Investor Presentaiton

ANNUAL REPORT 2018-2019 Audit Committee Report 2018-2019 Role of the Committee The Audit Committee's authorities, duties and responsibilities flow from the Board's oversight function and the terms of reference are detailed in Committee Charter approved by the Board. The major responsibilities of the Committee, among others, include: • • • • • Review of the quarterly, half-yearly and annual financial statements as well as 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 for appointment, re-appointment or removal of external auditors. Reviewing and monitoring of 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 year under report In accordance with Audit Committee Charter, governed by the BSEC notifications on Corporate Governance, the committee carried out its duties to work on the areas that were raised for consideration and discussed to evaluate issues related to key events of financial reporting cycles. During the current financial period under report activities of the committee include, among others: • • . • Reviewed the quarterly and half yearly financial statements of the Company and recommended to the Board for adoption and circulation as per the requirement of Bangladesh Securities and Exchange Commission (BSEC). Assessed the report of the external auditors on critical accounting policies, significant judgments and practices used by the company in preparation of financial statements. A. Qasem & Co., Chartered Accountants, have been recommended for re-appointment as the External Auditors of the Company for the next financial year. Committee reviewed the effectiveness of internal financial control and the internal audit procedures. • Reviewed the recurrent related party transactions during the year under report. . Reviewed the external auditors' findings arising from audit, particularly comments and responses of the management. Reviewed the matters of compliance as per requirements of the Bangladesh Securities and Exchange Commission (BSEC) and ensured corrections, as appropriate, to remain compliant. The committee is of the opinion that adequate 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 Matt Mue Mohammad Musa, Ph. D. Chairman The Audit Committee, appointed by and responsible to the Board of Directors of Khulna Power Company Ltd. (KPCL), is constituted as per the internal control framework of the company Policy and conditions imposed by the Bangladesh Securities and Exchange Commission (BSEC). The present committee comprises of 3 (Three) members of whom one are Independent Directors. The company secretary functions as the secretary of the committee as well. Meetings of the committee are attended by Managing Director. Besides, Directors, Head of Internal Audit, engagement partner of External Audit, as necessary, are also invited for their comments. All members of the committee are financially literate and able to interpret financial statements and assess the adequacy of the internal control process. The present committee members, nominated by the Board, are: Mohammad Musa, Ph. D. Independent Director - Chairman Abul Kalam Azad Non-Executive Director Member Azeeza Aziz Khan Non-Executive Director Member A total of 4 (four) meetings were held since the last Annual General Meeting of KPCL including the meeting dated 23rd October, 2019. Statutory Auditors A. Qasem & Co., Chartered Accountants was appointed as the auditors of the Company in the 20th Annual General Meeting (AGM). They have carried out the audit for the year ended 30 June 2019 and the auditors of the Company will retire in the 21st AGM. Being eligible under section 212 of the Companies Act, 1994 they have expressed their willingness for re appointment for the financial year 2019-2020. Our Board therefore, in its meeting held on 23 October 2019, resolved to recommend A. Qasem & Co., Chartered Accountants for appointment as Statutory Auditors of the Company for the year ending on 30 June 2020 subject to approval of the Shareholders in the forthcoming AGM. Corporate Governance KPCL believes that enriched corporate governance contributes to the long term success of a Company and creates trust and engagement between the company and its stakeholders. Accordingly, the Board of Directors and Management strive to maintain full compliance with ANNUAL REPORT 2018-2019 the laws, rules and regulations that govern our business and to uphold the highest standards. KPCL follows an Integrated Management System (IMS) to maintain all of its power plants, which includes - ISO 9001:2008 - Quality Management System (QMS), ISO 14001:2004 - Environmental Management System (EMS), BS OHSAS 18001:2007 Occupational Health & Safety (OH&S). A separate chapter on corporate governance has also been reported. Going Concern / Sustainability While approving the financial statements, the Directors have made appropriate enquires and analyzed significant operating and indicative financials which enabled them to understand the ability of the Company to continue its operations for a foreseeable future. The Directors are convinced and have a reasonable expectation that the company has adequate resources and legal instruments to continue its operations without interruptions. Therefore, the Company adopted the going concern basis in preparing these financial statements. 48 49

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