ACCOUNTING & BOOKKEEPING POLICY GUIDELINES

UBF Bridal Limited

Level-13, UTC Building, 8 Panthopoth, Dhaka-1215

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CONTENTS

Particulars Page
Salient features 1
Books and registers 4
Vouchers 4
Cash/Bank book and related guidelines 5
Payment, deposit and approval policy 5
Money receipt 5
Sales book 6
Purchase book 6
Inventory book 6
General ledger 6
Salary register 6
Leave register 7
Fixed asset register 7
Advance register 7
Procurement policy 8
Loans to and from related parties 8
Tax/VAT/Revenue Stamp rules 8
Regulatory Statements/ Returns 8

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 SALIENT FEATURES

General

The UBF Bridal Limited maintains a complete set of accounts and related books using
software based accounting system.

The salient features of the accounting system are summarized below:

g The accounting year runs from 1st of July to 30th of June each year.
g Complete set of financial statements including Statements of Financial Position,
Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes
in Equity, Statement of Cash Flows, and Notes to the financial statements are to be
produced at every year-end.
g Quarterly financial statements are to be prepared and submitted to Bangladesh Bank
along with F1 return.
g Monthly management reports are to be prepared for company’s performance
evaluation and analysis.
g Accounting books, records and reports are to be maintained and presented in
accordance with International Accounting Standards (IAS) and International Financial
Reporting Standards (IFRS).

The accounting system is shown in brief in the following flowchart:

Sales Invoice/ Purchase Attendance Record/ Journal Entries/

Estimate/ Credit Order, Bill, Payroll Statement Inventories/ WIP
Memo Expenses

Received/ Pay Bills/ Salary & Allowance Transfer Entries/

Refund Vendor Credit Disbursement Adjustment
Payment

Cash book/Bank book General ledger

Trial Balance, Statements of Financial Position,

Statement of Profit or Loss and Other
Comprehensive Income, Statement of Changes in
Equity, Statement of Cash Flows
(Annual/Interim)

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 The accounts department is required to maintain a number of files related to general
bookkeeping in hard copy or in the soft copy These are as follows:

Sl. Name of File Contents

no.
01. Accounts Statements FileYearly Trial Balance, Statements of Financial Position,
Statement of Profit or Loss and Other Comprehensive
Income, Statement of Changes in Equity, Statement of Cash
Flows with notes along with any interim set of accounts
produced
02. Budget File Approved Budgets and other documents relating to Budget
03. Cash and Bank Statement Cash certificate, Bank statements & bank reconciliation etc.
file
04. Voucher files One file each for Debit, Credit & Journal vouchers
05. Client files Individual file per client storing invoices, communications etc
including details of receivables.
06. Audit Related file Internal & External Audit Report, Management report,
Replies to observations, Review, Meeting minutes etc.
07. Procurement register Tender, Advertisement, Quotations, Work order etc i.e.,
procurement related documents.
08 Payables file Unpaid invoices relating to various suppliers and other
creditors etc.
09. Challan File All challans relating to VAT, TDS & AIT paid/deducted.

BOOKS AND REGISTERS

Necessary books and registers, vouchers with sufficient supporting documents in the hard
copy or soft copy are to be maintained for ensuring transparency and auditability. For storing
the books and registers of the previous years, provisions of the Companies Act, 1994,
Income Tax Ordinance 1984 and VAT and Supplementary Act 2012.

Vouchers

Vouchers are primary documents that record economic transactions of a business

/organization in a form equipped with all essential supporting documents.

Elements of vouchers

g Name of the organization

g Number and nature of voucher
g Date of preparation
g Account name and amount
g A brief narration about the transaction
g Signature of appropriate authorities
g Attachment of bill/ cash memo and other supporting documents.
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 Cash/Bank Book and related guidelines
The daily cash and bank transactions are recorded in the Cash Book and Bank Book
respectively in a chronological manner. Balance of cash in hand per Cash Book represents
physical cash balance at the end of a particular day’s transactions. The closing bank book
balance represents the balance in bank as per the books of accounts. The daily closing
balances of both cash and bank books are carried forward as opening balances of next
working day.

Useful guidelines
1. Cash and Bank book is to be closed at the end of each day and signed by Accounts
Officer.
2. Physical cash balance is to be checked every day and reconciled & matched to book
balance on a daily basis.
3. Cash in hand are kept with the accounts officer and is locked safely.
4. All entries to Bank book are made at the point of payment/deposit and not when the
related cheque clears in the bank statement. Similarly, all cash transactions are recorded
instantly at cash book at the time of transaction and voucher preparation.
5. Bank reconciliation is carried out at each month-end and the related statement is
attached to the bank book page at the month-end.
6. Petty cash- An amount of Tk. 30,000 is assigned for monthly office expenses. However,
this amount may vary depending on requirement
.

Payment, Deposit and approval policy

1. Cheques will be issued with the signature of accounting officer, Managing Director, or as
decided by the Board of Directors.
2. All income- whether received in cash or cheque, is banked on the same day. Expenses
are not paid directly from cash revenue receipts.
3. All payments must be approved by the Managing Director or Chairman irrespective of the
amount involved. Managing Director may put an standing order for recurring payments,
like, rent, security service bill etc.

Money Receipt
Money receipt is the acknowledgement of receipt both in cash and in cheque. This is the primary
evidence based on which amount received by any means is recorded in cash/bank book. A money
receipt issued by UBF Bridal Limited consists of two copies:

Original copy Client copy

copy

Duplicate copy Retained in book

copy

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Sales Book

Sales book is a ledger in which detailed information regarding credit sales are recorded. Sales
revenue will be recognized as per five steps model for revenue recognition prescribed by the
IFRS 15 - Revenue from Contracts with Customers. The transactions will be recorded to the
sales day book usually at the end of each business day, based on the company's copies of all
customer invoices issued.

Purchase Book

Purchase book is a ledger used to record all the purchase invoices for goods and services
supplied on credit to the company. All relevant expenses related with LC based purchase will
be recorded in the Purchase-in-transit ledger. All relevant expense will be allocated to the
inventory value and transfer to the purchase ledger.

Inventory Book
Inventories include raw materials, packing materials, accessories, semi-finished goods, finished
goods. All the inventories’ (as of stock or goods) movements such as inventory-in and
inventory-out or inter departmental movement will be recorded in the inventory books. Any fixed
asset movement will be excluded from the inventory book. Inventories will be valued at lower of
cost and net realizable value in line with IAS 2 – Inventories.

Physical verification of inventory is to be performed periodically, annually, to a minimum.

General Ledger
All bills/invoices and non-cash transactions are recorded in the General Ledger according to
their head of account. Daily cash/Bank transactions are recorded in Cash/Bank Book and
General Ledger (under the appropriate head of account) at the point of payment and voucher
preparation.

Salary Register
- Salaries and benefits form part of the operating expenses or cost of sale based on the
nature.
- UBF Bridal Limited has to maintain a personnel file and signed employment contracts for
each employee. The contract, among others, mentions the specific job responsibilities,
contract period, terms and conditions including salary and allowances.
- Salaries and benefits are paid on a monthly basis. Monthly payroll sheet will be prepared
based on attendance records. All amounts are calculated in reference to segregation into
basic salary and other benefits such as house rent, conveyance and medical allowances.
- Advance Income tax is to be deducted from salary at rates applicable to the specific tax
year.
- Payroll sheet for each month is to be approved by MD/Chairman.
- Tax deducted is to be deposited to government treasury within the timeframe stipulated by
Income Tax Ordinance.
- Salary payments in excess of Tk. 15,000 are made through cheque/bank transfer.
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Leave Register
UBF Bridal Limited staffs may be entitled to a fixed amount of leave in a year in accordance with
respective employment contracts. A leave register will be used to keep track of holidays entitled
and spent: Labour Act and rules will be followed in this regards.

Fixed Asset Register

Fixed assets play an important role in every organization. So, there is an ever-growing need to
record and update various data and information with regard to these assets. The following data
are very essential towards maintaining an effective fixed asset register:

g Date of purchase
g Description of assets
g Quantity of assets
g Cost of the assets
g Location
g Useful life
g Residual value
g Decommission/Dismantling cost
g Depreciation rate and depreciation amount to date
g Identification number and
g Any other relevant information

The register should identify all these data at a glance and should display the accumulated
depreciation and net book value of each asset or asset group accurately. The onus should be
on ensuring the usefulness of the register as an effective internal control tool.

Advance Register
- Advances are generally paid to employees in relation to specific works to be undertaken.
- Application for advance is accompanied by an official claim form from the respective
employee. The application is processed by the accounts department and approved by the
Managing Director or Chairman to initiate payment.

- Company policy requires that all advances must be adjusted in the books (through journal
voucher) within 15 days of payment. In case of lengthy non-adjustment, accounts department
has the authority to request for corresponding vouchers from the employee in concern. Petty
cash advance/ IOU will be adjusted at the end of each month.

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Procurement policy
- Procurements usually commence through requisition (from user department heads) to the
administration department which will then initiate procedures to select suppliers.
- Authorization matrix will be fixed by the Board.
- A purchase committee will be in charge of making material procurement decisions.
- Procurement options will be evaluated both in terms of cost and quality.
Loans to and from related parties
- Related parties, on this context, refer to the company shareholders, directors and senior
management.
- Any loans extended to or received from related parties should be supported by appropriate
loan agreements (even if the loan is of informal nature).

Tax deduction/VAT/ Revenue Stamp

Tax deduction
- Income Tax Ordinance 1984 requires deduction of tax at source from various payments
by business. Items of deductions and rates should be confirmed from the Finance Act of
the relevant year before making the payment/deduction.
- All tax deducted at source is required to be deposited to Government Treasury within the
stipulated time from the days of deduction or as per existing tax legislation.

VAT
- The company will deduct VAT from the payment at the applicable rate.
- VAT deducted at source and received from clients are to be deposited to government
treasury within the stipulated by the relevant VAT Act.
- VAT return is submitted within stipulated time by the relevant VAT Act.
The above is only a general guideline on VAT and a more exhaustive literature (relevant VAT
Act) should be referred to in practical circumstances.

Revenue Stamp
- In accordance with relevant Stamp Act, Revenue Stamp is collected on all payments in
excess of Tk. 400.
- Revenue stamp rule applies to payment of all business expenses, salary, loans etc.

Regulatory Statements/ Returns

Regulatory Statements/ Returns as required by different regulatory authority are to be submitted on
time.