HMCL Niloy Bangladesh Limited - Hero MotoCorp
Transcript of HMCL Niloy Bangladesh Limited - Hero MotoCorp
HMCL Niloy Bangladesh Limited
Audrtors'report and financial statements as at
and for the year ended 31 March 2019
Rahman Rahman HuqChartered Accountants9&5Mohakhali C/ADhaka 1212Bangladesh
Telephone +880 (2) 988 645G2Fax +880 (2) 988 6449Email [email protected] wwrru.kpmg.com/bd
lndependent auditors' report
To the Shareholders of HMCL Niloy Bangladesh Limited
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of HMCL Niloy Bangladesh Limited (the Company), which comprisethe statement of financial position as at 31 March 2019, and the statement of profit or loss and othercomprehensive income, statement of changes in equity and statement of cash flows for the year then ended,and notes to the financial statements, including a summary of significant accounting policies.
ln our opinion, the accompanying financial statements give a true and fair view of the financial position of theCompany as at 31 March 2019, and its financial performance and its cash flows for the year then ended inaccordance with lnternational Financial Reporting Standards (lFRSs).
Basis for Opinion
We conducted our audit in accordance with lnternational Standards on Auditing (lSAs). Our responsibilitiesunder those standards are further described in the Auditors' Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with the ethicalrequirements that are relevant to our audit of the financial statements in Bangladesh, and we have fulfilled ourother ethical responsibilities in accordance with these requirements. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in
accordance with lFRSs, and for such internal control as management determines is necessary to enable thepreparation of financial statements that are free from material misstatement, whether due to fraud or error.
ln preparing the financial statements, management is responsible for assessing the Company's ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate the Company or to cease operations,or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
Auditors' Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with lSAs will always detect a material misstatement when it exrsts. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financial statements.
IRahman Rahman Huq, a partne6hip firm registered in Bangladesh
and a memberllm of the KPI\,IG network of independent member
lims af,iliated with KPMG lnternational c@perative ('KPMG
lntemational'), a Swiss entily.
Chattogram78 Agrabad I
Chattogram,
off@ address :
c/A (13h Fl@r), Bangladesh
Tel +880 (31) 710704,710996Fax +880 (31) 2520795E-mail chittagong@kpmg.@mlntemet wW.kpgm.@m/bd
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WAb Rahman Rahman HuqChartorod Accountants
As part of an audit in accordance with lSAs, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
ldentify and assess the risks of material misstatement of the financial statements, whether due to fraud orerror, design and perform audit procedures responsive to those risks, and obtain audit evidence that issufficient and appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, or the override of internal control.
Evaluate the appropriateness of accounting policies used and lhe reasonableness of accounting estimatesand related disclosures made by management.
Conclude on the appropraateness of management's use of the going concern basis of accounting and, basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions thatmay cast significant doubt on the Company's ability to continue as a going concern. lf we conclude that amaterial uncertainty exists, we are required to draw aftention in our auditors' report to the related disclosuresin the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions arebased on the audit evidence obtained up to the date of our auditors' report. However, future events orconditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions and events in amanner that gives a true and fair view.
We communicate with those charged with governance regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control that weidentify during our audit.
Report on Other Legal and Regulatory Requirements
ln accordance with the Companies Act 1994, we also report the following
a) we have obtained all the information and explanation which to the best of our knowledge and belief werenecessary for the purpose of our audit and made due verification thereof;
b) in our opinion, proper books of account as required by law have been kept by the Company so far as itappeared from our examination of those books; and
c) the statement of financial position and statement of profit or loss and other comprehensive income dealt with
by the report are in agreement with the books of account.
Rahman Rahman HuqDhaka, '16 April 2019
RR/I
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Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effecliveness ofthe Company's internal control.
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HMCL Niloy Bangladesh LimitedStatement of financial position
lrote31 March
20't93l March
2018
AssetsProperty, plant and equipmentlntanqible assets
67
2,017,610,255248,129
1,794,204,325431,356
Non-current assets 2,017,858,384 1,794,635,681lnventoriesAdvances, deposits and prepaymentsCurrenl tax assetslnvestmentsTrade and other receivablesCash and cash equivalents
do
1011
12
1 ,653,323,47489,513,438
170,064,06040,505,494
238,784,830743,370,8281,396,652 ,631
Current assets 9223. .099,545 2.935.562.124Total assets s,939,9s7 ,929 4,730.197,805
Eq u ityShare capitalRetained earninqs
14 981,296,000 981,296,000919,091 ,91 11,394,966 ,021
Total equity 2.376.262,021 1,900.387.911LiabilitiesLoans and borrowingsShare money depositEmployee benefitsDeferred tax liabilities
1516
1718
4217,302,368
18,0't4,905
130,454,1202,567 ,2217,151,978
16,335,555Non-current liabilities 25,3't7 ,694 156,508,874Bank overdraftLoans and borrowingsTrade and other payablesAdvance from customer
13
1519)n
r,402,698,4752,091,119,592
44,560,147
18,999,194684.424,506
1,969,877,320
Current liabilities 3,538,378,214 2,673,301,020Total liabilities 3,563,695,908 2,829,809,894Total equity and liabilities 5,939,957,929 4,730,'197,805
The notes on pages 7 to 47 are an integral pad of these financial statements
Director
Dhaka, 16 April 2019
Director Com ny retary
As per our report of same date
@ Auditor u
37?//
ln Taka
1,594,978,548199,482,206150,851,696491,108,524
89,015,940
4.fl /.1,*l J.At
Rahman Rahman HuqChaater€d AccountentgKPMG ln Brngladesh
HMCL Niloy Bangladesh LimitedStatement of profit or loss and other comprehensive income
ln Taka Note
For the year ended 31 March
2019 20'18
Revenue
Cost of sales
21
228,765,937,876
(7,149,446,846)
6,837,808,220
(4,889,757,735)
Gross profitOther income
General and administrative expenses
Selling and distribution expenses
24
25
1,616,491,030
(146,167,696)
(300,s00,788)
1,948,050,485
4,701,616
(125,184,829)
(596,162,231)
Finance cost
Finance income
(124,806,339)
67,788,38926 (57,017,950) (108,461,052)
Profiu(loss) before WPPF & taxContribution to workers' profit participation fund
1,112,804,596(55,640,230)
1,122,943,989(56,147,199)
Profiv(loss) before taxlncome tax (expense)/income a7
1,057,'t64,366(90,642,256)
1 ,066,796,790(87,837,434)
Other comprehensive incomeTotal comprehensive income 966,522,r 10 978,959,356
The notes on pages 7 to 47 are an integral pafi of these financial statements
Director Director
&l/any retary
As per our report of same date
@6Lr",r",
Dhaka, 16 April 2019
Auditor
Rahman Rahman HuqChartered AccountantsKPilIG ln Bengladesh
4
Kk/l
Operating profiu(loss) 1,169,522,96 1,231,405,041(139,803,139)
31,U2,087Net finance income/(cost)
Profiu(loss) forthe vear 966,522,110 978,959,356
ft .Yl il^-l
HMCL Niloy Bangladesh LimitedStatement of changes in equity
ln Taka
For the year ended 3'l March 2018
Attributable to the owners of the CompanyShare
capitalRetainedearnings
Totalequity
Balance at I Aptil2017 979,200,000 (59,867,445) 9'r9.332,555Total comprehensive income for the yearProfiu(loss) for the yearOther comprehensive income for the year
978,959,356 978,959,356
Total comprehensive income for the year 978,959,356 978,959,356
Transactions with owners of the CompanyContributions and distributionslssue of ordinary sharesDividends
2,096,000
Total contributions and distributions 2 096 000 2,096 000Total transactions with owners of the Companv 2,096,000 2,096,000Balance at 31 March 2018 981,296,000 919,091 ,91 1 1 ,900,387,91 1
For the year ended 31 March 2019
Atfibutable to the or ners of the CompanyShare
capitalRetainedearninqs
TotalequiW
Balance at I April 2018 981.296,000 919,091,911 1,900,387,9fiTotal comprehensive incomeProfiu(loss) for the yearOther comprehensive income
966,522,fi0 966,522,fi0
Total comprehensive income 966,522,fi0 966,522,1 10
Transactions with owners of the CompanyContributions and distributionslssue of ordinary sharesDividends (490,648,000) (490,648,000)Total contributions and distributions (490,648,000) (490,648,000)Total transactions with owne6 of the ComDanv (490,648,000) (490.648.000)Balance at 31 March 2019 98'1,296,000 1,394.966,021 2.376.262.021
The notes on pages 7 to 47 are an integral paft of the6e financial statements.
oI
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- 2,096,000
I
HMCL Niloy Bangladesh LimitedStatement of cash flows
ln Taka /VoteFor the year ended 31 March
2019 2018
Cash flows from operating activitiesProfiv(Loss) for the yearAdjustments for:- Depreciation- Amortisation- Employee benefits- Loss on sale of property, plant and equipment- Finance income- Tax (income)/expense
966,522,110 978,959,3s6
67
2627
1',tz,760,957183,226150,390
(67,788,389)
84,054,285158,405
7 ,151 ,978390,630
(31,342,087)
87 ,837 ,43490.642 ,2561,102,470,550 1,127,210,001
Changes in:- Advance, deposits and prepayments- lnventories- Trade and other receivables- Trade and other payables- Advance from customer
I8
1219
20
(94,872,4,t,t|58,344,926
152,608,830(167,269,978)
41 ,010,534(1,577,400,849)
(23s,574,571)1,791,590,466
44,560,'t47Cash generated from operating activitieslncome taxes paid 10 (69.760,542)
r,095,842,032 1,146,835,580(213i84,541)
Net cash f.om / (used in) operating activities 1,026,08't ,490 933,651,039
Cash flows from investing activitieslnterest receivedCash dividend receivedGain on share tradeAcquisition of property, plant and equipmentProceeds from sale of property, plant and equipmentAcquisition of intangible assetDevelopment expenditurelnvestments
262626
o
57,593,2621,075,0376,280,150
(332,607,36't)
11 (450,603.030)
29,00't ,414
(463,040,720)310,000
(s29,205)(12 ,95s ,627)(40,505,494)
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Net cash used in investing activities (7'.tB,261,9421 (487,719,632)
Cash flows from financing activitiesProceeds from issue of share capitalShare money depositProceeds from loans and borrowingsDividend paid
14
1615
(2,566,800)s87,819,849
(220.791.600)
2,096,000(2,096,000)
( 141 ,486,218)
Net cash from / (used in)financing activities 364,461 ,449 (141 ,486,218)Net increase / (decrease) in cash and cash equivalentsCash and cash equivalents at the beginning of year
672,280,997724,37',t,634
304,445,190419,926,444
Cash and cash equivalents at the end of year 13 1,396,652,631 724,371.634
The notes on pages 7 to 47 are an integral pai of these financial statements
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Notes to the financial statements
1. Reporting entity
HMCL Niloy Bangladesh Limited (hereinafter referred to as "HNBL" or'the Company") is a private
limited company incorporated in Bangladesh on 24 June 2014 under the Companies Act, 1994. ltsshareholders are HMCL Netherlands B.V. and Niloy Motors Limited and the shareholding are 55o/o
and 45o/o respectively. lts registered office is at Nitol Niloy Tower, Plot-69, Nikunja-o2, Khilkhet,ohaka-1 229, Bangladesh.
The Company manufactures and sells motorcycles within Bangladesh through the distributionchannel of Niloy Motors Limited. The Company has started commercial operation on 1 June 2017 andhas completed setting up a manufacturing plant at Padmabilla, Shakharigati, Kotowali, Jashore.
The financial statements have been prepared in accordance with lnternational Financial ReportingStandards (lFRSs). The financial statements were authorised for issue by the Company's Board ofDirectors on 16 April 2019.
Details of the Company's accounting policies are included in note 36
The financial statements are presented in Bangladesh Taka (Taka/Tk), which is the Company'sfunctional currency. All amounts have been rounded to the nearest integer, unless otherwiseindicated.
4. Use of estimates and iudgments
ln preparing these financial statements, management has made judgements, estimates andassumptions that affect the application of accounting policies and the repo(ed amounts of assets,liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates arerecognised prospectively.
Assumptions and estimation uncertainties
lnformation about assumptions and estimation uncertainties that have a significant risk of resulting in
a material adjustment in the year ending 31 March 2019 is included in the following notes:
Note 6Note 7Note 18Note 10
Note 28
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2. Basis of accounting
The title and format of these financial statements follow the requirements of IFRS which is slightlyditferent from the requirement of the Companies Act 1994; however, such differences are not materialand in the view of management, IFRS format as mentioned in IAS 1 gives a better presentation to theshareholders.
3. Functional and presentation currency
DepreciationAmortisationDeferred tax assets/liabilitiesCurrent tax assets/liabilitiesContingencies and commitments
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Notes to the financial statements (continued)
i. Measurement of fair values
A number of the Company's accounting policies and disclosures require the measurement of fairvalues, for both financial and non-financial assets and liabilities.
The Company has an established control framework with respect to the measurement of fair values.Management has overall responsibility for overseeing all significant fair value measurements, includingLevel 3 fair values.
Management regularly reviews significant unobservable inputs and valuation adjustments. lf third partyinformation, such as broker quotes or pricing services, is used to measure fair values, thenmanagement assesses the evidence obtained from the third parties to support the conclusion thatthese valuations meet the requirements of IFRS, including the level in the fair value hierarchy in whichthe valuations should be classified.
When measuring the fair value of an asset or a liability, the Company uses observable market data asfar as possible. Fair values are categorised into different levels in a fair value hierarchy based on theinputs used in the valuation techniques as follows.
- Level 1: quoted prices (unadjusted) an active markets for identical assets or liabilities
- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset orliability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
- Level 3: inputs for the asset or liability that are not based on observable market data (unobservableinputs).
lf the inputs used to measure the fair value of an asset or a liability fall into different levels of the fatrvalue hierarchy, then the fair value measurement is categorised in its entirety in the same level of thefair value hierarchy as the lowest level input that is significant to the entire measurement.
The Company recognises transfers between levels of the fair value hierarchy at the end of the reportingperiod during which the change has occurred.
EM**
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Notes to the financial statements (continued)
5. Chanqes in significant accounting policies
The company has initially applied IFRS '15 (see A) and IFRS I (see B) from '1 April 2018. A number of amended standardsand interpretations are also effective from 1 January 2018 but they do not have a material effect on the ,inancialstatements.
Due to the cumulative effect method chosen for transition by the Company in applying these standards, comparativeinformation throughout these financial statements has not been restated to refled lhe requirements of the new standards.
The effect of initially applying these standards is mainly attributed to the following
Change in revenue recognition method due to impact of consideration payable to customer in the form o, periodicdealer incentive and promotional expense (discount sharing with customer) which shall be shown as a reduction ofthe transaction price.
A. IFRS 15 Revenue from Contracts with Customers
IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. ltreplaced IAS '18 Revenue, IAS 11 Construction Contracts and related interpretations. Under IFRS 15, revenue rs
recognised when a customer obtains control of the goods or services. Determining the timing of transfer of control - at apoint in time or over time - requires judgement.
The Company has adopted IFRS 15 using the cumulative effect method, with the effect of initially applying this standardrecognised at the date of initial application (i.e. '1 April 2018). Accordingly the information presented for 31 March 2018 hasnot been restated i.e. it is presented, as previously reported, under BAS 18 and related interpretations. Additionally thedisclosures requirement of IFRS 15 have not generally been applied to comparative information.
Periodic dealer incentive and promotional expense (discount sharing with customer): Under BAS 18, these itemswere not net off against revenue but rather classified as selling and distribution expenses. Under IFRS 15.70, both of theseitems are treated as consideration payable to a customer which includes cash amounts that the Company pays, or expectsto pay, to the customer (or to other parties that purchase the Company's goods from the customer). The Company shallconsider their effects while determining the transaction price and shall account for consideration payable to a customer as areduction of the transaction price and, iherefore revenue.
For additional information about the Company's accounting policies relating to revenue recognition, see Note 36(A)
B. IFRS 9 Financial lnstrumenB
IFRS 9 sets out the requirements for recognising and measuring financial assets, flnancial liabilities and some contract tobuy and sell non-financial items. This standard replaces IAS 39 Finarcial lnstruments: Recognition and Measurement
As a result of adoption of IFRS 9, the Company has adopted consequential amendments to IFRS 7 Financial lnstruments:Dlsc/osures that are applied to disclosures about the current year but have not been generally applied to comparativeinformation.
i- Classificalion and measurement oflinancial asseb and linancial liabilities
IFRS I contains three principal classification categories for financial assets: measured at amortised cost, FVOCI andFWPL. The classification of financial assets under IFRS 9 is generally based on the business model in which a financialassets is managed and its contractual cash flow characteristics. IFRS 9 eliminates the previous IAS 39 categories of held tomaturity, loans and receivables and available for sale. Under IFRS 9, derivatives embedded in contracts where the host is a
financial asset in the scope of the standard are never separated. lnstead hybrid financial instrument as a whole is assessed
for classification.
IFRS 9 largely retains the existing requirements of IAS 39 for classification and measurement of flnancial liabilities
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Notes to the flnancial statements (continued)
The following table and the accompanying notes below explain the original measurement categories under BAS 39 and thenew measurement categories under IFRS 9 for each class of the Company's financial assets and financial liabilities as at 1
April 2018.
Financialassets
Original classificationunder BAS 39
New classificationunder IFRS 9
Originalcarryingamount
under IAS 39
NewCarryingamount
under IFRS 9Trade and other
receivablesCash and cash
equivalentsAdvances, deposits and
prepayments
lnvestments
Loans and
receivablesLoans and
receivableSLoans and
receivables
Loans and
receivables
238,784,830
743,370,824
89,513,438
40,505,494
Total financial assets '1,'t12,174,590 1 ,112,17 4,590
Financial liabilities
ln TakaOriginal classification
under BAS 39New classification
under IFRS I
OriginalCarryingamount
under IAS 39
NewCarryingamount
under IFRS 9Bank overdraft
Loans and borrowings
Employee beneflts
Trade and other payables
Other financialliabilities
Other financialliabilities
Other financialliabilities
Other financialliabilities
Other fi nancial liabilities
Other fi nancial liabilities
Other financial liabilities
Other financial liabilities
18,999,194
814,878,626
7,151,978
't,969,877,320
18,999,194
8 t4,878,626
7,151,978
't,969,877,320
Total fi nancial liabilities 2,810,907,r18 2,810,907,1t8
Additional disclosures about how the Company measures the ailowance for impairment is described in Note 36 (H).
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ln TakaAmortised cost
Amortised cost
Amortised cost
Amortised cost
238,784,830
743,370,A2A
89,513,438
40,505,494
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Notes to the financial statem ents continued
6. Property, Plant and equiPment
See accounting policy in note 36(F)
Reconciliation of ca in amount
ln Taka
Factory Furniture andbuilding fixtures
Computerequipment
Officeequipment
Plant andmachineries Total
CostBalance at 1 AP(il2017Additions/Transfers
- 930,149 1202,395 1,213,421760,848,761 3,432,576 1,712,450 8,077,867
3,123,032637,150,281
12,956,3141,200,250
1,423,740,44a(973,364,749)
1.443.165.759439,057,436
Di 832 832 432Balance at 3'l March 2018
lance at 1 April 2018Additions/Transfers
761 4 362 725 2 845 99147 29'l 288760,448,761 4,362,725 2,914,845 9,29'1,2a8221,315,564 't,866,671 28,780,523 33,27',t,759
639639,440,881268,215,337
114 ,| 56414,156,564
329,480
450 375 699 'l 88r 39 7631,881,390,763
336,166,887450,375,699
(217,612,448\Dis sals
Accumulated dePreciationBalance al 1 APtil2Ol7DepreciationDisposals
24,O82,984151,128169,414
396,142803,582
220,376't,140,947
227.81755,758,874
(131,802)
2,268,4922,098,48s
3,263,95584,O54,285
(131,802)
Balance at 3l March 2018 082 984 320 ,1 199 724 1 361 323 55,854,889 4,366,977 87,186,438Balance at 1 Apri t 2018 24,082,984 320,542 1,199,724 1,361,323
28,000,095 1,279,875 4,725,576 5,182,32755,854,889 4,366,977
2,2s9,35987,186,438
'l't2,760,957Depreciation 71,313,72sDisposalsBalance at 3l March 2019 079 1 600 417 552 083 300 6 ,650 127,168,6'14 6,625,336 199,947,39s
Ca amountsAt 31 Ma 2018 736 765 777 4 o42 183 1 715 121 7 929 965 s83 585 992 9 789 587
At March 20 ,246 4,628,979 25,770,068 35,019,397 780,487,604 7,859,708450 699 1 794 204 325232,763,251 2,O17,6'tO,255
Allocation of dePreciationFor the year ended 31 March
2019 2014Cost of salesGeneral and administrative expenses
107,122,909 79,851 ,5714,202,7145,63 048
{Total depreciation 112,760,957 84,O54,285
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Motor Under constructionvehicle Note - 6.1
Elliice aiSl March 2019 982,164,325 6,229,396 31,695,358 42,563,047 907,656,218 14,486,044 232,763,251 2,217,557,650
Notes to the financial statements (continued)
6.'t Under construction
ln Taka ,Vote Common costs Factory buildingPlant and
machineries TotalBalance at 'l April 2017
Additions
Transfers (allocation of common costs)
Transfers (to respective asset class)
713,250,504170,998,619
46,529,380(760,848,761)
636,350,861
243,640,070
35,611,003(637,1s0,281)
6.1.1
6.1.1
74,139,083
9,995,605(82,140,383)
1.423,740,448
424,634.293
(1,397,999,042)
Balance at 31 March 2018 1,994,305 169,929,742 274,4s1,6s3 4s0,375,699
Balance at 1 April 20'18
Additions
Transfers
Transte6 (to respective asset class) 6.1.1 (1,994,305)
'r69,929,742104,122,954(7,632,610)
(200,814,967)
278,451,653't96,994,3't9
7,632,610(315,920,453)
450,375,700
301 ,1',t7,277
\518,7 29 ,7 25)Balance at 3'l March 2019 65,605,123 t67,158,129 232,763,252
6.1.1 Common costs
ln Taka
For the year ended 31 March 2019Openinq Additions Closinq
Bank interest on loan for capital machinery
Erection and commission materials546,340
1,447,965
546,340
1,447,965
Total common costs before allocation 1,994,305Allocation of common costsFactory building
Plant and machineries (r,994,305)
Allocated common costsTotal common costs after allocation (wi ll be distributed later)
ln Taka
For the year ended 31 March 2018Opening Additions Closing
Bank interest on loan for capital machinery
Erection and commission materials
Loan facility fee from HSBC
lnsurance for erection all risk
Electrical materials
Rental expense - Hydra crane
Erection Material- Parts and components
Dieselfor generator
Electricity bill
Unloading expense
48,223,247
5,905,923
5,777,880
5,554,500
2,442,984
3.184,429
1 ,318,1761,003,845
531 ,627196,472
6,090,339
542,384
54,313,586
6,448,307
5,777,880
5,554,500
3,692,948
3,477,1832,170,831'1,791,905
690,275
217,272
1,249,964
292,754
852,655
788,060
158,648
20,800
Total common costs before allocation 74 083 9,995,604 84,134,687139
(46,529,380)
(35,611,003)
Allocated common costsll bed late 't,994,304
L2
1,994,305
1,994,30s
(r,994,305)
Allocation of common costsFactory building
Plant and machineries(82,140,383)
Total common costs after allocation
#
Notes to the financial statements (continued)
7 lntangible assets
See accounting policy in note 36(G)
ln Taka
Accountingsoftware - Tally
CostBalance at 'l April 2016
Additions
Disposals
Balance at 31 March 2017 100,926
Balanc€ at 1 April 2017
Additions
Disposals
100,926
529,205
Balance at 3'l March 2018 630,13'tBalance at 1 April 2018
AdditionsDisposals
630,131
Balance at 31 March 2019 630,131
Accumulated amortisationBalanc€ at '1 April 2016
Amortisation for the year
Disposals
8,410
31,960
40,370Balance at I April 2017
Amortisation for the year
Disposals
40,370
158,405
Balance at 3'l March 2018 198,775Balance at 'l April 2018
Amortisation for the year
Disposals
194,775
't83,227
Balance at 31 March 2019 382 002
Carrying amountsAt 1 April 2016 92,516
At 31 lrarch 2017 60,556
At 31 March 2018 431,356
At 3t March 20'19 248,129
For the year ended 31 March
Allocation of amortisation 2019 2018
Cost of salesGeneral and administrative expenses
174,0659,16'l
150,485
7,920
Total depreciation 183,226 158,405
ffi Co*
.BAH
13
100,926
Balance at 31 March 2017
Notes to the financial statements (continued
8 lnventories
ln Taka 2019 20'18Goods-inlransitRaw materials and consumablesFinished goods
1,057,815,054417,723,330119,140,154
1,012,795,979562,603,58777,923,908
r,594 ,978,548 1.653,323,474
9 Advances, deposits and prepayments
ln Taka 20't9 20't8AdvancesVAT Current Ay'C
Build AsiaARRA Technologies Ltd.Structural Design Associates Ltd.Siemens Bangladesh LimitedAdvance to employeesDhrupadi Techno Consortium LimitedBashundhara LP Gas Limitedlnternational Convention City BashundharaPrime lnsurance Company Ltd.Vrap lnternationalRahimafrooz Renewable Energy Ltd.Receivable from HSBCSIMA Labs Pvt. Ltd.Bangladesh Steel Re-Rolling Mills Ltd.AC World Electronics LimitedArnob EnterpriseAvery Bangladesh LimitedUtopian AssociatesAlMadina Glass HouseKyto Engineering & Automation Ltd.Amber lT Limited
90,342,54110,352,022
't,827,046't,270,227
849,642705,170450,000293,815175,000,t t8,33376,07460,00025,323,4,560
685
28,139,632'1,730,168
1 ,827 ,086
2,848,935553,404225,OOO
89,052
60,00013,597,814
14,560
20,025,0003,303,8252,565,000
624,112168,125
12.8575,000
106,560,478 75,789,570
DepositsOeposit against shipping guaranteeBO account deposit (IDLC Securities Ltd. and LankaBangla Securities Ltd. account)Jessore Palli Bidyut Samity - 1
Elite Secuity Services LimitedLinde Bangladesh LimitedHouse rentMS MunshiBank guarantee marginPrem VarietiesUC Margin
9,084,000389,500336,000240,000200,000
15,000778,487
92 648 273 11 042 987
PrepaymentsHouse rentConsumables (Carbon dioxide gas)lnsurance premium (Employee group insurance)
270,0003,455
90,000102,350
2,488,53'1273,455 2,680,881
ffiD
I
HA(
199 206 89 513,438
L4
'-r
63,424,86818,a24,2349,084,000
389,500336,000240,000200,000134,67115,000
Notes to the financial statements (continued)
10. Currenttax agsets
See accounting policy in note 36(D)
ln Taka 2019 2018Advance income taxLess: Provision for income tax
10.110.2
287,140,436(136,578,740)
217,679,894(47,615,834)
150,861,696 170,064,060
10.1 Advance income tax
ln Taka irole 20't9 20't8Balance at beginning of the yearAdd: Paid durinq the vear
217,679,89459,760,542
4,495,353213,184.541
760 542 213 184 541287 ,440 ,436- 217,679,894
Less ustment for com letion of assessmentClosino balance 14.1.1 287,440,436 217 679.894
'10.1.'t Closing balance
ln Taka 20't9 2018Accounting year 2015-20'16Accounting year 20'16-2017Accounting year 2017-2018Accounting year 2018-2019
2,263,267 2,263,2672,232,086 2,232,086
213,181,541 213,1U,54169,760,542 -
287,440,436 217,679,894
iroleBalance at beginning of the yearAddr Provision made durinQ the year
47,6'15,83488.962.906
'190,700
47.425,13488 962 906 47,425.134
47 .615.834Less: Adiustment on completion of tax returnClosing balance 10.2.1 136,578,740 47,615,834
10.2.1 Closing balance
ln Taka 2019 20'18
Accounting year 2015-20'16Accounting year 2016-201 7
Accounting year 2017-2018Accountinq year 2018-20'19
61,953128,7 47
47,425,13488,962,906
61,953128,747
47,425,134
136 578 740 47,615,834
11 lnvestments
ln Taka iro,e 2019 2018
Trust Bank Limited- long term fixed depositsBRAC Bank Limited- long term fixed depositsCommercial Bank of Ceylon PLC- long term fixed depositNRB Global Bank- long term fixed depositsThe City Bank Limited- long term fixed deposit
176,832,851132,317,73350,000,000s0,000,000
81,957,930
10,505,494
30,000,00011.1Listed nres
49'l 108 524 40,505 494
ffiru o
RA
Note
10.2 Provision lor income tax
ln Taka 2019 2018
136,578,740
15
/.
Notes to the financial statements continued)
11.'l lnvestment in shares ol lkted companies - fair value
ln Taka31 March
20,t931 March
20't8Square Pharmaceuticals Ltd 16,703,403
16,096.42513,200,0007,767,0007,568,6005,3i10,0001,528,0023,829,5002.964,0001,325,0001,220,000
782,000348,000
United Power Generation & Distribution Company LtdActive Fine Chemicals LimitedIFAD Autos LimitedNahee Aluminium Composrte Panel Ltd.The City Bank LimitedBSRM Steels LimitedOrion Pharma Ltd.Mercantile Bank LimitedShahjalal lslami Bank Ltd.Baraka Power LimitedGlobal Heavy Chemicals LimitedWestern Marine Shipyard LimitedOne Bank Limated 286 000
8l 957 930
The company invested BDT 106,983,932 in the stock market up to 30 June 2018. The value of current shares held by theCompany measured at fair value as at 31 March 2019 as per IFRS I was BDT 81,957,930 for which the cost was BDT94,745,8'19 as detailed in Note 11.1.1.
11.1,1 lnvestment in shares ot listed companies. cost
ln Taka3l March
201931 March
2018Square Pharmaceuticals LtdUnited Power Generation & Diskibution Company LtdActive Fine Chemicals LimitedIFAD Autos LimatedNahee Aluminium Composite Panel Ltd.The City Bank LimitedBSRM Steels LimitedOrion Pharma Ltd.Mercantile Bank LimitedShahjalal lslami Bank Ltd.Baraka Power LimitedGlobal Heavy Chemicals LimitedWestern Marine Shipyard LimitedOne Bank Limited
't6,960,899r6,106,s98't7,854,98010,037,116
9,189,2046,702,1105,056,5784,962,2283,597,5961,442,0261,249,738
842,520433,296310 930
94 745 819
12. Trade and other receivables
ln Taka ,VoteTrade receivables due from related partiesOther receivables due from related partiesOther receivables
12.112.2 68,626,643
20,389,297
235,478,U7
3.306,28489.0t5.940 238,784,830
12.'.| Trade receivables due from related parties
ln Taka 20't 9 2018
Niloy lvlotors Limited 235,478,547235.478 ,547
ffir I
oD
I
ti A(
2019 2014
Notes to the financial statements (continued)
12.2 Other receivables due from relaled parlies
ln Taka 20't9 2018Hero Motocorp Ltd 68,626,543
68.626,643
't2.3 Other receivables
ln Taka 2019 2018lnsurance claim receivabieAccrued interestFatema EnterpriseDividend income receivable
15,462,7522,492,4922,086,60s
347,448
2,340.673965,610
20,389,297 3,306,284
13. Cash and cash equivalents
See accounting policy in note 36(H)
ln Taka ,Vofe 2019 2018Cash at bankShort term fixed deposits
13.1
13.21,038,713,456
357,939,175334,463,920408,906,909
Cash and cash equivalents in the statement of financial position 1,396,652,63'l 743,370,828Bank overdrafts used for cash man nt u
Cash and cash equivalents in statement of cash flows18,999 194
1.396.652.63't 724.371.634
13.1 Cash at bank
ln Taka 2019 20'18The City Bank LimitedStandard Chartered BankHongkong and Shanghai Banking Corporation LimitedTrust Bank Limited
518,400,241394,359,267
95,517,959
224,605,35934.784.9447 4.212.295
43s 989 861't.038.713.456 334,463.920
13.2 Short term fixed deposits
ln Taka 2019 2018Standard Bank LimitedTrust Bank LimitedBRAC Bank Limited
357,939,175 220,562,434158,344,47 5
30 000 000
357 939 175 408 906 909
13.3 Bank overdrafts uaed for cash management purposea
ln Taka 2019 2018Honqkonq and Shanqhai Bankinq CorDoration Limited 18,999,194
18,999 194
14. Share capital
See accounting policy in note 36(l)
ln Taka 2019 20't8Authorised15,000,000 Ordinarv Shares ofTaka 100 each 1.500.000.000 1,s00,000,000
ln Taka Nofe 2015 2018lssued, subscribed and paid-up9,792,000 Ordinary Shares of Taka '100 each9,8'12,960 Ordinary Shares of Taka 100 each 981,296,000 981,296,000
17
14.114.1
981 0 981 000
)( mt
c
Notes to the financial statements (continued)
14,'l Particularsofshareholding:
shareholdi no
olo of No. ofshares
Face value persham
Value (Taka)
HMCL Netherlands B.VNiloy Motors Ltd.
s5%4s%
5,397,1284,415,832
100100
539,7'12,800441,583,200
100% 9,812,960 98'1,296,000
Name of the shareholders
As at 31 March 2018
% ol No. ot Face value per Value (Taka)ghareholdinq shares share
HirCL Netherlands B.VNiloy Motors Ltd.
550/0
45%5,397,1284,415,832
100'100
539,712,800441,583,200
'100% 9,812,950 98'1,296,000
15. Loana and borrowinga
See accountang policy in note 36(H)
ln Taka 2019 2018Non-current liabilitiesLoan from HSBC (Taka denominated) 130,454.120
130 454 120rrent liabilities
UPAS loan from HSBC (USD denominated)UPAS loan from SCB (USD denominated)Loan from HSBC (Taka denominated)
865,554,407537,134,068
464,532,968'187,278,008
32,6'13,5301,402,698,475 684,424,506
16. Share money deposit
ln Taka 2018HircL Netherlands B.VNiloy Motors Ltd.
421 4212,566,800
421 2,567,221
17 Employee benefits
ln Taka ,Vote 2019 20't8Gratuity fund 17.1 7,302,368 7,151,978
7 302 368 7,151,978
'17.'l Gratuity fund
ln Taka 20'19 2018Balance at beginning of the yearAdd: Provision for qratuity made during the year
.18 Deferred tax assets/(liabilities)
See accounting policy in note 36(D)
ln Taka Note 20't9 2018
Opening balanceDefe.red tax (expenses)/income
(16,335,555)11.679.3s0t
24.076.7 45(40,412.300)
W' o0 ts
I
Closin balance
18
18.1 18 14 905 16,335,555
Name of the shareholders
As at 3t March 2019
20't9
7,151,9786.885.085 7.15',1,978
14,037,063 7,151,978
/
l8.l Deferredtax(expenses)/income
Nole
Carryingamount on
reporting date
(Taxable)/deductibletemporary
d ifferencesProperty, plant and equipment excluding CWIPlntangible assetsProvision for warranty
67
19.3
1,744,413,179 1,357,497,664 (426,915,515)248,129 6,308 (24'1,8211
(66,859,228) - 66,8s9,228
Tax rate(360,298,108)
5.00%Deferred tax liabilities as at 3l March 2019 (18,014,905)
18.2 Delerredtax(expenses)/income
,Vote
Carryingamount on
reporting date Tax base
(Taxable)/deductibletemporary
differencea
Property, plant and equipment excluding CWIPlntangible assetsProvision for warrantyProvision for gratuityCarry Iorward of tax lossesUnabsorbed depreciation
67
19.317
18.2.118.2.2
1,343,828,626431,356
(27,759,s14),(7,151,978)
982,138,380498,993
(361,690,246)
27/5g,5147,151.978
Tax rate(326,711,117)-
5.00%Deferred tax liabilities as at 31 March 2018 (16,335,555)
ln TakaFor the year ended 3l March
2016 2017 2018 Totalunabsorbed depreciation b/fAdjustment for accounting year 2016-20'17Absorbed up to 31 March 2018
3,425,933 62,25't,104(9,144,118)
65,677,037(9,144,118)
(56,532,919)(56,532,919)Unabsorbed depreciation c/f 3.425.933 53.106,986 (56,532,919)
18.2.2 Unabsorbed depreciation
ln TakaFor the year ended 31 March
2016 2017 201A TotalUnabsorbed depreciation b/fAdjustment for accounting year 2016-2017Absorbed up to 31 March 2018
2,066,027 3,195,31125,232
5,261,33825,232
(5,286,570)(s,286,570)Unabsorbed depreciation c/I 2,066,027 3,220,543 (s,286,570)
,t9. Trade and oth€r payables
See accounting policy in note 36(H)
ln Taka 2019Trade payables due to related partiesOther trade payables
19.1
19.2935,084,i146
18,515,7411,383,442,147
38,261,609Trade payables 953,600,187 1,421,703,756Accrued expensesOther payables due to related parties
Other payables19.4
628,s95,082406,612,s65102,311,7s8
496,838,9276.957
5'1,327,680Other payables r.137.519.405 548.173.564
2.091,119.592'1,969.877,320
19.1 Trade payables due to related parties
ln Taka IVo,e 2019 2018
Hero Motocorp Ltd.NitolMachineries Ltd
19.1.1 928,747,580'1,362,839,0426 336 866 20 603 105
935,084,445 1.383,442.147
19.1.,1 USD 1 '1 ,063,104.00 is payable to Hero Motocorp Ltd. for inventories. The conversion rate used is Taka 83.95/ USD
m Co19
Notes to the financial statements (continued)
Tax base
18.2,1 Business loss
/Vote 20't8
fl
Notes to the financial statements (continued)
19.2 Other trade payables
ln Taka 2019Auto Fit Pvt. Ltd.M/s. Shamsur RahmanCovesko lndia Pvt. Ltd.Berger Paints Bangladesh LimitedBerger Paints lndia LimitedOmera Petroleum LimitedRun lndustriesShamia Car PaintBengal Gases CorporationSumon Hardware StoreBiswas Hardware StoreLinde Bangladesh LimitedZhejiang Wanfeng MotorcyclesZeal EnterpriseDelcot LimitedExpress lnsurance Ltd.Biswas Hardware Store
3,626,2145,67 4,703
133,0762,248.817
6,778,629234,075322,36839,760
52,77319,037,318
89,20319,2603,3082 106
't8,5't5,74't 38,261,609
'19.3
,Vote 20't9 2018Periodic dealer incentiveRoyaltyAdvertisement expensesProvision for warranty and corrective costsWorkers' Profit Participation FundSalary and allowanceslnterest on upas loanConsultancy, professional and legal feeElectricity and gas billAudit feeContribution to PFSecurity guard expenseCanteen expenseUnloading chargeGroup reporting feeSupport staff expenseDrive/s allowancesRepair and maintenanceConsumable itemsFuel, tolland parkingOffice expenseOtfice suppliesTelephone, mobile and internetFactory ExpenseLocalconveyancel\riscellaneous factory indirect expensesPaper, books and periodicalsPrinting and stationerylT supplies and maintenancePromotional expense (discount sharing with customer)lnterest on Taka term loanStaff lvelfare expenseVehicle rentTours and travel localOthers
19.3.1
198,695,950181,208,75877,413,77066,859,22855,640,23030,789,919I,144,6042,264,907r,600,0001,177,312
694,778676,030664,148604,640345,000322,000117,500
90,82066,22265,65541,49226,03323,25420,235'13,376
11,6258,9167,1401,500
148,050,738136,756,'16576,442,72527,759,51456,147,19927.134.064
2,290,7361,500,000
741,750389,426680,000734,554284,536345,000
3,211,95989,68333,82332,38686,65030,92520,84129,908
60,952
36,538'1,200
't0,071,784
3,737,50760,83740,000
2,175
#
20
628 082 496.838 927
20185,907,0683,621,'t083,209,1992,581,073t,397,,t06
738,602375,171359,r11233,600
62,31424,852t":
Accrued expenses
ln Taka
Notes to the financial statements (continued)
19.3.1 Salary and allowances
ln Taka 20't9Target variable payEarned leaveHouse rent and car allowanceGross salary
14,827,5448,573,3534,149,2583,239,760
14,686,3865,592,7433,810,4143,OM,521
30 789 919 27 134 064
19.4 Other payables due to related partiesSee accounting policy in note 36(H)
ln Taka 2019 20't 8Nitol lnsurance Company Ltd.HIrCL Netherlands B.V. (dividend payable)Hero l\rotooorp Ltd. (royalty payable)
6,957269,856,400136,756,165406,612,565 6,957
't9.5 Other payables
ln Taka 20't9 2018Withholding tax payableWorkers Participatory FundWorkers Welfare Foundation FundCollection of taxARRA Technologies LimitedWithholding VAT payableWo*ers Welfare FundMohona TradersM/S. Faiz Steel HouseAC World Electronics LimitedSensotec Automation & ControlLubricants Asia LimitedRockwell BangladeshLegalMindsMilon TradersPEB Steel Buildings Co. Ltd.Hussain EnterpriseMarks Automation LimitedSeba ProductsSIMA LabsTurbotic lnternationalAkhtar Furnishers LimitedPower Tech ElectricMis. Babar Ali Filling StationLighting BDAffection Printing & PackagingDiamond lnternationalBio-Access Tech Co.MD. Abu Syem RashelR R PapersRenasha Stationery & LibraryActive Computer & TechnologyRainbow EnterpriseEsquire Electronics LimitedHossain Denting & Painting WorkshopKarim Printing WorksCity Plaza lnternationalAmber lT Limited
46,182,13115,107,3225,614,7203,124,0643,373,7171,634,4661,332,634
429,811381,r88359,049214,286130,002129,757127,778126,803,125,525
109,84382,28'l74,92258,24042,85737,88136,00035,60029,82828,90021,10719,50013,0't8't1,549't1,52910,836
8,2'.14
7,7007,3353,1002,470
505
84,384
731,2373,361,884
66,962
319,444'14,859
1 ,277,952
35,600
6,965
3,'100
rffiQir-n(
Co
27
2018
#
Notes to the financial statements (continued)
ln Taka ,Vo,e 2019 2018Monita lndustrial Corporationlngersoll-Rand Tech. and Service Ltd.Auto Fit Pvt. Ltd.Precision ARC Robotic SystemsFairdeal Agencies (Prop. Goyal)Transcom Electronics LimitedKhusboo Scientific Pvt. Ltd.Mayesha ApparelsPersons (BD) Ltd.Bangla TechHoque Bhattacharjee Das & Co.GaziTanksStar Tech & Engineering Ltd.Care lnternationalRona Electric & ElectronicsSabbir AutoRetention monev aoainst contractor bill 19.5.1 22,964,890
3,808,8962,522,9122,437,5232,021,1781,297,9201,2U,932
832,000273,880244,091237,764172,50059,78635,10032,18014,5683,953
30,166,107'l02 311 758 51,327,680
19.5.'l Retention money against contractor bill
ln Taka 20't9 2018Build AsiaSiemens Ltd.PatilAutomation Pvt.Srinivasa ToolsA.P. Precision AutoArnob EnterpriseJSR EngineersUtopian Associates
11,021,6774,752,7934,593,265't,247,254
877,731472,170
24,878,7593,753,146
856,640677,563
22,964,890 30,'166,107
ln Taka ,Vote3l March
201931 March
2018Advance from related parlies 20 1 44.560,147Advance from customer 44,560,147
20.1 Advance from related parties
ln Taka31 March
20193'l March
2018Niloy l\4otors Ltd 44,560,147
2'l Revenue
See accounting policy in note 36(A)
ln Taka lvote 2019 2018Revenue from motorcycle sales 21.1 8.765,937,876 6,837,808,220
8.765.937.876 6,837,808,220
[ffiH
ooHA(
)
22
20. Advance from customer
,14,560,'147
V
Notes to the financial statements (continued)
2'1.1 Revenue from motorcycle sales
ln Taka cc 20,t9 2018Splendor PlusHF DeluxeGlamourlgnitorHunk SDHunkSplendor I SmartHunk SD MattHunk DD MattHF Deluxe KickPleasureSplendor I Smart PlusAchieverPassion Xpro
1001001251251501501'10
1501501001001 10150110
r,938.964,9921,447,313,0291,535,007,6301,353,632,624
810,807,695607,977,978253,022,343145,528,089'136,705,770122,065,163r r6,989,088105,057,16645,383,71641,942,720
1,636,075,9051,222,129,3802,397,530,160
215,625,000884,467 ,545359,362,190
122,618,040
9.060,438,003 6,837.808,220Lessr Periodic dealer incentive (187,849,912)
22. Cost of sales
ln Taka ,Vote 20't9 2018Opening finished goods at 1 April 77,923,908Cost of goods manufactured 22.1 7,1q0-963,092 4,967,681,643Cost of finished qoods available lor sale 7,268,887,000 4,967,681,643
Closing finished goods at 31 March (119,440,,r54) (77,923,908)7,149,446,846 4,889,757,735
22.1 Cost of goods manutactured
ln Taka ,Voae 20'19 2018Raw and packing materials consumed 22.1.1 6,955,239,491 4,801,653,667
6,955,239,491 4,801,653,667
Manutacturing overhead:DepreciationSalary and allowancesElectricity and gas billEmployee benefitsRepairs and maintenanceunloading chargeLand rental expenselnsurance expenseConsumablesEmployee uniformOvertime expensesAmortisationToolsMedicalexpensesDenting and re-workGenerator rental expenseRoad test expense
,107 ,122,909
70,449,15119,241,46312,326,378,10,938,227
4,483,4363,510,0103,288,4511,857,5471,390,314
685,635'174,065
115,204101,454
39,357
79,851,57150,747,803
5,434,8129,025,7914,925,8163,273,8382,700,0003,100,3001 ,241 4911,357,304
772,049150,485227,899113,724
12,3432,628,101
64,648
24.2
7
235,723,601 166,027,976
lm.RA/J
oDHAK
7 19 963 924 967 68'1 643
23
624.1
#
Notes to the financial statements (continued)
22.1.,1 Raw and packing malerials consumed
ln Taka ,Vofe 2019 2018Opening balancePurchase during the year
- lmported- Local purchase
6,4,17,678,623414,105,957
5,854,424,080446.706,524
1,575,399,566 75,922.62522.1.1.1
6.861 ,784,580 6,301.'130,608
Closing balanceScrap sales
8,437,184,146(1,475,538,394)
(6,406.26't)
6,377,053,233(1,57s,399,566)
6.955,239,491 4,801,653,667
22,1.1.'l Purchase during the year
ln TakaFor the year ended 31 March 2019
Parts componentsWheelSeatPaints & chemicalsUC related costsDieselConsumable itemsLP GaS
CO,MigwireRework-paintBarcode
orted6,1 18,488,642
155,883,08035,583,5i1833,283,46359,420,804
Local
310,47'l,'11357,888,304'12,070,683
2,377,O0010,854,560r0,674,361
3,372,2382,877,1203,258,603
Total6,118,488,642
466,354,19293,471,85345,354,14659,420,8042,377,000
10,854,56010,674,361
3,372,2342,877,1203,2s8,603
261 5 26,1 9756,402,659,538 414,105,957 6,816,765,495
Less: opening goods-in{ransitAdd: closing goods-in-transit
(r,012,795,979)1,057,815,064
(1,012,795,979)'t,057,8't5,064
6,447,678,623 414,105,957 6,861,784,580
22.1.1.2 Purchase during the year
ln TakaFor the year ended 3'l ltlarch 2018
lmported Local TotalParts & componentsWheelSeatPaints & chemicalsUC related costsDieselConsumable itemsLP GasCO,MigwireRework-paintBarcode
4,7 44 ,977 ,37178,837,69619,305,4429,938,982
64,491,235
278,409,73267 ,934,27956,700,457
16,244,73613,639,3547,896,0342,103,871
1,854,0001,739,008
'185,057
4,744,977,371357,247,428
a7 ,239,72266,639,44064,491,235't6,244,73613,639,3547,896,0342,103,871
1,854,000'1,739,008
185,0574 917 550 726 446 706 528 5 364 257 254
Less: opening goods-in-transitAdd: closing goods-in-transit
(7 5,922,625)1,012,795,979
17 5,922 ,625J1,012,795,979
5,854,424,080 446 706 528 6 301 130 608
23 Other income
ln Taka 20184 701 616
ffi co*
sales
24
20'19
4 701 6'16
#-,
Notes to the financial statemen ts(continued)
24. Generalandadministrativeexpenses
ln Taka Nole 2019 2018Salary and allowances
80,446,93515,025,9575,371,7661,640,1424,202,714
42,807,28720,267,573
7,800,8415,998,3955,638,0483,688,3052,622,1322,505,5952,382,679r,954,9661,20Aj251,202,5881,182,200't,159,196
922,431878,335866,523797,459545,957505,522476,727't90,940143,156136,05698,3't86't,05535,82634,14027,300
9,.t 61
7,8702,980
24.1Consultancy, professional and legal feeSecurity guard expenseBank chargesDepreciation expenseVAT cunent account adjustmentForeign travel expensesEmployee benefitslriscellaneous f actory indirect expensesLocal travel expensesRepair and maintenanceOffice expenseAudit feeTelephone, mobile and internetMeeting expensesRegistration and renewal expensesPrinting and stationeryFuel, toll and parkinglT supplies and maintenanceOffice suppliesElectricalgoodsLocalconveyanceVehicle insuranceVehicle rentDish line billPostage and courierConsumable itemsPaper, books and periodicalsRecruitment expenseAmortisationComputer accessoriesNon judicial stamp expenseLoss on disposal of assetsGroup reporting teeEntertainment expenseTransport expense
6
24.22,034,1214,508,679
128,8901,008,522
750,1981,919,806
741,7501,084,844
627,4061,456,722
581,2061,022,318
200,910390,958161,572217,207201,23675,026
7
99,200300,073
46,43137,0987,920
15,65031.711
390,630345,000
62,14550,085
146,'167,695 125.184.829
24.1 Salaries and allowanceg
ln Taka 2019 2018Gross salarySupport staff expenseTarget variable pay
GratuityHouse rent and car allowanceBonusGuest house rentEarned leaveDrive/s allowancesRelocation allowance
79,0fi,99735,lod,27612,628,4426,885,0856,312,9204,491,U23,600,6823,570,944r,350,250
68,806,76s23,547,50613,296,0867,'t51,9786,873,3033,392,0233,616,3513,413,0681,078,158
19 500Total salaries and allowances 153,256,438 131,194,738
Allocation of salaries and allowances 2019 2018Cost of salesGeneral and administrative expenses
70,449,15182,807,287
50,747,80380,446,935
Total salaries and allowances
25
153 256 '131 194.738
Notes to the financial state ments (conti nued)
24.2 Employee benefits
ln Taka2019 2018Staff canteen
Provident fundHealth insuranceStaff welfare
8,212,5684,117,5152,184,043
6,638 7963 499,1113.298,226
98,33717 84714.831 ,973 13,534.470
Allocation of employee benefits 20't9 2018Cost of salesGeneral and administrative expenses
12,326,378 I,025.7914,508,6792.505,595
14 831 973 '13 470
25. Selling and distribution expenses
ln Taka 2019 2018Royalty expenseAdvertisement expensesWarranty and corrective costsPeriodic dealer incentivePromotional expense (discount sharinq with customer)
181,208,75880,'t92,31639,099,714
136,756,165135,946,68127,759,514
148,050,738147,649.133
300,500,788 596,162,231
Net finance income/(cost)
See accounting policy in note 36(B)
ln Taka ,Voae 2019 2018lnterest income oni- Unimpaired held-to-maturity investments 26.1 50,085,754 31 ,342,087Total interest income arising for financial assets not measured at FVTPLCash dividend receivedDividend income receivableGain/(loss) on share trade
60,085,7541,075,037
347,4486,280,r50
31 .342.087
Finance income 57,788,389 31,342,087Financial liabilities measured at amortised cost - interest expenseNet foreign exchange lossFinancial assets at FVTPL- net change in tair value
26.2 (91,181,707)(20,836,743)fi2,787.889)
(73,077,013)(66,726,125)
Finance costs {124.806,339) (139,803,139)
Net finance income/(cost) recognised in profit or loss (57,017,950) (108,461,052)
26.'l Unimpaired held-to.maturity investments
ln Taka 2019 2018
lnterest receipt from FDRlnterest receipt from SND accountAccrued interest
38,933,41318,659,8502,192,49'l
28,744,242257,172
2,340,67360,085,754 31,342,087
ln Taka 2019 2018
lnterest on UPAS loan
CIL loan interestlnterest on term loan - local currencylnterest on overdraft account
55,069,69029,362,9,19
5,500,181248,887
10,243,7471,260,414
34.564,650502,751
26,505,05'1
ffi*tc
lnterest on term loan - forei rrency
26
91 't8t 707 73,077 013
26.
26.2 Financial liabilities measured at amorlised cost - interest expense
Notes to the financial statements (continued)
27 lncome tax (expenseyincome
See accounting policy in note 36(D)
ln Taka,Vote 2019 20,18
(88,962,906) (47,42s,134)
urrent tax expenseCurrent yearPrior year adjustment
(88,952,906) (47,425.134Oeterred tax liabilitiesDeferred tax (expenses )/income 18 679 350) /40.412 ,300)
679.350t t40.41 2,300)(90.642.2s6) (87 ,837,434)
See accounting policies in note 36(M)
Contingencies
During the current period, the Company received tax demand notices from Deputy Commissioner of Taxes (DCT) oncompletion of DCT assessment for income years 2015-2016 and 2017-2018. The amount of income tax demanded by DCTfor income years 20'15-2016 and 2017-2018 were BDT 5,087,075 and BDT 250,033,663 respectivety forwhich the Company iscurrently maintaining provisions of BDT 61,953 and BOT 47,425,134 respectively. The Company has appealed to theCommissioner of Taxes (CT) for both of the above mentioned income years.
28.1.2 Siemens Bangladesh Limited has claimed a total of BDT 6,200,683 to HMCL Niloy Bangladesh Limited (the Company) against2 invoices (BDT 5,798,773 and BDT 401,910) in respect of work performed by them at the Company's factory premises forsetting up temperature control system. The claim has been regarded as a disputed claim by the Company on the grounds thatSiemens Bangladesh Limited could not present any work order and job completion certillcate in respect of the amount invoicedfor the work performed by them.
28.1
2A.1.1
28.2
24.2.1
Commitments
Letters of credit
The following letters of credit were outstanding as at 31 March 2019 against which the Company is committed to purchaseproducts from different companies.
UC no. UC issue date Bank Currency UC value Outstanding
DC DAK900858411010953839-L4't1010951895-L4110'10953820-L4'1 '1010960000-L
USDUSDUSDUSDUSD
22 January 20192'1 March 20'19'13 March 20'19
21 iilarch 20'19
28 March 2019
HSBCscBSCB
SCB
280,00027,60317,05514,43918,697
278,50027,603
41214,43918,697
$339,652
28.2.2 Rental lease agreement
The Company is obligated under one cancellable lease for residential space that is renewable at the option of both the lessorand lessee. The Company is committed to pay one month rental amounting BDT 120,000 as minimum charge in case ofdiscontinuing or vacating the flat within 12 months from the start date of the contract.
28.2,3 Bank guarantee
The City Bank Limited issued an unconditional and continuation bank guarantee (BDT 1,34,671) on behalf ol HMCL Niloy
Bangladesh Limited against cash margin held.
The Honkong and Shanghai Banking Corporation issued 4 shipping guarantee (BDT 6,34,24,868) on behalf oI HMCL Niloy
Bangladesh Limited, against cash margin held.
27
28, Contingencies and commitments
/
Notes to the financial statements (continued)
28.2.4
28.2.4.1
Facility from Standard Chartered Bank
Facilities grantedln Taka
Term Loanslmport LCs - Secured
50,000,000690,000,000
Total Iacilities qranted 740,000,000
28.2.4.2 Security i Collateral
- Demand Promissory Note and Letter of Continuation for Taka 740,000,000 each.
- Registered hypothecation (general charge) over stock and book debts of HMCL Niloy Bangladesh Limited on pari passubasis with HSBC where Standard Cha(ered Bank's share would be Taka 740,000,000.
- Registered hypothecation charge over plant and machinery of HMCL Niloy Bangladesh Limited on pari passu basis withHSBC where Standard Chartered Bank's share would be Taka 740,000,000.
28.2.5
28.2.5.1
Faciliv from Hongkong & Shanghai Banking Corporation
Facilities granted
In Taka
Raw materials importClean import loanShipping guaranteeWorking capital (limited to BDT 600,000,000)Guarantee (limited to BDT 80,000,000)Overdraft (limited to BDT 400,000,000)Capital expenditure (import) (limited to BDT 23,225,054.49\Term loan ocal urchase limited to BDT 121 173 534.37
2,944,398,589
2,800,000,000
144,398,589
Total facilities qranted
28.2.5.2 Security / Collateral
- Demand Promissory Note for Taka 3,144,398,588.86 with Letter of Continuity and Revival.
- Corporate Guarantee executed by Niloy lvlotors Ltd. for Taka 1 ,414,979,364.99 with supporting Board Resolution.
- First charge over the Company's stocks of raw materials, work-in-progress and finished goods & Book Debts and
Receivables with the Office of the Registrar of Joinl Stock Companies and Farms (RJSC) on Pari Passu basis with otherlende(s) where HSBC's share is to be minamum of Taka 3,000,000,000.
28
- First charge over the Borrowe/s Plant & Machinery with the RJSC for Taka 144,398,588.86.
- Power olAttorney on Hypothecated Goods.
- Trade Financing GeneralAgreement for Trade tacility.
- Blanket counter indemnity for Guarantee facility.
- Letter of Comfort for USD 20,838,887 from HMCL Netherlands B.V to support the credit facilities extended to HNBL.
#
Notes to the financial statements (continued)
29. Capacityutilisation
For the year ended 31 March 2019Units
ProductionMeasurement
unitAnnual installed
capacity
Utilisationduring the
periodOver/(under)
utilisation[,Iotor bikes Number 150,000 't03,162 (46,838)
For the year ended 3l March 20'18
UnitsUtilisation
Measurcment Annual installed during the Over/(under)
30. Particulars of employees
During the year ended 31 March 2019 there were 136 employees (2018: 1 19) \rvho received salary of Taka 36,000 or above
3't Subsoquent events
No material events had occurred after the reporting date to the date of issue of these financial statements, which could affectthe values stated in the financial statements
co0HAK
29
Production unit capacitv period utilisationMotor bikes Number 150.000 75,.t15 (74,885)
*
Notes to the flnancial statements continued
32 Financial :nstruments - FairYalue3 and rl3k management
A. Accounting classltlcation6 and falrvalu€s
measured al fairvalue ifthe carving amounl is a reasonable approximation offair value.
c31 March 2019
Falrvalue -
hedging Mandalorily alIvore instruments FWPLOthers
FinancialassetsFVOCldebt FVOCI-equity atamortisedinstruments instruments cost
Otherllnanclalllablllties Tolal Level 1 Level 2 Level 3 Total
Financial assets measurcd at fair valuelnvestmenl in shares of listed 11.1 8l 957 930 81 930 81,957,930 81,957,930
Financlal assets not measuled atfalrvalueAdvances, deposits and prepaym€nts
lnveslments (excluding investmenl in sharesof lisled companaes)Trade and other rcceivablesCash and cash equivalenls
199,482,206
409.150.594
199,442,206,rc9.150.594
89.015.9/r01,396,652,631
89.015.9401,396,652,631
371
liabilities lair
1./r02.598.4757.302.358
2,091,119,592
1.:l02.698.4757.302.36A
2,091,119,592
13
1719
3,545.680.582 3.545.580.582
Ca Fahvalua3'l March 2018
Held-for- Oe3lgnated at hedgingtrading Iair value instrument3
Held-to-maturity
Loans and Avallable-for- Othertlnanclalsale liabilities Total Level 1 Level 2 Level 3
Financialas36ts not m6asured attair valueAdvances, deposits and prepayments
lnvestment in shares of lisled companiesTrade and other receivables
1111_1
1213
40.505.49489,513,438
238 784.830
89,513,43840.505,494
238.784.830743,370,428Cash and cash 743,370,a2A
7A 322 32 268 112 174 590
ilities
Financial liabilitles not maasured at tairvalueBank overdraftLoans and borowingsEmployee benelitsTrade and othor payables
30 v81 907 118 2,810,907 118
't8.999.194814,87E,626
7,151,9741,969,877,320
18.999.194814,878,626
7,151,978
1,969,877,320
2
ffiH
o* 0H
9
1213
Flnancialllabllltles not meaaunad at fair valueBank overdrattLoans and bonowinosEmolovee benefilsTrade and other payables
Total
1315
17
19
Notes to the financial statements (continued)
32. Financial instruments - Fair values and sk managsment (continued)
B. Financial risk management
The management has overall responsibility for the establishment and oversight of the Company'srisk management framework. The Company's risk management policies are established to identifyand analyse the risks faced by it, to set appropriate risk limits and controls, and to monitor risks andadherence to limits. Risk management policies, procedures and systems are reviewed regularly toreflect changes in market conditions and the Company's activities. The Company has exposure tothe following risks from its use of financial instruments:
. credit risk
.liquidity risk
. market risk
32.1 Credit risk
(a) Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximumexposure to credit risk at the reporting date was:
ln Taka irote 2019 2018Trade and other receivables 12 89,015,940 238,784,830
89,015,940 238,784,830
b) lmpairment losses
There were no impairment losses to be recognised for such instrument for the period
32.2 Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligationsassociated with its financial liabilities that are settled by delivering cash or another financial asset.The Company's approach to managing liquidity is to ensure, as far as possible, that it will have
sufficient liquidity to meet its liabilities when they are due, under both normal and stressedcondilions, without incurring una losses or risking damage to the Company's reputation
fl
31
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financialinstrument fails to meet its contractual obligations, and arises principally from the Company'sreceivables from customers and investment securities. Credit risk is mainly attributable to trade andother receivables. Management has a credit policy in place and the exposure to credit risk ismonitored on an ongoing basis.
Notes to the financial statements continued
Exposure to liquidity risk
The fo owing are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and includeestimated interest payments and exclude the impact of nefting agreements.
Contractual cash flowsCarryingamount
2 monthsor less
2-12months
More thanln TakaShare money depositLoans and borrowings
42',1
1,402,698,47 52 091,'t 19,592
Tota I
42',1
'1,402,698,47 52,091,119,592
853,698,9822,091,'t',tg,592
548,999,493
1-2 rs42',1
2-5 rs 5 ars
Trade and other payables3 ,818,488 3,493,818,488 2,944,818,574 548,999,493 42'.1
31 March 2018
ln TakaCarryingamount Total
2 monthsor less
2-12months 1-2 years 2-5 years
More than5 vears
Share money depositLoans and borrowingsTrade and other payaOleq
2,567,221814,878,626
1,969,877,320
2,567,221814,878,626
1,969,877,320
2,567,221684,424,506
'l 0,91 0130,454,120
1,969,866,4102,787,323,167 2 787 323.167 1 866,410 687,002,637969 130,454,120
32.3 Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates that will affect the Company's income or the valueof its holdings of financial instruments. The objective of the Company's management is to manage and control market risk exposures within acceptableparameters, while optimising the return
[m*tc
fl
31 March 2019
Contractual cash flows
Notes to the financial statements (continued)
a) Curr6ncy risk
Exposurc lo cutency isk
The summary quantitative data about the Company's exposure lo currency risk as reported to the management of the Companybased is as follows:
31 March 2019 31 Ma.ch 2018uso uso
Loans and borrowings- UPAS loanPayable - Hero Motocorp Ltd.Payable - HMCL Nelherlands B.V.Payable - Autolit Pvt. Ltd.Payable - PatilAutomation Pvt.Payable - Coveslro lndia Pvt. Ltd.Payable - Berger Paints lndia LimitedPayable - Srinivasa ToolsPayable - A.P. Precision AutoPayable - PEB Steel Buildings Co. Ltd.Payable - SIMA Labs Pvt. Ltd.Payable - Zheijiang Wanfeng MotorcyclesPayable - Fairdeal Agencies (Prop. coyal)Payable - Monila lndustrial CorporationPayable - Precision ARC Robotic SystemsPayable - JSR EngineersAdvance - Receivable from HSBCUPAS loan from SCBUPAS loan from HSBCAdvance - SllVlA Labs Pvt. Ltd.Receivable - Hero [.4otocorp Ltd.
(9.794,214\(19,174,657)
(72,881),
117,029),
175845.9s0
(700)
1210,842),(15,600)(45,780)
12,429)(10,296)132,674
(2,025,594)(5,584,74S)
175
Net gxposure {31.705.948) 136 821 ,922)
The following significant exchange rates have been applied
2019Year end spot rate
2018US Dollar
Sensitivity analysis
In Taka
83.95
Equlty, n6t of tax
83.20
A reasonably possible strengthening / (weakening) of Ioreign currency against Taka at 3't frarch would have effected themeasurement of financial instruments denominated in a foreign currency and increased (decreased) equity and profit or loss by theamounts shown below. This analysis is based on foreign currency exchange rate variances lhat the Company considered to bereasonably possible at the end of the reporting period. The analysis assumes that all other vadables, in particular interest rates,remain constant and ignores any impact of forecast sales and purchases.
Protit or lossStr6ngth6nlng W6akenlng Slrongthoning Weakening
31 March 2019USD o/o move
(79.851.430) 79,85r,430 {79,851,430} 79,851,43085'l
3l March 2018USD (3% movement) (91,907.516) 91,907,516 (91,S07,516) 91,907,516
(91,907.516) 91,907,516 (91,907,s16) 91,907,516
b) lntsrost rate rlsk
lnterest rate risk is the risk that arises due lo changes in interest rates on borrowings and interest rates on fixed deposit receipt(FDR). The Company is not significantly exposed to fluctuation in interesl rates as it has neither floating interest rate bearing
financial liabilities nor has any type ofderivative instrument in order to hedge interest rate risk as at the reporting date.
At the reporting date, the interest rate profile ofthe Company's interest bearing financial instruments was:
Nominalamountlh Taka 20 't9 2018
Fixed rale instrumentsFinancial assetslnvestment in FDR
Financlal liabilitiesLoans and bonowings
449,412,403
814,878,626
ffi c
A(o
Variable rate instrumentsCash al bank
33 fl038 334 463 920
(16,/r58,123)
l12,672,OOOI(3,214,4901
(70,36ir1
{5,1,714)(38,228)(16,642){1,r,857)(10,455)
(1,500)(700)
767,089,769
1,iro2,698,475
Notes to the financial statements (continued)
Salary and allowancesBonus and incentiveProvident fundOther benefits
39,843,7431,495,6962,466,941
15,952,341
31,772,56411,370,7't'l1,958,9604,688,737
59,758,72'1 49,790,972
(c) Other related party transactions
Sale of goodsNiloy Motors LimitedNitol Motors Ltd.
Purchase of goods and servicesHero Molocorp Ltd.Nitol lvlachineries Ltd.Nitol Tours & TravelsNitol Motors LtdNreach-Net (Pvt) Ltd.Nitol ElectronicsNitol lnsurance Company Ltd.NITS Services (Pvl) Ltd.
OthersNiloy lvlotors LimitedNitol l\4otors Ltd.Hero l\4otocorp Ltd.Hero Motocorp Ltd.HMCL Netherlands B.V
9,744,491,2136,412,500
5,619,038,98'l332,470,268
463,4113,220,445
't2,178,10424,000
323,079,022541,303,82270,977,243
136,756,165269,856,400
4,960,692,35'l320,171 ,190
1 ,1 10,001
6,1M,01533,251
(928,747,580)(20,603,r 05)
68,626,643(136,756,165)(269,856,400)
1,362,839,04220,603,105
6,957
7,628,000,906 (/14,560,147) 235.478.547
9,817,66'l
34- Basis of measurement
35. Going concern
The Company has adequate resources to continue in operation for the foreseeable future. For this reason,
the directors continue to adopt going concern basis in preparing the financial statements. The currentent fund to meet the present requirements of its existing business
[ffi ooH
resources of the Company provide s
34
33. Related party transactions
(a) Parent and ultimate controlling party
HMCL Niloy Bangladesh Limited is a subsidiary of HMCL Netherlands 8.V., which is a wholly ownedsubsidiary of Hero Motocorp Limited. Therefore, HMCL Netherlands B.V. is the parent of the Company andHero Motocorp Limited is the ultimate controlling party.
(b) Transaction with key management personnel
Key management personnel compensation comprised the following:
ln Taka 2019 2018
ln Taka
Transaction values for the year Balance outstanding as atended 3'l March 31 March
2019 2018 2019 2018
201,296,3012,873,436
The flnancial statements have been prepared on the hlstorical cost basis except inventories which ismeasured at lower of cost and net realisable value on each reporting date.
/
Notes to the financial statements (continued)
36. Significantaccounting policies
The Company has consistently applied the following accounting policies to all periods presented in thesefinancial statements.
Set out below is an index of the significant accounting policies, the details of which are available on the pagesthat follow:
A. RevenueB. Finance income and finance costsC. Foreign currencyD. lncome taxE. lnventoriesF. Property, plant and equipmentG. lntangible assetsH. Financialinslrumentsl. Share capitalJ. lmpairmentK. ProvisionsL. LeasesM. ContingenciesN. Employee benefitsO. Workers' profit participation fundP. Statement of cash flowsQ. Reporting period
35
36JO
373839434344454546464646
A. Revenue
Revenue recognition under IFRS 15 (applicable from 1 April 2018)
Revenue is presented net of periodic dealer incentive and promotional expense (discount sharing withcustomer). Revenue is recognised when control of the goods is transferred to the customer at an amount thatreflects the consideration to which the Company expects to be entitled in exchange for those goods. NiloyMotors Limited is the only and exclusive distributor for HlilcL Niloy Bangladesh Limited according to the JointVenture agreement of the Company. As a result revenue will be recognised when the product is transferred orsold to Niloy Motors Limited.
Finance income and finance cosE
The Company's finance income and finance costs include:
. interest income from fixed deposit receipt (FDR)
. interest expense from long term loans
e cost of the asset
B
ffiH
tDH
construction period are included in
Revenue recognition under BAS't8 (applicable before 1 April 20'18)
Revenue is recognised when products are despatched to customers, i.e., when the significant risk andrewards of ownership have been transferred to distributors. Niloy Motors Limited is the only and exclusivedistributor for HMCL Niloy Bangladesh Limited according to the Joint Venture agreement of the Company. Asa result revenue will be recognised when the product is transferred or sold to Niloy Motors Limited.
lnterest income or cost is recognised using the effective interest method. Finance income rePresents interest
income on fixed deposits and is recognised on an accrual basis. As per IAS-23 the finance costs directly
attributable to the acquisition and construction of the factory and plant and machineries during the
35 N
Notes to the flnancial statements (continued)
C. Foreign currency
F o re i g n c u rre n c y tra ns actio ns
Transactions in foreign currencies are transtated to the respective functional currencies of the Companies atexchange rates at the dates of the transactions.
lvlonetary assets and liabilities denominated in foreign currencies are translated into the functional currency atthe exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in
a foreign currency are translated into the functional currency at the exchange rate when the fair value wasdetermined. Non-monetary items that are measured based on historical cost in a foreign currency aretranslated at the exchange rate at the date of the transaction. Foreign currency differences are recognised inprofit or loss in accordance with IAS 21: The Effects of Changes in Foreign Exchange Rates.
i. Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year andany adjustment to the tax payable or receivable in respect of previous years. The amount of current taxpayable or receivable is the best estimate of the tax amount expected to be paid or received that reflectsuncertainty related to income taxes, if any. lt is measured using tax rates enacted or substantively enacted atthe reporting date.
Current tax assets and liabilities are offset only if certain criteria are met
ii. Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amount of assets andliabilities for financial reporting purpose and the amounts used for taxation purposes. Deferred tax is notrecognised for:
. temporary differences on the initial recognition of assets or liabilities in a transaction that is not a businesscombination and that affects neither accounting nor taxable prollt or loss;
. temporary differences related to investments in subsidiaries, associates and.ioint arrangements to the extentthat the Company is able to control the timing of the reversal of the temporary differences and it is probablethat they will not reverse in the foreseeable future; and
. taxable temporary differences arising on the initial recognition of goodwill
mBA8
coAK
36
D. lncome tax
lncome tax expense comprises current and deferred tax. lt is recognised in proflt and loss except to the extentthat relates to an item recognised directly in equity or in other comprehensive income (OCl).
As per lncome Tax Ordinance 1984, minimum tax provision for industrial undertakings before commencementof commercial production is 0.6% on gross receipt as per section 82C. The applicable tax rate for theCompany is currently 5olo.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary
differences to the extent that it is probable that future taxable profits will be available against which they can
be used. 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 realised; such reductions are reversed when the probability
of future taxable prollts improves.
N
Notes to the financial statements (continued)
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that ithas become probable that future taxable profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when theyreverse, using tax rates enacted or substantively enacted at the reporting date.
The measurement of deferred tax reflecls the tax consequences that would follow from the manner in whichthe Company expects, at the reporting date, to recover or seftle the carrying amount of its assets andliabilities.
Deferred tax assets and liabilities are offset only if certain criteria are met
E. lnventories
lnventories are measured at the lower of cost and net realisable value. In the case of manufacturedinventories and work in progress, cost includes an appropriate share of production over heads based onnormal operating capacity. Net realisable value represents the estimated selling price for inventories less allestimated costs of completion and costs necessary to make the sale.
F. Property, plant and equipment
i. Recognition and measurement
lf significant parts of an item of property, plant and equipment have different useful lives, then they areaccounted for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in proflt or loss
ii. Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated withthe expenditure will flow to the Company. The cost of the day{o-day servicing of property, plant andequipment are recognised in profit or loss as incurred.
iii. Deprec iation
Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimatedresidual values of 5% using the straight-line method over their estimated useful lives, and is generallyrecognised in profit or loss. Leased assets are depreciated over the shorter of the lease term and their usefullives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term.Depreciation is charged for the full month in the month of acquisition and no depreciation is charged in the
Items of property, plant and equipment are measured at cost less accumulated depreciation and anyaccumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition ofthe asset and bringing to the location and condition necessary for it to be capable of operating in the intendedmanner. The cost of self constructed asset includes the cost of material, direct labour and any other costdirectly attributable to bringing the assets to a working condition for their intended use.
month of disposal or retirement.
N
Notes to the financial statements (continued)
The estimated useful lives of property, plant and equipment for current and comparative periods are asfollows:
- Computers and electrical equipment- Furniture and flxtures- Motor Vehicles- Office equipment- Plant and lvlachinery- Factory building
3 years10 years6 years5 years
10 years30 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted ifappropriate.
iv. Retirement and dr:sposa/s
An asset is derecognised on disposal or when no future economic benefits are expected from its use andsubsequent disposal. Gains or losses arising from the retirement or disposal of an asset is determined by thedifference between the net disposal proceeds and the carrying amount of the asset and is recognised in prolitor loss.
v. Capital wort in progress
Property, plant and equipment that is in the process of construction/acquisition/import is accounted for ascapital work in progress until construction/acquisition/import is completed and measured at cost. Theexpenditure capitalised under this head is for the construction of factory building along with the acquisition andinstallation of plant and machineries. All expenses including borrowing costs, incurred for the construction ofthe building and the installation of the machineries until it is converted into working condition are recordedunder this head.
G. lntangible assets
i, Recognifion and measurement
i i. Subsequent expenditu re
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in thespecific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill
and brands, is recognised in profit or loss as incurred.
iii. Amortisation
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using
the straight-line method over their estimated useful lives, from the month of purchase, and is generally
recognised in profit or loss. Goodwill is not amortised. Amortisation methods, useful lives and residual values
are reviewed at each reporting date and adjusted if appropriate.
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lntangible assets, including software, that are acquired by the Company and have finite useful lives aremeasured at cost less accumulated amortisation and any accumulated impairment losses.
The estlmated useful life of computer software is 3 years.
n
ft
Notes to the financial statements (continued)
H. Financialinstruments
Policy applicable from 1 April 2018i. Recognition and initial measurement
Trade receivables and debt securities issued are initially recognised when they are originated. All otherfinancial assets and flnancial liabilities are initially recognised when the Company becomes a party to thecontractual provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial liabilityis initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributableto its acquisition or issue. A trade receivable without a significant financing component is initially measured atthe transaction price.
Financial assets - Policy applicable from 1 April 2018
On initial recognition, a financial asset is classified as measured at: amortised cost; FVOCI - debt investment;FVOCI - equity investmenti or FWPL.
Financial assets are not reclassified subsequenl to their initial recognition unless the Company changes itsbusiness model for managing financial assets, in which case all affected financial assets are reclassified onthe first day of the first reporting period following the change in the business model.
A llnancial asset is measured at amortised cost if it meets both of the following conditions and is notdesignated as at FWPL:
- it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
- its contractual terms give rise on specified dates to cash flows that are solely payments of principal andinterest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated asAt FWPL:
- it is held within a business model whose objective is achieved by both collecting contractual cash flows andselling flnancial assets; and- its contractual terms give rise on specifled dates to cash flows that are solely payments of principal andinterest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect topresent subsequent changes in the investment's fair value in OCI. This election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measuredat FWPL. On initial recognition, the Company may irrevocably designate a llnancial asset that otherwisemeets the requirements to be measured at amortised cost or at FVOCI as at FWPL if doing so eliminates orsignifl cantly reduces an accounting mismatch that would otherwise arise
CI
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o
ii. Classification and su bsequent measurement
fl
Notes to the financial statements (continued)
Financial assets - Business model assessmentThe Company makes an assessment of the objective of the business model in which a financial asset is heldat a portfolio level because this best reflects the way the business is managed and information is provided tomanagement. The information considered includes:
- the stated policies and objectives for the portfolio and the operation of those policies in practice. Theseinclude whether management's strategy focuses on earning contractual interest income, maintaining aparticular interest rate profile, matching the duration of the financial assets to the duration of any relatedliabilities or expected cash outflows or realising cash flows through the sale of the assets;
- how the performance of the portfolio is evaluated and reported to the Company's management;
- the risks that affect the performance of the business model (and the flnancial assets held within thatbusiness model) and how those risks are managed;
Transfers of financial assets to third parties in transactions that do not qualify for de recognition are notconsidered sales for this purpose, consistent with the Company's continuing recognition of the assets.
Financial assets that are held for trading or are managed and whose performance is evaluated on a fair valuebasis are measured at FVTPL.
For the purposes of this assessment, 'principal' is defined as the fair value of the financial asset on initialrecognition. 'lnterest' is dellned as consideration for the time value of money and for the credit risk associatedwith the principal amount outstanding during a particular period of time and for other basic lending risks andcosts (e.9. liquidity risk and administrative costs), as well as a profit margin.
- terms that may adjust the contractual coupon rale, including variable-rate features;
- prepayment and extension features; and
A prepayment feature is consistent with the solely payments of principal and interest criterion if theprepayment amount substantially represents unpaid amounts of principal and interest on the principal amount
outstanding, which may include reasonable additional compensation for early termination of the contract.Additionally, for a financial asset acquired at a discount or premium to its contractual par amount, a feature
that permits or requires prepayment at an amount that substantially represents the contractual par amountplus accrued (but unpaid) contractual interest (which may also include reasonable additional compensation for
early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is
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- how managers of the business are compensated - e.g. whether compensation is based on the fair value ofthe assets managed or the contractual cash flows collected; and
Financial assets -Assessment whether contractual cash flows are solely payments of principal andinterest
ln assessing whether the contractual cash flows are solely payments of principal and interest, the Companyconsiders the contractual terms of the instrument. This includes assessing whether the financial assetcontains a contractual term that could change the timing or amount of contractual cash flows such that itwould not meet this condition. ln making this assessment, the Company considers:
- contingent events that would change the amount or timing of cash flows;
- terms that limit the Company's claim to cash flows from specified assets (e.9. non-recourse features).
insigniflcant at initial recognition.
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Notes to the financial statements (continued)
Financial liabilities - Classification, subsequent measurement and gains and losses
Financial liabilities are classified as measured at amortised cost or FWPL. A flnancial liability is classilied asat FWPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition.Financial liabilities at FWPL are measured at fair value and net gains and losses, including any interestexpense, are recognised in proflt or loss. Other financial liabilities are subsequently measured at amortisedcost using the effective interest method. lnterest expense and foreign exchange gains and losses arerecognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
iii. Derecognition
Financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the financialasset expire, or it transfers the rights to receive the contractual cash flows in a transaction in whichsubstantially all of the risks and rewards of ownership of the flnancial asset are transferred or in which theCompany neither transfers nor retains substantially all of the risks and rewards of ownership and it does notretain control of the financial asset.
The Company enters into transactions whereby it transfers assets recognised in its statement of financialposition, but retains either all or substantially all of the risks and rewards of the transferred assets. ln thesecases, the transferred assets are not derecognised.
The Company derecognises a tlnancial liability when its contractual obligations are discharged or cancelled, orexpire. The Company also derecognises a financial liability when its terms are modified and the cash flows ofthe modified liability are substantially different, in which case a new financial liability based on the modifiedterms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and theconsideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in prollt orloss.
iv. OffsettingFinancial assets and flnancial liabilities are offset and the net amount presented in the statement of financialposition when, and only when, the Company currently has a legally enforceable right to set off the amountsand it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
Financial assets atFVTPL
These assets are subsequently measured at fair value. Net gains and losses,including dividend income, are recognised in profit or loss.
Financial assets atamortised cost
These assets are subsequently measured at amortised cost using the effectiveinterest method. The amortised cost is reduced by impairment losses. lnterestincome, foreign exchange gains and losses and impairment are recognised in profitor loss. Any qain or loss on derecognition is recognised in profit or loss.
ffi CoDHA(
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Financial assets - Subsequent measurement and gains and losses
Financial liabilities
/
Notes to the financial statements (continued)
Policy applicable before 1 April 20'18
The Company classifies non-derivative financial assets into the following categories: financial assets at fairvalue through prolit or loss, held{o-maturity financial assets, loans and receivables and available-for-salefinancial assets.
The Company classifies non-derivative financial liabilities into the other llnancial liabilities category
i. Non-derivative financial assets and tinancial liabilities - Recognition and derecognition
The Company initially recognises loans and receivables and debt securities issued on the date when they areoriginated. All other financial assets and financial liabilities are initially recognised on the trade date when theentity becomes a party to the contractual provisions of the instrument.
The Company derecognises a financial asset when the contractual rights to the cash flows from the assetexpire, or it kansfers the rights to receive the contractual cash flows in a transaction in which substantially allof the risks and rewards of ownership of the financial asset are transferred, or it neither transfers nor retainssubstantially all of the risks and rewards of ownership and does not retain control over the transferred asset.Any interest in such derecognised tlnancial assets that is created or retained by the Company is recognisedas a separate asset or liability.
The Company derecognises a financial Iiability when its contractual obligations are discharged or cancelled, orexpire.
Financial assets and financial liabilities are offset and the net amount presented in the statement of financialposition when, and only when, the Company has a legal right to offset the amounts and intends either to settlethem on a net basis or to realise the asset and settle the liability simultaneously.
ii. Non-derivative financial assets - Measurement
Financial assets at fair value through profit or loss
Held-to-matu ty financra, assels
These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequentto initial recognition, they are measured at amortised cost using the effective interest method.
Loans and receivables
These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequent
to initial recognition, they are measured at amortised cost using the effective interest method.
Casr, and casr, equivalenb
ln the statement of cash flows, cash and cash equivalents includes cash in hand and cash at bank which form
an integrat part of the Company's cash management. Cash and cash equivalent also includes a Fixed Deposit
3 months
oD
C
Receipt (FDR) with a renewal Peri
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>4
A flnancial asset is classifled as at fair value through profit or loss if it is classifled as held-for-trading or isdesignated as such on initial recognition. Directly attributable transaction costs are recognised in prolit or lossas incurred. Financial assets at fair value through proUt or loss are measured at fair value and changestherein, including any interest or dividend income, are recognised in profit or loss.
Notes to the financial statements (continued)
Ava i I abl e-f o r-s al e ti n a nc i a I asse6
These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequentto initial recognition, they are measured at fair value and changes therein, other than impairment losses andforeign currency differences on debt instruments are recognised in OCI and accumulated in the fair valuereserve. When these assets are derecognised, the gain or loss accumulated in equity is reclassified to profitor loss.
iii. Non-derivative financial liabilities - measurement
Other non-derivative linancial liabilities are initially measured at fair value less any directly attibutabletransaction costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using theeffective interest method.
lntercompany payableslntercompany payables are comprised of balances that remain outstanding at year end arising fromtransactions with other entities that are sister concern to Nitol Motors Ltd (Shareholder). These are recognisedinitially at fair value.
Trade and other payablesPayables are recognised initially at fair value. Subsequent to initial recognition, trade payables are stated atamortised cost using the effective interest method. Other payables includes any amounts outstanding tosuppliers/contractors of machineries and equipment, professional and legal fees in relation to factoryconstruction and withholding VAT and tax payables.
Long term liabilitieslnterest bearing loans includes long term bank loans. These are recognised initially at fair value lessattributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated atamortised cost using the effective interest method.
l. Share capital
Ordinary shares
Ordinary shares are classified as equity. lncremental costs directly attributable to the issue of ordinary sharesare recognised as a deduction from equity. lncome tax relating to transaction costs of an equity transactionare accounted for in accordance with IAS 12.
J. lmpairment
i - Non-derivative ti nancial assels
Financial assets not classified as at fair value through prollt or loss, including an interest in an equityaccounted lnvestee, are assessed at each reporting date to determine whether there is objective evidence ofimpairment.
Objective evidence that financial assets are impaired includes:. default or delinquency by a debtor;. restructuring 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 of borrowers or issuers;. the disappearance of an active market for a security because of financial difficulties; or
is measurable decrease in expected cash flows from a group of. observable dfinancial assets
ata indicating th
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A financial liability is classified as at fair value through profit or loss if it is classified as held-for{rading or isdesignated as such on initial recognition. Directly attributable transaction costs are recognised in profit or lossas incurred. Financial liabilities at fair value through profit or loss are measured at fair value and changestherein, including any interest expense, are recognised in profit or loss.
N
Notes to the financial statements (continued)
For an investment in an equity security, objective evidence of impairment includes a significant or prolongeddecline in its fair value below its cost.
The Company considers evidence of impairment for these assets at both an individual asset and a collectivelevel. All individually significant assets are individually assessed for impairment. Those found not to beimpaired are then collectively assessed for any impairment that has been incurred but not yet individuallyidentified. Assets that are not individually significant are collectively assessed for impairment. Collectiveassessment is carried out by grouping together assets with similar risk characteristics.
ln assessing collective impairment, the Company uses historical information on the timing of recoveries andthe amount of loss incurred, and makes an adjustment if current economic and credit conditions are such thatthe actual losses are likely to be greater or lesser than suggested by historical trends.
An impairment loss is calculated as the difference between an asset's carrying amount and the present valueof the estimated future cash flows discounted at the asset's original effective interest rate. Losses arerecognised in profit or loss and reflected in an allowance account. When the Company considers that thereare no realistic prospects of recovery of the asset, the relevant amounts are written off. lf the amount ofimpairment loss subsequently decreases and the decrease can be related objectively to an event occurringafter the impairment was recognised, then the previously recognised impairment loss is reversed throughprofit or loss.
Ava i I abl e-fo r-s al e f i n an c i al as sets
lmpairment losses on available-for-sale llnancial assets are recognised by reclassifying the lossesaccumulated in the fair value reserve to profit or loss. The amount reclassified is the difference between theacquisition cost (net of any principal repayment and amortisation) and the current fair value, less anyimpairment loss previously recognised in prollt or loss. lf the fair value of an impaired available-for-sale debtsecurity subsequently increases and the increase can be related objectively to an event occurring after theimpairment loss was recognised, then the impairment loss is reversed through proUt or loss. lmpairmentlosses recognised in profit or loss for an investment in an equity instrument classified as available-for-sale arenot reversed through profit or loss.
ll. Non-financial assets
At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other thanbiological assets, investment property, inventories and deferred tax assets) to determane whether there is anyindication of impairment. lf any such indication exists, then the asset's recoverable amount is estimated.
For impairment testing, assets are grouped together into the smallest group of assets that generates cashinflows from continuing use that are largely independent of the cash inflows of other assets or CGUS.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to
sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-
tax discount rate that reflects current market assessments of the time value of money and the risks specific to
the asset or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.
For other assets, an impairment loss is reversed only to the extent that the asset's carrying amount does not
exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no
impairment loss had been recognised.
K. Provisions
provisions are recognised at the reporting date if, as a result of past events, the Company has a present legal
or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic
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benefits will be required to settle th ation
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Financial assets measured at amodised cost
{
Notes to the financial statements (continued)
L. Leases
l. Determining whether an arrangement contains a tease
At inception of an arrangement, the Company determines whether the arrangement is or contains a lease
At inception or on reassessment of an arrangement that contains a lease, the Company separates paymentsand other consideration required by the arrangement into those for the lease and those for other elements onthe basis of their relative fair values. lf the Company concludes for a finance lease that it is impracticable toseparate the payments reliably, then an asset and a liability are recognised at an amount equal to the fairvalue of the underlying asset; subsequently, the liability is reduced as payments are made and an imputedfinance cost on the Iiability is recognised using the Company's incremental borrowing rate.
,r. Leased assels
Assets held by the Company under leases that transfer to the Company substantially all of the risks andrewards of ownership are classified as finance leases. The leased assets are measured initially at an amountequal to the lower of their fair value and the present value of the minimum lease payments. Subsequent toinitial recognition, the assets are accounted for in accordance with the accounting policy applicable to thatasset.
Assets held under other leases are classified as operating leases and are not recognised in the Company'sstatement of financial position.
lll. Lease payments
Payments made under operating leases are recognised in profit or loss on a straightline basis over the termof the lease. Lease incentives received are recognised as an integral part of the total lease expense, over theterm of the lease.
Minimum lease payments made under flnance leases are apportioned between the finance expense and thereduction of the outstanding liability. The linance expense is allocated to each period during the lease term soas to produce a constant periodic rate of interest on the remaining balance of the liability.
M. Contingencies
Contingencies arising from claims, litigation assessments, fines, penalties, etc. are recorded when it isprobable that a liability has been incurred and the amount can reasonably be measured.
i. Contingent liability
Contingent liability is a possible obligation that arises from past events and whose existence will be confirmedonly by the occurrence or non-occurrence of one or more uncertain future events not wholly within the controlof the entity.
Contingent liability should not be recognised in the financial statements, but may require disclosure. Aprovision should be recognised in the period in which the recognition criteria of provision have been met.
ii. Contingent asset
Contingent asset is a possible asset that arises from past events and whose existence will be confirmed only
by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of
the entity.
A contingent asset should not be recognised. Only when the realisation of the related economic benefits is
virtually certain should recognition take place provided that it can be measured reliably because, at that point,
45
the asset is no longer contingent.
/
NStes to the flnancial statements (continued)
N. Employee benefits
The Company maintains a defned contribution plan for its eligible permanent employees. The eligibility isdetermined according to the terms and conditions set forth in the respective deeds.
Defined contribution plan (provident fund)
A deflned contribution plan is a post-employment beneflt plan under which an entity pays fixed contributionsand will have no legal or constructive obligation to pay further amounts. Obligations for contribution to definedcontribution plan are expensed as the related service is provided. Prepaid contributions are recognised as anasset to the extent that a cash refund or a reduction in future payments is available.
The Company contributes to a provident fund scheme (defined contribution plan) for employees of theCompany eligible to be members of the fund in accordance with the rules of the provident fund. All permanentemployees contribute 7% of their basic salary to the provident fund and the Company also makes equalcontribution.
Retirement benefit obligation (gratuity)
The Company operates an unfunded gratuity scheme for its permanent employees, under which an employeeis entitled to the benefits depending on the length of services and last drawn basic salary.
Poected Unit Credit method is used to measure the present value of delined benefit obligations and relatedcurrent and past service cost and mutually compatible actuarial assumptions about demographic and financialvariables are used.
Short-term employee benefits
O. Workers' profit participation fund
P. Statement of cash flows
The net cash flow from operating activities is determined by adjusting proliuloss for the year under indirectmethod as per IAS 7.
a, Rsporting period
The financial year of the Company covers one year from 1 April to 31 March and is followed consistentlyThese financial statements cover period from 1 April 2018 to 31 March 2019.
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This relates to leave encashment and is measured on an undiscounted basis and expensed as the relatedservice is provided. A liability is recognised for the amount expected to be paid if the company has a presentlegal or constructive obligation to pay this amount as a result of past service provided by the employee andthe obligation can be estimated reliably. Accordingly, necessary provision is made for the amount of annualleave encashment based on the latest basic salary. This benefit is applicable for employees as per servicerules.
The Company provides 5olo of its net proflt as a contribution to workers' profit participation fund before tax andcharging such expense in accordance with The Bangladesh Labour Act 2006 (as amended in 2013).
t
Notes to the financial statements (continued)
37. Standards issued but not yet effective
ln January 2018, the lnstitute of Chartered Accountants of Bangladesh (ICAB) has adopted lnternationalFinancial Reporting Standards issued by the lnternational Accounting Standards Board as lFRSS. As theICAB previously adopted such standards as Bangladesh Financial Reporting Standards without anymodification, this adoption will not have any impact on the financial statements of the Company going fonvard.
The following table shows standard and amendment to standard effective for annual period beginning on orafter 1 January 2019 and earlier application is permitted. However, the Company has not early applied thefollowing new standard in preparing these financial statements.
Summary of the requirements
IFRS 16 Leases IFRS 16 eliminates the currentoperating/finance lease dual accounting modelfor leases. lnstead, there is a single, on-balance sheet accounting model, similar tocurrent finance lease accounting. lssued in
January 2016, the new IFRS will replace theexisting guidance in IAS 17 Leases.
The standard is etfective for annual periodsbeginning on or after 1 January 2019. Eadyadoption is permitted if IFRS 15 Revenue fromContracts with Customers is also adopted.
The Company has yet to assess thepotential impact of IFRS 16 on itsfinancial statements.
EH4tr c
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38. Comparatives
Comparative information has been disclosed in respect of 2018 for all numerical information in the financial
statements and also the nanative and descriptive information when it is relevant for understanding of the
current year's fi nancial statements.
To facilitate comparison, certain relevant balances pertaining to the previous year have been rearranged/
restated/ reclassilied whenever considered necessary to conform to current period's presentation.
New standardsPossible impact on financial
statements