[FP]
Bengal Brands Management Bangladesh Limited
Statement of Financial Position
As at 30 September 2017
Second Draft
2017 | 2016 | 2015
Notes | Taka | Taka | Taka
Assets
Non-current assets
Property, plant and equipment - net | 5 | 47,622,690 | 59,061,826 | 295,155
Intangible assets - net | 6 | 212,449 | 269,833 | -
Capital work in progress | 7 | 199,354 | - | 46,205,108
Deferred tax asset | 8 | 2,796,757 | 869,877 | 1,926,880
50,831,250 | 60,201,537 | 46,500,263
Current assets
Inventories | 9 | 2,294,181 | 4,529,061 | (2,234,880) | 445,481
Advances, deposits and prepayment | 10 | 2,419,754 | 1,447,451 | 972,304 | 12,741,807
Cash and cash equivalents | 11 | 10,232,830 | 7,298,658 | 2,398,453 | 7,834,377 | 5,279,861
14,946,765 | 143,459,070 | 8,374,965 | 10,784,574 | 0.25 | 18,467,149
551,744
Total assets | 65,778,016 | 68,576,502 | 64,967,412
Equity and Liabilities
Share capital and reserves
Share capital | 12 | 100,000 | 100,000 | 100,000
Share money deposit | 13 | 114,762,676 | 103,721,036 | 91,174,536
Accumulated losses | (70,448,200) | (56,955,695) | (34,480,212)
44,414,476 | 46,865,341 | - | - | 56,794,324
Current liabilities
Short term borrowing | 14 | 160,000 | - | 160,000
Other payables | 15 | 20,817,512 | 21,555,029 | 8,011,082
Income tax payable | 16 | 386,028 | 156,131 | 229,897 | 2,006
21,363,540 | 21,711,160 | 69,897 | (0) | 8,173,088
Total equity and liabilities | 65,778,016 | 68,576,502 | (347,620) | 64,967,412
The accompanying notes 1 to 25 form an integral part of these financial statements.
Chairman Director | Director
Auditors' report to the shareholders
See annexed report of date
Chartered Accountants
Dhaka, | Chartered Accountants
Managing Director | Director | Chief Financial Officer | Financial Controller
Auditors' report to the shareholders
See annexed report of date
Dhaka, | Chartered Accountants | Chartered Accountants
(0.00) | (0) | (0)
99,650
(33,115)
[IS]
Bengal Brands Management Bangladesh Limited
Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 September 2017
2017 | 2016 | 2015
Notes | Taka | Taka | Taka
Revenue | 17 | 38,092,894 | 25,687,493 | -
Cost of sales | 18 | (23,849,935) | (16,886,615) | 16,886,615.02 | -
Gross profit | 14,242,959 | - | 8,800,878 | -
Less: Operating expenses
Administrative expenses | 19 | (25,433,592) | (28,164,411) | (17,813,172)
Selling and distribution expenses | 20 | (4,192,604) | (3,872,797) | -
Operating loss | (15,383,237) | - | (23,236,329) | (17,813,172)
Finance income | 223,518 | 76,656 | 38,316,412 | 251,877
Finance costs | (29,768) | (31,562) | 229,898.47 | (23,642)
Loss before tax | (15,189,488) | (23,191,235) | (17,584,937)
Tax expense | 16 | (229,897) | (154,125) | (756)
Deferred tax income | 8 | 1,926,880 | 869,877 | -
Net loss after tax | (13,492,506) | (22,475,483) | (17,585,693)
The accompanying notes 1 to 25 form an integral part of these financial statements.
Managing Director | Director | Chief Financial Officer | Financial Controller
Auditors' report to the shareholders
See annexed report of date
Dhaka, | Chartered Accountants | Chartered Accountants
[Equity]
Bengal Brands Management Bangladesh Limited
Statement of Changes in Equity
For the year ended 30 September 2017
Amount in Taka
Share capital | Share money deposit | Accumulated losses | Total
Balance as at 01 October 2015 | 100,000 | 91,174,536 | (34,480,212) | 56,794,324
Share money deposit | - | 12,546,500 | - | 12,546,500
Net loss after tax during the year | - | (22,475,483) | (22,475,483)
Balance as at 30 September 2016 | 100,000 | 103,721,036 | (56,955,695) | 46,865,341
Balance as at 01 October 2016 | 100,000 | 103,721,036 | (56,955,695) | 46,865,341
Share money deposit | - | 11,041,640 | - | 11,041,640
Net loss after tax during the year | - | (13,492,506) | (13,492,506)
Balance as at 30 September 2017 | 100,000 | 114,762,676 | (70,448,200) | 44,414,476
Managing Director | Director | Chief Financial Officer
Share capital | Share money deposit | Accumulated losses | Total
Balance as at 01 October 2014 | 100,000 | 35,337,241 | (16,894,519) | 18,542,722
Share money deposit | - | 55,837,295 | - | 55,837,295
Net loss after tax during the year | - | - | (17,585,693) | (17,585,693)
Balance as at 30 September 2015 | 100,000 | 91,174,536 | (34,480,212) | 56,794,324
Balance as at 01 October 2015 | 100,000 | 91,174,536 | (34,480,212) | 56,794,324
Share money deposit | - | 12,546,500 | - | 12,546,500
Net loss after tax during the year | - | (22,475,483)
Balance as at 30 September 2016 | 100,000 | 103,721,036 | (56,955,695) | 69,340,824
[CF]
Bengal Brands Management Bangladesh Limited
Statement of Cash Flows
For the year ended 30 September 2017
2017 | 2016 | 2015
Taka | Taka | Taka
A) | Cash flows from operating activities
Net loss before taxation | (15,189,488) | (23,191,235) | (17,584,937)
Adjustment for:
Depreciation on property, plant and equipment | 11,746,447 | 9,687,622
Amortization on intangible assets | 57,384 | 48,058 | 95,689
Impairment Losses | - | -
Operating loss before changes in working capital | (3,385,657) | (13,455,555) | (17,489,248)
Changes in working capital:
(Increase)/Decrease in advances, deposits and prepayment | (972,304) | 11,294,356 | (9,345,557)
(Increase) / Decrease in inventories | 2,234,880 | (4,083,580) | (445,481)
Increase in other payables | (577,518) | 13,383,948 | 6,912,726
Income tax paid | - | - | (1,378)
Net cash used in operating activities | (2,700,598) | - | 7,139,169 | (20,368,938)
B) | Cash flows from investing activities
Acquisition of property, plant and equipment | (307,311) | (1,609,128) | (95,476)
Acquisition of intangible assets | - | (317,892) | -
(Increase) / decrease in capital work in progress | (199,354) | (20,640,057) | (34,957,945)
Net cash used in investing activities | (506,665) | - | (22,567,077) | (35,053,421)
C) | Cash flows from financing activities
Share money deposit received | 11,041,640 | 12,546,500 | 46,618,137
Net cash generated from financing activities | 11,041,640 | 12,546,500 | 46,618,137
Net increase/(decrease) in cash and cash equivalents (A+B+C) | 7,834,377 | - | (2,881,408) | (8,804,222)
Cash and cash equivalents at beginning of the year | 2,398,453 | 5,279,861 | 14,084,083
Cash and cash equivalents at end of the year | 10,232,830 | - | 2,398,453 | 0.00 | 5,279,861
0
Managing Director | Director | Chief Financial Officer | Financial Controller
[Policy Note '17]
Bengal Brands Management Bangladesh Limited
Notes to the Financial Statements
For the year ended 30 September 2017
1 | Background
1.1 | 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 Bean & 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, Bangladesh.
1.2 | Nature of activities
The principal activity of the Company is to manage and operate 'The Coffee Bean and Tea Leaf' franchise, a global leisure lifestyle brand in Bangladesh. The Company has completed the 1st project of Flagship Store at Gulshan and began its commercial operation on 11 December 2015.
2 | Basis of preparation and statement of compliance
2.1 | 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 (IFRSs) so far adopted by the Institute of Chartered Accountants of Bangladesh and the Companies Act, 1994 and other applicable laws and regulations.
2.2 | Basis of measurement
The financial statements have been prepared under the historical cost convention.
2.3 | 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.
3 | 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.
3.1 | Property, plant and equipment (PPE)
Property, plant and equipment are stated at cost less accumulated depreciation and impairment loss, if any. Cost includes expenditure that is directly attributable to the acquisition of the assets.
Subsequent costs are included in the asset's carrying amount or recognized 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 maintenance are charged to the statement of profit or loss and other comprehensive income during the financial period in which they are incurred.
Depreciation on property, plant and equipment is charged on straight line method over the estimated useful lives of the assets, at the annual rates shown below:
Category of PPE | Rate (%)
Building renovation - Leasehold | 13%
Computer and IT equipment | 33.33%
Office equipment | 20%
Operating equipment | 20%
Electrical equipment | 20%
Kitchen appliances | 50%
Furniture & fixture | 20%
Office decoration | 13%
Depreciation on additions of property, plant and equipment made during the year is charged to the statement of profit or loss and other comprehensive income from the month in which the newly acquired assets are available for use. While depreciation on disposal of property, plant and equipment will be made up to the month prior to the disposal, where arises.
3.2 | Intangible assets
Intangible assets are recorded at historical cost less accumulated amortization and impairment loss, if any. These are amortized on straight line method at the annual rates given below:
Category of intangible assets | Rate (%)
Accounting software | 10%
POS software | 20%
Website development | 30%
3.3 | Impairment of PPE and intangible assets
The carrying amount of PPE and intangible assets 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 statement of profit or loss and other comprehensive income in the period concerned.
At the close of the financial year 2017, Book value less accumulated amortization of intangible assets has been reviewed for impairment losses. After reviewing thoroughly, No other PPE and Intangible Assets line-item has found to be impaired in this reporting period. There is no impairment in 2016.
3.4 | 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.
3.5 | Inventories
Inventories are stated at the lower of cost and net realizable value. The cost of inventories is based on the weighted average cost method.
3.6 | 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 BAS 7 'Statement of Cash Flows'.
3.7 | Provision
The Company recognizes provisions when it has a present obligation (legal or constructive) resulting from past event, the resolution of which would result in outflow of resources embodying economic benefits of the Company and a reliable estimate of the amount of obligation can be made thereon.
3.8 | Borrowings
The Company classifies borrowings 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.
3.9 | 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 currency at the date of transaction.
At each financial position date, monetary assets and liabilities denominated in foreign currencies recorded at historical cost are retranslated at the functional currency closing rate.
3.10 | Revenue recognition
Revenue from operation
Revenue from operation consists of gross inflows of economic benefits from the sale of beverage, food, add-on and retail. Revenue is measured at the fair value of the consideration received or receivable net of trade discounts and VAT. It is recognized when customers receive goods and services against their payment made thereto. The sales cut-off for a particular date encompasses one single day and night.
Interest income
Interest income is recognized on an accrual basis.
3.11 | Taxation
Current tax
The provision for income tax is computed @ 0.60% (for FYE 30 SEP 2016 applicable rate is 0.60%) of the amount representing the Company's gross receipts of income from all sources as per Income Tax Ordinance, 1984 and its subsequent amendments thereon. Corporate Tax Rate of 35% is not applicable due to substantial amount of net losses in Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 SEP 2017.
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 recognized for all temporary taxable differences while deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.
Since the income tax assessment is yet to be finalized, no deferred tax has been recognized on accumulated loss which the management believes prudent. However, the Company has started to recognize deferred tax on property, plant and equipment and intangible assets from financial year ending 30 SEP 2016 and onward.
3.12 | 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 identify 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.
3.13 | Functional and presentational currency
These financial statements are presented in Bangladesh Taka which is the functional and presentational currency of the Company.
3.14 | Reporting period
The reporting period of the Company consistently covers one year from 01 October to 30 September in line with the reporting period of its parent company, Bengal Brand Management Pte Ltd. domiciled in Singapore. And Tax Authority has accepted the aforesaid reporting period vide letter ref. TIN-3398-1628-5204/Sha 156/2016-2017/ dated 30 MAR 2017.
3.15 | Subsequent event
There are no events identified after the statement of financial position date which require adjustment or disclosure in these financial statements.
4 | 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 conform to current year's presentation and to ensure year to year comparability.
[ PPE (Note 5)]
5 Property, plant and equipment (at cost less accumulated depreciation)
Figures in Taka | Building renovation - Leasehold | Computer and IT equipment | Office equipment | Operating Equipment | Electrical Equipment | Kitchen Appliances | Furniture & fixtures | Office Decoration | Total | Furniture &
fixtures
COST:
Balance at 01 October 2016 | 24,952,576 | 1,760,492 | 134,000 | 15,748,110 | 10,916,029 | 931,010 | 2,704,119 | 11,747,673 | 68,894,010 | 137,788,021
Additions | - | 118,006 | - | 142,039 | 27,600 | 18,066 | 1,600 | - | 307,311
Disposals | - | - | - | - | - | - | - | - | -
Balance at 30 September 2017 | 24,952,576 | 1,878,498 | 134,000 | 15,890,149 | 10,943,629 | 949,076 | 2,705,719 | 11,747,673 | 69,201,321
DEPRECIATION:
Balance at 01 October 2016 | 2,658,891 | 550,751 | 22,330 | 2,716,566 | 1,819,609 | 360,557 | 430,820 | 1,272,660 | 9,832,184
Depreciation for the year | 3,243,840 | 595,836 | 26,796 | 3,156,359 | 2,184,588 | 470,956 | 540,880 | 1,527,192 | 11,746,447
Balance at 30 September 2017 | 5,902,731 | 1,146,587 | 49,126 | 5,872,925 | 4,004,197 | 831,513 | 971,700 | 2,799,852 | 21,578,631
CARRYING AMOUNTS
At 30 September 2017 | 19,049,845 | 731,911 | 84,874 | 10,017,224 | 6,939,432 | 117,563 | 1,734,019 | 8,947,821 | 47,622,690
At 30 September 2016 | 22,293,685 | 1,209,741 | 111,670 | 13,031,544 | 9,096,420 | 570,453 | 2,273,299 | 10,475,013 | 59,061,826
At 30 September, 2014
5.01 Allocation and absorption of depreciation during the year: | 2017 | 2016
Taka | Taka
Factory Overhead (Note: 18.01) | 7,581,238 | 6,400,612
Administrative expenses (Note 19) | 4,165,209 | 3,287,010
11,746,447 | 9,687,622
2016 | 2015 | 31 Dec 2014
Taka | Taka | Taka'000
22,293,685 | 1,209,741 | 111,670 | 13,031,544 | 9,096,420 | 570,453 | 2,273,299 | 10,475,013 | 59,061,826
Figures in Taka | Building renovation - Leasehold | Computer and IT equipment | Office equipment | Operating Equipment | Electrical Equipment | Kitchen Appliances | Furniture & fixtures | Office Decoration | Total | Furniture &
fixtures
COST:
Balance at 01 October 2015 | - | 178,535 | - | 253,482 | 7,700 | - | - | - | 439,717 | 879,434
Additions | 24,952,576 | 1,581,957 | 134,000 | 15,494,628 | 10,908,329 | 931,010 | 2,704,119 | 11,747,673 | 68,454,293
Disposals | - | - | - | - | - | - | - | - | -
Balance at 30 September 2016 | 24,952,576 | 1,760,492 | 134,000 | 15,748,110 | 10,916,029 | 931,010 | 2,704,119 | 11,747,673 | 68,894,010
DEPRECIATION:
Balance at 01 October 2015 | - | 59,273 | - | 84,776 | 513 | - | - | - | 144,562
Depreciation for the year | 2,658,891 | 491,478 | 22,330 | 2,631,790 | 1,819,096 | 360,557 | 430,820 | 1,272,660 | 9,687,622
Balance at 30 September 2016 | 2,658,891 | 550,751 | 22,330 | 2,716,566 | 1,819,609 | 360,557 | 430,820 | 1,272,660 | 9,832,184
CARRYING AMOUNTS
At 30 September 2016 | 22,293,685 | 1,209,741 | 111,670 | 13,031,544 | 9,096,420 | 570,453 | 2,273,299 | 10,475,013 | 59,061,826
At 30 September 2015 | - | 119,262 | - | 168,706 | 7,187 | - | - | - | 295,155
5 Capital work in progress
Opening balance | 46,205,108 | 2,028,005 | -
Addition during the year | 20,646,766 | 44,177,103 | 95,284 | =22521615.44-1874850 | =44177103-59687.82
Transfer/Capitalized to Non-current Assets note 5.01 | (66,851,874) | -
Closing balance | - | 46,205,108
5.01 CWIP Transferred to NCA
Computer and IT equipment | 1,400,527 | 1,760,492 | 359,965
Office Equipment | 25,000 | 134,000 | 109000
Furniture & fixtures | 2,448,338 | 2,704,119 | 255780.6
Operating equipment | 15,354,812 | 15,748,110 | 393298.58
Crockery, Cutlery, Glassware & Kitchenware | 73,918 | 931,010 | 857092.36
Building renovation-Leasehold | 36,700,249 | 24,952,576 | -11747673
Office decoration | - | 11,747,673 | 11747673
Electrical equipment | 10,849,029 | 10,916,029 | 67000
Total | 66,851,874 | 68,894,010 | 2042136.54
This represents mainly all the costs that were incurred exclusively for the construction and decoration of 'The Coffee Bean & Tea Leaf' franchise store. It includes site preparation cost, project management consultant fees, architects fees, foreign consultant expense, legal fees, vendors' bills for store construction and decoration, supply of generator, air conditioner and lift, cost of furniture, kitchen equipment and other electrical equipment exclusively pertaining to the project. All Capital WIP has been transferred to Property Plant and Equipment during the year since the project has been completed. | 95,284
Jan-Dec 2014
Taka '000
[Intangible assets (Note 6)]
6 Intangible assets (at cost less accumulated amortization)
Figures in Taka | Accounting software | POS Software | Website development | Total | Furniture &
fixtures
COST:
Balance at 01 October 2016 | 120,000 | 139,837 | 58,055 | 317,892 | 635,784
Additions | - | - | - | -
Disposals | - | - | - | -
Impairments (note 6.1) | - | - | - | -
Balance at 30 September 2017 | 120,000 | 139,837 | 58,055 | 317,892
AMORTIZATION:
Balance at 01 October 2016 | 11,000 | 23,996 | 13,062 | 48,059
Amortization for the year | 12,000 | 27,972 | 17,412 | 57,384
Adjustment for impairment | - | -
Balance at 30 September 2017 | 23,000 | 51,968 | 30,474 | 105,443
CARRYING AMOUNTS
At 30 September 2017 | 97,000 | 87,869 | 27,581 | 212,449
At 30 September 2016 | 109,000 | 115,841 | 44,993 | 269,833
At 30 September, 2014
Note 6.1 : As per management review on the carrying amount of Intangible Asset i.e. asset book value less accumulated amortization and impairment losses, there is no such indication of any asset being impaired.
(23,000)
Figures in Taka | Accounting software | POS Software | Website development | Total | Furniture &
COST:
Balance at 01 October 2015 | - | - | - | - | -
Additions | 120,000 | 139,837 | 58,055 | 317,892
Disposals | - | - | - | -
Balance at 30 September 2016 | 120,000 | 139,837 | 58,055 | 317,892
DEPRECIATION:
Balance at 01 October 2015 | - | - | - | -
Amortization for the year | 11,000 | 23,996 | 13,062 | 48,059
Balance at 30 September 2016 | 11,000 | 23,996 | 13,062 | 48,059
CARRYING AMOUNTS
At 30 September 2016 | 109,000 | 115,841 | 44,993 | 269,833
At 30 September 2015 | - | - | - | -
2015 | 31 Dec 2014
Taka | Taka'000
5 Capital work in progress
Opening balance | 2,028,005 | -
Addition during the year | 44,177,103 | 95,284 | =22521615.44-1874850 | =44177103-59687.82
Transfer/Capitalized to Non-current Assets note 5.01 | -
Closing balance | 46,205,108
5.01 CWIP Transferred to NCA
Computer and IT equipment | 1,760,492
Office Equipment | 134,000
Furniture & fixtures | 2,704,119
Operating equipment | 15,748,110
Crockery, Cutlery, Glassware & Kitchenware | 931,010
Building renovation-Leasehold | 24,952,576
Office decoration | 11,747,673
Electrical equipment | 10,916,029
Total | 68,894,010
This represents mainly all the costs that were incurred exclusively for the construction and decoration of 'The Coffee Bean & Tea Leaf' franchise store. It includes site preparation cost, project management consultant fees, architects fees, foreign consultant expense, legal fees, vendors' bills for store construction and decoration, supply of generator, air conditioner and lift, cost of furniture, kitchen equipment and other electrical equipment exclusively pertaining to the project. All Capital WIP has been transferred to Property Plant and Equipment during the year since the project has been completed. | 95,284
Jan-Dec 2014
Taka '000
[Notes 7 - 25]
2017 | 2016 | 2015
Taka | Taka | Taka
6 | Intangible assets - net
Opening balance | - | - | -
Add: Additions during the year | 317,892 | - | -
317,892 | - | -
Less: Accumulated amortization
Opening balance | - | - | -
Add: Amortization during the year | 48,058 | - | -
48,058 | - | -
269,834 | - | -
7 | Capital work in progress
Opening balance | - | 46,205,108 | 2,028,005
Add: Additions during the year | 199,354 | 20,640,057 | 44,177,103
199,354 | 66,845,166 | 46,205,108
Less: Transferred to property, plant and equipment (Note 7.1) | - | (66,845,166) | -
199,354 | - | 46,205,108
7.1 | Transferred to property, plant and equipment
Building renovation-leasehold | - | 24,952,576 | -
Computer and IT equipment | - | 1,400,527 | -
Electrical equipment | - | 10,849,029 | -
Operating equipment | - | 15,354,812 | -
Office equipment | - | 25,000 | -
Office decoration | - | 11,740,965 | -
Kitchen appliances | - | 73,918 | -
Furniture & fixtures | - | 2,448,338 | -
- | 66,845,166 | -
The above capital work in progress represents all the costs that were incurred exclusively for the construction and decoration and operations of 'The Coffee Bean & Tea Leaf' (CBTL) franchise flagship store at Gulshan, Dhaka. All the costs pertaining to establishment of the CBTL store have been capitalized in capital work in progress and transferred to non-current assets during the financial year then ended 30 SEP 2016 since the project has been completed. During the period under audit another project has been undertaken by the Company which represents the additions of capital work in progress in current period column.
8 | Deferred tax asset
Carrying amount of property, plant and equipment | 47,622,690 | 59,061,826 | -
Less: Tax base value of property, plant and equipment | 55,600,891 | 61,554,141 | -
Deductible/ (taxable) temporary difference | 7,978,201 | 2,492,315 | -
Carrying amount of intangibles | 212,449 | 269,833 | -
Less: Tax base value of Intangibles | 224,982 | 262,881
Deductible/ (taxable) temporary difference | 12,532 | (6,953) | -
Total deductible temporary difference | 7,990,733 | 2,485,362 | -
Applicable tax rate | 35% | 35% | -
Deferred tax asset at the end of the year | 2,796,757 | 869,877 | -
Deferred tax asset/ (liability) in previous year | 869,877 | - | -
Deferred tax income for the year | 1,926,880 | 869,877 | -
2,796,757 | 869,877 | -
9 | Inventories:
Beverage | 916,197 | 2,680,010 | 214,084
Foods | 602,644 | 437,017 | -
Retail | 129,209 | 432,524 | -
Operating and cleaning supplies | 583,967 | 914,720 | 112,246
Other consumable items | 38,652 | 64,790 | 55,500
2,270,668 | 4,529,061 | 381,830
Beverage in transit | 23,513 | - | 63,651
2,294,181 | - | - | 4,529,061 | 445,481
2017 | 2016 | 2015
Taka | Taka | Taka
10 | Advances, deposits and prepayment
10.01 | Advances
Advance store rent | - | - | 1,125,000
Advance to suppliers | 200,000 | 267,100 | 9,612,220
Advance against Salary | 67,470
Advance Amica Veritas | - | -
Advance against expenses | - | 21,250 | 272,963
Advance income tax | 407,808 | 333,772 | 50,000
Advance against purchases | 48,600 | - | 299,901
723,878 | - | - | 622,122 | 11,360,084
10.02 | Deposits
Security deposit for Gulshan store rent | 750,000 | 750,000 | 750,000
VAT Current Account | 12,950 | -
L/C margin deposit | 858,683 | - | 564,426
1,621,633 | - | - | 750,000 | 1,314,426
10.03 | Prepayment
Prepaid insurance premium | 74,243 | 75,329 | 67,297
Total Advances, deposits and prepayment | 2,419,754 | - | - | 1,447,451 | 2,903,550 | (483,796) | 12,741,807
11 | Cash and cash equivalents
Cash in hand | 44,866 | 30,964 | 10,000
Cash at bank
Current account with:
Commercial Bank of Ceylon PLC, Gulshan Branch | 626 | 23,634 | -
Bank Asia Limited , Scotia Branch | - | - | 1,346
Trust Bank Ltd., Gulshan Branch | 86,600 | 139,206 | -
BRAC Bank, Gulshan Branch | - | 5,899 | -
Dutch Bangla Bank Limited, Gulshan Branch | 717,533 | 58,976 | 5,000
Short Notice Deposit (SND) account with:
Commercial Bank of Ceylon PLC, Gulshan Branch | 8,831,507 | 1,853,218 | (6,978,289) | 5,250,111
Prime Bank Limited, Gulshan Branch | 1,648 | 3,535 | 13,404
9,637,914 | 2,084,468 | 10,541,463 | (8,456,995) | 5,269,861
Cash in Transit
Sales Collection - Cash | 342,694 | 111,031 | 10,232,830 | 2,398,453 | -
Sales Collection - City Bank POS | 84,611 | 54,650 | -
Sales Collection - DBBL POS | 122,745
Sales Collection - Prime Bank POS | - | 117,341 | -
550,050 | 0 | 0 | 283,022 | -
10,232,830 | 2,398,453 | 5,279,861
12 | Share capital
12.1 | Authorized capital
11,000,000 ordinary shares of Tk. 10 each | 110,000,000 | 110,000,000 | 90,000,000
During the financial year ended at 30 SEP 2016, the Board of Directors have increased the authorized capital of the Company from Taka 90,000,000 to Taka 110,000,000 by passing a special resolution on a duly called Extraordinary General Meeting on 22 September 2016.
12.2 | Issued, subscribed and paid up capital
10,000 ordinary shares of Tk. 10 each | 100,000 | 100,000 | 100,000
12.3 | Composition of shareholders at 30 September
Name of the shareholders | Incorporated in / Nationality | Number of shares | Amount in Taka | Amount in Taka | Amount in Taka
Bengal Brand Management Pte. Ltd. | Singapore | 9,999 | 99,990 | 99,990 | 99,990
Asif Husain Choudhury | Bangladesh | 1 | 10 | 10 | 10
10,000 | 100,000 | 100,000 | 100,000
2017 | 2016 | 2015
Taka | Taka | Taka
13 | Share money deposit
Bengal Brand Management Pte. Ltd. | 69,256,945 | 58,215,305 | 51,168,805
Integrated Services Ltd. | 45,499,741 | 45,499,741 | 39,999,741
Asif Husain Choudhury | 5,990 | 5,990 | 5,990
114,762,676 | - | - | 103,721,036 | 91,174,536
The amount of share money deposit for previous years have been received from the investors to meet the 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. However, the share money deposit on account of Bengal Brand Management Pte. Ltd. includes capital machinery of Taka 9,219,158 which is under process to report to RJSC, Bangladesh for enabling the Company to issue shares against import cost of machinery. During the period under audit, Brand Management Pte. Ltd. has further injected equity amount of SGD 200,000 (in word: Singapore Dollar Two hundred thousands only), equivalent BDT 11,041,646 (In word: Bangladesh Taka Eleven million forty one thousand six hundred forty six only) for its business expansions.
14 | Short term borrowing
AHC & Co. Ltd. | 160,000 | - | 160,000
During the period there is a borrowing of short-term non-interest bearing loan from an associated enterprise and the loan so borrowed has been settled subsequently.
15 | Other payables
Capital expenses payable - suppliers | 6,077,827 | 9,766,517 | 2,574,944
Withholding TAX payable | 622,091 | 786,705 | 1,105,581
Withholding VAT payable | 187,452 | 659,767 | 1,321,838
Withholding SD payable | 65,966 | -
VAT payable on revenue | - | 393,291 | -
Salary and allowances payable | 1,064,187 | 747,514 | 201881 | (1,768,818) | 597,945
Audit fee payable | 345,000 | 345,000 | 30000 | 402,500
Office rent payable | 1,521,700 | 2,025,289 | (1,738,818) | 76,300
Other capital expenses payable | 1,624,050 | 2,072,713 | 22527021 | 1,210,821
Other expense payable | 4,675,777 | 3,001,574 | 20,788,203 | 656,524
Unearned Revenue | 2,000 | -
Royalty and other technical fee payable (Note 15.1) | 4,400,850 | 1,541,250 | 3,826,825 | 574,025 | -
Utility payable | 21,363,540.01 | 230,613 | 215,410 | 64,629 | Capital expenses payable - suppliers | 6117826.5 | 12417653.03 | 40,000
(0.41) | 21,363,539.60 | 20,817,512 | 0 | 0 | 21,555,029 | 22,557,021 | 1,739,509 | 8,011,082 | Audit fee payable | 345000
0
15.1 | Royalty fee and Artwork and promotional material fee are payable at 5.50% and 0.50% respectively on net sales (Note 17) in line with the provision of the Franchise Agreement entered into by the Company and its counter party CBTL Franchise, LLC of USA. | Utility payable | 230613
Office rent payable | 1521700
Other expense payable | 4675776.53
16 | Income tax payable | Other capital expenses payable | 1624050
Royalty and mkt. fee payable note 13.01 | 4400849.57
Opening balance | 156,131 | 2,006 | 2,628 | Salary payable | 1064187 | -
Add: Provision made during the year | 229,897 | 154,125 | 228,585 | 1,312 | 756
386,028 | 156,131 | 3,384
Less: Payment made during the year | - | - | (1,378)
386,028 | 0 | 0 | 156,131 | 384,716 | 1,312 | 2,006
17 | Revenue
Beverage | 18,515,060 | 11,902,254 | -
Food | 17,713,163 | 11,728,873 | -
Add-on | 1,653,220 | 1,904,263 | -
Retail | 82,000 | 336,500 | -
Others | 397,300 | -
Total sales net of VAT | 38,360,743 | 25,871,890 | -
Less: Trade discount | (267,849) | (184,397) | -
Net sales | 38,092,894 | - | - | 25,687,493 | 2,628,409.69 | 12,405,401 | 0.482935445 | -
(231,190)
During the year, VAT on account of sales was to the tune of Taka 5,711,092 and deposited to the government exchequer under rebate system by maintaining VAT Current account and price declaration from July 2017 onward and at the year end reported VAT Current Account balance is Tk. 12,950 (ref note - 10.02 "Deposits"). | 228,557
(28)
2017 | 2016 | 2015
Taka | Taka | Taka
18 | Cost of sales
Beverage | 4,993,375 | 3,046,649 | -
Food | 6,118,111 | 3,967,349 | -
Operating supplies & equipment | 1,126,839 | 885,836 | -
Retail | 324,832 | 131,005 | -
Tasting | 98,388 | 43,336 | -
Wastage | 362,322 | 304,197 | 63% | -
Cost of sales under direct costing | 13,023,866 | 8,378,373
Factory overhead (note : 18.01) | 10,826,069 | 8,508,242
Total Cost of sales | 23,849,935 | - | - | 16,886,615 | 66% | - | -
18.01 | Factory overhead
Direct Labor | 570,031 | 290,676
Machine Depreciation (note 5.01) | 7,581,238 | 6,400,612
Repair & Maintenance | 495,308 | 132,431
Property Insurance | 79,322 | 57,822
Factory Rent | 1,197,369 | 1,107,131
Light , Power & Heat & Factory utilities | 375,377 | 298,119
Other Overheads | 527,424 | 221,452
10,826,069 | 8,508,242
Previous years comparative figures has been rearranged to comply with BAS Frameworks of Comparability. Previously all the factory overheads which form part of Cost of Sales were clubbed to General and administrative cost. All machine depreciation and other expenses in production cost center has been accounted for as factory overhead.
19 | Administrative expenses
Salary, allowances and benefits | 8,323,053 | 9,586,870 | 6,037,327
Store and office rent | 6,124,842 | 7,983,358 | 9,616,800
Office running and maintenance | 2,556,514 | 2,242,505 | 599,826
Printing and stationery | 162,862 | 257,850 | Books & Periodicals | 43,568
Registration, renewal and other fees | 82,181 | 96,540 | 76,865
Legal and professional fees | 553,250 | 403,156 | 60,950
Audit fee | 172,500 | 172,500 | 172,500
Travelling and conveyance | 917,854 | 459,529 | 160,665
Utilities | 1,446,007 | 1,837,753 | 78,433
Entertainment | 33,869 | 24,988 | 25,106
IT Services Fee | 402,500 | -
Bank charges | - | 31,562 | 23,642
Depreciation (Note 5.01) | 4,165,209 | 3287010 | 9,687,622 | 95,689
Amortization (Note 6) | 57,384 | 48,059 | -
Impairment Losses (Note 6.1)
Training expenses | 9,836 | 329,923 | 670,635
Power and fuel | 37,686 | 5,680 | 20,400
Insurance | 49,399 | 45,231 | 20,854
Telephone, postage and internet | 317,269 | 357,555 | - | 93,554
Business development | 21,376 | 1,025,904 | - | 40,000
25,433,592 | - | - | 28,164,411 | 8,508,242 | 36672653 | 17,813,172
(195,552)
20 | Selling and distribution expenses
Royalty and other technical fee (note 20.1) | 2,859,600 | 1,541,250 | 2,285,575 | 574,025 | -
Publicity & advertisement | 973,062 | 2,112,087 | Business promotion | -
POS charges for collection | 323,833 | 205,493 | -
Change money commission | 36,110 | 13,966
4,192,604 | - | - | 3,872,797 | -
20.1 | Royalty and other technical fee includes 15% VAT payable at the time of remitting to the USA Franchisor as per the relevant provision of the VAT Act 1991 and SRO. VAT on Royalty and other technical fee payable for previous financial year has also been considered in this year.
21 | Related party transactions
During the year, the Company carried out the following transactions with related parties in the normal course of business and on an arms' length basis. The name of these related parties, nature of these transactions and their total value have been set out in accordance with the provisions of BAS 24.
Figures in Taka
Name of the Party and relationship | Nature of transaction | Receivable/ (payable) at 01 Oct 2016 | Transaction value during the year | Payable at 30 Sept 2017 | Name of the Party and relationship | Nature of transaction | Receivable/ (payable) at 01 Oct 2015 | Transaction value during the year | Receivable/ (payable) at 30 Sept 2016
AHC & Co. Ltd. - Common Director | Short term borrowing | - | (160,000) | (160,000) | AHC & Co. Ltd. - Common Director | Short term borrowing | (160,000) | 160,000 | -
2017 | 2016 | 2015
Taka | Taka | Taka
22 | Commitments
Capital expenditure commitments made during the year | - | - | 9,170,191
Purchase commitment - Letter of Credit | 858,683 | - | 4,860,000
858,683 | 0 | 0 | 0 | 14,030,191
(USA Bulk Import for Beverage items against LC # 266017010101, Date 22 JUN 2017, and Value US$15,031.90 has been partially retired and rest amount form the purchase commitment to the amount of LC Margin withstanding.
23 | Contingent liabilities and claims
a. Contingent liabilities | Nil | Nil | Nil
b. Claims against the Company not acknowledged as debt | Nil | Nil | Nil
Disclosure on Contingent liability under BAS 37 " Provisions, Contingent Liabilities and Contingent Assets":
During the period under audit, Assessment Order for the Income Year 2013-14, 2014-15 and 2015-16 respectively has been issued from the Income tax authority. As per tax demand notice vide ref. BOKEYA AIKAR/SHA/156/2017-2018 Dated 30 JUL 2017, there is a tax claim to the tune of BDT 16,26,659 in total for respective income year. We see no merit and legal ground of that prejudicial assessment and have appealed against the arbitrary assessment order to the higher IT Authority. Therefore the event does not give raise to adjustment in the financial statements instead full particulars of the fact has been disclosed.
24 | Operating lease commitment
The Company is obligated under an operating lease agreement for the use of land and building for the period of ten (l0) years which is renewable after expiry on 30 Jun 2023 of the lease term at the option of both the lessor and the leasee through a written agreement. However, the future minimum lease payments, after adjustment of advance and renegotiations, in respect of operating leases as at 30 September are as follows:
Amount due:
Not later than one year | 6,120,000 | 6,000,000 | 8,332,500 | Oct-17 - Sep'18 | 500000 | 12 | 6000000 | Gul
Later than one year but not later than five years | 33,887,120 | 34,347,142 | 53,619,474 | Oct-17 - Sep'18 | 10000 | 12 | 120000 | Dhan
Later than five years | 34,744,389 | 10,616,980 | 58,334,361 | Not later than one year | 6120000
74,751,509 | - | - | 50,964,122 | 120,286,335
Disclosure requirement as per IAS 10 , " Event After Reporting Period" | Oct'18-Dec'18 | 500000 | 3 | 1500000 | Gul
The company has entered into another long term lease agreement with a tenure of 10 years expiring at 30 NOV 2028 to acquire a site in Dhanmondi Dhaka to launch another CBTL Standard Store. Monthly lease commitment is Tk. 255,900 in total. | January'19-Dec-20 | 575000 | 24 | 13800000 | Gul
January'21-Jun23 | 661250 | 9 | 5951250 | Gul
25 | Number of employees | 2017 | 2016 | 2015
Salary range: | Oct'18-Nov'17 | 10000 | 2 | 20000 | Dhan
Monthly Taka 3,000 or above | 26 | 22 | 11 | Dec'18-Nov'20 | 255900 | 24 | 6141600 | Dhan
Monthly below Taka 3,000 | - | - | - | Dec'20-Sep'22 | 294285 | 22 | 6474270 | Dhan
26 | 22 | 11 | Later than one year but not later than five years | 33887120
Oct'22-Jun'23 | 661250 | 9 | 5951250 | Gul
Oct'22-Nov'22 | 294285 | 2 | 588570 | Dhan
Dec'22-Nov'24 | 338427.75 | 24 | 8122266
Dec'24-Nov'26 | 389191.9125 | 24 | 9340605.9
Dec'26- Nov'28 | 447570.6994 | 24 | 10741696.79
Managing Director | Director | Chief Financial Officer | Later than five years | 34744388.69