SALVO CHEMICAL INDUSTRY LIMITED

SALVO CHEMICAL INDUSTRY LIMITED

3rd Quarter Financial Statements (Q3)

of

SALVO CHEMICAL INDUSTRY LIMITED

for the period ended 31 March 2021

Salvo Chemical Industry Limited Notes to the Financial Statements

For the year ended March 31, 2021 01. BACKGROUND AND OBJECTIVES OF THE COMPANY

01.01 Introduction and Legal Status

The company was incorporated as a private limited company in Bangladesh in the name &

style of Salvo Chemical Industry Limited under the Companies Act, 1994, vide Reg. No. “C-44978(1446) 2002” dated 29 January, 2002 with the Registrar of Joint Stock Companies & Firms (RJSCF), Dhaka. Subsequently the Company was converted to a Public Limited

Company by registration on 04 August 2008 from the Registrar of Joint Stock Companies & Firms (RJSCF). Corporate office of the company is situated at “Suite No.# 401, (3rd Floor),

210-211, Nawabpur Road, Dhaka-1100” and the factory located at “South Dhonua, Sripur, Gazipur. The Company went for public issue in 2011 and its shares are listed in both Dhaka Stock Exchange and Chittagong Stock Exchange on 18.04.2011 and 20.04.2011

respectively. Consequently the company has acquired the following licenses and legal Approvals:

Sl.

No.

Name of License Registration of license Date of License

Renewed up to

1. Trade License (Factory) 38 24/06/2007 2020-2021

2. Trade License (Head Office) 089967/Ward No.32 16/03/2005 2020-2021

3. Tax Identification Number 440684599827 05/03/2002 N/A

4. Assessment completion - - Up to 2019-

2020

5. BIN Number 000313586 01/10/2002 N/A

6. Import Registration

Certificate

BA-135303 13/07/2003 2020-2021

7. DCCI Membership Certificate

11138 27/12/2007 31.12.2021

8. Board of Investment L-28010204010-H 01/04/2002 N/A

9. Environment Clearance

Certificate

PARIBESH/DA-B/4701/Re

950

24/07/2004 2021

10. Fire License DHAKA/17582/2003 27/04/2003 2021

11. Production Clearance

Certificate from Department of Explosives

9/(40)/1-2/3441 7/5/2003 N/A

12. Factory License from chief inspector of Factories

11911/Gazipur 31/12/2003 2021

13. Boiler Certificate 3030 27/10/2003 2021

14. Sulphar Stock License For Production of H2So4

Gazipur D.C Office No. 134-01/2003

22/08/2003 2021

15. Trade Mark Registration App. No. 81276-01 22/07/2003 N/A

01.02 Nature of Business

The company has been established with a view to producing and supply of different chemicals for local consumption. Some of the chemicals are, interalia:

a) Sulphuric Acid ;

b) Battery Grade Water c) Magnesium Sulphate & Zinc Sulphate; d) Liquid Glucose;

e) Starch etc. The company is now producing Sulphuric Acid and Liquid Glucose as “Main Product” &

Battery Grade Water as “By-product”. The commercial production of product "Liquid Glucose" starts from 09 August 2018.

The company has decided to set up progressive plant of Corn Starch with the existing Liquid

Glucose unit to grab the huge potential market at food, pharmaceutical, paper & textile industry at Bangladesh. Through implementing the project, the company will be able to improve the excellence for producing raw material of Liquid Glucose unit at its own plant

which will reduce cost of materials as well as unique product for sale. With the new manufacturing units, the company will produce around 25,000 Metric Ton Corn Starch per year. Total estimated project cost will be 70.00 crore. This project will be cost-effective for

the company with the existing business set-up. It may be noted that the above decisions were taken by the Board of Directors meeting in its 163th meeting held on October 28, 2020 at 3:00 p.m.

02. SIGNIFICANT ACCOUNTING POLICIES

02.01 Accounting Basis The financial statements have been prepared on a going concern basis under historical cost convention on accrual basis and in accordance with, IAS, IFRS. The accounting polices

have been consistently followed.

02.02 Basis of Preparation and Presentation of the Financial Statements The financial statements have been prepared and the disclosure of information thereof have been made in accordance with the requirements of the International Accounting Standards

(IASs) and the International Financial Reporting Standards (IFRS) as adopted by Institute of Chartered Accountants of Bangladesh (ICAB) and the companies Act- 1994 and other the applicable laws, rules and regulations.

02.03 Recognition of Tangible Property, Plant & Equipment

Recognition

Assets having a useful life for more than a year are generally capitalized. Fixed Assets are stated at cost less accumulated depreciation. Cost of assets represents cost of acquisition plus construction, erection and other relevant expenditure etc.

Lease assets in case acquired, for transfer of ownership, as a Finance Lease shall be recognized in accordance with International Accounting Standard (IAS)-17. Depreciation

No depreciation has been charged on land & land development. Depreciation has been charged on all other fixed assets, acquired either purchase or lease, applying diminishing

balance method. All the assets acquired during the year have been depreciated considering month of Acquisition and available for use. The rates of depreciation are as follows: Category Rate

Factory Building & Construction 5%

Plant & Machinery 10%

Electric Installation 10%

Office Equipments 10%

Furniture 10%

Vehicles 10%

02.04 Inventories

In compliance with the requirement of IAS-2 “Inventories”, Raw Materials and Stores are valued at the lower of average cost and the net realizable value. The costs of inventories are

valued at weighted average price. 02.05 Cash and Cash Equivalents

Cash and Cash Equivalents include cash in hand, cash at bank and cash at BO Account

which are held and available for use by the company without any restriction and in support of the Articles of Association of the company.

02.06 Cash Flow Statement Cash Flow Statement is prepared in accordance with the requirements of IAS- 7 (“Cash Flow

Statement”) under direct method. 02.07 Revenue Recognition

Revenue from the sale of chemical is recognized when:

i) Significant risk and rewards of ownership is transferred to the customers,

ii) The company has no managerial involvement of ownership to the goods, iii) The amount of revenue and cost of the transaction can be measured reliably, and iv) Invoice and delivery challan are issued to the customers.

02.08 Provision for expenses

While the provision for certain charges and known liabilities is made at the balance sheet date based on estimate, the difference arising there from on receipts of bills/ demands and/ or actual payments is adjusted in the subsequent year when such liabilities are settled.

02.09 Taxation

Provision for income tax has been made in the accounts @ 25% as applicable for a public limited company considering Finance Act, 2019 and accounted for in accordance with IAS 12: Income Taxes.

02.10 Earning Per Share

“Basic Earning per Share (EPS)” & “Earning per Share (EPS)- Restated” have been calculated under weighted average method as per IAS-33: Earning per share.

02.11 Borrowing Costs

In compliance with the requirements of BAS 23 “Borrowing Costs” borrowing costs directly

attributable to the acquisition, construction and production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale are added to the cost of these assets, until such time as the asset are substantially

ready for their intended use or sale.

Borrowing costs are recognized as expenses in the period in which they incurred and capitalized the same that incurred before commencement of commercial operation.

02.12 Integral Components of the Financial Statements In compliance with the International Accounting Standard (IAS)-1 “Presentation of Financial Statements,” the following components are annexed with this component (Notes to the

Financial Statements):

i) Statement of Financial Position as at March 31, 2021; ii) Statement of Profit or Loss and Other Comprehensive Income for the period from 01 July

2020 to March 31, 2021; iii) Statement of Changes in Equity for the period ended March 31, 2021; iv) Statement of Cash Flows for the period ended March 31, 2021.

v) Notes, comprising significant accounting policies and other explanatory information’s for the period ended March 31, 2021.

02.13 Comparative Information: Comparative information have been disclosed in respect of the previous year for all

numerical information in the financial statements and also the narrative and descriptive information when it is relevant for understanding of the current year ’s financial statements.

02.14 Comparative Information: The Companies complied, as per Para 12 of Securities & Exchange Rule 1987, with the following International Accounting Standards (IASs) as adopted by The Institute of Chartered

Accountants of Bangladesh (ICAB) in preparing the financial statements of the Company subject to departure where we have followed:

Sl. No.

IAS & IFRS No. IFRS / IAS Title

Compliance

Status

1 IAS 1 Presentation of Financial Statements Complied

2 IAS 2 Inventories Complied

3 IAS 7 Statement of Cash Flows Complied

4 IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

Complied

5 IAS 10 Events after the Reporting Period Complied

6 IAS 12 Income Taxes Complied

7 IAS 16 Property, Plant & Equipment Complied

8 IAS 17 Leases Complied

9 IAS 19 Employee Benefits Complied

10 IAS 23 Borrowing Costs Complied

11 IAS 24 Related Party Disclosures Complied

12 IAS 33 Earnings per Share Complied

13 IAS 36 Impairment of Assets Complied

14 IAS 37 Provisions, Contingent Liabilities and Contingent

Assets

Complied

15 IFRS 15 Revenue from controls with customers Complied

02.16 General

i) Figures shown in the accounts have been rounded-off to the nearest Taka;

ii) Previous year figures have been re-arranged where necessary to confirm to current

year’s presentation;

iii) All shares have been fully called-up and paid-up;

iv) There was no Contingent Liability.

v) Bank Balance shown in the accounts were duly reconciled.

Mar 31, 2021 June 30, 2020

03 Property, Plant and Equipment

A. Cost Information

Opening balance 1,342,839,949 1,281,945,752

Addition during the period 13,921,886 60,894,197

Total assets value at cost 1,356,761,835 1,342,839,949

B. Accumulated Depreciation

Opening Balance 459,272,528 387,569,451

Current period deprecation 51,058,441 71,703,077

510,330,969 459,272,528

Written down value (WDV) [A-B] 846,430,866 883,567,421

Details of property, plant & equipment are shown in the annexed Annexure-A.

04 Intangible Asset

A. Cost

Opening Balance 60,000 60,000

Addition during the period - -

60,000 60,000

B. Accumulated Amortization

Opening Balance 46,961 45,512

Current period amortization 978 1,449

47,939 46,961

Written down value (WDV) [A-B] 12,061 13,039

Details of Intangible Assets are shown in the annexed Annexure-B.

05 Capital work in progress

Opening Balance 578,810,770 446,340,681

Add: Addition during the period 150,183,133 144,121,084

728,993,903 590,461,765

Less: Transfer to Property, Plant and Equipment - 55,483,622

Add: Borroeing Cost 10,993,924 43,832,627

728,993,903 578,810,770

Notes ParticularsAmount in Taka

Mar 31, 2021 June 30, 2020Notes Particulars

Amount in Taka

06 Advance, Deposits & Pre-payments

Advance Income Tax 06.01 49,432,247 41,174,491

Advance against Rent -Factory 40,000 40,000

Advance against L/C- Margin & Purchase 5,394,803 4,518,943

Advance against Construction 14,500,000 14,500,000

Advance against Salary 94,355 773,538

Advance agains purchase land 5,794,320 5,794,320

Security Deposit- Telephone (3 Nos.) 30,000 30,000

Security Deposit- Electric Connection (Mymansing PBS-2) 8,745,644 8,745,644

Advance for Expenses 5,825,499 3,656,425

89,856,868 79,233,361

06.01 Advance Income Tax

Opening Balance 41,174,491 29,699,126

Add: Addition during the period 8,257,756 11,475,365

49,432,247 41,174,491

Less: Adjustment During the period - -

49,432,247 41,174,491

07 Inventories

Raw Materials 07.01 54,159,208 102,962,493

Work in process 1,236,523 657,036

Finished Goods 07.02 38,506,506 17,726,691

93,902,237 121,346,220

07.01 Closing Stock of Raw Material

Sulphur 1,550,368 36,377,634

Caustic Soda 2,398,250 1,614,804

Lime 33,186 127,912

Soda ash 1,698,738 3,145,627

Maize 19,927,557 25,591,817

Starch 14,526,326 22,428,570

Clearflow AA (Food Grade Enzyme) 3,618,231 5,597,599

Sodium Metabi Sulphate 2,011,632 2,572,135

Activated Carbon 3,276,420 1,864,090

Acid Resin 1,953,994 1,953,994

Hydrochoric Acid 408,184 262,478

Others 2,756,322 1,425,833

54,159,208 102,962,493

Advance Income Tax amounting Tk. 21,368,788 carried forwarded since 2012-2013, because there

is a suit on honourable high court against 2009-2010, 2010-2011, 2011-2012 and 2012-2013

financial year assessment.


Amount in Taka

07.02 Finished Goods

Sulphuric Acid 12,759,180 10,469,605

Liquid Glucose 13,292,529 2,932,411

Battery Grade Water 4,661,770 4,324,676

By-Product:

Gluten 5,482,600 -

Germ 1,074,327 -

Fiber 1,236,100 -

Total Value of Closing Stock of Finished Goods 38,506,506 17,726,691

08 Spare Parts

Opening Balance 9,409,339 8,170,867

Addition during the period 327,483 3,356,069

Spare Parts Available for use 9,736,822 11,526,936

Less: Issued during the period 750,822 2,117,597

8,986,000 9,409,339

09 Trade Receivable

Aysha Trading Corporation 3,410,988 6,235,098

Abul Khair Consumer Products Ltd. 2,798,995 2,277,000

Ak Motors - 40,125

Asad Trading 1,380,835 113,610

ASM Chemical 78,780 -

Bhai Bhai Dairy (BP) - 115,400

Bangas Holding Ltd. - 177,000

Baizid Enterprise 160,000

Ceylon Biscuits 271,500 -

Friends Chemical 8,649,486 4,978,627

Farid & Co. 3,055,500 -

Gazi Corporation - 111,253

Hassan Chemical (Kustia) 1,615,653 6,407,573

Hasan Chemical Supply & Pharmaceutical Ind. 745,202 5,226,589

Zaman Enterprise 3,092,594 2,296,098

Jharna Chemical 2,503,211 3,164,300

Kamal Enterprise (FD) 75,200 -

Mita Chemical & Scientific Store 3,206,658 6,959,769

Metador Food and Allied Ind. 548,550 -

Nirob Enterprise - 11

N P Chemical 2,471,854 7,810,683

Noor Perfumery - 59,800

Nabisco Bread & Biscuts 662,400 -

Next Food 1,049,700 -

Olympic Induatries Ltd. 10,019,700 8,043,460


Amount in Taka

Palash Banijja Bitan 3,859,240 1,152,118

Perfetti Van Melle Bangladesh Pvt. Ltd. 6,883,250 2,551,850

Reedisha Food & Beverage Ltd. - 10,100

Sawdagar Trading 1,652,300 616,800

Shahjahan Chemical Industry 2,874,936 6,538,938

Smart Bio Inception 719,600 -

Tareque Enterprise 1,752,632 7,083,899

63,538,764 71,970,101

09.1 Ageing of Trade Receivable

Due within 6 Months 56,557,125 63,282,659

Due within above 6 Months 6,981,639 8,687,442

63,538,764 71,970,101

10 Others Receivable

M/s. A.A. Enterprise 3,407,515 3,010,949

Ashrag Traders 5,900 -

Crown Cement 497,992 497,992

City Alminum Fabricator 295,700 111,500

Bright Scientific Co. 578,230 28,230

Bengal Polly & Paper Sack Ltd 100,000 100,000

Boishakhi Enterprise 1,457,000 307,000

Farhad Nagar Machineries 26,000 -

PF Fund Loan 3,568,714 1,906,044

Shahjalal Engineering 3,550,000 3,550,000

Runner Motors Ltd. 202,500 202,500

Abul Khair Steel Mills Ltd 119,000 119,000

Dainamic Steel 200,000 200,000

Daily Jugantor - 26,250

GQ Industries Ltd. 989,822 153,000

Hawlader Enterprise 191,000 191,000

Link3 Technologies Ltd. 13,800 4,600

Mitali Light House 69,200 39,200

New Panama Printers - 1,785,000

Perfect Tools & Insulation - 62,779

Protha Enterprise - 1,468

Insia Enterprise 5,817,208 -

PPF receivable 2,213,162 3,360,054

Ratan Enterprise 175,000 175,000

Radix Service 25,000 25,000

Rumi Enterprise 166,550 166,550


Amount in Taka

RV Tharmal Engineering Co. 498,453 498,453

Satcom Engineering Company - 3,265,228

Satcom IT Limited - 400,000

SGS Bangladesh Ltd 94,300 -

Uttaran Enterprise 1,331,140 1,331,140

Receivable from employee against PPF 2,311,706 2,213,162

27,904,892 23,731,099

11 Cash and Cash Equivalents

Cash in Hand (A) 1,026,316 612,285

Head Office 901,227 493,164

Factory 125,089 119,121

Cash at Bank (B) 29,482,006 22,233,366

NCC Bank, A/C # 0210014874 2,421 2,564

NCC Bank, A/C # 0325000813 14,377,289 14,264,483

NCC Bank, A/C # 00280210017915 126,522 127,247

Dutch Bangla Bank, A/C # 10511015936 3,896,276 48,014

Dutch Bangla Bank, A/C # 1011200007473 661,067 -

Dutch Bangla Bank, A/C # 1011100053146 4,713

MTBL, C/A # 2032003267 664,390 660,702

Social Investment Bank Ltd., A/C # 133300000121 10,689 10,689

SIBL, C/A # 0211330009134 Dhanmondi Br. 17,893 17,893

SIBL, C/A # 0221330009875, Nawabpur Road Br. 95,780 5,267,369

SIBL, STD # 0221360001242 2,737,642 59,574

SIBL, C/A # 1011330000019, Mawna Br. 470,551 1,542,632

Sonali Bank Ltd, CD # 0002602005413 48,965 49,310

Standard Bank, A/C # 22733000368 639,130

Premier (PBL) Bank, CD # 010211100015969 88,746 88,746

Al-Arafah Islami Bank Ltd. # 024103, Navabpur Br. 4,193,114 57,029

Agrani Bank Ltd. CD # 0200014164461 52,737 27,907

BCB, CD # 00721001123 1,384,874 -

Bank Asia, C/A # 03533000949, Shantinagar Br. 7,440 7,440

Basic Bank Ltd, C/A # 0210010007825 1,767 1,767

B.O. A/C-19573, Shyamol Equity Management Ltd. (C) 11,960 11,960

Total Cash and Cash Equivalents (A+B+C) 30,520,282 22,857,611


Amount in Taka

Mar 31, 2021 June 30, 2020

12 Share capital

Authorised Capital150,000,000 Ordinary Shares of Tk. 10 each. 1,500,000,000 1,500,000,000

Issued, Subscribed and Paid

up Capital(65,022,793 ordinary shares

@ Tk 10 each)

Balance of Beginning of the

year65,022,793 10 650,227,930 650,227,930

Issue of bonus share - 10 - -

Balance of End of the year 65,022,793 650,227,930 650,227,930

Class of Shareholders Number of

Investors

Number of

Share hold

Share holding

(Percentage)

31.03.2021

Share holding

(Percentage)

30.06.2020

Sponsors/Directors 2 14,568,728 22.41 22.14

General Public 12,675 41,183,286 60.29 61.22

Institutional Investors 112 9,270,779 17.30 16.64Total 12,789 65,022,793 100.00 100

Details of Share Holding Position are as Under

Share Groups Number of Share No. of

Shareholder % of holding

Less Than 500 492,061 6,051 0.76

501 to 5,000 6,993,627 5,695 10.76

5,001 to 10,000 3,228,141 425 4.96

10,001 to 20,000 4,339,134 297 6.67

20,001 to 30,000 2,544,711 100 3.91

30,001 to 40,000 1,498,793 43 2.31

40,001 to 50,000 1,929,285 42 2.97

50,001 to 100,000 4,568,047 62 7.03

100,001 to 1,000,000 15,848,491 66 24.36

Above 1,000,000 23,580,503 8 36.27 Total 65,022,793 12,789 100.00

The stocks of the company were listed with the Dhaka Stock Exchange Ltd. and the Chittagong Stock

Exchange Ltd. on 18.04.2011 and 20.04.2011 respectively. Trading of stocks was started in the both

houses since 21 April 2011.

The corona virus (COVID-19) pandemic has created major disruptions of our country in the economy and

the businesses operations as well as our personal life & wealth. As a result, Directors of our company

need extra time to acquire the shortfall 7.59% shares to comply with the BSEC’s Notification No. BSEC/

CMRRCD/ 2009-193/217/ Admin/90 dated May 21, 2019. Now, Sponsors of the company jointly hold

22.41% shares of the company.


Number of

Shares

Face Value

per Share

Share Capital

31.12.2020

Share Capital

30.06.2020

Mar 31, 2021 June 30, 2020

13.00 Long Term Loan - Secured

Social Islami Bank Ltd.

Opening Balance 538,135,742 418,630,549

Addition during the period - 139,212,665

Add: Interest charged during the period 26,792,490 34,495,508

564,928,232 592,338,722

Less: Payment made during the period - 54,202,980

564,928,232 538,135,742

Less: Current Portion of Long Term Loan 102,030,360 102,833,592

462,897,872 435,302,150

14.00 Deferred Tax Liability/(Assets)

Deferred Tax Liability for temporary difference of PPE 14.01 60,861,495 54,727,697

Deferred Tax Liability/(Assets) on Gratuity Provision 14.02 (1,414,306) (1,244,690)

59,447,189 53,483,008

14.01 Deferred Tax Liability for temporary difference of

PPEAccounting Base Written Down Value (WDV) 846,442,927 883,580,460

Tax Base WDV 560,943,888 622,616,611

Taxable temporary difference 285,499,039 260,963,849

Less: Unabsorbed depreciation (42,053,060) (42,053,060)

243,445,979 218,910,789

Applicable Tax Rate 25% 25%

Closing Deferred Tax Liability/(Assets) 60,861,495 54,727,697

Opening Deferred Tax Liability/(Assets) (54,727,697) (45,719,694)

Deferred Tax Expenses/(Income) during the year 6,133,798 9,008,004

14.02 Deferred Tax Liability/(Assets) on Gratuity

Provision

Closing Gratuity Provision 5,657,224 4,978,759

Applicable Tax Rate 25% 25%

Closing Deferred Tax Liability/(Assets) (1,414,306) (1,244,690)

Opening Deferred Tax Liability/(Assets) (1,244,690) (941,738)

Deferred Tax Expenses/(Income) during the period (169,616) (302,952)

15 Short Term Loan

Loan Trust Receipts (LTR) 140,522,422 140,709,569

Cash Credit 106,730,375 107,368,341

Stimulus Fund 67,756,622 -

315,009,419 248,077,910

Add: Current Portion of Long Term Loan 102,030,360 102,833,592

417,039,779 350,911,502

The above loan has been availed from Social Islami Bank Ltd. as Term Finance Facilities. Securities

for the facilities are 820.245 decimal land and hypothecation of machineries. Interest rate 9.00% .

Purpose of above loan was Machineries import, Building & Construction, ETP & utilities bill payment.



Amount in Taka

16 Accounts Payable

Munshi Enterprise 2,507,103 9,107,103

Madina Trading Corporation 5,167,487 -

Arosh Traders - 180,000

Ashraf Traders 55,600 -

Mayer Doya Enterprise 157,408 227,408

Navana Electric Limited - 551,450

Yeasmin Welding - 653,254

Goodluck Transport & Trading Ltd. 1,522,100 3,683,000

Global Quick Service 14,000 1,863,989

Ibrahim & Sons 1,415,428 4,935,708

Pacific Chemitrade Co. 63,250 63,250

Polly Engineering Works - 253,676

Boiler Vision 270,206 370,206

Colleage Engineering 248,060 248,060

Farid & Co - 4,035,000

Farhanagar Machineries & Servicing Centre - 14,000

Nur Enterprise (FD) 3,014,618 6,400,802

Noor Enterprise 24,803 24,803

Ruma Trading Corporation 1,457,988 2,046,828

Seema Enterprise 558 414,558

Shahin Enterprise 1,933,443 5,990,443

S M Eng. Workshop 181,854 181,854

SQ Wire & Cable Co. Ltd. 978,515 1,478,515

S S Enterprise 662,063 702,063

Shan Power Link 367,000 -

Team Star Trade International - 44,000

Vishwa Weighing System 62,000 62,000

20,103,484 43,531,970

17 Others Payable

Share Subscription Money 12,193,758 12,193,758

Withholding Tax Payable 2,259,008 3,903,879

Unpaid Fraction Share 777,756 777,928

Unpaid Cash Dividend 649,883 -

Dhaka & Chittagong Stock Exchange 2,143,774 1,818,660

VAT Current Account 820,125 1,658,464

Payable to Government workers welfare foundation fund 2,311,706 2,213,162

Payable to Salary & Remmuneration - 2,875,580

21,156,010 25,441,431

18 Provision for Employee Benefits

Provident Fund 18.1 12,734,451 11,272,745

Gratuity Fund 18.2 5,657,224 4,978,759

18,391,675 16,251,504

18.1 Provident Fund

This includes provision made for employer's subscription & employees' contribution to provident fund

and gratuity which is payable within the service life of each employee and/ or after his/ her retirement

as per terms of employment of service.

The above loan has been availed from Social Islami Bank Ltd. as Short Term Finance Facilities.

Stimulus fund has been avail from SIBL from Govt. Stimulus Fund package. Interest rate 9.00% &

4.5% will be subsiderized by Bangladesh Bank for Stimulus fund.


Amount in Taka

Opening Balance 11,272,745 8,365,535

Add: Charged for the period 1,830,724 2,907,210

13,103,469 11,272,745

Less: Payment made during the period 369,018 -

12,734,451 11,272,745

18.2 Gratuity Fund


Add: Charged for the period 711,242 1,211,808

5,690,001 4,978,759

Less: Payment made during the period 32,777 -

5,657,224 4,978,759

19 Provision for Profit Participation Fund


Add. Charged for the period 1,970,878 1,741,010

3,711,888 3,764,374

Less. Payment made during the period 1,569,369 2,023,364

2,142,519 1,741,010

20 Provision for Income Tax

Opening Balance 45,616,052 39,243,825

Add: Provision during the period 5,914,973 6,372,227

51,531,025 45,616,052

Less. Payment/ Adjustment made during the period - -

51,531,025 45,616,052

21 Provision for Expenses

Audit Fees 233,333 375,000

Electricity Bill 1,776,797 1,827,552

Office Rent 109,350 426,000

Remunerations 577,000 577,000

Salary (Admin. & Selling) 1,043,645 1,731,410

Wages 2,731,687 3,794,984

6,471,812 8,731,946

This includes provision made for Worker's Profit Participation Fund as per the provisions of the

Bangladesh Labour Act, 2006 and the Bangladesh Labour (Amendment) Act, 2013.

July 01, 2020

to

Mar 31, 2021

July 01, 2019

to

Mar 31, 2020

Jan 01, 2021

to

Mar 31, 2021

Jan 01, 2020

to

Mar 31, 2020

22 Revenue

Gross Sales 22.01 584,683,954 440,809,094 204,254,262 118,630,024

Less : VAT 76,263,124 57,496,838 26,641,860 15,473,481

508,420,830 383,312,256 177,612,402 103,156,543

22.01 Gross Sales

Sulphuric Acid 213,774,944 219,346,797 56,690,810 48,814,236

Battery Grade Water 25,303,305 32,679,029 8,483,425 7,400,552

Liquid Glucose 291,610,348 188,783,268 109,695,160 62,415,236

Starch - Test Production 4,325,332 - 4,325,332 -

By Product 49,670,025 - 25,059,535 -

584,683,954 440,809,094 204,254,262 118,630,024

23 Cost of goods sold

Opening Stock of Finished Goods 17,726,691 12,280,062 37,872,324 13,693,788

Add: Cost of Production 422,322,630 297,086,417 143,567,795 92,527,348

440,049,321 309,366,479 181,440,119 106,221,136

38,506,506 34,752,566 38,506,506 34,752,566

401,542,815 274,613,913 142,933,613 71,468,570

23.01 Cost of Production

Opening Stock Raw Materials (Note-07.01) 102,962,493 33,495,500 59,004,952 39,709,852

Add: Purchase during the period 254,196,738 174,756,798 96,085,464 42,702,162

Raw Materials Available for Consume 357,159,231 208,252,298 155,090,416 82,412,014

Less: Closing Stock of Raw Material (Note-07.01) 54,159,208 28,713,414 54,159,208 28,713,414

Raw Material Consumed during the period 303,000,023 179,538,884 100,931,208 53,698,600

Add: Opening Work in Process (WIP) 657,036 3,231 526,332 44,185

Less: Closing Work in Process (WIP) (Note-07.00) 1,236,523 34,526 1,236,523 34,526

Add: Manufacturing Overhead (Note-23.01.01) 119,902,094 117,578,828 43,346,778 38,819,089

422,322,630 297,086,417 143,567,795 92,527,348

23.01.01 Manufacturing Overhead

Wages & Allowances 24,585,180 21,624,763 8,809,890 8,230,830

Bonus 1,243,617 1,367,975 - -

Food & Tiffin 893,210 855,577 313,372 192,222

Carrying & Transport 10,970,109 9,776,368 3,745,930 2,475,213

Conveyance 135,444 147,671 46,334 43,256

Cell phone-Factory 64,548 49,887 23,505 17,856

Cooker Bill 43,000 16,000 11,000 4,000

Computer Maintenance 58,910 - 18,100 -

Electricity Bill 16,026,260 16,374,740 7,309,849 5,399,546

Entertainment 124,859 122,368 58,242 74,152

Fuel for Generator & Boiler 9,559,615 11,341,480 4,450,920 3,506,480

Notes Particulars

Amount in Taka

Less: Closing Stock of Finished Goods

(Note-07.02)

July 01, 2020

to

Mar 31, 2021

July 01, 2019

to

Mar 31, 2020

Jan 01, 2021

to

Mar 31, 2021

Jan 01, 2020

to

Mar 31, 2020

Notes Particulars

Amount in Taka

Insurance Premium 1,902,879 749,223 56,907 95,775

Internet Bill 23,550 - 8,350 -

Loading & Unloading 1,196,960 879,886 364,300 315,000

Medical Expenses 130,382 11,193 52,889 7,564

Office Maintenance Factory 1,310,218 587,304 438,289 199,630

Paper & Periodicals 2,920 2,830 910 940

Packaging Exp 717,250 - 717,250 -

Printing & Stationery 173,210 121,999 58,834 37,485

Repair & Maintenance 170,635 - 39,805 -

Spare Parts 750,822 1,358,632 164,598 806,000

Testing Fees 150,660 74,000 - 15,000

Depreciation (Annexure-A) 49,667,856 52,116,932 16,657,504 17,398,140

119,902,094 117,578,828 43,346,778 38,819,089

24 Administrative Expenses

Salary & Allowances 7,971,602 8,316,078 2,895,603 2,596,285

Bonus 679,102 871,789 - -

Remuneration 5,607,380 5,193,000 2,145,380 1,731,000

Advertisement 169,895 92,724 99,750 64,724

Audit Fees 233,333 - 58,333 -

AGM Expenses 435,500 791,360 404,000 -

Bank Charge and Other Charges 39,417 56,298 10,962 16,380

Business Development 34,690 118,800 34,690 38,300

Conveyance 268,454 138,561 40,500 40,191

Cell phone 64,500 100,600 29,500 32,600

Computer Maintenance 78,060 69,330 6,730 11,600

Car Maintenance & Fuel 1,522,643 1,843,386 619,197 583,311

Credit Rating Fees 47,750 19,114 47,750 19,114

Dish Line Bill 8,600 5,100 1,700 1,500

Electric Bill 85,500 280,249 14,500 62,995

Entertainment 229,191 292,972 42,813 52,380

Garage Rent 97,200 115,400 32,400 39,900

Internet Bill 159,680 193,246 63,520 44,738

Legal Expenses 592,240 - 20,000 -

Medical Expenses 56,286 15,513 11,326 4,871

Meeting Attendance Fees 55,000 - - -

Office Rent 984,150 554,305 419,000 105,405

Office Maintenance 183,918 358,372 80,343 142,597

Printing & Stationery 104,930 181,135 53,070 59,670

Plantation 42,780 30,075 2,675 18,950

Picnic - 664,301 - -

Postage & Telegram 36,778 32,205 21,163 2,745

Paper & Periodicals 2,556 4,440 1,050 2,100

Registration & Renewal 1,677,290 807,734 231,530 454,895

Subscription Charges 679,488 2,201,567 325,114 1,818,660

Telephone Bill 14,090 11,773 9,096 3,969

Traveling Expenses 25,200 1,142,672 17,200 216,329

WASA Bill 289,054 157,183 144,726 42,072

Web Page & Software Maintenance 115,000 15,000 30,000 -

Depreciation (Annexure-A) 1,390,585 1,447,462 474,178 490,812

Amortization of Intangibles (Annexure-B) 978 - 326 -

23,982,820 26,121,744 8,388,125 8,698,093

25 Selling & Distribution Expenses

Salary & Allowances 2,939,239 2,869,164 1,043,663 956,388

Bonus 74,049 186,626 - -

Business Promotion 227,500 - 63,000 -

Cell phone 55,400 70,653 14,400 24,153

Entertainment 29,096 31,202 7,415 13,252

July 01, 2020

to

Mar 31, 2021

July 01, 2019

to

Mar 31, 2020

Jan 01, 2021

to

Mar 31, 2021

Jan 01, 2020

to

Mar 31, 2020

Notes Particulars

Amount in Taka

Traveling & Conveyance 109,665 74,686 42,445 31,526

3,434,949 3,232,331 1,170,923 1,025,319

26 Non-operating Income

Interest on STD 209,599 279,973 61,725 -

Wastage Sale 4,278,300 859,163 157,000 253,663

Others 1,200,000 - 1,200,000 -

5,687,899 1,139,136 1,418,725 253,663

27 Financial Charges

Short Term Loan 16,967,223 17,869,417 6,403,870 5,761,730

Term Loan 26,792,490 23,446,728 7,530,074 8,423,088

43,759,713 41,316,145 13,933,944 14,184,818

28.0 Income Tax Expense

Current Tax 28.01 5,914,973 5,052,626 1,074,187 (441,971)

Deferred Tax 28.02 5,964,181 14,026,405 9,074,333 2,457,973

11,879,155 19,079,031 10,148,520 2,016,002

28.01 Current Tax

Current tax expense [ Higher of A, B & C ) 5,914,973 1,849,579 4,180,677 (506,364)

5,914,973 1,849,579 4,180,677 (506,364)

A. Income Tax on Regular Rate

Profit Before Tax 39,417,554 37,302,151 12,004,306 7,650,863

Add: Accounting depreciation & Amortization 51,059,419 53,564,394 34,147,581 17,812,507

Add: Gratuity Provision during the period 711,242 492,809 423,481 318,099

91,188,215 91,359,354 46,575,368 25,781,469

Less: Tax base Depreciation 75,594,608 83,961,037 27,806,925 27,806,925

Less: Gratuity paid during the period 32,777 - 32,777 -

15,560,829 7,398,317 18,735,666 (2,025,456)

Unabsorbed Depreciation - - - -

Taxable business income 15,560,829 7,398,317 18,735,666 (2,025,456)

Applicable Tax Rate 25% 25% 25% 25%

Income Tax on Regular Rate 3,890,207 1,849,579 4,683,917 (506,364)

B. Income Tax Paid at Source (U/S 82 (C) (2)

Tax Deducted from STD Int. Income 209,599 279,973 6,173 -

Tax deduct by customer 5,705,374 4,772,653 4,174,504 1,197,861

5,914,973 5,052,626 4,180,677 1,197,861

C. Minimum Tax on Gross Receipts (Under Section 82 (C) (4) (a)

Gross receipt from sales 508,420,830 383,312,256 177,612,402 103,156,543

Non-Operating Income 5,687,899 1,139,136 1,418,725 253,663

Gross Receipts during the period 514,108,729 384,451,392 179,031,127 103,410,206

Minimum Tax @0.60% 3,084,652 2,306,708 1,074,187 620,461

28.02 Deferred Tax Expenses/(Income)

July 01, 2020

to

Mar 31, 2021

July 01, 2019

to

Mar 31, 2020

Jan 01, 2021

to

Mar 31, 2021

Jan 01, 2020

to

Mar 31, 2020

Notes Particulars

Amount in Taka

Deferred Tax expenses/(income) for

temporary difference of PPE ( Note 14.1)6,133,798 14,264,980 9,164,424 9,164,424

Deferred Tax expenses/(income) for

Gratuity Provision (Note 14.2)(169,616) (238,575) (90,091) (79,525)

5,964,181 14,026,405 9,074,333 9,084,899

29.0 Basic Earning Per Share

Net Profit/ (Loss) After Tax- during the period 27,538,399 18,223,120 7,766,376 2,570,948

Divided by,-

Number of Shares : 65,022,793 65,022,793 65,022,793 65,022,793

Basic Earning per Share 0.42 0.28 0.12 0.04

Earning Per Share (EPS) (Adjusted)

Net Profit/ (Loss) After Tax- during the period 27,538,399 18,223,120 7,766,376 2,570,948

Number of Shares 65,022,793 65,022,793 65,022,793 65,022,793

Earning Per Share (EPS) (Adjusted) 0.42 0.28 0.12 0.04

30 Calculation of Net assets value per share (NAV) 31.03.2021 30.06.2020

Non-current assets 1,575,436,830 1,462,391,230

Add. Current assets 314,709,043 328,547,731

Less. Non-current liabilities 522,345,061 488,785,158

Less. Current liabilities 536,836,304 492,225,415

Net Asset 830,964,508 809,928,389

Divided by- Number of Shares outstanding 65,022,793 65,022,793

Net assets value per share (NAV) 12.78 12.46

31 31.03.2021 31.03.2020

Net Cash Flows from Operating Activities 84,545,970 103,715,942

Divided by- Number of Shares 65,022,793 65,022,793

Net Operating Cash Flow per Share (NOCFPS) 1.30 1.60

32 31.03.2021 31.03.2020

Net profit/(loss) before income tax during the period 39,417,554 37,302,151

Adjustments to reconcile net income to net cash

provided by operating activities

Depreciation and amortization 51,059,419 53,565,481

Income Tax paid during the period (8,257,756) (7,374,603)

Changes in current assets and liabilities:

(2,365,751) (330,870)

(Increase)/Decrease of Accounts receivable 4,257,544 43,319,310

(Increase)/Decrease of Inventories 27,867,322 (16,639,444)

Increase/(Decrease) of Creditors and accrued (27,713,907) (10,198,588)

Increase/(Decrease) of Provision for Expenses (2,260,134) 357,575

Increase/(Decrease) of Provision for

employee benefit & WPPF2,541,680 3,714,931

Reconciliation of Net Profit with Operating Cash Flow

(Increase)/Decrease of Advance, deposits &

prepayments

This represents earnings for the period attributable to ordinary shareholders. As there was no preference dividend,

minority interest or extra ordinary items, the net profit after tax for the year has been considered as fully attributable to the

ordinary shareholders. The company has no diluted instrument in capital structure on the reporting date.

Calculation of Net Operating Cash Flow per Share (NOCFPS)

July 01, 2020

to

Mar 31, 2021

July 01, 2019

to

Mar 31, 2020

Jan 01, 2021

to

Mar 31, 2021

Jan 01, 2020

to

Mar 31, 2020

Notes Particulars

Amount in Taka

Net cash flow from operating activities 84,545,970 103,715,943

Net Operating Cash Flow Per Share 1.30 1.60

33. Significant Deviation

For the period from July 01, 2020 to 31 March, 2021 (nine months) and from January 01, 2021 to 31 March, 2021 (Three months) our sales have been increased due to mainly increase of demand of Liquid Glucose -food grade item & sale of by-product of Liquid Glucose Plant.

Net Profit after Tax during the period from July 01, 2020 to 31 March, 2021 (nine months) and from January 01, 2021 to 31 March, 2021 (Three months) increase significantly due to increase of sales. As a result, EPS has been increased during this reporting period compare to previous

year.

Finance Charges during the period increased compared to same period of last year due to increase of long term loan & short term loan. Also, some borrowing costs are recognized as capitalized that incurred and include in capital work in progress for further completion.

Due to increase of sales & collection from customers has been increased. On the other hand, cash paid to supplier increase for purchase of raw material during the period under review

increase due to production increase of unit-2 Liquid Glucose Unit. As a result, net cash generated from operating activities has been decreased compare to same period of previous

year. Hence, net operating cash flow per share has been deviated from the same period of previous year.

Capital Work In Progress increase due to addition of set up progressive plant of Corn Starch with the existing Liquid Glucose unit.

34. Remuneration

Detail of remuneration paid during the period (09 months) is as follows:

Name Remuneration Tax at Source

Net Payment

Mrs. Khondoker Afia Sultana- Managing Director

3,027,000 310,000 2,717,000

Mr. Salam Obaidul Karim- Chairman

2,580,380 247,000 2,333,380

Total: 5,607,380 557,000 5,050,380

In addition to remuneration, the Chairman, Director and Managing Director are entitled a vehicle maintenance & fuel for car allowance amounting Tk. 837,934 which includes

under the head Car maintenance in Notes no. 24.00. 35. Number of employees

The numbers of employees of the company at the period then ended were as follows:

Category

Number of

Employees

Manufacturing Workers (including one foreign employee) 164

Sales & Distribution Officers and Staff 7 Management, Administrative Officers and Staff 34

Total Employees: 205

The above employees of the company have been employed with a compensation of more

than Tk. 5,000 and TDS was considered under Section-50 of the Income Tax Ordinance, 1984, where applicable.

36. Employee benefit plan:

The company maintains defined benefit plan for its eligible permanent employees. The eligibility is determined according to the terms and conditions set forth in the respective deeds. The company has accounted for and disclosed employee benefits in compliance

with the provisions of IAS 19 Employee Benefits. The cost of employee benefit is charged off as revenue expenditure in the period to which

the contributions relate.

The company’s employee benefits include the following: a) Short term employee benefits:

Short-term employee benefits include salaries, bonuses etc. Obligations for such benefits are measured on an undiscounted Basis and are expensed as the related service is provided.

b) Workers profit participation fund:

The company provides 5% of its net profit before tax after charging such expenses as Profit Participation Fund in accordance with Section- 234 and 235 of the Bangladesh Labour Act, 2006 and Section-65 of the Bangladesh Labour (Amendment) Act, 2013.

c) Gratuity benefits:

The company provides gratuity benefit when the employee retired and at least 10 years’ service provided to company. Gratuity amount is provided to employee 8.33%

of their basic salary deposit against their name and the full balance paid at the time of retirement. Gain or interest on the balance is not entitled by the employee.

37. Deferred tax

Deferred tax arises due to temporary difference deductible or taxable for the events or

transaction which is recognized in the statement of comprehensive income. A temporary difference is the difference between the tax Base of an asset or liability and its carrying amount / reported amount in the statement of financial position. Deferred tax assets or

liability is the amount of income tax recoverable or payable in the future periods recognized in the current year as per IAS 12 Income Taxes. Deferred Tax impact has been provided during the year.

38. Related party transaction

During the period Q3, Tk. 870,102 was received as loan from the directors of the Company and paid Tk. 870,102 for loan refund to the directors of the Company, closing

balance was nil as at 31 March 2021. The company in normal course of business has no other transaction with any individual/ entity that fall within definition of related party contained in International Accounting Standards (IAS) 24.

Annexure-A

Rate

Addition of

during Dep.

the year (%)

Manufacturing Components

Land & Land Development 109,949,572 3,491,989 113,441,561 0% - - - 113,441,561

Factory Building & Construction 228,048,066 53,461 228,101,527 5% 33,059,413 7,312,716 40,372,129 187,729,398

Plant & Machinery 941,035,985 8,506,116 949,542,101 10% 408,457,806 40,235,832 448,693,638 500,848,463

Electric Installation 34,723,554 518,318 35,241,872 10% 7,991,503 2,016,447 10,007,950 25,233,922

Vehicle 2,047,137 - 2,047,137 10% 675,656 102,861 778,517 1,268,620

Administrative Components

Office Equipment's 6,942,212 676,099 7,618,311 10% 2,962,578 320,570 3,283,148 4,335,163

Furniture & Fixture 9,922,879 675,903 10,598,782 10% 2,880,038 550,639 3,430,677 7,168,105

Vehicle 10,170,544 10,170,544 10% 3,245,534 519,376 3,764,910 6,405,634

Total: As on March 31, 2021 1,342,839,949 13,921,886 1,356,761,835 459,272,528 51,058,441 510,330,969 846,430,866

Total : As on June 30, 2020 1,281,945,752 60,894,197 1,342,839,949 387,569,451 71,703,077 459,272,528 883,567,421

Notes 31-03-2021

23 49,667,856

24 1,390,585

51,058,441

Salvo Chemical Industry Limited

Schedule of Property Plant and Equipment's

For the year ended March 31, 2021

Particulars

Cost Depreciation Written Down

Value as on

31.03.2021

Balance as on

01.07.2020

Total as on

31.03.2021

Balance as

on

01.07.2020

Charged

during the

year

Total as on

31.03.2021

Allocation of Depreciation:

Manufacturing overhead

Administrative expenses

Annexure-B

Rate

Addition of

during Dep.

the year (%)

Computer Software 60,000 - 60,000 10% 46,961 978 47,939 12,061

Total: As on Mar 31, 2021 60,000 - 60,000 46,961 978 47,939 12,061

Salvo Chemical Industry Limited

Schedule of Intangible Asset

For the year ended March 31, 2021

Particulars

Cost Depreciation Written Down

Value as on

31.03.2021

Balance as

on 01.07.2020

Total as on

31.03.2021

Balance as

on 01.07.2020

Charged

during the

year

Total as on

31.03.2021

SALVO CHEMICAL INDUSTRY LIMITED

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