Fax - BSRM an Acclaimed Steel Re Rolling Mill in … · Fax +880 (31) 2520795 E-mail...
43
Rahman Rahman Huq Chartered Accountants 102 Agrabad C/A (3rd Floor) Chittagong, Bangladesh Telephone +880 (31) 710704, 710996 Fax +880 (31) 2520795 E-mail [email protected] lnternet www.kpmg.com/bd INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF BANGLADESH STEEL RE-ROLLING MILLS LTD. Report on the Financial Statements We have audited the accompanying financial statements of BANGLADESH STEEL RE-ROLLING MILLS LTD. ("the Company") and its associates which comprise the statement of financial position as at 31 December 2013,the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with Bangladesh Financial Reporting Standards, and for such intemal control as management determines is necessary to enable the preparation of flnancial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity's preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of the Company as at 3l December 2013, and of its financial performance and its cash flows for the year then ended in accordance with Bangladesh Financial Reporting Standards. Report on Other Legal and Regulatory Requirements In accordance with the Companies Act 1994 and Securities and Exchange Rules 1987, we also report the following: (a) we have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof; (b) in our opinion, proper books ofaccount as required by law have been kept by the Company so far as it appeared from our examination of those books; (c) the statement of financial position, and the statement of profit or loss and other comprehensive income dealt with by the report are in agreement with the books of account; and (d) the expenditure incurred was for the purposes of the Company's business. fZ,/a.n*,,r, ?^4*r*^ % Chittagong, 09 March 2014 ' M, Dhaka office address : Rahman Rahman Huq, a partnership firm registered in Rahman Rahman Huq Telephon8 +880 (2) 988 M50'2 Bangladesh and a member firm of the KPMG network of Chartered Accountants Fil +880 (2) 988 6449 lndependent member firms affilialed with KPMG intemational 9, M0hakhali CiA{llIh & 12h floors) E.mail [email protected] Cmperative ("KPMG lnternational'), a Swiss entity. Dhaka 1212, Bangladesh. lnternel w.kpmg.@trVbd 1 BSR[r_Ac. 13 (F)
Transcript of Fax - BSRM an Acclaimed Steel Re Rolling Mill in … · Fax +880 (31) 2520795 E-mail...
Rahman Rahman HuqChartered Accountants102 Agrabad C/A (3rd Floor)Chittagong, Bangladesh
Telephone +880 (31) 710704, 710996Fax +880 (31) 2520795E-mail [email protected] www.kpmg.com/bd
INDEPENDENT AUDITOR'S REPORT
TO THE SHAREHOLDERS OF BANGLADESH STEEL RE-ROLLING MILLS LTD.
Report on the Financial Statements
We have audited the accompanying financial statements of BANGLADESH STEEL RE-ROLLING MILLSLTD. ("the Company") and its associates which comprise the statement of financial position as at 31 December
2013,the statement of profit or loss and other comprehensive income, statement of changes in equity and statement
of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory
information.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance
with Bangladesh Financial Reporting Standards, and for such intemal control as management determines is
necessary to enable the preparation of flnancial statements that are free from material misstatement, whether due to
fraud or error.
Auditor's ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit
in accordance with Bangladesh Standards on Auditing. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on our judgment, including the assessment of the risks ofmaterial misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,
we consider internal control relevant to the entity's preparation of financial statements that give a true and fair viewin order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by management,
as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
OpinionIn our opinion, the financial statements give a true and fair view of the financial position of the Company as at 3lDecember 2013, and of its financial performance and its cash flows for the year then ended in accordance withBangladesh Financial Reporting Standards.
Report on Other Legal and Regulatory Requirements
In accordance with the Companies Act 1994 and Securities and Exchange Rules 1987, we also report the following:
(a) we have obtained all the information and explanation which to the best of our knowledge and beliefwere necessary for the purpose of our audit and made due verification thereof;
(b) in our opinion, proper books ofaccount as required by law have been kept by the Company so far as itappeared from our examination of those books;
(c) the statement of financial position, and the statement of profit or loss and other comprehensive income
dealt with by the report are in agreement with the books of account; and
(d) the expenditure incurred was for the purposes of the Company's business.
fZ,/a.n*,,r, ?^4*r*^ %Chittagong, 09 March 2014 ' M,Dhaka office address :
Rahman Rahman Huq, a partnership firm registered in Rahman Rahman Huq Telephon8 +880 (2) 988 M50'2Bangladesh and a member firm of the KPMG network of Chartered Accountants Fil +880 (2) 988 6449lndependent member firms affilialed with KPMG intemational 9, M0hakhali CiA{llIh & 12h floors) E.mail [email protected] ("KPMG lnternational'), a Swiss entity. Dhaka 1212, Bangladesh. lnternel w.kpmg.@trVbd
1BSR[r_Ac. 13 (F)
BANGLADESH STEEL RE-ROLLING MTLLS LTD.
STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2OI3
Assets
Non-current assets:
Property, plant and equiPrnent
Capital work-in-progress
Investtnent in associate
Other investments
Total non-current assets
Current assets:
InventoriesTrade receivables
Other receivables
Due from inter companies
Advances and deposits
Shorl term investments
Cash and cash equivalents
Total current assets
Total assets
Equity and LiabilitiesEquity:Share capital
General reserve
Revaluation surplus
Retained earnings
Fair Value reselve
Total equity
Liabilities:Non-current liabilitiesLong term loan
Deferred tax liabilitiesTotal non-current liabilitiesTrade payables
Short term liabilitiesLiabilities for expenses
Advance against sales
Due to inter companies
Long terrn loan-current PonionProvision for income tax
Provision for.WPPF and Welfare Fund
Other IiabilitiesTotal current liabilitiesTotal liabilitiesTotal equity and liabilities
The annexed notes I to 47 fornt an integral part
Notes
6
7
8.01
8.02
9
t011
12
13
8.0314
5,889,585,061404,867,36678,591,566
2,277,089,3791,597 ,513,355
78,011,7 52
99,302,648
31.12.2013Taka
7,006,114,629345,062,819
3,268,469,94499.527 ,',194
10,719,175,186
10,424,961,127--aT${I163tr
1,558,510,3 80
30,1 70,8 1 8
4,129,104,568
2,398,521,265
2,439,1528,1 18,746,183
1,406,182,6121.07 1 ,987 ,61 s
2,478,170,287
3,563,424,2293,631,028,292
216,856,037101 ,714,671
2,401,210,345492,699,s56t24,274,416
806,3 85
15,205,91210,547,219,843
13,025,390,130
31.12.2012
Taka
6,117,152,324414,664,946
1,984,714,56953,659,91 I
9J',14,191,750
4,766,400,890543,137,398148,881,245
1,409,473,023484,118,657
232,608,16085,564,964
7,670,184,33716.840,37
1,228,233,910882,458,633
7,203,368,444
9,314,060,947
15
t6.0r16.02
16.03
17.01
i8
l920
21
22
23
r7.0r2425
26
21,144,136,313 16,840,376,087
Company Secretary
As per our annexed report ofsame da;e.
qZ.^/_*.^W^/."r"^Rahman Rahman HuqChartered Accountants
I ,55 8,510,38030,170,81 8
4,189,255,1 l81 ,1 47 ,355,332
1.023.492
7,526,315,140
2,110,692,543
2,181,935,317
3,351,042,310111,142,297
54,956,861
369,924,6163\6,932,s94184,962,166
2,665,27323,806,970
Chittagong, 09 March 2014
BANGLADESH STEEL RE-ROLLING MILLS LTD.STATEMENT OF PROFIT OR LOSS AND OTHER. COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2013
IlcvcnueCost of sales
Gross profit
Selling and distribution costs
Administrative costs
Otlier income
0perating profitFinance costs
Finance income
Loss on revaluation of properry, plant and equipment
Profit before tax and WPPF and Welfare FundContribution to WPPF and Welfare Fund
Non-operating income
Share ofprofit ofassociates (Net oftax)
Profit before taxIncome tax expense:
Current Tax:Current year
Previous year
Deferred tax
Net profit after tax for the year
Other comprehensive income;
Items that will never be reclassified to profit or loss
Revaluation of property, plant and equipmentDeferred tax on revaluation surplus ofassets
Items that are or may be reclassified to profit or loss
Available for sale financial assets- net change in fair value
Share of revaluation surplus of associate
Other comprehensive income, net of tax
Total comprehensive income
Earnings per share:
Basic earnings per share
The annexed notes I to 47 form an integral par
Chittagong, 09 March 2014
BSRM-AC. 13 (F)
1,756.824 2,631,394,681
790,458,435 3,085,318,868
5.06 2.91
Company Secretary
As per our annexed report ofsame date.
Notes
27
28
29
30
31
32
JJ
34
35
2013
Taka
8,602,415,008(8,102,322,138)
500,092,270
(55,646,51 l)166,109,408
(221,155,919)278,336,351
6,652,224
2012
Taka
14,043,421,489( 13,345,900,813)
697,520,675
(35,414,97 1)
( 1 76,030,894)(211,445,865)486,074,81A
108,231
284,988,5'75(264,396,406)
23.390.549
(24t,00s,8s7)
48 6, 1 83,04 1
(218,832,330)
34,150,796(28,023,369
(272,704,903)
43,982,118(2,199,136)41,783,582
169,063,732
934,127,635
1 ,103,191 ,367
213,418,138(10,673,907)
202,804,231
150,068,986
312,954,478
463,023,4641,144,974,949
(t24,214,4t6)(6,612,039)25,3 86,883
(356,273,338)
665,827,695
(188,224,809)(87,652)
(23,s91,04
(21 1,903,508)
788,701,61 I
1,156,824
1,7 56,924
453,924,187
2,004,256,895(2t2,067,263)
t,192,t89,632
1,023,492
838,181,557
839,205,049
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Chartered Accountants
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BANGLADESH STEEL RE-ROLLING MILLS LTD.
STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 3I DECEMBER 2OI3
b.
OPERATING ACTIVITIES:
Paid against revenue expenditure
Receipts fi'om customers against sales
Receipt against other income
Payment for Workers' Profit participation fundPayment of interest-Net
Income Tax Paid
Net cash provided by/(used in) Operating Activities
INVESTING ACTIVITIES:
Acquisition of property, plant and equipmentProceeds from sale ofpropefty, plant and equipmentShort term loan to affiliated cornpanies
Investment
Proceeds from sale of investments in tradable securities and FDRsCapital Work-in-progress
Dividend income
Net cash used in Investing Activities
FINANCING ACTIVITIES:
Receipt/(Re-payment) of Term LoanLoan received from /(paid to) affiliated companies and othersDividend paid
Share application money refundedReceipts of Short term loan
Net cash (used in)/provided by Financing Activities
Total (a+b+c)
Opening eash and cash equivalentsClosing cash and cash equivalents
2,432,562 178 (1,129,946,088)
13,737,694 (9,151,725)
2013Taka
353,115,664
2,03t,285,729(232,425,197)
279.985.982
82,010,848 s33,676,699
(2,500,935,342) s87 ,1 11 ,664
2012
Taka
834,259,149(2,1 i 5,987,1 96)
(788,759)
t52,470,119
c.
85,564,964
99,302,64894,722,699
85,554,96413,737,694 (9,157,725.)
(8,555,015,71 8
8,787,022,059
190,805,958
(4,059,024)(110,392,847)( 166,350,s80
(12,694,38s,182)
13,896,097,393
I 35,994,990
(24,793,700)
(514,169,155)
265,067,537
(95,680,881)
33,393,389(867,6t6,356
( 1,397,0 t 3,893
157,727,397
(433,233,15A)
101,588,742
(116,139,631)
9,032,s00
932,616,174(121,226,303)
177,725,197
(3 87,980,463)
I 53,084, I 90
BSRM Ac. 13 (F)
BANGLADESH STEEL RE-ROLLING MILLS LTD.NOTES TO THE FINANCIAL STATEMENTS
AS AT AND FOR THE YEAR ENDED 3I DECEMBER 2OI3I.()O REPORTING ENTITY
l.0l Company Profile
Bangladesh Steel Re-Rolling Mills Limited is a public company limited by shares is domiciled in Bangladesh. .rheaddress of the company's registered office is AIi Mansion, tossttzol Sadarghat Road, chittagong, Bangladesh. Thecompany was formed and incorporated with the Registrar of Joint Stock companies and Firms in Bangladesh onDecember 28, 1960 vide the certificate c/186-No. 14gll92 E.P. of 1960-1961 under companies Act l9l3 (sincerepealed and substituted by the companies Act 1994) as a private company limited by share. The company wasconverted into a public limited company on November 03,2009 under the Companies lit ;p1sq.
1.02 Nature of the business
The rnain activity of the company is to manufacture M.S. products by setting up rolling and re-rolling mills. Thecompany has set up its Re-Rolling mill and Steel Melting workshop (s\4w preriiously known 1s MeghnaEngineering works Limited) at l47l148ll4g and 78179 Baizid Bostami Road, Nasirabad Industrial .,irea,chittagong, Bangladesh respectively and commenced its commercial production from lggT after first BMRE.M'S' billets is manufactured from scraps and sponge iron etc. at steel Melting workshop (sMw) and these billetsare re-rolled in the next step at Re-Rolling Mills to manufacture M.S. products. The company also deals in sale ofM'S' products like angle, channel, I Beam, H Beam and ingot etc. which is very insignificant compared to the saleof own manufactured products"
1.03 Description of associates
(i) Legalform of BSRM Steels Ltd.
BSRM Steels Ltd' was incorporated on 20th |uly,2002, vide the ceftificate C-No.4392 of 2002as a private limitedcompany under Companies Act 1994. The company was converted to a public limited company on 20 December2006' The company is listed with Dhaka Stock Exchange and chittagong Srock Exchange as a publicly quotedcornpany' Trading ofthe shares ofthe company started in two stock exchanges from lg laiuary 2009. BangLdeshSteel Re-Rolling Mills Limited directly holds 3 i.188% of ordinary shares in BSRM Sreels Ltd.
Nature ofthe businessThe main purpose or risma Steels Ltd. is to manufacture M.S.products by sefting up rolling and re-rolling mills.The company had set up its Rolling mill at 4 Fouzderhar Industrial Estate, l-atifpui, Sitakunda, chittagong andcommenced commercial production from 0l April 200g.
(ii) Legal form of BSRM Iron & Steel Co. Ltd.BSRM lron & Steel Co. Ltd' (BISCO) was incorporated as aprivate Limited Company on l3th April,2005, videcefiificate No' CH-5415 of 2005 under the Companies Act, (No-XVill), lgg4. The Company was converred into apublic limited company on March 15,2011 . The company's Registered and corporate office is situated at AliMansiott, Sadarghat Road, chittagong. It is a subsidiary company orssRM steels Limited that holds 95o/o ordinaryshares in (BISCO). As a result Bangladesh steel Re-Rolling Mills Limited indirectly hotds 29.629% shares inBISCO.and has significant influence over it.
Nature of the businessThe principal activities of the company are manufacturing M.S. Billets of different qualities and selling the same tosteel rolling mills. The company had set up its automatic steel melting plant at 202-205 Nasirabad Industrial Area,Baizid Bostami Road, Chittagong and commenced commercial production from 1st June, 20I0.(iii) Legal form of BSRM Steel Milts Ltd.BSRM steel Mills Ltd., was incorporated as a private limited company on l6 April 200g vide registration # cH-6561(267)12008 under the Companies Act, 1994 to set up one of thl largest production plant in the steel industriesin Bangladesh' The company was converted into public limited company on 12 November 2013. Bangladesh steelRe-Rolling Mills Limited holds 21.160/o of ordinary shares directly and 6.79% of ordinary shares indirectly inBSRM Steel Milts Ltd.
Nature ofthe businessThe company is engaged in sefting up an automatic steel melting plant for making different quality of M.S billet andsell the same to steel rolling mills. The company has not yet commenced commercial production.
2.OO BASIS OF PREPARATION
2.01 Statement of compliance
These financial statements have been prepared in accordance with Bangladesh Financial Reporting Standards(BFRSs), applicable sections of Companies Act 1994 and the Securities and Exchange Rules 1987. BFRSsconrprise the lol lowing:
(i) Bangladesh Financial Reporting Standards. (BFRSs)
(ii) Bangladesh Accounting Standards. (BASs)
(iii) Interpretations of BFRSs and BASs.
2.02 Date of authorization
These financial statements have been authorized for issue by the Board of Directors on 09 March 2014.
2.03 RegulatorycomplianceThe company is required to comply with amongst others, the following laws and regulations:
(D The Companies Act 1994
(ii) The Securities and Exchange Ordinance 1969 ,
(iii) The Securities and Exchange Rules 1987(iv) The Income Tax Ordinance 1984
(v) The Income Tax Rules 19.84
(vi) The Value Added Tax Act 1991
(vii) The Value Added Tax Rules 1991
(viii) Bangladesh Labour Act 2006
2.04 Basis of measurement
These financial statements have been prepared on going concern basis under the historical cost convention exceptfor investment in tradable shares and property, plant and equipment which are measured at fair value.
2.05 Functional and presentation currency
These financial statements are presented in Bangladesh Taka (BDT) which is the company's functional currency. Allfinancial information presonted in BD Taka has been rounded off to the nearest Taka except when otherwiseindicated.
2.06 Statement of Cash flows
Statement of cash flows has been prepared as per BAS 7: Statement of Cash Flows using Direct Method as per therequirement of Securities and Exchange Rules 1987 and the Companies Act 1994.
2.01 Use of estimates and judgments
The preparation of financial statements in conformity with BFRSs requires management to make judgments,estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,liabilities, income and expenses. Estimates and assumptions are reviewed on an ongoing basis.
The estimates and underlying assumptions are based on past experience and various other factors that are believedto be reasonable under the circumstances, the result of which form the basis of making judgments about the carryingvalues of assets and liabilities that are not readily apparent fiom other sources. Actual results may differ from these
estimates.
Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affectsonly that period, or in the period of revision and future periods if the revision affects both current and futureperiods.
2.08 ComparativeinformationComparative information has been disclosed in respect of the year 2012 for all numeric information in the financialstatements and also the narrative and descriptive information where it is relevant for understanding of the currentyear's fi nancial statements.
Figures for the year 2012 have been rearranged wherever considered necessary to ensure comparability with thecurrent year.
2.09 Going concern
The Company has adequate resources to continue its operation for foreseeable future and hence, the financialstatements have been prepared on going concern basis. As per management's assessment there are no materialuncertainties related to events or conditions which may cast significant doubt upon the company,s ability tocontinue as a going concern.
2.10 Reporting period
These Financial Statements covered the reporting period of one year commencing ffom 0l January 2013 to 3lDecember 2013 which is followed consistently.
2.ll Merger of common control companyBy virtue of the decision of the High Court Division and approval of the Bangladesh Securities and ExchangeCommission, Meghna Engineering Works Limited was merged with Bangladesh Steel Re-Rolling Mills Ltd. witheffect from 0l January 2011 and a total of 27,160,056 Nos. Ordinary Shares of Tk. 10 each totaling Taka271,600,560 of Bangladesh Steel Re-Rolling Mills Ltd. was issued to shareholders of Meghna Engineering WorksLimited (MEWL).
In absence of specific accounting standards for recording such common control business combination, generallyaccepted accounting practices in other countries has been followed as per provisions of BAS 8.12. As per generallyaccepted accounting practices, polling of interests method has been followed by the company under which assets,liabilities and reserves of MEWL have been recorded under specific line items of the company and comparativesare restated as if the acquiree had always been merged with the company.
3.OO SIGNIFICANTACCOUNTING POLICIESThe accounting policies set out below have been applied consistently to all the years presented in these financialstatements by the company except otherwise mentioned.
3.01 Property, plant and equipment (PPE)
Items of propeffy, plant and equipment are stated at cost and re-valued amount less accumulated depreciation andaccumulated impairment losses, if any.
3.01.01 Recognition and measurement
The cost of an item of property, plant and equipment comprises its purchase price, irnport dury and non-refundabletaxes (after deducting trade discount and rebates) and any cost directly attributable to the acquisition ofthe assets.The cost ofselfconstructed/installed assets includes the cost ofmaterials, direct labour and any other costs directlyattributable to bringing the assets to the location and condition necessary for it to be capable of operating in theintended manner and the cost of dismantling and removing the items and restoring the site on which they arelocated"
When parls of an item of properfy, plant and equipment have different useful lives, they are accounted for asseparate items (major components) of properry, plant and equipment.
The gain or loss on disposal of an item of properfy, plant and equipment is detennined by comparing the proceedsfrorn disposal with the carrying amount of the properry, plant and equipment and is recognised under otherincome/expenses in profit or loss.
3.0I.02 Subsequent costs
The coit of replacing or upgrading part of an item of properfy, plant and equipment is recognised in the carryingamount of the item if it is probable that the future economic benefits embodied within the part will flow to thecompany and its cost can be measured reliably. The costs of the day-to-day servicing of properry, plant andequipment are recognized in profit or loss.
3.01.03 DepreciationDepreciation is based on the cosVrevalued amount ofan asset. Significant parts ofindividual assets are assessed andif a cornponent has a useful life that is different from the remainder of that asset, that component is depreciatedseparately.
Depreciation is recognised in profit or loss on diminishing balance method over the estimated useful lives of eachparts of properfy, plant and equipment. Depreciation is charged on addition cornmencing fiom the year ofacquisition and no depreciation is charged in the year ofdisposal. The principal annual rates are as follows.
Assets Rates (%o)
Land and land development NilPlant and Machinery 7.50% - 15%
Motor Vehicle 20%o
Air Conditioner and air compressor 15% - 20%Furniture and Fixtures 10%Office Equipments 15%Buildings and sheds 5% - 15%
Depreciation methods, useful lives and residual values are reassessed at the reporting date and adjusted ifappropriate.
3.01.04 Revaluation of Property, plant and equipment
All property, plant and equipment of the company were revalued by M/S Hoda Vasi Chowdhury & Co., CharteredAccountants, in 2008 and2012 considering the book value of such assets on December 31,2006 and December 31,2011 respectively. As per report of revaluation, net revaluation gain stands at Tk. 1,613,400, 176 and Tk.2,004,256,895 in 2008 and2012 respectively. These revaluations have been recognized in the financial statementsat the beginning of the year 2008 and2012 respectively.
Replacement cost and net realisable value method, as applicable, have been used by the independent valuer in re-valuation of properfy, plant and equipment.
Difference of depreciation befween revalued carrying amount and depreciation based on carrying amount as perassets' original cost has been transferred from Revaluation Reserve to Retained Earnings as shown in Statement ofChanges in Equify.
3.02 Capital work in progress
Capital work in progress consists of cost incurred for acquisition of new plant and machinery, civil structure, factoryshed for warehouse etc. which were not ready for use till reporting date.
3.03 Leases
At inception of an arrangement, the cornpany determines whether the arrangement is or contains a lease.
At inception or on reassessment of an arrangement that contains a lease, the entify separates payments and otherconsideration required by the arrangement into those for the lease and those for other elements on the basis oftheirrelative fair values.
3.03.01 Finance Lease
Leases in terms of which the company assumes substantially all the risks and rewards of ownership are classified asfinance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair valueand the present value of the minimum lease payments. Subsequentto initial recognition, the asset is accounted for inaccordance with the accounting policy applicable to that asset. Minimum lease payments made under finance leaseare apportioned between the finance expense and the reduction of outstanding liability. The finance expense isallocated to each period during the lease term so as to produce a constant rate of interest on the remaining balanceof the liabiliry.
3.03.02 Operating lease
Leases that are not finance lease are considered as operating leases and the leased assets are not recognised in thecompany's Statement of Financial Position. Payments made under operating leases are recognised in profit or losson a straight line basis over the term ofthe lease.
3.03.03 Leasehold land
Factory buildings of the company are situated at Nasirabad Industrial Area, Chittagong on leasehold landsmeasuring 7.905 acres. These lands are taken on lease for 99 years on payment of salami and renewable thereafter.These lands are duly mutated in the name of the company.
These leasehold lands are recognised as assets under property, plant and equipment. Since significant risks andrewards incidental to ownership ofthese assets are transferred to the company, these are covered under revaluationof assets done in 2008 and 2012.Beingrights to use of these lands are of perpetual nature, no amortization of valueoflands are recognised in the financial statements over the lease period.
3.04 Inventories
lnventories are measured at lower ofcost and net realisable value. The cost of inventories is calculated based on theweighted average method and inciudes expenditure incurred in acquiring these inventories, production orconversion costs and other costs incurred in bringing them to their existing location and condition in accordancewith BAS-2.
Catcqorv
Finished Goods -
Raw materials -
Store items -
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs ofcompletion and selling expenses.
3.05 Trade and other receivablesTrade and other receivables are initially recognised at cost which is the fair value of the consideration given inreturn. After initial recognition, these are carried at cost less impairment losses, if any, due to uncollectibility of anyalnount so recognised.
There is no fixed company policy regarding provision for impairment loss on receivables, if any receivables are notrealized within the credit period. It has been dealt with on case to case basis.
3.06 Transactions with inter companies
These represent balance amounts due to /fiom sister concems which are derived from short term loan, sale/purchaseof goods from tirne to time. Sales and purchase of goods are made on arm's length basis and interest on balances arecharged at 15.50o/o per annum. These balances are unsecured but considered good and realisable.
3.07 Advances, deposits and prepayments
Advances are initially measured at cost. After initial recognition, advances are carried at cost less deductions,adjustrnents or charges to other account heads such as properfy, plant and equipment, inventory or expenses.
Deposits are measured at payment value.
Prepayments are initially measured at cost. After initial recognition, prepayments are carried at cost less charges toprofit or loss.
3.08 Cash dnd cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks and other short term fixed depositswith banks.
3.09 Impairment
Financial assets
Financial assets are impaired ifobjective evidence indicates that a Ioss event has occurred after initial recognition ofthe assets and that the loss event had a negative effect on the estimated future cash flows ofthat assets that can beestimated reliably.
Financial assets not classified as at fair value through profit or loss , including an interest in an equity accountedinvestee, are assessed at each reporting date to determine whether there is objective evidence of impairment.
Valuation
Finished Goods are valued at Cost or Net Realisable Value whichever is lower.
Raw Materials are valued at Cost or Net Realisable Value whichever is lower.
Based on weighted average method.
10
Objective evidence that financial assets are impaired includes :
- default or delinquency by a debtor- restt'ucturing of an amount due to the company on terms that the company would not consider otherwise- indications that a debtor or issuer will enter bankruptcy- adverse changes in the payment status ofborrowers or issuers
- the disappearance ofan active market for a security, or- observable data indicating that there is a measurable decrease in expected cash flows from a group of
financial assets
For an investment in an equity securify, objective evidence of impairment includes a significant or prolongeddecline in its fair value below its cost.
Financial Assets measured at Amortized cost
The company considers evidence of impairment for these assets at both an individual asset and a collective level.All individually significant assets are individually assessed for impairment. Collective assessment is carried out bygrouping together assets with similar risks characteristics.
ln assessing collective impairment, the company uses historical information on the timing of recoveries and theamount of loss incurred, and makes any adjustment if current economic and credit conditions are such that the actuallosses are likely to be greater or lesser than suggested by historical trends.
An irnpairment loss is calculated as the difference between an asset's carrying amount and the present value of theestimated future cash flows discounted at the assets'original effective interest rate. Losses are recognized in profitor loss and reflected in an allowance account. When the company considers that there is no realistic prospects ofrecovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreasesand the decrease can be related objectively to an event occurring after the impairment was recognized, then thepreviously recognized impainnent loss is reversed through profit or loss.
Available for sale financial assets
lmpairment losses on available for sale financial assets are recognized by reclassifoing the losses accumulated in thefail value reserve to profit or loss. The amount reclassified is the difference between the acquisition cost (net of anyprincipal repayment and amortization) and the current fair value, less any impairment loss previously recognized inprofit or loss. Ifthe fair value ofan impaired available for sale debt securiry subsequently increases and the increasecan be related objectively to an event occurring after the impairment loss was recognized, then the impairment lossis reversed through profit or loss; otherwise, it is reversed through other comprehensive income.
Equity accounted investees
An impairment loss in respect of an equity accounted investee is measured by comparing the recoverable amount ofthe investment with its carrying amount. An impairment loss, is recognized in profit and loss, and is reversed if therehas been a favourable change in the estimates used to determine the recoverable amount.
Non financial assets
The carrying amounts of the company's property, plant and equipments are reviewed at each reporting date todetermine whether there is any indication of impairment. If any such indication exists then the property, plant andequipment's recoverable amount is estimated. An impairment loss is recognized if the carrying amount of an asset orits cash-generating unit exceeds its recoverable amount. Impairment losses, if any, are recognized in the statementof profit or loss and other comprehensive income.
3.10 Employee benefit schemes
3.10.01 Short-term employee benefitsShort-term employee benefits are expensed as the related service is provided. A liability is recognized for theamount expected to be paid if the company has a present legal or constructive obligation to pay this amount as aresult of past service provided by the employee and the obligation can be estimated reliably.
3.10.02 Defined contribution plan (Recognized provident fund)
A defined contribution plan is a post-employment benefit plan under which the company pays fixed contributionsinto a separate fund and will have no legal or constructive obligation to pay further amount. The Employees,Provident Fund was obtained recognition from lncome Tax Authority on August 05, 1975 which was effective fromSeptember 30, 1973 and is considered as defined contribution plan as it meets the recognition criteria specified forthis purpose in BAS-19.
11
Obligation for contribution to defined contribution plan is recognized as provident fund (PF) contribution expenses
in profit or loss in the period during which services are rendered by employees. Advance against PF is recognized as
an asset to the extent that a cash refund or a reduction in future payments is available.
The company maintains the Recognized Provident Fund for all permanent employees at which both the company
and employees contribute @ 10% of basic salary.
Appropriate provision has been made for Workers' Profit Participation Fund and Workers' Welfare Fund as per
provisions of law. Currently the rate of provision is 5% on net profit before tax and WPPF and Welfare fund.
3.11 Provisions and contingencies
3.ll.0I A provision is recognized in the financial statements if, as aresult of apast event, the company has apresent legal
or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefit willbe required to settle the obligation.
3.I 1.02 Contingencies arising fiom claim, lawsuit, etc. are recorded when it is probable that a liability has been incurred and
the amount can reasonably be measured.
3.12 Earnings Per Share (EPS)
Basic Earnings:
This represents profit for the year attributable to ordinary shareholders. As there is no preference dividend, non-
controlling interest or extra ordinary items, the net profit after tax for the year has been considered fully anributable
to the ordinary shareholders (refer to Note-36 to the Financial Statements).
Diluted Eamings:
No diluted earnings per share is required to be calculated for the year as there is no scope for dilution during the
year under audit.
3.13 Finance income and expenses
lnterest income on FDR and STD Account has been recognized on cash basis.
interest income/expenses on amount due toldue from inter companies has been recognized periodically.
3.14 Foreign currencytransactions
Transactions in foreign currencies are translated to the functional currency (BDT) at exchange rates at the dates oftransactions. Monetary assets and liabilities denominated in foreign currencies at reporting date are re-translated
into Bangladesh Taka at the exchange rates ruling at the reporting date. Non-monetary assets and liabilities
denominated in foreign curencies, stated at historical cost, are translated into Bangladesh Taka at the exchange rate
ruling at the date oftransaction. Foreign exchange differences arising on translation are recognized in profit or loss.
3.15 'Income tax expenses
Tax expenses comprises current and deferred tax. Current tax and deferred tax are recognized in profit and loss
except to the extent that it relates to items recognized directly in equity or in other comprehensive income.
Current tax:Cument tax is the expected tax payable or receivable on the taxable income or loss for the period, using rates
enacted or substantially enacted at the reporting date and any adjustment to tax payable in respect ofprevious years.
Cuirent tax also includes any tax arising from dividends.
Deferred tax:Deferred tax is recognized in compliance with BAS 12: Income taxes, providing for temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes and amount used for taxation purposes.
Defened tax is measured at the tax rates that are expected to be applied to the temporary differences when they
reverse, based on the laws that have been enacted or substantively enacted at the reporting date. Deferred tax assets
and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they
relate to income taxes levied by the authority on the same taxable entity.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits wili be available against
which the deductible temporary differences can be utilized. Deferred tax assets are reviewed at each reporting date
and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
12
Deferred tax on temporary differences between carrying amounts of investments in associates and tax bases has
been recognised following the tax rates applicable for profit on disposal of investments as well as distributions fromassociates.
Defened tax on revaluation surplus of lands has not been recognized in the financial statements on the ground that
incorne tax payable at source on capital gain during registration of sale of land are generally borne by the buyer.
Hence, possibilify of having any income tax implications on land is very remote.
3.16 Rcvenue
Revenue fiom sale of goods is measured at the fair value of the consideration received or receivable, net of returns
and allowances, trade discounts and rebates, ifany. Revenue is recognized when the significant risks and rewards ofownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and
possible return of goods can be estimated reliably, there is no continuing management involvement with the goods
and the amount of revenue can be measured reliably.
The tirning of the transfer of risk and rewards depends on the individual terms of the sales agreement.
3.17 Management fees
Bangladesh Steel Re-Rolling Mills, the reporting entity, entered into a management sharing agreement withBSRM Steels Ltd., an investee company, on October 15,2005 for allowing BSRM Steels Ltd. to use its goodwill.
According to the terms of the agreement, Bangladesh Steel Re-Rolling Mills Ltd. is entitled to receive Tk. 300 per
MT (in 2012: Tk.250 per MT) of monthly production as management fee on monthly basis provided that BSRM
Steels Ltd. has net profit in its rnonthly financial statements.
3.18 Borrowing costs
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifuing assets
are recognized in profit or loss using effective interest method. Borrowing cost incurred against loan for BMREproject have been capitalized under effective interest rate method.
3.19 Interest on balance of inter companies
Interest on balances due to /due ffom inter companies has been recognized in the financial statements periodically.
Interest @ 15.50% per annum is charged to these short term loan balances as per Board's Resolution dated January
04,2012.
3.20 Investments in associates
An associate is an entity in which the Company has significant influence and which is neither a subsidiary nor a
joint venture. The Company's investment in associates is accounted for in the Financial Statements using the Equity
Method in accordance with BAS 28: 'Accounting for investment in associates'. Such investments are classified as
non-current assets in the statement of financial position and the share of profit/loss of such investment is classified
under as share of profit form associate in the statement of profit or loss and other comprehensive income.
The excess of company's share of net assets' value of associates over cost of investments has been recognized in
proflt or loss as share of associate's profit or loss during the year following the provisions of BAS-28.
Unrealized gains and losses arising from transactions with associate are eliminated against the investment to the
extent of the company's interest in investee.
3.21 FINANCIALINSTRUMENTSA financial instrument is any contract that gives rise to a financial asset of one entity and a financial liabiliry or
equity instrument of another entity.
3.21.01 Financial assets
The Company initially recognizes loans and receivables on the date that they are originated, All other financial
assets are recognized initially on the date at which the company becomes a party to the contractual provisions of the
instrument.
The Company derecognizes a financial asset when the contractual rights to the cash flows frorn the asset expire, or ittransfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially
all the risks and rewards ofownership ofthe financial assets are transferred.
Financial assets are classified into the following categories: financial assets at fair value through profit or loss, held
to maturity, loans and receivables and available-for-sale financial assets.
13
At fair value through profit or loss
A financial asset is classified as at fair value through profit or loss if it is classified as held for trading or is
designated as such on initial recognition. Financial assets are designated as at fair value through profit or loss ifthecompany manages such investment and makes purchase or sale decisions based on their fair value in accordance
with the company's documented risk management or investment strategy. Attributable transactions costs are
recognized in profit and loss as incurred. Financial assets at fair value through profit or loss are measured at fairvalue and changes therein which take into account and dividend income are recognized in profit or loss.
Held to maturityThese assets are initially recognized at fair value plus any directly attributable transaction cost. Subsequent to initialrecognition, they are measured at amortized cost using the effective interest method.
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active
market. Such assets are recognized initially at fair value plus any directly aftributable transaction costs. Subsequent
to initial recognition, loans and receivables are measured at amortized cost.
Loans and receivables comprise cash and cash equivalents, loans and trade and other receivables.
(a) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, cash at bank which are available for use by the company withoutany restriction.(b) Trade and other receivables
Trade and other receivables represent the amounts due from customers for delivering goods or rendering services.
Trade and other receivables are initially recognized at cost which is the fair value of the consideration given in
return. After initial recognition these are carried at amortized cost less impairment losses due to uncollectibiliry ofany amount so recognised.
Ava ilable-for-sale
Available-for-sale financial assets are non-derivative financial assets that are designated as available for sale and are
not classifled in any other categories of financial assets. Generally available-for-sale flnancial assets are recognised
initially at fair value plus any directly attributable transaction costs and subsequent to initial recognition at fair valueand changes therein other than impairment losses are recognized in other comprehensive income and presented in
the fair value reserve in equity. Financial assets which are not traded in the market have been valued at cost unless
any indication of impairment in value of such financial assets exist. Cumulative gain/losses recognized in the othercomprehensive income are reclassified from equity to profit or loss upon derecognition.
Available-for-sale financial assets comprise investment in equity securities and debt securities.
3.21.02 Financial liabilities
The company initially recognises financial liabilities on the date that are originated.
The company derecognises a financial liability when its contractual obligations are discharged, cancelled or expired.
The company classifies non-derivative financial liabilities into the other financial liabilities category. Such financialliabilities are recognised initially at fair value less directly attributable transaction cost. Subsequent to initialrecognition, these financial liabilities are measured at amorlized cost.
Other financial liabilities comprise loans and borrowings, bank overdrafts and trade and other payables.
(a) Trade and other payables
Trade and other payables represent the amounts due to customers for receiving goods or services. Trade and otherpayables are initially recognised at cost which is the fair value of the consideration received. After initialrecognition these are carried at arrortised cost.
(b) Other liabilitiesOther liabilities represents the amounts due to various parties for receiving services. These are initially recognisedat cost which is the fair value. After initial recognition these are caried at amortised cost.
3.21.03 Equity Instruments' Share capital (.ordinary shares)
Ordinary shares are classified as equity. lncremental costs directly attributable to the issue
recognised as expenses.
of ordinary shares are
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14
4.OO MEASUREMENT OF FAIR VALUES
When rneasuring the fair value of an asset or liabiliry, the entity uses market observable data as far as possible. Fairvalues are categorized into different levels in a fair value hierarchy based on the inputs used in the valuationtechniques as follows.
Level l: Quoted prices (unadjusted) in active markets for identical assets and liabilities.Level2: Inputs other than quoted prices included in Level I that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: Inputs fbr the assets or liability that are not based on observable market data.
If the inputs used to measure the fair value of an asset or liabiiity might be categorized in different levels of the fairvalue hierarclty as the lowest level input that is significant to the entire measurement.
Property, plant and equipment
The fair value of items of property, plant and equipments has been determined based on the depreciated replacementcost method and net realizable value method as applicable.
Equity and debt securities
Fair values of tradable equity and debt securities are determined by reference to their quoted closing price in activemarket at the reporting date which are categorized under'Level 1'ofthe fair value hierarchy.
5.00 Ncw Standards and interpretations not yet adopted
New standards or interpretations that have been adopted by the Institute of Chartered Accountants of Bangladesh(ICAB) and effective from January 01 ,2013 are duly adopted by the company.
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Summary of financial information of equity accounted investee:
Name of the investee: BSRM Steels Ltd.
Reporting date: 3l December 2013
BSRM Steel Mills Ltd.
31 December 2013
31.12.2013
31.190
31.12.2012
3l.l9o/o
31.12.2413
21.760h
31.12.2012
13.500Ownership
Current assets
Non-current assets
Total assets
Current Iiabilities
Non-current liabil ities
Total liabilities
Revenue
Other income
Expenses
Profit for the year
Profit attributable to the
owners of the company
Total Comprehensive
income attributable toowners of the company
Tk.17,171,400,659
9,635,182,66126.806,s83.326
Tk.18,037,267,454
10,1 18,158,864
Tk. Tk.901 ,272,669 14t,612,073
5,194,648,732 3,572,102,4296,101,921,401 3,713,714,502
834,288,912 658,553,463
834,288,912 658,553,463
28,755,426,318
19,104,954,216 18,822,222,385
1,520,165,489 1,536,770,98520,62s,119,70s 20,358,993,370
36,294,868,280 38,262,395,136
8.02 Other investments
Investment in non-tradable shares at cost (Note - 8.02.01)
investment in shares of sister company, BSRM Steel Mills Ltd.-at cost
Investmeints in Fixed Deposit Receipts Q\ote - 8.02.02)
8.02.0I Investment in non-tradable shares at cost
Islamic Stearnship Co. Ltd.Apollo Hospital Ltd.
151,433,367 524,464,195(3 5,044,7 12,529) (3'7,7 85,652,254)
_J,4U{gUl_q_ *_l_g!1 zoLgJ_ 9.771.817
1,394,553,917 997,165,27A (9,771,817)
1,394,553,917 3,684,643,333 (9,771,817) 2,279,227,589
The company owns i06,594,173 nos. Ordinary Shares of Tk. 10 each in BSRM Steels Limited as on 31 December20l3.This represents3l.l9o/o of paid up capitalof BSRM Steels Limited (BSL). The market price of these Ordinary shares was
Tk. 68.70 per share on 3 I December 2013. Fair value of investments in BSL has been estimated alTk. 7,323,0 i 9,685.
Out of 106,594,173 nos. ordinary shares, 6,000,000 nos., 3,823,000 nos., 500,000 nos., 388,890 nos., 800,000 nos. and
2,200,000 of ordinary shares are pledged againstbridge finance andterm loans from United Commercial Bank Ltd., IDLCFinance Ltd., IPDC Ltd., United Leasing Company Ltd., National Housing Finance and Investments Ltd. and International
Leasing and Financial Services Ltd. respectively.
90,000(9,861,817)
31.12.2013
Taka
1,000,300
98,527,494
31.12.2012
Taka
1,000,300
13,500,000
39,159,61 r
99,527,794 53,659,911
300
1,000,000
300
r,000,000
19
--r;000300- -----l;000mr
8.02,02 lnvestments in Fixed
Name of banks
Deposit Receipts3t.12.2013
Taka
13,146,7 44
15,000,000
683,673
21,813,090
417,484
79,5561,326,947
20,000,000
20,000,000
31.12.2012Taka
11,821,792
614.90s
25,043,204
415,330
71,6181,192,762
BASIC Bank Ltd.
BD Finance Ltd.Dhaka Bank Ltd.
IPDC of Bangladesh Ltd.
Mercantile Bank Ltd.
The Ciff Bank Ltd.International Leasing and
Financial Services Ltd.
Fareast Finance &Investment Ltd.
ACI Zero Coupon BondLafarge Surma Cement Ltd.ACI Ltd.Eastem Insurance Co" Ltd.Pragati Life Insurance Ltd.Progressive Life Insurance Ltd.
Investments in Fixed Deposit
Name of banks
AB Bank Ltd.Dutch Bangla Bank Ltd.Pubali Bank Ltd.Standard Chartered BankLtd.
Habib Bank Ltd.
PurDose
Security depositSecurity deposit
Investment
Investment
Security DepositInvestment
Investment
Investment
Investment
Receipts
Purpose
LlCMarginL/C MarginL/CMargn
L/C Margin
Investment
Rate of interest
12.50%
ls.00%11.2s%
1250%12.50%
12.s0%
11.00%
14.25%
13.50%
Equivalentopening fair
value
98,527,494 39,159,611
Period
3 years
5 years
2 years
2 years
5 years
1 year
1 year
I year
I year
8.03 Short term investments
Investment in Tradable securities at fair value (Note - 8.03.01)Investments in Fixed Deposit Receipts (Note - 8.03.03)
8.03.01 Investment in Tradable securities at fair value
ACI Zero Coupon BondLafarge Surma Cement Ltd.ACI Ltd.Eastem Insurance Co. Ltd.Pragati Life Insurance Ltd.Progressive Life Insurance Ltd.
8.03.02 Fair value of tradable securities
Cost
15,711,44962,300,303
18,506,4602t4,101.700
78,011,752 232,609,160
10,785,3202,604,2901,691,676
78,120216,219335,824
14,352,9682,557,6701,135,192
13,600141,120245,920---Brr7o-
--18F06;260-
Closing fairvalue
Increase/(Decrease) in
Fair valuereserve
Tk.Tk. Tk.g,gg6,3 17
3,101,9001,176,693
t79,537319,606497,476
9,569,6452,ss7,6701,135,182
73,600141,120245,920
10,785,3202,604,2901,691,676
78,120216,219335,824
1,216,61546,620
556,4944 \)O
75,Ogg
89,90414,161,529 13,722,137 15,711,449
8.03.03
Period
6 months
6 months
6 months
6 months
6 months
Rate of interest
9.50%11.00%tL.00%
10.00%
12.50%
31.12.2013
Taka3,838,796
13,987,.100
1,640,509
42,833,909
31.12.2012
Taka
39,10 1,700
175,000,000
20
62,300,303 214,101,700
9.00 Inventories
Raw Materials-BilletsRaw Materials-ScrapsFinished Goods-Own production
Finished Goods-lmportedFinished Goods- Locally purchased
Mechanical stores
M.S. Roll
Electrical stores
General stores
Fuel and Lubricants
Consumable stores
Fire bricks
9.0I Quantitative movement of raw materials and finished goods
Raw Materials
Opening stock as on January I
Add: Imported during the year
Produced by SMW
Purchased from local market
Available for consumption
Less: Consumed /Sold/returned during the year
Closing inventories
Finished Goods
Opening stock as on January 1
Add: Produced during the year
Imported/ Purchased from sister concern
Less: Sold during the year
Sale offinished goods procured from outside
Closing inventories
10.00 Trade Receivables
From sale of M.S. product
From sale ofscrap and billet
53,203 47,022
191,628
50,000 27,586.
Otv. (MT)
22,89730,30647,464
2,358178
31.12.2013
Taka
1,106,847 ,1031,004,970,3682,690,98s,208
163,028,54611,452,427
384,736,720220,815,29213s,962,464
35,825,377
3,477,65113 1,483,305
31.12.2012
Taka
1,114,680,721
969,853,3581,325,565,778
262,960,302144,292,364
41 1,1 18,846
216,960,125130,200,820
33,731,1724, lg5,ggg
148,517,349
M.Ton M.Ton
47,022
63,485
119,289
73,939
256.713
64,013
80,1 33
95,810
34.774
210,717
303,735
250,532274,730227.708
The management believes that above receivables are good and fully realisable.
stage.
10.01 Party-wise breakup of Trade receivables
Inter companies:
Karnapuli Engineering Works Ltd.
Other customers
3t.12.2012Taka
542.712,306
425.092
404,867,366 543,137,398
been made at thisHence, no provision has
6,102 I,194,000404,861,264 541,943,398
____4!eg;ss_ __343 J37_3e!_
31.12.2013Taka
404,442,214
425,092
176,714
126,714
21
Ageing of Trade receivables
Due fbr 3 rnonths
Due for 3 to 6 months
Due for above 6 rnonths
Trade receivables- Classification by security and related party
i) Debts considered good and in respect of which the company is fully secured
ii) Debts considered good for which the company holds no securify other than thedebtors' personal security
iii) Debts considered doubtful or bad
iv) Debts due by directors or other officers of the company or debts due by firms orprivate companies in which any director is a partner or a director or a member
v) Debts due by companies under the same management
vi) Maxirnum amount due by directors or other officers of the company at any timeduring the year
I 1.00 Other receivables
Interest receivable
Rent receivable
12.00 Due from inter companies
H Akberali& Co. Ltd.
Chittagong Power Company Ltd.
East Bengal Trading & Industries Corp. Ltd.BSRM Real Estates Ltd.BSRM Steel Mills Ltd.BSRM Recycling Industries Ltd.BSRM Logistics l,td.BSRM Ispat Ltd.BSRM Metals Ltd.
13.00 Advances.and deposits
Advances(Note- 13.01)Deposits(Note- 13.02)
13.91 Advances:
Land
Staff loan against salary
Income tax-corporate
Against revenue expenses
Against scrap purchase- others
L/C margin
Against L/C' Share money deposit to BSRM Steel Mills Ltd. (Associate)
VAT current account and DEDO recoverable accountIncome tax of staff
31.12.2013
Taka
271 ,198,57174,582,812
59.085,923
31.12.20t2
Taka
437,508,78245,087,764
60,540,852
__!lass55_
399,288,440
5,518,926
6,102
6,102
78,496,566
95,000
543,137,398
s35,301,312
7,836,086
1,194,000
1,194,000
148,881,2-45
1,441,905,988
20,295,654r 00,000200,000
252,410,77588,004,1 89
182,472,39829t,700,37s
78,59I,566 __llg$141r
843,257,266
68,027,565129,934,144\33,516,258234,130,37 5
341,0921,409,47rA232,277,099,379:
These represent short term loans given to these sister companies as and when required to meet funding requirement.
All transactions were done through account payee cheque. No amount is receivable fiom Directors at the reporting date.
1,57 5,465,864 461,673,05422,445,60322.047.491
I,597,513,355 494,119,657
17,282,327
4,429,179
136,306,623
68,032,134
9,132,726
25,053,501
341,665,330
900,000,000
73,565.A44
16,462,3274,20 i,868
161,530,248
35, I 53,070
27,143,375
39,722,124
111,289,545
65,964,659
206,838461,673,054
22
1,575,465,864
13.02 De posits:
Customs Authority against clainrAnsar & VDP
l&TandothersPower Development Board
KarnaphuliGas Distribution Co. Ltd. (KGDCL)Bakhrabad Gas System Ltd.Bank guarantee to Bakhrabad Gas Systems Ltd.Linde Bangladesh Ltd.Meghna Petroleum Ltd.Others
I4.00 Cash and cash equivalents
Cash in hand (Note-i4.01)Cash at Banks (Note-14.02)Fixed Deposit Receipts ( Note - 14.03)
14.01 Cash in hand
Corporate of'ficeFactory ofliceDhaka ofliceOverseas otlice
31.12.2013Taka
1,545,145674,221
191,444
13,917,969
1,921,423
422,576
549,491
879,90040,000
31.12.2012Taka
1 ,545 ,145674,221
191,444
13,917,969
1,909,266
422,576
1 ,141 ,7 67g7g,g00
40,0001,924,316-----T4n]SE
ThedirectorsconsiderthatalItheaboveadvances,depositsandpre-paymentSare"i.ffioffiffiin kind and for that no provision against them are required at this stage.
2.005."117
3,996,343
95,316,305
99,302,649
3,822,55573,765,5257,976,994
1,037,0481,893,953I ,055, I 0l
241
1,954,950800,000
1,051,597
23
14.02 Cash at Banks:
Agrani Bank Ltd., Laldighi East Br., Ctg. - CD AiCAgrani Bank Ltd., Baizid Bostami Br., Ctg. - CD A/C
Agrani Bank Ltd., Tomson Bridge Br., Comilla -CD AiCAB Bank Ltd., Agrabad Br., Ctg.- CD AiCAl- Arafah lslamiBank Ltd., Agrabad Br., Ctg. - CD A/C
Bank Al-Falah Ltd., Agrabad Br., Ctg. - CD A/C
Bank Al-Falah Ltd., Agrabad Br., Ctg. - STD AiCBASIC Bank Ltd., Dewanhat Br., Ctg. - CD A/C
Commercial Bank of Ceylon, Agrabad Br., Ctg.- CD A/C
EXIM Bank Ltd., CDA Avenue Br., Ctg.- CD A/C
Dhaka Bank Ltd., Jubilee Road Br., Ctg.- CD A/CDutch Bangla Bank Ltd., Agrabad Br., Ctg. - CD A/C
Dutch Bangla Bank Ltd., Jubilee Road Br.,Ctg. - CD A/C
Habib Bank Ltd., Laldighi East Br., Ctg. - CD A/C
HSBC Ltd., Agrabad Br. Ctg.- CD A/C
HSBC Ltd. KolkataHSBC Ltd.,- Agrabad Br., - USD Exporters FCY A/C
IFIC Bank Ltd., Agrabad - CD A/CIndian Overseas Bank Ltd. (AiC No 817)
Islami Bank Bangladesh Ltd., Jubilee Road Br., Ctg. - CD A/C
Jamuna Bank Ltd., Khatungonj Br., Ctg. - CD A/CJanata Bank Ltd., Laldighi East Corporate Br., Ctg. - CD AiCJanata Bank Ltd. , Laldighi East Br., Ctg. - CD AiC (Old)
Janata Bank Ltd. Agrabad Br., Ctg - CD A/C
Janata Bank Ltd., Local office, Dhaka CD A/C
Mercantile Bank Ltd., Jubilee Road Br., Ctg. - CD A/C
Mutual Trust Banl< Ltd., Jubilee Road Br., Ctg. - CD A/C
National Bank Ltd., Jubilee Road Br. Ctg. - CD A/C
National Credit and Commerce Bank Ltd., Agrabad Br. Ctg. - CD A/C
NRB Cornmercial Bank Ltd.One Bank Lirnited., Agrabad Br. Ctg. - CD A/CPrime Bank Ltd., O. R. Nizam Road Br.,Ctg. - CD A/C
Premier Bank Ltd., O. R. Nizam Road Br., Ctg. - CD A/C
Premier Bank Ltd., I(hatungonj Br., Ctg. - CD A/CPubaliBank Ltd., Agrabad Br. Ctg. - CD AiCShahjalal Islami Bank Ltd., Jubilee Road Br., Ctg. - CD A/CSocial Islami Bank Ltd., Jubilee Road Br., Ctg. - CD A/C
Sonali Bank Ltd., Kalibari Br., Ctg. - CD A/C
Sonali Bank Ltd., I(alibari Br., Ctg. - STD A/C
Sonali Bank Ltd., Cable Shilpa Br., Khulna - CD A/C
Southeast Bank Ltd., CDA Avenue Br., Ctg. - CD AiCSoutheast Bank Ltd. , Pahartali Br., Ctg. - CD A/C
Standard Bank Ltd., Sadarghat Br., Ctg.- CD A/C
Standard Charlered Bank Ltd., Agrabad Br., Ctg.- CD A/C
Standard Chartered Bank Ltd., Motiiheel Br., Dhaka- CD A/C
State Bank of hidia,Agrabad Br., Ctg. - CD A/CTrust Bank Ltd., CDA Avenue Br., Ctg. - CD A/CThe City Bank Ltd., Agrabad Br., Ctg. - CD A/CUnited Commercial Bank Ltd., Jubilee Road Br. Ctg. - CD A/C
All bank balaltces are reconciled with bank statements and negative
overdraft.
95,316,305 73,765,525
31.12.2013Taka
/? lq5
2,046,21211,27 5
8,546,514
916,24511,124)'t 1<1
52,80614,090
641,5306,276
45,62825,334,452
6,881,1253,144,901
109,3 10
149,942
37 5,563i,8024,060
82,s311 ,485,167
1,008
7611,911
12,135
850,9s 1
74,83341,317,362
3,8167,532
4,459,48320,6051 1,53 1
33,76489,363
384,9747,526
512
2,672,422
1,016,7822,576,986
(17,656,904)134,745
10,3 82
13.1 ,852368,029
) )\'7 \'7)
31.12.2012Taka
27,5761,448,41'1
72,5493,592,8 l0
65,123
.37,33523,0224g,5gg33,740
4,419,61830,439
7,767293,119
30,801 ,78545,578,456
19,828
1,407
1,802161 ,558
2,166,408129,629
1,008
761
3,12724,404
2,771,9643 8,50248,039
30,014204,289
1,99569,88090,279
199,612485,015
84,503
71 ,5143,789
3,564,28682,502
(32,939,762)
206,9932,172,785
132,79123,983
6,821,276
24
balances shown in the bank book represent book
14.03 Fixed Deposit Receipts
Name of banks
31.12.2013
Taka31.12.2012
Taka
3,464,3704,512,514
7,976,994
5,000,000,0005,000,000.000
Purpose
L/C MarginL/C Margin
Period
1 month
3 months
Rate of interest
t2.00%12.50%
AB Bank Ltd.
Pubali Bank Ltd.
15.00 Share capital
Authorised capital:500,000,000 Ordinary Shares of Tk. 10 each
Issued, Subscribed and Paid-up capital:
64,345,491 Ordinary Shares of Tk. l0/- each issued in cash
64,345,491 Ordinary Shares of Tk. I 0/- each
fully paid-up as Bonus Shares
27,160,056 Ordinary shares of Tk. 10/- each
fully paid up (other than cash)
15.01 Shareholding position
Name of shareholders
Mr. Alihussain AkberaliMr. Aarneir AlihussainMrs. Bilkis AlihussainMr. Saifuddin Abbas UnwalaMr. lqbal Hussain
Mr. Abbas Jurnani
Mr. Ali Asgar Badruddin
Mr. Zohair Taherali
Mrs. Tehseen Zohair TaheraliVORTEX Investments Ltd.Mrs. Sabeen AameirMr. Abdul Qadir ZohairMrs. Munira Saif UddinMr. Md. Hussain HabibMr. Faisal Iqbal PoonawaiaMrs. Shahnaz Hussain
H. Akberali& Co. Ltd.I(arnafully Engineering Works Ltd.Mrs. Rizwana Khandwala
Mrs. Fatema JangbarwalaMr. Yusuf Nosir Jangbarwala & Batul Alibhoy TyebkhanMr. AquilHatim BhaiVarious employees of BSRM Group
5,000,000,0005,000,000,000
643,454,910
643,454,910
271,600,560
643,454,910
643,454,910
271,600,560
1,558,510,380 1,558,510,390
Number ofo//o Number of shares
21,967,13017,069,95516,143,581
8,399,000
10,870,000
10,000,000
20,000,000
s,682,204
6,147,8223,645,8904,004,600
4,60013,880
4,6504,520
35,84026,210,116
4,000,950
r0 r,000
245,000
900,000
t4.09%t0.95%t0.36%539%6.97%
6.42%
t2.83%3.6s%3.94%2.34%2.57Yo
0.00%0.01%0.00%0.00%0.02%
t6.86%2.57%
0.06%0.16%0.58%0.00%0.22% 340,400
shares
21,967,t3017,069,95516,322,540
9,400,000
10,870,000
i 0,000,000
20,000,000
5,682,204
6,1 88,6633,645,8904,004,600
4,60013,880
4,650' 4,52035,840
26,270,1164,000,850
zo,ooo34s,600
25
1000 155,851,038 155,851,038
15.02 DividendsThe following dividends were declared and paid/ payable by
year:
l5% Cash dividend (Tk. I .5) per qualifuing ordinary share (for
100% Stock dividend per qualifoing ordinary share (for 2011)
the company for the
2012)
31.12.2013
Taka
233,776,557
31.12.2012
Taka
643.454.9r0233,'176,557 643,454,910
During the year 20 1 3,
oftax at source.
Tk. 67,jj8,860 was remitted to non-resident shareholders as dividend after making required deduction
After the reporting date, the following dividends were proposed by the Board of directors.
l5% Cash dividend (Tk. 1.5) per qualifying ordinary share 233,776,557
16.00 Reserves
16.01 General reserve
The general reserve is used ftom time to time to transfer profits from retained earnings for appropriation purposes and to
meet future known or unknown requirements. There is no policy of regular transfer. As the general reserve is created by a
. transfer from one component of equity to another and is not an item of other comprehensive income, items included in the
general reserve will not be reclassified subsequently to profit or loss.
t 6.02 Revaluation reserve
Revaluation reserve relates to the revaluation of properly plant and equipment (Note- 3.01.04)'
16.03 Fair value reserve
The fair value reserve comprises the cumulative net change in the fair value of available for sale financial assets until the
assets derecognised or impaired (Note-3'21.01).
16.04 Reserve for issuance ofshare against merger
This represents total face value of shares issued against acquisition of assets and liabilities of Meghana Engineering Works
Lrd. as on December 3 1, 2010. As per calculation 27 ,160,056 nos Ordinary Shares of Tk. l0 each totaling Tk' 271,600,560
of Bangladesh Steel Re-Rolling Mills Ltd. has been allotted subsequently after getting approval from Securities and
Exchange Commission (SEC) vide letter of consent (ref: SEC/CIICPLC-2131200911582) dated September 30,2012.
The procedure for transferring the legal title of all movable and immovable properties of Meghna Engineering Works
Limiied due to acquisition is under process. However, physical possession of movable and immovable properties of Meghna
Engineering Works Limited continues to remain with the reporting Entify.
26
31.12.2012Taka
627,490,645917 ,67 5,959
__1S45J_66,504_
17.01 Long term loan -Maturity analysis
Long term loans received fiom Banks and financial institutions are re-payable as per the following schedule from April,2013:
I7.00 Long'ferm Loan
Project loan and syndicated term loan(Note- 17.03)Other Term loan (Note- 17.04)
Due within one year-Current portionDue after more than one year-Long term portion
17,02 Long Term Loan- Long term portion
Agrani Bank Ltd. - Project loanOne Bank Ltd. - Svndicated term loanOther term loan
17.03 Project Ioan and syndicated term loan
Agrani Bank Ltd. - Project loan (Note - 17.03.01)One Bank Ltd. - Syndicated term loan ( Note - 17.03.02)
31.12.2013Taka
592,804,2761,306,077,992
1.898.882.168
492,699,5561,406,182,612I ,898,882,168
qsz,erc,lst
913,565,815'--T7[;6r8trfiT
10,820,97458 r,983,302
316,932,5941,229,233,910
:lFa5;ir-6,56T-
9,594,631579,796,22963 8,843,051w27,490.64s
600,000,000
627,49A,645592,804,276
17.03.01 Terms of project loan
Lenders:
Agrani Bank Ltd. sanctioned an amount of Tk. 1,119.36 lac as project loan against BMRE and disbursed the full amountwithin 2nd November,2005. Total loan amount was divided into two parts as long term loan Tk. 1.008.43 lac andinterest during irnplementation Tk. 1 10.93 lac.
Total Ioan facilities: Tk. 1,119.36 lac.
Interest rate:
Interest rale is 12oh per annum or at applicable rate as detennined from time to time on half yearly basis.
Disbursement:
The first disbursement was made on 18.12.2004.
Repayments
Long tenn loan is being re-paid in 16 half-yearly equal installments starting from 18 June 2007.
Interest for the period of implementation is being re-paid in five equal yearly installments commencing from completionof one year from the commencement of the commercial production of the project.
Loan period
The entire loan amount shall be re-paid by ten (10) years including grace period oftwo (2) years.
Securities:i. Mortgage of land area of 1.98 acre and building thereon.ii. Hypothecation on all existing and proposed machineries and furniture of the projectiii. Personal guarantee of all directors of the company.
Lender's covenants
Any subsequent requirement of working capital for BMRE Project shall be financed by entrepreneurs.
Purpose:
For meeting expenditure for capital machineries.
27
17.03.02 Terms of Syndicated term loan
Lendersl
The cornpany entered into a syndicated loan agreement for BMRE on May 15,2012 with One Bank Limited. the lead
arranger and 6 (Six) other Banks and Financial lnstitutions'
Total loan facilities: Tk. 60 crore.
Interest rate:
lnterest rate is l5%-l 6o/o per annum calculated on quarterly basis and variable depending on the situation of money
market.
f)isbursement:
The first disbursement was made on September 16,2012'
Repayments
This term loan is repayable in 60 (sixty) monthly installments after 1 (one) year of grace period'
Securities:i. Registered Mortgage on 827 decimals of land at Sitakunda, Chittagong along with building and
or to be constructed thereon on first ranking parri passu basis'
ii. Fixed and floating charge over assets.
iii. irrevocable general power of attomey.
iv. Demand promissory note covering full amount'
Purpose:
For acquisition of plant and machineries to enhance the production capacity
product quality, undertake civil construction etc' for BMRE'
17.04 Other Term Loan
AB Bank Ltd.
IPDC of Bangladesh Ltd.
IDLC Finance Ltd.
Jamuna Bank Ltd.
Lanka Bangla Finance Ltd.
MIDAS Financing Ltd.
Fbreast Finance & Investment Ltd'
International Leasing and Financial Services Ltd'
National Housing Finance and lnvestments Ltd'
Prime Bank Ltd.
United Leasing ComPanY Ltd.
National Credit and Commerce Bank Ltd.
Shahjalal Islami Bank Ltd.
United Comrnercial Bank Ltd.
Terms and conditions of above term loans are shown in Note-17.04.01 below:
1,306,077,892 917,675,859
to 450,000 metric tons Per
31.12.2013
Taka
32,991,605
17 ,429,105140,619,142
23,151,941
459,350,025
18,748,307
i 86,880,733
250,000,000
94,855,836
24,480,131
51,504,461
structures constructed
year, improve
31.12.2012Taka
68,998,756
48,233,275
I 1,678,075
46,522,139
500,000,000
56,244,9_23
ez,lzs,est67,724,0r916,533,718
26,118,90211,886,361
28
18.00 Deferred tax liabilities
Opening balance as on January 1
Provided during the period:
Investments in associates
Increases in fair value oftradable securities
Revaluation surplus of PPE (excluding land)
Taxable temporary difference of PPE (excluding land)
Adjusted during the period:
Deductible temporary difference of PPE
Sale ofrevalued assets
Loss on revaluation ofPPEImpact of depreciation on revaluation surplus
Closing balance
18.01 Reconciliation of deferred tax liabilities/ (assets)
1,071,987,675 882,458,633
31.12.2013Taka
882,458,633
171,455,321
232,488
53.931.s62
(5,012,482)
Q1,A77,847)
189.529.042
31.12.2012Taka
682,920,590
44,5?1,271
212,067,263
(10,42t,460)(r,845, l l
( 10,508,763
(34,27s,ts0)
199,538,043
Carryingamount
Tax base
TaxableiTax ro.ar.rrnl.r Deferred tax
rate '"'"-':.;-- liabilities/ (assets)temnorarv (llllerence
Property, plant &equipment (except
land)
Tradable securities
Tal<a Tal<a
3,232,887 "537 I ,021 ,386,196
ls.711,449 14,161,529
37.5%
t5%
Taka
2,211,501,341
1.s49,920
3,s63.424,229
Taka
829,313,002
232,488
242,442,185Deferred tax liability on investment in associates
Total deferred tax liabilities
19.00 Trade payables
BSRM Steels Ltd.
Purchase from outsiders
BSRM Wires Ltd.
20.00 ShoI't term liabilities
Loan against Trust Receipt (LTR) (Note - 20.01)Bridge Loan from United Commercial Bank Ltd.Time Loan from AB Bank Ltd.Time Loan from Habib Bank Ltd.Time Loan from One Bank Ltd.Factoring Loan against sales invoice (Note - 20.02)
Loan against CC Pledge and Hypo (Note - 20.03)
Inland Foreign Documentary Bills For Collection (IFDBC) (Note-20.04)
Time Loan from Trust Bank Ltd.
Terms and conditions of the above liabilities are shown in Note-47.
1,071,987,675
2,775,603,565
5,368,952
962,800
______3;$ele2*
1,089,112,121
s30,390,716149,108,293100,069,444
118,327,083
4,783,3601,125,898,695
s13,337,980
_____?$1&5;J1_
886,787,5 i 5
518,929,3791 1,700,000
14,047,257
1,219,739,906598,31 1,309
101,526,944
30
3,631,028,292 3,351,042,310
20.01 Loan against Trust Receipt (LTR)
Bank Alfalah Ltd.HSBC Ltd.Islami Bank Bangladesh Ltd.Mercantile Bank Ltd.Prime Bank Ltd.Pubali Bank Ltd.Standard Chartered Bank Ltd.Shahjalal Islarni Bank Ltd.Trust Bank Ltd.
Al-Arafah Islami Bank Ltd.Dutch Bangla Bank Ltd.National Credit and Commerce Bank Ltd.One Bank Ltd.
20.02 Details of Factoring LoanUnited Leasing Co. Ltd. (Note - ZO.O2.0|)
l,ogqltl7lrt- ------BE6-7gim-
31.12.2013
Taka
56,759,955284,156,4362s9,669,880
5,718,85630,343,731
1 85,1 57,5871 05,367,50074,530,1002,959,142
2,929,36113,500,292
34,960,993
33,158,982
3t.t2.2vnTaka
54,374,199299,813,278
95,432,0871 ,491,146
19 I ,8 12,87812,757,10979,420,25693,993,38057,693,183
68,964,095
431,152,637
187,260
65,164,s44
32,424,32s
16,516,222
141,094,424
69,779,967
79,718,114
5,818,357
14,309,721
200,768,429
134,306,51 I
429,049,469
11,665,249
45,143,157
18,589,514
47,926,506
139,931,200
249,261,212
67,439,402
16,169,091
44,988,794
9,726,8872,001,889
3,642,025
4,793,360 14,047,257
20.02.01 Terms and conditions
i. 80% of gross sales invoice/billed amount is paid by discounting sales invoice.ii. Interest rate is l5olo per annum along with processing and collection fees of 0.25oh on the invoice amount.Security:Personal guarantee of directors of the company and deed of floating charge on all accounts receivables (present andfuture).
20.03 Loan against CC Pledge, Hypo and Overdraft
Agrani Bank Ltd. - CC (Hypo) A/CAgrani Bank Ltd., Laldighi East Br. Ctg. - CC (pledge) A/CBASIC Bank Ltd. - OD AiCHabib Bank Ltd., Laldighi Br. Ctg. - CC AICJamuna Bank Ltd. - CC (Hypo) A/CNational Bank Ltd. - CC AIC (Hypo)Prime Bank Ltd. - CC (Hypo) A/CPubali Bank Ltd., Agrabad Br., Ctg. - CC (Hypo)Sonali Bank Lrd., K.C. Dey Road Br. Ctg.- CC (Hypo) A/CSonali Eank Ltd., Kalibari Br. Ctg.- CC (Hypo) A/CTrust Bank Ltd. - OD A/CStandard Bank Ltd" - CC (Hypo) A/CDhaka Bank Ltd.Shahjalal Islami Bank Ltd.Sociallslami Bank Ltd. - (CC Hypo) A/C
____u3$29f2!_ 1,219,739,906
20.04 Inland Foreign Documentary Bills For Collection (IFDBC)
HSBC Ltd.
Shahjalal Islarni Bank Ltd.
One Bank Limited.
Pubali Bank Ltd"
Islami Bank Bangladesh Ltd.Prime Bank Ltd.IFIC Bank Ltd.United Commercial Bank Ltd.Standard Chartered Bank Ltd.Dhaka Bank Ltd.Dutch Bangla Bank Ltd.AB Bank Ltd.
Mercantile Bank Ltd.
State Banl< of India
National Bank Ltd.
Agrani Bank Ltd.
21.00 Liabilities for expenses
Audit Fees
Karnaphuli Gas Distribution Co. Ltd.Power Development Board for electricify (Factory)
Godown rent
C & F Bill and othersOthers
Carriage on sales
Salary & AllowancesFinancial expenses
Linde Bangladesh Ltd. (formerly BOC)Telephone expenses
Carrying charges
Medical expenses
ConveyanceCasual wages
Fees and renewals
Power Development Board for electriciry (Depot, godown etc.)
Guest House rent
ULC Bill Collection charges and interest
Printing'and stationeryPostage and telegramLegal expenses
Fuel and lubricantsSpare parts
Carriage on purchase
Repair and maintenance
Entertainment expenses
22.00 Advance against sales
3r.12.2012Taka
62,597,982
39,207,622
37,345,038
117,264,979
26,272,490
73,299,153
37,346,870
66,549,086
85,631,731
33,796,086
18,997,272
513,337,980 598,3 I 1,309
360,0002,451,150
49,550,779
I 13,100
3,594,131I 85,836
10,03 1 ,86821,283,04615,965,289
293,32075,279
2,857,154277,859
91,0291,670,595
158,650
40,100
208,613
3,06093,1 80
24,40016,644
7,51 8,570178,086
72,50028,459
216,856,037 117,142,297
101,714,671 54,956,861
These represent advances received from different parties against sale offinished goods. Coods have not been deliver'ed to
them within the reporting date.
31.12.2013
Taka
23,660,101
10,444,473
27,804,729
32,080,348
58,243,226
42,758,175
71,158,984
23,379,408
31,656,333
31,999,946
160.152.2s1
360,0002,079,848
t33,947,055133,050
8,294,817120,102
4,167,27723,046,70839,584,169
317,090191,097
1,339,378782,928
14,400
1,863,868
614,250
JZ
23.00 Due to inter companies
Karnaphuli Engineering Works Ltd.
BSRM Metals Ltd.
Section Steel Ind. Ltd.
BSRM Wires Ltd.
BSRM Steels Ltd.
Bangladesh Steels Ltd.
These balances represent short term financial arrangement availed fromworking capital. Interest @ 15.50% has been charged to these balances.
All transactions were made through account payee cheques.
24.00 Provision for income tax
Opening balance as on January I
Provided during the period:
Against current year
Against previous years
Less: Adjusted with advance income tax paid at source
Closing balance
Year wise Income Tax assessment status is as follows:Accounting
year
2008
2009
2010
2011'
2012
25.00 Provision for WPPF and Welfare Fund
Opening balance as on January 1
Provided during the period
Less:.Paid during the period with salary
Closing'balance
26.00 Othet'liabilities
Liability for other finance
Earnest Money
Security Deposit
Retention MoneyIncome Tax deducted at source from salary
Income Tax deducted at source-others
VAT deducted at source
Dividend payable
Employees' Provident Fund
2,407,2\0,345 369,924,616
inter companies as and when required to meet
184,962,166 256,237,264
31.12.2013Taka
6,000,000
988,918
550,000
12,81 1,3 I 8
2,37 5,947 ,7114,912,398
31.12.2012Taka
6,949,912
362,970,206
4,498
124,274,416
6,612,039
188,224,809
97,652
Assessment year
2009-2010
2010-2011
2011-2012
2012-2013
2013-2014
130,886,455 188,312,461
19t,574,205 ?59,587,559
124,274,416 184,962,166
Present status
Assessment of Meghna Engineering WorksLtd. is pending at High Court Division
Assessment corhpleted
Assessment completed
Assessment completed
Assessment completed
2,665,273 16,775,0662,199,136 10,673,9074,864,4094,059,024
806,385
27,448,97324,783,700
2,665,273
150,000
50,000
953,762
7,744,989
7,724,335
2,564,198
1,267,2681,351 ,360
150,000
50,000
8,598,448
11,787,273
1,162,918
843,3_40
1.214.991
15,205,912 23,906,970
Income Tax and VAT deducted at source above have subsequently been paid to the Govt. Exchequer.
JJ
27.00 Revenue
Local sales
Export sales (Note-27.0 1)
Sale ofscrapSale ofby-products
2013Taka
8,341,552,98548,263,134
116,370,841
96,228,048
2012Taka
12,971,618,436
52,132,524
977,371,266
36,239,262
8,602,415,008 141043,421,499
27.01 Export sales
TotalexportsalesduringthisperiodwasUSD 623,364 againstexporting of 797.87 MTgoods.
28.00 Cost of sales
Cost of sales-own production (Note -28.01)Cost of sales- finished goods purchased Q.{ote - 28.02)Cost ofsale ofscrapCost of sale of billet
28.01 Cost of sales-own production
Opening Stock of raw materials - BilletsAdd: Purchased during the year
Consumption of scrap and spongeQ,{ote - 28.01.01)
Less: Closing Stock of Raw Materials
Cost of sale of billets to other parties
Raw Materials Consumed- BilletsAdd: Manufacturing Expenses:
Direct expenses
Direct materials consumed
Factory overhead (ltlote - 28.03)Power
Gas
Welding gas and liquid oxygenFuel and LubricantsRepair and maintenance of furnace
Consumption of mechanical stores
Consumption of MS RollConsumption electrical stores
Consumption general stores
Depreciation (Note- 6.00)
Cost of Goods ManufacturedAdd: Opening stock of Finished Goods
Less: Closing stock of Finished Goods
Cost of sales of manufactured finished goods
28.01.0I Raw materials consumed - scrap and sponge
Opening Stock of raw materialsAdd: Purchased during the year
8,102,322,739
4,738,149,906
6,510,766,441
1,32s,s65.7',18
5,145,347,0112,863,475,160
93,s00,567
5,129,813,667
6,287,904,039
964,002,867
964,190,241
13,345,900,913
1,106,847,703
4,745,981"824
5,123,236,549
5,770,211,J43
2,078,860,962
3,691,410,391
5,074,643,9021,380,735,643
1,836,332,2192,690,985,208
6,455,379,4451,325,565,779
5,145,347,011 5,129,813,667
Less: Closing Stock of raw materials
Cost ofsale ofscrap
969,853,359
4,771,465,2805,741,318,638
1,004,970,368
93,s00,s671,098,470,93s
2,079,694,997
3,962,957,001
6,041,541,888
969,853,358
964,002,867
1,933,856,225
4,107,695,663
74,550,985397,762,542272,038,973
596,745,125
27 ,641,1273,186,939
14,947,651
48,276,631
35,896,526
18,854,670
6,850,395
268,033,053
1,7 64,784,617
71,340,455
346,936,923
193,232,774
418,907,137
27,224,67t2,998,402
8,865,594
3,578,41035,244,681
26,551,305
9,143,057
2,236,395
237,073,137
1,383,233,427
.ffi 4,642,847,703
2012
Taka2013
Taka
28.02 Cost of sales-finished goods imported and locally purchased
Opening stock of finished goods
Add: Finished goods imported
Finished goods locally purchased
Less: Closing stock of finished goods
28.03 Factory overhead
Salaries and allowances
Godown rent
Carrying charges-raw materials
Conveyance expenses
Electricity expenses
Water bill-WASAEntertainment
Travelling expenses
Factory office expenses
General expenses
Guest house rent
Guest house expenses
Insurance expenses
Medical expenses
Paper and periodical
Postage and telegram
Printing & stationery
Repairs and Maintenance
Land revenue, Municipal tax
Generator expenses
29.00 Selling and distribution costs
Advertisement
Brokerage and commission
Carriage on sales
Travelling expenses
Exporl charges
Debtors written offSales commission
Godown rent
407,252,666
205,308,252
2.425.395.215
3,037,956,133
174,480,973
260,086,164
471,037 ,6945,964,032,846
6,695,156,704
407,252,666
I 98,01 0,034
7,612,770
27,057,387
9,686,277
4,250,526
54,423
4,793,322
2,083,8 1 0
|,206,03s474,917
1,s23,280
867,285
581,561
1,960,488
10,515
133,374
814,829
10,319,17 4
548,766
50,200
__ 272,03!fE_
301,294
50,000
50,934,483
2,361,021
663,769
420,791
360,255
548,898
2,863,475,160 ____q28Uqfl$_
t24,444,5846,926,640
23,806,656
3,263,754
5,1 88,471
75,432
3,625,007
965,640
706,680
13 3,960
81 1,550
548,807
359,281
941,582
12,984
62,253
1,115,411
17,159,462
554,815
2,563,805
193,232,774
450,826
66,233
25,654,496
3,308,978
1 ,3 84,1 08
3,760,676
789,6s455,646,511 35,414,971
35
30.00 Administrative costs
Salaries and allowancesDirectors' remuneration (Note - 30.01)Rent (Office, depot and others)Fees and renewals
Land revenue, Municipal tax
Audit fees
Conveyance expenses
Donation and subscriptions
Entertainment
General expenses
Guest house expenses
Legal expenses
Professional expenses
Motor vehicle expenses
Office expenses
Postage expenses
Computer expenses
Printing expenses
Stationery expenses
Laboratory expenses and others
Paper and Periodicals
Telephone and e-mail expenses
Training expenses
Depreciation (Note- 6.00)Electricify expenses
Medical expenses
Staff welfare
Travelling expenses
30.01 Directors' Remuneration
Details of Directors' remuneration paid during
Name
Mr. Alihussain Akberali-Managing DirectorMr. Aarneir Alihussain-DirectorMr. Zohair Taherali-DirectorMrS. Tehseen Zohair Taherali-DirectorMrs. Sabeen Aameir- Director
31.00 Other Income
Profit/(Loss) on sale of motor carProfit on sale of machineryMiscellaneous incomeLoss on sale of office equipment
2013Taka
99,421,29024,600,000
s,420,0403,17 5,453
1,125
790,525
1,449,423
562,336
2,929,564
217,293
132,660
909,536
1,457 ,4405,839,905
1 ,555,343463,909
7,653
38, I 33
43,937
72,506
34,548
3,24s,429
254,261
11 ,105,1321,287 ,2761,094,891
2012Taka
79,383,945
24,600,000
21,182,096
1,491,043
195,054
868,300
658,312
1,951,932
3,145,402246,661
r 80,000
1,479,492
2,765,762
12,261,500
t,961,172
650,737
1,295,597
296,279
667,369
29,376
48,265
3,937,930
200,9s7
10,712.,097
986,609
2,112,421
32,4342,701,173
166,109,409 176,030,994
the year are as follows:Gross
RemunerationIncome TaxDeducted Net Paid
Taka
7,200,000
4,800,000
1,200,0004,800,000
600,000
Taka
1,900,000
1,200,000
1,800,000
r,200,000
49,500
Taka
5,400,000
3,600,000
5,400,000
3,600,000
550,50024,600,000 6,049,500
In addition to remuneration, Directors avail company vehicles for transportation purposes.
18,550,500
827,295
2,951,567
2.873,362
(610,131)
744,862- (26,500)
6,652,224 109,231
2013
Taka
158,815,914
14,358,440
1,467,553
206,137,5526,7 55,340
130,77 4
(279,203,494)
166,931,728
(10,997,401)
2012Taka
144,499,441
4,959,270
1,358,644
111,592,129
7,412,237
14,530(108,536,253)
158,011,447
(2,040,999)
1 ,571 ,gg5
32.00 Finance costs
Interest on LTRInterest on Demand and Time loanInterest on factoring loanInterest on Term loan
Bank charges
Bank Guarantee Commission
lnterest on balance due to inter companies-Net
Interest on OverdraftIroreign currency exchange rate fluctuation gain
Interest on BMRE Term loan
33.00 Finance income
Interest income from FDR
34.00 Non- operating income
Dividend income
Management fees
Profit on sale of investment in shares
Rental incorne
Irrrpairment loss on investment in tradable shares
264,396,406 278,932,330
2339A,s49 34,1s0.79623,390,549 34,150,796
70,482163,550,409
1,492,941
3,960,000
56,800
99,159,222
50,034,634
1,940,000
(1,121,'t20)
I50,068,986169,063,732
35.00 Share of profit of associate (Net oftax)
Net profit attributable to the
shareholders of associates
Ownership
Net (loss)/profit attributable toBSRM Ltd.
Excess ofproportionate net asset
value of associates over acquisitioncost
Adjustment against unrealized profi ton inventories-net
BSML BSLTotal20t3
BSL2012
(9,771,811) 1,394,553,917
21.76% 31.19%
434,939,131 433,395,135
498,898,126
1.833.7741,833,714
497354J30 436J?r,905* Share of loss fiom BSML has been calculated from the day it has become an associate i.e., I 1
997,165,270
(1,543,996) *
498,898,726
310,ggg,g4g
t,954,530
312,954,479
April2013.
36.00 Basic earnings per share (EPS)
Profit attributable to the ordinary shareholders (Taka) 788,741,611 453.924.187
weighted Average number of shares outstanding during the year (Nos.) 155,g51,03g I 55,85 I ,03 8
Basic earnings per share (EPS)-Taka 5.06 2.91
37.00 Related party transactions
During the year, the company carried out a number of transactions with related parties in the normal course of business
and on ams length basis. The name of these related parlies, nature of transactions, their total value and balances on
reporling date have been set in accordance with the provisions of BAS-24.
Related parties comprise of companies under common ownership and common management control.
Name of parties
H Akberali& Co. Ltd.
Karnaphuli Engineering Works Ltd.Chittagong Power Company Ltd.
BSRM Wires Ltd.BSRM Recycling Industries Ltd.
Bangladesh Steels Ltd.
BSRM Logistics Ltd.
BSRM Ispat Ltd.
BSRM RealEstates Ltd.
BSRM Metals Ltd.Section Steel Ind. Ltd.East Bengal Trading & Industries
Corp. Ltd.
BSRM Steels Ltd.BSRM Steel Mills Ltd.BSRM Steels Ltd.Karnaphuli Engineering Works Ltd.
37.01 Details of transactions
Narne of inter comnanies
H Akberali& Co. Ltd.
Karnaphuli Engineering Works Ltd.
Chittagong Power Company Ltd.BSRM Wires Ltd.BSRM Recycling Industries Ltd.
BSRM Iron & SteelCo. Ltd.
Bangladesh Steels Ltd.
BSRM Logistics Ltd.
BSRM Ispat Ltd.
BSRM Real Estates Ltd.
Section Steel Ind. Ltd.
BSRM Metals Ltd.
East Bengal Trading & Industries
Corp. Ltd.
BSRM Steels Ltd.BSRM Steel Mills Ltd.Burhani Scrap Traders
BSRM Wires Ltd.BSRM Iron & Steel Co. Ltd.
BSRM Steels Ltd.
H Akberali& Co. Ltd.
I(arnaphuli Engineering Works Ltd.
BSRM Steets Ltd.
BSRM Steel Mills Ltd.BSRM Logistics Ltd.
BSRM Iron and Steel Co. Ltd.Bangladesh Steels Ltd.
Nature of Outstanding as
Tru,rr*tio,o ffi ComPensation
laka
Relationship
Sister Company
and shareholder
-DO-Sister Company
-DO--DO--DO--DO--DO-
-DO--DO--DO-
_DO-
Investee
Investee
Investee
-DO-
Orreningbalances
Taka843,257,266 Dr.
266,333 Dr.6,949,912 Cr.
t29,934,144 Dr.
4,498 Cr.
133,516,258 Dr.
234,130,375 Dr.
341,082 Dr.
362,970,206 Cr.68,021,5_65 Dr.
962,800 Cr.
2,775,603,565 Cr.
t,tg+,000 or.
Short term loan
Short term loan
Short term loan
Short term loan
Short term loan
Short term loan
Short term loan
Short term loan
Short term loan
Shoft term loan
Short term loan
Shorl term loan
Short term loan
Short term loan
Purchase
Sales
Provided duringthe year
Taka1,1a2,192,t49
7,61 1,060
20,928,821
99,444,506
91,429,164
3,824,310,335
4,907,900
1 I 1,669,61 I
63,820,000
200,000
600,000.00
720,000
650,000
12,879,736,472
2,202,797,993
6,350,000
39,804,1 s0
1,639,086,005
264,441
8,469,002I 8,93 8,903
33,034,657
6,222,7791,163,077
46,480
1,441,905,988 Dr
6,000,000 cr.20,295,654 Dri2,811,318 Cr.
88,004,189 Dr4,912,398 Cr.
182,412,398 Dr291,700,375 Dr
200,000 Dr
988,918 Cr.
550,000 Cr.
100,000 Dr
2,37 5 ,947 ,7 1 I Cr .
252,410,77 5 Dr3,563,424,229 Cr.
6,102 Dr
Adiusted durinsthe vear
Taka503,543,421
1 ,61 1 ,060899,500
93,583,1 00
133,359,1 19
3,824,310,335
62J12,471
6,250,000
50,000
2,050,000
550,000
10,866,7s8,96'7
2,018,404,773
6,350,000
38,841,350
2,426,906,669
264,441
9,656,900
r 8,938,903
33,034,657
6,222,779
1,163,077
46,480
Market price
Market price
Market price
Market price
Market price
Market price
Market price
Market price
Market price
Market price
Market price
Market price
Market priceMarket price
Market price
Market price
Closinsbalances
Taka1,441,905,988 Dr.
6,000,000 cr.20,295,654 Dr.12,811,318 Cr.
88,004,189 Dr.
4,912,398 Cr.
182,412,398 Dr.291,700,375 Dr.
200,000 Dr.
550,000 Cr.
988,918 Cr.
100,000 Dr.
2,375,947,7|I Cr.252,410,775 Dr.
3,563,424,229 Cr.
6,102 Dr.
38.00 Contingentliabilities
The company had contingent liabilities at the reporting date which are as follows:
ParticularsAmount(Taka)
Present status
Against approval ofvalue addition in 2003
Pending for hearing and amount of liabilitycan not be estimated at this stage
Penalty imposed by VAT Authority in2004 100,000
Pending before the High Court Division ofSupreme CourtDemand raised by VAT Authority in 2004 for
difference in selling price536,17 4
Against trade VAT in 2006 178.415
Against percentage ofwastage (4oh in place of2.50%) in2011
Pending before the High Court Division ofSupreme Court and liability of which can
not be estimated at this stage.
38.0I Status of pending litigation with the Income Tax authority for dispute with respect to income tax
liability.
Disputed amount of tax liability has already been deducted by Income Tax authority and shown as advance
income tax under advance, deposits and pre-payments.Present status
Pending before High Court Division ofSupreme Court for hearing as the company
appealed against the order ofAppellateTribunal.
31.12.2013 37.12.2A12
Taka Taka39.00 Guarantees
39.01 Bank guarantees
Bank Guarantee Against Bakhrabad Gas System
- Deposit to Customs Authority against claim under appeal
Name of inter companies
BSRM Steels Ltd.BSRM Iron and Steel Co. Ltd.
Assessment year
2001-20022002-20032005-20062003-20042005-20062009-2010
Unit Amount (Tk.)BSRMBSRMBSRMSMWSMWSMW
4,900,00010,561,5629,861,000
t4,764,0003,266,0002,320,000
45,672,562
s49,497
1,545,145
1,138,472
t,545,145
2,094,642
The above margin and deposits have been included in Advance, Depo-sits and Pre-payments.
39.02 Corporate guarantees
The company has a policy to extend corporate guarantee for the financial arrangements ofthe sister' cgmpanies within the group. At the reporting date, status of such guarantee was as follows:
2,693,617
Asainst Maximum limit (in million) (Taka)
L/C liability 2A,115
L/C liability 15,430
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41.00 Financial instruments- Financial risk management-l'he
Company has exposure to the following risks from its use of financial instruments:(i) Crcditrisk( ii ) Liquidity risk( iii ) Market risk
41.01 Risk management frameworkl'he company management has overall responsibility for the establishment and oversight of the Company,s risk managementllamework. The company's management poticies are established to identify and analyze the risks faced by the Company to setappropriate risk limits and controls and to monitor risks and adherence to limit. Risk management policies, procedures and systemsare I'eviervcd regularly to reflect changes in market conditions and the company's activities.
41.02 Crcdit risk
Credit risk is lisk of frnancial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractualobligations which arises principally from the Company's receivables and investments.
41.02.01 Exposure to credit risk
Thc canying amount of financial assets represents the maximum credit exposure. The maxirnum exposure to credit risk at thereporting date was as ibllows:
31.12.2013 31.12.7,012
Taka
15,7 1l ,4491,000,300
160,827,797
1,597,513,355
483,458"932
2,277,089,379 1,409,473,023
95,316,305 81,742,4094,630,917,517 2,940,120,903
The company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However,management also considers the factors that may influence the credit risk of its c.ustomer base, including the default risk of theindustry in which customers operate. During 2013, 99.25 % (2012:99.78%) of the company's receivables balance was with variousoutside parties. However, based on the company's operations there is no concentration ofcredit risk.
The company's management has established a credit policy under which each new customer is analyzed individually forcreditworthiness before the company's standard payment and delivery terms and conditions are off'ered. The company reviewincludes clients goodwill and in some cases bank ref'erences. Customers that fails to meet the company's standard credit policy maytransact with the conlpany only on a pre-payment basis.
Ageing of trade and other receivables
The ageing of gross value at the reporting date that was not impaired was as follows:
31.12.2013 31.12.2012
lnvestment in quoted shares and debt securitiesInvestments in non-tradable shares
lnvestments in FDRs (Short term & long term)Advances and deposits
Trade and other receivables
Due ll'om inter companies
Cash and cash equivalents
(a) Trade and othcr receivables
0-90 days
91- 180 davs
Over 180 days 59,085,923 60,540,852
Taka
i 8,s06,460
1,000,300
253,261,311
484,118,557
692,018,643
Taka
349,790,137
74,582,872
Taka
s86,390,027
45,087,764
__ls3lig, e3 2_ ____!z'01qff _The management believes that the amounts are collectible in frtl, baod on histo.i" puy**t U"t urioilIna extensive analysis ofcustomer cledit risk, including underlying customers,credit ratings ifthey are available.(b) Due from inter companies
The carrying amount represents amount paid to one of the inter companies to meet its operational finance from time to time. Theoutstanding balance is redeemable including 15.50% interest per annum and has no prescribed repayment schedule.(c) Cash and cash equivalents
The cornpany held cash at bank of Tk. 95,316,305 at December 31,2013 (2012:Tk. Bl,742,4og), which represents its maximumcredit exposure on these assets. The balancc with banks are maintained with both local branch of International banks and domesticscheduled banks.
(d) Cuarantees
The conrpany's policy is to provide financial guaranl.ees only to its sister companies. At December 31,2013 the company has anumber of corporate guarantees for L/C liabilities of sister companies (refer to Note - 39.02).
41
41.03 Liquidity rislr
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilitiesthat are settled by delivering cash. The Company's approach to managing liquidity is to ensure, as far as possible, that it will alwayshave sufflcient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incuning unacceptablelosses or risking damage to the Company's reputation.
41.03.01 Exposure to Liquidity risk-fhe lbllowing are the contractual maturities of financial liabilities:
Non-dcrivative fi nancialliabilities carrving
amount
Contractual cash flows
Within l2 months 1 to 5 vears More than 5 years Total
Taka Taka Taka Taka Taka
1,898,882,168 492,699,556 1,406,182,612
3,s63,424,229 3,s63,424,229
3,631,028,292 3,631,028,292
216,856,037 216,856,037
2,401,210,345 2,401,210,345
r,898,882, I 68
3,563,424,229
3,631,028,292
216,956,037
2,401,210,345
806,385
ts,205.912
806,385
15,205,912
806,385
15,205,912
As at 31.12.2013
Long term Ioan
Trade creditors
Short term liabilitiesLiabilities for expenses
Due to inter companies
Provision for WPPF and
Welt'are Fund
Other liabilities
Non-derivative fi nancialliabilitiesAs at31.12.2012
L,ong term loan'll'adc creditors
Short tcrm liabilitiesLiabi I ities lbr expenses
Due to inter companies
Provision for WPPF and
Welfare Fund
Other Iiabilities
11,727,413,368 10,321,230.7s6 1,406,182,612 11,727,473.368
1,102,694.386 t2s,539,524
8.191.683,287 6,963,449,377 t,102,694,386 125,539,524
41.04 Market risk
Market risk is the risk that changes in market prices such as foreign exchange rates, will affect the Company's income or the valueof its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposureswithin acceptable parameters, while optimizing the return.
4I.04.01 Currency risk exposure and its management
The company is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than thelirnctional currencies of the company. To manage this exposure, the company is adapted direct risk reduction methods based onmatching receipts and payments on assets and liabilities.
The Company is exposed to foreign currency risk relating to purchases, sales and other transactions which are denominated inloreign currencies. As at 31 December 2013, the Company was exposed to foreign currency risk in respect of financial liabilitiesdenominated in the fbllowing curencies:
I ,545,1 66,504
2,781,935,317
3 ,3s t ,042,310t17,142,297
369,924,616
2,665,273
23.806,970
316,932,594
2,781.935,317
3,35 I ,042,3 l0117,142,297
369,924,616
2,66s,273
23,806.970
1,545,166,504
2,781,935,317
3,351,042,310
1t7 ,142,297369,924,616
2,665,273
?3,806,970
____!:121f8r8?_
ExDosure to currencv riskESIgLs^n curren cv denom i
Cash and cash equivalents
ll'adc and othcr receivables
Iirreign currency denominated liabi I ities:
Inland Foreign Documentary Bills For
Collection (IFDBC)
Net exposure
Fixed.- rate instruments
Financial assets
Financial liabilities
Variable- rate instruments
Financial assets
Financial Iiabilities
31.12.2013
US$
1,921
152,723
Taka
149,942
11,813,086
31.12.2012
91
US$ Taka
7,4_07
7,407
6,s60,230 7,478,891 598,3 I 1,309
6,560,230 513,337,980 7,478,991 598,311,309
6,714,874 525,301,008 7,478,982 598,3I8,716
The following significant exchange rate is applied during the period:
tJS dollar
Sensitivity analysis
A reasonably possible strengthening (weakening) of the US Dollar against BD Taka at the reporting date would have affected themeasurement of financial instruments denominated in a foreign cuffency and aff-ected equity and profit or loss by the amounts shownbelow. l'he analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact offorecastsales aud purchases.
Profit or loss Equity- net of tax3.1 December 2013
154,644 ______ll263:!?q_
5 13,337,980
9t
8078
USD (20% movement) (10,027,499) 10,027,499 (6,267,187) 6,267,187
3l December 2012
usD (2oz movement) (11,966,078) 11,966,078 (7,478,799) 7,478,799
41,04.02 Transaction risk
Transaction lisk is the risk that the company will incur exchange losses when the accounting results are translated into the homecurrency.
41.04.03 Economic risk
Economic risk refers to the eft'ect of exchange rate movements on the international competitiveness of the company.
41.04.04 Interest risk
'lnterest rate risk arises from movement in interest lates. The company needs to manage interest rate risk so as to be able to re-paydebts as they fall due and to minimize the risks surrounding interest payments and receipts.
Exposure to interest rate risk
The interest rate profile of the company's interest- bearing financial instruments as reported to the management of the company is astbllorvs.
Strengthening
Taka
Weakenins
Taka
Strengthening
Taka
Weakening
Taka
2012Taka
1,670,711,218
z013
Taka
2,437,917,176(7,931,120,805) (5,266,133,+30)
(5,493,203,629) (3,595,422,2t2)
41.05 Other market price risk
The company is exposed to equity price risk, which arises from available for sale equity and debt securities. Management of thecompany monitors its investment pottfolio based on market indices and all buy and sell decisions are approved by the Directors. .
^a
!l
I
42.00 Operating lease
Operating Iease rentals as per BAS I7: Leases are payable as follows :
Within one year
Within2to5yearsAllcr 5 ycars
44.00 Productioncapacity
lnstalled Capacity (ln M.Ton) yearly
Production (ln M.Ton)
Capaci ty utilized (o/o)
45.00 Employees
Number of employees whose monthly salary was below Tk. 3,000
Nurnber of employees whose monthly salary was above Tk. 3,000
46.00 Events After Reporting DateNo material events have occurred fiom the repofting date to the date
values stated therein.
106,8 r 0 94,127
78.4489.01
712
of issuing of these financial statements which could affect the
31.12.2013 3"t.12.2012
Taka
17,386,275
54,842,4_48
Taka
9,916,144
6,173,725
____*l-q08ef!2_ _____J2 328 J 23_
43.00 Capitalcommitment
The company has decided to increase its production capacity to 450,000 MT from existing 120,000 MT per annum by modemizingits existing Re-rolling plant located at Nasirabad Industrial Area, Baizid Bostami Road, Chittagong. The entire plant will be futlyautomated and configured in such a way so as to maximize the output and reduce production cost. The estimated proiect cost stands
at Tk. 4,800 million. Out of required amount, Tk. 600 million has been financed by One Bank Ltd.- the lead arranger and 6 (Six)other Banks and Non-Banking Financial Institutions under syndication. A further sum ofTk. 2,790 million will be financed under a
syndicated term loan facility arranged by UCBL as lead arranger and other 15 participants. Balance amount will be financed fromthe sponsors' own soul'ces.
2013
I 20,000
2012
r 20,000
718
712718
44
