Department of Accounting and Information Systems

University of Dhaka

Assignment on

“SAIF POWERTEC LIMITED”

Submitted To:
Ishter Mahal
Associate professor,
Department of Accounting and Information Systems
University of Dhaka

Submitted By:
Aameer Khasroo Shahansah
ID: 23068, Section: C
rd
BBA- 23 Batch
Department of Accounting and Information Systems
University of Dhaka

Date of Submission: 20 June, 2021

1|Page
 SAIF POWERTEC LIMITED

Introduction

SAIF POWERTEC LTD is one of the largest companies of Bangladesh keeping its territory into the
world of engineering service of the energy sector of Bangladesh. It is occupied in sales and
service of construction, materials handling and power production equipment in Bangladesh by
exclusive agreement with world renowned producer.

It has been registered & transformed to a Private Limited Company in 2003, before it was
SaifPowertec Corporation. It has diversity its business activity of port operation which in turn
give them the contract for complete terminal operation of Chittagong Port Authority (CPA),
Pangaon ICD and Kamalapur ICD (KICD) SAIF POWERTEC continued its business expansion plan
and have entered into the word of renewable energy, Plastic & Polymer based manufacturing
plant & OEM supply. And recently it has entered into the world of Strong Power Industry.

SAIF POWERTEC LIMITED set its footstep into the Battery Industry as the as the largest Battery
Manufacturing plant with the capacity of over 1.2 million automotive Battery (N50) per year.
Manufacturing world class standard so that best quality production is there each and every time.
It is ISO 9001:2015,ISO 14001:2015,ISO 50001:2011(EnMs) and OHSAS 18001:20007 certified
company and our endeavor is always there for the social and environmental responsibility.
Today within a span of little more than two decades, whether it is energy based business of port
operation, it has become a renowned brand to be reckoned in Bangladesh.

Analysis of Profit Margin

Profit margin for ROA captures the overall profitability of a firm’s operations and is measured as
the amount of after-tax profit generated (before financing costs) as a percentage of sales. Thus,
the analysis of profit margin focuses on all expenses (other than interest expense) that reduce
sales to after-tax profit. In this part, the profitability of Saif powertec Limited is given and the
profit margin for ROA is shown positive. We can see that sales revenue is the only income of this
company. Other revenue is only 0.87% and 1.03% in 2020 and 2019 respectively. The cost of
2|Page
sale is about 52.59% and 50.75% of net sales revenue in 2020 and 2019 respectively. Operating
expense is moderate and it is the combination of selling, general, administrative and
depreciation expenses. The financial expense is much than any other expenses. Financial
expenses are 19.86% in 2020 and 20.10% in 2019 on revenue.

Analysis for the profit margin for

SAIF POWERTEC LIMITED
Particulars Year 2020 Year 2019
Net revenue 100% 100%
Interest income and other 0.87 1.03
Cost of sales (52.59) (50.75)
Selling, general and administrative expenses (14.28) (12.02)
Financial expense (19.86) (20.10)
Provision for income taxes (3.42) (4.39)
Workers profit participation / Welfare fund (0.67) (0.84)
Numerator addbacks for after tax interest and 0.04 (0.07)
non controlling interest
Profit margin for ROA 10.09% 12.86%

3|Page
Profitability Analysis of Saif Powertec Limited

Three levels profitability are given in this part with various quantitative information. We can see
that ROA is 2.66% and 4.11% respectively in year 2020 and 2019 of the company. The profit
margin for ROA is used to find out the asset turnover in this part.

Profitability Analysis for

SAIF POWERTEC LIMITED
Level 1 Analysis ROA
2020 2019
2.66% 4.11%

Level 2 Analysis Profit Margin Asset

for ROA Turnover
2020 2019 2020 2019
10.09% 12.86% 0.26 0.32

Level 3 Analysis

Net revenue 100% 100%

Interest income and other 0.87 1.03 Receivable
2.46 2.94
Cost of sales (52.59) (50.75) Turnover
Selling, general and (14.28) (12.02)
administrative expenses
Financial expense (19.86) (20.10) Inventory
1.73 1.39
Provision for income taxes (3.42) (4.39) Turnover
Workers profit participation (0.67) (0.84)

Non controlling interest 0.04 (0.07) Fixed Asset

1.18 1.38
Profit margin for ROA 10.09% 12.86% Turnover

Asset turnover is very low in both year 2019 and 2020. In the year 2020, it was 0.26 times of
sales which means asset can’t properly utilize to create sales. The efficiency of the company is
very much low. Receivable turnover, inventory turnover and fixed asset turnover are the signs of
inefficiency of the company activities. The expenses are more than the earnings of the company.
The highest expense is in the cost of goods sold. Saif Powertec Limited purchased its raw
materials with high cost which is the major cost component and liable for incurring net loss in
the year 2019 and 2020.

4|Page
Forecasting of Financial Statements

In this part, the financial statements are forecasted with analytical information. First of all, the
Income Statement is forecasted. Income statement is forecasted based on the available two
years information. The information of year 2019 and 2020 are taken for the projection. On the
basis of average growth rate, the incomes and expenses for 2021 are given.

SAIF POWERTEC LIMITED

Statement of Profit or Loss and Other Comprehensive Income

For the year ended 30 June, 2019, 2020, 2021

Average

growth

Particulars Taka (2019) Taka (2020) rate Taka (2021)

Sales Revenue 3,968,863,398 3,848,562,002 -3.03% 3,731,907,097

Cost of goods sold 2,014,078,363 2,023,878,143 0.49% 2,033,725,605
Gross Profit 1,954,785,035 1,824,683,859 -6.66% 1,703,241,597
Operating Expenses:
General and Administrative

Selling and Distributive 89969016 114768006 27.56% 146402570.4

Trading Profit 199957034 231514163 15.78% 268051623.9

Financial expenses 348479771 361283537 3.67% 374557736.1

Profit before other income -148522737 -129769374 -12.63% -113383922

3858536 1063377 -72.44% 293056.9118

Other income- operating

Net profit before WPPF -144664201 -128705997 -11.03% -114508175.1

5|Page
Contribution @5% to Workers'

Profit 0 0 0.00% 0

Participation & Welfare Funds

Profit before income tax -144664201 -128705997 -11.03% -114508175.1

Provision for income tax:

Current 11197232 84836869 657.66% 642774423.3

Deferred 18723225 18761035 0.20% 18798921.35

Profit after income tax -174584658 -232303901 33.06% -309105639.9

Other comprehensive income:

Revaluation surplus of PPE 1257921423 1257921423

Deferred tax on revaluation

187610809 187610809

surplus of assets

Total Comprehensive income

-174584658 838006713 -4022433924

for the period

Page |
4

6|Page
 ARAMIT CEMENT LIMITED

Statement of Profit or Loss and Other Comprehensive Income

For the year ended 30 June, 2021

2021
Particulars
Tk.

Revenue 2004442314

Cost of goods sold 1540594457

Gross Profit 471836311.3

Operating Expenses:

General and Administrative 58915190.93

Selling and Distributive 146402570.4

Trading Profit 268051623.9

Financial expenses 374557736.1

Profit before other income -113383922

Other income- operating 293056.9118

Net profit before WPPF -114508175.1

Contribution @5% to Workers' Profit

0
Participation & Welfare Funds

Profit before income tax -114508175.1

Provision for income tax:

Current 642774423.3

Deferred 18798921.35

7|Page
 Profit after income tax -309105639.9

Other comprehensive income:

Revaluation surplus of PPE 1257921423

Deferred tax on revaluation

187610809
surplus of assets

Total Comprehensive income -4022433924

The income statement for 2021 is given here separately for a better look. The
comprehensive income is Tk.4,022,433,924 in negative figure. Gross profit and trading
profit are positive but net profit is negative. The reason of net loss is the huge financing
expense. Aramit Cement Limited is inundated with huge debt and that’s why, it has to
pay more interest in each year which is the root cause of net loss. The contribution to
worker’s profit participation and welfare fund is zero in 2021. As profit is negative and so
nothing is kept for the worker’s motivation. The cost of goods sold is also very high
comparing with other costs. Cost of goods sold is about 80% of net sales which is
increasing year by year.

Page | 5

8|Page
The statement of financial position is projected based on the information of year 2019
and 2020. The average growth of total asset in 2020 is 33.45% which is growing per
year. The total asset figure is calculated by considering this growth rate. Non-current
assets are increasing with 105% yearly but current assets are increasing by only 10%
per year. That means the fixed asset are becoming more and the company makes huge
investment in this sector which is unable to give proper return for the company.

ARAMIT CEMENT LIMITED

Statement of Financial Position

As at 30 June 2019, 2020, 2021

Average
2019 2020 2021
Particulars Growth
Tk. Tk. Tk.
rate

Assets and Properties

Non-Current Assets & Properties:

Property, Plant & Equipment 891048706 2182120952 144.89% 5343873816

Capital Work-in-process 237848131 177519105 -25.36% 132492244.1

Investment 39532500 39532500 0.00% 39532500

Total Non-Current Assets &

Properties 1168429337 2399172557 105.33% 4926296162

Current Assets and Properties:

Inventories 128023668 123598709 -3.46% 119326692.5

Trade Receivable 2107210444 2389970660 13.42% 2710673617

9|Page
Advances, deposit and prepayments 667896348 787105593 17.85% 927591858.2

Due from associate companies 635816555 601454565 -5.40% 568949630.1

Other receivable 2898955 2918955 0.69% 2939092.981

Cash and cash equivalents 77213628 84659705 9.64% 92823842.58

Total Current Assets & Properties 3616059600 3989708187 10.33% 4401966001

Total Assets and Properties 4787488936 6388880745 33.45% 8525930340

Shareholders' Equity and

Liability

Shareholders' Equity:

Share Capital 338800000 338800000 0.00% 338800000

Share Premium 84700000 84700000 0.00% 84700000

Reserve & Surplus -394869604 444797251 -212.64% -501037792

Page | 6

10 | P a g e
 General Reserve 26000000 26000000 0.00% 26000000

Revaluation Reserve 0 1064886774 1064886774

Retained Earnings -420869604 -646089524 53.51% -991831363.1

Total Shareholders' Equity 28630396 868297251 2932.78% 26333555292

Non-Current Liabilities:

Term Loan & Lease Finance 397653136 341964329 -14.00% 294074387.3

Deferred Income Tax 54181359 258893060 377.83% 1237060453

Provision for Employees' Retiral

Gratuity 30139312 37751722 25.26% 47286829.7

Total Non-Current Liabilities 481973808 638609112 32.50% 846148880.2

Current Liabilities & Provisions:

Current portion of Term loan & Lease 195561129 210346143 7.56% 226248948.9

Current Portion of redeemable

debentures 17836805 17811065 -0.14% 17785362.14

Creditors & Accruals 582879546 299762526 -48.57% 154161477.5

Provision for income tax 45965125 82345763 79.15% 147521075.7

Provision for WPP & WF 31335 31335 0.00% 31335

Short Term Loan 3368683081 4226532692 25.47% 5302837390

Due to Associated companies 44661240 23878388 -46.53% 12766717.03

Unclaimed dividends 21266471 21266471 0.00% 21266471

Total Current Liabilities &

provisions 4276884732 4881974382 14.15% 5572671549

Total Shareholders' Equity &

Liabilities 4787488936 6388880745 33.45% 8525930340

11 | P a g e
The financial position of Aramit Cement Limited is given in this part. Total asset of this
company is Tk. 4,787,488,936 in 2019 which is more than its net sales in this year. That
means this asset can be used properly to generate sales revenue. The property, plant
and equipment are increased year by year. Company invests huge in this section but it
cannot ensure the good return for the company by the proper utilization of fixed assets.
Capital work-in-process, inventories and due from associated companies are with
negative figure. The other figures except these three are with positive growth. The
company’s assets are increasing year by year. But loss also is occurring which means,
the company is operating with little efficiency. The company has huge loan and other
liabilities rather than equity. So, the company is running with huge debt and it has to pay
huge interest expenses in every year. Interest expense is one of the major expenses in
the income statement of the company.

Page | 7

12 | P a g e
The single balance sheet is given in this part so that a clear view on the individual
element can be given. The financial position of the company can be shown for 2020
which is an analytical assumption on the basis of past information. Aramit Limited has
huge fixed assets. The amount of current assets is also significant. The inventory is
decreasing year by which means the down warding trend of sales and cost of goods
sold.

ARAMIT CEMENT LIMITED

Statement of Financial Position

As at 30 June 2021

2021

Particulars Tk.

Assets and Properties

Non Current Assets & Properties:

Property, Plant & Equipment 5343873816

Capital Work-in-process 132492244.1

Investment 39532500

Total Non Current Assets & Properties 4926296162

Current Assets and Properties:

Inventories 119326692.5

Trade Receivable 2710673617

Advances, deposits and prepayments 927591858.2

Due from associate companies 568949630.1

Other receivable 2939092.981

Cash and cash equivalents 92823842.58

Total Current Assets & Properties 4401966001

13 | P a g e
Total Assets and Properties 8525930340

Shareholders' Equity and Liability

Shareholders' Equity:

Share Capital 338800000

Share Premium 84700000

Page | 8

14 | P a g e
 Reserve & Surplus -501037792

General Reserve 26000000

Revaluation Reserve 1064886774

Retained Earnings -991831363.1

Total Shareholders' Equity 26333555292

Non Current Liabilities:

Term Loan & Lease Finance 294074387.3

Deferred Income Tax 1237060453

Provision for Employees' Retiral Gratuity 47286829.7

Total Non Current Liabilities 846148880.2

Current Liabilities & Provisions:

Current portion of Term loan & Lease 226248948.9

Current Portion of redeemable debentures 17785362.14

Creditors & Accruals 154161477.5

Provision for income tax 147521075.7

Provision for WPP & WF 31335

Short Term Loan 5302837390

Due to Associated companies 12766717.03

Unclaimed dividends 21266471

Total Current Liabilities & provisions 5572671549

Total Shareholders' Equity & Liabilities 8525930340

The single financial statement for the year 2021 is separately is given in this part. The
statement of financial position is forecasted by taking the given information of Aramit
Cement Company Limited from the 2019 and 2020 which are analyzed in the previous
page. The single balance sheet or statement of financial position represents the current
or ongoing position of Aramit Limited. The statement of financial position shows that the
15 | P a g e
assets and liabilities are increasing year by year. The liabilities are increasing year by
year but sales and profit are not increasing with this enhanced rate.

Page | 9

16 | P a g e
 ARAMIT CEMENT LIMITED

Statement of Cash Flows (For the year ended 30 June)

Average
2019 2020 2021
Particulars Growth
Tk. Tk. Tk.
rate

A. Cash Flows from Operating

Activities:

Cash received from customers and

others 1482186603 1649308468 11.28% 1835273924

Cash paid to supplies and others 1795040741 2057967534 14.65% 2359406265

Net cash inflow/(outflow) from

Operating Activities -312854138 -408659066 30.62% -533802216

B. Cash Flow from Investing

activities

Acquisition of property, plant and

equipment -1894382 -117556193 6105.52% -7294969290

Addition to capital work in progress -164298220 60329026 -136.72% -22152348.2

Disposal of property, plant and

equipment 0 2705000 2705000

Due from associate companies -204451296 34361990 -116.81% -5775196.24

Interest earned 2224608 823496 -62.98% 304838.2735

Net cash inflow/(outflow) from

Investing Activities -368419290 -19336681 -94.75% -1014895.91

17 | P a g e
C. Cash Flow from Financing

activities

Due to associated companies 44661240 -20782852 -146.53% 9671181.034

Short term loan 1252260211 857849611 -31.50% 587662171.7

Long term loan & lease finance -258524548 -40903792 -84.18% -6471803.99

Dividends paid -15859 0 -100.00% 0

Interest paid on short term loan & bank

charges -345639200 -361283537 4.53% -377635969

Interest on debentures -2840571 0 -100.00% 0

Redeemable debentures 0 -25740 -25740

Net cash inflow/(outflow) from

Financing Activities 689901273 434853689 -36.97% 274093900.4

Net increase/(decrease) in cash &

cash

equivalents(A+B+C) 8627847 6857944 -20.51% 5451116.125

Adjustments for unrealized foreign

currency fluctuation gain/(loss) 1690056 588134 -65.20% 204668.7222

Cash and cash equivalents at the

beginning of the year 66895725 77213627 15.42% 89122947.61

Cash and cash equivalents at the

end of the year 77213627 84659705 9.64% 92823843.78

Page | 10

18 | P a g e
 ARAMIT CEMENT LIMITED

Statement of Cash Flows

For the year ended 30 June, 2021

2021
Particulars
Tk.

A. Cash Flows from Operating Activities:

Cash received from customers and others 1835273924

Cash paid to supplies and others 2359406265

Net cash inflow/(outflow) from Operating Activities -533802216.2

B. Cash Flow from Investing activities

Acquisition of property, plant and equipment -7294969290

Addition to capital work in progress -22152348.2

Disposal of property, plant and equipment 2705000

Due from associate companies -5775196.244

Interest earned 304838.2735

Net cash inflow/(outflow) from Investing Activities -1014895.914

C. Cash Flow from Financing activities

19 | P a g e
Due to associated companies 9671181.034

Short term loan 587662171.7

Long term loan & lease finance -6471803.985

Dividends paid 0

Interest paid on short term loan & bank charges -377635968.7

Interest on debentures 0

Redeemable debentures -25740

Net cash inflow/(outflow) from Financing Activities 274093900.4

Net increase/(decrease) in cash & cash equivalents(A+B+C) 5451116.125

Adjustments for unrealized foreign currency fluctuation gain/(loss) 204668.7222

Cash and cash equivalents at the beginning of the year 89122947.61

Cash and cash equivalents at the end of the year 92823843.78

20 | P a g e