Technical Proposal for Internet Service
1.0 INTRODUCTION1.1 Required level of prudence and expertise have been exercised in preparing this proposal by using bank loan
ACNABIN's professional staff of around 170 includes audit, consultancy and valuation specialists (very recently provided similar services to Janata Bank, Ascent Group, Banglalink), financial management specialists, tax advisors, financial analysts, systems experts, organization and personnel management specialists, training specialists and educators. aaa
Since the Firm's inception, ACNABIN has been providing auditing, management, review, valuation and tax consultancy services to clients (now numbering over 250) actively involved in industry, trade, manufacturing, finance, micro finance, education, health, social services, and agriculture in the public and private sectors throughout Bangladesh. Many of those engagements involved projects funded by international agencies such as the World Bank, ADB, UNDP, UNICEF, UNFPA, WFP, CIDA, DFID, FAO, ILO, IFAD, NORAD, SIDA, USAID, UNCDF, etc.
ACNABIN was associated with the then Global Leader Aurther Anderson since the Enron Debacle in 2002. The firm is now the independent member of BakerTilly International (www.bakertillyinternational.com), an accounting conglomerate being operating in 110 countries around the globe.
2.1. Membership
(a) Metropolitan Chamber of Commerce and Industries
(b) The Dhaka Chamber of Commerce & Industries
(c) American Chamber of Commerce in Bangladesh.
The firm has one office in the capital city of Bangladesh occupying 9,0500 sft. of office space with four different Divisions to manage its day-to-day activities. The divisions are Auditing, Income Tax, Consultancy Service, and Insolvency & Receivership. The firm has a branch office in Chittagong also.
3.1 ACNABIN Have been appointed by the Management of Auto GROUP to re-value its assets and liabilities to reflect their fair market value in the books of accounts as of 30 June 2008. ACNABIN was appointed as the consultants to carry out the revaluation work under certain terms and conditions stipulated in the letter of appointment dated June 19 2008. which included inter alia the following: consultant has to specify in detail the valuation method; the report has to contain a clear identification / justification with necessary information relevant to assets and liabilities valuation, and the valuation of assets and liabilities should represent fair market price.
In this revaluation assignment, ACNABIN was required to revalue the assets, and liabilities of six of the companies of the group including. The assets are of four types: Land, Building and Transportation and equipments.
3.2 ACNABIN provided similar services to Janata Bank Limited and conducted the assignment in accordance with the following specific and implied requirements of Janata Bank Limited which adds credit on part of ACNABIN:
Valuation of financial assets of the bank as of 30 June 2007;
Review of liabilities of the bank as of 30 June 2007;
Consideration of the revalued land and buildings of the bank as done by a third party consulting company.
Consideration of the book value of other fixed assets as per the audited balance of 30 June 2007.
Calculation of net worth of the bank as of 30 June 2007;and
Preparation of restructured financial statements of the bank on the basis of revalued financial assets and reviewed liabilities as of 30 June 2007.
Assessment of the fixed assets valuation report conducted by third party was also under the scope of our work. In performing the assignment we considered the requirements of relevant accounting standards, accounting convention, Banking Companies Act 1991, Companies Act 1994, Circulars and Guidelines of Bangladesh Bank, and other applicable laws and regulations, International Valuation Standards and practices etc.
3.3 Of more significance, we have extensive experience in conducting valuation of Telecom Assets and physical facilities related to telecom sector. We have conducted the Physical Verification of Telecom Assets of Orascom Telecom (Bangladesh) Ltd. in accordance with the procedures as agreed upon with the management of the Orascom Telecom (Bangladesh) Ltd. Accordingly, our assignment includes the verification of Telecom assets about their existence as per fixed assets register, their workability/condition, counting shortage/excess, if any, filling up compliance sheet for each BTS, BSC and MSC that includes all the information about the sites with signature of the assigned vendors (Detec & Alandick). The assignment also required us to conduct verification of the physical facilities of Orascom Telecom (Bangladesh) Limited.
3.4 We have rendered similar service to Bangladesh Rural Telecom Authority (BRTA) and Gulf Bangladesh Group. Our services included valuation of assets and liabilities, physical verification of all assets, valuation of land, building, telecom assets etc.
Many a number of similar assignments were carried out by ACNABIN over 10 years, some of which are also listed below:
METHODOLOGY OF THE ASIGNEMTNT:
The following work approach will be taken for share valuation and full physical inventory works of Autogarment Internet Service :
Entrance Meeting : Before planning, an entrance meeting with the Autogarment Internet Service management will be held. This will help us to obtain information and direction needed for planning the assignment under reference. Such a meeting will also help us to discuss about the Terms of Reference (TOR) and to define an outline of the physical inspection and be subject to other relevant verification for determining the value of shares.
Work Planning : We will develop a work plan for verification of the identified assets or liabilities and setting out the nature, timing and extent of planned work. In developing the overall work plan we propose to consider the following matters:
Nature of assets and liabilities;
Classes of assets and liabilities;
Methods of depreciation;
Selection of Facilities/offices for physical inspection/site visits;
Manpower deployment planning, etc.
Field Work : The required manpower will be mobilized after due orientation and briefing of valuation Team by the Engagement Partner, valuation Expert Audit Director and Engineers. The fieldwork will cover verification of assets and liabilities, physical verification of tangible assets, site visits, and valuation of shares of Autogarment Internet Service etc.
The consultants will perform necessary work as to conform with the ToR which will be agreed at the time of award of the contract.
Report Writing : The consultants will prepare the report incorporating the valuation of shares and results of verification of assets. After discussion on the draft reports with the management, the reports will be finalized and submitted.
METHODOLOGY OF THE ASSIGNMENT:
General: To gather information about Autogarment Internet Service through interviews, inspections and review of reports, audited financial statements, and internal reports on the operation of the entity;
To carry out in-depth study of the audited financial statements of five preceding years;
To obtain detailed schedule, sub schedule and other information of each and every item of assets and liabilities. Category and aging wise assets and liabilities will be collected from the management.
To obtain and check available records in respect of ownership and possession of the land of the entities;
To gather information from the secondary markets to confirm about estimated market price of the fixed assets with the help of expert consultants group;
To collect last three years’ management reports of the auditors, internal audit reports and Board minutes to gather relevant information, particularly about contingent liabilities, litigations, etc.
(ii) Specific:
Land : Identifying and listing of total area of Land owned by AUTOGARMENT INTERNET SERVICE by recording Location, Mouja No. Khatian No. and Dag No. We prefer a higher professional way for locating the land area by GPS (Global Positioning System).
Examining original land deed, C.S. Parcha and S.A. Parcha.
Obtaining the value of land from concerned Sub-Registrar Offices, where possible, to arrive at their present value, otherwise taking the currently transacted prices of land in the locality as the basis of determination of market value .
Collecting the latest rate from PWD or established Civil Engineering Firm and from prevailing market price for logistic for valuation;
Building : Preparation of a list of Building through type/category, construction year, physically inspecting the building constructions, measuring their physical areas and assessing their present physical condition for determining present market value;
Obtaining the rate of construction works from public Works Department (PWD) or established Civil Engineering Firm to arrive at the present value of the construction, otherwise, arriving at the value by using best estimates;
Examine complete recording in Fixed Assets Register;
Mechanical & Telecommunication Equipment:
Prepare a list of telecommunication and office equipments, verify with reference to relevant documents and books of accounts;
Identifying office equipment with country of origin, model no. year of installation, capacity, estimated physical life and economic life;
Physically examine the existing condition;
Examining complete recording in Fixed Assets Register;
Motor Vehicle: Identifying Motor Vehicle, with year of acquisition, estimated physical life and economic life;
Examine complete recording in Fixed Assets Register;
Physically examine the existing condition;
Valuation on present market value;
Fixture and Fittings: Prepare detailed list of Fixture and Fittings;
Prepare a list of Fixture and Fittings, with country of origin, model no., year of installation, capacity, estimated physical life and economic life, verify with reference to relevant documents and books of accounts;
Identifying different Fixture and Fittings and their physical condition;
Examining complete recording in Fixed Assets Register.
Investments: Investment and Fixed Deposit will be valued as per the rules of the bank/ financial institution;
The investment (other than associate companies, if any) will be valued at cost. If the market value falls below the cost price, then provision will be made. Nothing will be done when market value is above the cost i.e. no gain will be recognized (as per BAS 25);
The investment in associate companies will be valued on the basis of equity method (as per BAS 28);
The treasury bonds will be valued as per the requirement of Bangladesh Bank at present value.
Stock & Stores: List of Stock and stores in the Technical Stores will be obtained from the management and will be checked with the BIN cards. Physical verification and condition will be examined;
Separate list is to be prepared for shelf expired store items;
Stock & Stores will be valued as per the Book value;
Book value method will be applied for consumable store & spares/store in transit on the basis of paper and documents.
Debtors, Advance, Prepayment and other current Assets:
Debtors, advance, prepaid and other current assets will be valued as per book value;
Debtors, Advance, Prepaid and other current Assets will be estimated on the basis of balance confirmation received from the parties;
Current Liabilities: Other than short-term loan, the list of loans and liabilities incorporated in the head of current liabilities will be valued as per book value;
Current Liabilities will be estimated on the basis of balance confirmation received from the parties.
Short Terms Loans: The short-term loan will be cross checked with the bank certificates from the concerned banking institutions;
Confirmation from respective banks will be obtained.
Long Terms Loans: Long-term loan will be determined as per Book value subject to confirmation related parties;
Foreign loans, if any, will be valued as per IAS-21.
Deferred Liabilities: Deferred liabilities e.g. Provident Fund, Gratuity etc. will be valued as per book value;
Fund will be confirmed from the respective bank.
Utility Services: Separate Statement will be prepared for the utility service, municipal tax and other taxes payable currently;
The documentary evidence & certificates will be collected from the concerned agencies.
Others: Besides the above-mentioned items, all other items of assets & liabilities will valued as per applicable valuation method.
(iii) Post Balance Sheet Events:
In order to arrive at the current valuation of assets and liabilities and net worth, the assets and liabilities at the current date (i.e. valuation date) need to be considered. As such, the financial events subsequent to the balance sheet date will be reviewed and their impact on the valuation will be factored in.
WORK PLAN OVERVIEW:
The following work procedures will be adopted in order to perform the assignment within the time frame of 8 (twelve) weeks. Detailed work plan will be prepared after awarding the assignment.Holding entrance conference with the management of Autogarment Internet Service ;
Collection and gathering information regarding detailed list of assets and liabilities of the entity;
Preparation of work plan for verification/examination of all assets and valuation of shares;
Mobilizing resource personnel and orientation to the team;
Conducting fieldwork: Verification of assets and liabilities, Physical verification of tangible assets, site visits if necessary and valuation of shares. Interim discussion with the management if required.
Determination of financial position and net worth of Autogarment Internet Service respectively after valuation of shares;
Preparation and submission of Draft report;
Required Modification of Draft report / preparation and submission of Final Report
Preparation and arranging the Presentation
ORGANIZATION AND STAFFING
The proposed assignment will be led by Mohammad VVV, FCA who possesses significant experience in conducting many similar assignments. There will be one qualified chartered accountant who will be supervising the assignment. Three (03) two member teams each comprising Semi-senior staff will be formed to be mobilized. Outsourced engineers will perform their respective jobs maintaining close coordination with the team leader and they will be outsourced by Autogarment Internet Service .
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