DJL-Final Manual .

DESIGNER JEANS LIMITED
FINANCIAL & ACCOUNTING MANUAL
Prepared by:
HUSSAIN FARHAD & CO.

Chartered Accountants
House # 15, Road # 12, Block-F, Niketon,
Gulshan-1, Dhaka-1212

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Designer Jeans Limited
TABLE OF CONTENTS
CHAPTER 1 INTRODUCTION Page

No.
1.1 - About Designer Jeans Limited 7
1.2 - How the company will operate 8
1.3 - Preamble 8
1.4 - Financial Accounting Objectives 9
1.5 - Accounting and Auditing Requirements 9
1.6 - Accounting Offices 10
1.7 - Accounting Year 10
1.8 - Books of Accounts 10
CHAPTER 2 - ACCOUNTING POLICIES
2.1 - Basis of Accounting 11

2.2 - Accounting Responsibility 11
2.3 - Accounting Policies of Designer Jeans Limited 11
-Accounting Convention - Basis of Preparation 12
-Fixed Assets 13
-Depreciation on Fixed Assets 14
-Revenue Recognition 14
-Borrowing Cost 15
-Taxation 15
-Accounting for Expenses 15
-Materiality and Aggregation 15
-Offsetting 16
2.4 - Currencies 16
2.5 - Accounting Assumptions of Designer Jeans Limited 16
2.6 - Characteristics of Financial Transactions &
Statements 17
2.7 - Procedure for Recording Transactions 17
2.7.1 - Invoice Preparation 17
2.7.2 - Money Receipts / Cash Memo & Its Recording 17
2.7.3 - Payment Made in Cash / by Cheque & Its Recording 18
2.8 - Preparation of Daily Cash & Bank Balance Statement 19
2.9 - Passing Adjusting Journal & Closing Entries 19
2.10 - Preparation of Trial Balance 20
2.11 - Reporting of Accounting Offices 20

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2.12 -Activity Chart of Financial Transactions and its
Documentation 21
2.13 - Financial Accounting Flow Chart 23
CHAPTER -3- BUSINESS PLAN & ANNUAL BUDGET
3.1 - Introduction of Business Plan, Annual Budget and

Operational Review 24
3.2 - Budget Period and Format 25
3.3 - Process of Budget Preparation 25
3.4 - Budgetary Control 25
3.5 - Budget Monitoring 26
3.6 - Budget Variance Analysis 26
3.7 - Line Item Flexibility 26
3.8 - Submission of Budgets 26
3.9 - Cash Flow Reporting 26
CHAPTER 4 BOOKS OF ACCOUNTS
4.1 - Introduction 31
4.2 - Cash Journal Debit / Payment Voucher 31
4.3 - Cash Journal Credit / Receipts 31
4.4 - Bank Journal Debit / Payment Voucher 31
4.5 - Bank Journal Credit / Receipts 31
4.6 - Journal Voucher Adjustments / Non Cash 31
Transactions
4.7 - Cash Journal Register 32
4.8 - Bank Journal Register 32
4.9 - Control/ General Ledger 32
4.10 - Subsidiary Ledger 33
4.11 - Stock & Store Ledger 33
4.12 - Bank Reconciliation Statement 33
4.13 - Formats to be Used 33
4.14 - Erasing & Overwriting Prohibition 34
4.15 - Conclusion 34
4.16 - List of Books of Accounts 34
4.17 - Chart of Accounts 35
4.18 - Backup Documents 35
4.19 - Numbering of Documents 35
4.20 - Records Keeping 36
4.21 - Exchange Rates 36
CHAPTER 5 WRITING PROCEDURES OF FORMS, VOUCHERS &

RECORDING BOOKS

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5.1 - Instructions to write up Cash Journal 37
5.2 - Instructions to write up Bank Journal 37
5.3 - Instructions to write up Journal Voucher 38
5.4 - Instructions to write up Revenue Voucher 38
5.5 - Instructions to write up Cash Journal Register 39
5.6 - Instructions to write up Bank Journal Register 39
5.7 - Instructions to write up Control General Ledger 40
5.8 - Instruction to write up Bank Reconciliation Statement 40
CHAPTER 6 - MAINTENANCE OF REGISTERS
6.1 - Types of Registers 41

6.2 - Fixed Assets Register 41
6.3 - Payroll & Salary Payment Register 41
6.4 - Cheque Issue Register 41
6.5 - Cheque/DD/PO Receipt Register 41
6.6 - Income Tax Register 42
6.7 - VAT Register 42
6.8 - Stock & Store Register 42
6.9 - Cash Register 42
6.10 - Advance Slip / IOU Register 42
6.11 - Budget Register 42
CHAPTER 7 ACCOUNTS & FINANCE ACTIVITIES
7.1 - Accounts & Finance Activities 43

7.2 - Treasury, Bills & Salary Activities 43
7.3 - General Accounting, Ledger and Final Accounts 44
Activities
7.4 - Revenue & Service Charges Accounting Activities 44
7.5 - Purchase, Stock & Store Accounting Activities 44
7.6 - Budgeting, Tax, Register of Joint Stock company, 44
BTRC and Internal & External reporting activities
7.7 - Aged Receivables Reporting 45
CHAPTER 8 - CASH TRANSACTION
8.1 - Duration of Cash Transaction 46

8.2 - Closing of Cash Account 46
8.3 - Daily Cash Holding Limit 46
8.4 - Handling of Cash 46
8.5 - Cash Scroll 46
8.6 - Cash Security 47
8.7 - Receipt in Cash Section 47
8.8 - Imprest Fund 47

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8.9 - Cash Deposited into Bank 47
BANK TRANSACTION
8.10 - General 48
8.11 - Procedure of Opening Bank Account 48
8.12 - Project Bank Accounts 48
8.13 - Operation of Bank Accounts 48
8.14 - Signatories Details 49
8.15 - Cheque Counterfoil 49
8.16 - Cancellation of cheques 49
8.17 - Canceled Cheques 49
8.18 - Cheque Issue Register 49
8.19 - Cheque, Demand Draft & Pay-order Receipt Register 49
8.20 - Payment from Bank 49
8.21 - Withdrawal of Cash from Bank 49
8.22 - Bank Statement and Bank Certificate 50
8.23 - Bank Reconciliation Statement 50
8.24 - Ordering of New Cheque book 50
8.25 - Safety to Cheque Books 50
8.26 - Receipts of Cheque / Demand Drafts pay- Order 50
8.27 - Dishonour of Cheques 51
8.28 - Payment for Lost Cheques 51
CASH MANAGEMENT
8.29 - Operational Bank Accounts 51

8.30 - Cash Management 52
8.31 - Investments 52
8.32 - Cash Payment Limit 52
8.33 - Loan 52
8.34 - Advance 53
8.35 - Sales Invoicing & Receivable 53
8.36 - Procedure of Receiving Money 55
8.37 - Imprest Cash Management 56
8.38 - Payment Procedure 56
EXPENDITURE
8.39 - Expenditure Management Policy 59

8.40 - Expenditure Process 61
8.41 - Revenue Expenditure procedure 61
8.42 - Procurement Procedure 61
8.43 - Procedure of Letter of Credit 62

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8.44 - Requirements For Reimbursement of Expenditure 63
8.45 - Expenditure Report Approval and Submission 64
CHAPTER 9 SALARY PACKAGE & ACCOUNTING
9.2 - Salary Payment 70
9.3 - Some Noteworthy Points with Regard to Payment 70
9.4 - Attendance Register & Statement 70
9.5 - Leave Statement 71
9.6 - Procedures of Salary Payment 71
9.7 - Timing of Salary Payment 71
9.8 - Overtime Management 71
9.9 - Telephone 71
9.10 - Accounting for Salary 72
CHAPTER 10 ADVANCES, DEPOSITS & PREPAYMENTS :
10.2 - Types of Advances to be allowed 73
10.3 - Staff Advances Against Traveling 73
10.4 - Staff Advances Against Purchase 74
10.5 - Staff Advances Against program Expenses 76
10.6 - Third Party Advance Against House Rent 77
- Third Party Advance Against Material 78
10.7 Suppliers/Conductors
10.8 - Third Party Advance Against Service Providers 80
10.9 - Authorization of Advances 81
- Internal Control in Advance Management & 82
10.10 Accounting
10.11 - Inventory Network and Sales 82
CHAPTER 11 - FIXED ASSETS & DEPRECIATION ACCOUNTING
11.1 - Capital Expenditure 84

11.2 - Concept 85
11.4 - Safe Custody of Fixed assets 85
11.5 - Work in Process of Fixed Assets 85
11.6 - Procurement of Fixed Assets 86
11.7 - Fixed Assets Registration 87
11.8 - Identification of Fixed Assets 87
11.9 - Depreciation & its Accounting 87
11.10 - Sale of Fixed Assets 87
11.11 - Accounting for Fixed Assets 88

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11.12 - Fixed Assets Register 90
11.13 - Instruction to Write up of Fixed Assets Register 90
11.14 - Physical Counting of Fixed Assets & Reporting 91
- Damage, Loss & Destruction and Insurance of Fixed 91
11.15 Assets
CHAPTER 12 FINANCE DEPARTMENT
12.01 - Finance Department 92
CHAPTER 13 CORPORATE GOVERNANCE 93
CHAPTER 14 FINANCIAL REPORTING
14.01 Annual Financial Statements 94

14.02 Responsibility for Financial Statements 94
14.03 Components of Financial Statements 94
CHAPTER 15 - DELEGATION OF FINANCIAL AUTHORITIES
- Personnel 96
- Property 97
- Capital Expenditure 97
- Expenditure 98
- Budget and Planning 98
- Risk Management 99
CHAPTER 16 - SECRETARIAL MATERIALS
16.01 - Introduction of the Meetings 100

16.02 - Details about Meetings 100
16.02. -Ordinary General Meeting / Annual General Meeting 100
01
16.02. -Extraordinary General Meeting (EGM) 100
02
16.02. -Board Meeting 102
03
16.02. -Summery of Meeting Procedure 102
04
16.03 -Statutory and Statistical Register 103
16.03. -Introduction 103
01
16.03. -Statutory Registers 104
02
16.03. -Statistical Registers 105
03
16.04 -Important Returns as Per Company Act 106

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16.05 -Income Tax 107
16.05. -Income Tax Return submission 107
01
16.05. -Tax Deducted at source (TDS) 107
02
16.05. -Advance Income Tax (AIT) 107
03
16.05. -Penalties for different kinds of default 108
04
16.05. -Offence and Prosecution punishment for non- 109
05 compliance of obligation
CHAPTER 17(A) - INTERNAL CONTROL
17.1 - Introduction and Concept 111

17.2 - Internal Control Categories 111
17.3 - Classification of Control Procedures 112
17.4 - Internal Check System 112
17.5 - Payment Management 113
17.6 - Payment for Services 114
17.7 - Payment of Salaries 114
17.8 - Management of Receipts 114
17.9 - Staff Advance and its Liquidation 115
17.10 - Physical Inventory Counting & Checking 115
17.11 - Preservation of Accounting Records 115
CHAPTER 17(B) AUDIT AND ANTI CORRUPTION STRATEGY
17.12 - External Audit 116

17.13 - Internal Audit 117
17.14 - Anti-Corruption Strategy 118
Appendix 120
A - Operating Budget (Departmental Expenses)
Appendix 122
B - Chart of Accounts
Appendix 134
C - Cash Advance Requisition Form and IOU Slip Form
Appendix 135
D - Expenditure Note Sheet Form

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CHAPTER 1
INTRODUCTION
1.1 About Designer Jeans Ltd.:
Legal Form:
Designer Jeans Limited is a private company limited by shares. The company was
incorporated under Companies Act- 1994 in Bangladesh on 31 January 2006 and its
incorporation certificate no. is C-60343 (2352) / 2006. The main objectives of this
company is to carry on the business for establish the all types of 100% export
oriented readymade garments products. Establish trade, import, export,
manufacture of any commodity, commission agents, clearing and forwarding agents,
buying and selling agents, indenting agents, stevedores, foreign brokers and
merchandise of all kinds of readymade garments, woolen apparels, knitting apparel
and textile goods in any part of Bangladesh or outside Bangladesh.
1.2 How the company will operate:

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Accounting Standing Orders outline the financial policies that Designer Jeans
Limited will follow. The policies have been approved by the Board of Directors and
will be reviewed annually.
Any exceptions to these policies must be authorized by a Board of Director, and

subsequently approved at the next Board meeting.
The company will operate in the following manner. The Board will approve
1. Annual Business Plan, Cash Flow & main Strategies, & Key Performance
Indicators (KPIs). The plan should be prepared 3 months before the start of
the financial year
2. Annual budgets, covering Monthly Sales and Expenses, Organisation &
Headcount, and Capital Expenditure to show how the Business Plan will be
achieved. The budget should be prepared one month before the start of the
financial year.
3. Authorisation levels by function, level and type of expenditure.
4. Operating Reviews, monthly Management will carry out operating reviews to
measure the progress of actual results to budget, and send a report to the
Board
Quarterly the Board and Chief Executives will review the results and decide if a
revised budget (forecast) is required.
1.3 Preamble:
This manual is the essence of a sound financial management and effective

accounting administration of the Company. The intent of this manual is to provide
written guidelines to all concerned with a view to facilitate proper financial control
on overall operational activities of the Company. It is endeavored that this manual
will be of great assistance in fulfilling the requirements of the financial discipline
and bringing uniformity and cohesion at different areas of the financial
management.
A smooth, sound and sophisticated accounting system is a pre-condition for an

effective and meaningful financial management. The basic requirement for ensuring
a good and beneficial financial management is to establish a system with a well
defined procedure so that the accounting records are maintained accurately and the
financial statements are prepared on time. It is obvious that a foolproof accounting
system is needed first for attaining the benefits of the financial management.

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It is important indeed that DESIGNER JEANS LIMITED may expect to prepare and
receive financial statements of the revenue so utilized. Therefore, to enable the
accounts personnel to prepare useful and accurate financial reports it has
developed a standardized financial recording system that will help to ensure the
correctly, timely and regular basis financial reporting. The purpose of introducing
the accounting manual is:
To implement an appropriate accounting system as per the Generally Accepted
Accounting Principles (GAAP) in all sphere of the financial transactions &
activities of the company;
To ensure the application of International Financial Reporting Standards (IFRS);
To ensure the applicable coverage of the requirements of the Companies Act.-
1994;
To ensure the full coverage of taxation aspects of the Company as per the rules
& regulations of the Income Tax Ordinance 1984 and VAT Act 1991;
And in turn to help the management not only in establishing an effective control
over the financial transactions & activities and
Also to avail a positive support in administering the overall activities of
DESIGNER JEANS LIMITED .
1.4 Financial Accounting Objectives:
The objectives of maintaining accounts of DESIGNER JEANS LIMITED are:

a) To maintain sound financial regularity & discipline at all levels of financial
management of DESIGNER JEANS LIMITED activities;
b) Transparency, accountability and timely financial reporting should be achieved
through better implementation of effective financial management control system
and accordingly better preparation & presentation of the Company's financial
statements following the international financial reporting standards.
c) Full disclosure of the operating cost / expenses of the Company.
d) Accounting records that can serve as the basis of ascertaining the
implementation of plans and budget, preparing future plan of operation and
budgets, and for evaluating plan and budget demands and proposals.
e) Reliable information for report purposes, which will serve the requirement of
Government of Bangladesh (GOB), DESIGNER JEANS LIMITED Internal
Management, Internal Audit, External Audit, Investigation, Assessment, Review
and for any purposes.
f) To strengthen internal control techniques & policies, internal check, better
mechanism to improve financial accountability, ensure the accuracy of the
financial reports and maintain a methodical recording of financial transactions.

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1.5 Accounting and Auditing Requirements:
Sound financial management is vital to DESIGNER JEANS LIMITEDs success.
Sound financial management will help to perform efficiently by reducing in-progress
delays or bottlenecks, speeding disbursements and facilitate monitoring.
The accounting and auditing requirements which are required to be complied with
are outlined below:
A - Accounting Requirements:
Accounts must be maintained in accordance with accounting practices that are
generally recognized by the international accounting community. Such practice,
once adopted should be consistently followed. The accounting records should be
maintained in a manner that is transparent and auditable and financial statements
produced must reflect a clear link to the books of accounts.
B - Auditing Requirements:
The broad aim of DESIGNER JEANS LIMITED s audit is to safeguard the interest of
the Shareholders, stakeholders, Government of Bangladesh (GOB) / other related
bodies and DESIGNER JEANS LIMITED itself and promote transparency and
accountability, along with sound economic and financial management practices
across the DESIGNER JEANS LIMITED . Towards that broad aim, the objectives of
auditing are to give an independent assessment of:
Whether the financial statements shows a true and fair view of the financial
position of the DESIGNER JEANS LIMITED and its income and expenditures for
the year and have been properly prepared in accordance with appropriate rules
and regulations and following the international financial reporting standards;
The adequacy of the DESIGNER JEANS LIMITED 's arrangements to secure
economy, efficiency and effectiveness in the use of the resources;
The adequacy of the DESIGNER JEANS LIMITED 's financial management
systems;
The adequacy of the DESIGNER JEANS LIMITED 's arrangements for preventing
and detecting fraud, corruption and the internal control framework generally;
The adequacy of the DESIGNER JEANS LIMITED 's arrangements for ensuring
the legality of transactions that might have a financial consequence;
The adequacy of the DESIGNER JEANS LIMITED 's arrangements for collecting,
collating and recording accounting data and publishing financial statements and
reports pursuant to appropriate rules and regulations and as per internationally
accepted standards.
1.6 - Accounting Offices:

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Chief Financial Officer will be in charge of the Finance & Accounts Department who
remains directly responsible to the Board of Directors for all financial and
accounting functions & activities.
1.7 Accounting Year:

DESIGNER JEANS LIMITED shall use 1st January to 31st December as their
accounting year.
1.8 Books of Accounts:

DESIGNER JEANS LIMITED shall maintain all books of accounts based on the
following requirements, guidelines, instructions, rules and regulations as per the:
(a) Financial and Accounting Manual of DESIGNER JEANS LIMITED ;

(b)Rules of the DESIGNER JEANS LIMITED Accounting Code;
(c) Requirements of the International financial reporting standards (IFRS) and
Bangladesh Accounting Standard (BAS);
(d)Contents of the Company Act-1994;
(e) Requirements of the Income Tax Ordinance 1984;
(f) Guidelines of the Value Added Tax Act 1991;
(g)DESIGNER JEANS LIMITED 's policies approved by the Board of DESIGNER
JEANS LIMITED ;
(h)And such other books of accounts as required circulated and instructed by the
Management of DESIGNER JEANS LIMITED from time to time.
CHAPTER - 2
ACCOUNTING POLICIES
2.1 - Basis of Accounting:

Accounts of DESIGNER JEANS LIMITED should be maintained on acceptable basis,
that is, all income actually received are to be considered as income and all
expenditure / payments, actually made are to be taken as expenditure, with a few
book adjustments for stock & stores, advances, prepayments, outstanding expenses,
depreciation, deferred income, accrued income, receivables, etc.
As such accrual basis of accounting is being pursued. The Company shall apply,
adopt, follow and implement the guidelines / instructions of the International
financial reporting standards (IFRSs) for all purposes of accounting.
2.2 - Accounting Responsibility:
Finance & Accounts Department is entrusted with the responsibility to ensure the
proper maintenance of the books of accounts of the Company. Timely and accurate

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presentation of the financial reports is the prime job of the accounts personnel in
DESIGNER JEANS LIMITED.
The Finance & Accounts Department will ensure the authenticity & recording for all
payments and also responsible for recording of all receipts on time. They will
supervise the effective implementation of the internal control and assist the
management in attaining financial management.
Chief Financial Officer is responsible to preserve all books of accounts & supporting
accounting records in a systematic and dynamic manner. Management will make job
/ duty allocations to the staff members of finance / accounts Department & ensure
smooth function of his department.
As a measure of management safe-guard, the required coverage and appropriate

precautions must be exercised for handling of cash, handling of store materials,
carrying of cash from and to bank and preservation of cheque books and over all
financial discipline of DESIGNER JEANS LIMITED .
Any staff member of DESIGNER JEANS LIMITED who signs or countersigns in any
primary documents, books of original entries, books of final entries and reporting
etc. is personally, officially and professionally responsible for their completeness,
correctness & for the facts as stated there-in so far as it is his / her duty to know or
to extent to which he / she may be responsible or expected to be aware of them.
2.3 - Accounting Policies of DESIGNER JEANS LIMITED :
Accounting system, selection and application of accounting policies and

presentation of financial statements of DESIGNER JEANS LIMITED shall be in
conformity with the international financial reporting standards. Accounting policies
of DESIGNER JEANS LIMITED encompass the principles, bases, conventions, rules
and procedures adapted by DESIGNER JEANS LIMITED management in preparing
and presenting financial statements by using best management judgment in the
circumstances. DESIGNER JEANS LIMITED shall use its judgment in selecting and
applying its accounting policies keeping in view the following:
The requirements and guidelines in International Financial Reporting Standard

(IFRS) and Bangladesh Accounting Standard (BAS) dealing with similar and
related issues;
The definitions, recognitions and measurement criteria for assets, liabilities,
incomes and expenses set out in the International financial reporting standards
Committee (IFRSC) framework; and
Pronouncements of other standards setting bodies and accepted policies, but
only to the extent, that these are consistent with the above.

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Four considerations shall govern the selection and application of the appropriate
accounting policies and the preparation of the financial statements of DESIGNER
JEANS LIMITED . These are:
I. Prudence -
Uncertainties inevitably surround many transactions in DESIGNER JEANS

LIMITED. This shall be recognized by prudence in preparing financial
statements.
II. Substance Over Form -
Financial transactions and other events of DESIGNER JEANS LIMITED shall

be accounted for and presented in accordance with their substance and
financial reality and not merely with their legal form.
III. Materiality -
Financial statements of DESIGNER JEANS LIMITED shall disclose all items

which are material enough to effect evaluation or decisions.
IV. Neutrality -
Financial transactions of DESIGNER JEANS LIMITED shall be neutral and

shall be free from bias.
Accounting policies of DESIGNER JEANS LIMITED are listed below:
1) Accounting Convention - Basis of Preparation:
Financial statements shall be prepared under historical cost convention and in

accordance with the International financial reporting standards as adapted in
Bangladesh.
All financial statements shall be prepared on going concern basis;
Financial transactions shall be accounted for and presented in accordance with
their substance and financial reality and not merely with their legal form;
Assets received but not paid will be accrued at cost;
Comparative figures shall be stated in the financial statements;
The disclosures in the financial statements, in all material respects, are in
accordance with International Financial Reporting Standards (IFRS).

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2) Fixed Assets:
Fixed assets shall be stated at cost less accumulated depreciation;
Fixed assets valuation basis used for determining the amounts at which
depreciable assets shall be stated in the financial statements;
Maintenance and repairs are charged to the statement of income when
expenditures are incurred but any improvements need to be capitalized. Land is
not to be depreciated;
The gross amount of depreciable assets and the related accumulated
depreciation shall be disclosed in the financial statements;
An item shall be recognized as an asset when it is probable that future economic
benefits associated with the asset shall flow to the Company i.e over 12 months.
The cost of the asset to the Company can be measured reliably.
The component of cost is purchase price plus all other costs of bringing the asset
to its present condition and location. Providing total cost is equal to current
market value.
The policies in recognition, valuation & revaluation of property, plant and
equipment should be in line with the International Financial Reporting Standards
(IFRS).
The assets are accounted for in the following classes:
(a) Machinery: Machinery is acquired at cost that can be measured reliably. All
other expenses to bring the machinery to the working condition are considered.
(b) Motor Vehicles: Shown in the balance sheet at cost less accumulated
depreciation. The other related expenses are added to the cost for making it road
worthy. Among the other costs that can be recognized over its purchase price are
the following: (i) - Registration cost; (ii) - First time checking and inspecting
expenses.
(c) Furniture and fixture: Are recorded at the amount paid or consideration
given to acquire them at the time of their acquisition. These are shown at cost
less accumulated depreciation in the balance sheet.
(d) Office equipment: Are recorded at the amount paid or consideration given
to acquire them at the time of their acquisition. These are shown at cost less
accumulated depreciation in the balance sheet.
(e) Others: On the basis of the chart of accounts.
3) Depreciation on Fixed Assets:

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Depreciation shall be charged on fixed assets on reducing balance method;
Depreciation on fixed assets additions shall be charged from the date of the
acquisition under reducing balance method;
Depreciation for the period shall be charged to income statement for the
period;
Depreciation method selected shall be applied consistently from period to
period;
The selection of allocation and estimation of the useful life of a depreciable
assets shall be the matter of Judgment of DESIGNER JEANS LIMITED
management considering the expected future life;
A reconciliation of additions, adjustments, disposals, amount of depreciation
and other movements shall be included as part of the financial statements;
The rate of depreciation on each class of asset shall be follows:
Category of Assets Useful Life / Rate of

Future Life Depreciation
(Years) (%)
Floors and Interior work on Building 10 10
Fire Extinguisher 10 10
Office Equipment 10 10
Machinery 10 10
Steel Material 10 10
Steam Boiler 10 10
Furniture and Fixture 10 10
Electrification 10 10
Generator 10 10
Motor Vehicles 10 10
4) Revenue Recognition:
Revenue is recognized by DESIGNER JEANS LIMITED when it is probable that

future economic benefits will flow to the Company and these benefits can be
measured reliably.
All incomes shall be accounted for on accrual basis;

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Sales of readymade garments and Interest on FDR or Short Term Deposit etc.
shall be calculated in accordance with the agreement between DESIGNER
JEANS LIMITED & the parties.
Any deferred revenues shall be disclosed separately in the financial statements
in order to give a better understanding of the composition;
Interest income from short-term investment / deposits shall be accounted for on
accrual basis;
Any other / miscellaneous income (e.g, Leftover sale, Jhut sale, Wastage sale)
shall be accounted for on realized basis / actual basis that shall be disclosed in
the financial statements;
All items of income recognized in a period by DESIGNER JEANS LIMITED shall
be included in the determination of the net surplus or deficit for that period;
The nature and amount of each extraordinary item shall be separately
accounted-for and disclosed in the financial statements;
5) Borrowing Cost:
Borrowing costs shall be interest and other costs in connection with the
borrowing of funds and be accounted for on accrual basis;
The nature & extent of borrowing costs recognized shall be disclosed adequately
in the financial statements;
6) Taxation:
A. Income Tax:
A provision will be made for income tax on Net Profit as per prescribed rate in
the Income Tax Ordinance -1984 and will be completed the assessment activities
in due time;
Employee income tax shall be paid by the employee himself as per their
agreement.
Income tax will be deducted at source and deposited in Government Treasury in
due time as per Income Tax Ordinance-1984.
B. Value added tax (VAT):
VAT pays by maintaining a current account on their revenue as Service Render &
Importer (Registration No. 5111037686), SRO-50301 as per VAT Act. 1991.
VAT should be deducted at source and deposited in Government Treasury as per
Value Added Tax (VAT) Act. 1991.
7) Accounting for Expenses:

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All expenses shall be accounted for on accrual basis. Under the accrual basis of
accounting, transactions and events shall be recognized when they occur (and not
as cash or its equivalent is paid) and shall be recorded in the accounting records
and reported in the financial statements of the periods to which they relate.
Expenses shall be recognized in the income statement on the basis of a direct
association between the costs incurred and the earning of specific items of income
(matching).
8) Materiality and Aggregation:
Each material item that is enough to effect evaluation or decision shall be

presented separately in the financial statements. Immaterial amounts are
aggregated with the amounts of similar nature or function and need not be
presented separately.
Financial statements result from processing large quantities of transactions,

which are structured by being aggregated into groups according to their nature
or function. The final stage in the process of aggregation and classification is the
presentation of condensed and classified data, which form line items either on
the face of the financial statements or in the notes. If a line item is not
individually material, it shall be aggregated with other items either on the face of
the balance sheet or in notes. An item that is not sufficiently material to warrant
separate presentation on the face of financial statements may nevertheless be
sufficiently material that it should be presented separately in the notes.
Materiality depends on the size and nature of the item judged in the particular
circumstances of its omission. In deciding whether an item or an aggregate of
items is material, the nature and the size of the item shall be evaluated together.
Depending on the circumstances, either the nature or the size of the item could
be the determining factor. For example, individual assets with the same nature
and function shall be aggregated even if the individual amounts are large. Large
items which in nature or function shall be presented separately.
9) Offsetting:
DESIGNER JEANS LIMITED 's assets and liabilities shall not be offset except
when offsetting is required or permitted by any International Financial Reporting
Standards.
Items of income & expenditure shall be setoff when an International Financial
Reporting Standard and Income Tax Ordinance -1984 requires or permitted.
It is important that both assets and liabilities, and income and expenses, when
material are reported separately. Offsetting in either income statement or

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balance sheet, except when offsetting reflects the substance of the transaction or
event detracts from the ability of users to understand the transactions
undertaken and to assess the future cash flows of the Company.
2.04 Currencies:
All DESIGNER JEANS LIMITED 's assets, liabilities, capital fund, income and
expenditure are denominated in terms of the Taka, the local currency or US$;
Hence, any receipt by DESIGNER JEANS LIMITED for any other sources from
foreign Countries and payments to foreign employees and foreign currencies
from any scheduled Bank USD Account is required to be converted in Taka
currency for accounting purpose. Foreign currencies fluctuation gains / loss shall
be calculated at the end of month at that present rate as per IAS 21 (The
effects of changes in foreign exchange rates).
2.5 - Accounting Assumptions:
Following are the accounting assumptions of Designer Jeans Ltd.:
a) Going Concern:
When preparing the financial statements, DESIGNER JEANS LIMITED shall make
an assessment of an enterprise's ability to continue as a going concern.
b) Consistency:
The presentation and classification of financial items in the financial statements

shall be retained from one period to next period unless;
i) - A significant change in the Company and

ii) - A change in presentation is required by an International Financial
Reporting System (IFRS).
c) Accrual:
DESIGNER JEANS LIMITED shall prepare its financial statements, except for cash
flows information, under the accrual basis of accounting.
2.6 - Characteristics of Financial Transactions & Statements:

19 9/14/2017
The financial transactions and the financial statements of DESIGNER JEANS
LIMITED shall have the following characteristics:
1. 4. Faithful 7. Prudence;
Understandabili presentation;
ty;
2. Relevance; 5. Substance over 8. Completeness and
form;
3. Reliability; 6. Neutrality; 9. Comparability.
2.7 - Procedure for Recording Transactions:
Accounting Entries
Transaction /Event Accounting entry

1) Receiving of export LC No entry
2) Opening of back to back LC No entry
3) Acceptance of import documents Material Inventory in Transit
by the manufacturer/exporter. Dr.
Acconts Payable- Supplier
Cr.
(Back to back LC amount in foreign
currency X Prevailing TT rate.)
4) Upon lodgment with bank Acconts Payable- Supplier
Dr.
Exchange loss
Dr.
IFDBC Liability
Cr.
Or
Acconts Payable- Supplier
Dr.
Exchange Gain
Cr.
IFDBC Liability
Cr.
IFDBC liability=Back to back DC
amount in foreign currency X TT rate
at lodgment date.
5)Packing credit taken Bank

20 9/14/2017
Dr.
Packing credit
Cr.
6) Once suppliers liability is Inventory- Materials
discharged by the exporters bank, Dr.
exporter records material in its Materials Inventory in Transit
inventory. Concurrently, a liability to Cr.
the bank is credited as mentioned in
step 4 above.
7) Goods exit factory ( ex- factory) Goods in transit
Dr.
Finished Goods Inventory
Cr.
(This is a memorandum entry will be
reversed when the revenue
recognition point is reached.)
8) Goods on-board Finished Goods Inventory
Dr.
Goods in Transit
Cr.
( Reversal of above memorandum
entry)
(i)
Accounts receivable
Dr.
Sales
Cr.
(ii)
Cost of goods sold
Dr.
Finished goods inventory
Cr.
(iii)
Bank
Dr.
Bank Charges
Dr.
ERQ(ExportRetention Quota)
Dr.
Margin
Dr.

21 9/14/2017
Packing Credit
Dr.
Accounts Receivable-
Cr.
2.7.1- Invoice/ Bill Preparation:
At first DESIGNER JEANS LIMITED should ensure the existence of finished goods
then prepare the commercial invoices by the marketing department in case of
export sales. In any other case Invoice, Bill and money receipt should be prepared.
All the invoices and bills must be pre numbered in sequence.
2.7.2- Money Receipts / Cash Memo & its Recording:
The Company gains its income by way of sales of readymade garments and its
received in the form of documentary credit subject to the terms of the Agreement.
The other sources of the income are sales of Jhut Leftover sale, used mobil sale,
Interest on FDR, bank interest earned on savings account, etc.
Money Receipts / Cash Memo are to be prepared along with Bill / Invoice number
and issued to the concerned parties / customers on receipt of any other income by
the Company. Money receipts / Cash memo must be pre-numbered.
Money Receipt shall be prepared in three (3) copies, original receipt goes to the
payer, the second copy will be attached with the credit voucher and third copy will
be in the file or reserve copy. Money receipt shall be checked and then recorded in
the Cash Book and at the day end cash scroll is checked with physical cash and duly
signed by cashier/ cash officer, and then kept it in vault, which is operated by joint
custodian.
A Cheque / Demand Draft / Pay-order Receipt Register shall be opened and be

recorded chronologically with detail information on daily basis and authenticated by
a competent personnel of DESIGNER JEANS LIMITED .
All receipts (cash, cheques, demand draft, pay order etc.) shall be deposited at the
earliest opportunity, in the bank by filling in the pay-in-slips, after due verification
and approval and then record it in the Cash Journal Register and Bank Journal
Register in the computer through preparing cash / Bank journal - credit voucher.
2.7.3 - Payment made in Cash / by Cheque & its recording:

22 9/14/2017
All payments made by cash or cheque shall be processed through the payment
vouchers (Cash /Bank Journal - Debit Voucher) and posted in the credit side of the
Cash Journal Register / Bank Journal Register that will be debited to the
appropriate head of accounts.
General principles are that all payments should be supported by authorized

purchase order, Supplier Invoice and physical receipt.
All payment vouchers must be supported by the documentary evidences such as

requisition / indent, quotation, comparative statement, purchase committee
resolution, purchase order, receiving entry, challan, bills, cash memo, job
completion certificate, Expenditure Note Sheet, Budget Copy and duly approved by
the authorized personnel.
Upon receipt of a bill, the Finance and Accounts Department will verify the relevant
documents to justify the payment. After approval of the cheque will be prepared and
signed by the signatories. After completion of the above tasks, the voucher will be
prepared and posted in the books of the accounts.
Every payment should be made compare with Budget if any. The relevant
documents should be enclosed with the respective voucher.
Payment in cash should be restricted to the limit (upto Tk.10,000) and cases as are
narrated and earmarked in the delegation of authority.
Generally, all payments will be made by cheque and that should be:
i. Crossed before handing over the same to the payee.

ii. Neither a blank nor a bearer cheque should ever be signed by the
Management.
iii. The cheque must bear the name of the payee, date of issue, amount in
both figures and words.
iv. While signing the cheque, an initial should be given on the counter-part
of the cheque where the cheque particulars will be recorded in a brief.
Cheque books should always be kept under lock & key in safe custody of the
authorized custodians. Cancelled cheque should be retained with cheque books &
corners thereof torn off as a measure of safeguarding against any misuse, in future.
When disbursing amounts, person responsible for payment (as per job / duty
allocation) should obtain the signature of the payee or his / her authorized
representative, acknowledgment of receipt of cheque or cash as the case may be.

23 9/14/2017
A Cheque Issue Register shall be opened and be recorded chronologically with
detail information on daily basis and authenticated by Finance Manager of
When approving a payment, all supporting vouchers or documents must be

canceled (by affixing a rubber stamp worded "PAID AND CANCELED DATE") to
minimize the risk of a double payment subsequently being made by mistake or
manipulation.
2.8 - Preparation of Daily Cash & Bank Balance Statement:
Daily cash & bank balance statement usually contains the following data &
information:
A - Bank account balance of different banks;

B - Cash in hand;
C - Advance slip (IOU-Temporary Loan) balance (If any);
Prepared by cashier and will be checked by accounts personnel & authenticated by

Financial Manager through signing this statement at the end of the day as per
format.
2.9 Passing Adjusting Journal and Closing Entries:
Adjustment entries for stores, advances, prepayments, outstanding expenses,

deferred service charges, accrued income, receivables and depreciation shall be
made at the end of each month through journal vouchers.
All rectifications, transfers and adjustments and non-cash transactions are to be
processed through journal voucher.
The adjusting journals will be prepared by the Assistant Manager Finance
(AMF), duly checked by Finance Manger (FM) and a monthly summery certified
by the Chief Financial Officer.
The journal vouchers will be in a chronological order.
2.10 - Preparation of Trial Balance:
The ledger accounts shall be used to prepare trial balance. Consolidated

Accounts and Unit Accounts to be drawn to ensure the arithmetical accuracy of
the entries made in the Cash Journal Register, Bank Journal Register and
Ledgers Accounts.

24 9/14/2017
Trial balance will be the base document to prepare the Income Statement,
Balance Sheet, Cash Flow Statements and all other financial statements as
required the management.
2.11 - Reporting of Accounting Offices:
Accounting office shall close the accounts at the last transaction day of the month.
This Closing of the accounts includes:
A - Closing of Books and Accounts:
Closing of Cash Journal Register - Cash balance;

Closing of Bank Journal Register - Bank balance;
Balancing of General Control Ledger;
Balancing of all Subsidiary & Sub-subsidiary Ledgers.
Balancing of all Loan Ledgers
Balancing and updating of all kinds of registers (advance register, accounts
payable register, accounts receivable register etc.).
Cash and bank balance confirmation;
Bank reconciliation statements preparation;
B - Preparation of Financial Statements:
Preparation of Trial Balance;

Preparation of monthly Income Statement;
Preparation of monthly Balance Sheet;
Preparation of all necessary schedules and break up of figure;
Preparation of Cash flow statement as per International Financial Reporting
Standards-7.
Notes to Accounts with full disclosure requirements of adequate & correct
presentation of Financial Statements as per International financial reporting
standards;
Interpretation of Financial Statements;
Budget Monitoring & Budget Variance Analysis;
Accounting office shall prepare the complete set of accounts financial statements
by the 10th of the next month at the latest and submitted to the Internal Auditor for
the internal audit.

25 9/14/2017
2.12 - Activity Chart of Transactions & Its Documentation:
Activity Chart of the total financial accounting system of the Company has been
outlined as below:
ACTIVITY CHART
Activity Documentation
1-Transactions cash or non-cash As and when it takes

place
2-Adequcy of documents of transactions For each transaction
3-Approval of transactions along with Budget For each transaction
4-Payment vouchers Cash Journal / Bank Journal For each

transaction
5-Payees acknowledgement For each transaction
6- Revenue vouchers - Cash Journal / Bank Journal For each

transaction
7- Sales of Ready made garments For each transaction
8- Income from other sources For each

transaction
9-Deferred Revenue (mentioned above-8)-Journal Voucher For each

transaction
10-Posting to Cash Journal Register Daily basis
11-Balancing of cash journal voucher Daily basis
12-Posting & balancing to bank accounts ledger Daily basis
13-Preparation of daily cash & bank balance statements Daily basis

26 9/14/2017
14-Preparation of bank reconciliation statements Monthly basis
15-Journal vouchers Daily, as & when takes

place
16-Adequacy of documents of journal voucher For each transaction
17-Posting to control general ledger Daily basis
18-Posting to fund ledger Daily
19-Posting to budget register Daily
20-Balancing of all ledgers Daily
21-Posting to fixed assets register As & when it takes place
22-Work in Progress Assets register As & when it takes

place
23-Posting to stock register As & when it takes place
24-Balancing of stock register Daily basis
25-Posting & balancing of advance register As & when it takes

place
26-Posting & adjustment of advance register As & when it takes

place
27-Posting and balancing of loan register As & when it

takes place
28-Posting & balancing of all payable registers As & when it takes

place
29-Posting & balancing of all subsidiary ledgers As & when it takes

place
30-Posting & balancing of all sub subsidiary ledgers &

registers As & when it takes place

27 9/14/2017
31-Preparation of trial balance Monthly basis
32-Preparation of income/expenditure statements of

all projects Monthly basis
33-Preparation of income statements of DESIGNER JEANS LIMITED

Monthly and Yearly basis
34-Preparation of balance sheets of DESIGNER JEANS LIMITED

Monthly and Yearly basis
35-Preparation of cash flow statements of DESIGNER JEANS LIMITED

Quarterly /Monthly basis
36-Preparation of notes to accounts of DESIGNER JEANS LIMITED

Monthly/Quarterly/Annual
37-Preparation of cash custody certificates of DESIGNER JEANS LIMITED

Monthly basis
38-Obtain bank balance confirmation certificates

Monthly basis

28 9/14/2017
2.13 - Financial Accounting Flow Chart:
DESIGNER JEANS LIMITED s financial accounting system flow chart is given

below:
Flow Chart of Financial Accounting

29 9/14/2017
Financial Transactions
Cash/Bank transactions Non-Cash transactions
Receipt Payment Depreciation & Accrual Prior Year

transactions transactions Adjustment of Assets transactions Adjustment
Cash Journal Journal Voucher
Bank Journal
Control General Ledger
Subsidiary Ledger
Trial Balance
Income Statement Balance Sheet
Cash Flow Statement
Notes to the Accounts
CHAPTER-3
BUSINESS PLAN & ANNUAL BUDGET
3.1 - INTRODUCTION OF BUSINESS PLAN, ANNUAL BUDGET AND

OPERATIONAL REVIEWS:
1. Business Plan:

30 9/14/2017
The Business Plan outlines the key objectives for the company over the next 2/3
years. The plan will highlight Key Performance Indicators (KPIs), Cash Flow and
main strategies for achieving the KPIs.
For example, KPIs could include the following:
a. Grow Buyers to 1 within ----------5 years, and achieve -------in year 1

b. Target Average Revenue per Buyer
c. With a funding target of $ m us equity, and $ m debt financing, generate positive
cash flow of $ m us in Year 1
Key Strategies include:
a. Use a fast roll out of buyers to grow revenue in year 1 of $ m US.
b. Grow foreign buyers to % of revenue within 2 years.
c. Offer high quality ready made garments aimed at high value business customers
d. Use fully integrated production, IT & finance platform. With central control, this
system will eliminate paper entry.
2. Annual Budget:
The Annual Budget shows how the Business Plan Goals will be achieved financially.
The organization chart will define the functional relationships used to manage the
company, from the Board, Chief Executive, and Departmental Management,
together with supporting regions/branches.
The budget documents how each function will operate financially, detailing sales,
headcount, expenses, and capital fixed assets for the next 12 months, by month.
Each Departmental Manager will submit his budget for approval by the Head of
Finance, CEO, and then the Board prior to the start of the financial year. Following
approval by the Board, each Manager will have defined authorization levels for
Capital, Expenses, and Headcount.
3. Operational reviews:
Monthly the CEO & the departmental managers will hold a brief review of the
companys performance, including the Balance Sheet, Income Statement and Cash
Flow and send a report to the Board. The purpose of the review is to ensure that the
annual budget is achieved by monitoring current performance.
This review will analyse major variations from budget by functional manager, the
potential dollar impact, corrective action required, by whom and a timetable. A
summary will be sent to the Board.

31 9/14/2017
Quarterly the Chief Executives will present to the Board the results to date, to
demonstrate how the budget is being achieved, identify significant variations and
corrective actions, and to review overall strategies.
3.2 BUDGET PERIOD AND FORMAT:

Type of Budget:
On an annual basis (starting from October 1 each year), and based on the
organogram, each cost centre prepares: an Annual Budget for DESIGNER JEANS
LIMITED Operational Activities detailing headcount, expenses and capital
requirements by month. This budget will be consolidated by Finance, who will
produce a summary, together with a forecast of cash flow.
Format of budget:
Amounts in DESIGNER JEANS LIMITED Operational Activities Budget should be
allocated as per the Chart of Accounts. The Operational Activities Budget format
will be as per Appendix-A.
3.3 PROCESS OF BUDGET PREPARATION:

Budget for DESIGNER JEANS LIMITED Operational Activities:
Operational budget is prepared by the

Head of Finance
The CEO approves the budget and places it before the Managing
Director
The Managing Director makes its recommendations to the Board

meeting
The budget is then reviewed and recommended by the Board Meeting

for approval
Budget is approved at the AGM by

Directors
Timing of Budget Preparation

The Annual budget is prepared for the one year from January to December. The
budget for the year should be finalized by the Head of Finance by December 31st of
each year
3.4 BUDGETARY CONTROL:

32 9/14/2017
Budgetary Control is a system of planning and controlling cost, which starts with
the establishment of budget relating to activities to be carried out in order to
achieve the Company goals and regular comparison between budget and actual
results / costs; analysis of variances and taking corrective measures.
Objectives of the Budgetary Control System

From the functional point of view, a system of Budgetary Control will serve the
purpose of Planning, Coordination and Control. The objectives of the budgetary
control are detailed below:
Combining the ideas of all levels of management in the preparation of different

functional budget
Coordinating all the activities of a program and Company
Helping to centralize control and de-centralize responsibilities
Planning and controlling income and expenditure to determine Company needs
Acting as a guide for management decisions
Providing a yardstick against which actual results are compared
A tool helping to point out the areas where management action is required
3.5 BUDGET MONITORING:
DESIGNER JEANS LIMITED Finance Department shall closely control and monitor
the budget with the actual results on monthly basis. At all levels of DESIGNER
JEANS LIMITED , the persons concerned with the Expenditure Process
(requisition / authorization / disbursement / approval) will be responsible for
ensuring that the expenses are incurred with in the budgetary previsions. Before
making any commitment for any expenditure, the concerned person(s) shall ensure
that disbursement and unpaid obligations do not exceed the budget limit.
The Budget shall be closely monitored by the Finance Department of DESIGNER

JEANS LIMITED , who are responsible for preparation of monthly Financial
Statement, Variance Report showing Budget VS Actual amounts and reasons for
major variances. The Head of Finance will oversee the budget
monitoring/controlling process.
3.6 BUDGET VARIANCE ANALYSIS:
DESIGNER JEANS LIMITED Finance Department shall prepare line wise

comparative statement of income and expenditure showing Budget VS Actual
(income and expenditure) and variance thereon on a quarterly basis, along with
explanations for variations. The main reports should be:
a) Month a year to date actual VS budget and

33 9/14/2017
b) Trend by month a year to date VS budget.
3.7 LINE ITEM FLEXIBILITY:
There will be a flexibility of 10% in any particular line item, for which no prior
approval will be required, provided that the actual total expenditure in all line items
does not exceed the total budget. However, such flexibility is not to be considered
as a budget revision, and the actual excess expenditure, of any, will need to be
shown as an adverse variance against the original budget.
3.8 SUBMISSION OF BUDGETS:
The respective departments shall submit their budgets to the DESIGNER JEANS
LIMITED Secretariat as per agreed terms and conditions and time frame. On
receipt of the Budgets, the Secretariat shall release funds to programs based on the
approved work plan and estimated budget requirements for a period of 3 months.
However, all projects are required to submit expenditure report to the DESIGNER
JEANS LIMITED on a monthly basis.
3.9 CASH FLOW REPORTING:
The forecasting and control of cash is vital for the operation of the company.
The annual budget & cash flow by month will be the main measurement for
controlling cash. Each month Finance will prepare a 3 month cash flow report, and
compare to the budgeted cash flow.
Cash Flow forecasting report:
The Finance Manager will prepare each month a forecast of receipts and payments,
together with bank balances, for the next 3 months. This report (see below) will be
reviewed by the Head of Finance and approved by the CEO.
This report will be prepared from input from the departmental managers of
estimated purchases (from planned purchase orders), sales, and special expenses
etc.
A weekly review will be made of actual cash flow and any variances of more than
50,000 taka will be reported to the Head of Finance. Major variances may require a
new forecast to be prepared.
At the end of each month a variance report will be prepared for the Head of
Finances review to measure the accuracy of the forecast, and to help to improve
the next forecast preparation.
Cash flow- payments & receipts:

34 9/14/2017
Purchases:
It is important that all major purchases are documented by an approved purchase

order, with a copy to finance, for inclusion in the cash flow report. Approved
purchase orders will be checked with supplier invoices and paid. Purchase orders
not paid need to be included in the Purchase Orders not paid report (see below),
and added to the cash flow report.
Capex:
Estimated capex expenditure from the budget for the next 3 (three) months will be
updated by Engineering on the Planned Capex report (see below) & submitted to
Finance. Engineering will coordinate capex from each department, including
engineering, to provide a total requirement of capex.
Expenses:
Based on actual & budgeted expenses, Finance will estimate expenses.
Sales:
Sales need to be forecasted, so that receipts can be estimated. Monthly, the Sales
department will forecast sales by month for the next 3 months (see below),
compared to budget, from which Finance will calculate sales receipts.
Receipts & Payments

Cash Flow report for 3 months Oct, Nov & Dec 2006
Amount in Taka
Item Oct Nov Dec
Cash in Bank 100 80
Less: O/s Cheques (10)
Net bank 90
Receipts-sales (see forecast) 50
Investors funds 0
Cash Available 140
Operational expenses 10
Purchases (see list) 20

35 9/14/2017
Capex (see list) 30
Cash outflow 60
Net Cash in bank month end 80
Budget 70
Variance 10
Variance explanations:
October:
1. Sales over budget by 5k due to higher sales of FWTs +5
2. Capex decreased due to lower cost of a/c equipment by 4k +4
Prepared by :. Approved by:

Head of Finance
Approved by:
Date:././ CEO
Sales forecast report Taka for 3 months Oct, Nov & Dec 2006
Summary Export Revenue
Amount in Taka
Product Oct Nov Dec Total

36 9/14/2017
Total
Budget
Variance

Sales & Marketing
Date:././
Purchase Orders not paid for 3 months Oct, Nov & Dec 2006
..Date payable
Amount in Taka
P.O. Supplier Description Oct No Dec Total
Number v
12345 Chowdhu 3 zones a/c 50,000
ry
12666 Mullah 5 masts for NW 30,000
zone
12765 3 Vehicles 75,000
Contract CBOSS Software 42,000
Total taka 197,0

00

Finance
Date:././
Planned Capex report for 3 months Oct, Nov & Dec 2006
..Date payable

37 9/14/2017
Amount in Taka
Budget Description Oct Nov Dec Total
#
1 Huawei equipment 650,000
3 National roll out mobilization- 450,000
SE Zone
6 3 Vehicles 75,000
Total taka 1,175,0

00
Budget 1,150,0
00
Variance (25,000
)

Engineering
Date:././

38 9/14/2017
CHAPTER 4
BOOKS OF ACCOUNTS
4.1 - Introduction:
In general, the following accounting forms and recording books will be kept and
maintained by DESIGNER JEANS LIMITED . These accounting forms and recording
books would be used for documentation of various records, analysis and
interpretation of daily financial transactions of DESIGNER JEANS LIMITED in
terms of cash and accrual basis. Utilities and characteristics of different forms and
recording books are described here in details for smooth functioning of processing
the every day financial transactions of DESIGNER JEANS LIMITED.
4.2 Cash Journal Debit / Payment Voucher:
In case of cash expenses or payments or discharging of liabilities, it has to be

recorded through Debit Cash Journal. Debit / Payment vouchers shall be
submitted for approval to the competent authority together with all supporting
documents. Only duly approved and authorized vouchers can be posted to the books
of accounts.
4.3 Cash Journal Credit / Receipts:

In case of cash receipts or incomes, it has to be recorded through Credit Cash
Journal. Credit / Receipts vouchers shall be submitted for approval together with all
supporting documents. Only duly approved vouchers can be posted to the books of
accounts.
4.4 Bank Journal Debit / Payment Voucher:

In case of bank expenses or payments or discharging of liabilities, it has to be
recorded through Debit Bank Journal. Debit / Payment vouchers shall be
submitted for approval to the competent authority together with all supporting
documents. The voucher should be authorized through Expenditure Note Sheet,
which will be mentioned the description of the nature of expenditure, VAT at source
and TDS amount and shown the option of authorized personnel. Only duly approved
and authorized vouchers can be posted to the books of accounts.
4.5 Bank Journal Credit / Receipts:

In case of bank receipts or incomes, it has to be recorded through Credit Bank
Journal. Credit / Receipts vouchers shall be submitted for approval together with all

39 9/14/2017
supporting documents. Only duly approved vouchers can be posted to the books of
accounts.
4.6 Journal Voucher For Adjustments / Non Cash Transactions:

Journal vouchers need to be prepared in order to reconcile different combinations
of inter related accounts. Besides, transactions of some non-cash items will also be
made through the preparation of Journal Voucher.
Preparation of journal voucher is generally necessary to record the posting of all

financial transactions that are generally categorized as below:
Depreciation of all fixed assets;

Provision created for the capital expenditures;
Provision created for the revenue expenditures;
Adjustment in inventory accounting;
Adjustment of advances;
Income receivables;
Deferred service charges
Provision created for the bad debts;
To accounts for accrued liabilities;
Accounting of deduction of security deposit, Income Tax, & VAT
Entries for appropriate corrections;
Other transactions not covered by any other vouchers.
Journal vouchers shall be submitted for verification to the Manager Finance (FM)
and then for approval to the Head of Finance, together with all supporting
documents. Only duly approved and authorized journal vouchers can be posted to
the books of accounts.
4.7 Cash Journal Register:
DESIGNER JEANS LIMITED Account Department shall maintain Cash Journal

Register. All cash transactions will be recorded in the cash journal register strictly
on daily basis in computer.
Cash debit journal will be recorded on the expenditure / payments side and cash
credit journal will be recorded on the receipt side of the cash journal register
strictly chronologically. Cash journal register must be balanced after daily
operations are being completed.
After balancing the cash journal, the balance amount will be physically verified and
there after both accounts officer and cashier will put their signatures
acknowledging the above balance as found correct. Thus, it is the primary and main

40 9/14/2017
book of the DESIGNER JEANS LIMITED that will give an accurate picture of the
cash item transactions in a particular time.
4.8 Bank Journal Register:

DESIGNER JEANS LIMITED account Department shall maintain Bank Journal
Register. All Bank transactions will be recorded in the bank journal register strictly
on daily basis in respective Bank name wise in separate page in the Bank Journal
Register in computer.
Bank debit / Payment journal will be recorded on the expenditure / payments side
and Bank credit journal will be recorded on the receipt side of the Bank journal
register strictly chronologically. Bank journal register must be balanced in
respective bank name wise at the end of the month.
After balancing the Bank journal Register, the respective bank account will be
reconciled with Bank statement.
4.9 Control General Ledger:
The control general ledger is the control book to summarize all financial
transactions (cash items, bank items and non-cash items transactions) of
DESIGNER JEANS LIMITED in accounts head and accounts code wise for easy
preparation of financial statements. Recording of all the daily income and expenses
transactions will be made in the control general ledger through computer. All
transactions in cash journal register and through journal vouchers will have to be
recorded in control general ledger under different accounting heads and codes.
4.10 Subsidiary Ledger:
Subsidiary ledger is the secondary control book to summarize all financial

transactions (cash items and non-cash items transactions) of DESIGNER JEANS
LIMITED in accounts head & code wise for detailed presentation of the control
general ledger. Detail recording of the daily income and expenses transactions will
be made in this ledger as it requires. All transactions in cash journal register, bank
journal register and through journal vouchers will have to be recorded in this ledger
under different accounting sub-heads and sub-codes.
4.11 Stock & Store Ledger:
Stock & Store ledger shall be maintained for all materials purchased - whether for
works or for store or for sale. A separate folio or set of folios shall be opened for
each stock & store group. All stock & store items placed in store or issued out of
stock & store should be recorded in the stock & store ledger individually. All stock
& store items in store shall be inventoried regularly (monthly / quarterly). All types

41 9/14/2017
of stock & store ledgers shall be up-to-date at all times and balanced at the end of
each month.
4.12 Bank Reconciliation Statement:

Bank statement providing all details of bank transactions should be obtained from
the bank by the fifth (5) day of the following month and scrutinize all the
transactions recorded in bank statement and reconcile with the Bank Journal
Register compulsorily on monthly basis.
Bank reconciliation statement should be prepared by the tenth (10) day of the
following month.
Appropriate reconciliation would also be required for bank charges, which are
generally accounted for only on receipt of bank statements.
The Finance Manager for verification should sign the completed bank reconciliation
statement very carefully monthly.
4.13 Formats to be Used:
The Company will also use the following formats in the prescribed forms designed
in connection with recording, posting, documenting, as evidences, finalizing all
financial transactions and preparing & presenting financial statements of
DESIGNER JEANS LIMITED :
Advance slip / IOU form;

Requisition of fund / indent form;
Store materials requisition form;
Purchase requisition form;
Schedule of comparative statement form;
Purchase order form;
Goods receipt & inspection note form;
Travel expenses and allowance bill form;
Log book sheet;
Travel request from;
Overtime request form;
Annual accounts statements form;
Accounts schedules form;
Staff advances statements form;
Accounts payable statements form;
Accrued liabilities statements form;
Physical inventory statements form;
Trial balance statements form;
Income & expenditure accounts form;

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Balance sheet statement form;
Cash flow statement form;
Cash certificates form;
Bank confirmation certificates form and
Cash Scroll Book form.
4.14 Erasing & Overwriting Prohibition:
Erasure and overwriting of entries once made in the Cash journal register, Bank
journal register, ledgers and other registers are strictly prohibited. If a mistake is
discovered, drawing the pen through the incorrect entry and inserting the correct
one in between the lines should correct it. Every such correction should be attested
by the officer / cashier / AMF with his dated initials.
4.15 Conclusion:
The above mentioned forms and registers are important documents in connection
with true and fair view presentation of the financial statements of DESIGNER
JEANS LIMITED . So, due care must be taken of these ledgers & registers and be
updated regularly with correct information. Special attention should also be taken
so that the entries to the forms and registers are made as carefully as possible and
deletion.
Over writing or tearing of page with wrong entries should be avoided. If an entry in
the form / register is found to be erroneous, then initials should be given after
inserting correct data deleting the previous one.
Eraser, vanishing liquid / fluid should never be used to rectify a wrong entry. Data
transferred from certain column or space of original source will have to be recorded
in the respective column or page of the register.
4.16 - List of Books of Accounts:
Following is a suggested list of books of accounts can be maintained in a

Computerized Accounting Software / Manually with following options by DESIGNER
JEANS LIMITED :
I. Cash Journal Register;

II. Bank Journal Register;
III. Subsidiary Register;
IV. Control Ledger;
V. Subsidiary ledger books;
VI. Advance Register;
VII. Accounts Receivable Register;
VIII. Accounts Payable Register;

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IX. Statutory and Statistical Register:
a. Statutory Register:
i. Share Register / Member Register,
ii. Register of Directors,
iii. Register of Mortgages and charges,
iv. Register of contracts with Directors and
v. Minute Book.
b. Statistical Register:
i. Application and Allotment Register,
ii. Share Transfer Register,
iii. Share Certificate and Debenture Books,
iv. Attendance Book,
v. Agenda Book,
vi. Proxy Register and
vii. Index Cards.
4.17 - Chart of Accounts:
The books of accounts / records shall be maintained strictly as per the Chart of
Accounts and other codes to facilitate generating any financial information on
demand with every detail. The designed system shall ensure the facility of coding
and de-coding financial data / information.
Appendix B shows the Chart of Accounts of DESIGNER JEANS LIMITED .
4.18 - Backup Documents:
Backup Documents mean documents that support the genuineness / approval /

authorization of the receipts / income and payments / expenditures.
Documents include Pro -forma Invoice/Bank Voucher/Bills / Commercial Invoice /

Delivery Challan /MRR /Cash Memos / Money Receipts given by the Vendors / Shop
keepers / Suppliers / Contractors / Service Providers / the Vendors / Shop keepers /
Suppliers / Contractors / Service Providers / Employees etc.
All backup documents must be cancelled by using a PAID DATE seal.
4.19 - Numbering of Documents:
All payment vouchers, receipt vouchers, journal vouchers, money receipts, debit
notes, credit notes and invoices must be printed and sequentially numbered. All
these printed vouchers / documents must be used chronologically in order to keep
track of any missing vouchers / documents.

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Any printed voucher / documents becoming unusable for any reason shall be
crossed out and marked as VOIDED and shall be kept with the voucher file.
4.20 - Record Keeping:
All vouchers shall be kept chronologically according to its number in a file. Separate
file for different series of vouchers / documents shall be maintained. All voucher /
documents files shall be kept under safe custody and only authorized person shall
be given access to those vouchers / documents.
All unpaid vouchers / Bills / Invoices / Cash Memos should be kept in a separate file.
Monthly Reports:
For every Fixed Deposit and other deposits (both short term and long term) at the
end of each month a report should be generated showing the principal, accrued
interest, etc. All refundable deposits, invoices should be kept systematically in a
separate file. All Fixed Deposits and other deposits (both short term and long term)
certificates must be kept under the safe custody of the Finance Manager. A separate
Register should be maintained for the Fixed Deposits and other deposits (both short
term and long term)
Receivable, Payable and Accrued Expenses:
Journal Vouchers should be used for accounting for Receivable, Payable and
Accrued expenses. For all types of Receivable, Payable and Accrued Expenses,
monthly statements showing all the transactions should be generated. At the end of
each year, direct confirmations to customer and supplier should be sent for the
Receivables and Payables. All invoices / bills received, irrespective of whether paid
or not must be kept with the Journal Voucher and if not accounted for in separate
files. DESIGNER JEANS LIMITED must ensure that payments are made within the
credit period.
Every after 6 (six) months balance confirmation letters should be sent to the
debtors / creditors for the receivable / payables as shown in the accounts. If there
are differences with the debtor / creditors the matter must be reconciled
immediately. Each advance, debtor and creditor account should be reconciled on
monthly basis to the ledger account. Break up of the each closing balance should be
readily available.
Taxes:

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Tax should be deducted at source from all applicable payments as per the Tax Rules
as and when indirect taxes are paid it should be accounted for in the books of
account.
DESIGNER JEANS LIMITED must withhold tax from rental of moveable property
paid to a non-resident person with exemption of offshore banks or offshore
companies carrying out leasing business.
Stamp Duties:
DESIGNER JEANS LIMITED must ensure that Stamp Duties are paid as per
government rules.
4.21 - Exchange Rate:
DESIGNER JEANS LIMITED Head of Finance must regularly obtain exchange rate
of US $ with the Local Currency and preserve it. Only these exchange rates can be
used for translation purposes at month end.
CHAPTER 5
WRITING PROCEDURE OF FORMS, VOUCHERS & RECORDING
BOOKS
5.1 Instructions to write up Cash Journal:
At first, mention project name for which the concerned cash journal will be
prepared;
And then, voucher number will be set-forth chronologically relating to the date of
incurring the financial transactions.
Put the date of preparation of cash journal.
Exchange rate of the date of happening the transactions to be mentioned for
foreign currency conversion purpose;
Accounts head and code from the chart of accounts has to be clearly specified in
the voucher format for both debit and credit sides. Other wise, summarization of
ledger is not accurately possible in computer software.
For better internal check system, it is compulsory to write up the Taka amount in
words in cash journal format correctly.
Narration of the occurring of the financial transaction shall be written in legible
way that shall be easily understood by all concern.
Before posting, the cash journal shall be checked compulsorily. Posting of cash
journal in the cash journal register through computer software will be clearly
earmarked with the words YES or NO along with the signature and also

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mention the date of posting. Control general ledger, subsidiary and sub-
subsidiary ledger positing automatically generated in the computer software.
Finally, cash journal will be printed out in hardcopy, signed by the prepared by,
checked by and approved by.
5.2 Instructions to write up Bank Journal:
At first, mention project name for which the concerned Bank journal will be
prepared.
And then, voucher number will be set-forth chronologically relating to the date of
incurring the financial transactions.
Put the date of preparation of bank journal.
Name the bank account from which payment is to be made and receipt will
accumulate.
Mode of payment will have to be mentioned. i.e. cheque or Bank debit advice or
T.T in payment voucher.
Mode of receipt will be mentioned cheque or T.T in case of receipt voucher.
It is compulsory to write down the cheque number for better internal control
over bank payments and receipts;
Exchange rate of the date of happening the transactions to be mentioned for
foreign currency conversion purpose;
Accounts head and code from the chart of accounts has to be clearly specified in
the voucher format for both debit and credit sides. Other wise, summarization of
ledger is not accurately possible in computer software.
For better internal check system, it is compulsory to write up the Taka amount in
words in cash journal format correctly.
Narration of the occurring of the financial transaction shall be written in legible
way that shall be easily understood by all concern.
Before posting, the Bank journal shall be checked compulsorily. Posting of Bank
journal in the Bank journal register through computer software will be clearly
earmarked with the words YES or NO along with the signature and also
mention the date of posting. Control general ledger, subsidiary and sub-
subsidiary ledger positing automatically generated in the computer software.
Finally, Bank journal will be printed out in hardcopy, signed by the prepared by,
checked by and approved by.
5.3 Instructions to write up Journal Voucher:
First point is that to note the project name for which journal has been prepared;
Then, put the journal voucher number in the format;
Date of preparation of journal voucher is compulsory to write down;

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Accounts head and accounts codes from chart of accounts to be accurately
mentioned in the journal voucher form with debit and credit amount. Then,
totaled both the sides.
Being implementation of internal check system it is compulsory to write up the
Taka amount in figure and in words correctly in the journal voucher format.
In narration column, the causes of making the journal voucher will be
highlighted in details with putting references.
Finally, journal voucher will be signed by who prepared it and checked it and
then placed to Chief of Finance / Accounts for final approval.
Posting of non-cash transactions in ledgers should be clearly earmarked by
putting the YES or NO with date of posting in journal voucher format.
5.4 Instructions to write up Revenue Voucher:
First point is that to note the income particulars for which sale voucher has been
prepared;
Then, put the Revenue voucher number in the format;
Date of preparation of Revenue voucher is compulsory to write down;
Accounts head and accounts codes from chart of accounts to be accurately
mentioned in the Revenue voucher form with debit and credit amount. Then,
both the sides should be totaled.
For implementation of better internal check system it is compulsory to write up
the Taka amount in figure and in words correctly in the journal voucher format.
In narration column, the causes of making the Revenue voucher will be
highlighted in details giving references.
Finally, Revenue voucher will be signed by who prepared it and checked it and
then placed to Chief Financial Officer (Head of Finance) for final approval.
Posting of Revenue transactions in ledgers should be clearly earmarked by
putting the YES or NO with date of posting in Revenue voucher format.
5.5 Instructions to write up Cash Journal Register:
Cash Journal Register is a computer software generated format.

Computer generated cash journal register has two sides for recording of cash
journals
o Credit journals will be recorded in Receipts side and

o Debit journals will be recorded in Payment side.
Format is same for recording in both sides (credit and debit).
Cash Journal both debit and credit shall be posted in the Cash Journal Register
that is a computer software generated format.

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Finally, cash journal register will be printed out in hardcopy & to check the
following by a responsible official:
At first, check the dates of the cash journal register. This will be the date of
debit and credit journals and sequence of writing up the date should
always be maintained accurately.
Then, voucher number from cash journal of debit and credit shall be
written so correctly to attain the goal of internal check and control.
To check the columns whether transactions are recorded as the details of
nature of expense. Whether accounts head and codes column are in line
with the accounts head and codes that are written in cash journal.
Then, check the Taka amount separately for cash payment and receipt in
cash journal register.
Check balancing amount after deducting total payments from total receipt.
Finally, accounts personnel will sign cash journal register after detail checking
and verification of vouchers posting & balancing with the close of every day's
recording.
5.6 Instructions to write up Bank Journal Register:
Bank Journal Register is a computer software generated format.

Computer generated Bank journal register has two sides for recording of bank
journals
o Credit journals will be recorded in Receipts side and

o Debit journals will be recorded in Payment side.
Format is same for recording in both sides (credit and debit).
Bank Journal both debit and credit shall be posted in the Bank Journal Register
that is a computer software generated format.
Finally, Bank journal register will be printed out in hardcopy & to check the
following by a responsible official:
At first, check the dates of the Bank journal register. This will be the date
of debit and credit journals and sequence of writing up the date should
always be maintained accurately.
Then, voucher number from bank journal of debit and credit shall be
written so correctly to attain the goal of internal check and control.
To check the columns whether transactions are recorded as the details of
nature of expense. Whether accounts head and codes column are in line
with the accounts head and codes that are written in bank journal.

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Then, check the Taka amount separately for bank payment and receipt in
bank journal register.
Check balancing amount after deducting total payments from total receipt
in respective bank name wise at the end of the month.
After balancing the Bank journal Register, the respective bank account will be
reconciled with Bank statement.
5.7 Instructions to write up Control General Ledger:
Control General Ledger is also a computer software generated format.

The Debit and Credit of Control General Ledger will be automatically posted
through computer software simultaneously at the time of inputting the posting of
debit and credit of Cash Journals, Bank Journals and Journal Vouchers in the
computer.
Finally, cash journal register, bank journal register & journal voucher register
will be printed out in hardcopy and to check the following by a designated
DESIGNER JEANS LIMITED official:
Firstly, to check the accounts head and accounts code very carefully
and accurately.
Check the correct date from cash journal and journal vouchers.
Check the debit and credit column Taka amount whether recorded as
per accounts head and code debit & credit basis from cash and
journal voucher.
Then, check the balance amount by balancing debit & credit figure in
line by line.
Finally, marking of debit and credit balances accurately and signed the cash
journal register, bank journal register and journal voucher register that these
have been checked.
5.8 Instruction to write up Bank Reconciliation Statement:
First the balance as per bank statement for reconciliation purpose in

reconciliation statement.
Then, add all cheques cashed by bank but not entered into Bank Journal
Register.
Then, add all cheques deposited in bank but not collected by bank.
Then, add all cheques entered in to Bank Journal Register but not credited by
bank.
Then, account for the Bank interest credited in statement but not entered in to
Bank Journal Register.
Then, deduct all cheques issued but not presented in bank for payment.

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Then, add all bank charges & commission debited in bank statement but not
entered in to Bank Journal Register.
The official designated for verification should review the completed bank
reconciliation statement very carefully.
To ensure the companies assets are protected, all bank accounts must be fully
reconciled monthly in writing. The Finance Manager will authorize the
reconciliations, for spot checked/initialing by the Head of Finance.
Any item (deposit or cheque) outstanding for longer than 60 days must be
explained in detail on the reconciliation.
CHAPTER 6
MAINTENANCE OF REGISTERS
6.1 - Types of Registers:
Accounting offices of DESIGNER JEANS LIMITED shall maintain the following
registers to record the financial transactions and its related information:
Fixed Assets Register
Salary and Payroll Payment Register
Cheque Issuing Register
Cheque/DD/PO Receipt Register
Income Tax Register
VAT Register
Stock & Store Register
Advance Slip / IOU Register
Budget Register
6.2 - Fixed Assets Register:

All fixed assets acquired / disposed off shall be recorded as per the format given for
the Fixed Assets Register. A separate folio or set of folios shall be opened for each
asset group. All fixed assets on hand shall be recorded in the fixed assets register
individually. The register shall be kept up to date at all times and balanced at the
end of each month by the DESIGNER JEANS LIMITED Head Office and its Unit
Offices.
The fixed assets shall be physically verified at the end of every year and results
should be reconciled with the fixed assets register and short / excess, if any, should
be adjusted in the books of accounts and Fixed Assets Register with the approval of
the competent authority of DESIGNER JEANS LIMITED . Sold, disposed off and
damaged asset must be recorded in the appropriate column of the Register.
Depreciation on fixed assets will be recorded in the fixed assets register in
appropriate column.
6.3 - Payroll & Salary Payment Register:

DESIGNER JEANS LIMITED Head Office and its Unit Office shall maintain a
register for payment of monthly salaries to the staff members. All employees should

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be encouraged to receive their salary through their individual bank account or
through cheques. This will reduce the risk of handling cash.
6.4 - Cheque Issue Registers:

To establish an effective internal control mechanism, cheque issue register shall be
effectively maintained by the DESIGNER JEANS LIMITED. Register to be
maintained for recording cheques for persons to whom cheques are issued, date,
amount, indicating payment date, cheque nos., purposes of payment, bank branch
upon which cheques are drawn. Separate cheque issue register shall be opened for
individual bank account. Cheque signatories shall compulsorily sign the register.
Register shall always be signed by a senior level officer of accounts Department &
shall be signed by preparing personnel.
6.5 - Cheque/DD/PO Receipt Registers:

To establish an effective internal control mechanism a cheque & demand draft
receipt register shall be effectively maintained by the DESIGNER JEANS LIMITED.
This register is to be maintained for recording cheques for persons from whom
cheques & demand drafts are received, date and amount, indicating receipt date,
cheque nos., purposes of receipt, bank branch upon which cheques and demand
drafts are received. This register shall always be signed by a senior level officer of
accounts department and shall be checked by another personnel.
6.6 - Income Tax Register:

Income Tax register shall always be maintained by DESIGNER JEANS LIMITED to
control over the income tax deductions from the suppliers & consultants and
deducted amount are duly deposited to the Government fund through treasury
challan as per rules and regulations made for this purpose by the Income Tax
Ordinance 1984.
6.7 - VAT Register:

VAT register shall always be maintained by DESIGNER JEANS LIMITED to control
over the VAT collections from customers/suppliers/consultants & are duly deposited
to the Government fund through treasury challan as per rules & regulations as
made for this purpose by the VAT Act 1991.
6.8 - Stock & Store Register:

The Store Keeper should maintain a Store Register. He/she should make entries for
every single purchase in the store register even if it is immediately required by the
production section. He/she should check the materials against the invoice in terms
of quantity and quality and prepare a Material Receiving Report (MRR) as per the
prescribed format. The key of the Store should be held by the Store Keeper. He/she
should issue the materials against the Store Requisition Slip (SRS) signed by the
Factory General Manager or any other person and make necessary entries in the
Store Register under the First In First Out (FIFO) Method. Physical Stock Taking

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should be conducted by the Project Coordinator or by any other person authorized
by him on a random basis.
This register will be checked and signed at the end of month by respective Finance
Manager and Admin Manager. The above register to be recorded systematically all
detail information (purchases/received, issues, returns and balances) to the need of
management for all related purposes. The register shall be duly checked on regular
basis and signed by the accounts personnel responsible for this purpose.
6.9 - Cash Register:

Cash register to be maintained by the DESIGNER JEANS LIMITED Head Office and
its Unit Offices to record systematically all detail information (cash fund received,
payments, reimbursement amount and balance outstanding) to the need of
management for petty expenses made for emergency purposes. The register shall
be duly checked regularly and signed by the accounts personnel responsible for this
purpose.
6.10 - Advance Slip / IOU Register:

IOU / Advance Slip register shall be maintained by the DESIGNER JEANS LIMITED
Head Office and its Unit Offices to record the Taka amount given as IOU /Advance
and to record the Taka amount adjusted / refunded by the staff members of the
Company only for emergency purposes or making expenses of very small amount.
The adjustment of advance will be made with respective bills within two working
days from the advance receipt date. But advance for away tour or tournament will
be adjusted within one week after completion of the away tour or tournament.
6.11 - Budget Register:
A budget register shall be maintained by the DESIGNER JEANS LIMITED Head

Office in an updated manner by the accounts personnel to control the expenditure
in any particular head. Before confirming the payment, budget should be checked
and verified and this is why the budget register should be maintained regularly and
correctly.
CHAPTER 7
FINANCE & ACCOUNTS ACTIVITIES
7.1 Finance & Accounts Activities:
DESIGNER JEANS LIMITED finance and accounts activities can be subdivided into
five main specialized ways for the sake of better handling of its entire operations /
functions viz:
i. Treasury, bills and salary activities;

ii. General accounting, ledger & final accounts activities;
iii. Revenue Accounting Activities;
iv. Purchase, Stock & Store Accounting Activities;

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v. Budgeting, tax, Register of Joint Stock Company and internal & external
reporting activities.
The details of the above activities are highlighted as follows:
7.2 Treasury, Bills and Salary Activities:

a) Handling of cash floats All receipts and payments by cash and bank accounts;
b) Payment of various expense bills in cash or in cheque after proper examination
of these bills;
c) To exercise control over all banking transactions;
d) Withdrawal of necessary amount of cash from banks to carry out daily cash
transactions;
e) Preparation of cash requisition statement on need basis;
f) Proper, accurate and up dated writing of cash book (Cash Scroll Book) and daily
balancing;
g) Proper, accurate and up dated writing of Bank Book (Bank Journal Register) and
month end balancing;
h) Reconciliation of cash balance with physical balance of cash;
i) Preparation of IOU slip and file the duplicate for control and internal cheek;
j) Preparation & checking of advance forms and their reporting;
k) Debit & credit vouchers preparation through cash journal only the approved
ones;
l) Debit & credit vouchers preparation through bank journal only the approved
ones;
m) Preparation of cash & bank payments and receipts summary as per accounts
heads and code on monthly basis;
n) Preparation of journal vouchers for adjustments, rectification and for other
transactions as and when needed;
o) All types of correspondences with the banks;
p) Collections of bank statements accounts wise;
q) Collections of bank confirmation statements from all banks on monthly basis;
r) Maintaining of bank accounts register / ledgers;
s) Preparation of bank reconciliation statement for all bank accounts on monthly
basis;
t) Preparation of daily cash and bank balance statements;
u) TA / DA bills checking with rules;
v) Budget provisions verifications;
w) Process of salary and bonus payments to staff members;
x) Preparation of bank advice for salary payments with detailed list of individuals
net salary payable;
y) Documentation of recording the various kinds of deductions from salary;

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z) Processing all sorts of internal bills, their documentation, authentication,
approval, payments & recording accordingly;
aa) Processing all sorts of external bills (bills of contractors, suppliers and other
third parties), their documentation, relevancy, authentication, approval,
payments and recording accordingly;
7.3 General Accounting, Ledger & Final Accounts Activities:

a) Preparation, checking and verification of Journal vouchers for all non cash
transactions;
b) Posting of approved journal vouchers (non-cash) in computer accounting
software daily;
c) Posting of all cash transactions through cash-journal in Cash Journal Register
daily;
d) Posting of all bank transactions through bank-journal in Cash Journal Register
daily;
e) Properly and accurate posting and balancing of all types of registers and sub -
subsidiary registers on a timely basis;
f) Maintenance of more than one fixed assets register for better control;
g) Posting and balancing of fixed assets register.
h) Depreciation calculations of all fixed and other assets which are depreciable
assets;
i) Preparation of fixed assets schedules showing their depreciation and written
down value;
j) Preparation of Trial Balance;
k) Preparation of Income Statements.
l) Preparation of Balance Sheet;
m) Preparation of all accounts schedules and statements;
n) Preparation of Notes to the Accounts / Financial Statements;
o) Finally, to confirm that the financial statements / accounts of DESIGNER JEANS
LIMITED are prepared as per the requirements and disclosure requirements of
the International financial reporting standards (IFRSs) as adopted in
Bangladesh;
7.4 Revenue Accounting Activities:

a) Preparation of all revenue related activities for preparation of income statements
in presenting the financial statements;
b) Preparation of revenue related cash journal and their documentation &
recording properly;
c) Preparation of revenue related bank journal and their documentation &
recording properly;
d) Preparation of revenue related journal vouchers and their documents &
recording properly;

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7.5 Purchase, Stock & Store Accounting Activities:
a) Maintenance of all related documents, papers, agreement, deeds with the
Purchase Orders/Work Order;
b) Maintenance of disbursement records, their recording in the loan register and
update the documentation.
7.6 Budgeting, Tax, Register of Joint Stock Company and Internal &
External Reporting Activity:
a) Budget and budgeting functions preparation of budgets for new and all existing
offices;
b) Collection of information & data in connection with formulation of budget;
c) Processing, editing & reviewing the collecting information and data in
connection with formulation of budget;
d) Setting of standards in relation to the formulation of budget;
e) Formulation of budget;
f) Maintenance of budget registers in all offices as per requirements;
g) Preparation of budget monitoring statements;
h) Preparation of variance statements;
i) Analysis of variances;
j) Assessment of actual results with the budgeted ones and if any deviation found,
then to pinpoint the actual causes;
k) To take necessary steps to eradicate or minimize this deviation in future through
more realistic budget preparation and / or better performance;
l) To give necessary guidelines & advice in order to rectify those
anomalies/mistakes that have been pinpointed by the internal auditors in their
periodic audit reports;
m) All correspondences to the Tax authority as per Income Tax Ordinance-1984;
n) All correspondences to the VAT authority as per VAT Act-1991;
o) Filling of tax returns of the company and its staff members whose income are
taxable;
p) Processing of tax assessments;
q) Maintenance of tax deductions register for the staff members, suppliers and for
others who are related;
r) Deposit of money to Bangladesh Bank / Sonali Bank through Challan of the
deducted amount as advance tax from staff members and outsides parties;
s) All correspondences to the RJC authority as per Company Act-1994;
t) Filling of returns of the company to the RJSC;
u) Processing of assessments relating to RJSC;
v) Internal reporting to the management for decision making relating to the
information of accounts and finance as and when needed;

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w) External reporting of financial accounting on the basis of DESIGNER JEANS
LIMITED requirements i.e scope of audit;
x) All types of correspondences to the Government where relevant;
7.7 AGED RECEIVABLES REPORTING

Each month the marketing department will produce an aged receivables report
identifying how long each invoice billed is outstanding (see report).
For customers with balances over 2 months, the marketing manager will explain
actions taken to collect the outstanding amounts, and the recommendation for
further action.
Aged receivables report as at month end

Name Total Curre +1 +2 +3 Gtr than 3 Action
o/s nt mth mth mth mths
Mullah 30,000 20,000 7,000 2,000 200 800 Stop
outgoing
Total
Prepared by:. Authorised by:..

Date:/./..
CHAPTER 8
CASH TRANSACTION
8.1 - Duration of Cash Transaction:
In order to complete writing of Cash Scroll Books and their posting in the Cash
Journal Register through computer, daily cash transactions shall be closed at least
two hours before the close of the office.
8.2 - Closing of Accounts:

Each day, all cash receipts & payments shall be entered into the Cash Journal
Register and it should be closed daily. Cash Officer (F&A) shall check and verify the
cash balance and Cash Journal Register at the end of each day and duly signed.
Manager (F&A) and Head of Finance will verify the cash balance and verify the
Cash Journal Register at the end of each month and signed duly.
8.3 - Daily Cash Holding Limit:

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The adoption of the principle of transacting cash business through bank is to keep
to the minimum the actual cash handling in the cash section.
The management will prescribe money limits for cash in hand in the Head Office.
When such limits are prescribed, cash in hand must not exceed that limit
(Tk.50,000).
Only cashier, cash officer (F&A) jointly shall be responsible to hold cash. Cash shall
be drawn from bank to meet the daily petty cash expenses. Requirement of cash
shall be intimated through Money Requisition. When the requisition of cash
approved then breakup of previous expenditures shall be approved at that time by
the CEO and Head of Finance. Such requisition shall be received by accounts at
least five hours before the Closing of banking hour. Required cash may be drawn
from the bank on requisition.
However, after disbursement & receipt the cashier, cash officer (F&A) jointly may
hold cash to the extent of Taka 50,000 (Fifty thousand).
Other than above, in no cases, money will be in the hand of any staff member of the
Company.
8.4 Handling of Cash:

Cash should be kept in secured strong iron safe. The cash safe should be double
locked. One set of key shall be kept with the Cash Officer (F&A) and the other set
will remain with the Manager (F&A). Persons handing the cash should be covered
by insurance in addition to cash security to be provided by them.
Cash Officer and Manager (F&A) who is responsible for the safe and security of
money must satisfy themselves that the iron safe is free from defects. If a defect is
detected or if there is even a doubt that the keys or their duplicates are missing,
immediately arrangement should be made for their replacement under intimation to
Head of Finance & accounts.
8.5 - Cash Scroll:

Cash shall remain in the custody of finance and accounts department. At the end of
each day after making all transactions cashier, Cash Officer shall count the cash
physically and record on a cash count sheet and shall confirm the balance with the
Cash Journal Register balance. For cash scroll specific designed format will be used.
8.6 - Cash Security:

While carrying office cash from the bank (for withdrawn purposes) and to the bank
(for deposition purposes), vehicles shall have to be used and security guard shall
have to be provided at its best level by the management.

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DESIGNER JEANS LIMITED management should arrange for insurance to cover the
risk of carrying and deposition of liquid cash.
8.7 - Receipt in Cash Section:

No money should be received from any person without issuing proper receipt / cash
memo which inter-alia will state the name of person from whom it has been
received, amount both in figure and words, purposes for which it has been received
etc. Signature of the depositor must be obtained on counterfoil of the money
receipt. Over writing & erasing is strictly prohibited.
The money receipt / cash memo should be in the prescribed form. These forms shall
be printed in number, bound book forms, kept in safe custody and properly
accounted-for.
Normally cashier shall receive the cash by giving money receipt duly signed by
Cash Officer (F&A). The receipt will be prepared in triplicate, the original will be
issued to the depositor, the duplicate copy will be kept with voucher & triplicate
copy will be retained for record and audit verification.
8.8 - Imprest Fund:

Cash is maintained on impress system with a limit of Taka 50,000 (Fifty thousand)
only. Each IOU slip/Advance Slip should be adjusted with in two (2) working days
after execution of the events or assignment.
At the time of adjustment of advance all backup documents like Bills / Invoices /
Cash Memos / Money Receipts given by the Vendors / Shop keepers / Suppliers /
Contractors / Service Providers / Employees should be received by the concerned
cashier.
The cashier & cash officer (F&A) jointly shall maintain an imprest fund for an
amount of Taka 50,000 (Fifty thousand) for DESIGNER JEANS LIMITED Head
Office in Dhaka to defray the petty expenses. The limit of amount for each
transaction is Taka 10,000 (Ten thousand) from this fund and voucher is required
for this purpose.
8.9 - Cash Deposited into Bank:

The cashier, cash officer and Manager (F&A) will make sure of the deposition of the
cash collected daily into bank and record the transaction immediately in the Cash
Journal Register and Bank Journal Register.
The Cash Officer will prepare the pay-in slip. The Manager (F&A) and Chief of F&A
will make best arrangement to send the money in the bank.

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BANK TRANSACTION
8.10 General:
General principle of DESIGNER JEANS LIMITED is that to encourage all concern to
make / receive payments through banks. All funds (received) shall be paid into the
DESIGNER JEANS LIMITED's accounts with the bankers of the DESIGNER JEANS
LIMITED and shall not be withdrawn except by cheque signed by the signatories.
There are two types of Bank transactions. One type is for operational activities
(Office & Administrative Expenses, Party Payment for goods and fixed assets etc.) of
the company. Another type is signed for transferring to the operational bank
account and payment any loan. The Operating Activities bank signatories are
Managing Directors and Directors. Any two persons must sign the cheque for this
type bank transaction. Bank signatory for bulk amount of cheque is Managing
Director or Director. All receipts of money through cheque / draft / pay order /
transfer advice, bank account shall be debited and relevant source / liability /
income account is credited. Cheque / Draft / Pay order shall be deposited into bank
through deposit slip of the bank.
8.11 - Procedure of Opening Bank Account:

The bank accounts of DESIGNER JEANS LIMITED shall be opened with the
approval of the Board.
8.12 Signatories Details:

Details of cheque signatories for operating the bank accounts will be kept
confidentially in Finance and Accounts Department under safe custody. It includes
name, designation, specimen signature and initials, validity date. When signatories
are included / deleted, list should be replaced to substitute previous one.
8.13 - Cheque Counterfoil:

While issuing cheques, it is to be remembered that counterfoil of cheques shall also
be filled in & put the date of issue, name of payees, initials of the cheque
signatories, amount in Taka and words in brief.
8.16 - Cancellation of cheques:

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If any cheque is issued but not presented for collection by the payee within six
months from the date of issue, the cheque shall be automatically canceled.
Accordingly, the finance and accounts department shall give reversal entry in the
Bank Book and keep a note in the bank reconciliation statement. Any loss or theft of
the cheque / cheque book must be informed to the concerned bank management at
earliest possible time.
8.17 - Canceled Cheques:

The word "CANCELED DATE" shall be written in the counterfoil as well as on the
face of the cheque when a cheque is required to be canceled.
8.18 - Cheque Issue Register:

Cheque Issue Register shall be maintained for each bank account separately in a
book in the prescribed manner and shall be updated always on daily basis and
counter signed by the competent authority of DESIGNER JEANS LIMITED .
8.19 - Demand Draft, Cheque & Pay-order Receipt Register:

Demand Draft (DD), Cheque & Pay-Order Receipt Register shall be maintained for
each bank account separately in a book in the prescribed manner and shall be
updated always on daily basis and counter signed by the competent authority of
8.20 - Payment from Bank:

Any payment exceeding Taka 10,000 (Ten thousand) shall preferably be made
through an account payee cheque and payment less than Taka 10,000 (Ten
thousand) may be made by cash from the cash in hand in Head Office level and unit
office level.
8.21 - Withdrawal of Cash from Bank:

For withdrawal of cash from the bank account for working cash or for any
operational expenses, a requisition for fund must be prepared for approval in
accordance with the delegated authority and withdrawal of cash from bank shall be
in accordance with the guidelines of "Delegation of Financial Authority". When cash
to be withdrawn, cash cheques should denote "Account Payee Cancelled".
Accounts personnel shall always keep in mind that the maximum Closing cash
balance in hand should not exceed Taka 50,000 after the day transaction in
DESIGNER JEANS LIMITED.
8.22 - Bank Statement and Bank Certificate:

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Collection of monthly bank statements along with Bank Certificates confirming bank
balances on monthly basis and relevant advice from bank shall be the responsibility
of Finance and Accounts Department.
8.23 - Bank Reconciliation Statement:
After receiving the monthly bank statement, the bank balance shown in that
statement as of last day of the month must be reconciled with the balance shown in
the Bank Journal Register on the same day by preparing a bank reconciliation
statement.
Bank reconciliation statements shall be prepared by Assistant Manager (F/A) duly

checked by Manager Accounts & Finance and shall be submitted for approval of the
Chief Financial Officer (Head of Finance).
The bank charge or interest not incorporated earlier in the Bank Journal Register
should be entered in the Bank Journal Register by preparing a voucher to this
effect.
Any deposit / interest, payment or cheques not recorded in the bank accounts or
bank statement shall be reconciled by adding or deducting from the Closing balance
as shown by the bank statement.
A reversal entry should be processed for canceling the cheque issue entry if the
cheque is found not presented within six (6) months. Any difference should be
thoroughly checked and investigated with the bank.
8.24 - Ordering of New Cheque book:
Respective Cash Officer with the approval Chief Executive Officer (CEO) and Chief
Financial Officer (Head of Finance) shall initiate for ordering new cheque book on
reaching the Cheque book order leaf.
While receiving new cheque book from bank respective Cash Officer (F&A) shall
count the cheque leaf and satisfy himself that the numbers of cheque leaves are
found in order.
8.25 - Safety of Cheque Books:
Finance and Accounts Department shall be the custodian of chequebook and shall
ensure that chequebooks are preserved safety. To be kept under lock (safe volt) and
key by the Cash Officer and Managers (F&A) designated for this.
Fraud, defalcation and misappropriation of public moneys are largely attributed to

inadequate measures taken by the authorized officers for the safety and security of

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the bank cheque books and bank pass books etc. The officers authorized to sign and
/ or entrusted with the custody of the cheques / pass books will be he held
personally liable for losses due to laxity on their part for the safe-keeping and
security of these books.
8.26 Receipts of Cheque / Demand Drafts Pay-Order:

Cheques / demand drafts / pay-orders received payment of dues cannot, however be
admitted till they are cleared from the bank. Final money receipt / cash memo in
printed forms shall not be granted till the cheques are en-cashed and proceeds
credited to account.
Cheques / drafts received in the Accounts department must be deposited in to the
bank without any delay, preferably on the same day, when these are received.
Delay in deposit involves question of safety and security and sometimes may result
in non-realization of the amount of the cheque.
8.27 Dishonor of Cheques:
In the event of cheques being dishonored by the bank on presentation, the causes of
dishonor should be reported at once to the drawer of the cheque with demand for
immediate payment together with any bank charges incurred and mean while the
entry in the books of accounts should be reversed.
The dishonored instruments will then be sent to the respective sender with a
forwarding letter stating the reasons of dishonor and asking them to send the
instrument back after correction or to send a fresh instrument with in three days.
8.28 Payment for Lost Cheques:

If a cheque is reported lost, contact should at once be made with the bank on which
the cheque was drawn. The bank should be informed / instructed to stop payment
on that cheque. The fact should be reported to the respective Police Station.
Fresh cheque may be issued only after obtaining non-payment certificate from the
bank.
FUND MANAGEMENT
8.29 - OPERATIONAL BANK ACCOUNTS:
Separate operational bank accounts should be maintained by DESIGNER JEANS

LIMITED for different purposes. The authorized signatories for these accounts

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should be nominated by the Board. The Company is maintained two types of Bank
Account. One type of Bank account is for maintaining operation activities and
another is maintained for deposition of all type revenue and payment / transferred
the fund to operational bank account.
Operational Activities Bank accounts:
The Operational Activities Bank accounts will be operated for Office &
Administrative Expenses, Payment for goods and fixed assets etc. of the company.
The Operating Activities bank signatories are Managing Director or Director. No
transactions other then Operational Activities can be made from this account.
Bank Accounts for bulk amount transaction:
The bulk amount transaction Bank Accounts is operated for transferring of bulk
amount to the operational bank account and payment any loan. Any type revenue
are deposited to this account. The signatories of this type of bank account are
Managing Director or Director.
DESIGNER JEANS LIMITED shall maintain two bank accounts one in Taka and
other one in USD to carry out DESIGNER JEANS LIMITED normal business
activities.
8.30 - FUND MANAGEMENT:
DESIGNER JEANS LIMITED must issue a money receipt at the time of receipt of the
money (cash / cheque / pay order / demand draft) from whatever source. Every
single collection must be deposited with the finance department on the same day of
receipt. Finance department shall deposit all collection to the nominated bank
account on the following day. The finance department shall immediately update the
system for all such funds received and enter in the books of accounts on the same
day.
8.31 - INVESTMENTS:
Excess funds or otherwise as per decision of the Head of Finance can be placed in
short-term deposits, fixed deposits and other savings instruments. The title of the
investments must belong to DESIGNER JEANS LIMITED. These deposits should
only be placed in a reputable bank.
In no circumstances these investments can be pledged as security or guarantee
without the approval of the Board.
Record of each investment should be maintained separately with information like
Principal Amount of the Investment, Interest Accrued, Principal En-cashed, Interest

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En-cashed, and Closing Balance etc. At the end of each month balance confirmation
for the investment should be obtained and differences (if any) must be reconciled
immediately.
8.32 - CASH PAYMENT LIMIT:

All payments exceeding Tk.10,000 (Ten Thousand) must be made by Crossed
(Accounts Payee) Cheque or Bank Transfer. No payments exceeding Tk.10,000 (Ten
Thousand) can be made in cash. Any exception needs CEOs and Head of Finances
written approval.
8.33 - LOAN:
DESIGNER JEANS LIMITED may have to borrow for the exigencies of its business.
But the company having power to borrow may do so to any extent within the
limitations laid down by the Memorandum or Articles or the Act. The company may
take loans from different sources with prior approval of the Board. No loan can be
received in cash; all loans must be received directly through company the bank
account. The company having borrowing powers also has the power to give security
to the lender for the loan advanced to him. This may be done by charging or
mortgage any or all of the companys property. The loan may be secured, in broader
terms, by any one or more of the following ways:
c) A legal mortgage of its property;
d) An equitable mortgage by deposit of title deeds;
e) A mortgage of movable property;
f) Bonds;
g) Promissory Notes, Bills of exchange;
h) A charge on call made but not paid;
i) A floating charge;
j) A charge on Goodwill, on a patent or a license under a patent, on a trade
mark or on a copy right;
k) By debenture or debenture stock.
The company should maintain a Register of Debenture Holders and a Register of
Mortgages with relating to all particulars of debenture and Mortgages. As per
section 159 of Company Act 1994 describes that when a company creates any
mortgage then it has to be filed with the Registrar within 21 days of the creation of
a mortgage or charge with the complete particulars of the said mortgage or charge
together with instrument, if any, creating or evidencing the charge or a verified
copy thereof.
8.34 - ADVANCE:
Advances can be given on the basis of "Requisition Forms". Before making an
advance the "Advance Form (Appendix C)" must be filled in. All advances should
be recorded in the Advance Register.

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Advances should be adjusted with in 6 working days after execution of the event or
assignment or travel etc.
At the time of adjustment of advance all backup documents like Bills / Invoices /
Cash Memos / Money Receipts given by the Vendors / Shop keepers / Suppliers /
Contractors / Service Providers / Employees should be received by the DESIGNER
JEANS LIMITED .
All expenses should be charged against appropriate account heads as per the Chart
of Accounts.
8.35 SALES INVOICING AND RECEIVABLE:
Sales of ready made garments, Jhut, Leftover and other income and Interest on FDR
or Short Term Deposit etc. shall be calculated in accordance with the agreement
between DESIGNER JEANS LIMITED & the parties.
Accounting for garments manufacturing entries reveals certain distinctive features.

These distinctive features are primarily manifested in the way such entities account
for purchase of raw material and the sale of finished goods. Transactions is
involving documentary credits and exchange of foreign currencies.
A. Parties involved
1. Exporter/Shipper: In the context of Bangladesh, the garments
manufacturer cum seller.
2. Importer/Buyer: The foreign entity buying goods from Bangladesh
entities.
3. LC issuing Bank: The importer/buyers bank
4. Negotiating Bank: The exporter/shippers bank. It is exporters
authorized dealer.
5. Supplier of materials: If the supplier of materials to the
exporter/shipper is a Bangladeshi entity, then it is called deemed
exporter.
6. Suppliers Bank:
B. Steps in sales:
1. Ex- factory i,e, the manufactured garments have exited the factory.
Sales should not be recognized at this point. This is incorrect.
2. Goods are shipped on board and the bill of lading (BL) is issued. This is
the correct point of revenue recognition.
3. Documents including the master B/L is submitted to the LC issuing bank
i.e. the buyers bank.

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4. Proceeds are repatried. Proceeds should be received within 120 days. If
proceeds are not received within 120 days, action may be taken against
the importer.
5. Allocation.
Credits:
Wherever corrections are required to an invoice a credit note will be issued by the
relevant sales person, signed by the customer, and authorized by the COO & sent to
Finance. Supporting evidence for the credit must accompany all credits-returns,
line fault, billing error etc.
A summary report will be prepared by Finance for all credit notes monthly, & Year
to date, analyzing by reason.
Deposits:
Customers are required to deposit payment of sales invoices into their local bank. A
copy of the invoice, together with amount paid, is sent by the bank to the billing
department, together with the amount deducted for VAT.
Finance is responsible, in conjunction with the selling department, to ensure that

the cash for all sales invoices are collected, posted to the General Ledger and
agreed to the bank statement daily.
2. Leftover Sales:
DESIGNER JEANS LIMITED also sells the leftover, Jhut and used mobil. Sales will
be made after preparing a controlled sales invoice, and the customer paying &
signing for receipt.
The general policy will be cash on receipt, but the COO only may authorize credit
facilities as appropriate. Outstanding amounts will be reported on the monthly
report.
Sales will check inventory quantities daily and reconcile to the system inventory
count. All Bills must be numbered in sequence.
5. Bank interest earned (FDR and Savings account):

Interest on FDR is short term investment, which will be account for accrual basis
with applying interest rate and number of days invested out of matured duration at
that end of period. Bank interest earned on Savings account, sale of waste & scraps
materials are to be treated as other income.

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6. Miscellaneous Income:
Income, which cannot be classified under any of the above groups, shall be treated
as miscellaneous income & entered in the receipt side of the Cash Journal Register
or Bank Journal Register (depend on cash or bank transaction).
8.36 - PROCEDURE OF RECEIVING MONEY:

Source of receipts of the Company may be as follows:
Sales of ready made garments
Leftover Sales,
Income from sale of Jhut,
Income from used mobil,
Bank interest earned (FDR and Savings account);
Miscellaneous income etc.
Each receipt shall be acknowledged either through acknowledgment letter or a

Money Receipt / Cash Memo. Cashier shall prepare receipt voucher for daily receipt
of money & a copy of acknowledgment letter / money receipt / cash memo shall be
attached to receipt voucher and indicating its head of account according to Chart of
Accounts.
A - Cash Receipts System:
Every employee of DESIGNER JEANS LIMITED shall be personally responsible for

the cash that passes through his hand and for the prompt record of receipts in the
manner prescribed below. All cash, not banked, shall be kept in a strong safe.
All receipts, other than cash drawn from bank for payments, must be
deposited to bank intact preferably on the same day or positively on the next
morning;
Cash shall be received by cashier or by any other person deputed by the
management in his / her absence;
Money Receipt (MR) / cash memo must be issued immediately on receipt of
cash. The cashier will enter the receipt in Financial Management System
(FMS) in the computer from where Money Receipt will be generated in the
printer;
Money Receipt / Cash Memo is to be checked and signed by an officer (F&A)
and be issued to the payer;
The receipt is recorded in cash scroll;
Credit voucher will be generated in the FMS that will be checked by the
Manager (F/A) and countersigned by Chief of F&A;
Credit Voucher is posted in the Financial Management System (FMS) in the
computer at the day end;

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Cash scroll will be checked with physical cash and signed by Cashier, Officer
(F&A) at the day end;
The joint custodian as designated will keep cash in vault.
B - Cheque Receipts System:

Mail will be opened at the reception by a responsible officer who will enter
the checks/drafts/pay order etc. and the Cheques/drafts/POs/DDs will be
handed over to Finance and Accounts Department;
Designated person will enter the instruments (Cheques/draft/PO/DD) in the
appropriate receipt register. He will check the entries made by the reception
desk and will correct the mistake if any. The system will accept the
transaction on accepting by concern staff member;
He will sort out the instruments (Cheques/draft/PO/DD) and will arrange to
deposit those instruments in respective bank accounts;
He will then prepare pay-in-slips which is checked by Assistant Accountant
and will send the instruments to banks on the same day. Assistant Accountant
will check the pay-in-slips again after depositing whether the banks properly
received those.
Dishonored / returned cheques:
Dishonored / returned instruments The Assistant Accountant will check the

reasons for dishonor and will put up the case in a file that will go to the Chief
of F&A via Manager (F&A);
The dishonored instruments will then be sent to the respective sender with a
forwarding letter stating the reasons of dishonor and asking them to send the
instrument back after correction or to send a fresh instrument with in three
days;
Responsible accounts personnel will check the position daily and will follow up
the cases.
8.37 IMPREST FUND MANAGEMENT:
DESIGNER JEANS LIMITED will maintain Imprest Float of Tk.25,000 No payment

can be made from the cash float which exceeds Tk.10,000.
The Cash Custodian will submit vouchers for the amount spent and get a
reimbursement for the amount. A Cash book will be maintained for the Imprest
Fund management and the Cash Book must be updated immediately.
At the end of each month Cash must be physically verified by a responsible officer.

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8.38 PAYMENT PROCEDURE:
A - Cash Payment System:
Maximum up to Taka 10,000 can be paid from cash. All payments above Taka
10,000 should be made through cross cheques;
All payments shall be prior approved. Before the payment is made, the related
person raises notes for the expenditure explaining the necessity of the payment
to the departmental head in a proper file. If the payment seems necessary, then
the file is forwarded to the competent authority who approve the payment;
After the expenditure is incurred, the supporting are raised in the file;
The file is sent to the proper authority for payment approval;
Payment is made on producing the proper authorization and supporting
documents to the cashier who makes the payment keeping recipients signature
on the voucher;
The payment is entered in the cash scroll.
Cash Advances for employees off site: When employees can not attend the
local cashier, he may request (by phone) his manager to prepare an advance
request, who will authorise the request, and then be signed for by the person
collecting the cash on his behalf. Cash will then be delivered to the employee,
who will sign for receipt and return to Finance as confirmation of receipt.
Finance will control that all such advance are accounted for by signed receipts.
Employees will then submit completed vouchers and supporting expense
vouchers and clear any balance outstanding.
Cash handling -
Cash is maintained on imprest system. The imprest amount depends on the

decision of the Head of Finance. At present the imprest amount is Taka 50,000
(One Lac), 50% of the imprest i.e., Taka 25,000 can be used against IOU for
emergency purchase / payments against prior payments approval;
Cash is kept in the Joint custody of two Managers (F&A). In case of leave of one
Manager, Assistant Manager or any other officer approved by the authority will
take the charge of the custody;
The vault is kept in Joint Custody.
Cash Recording -
Vouchers are punched in computer software by the Assistant Accountant at the

days end;
Cash & Cheque Summary (CCS) for the day is produced next morning that is
checked by the Assistant Manager (F&A) will regard to correctness of punching;

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CCS along with vouchers are checked & signed by the Chief Financial Officer;
A Summary Expenditure Note Sheet will be prepared with mentioned the head of
expenditure of the previous withdrawal at the time of withdrawal of the Cash in
hand and it will be approved by the Head of Finance and CEO.
Payments are posted to the ledger by computer.
Custody & Safeguarding of cash -
Cash scroll is balanced by cashier;

Physical cash is counted by Assistant Accountant & Officer (F&A) at day end;
Cash scroll is signed by both Assistant Accountant and Officer (F&A);
Kept at safe-custodian by two designated officers of Finance & Accounts.
B - Cheque Payment Procedure:
Requisition from the respective department for expenditure is raised and sent for
approval of proper and competent authority;
Expenditure shall be approved after comparing with related budgeted amount
after being recommended by the appropriate purchase committee;
To be collected the spot quotations/ published an advertisement in the News
Papers/ call press advertisement as per Procurement Policy of the Company.
Prepare work order on the basis of spot quotation/Tender dropping in the
DESIGNER JEANS LIMITED and obtain approval of the Purchase Committee,
CEO and Managing Director.
Send the work order to the supplier and the supplier sends the goods to the
store. The store keeper shall count the goods physically and check with related
challan. After confirming the goods, the store keeper records the goods in the
store register and puts his seal and signature on the challan and puts store
register page number behind the challan. The Store Keeper sends the challan to
the Accounts Department. Disputes with the supplier must be notified in
writing/email within 7 days maximum.
The Accounts Department shall check the bills quantity and description with
challan. After checking the bills accuracy, the bill along with challan is sent to
the respective department for approval. After approving the bill by the
respective department shall be sent to the Accounts Department for payment.
The Accounts Department prepares an Expenditure Note Sheet along with
related documents (three spot quotations and work order, budget, bills and
challan) for payment and sends the same to the Chief Financial Officer (Head of
Finance), Chief Executive Officer (CEO) and Managing Director for approval. The
signature of mentioned these persons must be obtained before payment. The VAT
as per VAT Act.-1991 and Tax as per Income Tax Ordinance-1984 will be

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deducted at source from the bill at the time of payment and is to be mentioned in
the Expenditure Note Sheet.
After approval, the Accounts Department will prepare the cheque for signature
(see delegation).
Payment terms will be 60 days unless there is a discount for early payment. Head
of Finance approval is required for early payment.
Expenditure Note Sheet format has been given in Appendix-D.
Cheque handling:
Joint custodian;
Joint Signatory as per delegation of authority;
Pages are counted at the day end and
Kept in safe.
Payment of Salaries:
All employees must have received a letter of offer outlying salary and terms, which
they have signed and return to payroll officer.
Payment of salaries of DESIGNER JEANS LIMITED staff members shall be made
through bank transfer advice or cheque. Each employee shall open a bank account
in his own name with the same bank where DESIGNER JEANS LIMITED maintains
its account and accounts number shall be intimated to the Finance & Accounts
Department.
Accounting office shall issue transfer advise letter to the bank for total amount of
monthly salary payable to credit the individual account of each staff member with
the amount written against each individual.
The accounting offices shall maintain a salary register, which shall be prepared
every month.
Salary register shall be prepared considering the following points:
a) Name and designation;

b) Number of working days - as per attendance register;
c) Increment, Promotion, Suspension, Transfer order / instruction;
d) Leave without pay - as per leave register and
e) Other deductions like Advance, Tax, etc.;
All the staff members working at different offices of DESIGNER JEANS LIMITED
will be paid their salaries on or after the last working day of the month.

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EXPENDITURE
8.39 EXPENDITURE MANAGEMENT POLICY:
I. Scope
This policy sets the mandatory" minimum" standards for travel and expenditure
management in the DESIGNER JEANS LIMITED , including all DESIGNER JEANS
LIMITED staff and consultants and contractors.
Proper approvals must be taken at every step of the expenditure process regardless
of whether an expenditure item has been approved in the DESIGNER JEANS
LIMITED budgeting process.
This policy should be applied in conjunction with the Procurement Policy.
II. General Policy

Expenditures must be incurred, approved, and reimbursed in a manner consistent
with the policy outlined in this document. Any circumstances not addressed in this
document should be dealt with in the spirit expressed throughout the policy, i.e
incurred and reimbursed expenditures would be:
Reasonable (defined as neither lavish nor extravagant), and necessary to
accomplish the intended purpose;
Properly documented and reported in a timely manner;
Approved by the proper authority and
Wholly, exclusively and necessarily for the purpose of DESIGNER JEANS
LIMITED .
Employees at every level are responsible for expenditure management. Supervisors

are responsible for ensuring that expenditure is correct and adhere to the policies
and common business sense. Any misrepresentation of expenditure will result in
disciplinary action up to and including termination of employment.
III. CATEGORIES OF EXPENDITURE:

Expenditure can be divided into following two Categories:
Revenue expenditure: The expenditure that are immediately charged against
revenue.
Capital expenditure: The expenditure that increase DESIGNER JEANS
LIMITED investment in productive facilities.
IV. CLASSIFICATION OF EXPENDITURE

Expenditure will be categorized and classified as per the Chart of Accounts
V. REPRESENTATIVE LIST OF EXPENDITURE

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Some examples of Revenue and Capital Expenditure are given below:
A. Revenue Expenditure:
a) Personnel
This comprises all expenditure relating to staff salary packages including salary,
allowances, motor vehicle expenditure, professional development and medical
insurance.
b) Office Expenditures
This comprises all items relating to office expenditure (location and day to day
running of the office) including rent, power and utilities, office maintenance and
cleaning, office insurance, repairs of the office related assts, telephone bill,
computer accessories, stationery, hospitality etc..
C) Steps in purchase of materials:

1. Exporter receives order from the importer/buyer. This is
called the purchase order/customer order.
2. Exporter issues pro-forma invoice on the basis of
customer order. The pro-forma invoice is an important
document. Its format is shaped by the uniform customs
practice 500 ( UCP 500) and foreign exchange guidelines
of Bangladesh.
Once important clause is the BL clause (BL is the Bill of Lading). As per
Bangladesh Bank guidelines, the BL clause should contain the following
terms.
.3/3 BL made out to the order of the negotiating Bank and

endorsed to the order of the LC issuing bank marked freight collect
Notify Applicant.
Receipt of export LC or export documentary credit (DC). The export DC is

accepted as a
security document.

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The export DC is liened by the exporter/shipper as security, in order to
open back to back LC or DC in favor of the supplier from whom it wishes
to purchase the materials required to manufacture garments.
The value of the back to back L/Cs should not exceed 85% of FOB (i.e. the
export DC) as per Bangladesh Bank rules. For B grade EPZ companies,
this limit is set at 75% of FOB. All
back to back L/Cs should clearly mention export LC number.
The back to back DCs are opened. The exporter DC number must clearly
be written on the BB LC. The importer (or back to back) LC tenor should
be such that export proceeds are received prior to the import liability
becoming due for payment.
The documents are accepted and materials are cleared from the port.
f. Travel & Accommodation

All travel, accommodation and daily expenditures incurred when traveling for
Officials should include under this budget heading rather showing under other
headings.
i. Promotional Items Memorabilia

Merchandising and promotional items (memorabilia, gifts etc) that are produced to
assist with development. Items in this category should be specific items that are
claimed in advance.
j. Special Projects
Special Projects that are specifically planned and budgeted for in advance of the
financial year. These may be projects that do not exactly fit any of the above
categories or projects you wish to include here as they involve a large one time
expenditure. If any of these Special Projects is cancelled approval must be sought to
realign the budgeted funds to a new Special Project.
There may be other expenditure categories according to the annual development
program.
B. Capital Expenditure:
All expenditure that provides economic benefits for more than one year will be
treated as capital expenditure. The various nature of Telecommunication Fixed
Assets are as follows:
Office Equipment;

75 9/14/2017
Plant & Machinery,
Steam Boiler;
Electrical Equipment;
Motor Vehicles;
Computer and Accessories etc.
8.40 - EXPENDITURE PROCESS:

The Expenditure process has been described in the Payment Procedure (Point
8.38).
8.41 - REVENUE EXPENDITURE PROCEDURE:

Following will be the procedure for revenue expenditure:
Step-1: Respective department will raise a requisition for the expense.

Step-2: Finance department will prepare the requisition / salary sheet / payment
schedule for the recurring expenses like salary, utility bills etc.
Step-3: The requisition will be approved as per the delegation of authority and
submitted to the finance department.
Step-4: Based on requisition voucher will be prepared by the finance
department.
Step-5: Check / bank advice will be prepared by the finance department and
signed by the authorized persons.
Step-6: Payment will be made.
8.42 PROCUREMENT PROCEDURE:
Requisition from the respective department for expenditure is raised and sent for
approval of proper and competent authority;
Expenditure shall be approved after comparing with related budgeted amount by
the proper authority recommended by the appropriate procurement committee;
Collect three spot quotations when the purchase is between Tk. 10,000 and Tk.
300,000. When the purchase is between Tk. 300,000 and Tk. 500,000, then an
advertisement will be published in at least two daily national News Papers, one is
Bangla and one is English. If the opinion of the respective department
advertisements of tender is not considered advisable, full reasons for dispensing
with advertisement should be recorded and the action should be approved by the
department. The decision to dispense with advertisement should be finally
approved by the respective department in all cases where the amount involved is
over Tk. 300,000 but below Tk. 500,000.
Purchase above Tk.500,000 should always be made through press advertisement.
Purchase by negotiation should not be made. However, in exceptional cases
when the stores require goods urgently and the available time does not permit
any other method of purchase, then this may be taken with special prior verbal

76 9/14/2017
approval of the CEO and Managing Director which should be confirmed during
following Board Meeting.
Prepare work order on the basis of spot quotation/Tender dropping in the
DESIGNER JEANS LIMITED and obtain approval of the Procurement committee,
CEO and Managing Director.
Send the work order to the supplier and the supplier send the goods to the store.
The store keeper shall count the goods physically and check with related challan.
After confirming the goods, the store keeper records the goods in the store
register and puts his seal and signature on the challan and puts store register
page number behind the challan. The Store Keeper will sent the challan to the
Accounts Department. Disputes with the supplier must be notified in
writing/email within 7 days maximum.
8.43 PROCEDURE OF LETTER OF CREDIT:

Letter of Credit relating to Imported Goods:
The procedure of Letter Credit regarding of imported goods are as follows:
1. At first the Buyer communicates with the Supplier for required goods and sends
a Purchase Order. The Supplier sends Pro-forma Invoice (mentioned with Goods
description, Quantity, Rate and Delivery Date) to the Buyer. The Buyer duly
signed one copy (4th Copy) Pro-forma Invoice as a token receipt and sends it to
the Supplier by E-Mail/Courier.
2. The Buyer opens a L/C with Scheduled Bank. At the time of opening L/C then
three (3) sets L/C Application Form of Bangladesh Bank (i. Application and
agreement for confirmed irrevocable without recourse to drawers letter of
credit, ii. Letter of Credit Authorization form for Industrial Consumers and iii.
Application for permission under section 4/5 of the foreign exchange regulation
Act, 1947 i.e Form IMP) to be filled up and submitted to the Bank. At the time of
submission of the above documents, TIN certificate copy, VAT Registration Copy,
IRC Copy, Trade License Copy, 6 copies Pro-forma Invoice (signed by M.D),
Catalogue and Forwarding Letter (mentioned the Buyer Bank Account Number,
Exporter Bank Name and Swift Account Number, Exporter Name and Address
etc.) are also to be submitted to the Bank. At the time of submitting of the above
documents to the Bank, the Buyer to be deposited the prescribed L/C Margin as
per H.S Code of the Company. The Bank issues a Debit Advice for L/C Margin
amount to the Buyer. Before opening L/C, the Buyer pays the Marine Insurance
premium.
3. After completion of the above work, the Scheduled Bank transmits the Letter of
Credit (L/C) to the supplier mentioned Bank. After transmission of the Letter of

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Credit (L/C), the Scheduled Bank sends a Letter of Credit (L/C) copy to the
Buyer. The Buyer directly communicates with the supplier for timely shipment
(time mentioned in the Letter of Credit -L/C copy).
4. At the time of Shipment, the supplier informs the Buyer about the Shipment
Status (Name of Ship, Name of Ship Agent, Port of Loading, Port of Destination,
Target Date, ect.).
5. When the goods are shipped then the supplier sends a full set of documents
(Invoice Copy, Bill of Landing Copy, Weight and Packing List, Ship Certificate,
Foreign Chamber of Commerce Certificate, etc.) to the Buyer Scheduled Bank
and also sends soft copy by E-Mail or Fax copy by Fax to the Buyer. The original
full sets of documents will be reached to the Buyer within 15 days of the goods
delivery. If the goods are shipped by Air then goods will be cleared from the
Customs within 5 days. To avoid demurrage, certified the full set of printed or
Fax documents by the Scheduled Bank. If the goods are shipped by Vessel then
the original full set of documents are received by the Buyer before goods
reached. The Scheduled Bank pays the balance amount of the L/C to the Supplier
mentioned Bank and gives a Debit Advice to the Buyer. The Buyer will
communicate with the Clearing & Forwarding Agent along with the above
certified full set of documents (if goods delivered by Air) / Original full set of
documents. The Clearing & Forwarding Agent releases the goods after
completion of the Customs formalities. The Custom assesses goods value of the
goods on the basis of above set of documents and charges customs duty and
recorded all in the Bill of Entry.
6. The Goods are delivered to the Buyer destination by the Clearing & Forwarding
Agent and he charges to the Buyer for his commission and settled custom
amount.
The above mentioned documents to be kept in respective L/C file. A separate Letter
of Credit (L/C) register with mentioning details information to be maintained in the
Company for proper recording the L/C transaction and its adjustment. It helps to
calculate accurate valuation of the goods.
8.44 - REQUIREMENTS FOR REIMBURSEMENT OF EXPENDITURE:

A. Itemized Expenditures
Travel & Expenses:
Employees requesting to travel will submit a request outlining the purpose of the
trip, advance required, and estimated cost details. Finance will publish authorized
rates for hotel & travel costs as a guideline for employees to adhere to.

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Departmental Managers* will be responsible for authorizing the requests before
submitting to Finance for payment. For emergency purposes only, Departmental
managers may authorize advances verbally, and confirm in writing later (24 hours).
When travel is complete, employees will submit an expense report, outlining how
the advance has been spent, (together with supporting vouchers) which will be
checked by Finance (using expense guidelines), before submitting to the
departmental manager for authorization.
* Departmental managers can delegate responsibility for authorizing advances &

expenses to their immediate managers, providing they confirm names, dates
applicable and supporting details to Finance in writing.
Employees requesting reimbursement must fully itemize their expenditures on the

standard expenditure report. Itemization includes:
The business purpose of the expenditure
The amount and description of each expenditure
Place and date of the expenditure
The names and business relationships of the persons involved where applicable
(eg. meals and conferences)
Employees may group expenditures provided they are from the same expenditure
category and supplier (eg., car rental, phone bills, room charges for multiple nights
at the same hotel).
B. Documentation
Original receipts must be submitted by all employees for all individual
expenditures.
Air travel: Employees must book air travel through proper travel booking
procedures.
Hotels: The hotel bill must always be attached for hotel stays regardless of
the expenditure.
C. Senior-ranking Employee/Executives
The most senior ranking employee must pay for expenditures. Attendees are peers,
then any of them may pay and request reimbursement.
D. Timely Submission
Expenditures must be reported in a timely manner. It is recommended that travelers
returning from an international business trip wait for a charge to appear on their
Credit Card statement before submitting the item on an expenditure report. This
enables a traveler to obtain a true picture of expenditures, including the conversion
rate used.

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Late fees and interest charges: Late fees and interest charges on personal credit
cards will not be reimbursed.
Expenditure Reports: Executives / Employees must submit expenditure reports
within 6 days of the expenditure being incurred. Any expenditure reports submitted
after this date will be subject to the approval of the Chief Executive
Officer/Managing Director, DESIGNER JEANS LIMITED .
8.45 EXPENDITURE REPORT APPROVAL AND SUBMISSION:

I. Expenditure reports
Expenditure reports or reimbursement requests submitted by manually
Employees / Executives of DESIGNER JEANS LIMITED must have their
expenditure reports reviewed and approved by the Head of Finance. Both parties
are responsible for the accuracy of transactions appearing in the expenditure
report. Head of Finance is responsible for ensuring that expenditures are correct
and adhere to policy and common business sense.
Employees / Executives of DESIGNER JEANS LIMITED must have their
expenditure reports reviewed and approved as per Delegation. Both parties are
responsible for the propriety of transactions appearing on an expenditure report.
Approver is responsible for ensuring that expenditures are correct and adhere to
policy and common business sense. Both incurrer and approver must sign
expenditure reports when they are manually submitted.
Changes should be avoided on expenditure reports.
II. Approved Suppliers where Available

Employees must use Approved Suppliers, where they are available, when obtaining
products and services. A list of approved suppliers should be maintained at the
III. Supplier Contracts

Departments may enter into separate contracts for products or services with a
supplier within the following guidelines.
Supplier contracts require the approval of an employee with the appropriate

level of delegated authority. Please refer to the delegated authority list that is
currently in force.
For contracts greater than one year in duration, the total value of the contracts
should be calculated over the lifetime of the contract, which should not be
greater than 3 years. No I evergreen' contracts without time limits are allowed.
IV. Deviations from Policy

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Unless otherwise stated in this manual, exceptions to any provision of this policy
require written approval from the Chief Executive Officer (CEO) as well as the Head
of Finance of DESIGNER JEANS LIMITED.
V. Guidelines on some selected item of expenditure:
A. TRAVEL RESERVATIONS
All Travel reservations and arrangements must be made through the approved
Travel Agency and the relevant staff members.
B. AIR TRAVEL
All air travel will require documented approval from the immediate supervisor (who
must have the necessary delegated authority) prior to the trip. This approval can be
through e-mail. The staffs, who handle the air travel requests, should check the
approval before confirming the bookings.
The approved travel agencies will be instructed to process requests only through
individuals designated for this purpose with documented confirmations to follow.
Travelers should book the lowest fare, which may include restricted fares and/ or
non-refundable fares. Non-refundable tickets are normally reusable and can be
applied towards future travel with the same carrier within a certain period from
date of issue.
C. HOTEL ACCOMMODATION
When traveling, all staff should also check whether the host Company can
organize accommodation as they can get local discounts and have knowledge of
appropriate places to stay etc.
Executives / Employees must use approved or recommended Hotels. Non-
Approved hotels may be used only when Approved Hotels are not available in the
particular city
Arrival should normally be the day before the meeting or the day of the meeting
where appropriate. DESIGNER JEANS LIMITED responsibility will normally
cease on the day the meeting concludes unless there is no suitable return flight
in which case the responsibility will cease the day after that.
Accommodation will be on bed and breakfast basis.
Cancellations
Executives / Employees should cancel the bookings as soon as they found changes
in their travel. Executives / Employees must obtain a cancellation number. Failure to
cancel can result in a hotel no-show charge. No-show charges are reimbursable only

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if circumstances prevent an employee from checking in to the hotel. Employees
must explain such circumstances on their expenditure report
D. RENTAL CARS
Travel Staff must be used for making car rental reservations where available.
All business related car rental reservations must be made through an Approved
Travel Agency.
Employees must rent cars from Approved Car Rental Companies only. Non-
Approved car rent companies may be used only where no cars are available from
Approved Car Rental Companies or if there are no Approved Car Rental
Companies at the location. The Executives /Staff hiring the car must ensure that
full insurance coverage is in effect.
Compact and intermediate cars are the approved car classes. A full size car may
be rented when four or more DJL will use the car or when business needs require
it.
Cars may not be rented for a period of more than 2 weeks without the prior
approval of the CEO / Head of Finance subject to Delegated Authority Limits.
E. PERSONAL VEHICLES
An employee who uses his/her vehicle for occasional business travel will be
reimbursed on a per-mile basis or one off payment with agreement of the
Finance Department. However, expenditures associated with theft or damage of
an employee's vehicle while on company business is not reimbursable. Insurance
deductible payments are not reimbursable.
Fines for traffic violations are not reimbursable.
F. TRAIN TRAVEL
All train travel will be in coach or second class. First-class travel, including Club
Class and Custom Class, is not permitted unless used by the Senior Executive staff
or overnight travel instead of a more expensive airline ticket.
G. LAUNDRY/DRY CLEANING EXPENDITURE
No Laundry expenses are paid. This should be covered from SA.
H. PASSPORTS AND VISAS
Costs associated with passports that are maintained for business travel and
requisite visas will be reimbursed.
I. MEALS DURING BUSINESS TRAVEL
Not reimbursable. This type of expenses must be covered from SA.

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J. MEALS WITH VISITING EXECUTIVES / STAFF
Meals with visiting executives / staffs from out of town will be reimbursed provided
there is an appropriate reason and these are approved by the respective
Department Head.
K. LATE NIGHT AND WEEKEND MEALS
Employees are entitled to reasonable meal reimbursement when they work three
hours beyond the normal workday or on a non-scheduled workday in the office.
Receipts are required for all late night and weekend meals, regardless of the
expenditure amount.
L. GROUP EVENTS, MEETINGS AND SEMINARS
INTERNAL
Internal conferences, meetings and training events for three or more DJL, whether
on DESIGNER JEANS LIMITED premises or offsite, where travel and/ or lodging
expenditures will be incurred by most participants must be pre-approved by the
Delegation of Authority attached to this Manual. As part of the pre-approval
process, the sponsoring department must provide an estimate for the total cost,
including airfare, hotel and group meal expenditure for all attendees.
EXTERNAL
Attendance at external conferences/meetings/training/ events where air travel is

required must be pre- approved on a case-by-case basis by the Delegation of
Authority attached to this Manual.
M. MOBILE PHONES
Purchase, installation, monthly fee or loss of personal Mobile phones will not be
reimbursed.
All business mobile phones must be ordered through normal office procedures and
require the approval of the Delegation of Authority attached to this Manual.
Employees must indicate on the expenditure report the business reason(s) for using
tl1e private mobile phone for business purposes.
Employees will not be reimbursed for the use of Mobile phone services such as
weather, sports, or stocks.
The use of Mobile phones from rent a cars, private cars, trains and airplanes is
prohibited except when the call is urgent and crucial to the business needs.
Executives / employees should not discuss restricted or confidential information

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when using a Mobile phone. A Mobile phone is not a secure way to communicate,
and conversations transmitted through these phones are capable of being
infiltrated.
N. NON-REIMBURSABLE EXPENDITURE
Although various types of expenditure incurred while doing business are covered,
many are not. In addition to those mentioned elsewhere in this document, the
following items are examples of non-reimbursable expenditures. This list serves as a
guide and is not meant to be all-inclusive.
Annual fees for personal charge cards

Baby sitters
Barber shop/beauty salon/shoe shines
Class-of-service upgrades
Clothing purchases
Drugstore items
Expenditures related to home entertainment
Health Club and Sports Facilities
Holiday cards, decorations or gifts
House sitters
Kennel costs
Lost airline ticket application fee
Movies and videos on trips
Social newspapers and magazines
Personal Digital Assistant (PDA) (eg. Palm Pilots)
Premiums for additional travel insurance
Pro-shop and gift shop items
Spa services (facials, massages, etc.)
Room Mini Bar
O. CONSULTING CONTRACTS
All consulting projects irrespective of the amount must be pre-approved by
Delegation of Authority attached to this Manual.
To request prior approval for a new consultant, submit the terms of the
assignment/ contract, a description of the work to be performed, the name of the
responsible manager and the cost. All proposals must be submitted one month
before the work begins or the contract is signed.
No consulting work can be initiated without an approved contract.
Managers must ensure that the use of consultants is warranted, that there are
measurable milestones in the contract and that the relationship is monitored
closely.
Independent contractors and consultants should be aware of our code of ethics
policy and policies relating to confidentiality
P. EXPRESS COURIER AND MESSENGER SERVICES

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Employees should take every opportunity to send documents bye-mail, fax or the
intranet when security is not an issue or is provided by passwords. If hardcopy
documents must be sent, executives / employees should use approved mail or
courier services. Same-day messenger service and next-day or second day express
courier service should be restricted to documents that are of a confidential nature
and/or contain time-sensitive material. In general, when determining which delivery
method to use, employees should consider the length of the document, its
confidential nature and time sensitivity.
Mail services are for business purposes only. Personal shipments should be avoided.
Express Courier Service
When express mail service is required, executives / employees must use the
Approved Supplier. To reduce expenditures, express mail should be shipped by
second-day air where possible. Express courier service should not be used for
employee expenditure reports or reimbursement requests or general
correspondence.
Local Messenger Service
Messenger service should only be used when business information must be received
the same day and cannot be sent electronically.
Once you have determined that you need to use a Messenger Service, you must use
a local Approved Supplier.
R. OFFICE SUPPLIES
Purchases must be approved by an employee with the appropriate level of

delegated signing authority.
Office supplies must be purchased from the approved supplier.
S. PCs, TECHNOLOGY, FAX MACHINES, COPIERS AND SOFTWARE
All purchases (including leases) of office equipment, computer equipment and

software packages must be approved by the Delegation of Authority attached to
this Manual. DESIGNER JEANS LIMITED approved the authority limits.
Orders for office equipment and technology items, including PCs, laptops,
peripherals and software, must be placed through the appropriate department.
Such purchases should not be put on an expenditure report.
T. INTERNAL COMMUNICATION
Expenditure associated with internal employee communication, including printed

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material (staff newsletters etc) requires the approval of the Delegation of Authority
U. RECRUITING
The use of employment agencies, search fees and recruitment advertising requires
the approval of the Delegation of Authority attached to this Manual. DESIGNER
JEANS LIMITED approved the authority limits.
Retainer contracts of any amount must be pre-approved by the Delegation of

Authority attached to this Manual. DESIGNER JEANS LIMITED approved the
authority limits.
V. STATIONERY AND BUSINESS CARDS
The purchase of personalized stationery is not authorized.
Executives / Employees requiring business cards should obtain the approval of the
Delegation of Authority attached to this Manual. Orders should be placed through
relevant staff of DESIGNER JEANS LIMITED and should be purchased from an
authorized supplier. DESIGNER JEANS LIMITED approved the authority limits.
W. TEMPORARY AGENCY WORKERS
Executives / Employees must contact an approved agency, where available, when

requesting the use of an agency temporary worker. This should be pre-approved by
the Delegation of Authority attached to this Manual. DESIGNER JEANS LIMITED
approved the authority limits.
Executives / Employees must comply with any departmental policies and

guidelines regarding allowable length of assignment or business confidentiality
requirements.
Temporary agency workers should not be treated as employees. For instance,
supervisors and managers should not give raises, bonuses or other forms of
salary increases, but instead should refer to his or her agency for any such
discussions.
All temporary staff should be aware of our code of ethics policy and DESIGNER
JEANS LIMITED policies relating to confidentiality. These staff will be required
to sign a declaration of secrecy.
All temporary staff in assignments for sixty (60) or more consecutive days, as
well as all temps in sensitive positions, may be subject to additional special
checks or references.

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CHAPTER - 9
SALARY PACKAGE & ACCOUNITNG
9.1 - Introduction:
Policy instructions, payment and documentation in connection to the Salary
packages of staff members of DESIGNER JEANS LIMITED shall be conducted,
controlled and constituted as per the existing "Service Rules" of the DESIGNER
JEANS LIMITED that are in force.
Expenditure on account of salary and allowances forms a major portion of the
recurring or revenue expenditure of any large purpose. This very fact, calls for the
need of proper recording system as well as controlling mechanism to account for
this expenditure. Various staff related activities VIZ, recruitment, salary, increment,
transfer, promotion, termination, penalty imposition, salary deductions etc. are
usually carried out by Personnel Department / Administration Department.
9.2 Salary Payment:

New employees will receive a letter of offer including Salary and terms. They will
sign as acknowledgement and return to payroll officer.
In general, staffs are recruited by DESIGNER JEANS LIMITED at certain salary
level / scales. All particulars of staff members are notified to the Head Office finance
& accounts department. Other staff related information such as staff salary
increment, salary withholding, loan recovery through installments etc. are also
provided by the personnel department. Payment of salary and the preservation of all
the data related to staff salaries are done by the finance and accounts.
In case of Unit offices, salary related matters, however, would be controlled by
Head Office. Other wise incidents like presenting information about some bogus
staff and then drawing his or her salary might take place.
9.3 Some Noteworthy Points with Regard to Payment:

The following matters need to be dealt with prior to salary payment:
Up to date information regarding appointment or transfer of any staff member;

Proper maintenance of salary register;
Correct recording of all necessary data with regard to salaries and allowances to
staff members;
Collection & preservation of particulars in respect of deduction made or to be
made from salaries on different accounts;
Attendance register being properly maintained;

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Information of those employees who have resigned or were terminated or whose
transfer orders have been issued are to be recorded in the salary register and
that salary to be withheld accordingly;
Calculation of net salary after making all necessary additions or deductions
correctly and appropriately.
9.4 Attendance Register & Statement:
The attendance register serves as the supporting document in the preparation

of salary bills. Administration department shall provide the monthly attendance
statement to the Finance and Accounts Department.
This register will also help towards annual budget preparation of DESIGNER
JEANS LIMITED . Apart from this, it creates effective pressure on the staff
members to arrive at the office within stipulated time limit.
From Companys point of view, the prime objective of this register, however, is
to help the staff to attend office in time. So, attendance registers have to be
maintained at all level offices of DESIGNER JEANS LIMITED .
9.5 Leave Statement:
It is essential to record particulars of leave in order to prepare salary bills by

accounts department easily and correctly. If any staff member of DESIGNER JEANS
LIMITED wants to go on leave, he / she should apply in a prescribed form and get
that leave application approved before actually leaving the workstation.
The officer dealing with the leave register will record all particulars about leave of a
staff, so that, up to date information of the persons current leave position is readily
available by Finance & Accounts Department.
9.6 Procedures of Salary Payment:
All staff members have been advised to open a bank account and given the bank
account number to accounts department at the time of joining in the DESIGNER
JEANS LIMITED .
Bank advice has been prepared by the accounts department to transfer the
individual salary to the individual staff salary account in bank at the end of the
month whose salary became due after approval of Chief of F&A, General Manager,
Chief Executive Officer as per delegation of authority.
9.7 Timing of Salary Payment:
All the staff members working at Head Office will be paid their salaries on or after
the last working day of a month.

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9.8 - Overtime Management:
Payment of overtime should be discouraged in all respects. But in special

circumstances the management may give overtime to employees who have worked
beyond office hours. In such case a prior approval for overtime must be taken from
the appropriate authority. The overtime of a staff will be guided by following
overtime policy of DESIGNER JEANS LIMITED .
Overtime for which payment is to be made must be authorized in advance. On the

form indicate the reasons for the overtime work and the estimated number of hours
overtime as well as the period of days will be needed before it is completed. The
form is dated and signed by the chief of the department / section and sent for
approval to chief of personnel.
9.9 - Telephone:
Office telephone is only for official use. Personal call is entitled for meeting
emergency whose duration should be as short as possible. Personal trunk call /
overseas call shall be entitled only on payment and with prior approval. Budget
allocation for Head Office and unit office shall be monitored regularly.
9.10 - Accounting of Salary:
A) - For making the salary payable account:
Debit - Salary & Allowances Account - Gross Salary

Taka 50,000
Credit - Contribution to Provident Fund Account Taka
5,000
Credit - Tax Liability - Income Tax Staff Taka
5,000
Credit - Salary & Allowances Payable Account
Taka 40,000
B) - For payment / transfer of net salary from the bank account of DESIGNER
JEANS LIMITED to the bank of individual staff member after preparing bank advice
and duly approved as per delegation of authority:
I) Preparation of cash journal for making payment of salary:
Debit - Salary & Allowances Payable Account Net Salary Taka

40,000

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Credit - Cash at Bank Taka
40,000
II) Preparation of cash journal for making payment of PF deduction to PF

Account:
Debit - Contribution to Provident Fund Account Taka

5,000
5,000
C) Preparation of journal voucher for deduction of salary for telephone / fax / e-

mail / car use / petrol bill beyond ceiling / telephone bill beyond ceiling / staff house
building loan / staff house building loan interest:
Debit - Salary & Allowances - Deducted amount

Credit - Telephone / fax / e-mail / car use / petrol bill beyond ceiling /
telephone bill beyond ceiling / staff house building loan /
staff house building loan interest
D) Preparation of cash journal for making payment of staff Income Tax:
Debit - Tax Liability - Income Tax - Staff Taka

5,000
5,000
CHAPTER 10
ADVANCES, DEPOSITS AND PREPAYMENTS
10.1 Introduction:
To fulfill different projects / programs and normal activities of DESIGNER JEANS

LIMITED it becomes essential to procure goods and services from different persons

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or Company at different points in time and in doing so, advance payments need to
be made from time to time. Depending on the particular situation, these advance
payments at times are made directly to some outside person or as well as
DESIGNER JEANS LIMITED 's own staff members in some cases.
10.2 Types of Advances to be Allowed:
Mainly categorized in two:
a. Advance to staff members these are commonly known as temporary advances

and long term loans to the Staff and Members for personal and DESIGNER JEANS
LIMITED official purpose:
Advance against traveling expenses;

Advance against purchase of goods
b. Advance to third parties:

Advance against house rent;
Advance to materials suppliers / contractors;
Advance to service providers;
10.3 Staff Advances - Against Traveling:
DESIGNER JEANS LIMITED staff members frequently travel to different areas of

the country and also outside the country for official purposes. The staff members
are entitled to take advances to bear the transportation and traveling expenses.
Allowances for traveling inside and outside the country will be entitled by staff
member as per the rules and regulations of the "Service Rules" of DESIGNER
JEANS LIMITED and other relevant rules that are in force.
General conditions are as follows:

Following conditions govern the sanction of temporary cash advances against
traveling:
To be paid only against approved tour;
Must be adjusted with in twenty (20) days from the date of payment;
If a staff member to whom an advance has been made fails to submit bills /
accounts supported by vouchers for adjustment with in stipulated time, total
amount of advance will be notified to the employee and deducted from his / her
salary account till the accounts of advance are finalized.
The accounting of the advances, their adjustment against submission of bills,

payment of extra amount and deduction of salary for non submission of bills against
advance will be made in due care and timely manner.

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Accounting of advances and its' adjustment against submission of bills, payments of
extra amounts & receipt of unspent amount will be as follows:
A- Journal entries through preparation of Cash Journal relating to the traveling

advance payment of Unit office audit to Mr. X is as below:
Debt - Advance against Evaluation & Monitoring -(General ledger

Code)
- Advance to Mr. X (Name of person) -(Subsidiary ledger
Code)
Credit - Cash At Bank -(General ledger

Code)
- HO Bank Account -(Subsidiary ledger
Code)
(Only for advance amount given to Mr. X)
B- If the advance is adjusted on submission of approved bills, then the following

Journal Voucher will be prepared:
Debit - Evaluation & Monitoring Expenses - (General ledger

Code)
- Audit Expenses - Unit Office -(Subsidiary ledger
Code)
Credit - Advance against Evaluation & Monitoring -(General

ledger Code)
- Advance to Mr. X -(Subsidiary ledger
Code)
(Only for Taka amount of approved bill)
C- If the actual bills approved more than advance taken amount then, for
payment of excess amount to Mr. X, the following Cash Journal will be prepared:
Debit - Advance against Evaluation & Monitoring -(General ledger

Code)
Code)

Code)
Code)
(Only for excess payment of Taka amount to Mr. X against audit

expenses of Unit Office)

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D- If the actual bills approved less than advance taken amount then, for receipt
of balance amount from Mr. X, the following Cash Journal will be prepared:
Debit - Cash In Hand -(General ledger Code)

Code)
Credit - Advance against Evaluation & Monitoring -(General

ledger Code)
Code)
(Only for receipt of balance Taka amount from Mr. X against audit
expenses of Unit Office)
10.4 Staff Advances - Against Purchase:
To carry out the routine duties and activities related to different projects / programs
of DESIGNER JEANS LIMITED Head Office and Unit office, all sorts of goods and
materials need to be procured. Out of these materials, some are purchased through
the staff members while others directly through outside parties / suppliers.
Following conditions govern the sanction of cash advances against purchases of

goods:
That the stores are immediately and urgently required;

That time at disposal does not permit purchase by open or selected tender;
That delay in procurement would involve loss;
That purchases should be completed and account rendered within three (3) days
of taking the advance and the balance, if any be refunded in cash immediately
after purchase;
In making the purchase basic principles of purchase policy shall be always kept
in consideration and view;
Accounting of advances, their adjustment against submission of bills, payment of

extra amount and deduction for non-submission of bills against advance will be
made in due care and timely manner.
Accounting of advances and its' adjustment against submission of bills & payments
of extra amounts will be as follows:

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A- Journal entries through preparation of Cash Journal relating to the advance
payment for purchase of printing & stationery to Mr. Y is as below:
Debt - Advance against Administrative Expenses -(General

ledger Code)
- Advance to Mr. Y (Name of person) -(Subsidiary
ledger Code)
Credit - Cash At Bank -(General

ledger Code)
- HO Cash In Hand -(Subsidiary
ledger Code)
(Only for advance amount given to Mr. Y).

Debit - Administrative Expenses -(General ledger
Code)
- Printing & Stationery Expenses -(Subsidiary
ledger Code)
Credit - Advance against Administrative Expenses -

(General ledger Code)
- Advance to Mr. Y -(Subsidiary ledger
Code)
payment of excess amount to Mr. Y, the following Cash Journal will be prepared:
Debit - Advance against Administrative Expenses -(General ledger

Code)
Code)
Credit - Cash At Bank -(General ledger Code)

- HO Bank Account - (Subsidiary
ledger Code)
(Only for excess payment of Taka amount to Mr. Y against purchase of

printing & stationery expenses).
of balance amount from Mr. Y, the following Cash Journal will be prepared:

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- HO Cash In Hand -(Subsidiary ledger
Code)
Credit - Advance against Administrative -(General ledger

Code)
Code)
(Only for receipt of balance Taka amount from Mr. Y against purchase of
printing & stationery expenses).
10.5 Staff Advances - Against Program Expenses:

To carry out the program activities related to different Unit and programs of
DESIGNER JEANS LIMITED , some expenses are needed to be paid out to the staff
members of DESIGNER JEANS LIMITED in the form of liquid cash on the same
date as the expenses as incurred for smooth completion of the activities.
Following conditions govern the sanction of temporary cash advances against

program expenses:
Approval is needed before advance;

Those time at disposal does not permit purchase by open or selected tender;
Those delay in procurement would involve loss;
Those the payments from advance amount involves larges quantity but in a small
form on each quantity;
Those advances should be compulsorily adjusted / settled within seven (7) days
of taking the advance and the balances, if any should be refunded accordingly. In
no circumstances will cash be lying in the hands of the staff members of
DESIGNER JEANS LIMITED . Thus, after making the payment of the related
program expenses by the person whom advance has been taken, the remaining
balance of cash amount should compulsorily refunded / deposited to the cash
section of finance and accounts.
In making the payment basic principles of payment policy shall be always kept in
consideration and view;
Accounting of advances, their adjustment against submission of bills, payment of
extra amount and deduction for non-submission of bills against advance will be
made in due care and timely manner.

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payment to Mr. Z for seminar & workshop expenses for Institutional
Development is as below:
Debt - Advance against Inst. Development -(General

ledger Code)
- Advance to Mr. Z (Name of person) -(Subsidiary
ledger Code)

ledger Code)
- HO Cash In Hand -(Subsidiary
ledger Code)
(Only for advance amount given to Mr. Z).

Debit - Institutional Development -(General ledger

Code)
- Seminar & Workshop -(Subsidiary ledger
Code)
Credit - Advance against Inst. Development -

- Advance to Mr. Z -(Subsidiary
ledger Code)
payment of excess amount to Mr. Z, the following Cash Journal will be
prepared:
Debit - Advance against Inst. Development -(General ledger

Code)
- Advance to Mr. Z -(Subsidiary ledger
Code)
Credit - Cash At Bank -(General ledger Code)

Code)
(Only for excess payment of Taka amount to Mr. Z against expenses of

seminar & workshop for Institutional Development)
of balance amount from Mr. Z, the following Cash Journal will be prepared:

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- HO Cash In Hand -(Subsidiary ledger
Code)
Credit - Advance against Inst. Development -(General

ledger Code)
- Advance to Mr. Z -(Subsidiary ledger
Code)
(Only for receipt of balance Taka amount from Mr. Z against expenses of
seminar & workshop for Institutional Development)
10.6 Third Party Advance against House Rent:

This is called as prepaid rent. In case of rental of houses for official purposes by
DESIGNER JEANS LIMITED Head Office and Unit Offices, the following
procedures are applicable:
Rental of a house is initiated upon contractual agreement between DESIGNER
JEANS LIMITED and the owner of the house;
Any authorized officer on behalf of DESIGNER JEANS LIMITED can carry out
the initial formalities prior to rental of house and then signed the agreement on
behalf of DESIGNER JEANS LIMITED ;
After Agreement is done, the house owner may be given advance against office
rent as per terms and conditions of that agreement;
Adjustment of advances shall be clearly stated in the agreement and Account
Department should have a copy of that agreement and accordingly adjusted the
advance amount.
Accounting of advances & their adjustment against submission of bills will be made
monthly rent. This advance will have to be adjusted as per terms & conditions.
Accounting of advances and its' adjustment against submission of monthly rent bills
will be as follows:

payment for office rent expenses is as below:
Debt - Advance against Occupancy Expenses -(General ledger
Code)
- Advance House Rent -(Subsidiary ledger
Code)
ledger Code)

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- HO Bank Account -(Subsidiary
ledger Code)
B- This advance will have to be adjusted as per terms and conditions. If the
advance is adjusted on submission of monthly rent bills, then the following Journal
Voucher will be prepared:
Debit - Occupancy Expenses -(General ledger
Code)
- House Rent Expenses -(Subsidiary ledger
Code)
Credit - Advance against Occupancy Expenses -(General
ledger Code)
- Advance House Rent -(Subsidiary
ledger Code)
10.7 Third Party Advance Against Material Suppliers / Contractors:

Advances to suppliers against material supplies / contractors are generally
discouraged. System should be such that no payments are made except for works
actually done.
Following are the cases where advances can be given:
If the contractual agreement permits, advances shall be made as per clause of
the agreement;
Approval is needed before advance from Head of Finance;
In all other cases, only with the sanction of the Chief Executive Officer, which
may, in exceptional circumstances, authorize such advances as may be deemed
necessary, taking the proper precautions against loss and for preventing the
system from becoming general or continuing longer than is absolutely essential.
Accounting of advances & their adjustment against submission of bills will be
made on regular basis. This advance will have to be adjusted as per terms &
conditions of the agreement;
For payment of the submitted final bill of the supplier / contractor: Noted that;
o If the final bill amount of the supplier exceeds the taxable limit for
deduction of tax at source at the time of payment as per the Income Tax
Ordinance 1984, then it should be compulsory to deduct tax at the rates
applicable to this payment of the final bill.
o If the bill amount of supplier is subject to VAT deducted at source at the
time of payment as per VAT Act 1991, then it should be compulsory to
deduct VAT at the rates applicable to this payment of the final bill.
o Finally, the deducted (TAX & VAT) amount from the suppliers bill should
be deposited to the Government through treasury challan with in the date
as specified in the Income Tax Rules.

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Accounting of advances & its' adjustment against submission of bills & payments of
extra amounts will be as follows:

payment to supplier (Ran Industries Ltd.) against purchase of spare parts for
car of DESIGNER JEANS LIMITED is as below:
Debt - Advance against Administrative Expenses -(General
ledger Code)
- Advance to Ran Industries Ltd. -(Subsidiary ledger
Code)
Credit - Cash At Bank -
Code)
B- This advance will have to be adjusted as per the terms and conditions. At the
time adjustment of advance on submission of final bill, If the final bill amount of the
supplier exceeds the taxable limit for deduction of tax at source as per Income Tax
Ordinance 1984, then it should be compulsory to deduct tax at the rates applicable
to this payment of the final bill and then, final payments to supplier.
C- If the bill amount is subject to VAT deducted at source at the time of payment
as per the VAT Act 1991, then it should be compulsory to deduct VAT at the rates
applicable to this payment.
(I) - First of all, prepare a Journal Voucher for deduction of tax amount from
the gross amount of suppliers bill:
Debit - Administrative Expenses -(General ledger
Code)
- Car Maintenance -(Subsidiary ledger
Code)
Credit - Liabilities For Other Finance -
- Income Tax Deducted At Source-Suppliers -
(Subsidiary ledger Code)
(Only the tax deducted amount at source)
(II) - Secondly, prepare a Journal Voucher for adjustment of advance amount:
Debit - Administrative Expenses -(General ledger Code)
Code)
Credit - Advance against Administrative Expenses -(General
ledger Code)

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- Advance to DESIGNER JEANS LIMITED -
(III) - Then, prepare Cash Journal for payment of rest amount (final bill is
more than the advance amount) after deduction of tax amount:
Debit - Administrative Expenses -(General ledger Code)
Code)
ledger Code)
Code)
(Only the excess amount after adjustment of advance amount and tax
deducted at source amount).
(IV) - Finally, prepare the Cash Journal for deposition of tax deduction amount
from supplier's bill to the Government Treasury through treasury challan:
Debit - Liabilities For Other Finance -(General
ledger Code)
- Income Tax Deducted At Source-Suppliers -(Subsidiary
ledger Code)
ledger Code)
Code)
10.8 Third Party Advance against Service Providers:

Advances to consultant for providing services are, however, permitted in the
following cases:
As per contractual agreement with the consultants / consulting firm & Board.
Cases, in which, in the interest of works, it is absolutely necessary to make
advance;
In all other cases, only with the sanction of the Chief Executive Officer, who may,
in exceptional circumstances, authorize such advances as may be deemed
necessary, taking the proper precautions against loss and for preventing the
system from becoming general or continuing longer than is absolutely essential.
Accounting for advances & their adjustment against submission of bills will be
made on regular basis. Advance will be adjusted as per terms & conditions with the
service provider.
For payment of other part of the submitted final bills of consultant. Noted that:

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If the final bill amount of consultant exceeds the taxable limit for deduction of
tax at source at the time of payment as per the Income Tax Ordinance 1984, then
it should be compulsory to deduct tax at the rates applicable to this payment of
the final bill.
If the bill amount of the consultant is subject to VAT deducted at source at the
time of payment as per the VAT Act 1991, then it should be compulsory to deduct
VAT at the rates applicable to this payment of the final bill.
Finally, the deducted (TAX & VAT) amount from the consultants bill should be
deposited to the Government through treasury challan with in the date as
specified in the Income Tax Rules.

payment to consultants (Hussain Farhad & Co.) against consultancy in
DESIGNER JEANS LIMITED is as below:
Debit - Institutional Development -(General ledger
Code)
- Advance to Hussain Farhad & Co. -(Subsidiary ledger
Code)
ledger Code)
- Bank Account -(Subsidiary ledger
Code)
B- This advance will have to be adjusted as per the terms and conditions. At the
time of adjustment of advance on submission of final bill, If the final bill amount of
the service provider exceeds the taxable limit for deduction of tax at source as per
Income Tax Ordinance 1984, then it should be compulsory to deduct tax at the rates
applicable to this payment of the final bill and then, final payments to service
provider.
C- If the bill amount is subject to VAT deducted at source at the time of payment
as per the VAT Act 1991, then it should be compulsory to deduct VAT at the rates
applicable to this payment.
(I) - First of all, prepare a Journal Voucher for deduction of tax amount from
the gross amount of service provider's bill:
Debit-Institutional Development -(General ledger

Code)
-Consultants Service at DESIGNER JEANS LIMITED Head Office
-(Subsidiary ledger Code)

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Credit - Liabilities For Other Finance -
- Income Tax Deducted At Source-Ser. Pro. -
(II) - Secondly, prepare a Journal Voucher for adjustment of advance amount:

Code)
Credit - Advance against Inst. Development -

- Advance to Hussain Farhad & Co. -(Subsidiary
ledger Code)
(Only the advance amount adjustment)
(III) - Then, prepare Cash Journal for payment of rest amount (final bill is
more than the advance amount) after deduction of tax amount:

Code)

ledger Code)
Code)
(Only the excess amount after adjustment of advance amount and tax
deducted at source amount).
(IV) - Finally, prepare the Cash Journal for deposition of tax deduction amount
from service provider's bill to the Government Treasury through treasury
challan:
Debit - Liabilities For Other Finance -

- Income Tax Deducted At Source-Ser. Pro. -

ledger Code)

102 9/14/2017
Code)
10.9 - Authorization of Advances:
The authorization of advances shall be made in the following ways;
Prior approval from the Chief Executive Officer is compulsory for outside
advances in cases of "advance against third party for material supplies",
"advance against service providers", "advance against rent" and "advance
against traveling - outside the country".
Prior approval from the Chief Executive Officer is compulsory for staff advances.
Prior approval from the concerned authority is compulsory for staff advances in
case of "advance against traveling - within the country".
10.10 - Internal Control in Advance Management & Accounting:
DESIGNER JEANS LIMITED management should establish a proper internal

control system in such a manner that:
One transaction of advance is never complete without passing through the hands
of at least three officials (preparation, authentication and financial clearance);
Before authorization of adjustment of advances, proper documentation,
evidences and finally authenticity should be proved appropriately and accurately
with due care;
The authorities and responsibilities of various officials have to be arranged in
such a way that different persons are authenticating the advances, documenting
& recording the advances and ensure that the person who receives the advances
is always a different person.
Internal control in connection to operational steps of advances:
o Advances will be initiated on advance requisition form.

o The advance will be approved as per delegated authority.
o The advances requisition form will then be handed over to the Finance
and Accounts Department to check the particulars therein.
o Accounts Department will prepare payment voucher and checked the
same.
o Cash Section will then make payment after obtaining receiver's
signature.

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o Accounts Department will make the cash entry in the Cash Scroll.
Staff advances for traveling will be adjusted with in three (3) days after return to
office.
Maximum limit of advance shall be received by the staff members of DESIGNER
JEANS LIMITED is not exceeding the limited as outlined by the "Service Rules"
of the DESIGNER JEANS LIMITED in case of staff advance for traveling cost.
Other advances will be adjusted as per DESIGNER JEANS LIMITED Service
Rules and related Contract Agreement basis.
Expenses incurred will subsequently be approved as per policy and guidelines.
On approval of the bills, accounts department will make the payment voucher /
journal voucher / received voucher as the case may be.
Finance & Accounts Department will make entry in the computer and updated
the all ledgers.
10.11 - Inventory Fabrics and Accessories:
Inventory is needed to support
a. The production of finished goods

b. Export sales to customers.
Inventory must be kept in a secure location, under clear management, and records
kept of all quantity movements, using the integrated IT system. All inventories will
have a bar code label to enable quick counting and verification.
Fabrics Inventory:
General Manager of production will confirm the quantities (minimum & maximum)
to be kept by location for both fabrics and accessories in the Budget, and place
orders appropriately. Production will ensure that all items are the correct version to
support the relevant equipment. Persons authorized to use/return inventory must
enter a usage form into the system to ensure quantities recorded are accurately and
charged to the department concerned.
Physical counts should be made quarterly by Operations and reported to Finance,

who will carry out independent spot checks on a random basis, and report results.
Sales Inventory:

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Sales will confirm the quantities (minimum & maximum) to be kept by location for
customer sales in the Budget, and the Sales Manager will place orders
appropriately. Similarly, sales or returns must be entered into the system, and
reconciled to cash collected/paid. A copy of this sales reconciliation will be sent to
Finance for audit.
Finance will carry out independent quantity spot checks on a two weekly basis, and
report results.
CHAPTER 11
FIXED ASSETS AND DEPRECIATION ACCOUNTING
11.1 Capital Expenditures:
Capital can be classified and assessed as follows:
1. New
2. Cost reduction
3. Replacement

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Annual Budget:
As part of the Business Plan and Budget, each Function will prepare a Capital
Budget for the next 12 months, with a brief description, and justification, and
supporting detail (the level of supporting detail dependent on the value involved).
The Board will agree on guidelines for Capital Expenditure justification, but as a
starting point projects should aim to payback investment within 18-24 months.
Following Board approval of the capital budget, each item will be assigned a
sequential control number.
Capital Expenditure requests & reporting:
A Capital Requisition Form needs to be completed, referencing the Budget control

number and dollar value approved. More detailed support information will be
prepared including
a. Justification for the project

b. Risk profile-high, medium or low
c. Timetable
d. Cost**
e. Profit/savings
f. Payback (time to pay back cost of capital)
g. Contingency-not more than 5%
The form will be signed by the originator and the functional manager and reviewed
and checked by Finance, and depending on value authorized by the Chief
Executives, and the Board.
Note that increased authorization levels apply to non-budgeted items.
**Cost includes written quotations from suppliers, or sub-contractors, internal

labour and parts to arrive at a total estimated cost. Internal labour for capital
projects should be costed at an average actual cost rate including overheads,
prepared by finance.
Following authorization, Finance will issue an asset number, and bar code label with
the asset description for placement on the asset following receipt/installation.
11.2 Concept:

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Fixed assets have the fundamental characteristic that they are held with the object
of earning revenue and not for the purpose of sale in the ordinary course of
business. Depreciable assets are assets which are expected to be used during more
than one accounting period. Note that land generally has an indefinite life and is
therefore not depreciable asset as defined above. The other assets do have a
definite life and are therefore depreciable assets. Thus, for accounting purposes the
value of land and building should be segregated.
11.3 Introduction:
A proper record shall be maintained for all fixed assets. The records of assets shall
be maintained using the accounting codes and heads as illustrated in common chart
of accounts.
Capital expenditure is defined as items or software that will last for more than 12
months. Unit price of any asset is at least Taka 1,000 (One Thousand) only will be
regarded as fixed asset of DESIGNER JEANS LIMITED for all that any item is
below worth Taka 1,000 (One Thousand) only but durable for many years will not be
capitalized.
For this reason, proper register and accounting books are to be maintained in Head
Office to fully account for fixed assets in their possession. Where fixed assets are
procured, it will be necessary to keep an accurate account of such assets for
physical control and inventory.
11.4 Safe Custody of Fixed Assets:
Every offices of DESIGNER JEANS LIMITED shall designate a staff member for
maintaining the records of fixed assets and their movements and safe custody.
Assets issued to various offices of DESIGNER JEANS LIMITED shall remain in the
safe custody of those offices and therefore they will be responsible for management
of those assets.
11.5 Work in Process of Fixed Assets:
Asset build-Work in Process:
The functional manager in charge of each asset will use the authorized Budget
details to establish project number(s) & sub projects, which will be recorded in
Work in Process with a budget value, and timetable.
The manager will start procurement procedure and communicate with the
suppliers/sub-contractors along with purchase orders or to arrange internal
resources. The on line system will record POs placed, paid, & the value of
outstanding POs.

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Internal resources-Advances & actual costs:
For internal resources, DJL assigned will estimate the costs, using the budget
value(s) as a guideline, for each project/sub project and request cash advances.
Requests on Advance Form will cover expenses-travel, meals/allowances,
contractors etc and must be submitted at least 2 days prior to departure.
Authorisation will be by the immediate manager.
Actual charges, with supporting paid vouchers, will be authorized by the immediate
manager, checked by Finance and recorded against each project For internal labour
costs, finance will take the hours worked at an average rate paid for all staff,
including an overheads allowance.
Advances must be cleared with actual expenses (or cash returned), within 7 days of
completion of the specific project. Finance will prepare a list of outstanding
advances for the managers concerned. Failure to clear an advance will result in the
advance being deducted by the manager from the employees salary.
Reporting:
Monthly a report of all WIP capital assets will be prepared showing amount
authorized, actual expenditure to date, forecasted costs, amount over/under budget,
and expected completion date. Anticipated Variances of +5% or -10% on total cost
will require COO approval.
Asset cost/completion:
Once the Functional manager in charge of the project confirms that the asset is
complete, & all costs have been charged, he will advise Finance in writing. Finance
will then transfer the costs from Work in Process to the relevant Fixed Asset
Account.
For projects with a total value of Tk.50,000 where costs exceed the budget by more
than 5%, a written explanation should be prepared by the functional manager, and
forwarded to the CEO for authorization. A quarterly summary on capex will be
given to the Board, showing WIP, & completed projects.
11.6 Procurement of Fixed Assets:
Fixed assets can only be procured by DESIGNER JEANS LIMITED Head Office
centrally for its own use and for its unit offices. Unit Offices may procure assets
with the approval of Head Office. In any case, purchase or procurement should
always follow the rules & regulations of "Purchase Policy" made and constituted in

108 9/14/2017
this regard. To procure and purchase of fixed asset it should at least follows the
under mentioned guidelines:
Prior approval is compulsorily needed of the respective authority;

Should follow the all rules and instructions of the purchase procedures as laid
down in this context;
Budgetary provision must be made and confirm for a fixed assets item before its
procurement can takes place;
Requisition from the user and need of use should be clearly identified and
properly evaluated before placing the requisition of the concern asset purchased;
Approval should be obtained for requisition of an assets in accordance with the
authorization of the Company;
Purchase requisition shall be raised by the person requiring the assets in a
purchase requisition form;
For sole agent lone quotation is sufficient;
Other cases, at least three quotations are required;
Spot quotation or quotation is required for purchase through Purchase
Committee;
Purchase over Taka 300,000 to Tk.500,000 requires tender or quotation;
Purchase over Taka 500,000 requires Press Conference;
For numerous suppliers, purchase shall be through quotation by advertisement
in at least two National Dailies;
Spot quotation / price collection by two officers or employees from at least three
seller is required for purchase assets below Taka 300,000 for spot purchase;
Comparative price statement shall be prepared for quotations received;
Goods Received & Inspection Note should be prepared;
Fixed Assets Register to be up dated.
In case of fixed assets being supplied by Head Office to unit offices,
corresponding challan/ advice must be sent as soon as goods are received.
11.7 Fixed Assets Registration:
Legal registration of all the purchased fixed assets shall be in the name of
DESIGNER JEANS LIMITED . Chief Executive Officer or authorized officer of
DESIGNER JEANS LIMITED on behalf of DESIGNER JEANS LIMITED will sign in
deed / document related to registration.
11.8 Identification of Fixed Assets:
Identification number of fixed assets is a compulsory item in the management of

fixed assets and its control mechanism. An identification number for each category
of fixed assets items should be assigned for easy identification of the assets. These
identification numbers should be written on each item and the numbers should be
indicated on the fixed assets register also for each fixed assets. In doing so the
following continuity shall have to be maintained:

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Name of Designer Jeans Ltd. will be introduced by PTISL;
One or two letters introducing the group viz., FR for furniture;
Two letters identifying the item viz., CH for chair;
Two letters identifying location of the assets for example, HO for Head
Office;
Three figures indicating serial number of same item such as 001,002,003
etc;
Last figures indicating the year of purchase used in the purchased item, for
example, for Head Office: PTISL/FR/CH/HO/001/05.
11.9 Depreciation & its Accounting:
Every asset has a certain life span that varies depending on the particular
characteristics of that asset. Dividing the purchase value of an asset by its expected
economic life or duration period (in years) results in that assets yearly
depreciation. Depreciation for the accounting period is charged to income directly.
The depreciation method selected should be applied consistently from the period to
period unless altered circumstances justify a change. Depreciation is to be charged
on fixed assets on reducing balance method. Special instructions are:
The rate of depreciation will be instructed / circulated from Head Office;

Depreciation of a fixed asset will have to be charged from the date of
received/installation;
11.10 Sale of Fixed Assets:
If an item of fixed asset gets unusable, broken, obsolete, or no longer necessary,

then this item could be eligible for sale subject to the approval from the Chief
Executive Officer.
To sale or disposal it should at least follows the under mentioned guidelines:
Administration Department (Logistics section) in Head Office will prepare a

statement containing all unusable fixed assets & submit it to the Chief Executive
Officer through Chief of F&A & GM. He will then place it to purchase committee
to assess the need of disposal;
Purchase Committee will then assess the need of sale of assets, repurchase of
same assets, feasibility of fund etc, and final recommendation will then be place
to Chief Executive Officer in the matter of sale;
Fixed assets could be sold by inviting press tender (If the approximate price of
disposable asset is above Taka 100,000) or taking comparative quotation rates (If
the approximate price of disposable asset is below Taka 100,000). This sale
however, could be made also through mutual negotiation by taking at least three

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(3) quotations to avoid undue complications. In all cases the asset will be have to
be sold to the highest bidder;
Fixed assets are usually sold through the DESIGNER JEANS LIMITED Head
Office; Unit office may only on special circumstances with the permission of
Chief Executive Officer;
Only approved and authenticated Revenue / disposal of fixed assets compulsorily
shall be recorded and documented by doing accounting in books of accounts and
concern fixed assets register accordingly.
A money receipt should be issued for sale of Fixed Assets.
11.11 Accounting for Fixed Assets:
This has been considered in four ways such as;
At the time of purchase / procurement;

At the time of sale / disposal;
At the time of write off and
At the time of charging depreciation.
A) - At the time of purchase / procurement:
1) If a fixed asset (photocopier) is purchased or procured by the Head Office

through making payment on cash / bank, then the journal entry in the
books of accounts will be made through cash journal:
Debt - Fixed Assets -(General ledger

Accounts Code)
- Office Equipment -(Subsidiary ledger Accounts
Code)

Accounts Code)
Accounts Code)
This will be recorded in fixed assets register.

on credit, then the journal entry in the books of accounts will be made
through journal voucher:
Debt - Fixed Assets -(General ledger Accounts

Code)
- Office Equipment -(Subsidiary ledger Accounts
Code)

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Credit - Accounts Payable -(General ledger
Accounts Code)
- Accounts PayableSuppliers -(Subsidiary ledger
Accounts Code)
This will be recorded in fixed assets register and accounts payable Suppliers
subsidiary ledger and also in the register.

on credit and make payment to the supplier later on, then the journal entry
in the books of accounts will be made through cash journal:
Debit - Accounts Payable -(General ledger Accounts

Code)
- Accounts Payable - Suppliers -(Subsidiary ledger
Accounts Code)

Accounts Code)
Accounts Code)
This will be recorded in accounts payable - supplier subsidiary ledger & also
in registers.
B) - At the time of sale / disposal:
Journal entries to record the sale / disposal of fixed assets are as

follows;
a - Sale of fixed assets:
Debit - Fixed Assets Sold Account

Credit - Fixed Assets Account (Cost price)
b - Sale price received:
Debit - Cash / Bank Account

Credit - Fixed Assets Sold Account (Sale price)
c - For Accumulated Depreciation:
Debit - Accumulated Depreciation of Fixed assets Account

Credit - Fixed Assets Sold Account
C) - At the time of write-off:
Journal entries to record the write-off of fixed assets are as follows;

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a - Write of fixed assets:
Debit - Fixed assets Obsolete Account

Credit - Fixed Assets Account (Cost price)
b - For Accumulated Depreciation:
Debit - Accumulated Depreciation of Fixed Assets Account

Credit - Fixed Assets Obsolete Account
D) - At the time of charging depreciation.
Through wear & tear, working lives of the fixed assets get shortened and gradual
loss of their workability takes place depending, of course, on the rate of usage. To
account for this loss / damage, depreciation as per schedule fixed by management
will have to be charged on fixed assets.
Necessary entries through journal voucher for this depreciation charge will be:
(Photocopier)
Debit - Depreciation of Fixed Asset - Office Equipment
Credit - Accumulated Depreciation on Fixed Assets - Office
Equipment
It is worth mentioning here that the fixed assets will always have to be shown in the
books of accounts at the original cost. At the time of preparing final accounts, the
total accumulated depreciation is to be deducted from the cost price of the fixed
assets in question and the result is to be shown as the net book value.
11.12 Fixed Assets Register:

Obviously, fixed assets play an extremely important role in every Company. As a
result, there is an ever-growing need to maintain and update various data and
information with regard to these assets i.e, the maintenance system, total numbers,
total value, present conditions and location of all the fixed assets.
Considering this requirement, it is necessary to keep a separate register for fixed
assets.
As soon as the procurement of fixed assets take place, various data related to that
assets have to be recorded in the fixed assets register. The vouchers prepared (both
cash journals and journal vouchers) in this connection will indicate where and how
the particulars are to be recorded in the fixed assets register.
11.13 Instruction to Write up of Fixed Assets Register:
A - First stage - Particulars and references of assets:

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In column 1 put the date of acquisition of fixed assets purchased;
In column 2 insert the references of cash journals or journal vouchers for the
concern procurement / sale / adjustment;
In column 3 put the quantity of assets;
In column 4 put the unit price of the asset;
In column 5 insert the cost price of the concern asset;
B - Second stage Value of assets:

In column 6 insert opening balance value at cost price of the asset of
particular year;
In column 7 insert the Taka amount for additional purchase during the period;
In column 8 put the Taka amount cost price of sale / disposal / adjustment of
asset for the period;
In column 9 find out the Taka amount of total balance by adding the column
6&7 and then deducting the column 8 from the results of adding;
C Third stage Depreciation of assets:

In column 10 insert opening accumulated depreciation of assets of particular
period;
In column 11 insert the Taka amount of depreciation charges during the
period; Depreciation = [(Column 9 less column 10) multiply by rate of
depreciation]
In column 12 insert the Taka amount of any adjustment of depreciation;
In column 13 find out the Taka amount of total balance of depreciation by
adding the column 10 & 11 and then deducting the column 12 from the
results of adding;
D Fourth stage Written Down Value of assets:

In column 14 find out the Taka amount of written down value of assets by
deducting the column 13 from the column of 12.
11.14 Physical Counting of Fixed Assets & Reporting:

Every offices of DESIGNER JEANS LIMITED shall make a provision for inspection
and physical verification of assets, by the person not related with the record of
assets. Assets will be physically verified every 2 years, using bar code readers and
compared to the Finance records. Approved inventory sheet shall be used for this
purpose. A colour date sticker will be attached to the asset to indicate the date
counted. Differences must be reported by Finance to the COO for authorisation, and
if more than 100,000 tk value, explanations reported to the Board.

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The stock on hand per fixed assets register shall be verified against the physical
counts and physical quality shall be recorded in the fixed assets register.
11.15 Damage, Loss & Destruction, and Insurance of Fixed Assets:
Each office of DESIGNER JEANS LIMITED shall ensure that proper system is
installed to prevent assets from being damaged, lost or destroyed.
Every office also shall, when feasible, insure fixed assets against theft, pilferage or
possible loss due to accident, fire or natural calamities.
CHAPTER 12
FINANCE DEPARTMENT
12.1 - FINANCE DEPARTMENT:
The Finance Department will consist of Head of Finance, Manager Finance,

Assistant Manager, Cash Officer and Petty Cashier.
Purpose
To consider the financial results and budget of the DESIGNER JEANS LIMITED on a
regular basis. Following are the functions of the Finance Department:

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To consider the financial results and budgets on a regular basis.
To review and monitor internal controls procedure and systems of DESIGNER
JEANS LIMITED on a regular basis.
Recommend to the Board Meeting on finance and other commercial matters.
Recommend Good Corporate Governance practices.
Roles and Responsibilities
The following matters are the specific responsibility of the Finance Department
which acts as an advisory to the Company.
The principle matters are:
Financial Planning Financial Aspects of

Events
Preparation of budgets. Review financial processes
Receive reports on Financial Distribution of revenues
Budgets.
Monitoring of financial DESIGNER JEANS LIMITED
performance on a regular basis. Costs
Financial Policy Consideration of Sponsorship

and Promotion Proposals
Financial Controls and compliance Assist and advice any member on
Investments financial matters when required.
Management of funds
Review of Bank Accounts Any other matter deemed relevant
Review of Auditors raised by DESIGNER JEANS
LIMITED Management
DESIGNER JEANS LIMITED Tax
Position
CHAPTER-13
CORPORATE GOVERNANCE
The Corporate Governance structure of DESIGNER JEANS LIMITED will be based

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on the Memorandum and Articles of Association of the DESIGNER JEANS LIMITED
and Companies Act-1994. The Memorandum and Articles of Association of the
DESIGNER JEANS LIMITED and Companies Act-1994 will be followed in heart and
sprit to ensure strict accountability, transparency and good governance.
CHAPTER-14
FINANCIAL REPORTING

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14.01 - ANNUAL FINANCIAL STATEMENTS
Financial statements are a structured financial representation of the financial
position of and the transactions undertaken by the DESIGNER JEANS LIMITED .
The objective of general purpose financial statements is to provide information
about the financial position, performance and cash flows of the DESIGNER JEANS
LIMITED s. Financial statements also show the results of management's
stewardship of the resources entrusted to it. To meet this objective, financial
statements provide information about an enterprise's:
(a) assets;
(b) liabilities;
(c) equity;
(d) income and expenses, including gains and losses and
(e) cash flows.
This information, along with other information in the notes to financial statements,
assists users in predicting the enterprise's future cash flows and in particular the
timing and certainty of the generation of cash and cash equivalents.
14.02 - RESPONSIBILITY FOR FINANCIAL STATEMENTS

The DESIGNER JEANS LIMITED Head of Finance is primarily responsible for the
preparation and presentation of its financial statements.
Monthly Financial Statements:

By the 10th day of the following month the Head of Finance shall prepare a monthly
Financial Statement for submission to the Internal Auditor.
Annual Financial Statements:

DESIGNER JEANS LIMITED financial year is 1stJanuary to 31st December. By 31st
January the financial statements of preceding financial year must be ready for the
audit. Audit must be completed within three weeks and ready for distribution by
28th January in each year.
14.03 - COMPONENTS OF FINANCIAL STATEMENTS

Annual and Quarterly financial statements of DESIGNER JEANS LIMITED should
include following components:
Balance Sheet;
Income Statement;
Statement of Changes in Funds;
Cash Flow Statement;
Accounting Policies and
Explanatory Notes.
Balance Sheet:

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The Balance sheet of DESIGNER JEANS LIMITED will reflect the Financial Position
of DESIGNER JEANS LIMITED . The Statement will be presented in accordance
with the Accounting Standard issued by the International Financial Reporting
Standards (IAS) and Bangladesh Accounting Standard (BAS).
Income Statement:
The Income Statement will be presented in accordance with the Standards issued
by the International Financial Reporting Standards (IAS) and Bangladesh
Accounting Standard (BAS).
Statement of Changes in Equity
DESIGNER JEANS LIMITED should present, as a separate component of its

financial statements, a statement showing:
a. The net income or expenditure for the period;

b. Each item of income and expense, gain or loss which, as required by
Standards, is recognised directly in equity, and the total of these items and
c. The cumulative effect of changes in accounting policy and the correction of
fundamental errors.
In addition, an enterprise should present, either within this statement or in the

notes:
i. Capital transactions,
ii. The balance of accumulated profit or loss at the beginning of the period
and at the balance sheet date and the movements for the period and
iii. A reconciliation between the carrying amount of each class of equity
capital, share premium and each reserve at the beginning and end of the
period, separately disclosing each movement.
Cash Flow Statement
The cash flow statement should report cash flows (inflows, outflows) during the
period classified under operating, investing and financing activities.
Operating activities are the principal revenue-producing activities of DESIGNER
JEANS LIMITED and other activities that are not investing or financing
activities.
Investing activities are the acquisition and disposal of long-term assets and other
investments not included in cash equivalents.
Financing activities are activities that result in changes in the size and
composition of the equity capital and borrowings of the enterprise.

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Accounting Policies and Explanatory Notes:
The notes to the financial statements of DESIGNER JEANS LIMITED should:

a. Present information about the basis of preparation of the financial statements
and the specific accounting policies selected and applied for significant
transactions and events;
b. Disclose the information required by the International Financial Reporting
Standards (IAS) and Bangladesh Accounting Standard (BAS) that is not
presented elsewhere in the financial statements; and
c. Provide additional information which is not presented on the face of the
financial statements but that is necessary for a fair presentation.
CHAPTER-15
DELEGATION OF FINANCIAL AUTHORITIES
PERSONNEL
Matter Approval Authority

Within Approved Not in Budget
Budget
1. APPROVAL OF NEW Function Manager CEO
POSITION
2. RECRUITMENT,
CONDITIONS OF
EMPLOYMENT,
REMUNERATION, APPRAISAL
AND DISCIPLINARY
Chief Executive Officer of Recommendation --------------------
DESIGNER JEANS LIMITED from Board
Function Managers Chief Executive Board Approval

Officer
Staff Function Managers Chief Executive
Officer.
3. HOLIDAY LEAVE Company Policy Chief Executive

Officer

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4. SICK LEAVE AND OTHER
LEAVE
Chief Executive Officer Board -------------------
Managers Chief Executive -------------------

Officer
Staff Company Policy CEO
5. STAFF TRAVEL AND OTHER

STAFF EXPENSES
Chief Executive Officer Finance and Board

confirmation quarterly
Function Managers Chief Executive

Officer
Staff Function
Manager/Delegate
PROPERTY

Budget
New Leases Function Manager Chief Executive Officer
Renewal Leases and Manager Function Manager
Rent reviews
Repair &
Maintenance
Manager Upto Tk.50,000
Departmental Manager
Tk.50,000 to
Tk.500,000 CEO
Above Tk.500,000
Board
Insurance Manager Where necessary,
consultation with CEO
Office Security Manager CEO

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CAPITAL EXPENDITURE

Budget
Capital Expenditure See Expenditure
Purchasing below
Asset Written off:

- Under Tk.500,000 Function Manager & CEO
Finance
- Over Tk.500,000 Chief Executive Officer Board
EXPENDITURE

Budget
General
Expenditure:
- Under Tk.100,000 Respective Function CEO or Head of
Manager Finance
- Over Tk.100,000 Procurement CEO

Committee *
Credit Card
- Approval to issue Function Manager & Chief Executive Officer

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Credit Card Finance (CEO)
Cheque signing limits:
Cheque Signatories:
Cheques must be signed by 2 signatures. One of the signatures
must be a Functional Manager. In addition the Finance Manager
can sign.
Purchasing:
1. Foreign purchases & purchases over 10 lakh will be authorized by a Central

Procurement Committee.
2. Purchases under 10 lakh will be authorized by Functional Managers.
* Central Purchasing Committee:

Membership: All functions will be represented on the committee-Sales,
Engineering, HR & Finance
TOR: The committee will meet regularly under the chairmanship of the Chairman,
or his delegate, and review major purchases to ensure price, quality, and delivery
are appropriate, and that funds are available. The committee will then authorize a
Purchase Order signed by the Chairman/delegate, and initialed by finance, who will
then record the Purchase Order as outstanding.
BUDGET AND PLANNING
Matter Approval Authority Conditions

Business Plan, Annual Board Recommendation from
Budget and CEO / Head of Finance
Amendments
RISK MANAGEMENT
Matter Approval Conditions

Authority
Image and general Chief Executive Consultation with
perception of Officer (CEO) Board Meeting
DESIGNER JEANS

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LIMITED
Major DESIGNER Board Recommendation from
JEANS LIMITED CEO
Policies (including
location)
Media Policy and Manager Consultation with CEO
General Communication Administration
Financial Policy Board Recommendation from
CEO and Head of
Finance.
- Financial Controls CEO Recommendation from

Head of Finance
HR issues Manager Company Policy
Administration
Government Procedures Manager Consultation with CEO
and Process Administration and Chairman
Governance review
committee
Legal issues Functional CEO to commit in
Manager / CEO writing appointment of
external lawyers and
inform the Board.

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CHAPTER-16
SECRETARIAL MATERIALS
16.01 INTRODUCTION OF THE MEETINGS:
Meeting refers to group discussion. It is an assembly of DJL, where matters are

moved or put forward, discussed and resolved, which makes an effective meeting.
Company meetings are not different it may be of the directors, of the shareholders
or of the policy makers. So far as the company meetings are concerned, those are
governed, mostly, by the Company Act-1994. The Company may have its own
provisions laid down in the articles but the mandatory requirements mentioned in
the Companies Act must be observed.
The meeting of a company starts only after its incorporation. Primarily the different
kinds of company meetings are (i) Ordinary General Meeting / Annual General
Meeting (ii) Extraordinary General Meeting and (iii) Board Meeting. The above
meetings shall be complied by the company as per companies Act-1994.
16.02 DETAILS ABOUT MEETINGS:
16.02.01 Ordinary General Meeting / Annual General Meeting
This meeting is a recurrent affair of every company every year. It deals with normal
business of the Company and provides a forum for the Shareholders to meet at least
once in a year to discuss company affairs. The first AGM is to be held within
eighteen months from the date of incorporation of the company. Subsequent
meetings are to be held once at least in every calendar year and not more than
fifteen months after holding of the last preceding general meeting (U/S 81(1). It is
important to note also in section 183(2) that the general meeting, where annual
accounts are to be placed, can not be fixed at a date away from the date of the
Balance sheet by more than nine months. Annual return under the prescribed form
along with the audited accounts will have to be filed with the RJSC by 21 days of the
AGM. U/S 36(3).
The normal (ordinary) business done in and Annual General Meeting are as follows,
however, regulation may also be contained:
a) To adopt the statement of annual accounts i.e the Balance Sheet and the Profit &
Loss Account/Income Statement, together with the report of the Auditors
thereon. [Section 183 (1 and 3)]

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b) To approve the Directors report. [184 (1)]
c) To elect Directors in place of those retiring. [91 (2)]
d) To appoint Auditors and fix their remuneration. [210 (1)]
e) To declare dividend (if any). [184 (1-c)]
Any other business to be transacted as per provisions of the Companies Act.
16.02.02 Extraordinary General Meeting (EGM)
Any meeting of the Shareholders other than the Statutory and Annual General Meeting
(AGM) is called the Extraordinary General Meeting (EGM). It is convened to do some
urgent business which is not to be deferred till the holding of the next Annual
General Meeting. Where it is necessary to pass a special or extraordinary
resolution, an Extraordinary General Meeting (EGM) has to be called. A special
resolution is required say for altering articles, is required to be passed and also at
the same time next AGM is due ahead, notice of 21 days is served mentioning
explicitly that a special resolution (with expressed terms) will be passed, apart from
the routine ordinary resolution of AGM. The following are the cases where Special
Resolution and Extraordinary Resolution are necessary:
a. Special Resolution:
Cases where Special Resolution are necessary:
i. To change the name of the Company [Section-11(6)]

ii. To change provisions of the object clause. [Section-12(1)]
iii. To alter or add to its articles. [Section-20]
iv. To reduce Share Capital in any way. [Section-59 & 70]
v. To make reversal capital. [Section-74]
vi. To make Directors liability unlimited. [Section-76(1)]
vii. To remove a Director from Office. [Section-106(1)]
viii. To sanction addition remuneration to a Managing Agent. [Section-119
(2)]
ix. To appoint inspector to investigate company affairs. [Section-207 (1)]
x. To remove auditor before expiry of terms. [Section-210 (9)]
xi. On court winding up. [Section-241(i)]
xii. On voluntary winding up. [Section-286(b)]
xiii. To confer authority on the liquidator of a voluntary winding up.
[Section-294(1)]
xiv. On substitution of Memorandum and Articles of Association (MA & AA)
for deed of settlement. [Section-368(1)]

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b. Extraordinary Resolution:
Cases where Extraordinary Resolution are necessary:
i. On voluntary winding up because of excess liability. [Section-286(c)]
ii. To sanction certain acts of liquidator in case of voluntary winding up.
[Section-308(1-a)]
iii. To sanction all arrangement between company and creditors. [Section-
311(1)]
iv. To dispose off documents on voluntary winding up. [Section-339(1-b)]
It may be called by the Directors or by the Shareholders. The Directors at a Board

Meeting will decide about the calling of an Extraordinary General Meeting. In case
it is not possible to hold a valid Board Meeting, then the Directors or one Director,
even without a Quorum, can act only for calling the Extraordinary General Meeting.
His such action may be ratified by the board before the General Meeting.
Shareholders holding not less than one-tenth (1/10) of the issued and paid up
capital of the company may sent a requisition stating the reason for such a meeting
to the Directors (Section-84). The Directors are to issue a notice calling for such a
meeting within 21 days of such a valid requisition. The date of the meeting must be
fixed within 45 days from the date of deposit of the requisition. If the Directors
failed to convent such a meeting, the shareholders may themselves arrange and
hold such a meeting. The time limit in this case is three months.
16.02.03 Board Meeting:

When the Directors meet together to supervise, study and review the activities of
the company it is called the Directors Meeting or collectively the Board Meeting.
The Directors are the representatives of the Shareholders. They meet together time
to time to discuss and decide matters relating to policy and for monitoring progress
of the company. In this way they exercise their control over the company and
discharge their responsibilities to the Shareholders.
The Directors in their meeting may take up any thing and every thing of the
company, which do not fall within the purview of the members meeting, for
transaction. However, the usual business transacted at a Board Meeting are as
follows:
i. Determining overall business and management policy.

ii. Insurance, allotment, call and forfeiture of shares.
iii. Approving transfer and transmission of shares.
iv. Insurance of Debentures and allotment thereof.
v. Exercise borrowing powers.

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vi. Investment of company funds.
vii. Appropriation of profit with recommendation of final and declaration of
interim dividend.
viii. Adopting Annual Report.
ix. Convening General Meeting.
x. Fixation of the period of book closure.
xi. Framing and approval of company contracts and agreements
xii. Recording and correction of Statutory Books.
xiii. Filing of various returns and statements.
xiv. Review progress and affairs of the company.
xv. Conduct any specific inquiry and
xvi. Appointment, promotion and dismissal of staff.
As per the provisions of the Companies Act the Board Meeting should have been
held at least once in every three months and at least four such meetings shall be
held in every year and minutes of the proceeding should have been kept in the
minutes book (Section- 96).
16.02.04 Summery of meeting procedures:
The summery of meeting procedures are as follows:
Particul Ordinary /Annual Extraordinary Board Meeting

ars General Meeting General Meeting
Purpose To approve accounts, elect To transact any To discuss such
Directors and appoint urgent or matters as are
Auditors etc. emergency matters. needed by the
Directors.
When Every year within 15 As and when As and when
held months of the last A.G.M required by the required by the
and within 9 months from Directors. Directors.
the date of Balance Sheet
date.
Notice 14 clear days notice. 14 clear days notice No length of notice
Shorter notice allowed if all for ordinary/extra- specified.
the shareholders give their ordinary resolution.
consent. 21 days notice for
special one.
Quorum 5 members in person. If Same as in the case As provide in the
within half hour from of Annual General articles.
appointed time Quorum is Meeting unless the
not present, the meeting is articles provide

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adjourned to next week otherwise.
same as same time. At the
adjourned meeting
members present from the
Quorum.
Chairma Chairman of the Board will Same as in the case Directors to elect a
n always preside. If Chairman of Annual General Chairman of the
is absent then one of the Meeting apply. Board who will
Directors if elected, will preside in the
preside. If otherwise, one of Board Meeting.
the members may be
elected as Chairman.
Voting Discussions are arrived at Similar as in the Resolution are
through voting on motions case of Annual passed (with few
duly proposed and General Meeting exceptions) by
seconded. Voting may be on will apply. simple majority.
show of hands or by poll, by
majority of votes. For
Ordinary Resolution, simple
majority and for Special
Resolution 75% votes are
required.
Proxy Allowed Allowed Not allowed
Frequen At least once yearly. As and when At least four times
cy required. a year.
16.03 STATUTORY AND STATISTICAL REGISTER:
16.03.01 Introduction:
To meet the requirements of the Companies Act it is obligatory to maintain certain

books and registers which should record the important information of the company.
Because those are specifically prescribed by the statute, in addition to the
customary books and records, they are called the statutory registers. It is to be
mentioned that the Act, in cases, allows gap in specifically mentioning about
requirements of some registers, but instead has, in the Length of the particular
section, given the sense of those registers. The Act also requires the registers to be
open for inspection by those concerned. Also there are some other books the
purpose of which can not be dispensed with. Those are the subsidiary registers. The
fact that various statistical and financial information are available in those
documents, they are called the statistical registers.

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16.03.02 Statutory Registers:
The following are the statutory registers:
i. Members Registers (Section-34)- It contains names, addresses and

descriptions of the members, number of shares held, distinctive numbers, number
of certificates, amount paid, shares transferred, date of becoming a shareholder and
the date of ceasing to be shareholder. An entry in this register is the prima-facie
evidence of membership in the company.
ii. Register of Directors (sec.115)- The company is obliged to maintain a register

of its directors. The names, nationalities, addresses, occupations, and other
business connections of all directors, with date of becoming or ceasing to be
directors are entered in this book. All changes of the particulars of directors are
also to be noted in this book with the date of change. If the company fails to
maintain this register, the company and every officer of the company who is
knowingly and willfully in default shall be liable to a fine of Taka five hundred.
iii. Register of Mortgages and charges (sec.174)- There should be a register to

record all mortgages and charges specifically affecting the property of the company.
This register contains the kinds, particulars and descriptions of the mortgages, the
amount received and description of the property in respect of each mortgage and
the names of the mortgagees or the persons entitled thereto. If any director,
manager or other officer of the company knowingly and willfully authorises or
permits the omission of any entry required under section 174, he shall be liable to a
fine not exceeding Taka two thousand.
iv. Register of contracts with Directors (sec. 130) - It must contain the full
particulars of all contracts or arrangements in which any director is directly or
indirectly interested. This register also is indispensable and every officer of the
company who knowingly and willfully acts in contravention of the provisions of this
section shall be liable to a fine not exceeding Taka one thousand.
v. Register of Debenture holders (sec. 176) - The full particulars of the

debentureholders, their names, addresses and occupations, the date of allotment
and redemption, the number debentures held by each, distinctive numbers, amount
paid upon each debenture, the dates when paid and transfers in respect of any
debenture are all to be incorporated in this register. The Act in this section does not
say that this regster is necessary, but starts with inspection of such a register.

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However, treatment of this book is almost the same as with the register of
members.
vi. Minute Books (sec.89)- These are used for recording all resolutions and the
proceedings of meetings of the directors and the members of the company. Two
minute books are maintained, one being directors minute book and another for the
meeting of the shareholders.
The shareholders minute book should be kept open for inspection by any interested
members and copy of extracts thereof furnished if so requested. If any such
inspection is refused or copy not provided, the company and every officer of the
company who is knowingly and willfully in default shall be liable in respect of each
offence to a fine not exceeding Taka one hundred (100) and a further fine of Taka
one hundred (100) for every day during which the default continues. In case of any
such refusal or default, the court may by order compel an immediate inspection of
the books in respect of all proceedings of general meetings or direct that the copies
required be sent to the persons requiring them. However, directors minute books
cannot be inspected by anybody other than a director or the auditor of the company.
vii. Books of accounts (sec. 181)- Every company must maintain proper books of
accounts. The sub-section 6 of this section contains penal provisions for default in
maintaining books of accounts which is six months applicable for those who are
listed in sub-section 7 of section 181.
16.03.03 Statistical Registers:

Statistical books are required more of necessity than by the Act and are subsidiary
in nature. The following are some of the commonly used statistical books:
i. Application and Allotment register (sec.148)- This book contains names,

addresses and occupations of the applicants of shares, the amount of applicants of
shares, the amount of application money received, if any money is refunded its
particulars, cheque number, date etc. This register is required in case of a new
company or at the time of share floatation for public subscription. The particulars in
this book are important till filing the Allotment return, after which the descriptions
are shifted to the register called the members register. The Act is not very clear
about such a register. But the particulars as mentioned in section 148 cannot be
properly recorded and maintained or monitored unless such a register is there.
ii. Register of Share Transfer (sec. 38)- This register contains the names,
addresses and occupation of the transferor and the transferee, number of shares
transferred, date of transfer and the number of share certificate. This register,

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though not specifically mentioned in this section, cannot be dispensed with if the
details of all transfers are required to be kept in one concise place. Such details
may be necessary for any future use; say for any case of litigation.
iii. Share Certificate and Debenture books- The details of each share certificate
and debenture certificate in relation to their number, distinctive number, number of
shares contained in each certificate, name of the holder of the certificate etc, are
recorded in these registers. They are also called scrip register which contains the
details of share scrips.
iv. Attendance Book- The book is necessary to record the presence of directors in
the Board Meeting and the amount paid to them as their attendance fees.
Signatures of all the directors present in the meeting are recorded in original and
when there is any absence, the reason is laid down if it is a leave of absence against
the directors name. (Regulation 76).
v. Agenda Book- The Company Secretary, to be upright, maintains the agenda
book. It contains, in the left hand side, the agenda points, in chronological order
and in the right hand side his notings as per agenda. This is very helpful for
preparing the minutes of the meetings after the meeting is over.
vi. Proxy register This book record, meeting wise, the details of proxies received
from different members. It facilitates a permanent record of who was the proxy and
who appointed him and for which meeting. This may be necessary for any future
use.
To meet the need of time, the Company Secretary may, in the course of his
functions, maintain some other books and registers, such as: the dividend register,
shareholders address book etc., according to his necessity and experience.
vii. Index cards One more important aspect that the Secretary should take care
of, is the specimen signatures of the shareholders. The only mark of identity of any
shareholder with the company is his signature. It is necessary to check the
signature of the shareholders usually in the cases of transfers, blank transfers,
change of address requests and claim for arrear dividend. Without such a scrutiny
the merit of the claim cannot be ascertained.
Therefore, it is advisable for the Company Secretary to procure all the signatures of
the shareholders and maintain those in a cardex system. In this system the
signature cards are placed in alphabetic (or may be some other ) chronology in a
card-tray and locked in the cabinet.
A list of books and registers and copies of other documents to be kept at the
registered office for inspection.
16.04 IMPORTANT RETURNS AS PER COMPANY ACT:

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The Companies Act 1994 is the prescription to guide and control the activities of
the registered companies. It also, in its text and spirit, exercises some protection to
the shareholders, in that it requires some returns to be filed to the Registrar of Joint
Stock Companies and firms which have bearing on the shareholders interests.
Returns are nothing but disclosure of some facts as per the relevant sections, in the
prescribed format to the Registrar.
The submission of returns are mandatory, failure of which leads to various penalties
and other complications. Therefore, due care is to be laid in submitting returns as
per statutory time limit and according to various provisions.
The frequencies of returns are varied. Some are routine yearly returns, some are
regular but only occasional depending on the happening of certain events. Then
there are some returns which need to be filed only once. Still more, some arise very
hardly.
The following table shows only the frequent important returns, their provisions and
requirements as per different sections in chronological order:
Sectio Returns Requirements Return

n Forms
36 Annual Return Within 21 days of General Meeting Schedule-
X
56 Increase of Within 15 days of passing the resolution From- IV
Authorized capital thereof.
77 Notice of Within 28 days incorporation or of any From- VI
Registered Office change therein.
88 Special Resolution Within 15 days of passing the resolution From- VIII
thereof.
115 Particulars of Within 14 days of any change in the From- XII
Directors structure of directorship.
151 Return of Within 60 days of allotment. From- XV
Allotment
159/16 Creation of Within 21 days of creation/ change of From-
7 charges and hypothecation/ mortgages/ charges. XVIII XIX
172 satisfaction Notification of payment of satisfaction & XXVIII
thereof also within 21 days
190 Filing of annual Within 30 days of General meeting with Copies
accounts the annual return. thereof
16.05 INCOME TAX:

16.05.01 Income Tax Return submission:
The Income Tax return shall be furnished in prescribed form complying such
particulars and information as may be required thereby including total income of

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the assessee. The return shall be signed and verified by the mentioned person in the
Section 75 [2-b]. The Income Tax return of the Company and individual are as
follows:
a. Company:
The Company shall file its return, by the fifteenth day of July next following the
income year or, where the fifteenth day of July falls before the expiry of six months
from the end of the income year, before the expiry of such six months.
b. Individual:
The Income Tax Ordinance describes in Section 75 (2-C) (ii) that in all other cases
except company by the thirtieth day of September next following the income year.
So, the company should file the tax returns of the Employees and staff members
whose income are taxable in prescribed time and prescribed manner.
16.05.02 Tax Deducted at source (TDS):

Income Tax payable under this ordinance is deductible or collectible at source in
respect of certain specified items of income (the specified income heads are
described in Section 49 of the Income Tax Ordinance). The tax deducted or
collected at source is part of income of the assessee and is treated as payment of
tax in due time. Tax Deducted at source will be deducted as per provision of the
Income Tax Ordinance (TDS rate has been described in Section 50 to 56).
Section 56 (Deduction from income of Non Resident) describes that TDS will be
deducted from the foreign company as per prescribed company rate and the person
other than a company then TDS will be deducted at the maximum rate. If the
Government of Bangladesh may enter into an Agreement with the Government on
any other country for the avoidance of Double Taxation and prevention of fiscal
evasion with respect to taxes on income leviable under this ordinance and also
under the corresponding law in the other country then the Seven Schedule
describes in paragraph 8 (2) that any person (Bangladeshi Payer) who pays income
of any such class to a person (Non Resident) in the said country who is beneficially
entitle to the income may be required, by notice given by or under the direction of
the Board, to pay any such income to the Non Resident without deduction of tax.
Section 58 of Income Tax Ordinance describes that Company (who deducts or
collect tax at the time of making payment) must be given a Certificate to the person
(to whom the payment and deduction has been made) mentioning the TDS amount,
TDS Rate and such other particulars as may be prescribed.
16.05.03 Advance Income Tax (AIT):

Advance Tax is payable by an assessee during each financial year if the latest

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assessed (assessment completed either on regular or provisional basis before the
15th May of the year) income exceeds Taka 200,000/ prescribed by the ordinance
under section 64 (1).
The amount of advance tax payable by an assessee in a financial year shall be the
amount equal to the tax payable on his total income of the latest income year as
assessed on regular basis or provisionally, as the case may be, as reduced by the
amount of tax required to be deducted or collected at source in accordance with the
provision relating to deduction or collection of tax at source. The tax payable as
above is determinable at the rates in force during the concerned financial year.
Advance tax shall be payable in four equal instalments on the fifteenth day of
September, December, March and June of the financial year for which the tax is
payable. If one estimates that ones income during any financial year will be less
than the last assessed income, one may submit an estimate of income of ones own
and pay the advance tax accordingly. While preparing the estimate, one must take
sufficient care that the tax paid on the basis of the estimate does not fall short of
75% of the tax payable on the regular assessment. Because, if the tax paid falls
short, he is liable for interest.
If the assessee fails to pay any instalment of advance tax, he will be deemed to be
an assessee in default. Penalty may be imposed for such default.
Where payment of Advance tax by a new assessee or by an old assessee on the basis
of his own estimate, fall short of 75% of the tax payable on the basis of regular
assessment, interest at the rate of 10% is leviable on the amount by which the tax
paid together with the tax deducted at source if any, fall short of 75% of the
assessed tax. The interest is leviable for the period from 1 st day of July of the
relevant financial year to the date of regular assessment or for a period of 2 years
from the aforesaid 1st day of July, whichever is shorter.
16.05.04 Penalties for different kinds of default:

Income Tax Ordinance provides penalties for details as mentioned below:
Sect Particulars Reason Penalty

ion
123 Penalty for not Failed to Comply with the provision of One and half times of Tax
maintaining Sec, 35(2) i.e. the accounts and other liability. If there no assessable
accounts in the documents are not maintained in the income maximum penalty is Tk.
prescribed prescribed manner and form directed 100.
manner- by the Board.
124 Penalty for Failed to file or furnish a return of At the @ 10% of tax imposed on
failure to file income required by or under sections last assessed income subject to a
return, etc. 75, 77, 89(2), 91(3), or obtain any maximum of Tk. 2,500 and Tk.
certificate, statement, accounts or 250 for every day during which
information required by or under the default continues or Tk.500
sections 58, 108, 109, 110 or 113; or or Tk.250 per month during

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display the tax-payers TIN which the default continues
Certificate under section 184-C. respectively.
125 Failure to pay Failed to pay advance tax as required Not exceeding the shortfall
advance tax, etc. by section 64; or failed to furnish any amount.
estimate of tax liability under section
67.
126 Penalty for non- Failed to comply with any notice Not exceeding the amount of tax
compliance with issued under sections 79, 80 or under chargeable on the total income
notice sub-section (1) or (2) of section 83.
127 Failure to pay Advance tax paid or the tax paid by Sum not exceeding 25% of the
tax on the basis him under that section less than 80% whole of the tax or the short fall
of return required by section 74. as the case may be.
128 Penalty for (a) Concealment of income or Sum not exceeding five times
concealment of furnishing of inaccurate particulars of the amount of tax which would
income such income or have been avoided.
understated the value of any property
in connection with its sale or transfer
with a view to evading tax
(b) Concealment of income or
furnishing of inaccurate particulars of
such income in the case of self
assessment.
137 Penalty for Default or is deemed to be in default Sum not exceeding the amount
default in in making payment of tax. of Tax in arrear.
payment of tax
16.05.05 Offence and Prosecution punishment for non-compliance of

obligation:
Income Tax Ordinance provides Offence and Prosecution punishment for non-compliance of the obligation which details as
mentioned below:
Sectio Particulars Nature of Defaults Maximum

n Penalty
164 Punishment i. Failure to deduct or collect and
for non- pay any tax as required under the
compliance provisions of Chapter VII except
of obligation advance payment of tax or fails to
deduct and pay tax as required
under section 143(2);
ii. Non production of accounts,
documents or statements as
Imprisonment for a
required under Chapter VIII, or
term which may
under section 83

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extend to one year,
iii. Fails to furnish, in due time, the
or with fine, or
return of income which he is
with both, if he,
required to furnish under section
without reasonable
75, or by notice given under section
cause,-
77 or 93;
iv. Refusal to permit inspection or to

allow copies to be taken in
accordance with the provisions of
section 114;
v. Failure to afford necessary

facilities or to furnish the required
information to an income tax
authority exercising powers under
section 115;
vi. Refusal to permit or in any

manner obstructs the exercise of
powers under section 117 by an
income tax authority.
165 Punishment i. False verification in any return or

for false false document furnished under this
statement in Ordinance; A person is guilty
verification, of an offence
etc. ii. knowingly and willfully aids, punishable with
abets, assists, incites or includes imprisonment for a
another person to make or deliver a term which may
false return, account, statement, extend to three
certificate or declaration under this years, but shall not
Ordinance, or himself knowingly be less than three
and willfully makes or delivers such months, or with
false return, account, statement, fine, or with both.
certificate or declaration on behalf
of another person;
iii. signs and issues any certificate

mentioned in the first or second
proviso to section 82 which he
either knows or believes to be false
or does not believe to be true;
iv. refuses to furnish such

information as may be necessary for
the purpose of survey under section
115.
166 Punishment Concealment of ect. as mentioned A person is guilty

for of an offence

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concealment in Section 128 punishable with
of income, imprisonment
etc. which may extend
to five years, but
shall not be less
than three months,
or with fine, or
with both.
167 Punishment Disposal of property to prevent Imprisonment for a

for disposal attachment after receipt of notice term which may
of property from tax authority extend to five
to prevent years, or with fine,
attachment or with both.
168 Punishment Disclosure of information as Imprisonment for a

for protected under section 163. term which may
disclosure of extend to six
protected months, or with
information fine.
No prosecution shall be instituted except with the prior sanction of the National
Board of Revenue. (Section-169).
CHAPTER 17(A)
INTERNAL CONTROL
17.1 Introduction and Concept:
The internal control system is inevitable for the DESIGNER JEANS LIMITED to
control its financial matters as well as to maintain the continuity and accuracy in
the arena of its financial affairs. With a view to maintain an effective and efficient
work flow in all sphere of transaction procedures, it is essential to segregate a
specific job in different segments and make a meaningful division of labour to

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accomplish that task. Some important elements of the internal control device are
narrated below:
The DESIGNER JEANS LIMITED plan with particular reference to the

allocation of staff function;
Authorization, recording and custody procedures including internal
check;
Managerial supervision and reviews including audit.
An internal control system is defined as the whole network of systems established to

provide reasonable assurance that DESIGNER JEANS LIMITED objectives will be
achieved, with particular reference to:
The effectiveness of operations;

The economical and efficient use of resources;
Compliance with applicable policies, procedures, laws and regulations;
The safeguarding of assets and interests from losses of all kinds;
The integrity and reliability of information, accounts and date;
These embraces the concepts of effectiveness, value for money, compliance,

irregularity, inconsistency and financial controls. The manual highlights the role of
management in ensuring adequate systems of internal control are in place at
strategic and operational levels.
17.2 Internal Control Categories:
There are broadly eight categories of internal controls. The acronym "SOAP
MAPS" can be used to categorize the controls as follows:
1 - Segregation of duties - Roles and responsibilities should be clearly defined.
2 - Board structures - Appropriate Board structures should exist.
3 - Authorization & Approval - Appropriate authorization & approval procedures

should be introduced.
4 - Physical Safeguard - Appropriate physical safeguard should be established.
5 - Management review & Monitoring - Financial and other performance should

be monitored regularly.

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6 - Accounting & Arithmetical - Appropriate accounting and arithmetical
procedures should be operated.
7 - Personnel arrangements - Appropriate personnel arrangement should be

established.
8 - Supervision - Appropriate supervision procedures should be established.
17.3 - Classification of Control Procedures:
1 - Management Controls: These are detective in nature and encompass the high-
level supervision and review. For example - Management review of exception
reports, performance against budgets etc.
2 - Board Controls: These are both detective and preventive in nature and include
well-defined responsibilities and the segregation of functions conveying as
transactions initiating, Processing and recording.
3 - Authorization Controls: These are preventive in nature. Good authorization

controls will be specific about who can approve what, the extent of checking
required before approval and how the check should be evidenced.
4 - Operational Controls: These are either detective or preventive in nature. It

includes sequence checking to provide assurance on the completeness of numbered
documents, comparison of one set of documents to another (e.g. purchase order to
invoice).
5 - Access Controls: These are detective in nature and includes control over
access to assets and accounting records through simple physical measures such as
locks and safes and procedural controls such as controls over petty cash issue.
17.4 - Internal Check System:
The absolute and independent control of one person in the financial transaction may
create the opportunity of fund misappropriation. As such, to safeguard the interest
of the Comapny, adequate control over financial transaction, internal check system
is a must. The function of accounts department should be designed in such a way
that the job done by one person is automatically checked by another and thus
minimizing the possibility of fraud or irregularities. The job distribution of the
personnel of finance & accounts department of DESIGNER JEANS LIMITED Head
Office shall be arranged in such a way that a person handling cash and posting in

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the Cash Scroll Book shall not be given the responsibility of preparing vouchers,
writing of cheques and posting in the Cash Journal Register, Bank Journal Register
& Control Ledger.
It is therefore, recommended that:
Cashier & Cash Officer shall be engaged for receipts and payments of cash,
maintenance of physical cash and writing of Cash Scroll Book.
Writing of various vouchers, like transfer vouchers, cash payment voucher,
cheque payment voucher, money receipts, writing of cheque should be done by
other person in finance and accounts department.
The person who has no connection of maintaining cash and voucher preparation
shall do posting in computer and other registers.
The Manager (F&A) shall be responsible for the preparation of monthly Trial
balance, income statements and balance sheet, cash flow statements, notes to
accounts.
The Chief Financial Officer (Head of Finance) shall be responsible for the
preparation of reports to the Chief Executive Officer (CEO) and placed in Board
Meeting.
17.5 - Payment Management:

Before making payment in connection to all bills / vouchers for expenses of the
Company, the bills shall be duly checked by finance & accounts department as per
rules and regulations of DESIGNER JEANS LIMITED in this context and shall be
finally approved by the respective Department, CEO and Head of Finance as per the
delegation of financial authority of the DESIGNER JEANS LIMITED . The Cheque
will be signed by the bank signatories as prescribed by the DESIGNER JEANS
LIMITED 's governing body.
No payment shall be made without the prior approval of the above authority as
narrated. The bills and the invoice for payment shall be canceled by affixing the
stamp "Paid" and shall be dated. The payment voucher should always have the
supporting documents in original as its attachments. All sums of money expended
by the Company shall be recorded in books of accounts and there should be
systematic procedures of payment that can ensure:
a) Payment is made within the budget amount;
b) Payment is made for Company;
c) Payment is made properly to the right person;
d) Vouchers are prepared correctly to record transaction in Cash Journal
Register;
e) Expenditures have genuine supporting documents;

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f) Documents are duly valid, authenticated & appropriate for the
purposes;
g) Payment shall be authorized and approved by competent authority.
Before making payment either in cash or cheque, person responsible to make the
payment is to be ensured that payment vouchers have been prepared, checked and
approved. Accounts shall prepare payment vouchers and shall be supported by
documents like:
Expenditure Note Sheet,
Budget Copy,
Cash Memo / Bill,
Challan,
Indent,
Quotations / News Paper Advertisement,
Purchase order,
Money receipts,
Comparative statement,
Purchase committee resolution,
Job completion certificate,
Telephone bill, electric bill, rent bill etc.,
And any other document that are required,
Approval of tour program along with tour plan,
Air / Bus / Train / Launch tickets where required,
Entitlement of class, Per-diem & DA according to grade as specified
in the service rules.
Accounting department shall keep the payment vouchers in chronological order.
Each financial year shall maintain a serial number beginning from 01. Accounting
office shall file the voucher along with all supporting documents.
A - Cash Payment System:

The cash payment and cash handling system will be maintained as per financial
guideline (covered in Chapter-8) of the DESIGNER JEANS LIMITED . The
recording of cash transaction will be done as per financial guideline.
B - Cheque Payment Procedure:
The Cheque payment procedure will be maintained as per financial guideline

(covered in Chapter-8) of the DESIGNER JEANS LIMITED. The signatories of the
cheque should be followed each bank transaction. The recording of bank
transaction will be as per financial guideline.

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17.6 - Payment for Services:
Payment for services shall require the following DESIGNER JEANS LIMITED :
Requisition / Indent;
Resolution of the Governing Body if needed;
Approval of Chief Executive Officer;
Agreement / Deed of contract;
Assignment letter which should include TOR;
Assignment completion certificate
17.7 - Payment of Salaries:
Payment of salaries of DESIGNER JEANS LIMITED staff members shall be made

through bank transfer advice or cheque. Each employee shall open a bank account
in his own name with the same bank where DESIGNER JEANS LIMITED maintains
its account and account number shall be intimated to the Finance & Accounts
Department.
17.8 - Management of Receipts:
Maintaining of documentation and accounting treatment will be recorded of each

receipts as per financial guideline (covered in Chapter-8) of the DESIGNER
JEANS LIMITED .
A - Cash Receipts System:
The cash receipt system will be maintained as per financial guideline of the
DESIGNER JEANS LIMITED (covered in Chapter-8). The recording of cash
transaction will be done as per financial guideline.
B - Cheque Receipts System:

The cheque receipt system will be maintained as per financial guideline (covered in
Chapter-8) of the DESIGNER JEANS LIMITED . The cheque will be kept in the safe
custody until deposit in the bank. The dishonored instruments will then be sent to
the respective sender with a forwarding letter stating the reasons of dishonor and
asking them to send the instrument back after correction or to send a fresh
instrument within three days. Responsible accounts personnel will check the
position daily and will follow up the cases.
17.9 Staff Advance and its Liquidation:

Advance against any operational cost shall be initiated on Money Requisition and
the delegated authority will approve such advance.

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Approved advance requisition form shall be sent to the accounts which will be
checked the particulars therein and then payment voucher shall be prepared by the
accounts & shall disburse the amount of advance after obtaining the signature of
the recipient.
Any advance to staff members may be made on specific requirement with the
written approval of the competent authority as per delegation of authority.
Any payment to staff as advance should be adjusted and replenished at regular

interval on submission of bills / vouchers to the account department and must be
adjusted within three (3) days of completion of the requirement.
17.10 - Physical Inventory Counting and Checking:
It is one of the prime responsibilities of the DESIGNER JEANS LIMITED to

protect / safeguard resources / property. DESIGNER JEANS LIMITED has been
implementing various programs throughout the country by its own offices and
resources.
DESIGNER JEANS LIMITED shall follow the noted steps in verifying / checking the
validity of all the resources at its disposal.
A committee comprising at least two (2) members shall be formed. The said
committee shall do a feasibility study / checking of all the resources once in each
year.
Committee shall examine all of the resources in light of the lists prepared by
Administration Department.
The committee shall submit the feasibility report as per stipulated date and time.
Required adjustment of any inconsistency shall be made having approval from

the management as per delegated authority.
17.11 - Preservation of Accounting Records:
All of the documents / records related to financial transaction shall be preserved for
a period of twelve years.
CHAPTER 17(B)
AUDIT & ANTI-CORRUPTION STRATEGY
17.12- EXTERNAL AUDIT:

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The auditor shall be appointed after recommended by the Board. Any subsequent
changes have to be approved by the Members of the DESIGNER JEANS LIMITED .
The Auditors shall have access to all convenient times, during the agreed period for
annual audit, to all books, records, vouchers and other documentation which are, in
the opinion of the auditors, necessary in performance of the audit.
Terms of Reference (ToR):
Terms of Reference (ToR) for the Auditor will be as follows:
Audit will be conducted as per International Standards on Auditing (ISA) /

Bangladesh Standard on Auditing (BSA). In addition the auditors will:
a. Check to ensure that the provisions of the DESIGNER JEANS LIMITED

Finance Manual have been complied with.
b. Check that proper, separate and up to date books and accounting records
have been maintained.
c. Conduct physical verification of the assets purchased form DESIGNER JEANS
LIMITED funds.
d. Check the accuracy of the quarterly and other returns that are submitted t o
e. Check the documents and invoice etc. underlying the expenses and ensure
that these have been properly processed and approved.
f. Where lump sum expenses have been advanced (e.g. for traveling or
purchase) then check that these have been properly accounted for in a timely
manner and with supporting documentation
g. Check that any Sustenance Allowances (if any) paid to staff during their travel
are properly authorized and accounted for
h. Review that the expenses have been properly classified within the Chart of
Accounts
i. Review that the expenses incurred are correctly monitored against the
budget.
j. Review office administration expenses, salaries, travel costs and other
administration costs that are charged and check to ensure that adequate
documentation and proper approvals are in place to support these
k. Review the agreement with other operator and to be checked calculation and
treatment of the interconnection usage charge (IUC) amount in the accounts
as per prescribed rate in the agreement.

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l. Review the system of internal controls (control over bank accounts,
authorization of expenses, control over purchases, levels of financial authority
etc.
m. Review the internal approval process for expenses incurred and check for
evidence of authorization
n. Confirm bank balances that are maintained.
o. Review tax computation of the Company and compliance to tax authorities
laws and regulations.
p. Ensure funds/grants received form DESIGNER JEANS LIMITED have been
properly accounted for and recorded in the books of account.
q. Review the Fixed Assets Register (Power Equipment, Cable and Wire,
Switching Equipment, Telecom Equipment and Exchange Office Building) to
ensure they are maintained in a timely manner.
r. Follow up the prior year audit findings.
The Auditors shall have access to all books, records, vouchers and other
documentation which are, in the opinion of the auditors, necessary in performance
of the audit.
Management Letter:
The Auditor may issue a Management Letter if he finds any item which he thinks
should brings in to the notice of the management.
17.13 - INTERNAL AUDIT:
DESIGNER JEANS LIMITED will appoint a firm of Chartered Accountants to act as

the Internal Auditor of the DESIGNER JEANS LIMITED . Internal audit of
DESIGNER JEANS LIMITED activities should be carried out monthly to ensure
compliance of policies and procedures.
The Internal Audit Report shall be submitted to the CEO with detailed findings and
recommendations, if any.
The Internal Auditors shall have functional independence and unhindered access to
records and documents for undertaking all internal control activities and duties.
Internal auditor shall review and appraise the soundness and effectiveness of
accounting and administrative controls and ascertain the extent of compliance with
established policies, plans and procedures.
Terms of Reference (ToR) for the Internal Auditors will be as follows:

146 9/14/2017
a. Check to ensure that the provisions of the DESIGNER JEANS LIMITED
Financial and Accounting Manual have been complied with.
b. To report on the accounts and include :
(i) keeping under review the Companys system of book keeping,

accounting and internal control.
(ii) making such tests and inquiries as consider necessary for the
purpose of audit, those tests will inter alia apply to :
(1)day to day operations of the Company,
(2)the verification of assets and liabilities.
(iii) keeping under review the Companys adherence to all local legal
requirements.
(iv) keeping under review the Companys adherence to all internal rules
and regulations as laid out in the constitution and other decisions of the
management.
But their nature and extent will vary according to assessment of the Companys
system of internal control and may cover all aspects of the Company.
Management report:
At the end of each month the auditor shall prepare a monthly report for submission
to the Management which will cover:
(i) regularity of day to day transactions.
(ii) compliance with the local laws, rules and regulations.
(iii) adherence to the constitution including internal rules regarding budget limit,
transaction procedures, authority etc.
(iv) verification of month end stock, cash and bank balance etc.
(v) examination of bank reconciliation statement.
(vi) any other matter as may be required by the Management.
Report to the Management on material weaknesses, if any, which may come to

notice and which the auditor think should be brought to their attention.
The Auditor should be done the following activities at the time of audit:
a. Follow up the prior year audit findings.

b. Follow up the prior audit findings.

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17.14 - ANTI-CORRUPTION STRATEGY:
I. Definition of Corruption:
Corruption is the abuse of public or private office for personal gain.
II. Confidentiality:
In all cases, it is essential that allegations, evidence and investigations of fraudulent

or corrupt practices be treated with the utmost confidentiality and disruption.
Circulation of all materials involved in cases should be limited to a strictly need to
know basis, and proper safeguards should be there to protect both the accused
and the firm or individual (entity) whose allegation or evidence led to the
investigation.
III. Procedures for Addressing Allegations of Fraud and Corruption
The Chief Executive Officer (CEO) of DESIGNER JEANS LIMITED is the point of
contact to report allegations of fraud and corruption among DESIGNER JEANS
LIMITED activities or its staff.
DESIGNER JEANS LIMITED staff/stakeholders /others are required to report to

CEO any allegations or evidence of corruption that they receive or encounter. In the
context of this policy, evidence is information, facts or circumstances which would
lead a neutral, unbiased observer to the reasonable belief that corrupt or fraudulent
practice (s) may have occurred in any aspect of DESIGNER JEANS LIMITED
activities. While CEO may require providing additional background information to
facilitate the investigation, staff involvement will typically end with their submission
of the matter to CEO.
Once the allegation and /or evidence have been turned over to CEO, CEO will
present it before the Board. Upon screening, Board will determine whether to
proceed with an investigation or not. At Boards discretion, it may conduct
preliminary inquiries of concerns that an executive / staff may have committed any
conduct perceived to be fraudulent or corrupt practices. If Board finds that there is
no basis to consider disciplinary action, Board will note the reasons for that
decision, and the case will be entered into the Company fraud and corruption
database.
Board will outline the proposed nature, scope, duration, investigating officer or
entity, and method for conducting the investigation.
Board may engage outside auditors, investigators or other experts for the
investigation.

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The investigating entity will conclude the investigation and submit its findings and
any relevant evidence to Board. On the basis of investigative findings, and taking
into consideration the submissions of the accused party, the Company will assess
whether the alleged violation took place, the case should be closed, or if the
investigating entity should conduct further investigation. If the Company
determines that the accused party has engaged in corrupt or fraudulent practices in
any DESIGNER JEANS LIMITED activity, it shall decide upon the appropriate
measures or remedial action to be taken.
Remedial action (sanctions) imposed by the Board may be appealed to the Board if
submitted by a concerned entity within 90 days form the date on which the decision
of the Board was sent to the entity. Any such appeal must be in writing, and clearly
and succinctly state the reason(s) for the requested review of the decision of the
Board. Board may constitute a Review Sub-committee (RS) for the review. The
Review Sub-Committee shall consider any new information to the extent that:
Such information was not known, or could not reasonably have been known, to the
investigation entity at the time that explanations were sought by the Board, and
Such information is relevant to the decision of the Board.
The Review Sub-Committee will render its decision. The decision of the Review Sub-
Committee on any such appeal shall be final and binding and shall not be subject to
further appeal.
While acknowledging the need for fairness and consistency in its operations, and
strongly affirming the need for its operations to adhere to the highest levels of
probity and integrity, DESIGNER JEANS LIMITED notes that different types of
corruption will require different responses. There is a need for careful judgment
based on accurate information and the specifics of the situation. If Board
investigation determines that fraud or corruption has occurred, then- depending
upon the nature of the violation Board could pursue a range of options.
Board could request the reassignment, demotion, dismissal or possible prosecution

of personnel associated with the fraud or corruption or blocking of funds.

149 9/14/2017
Appendix-A
DESIGNER JEANS LTD.
Budget format for departmental expenses:
Department:

Report Date:

SUMMARY EXPENSES
Monthly YTD Comme

Expense Expense Descript Ac Bu Va Ac Bu Va nts
Type code ion t d r t d r
Headcount*
DJL*
Building
Travel&
Living
Consultants
Auditors
Bank fees
Lawyers
Total
Expenses
Recoveries*

150 9/14/2017
Hours*
Net expense
*direct from Payroll
DETAILED EXPENSES
Monthly YTD Comme

Expense Type Expen Descripti Ac Bu Va Ac Bu Va nts
se on t d r t d r
code
Headcount*
DJL*
Salaries
Benefits
Bonus
Total DJL costs
Building
Rent
Maintenance
Electricity
Total Building
Travel& Living
Travel
Accommodation
Overseas travel
Total T & L
Consultants
Auditors
Bank fees
Lawyers
Total Expenses
Recoveries*$$
Hours*
Net expense
Department:

151 9/14/2017
.
Headcount Salary Report-BUDGET Year 2006

BUDGET/ACTUAL 2006
SL Name Sala Oc No De Ja Fe M Ap Ma Jun Jul Au Se 12

# ry t v c n b ar r y e y g pt mth
Total
1
2
3
Total *
*Benefits
*Finance will add any

benefits/bonus etc
Appendix-B
DESIGNER JEANS LTD.
Chart of Accounts
SL Code
# A/c. Description A/c. Type No.
A. Fixed Assets:
15100
1 Land: Fixed Assets 0
15100
a. Land " 1
15200
2 Building: " 0
15200
a. Building " 1
3 Furniture and Fixture: " 15300

152 9/14/2017
0
15300
a. Furniture & Fixture " 1
15400
4 Office Equipment: " 0
15400
a. Computer Materials " 1
15400
b. Fax Machine " 2
15400
c. Other Equipment " 3
15400
d. Photocopy Machine " 4
15500
5 Electrical Equipment: " 0
15500
a. Electrical Equipment " 1
15600
6 Transport & Vehicles: " 0
15600
a. Transport & Vehicles " 1
15700
7 Loose Tools " 0
15700
a. Loose Tools " 1
15800
8 Air Condition " 0
15800
a. Air Condition " 1
15800
i. 5 Ton AC " 1.1
15900
9 Office Equipment: " 0
15900
a. Office Equipment " 1
17400
10 Power Equipment: " 0
17400
a. Generator sets " 5
B. Current Assets:
10100
1 Cash and Bank Balance: Current Assets 0
10100
a. Cash " 1
10200
b. Bank: " 0
10200
i. Southeast Bank Ltd.-CD- " 1
ii. Prime Bank Ltd.- " 10200

153 9/14/2017
2
10200
iii. Mercantile Bank " 3
10300
2 Debtors: " 0
13200
3 Advance against Purchase: " 0
13300
4 Advance against TA/DA: " 0
13400
5 Advance Income Tax: " 0
13400
a. Advance Income Tax " 1
13500
6 Other Advance: " 0
13600
7 Security deposit: " 0
13600
a. Security deposit " 1
13800
8 VAT Current Account: " 0
13700
a. Vat A/C " 1
14100
9 Spare parts Inventory: " 0
14100
a. Spare part Inventory " 1
14200
10 Advance against House Rent: " 0
10800
11 Store Account: " 0
10800
a. Store Account " 1
11500
12 Goods in Transit: " 0
10700
13 Bank Guarantee: " 0
10700
a. Standard Chartered Bank " 1
10700
b. Sonali Bank " 2
11700
14 Share Money Deposit " 0
17900
C. Other Assets: Other Assets 0
17900
1 Defferd Expenses " 1
17900
2 Loan to Other " 2

154 9/14/2017
Current
D. Current Liabilities: Liabilities
1 Bank Balance: "
10500
a. Bank Loan: " 0
10500
i. Term Loan " 1
20100
2 Accounts Payable: " 0
10300
3 Creditors: " 0
20200
4 Accrued Liabilities: " 0
20200
a. Salary Payable " 1
20200
b. Electricity bill Payable " 2
20200
c. Other Payable " 3
20200
d. Income tax Payable " 4
20200
e. Expense Payable " 5
20200
f. Wages Payable " 5.1
E. SOURCE OF FUNDS:
29500
1 Share Capital: Source of Fund 0
29500
a. Share Capital " 1
29600
2 Loan from MD: " 0
29600
a. Loan from MD's A/C " 1
29700
3 Retained Profit: " 0
29700
Retained Profit " 1
F. Revenue:
40200
1 Operating Income (Export sale): Revenue 0
41000
2 Other Income: " 0
41000
a. Bank Interest " 1
41000
b. Misc. Income " 2
G. Expenditure:
1 Salary & Allowance: Revenue

155 9/14/2017
Expenditure
50100
a. Salary & Allowance Factory " 1
Salary & Allowance Selling and 50100
b. Distribution " 2
Salary & Allowance Office and
c. Administration
MD/Director/Chairmans
2 Remuneration: "
50200
a. MD Remuneration " 1
50200
b. Director Remuneration " 2
50200
c. Chairmans Remuneration " 3
3 Good Service Allowance "
50300
a. Good Service Allowance " 1
4 Export cum Import "
50600
a. Service Chq & Other Exp " 1
50600
b. Custom Duty " 2
50600
c. Demurrage " 3
50600
d. Air Freight " 4
5 Uniform & Liveries "
50800
a. Uniform & Liveries " 1
6 Unallocated Staff Cost "
50700
a. Unallocated Staff Cost " 1
7 TA/DA Expenses "
50900
a. TA/DA Expenses " 1
8 Traveling Allowance "
51000
a. Traveling Allowance " 1
9 Conveyance "
51100
a. Conveyance- Factory " 1
51100
b. Conveyance- Selling and Distribution " 2
c. Conveyance- Office and Administration
10 Entertainment "
a. Entertainment " 51200

156 9/14/2017
1
11 Books paper & Periodicals "
51300
a. Books paper & Periodicals " 1
12 Crockery & Cutleries "
51400
a. Crockery & Cutleries " 1
13 Printing & Stationary "
51500
a. Printing & Stationary " 1
14 Office General Exp "
51600
a. Office General Exp " 1
15 Tel. Telex, Fax Bill "
51800
a. Tel. Telex, Fax Bill " 1
51800
b. Mobile Bill " 2
51800
c. Internet Bill " 3
51800
d. Tel.Fax-Local " 4
16 Office Rent "
51900
a. Office Rent " 1
17 Extra Duty Allowance "
52000
a. Extra Duty Allowance " 1
18 Electric Bill "
52100
a. Electric Bill " 1
19 Gas Bill "
52200
a. Gas Bill " 1
20 Wasa Bill "
52300
a. Wasa Bill " 1
21 Electric Expenses "
52400
a. Electric Expenses " 1
22 Vehicle Running Exp "
52500
a. Vehicle Running Exp " 1
23 R&M Vehicles "
52600
a. R&M Vehicles " 1
24 Carriage & Cartage "

157 9/14/2017
52700
a. Carriage & Cartage " 1
25 R&M Furniture & Fixture "
52800
a. R&M Furniture & Fixture " 1
26 R&M Switching Equipment "
52900
a. R&M Switching Equipment " 1
27 R&M Building "
53000
a. R&M Building " 1
28 R&M Power & Equipment "
53400
a. R&M Power " 1
29 R&M Office Equipment "
53500
a. R&M Office Equipment " 1
30 R&M AC "
53600
a. R&M AC " 1
31 Business Promotional Exp "
53700
a. Business Promotional Exp " 1
53800
b. Consultancy Fee " 0
32 Rent Rates & Taxes "
53900
a. Rent Rates & Taxes " 1
54000
c. Subscription & Donation " 0
33 Generator Fuel Exp "
54100
a. Generator Fuel Exp " 1
34 Advertisement & Publicity "
54200
a. Advertisement & Publicity " 1
35 Research, Develop& Survey "
54300
a. Research, Develop& Survey " 1
54400
c. Security Guard Expenses " 0
36 Sundry Trade Expenses "
54500
a. Sundry Trade Expenses-HO " 1
37 Telephone Shifting Fee "
54600
a. Telephone Shifting Fee " 1
42 Tax Token- Vehicle "

158 9/14/2017
54700
a. Tax Token- Vehicle " 1
43 Motor Cycle Allowance "
54800
a. Motor Cycle Allowance " 1
44 Insurance Premium "
54900
a. Insurance Premium " 1
46 Audit Fees "

55100
a. Audit Fees " 1
48 License & Renewal Fees "
55500
a. License & Renewal Fees-HO " 1
55600
d. Legal Expenses " 0
49 Registration Fee: "
55700
a. Registration Fee Motor Cycle " 1
55700
b. Registration Fee-BRTC " 2
50 Depreciation on: "
56100
a. Floors and Interior work on building " 1
56100
b. Furniture and Fixture " 2
56100
c. Office Equipment " 3
56100
d. Electrical Equipment " 4
56100
e. Motor Vehicles " 5
56100
f. Fire Extinguishers " 6
56100
g. Electrification " 7
56100
h. Machinery " 8
56100
i. Steam Boiler " 9
56101
j. Generator " 0
51 Office Decoration "
56200
a. Office Decoration " 1
52 Bank Charge & Commission "
a. Bank Charge & Commission & VAT " 57100

159 9/14/2017
1
53 Miscellaneous Exp "
57200
a. Miscellaneous Exp " 1
54 Interest & Financial Expenses: "
57500
a. Interest On Loan " 1
57500
b. Interest On Foreign Bank Loan " 2
57500
c. Fluctuation Loss " 3
Appendix-C
DESIGNER JEANS LTD.
Cash Advance Requisition Form
DESIGNER
JEANS LIMITED / CA - 1
Date:
Requested By: ..
Amount: ..
Purpose: Advance for .

160 9/14/2017
Requested by Prepare By Approved By

161 9/14/2017

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DESIGNER JEANS LIMITED

FINANCIAL & ACCOUNTING MANUAL

HUSSAIN FARHAD & CO.

FINANCIAL & ACCOUNTING MANUAL

CHAPTER 1 INTRODUCTION Page

CHAPTER 2 - ACCOUNTING POLICIES

2.1 - Basis of Accounting 11

FINANCIAL & ACCOUNTING MANUAL

CHAPTER -3- BUSINESS PLAN & ANNUAL BUDGET

3.1 - Introduction of Business Plan, Annual Budget and

CHAPTER 4 BOOKS OF ACCOUNTS

CHAPTER 5 WRITING PROCEDURES OF FORMS, VOUCHERS &

FINANCIAL & ACCOUNTING MANUAL

CHAPTER 6 - MAINTENANCE OF REGISTERS

6.1 - Types of Registers 41

CHAPTER 7 ACCOUNTS & FINANCE ACTIVITIES

7.1 - Accounts & Finance Activities 43

CHAPTER 8 - CASH TRANSACTION

8.1 - Duration of Cash Transaction 46

FINANCIAL & ACCOUNTING MANUAL

8.29 - Operational Bank Accounts 51

8.39 - Expenditure Management Policy 59

FINANCIAL & ACCOUNTING MANUAL

CHAPTER 9 SALARY PACKAGE & ACCOUNTING

CHAPTER 10 ADVANCES, DEPOSITS & PREPAYMENTS :

CHAPTER 11 - FIXED ASSETS & DEPRECIATION ACCOUNTING

11.1 - Capital Expenditure 84

FINANCIAL & ACCOUNTING MANUAL

CHAPTER 12 FINANCE DEPARTMENT

12.01 - Finance Department 92

CHAPTER 13 CORPORATE GOVERNANCE 93

CHAPTER 14 FINANCIAL REPORTING

14.01 Annual Financial Statements 94

CHAPTER 15 - DELEGATION OF FINANCIAL AUTHORITIES

CHAPTER 16 - SECRETARIAL MATERIALS

16.01 - Introduction of the Meetings 100

FINANCIAL & ACCOUNTING MANUAL

CHAPTER 17(A) - INTERNAL CONTROL

17.1 - Introduction and Concept 111

CHAPTER 17(B) AUDIT AND ANTI CORRUPTION STRATEGY

17.12 - External Audit 116

FINANCIAL & ACCOUNTING MANUAL

1.2 How the company will operate:

FINANCIAL & ACCOUNTING MANUAL

Any exceptions to these policies must be authorized by a Board of Director, and

This manual is the essence of a sound financial management and effective

A smooth, sound and sophisticated accounting system is a pre-condition for an

FINANCIAL & ACCOUNTING MANUAL

1.4 Financial Accounting Objectives:

The objectives of maintaining accounts of DESIGNER JEANS LIMITED are:

FINANCIAL & ACCOUNTING MANUAL

1.6 - Accounting Offices:

FINANCIAL & ACCOUNTING MANUAL

1.7 Accounting Year:

1.8 Books of Accounts:

(a) Financial and Accounting Manual of DESIGNER JEANS LIMITED ;

2.1 - Basis of Accounting:

2.2 - Accounting Responsibility:

FINANCIAL & ACCOUNTING MANUAL

As a measure of management safe-guard, the required coverage and appropriate

2.3 - Accounting Policies of DESIGNER JEANS LIMITED :

Accounting system, selection and application of accounting policies and

The requirements and guidelines in International Financial Reporting Standard

FINANCIAL & ACCOUNTING MANUAL