report

annual

& accounts

UNITED POWER GENERATION & DISTRIBUTION COMPANY LTD.

 Annual Report 2014

Table of
Contents

Corporate information 2
Company information 4
Who we are ? 5
Corporate Ethos 6
WHAT WE DO 8
UPGDCL AT-A-GLANCE 10
Benchmarks & Milestones 12
EVENTS 14
UNITED GROUP & POWER SECTOR 16
Notice Of The 8Th Annual General Meeting 17
Message from the Chairman 18
Analysis of Financial Statements (Key Highlights 2014) 20
DIRECTORS’ REPORT 21
Annexure 1: Compliance Report under BSEC’s Notification under 2CC 31
Annexure 2: Certificate on Compliance of Corporate Governance 36
Annexure 3: Compliance Report on BAS and BFRS 37
Annexure 4: Financial Highlights 38
Annexure 5: Operational Performance Highlights 40
Annexure 6: Shareholding Information as of 31 December 2014 41
Annexure 7: Directors’ Involvement in other Organizations 42
VALUE ADDED STATEMENT 46
REPORT OF AUDIT COMMITTEE - 2014 47
CEO & CFO’S DECLARATION TO THE BOARD 48
DIRECTORS’ PROFILE 49
EXECUTIVE MANAGEMENT PROFILE 55
Auditors’ Report & Audited Financial Statements 57

1
United Power Generation & Distribution Company Ltd.

Corporate
information
BOARD OF DIRECTORS MANAGEMENT TEAM
Chairman Managing Director
Gen. Md. Abdul Mubeen, SBP, ndc, psc (Retd.) Moinuddin Hasan Rashid
Directors Advisor
Hasan Mahmood Raja Syed Abdul Mayeed
Ahmed Ismail Hossain
Chief Executive Officer
Khandaker Moinul Ahsan Shamim
Rear Admiral Bazlur Rahman (Retd.)
Abul Kalam Azad
Faridur Rahman Khan Executive Director (Technical)
Akhter Mahmud Rana Rafiqul Islam
Moinuddin Hasan Rashid
Company Secretary, CFO & Compliance Officer
Independent Directors Md. Mahfuzul Haque, FCMA
Lt. Gen. Sina Ibn Jamali, AWC, psc (Retd.)
Md. Ebadat Hossain Bhuiyan, FCA

2
 Annual Report 2014

AUDITOR LEGAL ADVISOR

Hoda Vasi Chowdhury & Co. Tanjib-Ul Alam & Associates, Barristers
Chartered Accountants, BTMC Bhaban (Level 7 & 8) Advocates and Legal Consultants
Karwan Bazar C/A, Dhaka BSEC Bhaban (Level - 11),
102 Kazi Nazrul Islam Avenue,
AUDIT COMMITTEE Karwan Bazar, Dhaka - 1215
Lt Gen Sina Ibn Jamali, awc, psc (Retd) - Chairman
Abul Kalam Azad - Member LEAD BANKERS
Ebadat Hossain Bhuiyan, FCA - Member Dhaka Bank Limited, Foreign Ex. Branch
Dutch Bangla Bank Ltd, Banani Branch
HEAD OF INTERNAL AUDIT Jamuna Bank Ltd. Gulshan Branch
Mir Akhterul Alam Trust Bank Ltd., Kawran Bazar Branch

3
United Power Generation & Distribution Company Ltd.

Company
information
YEAR OF INCORPORATION REGISTERED OFFICE
15 January 2007 United Center
House NW (J) – 6, Road – 51, Gulshan – 2
LISTING STATUS
Dhaka – 1212, Bangladesh
Listed both in Dhaka Stock Exchange and
PABX : +88-02-9861000 (10 lines), +88-02-9850161-5
Chittagong Stock Exchange
Fax : +88-02-9896445, +88-02-9893446
AUTHORIZED CAPITAL Email : [email protected]
Taka 10,000,000,000.00 Web : www.unitedpowerbd.com
BUSINESS LINE
Power Generation & Distribution POWER PLANTS

STOCK EXCHANGE LISTING DHAKA EXPORT PROCESSING ZONE (DEPZ) – 86 MW

8 March 2015 – Chittagong Stock Exchange Plot No 280, Extension Area, Dhaka Export Processing Zone
19 March 2015 – Dhaka Stock Exchange Ganakbari, Savar, Dhaka
Tel : +88-02-7788460
O&M TEAM Fax : +88-02-7788461
United Engineering & Power Services Ltd
CHITTAGONG EXPORT PROCESSING ZONE (CEPZ) – 72 MW
Plot No 6 & 7, Sector 2/A, Chittagong Export Processing Zone
South Halishahar, Chittagong
Tel : +88-031-740449
Fax : +88-031-740450

PAID – UP CAPITAL
As of 31 December 2014 : Taka 2,969,497,260.00
Pre IPO : Taka 2,969,497,260.00
Post IPO : Taka 3,299,497,260.00

4
 Annual Report 2014

Who
we are ?
U
nited Power Generation & Distribution Company Ltd., formerly known as
Malancha Holdings Limited (MHL), was incorporated under the Companies
Act 1994 as a private limited company on 15 January 2007. The Company
changed its name from Malancha Holdings Limited to United Power Generation &
Distribution Company Ltd. on 1 October 2009 and was eventually converted to a public
limited company on 22 December 2010.
The registered office of the Company is located at United Centre, House - NW (J)-6,
Road - 51, Gulshan - 2, Dhaka - 1212, Bangladesh. The Company started its commercial
operations on 26 December 2008 with its first natural gas fired power plant located
at Dhaka Export Processing Zone having an installed capacity of 35 MW, with a
subsequent addition of another 6 MW unit. The Company then enhanced its
production capacity by installing and commissioning its second power plant at
Chittagong Export Processing Zone with an installed capacity of 44 MW.
Initially operating a 41 MW unit in DEPZ and a 44 MW unit in CEPZ, this
Company allows its clients to concentrate only on their core business
rather than worrying about their energy requirements. Since UPGDCL
came into operation, both EPZs have experienced exponential growth
in investment, export earnings and employment and to cater to
the ever increasing demand, the Company has expanded its
generation capacity up to 160 MW and installed steam generation
capacity. High Voltage Substations comprising of several power
transformers, required length of 11 kV and 33 kV distribution
lines were built by UPGDCL under each of the two project
sites along with an 11 km, 150 psi, 12” gas pipeline from
the gas company’s TBS at Ashulia to UPGDCL’s RMS at
DEPZ plant site. Thus the company has constructed
multidisciplinary infrastructures like power
generation, high voltage transmissions and
distribution network, high/low pressure gas
pipelines, steam distribution lines, etc. for the
projects. In effect, this makes UPGDCL the
only true commercially independent
power generation and distribution
company as well as a multi-
utility provider in true sense
of the terms. It is a model
that UPGDCL plans to
replicate across all
the EPZs of the
country.

5
United Power Generation & Distribution Company Ltd.

Corporate
Ethos

VISION MISSION OBJECTIVE

To replicate being the multi Energy is Life - Provide uninterrupted and
utility service provider and the To be the institution that quality power to the export
independent power generation generates the lifeblood of oriented industries housed
& distribution entity in true the nation’s economy by within the EPZs of Bangladesh
sense of the terms across all introducing a paradigm shift allowing the industries to
EPZs of Bangladesh in operational efficiency concentrate only on their core
business and contribute to the
nation’s growth

CORE VALUES
Innovative Thinking to introduce
pioneering ideas, operational
efficiency & flexibility
Upholding Commitment to all its
stakeholders, dedicated to
achieve mutual benefits
Ethical Business Practices in all
endeavors, united in all its
ventures

6
Annual Report 2014

7
United Power Generation & Distribution Company Ltd.

WHAT
WE DO
U
nited Power Generation & Distribution Company Ltd. was born UPGDCL in Dhaka Export Processing Zone
out of the necessity for uninterrupted, quality power supply
to the industries housed within the Export Processing Zones UPGDCL’s Power Plant inside Dhaka Export Processing Zone is situated
(EPZs) of Bangladesh. UPGDCL is a first of its kind company that is not over an area of 6,125.13 sq. meters, leased to the Project Company for
only involved in power generation but also power distribution up to 30 years under a Land Lease Agreement between UPGDCL and BEP-
their customer’s doorstep. What makes this company unique is that it ZA, entered on 6 May 2007. The power plant was established to sup-
was built specifically for the Export Processing Zones of the country, ply power to the industries inside Dhaka EPZ under a Power Supply
particularly for Dhaka and Chittagong EPZ. These zones are nationally Agreement dated 6 May 2007 between BEPZA and UPGDCL. At pre-
important as they have been specially set up by the government for sent the plant has four (4) Wärtsilä Finland 20V34SG engines each hav-
local and foreign companies who have heavily invested in export ori- ing capacity of 8.73 MW, five (5) Rolls-Royce Norway B35:40V20AG2
ented production. Reliable, uninterrupted and quality power are the engines each having capacity of 9.34 MW and two (2) MTU Germany
key requirements for these industries to operate. It is UPGDCL’s power AOE20V4000L62 engines each having a capacity of 1.96 MW resulting
plants providing this essential utility to the industries located inside in a combined output of 86 MW. The plant also have 2 Exhaust Gas
these EPZs thereby helping the nation earn greater export revenue Boilers supplied by Khan SPP having a steam production capacity of 4
and foreign currency. ton per hours (TPH) per boiler, fitted to two of the plant’s Rolls-Royce
engines. The total steam production capacity of Dhaka EPZ is 8 TPH.
Initially operating a 35 MW unit, with a subsequent addition of an- Power generated at 11 kV is being distributed at 11 kV and 33 kV by
other 6 MW unit, in DEPZ and a 44 MW unit in CEPZ, the Company UPGDCL’s own 20 km and 30 km long distribution lines, respectively.
implemented two expansion projects, one at Dhaka Export Process- Natural Gas is the fuel for the engines supplied by Titas Gas Transmis-
ing Zone (DEPZ), to increase its production capacity from 41 MW to sion & Distribution Co. Ltd. under a Gas Supply Agreement signed on
86 MW, and another at Chittagong Export Processing Zone (CEPZ), to 16 November 2008 and on 27 February 2014 (effective from 1 August
increase its production capacity from 44 MW to 72 MW, at the behest 2009) for a term of the Power Supply Agreement signed between BE-
of BEPZA. In doing so, UPGDCL has increased its production capacity PZA and UPGDCL.
from a total of 85 MW to 160 MW through these expansion projects by
December 2013.
It may be mentioned here that BEPZA, in consultation with IFC & KOI-
KA, is working to develop its different
EPZs in to Low Carbon Green Zone
and improve efficiency through Sym-
biosis among different industries
located inside EPZs. UPGDCL with a
view to be associated with the pro-
gram, undertook the scheme to in-
stall Exhaust Gas Boiler (EGB) to use
exhaust heat from the engines to
produce steam and supply commer-
cially to the neighboring industries
inside Dhaka & Chittagong EPZs.
This setup has further improved the
power plant efficiency and reduced
environmental emissions signifi-
cantly as the exhaust of the en-
gines, instead of being released to
the atmosphere, is being recycled
and reused to produce steam.

8
 Annual Report 2014

UPGDCL in Chittagong Export Processing Zone Operation & Maintenance (O&M) of UPGDCL’s plants

UPGDCL’s Power Plant inside Chittagong Export Processing Zone is The overall Operation and Maintenance (O&M) of the plants have been
situated over an area of 6033.80 sq. meters, leased to the Project Com- outsourced to United Engineering & Power Services Ltd. (UEPSL), a
pany for 30 years under a Land Lease Agreement between UPGDCL concern of United Group, under a long term O&M Agreement.
and BEPZA, entered on 16 May 2007. The power plant was established UEPSL was formed in 2011 and is currently performing operation and
to supply power to the industries inside Chittagong EPZ under a Power maintenance of 5 (five) plants under the banner of United Group.
Supply Agreement dated 16 May 2007 between BEPZA and UPGDCL. UEPSL has O&M experience of over 240 MW with an average plant
At present the plant has five (5) Wärtsilä Finland 20V34SG engines availability of over 95%. The management team is led by ex-officials
each having capacity of 8.73 MW and three (3) Rolls-Royce Norway from Wärtsilä with over 25 years of experience in the marine industry
B35:40V20AG2 engines each having capacity of 9.34 MW resulting in a and handling Wärtsilä engines. They each have 96000 hours of major
combined output of 72 MW. The plant also have 3 Exhaust Gas Boilers maintenance experience of Wärtsilä engines. Engaging UEPSL for pro-
supplied by Khan SPP having a steam production capacity of 4 ton per viding O&M services has benefitted the plant not only in terms of avail-
hours (TPH) per boiler, fitted to the plant’s Rolls-Royce engines. The ability but also in terms of efficient operation, greater output and has
total steam production capacity of Chittagong EPZ is 12 TPH. Natu- secured a steady flow of revenue from the plant.
ral Gas is the fuel for the engines initially supplied by Bakhrabad Gas
Distribution Co. Ltd. under a Gas Supply Agreement signed on 9 July UEPSL has the full responsibility of carrying out all services required
2009, currently supplied by Karnaphuli Gas Distribution Co. Ltd. under to ensure smooth operation of the plant. The operational process has
a Gas Supply Agreement effective from 15 May 2013 for the term of been developed and managed by the expert team. For any technical
the Power Supply Agreement signed between BEPZA and UPGDCL. issue, the equipment manufacturer extends their support as and when
required. UEPSL is paid a management fee for their services rendered
and any other actual cost, including manpower salary and emolu-
ments, incurred by them while providing O&M services to UPGDCL’s
plant is reimbursed.

9
United Power Generation & Distribution Company Ltd.

UPGDCL
AT-A-GLANCE

10
 Annual Report 2014

First Commercial Independent Power Plant (CIPP) in Bangladesh

Provides uninterrupted and quality power to Dhaka & Chittagong Export Processing Industries
Initial project tenure of 30 years with a provision for further extension for a term of 30 years
High Plant Factor and Maximum Plant Availability since commissioning

UPGDCL DEPZ UPGDCL CEPZ

4 units each of capacity 8.73 MW 5 units each of capacity 8.73 MW
Number of Generators: 5 units each of capacity 9.34 MW 3 units each of capacity 9.34 MW
2 units each of capacity 1.96 MW
Wärtsilä Finland 20V34SG Wärtsilä Finland 20V34SG
Genset Model: Rolls-Royce Norway B35:40V20AG2 Rolls-Royce Norway B35:40V20AG2
MTU Germany AOE20V4000L62
86 Megawatts (Total) 72 Megawatts (Total)
Capacity:
(one of the MTUs has been dismantled)
Number of Boilers: 2 Units each of capacity 4 TPH 3 Units each of capacity 4 TPH
Boiler Model: Khan SPP Smoke Tube EGB Khan SPP Smoke Tube EGB
Steam Capacity: 8 TPH 12 TPH
35 MW, December 2008 44 MW, August 2009
Commercial Operation
6 MW, October 2010 28 MW, July 2013
Dates (COD):
47 MW, December 2013
Dhaka Export Processing Zone Chittagong Export Processing Zone
Rural Electrification Board Karnaphuli Export Processing Zone
Clientele:
Bangladesh Atomic Energy Commission Bangladesh Power Development Board
Large Private Customers
Fuel: Natural Gas Natural Gas
Fuel Supplier: Titas Gas Transmission & Distribution Co. Ltd. Karnaphuli Gas Distribution Co. Ltd.
Project Cost: BDT 5623.22 Million BDT 4429.34 Million

11
United Power Generation & Distribution Company Ltd.

Benchmarks &
Milestones
15 January 2007
Incorporated as Private Limited
Company
6 May 2007
UPGDCL DEPZ entered into a Power
Supply Agreement with BEPZA for supply
22 December 2010
to DEPZ
Converted from Private Limited
6 May 2007 Company to Public Limited
UPGDCL DEPZ entered into a Land Lease Company
Agreement with BEPZA for constructing
DEPZ plant
16 May 2007
UPGDCL CEPZ entered into a Power
Supply Agreement with BEPZA for supply
to CEPZ
16 May 2007
UPGDCL CEPZ entered into a Land Lease
Agreement with BEPZA for constructing
CEPZ plant

23 October 2008
UPGDCL became a licensed Commercially
Independent Power Producer (CIPP)
16 November 2008
UPGDCL DEPZ entered into a Gas Supply
Agreement with TGTDCL
(A second GSA was signed on 27 February
2014 effective from 1 August 2009)
26 December 2008
UPGDCL DEPZ achieved Commercial
2 April 2009
Operations
UPGDCL DEPZ entered into a Power Supply Agreement 21 November 2011
with its first private customer, Oli Knitting & Fabrics Ltd. UPGDCL DEPZ entered into an
9 May 2009 Amendment to the Power Supply
UPGDCL DEPZ entered into a Power Supply Agreement Agreement with BEPZA for capacity
with REB expansion to 100 MW

9 July 2009 21 November 2011

UPGDCL CEPZ entered into a Gas Supply Agreement UPGDCL CEPZ entered into an
with BGDCL Amendment to the Power Supply
Agreement with BEPZA for capacity
12 August 2009 expansion to 100 MW
UPGDCL CEPZ achieved Commercial Operations
23 September 2009
12 UPGDCL CEPZ entered into a Power Purchase
Agreement with BPDB
 Annual Report 2014

13 May 2013
UPGDCL DEPZ acquired license from BEPZA
for Commercial Sales of Steam
15 May 2013
UPGDCL CEPZ entered into a Gas Supply
Agreement with Karnaphuli Gas Distribution
Co. Ltd.
17 April 2013
4 April 2012 UPGDCL held a Roadshow for discovery of
UPGDCL CEPZ entered into a Indicative Price for IPO
Power Supply Agreement with
BEPZA for supply to KEPZ July 2013
Installed capacity of UPGDCL CEPZ increased
4 September 2012 to 72 MW through expansion
UPGDCL DEPZ entered into a
Steam Sales Agreement with December 2013
Gunze United Ltd. Installed capacity of UPGDCL DEPZ increased
to 86 MW through expansion

19 February 2015
Conducted lottery for Allotment
of Shares to the investors
8 March 2015
Listed in Chittagong Stock
Exchange
19 March 2015
Listed in Dhaka Stock Exchange
5 April 2015
Started trading of UPGDCL’s
shares in both Dhaka and
Chittagong Stock Exchange

13 January 2014
UPGDCL DEPZ entered into a Power Supply Agreement
with its first large public customer, Bangladesh Atomic
Energy Commission
18-20 May 2014
Successfully discovered the price for IPO under Book
Building Method through Electronic Bidding conducted
by DSE
9 December 2014
Acquired consent from BSEC
13
United Power Generation & Distribution Company Ltd.

EVENTS

Foundation Laying of DEPZ Agreement signing ceremony

with Bangladesh Atomic Energy
Engine Supply Contract Commission
Signing Ceremony

UPGDCL’s Roadshow

14
 Annual Report 2014

L o t t er y f o r All o t m e n t o f S h a re s

UPGDCL starts trading in

Dhaka & Chittagong Stock
Exchange

15
United Power Generation & Distribution Company Ltd.

UNITED GROUP &

POWER SECTOR
U
nited Group, one of the leading business houses of Bangladesh, has been a major player
in Bangladesh’s power sector for decades. The Group took a giant leap to its future
development by establishing the country’s first Independent Power Plant (IPP) in Khulna, a
110 MW HFO-fired modular power plant, Khulna Power Company Ltd., in partnership with other
likeminded local and international firms. This established the ground work for the Group, on which
they continued investment in the power sector, having set up several small power plants for REB
thereafter. The Group’s experience in the power sector eventually led to the formation of United
Power Generation & Distribution Company Ltd. (UPGDCL), formerly known as Malancha Holdings
Ltd., in 2007. UPGDCL is the country’s first Commercial Independent Power Producer (CIPP)
supplying quality power by their two power plants in Dhaka and Chittagong EPZs. Subsequently
2011 saw launching of United Ashuganj Power Ltd., Khulna Power Company Ltd. – Unit II and
Khan Jahan Ali Power Company Ltd. 2013 was another year of significant growth for the Group.
Capacity of UPGDCL’s both the power plants were increased. In the same year, Shajahanullah
Power Generation Company Ltd., another CIPP was successfully commissioned in Sylhet. In 2015,
United commissioned the nation’s first Combined Cycle, Modular Power Plant, United Ashuganj
Energy Ltd., in joint collaboration with the government of Bangladesh, in partnership with
Ashuganj Power Station Company Limited.

Sl. Company Capacity Ownership

1. United Power Generation & Distribution Co. Ltd. (DEPZ) 86 MW United Group
2. United Power Generation & Distribution Co. Ltd. (CEPZ) 72MW United Group
3. United Ashuganj Power Ltd. 53 MW United Group
4. Shajahanullah Power Generation Company Ltd. 28 MW United Group
5. Khulna Power Company Ltd. (KPCL-I) 110 MW United Group & Summit Group
6. Khan Jahan Ali Power Company Ltd. 40 MW United Group & Summit Group
7. Khulna Power Company Ltd. (KPCL-II) 115 MW United Group & Summit Group
United Group & Ashuganj Power Station
8 United Ashuganj Energy Ltd. 200 MW
Company Ltd.

16
 Annual Report 2014

Notice
Of The 8Th Annual General Meeting

N
otice is hereby given that the 8th Annual General Meeting of the Shareholders of United Power Generation & Distribution Company Ltd.
will be held on Wednesday, the 24th day of June, 2015, at Golf Garden, Army Golf Club, Airport Road, Dhaka, at 12.00 P.M to transact the
following businesses:
Agenda
1. To receive and adopt the Director’s Report and the Audited Financial Statements for the year ended December 31, 2014 together with the
Auditors’ Report thereon.
2. To declare dividend for the year 2014 as recommended by the Board of Directors.
3. To elect Directors of the Company retiring in terms of relevant Article of the Company’s Articles of Association.
4. To appoint Auditors for the year 2015 and to fix their remuneration.

By order of the Board

Dhaka, 24 May 2015 Md. Mahfuzul Haque, FCMA

Company Secretary
Notes:

1. Members whose names appeared on the Members/Depository Register as on “Record Date” i.e. 20 May 2015 are eligible to attend the
Annual General Meeting (AGM) and receive dividend.
2. A Member entitled to attend and vote at the AGM may appoint a Proxy to attend and vote in his/her stead.
3. The “Proxy Form”, duly filled and stamped at Tk. 20 must be deposited at the Company’s Share Office located at ‘United Centre’, House - NW(J)
- 6, Road - 51, Gulshan - 2, Dhaka - 1212, Bangladesh not later than 48 hours before commencement of the AGM.
4. Members/Proxies are requested to record their entry in the AGM well in time on 24 June 2015. The registration counter will open at 9:00 am
on the AGM date.
5. In case of non-receipt of Annual Report 2014 of the Company sent through courier, Members may collect the same from the Company’s
Share Office within 23 June 2015. No additional Annual Report will be distributed at AGM venue. Soft copy of the Annual Report is available
in Investor Relations section of the Company’s website: www.unitedpowerbd.com

Special Note:
No benefit or gift in cash or kind shall be given to the Shareholders for attending the 8th Annual General Meeting as per Bangladesh
Securities and Exchange Commission’s Circular No. SEC/CMRRCD/2009-193/154 dated 24 October 2013.

17
United Power Generation & Distribution Company Ltd.

Message
from the Chairman
Honorable Shareholders, Respected Members of the Board and Distinguished Guests, it is with immense
pleasure that I welcome you all to the 8th Annual General Meeting of United Power Generation & Distribution
Company Ltd (UPGDCL).
On behalf of the entire Board of UPGDCL, I would like to convey our March 2015. On a happy note I announce that the Company has started its
sincere appreciation and gratitude to you, our esteemed shareholders, trading from 5 April 2015.
for your continuous support and cooperation and for being here with us
Being located inside the Export Processing Zone and being one of the key
to celebrate the occasion. I am delighted to present to you the Director’s
utility providers, UPGDCL is exempted from paying taxes. This exemption
Report and audited Financial Statements for the year ended 31 December
helps to increase the value of the shareholders. Against a challenging
2014 along with the Auditor’s Report.
landscape of business, we have made satisfactory progress in pursuit of our
United Power Generation & Distribution Company Ltd., the first Commercial mission to sustain excellence and equitable growth. On the key actions, we
IPP in Bangladesh, has concluded yet another year of success and continue to deliver strong, stable and sustainable return for shareholders. I
accomplishments. UPGDCL was formed to supply quality power to cater inform you all, with utmost delight, that our books show that UPGDCL has
to the large industrial consumers, mainly the industries inside Dhaka and earned a revenue of Tk. 4,463.32 Million in 2014, which is a notable 31.43%
Chittagong Export Processing Zones. For this purpose the Company built a more than the revenue earned in 2013. In 2014, the company’s Operating
natural gas fired 35 MW Power Plant, with a subsequent addition of another Profit amounted to Tk. 2,821.03 Million, 33.38% more compared to 2013.
6 MW, in Dhaka EPZ (DEPZ) and 44 MW Power Plant in Chittagong EPZ The Earnings Per Share (EPS) also increased by 38.8% in 2014.
(CEPZ), allowing their clients to put their undivided attention only on their I understand that 2015 will be a more challenging and telling year for the
core business rather than be concerned about their energy requirements. economy as well as the power sector of Bangladesh. I strongly believe
Since UPGDCL’s Power Plants came into operation, the availability of quality that UPGDCL’s capital position, strength of business and the ability and
power led to exponential increase in Investment, Export and Employment dedication to deliver to its Customers through power generation and
of both DEPZ and CEPZ, which is well documented and acclaimed. Owing to distribution will have a significant impact in the development of the nation
such positive results and eventual growth of electricity demand, BEPZA asked and create compelling opportunities in the new, competitive landscape,
UPGDCL to increase its capacity up to 100 MW each which led to the extension building up on the momentum that we established in the past years.
projects of both the plants. The first phase of extension, DEPZ up to 86 MW
On behalf of the Board of Directors, I would like to express my thanks to
and CEPZ up to 72 MW, was commissioned on December 2013 and July 2013
the Honorable Prime Minister, Honorable Energy Advisor, Honorable State
respectively. The importance of reliable and quality supply of power is reflected
Minister, Senior Secretary of PMO, Ministry of Power, Energy and Mineral
in the achievements of our clients. CEPZ has ranked 9th in the top 10 Free Zones
Resources, Bangladesh Export Processing Zones Authority, Bangladesh
of the Future 2012/13, 3rd in top 10 Best Cost Effectiveness and 4th in top 10
Securities & Exchange Commission, Stock Exchanges, Registrar of Joint Stock
Best Economic Potential in the Global Ranking 2010-11 by FDI Magazine.
Companies, Bangladesh Power Development Board, Rural Electrification
UPGDCL’s list of clientele also includes government bodies, namely Board, Petrobangla, Department of Environment, United Engineering &
Bangladesh Power Development Board, Rural Electrification Board, Atomic Power Services Ltd., Central Depository of Bangladesh Ltd., Respected
Energy Research Establishment, a concern of Bangladesh Atomic Energy Shareholders, Preference shareholders, Investors, Customers, Commercial
Commission and several private large power consumers. banks and all other companies which participated in the IPO process for their
unwavering support, encouragement, valuable help and assistance.
UPGDCL engaged in Initial Public Offering (IPO) exercise under the “Book
Building Method” enabling the issuer, to determine the indicative price I would like to express my sincere thanks to my fellow Directors for
of its shares based on demand from Eligible Industrial Investors (EIIs). their continuous support and contribution and the Members of the
Participating in an automated bidding process in the course of a road management team and all employees of UPGDCL for their resolute
show for price discovery the investors were, accordingly, able to determine commitment, sincerity and hard work.
an indicative price based on the Company’s Financial Statement of the With Best Regards,
year 2012 and its projected growth rate and earnings for the year 2013.
After successful completion of the price discovery exercise, Bangladesh Sincerely Yours,
Securities & Exchange Commission (BSEC) issued Consent Letter to
UPGDCL on 9 December 2014. The IPO Process has been stringently
regulated by BSEC and the lottery was conducted on 19 February 2015
for issuing Letters of Allotment. The Company listed in Chittagong Stock
Exchange (CSE) on 8 March 2015 and in Dhaka Stock Exchange (DSE) on 19
General Md. Abdul Mubeen, SBP, ndc, psc (Retd.)
18 Chairman
 Annual Report 2014

General Md. Abdul Mubeen, SBP, ndc, psc (Retd.)

Chairman

19
United Power Generation & Distribution Company Ltd.

Analysis of
Financial Statements
Key Highlights 2014
(BDT in million)
Particulars 2014 2013 Change (%) 15000
2013

Revenue 4463.32 3396.09 31.43 12000 2014

Cost of Sales 1582.65 1038.61 52.38 9000

Net Profit 2464.63 1774.43 38.90 6000

3000
Total Equity 9485.29 7020.81 35.10
0
Total Assets 12263.07 11678.01 5.01

t
e

ity
s

ts

y
rofi
ale
enu

ilit
sse
qu

iab
of S

tP

al A
Rev

al E
Ne

al L
t
Total Liability 2777.77 4657.20 (40.36)

Tot
Tot
Cos

Tot
United Power Generation and Distribution Company Ltd. managed to maintain its profitability despite the various macroeconomic challenges the
economy underwent in 2014. As can be seen from the review below, the Company managed to exhibit increased revenue performance and net
profit:

Revenue increased by 31.43% to Taka 4463.32 million in 2014 from

Taka 3396.09 million in 2013. This increase in Revenue occurred due
to the increase in production and increase in sales price per unit.

Cost of Sales increased by 52.38% to Taka 1582.64 million in 2014 from Taka 1038.63 million in 2013.
The increase occurred due to the increase in fuel consumption (gas) for incremental production,
spare parts and operation & maintenance expenses in the power plants as a result of capacity en-
hancement, major maintenance of power generation equipment and machinery.

Net Profit went up by 38.9% to Taka 2464.63 million in 2014 from Taka
1774.43 million in 2013. The increase in Net Profit occurred on ac-
count of operational and cost efficiency. Consequently the Earnings
per Share was raised from Taka 5.98 to Taka 8.30.

Total Equity increased by 35.1% to Taka 9485.29 million in 2014 from

Taka 7020.81 million in 2013 mainly due to increase in Retained Earn-
ing. The Share Capital of the Company remains unchanged as no
shares were issued during the year 2014.

Total Assets increased by 5.01% to Taka 12263.07 million in 2014 from

Taka 11678.01 million in 2013 mainly due to increase in Cash & Cash
Equivalents, Trade Receivables and Inter Company Receivables.

Total Liabilities saw a significant decrease by 40.36% to Taka 2777.77 million

in 2014 from 4657.2 million in 2013 due to redemption of redeemable cumu-
lative preference share and repayment of Long Term borrowings.

20
 Annual Report 2014

DIRECTORS’
REPORT
For the year ended 31 December 2014
Report of the Board of Directors to the Shareholders under Section 184 of the Companies Act 1994 and Bangladesh Securities
& Exchange Commission’s (BSEC) notification No. SEC/CMRRCD/2006-158/134-Admin/44 dated 7 August 2012.

Dear Shareholders,
On behalf of the Board of Directors, I welcome you all to the 8th Annual General Meeting of the company, and have the pleasure to submit before
you the Operational Activities and Audited Financial Statement of the company for the year 2014, along with the Auditor’s Reports thereon.

Economic Environment of Bangladesh manufacturing sector.

The year 2014 has been one of the most challenging year for the
country’s economy in recent times. However, against all odds,
Bangladesh has been able to attain a GDP growth of 6.12% in the year
2014, whereas the projected growth of our neighboring developing
countries has been below 6% in the fiscal year 2014.
In longer timeframe, the economy has grown at a rate of 5-6% per year
since 1996 despite poor infrastructure, insufficient power supplies,
and slow implementation of economic reforms. The Consumer Price
Index CPI in Bangladesh averaged 107.65 Index Points from 1993 until
2015, reaching an all-time high of 210.74 Index Points in February
2015 and a record low of 51.99 Index Points in July 1993.

Despite the slow recovery of the global economy especially in

developed countries and prevailing adverse internal situation in
Bangladesh, the domestic economy has managed to consistently
exceed growth rates of five per cent since 2009.
The Gross Domestic Product (GDP) in Bangladesh expanded by 6.12
percent in 2014 from the previous year. GDP Annual Growth Rate in
Bangladesh averaged 5.64 percent from 1994 until 2014. Bangladesh
achieved 6.7 percent Growth in the year 2011, which was the highest
rate achieved since the year 1994 and the growth performance was
possible due to strong rebound in export and the expansion of the Foreign Exchange Reserves in Bangladesh decreased to BDT 1718.86
Billion in December 2014 from BDT 1744.63 Billion in November 2014.
Foreign Exchange Reserves in Bangladesh averaged BDT 334.25 Billion
from 1990 until 2014, reaching an all-time high of BDT 1744.63 Billion
in November 2014 and a record low of BDT 13.75 Billion in May 1990.

21
United Power Generation & Distribution Company Ltd.

Directors’ Report
Recognizing this constraint the present government has prioritized
power sector right from its election manifesto. As per the manifesto,
electricity generation in the country was supposed to be 5000 MW
by the year 2011 and 7000 MW by 2013. The government has been
successful in meeting these targets and has even been able to achieve
higher level of precedents. The government aims to add additional
9600MW electricity generation capacity from 2014 to 2018 under
medium and long term plan. The government has further extended
its vision targeting the upcoming years up to 2030 and prepared
the Power System Master Plan 2010 (PSMP). This plan states that the
generation capacity should be about 39,000 MW in 2030. According to
the PSMP - 2010 year wise peak demand forecast is appended below.
The inflation rate in Bangladesh was recorded at 6.14 percent in Fiscal Year Peak Demand (MW)
February 2015. Inflation Rate in Bangladesh averaged 6.64 percent
from 1994 until 2015, reaching an all-time high of 12.71 percent in 2015 10,283
December 1998 and record low of -0.02 percent in December 1996. 2016 11,405
2017 12,644
2018 14,014
2019 15,527
2020 17,304

In light of the above we may conclude that the performance of

Bangladesh’s economy is quite well in terms of Gross Domestic
Product (GDP), Consumer Price Index (CPI), Foreign Exchange Reserves
and Inflation Rate.

Power Sector Scenario in Bangladesh

The installed power generation capacity (as of February 2015) stood
at 10,868 MW of which the public sector produced 54.1% and private
Bangladesh with its 160 million people in a land of 147,570 square- sector produced 45.9% of the total electricity produced in the country.
km has shown tremendous growth in recent years. A booming It may be mentioned here that United Group contributes about 7% in
economic growth, rapid urbanization, increased industrialization the nation’s power sector.
and development has increased the country’s demand for electricity.  
The installed electric generation capacity stands 11,203 MW in May
2015. Obstacles, in the Bangladesh’s electric power sector includes Installed Generation Capacity
Public Sector
high system losses, delays in completion of new plants, low plant (MW)
efficiencies, erratic power supply, electricity theft, blackouts, and BPDB 4,126
shortages of funds for power plant maintenance. Overall, the country’s APSCL 687
generation plants have been striving to meet system demand over the
past decade. EGCB 622
NWPGCL 368
RPCL 77
Sub Total 5,880
22
 Annual Report 2014

Installed Generation Capacity

Private Sector
(MW)
IPPs 2,017
SIPPs (BPDB) 99
SIPPs (REB) 251
15 yr. Rental 167
3/5 yr. Rental 1,954
Power Import 500
Sub Total 4,988
Total 10, 868 Board and NTPC, India. In addition to this several other coal fired
plants will be set up in different locations: Chittagong, Matarbari and
Considering the country’s future energy security, the government has Moheshkhali. The government is also progressing with negotiation
rightly given due importance on renewable energy, energy efficiency for the implementation of nuclear power plant in cooperation
as well as energy conservation. Access to electricity has been raised with Russia and Japan. Cooperation has been initiated through
from 47% to 70% (including Renewable Energy) and per capita SAARC, SASEC and BIMSTEC etc. for sharing of hydropower through
electricity generation improved drastically (from 220 kWh to 370 cross-border connectivity and capacity development. At present,
kWh). Around 3.45 million people have newly been connected and Bangladesh is importing 500MW of electricity from India through grid
System Loss (distribution) reduced from 15.67% to 12.03%. Highest interconnectivity with a process underway to bring in another 600MW.
generation so far was 7747 MW recorded on 20 May 2015, and it is The government has taken up huge development plans in the
increasing gradually. transmission and distribution system to accommodate the increased
generation. From April 2010 to April 2011, distribution line was
been extended from 2,66,460 km to 2,70,000 km. Government has
undertaken a massive plan to strengthen the transmission system and
fulfill the future demand of electricity with its aim to achieve its Vision
2021. It is expected that by 2017, 1,10,000 km new distribution line will
be built to accommodate new customers.
Relentless and careful monitoring over implementation of long
term, mid-term and emergency measures has led the government to
achieve landmark progress in realizing its target to make Bangladesh
a complete power hub.

Several programs have been undertaken to promote use of renewable

energy keeping in mind the country’s future energy security and low-
carbon emission strategy. Government has formulated pro-investment
policy to encourage private sector investment in Renewable Energy
(RE) Sector. Bangladesh has the fastest growing Solar Home System
(SHS) in the world with about 3.6 million homes covered under the
program being spearheaded by a public infrastructure financing entity.
A coal fired plant with capacity of 1,320 MW will be set up in Khulna,
a joint venture project between Bangladesh Power Development 23
United Power Generation & Distribution Company Ltd.

Directors’ Report
Business Opportunities for Private Sector Business Activities including Operating Performance
To encourage private sector to investment in the power sector of United Power Generation & Distribution Co. Ltd. (UPGDCL) is the
the country the Government of Bangladesh adopted several policies country’s first Commercial Independent Power Producer. Established
namely Private Sector Power Generation Policy of Bangladesh, 1996 under the Private Sector Power Generation Policy of Bangladesh,
(revised 2004) and Policy Guideline for Enhancement of Private 1996 (Revised in November 2004). UPGDCL’s power plants have been
Participation in the Power Sector, 2008. The government has also in operation for the past six and a half years. Initially UPGDCL started
taken a pragmatic step to revise the Electricity Act 1910, to be its journey with a 35 MW gas-fired, modular power plant in Dhaka
renamed as Electricity Act 2015, where adequate provisions has been EPZ, with a subsequent addition of 6 MW. In the following years a 44
kept to facilitate private companies to participate in developing the MW gas-fired modular power plant was commissioned in Chittagong
nation’s power sector. Investment in power sector, at present, can be EPZ and by December 2013 UPGDCL’s total installed capacity was
considered to have a much rewarding outcome. Some of such benefits enhanced to 160 MW. The principal activity of your company is to
for potential investors are as follows: generate electricity and deliver output to Dhaka, Chittagong and
Karnaphuli EPZs, REB, BPDB and several private customers. In addition,
Facilities and Incentives for Facilities and Incentives for the DEPZ plant also produces steam as a by-product, using the exhaust
Private Power Companies Foreign Investors of the engines and sells it commercially to industries inside Dhaka EPZ
having demand for quality steam
· Exemption from corporate · Tax exemption on royalties,
income tax for different technical know-how and Production
tenor/period with different technical assistance fees,
tax rates and facilities for their
Installed Capacity (kW)

· Allowed to import plant repatriation.

Capacity Utilization
Name of the Plant

equipment and spare parts · Tax exemption on interest

at up to a maximum of on foreign loans. Production (kWh) Sales (kWh)
ten percent (10%) of the · Tax exemption on capital
original value of total plant gains from transfer of shares
and equipment within a by the investing company. 2014 2013 2014 2013
period of fifteen (15) years
· Avoidance of double DEPZ 85,540 63% 448,009,720 283,357,570 434,542,144 278,093,102
of commercial operation
taxation case of foreign CEPZ 71,670 77% 454,528,231 354,216,483 445,254,801 346,223,915
without payment of
investors on the basis of
customs duties, VAT and any Total 159,290 902,537,951 637,574,053 879,796,945 624,317,017
bilateral agreements.
other surcharges as well as
import permit fee except · Exemption of income tax
for indigenously produced for up to three years for
equipment manufactured the expatriate personnel
according to international employed under the
standards. approved industry.
· Repatriation of equity along · Remittance of up to 50%
with dividends allowed of salary of the foreigners
freely. employed in Bangladesh
and facilities for repatriation
· Exemption from income tax
of their savings and
for foreign lenders to such
retirement benefi­ts at the
companies.
time of their return.
· The foreign investors will
· No restrictions on issuance
be free to enter into joint
of work permits to project
ventures but this is optional
related foreign nationals
and not mandatory.
and employees. Facilities
for repatriation of invested
capital, profi­ts and dividends.

24
 Annual Report 2014

During the year 2014, your company exported 879.797 million units Related Party Transaction
(kWh) as compared to 624.317 million units (kWh) in 2013, representing The related party transactions carried out by the Company on a
an overall growth of 41% in export. The average capacity utilization commercial basis have been disclosed in notes 36 to the financial
from both the plants is 70%. The Operational Performance Highlights statements
has been enclosed as Annexure 5.
Significant Deviation from Previous Year’s Operating Results Utilization of proceeds from Public Issues

The deviation from previous year’s operating results is not significant. As the IPO proceeds were received in 2015, the utilization of which is
still in progress and as such has not been reported.
Contribution to the Economy and the National Exchequer
Deterioration of Financials post-IPO
Electricity is indisputably the indispensable tool for the development of
industrialization and hence the nation’s economy. The 879.797 million It is still too early to determine the effect on financials post – IPO. As
kWh of reliable, quality electricity exported from your company’s the proceeds were received on 2015, it had no effect on the financials
power plants had a notable contribution to the country’s power sector, of 2014.
enhancing industrial production, and consequently creating more job
Significant variance between Quarterly and Annual Financial Statements
opportunities. As a shareholder you can be proud of your Company’s
contribution to the nation’s economy. No significant variations have occurred between quarterly and annual
financial results of the Company during the year under report.
UPGDCL has received exemption from all corporate taxes from the
Government of Bangladesh under the Private Sector Power Generation Remuneration of Directors
Policy, 1996 for a period of 15 years from start of its commercial
operation vide S.R.O. reference 188-LAW/Income Tax/2009/Income Remuneration of Chairman and Managing Director is being paid.
Tax Ordinance (#36) 1984 dated 1 July 2009. For the Company such Directors including Independent Director are paid attendance fee per
exemption will expire in the year of 2023. UPGDCL also enjoys VAT, tax meeting. Related fees have been disclosed in notes 18 of the financial
exemptions for being located inside export processing zones (duty statements.
free zones).
Corporate and Financial Reporting Framework
You will be pleased to know that this year your company’s contribution
The law required that the financial statement of the company
to the National Exchequer was Tk. 47.48 Million in 2014.
should be prepared in accordance to the prescribed format given
Extraordinary Gain or Loss by International Financial Reporting Standard (IFRS) as adopted by
ICAB and Bangladesh Financial Reporting Standards (BFRS). This has
There is no extra-ordinary gain or loss in the financial statements
been completely followed to fairly present the financial position and
under report
performance of the company. While preparing the financial statement,
the following points were considered:
1. Selection of suitable accounting policies and then applying them
consistently.
2. Making judgement and estimates that are reasonable and
prudent.
3. Ensuring that the financial statements have been prepared in
accordance with Bangladesh Financial Reporting Standards (BFRS)
4. Preparing the financial statements in an ongoing concern basis
unless it is appropriate to presume that the company will not
continue in business.
Proper accounting records have been kept so that at any given point
the financial position of the company is reflected with reasonable
accuracy, which will enable them to ensure that its financial statements
comply with Companies Act 1994 and other required regulatory
authorities.
In compliance with the requirements of the BSEC’s Notification dated
7th August 2012, the Directors are also pleased to make the following
declarations in their report:
25
United Power Generation & Distribution Company Ltd.

Directors’ Report
a) The financial statements prepared by the management of
Amount (in
your Company fairly presents its state of affairs, the result of its Particulars
Million Taka)
operations, cash flows and changes in equity;
b) Proper books of accounts of your Company have been maintained; Net Profit available for appropriations 2,464.63
c) Appropriate accounting policies have been consistently applied in Appropriations
preparation of the financial statements and that the accounting Distribution of Cash Dividend for the year 2014
estimates are based on reasonable and prudent judgment; 989.85
@ Tk. 3.00 per share
d) International Accounting Standards and International Financial Stock Dividend 1 (One) share for 10 (Ten) shares
Reporting Standards as applicable in Bangladesh, have been 329.95
for the year 2014
followed in preparation of the financial statements and any
discrepancies have been adequately disclosed; Transfer to Retained Earnings 1,144.83
e) The system of internal control is well structured and has been 2464.63
effectively implemented and monitored; Dividend
f) There are no significant doubts upon your Company’s ability to
continue as an ongoing concern basis; The Board recommends a cash dividend of 30% (i.e. Taka 3.00 per
share of Taka 10.00 each) and stock dividend of 10% (i.e. 1 bonus
g) Significant deviations from last year in operating results of the
share for every 10 shares) for the year 2014, subject to approval by the
Company are highlighted and the reasons have been explained in
shareholders at the Annual General Meeting.
financial results & profit appropriation;
h) Key financial and operating data has been summarized for the
preceding five years in Annexure – 4 and 5 respectively;
i) The number of Board meetings held during the year and
attendance of each director has been disclosed;
j) The pattern of shareholding has been reported in Annexure - 6 to
disclose the aggregate number of shares;

Financial Result and Performance of the Company

2014 2013
Particulars
(in million taka) (in million taka)
Revenue 4,463.32 3,396.10
Cost of Sales (1,582.65) (1,038.61)
Gross Profit 2,880.68 2,357.48
General and Administrative Expense (59.65) (242.52)
Operating Profit 2,821.03 2,114.96
Finance Income 130.92 32.25
Finance Expenses (441.5) (360.69)
Net Profit before Income Tax 2,510.45 1,786.52
Income Tax (45.82) (12.09)
Net Profit after Income Tax 2,464.63 1,774.43

The net profit margin during the year 2014 increased from 52.25% to
55.22% mainly due to increase in financial income and reduction of
expenses.
Profit Appropriation
During the year 2014 the Company’s net profit amounted to Tk.
2,464.63 Million as compared to Tk. 1,774.43 Million in the year 2013.
The Directors of the company recommend to appropriate as follows:

26
 Annual Report 2014

Board of Directors’ Meeting and Attendance Directors’ Election and Re-Appointment

The Board of Directors of the Company comprises of ten (10) members As per article 23(b) of the Articles of Association, General Md. Abdul
including two (2) independent directors. Names and profiles have Mubeen (Retd.), Mr. Faridur Rahman Khan and Mr. Moinuddin Hasan
been provided in detail under the heading Directors’ Profile of this Rashid shall retire in the 8th Annual General Meeting and by rotation
Annual Report. A statement for each of their involvement in other and being eligible, offer themselves for re-election.
corporate bodies is provided in Annexure – 7.
In exercise of the power vested in article 20(c) of the Articles of
The meeting of the Board of Directors are presided over by the Association of the Company, the Board appointed Lt. Gen. Sina
Chairman. Written notices of the Board meeting mentioning agenda Ibn Jamali, awc, psc (retd) and Mr. Ebadat Hossain Bhuiyan, FCA as
along with working papers are circulated ahead of the meeting; Independent Director on 30 December 2014. Both the Independent
minutes are correctly recorded, signed by the chairman and circulated. Directors will retire on the 8th Annual General Meeting and being
eligible offer themselves for re-election.
Eleven (11) Board Meetings took place during the year 2014. The
attendance of the Directors are as follows: Audit Committee
Name Designation Attendance Audit committee of UPDGCL comprises of 3 (three) members of the
Board of Directors nominated by the Board of Directors and operates
General Md. Abdul Mubeen according to the charter of the Committee approved by the Board on
Chairman 11
(Retd.) the basis of Bangladesh Securities & Exchange Commission guidelines.
Mr. Hasan Mahmood Raja Director 11
The Audit Committee has met once during this year and comprises of
Mr. Akhter Mahmud Rana Director 8
the following Board members:
Mr. Ahmed Ismail Hossain Director 8
Mr. Khandaker Moinul Ahsan 1. Lt Gen Sina Ibn Jamali, awc, psc (Retd) - Chairman
Director 11 2. Mr. Abul Kalam Azad - Member
Shamim
Mr. Faridur Rahman Khan Director 11 3. Mr. Md. Ebadat Hossain Bhuiyan, FCA - Member
Mr. Abul Kalam Azad Director 11 Appointment of Auditor
Mr. Moinuddin Hasan Rashid Managing Director 11
Hoda Vasi Chowdhury & Co., Chartered Accountants retires at the
Independent 8th Annual General Meeting as Auditor of the Company. The retiring
Lt Gen Sina Ibn Jamali (Retd) 1
Director auditor is eligible for re-appointment and therefore offer themselves
Independent for reappointment as Auditor of the Company for the year 2015.
Mr. Md. Ebadat Hossain Bhuiyan, Fca 1
Director
N.B.: The Independent Directors were appointed on 30 December 2014. The Risk Management:
Directors who could not attend the meeting were granted leave of absence. Investment in equity shares involves various levels of risk. Consequently,
the return of investment is dependent on the functioning of the risk
factors, UPGDCL operates in an industry which is exposed to a number
of internal and external risk factors over which our company has
little or no control. The occurrence of the risk factors as delineated
hereunder can have significant bearing on the operational and
financial performance of the Company. Therefore, it is imperative to
thoroughly understand the risk profile of the Company along with
management’s perception of the risks so that you are aware that your
company is in safe hands.
Credit risk:
Credit risk refers to the financial loss to the Company if a customer
or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Company’s receivable from
customers.

27
United Power Generation & Distribution Company Ltd.

Directors’ Report
Your company’s product, electricity and steam, is sold to Dhaka Export b) Interest Rate Risk
Processing Zone Authority (DEPZ), Chittagong Export Processing
Interest rate risk refers to the likely changes in the cash flows or
Zone Authority (CEPZ), Rural Electrification Board (REB), Bangladesh
future value of a firm on account of changes in the interest rates in
Power Development Board (BPDB), Karnaphuli Export Processing
the market. Increase in interest rate increases the cost of borrowed
Zone (KEPZ), and other private customers under the conditions of the
funds for a company in case of floating rate loans. Interest/
long term Power Sales Agreement (PSA)/Power Purchase Agreement
financial charges are paid against the Company’s borrowed
(PPA). Sales made to these entities are fully secured by Letters of Credit
funds. In the event of unfavorable movement in money markets,
issued by local scheduled banks. Credit risk does not arise in respect of
rising interest rate could increase the cost of debt and negatively
any other receivables.
impact profitability. The management of your company is well
The maximum exposure to credit risk is represented by the carrying aware of the volatility in the money market of our country and
amount of each financial asset in the statement of financial position. believes that rising interest rates will not substantially affect the
Company. UPGDCL’s finance cost to revenue ratio has improved
Liquidity risk
from 10.62% in 2013 to 9.89% in 2014 and the interest coverage
Liquidity risk is the risk that the Company will not be able to meet ratio was more than 5 times during the year 2014.
its financial obligations as they fall due. The Company’s approach to
managing liquidity is to ensure, as far as possible, that it will always
have sufficient liquidity to meet its liabilities when due, under both
normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Company’s reputation.
Your company’s management ensures you that UPGDCL has sufficient
cash and cash equivalent to meet expected operational expenses,
including the servicing of financial obligation through preparation of
the cash forecast that has been prepared based on timeline of payment
of the financial obligation and has accordingly arranged for sufficient
liquidity/fund to make the expected payment within due date.
Moreover, UPGDCL seeks to maintain short term lines of credit with
scheduled commercial banks to ensure payment of obligations in the
event that there is insufficient cash to make the required payment. The
requirement is determined in advance through cash flows projections
and credit lines facilities with banks are negotiated accordingly.
Market risk
Market risk refers to the risk that accompanies the changes in market
forces, such as foreign exchange rates and interest rates, which
affects the Company’s income or the value of its holding of financial
instruments.
a) Currency Risk :
Your Company is exposed to currency risk as it imports machinery
and equipment against payment of international currencies (USD and
EURO). Unfavorable volatility or currency fluctuations may increase
import cost and thus affect profitability of the company. However, the
management of your company is fully aware of the risks associated
with currency fluctuations. Major imported machinery and equipment
purchases from abroad has been settled. Currently spare parts are
being procured from suppliers from various countries. However, cost
of these imported parts are a small component of revenues generated
by the Company. Therefore, your Company’s management believes
that currency risk is not going to hamper business of the Company.

28
 Annual Report 2014

Capital Risk Management Good Corporate Governance

Capital risk management refers to the implementation policies and Good Corporate Governance requires a transparent, efficient
measures adopted to maintain sufficient capital (consisting of share and effective system of decision making. It aims for high level of
capital and retained earnings) and to assess the Company’s internal transparency in the company’s operation. It has always been the
capital adequacy to ensure its operation as a going concern. Valued company’s endeavor to excel through better governance. The
shareholders, it is for your kind information that all major investment management strictly adheres to two basic principles of corporate
and operational decisions having even the slightest exposure to any governance: transparency and disclosure.
risk are evaluated and approved by the Board or your Company. The
level of dividends to ordinary shareholders are monitored by the Board.
Operational Risk
Operational risk is measured against the ability of the Company’s power
projects to generate and distribute stipulated electricity to its off-takers.
Limitation of technology used, fuel supply arrangement, operational
and maintenance (O&M) arrangement, political or force majeure in the
form of natural disasters like floods, cyclone, tsunami and earthquake
may hamper normal performance of power generation.
The routine and proper maintenance of their own generating units
and distribution networks undertaken by BEPZA reduces the chance
of major disruptions. However, severe natural calamities which are
unpredictable and unforeseen have the potential to disrupt normal
operations of UPGDCL. The management of your company believes
that prudent rehabilitation schemes and quality maintenance will The Board of UPGDCL comprises of 10 Members and each of the Board
lessen the damages caused by such natural disasters. Most importantly, members are seasoned professionals equipped with academic and
all the above risks are covered under the insurance agreement with professional qualification in the field of business & administration. This
Pragati Insurance Ltd. and Green Delta Insurance Company Ltd., to gives strength for effective discharge of duties and responsibility of
compensate for all potential damages caused in such situations. the Board. Board Meetings are held regularly where policy decisions
are taken on the basis of open discussion and consensus, keeping the
Risk associated with supply of Raw Material (Gas Supply) interest of all the shareholders and stakeholders of the company in
The main raw material used for generating electricity is natural gas. mind. Since the inception of the company, the Board of Directors has
Any interruption of supplies of the gas to the power plants will hamper been fully committed to build a strong and empowered management
the generation of electricity, the main product of your Company. team. To ensure close monitoring and prompt actions of financial
matters of the company an Audit Committee was formed.
The supply of raw material to your Company is secured by the Gas
Supply Agreements with Karnaphuli Gas Distribution Company Ltd. In accordance with the requirement stipulated in condition No. 7 of
and Titas Gas Transmission & Distribution Company Limited for the the Bangladesh Securities & Exchange Commission’s notification no
term of the Power Supply Agreement with BEPZA. So there is no – SEC/CMRRCD/2006-158/134/Admin/44 dated 7 August 2012 issued
threat of interruption of supplies of the gas to the power plants that under section 2CC of the Ordinance 1969 the Corporate Governance
may hamper the generation of electricity. Furthermore, new gas are Compliance Report is shown in Annexure – 1. A certificate from
being explored and discovered in many areas of the country such Podder & Associates, Cost & Management Accountants confirming
as Narayanganj, Narshindi, and Bay of Bengal. As the Government of compliance of conditions of Corporate Governance Guidelines as
Bangladesh plans to add these discoveries to the national grid the stipulated under condition 7(i) is also annexed to this report as
management does not expect gas supply interruption in the future. Annexure – 2. A Compliance Report on BAS and BFRS is also enclosed
to this report as Annexure - 3
Going Concern
While approving the financial statement, the Directors have made Corporate Social Responsibility
appropriate enquires and analyzed significant operating and UPGDCL has travelled quite a distance since its inception in 2007.
indicative financials which enabled them to understand the ability However, throughout its journey it never forgot its commitments to
of your Company to continue its operations for a foreseeable future. the society. UPGDCL has extensive plans to contribute towards several
The Directors are convinced and gave reasonable expectation that the social and humanitarian causes, such as education, skill development,
Company has adequate resources and legal instrument to continue underprivileged children and so on. Till date, UPGDCL has constructed
its operations without interruption. Therefore UPGDCL adopted the a mosque on the Ashulia highway, Dhaka, as part of its CSR activity.
going concern basis while preparing these financial statement. Plans are underway to construct primary schools and madrasas in 29
United Power Generation & Distribution Company Ltd.

Directors’ Report
Future Plan
UPGDCL is apprehending load growth inside Dhaka and Chittagong
Export Processing Zones due to an increase in the number of industries
as well as capacity development of the existing industries housed
inside. We are also anticipating increased load growth due to expansion
of capacity of our private clients. We are hopeful that in time we will be
successful to acquire more clients in the near future. Keeping all these in
mind, to cater to this increasing demand UPGDCL has plans to undertake
further capacity expansion, DEPZ to 120 MW and CEPZ to 100 MW. As
the plants have a modular configuration, the number of generating
units shall be increased. To facilitate the dispatch of increased power,
the substation capacity will also be augmented respectively.
Acknowledgement
The Board of Directors would like to extend its foremost regards and
appreciation to the valued Shareholders and other Stakeholders
of the company for their persistent support and guidance to the
company that led to this achievement. The Board also recognizes that
the attainment made during the year was possible because of the
cooperation, positive support and guidelines it had received from the
Government of Bangladesh, Prime Minister’s Office, Ministry of Power,
Energy and Mineral Resources, Power Division, Energy Division, Ministry
the neighboring area of Dhaka and Chittagong EPZ. UPGDCL is also
of Finance, National Board of Revenue, Ministry of Commerce, Board
planning to undertake a Scholarship Program for poor and meritorious
of Investment, Bangladesh Power Development Board, Petrobangla,
students of local schools and madrasa.
Titas Gas Transmission & Distribution Company Ltd. and Karnaphuli
Human Resource Management: Gas Distribution Company Ltd. and local administration and people.
Efficient manpower is the pre-requisite for an organization’s Accordingly the Board offers its utmost and sincere gratitude to them.
development. Success of this organization depends on qualified The Board would also like to express their humble gratitude to all the
and skilled manpower for the right post. UPGDCL is performing the stakeholders including the investors, suppliers, banks & financial institutions,
task with due care and integrity to increase the efficiency of the insurance companies, service providers, Bangladesh Securities & Exchange
plant through appropriate maintenance and operation. The aim is to Commission, Registrar of Joint Stock Companies & Firms, Dhaka Stock
maintain the place of work and surrounding condition in a manner Exchange Limited, Chittagong Stock Exchange Limited, The Central Depository
that permits employees to work to the highest effectiveness and of Bangladesh Limited, various Government Authorities and lastly the
perform investing their full potential. individuals and agencies who have helped us accomplish what we are today.
Environmental and Social Obligation
We also extend our warmest greetings and felicitations to the
United Power Generation & Distribution Company Ltd. (UPGDCL) is Management and Employees of United Group for being the essential
committed to conduct its business in socially responsible and environmentally part of UPGDCL during the year. It was their unrelenting commitment,
sustainable manner. This commitment is consistent with our corporate dedication and diligence throughout the year that led to the company
objectives and is essential to continued business success. We shall: achieving the accolades so far.
• Comply with all applicable environmental and social requirements.
We are proud of you all and look forward to your continued support as we
• Seek to reduce energy use, harmful emissions, airborne pollutants, etc. march ahead to take United Power Generation & Distribution Company
• Focus on conserving water to help preserve an increasingly scarce resource. Ltd. further forward as a leading player in the power sector of the country.
• Use resources responsibility, from purchase to use.
With Best Wishes,
The company is taking steps to implement the Integrated Management On behalf of the Board
System (IMS) to make it compliant to ISO 9001:2008-Quality
Management System (QMS), ISO 14001:2004-Environmental
Management System (EMS), BS OHSAS 18001:2007 Occupational
Health and Safety Management System (OH&S) and ISO 50001:2011 –
Energy Management System (EnMS). Moinuddin Hasan Rashid
Managing Director
30
 Annual Report 2014

Annexure 1:
Compliance Report under BSEC’s Notification under 2CC

Status of compliance with the conditions imposed by the Bangladesh Securities and Exchange Commission’s Notification No.
SEC/CMRRCD/2006-158/134/admin/44 dated 7 August 2012 issued under section 2CC of the Securities and Exchange Ordinance
1969 is presented below:
(Report under Condition No. 7.00)

Not
Condition No. Title Complied Remarks (if any)
Complied

1 Board of Directors
1.1 Boards size
The UPGDCL Board is
comprised 10 Directors
The number of the board members of the company shall not be less than 5 (five)
√ including 01 Managing
and more than 20 (twenty).
Director and 02 Independent
Director.
1.2 Independent Directors
There are two Independent
At least one fifth (1/5) of the total number of directors in the company’s board
(i) √ Directors in the UPGDCL
shall be independent directors.
Board.
(ii) For the purpose of this clause ‘Independent directors’ means a director-
Who either does not hold any share in the company or holds less than one Independent Directors have
a) √
percent (1%) shares of the total paid-up shares of the company; declared their compliance
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
b) of the total 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 pecuniary or otherwise, with
c) √
the company or its subsidiary/ associated companies;
d) Who is not a member, director. or officer of any stock exchange; √
Who is not a shareholder, director or officer of any member of stock exchange or
e) √
an intermediary of the capital market;
Who is not a partner or an executive or was not a Partner or an executive during
f) √
the preceding 3 (three) years of the concerned company’s statutory audit firm;
g) Who shall not be an independent director in more than 3 (three) listed companies; √
Who has not been convicted by a court of competent jurisdiction as a defaulter in
h) √
payment of any loan to a bank or a Non-Bank Financial Institution (NBFI);
i) Who has not been convicted for a criminal offence involving moral turpitude. √
Approval for appointment of
The independent director(s) shall be appointed by the board of directors and Independent Director shall
(iii) √
approved by the shareholders in the Annual General Meeting (AGM). be placed in the upcoming
AGM on 24 June, 2015
The post of independent director(s) cannot remain vacant for more than
(iv) √ No such incidence arose
90(ninety) days.
The Board shall lay down a code of conduct of all Board members and annual
(v) √
compliance of the code to be recorded.
The tenure of office of an independent director shall be for a period of 3(three)
(vi) √
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 The qualification and
(i) able to ensure compliance with financial, regulatory and corporate laws and can √ background of IDs justify
make meaningful contribution to business. their abilities as such.

31
United Power Generation & Distribution Company Ltd.

Annexure 1:
Compliance Report under BSEC’s Notification under 2CC

Not
Condition No. Title Complied Remarks (if any)
Complied

The person should be a Business Leader/ Corporate Leader/ Bureaucrat/University

Teacher with Economics or Business Studies or Law background/Professionals
(ii) like Chartered Accountants, Cost & Management Accountants, and Chartered √
Secretaries. The independent director must have a least 12(twelve) years of
corporate management /professional experiences.
In special cases the above qualifications may be relaxed subject to prior approval
(iii) Not applicable
of the Commission.
1.4 Chairman of the Board and Chief Executive Officer
The position of the chairman of the Board and the Chief Executive Officer of the
Different persons hold
companies shall be filled by different individuals. The chairman of the company
the positions with specific
(i) shall be elected from among the directors of the company. The Board of Directors √
responsibilities set by the
shall clearly define respective roles and responsibilities of the chairman and the
Board
chief executive officer.
1.5 Directors Report to the Shareholders
The Directors Report
(i) Industry outlook and possible future developments in the industry. √
complies with the guideline
(ii) Segment-wise or product-wise performance. √
(iii) Risks and concerns. √
(iv) A discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin. √
(v) Discussion on continuity of any Extra-Ordinary gain or loss. √
Basis for related party transactions-a statement of all related party transactions
(vi) √
should be disclosed in the annual report.
Utilization of proceeds from public issues, rights issues and/or through any others
(vii) √
instruments.
An explanation if the financial results deteriorate after the company goes for Initial
(viii) √
Public Offering (IP0), Repeat Public Offering (RPO). Rights Offer, Direct Listing, etc.
If significant variance occurs between Quarterly Financial Performance and
(ix) Annual Financial Statements the management shall explain about the variance √
on their Annual Report.
(x) Remuneration to directors including independent directors.
The financial statements prepared by the management of the issuer company
(xi) present fairly its state of affairs, the result of its operations, cash flows and changes √
in equity.
(xii) Proper books of account of the issuer company have been maintained. √
Appropriate accounting policies have been consistently applied in preparation
(xiii) of the financial statements and that the accounting estimates are based on √
reasonable and prudent judgment.
International Accounting Standards (IAS)/Bangladesh Accounting Standards
(BAS)/International Financial Reporting Standard (IFRS)/Bangladesh Financial
(xiv) Reporting Standards (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 effectively
(xv) √
implemented and monitored.
There are no significant doudts upon the issuer company’s ability to continue as a
(xvi) going concern. If the issuer company is not considerer to be a going concern, the √
fact along with reasons thereof should be disclosed.
Significant deviations from the last year’s operating results of the issuer company
(xvii) √
shall be highlighted and the reasons thereof should be explained.
Key operating and financial data of at least preceding 5 (five) years shall be
(xviii) √
summarized.
32
 Annual Report 2014

Not
Condition No. Title Complied Remarks (if any)
Complied

if the issuer company has not declared dividend(cash or stock) for the year, the
(xix) √
reasons thereof shall be given.
The number of Board meetings held during the year and attendance by each
(xx) √
director shall be disclosed.
The Pattern of shareholding shall be reported to disclose the aggregate
(xxi)
number of shares (along with name wise details where stated below) held by:
Parent/Subsidiary/Associated Companies and other related parties (name wise
(xxi) a) √
details);
Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer,
(xxi) b) √
Head of Internal Audit and their spouses and minor children (name wise details);
(xxi) c) Executives; √
Shareholders holding ten percent (10%) or more voting interest in the company
(xxi) d) √
(name wise details).
In case of the appointment/re-appointment of a director the company shall
(xxii)
disclose the following information to the shareholders:
(xxii) a) a brief resume of the director √
(xxii) b) nature of his/her expertise in specific functional areas; √
Names of companies in which the person also holds the directorship and the
(xxii) c) √
membership of committees of the board.
2 Chief Financial Officer (CFO), Head of Internal Audit and Company Secretary (CS)
The company shall Appoint a Chief Financial Officer (CFO), a Head of Internal
2.1 Audit (Internal Control and Compliance) and a Company Secretary (CS). The Board
√
Appointment of Directors should clearly define respective roles,responsibilites and duties of the
CFO, the Head of internal Audit and the CS.
The CFO and the Company Secretary of the companies shall attend the meetings
2.2 Requirement
of the Board of Directors, provided that the CFO and/or the Company Secretary
to attend the √
shall not attend such part of a meeting of the Board of Directors which involves
Board Meetings
consideration of an agenda item relating to their personal matters.
3 Audit Committee
The company shall have an Audit Committee as a sub-committee of the Board
(i) √ Already in place
of Directors.
The Audit Committee shall assist the Board of Directors in ensuring that the
(ii) financial statements reflect true and fair view of the state of affairs of the company √ In practice
and in ensuring a good monitoring system within the business.
The Audit Committee shall be responsible to the Board of Directors. The duties of
(iii) √ In practice
the Audit Committee shall he clearly set forth in writing
3.1 Constitution of the Audit Committee
(i) The Audit Committee shall be composed of at least 3 (three) members. √
The Board of Directors shall appoint members of the audit committee who
(ii) shall be directors of the company and shall include at least 1 (one) independent √
director.
All members of the audit committee should be “financially literate” and at least I
(iii) √
(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
(iv) members to be lower 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.

33
United Power Generation & Distribution Company Ltd.

Annexure 1:
Compliance Report under BSEC’s Notification under 2CC

Not
Condition No. Title Complied Remarks (if any)
Complied

(v) The company secretary shall act as the secretary of the Committee. √
The quorum of the Audit Committee meeting shall not constitute without at least
(vi) √
1 (one) independent director.
3.2 Chairman of the Audit Committee
The Board of Directors shall select 1 (one) member of the Audit Committee to be
(i) √
Chairman of the Audit Committee, who shall be an independent director.
Chairman of the Audit Committee shall remain present in the Annual General
(ii) √
Meeting (AGM).
3.3 Role of Audit Committee
(i) Oversee the financial reporting process. √
(ii) Monitor choice of accounting policies and principles. √
(iii) Monitor Internal Control Risk management process. √
(iv) Oversee hiring and performance of external auditors. √
Review along with the management, the annual financial, statements before
(v) √
submission to the board for approval.
Review along with the management, the quarterly and half yearly financial
(vi) √
statements before submission to the board for approval.
(vii) Review the adequacy of internal audit function. √
Review statement of significant ‘related party transactions submitted by the
(viii) √
management.
Review Management Letters/ Letter of Internal Control weakness issued by
(ix) √
statutory auditors.
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
(x) marketing expenses, working capital, etc), on a quarterly basis, 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 Audit Committee
(i) The Audit Committee shall report on its activities to the Board of Directors. √
The Audit Committee shall immediately report to the Board of Directors on the
(ii) √
following findings, if any:-
3.4.1 (ii) a) report on conflicts of interests;
suspected or presumed fraud or irregularity or material defect in the internal
b) √
control system;
suspected infringement of laws, including securities related laws, rules and
c) √
regulations;:
d) any other matter which shall be disclosed to the Board of Directors immediately. √
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
andhas discussed with the Board of Directors and the management that
3.4.2
anyrectification is necessary and if the Audit Committee finds that such
Reporting to the √
rectificationhas been unreasonably ignored, the Audit Committee shall report
Authorities
such finding tothe Commission, upon 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 during the year,
√
shall be signed by the Chairman of the Audit Committee and disclosed in the
34 annual report of the issuer company.
 Annual Report 2014

Not
Condition No. Title Complied Remarks (if any)
Complied

4 External/ Statutory Auditors

The issuer company should not engage its external /statutory auditors to perform the following services of the company; namely:- 
(i) Appraisal or valuation services or fairness opinions. √
(ii) Financial information system design and implementation √
Book-keeping or other services related to the accounting records or financial
(iii) √
statement
(iv) Broker –dealer services √
(v) Actuarial services √
(vi) Internal audit services √
(vii) Any other services that the audit committee determines. √
No partner or employees of the external audit firms shall possess any share of the
(viii) company they audit at least during the tenure of their audit assignment of that √
company.
Audit/ Certifiaction services on compliance of corporate governance as required
(ix) √
under clause (i) of condition o. &
5 Subsidiary Company
Provisions relating to the composition of the Board of Directors of the holding
(i) company shall be made applicable to the composition of the Board of Directors No subsidiary company
of the subsidiary company.
At least 1 (one) independent director of the Board of Directors of the holding
(ii) No subsidiary company
company shall be a director on the Board of Directors of the subsidiary company.
The minutes of the Board meeting of the subsidiary company shall be placed for
(iii) No subsidiary company
review at the following Board meeting of the holding company.
The minutes of the respective Board meeting of the holding company shall state
(iv) No subsidiary company
that they have reviewed the affairs of the subsidiary company also.
The. Audit Committee of the holding company shall also review the financial
(v) No subsidiary company
statements, in particular, the investments made by the subsidiary company.
6 Duties of Chief Executive Officer (CEO) and Chief Financial Officer(CFO)
The CEO and CFO shall certify to the Board that:-
They have reviewed financial statements for the year and that to the best of their
(i)
knowledge and belief:
These statements do not contain any materially untrue statement or omit any
a) √
material fact or contain statements that might be misleading;
These statements together present a true and fair view of the company’s affairs
b) √
and are in compliance with existing accounting standards and applicable laws.
There are, to the best of knowledge and belief, no transactions entered into
(ii) by the company diving the year which are fraudulent illegal or violation of the √
company’s code of conduct.
7 Reporting and Compliance of Corporate Governance
Required certification
The company shall obtain a certificate from a practicing Professional Accountant/
has been obtained from
Secretary (Chartered Accountant/Cost and Management Accountant/Chartered
‘’PODDER & ASSOCIATES”
(i) Secretary) regarding compliance of conditions of Corporate Governance √
Cost & Management
Guidelines of the Commission and shall send the same to the shareholders along
Accountants for the year
with the Annual Report on a yearly basis.
ended 31st December 2014.
The directors of the company shall state, in accordance with the Annexure
(ii) attached, in the directors’ report whether the company has complied with these √
conditions.

35
United Power Generation & Distribution Company Ltd.

Annexure 2:
Certificate on Compliance of Corporate Governance

36
 Annual Report 2014

Annexure 3:
Compliance Report on BAS and BFRS

Sl. No. BAS Titles BAS Effective Date Remarks

BAS-01 Presentation of Financial Statements Adopted, on or after 1st January 2007 Applied
BAS-02 Inventories Adopted, on or after 1st January 2007 Applied
BAS-07 Statement of Cash Flows Adopted, on or after 1st January 1999 Applied
BAS-08 Accounting Policies, Changes in Accounting Estimates and Errors Adopted, on or after 1st January 2007 Applied
BAS-10 Events after the Reporting Period Adopted, on or after 1st January 2007 Applied
BAS-11 Construction Contracts Adopted, on or after 1st January 1999 N/A
BAS-12 Income Taxes Adopted, on or after 1st January 1999 Applied
BAS-16 Property, Plant & Equipment Adopted, on or after 1st January 2007 Applied
BAS-17 Leases Adopted, on or after 1st January 2007 Applied
BAS-18 Revenue Adopted, on or after 1st January 2007 Applied
BAS-19 Employee Benefits Adopted, on or after 1st January 2004 Applied
BAS-20 Accounting of Government Grants and Disclosure of Government Assistance Adopted, on or after 1st January 1999 N/A
BAS-21 The Effects of Changes in Foreign Exchange Rates Adopted, on or after 1st January 2007 Applied
BAS-23 Borrowing Costs Adopted, on or after 1st January 2010 Applied
BAS-24 Related Party Disclosures Adopted, on or after 1st January 2007 Applied
BAS-26 Accounting and Reporting by Retirement Benefit Plans Adopted, on or after 1st January 2007 N/A
BAS-27 Separate Financial Statements Adopted, on or after 1st January 2010 N/A
BAS-28 Investments in Associates Adopted, on or after 1st January 2007 N/A
IAS-29 Financial Reporting in Hyperinflationary Economics Adopted, on or after 1st January 2013 N/A
BAS-32 Financial Instruments: Presentation Adopted, on or after 1st January 2010 Applied
BAS-33 Earnings per Share Adopted, on or after 1st January 2007 Applied
BAS-34 Interim Financial Reporting Adopted, on or after 1st January 1999 Applied
BAS-36 Impairment of Assets Adopted, on or after 1st January 2005 Applied
BAS-37 Provisions, Contingent Liabilities and Contingent Assets Adopted, on or after 1st January 2007 Applied
BAS-38 Intangible Assets Adopted, on or after 1st January 2005 Applied
BAS-39 Financial Instruments: Recognition and Measurement Adopted, on or after 1st January 2010 Applied
BAS-40 Investment Property Adopted, on or after 1st January 2007 N/A
BAS-41 Agriculture Adopted, on or after 1st January 2007 N/A

Sl. No. BFRS Titles BAS Effective Date Remarks

Adopted as BFRS 1,
BFRS 1 First-time adoption of International financial Reporting Standards N/A
effective on or after 1 January 2009
Adopted as BFRS 2,
BFRS 2 Share-based Payment N/A
effective on or after 1 January 2007
Adopted as BFRS 3,
BFRS 3 Business Combinations N/A
effective on or after 1 January 2010
Adopted as BFRS 4,
BFRS 4 Insurance Contracts N/A
effective on or after 1 January 2010
Adopted as BFRS 5,
BFRS 5 Non-current Assets Held for Sale and Discontinued Operations N/A
effective on or after 1 January 2007
Adopted as BFRS 6,
BFRS 6 Exploration for and Evaluation of Mineral Resources N/A
effective on or after 1 January 2007
Adopted as BFRS 7,
BFRS 7 Financial Instruments: Disclosures Applied
effective on or after 1 January 2010
Adopted as BFRS 8,
BFRS 8 Operating Segments N/A
effective on or after 1 January 2010
Adopted as BFRS 9,
BFRS 9 Financial Instruments Applied
effective on or after 1 January 2013
Adopted as BFRS 11
BFRS 11 Joint Arrangements N/A
effective on or after 1 January 2013
Adopted as BFRS 12,
BFRS 12 Disclosure of Interests in other Entities N/A
effective on or after 1 January 2013
Adopted as BFRS 13,
BFRS 13 Fair Value Measurement Applied
effective on or after 1 January 2013

37
United Power Generation & Distribution Company Ltd.

Annexure 4:
Financial Highlights
2014 2013 2012 2011 2010

Operating Data (BDT in million)

Revenue 4,463.32 3,396.09 3,273.49 2,227.63 1 ,778.49
Operating expenses 1,582.65 1,038.61 884.55 895.48 673.31
Gross profit 2,880.68 2,357.48 2,388.94 1,332.15 1,105.18
Administrative expense 59.65 242.52 57.4 36.37 22.41
Operating profit 2,821.03 2,114.96 2,331.54 1,295.78 1,082.77
Other non-operating income 130.92 32.25 0.225 2.06 0.33
Financial expenses 441.5 360.69 311.2 234.8 182.15
Net profit before tax 2,510.44 1,786.52 2,020.56 1,063.04 900.28
Provision for income tax 45.82 12.09 0.084 0.771 -
Net profit after tax 2,464.63 1,774.43 2,020.48 1,062.27 900.28
Balance Sheet Data (BDT in million)
Paid-up Capital 2,969.50 2,969.50 1,979.66 1,979.66 1,070.09
Shareholders’ Equity 9,485.29 7,020.81 5,246.38 3,225.90 2,163.63
Total Debt 2,617.09 2,540.75 2,477.38 2,404.35 2,308.09
Current Assets 3,008.11 2,198.53 3,908.78 2,100.72 831.64
Current Liabilities 2,328.83 1,720.93 603.77 376.02 216.89
Total Asset 12,263.07 11,678.01 7,784.87 5,737.76 4,554.86
Total Liabilities 2,777.77 4,657.20 2,538.49 2,511.86 2,391.22
Financial Ratios
Current Ratio (Times) 1.29 1.28 6.47 5.59 3.83
Debt to Equity Ratio (Times) 0.28 0.36 0.47 0.75 1.07
Debt to Asset Ratio (Times) 0.12 0.22 0.32 0.42 0.51
Return on Asset (%) 20.09 15 29.88 20.64 21.11
Return on Equity (%) 25.98 25.27 38.51 32.93 41.61
Gross Margin Ratio (%) 64.54 69.42 72.98 59.8 62.14
Net Income Ratio (%) 55.2 52.25 61.72 47.69 50.62
Other Data
Earnings Per Share (Taka) 8.3 5.98 6.81 3.58 3.03
Stock Dividend (%) 10 Nil 50 Nil 85
Cash Dividend (%) 30 35 Nil Nil Nil
Total no of shares outstanding 296,949,726 296,949,726 197,966,484 197,966,484 107,008,910

38
 Annual Report 2014

Operating Data Balance Sheet

Financial Ratios Financial Ratios

39
United Power Generation & Distribution Company Ltd.

Annexure 5:
Operational Performance Highlights
 (Sales) 2014 2013 2012 2011 2010

(Amount in MWh)

DEPZ 434,542 278,093 276,464 267,156 238,799

CEPZ 445,255 346,224 321,555 312,010 230,329

UPGDCL DEPZ: UPGDCL CEPZ:

Production
From 1 January 2014 to 31 December 2014, UPGDCL’s DEPZ power plant has produced From 1 January 2014 to 31 December 2014, UPGDCL’s CEPZ power plant has produced
448,010 MWh. 454,528 MWh. The engine wise running hours and generation are given below:
Sale
From 1 January 2014 to 31 December 2014, UPGDCL’s DEPZ power plant has sold 434,512 From 1 January 2014 to 31 December 2014, UPGDCL’s CEPZ power plant has sold 445,254
MWh to its clients. MWh to its clients.
Auxiliary Consumption
From 1 January 2014 to 31 December 2014, UPGDCL’s DEPZ power plant has consumed From 1 January 2014 to 31 December 2014, UPGDCL’s CEPZ power plant has consumed
12,670 MWh as auxiliary. This is 2.83% of Annual Production. 11,194 MWh as auxiliary. This is 2.46% of Annual Production.
Gas Consumption:
During the year 2014 UPGDCL’s DEPZ plant consumed 120,545,183 m3 (pressure factor During the year 2014 UPGDCL’s CEPZ plant consumed 126,783,763 m3 (pressure factor
adjusted) of gas at a cost of Taka 339,937,416.06 to produce 448,010 MWh and sell 434,512 adjusted) of gas at a cost of Taka 393,283,231 to produce 454,528 MWh and sell 445,254
MWh. Fuel consumption is 0.269 m3/kWh. MWh. Fuel consumption is 0.3224 m3/kWh.
Lubricating Oil Consumption
Lubricating Oil consumption for the year 2014 was 92,163 Liters which is less than the Lubricating Oil consumption for the year 2014 was 117,501 Liters which is more than the
lube oil consumption of 106,591 Liters as recorded in 2013. The per unit consumption of lube oil consumption of 75,382 Liters as recorded in 2013 due to the addition of a third
lube oil is 0.206 mL/kWh. Rolls-Royce engine. The per unit consumption of lube oil is 0.2585 mL/kWh.

40
 Annual Report 2014

Annexure 6:
Shareholding Information
as of 31 December 2014

Name of the Shareholders Status Shares held % of Shareholding

i) Parent/Subsidiary/Associated Companies and Other Related Parties

United Enterprises & Co. Ltd. Sponsor Shareholder 155,339,035 52.31%

ii) Directors

Mr. Moinuddin Hasan Rashid Managing Director 25,489,929 8.58%

Mr. Hasan Mahmood Raja Director 25,489,929 8.58%

Mr. Ahmed Ismail Hossain Director 25,489,929 8.58%

Mr. Akhter Mahmud Rana Director 25,489,929 8.58%

Mr. Khandaker Moinul Ahsan Shamim Director 25,489,929 8.58%

Mr. Faridur Rahman Khan Director 7,080,523 2.38%

Mr. Abul Kalam Azad Director 7,080,523 2.38%

Lt. Gen. Sina Ibn Jamali, awc, psc (Retd.) Independent Director - -

Mr. Md. Ebadat Hossain Bhuiyan, FCA Independent Director - -

iii) Chief Executive Officer, Chief Financial Officer, Company Secretary, Head of Internal Audit and Their Spouses and Minor Children

Mr. Moinuddin Hasan Rashid Managing Director 25,489,929 8.58%

Mr. Md. Mahfuzul Haque, FCMA Company Secretary - -

Mr. Akhterul Alam Head of Internal Audit - -

iv) Executives Not Applicable

v) Shareholders Holding 10% or more voting interest in the Company

United Enterprises & Co. Ltd. Sponsor Shareholder 155,339,035 52.31%

41
United Power Generation & Distribution Company Ltd.

Annexure 7:
Directors’ Involvement in other Organizations
Designation in the Involvement with other Organizations
Name
Company
Name of the Organization Position

United Enterprises & Co. Ltd.

United Hospital Ltd. Chairman
United Makkah Madina Travel & Assistance Co. Limited
Khulna Power Company Limited
Khulna Power Co. Unit II Limited
Khanjahan Ali Power Co. Limited
Managing Director
IPCO Developments (Bangladesh) Limited
IPCO Hotels Limited
IPCO Resorts Ltd.
HASAN MAHMOOD RAJA Director United Land Port Teknaf Limited
United Ashuganj Power Limited
Neptune Land Development Limited
Neptune Commercial Limited
Director
Comilla Spinning Mills Limited
United Property Solutions Limited
Novo Healthcare and Pharma Limited
Shajahanullah Power Generation Co. Limited
Neptune Properties Partner
United International University Member
United Hospital Limited Vice-Chairman
Comilla Spinning Mills Limited
Managing Director
Novo Healthcare and Pharma Limited
United Ashuganj Power Limited
IPCO Developments (Bangladesh) Limited
IPCO Hotels Limited
IPCO Resorts Ltd.
Khulna Power Company Limited
Khulna Power Co. Unit II Limited
Director
United Engineering & Power Services Ltd.
Shajahanullah Power Generation Co. Limited
Neptune Land Development Limited
AHMED ISMAIL HOSSAIN Director
Neptune Commercial Limited
United Property Solutions Limited
United Land Port Teknaf Limited
United Polymers Limited
United City Twin Tower Developers Limited
United Elevator World Limited
Soya Products Bangladesh Ltd. Shareholder
United Makkah Madina Travel & Assistance Co. Limited
United Enterprises & Company Limited
United Maritime Academy Limited
Neptune Properties Partner
United International University Member

42
 Annual Report 2014

Designation in the Involvement with other Organizations

Name
Company
Name of the Organization Position

United Polymers Limited Managing Director

United Enterprises & Company Limited
United Hospital Limited
United Ashuganj Power Limited
Khulna Power Company Limited
Khulna Power Co. Unit II Limited
Khanjahan Ali Power Co. Limited
United Land Port Teknaf Limited
Comilla Spinning Mills Limited
Neptune Land Development Limited
Neptune Commercial Limited
KHANDAKER MOINUL AHSAN United Property Solutions Limited Director
Director
SHAMIM United Makkah Madina Travel & Assistance Co. Ltd
United City Twin Tower Developers Limited
United Elevator World Limited
Novo Healthcare and Pharma Limited
United Engineering & Power Services Ltd.
UG Ship Management Limited
United Grains & Spices Ltd.
United Maritime Academy Limited
Shajahanullah Power Generation Co. Limited
Soya Products Bangladesh Ltd.
Neptune Properties Partner
United International University Member
United Hospital Limited
Soya Products Bangladesh Ltd. Managing Director
Neptune Properties
United Enterprises & Co. Limited
United Polymers Limited
IPCO Developments (Bangladesh) Limited
IPCO Hotels Limited
IPCO Resorts Ltd.
United Makkah Madina Travel & Assistance Co. Ltd
United Engineering & Power Services Ltd.
Neptune Land Development Limited
United Land Port Teknaf Limited
Comilla Spinning Mills Limited
FARIDUR RAHMAN KHAN Director Novo Healthcare and Pharma Limited
Khulna Power Company Limited Director
United Ashuganj Power Limited
United Ashuganj Energy Limited
United Property Solutions Limited
Khulna Power Co. Unit II Limited
Khanjahan Ali Power Co. Limited
United City Twin Tower Developers Limited
Shajahanullah Power Generation Co. Limited
UG Ship Management Limited
United Maritime Academy Limited
United Grains & Spices Limited
United Elevator World Limited
United International University Member
43
United Power Generation & Distribution Company Ltd.

Annexure 7:
Directors’ Involvement in other Organizations
Designation in the Involvement with other Organizations
Name
Company
Name of the Organization Position

United Enterprises & Company Limited Vice Chairman

Neptune Land Development Limited
United Land Port Teknaf Limited
Managing Director
Neptune Commercial Limited
United City Twin Tower Developers Limited
United Hospital Limited
United Ashuganj Power Limited
IPCO Developments (Bangladesh) Limited
IPCO Hotels Limited
IPCO Resorts Ltd.
Khulna Power Company Limited
Khulna Power Co. Unit II Limited
Khanjahan Ali Power Co. Limited
Comilla Spinning Mills Limited
MR. ABUL KALAM AZAD Director
Neptune Commercial Limited
United Rotospin Limited Director
United Property Solutions Limited
Novo Healthcare and Pharma Limited
United Engineering & Power Services Ltd.
United Polymers Limited
Shajahanullah Power Generation Co. Limited
UG Ship Management Limited
United Maritime Academy Limited
United Grains & Spices Limited
United Elevator World Limited
Soya Products Bangladesh Ltd.
Neptune Properties Partner
United International University Member
United Elevator World Limited Managing Director
United Enterprises & Company Limited
United Hospital Limited
United Ashuganj Power Limited
Khulna Power Company Limited
Khulna Power Co. Unit II Limited
United Land Port Teknaf Limited
Comilla Spinning Mills Limited
Neptune Land Development Limited
Neptune Commercial Limited
Director
MR. AKHTER MAHMUD RANA Director United Property Solutions Limited
United Makkah Madina Travel & Assistance Co. Ltd
United City Twin Tower Developers Limited
Novo Healthcare and Pharma Limited
United Polymers Limited
Shajahanullah Power Generation Co. Limited
United Maritime Academy Limited
United Engineering & Power Services Ltd.
Soya Products Bangladesh Ltd.
Neptune Properties Partner
United International University Member

44
 Annual Report 2014

Designation in the Involvement with other Organizations

Name
Company
Name of the Organization Position

United Enterprises & Company Limited

United Ashuganj Power Limited
United Property Solutions Limited
Shajahanullah Power Generation Co. Ltd.
Managing Director
UG Ship Management Ltd.
United Maritime Academy Ltd.
United Grains & Spices Ltd.
United Ashuganj Energy Ltd.
United Hospital Limited
Novo Healthcare and Pharma Ltd.
IPCO Developments (Bangladesh) Limited
IPCO Hotels Limited
IPCO Resorts Ltd.
MR. MOINUDDIN HASAN
Managing Director Khulna Power Company Limited
RASHID
Khulna Power Co. Unit II Limited
Khanjahan Ali Power Co. Limited
United Engineering & Power Services Limited
Director
United City Twin Tower Developers Limited
United Makkah Medina Travel & Assistance Co. Limited
Neptune Land Development Limited
United Land Port Teknaf Limited
Gunze United Limited
United Polymers Limited
United Elevator World Limited
Soya Products Bangladesh Ltd.
Comilla Spinning Mills Limited
United International University Member
Radiant Nutraceuticals Ltd.
Radiant Distribution Managing Director & CEO
LT. GEN. SINA IBN JAMALI, awc, Pharmacil Ltd.
Independent Director
psc (Retd.) Radiant Pharmaceuticals Ltd. Corporate Adviser
Khulna Power Company Limited Director
Ebadat Hossain Bhuiyan, FCA Independent Director Abdul Monem Ltd. Group CFO

45
United Power Generation & Distribution Company Ltd.

VALUE ADDED
STATEMENT Amount in BDT (million)
Particulars
2014 2013
Value Added:
Revenue 4,463.32 3,396.09
Other Income Including Interest 130.92 32.25
Cost of Sales, Excluding Depreciation 1,252.32 909.29
Other Operating Expenses 42.15 221.34
Total Value Added 3,299.77 2,297.71
Distribution of Added Value:
To Employees as Salaries and Allowance 2.33 11.17
To Directors as Salaries and allowances 11.83 8.7
To Government 45.82 12.09
To Banks and other lenders 441.5 360.69
To Shareholders 1,319.80 1,154.82
1,821.28 1,547.47
Retained for reinvestment:
Depreciation and Amortization 333.67 130.62
Retained Profit 1,144.82 619.62
3,299.77 2,297.71

46
 Annual Report 2014

REPORT OF
AUDIT COMMITTEE - 2014
T
he Audit Committee of United Power Generation and Distribution Company Ltd. (UPGDCL) was established and its Charter was approved
by the Company’s Board in its meeting held on 30 December 2014. The Committee, a sub-committee of the Board, supports the Board in
fulfilling its oversight responsibilities. The Audit Committee of UPGDCL comprises of the following Board members:
1. Lt Gen Sina Ibn Jamali, awc, psc (Retd) - Chairman
2. Mr. Abul Kalam Azad - Member
3. Mr. Md. Ebadat Hossain Bhuiyan, FCA - Member
The Audit Committee has met once during this year.

Role of the Committee

The Audit Committee’s authorities, duties and responsibilities flow from the Board’s oversight function. The major responsibilities of the Committee,
among others, include:
• Reviewing the quarterly, half-yearly and annual financial statements and other financial results of the company and, upon its satisfaction
of the review, recommend them to the board for approval.
• Monitoring and reviewing the adequacy and effectiveness of the Company’s financial reporting process, internal control and risk
management system.
• Monitoring and reviewing the arrangements to ensure objectivity and effectiveness of the external and internal audit functions. Examine
audit findings and material weaknesses in the system and monitor implementation of audit action plans.
• Recommending to the Board the appointment, re-appointment or removal of external auditors.
• Reviewing and monitoring the Company’s ethical standards and procedures to ensure compliance with the regulatory and financial
reporting requirements.

Activities of the Committee on Company’s affairs for the period under Report
The Committee during the period under report met one time and its activities include:
• Reviewed the audited financial statements of the Company for the year ended 31 December 2014 and being satisfied that the critical
accounting policies, significant judgments and practices used by the Company are compliant with the required laws and regulations,
also confirmed by the external auditor in their independent report, recommended to the Board for adoption.
• Reviewed the quarterly financial statements of the Company and recommended to the Board for adoption and circulation as per the
requirement of Bangladesh Securities & Exchange Commission.
• Committee recommended Hoda Vasi Chowdhury & Co, Chartered Accountants, for re-appointment as the external auditors of the
Company for the year ending on 31 December 2015.
• Reviewed the external auditors’ findings arising from audit, particularly comments and responses given by the management.
• Reviewed the matters as per requirement from the Bangladesh Securities and Exchange Commission (BSEC).
The committee is of the opinion that reasonable controls and procedures are in place to provide reasonable assurance that the Company’s assets
are safeguarded and the financial position of the Company is adequately managed.

On Behalf of the Committee

Lt Gen Sina Ibn Jamali, awc, psc (Retd)

Chairman 47
United Power Generation & Distribution Company Ltd.

CEO & CFO’S

DECLARATION TO THE BOARD
Date : 29 April 2015

The Board of Directors

United Power Generation & Distribution Company .Ltd
United Center, House NW (J) – 6, Road 51
Gulshan 2, Dhaka 1212

CEO and CFO’s Declaration to the Board

Subject :

Dear Sirs,

In compliance with the condition no. 6 imposed by Bangladesh Securities & Exchange Commission’s Notification No. SEC/CMRRCD/2006-158/134/
Admin/44 dated 7 August 2012 issued under section 2CC of the Securities and Exchange Ordinance, 1969, we do hereby certify to the Board that:
i. We have reviewed financial statements for the year ended 31 December 2014 and that to the best of our knowledge and belief:
a. These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;
b. These statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards
and applicable laws.
ii. There are, to the best of knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or
violation of the Company’s code of conduct.

Sincerely yours

Md. Mahfuzul Haque, FCMA Rear Admiral Bazlur Rahman (Retd.)

Executive Director (Finance) & Company Secretary Chief Executive Officer

48
 Annual Report 2014

DIRECTORS’
PROFILE
General Muhammad Abdul Mubeen, SBP is a retired four-star General of the
Bangladesh Army. He was a student of Adamjee Cantonment Public School and
Adamjee Cantonment College and graduated from the Bangladesh Military
Academy in 1976. General Mubeen is a graduate of the Defense Services
Command and Staff College and also the National Defense College, Bangladesh.
He has successfully completed the Senior Command Course from the War
College in India. In his long service career he has attended various professional
courses both at home and abroad. He completed the NATO Weapon Conversion
Course, Officers Weapons Course and Junior Tactics Course from School of
Infantry and Tactics, where he returned later to teach tactics. He went to Military
School in Guangzhou, China to undergo Infantry Heavy Weapons Course.
General Mubeen has a commendable record of ethical leadership and retired
from the Bangladesh Army in 2012 after a long distinguished military career
spanning over three decades of honorable active service. He started his
career as a commissioned officer in an Infantry battalion. During his service
career he has served in various challenging command, staff and instructional
appointments. He has commanded two infantry battalions, one infantry brigade
and two infantry divisions including the largest field formation in Chittagong
and Chittagong Hill Tracts involved in post counter insurgency operations. He
has been the Director, Military Training of Bangladesh Army and senior tactics
instructor in Bangladesh Military Academy. He served as the Chief of Staff in
United Nations Operations in Mozambique (ONUMOZ). He has been at the helm
of affairs of two prestigious institutions namely Defense Services Command and
Staff College and Bangladesh Institute of International and Strategic Studies. His
GENERAL MD. ABDUL MUBEEN, SBP, ndc, psc. (Retd.) last assignment in service was holding the highest office of the Chief of Army
Chairman & Nominated Director, Staff, Bangladesh Army.
United Power Generation & General Mubeen has attended, chaired and been a panelist in numerous
Distribution Company Ltd. international conferences, seminars and exercises both at home and abroad.
Some of his significant ex-officio assignments include, but not limited to, being
Chairman of The Trust Bank Limited, Chairman Sena Hotel Development Limited,
Chairman Board of Trustees, Sena Kallyan Sangstha, President Bangladesh
Olympic Association and President of Bangladesh Golf Federation.
For his commendable service the Government of Bangladesh has awarded him
the highest military award “Sena Bahini Padak”. Besides, General Mubeen’s award
and decorations include 16 operational, service and UN honors, medals and
decorations for his distinguished service.

49
United Power Generation & Distribution Company Ltd.

DIRECTORS’ PROFILE
Mr. Hasan Mahmood Raja is one of the most renowned
businesspersons of the country. Born in 1957, he completed his
graduation in commerce and got passionately involved in business.
He is one of the Founding Directors of the country’s one of the
leading business houses - ‘United Group’.
Mr. Raja had a keen interest and an innate aptitude for doing
business and rendering service to the nation for promoting economic
development of Bangladesh. With a humble beginning in 1978,
Mr. Raja displayed his excellence in business entrepreneurship by
building his business domain. The biggest milestone of his success is
the courage to embark into new business ventures based on sound
foresight, ingenuity and skillful execution. Within a span of 37 years
of his business career, he successfully managed to establish many
diversified business enterprises under the umbrella of United Group.
Commitment, integrity and sincerity are the key values of his various
business achievements.
Dominant position of United Group in the Country’s Power and Real
Estate sectors and creating unique establishments like Khulna Power
Company Ltd., United Power Generation & Distribution Co. Ltd.,
United Hospital Ltd., United Nursing College, United International
University and United Maritime Academy are few of his landmark
entrepreneurship. United Group has always marked its steady growth
under Mr. Raja’s leadership. His charming personality, focus in flawless
implementation of every single business on time, constantly stressing
HASAN MAHMOOD RAJA
on brainstorming for new ideas, efficiency in business management
Director, United Power Generation & etc are only a few of his traits that eventually transformed into the
Distribution Company Ltd. core values of his business undertaking and implementation.
At present, Mr. Raja is the Chairman of United Enterprises & Co. Ltd as
well the Chairman and Managing Director of more than 20 Concerns
of the Group, notably Khulna Power Company Limited, Neptune
Land Development Ltd, United City twin Towers Developers Ltd,
Novo Healthcare and Pharma Ltd, United Hospital, United Maritime
Academy Ltd etc. He is also the Chairman, Board of Trustees of United
International University.
Mr. Raja has travelled extensively at home and abroad namely to
USA, UK, Australia, Canada, Germany, Japan, Malaysia, Singapore and
many other countries for the purpose of business. He also takes a
profound interest in community services and contributes generously
for the welfare of the community, particularly to the underprivileged
ones. He has established multiple school and madrasa in his village
and surrounding areas. He continues to employ his best efforts to
provide education, healthcare and infrastructure facilities for overall
development of the people of Jamalpur district.

50
 Annual Report 2014

AHMED ISMAIL HOSSAIN KHANDAKER MOINUL AHSAN SHAMIM

Director, United Power Generation & Director, United Power Generation &
Distribution Company Ltd. Distribution Company Ltd.
Mr. Ahmed Ismail Hossain is one of the Founding Directors of the Mr. Khadaker Moinul Ahsan Shamim is one of the Founding Directors
country’s one of the leading business houses - United Group which of United Group. After completion of his Bachelor of Commerce, he
marked its debut in business in 1978. He was born in June 1956 and joined the business together with a few like-minded friends. With his
hailed from Kishoreganj district. After schooling from Faujderhat Cadet diligence and exceptional entrepreneurial skills, he played important
College, he completed his Honours and Master’s degrees in International roles in establishing firm footing and quick expansion of business of the
Relations from Dhaka University. He is one of the architects of the Group. At one time he also undertook the responsibility of United Group
company we know as United Group today. in the capacity of the Managing Director, displaying his entrepreneurial
skill and business experience, in order to sustain growth of business of
He undertook the responsibility as the Managing Director of United
United Group.
Enterprises & Co. Ltd., the parent Company of United Group for many
years, demonstrated his entrepreneurial skills, and used his experience At present, he is one of the Directors of all the corporate entities of United
to establish many corporate bodies of the Group notably in textile and Group, notably United Enterprises & Co. Ltd., United Power Generation
pharmaceutical sectors. He is the Vice-Chairman of United Hospital Ltd and Distribution Company Ltd., United Hospital Limited, Khulna Power
and Managing Director of Comilla Spinning Mill Ltd., performing diverse Company Ltd., etc. He oversees the overall financial management of
responsibilities of the Group as and when required. He is also one of the Group on behalf of the Board of Directors. Besides this, he is also a
the Directors on the Board of Khulna Power Company Ltd. He is also a member, Board of Trustees of United International University.
member of the Board of Trustees of United International University. He plays key role in the social development sector of his home district.
Being one of the Trustees of the United Trust, the CSR wing of the Group, Being one of the active Trustees of the United Trust, a CSR organization of
he enthusiastically undertakes social works in his village in Kishoregonj the Group, he generously patronizes education sector in his home village
district. Mr. Ismail is a widely travelled man and has visited many parts of and surrounding areas.
the world for the purpose of business.

51
United Power Generation & Distribution Company Ltd.

DIRECTORS’ PROFILE

MR. ABUL KALAM AZAD MR. FARIDUR RAHMAN KHAN

Director, United Power Generation & Director, United Power Generation &
Distribution Company Ltd. Distribution Company Ltd.
Mr. Abul Kalam Azad was born in 1955. After completion of his Bachelor Mr. Faridur Rahman Khan, one of the Founding Directors of United
of Science, he joined United Group as one of the Directors. Presently, he Group, was born in 1955. After completion of his Bachelor degree in
is the Vice-Chairman of United Group. Best known for his dynamism, he Science, he engaged himself in Business. He is, at the moment, the
is a key entrepreneur of the Group especially in real estate sector. His Managing Director of one of the most vibrant concerns of the Group:
dedication and relentless efforts to the business is playing a pivotal role United Hospital Ltd. Under his entrepreneurship and foresight, United
that has also helped United Group reach new heights. Hospital developed its Medicare system at par with any international
standard hospitals. Now, it has become a health care asset of the country.
Over the years in United Group, Mr. Azad has been overseeing diverse
He is the founding Chairman of United College of Nursing – a wing of
construction projects of the group starting from real-estate to power
United Hospital Ltd. He is also the Vice-Chairman of the Board of Trustees,
plant construction. Under his leadership United Group is developing
United International University. He is a member of the Board of Governors
“United City”, the largest mini township in the country - at Satarkul
of United Maritime Academy and a member of the Board of Trustees of
and the largest international standard commercial complex with two
United Trust – a CSR wing of United Group.
international hotels and resorts adjacent to Hazrat Shahjalal International
Airport, Dhaka. At present, he is the Managing Director of almost all real He is one of the Directors of United Ashuganj Power Ltd (UAPL), United
estate enterprises of the Group, notably Neptune Land development Ashuganj Energy Ltd (UAEL) and also Khulna Power Company Ltd (KPCL).
Ltd., United City Twin Towers Developers Ltd., Neptune Commercial Ltd. Mr. Faridur Rahman Khan hails from Louhojang, Munshigonj. He started
etc. He is also the Managing Director of United Land Port Teknaf Ltd., his career in shipping and went on to lead one of the most reputed
one of the pioneering ‘Build, Operate and Transfer” (BOT) project of the construction companies of the country, Neptune Commercial Limited.
Government. He is also the Director of Khulna Power Company Limited Under his dynamic leadership the country saw the implementation of its
(KPCL), United Hospital Ltd. and many more concerns of the Group. He first Independent Power Plant, Khulna Power Company Limited and the
is one of the members of the Board of Trustees of United International first Commercial IPP, UPGDCL. He was also responsible for the successful
University. completion of several coastal embankment projects, namely Chandpur,
He is well known for his benevolence in the Group, he is one of the Ekhlaspur, Patenga and Anwara to name a few.
Trustees of United Trust, an organ of United Group responsible for Being one of the honored Trustees of the United Trust, the CSR wing of
Corporate Social Responsibility (CSR). He is a widely traveled man and the Group, he spontaneously patronizes and contributes substantially in
engaged in many social and charitable works at his village home in social activities in his home village and surrounding areas. Notably, he set
Bikrampur. up and is currently the Chairman of “Younus Khan - Mahmuda Khanam
Memorial Complex” in his village home which provides treatment to the
local people including Pathology, Radiology and cataract Eye Surgery
with nominal fees.

52
 Annual Report 2014

MR. AKHTER MAHMUD RANA MOINUDDIN HASAN RASHID

Director, United Power Generation & Managing Director & Director,
Distribution Company Ltd. United Power Generation & Distribution Company Ltd.
Mr. Akhter Mahmud Rana is one of the first generation Directors of Mr. Moinuddin Hasan Rashid was born in 1982 in Dhaka. Upon
United Group. He is the younger brother of Mr. Hasan Mahmood Raja. Mr. completion of his B.Sc. in Electrical and Electronics Engineering from
Rana was born in 1960 and completed his education. University College London he joined United Group in 2005 as a second
generation Director. As a young and energetic entrepreneur, he marked
Mr. Rana’s entrepreneurial initiatives and commitment has added
his future through dedication, dynamism and foresight in shaping the
significantly to United Group’s current growth and streamlined human
Power Sector, one of the major enterprises of United Group. On 12 July
resources of the Group. Throughout the past decades his attachment
2011 he was appointed as Managing Director of United Enterprises &
to the Group has flourished diversification, particularly in the textile
Co. Ltd, and simultaneously holds the position of the Managing Director
industry. In the yearly years of the Group’s journey Mr. Rana played an
for United Power Generation and Distribution Co. Ltd. and many more
instrumental role in the implementation and commissioning of sub-
sister concerns. Mr. Rashid is an Active Trustee of the United Trust, a
substation of Radio Bangladesh, a milestone the Group achieved through
CSR organization of the Group and United International University
his pivotal part.
Foundation. In 2011 he oversaw commissioning of 208 MW Power
His contribution in developing the textile sector in the Group is Generation under three projects (KPCL II, KJAPCL & UAPL). United
noteworthy. Of his many outstanding works, the revival of Comilla Ashuganj Power Ltd. (UAPL) is a quick rental power plant that was
Spinning Mills Ltd. as a profitable venture from a bankrupt one and constructed and commissioned in a record time of 120 days under the
establishment of United Rotospin Ltd. stands as his most daring tireless and bold leadership of Mr. Rashid. He also established United
endeavors. United Elevator World is yet another one of his successful Maritime Academy in 2011, one of the finest academic institutions in
business projects. This company formed under his bold leadership is Bangladesh, United Property Solutions Ltd. one of the leading real estate
now supplying world class quality elevators to industrial and residential developers of the country and oversaw the development of United
complexes in the country. Land Port Teknaf Ltd, Bangladesh’s only land port with Myanmar. Along
He is one of the Directors of all the corporate entities under United with responsibilities mentioned above, he looks after Group Investment
Group, notable United Enterprises & Co. Ltd., United Power Generation & and Business Development. Mr. Moinuddin Hasan Rashid supervised
Distribution Co. Ltd., United Hospital Ltd., Khulna Power Company Ltd., Power Plant expansion projects of UPGDCL DEPZ and UPGDCL CEPZ by
etc. In addition to this, he is also a member of the Board of Trustees of 75 MW, oversaw commissioning of Shajahanullah Power Generation Co
United International University. Ltd, a 28 MW Power Plant, and spearheaded the Joint-Venture of Gunze
United Limited in 2013. Mr. Rashid also established United Shipping and
Being one of the active trustees of United Trust, a CSR organization of Logistics Services Ltd. in 2015.
the Group he generously patronizes education, healthcare and various
charitable activities in and around his village home, Malancha, Jamalpur. Currently, Mr. Rashid is the Managing Director of United Power
Generation & Distribution Co. Ltd. (UPGDCL), United Ashuganj Power
Ltd. (UAPL), United Ashuganj Energy Ltd. and United Property Solutions
Ltd. (UPSL) and is in the Board of Directors of United Hospital Ltd. (UHL),
Khulna Power Company Ltd. (KPCL) and United Landport Teknaf Ltd.
(ULPTL). He is also an active member of the Board of Trustees of United
International University (UIU).
53
United Power Generation & Distribution Company Ltd.

DIRECTORS’ PROFILE

LT GEN SINA IBN JAMALI, AWC, PSC (RETD) MD. EBADAT HOSSAIN BHUIYAN, FCA
Independent Director, United Power Generation & Independent Director, United Power Generation &
Distribution Company Ltd. Distribution Company Ltd.
Lt Gen Sina Ibn Jamali, awc, psc (retd) studied at Mirzapur Cadet Mohammad Ebadat Hossain Bhuiyan is a Fellow Chartered Accountant
College and was commissioned in Bangladesh Army (Infantry) in May of the Institute of Chartered Accountants of Bangladesh (ICAB). Currently
1977. Besides other coveted appointments, he commanded two Infantry he is working as Executive Director and Group Chief Financial Officer
Battalions and an Infantry Brigade involved in counter insurgency in Abdul Monem Group. He did his articleship in 2006 from Hoda Vasi
operations in Chittagong Hill-Tracts. He held the appointments of Chowdhury & Co, a renowned Chartered Accountancy Firm affiliated with
Director Military Operations, Adjutant General, Bangladesh Army, General the globally reputed Chartered Accountancy Firm named Deloitte Touche
Officer Commanding of 24 Infantry Division, Chittagong and the Chief of Tohmatsu and qualified as Chartered Accountant in year 2007.
General Staff in Army Headquarters. He did his Masters of Business Administration (MBA) and Bachelor of
He is the Masters of Defense Studies (MDS) and graduate of Defense Business Administration (BBA) major in Accounting and Information
Services Command and Staff College, Mirpur; ‘Staff College’ Quetta, Systems from the University of Dhaka. He is a seasoned professional who
Pakistan and ‘Army War College’ of USA. He held the honor of being the has worked in companies such as Abul Khair Group, M & J Group and
Colonel Commandant of ‘Corps of Military Police’ of Bangladesh Army and United Group.
the Commandant of National Defense College. He served as an ‘Observer’
in the United Nation’s Iraq-Iran Military Observer Group (UNIIMOG)
in 1988, the first Bangladeshi UN Deployment. His other experiences
include serving as the President, Bangladesh Cricket Board, Chairman,
SenaKallyanSangstha, Sena Hotel Development Ltd, Governing Body of
Cadet Colleges, Army Welfare Trust and Central Coordination Committee
of Cantonment Public Schools & Colleges. He also rendered his services as
the Vice Chairman, Trust Bank Limited and Senior Vice President, Bhatiary
Golf and Country Club, Chittagong. Currently, he is serving as the
Corporate Adviser at Radiant Pharmaceuticals Ltd, MD & CEO of Radiant
Nutraceuticals Ltd, Radiant Distribution Ltd and Pharmacil Ltd.

54
 Annual Report 2014

EXECUTIVE MANAGEMENT
PROFILE

MOINUDDIN HASAN RASHID SYED ABDUL MAYEED

Managing Director Adviser

Mr. Moinuddin Hasan Rashid joined United Group Mr. Syed Abdul Mayeed, former Chairman, Bangladesh
in 2007 as a second generation Director. On October Power Development Board, has been on-board with
2011 he was appointed as Managing Director of United United Power Generation & Distribution Co. Ltd. since
Power Generation and Distribution Co. Ltd. Mr. Rashid is December 2007. He has a Masters in Electrical and
an Active Trustee of the United Trust, a CSR organization Electronics Engineering Degree with a work experience
of the Group and United International University that spans over four decades. During his lifelong
Foundation. In 2011 he oversaw commissioning of 208 career in Bangladesh’s power sector he has served
MW Power Generation under three projects - KPCL II, in many roles beginning from Assistant Engineer to
KJAPCL and UPACL (in a record time of 120 days). He Project Director, Superintending Engineer, General
also established United Maritime Academy in 2010, Manager, Member and finally Chairman. Mr. Mayeed is
one of the finest academic institutions in Bangladesh, a seasoned professional having sound knowledge of
and oversaw the development of United Land Port the overall operation of power generation, transmission
Teknaf Ltd, Bangladesh’s only land port with Myanmar. and distribution of the country, inclusive of operation
Mr. Moinuddin Hasan Rashid supervised Power Plant maintenance and development of all power projects.
expansion projects of UPGD DEPZ, UPGD CEPZ by 75 He is also closely associated with power sector reform
MW in 2013, oversaw commissioning of Shajahanullah activities. He has been with United Group for over a
Power Generation Co Ltd., 28 MW Power Plant in 2013 decade and has played a pivotal role in developing the
and United Ashuganj Energy Ltd., a 200 MW Modular power division of the Group and UPGDCL in particular.
Combined Cycle Power Plant in 2015.

55
United Power Generation & Distribution Company Ltd.

EXECUTIVE MANAGEMENT
PROFILE

REAR ADMIRAL BAZLUR RAHMAN (RETD.) RAFIQUL ISLAM MD. MAHFUZUL HAQUE, FCMA
Chief Executive Officer Executive Director (Technical) Company Secretary and Chief Financial Officer

Born in 1956, Rear Admiral Bazlur Rahman Mr. Rafiqul Islam is an Electrical Engineer Md. Mahfuzul Haque, a Fellow Member of the
served in the Bangladesh Navy from 1975 with over three decades of experience in Institutes of Cost & Management Accountants of
to 2009, after completion of S.S.C and H.S.C. power sector. He joined Bangladesh Power Bangladesh, joined United Group as Executive Director
from Mirzapore Cadet College. He attended Development Board in 1980 as Assistant (Finance) of Power Division in 2014. Mr. Haque holds
Naval Academy Training at Britannia Royal Engineer. During his tenure at BPDB he served the charge of Group CFO and Company Secretary of
Naval College, UK and later attended various as Sub-Divisional Engineer, Executive Engineer United Ashuganj Energy Limited and United Power
professional courses both home and abroad. In and Deputy Director (Executive Engineer). He Generation and Distribution Company Ltd.. Prior to
professional career, he commanded seven ships joined Power Grid Company of Bangladesh in joining to United Group he also served in Ashuganj
and crafts including two Frigates and three 2008 as Deputy General Manager and worked Power Station Company Ltd. (APSCL) as Executive
major Navy Establishments including the Naval in the design team. He joined Energypac Director (Finance) and Company Secretary. He also
Academy. He also commanded three of the Engineering Limited, as Consultant in 2012. He served erstwhile Burmah Eastern Limited (Presently
Naval Areas and served as the Defense Adviser is highly experienced in designing of 230/132 known as Padma Oil Limited) for more than three
in Malaysia. He further served as the Senior kV, 132/33 kV, 400 kV grid sub-station and decades in various significant positions including the
Directing Staff at the National Defense College, transmission line, back-to-back 400/230 kV position of General Manager (Marketing), General
and as the Assistant Chief of Naval Staff. After High Voltage DC Station and equipment. He Manager (Finance & Accounts) and Company
retirement he served as the Director General of has been with United Power Generation & Secretary. Born in 1954, Mr. Haque, a Management
the Department of Shipping. He joined United Distribution Co. Ltd. since 2014. student, completed his graduation and post-
Group in 2011 to pioneer the voyage of the graduation with excellent results from Chittagong
United Maritime Academy as the Commandant. University and then started his career as Executive
He is also the Advisor of United Makkah Madina of the Burmah Eastern Limited (currently known as
Travel Assistance Co. Ltd. Besides being a Padma Oil Company Limited) in 1979.
director of UAEL he is also the Chief Executive
Mr. Haque is also very proficient in finalizing loan
Officer of the Power Division of the United
agreements with various like HSBC, Standard
Group.
Chartered Bank, ADB, IDB etc for APSCL’s projects
of 225 MW CCPP, 450 MW CCPP (South) and 450
MW CCPP (North). He, who was two times General
Secretary & Chairman of ICMAB Chittagong Branch,
attended various training, workshop, seminar and
56 symposiums in home and abroad on professional trips.
United Power Generation & Distribution Company Ltd. Annual Report 2014

Auditors’ Report
to the Shareholders of United Power Generation & Distribution Company Ltd.

Introduction
We have audited the accompanying financial statements of United Power Generation & Distribution Company Limited (the “Company”), which
comprise the statement of financial position as at 31 December 2014, 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 i.e. notes to
the Financial Statements.

Management’s responsibility for the financial statement

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Accounting
Standards (BAS), Bangladesh Financial Reporting Standards (BFRS), the Companies Act (#18) 1994, the Securities and Exchange Rules 1987 and
other applicable laws and regulations. This responsibility includes: designing, implementing, and maintaining internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatements, whether due to fraud or error; selecting and
applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conduct our audit in accordance with Bangladesh
Standards on Auditing (BSA).Those standards require that we comply with relevant 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 auditor’s 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, we consider 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 audit opinion.

Opinion
In our opinion, the financial statements, prepared in accordance with Bangladesh Financial Reporting Standards (BFRS), give a true and fair view of
the state of the Company’s affairs as at 31 December 2014 and of the results of its operations and cash flows for the year then ended and comply
with the Companies Act (#18) 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations.

We also report that:

a. 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;
b. 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;
c. the Company’s statement of financial position (balance sheet) and statement of comprehensive income (profit and loss account) together
with notes dealt with by the report are in agreement with the books of account and returns; and
d. the expenditure incurred and payments made were for the purposes of the Company’s business.

Dhaka, Chartered Accountants

57
 United Power Generation & Distribution Company Ltd.

Statement of Financial Position

As at 31 December 2014

2014 2013
Note (s)
Taka Taka

Assets
Non-current assets
Property, plant and equipment-net 4 9,254,961,271 9,479,476,556
9,254,961,271 9,479,476,556
Current assets
Inventories 5 251,555,997 250,939,632
Trade receivables 6 851,807,451 670,397,657
Inter company receivables 7 1,562,043,136 1,128,541,871
Advances, deposits and prepayments 8 75,827,208 73,036,908
Cash and cash equivalents 9 266,872,319 75,613,642
3,008,106,111 2,198,529,710
Total Assets 12,263,067,382 11,678,006,266
Equity & Liabilities
Shareholders’ equity
Share capital 10 2,969,497,260 2,969,497,260
Retained earnings 6,515,795,388 4,051,308,485
9,485,292,648 7,020,805,745
Non-current liabilities
Redeemable pref. shares - non-current portion 11 - 1,192,000,000
Long term loan- Non Current Portion 12 448,949,104 1,744,273,042
448,949,104 2,936,273,042
Current liabilities
Trade payables 13 100,070,520 80,113,687
Other payables and accrual 14 14,785,339 24,239,960
Redeemable preference shares - current portion 11.1 1,192,000,000 808,000,000
Long term loan -Current portion 12.01 976,149,050 796,479,149
Provision for taxation 15 45,820,721 12,094,683
Total liabilities 2,328,825,630 1,720,927,479
Total equity and liabilities 12,263,067,382 11,678,006,266

The annexed notes 1 to 38 form an integral part of these financial statements.

Managing Director Director Company Secretary

Dhaka, Chartered Accountants

58
United Power Generation & Distribution Company Ltd. Annual Report 2014

Statement of Comprehensive Income

For the year ended 31 December 2014

2014 2013
Note (s)
Taka Taka

Revenue 16 4,463,323,168 3,396,097,108

Cost of sales 17 (1,582,645,188) (1,038,613,967)
Gross profit 2,880,677,980 2,357,483,141
General and administrative expenses 18 (59,647,472) (242,519,472)
Operating profit 2,821,030,508 2,114,963,669
Other operating income 19 130,916,345 32,252,489
Financial expenses 20 (441,498,097) (360,693,817)
Net profit before income tax 2,510,448,756 1,786,522,341
Income tax expenses (45,820,721) (12,094,683)
Net profit after income tax 2,464,628,035 1,774,427,658
Other comprehensive income - -
Total comprehensive income 2,464,628,035 1,774,427,658

Earning per share (EPS) 21 8.30 5.98

The annexed notes 1 to 38 form an integral part of these financial statements.

Managing Director Director Company Secretary

Dhaka, Chartered Accountants

59
 United Power Generation & Distribution Company Ltd.

Statement of Cash Flows

For the year ended 31 December 2014

2014 2013
Taka Taka

A Cash flows from operating activities
Cash received from customers 4,281,913,375 3,566,333,325
Cash received from other operating income 130,916,345 32,252,489
Cash paid to suppliers and contractors (1,008,475,385) (784,202,235)
Cash paid for other operating expenses (278,698,772) (406,705,359)
Payment of financial expenses (441,498,097) (360,693,817)
Income tax paid (13,420,815) (84,500)
Net cash flow from operating activities 2,670,736,650 2,046,899,903
B Cash flows from investing activities
Payment for acquisition of property, plant and equipment (140,151,753) (5,734,011,651)
Cash received / (paid) for inter-company loan (433,501,265) 1,692,572,199
Proceeds from sale of property, plant and equipment 17,772,179 -
Net cash used in investing activities (555,880,839) (4,041,439,452)

C Cash flows from financing activities
Long term loan received/(paid) (1,115,654,037) 63,367,933
Redemption of cumulative preference shares (808,000,000) 2,000,000,000
Security money received / (paid) 56,904 700,000
Net cash flow from financing activities (1,923,597,133) 2,064,067,933
Net changes in cash and cash equivalents (A+B+C) 191,258,677 69,528,384
Cash and cash equivalents at the beginning of the year 75,613,642 6,085,258
Cash and cash equivalents at the end of the year 266,872,319 75,613,642


The annexed notes 1 to 38 form an integral part of these financial statements.

Managing Director Director Company Secretary

60
United Power Generation & Distribution Company Ltd. Annual Report 2014

Statement of Changes in Equity

For the Year ended 31 December 2014

Share Capital Retained Earnings Total

Particulars
Taka Taka Taka
Balance at 1 January 2013 1,979,664,840 3,266,713,247 5,246,378,087
Issue of Stock Dividend for the year 2012 989,832,420 (989,832,420) -
Net profit for the year 2013 - 1,774,427,658 1,774,427,658
Balance at 31 December 2013 2,969,497,260 4,051,308,485 7,020,805,745
Balance at 1 January 2014 2,969,497,260 4,051,308,485 7,020,805,745
Prior year adjustment for short provision of Income tax - (141,132) (141,132)
Net profit for the year 2014 - 2,464,628,035 2,464,628,035
Balance at 31 December 2014 2,969,497,260 6,515,795,388 9,485,292,648

The annexed notes 1 to 38 form an integral part of these financial statements.

Managing Director Director Company Secretary

61
 United Power Generation & Distribution Company Ltd.

Notes to the financial statements

As at and for the year ended 31 December 2014

1. Reporting entity

1.1 Company profile

United Power Generation & Distribution Company Ltd. (UPGDCL) (hereinafter referred to as “the Company”) a Public Limited Company
incorporated in Bangladesh on 5th January 2007 under the Companies Act (#18) 1994 under registration no: C-65291(2783)/07
dated 15 January 2007 with its registered office at United Center, Road No. 51, and House No. NW (J) 6, Gulshan-2, Dhaka-1212,
Bangladesh.The Company was initially registered as a Private Limited Company formerly known as Malancha Holdings Ltd. (MHL)
and subsequently converted into a Public Limited Company. The authorized share capital of the Company is Tk. 10,000,000,000 (Taka
One Thousand crore) only divided into 800,000,000 (Eight Hundred million) ordinary shares of Tk. 10 (Tk. ten) each and 200,000,000
( Two Hundred million) redeemable preference shares of Tk. 10 (Tk. ten) each.

1.2. Nature of Business

The principal activity of the Company is to generate electricity by two gas fired power plants, one at DEPZ with 86 MW capacity and
the other at CEPZ with 72 MW capacity and to sell generated electricity to the export processing industries located inside DEPZ and
EPZ with the provision of selling surplus power outside the Export Processing Zones (EPZs) after fulfilling their requirement. The
Company is supplying electricity to the national grid of Bangladesh through selling the same to Dhaka PBS-1 of Rural Electrification
Board (REB), Bangladesh Power Development Board (BPDB), Karnaphuli Export Processing Zone (KEPZ) and other Private Sector
Companies.

1.3 Capacity of the power plant

Initially the Company has developed two power plants. One of them with capacity of 41 MW at Dhaka Export Processing Zone
(DEPZ) premises and another with capacity of 44 MW at Chittagong Export Processing Zone (CEPZ) premises, under two agreements
with Bangladesh Export Processing Zones Authority (BEPZA) signed on May 6, 2007 and May 16, 2007 respectively. Both plant DEPZ
and CEPZ came into commercial operation on 26th December 2008 and 12 August 2009 respectively.
In 2013, the Company increased its capacity from 41 MW to 88 MW at Dhaka Export Processing Zone (DEPZ) and another project
at Chittagong Export Processing Zone (CEPZ) increased capacity form 44 MW to 72 MW. In 2014 the company operates 86 MW at
Dhaka Export Processing Zone (DEPZ) due to disposal of 2 MW MTU engine. The DEPZ project has installed 2 no’s of Heat Recovery
Boiler to produce 8 ton/h of steam & CEPZ project has installed 3 no’s of Heat Recovery Boiler to produce 12 ton/h of steam to sale
to other customers. The Company now operates 86 MW at Dhaka Export Processing Zone (DEPZ)and 72 MW at Chittagong Export
Processing Zone (CEPZ).

2. Basis of preparation financial statements

2.1 Statement of compliance

These financial statements (including consolidated and separate financial statements) have been prepared in accordance with
Bangladesh Accounting Standards (BAS), Bangladesh Financial Reporting Standards (BFRS), Companies Act (#18) 1994, the Securities
and Exchange Rules 1987 and other applicable laws and regulations.
Authorization for issue
These financial statements have been authorised for issue by the Board of Directors of the Company on 29th April 2015.

2.2 Basis of Measurement

The financial statements have been prepared on historical cost basis .

2.3 Functional and presentational currency

The financial statements are presented in Bangladesh Taka (BDT/Tk.), which is the Company’s functional currency. All financial
information presented in BDT/Tk. has been rounded off to the nearest BDT/Tk.

2.4 Use of estimates and judgments

62 In preparing these financial statements, management has made judgment, estimates and assumptions that affect the application
United Power Generation & Distribution Company Ltd. Annual Report 2014

Notes to the financial statements

As at and for the year ended 31 December 2014

of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revision to estimates are recognised prospectively.
(a) Judgments
Information about judgments made in applying accounting policies that have the most significant effects on the amounts
recognised in the financial statements.
(b) Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment
in the year ending 31 December 2014 is included in the following notes:
Note 4 Depreciation
Note 5 Inventory
Note 14 Other payables and accrual
Note 15 Provision for tax

2.5 Reporting period

The financial period of the Company covers one year from 1 January to 31 December.

2.6 Going concern

The Company has adequate resources to continue in operation for the foreseeable future and the directors continue to adopt going
concern basis in preparing the financial statements. The current resources of the Company provide sufficient fund to meet the
present requirements of its existing business.

2.7 Preparation and presentation of Financial Statements

The management of the Company is responsible for the preparation and presentation of Financial Statements of United Power
Generation & Distribution Company Ltd. for the year ended 31 December 2014.

3. Significant accounting policies

The accounting policies set out below have been applied to the accounts consistently to all periods presented in these financial statements.
3.1 Property, plant and equipment
3.1.1 Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment
losses, if any. The cost of an item of property, plant and equipment comprises its purchase price, import duties and non-
refundable taxes, after deducting trade discount and rebates, and any costs directly attributable to bringing the asset to the
location and condition necessary for it to be capable of operating in the intended manner.
3.1.2 Subsequent cost
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured
reliably. The costs of the day-to-day servicing of property and equipment are recognised in the statement of comprehensive
income as incurred.
3.1.3 Retirement and disposals
An asset is derecognised on disposal or when no future economic benefits are expected from its use and subsequent
disposal. Gain or loss arising from the retirement or disposal of an asset is determined as the difference between the net
disposal proceeds and the carrying amount of the asset and is recognised as gain or loss from disposal of asset under other
income in the statement of comprehensive income.
63
 United Power Generation & Distribution Company Ltd.

Notes to the financial statements

As at and for the year ended 31 December 2014

3.1.4 Depreciation
Property, plant and equipment are stated at cost less accumulated depreciation. All property, plant and equipments have
been depreciated on straight line method.
In respect of addition of fixed assets, depreciation is not charged in the year of addition. Full year’s depreciation is charged
in the year of disposal. Residual value is estimated to be zero for all assets. The rates of depreciation vary according to the
estimated useful lives of the items of all property, plant and equipment.
The estimated useful lives for the current and comparative years of property and equipment are as follows:
Depreciation rates (%)
Plant and machinery 3.33%
Gas line (50 years) 2%
Office equipment 15%
Furniture and fixtures 10%
Transport and vehicles 10%
The asset’s residual values and useful lives are reviewed and adjusted if appropriate at the end of each reporting period
depreciation method, useful lives and residual values are reviewed and adjusted if appropriate, at each reporting date.
Depreciation is charged at the rate of 2% on gas pipeline because although the gas pipeline suppose to be built by BEPZA
but as per their letter dated 24 September 2007 vide reference BEPZA/GM (M)/ DEPZ /E/416/299, they have requested the
company to build Gas pipe line at its own cost and accordingly the Company has constructed the Gas pipe line and charged
depreciation on gas pipe line to amortize the cost over the years. The company made the gas pipeline and considered as
assets of the company as per the recognition criteria of para-8 of BAS-16.
3.2 Inventories
Inventories consisting of spare parts, fuel and lubricant are valued in accordance with BAS-2 (Inventories) at the lower of cost and net
realizable value. Net realizable value is based on estimated selling price in the ordinary course of business less any further costs expected
to be incurred to make the sale. Inventories are measured at cost. Cost is calculated on First In First Out (FIFO) principle and includes
expenditure incurred in acquiring the inventories and other costs incurred in bringing them to their existing location and condition. When
inventories are used, the carrying amount of those inventories is recognised in the period in which the related revenue is recognised.
3.3 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of
another entity.
3.3.1 Financial assets
The Company initially recognises receivables and deposits on the date that they are originated. All other financial assets are
recognised initially on the date at which the Company becomes a party to the contractual provisions of the transaction.
The Company derecognises a financial asset when the contractual rights or probabilities of receiving the cash flows from
the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which
substantially all the risks and rewards of ownership of the financial asset are transferred.
Financial assets include trade receivables, inter company receivables cash and cash equivalents etc.
(a) Trade receivables
Trade receivables represent the amounts due from customers for rendering services. Trade receivables are recognised
initially at cost which is the fair value of the consideration given for them. Provision for debts doubtful of recovery, if
any, are made at the discretion of management.
(b) Cash and cash equivalents
Cash and cash equivalents include cash in hand and cash at bank which are held and available for use by the Company
without any restriction. For the purposes of the statement of cash flows, cash and cash equivalents comprise cash in hand,
deposits held at bank and financial institutions and short-term highly liquid investments with maturities of three months
64 or less from the date of acquisition. Cash flows from operating activities have been presented under direct method.
United Power Generation & Distribution Company Ltd. Annual Report 2014

Notes to the financial statements

As at and for the year ended 31 December 2014

3.3.2 Financial liabilities

A financial liability is recognised when its contractual obligations arising from past events are certain and the settlement
of which is expected to result in an outflow from the Company of resources embodying economic benefits. The Company
initially recognises financial liabilities on the transaction date at which the Company becomes a party to the contractual
provisions of the liability.
The Company derecognises a financial liability when its contractual obligations are discharged or cancelled or expired.
Financial liabilities include trade payables, Other payables and accrual, redeemable preference share and other current
liabilities.
(a) Trade and other payables
The Company recognises a financial liability when its contractual obligations arising from past events are certain and
the settlement of which is expected to result in an outflow from the entity of resources embodying benefits.
(b) Loans and borrowings
Borrowings are classified into both current and non-current liabilities. Moreover in compliance with the requirements
of BAS-23 (Borrowing Costs), interest and other costs incurred by the Company in connection with the borrowing
of funds are recognized as an expense in the period in which they are incurred. Principal amounts of the loans
and borrowings are stated at their amortised amount. Borrowings repayable after twelve months from the date of
statement of financial position are classified as non-current liabilities whereas the portion of borrowings repayable
within twelve months from the date of statement of financial position, unpaid interest and other charges are classified
as current liabilities.
(c) Redeemable preference shares
The Company had issued redeemable preference shares during 2013. As per BAS-32 Financial Instruments:
Presentation, the substance of a financial instrument rather than its legal form governs its classification on the entity’s
financial statements. Accordingly, the redeemable preference shares which, in substance, meet the conditions of a
financial liability, have been classified as liabilities in these financial statements.

3.4 Impairment
3.4.1 Financial assets
Trade receivables is assessed at each date of statement of financial position to determine whether there is objective evidence
that it is impaired. Trade receivable is impaired if objective evidence indicates that a loss event has occurred after the initial
recognition of the assets, and that the loss had a negative effect on the estimated future cash flows of that asset that can be
estimated reliably.
3.4.2 Non-financial assets
At each reporting date, indicates of impairment are reviewed. For this review, the Company is considered as a single cash
generating unit and assets are reviewed. If any indication exits, the assets’ recoverable amount will need to be estimated.
As at 31 December 2014, the assessment of indicators of impairment reveals that impairment testing is not required for the
Company.
3.4.3 Inventories
Inventories are measured and stated at cost less allowance for obsolescence. These are for use in the operation and
maintenance of power plants. As inventories are for internal use, the value is unlikely to diminish.

3.5 Revenue recognition

Revenue is recognised in the statement of comprehensive income upon supply of electricity, quantum of which is determined by
survey of meter reading. As per BAS-18 Revenue is recognized to the extent that it is probable that the economic benefits will flow
to the Company and the revenue can be reliably measured. Revenue measured at the fair value of the consideration received or
receivable. The following specific recognition criteria must be met before revenue is recognized:
65
 United Power Generation & Distribution Company Ltd.

Notes to the financial statements

As at and for the year ended 31 December 2014

a. The amount of revenue can be measured reliably

b. The flow of economic benefits to the entity is probable
c. The stage of completion at the period end can be measured reliably
d. The costs incurred to date and the costs to completion can be measured reliably
e. When the service is performed in accordance with the terms of contractual arrangement
Revenue is recognized, excluding Value Added Tax and other Government levies, on the basis of net units of energy generated and
transmitted to the authorized customer’s transmission systems and invoiced on a monthly basis upon transmission to the customers.
Revenues are valued using rates in effect when services are provided to customers. Accrued billed revenues are presented in current
assets as trade receivables and the corresponding cost is included in operating expenses.

3.6 Finance expenses

Finance expenses comprise interest expense on loan, overdraft and bank charges. All borrowing costs are recognised in the statement
of comprehensive income using effective interest method except to the extent that they are capitalised during construction period
of the plants in accordance with BAS-23 Borrowing cost.

3.7 Employee benefit schemes

Defined contribution plan (provident fund)
All the activities of the company are completed from outsourcing basis. The Company has no permanent employees and hence not
required to maintain provident fund policy.
Workers profit participation fund (WPPF)
The government of Bangladesh has made an amendment to the Labour Law 2006 in July 2013. As per amended section-232 (chha)
of the Act, any undertaking carrying on business to earn profit is liable to make provision for WPPF at 5% of the net profit and also
need to be distributed within 9 months of the statement of financial position/balance sheet date. UPGDCL has no employees and
the operation and maintenance activities of UPGDCL were managed by 179 employees of United Engineering and Power Services
Limited under an O&M Contract.
Considering the situation as above UPGDCL board of directors are of the view that UPGDCL is not required to make provision for
WPPF for the year 2014 and as such no provision for workers profit participation fund (WPPF) has been made in the accounts of
these companies for the year ended 31 December 2014.

3.8 Income Tax

Tax on the statement of comprehensive income for the year comprises current and deferred tax. Tax is recognised in the statement of
comprehensive income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
3.8.1 Current tax
Income tax has made for other operating income only and no provision is required for income tax on the company’s business
profits as the Company has received exemption from all such taxes from the Government of Bangladesh under the private
sector power generation policy for a period of 15 years from start of its commercial operation, vide SRO ref: 188-Law/Income
Tax/2009-Income Tax ordinance (#36) 1984 dated 01 July 2009.
3.8.2 Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amount of assets and liabilities for
financial reporting purpose and the amounts used for taxation purposes. As there is considerable uncertainty with regard
to the taxation of the Company after the expiry of the tax exemption period, management feels it is not possible to make a
reasonable estimate of deferred tax assets/liabilities at this stage.

3.9 Provisions
A provision is recognised in the statement of financial position when the Company has a legal or constructive obligation as a result
of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate
can be made of the amount of the obligation and accordingly provision for expenses has been made in the accounts.
66
United Power Generation & Distribution Company Ltd. Annual Report 2014

Notes to the financial statements

As at and for the year ended 31 December 2014

3.10 Contingencies
Contingencies arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is probable that a liability has
been incurred and the amount can be reasonably estimated.
3.10.1 Contingent liability
Contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.
Contingent liability should not be recognised in the financial statements, but may require disclosure. A provision should be
recognised in the period in which the recognition criteria of provision have been met.
3.10.2 Contingent asset
Contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the entity.
A Contingent asset shall not be recognised. Only when the realisation of the related economic benefits is virtually certain
should recognition take place provided that it can be measured reliably because, at that point, the asset is no longer
contingent.

3.11 Statement of cash flows

Considering the provisions of BAS-1 “Presentation of Financial Statements” and BAS-7, “Cash Flow Statements “cash in hand and
bank balances have been stated as cash and cash equivalents.
The net cash flow from operating activities is determined after adjusting cash received from customers and other income with
operating expenses paid and interest paid to suppliers during the period under direct method as per BAS-7 “Cash Flow Statements”.

3.12 Earning per share

a) Basic earnings per share
The Company represents basic earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the
profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares
outstanding during the period.
Diluted earnings per share
Diluted EPS is determined by the adjusting the profit or loss attributable to ordinary shareholders and the weighted average
number of ordinary shares outstanding, for the affects of all dilutive potential ordinary shares. However, dilution of EPS is not
applicable for these financial statements as there was no potential dilutive ordinary shares during the year 2014.
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 number of ordinary shares
issued during the year multiplied by a time weighting factor. The time weighting factor is the numbers of days the specific
shares are outstanding as a proportion of the total number of days in the period.

3.13 Events after reporting period

Events after reporting period that provide additional information about the Company’s position at the date of financial position are
reflected in the financial statements. Events after the reporting period that are not adjusting events are disclosed in the notes when
material.

3.14 General
i) Figures appearing in these financial statements have been rounded off the nearest Taka.
ii) Previous period/year’s figures have been rearranged, wherever considered necessary to conform to the current period’s
presentation.

67
 United Power Generation & Distribution Company Ltd.

Notes to the financial statements

As at and for the year ended 31 December 2014

4 Property, plant and equipment, net

Cost Depreciation Written

Down Value
Disposal or Balance Charged Balance
Balance as Addition Balance as on Rates Adjustment as on 31
Particulars adjustment as on 01 during the as on 31
on 01 January during the 31 December % during the December
during the year January year during December
2014 year 2014 year on Sales 2014
adjustment 2014 the year 2014
Taka Taka Taka Taka Taka Taka Taka Taka Taka
Plant and machinery 9,829,268,588 114,448,621 35,766,061 9,907,951,148 3.33% 547,467,001 327,314,644 4,764,039 870,017,606 9,037,933,542
Gas line 205,581,967 19,472,944 - 225,054,911 2% 21,479,032 4,111,639 - 25,590,671 199,464,240
Office Equipment 9,367,112 1,155,565 - 10,522,677 15% 1,986,650 1,405,067 - 3,391,717 7,130,960
Furniture & Fixtures 1,169,828 784,623 - 1,954,451 10% 176,406 116,983 - 293,389 1,661,062
Motor vehicles 7,166,836 4,290,000 - 11,456,836 10% 1,968,686 716,684 - 2,685,370 8,771,466
Total as on 31 December 2014 10,052,554,331 140,151,753 35,766,061 10,156,940,023 573,077,775 333,665,017 4,764,039 901,978,753 9,254,961,271
Total as on 31 December 2013 3,950,438,316 6,102,116,015 - 10,052,554,331 442,456,098 130,621,677 - 573,077,775 9,479,476,556

2014 2013
Taka Taka
4.1 Allocation of depreciation expenses, note 4
Operating expenses (Note 17) 330,328,366 129,315,460
Administrative expenses (Note 18 ) 3,336,650 1,306,217
333,665,017 130,621,677
4.2 Deletion during the year

Particular Cost Acc. Dep. Sales Proceed Profit/(loss)

Generator 35,766,061 4,764,039 17,772,179 (13,229,843)
Total 35,766,061 4,764,039 17,772,179 (13,229,843)

4.3 Power plant

Plant description
The natural gas fired power plants of UPGDCL consist of Wärtsilä, Rolls Royce and MTU engine generators with 30 years expected
useful life, which form the major part of the power generation companies. This gas fired generating set consists of auxiliaries,
exhaust gas silencer and electrical, mechanical & civil construction and erection. Each power plan has fourteen (14) integrated
systems named fuel, lubrication oil, compressed air, cooling, charge air, exhaust, water treatment, fire protection, emission control,
automation, electrical, station service, DC and high voltage systems. At DEPZ there are four (4) gas fired engines with the capacity of
8.73 MW each, five (5) gas fired engines with capacity of 9.34 MW each and two (2) gas fired engines with the capacity of 2 MW each
for the generation of electricity. At CEPZ there are five (5) gas fired engines with the capacity of 8.73 MW each and three (3) gas fired
engines of capacity 9.34 MW. The total output of these stationary power plants at DPEZ and CEPZ is 86 MW & 72 MW respectively.
Environmental impact
The environmental impact of a gas power plant is low; it is both efficient and environmentally sound. These gas power plants have the
highest simple-cycle efficiency in the market. Natural gas has the lowest CO2 emissions compared to other fossil fuels. The SO2 and PM
emissions are relatively low for power plants running on natural gas. The NOx emissions are also lower than with fuel oil-fired diesel/HFU
engines. The engine cooling arrangement using closed-circuit radiator cooling reduces plant process water consumption to almost zero,
68 minimizing the effect on local water resources. Effective sound-proofing allows the plant to be operated even in densely populated areas.
United Power Generation & Distribution Company Ltd. Annual Report 2014

Notes to the financial statements

As at and for the year ended 31 December 2014

Gas Line
According to Power Supply Agreement, dated 6th and 16th May 2007 with Bangladesh Export Processing Zone Authority (BEPZA); BEPZA,
at their own cost, shall provide necessary gas connection of required quantity and specification from the nearest District Regulatory
Station (DRS) of Titas Gas Transmission and Distribution Company Limited and Bakhrabad Gas system Limited, the former name of
Karnaphuli Gas Distribution Company Ltd. BEPZA shall maintain such gas connection until the expire of a period of fifty (50) years unless
extended or earlier termination. Although both parties agreed upon this condition but due to lack of initiative by concerned authority
(BEPZA), UPGDCL has established this gas line back on 17 November 2008 at its own cost. For DEPZ plant the initial contract was for 6.91
(Million Cubic Feet Per Day) MMCFD. Subsequently additional allocation 9 MMCFD gas given by Titas Gas Transmission & Distribution
Company Ltd. for further capacity enhance. Thus total contract load 15.91MMCFD. For CEPZ plant the initial contract was for 10.68 MMCFD.
An additional allocation was given for another 4 MMCFD by Karnaphuli Gas Distribution Company Ltd. for further capacity enhance. Thus
total contract load 14.68 MMCFD. Gas line cost includes Electric Resistance Welded (ERW) carbon steel pipe, tape for gas line, Regulating &
Metering System (RMS), Town Border Station (TBS), line accessories, and construction and commissioning expenditures.

2014 2013
Taka Taka

5.00 Inventories

Spare parts (Note 5.01) 245,304,781 218,754,767

Fuel and lubricants (Note 5.01) 6,251,216 32,184,865
251,555,997 250,939,632
Inventories comprises spare parts and fuel & lubricants which are used for maintenance and operational purpose of power plants
machineries.

Spare parts Fuel and lubricants

5.01 Movement of inventories(Note 5)

Balance as at 01 January 2013 185,062,362 6,920,049
Purchase during the year 2013 194,778,278 75,689,049
Issued during the year 2013 (161,085,873) (50,424,233)
Balance as at 31 December 2013 218,754,767 32,184,865

Balance as at 01 January 2014 218,754,767 32,184,865

Purchase during the year 2014 250,947,315 44,284,506
Issued during the year 2014 (224,397,301) (70,218,155)
Balance as at 31 December 2014 245,304,781 6,251,216

5.02 Number of inventories (as at 31 December 2014)

Spare parts Fuel and lubricants

Quantity (Nos) Amount (Taka) Quantity (Ltr) Amount (Taka)

2014 2013 2014 2013 2014 2013 2014 2013
DEPZ 11,408 1,915 134,199,535 154,067,905 15,026 68,234 3,632,226 14,445,399
CEPZ 7,993 2,186 111,105,246 64,686,863 10,016 86,219 2,618,990 17,739,466
Total 19,401 4,101 245,304,781 218,754,767 25,042 154,453 6,251,216 32,184,865
69
 United Power Generation & Distribution Company Ltd.

Notes to the financial statements

As at and for the year ended 31 December 2014

2014 2013
Taka Taka

6 Trade Receivables

Bangladesh Power Development Board (BPDB) 293,453,039 208,101,982

Rural Electrification Board (REB) 262,949,572 229,920,504
Chittagong Export Processing Zone (CEPZ) 135,640,893 115,708,676
Dhaka Export Processing Zone (DEPZ) 94,102,143 83,879,684
Karnaphuli Export Processing Zone (KEPZ) 32,107,248 26,220,218
Oli Knitting Fabrics Ltd. 5,573,758 3,141,996
Lilac Fashion 2,377,460 2,397,231
Dhaka Thai Ltd 3,041,900 949,323
Ahad Fashion Ltd. 164,623 78,042
Atomic Energy Research Establishment (AERE) 509,089 -
Rahimafrooz Accumulators Limited 2,008,129 -
GMS Composit Knitting Ind. Ltd. 8,220,794 -
Square Textile Limited 9,335,898 -
Gunze United Limited 1,630,234 -
Rahimafrooz Batteries Limited (Unit-2) 169,471 -
Zam Zam Engineering Limited 523,200 -
851,807,451 670,397,657

The Company did not charge any interest for the time being on the receivables to BPDB and REB considering the strategic reasons but the
Company is actively considering applying the clause to charge interest on the receivables. Upon realization of the principal amount, the Company
shall pursue collection of interest separately.

7 Inter company receivable

United Enterprises & Co. Ltd. 1,562,043,136 1,128,541,871

1,562,043,136 1,128,541,871

As per decision in the meeting of the Board of Directors, dated, 01 January 2014, interest has been charged on the inter company loan from
1st January 2014 @ average FDR interest rate receivable by UPGDCL against their FDR in respective commercial banks (note-19).

8 Advances, deposits and prepayments

Advances : 62,994,208 34,768,125

Advance against Expense 61,381,689 32,259,306
Against Land Lease Rent 1,112,519 1,112,519
Against Salary 500,000 1,396,300
Advance income tax 1,185,000 -
Security and other deposits : 6,159,667 32,319,116
LC Margin 309,667 26,469,116
Bank guarantee margin 5,850,000 5,850,000
Prepayments : 5,488,333 5,949,667
Insurance premium 5,113,333 4,974,667
BERC license fees 375,000 975,000
75,827,208 73,036,908
70
United Power Generation & Distribution Company Ltd. Annual Report 2014

Notes to the financial statements

As at and for the year ended 31 December 2014

2014 2013
Taka Taka

9 Cash and cash equivalents

Cash in hand 190,786 217,215
Cash at bank :
Dhaka Bank Ltd. 125,924,438 69,061,097
Standard Chartered Bank 93,931 94,855
One Bank Limited 18,295 19,445
Mercantile Bank Limited 47,941 47,941
Dutch-Bangla Bank Ltd. 25,930,456 3,647,698
The City Bank Ltd. 22,135 22,135
Shahjalal Islami Bank Ltd. 2,359,871 146,042
National Bank Ltd. 6,260 6,260
Eastern Bank Ltd. 44,757 48,842
Brac Bank 141,738 140,479
Jamuna Bank 5,639,580 234,060
Trust Bank Ltd 188,937 420,749
Eastern Bank Ltd.-Escrow 1,318,194 1,465,402
Prime Bank Limited - 1,477
AB Bank Ltd. - 5,642
Standard Bank Ltd. - 15,559
Bank -Al - Falah - 18,744
161,736,533 75,396,427
Fixed Deposits Receipts (FDR):
Lanka Bangla Finance Limited 94,511,250 -
Dhaka Bank Limited 10,433,750 -
104,945,000 -
266,872,319 75,613,642
10 Share capital

10.01 Authorized share capital

800,000,000 ordinary shares of Tk. 10 each 8,000,000,000 8,000,000,000

200,000,000 redeemable preference shares of Tk. 10 each 2,000,000,000 2,000,000,000
10,000,000,000 10,000,000,000
10.02 Issued, subscribed and paid-up capital
296,949,726 ordinary shares of Tk. 10 each 2,969,497,260 2,969,497,260
2,969,497,260 2,969,497,260

71
 United Power Generation & Distribution Company Ltd.

Notes to the financial statements

As at and for the year ended 31 December 2014

10.03 Shareholding position was as follows:

Percentage of holding Value of shares (Tk.)

2014 2013 2014 2013
Name of Shareholders:
Hasan Mahmood Raja 8.58% 8.58% 254,899,290 254,899,290
Ahmed Ismail Hossain 8.58% 8.58% 254,899,290 254,899,290
Akhter Mahmud Rana 8.58% 8.58% 254,899,290 254,899,290
Khandaker Moinul Ahsan Shamim 8.58% 8.58% 254,899,290 254,899,290
Faridur Rahman Khan 2.38% 2.38% 70,805,230 70,805,230
Abul Kalam Azad 2.38% 2.38% 70,805,230 70,805,230
Moinuddin Hasan Rashid 8.58% 8.58% 254,899,290 254,899,290
United Enterprises & Co. Ltd 52.31% 52.31% 1,553,390,350 1,553,390,350
100% 100% 2,969,497,260 2,969,497,260

10.04 Classification of shareholders’ by holding

No of shareholders No of shares
2014 2013 2014 2013
5,001 to 20,000 shares - - - -
20,001 to 50,000 shares - - - -
50,001 to 1,000,000 shares - - - -
1,000,001 to 10,000,000 shares 2 2 14,161,046 14,161,046
over 10,000,000 shares 6 6 282,788,680 282,788,680
8 8 296,949,726 296,949,726

11 Redeemable Preference Share capital

Opening Balance as at 1 January 2,000,000,000 -
Issued during the year - 2,000,000,000
Repayment during the year (808,000,000) -
Balance as at 31 December 1,192,000,000 2,000,000,000
11.1 Non-current portion - 1,192,000,000
Current portion 1,192,000,000 808,000,000
1,192,000,000 2,000,000,000
As per declaration to prospectus by UPGDCL, part of IPO proceeds will be utilize for full redemption of redeemable cumulative preference
share in the year 2015. Hence full portion of redeemable preference share shown as current liability.
Shareholding position of redeemable preference shares :
2014 2013
Name of the shareholders
No. of Shares Face Value No. of Shares Face Value
Eastern Bank Ltd. - - 51,000,000 510,000,000
Pubali bank Ltd. 40,000,000 400,000,000 50,000,000 500,000,000
Delta Brac Housing Finance Ltd. 7,200,000 72,000,000 9,000,000 90,000,000
Trust Bank Ltd. 16,000,000 160,000,000 20,000,000 200,000,000
The City Bank Ltd. 24,000,000 240,000,000 30,000,000 300,000,000
Jamuna Bank Ltd. 16,000,000 160,000,000 20,000,000 200,000,000
Standard bank Ltd. 16,000,000 160,000,000 20,000,000 200,000,000
72 119,200,000 1,192,000,000 200,000,000 2,000,000,000
United Power Generation & Distribution Company Ltd. Annual Report 2014

Notes to the financial statements

As at and for the year ended 31 December 2014

Name of the Instrument is Redeemable cumulative preference share and other features of the instruments are as follows :
a) Number of shares to be issued 200,000,000
b) Issue size in currency is BDT 2,000,000,000
c) Face value is BDT 10
d) Issue price is BDT 10
e) Purpose of issue is to expansion of power plants in DEPZ & CEPZ
f) Security of the instrument is put option on expansion assets.
g) Tenure is 5 years.
h) Dividend rate is 11% p.a
i) Frequency of dividend payment is quterly payable in arrears commencing from 1st quarter of 1st year
j) Frequency of Capital Redemption is yearly payable in arrears in equal installments commencing from 4 the quarter of 1st year
k) Participation fee is 0.80% (upfront).

2014 2013
Taka Taka

12 Long term loan - Non current portion

Dhaka Bank Limited - 775,016,167

Dutch-Bangla Bank Ltd. 448,949,104 919,403,833
Trust Bank Ltd - 49,853,042
448,949,104 1,744,273,042

12.01 Long term loan (Current portion)

Dhaka Bank Limited 660,425,548 121,495,845
Dutch-Bangla Bank Ltd. 315,723,502 122,726,155
Trust Bank Ltd. - 552,257,149
976,149,050 796,479,149
a) Dhaka Bank Limited
This is a syndicated loan arranged by Dhaka Bank Ltd. Total facility amount is Taka 115.00 crore, out of which Investment
Promotion and Financing Facility (IPFF) fund was Taka 92.00 crore and the remaining Taka 23.00 crore was syndicated non IPFF
term loan.
a) Interest rate:
For IPFF loan: 364 days Bangladesh Bank Treasury bill rate plus 0.30%(IPFF margin) plus 2.50%(PFI’s margin).

For Non-IPFF Syndicated Loan: 15.50% p.a.
b) Tenor: For IPFF Door -to-Door 120 months (10 years) from the date of disbursement.
c) Repayment: For IPFF- 34 equal quarterly installments and for non-IPFF- 21 equal installments.
d) Purpose: To pay off the Syndicated Term Loan arranged by SCB and IDLC.
e) Security: Hypothecation of all fixed and floating assets including but not limited to machinery, book debts, furniture
and equipment on first ranking pari passu basis creating present and future charge with the RJSC.
b) Dutch-Bangla Bank Ltd.
This is arranged by Dutch-Bangla Bank Ltd. Total facility amount is Taka 135 crore, out of which Investment Promotion and
Financing Facility (IPFF) fund was Taka 108 crore and the remaining Taka 27 crore was non IPFF term loan.
a) Interest rate:
For IPFF loan: 360 days Bangladesh Bank Treasury bill rate plus 0.30% (IPFF margin) plus 2.10% (PFI’s margin). 73
 United Power Generation & Distribution Company Ltd.

Notes to the financial statements

As at and for the year ended 31 December 2014

For Non-IPFF Syndicated Loan: 15.50% p.a.

b) Tenor: For IPFF Door - to - Door 120 months (10 years) from the date of 1st disbursement.
c) Repayment: 28 equal quarterly installments.
d) Purpose: To implement the CEPZ power project.
e) Security:
Hypothecation of all fixed and floating assets including but not limited to machinery, book debts, furniture, fixture
and equipment on first ranking pari passu basis creating present and future charge with the RJSC.
c) Trust Bank Ltd
This a term loan amounting BDT 700 million for Erection, Procurement & Construction (EPC) against capacity expansion
power plant of DEPZ and CEPZ.
a) Interest rate: Interest to be charged at quarterly rests @ 15 % p.a.
b) Tenor : 2 years from the date of first disbursement.
c) Repayment : 16 numbers of equal installments starting from the following month of completion of moratorium.
d) Purpose : For Erection, Procurement & Construction (EPC) against capacity expansion power plant of DEPZ and CEPZ.
e) Security : The company will provide corporate guarantee of United Enterprise & Company Ltd / United Ashugonj
Power Company Ltd supported by its board resulation in conformity with memorandum and articles of association
and alos undated/post dated cheque covering the credit facilities.

2014 2013
Taka Taka

13 Trade payables

Gas bill for DEPZ - Titas Gas Transmission & Distribution Company Ltd. 34,496,017 22,596,914
Gas bill for CEPZ - Karnaphuli Gas Distribution Company Ltd. 65,574,503 57,516,773
100,070,520 80,113,687
14 Other payables and accrual
Other payables
Directors Remuneration 1,250,000 -
Utility bill 127,500 30,528
Security expenses 195,790 253,439
Service charge on gas bill 6,557,450 5,751,677
Medical expenses 13,755 13,720
Audit fees 299,000 276,000
TDS payable 390,000 41,000
Welfare fund 15,593 15,553
Operation & Maintenance expense 2,802,697 6,273,123
VAT payable 1,734,283 1,170,710
Salary and allowances - 490,625
Mobile bill - 15,000
Payable to REB - 9,115,215
Payable to provident fund - 93,370
C&F Bill 642,367 -
14,028,435 23,539,960
Security Money Received (Note 14.02)
Lilac Fashion wear Ltd. 700,000 700,000
Delco Building Systems 56,904 -
756,904 700,000
74 14,785,339 24,239,960
United Power Generation & Distribution Company Ltd. Annual Report 2014

Notes to the financial statements

As at and for the year ended 31 December 2014

14.01 United Power Generation & Distribution Company Limited has entered into a management agreement with United
Engineering & Power Services Ltd. (UEPSL) for providing technical and operational support. Therefore, no. of
employees of UPGDCL has been nill for the event as mentioned in Note # 31.
14.02 Security deposit received comprises of an amount equal to 2 months MMC (Monthly Minimum Charge) received from
Lilac Fashion Wear Ltd and earnest money deduct from Delco Building Systems.

2014 2013
Taka Taka

15 Provision for taxation

Opening Balance as at 1 January 12,094,683 -

Prior year adjustment for short provision of Income tax provision 141,132 -
Addition during the year 45,820,721 12,094,683
Paid during the year (12,235,815) -
45,820,721 12,094,683

16 Revenue

From power supply (Note-16.1) 4,460,918,254 3,396,097,108

From steam supply (Note-16.2) 2,404,914 -
4,463,323,168 3,396,097,108

16.1 From power supply 4,460,918,254 3,396,097,108

Dhaka Export Processing Zone (DEPZ) 1,207,666,336 1,261,237,385
Rural Electrification Board (REB) 769,359,245 295,898,351
Oli Knitting Fabrics Ltd. 30,291,644 25,547,750
Chittagong Export Processing Zone (CEPZ) 1,469,548,089 1,276,876,346
Bangladesh Power Development Board (BPDB) 553,423,237 358,203,255
Karnaphuli Export Processing Zone (KEPZ) 312,038,690 162,126,359
Dhaka Thai Ltd 25,916,229 10,540,559
Lilac Fashion 4,469,124 5,527,146
Ahad Fashion 814,602 139,957
Atomic Energy Research Establishment (AERE) 5,097,100 -
Rahimafrooz Accumulators Limited 12,184,942 -
GMS Composit Knitting Ind. Ltd. 33,559,403 -
Square Textile Limited 36,388,211 -
Rahimafrooz Batteries Limited 161,401 -

16.2 From steam supply 2,404,914 -

Gunze United Limited 2,404,914 -

In 2014 electricity sale of the company increased by tk. 1,067,226,060/- as compared to the period 2013 due to the increasing
production. Net sales increased by 31.43% during the period under review. During the year the Company produced electricity
totally 879,796,945 kwh (DEPZ project produced 434,542,144 kwh & CEPZ project produced 445,254,801 kwh).

75
 United Power Generation & Distribution Company Ltd.

Notes to the financial statements

As at and for the year ended 31 December 2014

2014 2013
Taka Taka

17 Cost of sales

Fuel and energy 733,200,397 538,240,027

Operation and maintenance expenses ( Note 17.1) 437,087,623 273,125,771
Depreciation expenses (Note 4.01) 330,328,366 129,315,460
Minimum load charge 49,203,621 82,929,653
Liquidity damage charge 544,767 1,311,481
Land lease rent 2,140,315 1,050,388
Traveling and conveyance 2,061,237 319,750
Entertainment 3,631,867 909,935
Telephone, mobile, internet & dish line bill 461,235 158,343
Printing and stationery 610,607 125,743
Newspaper, postage and courier 74,831 14,193
Vehicle running and maintenance 735,219 110,190
Rent, rates and taxes 2,042,099 412,266
Utility bill 942,398 184,736
Insurance premium 10,573,334 7,600,666
Fire fighting expenses 349,428 5,820
Medical expenses 340,755 136,817
Beautification and gardening expenses 17,768 -
License and other fees 1,652,145 1,272,000
Environmental expenses 744,000 169,000
Site office expenses 389,244 174,414
Security expenses 2,861,490 1,047,314
Discount on sales 2,652,442 -
1,582,645,188 1,038,613,967

17.1 Operation and maintenance expenses

Operational expenses 73,258,348 39,494,390

Stores and spares consumed 294,615,456 211,510,106
Repair and maintenance 69,213,819 22,121,275
437,087,623 273,125,771

76
United Power Generation & Distribution Company Ltd. Annual Report 2014

Notes to the financial statements

As at and for the year ended 31 December 2014

2014 2013
Taka Taka

18 General and administrative expenses

Personnel costs
Salary and bonus 2,333,982 11,165,013
Welfare and benefits 1,581,313 904,497
3,915,295 12,069,510
Depreciation on property, plant & equipment, (Note 4.01) 3,336,650 1,306,217
Directors’ remuneration 11,829,036 8,698,839
Trade licence renewal fees 4,255 -
Traveling and conveyance 2,266,689 2,937,956
Postage, telephone and telex 130,449 79,277
Entertainment 954,737 1,449,407
Printing and stationery 1,438,114 1,304,033
Newspaper bill 15,764 7,656
Computer maintenance 5,730 -
Auditor’s fee (Note-18.1) 833,750 448,500
Advertisement 1,130,000 1,264,423
Medical expenses 149,533 -
Vehicle running expenses 4,548,043 778,258
Office rent 13,080,000 13,080,000
Office expenses 43,100 80,914
Consultancy fees - 18,595,500
Capital Increasing Fees - 682,966
Overseas Travelling 701,484 373,410
Legal fees 1,607,500 -
Other administrative expenses 27,500 93,957
Loss on disposal of fixed assets 13,229,843 -
Fine, Fees and others 400,000 -
Write off of Accounts receivable - 179,268,649
59,647,472 242,519,472

18.1 The break up of auditor’s fee are as below:

Statutory audit 299,000 276,000
Credit rating & various certification for IPO 534,750 172,500
833,750 448,500

19 Other operating income

Burn lube oil/use drum sales 3,751,400 3,531,880

Scrap Sale 499,048 756,157
Interest income 10,907,666 452,619
Interest on Inter Company Loan 115,758,231 27,511,833
130,916,345 32,252,489

77
 United Power Generation & Distribution Company Ltd.

Notes to the financial statements

As at and for the year ended 31 December 2014

2014 2013
Taka Taka

20 Financial expenses

Syndication loan agency fees - 2,196,250

Interest on long term loan: -
Dhaka Bank Limited 95,022,220 140,538,206
Dutch Bangla Bank Limited 101,923,338 157,148,632
Trust Bank Ltd. 53,667,076 23,389,533
Interest on overdraft:
Dhaka Bank Limited 3,731,938 11,672,099
Preference share Dividend:
Eastern Bank Ltd. 21,671,507 -
Pubali bank Ltd. 55,000,000 -
Delta Brac Housing Finance Ltd. 9,900,000 -
Trust Bank Ltd. 22,000,000 -
The City Bank Ltd. 33,000,000 -
Jamuna Bank Ltd. 22,000,000 -
Standard bank Ltd. 22,000,000 -
Preference share agency fees 1,370,800 20,931,380
Bank charge and commission 211,217 4,817,717
441,498,097 360,693,817

21 Earnings per share

Basic EPS
Net profit from core business 2,379,532,410 1,754,269,852
Weighted average number of shares outstanding during the period 296,949,726 296,949,726
Basic EPS on Core business 8.01 5.91
Extra ordinary income (Other operating income- net of Tax) 85,095,624 20,157,806
Weighted average number of shares outstanding during the period 296,949,726 296,949,726
Basic EPS on extra ordinary business 0.287 0.068
Earning per Share (EPS) 8.30 5.98

*Since the stock/bonus issue is an issue without consideration, the issue has been treated as if it occurred at the beginning of 2013, the
earliest period reported for the purposes of EPS calculation.

21.1 Diluted earning per share

No diluted earnings per share is required to be calculated for the years presented as there was no scope for dilution during these
years.

22 Financial risk management

The Company has exposure to the following risks from its use of financial instruments:
Credit risk
Liquidity risk
Market risk
78
United Power Generation & Distribution Company Ltd. Annual Report 2014

Notes to the financial statements

As at and for the year ended 31 December 2014

The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The
Board oversees how management monitors compliance with risk management policies and procedures, and reviews the adequacy of
the risk management framework in relation to risks faced by the company. The Board is assisted in its oversight role by Audit Committee.
Internal Audit, under the purview of Audit Committee, undertakes both regular and adhoc reviews of risk management controls and
procedures, the results of which are reported to the Audit Committee.

23 Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Company’s receivable from customers. The company’s sales is made to Dhaka Export Processing
Zone Authority (DEPZ), Chittagong Export Processing Zone Authority (CEPZ), Rural Electrification Board (REB), Bangladesh Power
Development Board (BPDB), Karnaphuli Export Processing Zone (KEPZ), and other private sector under the conditions of the long term
Power Purchase Agreement (PPA). Sales made to this entity is fully secured by Letters of Credit issued by local scheduled banks. Credit risk
does not arise in respect of any other receivables.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position.

2014 2013
Taka Taka

23.1 Exposure to credit risk

The carrying amount of financial assets represent the maximum credit exposure. The maximum exposure to credit risk at the reporting
date was:
Trade receivables 851,807,451 670,397,657
Inter-company receivables 1,562,043,136 1,128,541,871
Advances, deposits and prepayments 75,827,208 73,036,908
Cash and cash equivalents 266,872,319 75,613,642
2,756,550,114 1,947,590,078

23.2 Aging of trade receivables

Past due 1-30 days 419,309,045 361,506,623
Past due 31-60 days 53,647,908 1,339,408
Past due 61-90 days 65,128,516 850,601
Past due 91-180 days 4,861,212 614,463
Past due 180-365 days - 3,171,627
Past due above 365 days 308,860,770 302,914,935
851,807,451 670,397,657

24 Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach
to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under
both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. Typically, the
Company ensures that it has sufficient cash and cash equivalent to meet expected operational expenses, including the servicing of financial
obligation through preparation of the cash forecast, prepared based on time line of payment of the financial obligation and accordingly
arrange for sufficient liquidity/fund to make the expected payment within due date. Moreover, the company seeks to maintain short term
lines of credit with scheduled commercial banks to ensure payment of obligations in the event that there is insufficient cash to make the
required payment. The requirement is determined in advance through cash flows projections and credit lines facilities with banks are
negotiated accordingly.

In extreme stressd condition, the company may get support from the group in the form of inter-company loan.

79
 United Power Generation & Distribution Company Ltd.

Notes to the financial statements

As at and for the year ended 31 December 2014

The following are the contractual maturities of financial liabilities:

Contractual cash flows
Carrying 6 months 6 - 12 1-2 More than
Total
amount or less months years 2 years
Taka Taka Taka Taka Taka Taka
2014
Non-derivative financial liabilities:
Redeemable preference shares 1,192,000,000 1,192,000,000 1,192,000,000 - - -
Term loan 1,425,098,154 1,425,098,154 910,000,584 66,148,466 203,628,638 245,320,466
Trade payable 100,070,520 100,070,520 100,070,520 - - -
Other payables and accrual 14,785,339 14,785,339 14,785,339 - - -
Provision for taxation 45,820,721 45,820,721 45,820,721 - - -
2,777,774,734 2,777,774,734 2,262,677,164 66,148,466 203,628,638 245,320,466
2013
Non-derivative financial liabilities:
Redeemable preference shares 2,000,000,000 2,000,000,000 - - - -
Term loan 2,540,752,191 3,512,250,000 - -
Trade payable 80,113,687 80,113,687 - - -
Other payables and accrual 24,239,960 24,239,960 - - -
Provision for taxation 12,094,683 12,094,683 - - -
4,657,200,521 5,628,698,330 - - - -
4,657,200,521 5,628,698,330 - - - -

25 Market risk

Market risk is the risk that any change in market conditions, such as interest rates that will affect the company’s income or the value of its holdings of financial
instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

25.1 Interest rate risk

Interest rate risk is the risk that arises due to changes in interest rates on borrowings. Local loans and borrowings are however not
significantly affected by fluctuations in interest rates as the rate is below from market rate. The Company has not entered into any
type of derivative instrument in order to hedge interest rate risk as at the reporting date.
26 Capital risk management

Capital risk management refers to implement policies and measures to maintain sufficient capital, assessing Company’s internal capital adequacy to ensure
Company’s operation as a going concern. Capital consists of share capital and retained earnings. All major investment and operational decisions with
exposure to certain amount are evaluated and approved by the board. The Board of Directors monitors the level of dividends to ordinary shareholders.
27 Operational risk

Operational risk constitutes the ability of the Company’s power projects to generate and distribute stipulated electricity to its off-takers.
Technology used, fuel supply arrangement, operational and maintenance (O&M) arrangement, political or force majeure in the form of
natural disaster like floods, cyclone, tsunami and earthquake may hamper normal performance of power generation.
The routine & proper maintenance of the distribution networks undertaken by BEPZA reduces the chance of major disruptions. However, severe natural
calamities which are unpredictable and unforeseen have the potential to disrupt normal operations of UPGD. Management believes that prudent
rehabilitation schemes and quality maintenance will lessen the damages caused by such natural disasters. Most importantly, all the above risks are covered
under the insurance agreement with Green Delta Insurance Company Ltd., to compensate for all the potential damages caused in such situations.
28 Risk associated with supply of raw material (Natural gas)

The main raw material used for generating electricity is natural gas. Any interruption of supplies of the gas to the power plants will hamper
the generation of electricity, the only product of the Company.
80
United Power Generation & Distribution Company Ltd. Annual Report 2014

Notes to the financial statements

As at and for the year ended 31 December 2014

The Company has a Gas Supply Agreement with Bakhrabad Gas system Limited, the former name of Karnaphuli Gas Distribution Company Ltd. and
Titas Gas Transmission & Distribution Company Limited for 15 years which is renewable every 5 years thereafter. So there is no threat of interruption
of supplies of the gas to the power plants that may hamper the generation of electricity, the only product of the company. Furthermore, new gas
are being explored and discovered in many areas of the country such as Narayanganj, Narshindi, and Bay of Bengal. The Government of Bangladesh
plans to add these discoveries to the national grid. Therefore, management does not expect gas supply interruption in the future.
29 Accounting classifications and fair values

The following table shows the carrying amounts and fair values, where applicable, of financial assets and financial liabilities. It does not include fair value
information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value:
As at 31 December 2014
Carrying amount
Fair value Other
Note(s) Held for Designated at hedging
Held to Loans and Available
financial Total
trading fair value maturity receivables for sale
instruments liabilities
Taka Taka Taka Taka Taka Taka Taka Taka
Financial assets measured at fair value - - - - - - - -
Financial assets not measured at fair value
Trade receivables 6 - - - - 851,807,451 - - 851,807,451
Inter company receivables 7 - - - - 1,562,043,136 - - 1,562,043,136
Advances, deposits and prepayments 8 - - - - 75,827,208 - - 75,827,208
Cash and cash equivalents 9 - - - - 266,681,533 - - 266,681,533
- - - - 2,756,359,328 - - 2,756,359,328
Financial liabilities measured at fair value - - - - - - - -
Financial liabilities not measured at fair value
Trade payables 13 - - - - - - 100,070,520 100,070,520
Other payables and accrual 14 - - - - - - 14,785,339 14,785,339
Redeemable preference shares 11 - - - - - - 1,192,000,000 1,192,000,000
Long term loan 12 - - - - - - 1,425,098,153 1,425,098,153
Provision for taxation 15 - - - - - - 45,820,721 45,820,721
- - - - - - 2,777,774,734 2,777,774,734

As at 31 December 2013
Carrying amount
Fair value Other
Note(s) Held for Designated at hedging
Held to Loans and Available
financial Total
trading fair value maturity receivables for sale
instruments liabilities
Taka Taka Taka Taka Taka Taka Taka Taka
Financial assets measured at fair value - - - - - - - -
Financial assets not measured at fair value
Trade receivables 6 - - - - 670,397,657 - - 670,397,657
Inter company receivables 7 - - - - 1,128,541,871 - - 1,128,541,871
Advance, deposits and prepayments 8 - - - - 73,036,908 - - 73,036,908
Cash and cash equivalents 9 - - - - 75,396,427 - - 75,396,427
- - - - 1,947,372,863 - - 1,947,372,863
Financial liabilities measured at fair value - - - - - - - -
Financial liabilities not measured at fair value
Trade payables 13 - - - - - - 80,113,687 80,113,687
Other payables and accrual 14 - - - - - - 24,239,960 24,239,960
Redeemable preference shares 11 - - - - - - 2,000,000,000 2,000,000,000
Long term loan 12 - - - - - - 2,540,752,191 2,540,752,191
Provision for taxation 15 - - - - - - 12,094,683 12,094,683
- - - - - - 4,657,200,521 4,657,200,521

81
 United Power Generation & Distribution Company Ltd.

Notes to the financial statements

As at and for the year ended 31 December 2014

The Company has got the following loan facilities from the followings financial institutions:

30 Bank facilities

Short Term Bank Guarantee

Term loan Letter of credit- LTR - limit Overdraft Limit
Name of the bank (s) Loan Limit Facilities - limit
-Limit (million) limit (million) (million) (million)
(million) (million)
Dutch-Bangla Bank Ltd. 1,350 - 50 30 - 80
Dhaka Bank Ltd. 1,150 350 300 300 50
Trust bank Ltd. 700 - 250 237 - 79
Jamuna Bank Ltd. - 250 200 50 300
Total 3,200 - 900 767 350 509

31 Number of employees

2014 2013
Salary Range Officers & staffs
Worker Total employees Total employees
Head office factory
Below Tk. 3,000 - - - - -
Above Tk. 3,000 - - - - 9
Total - - - 9

31.1 The Company has entered into an management agreement with United Engineering & Power Services Ltd. (UEPSL) for providing
technical and operational support.
2014 2013
Taka Taka

32 Expenditure in equivalent foreign currency

Foreign travel for Company’s business purpose 701,484 373,410

701,484 373,410

33 Contingent assets

The company has raised a claim to BEPZA amounting to Taka 388,521,161 due to losses caused to it by the claimant’s obligation to provide
vacant possession of land and gas connection which resulted in delayed commercial operation date. Break up of the figures are as follows :
Particulars
Loss of profit 200,288,084 200,288,084
Loss of interest and charges 156,473,346 156,473,346
Loss of overhead expenses 14,335,221 14,335,221
Loss of warranty 17,424,510 17,424,510
388,521,161 388,521,161

82
United Power Generation & Distribution Company Ltd. Annual Report 2014

Notes to the financial statements

As at and for the year ended 31 December 2014

2014 2013
Taka Taka

34 Contingent liabilities and commitments

i) Contingent liabilities 117,000,000 117,000,000

Bank Guarantees issued by Shahjalal Islami Bank Ltd. with 5% margin in
favor of Bangladesh Export Processing Zone (BEPZA).
Bank Guarantees issued by Trust Bank Ltd. with Nil margin in favor of Titas Gas
Transmission and Distribution Company Limited. 78,790,400 78,790,400
ii) Financial Commitments
Confirmed irrevocable letters of credit 53,996,728 220,438,107
249,787,128 416,228,507

35 Transactions with key management personnel

Employee benefits 13,848,600 15,177,135

13,848,600 15,177,135

36 Related party transactions and balance

During the year, the company carried out a number of transactions with related parties. In accordance with the provisions of BAS-24 Related
Party Disclosures, these are detailed below:

Transactions during the year 2014 Figures in Taka

Nature of Nature of
Name of party 2014 2013
relationship transactions Addition Adjustment
Dr./(Cr.) Dr./(Cr.)
United Enterprises & Co Ltd. Parent Company Loan 1,652,758,231 1,219,256,965 1,562,043,136 1,128,541,871
United Engineering & Power Operations &
Sister concern 70,400,521 73,203,218 (2,802,697) -
Services Ltd. Maintenance
Gulshan Properties Ltd Sister concern Office Rent 13,080,000 13,080,000 - -

37 Capacity and Production

37.1 Own Manufacture

Actual Production (kwh) Capacity utilization (%)

Name of the Plant Installed capacity (kwh)
2014 2013 2014 2013
Dhaka EPZ plant 688,000,000 434,542,144 278,093,102 63% 77%
Chittagong EPZ plant 576,000,000 445,254,801 346,223,915 77% 81%
Total 1,264,000,000 879,796,945 624,317,017 70% 79%

37.2 Licensed capacity is no more applicable and the regulatory authority does not exercise any direct control over the procurement,
production or sale.

83
 United Power Generation & Distribution Company Ltd.

Notes to the financial statements

As at and for the year ended 31 December 2014

38 Events after reporting date

38.1 Listed with DSE and CSE

On 09 December 2014, the Company got consent from Bangladesh Securities and Exchange Commission (BSEC) vide their consent
letter ref: BSEC/CI/BB-01/2013-823 for raising of capital through Initial Public Offer (IPO) & accordingly on 19 March 2015 the
company listed with Dhaka Stock Exchange Limited and 8 March 2015 with Chittagong Stock Exchange Limited and has offered
of 33,000,000 ordinary shares of Tk. 10/- each at an issue price of Tk. 72/- each including a premium of Tk. 62/- per share totaling Tk.
237,60,00,000/-.

38.2 Proposal of dividend

The Board of Directors of United Power Generation & Distribution Company Limited. at its 65th meeting held on 29 April 2015
recommended a cash dividend of Tk 3.50 per ordinary share i.e. a total of Tk 1,154,824,041 for the year 2013 and also recommended
a cash dividend of Tk 3.00 per ordinary share i.e. a total of Tk 989,849,178 for 329,949,726 ordinary shares and 1 bonus share for
every 10 shares held for the year ended December 31, 2014.These dividends are subject to final approval by the shareholders at the
forthcoming annual general meeting of the company.

Managing Director Director Company Secretary

84
 a LITA ASSOCIATE production : 017 1110 7917, email: [email protected]

Scan code with a QR code REGISTERED OFFICE

reader-enable mobile phone UNITED POWER GENERATION & DISTRIBUTION COMPANY LTD.
to find out more about the
United Center
company
House NW (J) - 6, Road - 51, Gulshan - 2, Dhaka -1212, Bangladesh
PABX : +88-02-9861000 (10 lines), +88-02-9850161-5
Fax : +88-02-9896445, +88-02-9893446
Email : [email protected]
Web : www.unitedpowerbd.com