Annual Report Analysis

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 Annual Report Analysis

Fundamentals of Financial Accounting- B: 108

Submitted to: Mr. Hasibul Alam Chowdhury

Lecturer
Department of Banking

University of Dhaka

Submitted By:
Name ID Signature
Md. Mezbaul Haider 16030

Md. Mashroor Ali 16031

Nazim Reza 16011

Tauhidul Islam 16071

Rafsan Mahtab 16087

Rezaur Rahman 16040

Md. Nahid Bulbul 16078

Date of Submission: April 22, 2010

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Date: April 22, 2010

Mr. Hasibul Alam Chowdhury

Course Instructor
Fundamentals of Financial Accounting
Department of Banking
Faculty of business studies
University of Dhaka.

Dear Sir,
It gives us pleasure to submit the report on “Annual Report Analysis” on the basis of the previous
three years annual reports of two listed company: Singer BD and Pran AMCL as you authorized
us to prepare by April 22, 2010.

It was fantastic opportunity for us to prepare the report under your guidance, which really was a
great experience for us. We have collected the information from their annual reports, websites
and text books.

We have worked hard and tried our best to prepare the report. We will be very pleased to provide
further information if necessary.

Sincerely,

Md. Mezbaul Haider

On behalf of the group

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 Acknowledgement
At first, we would like to thank our respective course teacher Mr. Hasibul Alam Chowdhury for assigning
us such an interesting topic that we can eagerly work on. We gratefully declare that without his
guidelines and suggestions it would not be Possible for us to complete this task. Many of our fellows and
seniors here helped us a lot by generously supplying comments; suggestions and giving inspiration. We
have collected data from published annual reports, websites, many books and business journals. We have
discussed and worked as a group and finally we have prepared a report as a group.

Last but not the least, our hearts felt thanks to our family members, classmates and seniors for helping us
in making this report.

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 Contents
Chapter Topic Page

Executive Summary 1

1 Companies‟ Profile 2

2 Basic Parts of the Annual Reports 3

3 Summary of the Chairmen‟s Statement 4

4 Findings from Corporate governance 5

5 Corporate Governance Compliance Report 8

6 Comparison of auditors‟ reports 8

7 Comparison of items of financial statements 10

8 Comparison of Disclosure Policies: 13

9 Conclusion 15

Bibliography 16

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 Executive Summary

Financial report means the presentation of financial data of a company's position, operating performance,
and funds flow for an accounting period with some other useful instructive components particularly as a
brochure. It is a written report which quantitatively describes the financial health of a company. A
financial report contains financial statements along with related information which may be used by
internal and external parties. Financial statements include an income statement, a balance sheet, a cash
flow statement. Financial report may be published monthly, quarterly or annually etc. The main goal of
presenting useful information to financial statement is helping to make proper decisions.

This report compares two companies‟ Annual financial reports of three year as we are assigned to do. The
chosen companies are Singer Bangladesh Limited and Pran AMCL for this purpose. These companies are
enlisted in DSE( Dhaka stock Exchange).This report precisely shows the comparison of each partition of
annual report of these two companies in yearly basis for three sequential years.

In this report we have included some comparisons of different partitions like financial statements,
corporate governance report, auditors‟ report, disclosure policies etc with some summary of other crucial
parts like corporate governance compliance report, chairman‟s statements etc as well as some findings.

In comparison of financial statements we compared the elements of balance sheet, items of profit and loss
accounts and parts of cash flow statements. We have not worked with numerical terms and tools like
profitability or other ratio analysis rather we have worked with the qualitative modifications and
premises.

As both of these companies are manufacturing companies operating in Bangladesh the elements of annual
reports are seldom different. So the comparisons show the differences, correspondences and occurrences
year to year. Our comparative analysis and comparisons of these annual reports are evident that both of
these two companies‟ annual reports were sometimes almost identical to and sometimes different from
each other.

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1. Companies‟ Profile
1.1 Singer:
Singer as a company began its journey in 1851, when inventor of sewing machine, Isaac Merritt Singer
began to manufacture and market a machine to automate and assist in the making of clothing. Singer is
now engaged in Retail business which consists primarily of distribution through company owned retail
stores and direct selling of a wide variety of consumer durable products for the homes primarily in Asia
Pacific Rim, Latin America and the Caribbean. In some of the markets where it operates Singer is
recognized as a leading retailer of consumer electronics and home appliances.

At a glance:
 1850: Isaac Singer invested $40 and invented sewing, a needle that goes up and down.
 1851: The I.M. Singer & Co. manufacturers opened their factory in Boston and began
fabricating machines for mass consumption.
 1854: Isaac Singer renamed the company Singer Manufacturing Company and moved his
offices and production facilities to New York City.
 1855: The Singer Sewing Machine debuted at a trade exposition in Paris, France, and was
awarded a prize for design innovation.
 1856: Initiation of hire purchase plan.
 1880: The company began offering an electric motor-driven model
 1889: The first electric machine was introduced
 1979: Entry in the Bangladeshi market through the establishment of the Singer Sewing with a
view to 'spread the knowledge of cutting, stitching and embroidery'
 20th C: In the 20th century, Singer Sewing Machine engaged in a project to teach sewing
skills to women in developing countries.

1.2 PRAN:

AMCL (Agriculture Marketing Co. Ltd) markets its product under the brand name PRAN that stands for
Programme for Rural Advancement Nationally. AMCL is the sister concern of RFL Group, an Australian
based company and a leading plastic product manufacturer in Bangladesh.

PRAN is the pioneer in Bangladesh to be involved in contract farming and procures raw material directly
from the farmers and processes through state of the art machinery at their several factories into packed
food and drinks products.
At a glance:
 1980: Foundation of RFL Group in Australia.
 1985: Incorporation of the AMCL Group in Bangladesh, as private Ltd co. under the
companies Act 1913.
 1985: Inception of PRAN foods and beverage as the Brand name of AMCL in Bangladesh.

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  1993: AMCL converted into public limited co. The shares were listed in Dhaka and
Chittagong stock exchanges.
 1995: Production of orange juice in June & initiation of the widely popular PRAN Mango
Juice.
 2003: Launched first local carbonated soft drink, PRAN Cola.

2. Basic Parts of the annual Report

Having an overview of the two companies’ annual reports of three years, we have enlisted the major
parts of their annual reports. We are presenting this below comparatively:

Items Singer Pran

1. Mission/Objectives

2. Financial Highlight (5 years)

3. Chairman‟s Statement

4. Director‟s report

5. Notice of the previous year‟s AGM

6. Corporate governance compliance report

7. Review of operations

8. CSR

9. Corporate governance

10. Auditor‟s report

11. Comparative balance sheet

12. Notes to the financia l statement

13. Financial highlights for a decade

14. Address of retail stores

15. Address of wholesalers

From above findings, we can say that Singer has enriched their annual report much more than Pran
which ultimately helps the investors and other parties for taking decisions.

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3. Summary of Chairmen‟s Statements
3.1 Singer:
Year 2007:

In the year 2007, there was no chairman‟s statement in the annual report of Singer.
Year 2008:

In year 2008, Singer witnessed the beginning of a global financial crisis. The other common issues
which affected people were increase in price of essential commodities, higher inflation rate and scarcity
of power. Despite the above factors, 2008 experienced a record setting year for the company. The sales
turnover in 2008 was tk. 4436million, i.e. increase of 24.74% over 2007. Operating profit increased by
38.79% compared to last year. Net income increased to tk. 153.07 million and is up by 50.34%. Earnings
per share increased from tk. 45.38 to tk. 68.22. Introduction of Enterprise resource planning (ERP) and
thirty one (31) Singer plus outlets brought under the purview of ERP. During this year twenty six new
stores in different parts of the country are introduced. . During the year the company achieved `Star
performer` award for the third consecutive year. The annual report for 2007 won the First Prize of ICAB
National award in the manufacturing sector. Singer Bangladesh Limited was adjudged a runner up in the
manufacturing sector by south Asian Federation of Accountant (SAFA) “Best presented Accounts Award
2007” competition. During this year the paid up capital of the company has increased to Tk.58.17 million
after issuing bonus shares for 2007. This year the highest share value was Tk. 2,573 and the lowest was
Tk. 1,722. The total dividend will be Tk. 67.32 million, i.e. 15.72% higher than the amount paid in the
previous year. In the conclusion he thanked the employees around the country for their dedication and
commitment to the company over the past years. He also wanted to recognize the outstanding board of
directors for their guidance and counsel. Finally he acknowledged the shareholders for supporting and
believing in the management team as they have set the company on a new path of sustainable and
profitable growth.

Year 2009:

Though 2009 was an unusual year for the company due to worldwide economic meltdown, the company
continued gracefully and increased its profitability. It was possible due to pragmatic decisions and taking
timely cautious strategies towards improvement of sales margins, reducing costs and generating cash
flows and lowering interest expenses. Special thanks are given to the employees for their untiring effort.
The sales turnover was 4391 million slightly decrease of 1.01 % over 2008. The operating profit
increased by 15.89 % compared to last year. Net income increased to tk. 396.79 million and is up by
120.43%. Earnings per share increased from tk. 80.22 to tk. 176.83. Net cash inflow from operating
activities was ahead of operating profit. Net asset per share increased by 22 % compared to previous year.
Shareholders‟ Equity was tk. 1080.83 million at the end of 2009 compared to tk. 885.98 million at the
end of 2008. During the year the highest share value was tk. 2970 and the lowest was tk. 1590. An
interim dividend of tk. 60 per share (60%) was declared and later finally tk. 30 per share (30%) was given
for the year. Company has retained sufficient profits for expansion and growth of the business. The
company achieved „ Star Performer‟ award for the 2nd half Quarter 2009.The annual report for 2008 won
the First prize of ICAB National Awards in the manufacturing sector for best published accounts and
reports. Singer Bangladesh Limited adjudged a joint 1 st runner up in the manufacturing sector by South
Asian Federation of Accountants (SAFA) “Best Presented Accounts and Corporate Governance

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Disclosure Awards 2008 ” competition. In the conclusion he thanked the employees around the country
for their dedication and commitment to the company over the past years. He also wanted to recognize the
outstanding board of directors for their guidance and counsel. Finally he acknowledged the shareholders
for supporting and believing in the management team as they have set the company on a new path of
sustainable and profitable growth.

3.2 PRAN:
There was no chairman‟s statement in Pran‟s annual report for the year 2007, 2008 and 2009

4. Findings from Corporate governance

Corporate governance deals with the complex set of relationships between the corporation and its board
of directors, management, shareholders, and other stakeholders. It is a broad term that has to do with the
manner in which the rights and responsibilities are shared among owners, managers and shareholders of a
given company. In essence, the exact structure of the corporate governance will determine what rights,
responsibilities, and privileges are extended to each of the corporate participants, and to what degree each
participant may enjoy those rights.

4.1 Practice of Corporate Governance in Singer BD:

At Singer, Corporate Governance emphasizes, the enhancement of shareholder value while adopting
practices based on transparency and accountability to society. The Board of Directors ensures that the
activities of the Company are always conducted in accordance with the highest ethical standards in the
best interest of all stakeholders and the preservation of the environment. The Company remains
committed to highest standards of Corporate Governance and manage its affairs in accordance with the
guideline of Securities and Exchange Commission.

Implementation of CG related laws on Singer:

Singer has implemented laws that are currently enforced in Bangladesh while setting up its basic
blueprint of corporate governance. Following legal measures are in practice at SINGER BD-

• Securities and Exchange Ordinance 1969

• Bank Companies Act 1991

• Financial Institutions Act 1993

• Securities and Exchange Commission Act 1993

• Bankruptcy Act 1997

• Companies Act 1994

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Corporate Governance Structure in Singer:

In Singer the Corporate governance structure has a formation of several correlated and at the same time,
up to a certain limit, independent controlling bodies. These Controlling bodies are monitored by the
Board of Directors, and are comprised of some key executives related to the bodies operational concern,
and are usually chaired by a member of the Board.

The Controlling Bodies of Singer are:

The Board:

The Board is comprised of eight members. Non-executive Directors are from varied background and with
distinct experiences. Two directors from the eight are selected as the Independent Director, fulfilling
certain criteria as strong inter personal skill and independence of thought and perspective. The directors
have access to the service and advice of the Company Secretary.

The board‟s role is to-

 Determine company‟s direction and strategy,

 Attain the business objective,
 Ensure the company meets its responsibilities to its shareholders and
 Ensure that the control environment adequately protects the Company's assets
against the major risks it faces.

There is an annual cycle of Board meetings which is designed to address, in a systematic way, strategy,
investment policy, borrowings, treasury matters, marketing, revenue, dividend matter and communication
with shareholders.

Audit Committee:

The Audit Committee is comprised of one Executive Director and two Non- Executive Directors of the
Company. The Chairman of the Audit Committee is a non-executive Independent Director.

The Audit Committees role is to-

 Oversee the company‟s control mechanism.

 Monitor effectiveness of internal controls.
 Review interim & annual financial statements before submission to the Board.
 Manage and control the company‟s auditors affairs.

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Management Committee:

The Management Committee is chaired by the Managing Director and comprises of eight key senior
executives.

The Management Committee‟s role is to-

 Conduct day-to-day Management of the company

 Guide and control the managers
 Practice various crucial additional managerial functions.
Business Development Committee:

The Development Committee is comprised of twelve members headed by one director.

Business Development Committee‟s role is to-

 Review and analyze the entire gamut of the business activities a nd

 Assist the Management Committee in the decision making process.

Inventory Monitoring Committee:

The Inventory Monitoring Committee is comprised of twelve members headed by one director.

Inventory Monitoring Committee‟s role is to-

 Monitor the inventory position of the Company vis-à-vis sales

 Recommends procurements in line with the corporate plan,
 Forecast sales
 Stock-in transit &
 Identify Slow moving and obsolete items

Other key related areas of CG in Singe r:

Responsibilities to related parties: The Company tries to maintain a perfect balance within its group of
interested parties and in doing so pay attention to-

 Rights of shareholders
 Disclosure and Transparency
 Responsibilities of the board

Internal Controls: To ensure an effective implementation of all policies of and decisions of the Board the
Directors are required to ensure internal Control which highlights the follows-

 Definition of organization structure

 Procedure for the review of expenditures
 Strategic, annual and quarterly forecasting process
 Accounting & Financial statement policies
 Reporting & review of financial results.

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Code of Ethics for Employees: The Company considers the significance of ethical, human and
environmental matters in the conduct of its business.

Communication: To remain connected and maintain a fresh image the company discloses it‟s important
financial and other report to the extent to which the management approves. It also welcome shareholders
to participate at the Shareholders meeting.

Evaluating the Corporate Governance in Singe r from the years 2007 to 2009:

There is not obvious alteration on the Annual report of SINGER BD in part related to corporate
governance because over the three years, from ‟07 to ‟09, the corporate Governance of SINGER BD has
underwent some subtle change. Most of the changes are unpublished, so they are not included at the part
of the Annual Report of SINGER BD. These changes include election and selection within the
controlling bodies; change in some leading positions and in general staffs t hrough recruitment by hiring
or firing processes. Excluding these minor occurrences the corporate governance has mostly remained
unchanged over the three years and the main leading positions have not altered either.

4.2 Practice of Corporate governance in PRAN:

The annual report of AMCL PRAN does not disclose anything related to the practice of their Corporate
Governance Policies. Due to this confinement we are unable to report any material associated with the
practice of Corporate Governance in PRAN

5. Corporate Governance Compliance Report:

The Securities and Exchange Commission of Bangladesh issues the conditions of the corporate
governance that must be complied by all the companies to run their operations and made a report showing
that they have complied with all the conditions of the corporate governance. This status of compliance
must be published in the company‟s annual report. As we are working with the annual reports of Singer
and Pran, we have analyzed their corporate governance compliance report. After analysis, we found that
both of the companies have complied with almost all the conditions of corporate governance issued by
the SEC. Some conditions such as report of conflict of interest, suspected infringement of laws to the
Board of Directors, reporting (for the unreasonable ignorance by the management of any material impact
on the financial condition or results of operation) to the SEC were not complied by Singer since they are
not applicable for this company.

6. Comparison of auditors‟ reports:

Auditing basically involves with examining financial statements and books of accounts as well as its
supporting documents to ensure the reliability, authenticity and acceptability to the end users. It also
examines whether financial records, books of accounts and financial statements have been prepared in
accordance with the principles that comply with international accounting standards and also applicable in
a particular country. While examining auditors‟ report s of two different companies, we have found that
S.F. Ahmed & Co. executes auditing functions of Singer Bangladesh Limited for the years 2007 and 08

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but Rahman Rahman huq conducted audit function for the same company in the year 2009. On the other
hand in case of Pran Agricultural Marketing Company Limited the auditor was M.J. Abedin & Co. for the
years 2006-07, 2007-08 and 2008-09.

In our examination and thorough analysis of the auditors‟ reports of above two companies we have found
the following few issues which are reasonably identical to each other. Our findings of the comparative
analysis of auditors‟ reports of the above two companies are stated below:

1. Both of the two companies‟ financial statements are audited in accordance with International
Standardard on Auditing which is applicable in Bangladesh.
2. Both of these two companies execute audit functions to obtain a reasonable assurance about
whether the financial statements are free from material miss statements.
3. The audit functions of the two auditors include examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements.
4. Their functions of auditing also includes assessing the accounting principles used to prepare
financial statements and significant estimates made by managements as well as in the evaluation
of overall presentation of financial statements.
5. Both of the two auditors made their opinions that the financial statements of both of these two
companies exhibit a true and fair view of the state of the companies‟ affairs in their concerned
accounting years.
6. The result of the operations and their cash flows for different years have been drawn up in
accordance with the requirements of Companies Act 1994, Securities and Exchange Ordinance
1969, Securities and Exchange Rules 1987 and other applicable Laws and rules and International
Accounting Standards.
7. Both of these two auditors also comment that proper books of accounts, statutory books and other
requisite records were properly maintained by the concerned companies and managements duly
followed provisions of law and rules connected therewith.
8. The auditors of the concerned organizations also comment that balance sheets and income
statements are in agreement with the same books of accounts maintain by the company and the
cash flow statement conforms with the presentation laid out in the relevant International
Accounting Standard.
9. Both of the two auditors finally reports that the expenditure incurred and payments made were for
the purpose of the companies‟ business in the respective years.

Our comparative analysis of the auditors‟ report, it is evident that both of these two companies
Auditors‟ report were almost identical to each other. We have examined that, as International
Accounting principles for recording and preparing financial statements, diffe rent auditing
principles and relevant laws and rules are same for all the companies in Bangladesh. As our
selected two organizations belong to manufacturing organization, so accounting and auditing

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 rules and practices are almost same. That‟s why, on the basis of our examination and thorough
analysis we have found no significant distinctions between two auditors‟ report.

7. Comparison of items of financial statements:

Income Statement
Year 2007
After analyzing the Income statements of Singer Bangladesh Ltd. and PRAN AMCL,
we have found that Singer earned their revenue basically from sales and carrying charges while PRAN
generated their revenues only from sales. Singer‟s non-operating income includes “the share of income of
associate company ILFSL” and “sale of scrapped inventories”. On the other hand, both of the companies
made their major expenditures on cost of goods sold, operating expenses and interest expenses. Singer
had a loss on the sale of discarded fixed assets. Both of the companies kept a large provision for Tax.
They also contributed to the Workers Profit Participation Fund (WPPF) every year.

Year 2008
In 2008, the items of the income statements of both the companies were same as year
2007. Like 2007 Singer‟s revenue was generated from sales and carrying charges where PRAN earned
their revenue only from sales. Like 2007, Singer‟s non-operating income includes share of income of
associate company and sale of scrapped inventories. The sectors of expenses of both the companies were
cost of goods sold, operating expenses, interest expenses, contribution to WPPF, provision for tax. Like
2007 Singer had a loss on sale of discarded fixed assets.

Year 2009
In 2009, no changes occurred in the items of Income statement of both the companies.
The revenue and expense sectors of the two companies were same as those of the previous year.

Cash Flow Statement

Year 2007
Operating Activities: Analyzing the Cash Flow Statement of the two companies we have found that
both of them prepare their statement of cash flows following the direct method. While performing their
operating activities, they had inflow of cash from collections from turnover. And they had outflows of
cash for paying the suppliers and employees. Both of them paid interest and income tax to perfor m
operating activities. Singer made payments to WPPF.

Investing Activities: Analyzing this section of statement of cash flows, we have found that
Singer had inflow of cash from the “proceeds from sale of discarded fixed assets” and from “income from
investment” while PRAN had inflows of cash only from investment. Singer‟s outflow of cash occurred
for the “acquisition of property, plant and equipment” and for “acquisition of intangible assets” and
PRAN‟s outflow of cash occurred for purchasing fixed assets.

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Financing Activities: In this section, Singer‟s inflow of cash were receipt of long term loan and receipt
of short term loan while PRAN had no inflow of cash from financing activities. On the other hand PRAN
made payment of long term loan and short term loan and payment of liabilities from other finance. Both
of the two companies paid dividend to the shareholders.

Year 2008
In the year 2008, there were no changes in the items of the statement of cash flows of
both the companies. Their inflow and outflow of cash from operating, investing and financing activities
were just as same as those of year 2007.

Year 2009
Operating Activities: In year 2009, both Singer and PRAN received cash from customers, performing
their operating activities. On the other hand, they paid cash to their suppliers and employees. They also
paid interests and income taxes. Like every year, Singer contributed to the WPPF in cash.

Investing Activities: Form investing activities, Singer received dividend from associate company
ILFSL and received cash from the disposal of bonus shares of ILFSL. They also had an inflow of cash
from the “proceeds from the sale of discarded fixed assets”. On the other hand, PRAN had no inflow of
cash this year. But both of them made outflow of cash by purchasing fixed assets.

Financing Activities: In financing activities, Singer made payment of long term loans and short term
loans while PRAN received long term and short term loans and liabilities from other finance. Both of
them paid dividend this year.

Statement of changes in equity

Year 2007

The items of the statement of changes in equity of Singer includes share capital, various types of reserves
such as tax holiday reserve, revaluation reserve, capital reserve, other reserves and retained earnings.
They added their net profit to their retained earnings and deducted the payment of dividend. On the other
hand, the items of the statement of changes in equity of PRAN includes share premium besides share
capital, revaluation surplus, tax holiday reserve, revenue reserve. They added their net profit to their
revenue reserve and deducted the tax holiday reserve for this year and the payment of dividend. They also
deducted depreciation on revalued assets from revaluation surplus. They added the tax holiday reserve for
2006-2007 to the previous balance of this reserve. Unlike Singer they maintain an additional column
titled as proposed dividend, where they add the proposed amount of dividend of each year and deduct the
payment of dividend of the corresponding year.

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 Year 2008
In year 2008, Singer paid dividend as bonus shares and so, they added this to their share capital. Their
reserves include tax holiday reserve, revaluation reserve, capital reserve and other reserves. As usually,
they added their net income to their retained earnings and deducted the payment of dividend. Besides
they did some prior year‟s adjustment in this section. On the other hand, PRAN did not maintain any
column for share premium this year and did not keep any tax holiday reserve for this year like they did
the previous year. But as usually, they added their net income to their retained earnings and deducted the
payment of dividend.

Year 2009
This year Singer did not distribute any bonus shares. Their various types of reserves were same as those
of the previous years. They added their net profit to their retained earnings and deducted the payment of
interim dividend and final dividend. On the other hand, the items of the statement of changes in equity of
PRAN includes share premium besides share capital, revaluation surplus, tax holiday reserve, revenue
reserve and proposed dividend. They did the same operations in all the items like they are doing every
year.

Balance Sheet
Year 2007
Assets: After analyzing the balance sheets of Singer and PRAN in year 2007, we have found that current
assets such as inventories, trade and other receivables, advance, prepayments and cash and cash
equivalents were some common items in both of their balance sheets. But Singer had an advance against
corporate income tax included in their current assets. Both of them posses a large amount of property,
plant and equipment as their non-current assets. Singer‟s non-current assets also include investment in
associate company and deferred tax.

Liabilities: Singer‟s current liabilities include trade and other payables and short term borrowing while
PRAN‟s current liabilities include current portion of the long term loan, short term loan, liabilities for
goods, expenses and other finance, interest payable, WPPF, income tax payable and unclaimed dividend.
Singer had some non-current liabilities including term loan, retirement benefit obligations, due to Singer
Bhold B.V-Bangladesh Management while PRAN‟s no non-current liabilities include deferred tax
liabilities and long term debt.

Equity: The equity section of Singer includes share capital, reserves and retained earnings while PRAN‟s
equity section includes share premium and proposed dividend besides their share capital and reserves.

Year 2008
Assets: Like 2007 inventories, trade and other receivables, advance and prepayments, cash and cash
equivalents were common in both of the companies‟ current assets in 2008. Singer also had their advance
against income tax like the previous year. As non-current assets, both of the companies had property,
plant and equipment and investments.

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Liabilities: Like the previous year, Singer had trade and other payables and short term loans as their
current liabilities of this year. On the other hand PRAN had current portion of the LTL, short ter m loan,
liabilities for goods, expenses and other finance, interest payable, WPPF, income tax payable and
unclaimed dividend as their current liabilities. Both of the companies had deferred tax liabilities and long
term loan as their non-current liabilities. Besides, Singer also had retirement benefit obligation and due to
Singer Bhold B.V-Bangladesh Management as their non-current liabilities.

Equity: Share capital and reserves are two common items in the two companies‟ equity. Besides, Singer
had retained earnings and PRAN had share premium and proposed dividend in the equity section.

Year 2009
In year 2009 all the items of assets, liabilities and equity of the two companies as well as various
operations in these items were just as same as year 2008.

8. Comparison of Disclosure Policies:

8.1 Accounting Basis:

Year 2007:

Both Singer Bangladesh limited and Pran Agricultural Marketing co. Ltd prepared their financial
statements under the historical cost convention and in accordance with the requirements of the
companies‟ act 1994, the Securities and Exchange rules 1987. The listing regulations of Dhaka and
Chittagong stock Exchange and the International Accounting Standards (IAS) adopted by the Institute of
Chartered Accountants of Bangladesh (ICAB). But Pran used Bangladesh International Accounting
Standards (BAS) much than Singer. Both Pran and Singer used “Going concern” assumption as they did
not have any doubts in contrast of it.

Year 2008:

Like the last year, in the year 2008 both of Singer a nd Pran followed historical cost convention and the
requirements of the companies‟ act 1994, the Securities and Exchange rules 1987, the listing regulations
of DSC and CSE. Beside it, the International Accounting Standards (IASs)/ (IFRSs) adopted by the
Institute of Chartered Accountants of Bangladesh (ICAB) were followed. All of the requirements stated
above, were used in conformity with Bangladesh Accounting Standards (BAS) and Bangladesh Financial
Reporting Standards (BFRS).

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Year 2009:

Singer and Pran did not make any major change of accounting basis in comparison of the year 2007 and
2008. But one major change has come to or glance that both of the companies prepared financial
statements in much conformity with Bangladesh Financial Reporting Standards (BFRSs) and Bangladesh
Accounting Standards (BAS). Due to any government instruction or restriction such conformity would
happen. Like before, Singer and Pran used IAS and IFRS and others also.

8.2 Compliance of IFRS:

Year 2007:

As far we get, it is clear that both Singer and Pran maintained almost all of the qualitative characteristics
of financial statements: understandability, relevance and reliability. But in case of comparability, Singer
was clearly one step ahead. They provided the data in a manner that it is possible to compare easily.
Singer and Pran also fulfilled almost all of the IASB general requirements for the financial statements.
Both of them maintained all of the fundamental principles. In some points Singer was better than Pran,
for example, Singer‟s financial statements were more classified and full of information than Pran. Again
Singer provided more information and notes to the financial statements in order to make the former clear.
But Pran pointed out the IASs and IFRSs which they fo llowed in preparing financial statements. For
instance Pran followed IFRS 2, 3,4,5,6 and IAS 1 to 7 and 11 to 41.Both of the companies tried to follow
the IFRSs applicable in Bangladesh.

Year 2008:

Totally both of the companies prepared their financial statements mainly following Bangladesh Financial
Reporting Standards (BFRSs) and other local laws and requirements. As Bangladesh follows IFRS/ IAS
their financial statements were prepared in conformity with IFRS. Like the previous year both of them
maintained “IASB general requirements for financial statements” and “IFRS qualitative characteristics of
financial statements”. But like the year 2007 Singer was comparatively better in case if classified balance
sheet and comparability of data than Pran. Singer and Pran both followed all of the IFRS fundamental
principles for financial statements, like: Going concern, Accrual basis, Materiality etc.

Year 2009:

Like the previous years 2007 and 2008, in the year 2009 both Singer and Pran prepared their financial
statements and did not make any major change in case of their accounting policies. But one important
change was that Pran was more organized in case of financial statements than previous years. Both of the
companies followed IFRS framework for the preparatio n and presentation of financial statements as well
as the quantitative characteristics of financial statements. Both of them also maintained the IASB general
requirements for financial statements. Another important point is that Pran like previous years did not
disclose the IASs and IFRSs they followed in preparing financial statements.

Annual Report Analysis. Page | 18

8.3 Depreciation methods and Percentages:

Year 2007:

Both of the companies did not calculated depreciation of land considering its unlimited life. For other
fixed assets both Pran and Singer followed Reducing balance method. No depreciation was charged on
addition and full year‟s depreciation was provided on retirement irrespective of date of addition and
retirement respectively. Both of the companies applied almost same percent of depreciation on different
assets. But Pran did not depreciate on Office building. On the other hand Singer applied higher rate of
depreciation on Plant, Machinery, Equipment and Tools than Pran.

Year 2008:

Like previous year both Singer and Pran did not depreciate on land. Reducing balance method was
used by both of the companies in calculating depreciation. Full year‟s depreciation was charged on fixed
assets in the year of acquisition and no depreciation was calculated in the year of disposal. Maintenance
and repairs expenses were charged to revenue as incurred. No change was b rought in the rate of
depreciation of the 2007 in 2008. No other fixed asset was depreciated except those of 2007. Still Pran
did not depreciate on Office building and S inger applied higher rate of depreciation on „Plan and
Machinery‟ and „Equipment and Tools‟ than Pran.

Year 2009:

Both of the companies used Reducing balance method in depreciation and no depreciation was applied
in case of land considering its unlimited life. One important thing is that in this year Singer considered
capital work in progress and did not depreciated on it. Like previous years full year‟s depreciation was
charged on fixed assets in the year of acquisition and no depreciation was calculated in the year of
disposal. In the rate of depreciation no change was brought.

9. Conclusion
Financial report should furnish information about the firm's economic resources, claims against those
resources, owners' equity, and changes in resources and claims along with some statements and reporting
of central personnel and officials appropriate for this situation. Financial reporting should provide
information about financial performance during a period and management's discharge of its stewardship
responsibility to owners. It should likewise be useful to the managers and directors themselves in making
decisions on behalf of the owners. We have examined that International Accounting principles for
recording and preparing financial statements, different methods as well as assumption and relevant laws
and rules are same for all the companies in Bangladesh. As our selected two organizations belong to
manufacturing organization, so accounting and other rules and practices are almost same. That‟s why we
din not found any serious change in these surroundings. But we have found some diverse activities of
these companies year to year.

Overall we can undoubtedly according to this comparative analysis articulate that the financial statement
of Singer Limited is healthier than Pran AMCL.

Annual Report Analysis. Page | 19

 Bibliography

References:
1. Annual Report of Singer BD of the year 2007

2. Annual Report of PRAN of the year 2007

3. Annual Report of Singer BD of the year 2008

4. Annual Report of PRAN of the year 2008

5. Annual Report of Singer BD of the year 2009

6. Annual Report of PRAN of the year 2009

7. www.singerbd.com

8. www.pranfoods.net

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