000,000 -
Sub-Total: 1,016,107,002 246,021,598
Total 10,534,771,718 7,087,317,660

21.01 Loan from ADB ( No - 1505, 9th Power Project)

This has been arrived at as under:

2015-16 2014-15
US $ Taka US $ Taka
Opening Balance 6,544,804 515,403,286 7,090,204 563,671,211
Add: Drawn/Adjustment - - (545,400) (42,950,272)
6,544,804 515,403,286 6,544,804 520,720,939
Less: Transferred to current 1,090,801 85,518,764 - (5,317,653)
liabilities
5,454,003 429,884,522 6,544,804 515,403,286
Add: Exchange Loss/(Loss) - (2,290,682) - -
Closing Balance 5,454,003 427,593,841 6,544,804 515,403,286

(i) This represents dollars amount drawn to date translated at exchange rate prevailing at balance sheet
date for import of materials/ equipment for 9th Power Project under the Subsidiary Loan Agreement
(SLA) entered into between the company and the Govt. of Bangladesh (GOB). The primary loan agreement
is between the ADB and the GOB.

(ii) According to the terms of the agreement the Principal amount of the subsidiary loan repayable by DESCO
and the Government under this agreement shall be in local currency equivalent, determined at official rate
of exchange prevailing on the date of repayments. The principal amount of the subsidiary loan is repayable
in 25 years including a grace period of 5 (five) years in 40 ( forty) consecutive semi- annual installments as
per Amortization Schedule. The installment is payable on a semi-annual basis (i.e. June 15 and December
15 in each year). The foreign exchange risk on the outstanding amount of loan shall be borne by DESCO.

(iii) The company shall pay to the Government in local currency interest at the rate of 4% per annum on the
local currency equivalent, determined at the official rate of exchange prevailing on the date of each interest
payment of the principal amount of the Loan relent to DESCO disbursed and outstanding from time to time
The interest is payable semi- annually on June 15 and December 15 , each year).

(iv) The term of the project under which the loan was sanctioned expired on 30th June, 2004.
68 Annual Report 2016

21.02 Loan from ADB (No - 1731, 10th power project)

This has been arrived at as under:

2015-16 2014-2015
US $ Taka US $ Taka
Opening Balance 8,206,366 646,251,334 10,554,527 839,084,941
“Transferred to current 2,348,161 184,095,854 (2,348,161) (184,917,710)
liability”
5,858,205 462,155,480 8,206,366 654,167,231
Exchange (Gain)/Loss - (2,872,229) - (7,915,897)
Closing Balance 5,858,205 459,283,252 8,206,366 646,251,334

(i) This represents dollars amount drawn to date translated at exchange rate prevailing at balance sheet date
for import of materials/ equipment for 10th Power Project under the Subsidiary Loan Agreement (SLA)
entered into between the Company and the Govt. of Bangladesh (GOB), the primary Loan agreement being
between the ADB and the GOB.

(ii) As per the terms of the Agreement the principal amount of the subsidiary Loan repayable by DESCO to the
Government shall be in local currency equivalent, determined at official rate of exchange prevailing on the
date of repayment . The principal amount of the subsidiary loan is repayable in 20 years including a grace
period of 4 years in 32 consecutive semi- annual installments on a semi-annual basis (i.e. January 15 and
July 15 in each year). The foreign exchange and interest rate risks are to be borne by DESCO during the
repayment period of 20 years.

(iii) DESCO shall pay interest to the Government in local currency interest at the rate of 4% per annum on the
local currency equivalent, determined at the official rate of exchange prevailing on the date of each interest
payment of the principal amount of the loan relent to DESCO disbursed and outstanding from time to time.
The interest is payable on semi-annual basis, (i.e. January 15 and July 15, in each year).
(iv) The term of the project under which the loan was sanctioned expired on 30th June, 2006.

21.03 Loan from ADB (No - 2332 BAN, Sustainable Power sector Development Project)

This has been arrived at as under:

2015-16 2014-15
US $ Taka US $ Taka
Opening Balance 67,310,434 5,300,696,716 70,176,513 5,579,032,770
Add: Drawn - - - -
67,310,434 5,300,696,716 70,176,513 5,579,032,770
Less Transfer to current Liability 5,061,534 396,824,242 (2,866,078) (225,703,668)
62,248,901 4,903,872,474 67,310,434 5,353,329,102
Exchange (Gain)/ loss - (23,558,653) - (52,632,385)
Closing Balance 62,248,901 4,880,313,821 67,310,434 5,300,696,716

(i) This represents dollars amount drawn to date translated at exchange rate prevailing at balance sheet date
for import of materials/ equipment for Sustainable Power Sector Development Project under the Subsidiary
Loan Agreement (SLA) entered into between the Company and the Govt. of Bangladesh (GOB), the primary
loan agreement being between the ADB and the GOB.
(ii) As per the terms of the Agreement the principal amount of the subsidiary Loan repayable by DESCO
to the Government shall be in local currency equivalent, determined at official rate of exchange rate
prevailing on the date of repayment . The principal amount of the subsidiary loan is repayable in 20
years including a grace period of 5 years in 30 consecutive semi- annual installments (i.e. May 1 and
November 1 in each year). The foreign exchange and interest rate risks are to be borne by DESCO
during the repayment period of 20 years.
 Annual Report 2016 69
(iii) DESCO shall pay interest to the Government in local currency at the rate of 4% per annum. Such
interest shall be calculated on the total principal amount outstanding of the subsidiary loan. The
interest is payable on semi-annual basis, (i.e. May 1 and November 1, in each year).

(iv) The term of the project under which the loan was sanctioned expired on 30th June, 2013

21.04 Loan from ADB (No - 3087)

This has been arrived at as under:

2015-2016 2014-2015
US $ Taka US $ Taka
Opening Balance 4,811,997 378,944,725 - -
Add: Received 43,038,435 3,374,213,276 4,811,997 378,919,407
47,850,431 3,753,158,001 4,811,997 378,919,407
Less Transfer to current Liability - - - -
47,850,431 3,753,158,001 4,811,997 378,919,407
Exchange (Gain)/ loss - (1,684,199) - 25,319
Closing Balance 47,850,431 3,751,473,802 4,811,997 378,944,725

(i) This represents dollars amount drawn to date translated at exchange rate prevailing at balance sheet
date for import of materials/ equipment for Power System Expansion and Efficiency Improvement
Investment Program (tranche-2) project under Subsidiary Loan Agreement(SLA) entered into between
the Company and the Govt. of Bangladesh (GOB), the primary loan agreement being between the ADB
and the GOB.

(ii) As per the terms of the Agreement the principal amount of the subsidiary Loan repayable by DESCO
to the Government shall be in local currency equivalent, determined at official rate of exchange rate
prevailing on the date of repayment . The principal amount of the subsidiary loan is repayable in 20
years including a grace period of 5 years in 30 consecutive semi- annual installments (i.e. May 15 and
November 15 in each year). The foreign exchange and interest rate risks are to be borne by DESCO
during the repayment period of 20 years.

(iii) DESCO shall pay interest to the Government in local currency at the rate of 4% per annum. Such
interest shall be calculated on the total principal amount outstanding of the subsidiary loan. The
interest is payable on semi-annual basis, (i.e. May 15 and November 15, in each year).

(iv) The term of the project under which the loan was sanctioned will expire on 30th June, 2019

2015-16 2014-15
Taka Taka
21.05 Loan from GOB (No. 1505 & 1731)

This has been arrived at as under:

Opening Balance 112,174,545 112,174,545
- -
112,174,545 112,174,545
Transferred to Current Liability - -
Closing Balance 112,174,545 112,174,545
(i) This represents 40% of the amount released to the Company by the Government under Annual
Development Program (ADP) to enable the Company to pay the customs duty & VAT on material/
equipment imported by the company under the ADB Loan, as well as to meet other project related
expenses . The balance 60% is accounted for under “ GOB Equity”.
70 Annual Report 2016

(ii) The loan carries interest at 3% p.a, and is repayable as per Debt Service Liability (DSL) schedule
provided by the Government.
2015-16 2014-15
Taka Taka
21.06 Loan from GOB (loan No 2332)

Opening Balance 133,847,053 143,761,649

Add: Withdrawn - -
133,847,053 143,761,649
Less: Transfer to Loan:2332 - -
Less: Transfer to current liability (9,914,596) (9,914,596)
Closing Balance 123,932,457 133,847,053

(i) This represents 40% of the amount released to the Company by the Government under Annual
Development Program (ADP) to enable the Company to pay the customs duty & VAT on material/
equipment imported by the company under the ADB Loan, as well as to meet other project related
expenses . The balance 60% is accounted for under “ GOB Equity”. The loan is repayable in 30
installments starting from 2013 after a grace period of 5 years.

(ii) The loan carries interest at 3% p.a, and is repayable as per Debt Service Liability (DSL) schedule
provided by the Government.

21.07 Loan from GOB (loan No 3087)

Opening Balance
Add: Withdrawn 780,000,000 -
780,000,000 -
Less: Transfer to Loan:3087 - -
Less: Transfer to current liability -
Closing Balance 780,000,000 -

(i) This represents 40% of the amount released to the Company by the Government under Annual
Development Program (ADP) to enable the Company to pay the customs duty & VAT on material/
equipment imported by the company under the ADB Loan, as well as to meet other project related
expenses . The balance 60% is accounted for under “ GOB Equity”. The loan is repayable in 30
installments starting from 2020 after a grace period of 5 years.

(ii) The loan carries interest at 3% p.a, and is repayable as per Debt Service Liability (DSL) schedule
provided by the Government.

22.00 Due to DESA/ DPDC for assets taken over:

22.01 Area wise break-up is as under:

Gulshan Area (comprising Gulshan, Baridhara, Uttara, 1,998,920,000 1,998,920,000
Dakshinkhan)
Tongi Area (comprising Tongi East and Tongi West) 795,040,000 795,040,000
Uttara & Bashundhara Grid Substation 1,245,711,539 1,245,711,539
Total 4,039,671,539 4,039,671,539
22.02 Value of assets shown above are provisional. Independent valuers have been appointed for identification,
valuation and recording of assets taken over from DESA / DPDC which is under finalization.
22.03 The terms and conditions of repayment to DESA / DPDC against the assets taken over have not yet
been determined.
 Annual Report 2016 71
2015-16 2014-15
Taka Taka
23.00 Consumer Security Deposits:

Opening Balance 1,716,032,924 1,507,716,212

Received during the year 205,757,851 235,123,949
1,921,790,776 1,742,840,160
Refunded during the year (27,301,402) (26,807,236)
Closing Balance 1,894,489,374 1,716,032,924

24.00 Energy Sales: Taka Tariff %

Domestic A 41.85 13,082,731,892 11,692,332,867
Agricultural Pump B 0.00 772,009 414,276
Small Industries C 2.89 902,383,296 833,090,004
Non-Residential D 0.21 64,157,288 158,155,921
Commercial & Office E 14.56 4,552,302,625 3,860,606,167
Medium Voltage F 36.28 11,340,577,386 9,711,554,238
High Voltage(33kv & above) H 0.64 199,651,781 113,393,029
REB High Voltage I 0.55 170,517,172 160,090,353
Street Light, Pump J 0.35 108,171,555 91,453,947
Construction & others 2E 2.68 838,823,417 737,059,550
Total 100 31,260,088,421 27,358,150,352
100

24.01 Energy Sales -Unit Tariff % 2015-2016 2014-2015

Unit (Mkwh) Unit (Mkwh)

Domestic A 49.54 2,184.97 1,993.03

Agricultural Pump B 0.00 0.21 0.16
Small Industries C 2.66 117.27 111.97
Charitable Organization D 1.04 46.01 31.48
Commercial & Office E 10.35 456.49 398.09
Medium Voltage F 33.94 1,496.71 1,331.70
Very High Voltage H 0.55 24.31 14.86
REB High Voltage I 0.65 28.46 28.62
Street Light, Pump J 0.33 14.46 12.52
Construction & others 2E 0.94 41.31 37.04
Total 100.00 4,410.20 3,959.46

25.00 Other Operating Revenue:

Received from Consumer (Note:25.01) 338,078,547 331,397,750
Late payment charge 292,321,184 276,081,479
630,399,731 607,479,229

25.01 This represents application fee, disconnection / reconnection fees, cost of materials realized, meter testing fees,
meter rent etc.
26.00 Energy Purchase:

2015-2016 2014-2015
Unit (kwh) Taka Unit (kwh) Taka
4,795,115,212 28,956,565,428 4,320,976,096 24,344,811,425
26.01 Electricity is purchased solely from Bangladesh Power Development Board (BPDB) at the rate of Tk 5.85/ kwh effective
from 1st September -2015. The company also pays wheeling charge to Power Grid Co. Ltd (PGCB) at Tk 0.2791 per kwh.
72 Annual Report 2016

2015-16 2014-15
Taka Taka
27.00 Operating Expenses:
Commercial operation support services 149,557,243 145,113,827
Schedule & preventive maintenance 224,133,847 209,394,533
Special action team & collection drive 1,195,688 874,361
Consultancy fees for staking sheet 4,323,962 1,814,577
Maintenance of distribution of line & equipment 142,043,209 46,109,149
R&M of grid sub-station/sub-station 42,432,692 43,388,115
Repair & maintenance of transformer 11,378,597 60,312,508
Meter & service cable issue 5,625,264 84,163,470
Revenue stamp charge against consumer bill 64,608,135 59,588,716
System operating fee BERC ( Note 27.01) 15,630,044 13,679,075
660,928,680 664,438,331
Less: Receipt against deposit work 285,419,602 282,112,681
Total 375,509,078 382,325,650

27.01 This represents provision at 0.05% of net sales value as “annual system operating fees” payable to Bangladesh Energy
Regulatory Commission (BERC) as per BERC rules.
28.00 Administrative Expenses:
Directors’ Remuneration (Note 28.01) 1,362,125 1,345,500
Audit fees 270,000 270,000
Advertisement & Notices 7,792,011 6,257,053
Annual General Meeting (AGM) 3,052,136 2,879,507
Bank charges 4,582,065 3,898,399
Conveyance 1,886,838 1,951,169
Cleaning expenses 5,839,012 5,333,470
Electricity, gas & water 27,811,826 26,736,776
Entertainment 4,659,468 3,783,511
Fuel for vehicles 25,366,423 24,439,770
Honorarium to various committee members 1,298,850 511,750
Insurance of vehicles 2,225,984 2,568,490
Legal & Professional fees 6,740,005 5,479,226
Newspaper & Periodicals 455,803 437,563
Office maintenance 3,804,155 2,687,348
Office rent 46,103,438 37,506,630
Office security 36,742,979 36,786,003
Postage, telephone & internet 9,590,533 9,602,658
Printing & Stationery 24,059,785 24,450,765
Rates & Taxes 2,205,518 1,205,709
Repair & Maintenance of non operating assets 8,559,657 5,881,292
Repair & Maintenance of head office building 10,127,400 4,542,010
Repair & Servicing of vehicle 12,742,507 9,531,664
Recruitment expenses 6,654,397 384,192
Inspection survey & consultancy fees 1,560,573 1,286,307
Staff training 29,136,453 17,511,227
Listing fee & annual charges 2,263,018 3,767,298
Transport (hired) 25,842,810 25,657,651
Corporate Social Expenses 17,026,304 8,596,573
BERC license fee 2,557,500 2,500,000
Office shifting 240,754 46,867
Total: 332,560,327 277,836,378
28.01 Directors are entitled to a remuneration of Tk 5,000/- up to 23.01.16 & Tk. 7500/- from 24.01.16 for attending each
Board meeting.
 Annual Report 2016 73
2015-16 2014-15
Taka Taka
29.00 Employee Expenses:

Salary & Allowances ( Note - 29.01) 866,923,932 743,173,255

Festival bonus 118,263,376 63,150,781
Incentive bonus 110,234,757 90,178,503
Company’s contribution to provident fund 40,811,355 37,811,439
Company’s contribution to gratuity fund 372,469,886 207,094,298
Group insurance premium 5,278,190 8,068,241
Electricity / telephone expense reimbursed (Note - 29.02) 19,976,504 19,177,964
Medical expense reimbursed ( Note - 29.02) 48,805,822 47,776,525
Uniform 240,885 379,820
Total 1,583,004,707 1,216,810,826
29.01 Remuneration of Directors and Executives:

2015-16 2014-15
Taka Taka
Directors Executives Directors Executives
Salary and bonus 8,496,801 231,753,977 4,561,662 183,940,770
House rent 2,166,284 77,130,481 1,619,831 79,142,622
Provident fund 473,257 12,863,767 323,967 13,182,732
Total 11,136,342 321,748,225 6,505,460 276,266,124

29.02 Telephone bills and medical expense are reimbursed on actual basis to employees, subject to ceiling.
30.00 Interest Income:
Interest earned on FDR 873,196,599 1,129,847,378
Interest earned on STD 88,907,834 100,965,984
Total 962,104,433 1,230,813,362
31.00 Interest Expenses:
Interest expense against ADB loan 323,699,130 294,405,622
Interest expense against GOB loan 12,261,154 9,496,467
Interest expense against SOD loan (Rupali Bank) 5,564,496 28,615,571
Total 341,524,780 332,517,660

32.00 Exchange Fluctuation Gain / (Loss): 16,112,606 71,982,463

Exchange fluctuation gain of Tk. 16,112,606/- has arisen out of translation of foreign currency loan (in dollar) into
taka at Financial Position date at the rate of Tk.78.40/$1 (2014-15: at Tk.78.75/$1).
33.00 Miscellaneous Income:
Sale of tender documents 103,000 200,000
Sale of obsolete store materials and Others 23,001,127 37,472,828
Total 23,104,127 37,672,828
34.00 Depreciation:
Depreciation (operating) 656,993,375 699,960,243
Depreciation (non operating) 45,067,063 43,761,182
Total 702,060,438 743,721,425
35.00 Income Tax :
Current tax provision (35.01) (29,176,670) 424,858,698
Deferred tax provision (35.02) 183,579,386 (69,271,625)
Tax Expenses 154,402,716 355,587,073
74 Annual Report 2016

2015-16 2014-15
Taka Taka
35.01 The Company’s income tax assessment up to the FY 2010-2011 ( AY 2011--2012) has been completed and agreed
upon. The details of current tax calculation are given below:
Profit before tax as per income statement 600,584,561 1,990,459,182
Add: Accounting depreciation 702,060,438 743,721,425
Add: Bad debt Provision - 17,615,689
Add: Corporate Social Expenses (CSR) 17,026,304 8,596,573
1,319,671,303 2,760,392,869
Less: Depreciation as per 3rd Schedule of Tax Ordinance,1984. (1,436,377,984) (1,060,958,079)
(116,706,681) 1,699,434,791
Current Tax (at 25%) (29,176,670) 424,858,698
Current tax expenses (29,176,670) 424,858,698
35.02 Deferred Tax Provision:
Opening Balance 1,744,550,218 1,813,821,843
Provision for the year 183,579,386 (69,271,625)
Closing Balance 1,928,129,606 1,744,550,218

Deferred tax provision has been arrived at as under:

Carrying amount of assets 14,183,324,885 11,414,491,554
Tax base amount of assets 6,470,806,466 4,436,290,681
Temporary Difference 7,712,518,419 6,978,200,873
Effective Tax Rate 25.00% 25.00%
Total Deferred tax Provision required 1,928,129,605 1,744,550,218
Already provided up to last year 1,744,550,218 1,813,821,843
Deferred tax Provision during the year 183,579,386 (69,271,625)
36.00 Earning Per Share (EPS):
36.01 Earning Per Share
Earning attributable to ordinary Shareholders (Tk) 446,181,845 1,634,872,109
Weighted number of shares outstanding 397,569,805 397,569,805
Basic Earning Per Share (Adjusted) 1.12 4.11
36.02 Diluted Earning per share
No diluted earning per share is required to be calculated for the year as there was no potentially dilutive ordinary
shares during the year.
37.00 Adjustment related to previous year:
Advertisement expenses adjustment (23,542) 523,156
Salary adjustment from employee (33,503,698) (89,524)
Operating & administrative expenditure of previous year adjusted 2,654,194 (2,924,604)
Utility expenses adjustment - (22,232)
Distribution Equipment issued to BREB - 40,156,422
Adjustment related to provision against accounts receivables - 128,926,192
Encashment of performance guarantee - 7,447,257
Depreciation on distribution equipment (19,789,000) -
Adjustment related to previous year (LME Charge) 588,617,591 -
Bed debts provision 15,659,039 -
Total: 553,614,584 174,016,667

38.00 Subsequent Events-Disclosures Under IAS 10 “Events After The Balance Sheet Date”.
Proposed Dividend
38.01 Subsequent to the repoting date, 30th June, 2016, the Board of Directors in their meeting held on 20 October,
2016 recommended 10% cash dividend (Tk . 1 per ordinary share of Tk.10 each held on record date) amounting to
Tk. 39,75,69,804.00 for the year ended June 30, 2016. The dividend proposal is subject to shareholders’ approval
at the forthcoming 20th AGM.
 Annual Report 2016 75
38.02 Except the fact stated above, no circumstances have arisen since the Financial Position date which
would require adjustment to, or disclosure in, the financial statements or notes thereto.
39.00 Related Party Transactions:

DESCO Purchased / Received energy and materials from the following related parties in the normal
39.01
course of business:

Name of Nature of Relation Nature of Transaction 2015-16 2014-15

Party Taka Taka

BPDB 75% shareholding of Purchase of Energy

DESCO 27,662,002,845 23,354,875,803

DPDC Common Director of Purchase of Materials 24,625,461 75,071,958

DPDC & DESCO
Total 27,686,628,306 23,429,947,761

39.02 DESCO has following outstanding balances with the related parties:

2015-16 2014-15
Name of Taka Taka
Party
Receivable Payable Receivable Payable

BPDB 57,462,286 5,551,657,351 57,693,075 4,806,296,534

DPDC 15,881,133 286,058,838 8,720,300 261,433,377
Total 73,343,419 5,837,716,189 66,413,375 5,067,729,911

39.03 Key Management Personnel:

2015-16 2014-15
Taka Taka

Director’s Remuneration 11,136,342 6,505,460

Stock Dividend Paid to BPDP 425,967,647 387,243,317

40.00 Contingent Liabilities:

40.01 As the value of assets taken over from DESA in the Gulshan and Tongi areas have been shown at
estimated value, the Company may have to incurred additional cost after finalization of the value of
the assets.

40.02 An aggregate amount of Tk. 50,038,501/- claimed by BPDB as shown below is disputed by the Company.

Particulars 2015-2016

Arrear Energy bill (November ‘05 to June ‘16) 14,465,005

Arrear Surcharge (Up to June 2016) 10,121,901
PFC Charge (Up to June 2016) 25,451,595
Total 50,038,501
76 Annual Report 2016

41.00 Credit Facility Availed:

No credit facility existed under any contract as on June 30, 2016 other than trade credit available in the ordinary
course of business.

42.00 Capital Commitment:

The Company has entered into various contracts for construction works, sub-stations, land development
installation, renovation dismantling O/H and U/G cables, etc. amounting to Tk 10939.01 million , works of which
will be started in the next financial year.

43.00 Employees’ Salary: 2015-2016 2014-2015

No. No.

“a) Employment throughout the year in receipt of remuneration 1,502 1,497

aggregating Tk 36,000 or more per annum.“

“b) Employment for a part of the year and in receipt of remuneration Nil Nil
aggregating Tk 3,000 or less per month.”
Total: 1502 1,497

44.00 General :

Previous year’s figures have been re-arranged, wherever necessary, to confirm to current year’s presentation to
facilitate comparison.

Company Secretary Executive Director (F& A) Director Managing Director

Dated: Dhaka, 23 October, 2016

 Dhaka Electric Supply Company Ltd.
Schedule of Property, Plant & Equipment
As at 30 June 2016
Annexure-A
Cost Depreciation
Written down
Sl
Category of Assets “Balance Addition Total Rate Balance Charged Total value as
No.
as on during the Adjustment as on as on during the Adjustment as on on 30-06-16
01-07-15” Year 30-06-16 01-07-15 year 30-06-16

1 Land 914,199,131 1,748,138,692 - 2,662,337,823 - - - - 2,662,337,823

2 Building 459,074,510 51,972,706 - 511,047,216 2.50% 78,896,525 12,051,324 - 90,947,849 420,099,367
3 Motor Vehicles 260,914,742 5,879,900 - 266,794,642 15% 177,437,035 20,550,644 - 197,987,679 68,806,963
4 Furniture & Fixture 51,007,104 2,934,210 - 53,941,314 10% 28,081,045 3,884,690 - 31,965,735 21,975,579
5 Office Equipment 217,630,316 95,545,869 22,000 313,154,185 15%-20% 162,668,178 20,631,728 20,000 183,279,906 129,874,279
6 Distribution Equipment 5,944,081,210 304,187,760 1,386,000 6,246,882,970 3%-10% 1,897,275,743 237,305,769 1,386,000 2,133,195,512 4,113,687,458
7 Distribution Line 10,667,127,889 1,262,236,632 - 11,929,364,521 3%-10% 4,755,184,824 407,636,283 - 5,162,821,107 6,766,543,413
Total 18,514,034,903 3,470,895,769 1,408,000 21,983,522,671 - 7,099,543,349 702,060,438 1,406,000 7,800,197,788 14,183,324,885
Figures are in Taka
Allocation of Depreciation:
Depreciation ( Operating) 656,993,376
Depreciation ( Non-Operating) 45,067,062
702,060,438

Notes:

1) Building includes Office Building, Store Godown Sheds and Boundary Wall.
2) Office Equipment comprise Communication Equipment , Computer & Peripherals , Electric and Store Equipment etc.
3) Addition to Distribution Line and Equipment includes 873.572 Km Conductor and 788.057 Km Service Cable etc.
4) Addition to Motor Vehicle Includes 10nos motor cycle and 1 no of Pickup
Annual Report 2016
77
78 Annual Report 2016

Certificate of Compliance

Rahman Mostafa Alam & Co.

Chartered Accountants

Certificate of compliance of conditions of corporate governance guidelines to the

shareholders of

Dhaka Electric Supply Company Limited (DESCO)

We have examined the compliance of conditions of corporate governance guidelines of

the Bangladesh Securities and Exchange Commission (BSEC) by Dhaka Electric Supply
Company Limited (DESCO) for the year ended on June 30, 2016 as stipulated in clause
7(i) of the BSEC notification no SEC/CMRRECD/2006-158/134/Admin/44 dated August
07, 2012 as amended by notification no. SEC/CMRRCD/2006-158/147/Admin/48 dated
July 21, 2013 of Bangladesh Securities and Exchange Commission.

The compliance of conditions of corporate governance guidelines as stated in the

aforesaid notification and reporting of the status of compliance is the responsibility of the
management of Dhaka Electric Supply Company Limited (DESCO). Our examination for
issuing this certification was limited to the checking of procedure and implementation
thereof, adopted by Dhaka Electric Supply Company Limited for ensuring the
compliance of conditions of corporate governance and correct reporting of compliance
status on the attached statement on the basis of evidence gathered and representation
received.

To the best of our information and according to the explanations given to us, we certify
that, as reported on the attached status of compliance statement, Dhaka Electric Supply
Company Limited has complied with the conditions of corporate governance stipulated in
the above mentioned BSEC notification dated August 07, 2012 as amended by
notification dated July 21, 2013.

Dated: Dhaka Rahaman Mostafaa Alam & Co.

Co
October 23, 2016 Chartered Accountants

Dhaka Office : Paramount Heights (7th Floor, D2), 65/2/1 Box Culvert Road, Purana Paltan, Dhaka- 1000, Phone : 9553449, FAX : 9551128, E-mail : rma@dhaka.net
Chittagong Office : Taher Chamber (2nd Floor), 10 Agrabad C/A, Chittagong, Bangladesh. Phone : 725314, E-mail : rmactg@gmail.com
 Annual Report 2016 79
CORPORATE GOVERNANCE COMPLIANCE REPORT
Status of compliance with the conditions imposed by the Securities and Exchange Commission’s
Notification No. SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012.

Compliance Status
Condition No.

(Put  in the
appropriate Remarks
Title column) (if any)
Not
Complied
Complied

1 Board of Directors

1.1 Board’s Size

The number of the board members of the company shall not be less than
5 (five) and more than 20 (twenty)


1.2 Independent Directors

At least one fifth (1/5) of the total number of directors in the
1.2 (i) company’s board shall be Independent Director

“Independent Director” means a director-
who either does not hold any share in the company or
1.2 (ii) a) holds less than one percent (1%) shares of the total paid-

up shares of the company.
who is not a sponsor of the company and is not connected
with the company’s any sponsor or director or shareholder
who holds one percent (1%) or more shares of the total
1.2 (ii) b) paid-up shares of the company on the basis of family 
relationship. His/her family members also should not hold
above mentioned shares in the company
who does not have any other relationship, whether
1.2 (ii) c) pecuniary or otherwise, with the company or its 
subsidiary/associated companies
who is not a member, director or officer of any stock
1.2 (ii) d) exchange

who is not a shareholder, director or officer of any member
1.2 (ii) e) of stock exchange or any intermediary of the capital 
market
who is not a partner or an executive or was not a partner
1.2 (ii) f) or an executive during the preceding 3 (three) years of the 
concerned company’s statutory audit firm
who shall not be an independent director in more than 3
1.2 (ii) g) (three) listed companies

who has not been convicted by a court of competent
1.2 (ii) h) jurisdiction as a defaulter in payment of any loan to a 
bank or a Non-Bank Financial Institution (NBFI)
who has not been convicted for a criminal offence involving
1.2 (ii) i) moral turpitude

the independent director(s) shall be appointed by the board
1.2 (iii) of directors and approved by the shareholders in the Annual 
General Meeting (AGM)
the post of independent director(s) can not remain vacant for
1.2 (iv) more than 90 (ninety) days

80 Annual Report 2016

Compliance Status
Condition No. (Put  in the
appropriate Remarks
Title column) (if any)
Not
Complied
Complied

the Board shall lay down a code of conduct of all Board

1.2 (v) members and annual compliance of the code to be recorded.


the tenure of office of an independent director shall be for a

1.2 (vi) period of 3 (three) years, which may be extended for 1 (one) 
term only
1.3 Qualification of Independent Director(ID)
Independent Director shall be a knowledgeable individual
with integrity who is able to ensure compliance with financial,
1.3 (i) regulatory and corporate laws and can make meaningful

contribution to business
The person should be a Business Leader / Corporate Leader
/ Bureaucrat / University Teacher with Economics or Business
Studies or Law background/Professionals like Chartered
1.3 (ii) Accountants, Cost & Management Accountants, Chartered
Secretaries. The independent director must have at least 
12 (twelve) years of corporate management/professional
experiences
In special cases the above qualifications may be relaxed subject Not
1.3 (iii) to prior approval of the Commission applicable
1.4 Chairman of the Board and Chief Executive Officer
The positions of the Chairman of the Board and the Chief Executive Officer
of the companies shall be filled by different individuals. The Chairman
1.4 of the company shall be elected from among the directors of the
company. The Board of Directors shall clearly define respective roles and 
responsibilities of the Chairman and the Chief Executive Officer
1.5 Directors report to the Shareholders
Industry outlook and possible future developments in the
1.5 (i) industry

1.5 (ii) Segment-wise or product-wise performance 
1.5 (iii) Risks and concerns 
A discussion on Cost of Goods sold, Gross Profit Margin and Net
1.5 (iv) Profit Margin

Not
1.5 (v) Discussion on continuity of any Extra-Ordinary gain or loss
applicable
Basis for related party transactions- a statement of all related
1.5 (vi) party transactions should be disclosed in the annual report

Utilization of proceeds from public issues, rights issues and/or Not
1.5 (vii) through any others instruments. applicable
An explanation if the financial results deteriorate after the
Not
1.5 (viii) company goes for Initial Public Offering (IPO), Repeat Public
applicable
Offering (RPO), Rights Offer, Direct Listing, etc
If significant variance occurs between Quarterly Financial
Not
1.5 (ix) performance and Annual Financial Statements the management
applicable
shall explain about the variance on their Annual Report
1.5 (x) Remuneration to directors including independent directors 
 Annual Report 2016 81
Condition No. Compliance Status
(Put  in the
appropriate Remarks
Title column) (if any)
Not
Complied
Complied
The financial statements prepared by the management of the
1.5 (xi) issuer company present fairly its state of affairs, the result of 
its operations, cash flows and changes in equity

Proper books of account of the issuer company have been

1.5 (xii) maintained


Appropriate accounting policies have been consistently applied

in preparation of the financial statements and that the
1.5 (xiii) accounting estimates are based on reasonable and prudent 
judgment

International Accounting Standards (IAS)/Bangladesh

Accounting Standards (BAS)/International Financial Reporting
Standards (IFRS)/Bangladesh Financial Reporting Standards
1.5 (xiv) (BFRS), as applicable in Bangladesh, have been followed in 
preparation of the financial statements and any departure
there-from has been adequately disclosed

The system of internal control is sound in design and has been

1.5 (xv) effectively implemented and monitored


There are no significant doubts upon the issuer company’s

ability to continue as a going concern. If the issuer company
1.5 (xvi) is not considered to be a going concern, the fact along with

reasons thereof should be disclosed
Significant deviations from the last year’s operating results of
1.5 (xvii) the issuer company shall be highlighted and the reasons thereof 
should be explained
Key operating and financial data of at least preceding 5 (five)
1.5 (xviii) years shall be summarized.

If the issuer company has not declared dividend (cash or stock)
Not
1.5 (xix) for the year ended 30 June, 2015 the reasons thereof shall be
applicable
given.
The number of Board meetings held during the year and
1.5 (xx) attendance by each director shall be disclosed

Parent/Subsidiary/Associated Companies and other
1.5 (xxi) a) related parties (name wise Details)

Directors, Chief Executive Officer, Company Secretary, Chief
1.5 (xxi) b) Financial Officer, Head of Internal Audit and their spouses 
and minor children (name wise details)
1.5 (xxi) c) Executives 
Shareholders holding ten percent (10%) or more voting
1.5 (xxi) d) interest in the company (name wise details)


1.5 (xxii) a) A brief resume of the director 

1.5 (xxii) b) Nature of his/her expertise in specific functional areas 
Names of companies in which the person also holds the
1.5 (xxii) c) directorship and the membership of committees of the 
board
82 Annual Report 2016

Compliance Status
Condition No. (Put  in the
appropriate Remarks
Title column) (if any)
Not
Complied
Complied
Chief Financial Officer(CFO), Head of Internal Audit (HIA)
2.0 and Company Secretary(CS)
Appointment:
The company shall appoint a Chief Financial Officer (CFO), a Head of
Internal Audit (Internal Control and Compliance) and a Company Secretary
2.1 (CS). The Board of Directors should clearly define respective roles, 
responsibilities and duties of the CFO, the Head of Internal Audit and the
CS

Requirement to attend the Board Meetings:

The CFO and the Company Secretary of the companies shall attend the
meetings of the Board of Directors, provided that the CFO and/or the
2.2 Company Secretary shall not attend such part of a meeting of the Board
of Directors which involves consideration of an agenda item relating to 
their personal matters

3.0 Audit Committee

The company shall have an Audit Committee as a sub-
3 (i) committee of the Board of Directors

The Audit Committee shall assist the Board of Directors in
ensuring that the financial statements reflect true and fair view
3 (ii) of the state of affairs of the company and in ensuring a good

monitoring system within the business
The Audit Committee shall be responsible to the Board of
3 (iii) Directors. The duties of the Audit Committee shall be clearly set 
forth in writing
3.1 Constitution of the Audit Committee :
The Audit Committee shall be composed of at least 3 (three)
3.1 (i) members

The Board of Directors shall appoint members of the Audit
3.1 (ii) Committee who shall be directors of the company and shall 
include at least 1 (one) independent director
All members of the audit committee should be “financially
3.1 (iii) literate” and at least 1(one) member shall have accounting or 
related financial management experience
When the term of service of the Committee members expires or
there is any circumstance causing any Committee member to be
unable to hold office until expiration of the term of service, thus
making the number of the Committee members to be lower
3.1 (iv) than the prescribed number of 3 (three) persons, the Board of
directors shall appoint the new Committee member(s) to fill up 
the vacancy(ies) immediately or not later than 1 (one) month
from the date of vacancy(ies) in the Committee to ensure
continuity of the performance of work of the Audit Committee
The company secretary shall act as the secretary of the
3.1 (v) Committee

The quorum of the Audit Committee meeting shall not
3.1 (vi) constitute without at least 1 (one) independent director

3.2 Chairman of the Audit Committee
 Annual Report 2016 83
Condition No. Compliance Status
(Put  in the
appropriate Remarks
Title column) (if any)
Not
Complied
Complied

The Board of Directors shall select 1 (one) member of the Audit

3.2 (i) Committee to be Chairman of the Audit Committee, who shall 
be an independent director

Chairman of the audit committee shall remain present in the

3.2 (ii) Annual General Meeting (AGM)


3.3 Role of the Audit Committee

3.3 (i) Oversee the financial reporting process 
3.3 (ii) Monitor choice of accounting policies and principles 
3.3 (iii) Monitor Internal Control Risk management process 
3.3 (iv) Oversee hiring and performance of external auditors 
Review along with the management, the annual financial
3.3 (v) statements before submission to the board for approval

Review along with the management, the quarterly and half
3.3 (vi) yearly financial statements before submission to the board for 
approval
3.3 (vii) Review the adequacy of internal audit function 
Review statement of significant related party transactions Not
3.3 (viii) submitted by the management applicable
Review Management Letters/ Letter of Internal Control Not
3.3 (ix) weakness issued by statutory auditors applicable

When money is raised through Initial Public Offering (IPO)/

Repeat Public Offering (RPO)/Rights Issue the company shall
disclose to the Audit Committee about the uses/ applications
of funds by major category (capital expenditure, sales and
Not
3.3 (x) marketing expenses, working capital, etc), on a quarterly basis,
applicable
as a part of their quarterly declaration of financial results.
Further, on an annual basis, the company shall prepare a
statement of funds utilized for the purposes other than those
stated in the offer document/prospectus

3.4 Reporting of the Audit Committee

3.4.1 Reporting to the Board of Directors
The Audit Committee shall report on its activities to the Board
3.4.1 (i) of Directors

Not
3.4.1 (ii) a) Report on conflicts of interests
applicable
Suspected or presumed fraud or irregularity or material Not
3.4.1 (ii) b) defect in the internal control system applicable
Suspected infringement of Laws, including securities Not
3.4.1 (ii) c) related Laws, Rules and Regulations. applicable
Any other matter which shall be disclosed to the Board of Not
3.4.1 (ii) d) Directors immediately applicable
3.4.2 Reporting of the Authorities
84 Annual Report 2016

Compliance Status
Condition No. (Put  in the
appropriate Remarks
Title column) (if any)
Not
Complied
Complied

If the Audit Committee has reported to the Board of Directors about

anything which has material impact on the financial condition and
results of operation and has discussed with the Board of Directors and
the management that any rectification is necessary and if the Audit
3.4.2 Committee finds that such rectification has been unreasonably ignored, Not
the Audit Committee shall report such finding to the Commission, upon applicable
reporting of such matters to the Board of Directors for three times or
completion of a period of 6 (six) months from the date of first reporting to
the Board of Directors, whichever is earlier
3.5 Reporting to the Shareholders and General Investors
Report on activities carried out by the Audit Committee, including any
report made to the Board of Directors under condition 3.4.1 (ii) above
3.5 during the year, shall be signed by the Chairman of the Audit Committee 
and disclosed in the annual report of the issuer company
4 External /Statutory Auditors
The issuer company should not engage its external /statutory auditors to
perform the following services of the company ; namely
4 (i) Appraisal or valuation services or fairness opinions 
4 (ii) Financial information systems design and implementation 
Book-keeping or other services related to the accounting records
4 (iii) or financial statements

4 (iv) Broker-dealer services 
4 (v) Actuarial services 
4 (vi) Internal audit services 
4 (vii) Any other service that the Audit Committee determines 
No partner or employees of the external audit firms shall
4 (viii) possess any share of the company they audit at least during
the tenure of their audit assignment of that company 
Audit/Certification services on compliance of corporate
4 (ix) governance

5 Subsidiary Company
Provisions relating to the composition of the Board of Directors
5 (i) of the holding company shall be made applicable to the Not
composition of the Board of Directors of the subsidiary company applicable
At least 1 (one) independent director on the Board of Directors
Not
5 (ii) of the holding company shall be a director on the Board of
applicable
Directors of the subsidiary company
The minutes of the Board meeting of the subsidiary company
Not
5 (iii) shall be placed for review at the following Board meeting of the
applicable
holding company
The minutes of the respective Board meeting of the holding
Not
5 (iv) company shall state that they have reviewed the affairs of the
applicable
subsidiary company also
The Audit Committee of the holding company shall also review
Not
5 (v) the financial statements, in particular the investments made by
applicable
the subsidiary company
 Annual Report 2016 85
Condition No. Compliance Status
(Put  in the
appropriate Remarks
Title column) (if any)
Not
Complied
Complied
Duties of Chief Executive officer (CEO) and Chief financial
6 Officer (CFO)
The CEO and CFO shall certify to the Board that :-
They have reviewed financial statements for the year and that
6 (i) to the best of their knowledge and belief:
These statements do not contain any materially untrue
6 (i) a) statement or omit any material fact or contain statements 
that might be misleading
These statements together present a true and fair view of
6 (i) b) the company’s affairs and are in compliance with existing 
accounting standards and applicable laws
There are, to the best of knowledge and belief, no transactions
6 (ii) entered into by the company during the year which are
fraudulent, illegal or violation of the company’s code of conduct 
7 Reporting and Compliance of Corporate Governance
The company shall obtain a certificate from a practicing
Professional Accountant/Secretary (Chartered Accountant /Cost
and Management Accountant/Chartered Secretary) regarding
7 (i) compliance of conditions of Corporate Governance Guidelines of 
the Commission and shall send the same to the shareholders
along with the Annual Report on a yearly basis
The directors of the company shall state, in accordance with
7 (ii) the Annexure attached, in the directors’ report whether the 
company has complied with these conditions
86 Annual Report 2016

Tariff Rate
Bulk Purchase Tariff

Present Tariff
SL.No Tariff Category Level
( from September 01, 2015) Taka/KWH

132Kv 5.68
01 BPDB to DESCO (for energy)
33Kv 5.85

02 PGCB to DESCO (for wheeling) 0.2791

Retail Sales Tariff

Present Tariff
Sl.No Tariff Category Consumption Slab
(from March 13, 2015) Taka/KWH

Lifeline 1-50 unit 3.33

a) 1-75 unit 3.80

b) 76-200 unit 5.14
1 Domestic-A
c) 201-300 unit 5.36
d) 301-400 unit 5.63
e) 401-600 unit 8.70
f) Above 600 unit 9.98

2 Agricultural Pumping - B 3.82

g) Flat 7.66
3 Small Industries - C h) Off-peak hour 6.90
i) Peak hour 9.24

Non Residential - D (Light &

4 5.22
Power)

j) Flat 9.80
5 Commercial & Office- E k) Off-peak hour 8.45
l) Peak hour 11.98

m) Flat 7.57
6 Medium Voltage – F (11 KV) n) Off-peak hour 6.88
o) Peak hour 9.57

p) Flat 7.49
7 High Voltage – H ( 33 KV) q) Off-peak hour 6.82
r) Peak hour 9.52

8 Street Light & Water Pumps – J 7.17

 Annual Report 2016 87
Registered Office:
POWER IS YOURS 22/B, Faruk Sarani, Nikunja-2,
Dhaka Electric Supply Company Limited Khilkhet, Dhaka-1229.
ISO 9001:2008 Certified Visit us at : www.desco.org.bd

PROXY FORM

I/We...........................................................................................................of.............................................................................................................

.......................................... being a member of Dhaka Electric Supply Company Ltd. (DESCO) herby appoint
Mr./Mrs./Miss……………………………………………….……………………..……………….……........................................................................
Address………………….……………………...……………………………………………………………. as my/our proxy to vote for me/us on my/
our behalf at the 20th Annual General Meeting of the Company to be held on Saturday, 07 January, 2017 at
10 am and at any adjournment thereof.

As witness my / our hand this...........day of ………., 2016.

(Signature of the Proxy)

(Signature of the Shareholder)
A fix Revenue
Stamp of BO ID (if any):...........................................................
BO ID NO:............................................................. TK 20

Date:……………………………
Date:………….........

Note: The proxy form should reach the Corporate Office of the Company not less than 72 hours before the
time fixed for the meeting i.e. not later than January 5, 2017 within office hours. The proxy form must contain
revenue stamp of TK 20 as per Stamp Act.

Signature Verified
Authorized Signature

Registered Office:
POWER IS YOURS 22/B, Faruk Sarani, Nikunja-2,
Dhaka Electric Supply Company Limited
Khilkhet, Dhaka-1229.
ISO 9001:2008 Certified
Visit us at : www.desco.org.bd

ATTENDANCE SLIP
I hereby record my attendance at the 20th Annual General Meeting being held on Saturday, the January 07,
2017 at 10 am at PSC Convention Hall, Police Staff College, Mirpur-14, Dhaka-1216, Bangladesh

BO ID NO: ……………………………………………………………........................

Name of the Shareholder / Proxy………………………………………

Signature………………………………………………………………..

Date: …………………………………………………………………….

Note: Please present this slip at the Reception Desk.

88 Annual Report 2016

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