Course : Auditing
Course Code: ACC 491
Semester : 8th
Department BBA ,(Accounting Discipline)
Assignment On Padma Oil Company Limited
Annual Report June 2019 – June 2020
1
Prepared By Team: Data-Track
Name
ID
Topic
Tasnuva Farin
16034101019110
Engagement Letter, Internal Control
System, Audit Notebook, Auditor’s
Report & Opinion,
(Spoke-Person)
Field Visit
Making of word file , PPT file,
Mathematical part editing ,Typing &
Overall Editing & preparing
Mohiuddin Hasan
1603410109116
Slide: At a glance , Core Value,
Typing ,Field Visit
Md. Echa
1603410109068
Doc file: Balance sheet, statement of
equity, Typing
Sadmin Sultana Rime
1603410109024
Doc File: Income Statement, Cash
Flow Statement, Typing
Halimatus Sadia
1603410109013
Slide: Strategic priority, Mission ,
Vision , Typing
Zinan Masud
1603410109002
Slide: Risk Factors, Mitigation Policy,
Future Planning
Doc File: Helping in preparing,
Typing, Field Visit
Farhaz Bin Salam
1603410108963
Slide: Internal Audit Committee,
Functions of Internal Audit
Committee , Typing
Sajjadul Alam Shaown
1603410108952
Slide: External Audit Committee ,
Audit Plan
Field Visit, Typing
Gias Uddin Bablu
1603410108858
Slide: Performance at a glance,
word fie: Comparative analysis of
financial Performance, Typing
2
Contents
Page

Audit Engagement Letter………………………………………………………4-7

Comparative analysis of financial Performance………………………………..8

Financial Statement of Padma Oil Company Limited……………………...9-22
Components:





Balance Sheet of June 2019- June 2020
Income Statement June 2019- June 2020
Statements of Changes in Equity June 2019- June 2020
Cash flow Statement June 2019- June 2020
Notes to the Financial Statement

Report & opinion……………………………………………………………..23-26
3
AUDIT ENGAGEMENT LETTER
DATE : 15.02.2021
Audit Firm’s Information
Name of Audit Firm : Data Track Accounting Firm
Address:
Nasirabad Housing Society, Chattogram
Contact : 01798597229
Mail: datatrack.acc.official.229@gmail.com
Client’s Information
Padma Oil Company Limited.
Padma Bhaban , Strand Road
Sadarghat, Chattogram, Bangladesh
Dear Sir
We are pleased to confirm our acceptance & understanding of the services we are to provide you with
under this engagement.
Audit Scope. We will conduct our audit in accordance with Bangladesh Standards on
Auditing(BSA). We will submit the audit report of the company along with the financial
statement of 20….
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial Statements. An audit also includes assessing the accounting principles used and
significant estimates made by management. as well as evaluating the overall financial statement
presentation.
4
Audit Objectives. The objective of our audit is the expression of opinions as to whether your basic
financial statements are fairly presented, in all material respects, in conformity with (GAAP) Generally
Accepted accounting principles, the objective also includes reporting on:
o Financial Statement of June 2019-June 2020
Components:




Balance Sheet
Income Statement
Statements of Changes in Equity
Cash flow Statement
o Internal control System related to the financial statements and compliance with laws,
regulations, and the provisions of contracts and grant agreements, noncompliance with which
could have a material effect on the financial statements, in accordance with Government
Auditing Standards.
o Risk Assessment Techniques: How company Deal with all the risk factors.
If our opinions on the financial statements & Audi Report or the Single Audit compliance opinions are
other than unqualified, we will fully discuss the reasons with you in advance. If, for any reason, we are
unable to complete the audit or are unable to form or have not formed opinions, we may decline to
express opinions or to issue a report as a result of this engagement. Should such situation arise, we will
notify you.
We will provide judgment in determining the standards that apply to the work to be conducted. If this
engagement will not satisfy the requirements of all audit report users, laws, and regulations, we will
notify you as soon as this comes to our attention.
Management’s Responsibilities :We remind you that the responsibility for the preparation of financial
statements including adequate disclosure is that of management of the company. This includes the
maintenance of adequate accounting records and internal controls, and the safeguarding of the assets of
the company.
5
Audit Procedures: An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements; therefore,

Our audit will involve judgment about the number of transactions to be examined and the areas
to be tested.

We will plan and perform the audit to obtain reasonable rather than absolute assurance about
whether the financial statements are free of material misstatement, whether from
(1) errors,
(2) fraudulent financial reporting,
(3) misappropriation of assets, or
(4) violations of laws or governmental regulations that are attributable to the entity or to acts by
management or employees acting on behalf of the entity.
Because of the test nature and other inherent limitations of an audit, together with the inherent
limitations of any accounting and internal control system, there is an unavoidable risk that even
some material misstatements may remain undiscovered.
In addition to our report on the financial statement, we expect to provide you with a separate
letter concerning any material weaknesses in accounting and internal control systems which
come to our notice.
Our audit will include obtaining an understanding of the entity and its environment, including internal
control, sufficient to assess the risks of material misstatement of the financial statements and to design
the nature, timing, and extent of further audit procedures. An audit is not designed to provide assurance
on internal control or to identify significant deficiencies
Audit Administration, Fees, and Other Immediately upon completion of the engagement, the
auditor shall send a copy of the reporting package to (Auditee’s Name).
This is to inform you that all our payment policy are fixed & one time basis
The reporting package will consist of:
An opinion as to whether the financial statements are presented fairly in all material respects in
conformity with Generally Accepted Accounting Principles , when applicable, an opinion as to
whether the schedule of expenditures is presented fairly in all material respects in relation to the
financial statements taken as a whole.
We look forward at full cooperation with your staff and we trust that they will make available to
us whatever records, documentation and other information are requested in connection with our
audit.
This letter will be effective for future years unless it is terminated, amended or superseded.
6
We expect to begin our audit on approximately (Date) and to issue our reports no later than (date).
(Name of Engagement Partner) is the engagement partner and is responsible for supervising the
engagement and signing the report.
Approval. We appreciate the opportunity to be of service to you, and believe this letter accurately
summarizes the significant terms of our engagement. If these comments and arrangements meet with
your approval, please sign below and return the agreement to us.
We look forward to a pleasant association and the opportunity to provide the services included in this
engagement. If you have any questions, please let us know.
Very truly yours,
Data Track Accounting Firm
Nasirabad Housing Society
Date:15.02,2021
Acknowledged on behalf of
Padma Oil Company by
Signature:
7
Comparative analysis of financial Performance
Key financial data of immediately preceding five years is shown detailed in Annexure-3 of the
Directors' Report. For comparison, financial results and financial position of the Company for
the financial year 2019-20 with immediately preceding five years are given below:
Amount in Crore Taka
2019-2020
Financial
&
Operational
results
2018-2019
2016-2017
2015-2016
2014-2015
2017-2018
sales (MT
in Lakh)
19.63
22.61
23.66
20.08
17.83
17.89
Net
Earnings
on
petroleum
products
218.46
288.57
301.32
244.59
186.91
180.97
Operating
expenses
230.41
235.20
226.42
197.06
147.21
133.05
Total
operating
profit
72.59
134.04
148.97
106.71
113.67
113.01
Profit after
tax
272.96
285.55
335.80
203.13
187.36
192.80
EPS (taka)
27.79
29.07
34.18
20.68
19.07
19.63
Net Asset
Value per
share
(Taka)
157.64
142.85
126.78
103.60
92.92
83.85
(52.29)
(36.37)
116.42
80.22
(87.90)
1025
1042
1042
1145
1172
Net
operating
cash flow
per share
(Taka)
Number of
employees
80.91
1009
8
Financial Statements o Padma Oil Company Limited
June2019-June 2020
9
Padma Oil
Company Limited
1.Statement of
Financial
Position(Balance
Sheet)
As at 30 June 2020
ASSETS
Non-current assets
Taka in' 000
Note
Property, plant and equipment
Capital work-in-progress
Investment - Depreciation Fund (FDR)
6
Current assets Inventories
Accounts receivable
Due from affiliated companies
Advances, deposits and pre-payments
Cash and cash equivalents
7
8
9
10
TOTAL ASSETS
SHAREHOLDERS
EQUITY
Share capital
Depreciation Fund Reserve (Accumulated
Surplus)
Retained earnings
Total equity
LIABILITES
Non-current
liabilities:
Deferred tax
liabilities
Long Term Loan
10
30-Jun-20
30-Jun-19
1,784,043
536,933
1 379885
3,700,861
18,998,231
18,311,082
12,390,920
146.957
39.429,162
89 276 352
1,764.04
613,669
2 377707
18,765,63
18.049.875
95.318.951
358.265
31.337.390
163,830,111
92 977 213 166 207 81
14
15
982.327
982.327
36.628
14466415
15485 370
13 050 432
14032 759
212.928
183463
197.393
183463
Current liabilities
Accounts payable
Supplies and expenses payable
Our. to affiliated companies
Other liabilities
Dividend payable
Income tax payable
16
18
19
Total Liabilities
TOTAL EQUITY AND LIABILITIES
Net Asset Value (NAV) per share
The annexed notes from
11
396 391
380 856
10919.82
3,965.85
57.468.474
4.279.866
167,836
293613
77.095,452
77,491,843
92,977,21
Tk. 157.64
21.137.557
10.794,730
116,982,402
2,488.48
149.879
241 160
151,794,203
152,175,059
166207 818
Tk. 142.85
2.Padma Oil Company Limited
Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2020
Taka in' 000
01 July 2019 to
2020
Notes
30-Jun-20
Gross earnings
on Petroleum Products
Direct cost on Petroleum Products: Packing Charges
Harding Charges
23
Net Operational (Loss and Gain)
Net earnings on petroleum products
Operating expenses:
Administrative selling and distribution expense
24
Financial expenses
Operating Profit
Petroleum
Other operating income -petroleum trade
Operating (loss)\
Agro-chemical trading
Total Operating Profit
Non-operating Income
Profit before WPPF
Contribution to Workers' *profit Participation and We fare Fund
30-Jun-19
2158057
-18.819
-6,380
2,132,858
51787
2,184,645
2,852,038
-20.415
-7,346
2,824,277
61434
2885711
-2083.04
-221,040
-2,091.52
-260.431
-119,434
874.128
533,760
849006
-28.761
725.933
3.103.658
3,829.59
-191.48
-42.382
1,340,384
2.670461
4010845
-200,542
Net Profit before income tax
Provision or Income tax:
3,638,111
Current tax
-892.939
Deferred tax
14
-15.535
Net Profit after tax
2,729,637
Surplus from Investment trt1Sbr b Depreciations Fold Reserve Other
comprehensive income
-36,628
Total comprehensive income for the year
2693009
per Share (EPS • basic)
TK. 27.79
The annexed notes from 1 to 48 form an integral part of these financial statements.
12
01 July 2018
to 2019
3,810,303
-949.646
-5.138
2,855,519
2 855519
Tk. 29.07
3.Padma Oil company
Statement of Changes in Equity
For te year ended 30th June 2020
balance as on 01
July 2019
Share capital
Retained earning
982327
11471939
12454266
(1277026)
1277026
2855519
2855519
Cash dividend
declared for the year
2017-1018
Depreciation fund
reserve
Total equity
Transferred from
depreciation fund
Total
comprehensive
income for the year
Balance as at 30
June 2019
982327
13050432
14032759
Balance as at 01
June 2019
982327
13050432
14032759
(1277026)
(1277026)
Cash dividend
declared for the year
2018-2019
36628
Transferred from
Depreciation Fund
2693009
Total
comprehensive
income of the year
Balance as at 30
June 2020
982327
14466415
13
36628
2693009
36628
15485370
4.Padma Oil company
Statement of Cash Flows
For the year ended 30 June 2020
A. Cash flows from operating activities:
30 June 2020
30 June 2019
Receipts from customers and
others
236303881
176960945
Paid to suppliers against
petroleum and Agro product
and others
(227515501)
(1810078391)
Income tax paid
(840485)
(1089,155)
Net cash (used /generate from
operating activities
7947895
(5136601)
B. Cash flows from investing activities:
30 June 2020
30 June 2019
Capital expenditure
(188236)
338079
Investment In depreciation
fund FDRs
Interest received from
FDS/SND
Proceeds from disposal of
property, plant and equipment
Net cash generated from
investing Activities
(1379885)
4225910
2824897
2679596
146171
280
1402946
6567707
14
C. Cash flows from Financing activities
30 June 2020
30 June 2019
Dividend paid
(1259069)
(12060014)
Net cash used in financing
Activities
TOTAL (A+B+C)
(1259069)
(12060014)
8091772
171092
Opening cash and cash
equivalents
Closing cash and cash
Equivalents
Total
31337390
31166298
39429162
31337390
8091772
171092
Operating Cash
inflows/(outflows) per share
(note-40)
TK. 80.91
TK. (52.29)
15
NOTES TO THE FINANCIAL STATEMENTS
6.00 investment - Depreciation Fund (FDR)
Janata Bank Limited
BASIC Bank Limned
Bangladesh Krishi Bank limited
First security Islamic bank
National Bank limited
Union Bank Limited
NRB Global Bank
Total
352290
275911
60000
209741
104640
156052
1379885
13,79,885
-
• Investment- Depreciation fund (FDR) has been categorized the non-current assets as per
management decision because the fund won't be encashed in near future
7.00 Inventories
A. Stock-in-Trade (Petroleum products)
Major products
17565780
Minor product
713266
Freight
155962
Total
184,35,013
B. Agro-chemical products
Finished products
Raw material
IN TRANSIT
Total
C. Stores
IN stock
In transit
Total
D. packing materials
Total (A+ B+C+D)
310354
2023
260
312637
79444
2995
82439
17128392
7117505
138563
17978660
504467
2023
426
506916
80861
11397
92258
168143
18998231
16
187796
18765630
8.00 Accounts Receivable
30 June 2020
Account receivable – petroleum products
17,734,877
Account receivable - Argo chemical products
81,794
17816671
Other receivable
629308
18445979
30 June 2019
175513778
84577
17598355
586417
18184772
Less:
provision for bad debts against trade account receivable (134897)
TOTAL
18,311,082
(137897)
18,049,875
•Receivable against Agro-& chemical trade is secured by Bank Guarantee Sanchaya Patras
9.00 Due from Affiliated Entities /Companies
Bangladesh petroleum corporation
Eastern Refinery Limited
Eastern Lubricant Blenders Limited
Standard Asiatic Oil Company LTD
Liquified Petroleum Gas Limited
Meghna petroleum limited
Jamuna Oil Company Limited
10,869522
93,313,842
10,405
9,491
53,487
5,000
82,059
150,787
6,189
6, 144
683907
700,465
685,351
133,222
Total 12390920
95318951
10.00 Advances, Deposits and Pre-payments
Advance to employees
90,540
Advance against expenses
28,682
86,416
32,710
Total
119,222
Total
9,526
28,682
8,701
9,448
32,710
221,203
4,101
14,933
4,590
46,443
Deposits
Long term deposits
Short Term deposits
Prepayments
Insurance premium
Rent, rates and taxes
17
119,126
ALL Total
146,957
358,265
14.00 deferred tax liabilities
Deferred tax liability has been calculated below at the applicable tax rate on the difference
between the carrying value of fixed assets and their respective tax bases.
Opening balance
197,393
Add Provided (adjusted) for the year Closing balance 15.535
Closing Balance
212,928
Reconciliation of Deferred tax liabilities/assets
Carrying amount on the
date of statement of
financial position
Tax base
192,255
5.138
197,393
Taka in '000
Taxable?
Taka
Taka
Taka
(a) As at 30 June 2020
Property, plant and equipment
Deferred tax Liability(Tax Rate-25%)
1,784,041
932,331
851,710
212,928
(b) As at 30 June 2019
Property. plant and equipment
Deferred tax liability(Tax Rate - 25%)
1764,038
974,468
789,570
197,393
15.00 Long Term Loan
Loan Account - Storage Tank at GDL
Equity Account - Storage Tank at GDL
TOTAL
110,078
110,078
73,385 73,385
183,463
183,463
16.00 Accounts payable
Other supplies
Other charges
10,667,274
252,542
Total
10,919,816
18
20,840,780
296,777
21,137,55
18.00 Due to affiliated
entities / companies
Bangladesh Petroleum
Corporation (BPC)
57.315.086
116,808,622
Jamuna Oil company limited 118,199
113592
Eastern lubricant Blenders
limited
-
24,350
liquified petroleum Gas
Limited
35,189
35,838
1,426,369
1,587,140
Advance against sales from
Customers and Agent
1,426,369
1,587,140
Employees• pension fund
488,034
155526
Employees' fund-others
59,479
52,962
Security deposits
163,927
162,240
Tax deducted at source
37
Empbyees' personal account
50,021
40,575
liabilities for Capital
Expenditure
67,212
43602
Workers' Profit Particpation
and welfare Funds
191,480
200,542
Others
1,833,307
245,888
Total
4279,866
2488475
19.00 Other Liabilities
• Amounts due to managers and officers of the company
• Others included. amount received from Eastern Refinery Limited for lease of land Tk.
1580,193,014.
19
19.01 Employees' Pension
Fund
Opening balance
155,26
172,388
Provision made during the
year according to actuarial
valuation
739.465
514.017
Total
894,991
686,405
Payment to pension fund
made during the year
(406957)
(530879)
Closing balance
488,034
155.526
20
Taka ‘000
23.0
01 June
2019 to
01 June
2019 to
30 June
2020
30 June
2020
Gross earnings on Petroleum Product
Turnover (Note 23.02)
152,089,96
5
174,181,7
50
Less : Cost of goods sold (Note 23.02)
149,931,90
8
171,329,7
12
Gross Earnings
2,158,057
2,852,038
Taka ‘000
24.00
01 June 2019
to
01 June 2018
to
30 June 2020
30 June 2019
Salaries, wages and benefits (Note- 24.01)
1,466,259
1,472,780
Depreciation (Note- 4.00)
203,654
192,455
Fuel and power
55,780
56,971
Stores and spares
34,344
58,279
Repairs and maintenance (Note- 24.02)
42,435
42,901
Rent
41,828
32,930
Travelling and conveyance
17,569
20,494
Aviation Service fees paid to Shell (Note- 34.00)
19,002
18,500
Administrative, Selling and Distribution
Expenses
21
Printing and stationery
9,014
11,697
Insurance
7,905
7,376
Legal and professional fees
1,824
2,586
Rates and taxes
6,789
6,178
Advertisement
5,629
7,564
Communication expenses
3,868
4,188
Entertainment
4,118
3,653
Directors fees and expenses (Note- 31)
1,700
1,979
BPC service charges
700
700
Audit fees
180
180
Other charges (Note- 24.03)
160,941
150,609
2,083,539
2,092,020
(500)
(500)
2,083,039
2,091,520
Recoveries of Service charges from ELBL
22
Auditor’s Report & Opinion
DATE : 31.03.2021
Client’s Information
Padma Oil Company Limited.
Padma Bhaban , Strand Road
Sadarghat, Chattogram, Bangladesh
Annual Report of Padma Oil Company Limited prepared by Data-track Accounting
Firm for the financial year June 2019-June 2020. We are glad to be part of Padma Oil Company
Limited, We gather some practical knowledge regarding



What is Audit ?
How to Audit ?
What is the practical scenario behind an auditing session. Auditor faces & so on.
We Data-track team members audited the annual report of financial year June 2019-June2020 &
verified related documents & accounts so that we ca give our reasonable opinion & evidence to
support those reasonable statement.
Here are the reports that we have verified & reached to an opinion:
Management’s Responsibility: Top Management is responsible for the preparation & fair
presentation of these financial statements in accordance with International Financial Reporting
Standards(IFRS).
Whenever misstatement or ambiguous data found , the external auditor immediately call for
meetings.
They inquire all the issues till they are satisfied.
We data-track team also tried to make sure all the data are fair & trustable enough. We talked to
Management team when we found any misstatements & we figured out some lacking
(Discussed in Auditor’s opinion section) .
Auditor’s Responsibility:
23
Our responsibility is to express an opinion on these consolidated and separate financial
statements based on our audit. We conducted our audit in accordance with International
Standards on Auditing. Those standards require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance about whether the consolidated and
separate financial statements are free from material misstatement.
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
judgement , including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An
audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Auditor’s Opinion Regarding Financial Statement:
In our opinion, the financial statements present fairly, in all material respects, financial position
of Padma Oil Company Limited as at June 2020, financial performance, Profit & Loss Account,
and its cash flows , Statement of equity, for the year then ended in accordance with International
Financial Reporting Standards
Notes to financial statements are also prepared in accordance with International Financial
Reporting Standards .All these reports Give a true & Fair view of the financial position of the
company
The Results of their financial performance & cash flows for the year then ended and comply with
the Companies Act 1994, The Securities & Exchange Rules 1987& other applicable laws &
regulations.
24
Regarding Other Reporting Responsibilities :
We also report that
 we have obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purposes of our audit and made due
verification thereof;
 in our opinion, proper books of account as required by law have been kept by the
Company

the Company's balance sheet and profit and loss account dealt with by the report are in
agreement with the books of account; and

the expenditure incurred was for the purposes of the Company's business.
Disagreements :
There are some points we figured out that we aren’t agreeing with the company,
Those are listed below:
 They are not so clear about their internal control policy. We figured out some
good points which are mentioned in Slide, but we couldn’t find any evidence
regarding proper internal control policy.
i.e.
Employees aren’t so much aware about maintaining punctuality.
 They are not also clear about fraudulent act & punishment thereof, they are very
much aware about not to disclose any kind of fraudulent acts that generally occur
 Company has huge amounts of unclaimed dividend Outstanding from the year
2007 to 2019

Also the final decision of annual report regarding Padma Oil company always
taken by Bangladesh Petroleum Corporation.(BPC) , for this reason Padma Oil
Company’s audit session can’t be verified Independenty
25
Lastly.
Due to pandemic around the world , we couldn’t visit the field again & again & due to
company policy they (Padma Company Limited) are not allowed to open up all the
confidential matters (i.e. Fraudulent matters)
We reach to an opinion, that all the financial report & overall audit report prepared are
based on company’s statement & the evidence they provide us.
Thus, we are not giving absolute assurance but reasonable opinion that, all the data &
information are fair enough to support the trustworthiness of the annual report of padma
company limited we prepared.
Dated:Chattogram
March 31st , 2021
Data Track Accounting Firm
Address:
Nasirabad Housing Society, Chattogram
Contact : 01798597229
Mail: datatrack.acc.official.229@gmail.com
26