Course ID: ACT330

Section: 5
Fall 15
Group Report Prepared for

Ms. Afrin Rifat

Faculty Member, Department of Accounting & Finance

School of Business & Economics (SBE)

North South University

Submitted By,

Team SLAYERS

Students Names ID
Md Moinuddin Rabby 133 0907 630
Farhan Hossain 132 1051 630
Afsana Azmari 132 0372 030
S.M Abdul Wahab 111 1197 030
Rakibul Islam 123 0335 030

Date of Submission: 30th NOV 2015

30th November, 2015

To,

Ms. Afrin Rifat

Faculty Member, Department of Accounting & Finance

School of Business & Economics (SBE)

North South University

Bashundhara, Dhaka

Subject: Submitting the project of accounting analysis of financial statement

Ms,

We would like to present our project of accounting analysis of financial statement on AMCL
(PRAN) and BANGAS limited. While preparing the project we had learned about the
understanding of financial statements and to apply financial statement analysis technique for
comparison .We had also learned about teamwork, , observing, analyzing and most importantly
how to analyze an annual report of a company. It was highly exhilarating and appreciable task,
assigned for us. We were greatly inspired, while working on the project.

Thank you for guiding us and providing us an opportunity to demonstrate our potentials, talents
and skills with the accounting analysis.

Sincerely,

Name ID
Md Moinuddin Rabby 133 0907 630
Farhan Hossain 132 1051 630
Afsana Azmari 132 0372 030
S.M Abdul Wahab 111 1197 030
Rakibul Islam 123 0335 030
Acknowledgement

At first we want to thank almighty Allah for giving us the strength and ability to complete this
report. Then our sincere thanks go to our honorable faculty member Mrs. Afrin Rifat for her
support and encouragement in preparation of this group paper. Without her continuous support
and guidelines this report would not see the light. Last but not the least all of us want to thank
our family members for their tremendous help, support and encouragement.

This report has presented us the precious opportunity to know industry wide accounting practices
in Bangladesh and apply them in our project. This report, in fact, has enabled us to relate
fundamental things with realistic application. We hope we have done an adequate job
considering our level of experience and expertise. Finally we just pray and hope that our hard
labor and whole month night and day effort will be at least peripheral to live up your expectation
from us.
 An abstract
This report provides information about the depth of our understanding financial statement and
applying financial statement analysis technique for comparison. We have collected the Annual
Report of AMCL (PRAN) and BANGAS Limited for the last consecutive fiscal year (2013 &
2014). A brief overview of each of the companies along with an overview of the industry is
given. Current years primary focus of the company’s management letter has been discussed
elaborately. The primary target of this report was to discuss the income statement and balance
sheet of these two companies which we have learned through our course.
Table of Contents
An Overview................................................................................................................................................6
Primary focus of the company’s management letter..................................................................................8
Income Statement.......................................................................................................................................9
Balance Sheet............................................................................................................................................15
Notes to Financial Statements...................................................................................................................20
Dividend....................................................................................................................................................26
RATIO ANALYSIS........................................................................................................................................28
Appendix...................................................................................................................................................29
An Overview

AMCL (PRAN)
AMCL PRAN is the largest agro food processor and agro food exporter of Bangladesh.
Bangladesh has an economy based on agriculture. So, their view is to enrich our agriculture
sector. Keeping this view in mind, they look forward to creating more demand for agro product
made by native farmer and help to produce more agro products by giving proper training and
financial support to the poor farmers. They want their contract farming to be larger to the largest.
Again, for processing food products, employment is created. By this way, their view is to create
more employment. The company view is to make their products available to every hook and
corner of our country so that every consumer gets the right to consume. AMCLPRAN is in
testimony to people convictions. It stands for: “Programme for Rural Advancement Nationally”
or in Bangla "প্রগতিরূপায়নেঅগ্রণীনবোদ্যম"

AMCL PRAN is currently producing more than 200 food products under 10 different categories
i.e. Juices, Drinks, Mineral Water, Bakery, Carbonated beverages, Snacks, Culinary,
Confectionery, Biscuits & Dairy. The company has adopted ISO 9001 as a guiding principle of
its management system. The company is complaint to HACCP & certified with HALAL which
ensures that only the best quality products are reaches to the consumers table across the Globe.

The key players in the industry for AMCL PRAN are Square food and beverage, ACI Foods and
Beverage, AKIJ food and beverage.

PRAN is Bangladesh’s largest grower and processor of fruits and vegetables. Theycontract
growers cultivate the choosy fruits and vegetables which are processed in our modern and
hygienic factories to highest quality & international standards.

The products that AMCL PRAN offers are juice, mineral water, bakery, carbohydrate beverage,
snacks, confectionary, biscuit, dairy, frozen food, breakfast and refreshment.
BANGAS Limited
Bangas Ltd is established in 1980, a well-known manufacturer and exporter of a wide array of
delectable Biscuits, Noodles, chips etc. they are public Limited company in Bangladesh.
Presently they are exporting their product to Asia, USA & Europe.

In the year 2009, the company developed a scientifically planned, state-of-the-art manufacturing
unit, manned by skilled workers who ensure strict adherence to hygiene standards. Also they are
havingan industrial Group from Spinning Mills , Knit & Dyeing Mills - Finished Knit Garments
and also are in Electronic Media business etc.

The company owns and operates modern bread, biscuits manufacturing plant, noodles
manufacturing plant and a vegetable snacks manufacturing plant. The company sells the products
to the local and foreign markets. Its total capacity are 5 M.T. Biscuits Per Day, 5 M. T. Bread per
day.

The key players of the sector are Bangas , Olympic,Alamin , Danish, Haque , Multi, Novelty,
Bengal, Pran, Bonoful.

The main objective is quality ensure within reasonable price and also earning profit. The
company size is obviously better size when we think the other competitive company in
Bangladesh.

The products that Bangas offers are different types of bakery, snacks, confectionary, biscuit,
noodles etc.
Primary focus of the company’s management letter

In the management letter Agricultural marketing co. Limited and Bangas Limited’s
primary focus was on the reporting year’s political situation in Bangladesh and they way they
made profit through lots of difficulties. As we know, the political condition of Bangladesh was
not good in 2014 as it was national election year. Most of the companies had to face severe
external and internal challenges in that year. The reporting year had also been eventful & much
talked about because of the present global and local economic recession in terms of commodity
price hike. The rise on consumer prices emerged mainly through external trade channels, with
the growing exports of consumer necessities pulling their domestic prices to higher export prices;
rising import prices of fuel oil, food items, other consumer items and production inputs feeding
promptly and fully into domestic prices, except for partial shielding by the government in some
fuel oil and fertilizer prices.

Despite these adverse conditions, both the Company continued to maintain their
profitability and strong market leadership during the year 2013-2014. In the management letter
both the company talked about the reduction of the cost and how it helped to achieve the
objectives of the current year. During the year Bangas limited’s turnover increased by 7.47%
over the previous year reaching Tk. 137.49 million compared to Tk. 127.93 million of the last
year. The overall gross profit of the company increased by 13.15% compared to the previous
year. However, net profit after tax increased by 18.43% than the previous year. On the other
hand Agricultural marketing co. Limited tried to reduce the financial cost for enhancement
profitability. Their financial cost was reduced to 15% than the previous year. The management
tried to continue to sales flow of the company expending more in marketing. Consider the entire
adverse factors for consumer business, Company’s net revenue increased from Tk.
1,554,446,836 to Tk. 1,727,217,669 which is 11.12% higher than the previous year’s proceeds.

Despite the extreme competitiveness in the market due to inflow of many local and
imported brands, disruptions in social and business environment, interruptions in power supply
and downward trend in consumer spending, the profitable operating financial results of both the
company has added another remarkable chapter.
Income Statement
AMCL (PRAN)
The income statements for AMCL PRAN for both the fiscal years 2013 and 2014are
comprehensive income statements because they show all income and expenses recognized during
the financial periods. The statements include revenue, financial expenses and administrative
expenses, marketing expenses, selling and distribution expenses, other income, contribution to
workers’ participation and welfare funds and also the profit before and after taxation along with
the provision for income tax. The basic earnings per share is also shown at the end of the
comprehensive income statements.

Extra-ordinary Items: For both the fiscal years of 2013 and 2014, there were no extra-ordinary
items so no extra-ordinary gains or losses have been identified by the management within the
course of business under review. {Page-26 and Page-29}

Discontinued Items: None of the operations during the financial periods of 2013 and 2014 were
discontinued.

Cumulative effects of changes in accounting principle: A lot of changes were made for the
accounting principles during the financial period of 2013 and 2014.They are:

Going concern:The Board of Directors of AMCL, after analyzing the previous business
operation and having full cause and effect in the financial statement, confirm that they have
reasonable expectation on the going concern identity of the company. Management has prepared
financial statements on a going concern basis, having made due enquiries that the Company have
adequate resources to continue operations in the foreseeable future. {Page-26}

Nature of operations and principal activities: The principal activities of the Company
throughout the year continued to be trading,processing of fruits, vegetables and other agro
products. Previously the company had four units. All operational units have been merged.
Thereforethe Statement of Comprehensive Income has also been merged. {Page-50, Notes-1.02}

Basis of Presenting Financial Statements:

Basis of Measurement: {Notes-2.01}
The financial statements have been prepared on the Historical Cost Basis except revaluation of
certain fixed assets. The financial statements, therefore, do not take into consideration the effect
of inflation. The Board of Directors is responsible for preparing and presenting the financial
statements, which have approved and authorized for issue of these financial statements.

Statement of compliance: {Notes-2.02}

The financial statements have been prepared in compliance with the requirements of the
Companies Act, 1994, the Securities & Exchange Rules 1987, the Listing Regulations of Dhaka
and Chittagong Stock Exchanges and other relevant local laws as applicable and in accordance
with Bangladesh Financial Reporting Standards (BFRSs).
Presentation of Financial Statements: {Notes-2.03}
The presentation of these financial statements is in accordance with the guidelines provided by
BAS 1.

Other Regulatory Compliance: {Notes-2.04}

As required, Agricultural Marketing Company Limited also complies with the following major
regulatory provisions in addition to the Companies Act 1994, the Securities and
Exchange rules 1987 and other applicable laws and regulations:
The Income Tax Ordinance 1984
The Income Tax Rules 1984
The Securities and Exchange Commission Ordinance 1969
The Securities and Exchange Commission Act 1993
The value Added Tax Act 1991
The value Added Tax rules 1991

Use of Estimates and judgements: {Notes-2.05}

The preparation of financial statements in conformity with the BFRSs including BASs requires
management to make judgements, estimates and assumptions that affect the reported amounts of
revenues and expenses, assets and liabilities, and the disclosure of contingent assets and
liabilities at the date of and during the reporting period. Due to the inherent uncertainly involved
in making estimates, actual result reported could differ from those estimates.

Reporting Period:The Financial Statements cover one calendar year for both the financial
periods.{Notes-2.06}

Reporting Currency and Level of Precision:

The figures in the financial statements represent Bangladeshi Taka currency, which have been
rounded off to the nearest Taka except where indicated otherwise.{Notes-2.09}

Significant Accounting Policies Adopted:

The accounting problems related to recognition and valuation of items in financial statements
which are material and critical in determining the company's results of operations for the year
and as on the financial position date and are consistent with those adopted in the financial
statements for the previous year are:

Property, Plant &Equipments

Recognition and Measurement: {Notes-3.01}
These are initially stated at cost of acquisition and subsequently stated at cost/ valuation less
accumulated depreciation in compliance with the requirement of BAS 16: Property, Plant and
Equipment. The cost of acquisition of an asset comprises its purchase price and any directly
attributable cost of bringing the asset to its location and condition for its intended use inclusive
of inward freight, duties and non-refundable taxes.
Fixed assets were revalued by the professional valuer,M/S. GolarriMostafa& Associates of
Dhaka as on December 10, 1996. Fixed Assets do not include any assets held under lease.
Maintenance Activities: Expenditure incurred after the assets have been put into operation, such
as repairs &maintenance is normally charged off as revenue expenditure in the period in which it
isincurred. In situation where it can be clearly demonstrated that the expenditure has resultedin
an increase in the future economic benefit expected to be obtained from the use of the
fixedassets, the expenditure is capitalized as an additional cost of the assets. {Notes-3.01.2}

Depreciation: {Notes-3.01.3}
Land is held on a freehold basis and is not depreciated considering the unlimited life. In respect
of all other fixed assets, depreciation is provided using the reducing balance method.

Retirements and Disposals: {Notes-3.01.4}

On retirement or otherwise disposal of fixed assets, the cost and accumulated depreciation are
eliminated and any gain or loss on such disposal is reflected in the Comprehensive
Income Statement which is determined with reference to the net book value of the assets and the
net sales proceeds.

Intangible Assets: {Notes-3.02}

The cost of acquiring and developing computer software and all up gradation/ enhancement are
generally charged off as revenue expenditure unless they bring similar significant additional
benefits.
BANGAS Limited
The income statements provided by BANGAS for the fiscal years of 2013 and 2014 are
comprehensive income statements because they show all the income and expenses recognized
during those financial period such as revenue, gross profit, expenses such as administrative,
selling and distribution, financial and the operating profit or loss. The company has also showed
the workers’ profit participation funds and the net profit before and after tax along with the tax
expenses.

Extra-ordinary Items: There were no extra-ordinary items recognized during the financial
periods of 2013 and 2014.

Discontinued operations: No operations or any divisions were discontinued during the financial
periods of 2013 and 2014.

Cumulative effects of change in accounting principles: There were significant accounting

policies in both the years that were disclosed under BAS 1 “Presentation of financial
statements” measurement basis which were used in preparing the financial statements. They are:

The elements of financial statements have been measured on "Historical Cost" convention and all
business operations have been reported in the financial statements on 'Going Concern' basis,
which are the most commonly adopted bases as provided in "the framework for the preparation
and presentation of financial statements" issued by the International Accounting Standards
Committee(IASC). The financial statements have been prepared, except for cash flow
information under the accrual basis of accounting. The accounting policies and methods of
computation used in preparation of the financial statements for the year ended 30th
June, 2013 and 30th June 2014 are consistent with those adopted in the financial statements for
the year ended 30th June 2012 and 30th June 2013.{Notes-2.00}

Specific Accounting Policies Selected and Applied For Significant Transaction and Events
Recognition of Property, Plant & Equipment and Depreciation:
For 2012-2013: Property, Plant and Equipment are stated at their cost less accumulated
depreciation in accordance with BAS 16 "Property, Plant and Equipment". Cost represents cost
of acquisition or construction and capitalization of preproduction expenditure including interest
during constriction period. Expenditure for maintenance and repairs are expensed; major
replacements, renewals and betterments are capitalized.
The cost and accumulated depreciation of depreciable assets retired or otherwise disposed of are
subject to elimination from the assets and accumulated depreciation, and any gain or loss on such
disposal shall reflect in operations for the year.
During the year, no depreciation is charged on land and land development. Depreciation is
charged on all otherfixed assets (property, plant and equipment ) at rates varying from 5-20%.
Depreciation is computed using the written down value method to comply with the income tax
assessment procedure.{Notes-2.00}
For 2013-2014:Following financial position date and are consistent with those adopted in the
financial statements for the previous year.
Property, Plant &Equipments

Recognition and Measurement {Notes-3.01}

These are initially stated at cost of acquisition and subsequently stated at cost/valuation less
accumulated depreciation in compliance with the requirement of BAS 16: Property, Plant and
Equipment. The cost of acquisition of an asset comprises its purchase price and any directly
attributable cost of bringing the asset to its location and condition for its intended use inclusive
of inward freight, duties and non-refundable taxes.

Maintenance Activities{Notes-3.01.2}
Expenditure incurred after the assets have been put into operation, such as repairs & maintenance
is normally charged off as revenue expenditure in the period in which it is incurred. In situation
where it can be clearly demonstrated that the expenditure has resulted in an increase in the future
economic benefit expected to be obtain from the use of the fixed assets, the expenditure is
capitalized as an additional cost of the assets.

Depreciation{Notes-3.01.3}
Land is held on a freehold basis and is not depreciated considering the unlimited life. In respect
of all other fixed assets, depreciation is provided using the reducing balance method.

Retirements and Disposals{Notes-3.01.4}

On retirement or otherwise disposal of fixed assets, the cost and accumulated depreciation are
eliminated and any gain or loss on such disposal is reflected in the Comprehensive Income
Statement which is determined with reference to the net book value of the assets and the net sales
proceeds.
Intangible Assets{Notes-3.02}
The cost of acquiring and developing computer software and all up gradation/enhancement are
generally charged off as revenue expenditure unless they bring similar significant additional
benefits.

Foreign Currency Transactions {Notes-3.04}

The financial records of the company are maintained and financial statements are stated in
Bangladesh Taka.
Foreign currency transactions are recorded at the applicable rates of exchange rule at the
transaction date.
The monetary assets and liabilities, if any, denominated in foreign currencies at the Financial
Position date are translated at the applicable rates of exchanges rules at that date. Exchange
differences are charged off as revenue expenditure in compliance with the provisions of BAS 21:
The effects of charges in Foreign Exchange
Rates. However, as per requirement of the Companies Act, 1994 exchange differences relating to
foreign currency loan has been adjusted against fixed assets being procured under the said
obligation.
Compliance with Local Laws:
The financial statements have been prepared in compliance with requirements of the Companies
Act, 1994, the Securities and Exchange Ordinance, 1969, the Securities and Exchange Rules,
1987, Listing Rules of DSE and CSE, and other relevant local laws and rules.{Page-37}

Compliance with International Accounting Standards (IASs):

The financial statements have been prepared in compliance with requirements of IASs adopted
by theInstitute of chartered Accountants of Bangladesh (ICAB) and applicable in Bangladesh.
{Page-37}

Reporting Period:
Financial statements for both the fiscal years of the company cover one calendar year from 1 July
to 30 June consistently.{Page-37}

Reporting Currency and Level of Precision:

The figures in the financial statements represent Bangladesh Currency (Taka), which have been
rounded offthe nearest Taka except where indicates otherwise.{Page-37}
Balance Sheet

AMCL (PRAN)

The balance sheets of AMCL PRAN for both the years show all the non-current and current
assets for the financial periods along with all current and long-term liabilities including the
shareholders’ equity. The non-current assets of the business are property, plants and equipments.
The current assets include inventories, accounts receivables, advance, deposits and prepayments
and cash and cash equivalents. The current liabilities are the current portion of long-term debt,
short term secured loan from bank, liabilities for goods and expenses, liabilities for other finance,
interest payable, workers’ profit participation part, income tax payable and unclaimed dividend.
The business has been financed by shareholders’ equity which consists of share capital, share
premium, reserve and surplus, retained earnings. There were also deferred tax liabilities and
long-term debts.

50,000,000 ordinary shares were authorized for both the years with a par value of taka-10.
{Notes-16.00 for 2012-2013 and Notes 22.00 for 2013-2014}
The company can issue 42,000,000 more shares since 8,000,000 shares are issued, subscribed
and paid-up in both the financial periods of 2013 and 2014.
An income tax amount of Taka. 47,181,438 was payable at the end of the financial period of
2012-2013 and unpaid income tax as at 30 June, 2014 amounted to Taka. 32, 441, 008.

Leased Assets: {Notes-3.03}

In compliance with the BAS 17: Leases, cost of assets acquired under finance lease along with
related obligation has been accounted for as assets and liabilities respectively of the company,
and the interest element has been charged as expenses. Lease payments made under finance
leases are apportioned between the finance expenses and the reduction of the outstanding
liability. However, at present the company does not have such Leased Assets or any Lease
obligations

Employee Benefits:{Notes-3.08}
Defined Contribution Plan (Provident Fund): {Notes-3.08.1}
There is no benefit scheme for the employees for both the fiscal years of 2013 and 2014.

Contribution to Workers' Profit Participation/ Welfare Funds : {Notes-3.08.2}

This represents 5% of net profit before tax contributed by the company as per provisions of the
Bangladesh Labor Law, 2006 and is payable to workers as defined in the said law.
Break-down of InvestmentFor the Fiscal Year 2012-2013: The break-down of share -holding
is as follows:{Notes-16.00}

% 30.06.2013 % 30.06.2014

Sponsors 42.75% 3,420,130 42.75% 3,420,130

General 55.91% 4,472,570 55.36% 4,428,790

Public

Financial 1.34% 107,300 1.89% 151,080

institutions

The company took a long-term loan from IFIC Bank which is secured by legal mortgage and
hypothecation charge on all fixed assets of the company on pari-passu basis with all the lenders.

The sanctioned and availed loan amount was 2,750,000 USD. The current balance due is
1,650,000 USD.
The loan is being repaid in 10 equal half-yearly installments starting from July 2011. {Notes-
18.00}

Break-down of investment for the financial period of 2013-2014: The break-down of share
holdings is as follows: {Notes-22.00}

% 30.06.2014 % 30.06.2013

Sponsors 41.43% 3,314,130 41.43% 3,3141,30

General Public 54.22% 4,337,290 57.22% 4,578,570

Financial 4.35% 348,580 1.35% 107,300

Institutions
The current balance for the loan due at the end of the financial period of 2013-2014 is 1,100,000
USD. The loan is being paid in 10 equal half-yearly installments starting from July 2015.

BANGAS Limited

The balance sheet shows all the non-current and current assets available in both the fiscal years
of 2013 and 2014. The non-current assets are the property, plant and equipments. The current
assets include inventories, receivables, advances, deposits and prepayments and cash and cash
equivalents. The current liabilities and provisions are the short term loan secured, creditors for
expenses and goods, liabilities for other finance and income tax payable. The business is
financed by shareholders’ equity which contains share capital, reserve and surplus. The non-
current liabilities are the deferred tax liability, interest free directors; loan and the Bai-Muajjal
Finance which is secured.
During the financial year of 2012-2013, 15, 00,000 ordinary shares were authorized at Taka.10
par value for each share. The company issued 600,000 ordinary shares of Taka. 10 and 1,553,250
bonus ordinary shares. The company cannot issue any more stock.
During the financial period of 2013-2014, 50,000,000 ordinary shares were authorized at a par
value of taka. 10 per stock.600,000 ordinary shares were issued by cash and 3,060,525 ordinary
bonus shares were issued. The company can still issue more 46,339,475 ordinary shares.
There was a deferred tax liability of Taka. 3,733,530 at 30 June 2013 and also an unpaid income
tax of Taka. 3,529,456 at 30 June 2014.

Lease obligations:
There are equipments and vehicles used by the company brought in different preceding years
underoperating lease agreement. Due to adoption of BAS-17 by the ICAB all lease transactions
are subject to beclassified based on the extent to which all risks and rewards incident to
ownership where title may or maynot eventually be transferred. According to this classification
and after adoption of the said BAS-1 7 all leasetransactions shall be executed as per the
framework of finance lease contacts. In compliance of the saidaccounting standard measures
have been taken to account for all further lease transactions from the viewpoint of finance lease.
{Page-34}
The company paid a lease rent of Taka. 491000 during 2013-2014 and Taka. 484960 during
2012-2013.

Post-retirement benefit obligations: There were no post-retirement benefit obligations for

employees.
Break-down of investment for the financial period of 2012-2013:{Notes-4.00}

Description No. of investors No. of shares % of share % of Share

holding June Holding June
30,2013 30,2012
Sponsors 13 1,076,576 50.00 50.00

ICB & Body 165 155,550 7.22 6.89

Corporates
General Public 3,175 921,124 42.78 43.11

Long-term debt(2012-2013):
BAI-MUAJJAL FINANCE: TK. 4,209,133 86,702,033 9,774,337
The above financing facility was availed from Haji Finance
Company Limited, Fazlur Rahman Center (Ground Floor)
72 Dilkusha CA Dhaka - under the following criteria:
Purpose of the Finance
To meet up the cost for procuring different materials used in the production.
Period of Loan
2 (Two) years.
Rate of Profit
16% per annum at quarterly rests, subject to change by the institution from time to time.
Terms of Repayment
To be repaid by 24 monthly installments starting after 6(six) months from the date of creation.
Nature of Security
i) Hypothecation of raw materials and finished goods.
ii) Floating charges on all other assets both present and future.
iii) Personal guarantees of all the Directors Jointly and severally.
iv) Other usual charge documents/undertakings.{Notes-6.00}

Break-down of investments for the financial period 2013-2014:

Description No. of investors No. of shares % of share % of share

holding June holding June
30,2014 30,2013
Sponsors 13 1,830,167 50.00 50.00

ICB & Body 175 291,378 7.96 7.22

Corporates
General Public 3,523 1,538,980 42.04 42.78
Long-term debt(2013-2014):
BAI- MUAJJAL FINANCE: Tk. 3,273,696
The above financing facility was availed from Haji Finance
Company Limited, Fazlur Rahman Center (Ground Floor)
72 Dilkusha C/A, Dhaka - 1000 under the following criteria:

Purpose of the Finance

To meet up the cost for procuring different materials used in the production.

Period of Loan
2 (Two) years.

Rate of Profit
17.90% per annum at quarterly rests, subject to change by the institution from time to time.

Terms of Repayment
To be repaid by 24 monthly installments starting after 6(six) months from the date of creation.
Nature of Security
i) Hypothecation of raw materials and finished goods.
ii) Floating charges on all other assets both present and future.
iii) Personal guarantees of all the Directors Jointly and severally.
iv) Other usual charge documents/undertakings.
Notes to Financial Statements
Notes to the financial statements are basically additional information provided in a company’s
financial statements. These notes provide details and information that are left out of the main
reporting documents. They are important for the sake of clarity on many points as they outline
the accounting methodology used for recording certain transactions. The notes to the financial
statements are essentially footnotes because if included in the main statements, they would
obscure the important information, as they are generally quite elaborate and detailed.

Notes are commonly used to disclose the following :

- The existence and amount of any preferred stock dividends in arrears

- The terms of or obligations imposed by purchase commitments
- Special financial arrangements and instruments
- Depreciation policies
- Any changes in the application of accounting principles
- The existence of contingencies

First Foot Notes :

AMCL (PRAN) :

The first foot notes of the annual report of AMCL (PRAN) is about the formation of the
company , nature of operation and its principal activities.

The principal activities of the Company throughout the year continued to be trading, processing
of fruits, vegetables and other agro products.

Previously the company had four units. All operational units have been merged . Therefore the
Statement of Comprehensive Income has also merged.

(Notes: 1)

Bangas

The first foot notes of Bangas limited describes its legal form ,Country of Incorporation ,
Address of Registered office , Principal Place of Business, Principal Activities and Nature Of
Operations
Bangas Limited was incorporated in Banglaadsh as a public company with limited liability on
November 21, 1979 and commenced commercial operation in November, 1981. The company
went for public issue of shares in 1984 and was listed in Dhaka and Chittagong stock exchanges.

The Registered office of the company is situated at Daulatdiar, Chuadanga. The principal place
of business and the manufacturing plants are situated at Daulatdiar, Chuadanga.

The Company owns and operates a modern bread and biscuits manufacturing plant, noodles
manufacturing plant and a vegetable snacks manufacturing plant located at the mentioned places
of business. The company sells its products both in local and foreign markets.

(Notes :1)

The first thing that a company usually wants people to know is what they do, or what they make.
That’s why first notes of all companies that follows the principles of GAAP and FASB discloses
formation of the company ,Country of Incorporation , Address of Registered office , nature of
operation and its principal activities. The scenario was same for financial year 2012-2013 and
2013-2014.
Inventories
AMCL(PRAN)

Inventories of AMCL(PRAN) are carried at the lower of cost and net realizable value as
prescribed by BAS 2 : Inventories. Cost is determined using weighted average method. The
cost of inventories comprises of all costs of purchase, cost of conversion and other costs incurred
in the normal course of business in bringing the inventories to their present location and
condition. Cost of conversion include all direct cost excluding interest expense. Net realizable
value is based on estimated selling price less any further costs expected to be incurred to make
the sale. Cost of Finished Goods include material and conversion cost. Cost of work in progress
includes material cost.

(Notes 3.05)

BANGAS Limited

Inventories are carried at the lower of cost and net realizable value as prescribed by BAS 2:
Inventories. Cost is determined using weighted average method. The cost of inventories
comprises of all costs of purchase, costs of conversion and other costs incurred in the normal
course of business in bringing the inventories to their present location and condition. Costs of
conversion include all direct costs excluding interest expense. Net realizable value is based on
estimated selling price less any further cost expected to be incurred to make the sale. Cost of
Finished Goods include material and conversion cost. Cost of work-in process includes material
cost.

(Notes: 3.05)

The weighted average cost under this method is obtained by dividing the total value (at cost) of
materials in stock at the time of issue by the total quantity of materials in stock. Only the rates
are taken into consideration in case of simple average, on the other hand, the rates &
corresponding quantities are considered in case of weighted average because by multiplying the
quantity by the rate, the value at cost is obtained. Once a rate is worked out, it goes on being
applied until a fresh purchase is made.

Advantages:

- The effect of price fluctuations on issue rates are smoothened effectively by the method.
- The rate continues in its application unless a new purchase arrives.
- Only if, in the calculation of the rates, mathematical approximation is made then profit or loss on
materials arises.
- Simple & not too much clerical work is involved unless purchases are made frequently.
- Where both the price & quantity ordered fluctuate, this method suits the condition.
Disadvantages :

The work of calculation of rates becomes considerable in case where a frequent purchase is made.
The cost price (nor the market price) of the materials actually issued are not represented by the charges
made to issues.

Both these manufacturing food industry uses weighted average cost which gives them a fair
valuation of inventory between LIFO and FIFO. The inventory level of AMCL(PRAN) is higher
than BANGAS during the two consecutive years. But AMCL pran was able to decrease its
inventory in 2014 which is one of the factor that has increase the gross profit of AMCL in 2014.
The inventory level of Bangas have increased but due to a n increase in sales its gross profit for
2014 has also increased. Using WAC the inventory valuation of two companies for two
consecutive years are as follows:

Inventories
Company 2014 (TK) 2013 (TK) 2014 (Increase/decrease in
inventory) TK
AMCL(PRAN) 515,560,213 549,659,858 0
BANGAS 19,637,685 5,953,559 0

(Ref :AMCL page :58 ,59)

(Ref:Bangas page : 35 ,36)
 Depreciation

AMCL (PRAN)

Land is held on a freehold basis and is not depreciated considering the unlimited life. In respect
of all other assets , depreciation is provided using the reducing balancing method.

On events of disposal of fixed assets, the cost and accumulated depreciation are eliminated and
any gain or loss on such on disposal is reflected in the Comprehensive Income Statement which
is determined with reference to the net book value of the assets and net sales proceeds.

The annual depreciation rates applicable to the principle categories are:

Assets 2013-2014 2012-2013

Factory Building 10% 10%
Machinery and Equipments 15% 15%
Furniture and Fixtures 15% 15%
Tools and Accessories 20% 20%
Vehicles 20% 20%
Office Equipment 15% 15%
Plastic container 20% 20%
Other Fixed Assets 20% 20%

Depreciation in addition of fixed assets has been changed in compliance with Para 55 of Bas-16.

(Notes : 3.01.3)

Bangas LTD

Land is held on a freehold basis and is not depreciated considering the unlimited life. In respect
of all other fixed assets, depreciation is provided using the reducing balance method.

On retirement or otherwise disposal of fixed assets, the cost and accumulated depreciation are
eliminated and any gain or loss on such disposal is reflected in the Comperhensive Income
Statement which is determined with reference to the net book value of the assets and the net sales
proceeds.

The annual depreciation rates applicable to the principal categories are:

 Assets 2013-2014 2012-2013
Factory Building 5% 5%
Machinery and Equipments 5%-10% 5%-10%
Furniture & Fixtures 10% 10%
Vehicles 10% 10%
Office Equipments 10% 10%
Generators 15% 15%

(Notes: 3.01.3, 3.01.4 )

Reducing balancing method of depreciation involves multiplying the asset carrying amount by
the depreciation rate to calculate the depreciation that can be claimed that year.

The main advantages of reducing balance method of depreciation are listed below

- Reducing balance method is easy to understand and simple to implement. Depreciation

is calculated every year on the opening balance of asset.
- Reducing balance method equalizes the yearly burden on profit and loss account in
respect of both depreciation and repairs. The amount of depreciation goes on
decreasing while the expenses on repairs goes on increasing, so that the total charge
against revenue over different years remains more or less the same.
- Reducing balance method is acceptable for income tax purposes
- Reducing balance method matches the cost and revenue of the business. The greater
amount of depreciation provided in initial years is matched against the higher amount of
revenue generated by increased production by the use of new asset.

Disadvantages of Reducing Balance Method of Depreciation :

- Reducing balance method charges heavy amount of depreciation in earlier years.

- The formula to obtain rate of depreciation can be applied only when there is residual
value of the asset.
Dividend
AMCL (PRAN)

Events after the reporting period that provide additional information about the company’s
position at the date of Statement of Financial Position are reflected in the financial statements.
Events after the reporting period that are not adjusting events are disclosed in the notes when
material.

Subsequent to the Statement of Financial Position date, the Board of Directors recommended
32% cash dividend. i.e. TK 3.20 per share. The Dividend proposal is subject to shareholder’s
approval in the forthcoming Annual General Meeting. Except the fact as stated above , no
circumstances have arisen since the Statement of Financial Position date which would require
adjustments to or disclosure in the financial statements or notes thereto.

A stable Dividend policy is followed by the management considering benefits of the shareholder.
Last couple of year, declaration of dividend was 31%. In respect of Proposed appropriation of
profit , the board of directors proposed and recommended for the declaration of cash dividend for
the year 2013-2014 at the rate of 32% which is 1% higher than last year.

Considering the finalcial resuts of the Company, the Directors are pleased to report that their
recommendations for appropriation of earnings for the year under review. The appropriation are
as follows:

Details 2013-2014 (TK) 2012-2013 (TK)

Proposed Dividend 25,600,000 24,800,000

AMCL( PRAN) declared a cash dividend of 32% in 2014 which amounts to be TK 25,600,000
and which has also increased by 1% from previous years.
This declaration of dividend with become a current liability as its an obligation for the company
to its stock holder which they haven’t paid yet.

This will also effect the Statement of Changes In Equity. It will decrease the Statement of
Changes In Equity by 25,600,000

(Ref: pg : 61)

BANGAS Limited
In accordance with lAS-I "Presentation of Financial Statements" balance of accumulated surplus
carried forward in the Balance Sheet will be applied for payment of this year's dividend proposed
by Board of Directors and the proposed dividend will be recognized in the accounts as and when
approved by the shareholders in the Annual General Meeting. Following the principle dividend
approved in the last Annual General Meeting will be provided for in the accounts of current year.

On the basis of the proposed appropriation the Board of Directors is pleased to recommend for
declaration of stock dividend to all shareholders at the rate of 50% for the year under report. This
will involve an amount of Tk.18.30 million.

Out of the fund available for distribution, payment of stock dividend and un-appropriated surplus
to be carried forward for the year will be made as follows:

Details 2013-2014 (TK) 2012-2013 (TK)

Fund Available for 19,313,193 15,977,509
Distribution
Deduct: Proposed issue of 18,302,620 15,072,750
bonus share @ 50%
Un-appropriated Surplus 1,010,573 904,759

BANGAS limited Declared a stock dividend which amounts to be TK 18,302,620. The number
of bonus shares that it has issed is 3,060,525 at 10 TK par value.

The Statement of Changes In Equity of 2014 will decrease by 25,600,000.

( Ref . pg : 39)
RATIO ANALYSIS
Ratios Bangas Limited AMCL Pran Industry Average
(in Times unless
2013 2014 2013 2014 2013 2014
stated)
Liquidity:
Current Ratio 2.23 2.14 3.43 1.39 2.83 1.765
Quick Ratio 1.97 1.62 1.07 0.44 1.52 1.03
Current Cash 0.69 -.04 0.36 0.49 0.525 0.225
Debt
Coverage Ratio
Activity:
Inventory 21.48 6.72 2.83 2.54 12.155 4.63
Turnover
Asset Turnover 1.10 0.85 2.74 1.5497 1.92 1.19985
Profitability:
Profit Margin on 0.13 0.14 1.20 0.15 0.665 0.145
Sales
Rate of Return on 13.37% 11.85% 9.65% 4.97% 11% 8.4%
Assets
Rate of Return on 14.32% 15.67% 11.99% 11.74% 13.1% 13.7%
Common
Stock Equity
Earnings Per 7.2tk.. 5.03tk 6.85 tk. 6.93 tk. 7.025tk 5.98tk
Share
Price Earnings 107.74 154.12 18.65 31.99 63.195 93.055
Ratio
Payout Ratio 1.38 1.98 0.43 0.44 0.905 1.21
Coverage:
Debt to Total 1.2 0.11 2.04 1.68 1.62 0.895
Assets
Time Interest 8.40 11.06 0.45 0.54 4.425 5.8
Earned
Cash Debt 0.69 -.04 0.36 0.49 0.525 0.225
Coverage Ratio
Book Value Per 50.27 34.60 5.71 6.09 27.99 20.345
Share
Free Cash Flow 151.95 0.29 23.33 1.93 87.64 1.11
Appendix

Ratios Bangas AMCL Pran

2013 2014 2013 2014
Current Cash 16,326,640/ (1,405,526)/ 84141827/ 104842719/
Debt 23,494,352 38,209,488 15,973,122 212862261
Coverage
Ratio
Current ratio 52,299,398/ 81,571,366/ 798192332/ 757101724/
23,494,352 38,209,488 232792811 565399521
Quick ratio 52,299,398- 81,571,366-19 , 798192332- 757101724-
5953559/5953559 637,685/38,209,488 549659858/ 515560213/
232792811 565399521

Inventory 127,928,190/ 131,992,669/19 , 1554446836/ 374014673/

Turnover 5953559 637,685 549659858 515560213

Asset 127,928,190/ 131,992,669/ 1554446836/ 374014673/

turnover 115,973,122 171268273 567770121 1095910217
Profit Margin 15,506,091/ 18,408,434/ 54829899/ 55424126/
on Sales 121,390,759 131,992,669 45649353 374014673
Rate of 15,506,091/ 18,408,434/ 54829899/ 55424126/
Return on 115,973,122 171268273 567770121 1095910217
Assets
Rate of 15,506,091/ 15,506,091/ 54829899/ 55424126/
Return on 108,234,533 126,642,967 457103264 487066242
Equity
Payout Ratio 21,532,500/ 36,605,250/ 24613528/ 24300554/
15,506,091 18,408,434 54829899 55424126
Debt to Total 139467474/ 38,209,488/ 1133169643/ 541239463/
Assets 115,973,122 171268273 565399521 1095910217
Time Interest 20,334,907/ 23,948,305/ 67645984/ 70706446/
Earned 2,419,183 2,165,259 147928986 130388836
Book Value 108,234,533/ 126,642,967/ 457103264/ 487066242/
Per Share 21,532,50 36,605,25 80000000 80000000
Free cash 16,326,640/ (1,405,526)/ 84141827/ 104842719/
flow (107,450) (4,751,824) 3606000 54187468