t-
Hoda Vasi
Chowdhury & Co
Audited Financial Statements
of
Bengal Brands Management Bangladesh
Limited
For the year ended 30 September 2014
Hoda Vasi Chowdhury & Co
Chartered Accountants
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS OF
BENGAI- BRANDS MANAGEMENT BANGLADESH LIMITED
We have audited the accompanying financial statements of Bengal Brands Management Bangladesh
Limited (the "Company") which comprise the staternent of financial position as at 30 September
2014, statement of comprehensive income, statement of changes in equity and statement of cash
flows for the year then ended and a summary of significant accounting policies and other relevant
explanatory notes thereon"
Management's Respons ibility for th e Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with Bangladesh Accounting Standards (BASs) and Bangladesh Financial Reporting
Standards (BFRSs) and for such internal control as management determines is necessary to enable
the preparation of financial statements that are free from material misstatement whether due to fraud
or error.
Auditors' Respons ib ility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with Bangladesh Standards on Auditing (BSAs). Those standards
require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those. risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinio" $
National Office : BTMC Bhaban (8th Floor), 7-9 Karwan Bazar Commercial Area, Dhaka- 121 5, Bangladesh
Motuheel Office : lspahani Building (3rd Floor), 14-15 Motijheel Commercial Area, Dhaka-1000, Bangladesh
Chittigong Office : Delwar Bhaban(4th Floor), 104 Agrabad CommercialArea, Chittagong-4100, Bangladesh
Hoda Vasi
Chowdhury & Co
Opinion
In our opinion, the financial statements prepared in accordance with the Bangladesh Accounting
Standards (BASs) and Bangladesh Financial Reporting Standards (BFRSs), give a true and fair view
of the financial position of Bengal Brands Management Bangladesh Limited as at 30 September
2014 and the results of its financial performance and its statement of cash flows for the year then
ended and comply with the Companies Act 1994 and other applicable laws and regulations.
We also report that:
a) we have obtained allthe information and explanations which to the best of our knowledge and
beliefwere necessary for the purposes ofour audit and made due verification thereof;
b) in our opinion, proper books ofaccount as required by law have been kept by the Company so
far as it appeared from our examination ofthose books; and
c) the statement of financial position and statement of profit or loss and other comprehensive
income along with the annexed notes I to l6 dealt with by the report are in agreement with the
books ofaccount.
Dhaka, ?7rEB 20fr
W"
Hoda Vasi
Chowdhury & Co
Bengal Brands Management Bangladesh Limited
Statement of Financial Position
as at 30 September 2014
Assets
Non-current assets
Property, plant and equipment, net
Capital work in progress
Current assets
Advances and deposits
Cash and cash equivalents
Total assets
Equity and Liabilities
Share capital and reserves
Share capital
Share money deposit
Retained earnings
Current liabilities
Short term borrowing
Other liabilities
Tax payable
Total equity and liabilities
Dhaka, 27 FE) fit|
Notes
6
7
2014
Taka
295,369
2,028,005
2013
Taka
32,100
50,000
2,323,373
3,396,250
14,094,093
17,490,333
82,100
4,931,799
99.519
5,031,318
19,803,706 5,113,418
100,000
35,337,241
(16,894,519)
100,000
7,746,958
(3,562,345)
18,542,722 4,284,613
160,000
1,099,356
2,628
1,260,994 828,805
19,803,706 5,113,418
notes 1 to 16 form an integral part of these financial statements.
l0
ll 160,000
668,805
Auditors' report to the shareholders
See annexed report ofdate
Financial Controller
Mil*M t(
Hoda Vasi
Chowdhury & Co
Bengal Brands Management Bangladesh Limited
Statement of Comprehensive Income
For the year ended 30 September 2014
Other income
Less: Administrative expenses
Salary and allowances
Store and office rent
Office running and maintenance
Printing and stationary
License and renewal fees
Legal and professional fees
Audit fee
Travelling and conveyance
Utilities
Entertainment
Security maintenance
Preliminary expenses
Bank charges
Depreciation
Loss before tax
Tax expense
Net loss after tax
2014
Taka
7,508
13,337,054
(133r9,546)
(2,628)
Feb - Sept 2013
Taka
(3,562,345)
Mt*
3,562,345
(13,332,174) (3,562,345)
notes I to I6 form aryintegral part of these financial statements.
Wfr*,W ffi
Dhaka, 2 7 FEB 2015
Auditors' report to the shareholders
See annexed report ofdate
Hoda Vasi
Chowdhury & Co
Bengal Brands Management Bangladesh Limited
Statement of Changes in Equity
For the year ended 30 September 2014
Balance as at 07 February 2013
Shares issued during the year
Share money deposit
Net loss after tax during the year
Balance as at 30 September 2013
Balance as at 01 October 2013
Share money deposit
Net loss after tax during the year
Balance as at 30 September 2014
100,000
7,746,9-58
- 100,000
- 7,746,958
(3,562,345) (3,562,345)
100,000 7,746,959 (3,562,345) 4,284,613
100,000 7,746,959
- 27,590,293
(3,562,345) 4,284,673
- 27,590,283
(13"332.174) (13.332.174)
100,000 35,337,241 (I6,894,519) 18,542,722
\'d
Amount in Taka
Share
capital
Share
money
denosit
Retained
earnings Total equity
Director Financial Controller
Bengal Brands Management Bangladesh Limited
Statement of Cash Flows
For the year ended 30 September 2014
Hoda Vasi
Chowdhury & Co
Feb - Sept 2013
Taka
(3,562,345)
A) Cash flows from operating activities
Net loss for the year before taxation
Adjustments for:
Depreciation on property, plant and equipment
Operating loss before changes in working capital
Changes in working capital :
(Increase)/decrease in advances and deposits
Increase in other liabilities
Net cash used in operating activities
B) Cash flows from investing activities
Acquisition of properfy, plant and equipment
Increase in capital work in progress
Net cash used in investing activities
C) Cash flows from financing activities
Paid-up capital
Share money deposit received
Short term borrowing received
Net cash generated from Jinancing uctivities
Net increase in cash and cash equivalents (A+B+C)
Cash and cash equivalents at the beginning of the yearlperiod
Cash and cash equivalents at the end ofthe year/period
2014
Taka
(13,329,546)
46,995
(13,282,561)
1,535,549
429,551
(3,560,457)
(4,931,799)
668,805
1,888
(11,317,461)
(310,2s3)
(1,978,005)
(7,823,451)
(33,988)
(50,000)
(2,288,258)
27,590,283
(83,988)
100,000
7,746,958
160,000
8,006,958
99,519
99,519
27,590,283
13,984,564
99,519
14,084,083
Financial Controller Director
I
1.1
Hoda Vasi
Chowdhury & Co
Bengal Brands Management Bangladesh Limited
Notes to the financial statements
For the year ended 30 September 2014
tsackground
Legal status and objectives of the Company
The Company was incorporated in Bangladesh on 7 February 2013 as a private limited
Company under the provision of the Companies Act, 1994. The Company was set up with a
view to operating an international chain restaurant business under the brand of 'The Coffee
tsean & Tea Leaf (CBTL) in Bangladesh. The registered office of the Company is situated at
Wings Centre, House No. 55, Road No. 4/A, Dhanmondi, Dhaka-1209.
1.2 Nature of activities
The principal activity of the Company is to
franchise, a global leisure lifestyle brand in
development stage.
manage and operate 'The Coffee Bean and Tea Leaf
Bangladesh. Presently the Company is in the project
2
2.1
Basis of preparation and statement of compliance
Statement of compliance
The financial statements of the Company are prepared in accordance with Bangladesh
Accounting Standards (BASs) and Bangladesh Financial Reporting Standards (BFRSs), which
are consistent in all material respects with the International Accounting Standards (IASs) and
International Financial Reporting Standards (lFRSs) so far adopted by the Institute of Chartered
Accountants of Bangladesh and the Companies Act, 1994 and other applicable laws and
regulations.
Basis of measurement
The financial statements have been prepared under the historical cost convention.
Going concern
While preparing the financial statements, the directors have assessed the ability of the Company
to continue as a going concern. The Company does not foresee a need for liquidation or
cessation of trading, taking into account all available information about future. Accordingly, it
continues to adopt the going concern basis in the preparation of the financial statements.
Summary of significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set
out below. These policies have been consistently applied to all years presented, unless otherwise
stated. r,
al
2.2
2.3
Hoda Vasi
Chowdhury & Co
3.1 Property, plant and equipment (PPE)
Properff, plant and equipment are stated at cost less accumulated depreciation. Cost includes
expenditure that is directly attributable to the acquisition of,the assets.
Subsequent oosts are included in the asset's carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will
flow to the Company and the cost of the item can be measured reliably. All other repairs and
rnaintenance are charged to the income statement during the financial period in which they are
incurred.
Depreciation is provided under the straight-line method at the rates given below:
Category of PPE
Computer equipment
Operating equipment
Rate per annum
3333%
20%
Straight line depreciation method is followed and depreciation is charged to the statement of
comprehensive income so as to write off the cost of assets. Full month depreciation is charged
forthe month of acquisition and in case of assets retired/disposed, depreciation is charged up to
the month of their retiremenVdisposal.
3.2 Impairment of property, plant and equipment
The carrying amount of property, plant and equipment are reviewed at each reporting date to
determine whether there is any indication that the assets might be impaired. Any provision of
impairment is charged to the income statement in the period concerned.
There is no impairmentin2014 and2013.
3.3 Capital work in progress
These expenditure will be capitalized and recognized as operating assets upon completion of the
acquisition process or construction, where applicable and physical possession thereof.
3,4 Cash and cash equivalent
Cash and cash equivalents comprise of cash balances in hand and deposits held at call with
banks. The statement of cash flows is prepared using the indirect method as stipulated in the
Bangladesh Accounting Standard 7'Statement of Cash Flows'.
3.5 Provision
Provisions are recognised when the Company has a present obligation (legal or constructive) as
a result of past event, it is probable that the Company will be required to settle the obligation,
and a reliable estimate can be made of the amount of the obligation.
rlc
3,7
3.6
Hoda Vasi
Chowdhury & Co
Borrowings
Borrowings are elassified as current liabilities unless the Company has an unconditional right to
defer settlement of the liability for at least twelve months from the statement of financial
position date"
Foreign currency transaction/translation
Transactions in foreign currencies are initially recorded in the functional currency by applying
the exchange rates between the functional currency and foreign ourrency ai the date of
transaction.
At each finaneial position date, monetary assets and liabilities denominated in foreign currencies
recorded at historical cost are retranslated at the functional currency closing rate.
Revenue recognition
Revenue from operation
Revenue is recognised to the extent that it is probable that the economic benefits associated with
the item of revenue will flow to the Company and the revenue and associated costs incurred or
to be incurred can be reliably measured. Revenue is measured at the fair value of the
consideration received or receivable net of trade discounts. In the reportingyeff presented, the
Company was in the project development stage and has not generated any revenue.
Interest income
Interest income is recognised on an accrual basis.
Taxation
Current tax
The provision for income tax is computed on the basis of the provisions of the Income Tax
Ordinance, 1984 and its subsequent amendements thereon.
Deferred tax
Deferred income tax is provided on temporary differences arising between the tax base assets
and liabilities and their carrying amounts in the financial statements in accordance with the
provisions of BAS 12.
Deferred tax liabilities are recognised for all temporary taxable differences while deferred tax
assets are reoogttised to the extent that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
Since the income tax assessment is yet to be finalised, no deferred tax has been recognised on
accumulated loss which the management believes prudent.
3.10 Risk management
The Company's management, particularly the Board, has overall responsibility for the
establishment and oversight of the Company's risk management framework. The Company's
management policies are established to identiff and analyze the risks faced by the Company to
set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk
management policies, procedures and systems are reviewed regularly to reflect changes in
market and industry conditions, the Company's activities and the legal risk.
-\(
3.8
3.9
a- Hoda Vasi
Chowdhury & Co
3.11 Functional and presentational currency
These financial statements are presented in Bangladesh Taka which is the functional and
presentational currency of the Company.
3.12 Reporting period
The financial period of the Company covers from I October 2013 to 30 September 2014.
3.13 Subsequent event
There are no events identified after the statement of financial position date which require
adjustment or disclosure in these financial statements.
3.14 General
i) Figures appearing in these financial statements have been rounded off to the nearest Taka; and
ii) Previous year's figures have been rearranged wherever considered necessary to confirm to
current year's presentation.
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Hoda Vasi
Chowdhury & Co
2014 2013
Taka Taka
Advances and deposits
Advances
Advance store rent
Advance against expenses
Advance income tax
Deposit
Security deposit for gulshan store rent
Cash and cash equivalents
Cash al bank
Prime Bank Limited (Current account)
Bank Asia Limited (Current account)
Commercial Bank ofCeylon PLC (Short term deposit-STD account)
Cash in hand
8 Share capital
8.1 Authorized capital
9,000,000 ordinary shares ofTk. l0 each
8.2 Issued, subscribed and paid up capital
10,000 ordinary shares ofTk. 10 each
8.3 Composition of paid up capital at 30 September
14,084,083 99,519
90.000.000 90,000,000
:
100,000 100,000
2,625,000
20,000
1,250
2,646,250
750,000
_____E2g'2sq-
210,71',7
97,846
t3,775,520
4,125,000
56,199
4,181,799
750,000
4,931,799
ss,irs
Name of the shareholders Nationality
Singapore
Bangladesh
Number of
shares
Amount
in Taka
Amount
in Taka
Bengal Brand Management Pte. Ltd
Asif Husain Choudhury
99,990
t0
99,990
10
Share money deposit
Bengal Brand Management Pte. Ltd.
Integrated Services Ltd.
Asif Husain Choudhury
l0 Short term borrowing
AHC & Co. Ltd.
The borrowing is non interest bearing and will be repaid on demand by the lenders.
35.337.241 7,746,958
:
The amount of share money deposit has been received from the investors to meet project development expenses.
Necessary formalities are under process to induct Integrated Services Ltd. as the shareholder of the Company. The
Company shall issue ordinary shares to the shareholders in due course'
l 5,53 1,5 10
19,799,741
5,990
160,000
7,'146,9s8
160,000
Hoda Vasi
Chowdhury & Co
l1 Other liabilities
Withhotding tax payable
Witholding VAT payable
Salary payable
Audit fee payable
Office rent payable
Hotel bills payable
Other expense payable
668,805
l2 Related party transactions
During the year, the Company carried out the following transactions with a related party in the normal course ofbusiness
and on an arms' length basis. The name ofthe related party, nature ofthese transactions and their total value have been set
out in accordance with the provisions of BAS 24.
res in Taka
Name of the Party and relationship Nature of
transaction
Receivable/
(payable) at 0l
Oct 2013
Transaction
value during
the year
Receivable/
(payable) at 30
Sept 201 4
AHC & Co. Ltd. - Common directorshin Short term borrowins r 60.000' I 60.000
2014 2013
Taka Taka
Commitments
Capital expenditure commitments made during the year
Contingent liabilities and claims
a. Contingent liabilities
b. Claims against the Company not acknowledged as debt
7,550,000 7,500,000
45,500,637 38,799,469
74,665,698 88,866,866
____r27_J15 332 _l3s,r 66ill_
2014 2013
2014
Taka
276,746
340,909
230,000
76,300
130,729
43,672
1,098,356
2013
Taka
t82,5t7
203,788
225,000
57.500
13
14
2,194,000
Nil
15 Operating lease commitment
The Company is obligated under an operating lease agreement for the use of land and building for the period of ten (l 0)
years which is renewable after expiry ofthe lease term at the option ofboth the lessor and tho leasee through a written
agreement. The Company entered into another temporary lease agreement in 2014 for a period of one ( I ) year for use of
office space. However, the future minimum lease payments, after adjustment ofadvance, in respect ofoperating leases as
at 30 September are as follows:
2014 2013
Taka Taka
Amount due:
Not later than one year
Later than one year but not later than five years
Later than five years
l6 Number of employees
Salary range:
Monthly Taka 3,000 or above
Monthly below Taka 3,000
M- Financial Contloller
I
Yf
Director