Process activity Process description Process flowchart-Addition Management Comment, if any

Purchase requisition Purchase requisition (indent) is raised by respective user department to Supply Chain (SC) in MRF (Manual
(indent) raised Requisition Form). Before passing the requisition to higher authority, the capex budget is checked with . If the Purchase requisition raised
tentative cost of the item is within budget, he provides Go Ahead (GA) with his signature.

In the requisition form, information such as project ownership, budget, request type (e.g. replacement, addition,
new capital asset etc.), proposed physical location and rationale for the capex required are mentioned.
Approval of purchase requisition

Quotation Collection SC sources vendors based on indents. At first, Technical Offer is requested from enlisted vendors which is shared
with the user department that raised the indent. If the vendors and user department comes to consensus as to Quotation Collection
technical offer, the vendors are requested to submit quotations. SC receives the quotations and prepare a
Comparative Statement (CS). The CS is sent to the Budgetary Control team under Finance department for
checking with budget.
_ Comparative Statement (CS)

Approval of Comparative Budgetary Control team under Finance department reviews the CS as well as the budget for PPE. Once they are
Statement (CS) satisfied with the CS, they provide GO (Go Ahead) for further processing of the requisition (indent). After getting Approval of CS
GO from Budgetary Control team, the CS is sent to the CFO and CEO for approval.

Purchase Order (PO) issue Once indent is approved by CFO and CEO, a Purchase Order (PO) is issued by SC against the selected vendor. PO issue
and receipt of goods Goods are received along with Vendor Challan (VC) in the Central Store where initial inspection is performed, and
Addition respective user department is informed for further checking.
Goods received with VC
Installation certificate / User department is required to provide SC with an Installation Certificate / Commissioning Report. The vendor
commissioning report challan along with the Installation Certificate / Commissioning Report is sent to Fixed Assets (FA) team for
checking of assets class and other relevant information. Installation certificate issued

Preparing Goods Receipt Once FA team provides GO after necessary validation of the installation certificate, store team prepares GRN
Note (GRN) which the Finance team approves. After GRN issue, the asset is manually included in the asset register by the FA GRN issued and goods included in
team. asset register

Accounting entry Once the asset is included in the asset register, a manual journal entry is required to report the capitalisation. A
journal voucher is prepared by designated person in the FA team, checked by another person from Finance team
adn approved by a third person ranking higher in authority. The following entry is passed through a journal voucher Journal posted for capitalisation
at this point-

Fixed asset Dr.

Vendor Cr.
Payment processing begins
Payment processing begins after this entry.

Selection of disposable User department determines which assets to discard and fills up discard form signed by Head of the respective Process flowchart- Disposal
asset and filling up dicard user department. The discard form is sent to the Disposal Committee (a cross-functional team) designated for
form inspection of assets to discard. Filling up dicard form

Approval of discard form The Disposal Committee verifies whether items to be discarded are unusable. Based on their recommendation and
subject to further checking of book value by Finance team, if it appears that the assets are not salable then the
discard form is approved by CFO / CEO.
Verification by Disposal Committee
Physical disposition of For salabale assets:
assets If assets are salable and have an estimated market value exceeding BDT 50,000 then they must be sold through a
public tender and sealed bidding process which is overseen by the Disposal Committee. Upon selection of the
highest bidder and approval of disposal form by the committee and CEO/CFO, all the ownership dcouments of the
assets are submitted to the buyer and sales proceeds are received through bank payments. Salable asset: Non-salable
For non-salable assets: Tendering and asset:
Once discard approval is received, respective user team disposes of the asset with the help of Store team. sales to highest
bidder No tendering
Disposal
Recording The user department removes the assets from its asset list once the disposition process is complete based on the
approved discard form and completion of physical process of discarding. After that, they notify the FA team of the
matter and forwards the dicard form. FA team includes the asset in the disposal list and prepares a manual journal
at month-end through a maker-checker and approver process. The accounting entries passed are as follows-

For non-salable assets: Approval by DC

Accumulated Depreciation Dr. and CEO/CFO
Asset Cr.

For salable assets:

Bank Dr. Physical disposition of assets
Accumulated Depreciation Dr.
Loss/gain on disposal of asset Dr. or Cr.
Asset Cr.
Recording

Depreciation policy Depreciation is commenced when the asset is in the location and condition necessary for it to be capable of Process flowchart- Depreciation
operating in the manner intended. Property plant and equipment of the Company are depreciated using straight
line
Manual
method (except Instruments) whereby there is a constant charge each year, on the assumption that equal amount System (FA
calculation for
of economic benefit are consumed in each year of the assets life. Each significant part ofan item of Property, plant module)
subsequent
& equipment is depreciated separately, using their useful lives. calculation up
changes +
to Oct '20
instruments
Depreciation is charged on additions to fixed asset from the month of capitalization and no depreciation is provided
from the month of retirement. No depreciation is charged on land and capital work in progress (CWIP) as the land
has unlimited useful life and capital-work-in progress has not yet been placed in service. If any residual value is
considered for an asset on its expiry of expected life, the value is deducted from the cost io arive at the depreciable
amount. Depreciation method, useful lives and residual values are reviewed at each yearend and adjusted if Monthly depreciation expense
appropriate. calculated by FA team

Depreciation rates and The estimated useful lives of the items of property, plant and equipment are as follows:
useful lives Journal Voucher prepared by FA
Asset Class Rate Years team at monthend
1. Building 2 50
2. Leasehold improvement 16 6.25
3. Computer and lT Equipment 20 5
Depreciation 4. Fumiture and fixture 10 10
5. Library books 25 4
6. Medical and surgical equipment 10 10 Checked by Finance Team
7. Office equipment 15 6.67
8. Housekeeping equipment 20 5
9. Air conditioning plant and air conditioners 10 10
10. Electrical installations, generatos, boiler, elevator etc, 10 10
11. Office decoration 20 5
12. Vehicles 20 5
13. Instruments 20 Reducing balance Approved by Head of FA team
Depreciation process The Fixed asset module of EHD can capture depreciation upto October 2019. Therefore, part of depreciation
comes from the system calcutaion based on fixed assets as of October 2019 and depreciation on addition and
disposal subsequent to that is calculated manually by the fixed assets team. Deprecition on instruments is also
calculated manually as instrumnets do not show up in the fixed asset module and are depreciated follwoing Posted to ERP
declining balance method.

At monthend, the fixed asset team provides depreciation calculation to finance team for checking. The manual
journal entry at monthend undergoes a maker checker and approver control. However, the depreciation cycle is
from 16th day of a month to the 15th day of next month- that is- if an asset is added on 16 April, its depreciation will
appear in depreciation for the month of May.

List of abbreviations:

EHD Evercare Hospital Dhaka

PPE Property, plant and equipment
SC Supply Chain
FA Fixed Assets
CS Comparative Statements
GO Go Ahead
PO Purchase Order
VC Vendor Challan