A SHORT REPORT ON THE FOOTNOTES OFFERED BY

SAIHAM TEXTILE MILLS LTD

ENVOY TEXTILE LIMITED

H.R. TEXTILE MILLS LIMITED

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 Course Code: FIN 408
Course Title: Financial Analysis and Control
Section: 01

Assignment on
Short Report on the Information of Footnotes

Submitted to:
Quazi Sagota Samina
Assistant Professor
Department of Business Administration
East West University

Submitted by: Group 5

Name ID

Shamsun Nahar Kobita 2017-1-10-239

Sadia Islam 2017-1-13-009
Sheikh Mohammad Rasel 2017-2-10-012
Auntar Roy 2017-2-10-136
Iftyear Rahman 2018-1-10-294

Submission Date: 2nd November, 2020

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 INTRODUCTION

The textile sector is the most important sector in Bangladesh. It is the largest manufacturing
sector in the country. Saiham Textile Mills, Envoy Textile Ltd and H.R. Textile Mills Ltd are
the textile industries in our country.

In the financial statements of these three companies there are foot notes which provide
additional information or explanations for various portion. Footnotes to the financial
statements refer to additional information .These additional information helps to explain how
a company reached its financial statements figure. It is like a supplement which is providing
clarity to those who require it without having the information placed in the financial
statement, such as investors, creditors, analysts or general people.

The footnote present required disclosures, accounting methods, any modifications from
previous period etc. Footnotes are important investors, creditors and other users of the
financial statements. So that they can know more about the company and they may reveal
issues with a company’s financial health.

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 SAIHAM TEXTILE MILLS LTD
[ CITATION sai \l 1033 ]

1.0 Status and Activities

1.1 Legal form of the Enterprise

Saiham Textile Mills Limited was incorporated in Bangladesh on March 27, 1981 as a Public
Limited Company under the Companies Act, 1913 (Subsequently repealed by the Companies
Act, 1994) and listed with Dhaka Stock Exchange in the month of August, 1988.

1.2 Issue of Rights Share

Saiham Textile Mills Limited had issued 5,00,00,000 Rights Share of Tk. 10/= each at Tk.
25/= each including Premium of Tk. 15/= per share to general public in the ratio of 2:1 Rights
Share (two Rights Share for each existing one share) against present 2,50,00,000 Ordinary
Shares after obtaining consent from Bangladesh Securities & Exchange Commission (BSEC).

The purpose of issuance of Rights Share was to expand the company’s business by
establishing a new and modernized Melange Spinning Unit having 30,960 spindles.

1.3 Nature of Business Activities

The company produces various counts of quality yarn of both Spinning & Melange unit.

2.0 Significant Accounting Policies and basis of preparation of the

Financial Statements

2.1 Statement of Compliance

The Financial Statements have been prepared and disclosures of information made
inaccordance with the requirements of the Company Act 1994, the Bangladesh Securities and
Exchange Rules 1987, and Bangladesh Financial Reporting Standards (BFRSs.)

2.2 Basis of Preparation

The Financial Statements of the company have been prepared Going Concern basis based on
the accrual basis of accounting following under the historical cost convention except
Property, Plant and Equipment (PPE).

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2.3 Basis of Reporting
Financial Statements are prepared and presented for external users. Presentation has been
made in compliance with the standards adopted by the ICAB for reporting, BAS - 1
Presentation of Financial Statements.

2.4 Use of Estimates and Judgments

Actual result may differ from these estimates. Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in
which the estimate is revised and in any year affected.

2.5 Going Concern

The company has adequate resources to continue in operation for the foreseeable future. For
this reasons the directors continue to adopt going concern basis in preparing the Financial
Statements.

2.6 Components of the Financial Statements

According to the BAS – 1 “Presentation of Financial Statements” the complete set of the
Financial Statements includes the following components:

 The Statement of Financial Position as on June 30, 2018

 The Statement of Profit or Loss & Other Comprehensive Income for the year ended
June 30, 2018
 The Statement of Cash Flows for the year ended June 30, 2018;
 Statement of Changes in Equity for the year ended June 30, 2018
 Accounting Policies and explanatory notes the Financial Statements for the year
ended June 30, 2018.

2.7 Regulatory and Legal Compliance

The Company complied with the requirements of the following regulatory and legal
authorities:

 The Companies Act ,1994

 The Income Tax Ordinance,1984
 Bangladesh Securities and Exchange Rules, 1987
 The VAT Act,1991
 Other applicable Rules and Regulation.

2.8 Property, Plant and Equipment (PPE)

Property, Plant and Equipment are stated at their cost / revalued value less accumulated
depreciation in accordance with BAS 16 “Property, Plant and Equipment”. Expenditure on
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repairs and maintenance of Property, Plant and Equipment is treated as expenses when
incurred, subsequent expenditure on Property, Plant and Equipment is only recognized when
the expenditure improves the condition of the asset beyond its originally assessed standard of
performance.

Depreciation of Property, Plant and Equipment

Depreciation has been charged on time basis on the date of acquisition and no depreciation is
provided on retirement/disposal of Assets.

No depreciation has been charged on Land and Land development considering the unlimited
useful life. Depreciation has been charged to factory overhead & administrative expenses
consistently.

2.9 Inventories
Inventories are assets held for sale in the ordinary course of business, in the process of
production for such sale or in the form of materials or supplies to be consumed in the
production process. Inventories are stated at the lower of cost or Net Realizable Value. Costs
including an appropriate portion of fixed and variable overhead expenses are assigned to
inventories by the method most appropriate to the particular class of inventory. Net realizable
value represents the estimated selling price for the inventories less all estimated cost of
completion and cost necessary to make it salable.

2.10 Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable excluding
discounts, rebates, and sale taxes.

Revenue from the sale of goods is recognized when the following conditions are satisfied:

 The enterprise has transferred to the buyer the significant risk and rewards of
ownership of the goods.
 The enterprise retains neither continuing managerial involvement to the degree
usually associated with ownership of the goods
 The amounts of revenue can be measured reliably.
 It is probable that the economic benefits associated with the transaction will flow to
the entity.
 The cost incurred or to be incurred in respect of the transaction can be measured
reliably.

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2.11 Functional and Presentation Currency and level of precision
These Financial Statements are presented in Bangladeshi Taka which is both functional
currency and presentation currency of the Company.

2.12 Earnings per Share (EPS)

Earnings per Share (EPS) are calculated in accordance with the BAS – 33 “Earnings per
Share” which has been shown on the face Statement of Comprehensive Income.

i) Basic Earnings per Share

Basic Earnings per Share are calculated by dividing the net profit or loss for the year
attributable to the Ordinary Shareholders by the weighted average number of shares during
the year.

ii) Diluted Earnings per Share

No diluted Earnings per Share are required to be calculated for the year as there was no scope
for dilution during the year under review.

2.13 Cash & Cash Equivalents

According to BAS – 7 “Statement Cash Flows” cash comprises of Cash in hand and Cash at
Bank Considering the provisions of BAS – 7 Cash in hand and Bank balances.

2.14 Statement of Cash Flows

In the Cash Flows the operating activities have been presented in direct method as prescribed
by the Bangladesh Securities and Exchange Rule 1987.

2.15 Liabilities for Expenses and Other Finance

While the provision for certain standing charges and known liabilities is made at the
Financial Position date based on estimate, the difference arising there from on receipts of
bills or actual payments is adjusted in the subsequent year when such liabilities are settled.

2.16 Foreign Currency Translation

Transactions in foreign currencies are translated in to BDT at the rate of exchange ruling on
date of transaction.

2.17 Borrowing cost

In compliance with the requirement of BAS – 23 “Borrowing costs” borrowing costs relating
to operational period on long term loans, short term loans and overdraft facilities was charged
to revenue account as an expense as incurred.

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2.18 Revaluation Reserve
The company revalued the assets of land and land development, Factory Building and Other
Construction, Building Office Space, Plant and Machineries and Motor vehicle which has
absolutely owned by the company and the increase amount transferred to revaluation reserve.

2.19 Taxation
Current Tax: Provision for current tax has been made in the Financial Statements on taxable
profit at the rate of 15% as per SRO No. 193/Law/income tax/2015 dated 30.06.15 of Income
Tax Ordinance 1984.

Deferred Tax: Deferred tax is recognized on difference between the carrying amount of
assets and a liability in the financial statements and the corresponding tax based used in the
computation of taxable profit and is accounted for using balance sheet liability method.

2.20 Trade Debtors

Trade debtors for export of yarn are stated at their real value and consider goods. No
provision has been made for doubtful debts and no amount was written off as bad.

2.21 Provision for Worker's Profit Participation Fund

The company has provided @5% of net profit before tax after charging the contribution to
WPPF as per provision of the Labor Act (Amended) 2013 and is payable to workers as
delivered in the said Act.

2.22 Lease
Lease rental against acquisition of assets has been expensed on their due date.

2.23 Responsibility for Preparation and Presentation of Financial Statements

The Management is responsible for the preparation and presentation of Financial Statements
under section 183 of the Companies Act 1994 and by the International Accounting Standard
Committee (IASC).

2.24 Related Party Disclosures

The company has carried out transactions in the ordinary course of business on an arm’s
length basis at commercial rates with related parties. Related parties are stated their nominal
value which is reflected note no-27.

2.25 Reporting period

These Financial Statements cover the period from July 01, 2017 to June 30, 2018.

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2.26 Comparative Figure
Comparative information has been disclosed in respect of the year 2017 for all numerical
information in the Financial Statements and also the narrative and descriptive where it is
relevant for understanding of the current year’s Financial Statements.

2.27 Event after the reporting period

Post Statement of Financial Position events that provide additional information about the
company’s position at the Statement of Financial Position date are reflected in the Financial
Statements and events after the Statement of Financial Position date that are not adjusting
event are disclosed in the notes when material.

2.28 General
 Figures appearing in these Financial Statements have been rounded off to the nearest
Bangladesh Taka.
 These notes form an integral part of the annexed Financial Statements and
accordingly are to be read in conjunction therewith.
 The company has not incurred any expenditure in foreign currency against royalties
and technical fees.

3.0 Property, Plant & Equipment (net of depreciation): Spinning

Saiham Textile Mills Limited; Property, Plant & Equipment (net of depreciation) for
Spinning is 802,888,090 for the year 2018 and in 2017 it was 715,840,388.

So, we can see that in 2018 Property, Plant, Equipment is better than 2017. This is good for
the Saiham Textile Mills Limited.

4.0 Property, Plant & Equipment (net of depreciation): Melange

Saiham Textile Mills Limited; Property, Plant & Equipment (net of depreciation) for
Melange is 1,129,335,528 for the year 2018 and in 2017 it was 1,163,611,729.

So, we can see that in 2017 Property, Plant, Equipment is better than 2018. This is not good
for the Saiham Textile Mills Limited.

5.0 Inventories
In the year 2017 inventories was 1,292,180,696 and in 2018 inventory is 1,962,550,900. So,
we can see that inventories increased over the year.

Inventories are valued at cost price or net realizable value whichever is lower. Net realizable
value is based on estimated selling price less any other cost anticipated to be incurred to make

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the sale. Physical verification of inventories was carried out by the management staff of the
company.

6.0 Trade Debtors & Others Receivables

In the year 2017; Trade Debtors & Others Receivables was 561,697,052 and in 2018 the
amount is 813,737,911. So, we can see that it increased o0ver the year.

7.0 Sundry Receivable

In 2017 Sundry Receivable was 31,127,784 and in 2018 it is 10,699,872. Here we can see
that, it decreased over the year.

8.0 Advance, Deposits & Prepayments

In 2017 Advance, Deposits & Prepayments was 62,751,776 and in 2018 it is 75,277,023. So,
it increased over the year. It is good for the company but Advance, Deposits & Prepayments
should keep as Industry Average.

8.1 Advance
It includes Opening Balance, Advance Income Tax, and Tax at source on Bank Interest etc.
In 2017 it was 17,956,074 and in 2018 it is 3,502,720. So, we can say that it decreased
over the year.

8.2 Deposits
In 2017 deposits was 43,685,692 and in 2018 it is 70,664,293. So, it increased over the year.

8.3 Prepayments
In 2017 Prepayments was 1,110,010 and in 2018 it is still 1,110,010. So, Prepayment di not
changed over the year.

9.0 Fixed Deposit Receipts

In 2017 Fixed Deposit Receipts was 495,586,609 and in 2018 it is 145,586,609.

Out of total Taka 145,586,609, Taka 5,586,609 Fixed deposit receipts are lien with Bank Asia
& Dhaka Bank against bank guarantee and Tk.140, 000,000 fixed deposit receipts are lien
money with HSBC Ltd. against Term Loan.

10.0 Cash & Cash Equivalents

In 2017 Cash & Cash Equivalents was 25,440,706 and in 2018 it is 24,676,226.

10.1 Cash in Hand

Cash in Hand decreased 1,380,499 to 981,398 over the year.

10.2 Cash at Bank

Cash at Bank decreased 24,060,207 to 23,694,828 over the year.
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11.0 Share Capital
Authorized Capital is 1,500,000,000 in both 2017 and 2018 at the rate of 10 Taka.

9, 05, 62,500 Ordinary Shares issued in both 2018 and 2017.

 Sponsored Share Holder increased over the year.

 Local Financial Institution Share Holder decreased over the year.
 Public Share Holder increased over the year.
 In 2017 total number of shareholder was 7175 and in 2018 it is 6205. So, it decreased
over the year. Company should look into this matter very much carefully.

12.00 Revaluation Reserve

Revaluation reserve is treated as a capital reserve. It is created to finance future projects for
business expansion. Revaluation reserves are carried in the balance sheet until the asset is
discarded.

In 2018 the revaluation reserve was 380,449,077 and in 2017 it was 400,089,371.So we can
say that the revaluation reserve was better in 2017 then 2018.

13.00 Term Loan- Prime Bank

A term loan is a loan which is issued by a bank for a specific amount that has a specified
repayment schedule and either a fixed or floating interest rate. A term loan is appropriate for
business with sound financial statements. Companies often use a term loan to purchase fixed
assets, such as equipment or a new building for production process.

Here, Saiham Textile Mills took the term loan from Prime Bank. In 2018 the amount was
81,249,995 and in 2017 it was 0. That means in 2017 they did not take any term loan from
bank.

14.00 Deferred Tax Liabilities

The deferred tax liabilities is a tax which is assessed or is due for the current period but not
yet been paid. The deferral is the difference in time gap between when the tax is accrued and
when the tax is paid. Deferred income tax shows up as a liability on the balance sheet. It can
be classified either a current or long term liability.

In 2018 it was 171,886,833 and in 2017 it was 165,982,619. As it is liability, in 2017 it was
in better position than 2018.

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15.00 Short Term Loan
A short term loan is a type of loan which have to be paid in less than one year. It is obtained
to support a temporary business capital need. Short term loan provides quick cash for
temporary financial trouble and it has shorter repayment period.

Here, Saiham Textile Mills Ltd. took short term loan from different banks, such as SCB,
HSBC, EBL, and Lanka Bangla Finance. In 2018 their total amount of short term loan was
712,429,227 and in 2017 it was 699,642,973. We know that short term loan is liability so in
2017 the short term loan amount was better than 2018. Because they took less loan in 2017.

16.00 Current Portion of Long Term Loan

The current portion of long term loan is the amount of unpaid principal from a long term debt
that has accrued in a company’s operating cycle which is less than 12 months. It is considered
as current liability because it has to be paid within the period.

In 2018 the current portion of long term loan was 12,500,004 and in 2017 it was
125,606,126.So it was better in 2018 as the amount was less than 2017.

17.00 Liabilities for Goods

Liabilities for goods mean a liability which is occurred for goods. It is defined as the future
sacrifices of economic benefits. In 2018 the amount of liabilities for goods was
1,508,703,175 and in 2017 the amount was 874,055,585. So company was better in 2017 in
the perspective of liabilities of goods as the amount of liabilities was less in that year.

18.00 Liabilities for Expense and Others

We know that liabilities are the obligations and debts a company owes. And liabilities for
expense mean liabilities which are occurred for expenses. Electricity charges, gas charges,
dividend, auditor fees, office rent these are the expenses by which liabilities can occur.

Workers profit participation fund (WPPF) is another component of liabilities for expense.
According to the labor law the company has to pay 5% of net profit to the workers profit
participation fund. It is an expense. The payment must be made no longer than nine months
of the close of every year.

In 2017 the liabilities of expense was 26,324,656 which was less than 2018. So in 2017 it was
better as it is a liability.

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19.00 Provision of Tax
Tax provisions are for payment of income tax. Tax provisions are an amount set aside
specifically to pay a company’s income taxes. That means it is a amount of income taxes a
company estimates it will pay in a given period. Provision for taxes can be treated as a
current liability and it decreases the working capital in the schedule of changes in working
capital. In the balance sheet it is shown under the other liabilities and provision.

In 2018 it was 0 that means there were no provision of tax. But in 2017, it was 17,131,854.

20.00 Cost of Goods Sold

One of the major components of income statement is cost of goods sold (COGS) .COGS
refers to the direct costs of producing the goods sold by a company. The amount includes the
cost of the materials and labor directly used to produce the goods sold by company. Such as
cost of production, consumption of parts, consumption of packing materials, raw materials,
factory overhead. But it excludes indirect expenses. COGS could be different if different
inventories valuation methods are used.

21.00 Administrative and Marketing Expenses

Administrative and marketing expenses are shown in income statement. Administrative
expenses are costs incurred by an organization that are not directly related to a specific
business function. Administration expenses are for performing basic operations and increase
efficiency. Salary, allowances, provident fund, rent, printing, stationary, travelling, board
meeting fees, utility expense, electric expense, depreciation these are the typical items of
administration expenses.

In 2018 the amount was79, 761,932 and in 2017 the amount was 68,394,621. So the expenses
were less in 2017.

22.00 Financial Expenses

Financial expenses are costs incurred from borrowing or earning income from financial
investments and these are the external expenses of company’s core business. Financial
expenses include bank interest, bank charges and commission. It is shown in income
statement.

In 2018 the financial expenses were 58,385,508 and in 2017 the expenses were 71,875,052.
So we can say that in 2017 the financial expenses were more than in 2018.

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23.00 Non-Operating Income
Non-operating income is profit and loss from sources not related to the typical activities of
the business or organization. Non-operating income can include profit or loss from
investment, property, or asset sales. Non-operating income is generally not recurring and it is
considered separately when evaluating performance over a period time. It can include
dividend income, profits or losses from investments as well as gains or losses incurred by
foreign exchange. It is shown in the income statement.

Here in 2018 it was 20,628,337 and in 2017 it was 39,076,490. So it position was better in
2017.

24.00 Other Income

Other income does not come from company’s main business. Other income includes income
from interest, rent, and profit from the sale of fixed assets. Companies present other income
in a separate section, before income from operations.

In 2018 and 2017 company’s other income as office rent was 2,239,380.

25.00 Net Asset Value (NAV) Per Share

The net asset value per share is a real estate matric that indicates the value of a mutual fund.
It is the expression of the value of the company or fund per share.

In 2018 the net asset value per share was 26.98 and in 2017 the net asset value per share was
26.94.

26.00 Earnings per Share (EPS)

EPS is the company’s net profit divided by the number of common shares it has outstanding.
It indicates how much money a company makes for each share of its stock.

In 2018 earnings per share was 1.21 and in 2017 it was 1.02. EPS was better in 2018 because
in 2018 EPS was higher than 2017. The higher EPS indicates greater value because investors
will pay more for a company’s share if they think the company has higher profits relative to
its share price.

27.00 Related Party Transaction

In business related party transaction takes place between two parties who hold pre-existing
connection prior to the transaction. Companies often seek business deals with their familiar
parties.

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In Saiham Textile Mills Ltd. there are many related party transaction. Such as Faisal Sppining
Mills, Saiham Cotton Mills, Saiham Knit Composite. These were their common director. And
the nature of transaction was trade and other receivable. Apart from those, Mrs. Momena
Begum was there share holder and they took short term loan from her.

28.00 Disclosure as per requirement of Schedule XI, Part II of the

Companies Act 1994
This section was shown the director’s attendance status of board meeting. In 2018, seven
board meeting were held. And all the members were present on all the seven meetings.

29.00 Disclosure as per requirement of Schedule XI, Part II of the

Companies act 1994
A. This part was for salary range according to employee’s position. Here we can see that
there are different units such as spinning unit and melange unit and the salary range
according to the officers and staffs. The other was directors’ remuneration. A managing
director got remuneration that was shown in that section.

B. Details of production capacity was described in this part. Installed capacity, actual
production, % of achievement, % of shortfall these type of information we can get from this
part.

C. People can get the value of raw cotton, polyester fiber, viscose from this. Apart from
these, the information of import amount, opening amount, local purchase loan amount, total
purchase and consumption amount of raw materials, packing materials and spare parts are
also given here.

30.00 Contingent Liability

A contingent liability is a liability that may occur depending on the outcome of an uncertain
future event. Contingent liabilities are important financial matters for a business.

In 2018 total contingent liability was 11,347, 248 and in 2017 it was 9,582,311.

31.00 Events after reporting period

On October 24, 2018 the board meeting was held by the board of directors. And 15% cash
dividend has been recommended to the shareholders. These information were given in the
footnote. Apart from these some general information were also given.

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 ENVOY TEXTILE LIMITED
[ CITATION env \l 1033 ]

1.0 Legal status and nature of the Company

a) Background of the Company
Envoy Textiles Limited was incorporated as a private company limited by shares registered
under the Companies act. 1994, vide registration no. C-28622 (2468)/1995 dated 18 June
1995 and converted into public limited company on 25 October 2009. with the consent of the
Honorable Supreme Court of Bangladesh, High Court Division vide Company Matters no. 70
of 2009 and No. 71 of 2009 with effect from 30 September 2009 and Edge Denims Limited
has no more in existence.

b) Activities of the Company

Envoy Textiles Limited is a manufacturer of 100% export oriented denims fabric with
advanced quality denim fabric finishing. It is the first rope denims plant in Bangladesh with
highly sophisticated machineries of USA, Europe and Japan. Commercial operation of the
company has been started from 01 March 2008

2.0 Compliance with the requirements of notification of the Securities

and Exchange Commission

 Notes to the financial statements marked from 3.01 to 4.06 setting out the policies are
unambiguous with respect to the reporting framework on which the accounting
policies are based.
 The accounting policies on all material areas have been stated clearly in the notes
marked from 3.01 to 4.06
 The financial statements are in compliance with the International Financial Reporting
Standards (IFRSs)

The Financial Statements are prepared in accordance with International Accounting

Standards (IASs) and International Financial Reporting Standards (IFRSs). The elements of
financial statements have been measured on “historical cost”. Envoy textiles limited comply
with the following legal provisions. Companies Act 1994, Securities and Exchange Rules
1987,The income Tax Ordinance 1984, The value Added Tax Act 1991 .the Components of
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the Financial statements for annual reports are (1) Statement of financial Position (2) Income
statement and other comprehensive income (3)Statement of change in Equity (4) Statement of
cash flows (5) Notes to the Financial Statement.

3.0 Property, plant & equipment

Assets which are purchased for long term use and which are not to be converted quickly into
cash. Such as, Factory Equipment, Furniture, Machineries, office equipment. In this company
fixed assets are stated at their historical cost less accumulated depreciation. Land, Building
machineries, office spaces measured and valued at fair market value. No depreciation has
been charged on the land and land Development. In 2018 the balance of property plant and
equipment was 10,385,517,895 and in 2017 it was 9,176,322,282. So we can say that the
fixed assets was better in 2018 then 2017

4.0 Revaluation of fixed assets

The fixed assets have been revalued at fair market value as per decision of the board of
directors. All fixed assets were revalued by an independent valuation company named Asian
Surveyors Limited. In 2018 the revaluation asset was 1,713,134,427 and in 2017 it was
1,724,109,852. So we can say that the revaluation fixed was better in 2017 then 2018

Increase in the carrying amount arising on revaluation of property, plant &equipment are
credited to “Revaluation surplus” under shareholders equity. Amount of depreciation on
revaluation surplus has been credited to retained earnings by debiting revaluation surplus as
per IAS-16: Property, Plant and Equipment. Evaluation surplus” under shareholders equity.
In 2018 the revaluation surplus was 1,713,134,427 and in 2017 it was 1,724,109,852.So we
can say that as it is surplus, it was better in 2017 then 2018

5.0 Disposal of Fixed Assets

When no future economic benefits are expected from an asset is recognized on 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. There was no
disposal of asset during the period in the company.

6.0 Inventories
Inventories such as raw materials, raw materials in transit, packing materials, work in
progress, finished goods, and store items are valued at the lower of the cost and net realizable

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value. In 2018 the total inventories and stores was 2,645,507,118 and in 2017 it was
2,155,076,681. So we can say that the amount of inventories was better in 2018 then 2017.

7.0 Cash and Cash Equivalents

Cash and Cash equivalents contain cash in hand, bank current accounts, other bank deposits
free of burden and having maturity date of three months or less from respective dates of
deposit. In 2018, amount of cash in hand was 4,048,255 in 2017 it was 5,493,483 so there
was better liquidity ratio in 2017. On the other hand, in 2018 amount cash at bank was
94,965,992 in 2017, it was 76,711,201. It is says that the conditions on liquidity was better in
2018.

8.0 Statement of Cash Flows

Cash flow statement is a financial statement that provides aggregate data regarding all cash
inflows and outflows of a company from operational, financial and investment activities. The
company the cash flows from the operating activities have been presented under direct
method as prescribed by the Securities and Exchange Rules, 1987.

9.0 Taxation
9.01 Tax Holiday
During the tax holiday period 40% of net profit of the company is transferred to the tax
holiday reserve in proportionately to invest in the areas as specified by the income Tax
Ordinance 1984. Income tax provision made after expiry of tax holiday period as per rate
prevailing during that period. In 2018 the tax holiday reserve opening balance was
327,922,190 and in 2017 it was same. So we can say that the tax holiday reserve was no
change in 2017 then 2018

9.02 Current Tax

Current tax is the expected tax payable on the taxable income for the period ended. .
Provision for taxation is calculated on the basis of applicable current tax rate and
incompliance with Finance Act. 2018. In 2018 it was 53,581,591 and in 2017 it was
45,356,147 as it is liability, in 2017 it was in better position than 2018

9.03 Deferred Tax

The deferred tax liabilities is a tax which is assessed or is due for the current period but not
yet been paid. The deferral is the difference in time gap between when the tax is accrued and
when the tax is paid. Deferred income tax shows up as a liability on the balance sheet. It can
be classified either a current or long term liability. In 2018 it was 22,100,044 and in 2017 it
was 47,753,583 as it is liability, in 2018 it was in better position than 2017

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10.0 Revenue Recognition
Revenue from the sale of goods is recognized when all the following conditions are satisfied:

 The company has transferred to the buyer the significant risks and rewards of
ownership of the pods;
 The company retains neither continuing managerial involvement to the degree usually
associated with ownership nor effective control over the goods sold;
 The amount of revenue can be measured reliably;
 It is probable that the economic benefits associated with the transaction will flow to
the company; and
 The cost incurred or to be incurred in respect of the transaction can be measured
reliably

11.0 Borrowing Costs/Financial Expenses

Borrowing costs are recognized as expenses in the period in which they incurred and
capitalized the same that incurred before commencement of commercial operation.

12.0 Responsibility for preparation and presentation of Financial

Statements
The Board of Directors is responsible for the preparation and presentation of Financial
Statements under Section 183 of the Companies Act, 1994 and as per the provision of ”the
framework for the preparation and presentation of financial statements" issued by the
International Accounting Standards Committee (IASC).

13.0 Risk and uncertainties for use of estimates in preparation of financial

statements
The preparation of financial statements in conformity with the International Accounting
Standards requires management to make estimates and assumption that affect the report,
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and revenue and expenses during the period reported. Actual
results could differ from those estimates. Estimates are used for accounting of certain terms
such as long term contracts, provision for doubtful accounts, depreciation and amortization,
employees benefit plans, taxes reserves and contingencies.

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14.0 Reporting Currency and level of precision
The figures in the financial statements represent Bangladesh currency (Taka), which have
been rounded off to the nearest integer.

15.0 Going Concern

The company has adequate resources to continue in operation for the foreseeable future. For
this reason the directors continue to adopt going concern basis in preparing the financial
statements.

16.0 Period of Financial Statements

Period of financial statements is from 01 July 2017 to 30 June 2018.

17.0 General
Figures for the year ended 30 June 2017 have been rearranged wherever considered necessary
to ensure comparability with the current year.

18.0 Earnings per Share (EPS)

EPS is the company’s net profit divided by the number of common shares it has outstanding.
It indicates how much money a company makes for each share of its stock. Basic earnings
represents earnings for the year attributable to ordinary shareholders. As there was no
preference dividend, minority interest or extra ordinary items, the net profit after tax for the
period has been considered as fully attributable to the ordinary shareholders.

In 2018 earnings per share was 13 per capita and in 2017 it was 10 per capita. EPS was
better in 2018 because in 2018 EPS was higher than 2017. The higher EPS indicates greater
value because investors will pay more for a company’s share if they think the company has
higher profits relative to its share price.

19.0 Trade and other Receivable

Receivable is the balance of money due to a firm for goods or services delivered or used but
not yet paid for by customers. Receivables are listed on the balance sheet as a current asset.
Receivable is any amount of money owed by customers for purchases made on credit. In
2018, the company had 3,147,123,680 Taka that greater than 2,643,632,850 taka in 2017. It
can be said that the company have good condition in liquidity ratio. No provision has been
made for doubtful debt and no amount was written off as bad.

20.0 Advance, deposit and prepayments

Its explain the amounts that have been advanced for companies necessary essentials the
deposit shows how much money company have in total and payments means all the company

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outflow. Like in 2018 Envoy textiles advances were 145,641,186 taka basically they were
combination of Salary Advance,

Advance Tax, Factory Insurance Advance, Operational Advance, Tax deducted at source.

21.0 Secured loan

A secured loan is a loan which is issued by a bank for a specific amount that has a specified
repayment schedule and either a fixed or floating interest rate. A secured loan is appropriate
for business with sound financial statements. Companies often use a secured loan to purchase
fixed assets, such as equipment or a new building for production process.

Here, Envoy Textile Mills took the secured loan from BRAC, HSBC, and Pubali bank. In
2018 the amount was 3,893,868,051 and in 2017 it was 3,755,175,717. That means in 2017
they did not take less secure loan from bank.

22.0 Current Portion of secured Loan

The current portion of long term loan is the amount of unpaid principal from a long term debt
that has accrued in a company’s operating cycle which is less than 12 months. It is considered
as current liability because it has to be paid within the period.

In 2018 the current portion of long term loan was 787,576,054 and in 2017 it was
689,750,204.So it was bad in 2018 as the amount was greater than 2017

23.0 Short term loan

A short term loan is a type of loan which have to be paid in less than one year. It is obtained
to support a temporary business capital need. Short term loan provides quick cash for
temporary financial trouble and it has shorter repayment period. Here, Envoy Textile Mills
Ltd. took short term loan from different banks, such as BRAC, DBBL, MTBL, Jamuna bank,
and HSBC, PubAli Bank, Uttara Bank. In 2018 their total amount of short term loan was
5,712,381,266 and in 2017 it was 4,850,981,612. We know that short term loan is liability so
in 2017 the short term loan amount was better than 2018. Because they took less loan in
2017.

24.0 Account payable

Liabilities for goods mean a liability which is occurred for goods. It is defined as the future
sacrifices of economic benefits. In 2018 the amount of liabilities for goods was 650,082,956

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and in 2017 the amount was 555,651,234. So company was better in 2017 in the perspective
of Account payable as the amount of liabilities was less in that year.

25.0 Provision for Expense and Others

We know that liabilities are the obligations and debts a company owes. And liabilities for
expense mean liabilities which are occurred for expenses. Electricity charges, gas charges,
dividend, auditor fees, office rent these are the expenses by which liabilities can occur.

Workers profit participation fund (WPPF) is another component of liabilities for expense.
According to the labor law the company has to pay 5% of net profit to the workers profit
participation fund. It is an expense. The payment must be made no longer than nine months
of the close of every year.

In 2017 the liabilities of expense was 45,611,613 which was greater than 2017. So in 2017 it
was better as it is a liability

26.0 Revenue
Revenue is profit and loss from sources not only related to the typical activities of the
business or organization. Non-operating income can also include profit or loss from
investment, property, or asset sales. Non-operating income is generally not recurring and it is
considered separately when evaluating performance over a period time. It can include
dividend income, profits or losses from investments as well as gains or losses incurred by
foreign exchange. It is shown in the income statement. Here in 2018 it was 7,558,432,416 and
in 2017 it was 6,078,738,108. So it position was better in 2018

27.0 Cost of goods sold

It means how much money it takes to produce a product or sale in order to sale. It’s refer the
products that will in the market for sell. Cost of goods sold includes different expenses like
material which are consumed, salary, wages and allowance, factory Conveyance,
depreciation, Factory Insurance etc. All of those goods expenses are combined and accused
as the cost of goods sold. The annual report of Envoy textiles shows that that the total cost of
goods sold was 6,358,041,367 taka in 2018 and 4,994,609,393 taka in 2017. A part of the
cost of goods sold statement is Materials which direct material consumed. The annual report
shows that the total consumption of material was 4,776,092,554 units in 2018 and in 2017 it
was 3,920,944,94.Another part of cost of goods sold is Salaries, Wages and Allowances
where all the Salaries, Wages and Allowances statements are recorded. they paid about
248,332,695 taka in 2017 they hired some more employees in 2018 as usual the payment of

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salary, wages and allowances also got increased in 2018. The total amount was 309,721,950
taka.

28.00 General & Administrative Expenses

General and Administrative Expenses represent the necessary costs to maintain a company's
daily operations and administer its business, but these costs are not directly attributable to the
production of goods and services. G&A expenses include rent, utilities, insurance, legal fees,
and certain salaries etc.

In 2018, G&A expenses was BDT 225,556,742 which was 3.5% higher than 2017. As a
result, the net profit before tax may have be decrease for higher G&A expenses. But Salary,
Audit, CSR, Entertainment expenses were respectively 5.65%, 20.82%, 6.68%, 12.81% less
than 2017.In 2018 there haven’t any Iftary expenses, Govt. and Non Govt. fees and VAT
deposit expenses.

29.00 Selling and Distribution Expenses

Selling expenses are those expenses which are incurred to promote sales and service to
customer. On the other hand, Distribution Expenses are those which are incurred for
warehousing and storage, packing for goods sent and making the goods available for delivery
to the customer.

In 2018, Selling and Distribution expenses was BDT 57,365,600 and in 2017 it was BDT
53,994,758 which indicate that in 2018 it was 6.24% higher than 2017.

30.00 Financial Expenses

Financial expenses means all interest or similar amount paid to third parties, commissions,
discounts and fees related to loans, letter of credit etc.

Financial expenses in 2018 were BDT 543,476,724 which was 22.17% higher than 2017.In
2018 there have no interest on Commercial Paper Loan.

31.00 Other Income

Only Interest income includes on other income. For net other income loss on investment in
marketable securities has to deduct with other income.

In 2018, other income was 1.55% less than 2017 and it was BDT 1,363,391(2018).

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32.00 Factory Overhead
Factory overhead also called manufacturing overhead or work overhead is the total cost
involved in operating all production facilities of a manufacturing business that cannot be
traced directly to a product.

Factory Overhead in 2018 was BDT 1,390,206,656 and in 2017 it was BDT 1,235,289,045.In
2018 it was more than 12.54% compare to 2017.Electricity expenses, Gas bill, Fuel for
machinery expenses were extensively increase in 2018.

33.00 Related Party Disclosure under IAS-24

This section has shown the reporting period from 1 July 2017 to 30 June 2018 transaction
incurred of sales of finished goods against export LC and regarding key management
personnel compensation.

34.00 Disclosure of Directors Remuneration and Meeting attendance fees

under Para 4 of Schedule XI part II of the Company Act. 1994

35.00 Disclosures under Para 3 of schedule XI Para II of the companies Act

1994

36.00 Disclosure under Para 6 of schedule XI part II of the companies

Act.1994
This Part has shown the amount of balance paid to Auditors. In 2018, the amount was BDT
374,250 which was 24.83% more than 2017.

37.00 Particulars of Foreign Shareholder

In 2018, Foreign Shareholders market has dramatically decreased by 90% which indicate the
growth rate in foreign market was below than 2017 that has create a negative result of wealth
maximization.

38.00 Aging of Account Receivable under Part I of Schedule XI of the

company act, 1994.
This section has indicated credit cycle period within 4 month up to 8 month or above. In 2018
the amount was BDT 2,454,763,956 which was 22.03% more than previous year.

39.00 Basic Earnings per share:

EPS is calculated as a company’s profit divided by the outstanding shares of its common
stock. The resulting number serves as an indicator of a company’s profitability. The higher a
company’s EPS, the more profitable it is consider being.

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In 2018 the EPS was BDT 2.01 per share which was 1.95% less than previous year means
investor will pay less 1.9taka out of 100 from previous year. A higher EPS indicates greater
value because investors will pay more for a company’s shares if they think the company has
higher profits relative to its share price.

40.00 Net Operating cash flow per share:

Operating cash flow activities refers to the amount of cash a company generates from the
revenues it brings in, excluding costs associated with long term capital investment.

In 2018 net operating cash flow was BDT .24 per share which indicate 10% increase from
previous year.

41.00 Net Asset Value per Share:

Net asset value per share is an expression for net asset value that represent the value per share
of a mutual fund, an exchange trade fund or a close end fund.It is calculated by dividing the
total net asset value of the fund by the number of shares outstanding .

In 2018 net asset value per share was BDT 38.01 per share which 1.01% less than previous
year.

42.00 Computation of Number of Shares after Balance Sheet Date

Outstanding shares represent the number of a company’s shares that are traded on the
secondary market and, therefore, available to investors. Outstanding shares include all
restricted shares held by the company’s officers and insiders (senior employees), as well as
the equity portion owned by institutional investors such as mutual funds, pension funds, and
hedge funds. A company’s outstanding shares can fluctuate for a number of reasons. The
number will increase if the company issues additional shares. Companies typically issue
shares when they raise capital through an equity financing, or upon exercising employee
stock options (ESO) or other financial instruments. Outstanding shares will decrease if the
company buys back its shares under a share repurchase program.

Total number of share in 2018 was 164,445,850 and in 2017 it was 156,615,096 indicates in
2018 it was more than 7,830,754 number of share from 2017 year.

43.00 Commission
Commission or bonus has been paid to sales agent during the period under audit.

44.00 Brokerage or Discount

No brokerage was paid against sales during the year under audit.

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45.00 Board Meeting or Board Members
There were 10 members in the board of directors of the company and 21 board meeting were
held in the period under review.

46.00 Acknowledgement of Claim:

There no claim against the company not acknowledged as debt at the date of financial
position.

47.00 Declaration of Dividend:

The board has declared dividend 12% on paid up capital for the year ended 30 June 2018 as
per decision of the board of directors in their character meeting held on 11 October 2018 out
of which cash dividend is 10% and 2% stock dividend.

H.R. TEXTILE MILLS LIMITED

[ CITATION pri \l 1033 ]
1. General
H.R. Textile Mills Limited is public limited company entrepreneurship by Pride Group. The
share of H.R. Textile Mills Limited listed in both Dhaka and Chittagong Stock Exchange.
The other shareholders are general public and financial institutions. The Components of the
Financial Statements for Annual Report are:

(i) Statements of Financial Position (ii) Statements of Profit or Loss and other
Comprehensive Income (iii) Statements of Cash Flows (iv) Statements of Changes in
Shareholders’ Equity (v) Notes to the Financial Statements.

For the Annual Report of 2018 H.R. Textile Mills Limited covers an accounting year from
1st July 2017 to 30th June which is also count as the financial period. As it is a Bangladeshi
Public limited company its financial statement represents Taka as currency. All the necessary
information is given in order to describe The Financial Statement clearly. Also previous
year’s figures are re-classified for to ensure comparability with the year of 2018. The
financial statements have been prepared with all necessary compliance of local laws such as
The Companies Act, 1994, Bangladesh Securities and Exchange Rules, 1987 and other
relevant laws as applicable. The financial statements prepared with all the necessary
requirements of Bangladesh Accounting Standards (BASs) and Bangladesh Financial

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Reporting Standards (BFRSs) also which issued by the International Accounting Standards
Board (IASB) and verified with Institute of

Chartered Accountants of Bangladesh (ICAB). The financial statement prepared using

Statement of Measurement Basis where Historical Cost basis used, without the earlier
revaluation of certain non-current assets. Accrual basis Accounting have been used too,

Except the cash flows information, under the accrual basis of accounting. Also Statement of
Specific Accounting Policies Applied for Revenue Recognition where Sales are recognized at
the time of delivery from go down and fixed assets and depreciation:

Fixed Assets such as Property, Plant, and Equipment are stated in their historical cost less
accumulated depreciation. In their land and land development and on the Capital Work in
progress no depreciation has been charged. But on all other assets depreciation has been
charged. The way in which assets have depreciated haven shown. It shows after deduction of
accumulated depreciation from gross carrying amounts, the Net carrying amounts arrived. It
defined Stocks and Stores as lower of weighted average cost and net realizable value.
Material and proportionate conversion cost are included in Cost of Work in Process and
Material and conversion cost included in finished goods. Provision of Income taxes have
been at the rate of 15% on net profit and Provision for deferred tax at 15% too. The foreign
currency transaction have been done in at countries exchange rate. The exchange rate change
have been dealt with in different incomes. Trade Receivable written in their nominal value
and considered good. Trade payables are also stated in their nominal value. Cash in hand and
cash in bank were stated as Current asset. EPS was calculated according to Bangladesh
Accounting Standard

2. Property, Plant and Equipment

The asset H.R Textiles had during 2018. It shows the comparison make-up of Fixed Assets of
two years in two Units. In The make-up of Fixed Assets of Unit-1 cost or valuation in July
2017 was 146,465,367 taka and in June 2018 it was 146,465,367 which means it remained
same in both year. In July 2017 the depreciation was 129,694,407 taka but in June 2018 it
was 130,275,175 taka. Which means during the period the depreciation increased about
580,768 taka so the value was 16,190,192 taka. Now in The make-up of Fixed Assets of Unit-
2 cost or valuation in July 2017 was 1,375,828,493 taka and in June 2018 it was
1,534,950,155 taka which means it means additional 159,121,662 taka was added. In July
2017 the depreciation was 737,643,937 taka but in June 2018 it was 808,332,706 taka. Which

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means during the period the depreciation increased about 70,688,769 taka so the value was
726,617,449 taka. Depreciation for the year is charged 71,269,537 taka in 2018 and
67,782,726 taka in 2017.

3. Stocks and Stores: Stock means the share company issues for its
shareholders
Here the quantity and amount of different types of Stocks and Stores are given for the year
2017 and 2018 to compare. In 2018 the quantity of Stock of Spares was 281,124 and the
amounts of those stocks are 333,256,421 taka and in 2017 the quantity of Stock of Spares was
160,105 and the amounts of those stocks were 318,011,364 taka. In 2018 the quantity of
Stock of Yarn was 603,895 and the amounts of those stocks are 170,810,558 taka and in 2017
the quantity of Stock of Spares was 607,086 and the amounts of those stocks were
152,051,570 taka. In 2018 the quantity of Stock of Dyes and Chemicals was 281,124 and the
amounts of those stocks are 52,941,206 taka and in 2017 the quantity of Stock of Dyes and
Chemicals was 160,105 and the amounts of those stocks were 38,419,208 taka. The amount
of Stock in Work in Process was 43,464,295 taka and 57,568,320 taka in 2018 and 2017.
Finally the quantity of Stock of Finished Products was 110,348 in 2018 and 125,545 in 2017
the amount was 48,948,923 and 52,089,632 taka.

4. Trade and Others Debtors

It means the total business related debt a company have during the ongoing business. In 2018
the quantity was 3,941,468 and the amounts were 371,222,914 taka and in 2017 the quantity
was 3,292,652 and the amounts were 308,746,156 taka.

5. Export Incentives Receivables

It’s really normal that a company gets extra incentives from export cause companies only do
business in other countries if they have sufficient amount of profit from the export. Annual
report shows the incentives a company receives from export during the particular year.Like in
2018 Export Incentives Receivables amount was 75,406,776 taka and in 2017 it was
95,177,576. All the receivables are unsecured but considered goods.

6. Advances, deposits and payments

Its explain the amounts that have been advanced for companies necessary essentials the
deposit shows how much money company have in total and payments means all the company

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outflow. Like in 2018 HR textiles advances were 38,519,290 taka basically they were
combination of Salary Advance,

Advance Tax, Factory Insurance Advance, Operational Advance, Tax deducted at source.

7. Cash and Bank Balances

It means the total cash amount and Bank balance HR textile had at that time. In 2018 it was
48,281,991 taka and in 2017 it was 82,080,927 taka.

8. Share Capital
The amount of share authorized, issued and paid up by HR textile. It also contains a
distribution schedule. It shows the number of shareholders and their share-holdings in
percentage.

9. General Reserve
Every firm has general reserve which is basically the future urgency. The amount is not used
unless it’s really necessary. Which is 6,956,752 taka for H.R textiles.

10. Tax holiday reserve

Tax holiday temporary elimination of tax. Company can reserve the amount which is
22,378,988 for H.R textile.

11. Dividend Equalization Reserve

The amount of dividend which is reserved in order to get dividend back in low profit days.

12. Long term loan

Normally the long term loans are taken in order to achieve future maturity for the company.
The annual report says that H.R textiles have taken long term loan from Mutual Trust Bank
Ltd., Gulshan Branch and The Honkong and Shanghai Banking Corporation for import of
Plant and machinery.

13. Provision for Gratuity

We know that gratuity is the amount rewarded to employees for their long term services. That
means there should be a provision for gratuity every year in the financial statements of
employers. H.R textiles is also doing same. In 2018 they had opening balance of 29,166,174
taka for provision of gratuity and they paid 4,783,597 taka.

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14. Deferred Tax Liabilities
It means the amount company need to pay tax for its own assets. It combines tax of
Property, Plant and Equipment, Tax rate, Deferred Tax Liabilities, Gratuity provision,
Deferred Tax assets, Net deferred Tax Liabilities. H.R textiles paid 39,128,378 taka for
Deferred Tax Liabilities.

15. Bank overdraft

It means when a company don’t have any balance on bank but still withdraws money from
bank with an interest rate. It is similar to loan. In 2018 H.R Textiles took overdraft from three
banks and the final amount was 80,578,522 taka and in 2017 it was 89,658,237 taka.

16. Time Loan Bank

Time loan is a kind of loan that must repaid within certain amount of time. H.R textile took
123,733,987 taka time loan in 2018 and 14,483,306 taka in 2017

17. Creditors
Organization that will receive from H.R textiles. In 2018 H.R textiles
spend in total 643,380,910 taka and 7,054,770 US dollar in order to pay Import Purchases

Local Purchases Dividend, Payable Staff Income, Tax Refund Warrant

18. Accrued Expenses

Additional expense that need to be paid like Gas Expenses, Electricity bill, Telephone,
Salaries, Wages and Allowances, Security bill, Legal Fee, Auditors' Fee (Including Vat),
AGM Expense.

19. Provision for Taxation

Amount paid for tax. In 2018 and 2017 the total amount was 32,518,992 and 27,755,655 taka.

20 Bills Receivable Discounted

The amount which was discounted from bill that has been received. The added discounted
amount was 222,798,531 in 2018.

21. Workers' Participation/Welfare Funds

It’s basically is a fund for the workers which used for their welfare and active participation.
H.R textile contributed about 16,433,262 taka for the fund in 2018.

22. Current Maturity of Long-term Loans

It shows the amount maturity for the loans which were taken by the company. The closing
balance was 79,147,685 taka in 2018.

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23. Sales
It shows the quantity that have been sold in past year and the amount the amounts a company
have generates from those sales. It’s really necessary to compare and judge company’s
current position. H.R textiles have sold about 1,875,970 units of Knit Fabrics and 6,579,896
units Garments and generated in total 2,024,397,221 taka from those cash. Which quite than
the sales they had generated in 2017 cause they only sold 1,663,903 units knit fabrics and
4,782,887 units of Garments in 2017 and the amount they could generated was 1,640,655,729
taka which was very less than 2018.

24. Export Incentives

Amounts generated from exports. H.R textiles got 22,088,900 and 17,589,653 taka in 2018
and 2017 from exports.

25. Cost of Goods Sold

It means how much money it takes to produce a product or sale in order to sale. It’s refer the
products that will in the market for sell. Cost of goods sold includes different expenses like
material which are consumed, salary, wages and allowance, factory Conveyance,
depreciation, Factory Insurance etc. All of those goods expenses are combined and accused
as the cost of goods sold. The annual report of H.R textiles shows that that the total cost of
goods sold was 1,759,509,642 taka in 2018 and 1,417,026,861 taka in 2017. A part of the
cost of goods sold statement is Materials which consumed. The annual report shows that the
total consumption of material was 1,384,950,594 units in 2018 and in 2017 it was
1,112,025,337 unit. Another part of cost of goods sold is Salaries, Wages and Allowances
where all the Salaries, Wages and Allowances statements are recorded. H.R textile had in
total 1,847 employee in 2017 and for that they paid about 134,996,325 taka but in 2018 they
hired some more which was than 1,878 employees as usual the payment of salary, wages and
allowances also got increased in 2018. The total amount was 175,263,039 taka.

26. Administrative, Selling and General Expenses

Each companies have some additional ad\nd general expenses too which basically for the
things like Directors' Remuneration, Security Service charge, Electricity expenses, Postage,
Courier, Telephone and Fax, A.G.M expenses,

Registration and Fees, Staff welfare, Stationery expenses etc. The annual report shows us
how much money H.R textile used to pay the administrative, selling and general expenses.
Which was 220,427,548 and 184,707,006 in 2018 and 2017.

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27. Others Income
Apart from all the product revenues each companies have some other source of incomes like
Rental income. Which is basically they gets from renting their inventory space which are not
needed for them at those moment.

28. Income Tax

We know that income tax is generated by a countries government for companies. Where
companies need a pay portion of income to the government. As like other public limited
companies H.R textiles also pay its income tax regularly to Bangladesh Government in order
to do business. They paid 18,436,758 taka in 2018 and 14,082,234 taka in 2017 to
Bangladesh Government for the income tax.

29. Remuneration/Payments to Directors/Officers

In public limited companies the Board of Directors normally takes all the important decision
like selecting the manager, changing company rules. If those decisions works out well and it
helps the company to get large amount of profit the board of directors get a remuneration for
their performance. Also officers of the company get monthly allowance for themselves like
Basic salary, House rent allowance, other benefits and perquisites from the company. As we
have seen in annual report H.R textiles paid 2,600,000 taka remuneration to the directors and
55,325,412 taka to officers for their allowance in 2018.

30. The Company has obtained bank credit facilities from the following
banks
It shows from which banks H.T textiles have taken credit facilities.

31. The analysis of consumption of materials and spares as to origin is as

below
It shows from where the company have collected its producing materials. About 66.34%
materials of H.R textiles have been produced locally in 2018 and 33.66% were imported from
foreign countries. It also shows the amount that have been spend on producing and importing
those materials.

32. The capacity and actual production of the company are as follows
It explains the actual a amount of product a company produces each year and how much a
company can really afford to produce each year. Like in 2018 H.R textiles have the capacity
to produce Finished Garments 84 Lac Pcs but it produced 65.80 Lac pcs also in Knit fabrics
the actual capacity was 4,500 MTs but it produced 3,653 MTs.

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33. Even after Balance Sheet Date
The Board of Directors of the Company in its meeting held on 24th October 2018 (2017: 23rd
October 2017) recommended 10% cash dividend i.e., Tk. 1.00 per share of Tk. 10.00 each
(2017: 10% cash dividend) for all shareholders of the company subject to their approval in
the AGM.

34. Related Parties Disclosures

The Company has many transaction with other companies in normal course of business
according to Bangladesh Accounting Standard-24 which is known as related party.

35. General
The Company wasn’t liable any sum between 30 June 2018 and 30 June 2017. Except trade
credits and back to back L/C facilities there was no credit facilities available to the company.
The company had no shareholders in that period. There was no capital expenditure authorized
or contracted by the board.

CONCLUSION

Footnotes to the financial statements refer to additional information that helps explain how a
company arrived at its financial statement figures. They also help to explain any irregularities
or perceived inconsistencies in year to year account methodologies. Footnotes provide
information about accounting policies, the use of accounting principles, accounting changes,
non-monetary transactions, fair value, business combinations, revenue recognition,
commitments and contingencies of a legal and financial nature, risks and uncertainties

In our paper we explain the footnotes to the financial statement of three textile limited
company named Envoy textile ltd, HR textile ltd, and Shaiham textile ltd. We try to evaluate
all necessary information of three companies and try interpret the company’s financial
condition of 2018.

We try to evaluate the amount of capital, EPS, Receivable, secured loan, liabilities, asset
many other financial transaction that happened in 2018 and compare with the year of 2017
.we found that all over financial conditions were satisfactory of these company.

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References
(n.d.). Retrieved from saihamtextile: https://www.saihamtextile.com/report-financial.html

(n.d.). Retrieved from envoytextiles: https://envoytextiles.com/envoy/investors-reports.php

(n.d.). Retrieved from pride-grp: http://www.pride-grp.com/hrt/Annulareports.php?

fbclid=IwAR2HMyx6RzndXqS_PtuK5_U1u4OLPnTNUqhz3SGwJby3S1lrhJ3LUIFWbsE

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