2
T his document provides you with detailed and comprehensive information about the
overall performance of Bangladesh Online Limited in 2003.
A printable version is also available at the BOL web site : www.bol-online.com
Table of Contents
03 Corporate Directories
04 Mission Statement
05 Overall Highlights of BOL
06 Selected Data for Shareholder, Investor & Customer
07 Creating Shareholder Value
08 3 Years Statistics
09 Engine of Growth
10 Notice
11 Annual General Meeting of 2002
12 Chairman's Statement
16 Directors' Report
17 Statement on Corporate Governance
18 Auditors' Report to the Shareholders
20 Balance Sheet
21 Profit and Loss Account
22 Statement of Changes In Equity
23 Cash Flow Statement
24 Index of Notes to the Financial Statements
25 Notes to the Financial Statements
Annexed Proxy Form
BANGLADESH ONLINE LIMITED
3
Corporate Directories
Board of Directors
CHAIRMAN
A S F Rahman
Management Committee
MANAGING DIRECTOR
Chowdhury Hafizur Rahman
CHIEF OPERATING OFFICER
Syed Samiul Wadood
VICE CHAIRMAN
Salman F Rahman
MANAGING DIRECTOR
Chowdhury Hafizur Rahman
DIRECTOR
Iqbal Ahmed
Osman Kaiser Chowdhury
CHIEF INFORMATION OFFICER
Ershad Shafi Chowdhury
COMPANY SECRETARY
Md. Asad Ullah, FCS
ANNUAL REPORT 2003
4
BANGLADESH ONLINE LIMITED
5
highlights
highlights
Overall Highlights of the Company
company
Our Products & Services
◆
◆
◆
◆
Dial-up Internet Services
Corporate Dedicated Broad Band Internet
Web Base software
Computer Peripherals
Our Service Areas
Major Competitors
◆
◆
◆
◆
◆
◆
◆
◆
◆
◆
◆
◆
◆
◆
◆
◆
Gulshan
Banani
Baridhara
Dhanmondi
Eskaton
Maghbazar
Kawran Bazar
Motijheel
Dilkhusa
ISN Ltd.
Agni Systems Ltd.
Proshika Net Ltd.
Aftab IT Ltd.
AccessTel Ltd.
Grameen Cybernet Ltd.
Global Online Service Ltd.
Our Customers
Market Leadership
◆
◆
◆
◆
◆
◆
◆
◆
◆
BOL is still the proven Market Leader in
the Internet Service business. BOL has
the largest number of telephone lines for
any ISP in Dhaka City and this large
capacity has enabled it to meet demand
for its services. BOL has also aggressively
expanded its Points of Presence (POP's)
to provide Broadband Services in different
areas of Dhaka City, including Gulshan,
Tejgaon and Motijheel. Our dedication to
customer satisfaction is unmatched by
our competitors.
Government bodies
Shipping Lines
Air Lines
Financial Institutions
Corporate Groups
Multinational Companies
Foreign Missions
Universities
Individuals
ANNUAL REPORT 2003
6
Selected Financial and Statistical Data for
Shareholder, Investor & Customer
We recommend that the following information be read in conjunction with our
financial statement, the accompanying notes and other information included in
this report.
Particulars
Financial
Total Revenue
Total Expenses
Gross Profit
Gross Profit to sales
Net Profit
Net Profit to sales
Capital Expenditure
Depreciation & amortization
Cash and cash equivalents
Total assets
Total debts & Liabilities
Shareholder' equity
Operating Data
Network Operating Centers
No. Dial-up Telephone Lines
Number of employees - closing
Investment information
Number of Shareholders
Stock price - closing
Shareholder' equity per share
Earning per share
Proposed Dividend
2003
2002
Changes
Amount
%
106,761
69,293
50,395
47.20%
37,469
35.10%
15,838
18,705
802
393,403
162,058
231,345
96,481
60,836
47,350
49.08%
35,644
36.94%
22,283
17,640
3,737
368,265
152,264
216,001
10,280
8,457
3,045
(1.88)
1,825
(1.84)
(6,445)
1,065
(2,935)
25,138
9,794
15,344
10.65
13.90
6.43
(3.83)
5.12
(4.98)
(28.92)
6.04
(78.54)
6.83
6.43
7.10
2
573
49
2
573
50
(1)
(2)
841
25.42
15.68
2.54
15%
781
22.32
14.64
2.39
15%
60
3.10
1.04
0.15
-
7.68
13.89
7.10
6.28
-
(Financial result & investment information in nearest '000 Taka except
percentage & ratio)
BANGLADESH ONLINE LIMITED
Creating Shareholders Value
7
We assume it will never stop ...
ANNUAL REPORT 2003
Years
STATISTICS
3
8
BANGLADESH ONLINE LIMITED
3 Years Statistics
Particulars
2003
2002
2001
Results of operations
Turnover
Gross Profit
Net Profit
Cash inflow from operating activities
Basic earnings per share
Equity per share
Dividend per share
106,761
50,395
37,469
20,182
2.54
15.68
15%
96,481
47,350
35,644
32,154
2.39
14.64
15%
69,733
30,776
18,572
34,680
1.46
13.26
10%
Financial Positions
Total Assets
Total Current Assets
Total Current Liabilities
Paid up capital
Shareholders' equity
393,403
108,466
49,558
147,500
231,345
368,265
80,461
39,764
147,500
216,001
334,537
53,621
26,510
147,500
195,527
Key Financial Ratios & Figures
Return on paid up capital
Return on Investment
Price Earning Ratio
Current Ratio
Acid Test Ratio
25.40%
9.52%
10.01%
2.19 : 1
1.21: 1
24.17%
9.68%
9.35%
2.02 : 1
0.89 : 1
12.59%
5.55%
13.50%
2.02 : 1
0.44 : 1
841
25.42
49
781
22.32
50
1083
19.70
51
Other Key Data
Number of Shareholders
Stock price - closing
Number of Employee
(Financial result & investment information in nearest '000 Taka except
percentage & ratio)
Engine of Growth
ANNUAL REPORT 2003
9
NOTICE
10
BANGLADESH ONLINE LIMITED
BANGLADESH ONLINE LIMITED
17 DHANMONDI R.A., ROAD NO. 2
DHAKA - 1205
NOTICE OF THE SEVENTH ANNUAL GENERAL MEETING
Notice is hereby given that the SEVENTH ANNUAL GENERAL MEETING of the
Shareholders of Bangladesh Online Limited will be held on Wednesday, the 30th June,
2004 at 3.30 p.m. at 1, Shahbag C/A, Dhaka to transact the following business :
AGENDA
1.
To confirm the proceedings of the Sixth Annual General Meeting of the Company
held on 30th June, 2003.
2.
To receive, consider and adopt the Audited Accounts as of 31st December, 2003
together with reports of the Auditors and the Directors thereon.
3.
To elect Directors.
4.
To declare dividend @15%.
5.
To appoint Auditors for the year 2004 and to fix their remuneration.
6.
To transact any other business of the Company with the permission of the Chair.
Dated : April 27, 2004
By order of the Board,
Sd/(Md Asad Ullah, FCS)
Company Secretary
NOTES:
(1)
The Register of Members and Share Transfer Book of the Company will remain closed from
7th June, 2004 to 30th June, 2004 (both days inclusive). During that period no share transfer
will be effected. The Shareholders whose names will appear in the Share Register of the
Company at the close of business on 6th June, 2004 will be entitled to the dividend.
(2)
A member entitled to attend and vote at the General Meeting may appoint a Proxy to attend
and vote in his/her stead. The Proxy Form, duly stamped, must be deposited at the
Registered Office of the Company not later than 48 hours before the time fixed for the
meeting.
(3)
Members are requested to notify change of address, if any, to the Company.
(4)
Admission to the meeting room will be strictly on production of the attendance slip
sent with the Notice.
Sixth Annual General Meeting
The Sixth Annual General Meeting (AGM) of shareholders of
Bangladesh Online Limited was held on 30 June 2003 at
3.30 pm at 1, Shabagh C/A, Dhaka. A good number of
shareholders attended the AGM.
In absence of Mr. A S F Rahman, Chairman of the company,
MR. Salman F Rahman, Vice Chairman of the Company,
presided over the meeting. Verses from the Holy Quran
along with its translation in bengali were recited at the very
outset of the meeting.
The Chairman welcomed the shareholders in the AGM.
With the permission of the chair the meeting began and the
shareholders expressed their valued opinion on the audited
financial statements of the Company for the year ended 31
December 2003 and also on other affairs.
A
GM
Mr. Salman F Rahman, Vice-Chairman of the board of
directors, replied to the queries and explained various
comments of distinguished shareholders.
After approving the audited financial statements, electing
directors, proposed dividend @15% and fixing the
remuneration of the auditors by the shareholders, the
meeting ended with a vote of thanks from the chair.
ANNUAL REPORT 2003
11
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ANNUAL REPORT 2003
CHAIRMAN'S
14
Chairman's Statement
Dear Shareholders,
It is my pleasure to welcome you all to the 7th Annual General Meeting of your company. I take
this opportunity to lay before you a brief resume of the affairs of the company for the year 2003.
Operations
We are proud of what we have achieved in 2003, even in a difficult environment marked by the
economic downturn, in both international and local market of Information and Communication
Technology sector. We are just not running our business for today, we are also building our future
with the vision for tomorrow.
In the year 2003 our sales increased in both for Internet and software sales by 9.27%% and 6.06
% respectively. Our total turnover stood at 106,761,342 which have increased 10.66% with
compared to 2002.
Due to the sales growth, we have achieved a record profit of Tk. 37,468,771 in 2003, and as a
result we have retained our leading position in local IT market.
Creating Employment Opportunity
Bangladesh Online Limited always offer jobs with career prospects, excellent working environment
with attractive remuneration package taking consideration of cost of living and reducing
unemployment situation of the country .
BANGLADESH ONLINE LIMITED
STATEMENT
15
Contribution to the National Exchequer
During the year under report the company has contributed an amount Tk. 6.68 million to the
National Exchequer in form of Value added Tax .
Investment
Due to economic downtrend in local and international ICT market we have not made any significant
investments this year. Adverse situation of global ICT market is our main obstacle for the
development of the IT park. We have expanded our internet network by opening a broadband
distribution office in the Motijheel/ Dilkusha area.
Dividend
The board of directors has recommended a cash dividend Tk. 1.50 per share of Tk. 10.00 each for
the year 2003, considering it prudent and in the long term interest of the company. This is the
second consecutive year we are declared highest dividend as a listed IT firm of Dhaka and
Chittagong Stock Exchanges .
Acknowledgement
Finally, I would like to reiterate that, 2003 has been a very successful year for your company. This
result has been possible because of our loyal customers, the sincere and tireless efforts of our
staff and the support received from our bankers, suppliers and business associates. Above all, we
are grateful to our shareholders for extending at all times their invaluable support and co-operation
to bring the company to the level it has reached today.
I avail this opportunity to express my sincere thanks to all concerned and look forward for the
continued support and co-operation in the future.
A S F Rahman
Chairman
Dated : 27 April 2004
Dhaka.
ANNUAL REPORT 2003
16
Directors' Report to the Shareholders
Dear Shareholders,
The Directors have pleasure in submitting their report and the audited financial statements of the
Company for the year ended 31st December, 2003 together with the Auditors Report thereon.
(Figure in 000 Taka)
2002
2003
Financial Reports and Profit Appropriations
Net Profit before providing Income Tax
Less: Provision for Income Tax
Net Profit after Tax
Add: Un-appropriated profit from the previous year
Profit available for appropriation
37,469
37,469
17,709
55,178
35,644
(420)
35,224
18,868
54,092
14,988
22,125
2,213
(39,326)
15,852
14,258
22,125
Recommended for appropriations
Transfer to Tax-holiday reserve
Proposed Dividend (For 2003-15% and 2002-15%)
Dividend Distribution Tax
Un-appropriated Profit
(36,383)
17,709
Note : Proposed Dividend has not been accounted for in the audited financial Statement.
Dividend
The Board of Directors have recommended a cash dividend of taka 1.50 per share of taka 10.00
each fully paid up for your approval for the year ended 31st December, 2003.
Directors
In accordance with Articles 125 and 126 of the Articles of Association of the Company, Mr. A S F
Rahman retires by rotation and being eligible offers himself for re-election.
Auditors
The retiring Auditors M/S M J Abedin & Co., Chartered Accountants, National Plaza (6th Floor) 1/G,
Free School Street, Sonargaon Road, Dhaka-1205, being eligible offer themselves for reappointment as Auditors of the Company for the year 2004.
A S F Rahman
Chairman
Dated : 27 April 2004
Dhaka.
BANGLADESH ONLINE LIMITED
17
Statement on Corporate Governance
Bangladesh Online Limited (BOL) is committed to uphold the highest standard of corporate governance.
Proper accountability at each level of corporate management and transparency in every sphere of
business activities is our key focus. We are pleased to report our compliance with the core corporate
governance issues as set out in our ethical business guidelines.
Board of Directors
Going Concern
The board of directors is the highest level of authority in the
organization which comprises of five members with Mr. A S F
Rahman as Chairman and Mr. Salman F Rahman as Vice Chairman .
Board is responsible to the shareholders for attainment of strategic
objects of the company and stewardship of the company s
resources.
After making appropriate enquires at the time of approving the
financial statements the directors are confident that the company
has adequate resources to carry out its operational existence for the
near future and that it is therefore appropriate to adopt going
concern basis in preparing the financial statement.
Rights and Relations with shareholders
The board meets at periodical interval to deal with the issues that
require board s approval and directives . The key activities of the
business are reviewed and strategic policy directives are given to the
management. Full and timely information are provided to enable the
directors to give decisions on issues placed before them.
Management Committee
A three member management committee headed by the Managing
Director is responsible for implementation of strategic and operating
plans of the business . The company has a well defined
management structure with appropriate hierarchy manned with
committed professional managers who carry out the day to day
operational activities of the business.
Internal Control
BOL has deployed a internet control system including internal
financial control to ensure transparency and compliance of its
activities at all levels. The effectiveness of the control mechanism
already in place is periodically reviewed. There are systems for
careful monitoring of the activities to make sure that the standard
and procedures set out for each business function is being
effectively complied with.
The annual general meeting are uses as an important opportunity for
communication with both institutional and general shareholders. In
addition, the Company maintains relations with its shareholders
through the corporate affairs secretarial department.
The following information can be addressed through the secretarial
department :
◆
◆
◆
◆
◆
Dividend payment enquires
Dividend mandate instruction
Loss of share certificate / dividend warrants
Notification of changes of address
Transfer of Shares
The board believes that it is important to respond adequately to all
the queries of both institutional and general shareholders. At the
AGM the shareholders are afford an opportunity to raise with the
board any specific question the have concerning the Company. In
addition, meetings are also held between individuals directors and
institutional shareholders at various times during the year.
BOL has a well-defined management structure with clearly identified
responsibilities and appropriate chain of accountabilities.
The operational units are required to prepare annual budgets and
actual performance against the budget is actively monitored
throughout the year at the management level.
ANNUAL REPORT 2003
18
AUDITORS' REPORT
To
the
Shareholders
of
Bangladesh Online Ltd.
We have audited the accompanying Financial Statements of Bangladesh Online Limited consisting
of a balance sheet, a profit and loss account and the statements of changes in equity and cash
flows as well as the notes to the financial statements for the business year from January 1 to
December 31, 2003. The preparation and the content of the financial statements according to
International Accounting Standards are the responsibility of the Company's board of directors. Our
responsibility is to express an opinion, based on our audit.
We conducted our audit in accordance with International Standards on Auditing adopted by the
Institute of Chartered Accountants of Bangladesh. These standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement. Evidence supporting the amounts and disclosures in the financial
statements is examined on a test basis within the framework of the audit. An audit also includes
assessing the accounting principles used and significant estimates made by the board of directors,
as well as evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, based on our audit, the financial statements referred to above give a true and fair
view of the financial position, the results of operations and cash flows of the company, in all
material respects, for the business year referred to above, in accordance with the Companies Act
1994, the Securities and Exchange Rules 1987 and the International Accounting Standards adopted
by the ICAB.
We also report that :
(a)
we have obtained all the information and explanations which to the best of our knowledge
and belief were necessary for the purpose of our audit and made due verification thereof;
(b)
in our opinion, proper books of accounts as required by law have been kept by the company
so far as it appeared from our examination of those books ;
(c)
the Company's Balance Sheet and Profit and Loss Account dealt with by this report are in
agreement with the books of accounts ; and
(d)
the expenditures incurred were for the purpose of the Company's business.
National Plaza (6th Floor)
1/G, Sonargaon Road
Dhaka - 1205
27 April, 2004
BANGLADESH ONLINE LIMITED
M J Abedin & Co.
Chartered Accountants
FINAN
Financials
CIALS
FINANCIALS
20
BANGLADESH ONLINE LIMITED
Balance Sheet
As at 31 December, 2003
Note
2003
2002
284,936,362
279,109,996
10,848
1,495,978
1,819,540
2,500,000
108,466,402
2,658,298
59,394,857
45,611,451
801,796
287,803,819
280,924,809
21,696
2,537,774
1,819,540
2,500,000
80,461,498
1,029,978
31,717,585
43,976,715
3,737,220
TK. 393,402,764
368,265,317
231,345,040
147,500,000
43,653,230
40,191,810
112,500,000
112,500,000
49,557,724
49,557,724
-
216,001,269
147,500,000
28,665,722
39,835,547
112,500,000
112,500,000
39,764,048
39,344,353
419,695
Tk. 393,402,764
368,265,317
ASSETS
Non-Current Assets
Property, Plant and Equipment - Carrying Value
Preliminary Expenses, net of amortisation
Pre-operating Expenses, net of amortisation
Long Term Security Deposits
Investment in Shares of Beximco Zenith Ltd.
Current Assets
Inventories - At cost
Accounts Receivable - Considered good
Advances, Deposits and Prepayments
Cash and Cash Equivalents
16
17
18
19
20
21
22
23
24
TOTAL ASSETS
EQUITY AND LIABILITIES
Shareholders' Equity
Issued Share Capital
Tax- Holiday Reserve
Retained Earnings
Non-Current Liabilities
10% Debenture
Current Liabilities and Provisions
Accounts Payable & Other Liabilities
Income Tax Payable
25
26
27
28
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
Contingent Liabilities and commitments.
37, 38 & 39
Accounting Policies
7
The Notes are an integral part of the Financial Statements.
Approved and authorised for issue by the board of directors on 27 April 2004 and signed for and on behalf of
the Board :
C H Rahman
Managing Director
Iqbal Ahmed
Director
Md. Asad Ullah
Company Secretary
Per our report of even date.
Dhaka
27 April 2004
BANGLADESH ONLINE LIMITED
M J Abedin & Co.
Chartered Accountants
BANGLADESH ONLINE LIMITED
Profit and Loss Account
21
For the year ended 31 December, 2003
Note
Revenue ( Turnover ) from Net Sales
Operating Expenses
Gross Profit
Administrative and Selling Expenses
Amortisation of Preliminary Expenses
Amortisation of Pre-operating Expenses
29
30
31
Net Profit Before Tax
Provision for Income Tax
Net Profit After Tax Transferred to Statement of Changes in Equity
Basic Earnings Per Share ( Par value Tk 10/- )
Number of shares used to compute EPS
Accounting Policies
32
2003
2002
106,761,342
(56,366,290)
50,395,052
11,873,637
10,848
1,041,796
(12,926,281)
37,468,771
37,468,771
2.54
14,750,000
96,480,570
(49,131,053)
47,349,517
10,652,540
10,848
1,041,796
(11,705,184)
35,644,333
(419,695)
35,224,638
2.39
14,750,000
7
Figures in brackets indicate deductions.
The Notes are an integral part of the Financial Statements.
Approved and authorised for issue by the board of directors on 27 April 2004 and signed for and on behalf of
the Board :
C H Rahman
Managing Director
Iqbal Ahmed
Director
Md. Asad Ullah
Company Secretary
Per our report of even date.
Dhaka
27 April 2004
M J Abedin & Co.
Chartered Accountants
ANNUAL REPORT 2003
22
BANGLADESH ONLINE LIMITED
Statement of Changes in Equity
Particulars
At the beginning of year
Net Profit after tax for 2003
Transfer to Tax Holiday Reserve (Note 33)
Cash dividend of prior period
At the end of year
Total Number of Shares
Shareholders' Equity per share
Share
Capital
147,500,000
147,500,000
Tax holiday
Reserve
28,665,722
14,987,508
436,532,230
For the year ended 31 December, 2003
Retained
Earnings
39,835,547
37,468,771
(14,987,508)
(22,125,000)
40,191,810
Total
216,001,269
37,468,771
(22,125,000)
231,345,040
14,750,000
Tk. 15.68
Accounting Policies (Note 7).
Figures in brackets indicate deductions.
The Notes are an integral part of the Financial Statements.
Approved and authorised for issue by the board of directors on 27 April 2004 and signed for and on behalf of
the Board :
C H Rahman
Managing Director
Iqbal Ahmed
Director
Md. Asad Ullah
Company Secretary
Per our report of even date.
Dhaka
27 April 2004
BANGLADESH ONLINE LIMITED
M J Abedin & Co.
Chartered Accountants
BANGLADESH ONLINE LIMITED
Cash Flow Statement
23
For the year ended 31 December, 2003
Note
Cash Flows from Operating Activities :
Cash receipts from customers and others
Cash paid to suppliers and employees
Cash Generated from Operations
Income Tax paid & deducted at source
Net cash Generated From Operating Activities
Cash Flows from Investing Activities :
Acquisition of Property, Plant and Equipment
Investment in Shares of Beximco Zenith Ltd.
Long Term Security Deposit
Net cash Used in Investing Activities
Cash Flows from Financing Activities :
Dividend paid
Short term loan given
Net cash Used in Financing Activities
Net (Decrease)/Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year
34
2003
2002
79,084,071
(58,807,098)
20,276,973
(95,100)
20,181,873
73,891,984
(41,532,383)
32,359,601
(206,000)
32,153,601
(4,587,892)
(4,587,892)
(10,861,400)
(2,500,000)
255,000
(13,106,400)
(18,529,405)
(18,529,405)
(2,935,424)
3,737,220
Tk.
801,796
(12,810,350)
(5,000,000)
(17,810,350)
1,236,851
2,500,369
3,737,220
Accounting Policies (Note 7).
Figures in brackets indicate deductions.
The Notes are an integral part of the Financial Statements.
Approved and authorised for issue by the board of directors on 27 April 2004 and signed for and on behalf of
the Board :
C H Rahman
Managing Director
Iqbal Ahmed
Director
Md. Asad Ullah
Company Secretary
Per our report of even date.
Dhaka
27 April 2004
M J Abedin & Co.
Chartered Accountants
ANNUAL REPORT 2003
24
BANGLADESH ONLINE LIMITED
Index to the Notes to the Financial Statement - 2003
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Corporate History of the Reporting Entity
Corporate Business
Corporate Financial Statements And Reportings
Corporate Accounting Standards Practiced
Related Party Transactions
Financial Instruments
Corporate Accounting Policies
Concentrations
Profit and Loss Account
Reporting Currency
Comparative Amount
Segments Reporting
Recognized Gains and Losses
Historical Cost Profit and Losses
Appropriation of Proposed Dividend of Previous Year (2002)
Property, Plant and Equipment
Preliminary Expenses
Pre-operating Expenses
Long Term Security Deposits
Investment in Shares of Beximco Zenith Ltd.
Inventories
Accounts Receivable
Advances, Deposits and Prepayments
BANGLADESH ONLINE LIMITED
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
Cash and Cash Equivalents
Issued Share Capital
Tax - Holiday Reserve
10% Debenture
Accounts Payable & Other Liabilities
Revenue (Turnover)
Operating Expenses
Administrative and Selling Expenses
Basic Earnings Per Share (EPS)
Tax-Holiday Reserve (for the year)
Cash flow from Operation Under Indirect Method
Payment / Perquisites to Directors
Financial Instruments And Related Disclosures
Contingent Liabilities
Capital Expenditure Commitment
Operating Lease Commitments
Claims Not Acknowledged
Credit Facility Not Availed
Foreign Exchange Earned
Commission, Brokerage or Discount against Sales
Payment in Foreign Currency
Related Party Transactions
Post Closing Events
25
BANGLADESH ONLINE LIMITED
Notes to the Financial Statement
1
31 December, 2003
Corporate History of the Reporting Entity
The Bangladesh Online Ltd. (the "Company"), a member of BEXIMCO Group, is a company incorporated and
domiciled in Bangladesh as a public limited company. It commenced commercial operation in December 1,
1999 and went for public issue of shares in 2000. The shares of the Company are listed in the Dhaka and
Chittagong stock exchanges of Bangladesh.
The registered office of the Company is located at House No. 17, Road No. 2, Dhanmondi Residential Area,
Dhaka. The sales and administrative office of the company located at 32, Kazi Nazrul Islam Avenue of Dhaka.
2
Corporate Business
The company is primarily engaged as an Internet Service Provider (ISP) and Web Page Software Developer in
Bangladesh. BOLs ISP service includes Dial-up Internet Access, Leased Port Internet Access, Web Designing
& Web Hosting Services, corporate Network Solutions and Computer Peripherals,
3
Corporate Financial Statements And Reportings
This comprises of balance sheet, profit and loss account, statement of changes in equity, cash flow statement
and explanatory notes covering accounting policies.
This is prepared under the historical cost convention and in accordance with the requirements of the
Companies Act 1994, the Securities and Exchange Rules 1987, the Listing Regulations of Dhaka and
Chittagong Stock Exchanges and the International Accounting Standards (IASs) adopted by the Institute of
Chartered Accountants of Bangladesh (ICAB).
The Board of Directors are responsible for preparing and presenting the financial statements including
adequate disclosures, who approved and authorized for issue of these financial statements.
The preparation of financial statements in conformity with International Accounting Standards requires
management to make estimates and assumptions that affect the reported amounts of revenues and
expenses, assets and liabilities, and the disclosure of contingent assets and liabilities at the date of and during
the reporting period. Due to the inherent uncertainty involved in making estimates, actual result reported
could differ from those estimates.
4
Corporate Accounting Standards Practiced
The ICAB has adopted to date the following IASs for Bangladesh :
IAS
IAS
IAS
IAS
IAS
IAS
IAS
1
2
7
8
10
11
12
Presentation of Financial Statements
Inventories
Cash Flow Statements
Net Profit or Loss for the period, Fundamental Errors and Changes in Accounting Policies
Events after the Balance Sheet Date
Construction Contracts
Income Taxes
ANNUAL REPORT 2003
IAS
IAS
IAS
IAS
IAS
IAS
IAS
IAS
IAS
IAS
IAS
IAS
IAS
IAS
IAS
IAS
IAS
IAS
IAS
26
14
16
17
18
19
20
21
22
23
24
25
26
27
30
31
33
34
36
37
Segment Reporting
Property, Plant and Equipment
Leases
Revenue
Employee Benefits
Accounting for Government Grants
The effects of Changes in Foreign Exchange Rates
Business Combinations
Borrowing Costs
Related Party Disclosures
Accounting for Investments
Accounting and Reporting by Retirement Benefit Plans
Consolidated Financial Statements and Accounting for Investments in Subsidiaries
Disclosures in the Financial Statements of Banks and Similar Financial Institutions
Financial Reporting of Interests in Joint Ventures
Earnings Per Share
Interim Financial Reporting
Impairment of Assets
Provisions, Contingent Liabilities and Contingent Assets
Of the IASs referred above, IASs 1, 2, 7, 8, 10, 12, 16, 18, 21, 23, 25, 33 and 37 are applicable for the
accompanied financial statements and, the remaining IASs either are not relevant for the financial statements
under review or not effective for the year under review.
5
Related Party Transactions
All the related party transactions have been accounted for, considering these on arms' length basis, the details
of which are disclosed in Note 45.
6
Financial Instruments
Following information relating to the company's financial instruments have been disclosed in Note 36:
(a) primary and derivative financial instruments;
(b) exposures related to credit risk, interest rate risk and foreign currency risk; and fair value and market value
of financial instruments
7
Corporate Accounting Policies
(a) Recognition of Income
Sales are accounted for on preparation of invoices after delivery of services & hardware goods.
(b) Property, Plant and Equipment
These are initially stated at cost of acquisition and subsequently stated at cost less accumulated
depreciation. The cost of acquisition of an asset comprises its purchase price and any directly attributable
cost of bringing the asset to its working condition for its intended use inclusive of inward freight, duties
and non-refundable taxes. In respect of major projects involving construction, related pre-operational
expenses form part of the value of asset capitalized. Expenses capitalized also includes pre-operational
borrowing cost. Expenditure incurred after the assets have been put into operation, such as repairs &
maintenance is normally charged off as revenue expenditure in the period in which it is incurred. In
situation where it can be clearly demonstrated that the expenditure has resulted in an increase in the
future economic benefit expected to be obtained from the use of the fixed assets, the expenditure is
capitalized as an additional cost of the assets. Software and all up gradation / enhancement are generally
charged off as revenue expenditure unless they bring similar significant additional benefits.
Fixed Assets do not include any assets held under lease.
On retirement or otherwise disposal of fixed assets, the cost and accumulated depreciation are eliminated
and any gain or loss on such disposal is reflected in the profit and loss account which is determined with
reference to the net book value of the assets and the net sales proceeds.
BANGLADESH ONLINE LIMITED
(c) Depreciation
27
No depreciation is charged on IT in progress and Telephone Line Cost. In respect of all other fixed assets,
depreciation is provided to amortize the cost of the asset after commissioning, over their expected useful
economic lives. Depreciation is calculated using the straight-line method. Half year s depreciation is
charged on additions and no depreciation is provided on retirement, irrespective of date of addition or
retirement respectively.
The annual depreciation rate applicable to the principal categories are :
Internet System Hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18%
Furniture & Fixture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10%
Air Conditioner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18%
Office Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20%
V-Sat Tower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10%
Under Ground Cable Installation . . . . . . . . . . . . . . . . . . . . . . . . .10%
Generator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15%
Transport & Vehicle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20%
(d) Preliminary Expenses
This is being amortized over 5 years commencing from the year 2000.
(e) Pre-operating Expenses
This is being amortized over 5 years commencing from the year 2000 in respect of Dhanmondi Center
and from the year 2001 in respect of Eskaton Center.
(f) Investment in Shares of Beximco Zenith Limited
This is valued at cost.
(g) Promotional Expenses
All costs associated with promoting services are expenses in the year incurred.
(h) Borrowing Costs
Debentures were issued for IT Park, which is still under progress, and therefore, interest on debenture is
being capitalized to IT Park in progress.
The Company does not have any other borrowing, and therefore, no other borrowing cost was incurred.
(i) Leasing
Fixed Assets acquired under leases are considered as operating lease, and therefore, lease rentals are
charged as expenses when it is incurred, instead of accounting as the company s fixed assets.
(j) Inventories
Inventories are stated at the lower of cost and net realizable value.
The cost is calculated on weighted average method consistently. Costs comprise expenditure incurred in
the normal course of business in bringing such inventories to its location and conditions. Where
necessary, provision is made for obsolete, slow moving and defective inventories (if any) identified at the
time of physical verification of inventories.
Net realizable value is based on estimated selling price less any further costs expected to be incurred to
make the sale.
(k) Accounts Receivable
These are carried at original invoice amount which represents net realizable value only. This is considered
good and collectible, and therefore, no amount was written off as bad debt and no debt was considered
doubtful to provide for.
ANNUAL REPORT 2003
28
(l) Cash and Cash Equivalents
This represents only cash which consists of cash in hand and at banks.
(m) Other Current Assets
Other current assets have a value on realisation in the ordinary course of the company's business which
is at least equal to the amount at which they are stated in the balance sheet.
(n) Income Taxes
The Company is enjoying tax holiday for five years commencing from the date of commercial operation
on 1st December, 1999.
However, tax claim by the income tax authority under section 30 of the Income Tax Ordinance 1984 for
not deducting income tax at source on certain payments is provided after completion of income tax
assessment.
(o) Other corporate debt, accounts payable, trade and other liabilities.
These liabilities are carried at the anticipated settlement amount in respect of goods and services
received, whether or not billed by the supplier.
(p) Provisions
Provisions are liabilities of uncertain timings or amount. Provisions are recognised when the company has
a present legal or constructive obligation as a result of past events, it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation, and a reliable estimate
of the amount of the obligation can be made.
(q) Tax - Holiday Reserve
This is being created out of tax holiday profit to invest in the same undertaking or in any new industrial
undertaking or in stocks and shares of listed companies or in government bonds or securities or for other
purposes as required by the Income Tax Ordinance 1984.
(r) Proposed Dividend and Dividend Distribution Tax
Dividend proposed by the board of directors for the year under review and dividend Distribution Tax (10%
of total cash dividend declared ) shall be accounted for after the approval of the shareholders in the annual
general meeting.
(s) Earnings Per Share (EPS)
This has been calculated by dividing the basic earnings by the weighted average number of ordinary
shares outstanding during the year.
Basic Earnings
This represents earnings for the year attributable to ordinary shareholders. As there was no preference
dividend, minority interest or extra ordinary items, the net profit after tax for the year has been considered
as fully attributable to the ordinary shareholders.
Weighted Average Number of Ordinary Shares Outstanding During the year
This represents the number of ordinary shares outstanding at the beginning of the year plus the number
of ordinary shares issued during the year multiplied by a time-weighting factor. The time-weighting factor
is the number of days the specific shares are outstanding as a proportion of the total number of days in
the period.
Diluted Earnings Per Share
No diluted EPS is required to be calculated for the year as there was no scope for dilution during the year
under review.
BANGLADESH ONLINE LIMITED
(t) Foreign Currencies
29
Foreign Currency transactions are recorded at the applicable rates of exchange ruling at the transaction
date.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated
at the applicable rates of exchange ruling at that date. Exchange differences are dealt with in the profit
and loss account.
The rate of relevant foreign exchange at year end is :
1 U S Dollar ($)
8
2003
2002
Tk. 58.73
59.12
Concentrations
As of 31 December 2003, the Company does not have any significant concentration of business transacted
with a particular customer, supplier or lender that could, if suddenly eliminated, severely impact the
company's operations. The company also does not have a concentration of available sources of labor,
services, or licenses or other rights that could, if suddenly eliminated, severely impact the operations of the
company.
9
Profit and Loss Account
The results for the year were not materially affected by :
(a) transactions of a nature not usually undertaken by the company;
(b) circumstances of an exceptional or non-recurring nature;
(c) charges or credits relating to prior years; and
(d) changes in accounting policies.
10
Reporting Currency
The amounts shown in these financial statements are presented in Bangladesh currency (Taka), which have
been rounded off to the nearest Taka except where indicated otherwise.
Figures in brackets indicate deductions.
11
Comparative amounts
Certain amounts for previous year have been re-classified to conform with 2003 presentation.
12
Segment Reporting
This is not relevant for the company as their is single industry segment and single Geographic Segment
(Bangladesh).
13
Recognized Gains and Losses
No gain or loss was directly dealt with through the shareholders' equity without being recognized in the profit
and loss account.
Therefore, net profit after tax for the year is the total recognized gains.
14
Historical Cost Profit and Losses
As there was no extra-ordinary item, there was no difference in profit on ordinary activities before taxation
and the net profit before tax. Furthermore, as there was no revaluation of fixed assets in previous years and
during the year under review, there was no factor like the differences between historical cost depreciation and
depreciation on revalued amount, realization of revenue surplus on retirement or disposal of assets etc.
Therefore, no separate note of historical cost profit and loss has been presented.
ANNUAL REPORT 2003
30
15
Appropriation of Proposed Dividend of Previous Year (2002)
On 30th June 2003, the 6th Annual General Meeting of the Company decided that a dividend of Tk. 1.50 per
share (15 %) would be paid in respect of 2002 earnings. Accordingly, total dividend amount of Tk. 22,125,000
in respect of 2002 has been provided in the accounts of 2003.
16
Property, Plant and Equipment : Tk. 279,109,996
Particulars
IT Park in
Progress
Telephone
Line Cost
Internet
Office
Furniture,
System
Equipment &
VSAT Tower
Hardware & Motor Vehicles & Underground
Air Conditioner
Cable Installation
Generator
Total
Cost
At 31 December 2002
Additions in 2003
208,890,411
11,250,000
11,281,500
-
75,556,994
3,697,847
8,096,407
560,345
17,413,396
329,700
1,909,987
-
323,148,695
15,837,892
At 31 December 2003
220,140,411
11,281,500
79,254,841
8,656,752
17,743,096
1,909,987
338,986,587
Depreciation
At 31 December 2002
Charged for 2003
-
-
34,758,539
13,933,065
3,883,063
1,675,316
2,971,461
1,757,825
610,824
286,498
42,223,887
17,652,704
At 31 December 2003
-
-
48,691,604
5,558,379
4,729,286
897,322
59,876,591
Carrying Value
At 31 December 2003 Taka
Carrying Value
At 31 December 2002 Taka
220,140,411
11,281,500
30,563,237
3,098,373
13,013,810
1,012,665
279,109,996
208,890,411
11,281,500
40,798,455
4,213,344
14,441,936
1,299,163
280,924,809
16(a) IT Park In Progress : Tk. 220,140,411
This consists of as follows :
(i) Payment against Land
(ii) Capitalized Interest on Debenture
2003
180,000,000
40,140,411
Tk. 220,140,411
2002
180,000,000
28,890,411
208,890,411
(i) Payment Against Land : Tk. 180,000,000
To setup an IT Park facilitating the software development in Bangladesh and export thereof, the
Bangladesh Online Limited (BOL) has agreed to purchase 44 Bighas of Land at Ashulia of Savar from
Shinepukur Holdings Ltd. (SHL), a land developer and real.
In accordance with the provisions of Agreement of Sale, the BOL has paid in advance of Tk. 18.00 crore
against total cost of Tk. 22.00 crore (@Tk. 2.50 lakh per Katha).
Schedule of Land
All that piece and parcel of land containing by admeasurement an area of 44 (Forty Four) Bighas of land
situated in the district of Dhaka P.S. & Sub Registry office, Savar, Mouza 560, Diakhali, Parts of C.S. Plot
Nos. 143, 141, 139, 138, 108, 108/130
Title deed and registration thereof
The ownership of the said land shall be transferred to BOL on payment of balance amount of Tk. 4.00
crore and thereafter, execution and registration of title deed shall be completed.
Possession
In terms of Agreement of Sale, the possession of the land has already been transferred to BOL alongwith
an allotment letter issued by SHL on 15th October, 2000.
Price
Although the seller SHL is an associated / related company of BOL, the management of BOL negotiated
the deal on an "Arm's Length" basis at a fair market price. In fact, SHL sold and was selling land in the
same area with inferior location to other parties at the same price.
BANGLADESH ONLINE LIMITED
(ii) Interest on Debenture : Tk. 40,140,411
31
This has been capitalized to IT Park-in-progress as the debenture money was fully utilized for payment
against acquisition of land for IT Park which has not gone into operation.
This is arrived as follows:
As on 01.01.2003
Interest Provided in 2003
17
28,890,411
11,250,000
Tk. 40,140,411
Preliminary Expenses : Tk. 10,848
This is arrived at as follows :
Total Expenses
Less : Opening Balance of Amortisation
Amortised ( 1/5 ) during the year
Tk.
2003
54,240
32,544
10,848
43,392
10,848
2002
54,240
21,696
10,848
32,544
21,696
The management has decided to amortise preliminary expenses over five years commencing from the year 2000.
The balance amount of Tk. 10,848 shall be amortised in 2004.
18
Pre-operating Expenses : Tk. 1,495,978
This is arrived at as follows :
Total Amount
Less :Amortised upto year 2002
Balance as on 31.12.2002
Less : 1/5 th Amortized during the year 2003
Dhanmondi Center
2,938,071
(1,762,842)
1,175,229
(587,614)
Tk.
587,615
Eskaton Center
2,270,909
(908,364)
1,362,545
(454,182)
908,363
Total
5,208,980
(2,671,206)
2,537,774
(1,041,796)
1,495,978
The management has decided to amortise Pre-operating expenses over five years commencing from the year
2000 and 2001 in respect of Dhanmondi and Eskaton Centers respectively.
19
Long Term Security Deposits : Tk. 1,819,540
These were deposited with :
Telephone Line
For Bandwidth
Tk.
20
2003
1,370,000
449,540
1,819,540
2002
1,370,000
449,540
1,819,540
Investment in Shares of Beximco Zenith Limited : Tk. 2,500,000
This represents 2,50,000 shares of Tk. 10 each of Beximco Zenith Limited a Joint Venture company
incorporated in Bangladesh. This represents 50% of total paid-up capital of Beximco Zenith Limited. This is a
non-listed company, and therefore, no market value.
ANNUAL REPORT 2003
32
21
Inventories : Tk. 2,658,298
This consists of :
PIN Mailer's
CD Rom
Computer Peripheral
Tk.
22
2003
208,843
100,157
2,349,298
2,658,298
2002
613,085
416,893
1,029,978
Accounts Receivable : Tk. 59,394,857
This is receivable within one year and is unsecured and considered good and is made up as follows :
Internet Service
Web Page Software Sales
Computer Peripheral
2003
4,474,732
54,495,000
425,125
Tk. 59,394,857
2002
4,117,585
27,600,000
31,717,585
No amount was due by the Directors ( including Managing Director), Managing Agent, Managers and Other
Officers of the Company and any of them severally or jointly with any other person.
The amount due from the associated undertakings/related parties has been disclosed in the Note 45.
23
Advances,Deposits and Prepayments : Tk. 45,611,451
This consists of :
Advances
Advance to Shinepukur Holdings Ltd.
Other Advances
L/C Margin
Deposits
Lease Deposit
Sundry Security Deposits
Bank Guarantee
Earnest Money
Prepayments
Rent - Network Operating Centers
Group Insurance
Office Insurance
Other Prepaid
2003
42,507,683
40,000,000
1,266,109
1,241,574
2002
41,532,150
40,000,000
1,532,150
-
2,783,265
2,080,167
346,650
37,860
318,588
2,071,417
1,695,167
346,650
29,600
-
320,503
78,000
59,662
182,841
Tk. 45,611,451
373,148
44,000
35,227
185,921
108,000
43,976,715
No amount was due by the Directors ( including Managing Director), Managing Agent, Managers and Other
Officers of the Company and any of them severally or jointly with any other person.
No amount was due from any associated undertaking.
The advances are good and unsecured.
24
Cash and Cash Equivalents : Tk. 801,796
This consists of :
Cash in hand
Cash at Banks in Current Deposit Accounts
BANGLADESH ONLINE LIMITED
2003
308,423
493,373
Tk. 801,796
2002
239,021
3,498,199
3,737,220
25
33
Issued Share Capital : Tk. 147,500,000
This represents :
(a) Authorized
200,000,000 Ordinary Shares of Tk. 10/- each
Tk. 2,000,000,000
2,000,000,000
(b) Issued, Subscribed and Paid-up
14,750,000 Ordinary Shares of Tk. 10/- each fully paid-up in cash
Tk. 147,500,000
147,500,000
(c) Compositions of Shareholdings
Sponsors
Foreign Investors
Local Financial Institutions
General Public
Total
2003
No. of Shares
%
2002
No. of Shares
%
4,500,000
6,846,000
109,500
3,294,500
30.51
46.41
0.74
22.34
4,500,000
8,465,500
405,000
1,379,500
30.51
57.39
2.75
9.35
14,750,000
100.00
14,750,000
100.00
(d) Distribution Schedule - Disclosure under the Listing Regulations of Stock Exchanges
This distribution schedule showing the number of Shareholders and their Shareholdings in percentage has
been disclosed below as a requirement of the "Listing Regulations of Dhaka & Chittagong Stock
Exchanges :
Shareholders Range in number of Shares
Less than 500 shares
500 to 5,000 shares
5,001 to 10,000 shares
10,001 to 20,000 shares
20,001 to 30,000 shares
30,001 to 40,000 shares
40,001 to 50,000 shares
50,001 to 100,000 shares
100,001 to 1,000,000 shares
Over 1,000,000 shares
Total
Number of
Holders
675
74
68
5
5
1
4
5
4
841
% of Total
Holders
80.26
8.80
8.09
0.59
0.59
0.12
0.48
0.59
0.48
100.00
Number of % of Share
Shares
Capital
834,000
5.65
581,000
3.94
964,000
6.54
127,500
0.86
176,000
1.19
46,500
0.32
276,000
1.87
1,662,000
11.27
10,083,000
68.36
14,750,000
100.00
(e) Option on unissued shares
There is no option regarding authorized capital not yet issued but can be used to increased issued,
subscribed and paid-up capital through the issuance of new shares
(f) Market Price
The shares of the Company are listed in the Dhaka and Chittagong stock exchanges and quoted at Tk.
25.46 per share and Tk. 25.38 per share in the Dhaka and Chittagong stock exchanges respectively on 31
December, 2003.
(g) Voting Rights
The rights and privileges of the shareholders are stated in the Bye-laws ( Articles of Association) of the
Company.
ANNUAL REPORT 2003
34
26
Tax - Holiday Reserve : Tk. 43,653,230
This is arrived at as follows :
Opening Balance
Add : 40% of profit for the year
2003
28,665,722
14,987,508
Tk. 43,653,230
2002
14,407,989
14,257,733
28,665,722
This is being provided for as per Income Tax Ordinance 1984 to invest in the same undertaking or in any new
industrial undertaking or in stocks and shares of a public company or in govt. bonds or securities or for other
purposes specified in this respect
27
10% Debenture : Tk. 112,500,000
This is arrived at as follows :
25,000 Debentures of Tk. 5,000 each
Less : 10% converted into Ordinary Shares
Term
2003
125,000,000
12,500,000
Tk. 112,500,000
2002
125,000,000
12,500,000
112,500,000
: 10 (Ten) years from the date of issue.
Redemption : In one single payment for the entire principal amount at the end of term.
Interest
: 10% per annum payable at annual rest, first payment becoming due, twelve months from the
date of issue and every twelve months thereafter until final redemption.
Security
: This is unsecured.
The total amount was received in local (Taka) currency on July 30, 2000 through designated Bank, Standard
Chartered Bank Plc., Dhaka, and shall be repayable alongwith interest in local currency.
28
Accounts Payable & Other Liabilities : Tk. 49,557,724
This consists of :
Interest Payable on Debentures
Audit Fee Payable ( 2003 )
Other Payable
VAT Payable
Total
29
2003
40,140,411
30,000
8,803,652
583,661
Tk. 49,557,724
2002
28,890,411
30,000
9,886,866
537,076
39,344,353
2003
2002
51,193,559
6,677,421
44,516,138
59,119,884
3,125,320
Tk. 106,761,342
46,848,377
6,110,658
40,737,719
55,742,851
96,480,570
Revenue (Turnover) : Tk. 106,761,342
Sales of Internet Services
Less : VAT
Net Sales After VAT
Sales of Web Page Software
Computer Peripheral
BANGLADESH ONLINE LIMITED
30
VSAT Charge
Depreciation
Plant Lease Rental
Telephone Line Rental
Web Rental & SMS Charge
Rent - Network Operating Centers
Salaries & Allowances
Cost of Computer Peripheral
Cost of PIN Mailer & CD Rom
Repairs & Maintenance
Electricity,Gas and Water
Insurance Premium
Renewal, Rates, Registration
31
35
Operating Expenses : Tk. 56,366,290
2003
14,738,736
17,652,704
10,678,548
1,195,230
266,037
608,880
5,490,231
2,738,362
1,521,955
240,456
580,277
249,345
405,529
Tk. 56,366,290
2002
15,537,600
16,587,346
7,580,985
1,203,854
500,199
766,500
5,293,264
683,156
110,669
221,167
243,193
403,120
49,131,053
2003
3,921,879
570,000
364,598
196,623
618,122
183,458
482,984
447,425
392,371
277,009
1,127,400
247,504
250,000
22,280
107,589
200,460
30,000
2,433,935
Tk. 11,873,637
2002
3,098,117
840,000
158,645
173,309
719,853
137,342
470,769
303,927
227,083
258,667
1,127,400
257,369
257,850
7,471
83,176
214,296
30,000
2,287,266
10,652,540
Administrative and Selling Expenses : Tk. 11,873,637
Salaries & Allowances
Office Rent
Renewal, Rates, Registration
Travelling & Conveyance
Telephone,Internet,Fax, Pager,Postage
Entertainment
Printing and Stationery
Charges for Security Guard
Electricity,Gas and Water
Car Running Expenses
Car Lease Rental
Repairs & Maintenance
Legal & Professional fees
General Expense
Bank Charges
Insurance Premium
Auditors' Remuneration ( Audit Fee for 2003 )
Promotional Expenses
The number of employees of the Company at 31 December, 2003 was 49 and all of them received salaries
and allowances above Tk. 3,000 per month.
32
Basic Earnings Per Share (EPS)
This Computation of EPS is given below :
(a) Earning attributable to the Ordinary Shareholders (Net Profit After Tax)
(b) Weighted average number of Ordinary Shares outstanding during the year
33
2003
37,468,771
14,750,000
Tk.
2.54
2002
35,227,638
14,750,000
2.39
Tax - Holiday Reserve : Tk. 14,987,508
This is provided as per provisions of the Income Tax Ordinance, 1984 as a condition of granting tax holiday
which represents 40% of the net profit for the year.
ANNUAL REPORT 2003
36
34
Cash flow from Operation Under Indirect Method
2003
37,468,771
2002
35,224,638
17,652,704
10,848
1,041,796
56,174,119
16,587,346
10,848
1,041,796
52,864,628
(1,628,320)
(27,677,271)
(1,634,736)
(4,632,224)
(419,695)
(35,992,246)
Tk. 20,181,873
433,156
(22,588,586)
(3,448,245)
4,678,953
213,695
(20,711,027)
32,153,601
Net Profit After Tax for the year
Adjustment to reconcile net profit to net cash provided by operating activities :
(a) Non-Cash expenses
Depreciation
Preliminary Expenses
Pre-operating Expense
Fund from operation before charging working Capital
(b) Changes in Working Capital
Decrease / (Increase) in Inventories
Decrease / (Increase) in Debtors
Increase in Advance, Deposit and Pre-payment
Increase in Accounts Payable and others
Increase in Income Tax Payable
Net cash Generated From Operating Activities
35
Payment / Perquisites to Directors
No amount of money was spent by the Company for compensating any member of the Board for services
rendered.
36
Financial Instruments And Related Disclosures
(a) Primary (On Balance Sheet) Financial Instruments
Set out below is the year- end balance of carrying amounts (book values) of all financial assets and
liabilities (financial instruments) as on 31.12.2003 :
Interest Bearing
Maturity within
Maturity after
one Year
one Year
Financial Assets
Long-Term Security Deposits
Accounts Receivable (Trade Debtors)
Cash and Cash Equivalents
Financial Liabilities
Debenture
Accrued Expenses
Debenture Interest
Tk.
Net financial Assets / (Liabilities)
Non-Interest
Bearing
Total
-
-
1,819,540
59,394,857
801,796
62,016,193
1,819,540
59,394,857
801,796
62,016,193
-
112,500,000
(112,500,000)
(112,500,000)
9,417,313
40,140,411
49,557,724
12,458,469
112,500,000
9,417,313
40,140,411
162,057,724
(100,041,531)
Details of the Company's financial risk management objectives and policies are as follows :
Credit Risk Exposures
The maximum exposure to credit risk in the event the counter parties fail to perform their obligations as
at 31st December 2003 in relation to each class of recognized financial assets is the carrying amount of
those assets as stated in the balance sheet.
BANGLADESH ONLINE LIMITED
Inspire of facts that a significant amount is receivable from the related parties, the company's
management believe that there was no significant concentration of credit risk in trade debtors.
The company monitors its exposure to credit risk on an ongoing basis. Trade debtors are evaluated for
recoverability. Cash is placed with reputed financial institutions.
Interest Rate Risk Exposure
The rate of interest of debentures is 10% per annum.
The company has no other long term borrowings.
Foreign Currency Risk
The company is not subject to significant foreign currency fluctuations as the amount of transactions in
foreign currency is not significant.
Fair Value of Primary Financial Instruments
(i) Cash and Cash equivalents, security deposits, debtors, creditors and accruals
The carrying amount of these balances approximate their fair values because of the immediate or
short term maturity of these primary financial instruments.
(ii) Debenture
The carrying amount of this balance approximate their fair values, based on the fixed borrowing rate
(10%) as agreed upon with the Debenture holder.
Market Value of Primary Financial Instruments
Market value is not available as the said financial instruments are not traded on organized markets in
standardized form.
(b) Derivative (Off Balance Sheet) Financial Instruments
The Company is not a party to any derivative contract at the balance sheet, such as, forward exchange
contract, currency swap agreement or interest rate option contract to hedge currency exposure related
to import and others.
37
Contingent Liabilities
There was no sums for which the Company is contingently liable as on 31 December,2003.
38
Capital Expenditure Commitment
There was no capital expenditure contracted but not incurred or provided for at 31 December, 2003.
There was no material capital expenditure authorized by the board but not contracted for at 31 December, 2003.
39
Operating Lease Commitments
The future annual rentals payable are as follows :
Expiring within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,211,638
Expiring after one year but not more than five years . . . . . . . . . . . . . 787,563
Expiring after five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nil
40
Claims Not Acknowledged
There was no claim against the Company not acknowledged as debt as on 31 December, 2003.
41
Credit Facility Not Availed
There was no credit facilities available to the company under any contract, but not availed of as on 31
December, 2003 other than trade credit available in the ordinary course of business.
ANNUAL REPORT 2003
37
38
42
Foreign Exchange Earned
In 2003, Company earned Foreign Exchange USD 6,180.85 which is equivalent BD Tk. 363,001 against service
provide for software.
43
Commission, Brokerage or Discount against Sales
Distributors' commission of Tk. 126,116 ( year 2002 : 592,544 ) was incurred and paid during the year 2003
to the city wide Distributors of the company on account of sales of Recharge Cards & I - Kit.
44
Payment in Foreign Currency
In 2003, the company remitted foreign currency in respect of Bandwidth & Membership Fee amounting to
USD 100,000 & 2,500 respectively which equivalent BD Taka 6,024,475.
No other expenses including royalty, technical expert and professional advisory fee, etc. was incurred or paid
by the company in foreign currency during the year 2003.
45
Related Party Transactions
The Company carried out a number of transactions with related parties / associated undertakings in the normal
course of business and on arms' length basis. The nature of transactions and their total value is shown below:
Name of Related Parties
Beximco Pharmaceuticals Ltd.
Beximco Textiles Ltd.
Beximco Knittings Ltd.
Beximco Denims Ltd.
Beximco Holdings Ltd.
Beximco Synthetics Ltd.
Beximco Infusion Ltd.
Shinepukur Holdings Ltd.
Padma Textile Mills Ltd.
Shinepukur Ceramics Ltd.
46
Nature of
Transactions
Software Sales
Software Sales
Software Sales
Software Sales
Software Sales
Software Sales
Software Sales
Software Sales
Software Sales
Software Sales
Value of
Transactions
in 2003
4,000,000
3,800,000
1,950,000
1,650,000
2,750,000
1,850,000
1,950,000
3,200,000
3,500,000
2,750,000
Receivable
at year end
585,000
475,000
375,000
450,000
395,000
655,000
350,000
1,865,000
455,000
525,000
Post Closing Events
The directors recommended 15% cash dividend (Tk. 1.50 per share). The dividend proposal is subject to
shareholders' approval at the forthcoming annual general meeting.
Except the fact stated above, no circumstances have arisen since the balance sheet date which would require
adjustment to, or disclosure in, the financial statements or notes thereto.
C H Rahman
Managing Director
Dhaka
27 April 2004
BANGLADESH ONLINE LIMITED
Iqbal Ahmed
Director
Md. Asad Ullah
Company Secretary
BANGLADESH ONLINE LIMITED
Registered Office : 17, Dhanmondi R/A, Road # 2, Dhaka-1205
PROXY FORM
I/We............................................................................... of....................................................................... being a member of
Bangladesh Online Limited hereby appoint Mr./Ms...................................................................................................................
of.......................................... as my proxy to attend and vote for me on my behalf at the 7th Annual General Meeting of the
Company to be held on Wednesday, the 30th June, 2004 at 3.30 p.m. at 1 Shahbag C/A, Dhaka and at any adjournment thereof.
As witness my hand this................................. day of June 2004 signed by the said in presence of................................................
..............................................................................................................................................................................................
Revenue
Stamp
Tk. 8.00
..........................................
(Signature of the Proxy)
Date:..................................
.....................................................
Signature of the Shareholder(s)
Register Folio No. :.........................
Date:.............................................
.........................................
(Signature of Witness)
NOTE :
A member entitled to attend and vote at the General Meeting may appoint a proxy to attend and vote in his/her stead. The proxy
form, duly stamped, must be deposited at the Registered Office of the Company not later than 48 hours before the time appointed
for the meeting.
Signature Verified
.............................
Authorized Signatory
h
BANGLADESH ONLINE LIMITED
Registered Office : 17, Dhanmondi R/A, Road # 2, Dhaka-1205
S H A R E H O L D E R ' S AT T E N D A N C E S L I P
I/We hereby record my attendance at the 6th Annual General Meeting being held on Wednesday, the 30th June, 2004 at 3.30 p.m.
at 1 Shahbag C/A, Dhaka.
Name of Member/Proxy............................................................................................................................................................
Register Folio No......................................... holding of................................. ordinary Shares of Bangladesh Online Limited.
.......................................
Signature of Shareholder(s)
N.B.
1.
Please note that AGM can only be attended by the honorable shareholder or properly constituted proxy. Therefore, any friend or
children accompanying with honorable shareholder or proxy cannot be allowed into the meeting.
2.
Please present this slip at the reception Desk.