Audit Engagement Letter

01.01.2014

Md.Belal Hossain

Manageing Director Farid Group

Block -13 BSCIC INDUSTRIAL AREA, COMILLA

Post code
Dear Sir,

3500

We are pleased to accept the instruction to act as auditor for your co pany !arid "roup and are #riting to confir the ter s of our appoint ent. $he purpose of this letter, together #ith the attached ter s and conditions, is to set out our ter s for carrying out the #or% and to clarify our respecti&e responsi'ilities. We are 'ound 'y the ethical guidelines of your co pany. Terms of engagement (nce it has 'een agreed, this letter #ill re ain effecti&e until it is replaced. We shall 'e grateful if you could confir your agree ent to the ter s of this letter 'y signing the enclosed copy and returning it to us i ediately. $he "eneral $er s for )udit of *D +nterprises and (rganisations adopted 'y the ,nstitute for the )ccountancy Profession in *angladesh. Computaton of Payment $he audit fee can also 'e a fi-ed fee agreed 'efore co ence ent of audit. .nless other#ise agreed, our fees #ill 'e 'illed at appropriate inter&als during the course of the audit and #ill 'e due on presentation. (ur ter s relating to pay ent of a ounts in&oiced are strictly 30 days net. Pro pt pay ent discounts ay only 'e ta%en if #e recei&e the pay ent #ithin 14 days of the date of issue of any in&oice. ,nterest #ill 'e charged on all o&erdue de'ts. We ha&e the follo#ing pay ent proposals/ a. 500 t% per hour of #or% or '. 120000 $% for a onth ight 'e ta%en under negotiation.

(ther pay ent procedures

Responsibilities: (f course )uditing is a challanging tas% and it #ould not 'e possi'le for us to gi&e you a actual )udit 0eport if you not help us and if #e do not perfor our responsi'ilities properly. Managements Responsibilities: We thin% #e ha&e follo#ing responsi'ilities/ i. )s directors you are responsi'le for pro&iding assistance to our audit group 'y gi&ing the the necessary infor ations. ii. iii. i&. )s the )udit is on 1ash Manage ent you ha&e to pro&ide us all the past cash records of the fir . )nd you ha&e to ensure the pre&ious 'ills and sales reports of the fir . $he directors are responsi'le for %eeping proper 'oo%s of cash that disclose #ith reasona'le accuracy at any ti e the financial position of the co pany and ena'le the to ensure that the financial state ents co ply #ith the 1o panies )cts 1224 3ou are also responsi'le for safeguarding the assets of the co pany and hence for ta%ing reasona'le steps for the pre&ention and detection of fraud and other irregularities.

Our Responsibility: i. ii. iii. We ha&e a professional duty to report if the cashiers do not co ply in any aterial respect #ith State ents 1ash Manage ent ,t is our responsi'ility to find out the irregularities and fraud or any other ista%es inside the organi4ation. (ur professional responsi'ilities also include/ o Stating in our report a description of the directors5 responsi'ilities for the cashiers, #here the cashes or acco panying infor ation do not include such description6 and o 0eporting to you on a ti ely 'asis in respect of any issues, such as aterial #ea%nesses in your cash anage ent syste , #hich #e feel need to 'e 'rought to your attention.

Confirmation Please contact the undersigned if you ha&e any 7uestions concerning the contents of this engage ent letter. We re7uest that you sign this engage ent letter, #hich has 'een dra#n up in t#o copies, to sho# that you confir and consent to this agree ent. We #ish in particular to dra# your attention to the description in the "eneral $er s of the responsi'ilities of the anage ent and the auditor in the audit engage ent. 3ours sincerely Md. $are% 0ah an 1hartered )ccountants Rahman Audits

Audit Acceptance Letter

02.01.2014
Md.Belal Hossain

Manageing Director

Farid Group
Block -13 BSCIC INDUSTRIAL AREA, COMILLA

Post code
Sir,

3500

With regards to our pre&ious discussion, held on 8anuary, 01 , 2013, and in response to your re7uest for audit in letter no 9!arid "rou:p. We are pleased to infor you that your proposal for +-ternal )uditing on Cash Management has 'een appro&ed 'y our auditing co ittee and our co pany #ill 'e carrying out the audit for the financial year 2012;2013. We #ill 'e auditing the financial state ents of your co pany, #ith the ain o'<ecti&e of reaching an opinion #hich #ill 'e in accordance #ith the ,nternational Standards of )ccounting;)uditing. =o#e&er, it is li%ely that so e of the infor ation ay 'e left undisco&ered, and for that #e e-pect full co>operation fro your staff, e-perts and internal auditors. )part fro analy4ing and gi&ing an un'iased opinion, #e e-pect to pro&ide assistance in areas #here #e find aterial #ea%nesses in your accounting syste . ?indly re&ie# the ter s and conditions attached #ith this letter #hich #ill ser&e as a 'inding audit contract 'et#een us. , re7uest you to sign the docu ent and ail a copy 'ac% to us on our co pany address. ,f you ha&e any 7ueries, please feel free to contact our representati&es. We here at 0ah an )udit #ould li%e to than% you for choosing our fir 5s ser&ices and loo% for#ard to #or%ing #ith you. Sincerely 3ours, Md. $are% 0ah an 0ah an )udit !ir 5@;A 8orpu%urpara, $ha%ur Para co illa.

AU !T CO" UCTE A" PREPARE #$: Rahman Audit %irm !or

Farid Group
Audit Area: Cash Management
Date of )udit/ 15, 8anuary to 15 !e'ruary Date of report/ 20 !e'ruary Date of !inal 0eport/ 24 !e'ruary

PER&O""EL PART!C!PAT!"' !" T(E AU !T

4. ).D,$ $+)M M+M*+0S Bead )uditor )ssistant )uditors Md. $are% 0ah an Sudipta She%har Masud )la Senior 1hartered )ccountants 0ah an )udit !ir 1hartered )ccountants 0ah an )udit !ir

5. 1B,+C$ P+0S(CC+B Ca e
1. Md.*elal =ossain

2. 0a<i' Mah ud 3. )r<u 4. Dipan%or Shaha

$itle Managing Director 1hair an ). ". M =ead )ccountant

Depart ent >> >> "eneral )ccounts

About %arid 'roup

Farid Group a l adi!" rop a!d ! # $a!u%ac#uri!" co$pa!& i! Ba!"lad '(I# (a' ) ! $a!u%ac#uri!" *E +** rop 'i!c 1,-./0 (a1 ) ! l adi!" #( local $ark # a!d 2por#i!" our produc#' 3i#( 4apa! ' a!d G r$a!& T c(!olo"& 3i#(ou# a!& co$plai!/ Da& )& da& ! 3 produc#' ar ) i!" i!clud d 3i#( (i"( r # c(!olo"&/ No3 i# i' Ma!u%ac#uri!" a!d L adi!" #( local $ark # 3i#( our *E rop +** rop +Da! li! Rop +N&lo! $ul#i%ila$ !# rop +4u# rop +#ir cord rop +N&lo! $ul#i%ila$ !# ! # a!d *E #3i! ! #/ I! 1,-. #( co$pa!& '#ar# d i#' 'lo3 '# p )& $a!u%ac#uri!" 1555k"+da& %or #( #i$ ) i!" !o3 our $a!u%ac#uri!" capaci#& (a' r ac( d #o 6555 k"+da&/ Group ) li 1 ' i! cu'#o$ r7' 'a#i'%ac#io! a!d 'i!c ri#& o% 855 #rai! d 3ork r' a!d 85 2p ri !c d $plo& ' (a' r ac( d #( co$pa!& i! #oda&7' po'i#io!/ T( co$pa!& i' C r#i%i d )& ISO 9,551+:555; %or i#7' <uali#& $a!a" $ !# '&'# $/

T( ir $ai! produc#' ar Rop - 9**+*E+Da! li! +N&lo! $ul#i%ila$ !#+#ir cord+=u# a!d l ad; For Fi'(i!", Mari! a!d Co!'#ruc#io! u' / N&lo! $ul#i%ila$ !# ! #-For Fi'(i!" o!l&/ *E #3i! ' ! #For F !ci!"+A"ro '(ad +Co!'#ruc#io!+*oul#r&+Bird pro# c#i!"+Fi'( ri ' %ar$/

%arid 'roup in a #eries Clients information 1o pany Ca e Bocation/ =ead (ffice 1o pany $ype Producing Cu 'er of Wor%ers (fficals/ Wor%ers/ , port; +-port 1ontract =otline %arif 'roup 1o illa, *angladesh 1o illa *isic ,ndustrial )rea 0ope Manufacturing !ir A ,te s
85 855

*oth , porter and +-porter

&u'u%>dir?%arid"roup/co$

Audit &ummary
Farid Group

*S1,1 ,ndustrial )rea 1o illa We ha&e audited the acco panying *alance sheet of !orid "roup Bi ited, *S1,1 ,ndustrial )rea, 1o illa, *angladesh as at 8une <anuary 0D, 2014. and the related Manufacturing, $rading, Profit E Boss )ccount for the year ended on that date. $he preparation of these state ent is the responsi'ility of the anage ent of the co pany. (ur responsi'ility is to e-press an independent opinion on these financial state ents 'ased on our audit. $his audit is conducted in accordance #ith *angladesh Standards on )uditing F*S)G. $hose standards 0e7uired that #e plan and perfor the audit to o'tain reasona'le assurance a'out #hether the financial state ents are free of aterial isstate ent. )n audit includes e-a ining, on a test 'asis, e&idence supporting the a ounts and disclosures in the financial state ents. )n audit also includes assessing the accounting principles used and significant esti ates ade 'y anage ent, as #ell as e&aluation the o&erall financial state ent presentation. We 'elie&e that our audit pro&ides a reasona'le 'asis for our opinion.

OUR O#&ER)AT!O"&

$he audit e&aluated the ade7uacy of controls and processes to achie&e %ey 'usiness o'<ecti&es as it related to cashiers recei&ing pay ents. !ollo#ing are the condition and related control assess ent FSatisfactory, Ceeds , pro&e ent, .nsatisfactoryG and a su ary of good and #ea% controls noted in the audit. We ha&e ro&ided our o'ser&ations in t#o portions/

Obser*ation+,Obser*ation on the controll on cash 'ood Controls Daily cash receipts are stored in a loc%ed safe in the ain cash office. ?eys to the cash office safe are aintained on the cashiers5 #rist or in a loc%ed dra#er. ) 'onded courier ser&ice pic%s of daily cash receipts e&eryday for the co pany 'an%

.ea/ Controls Daily cash receipts in one office are deposited #ee%ly instead of daily. 1ash on hand #as ini al. 1ash collection goals #ere 'elo# esta'lished thresholds for the last three 7uarters. 1ash office e ployees #ere not %no#ledgea'le of point of ser&ice procedures for atte pting to collect a ounts due on the date of ser&ice. $here #ere no controls in place to ensure cashiers atte pted to collected pay ent #hen ser&ices #ere pro&ided.

Observation-02

#usiness Ob0ecti*e Safeguard cash collections Ma%e ti ely deposits of daily collections Ma-i i4e point of ser&ice collections 'y cashiers

Control Assessment &atisfactory "eeds !mpro*ement Unsatisfactory

OBSERVAT O!S S"MMAR# RE$OMMA!%AT O! A!% A$T O! &'A!

Follo3i!" i' a #a)l d #aili!" all #( o)' r1a#io!' %ro$ #( audi# alo!" 3i#( $a!a" $ !#@' ac#io! pla! #o addr '' #( ' i''u '/

Obser*ation &UMMAR$ $here #ere no controls in place to ensure cashiers atte pted to collected pay ent #hen ser&ices #ere pro&ided. )dditionally, 1ash collection goals #ere 'elo# esta'lished thresholds for the last three 7uarters. 1ash office e ployees #ere not %no#ledgea'le of point of ser&ice procedures for atte pting to collect a ounts due on the date of ser&ice. Recommendation De&elop and i ple ent procedures to educate cashiers of point of ser&ice cash collections. Docu ent procedures in #ritten policies and procedures and a%e accessi'le to all cash collection e ployees. Monitor cash collection results to identify #here targeted training is necessary. Action Plan Estimated Completion 123,131,-4 ate 1ash anage ent generally agrees #ith ,nternal )udit5s findings. We ha&e de&eloped and appro&ed policies and procedures to pro&ide guideline for our cashier5s to collect. We ha&e 'egun training at each location #hich is scheduled to 'e co pleted 'y 2A.02.2014. We #ill onitor cash collection results and pro&ided targeted training to those indi&iduals not eeting esta'lished guidelines. Person Responsible Md/ Tar k Ra($a!

8orpu%urpar, $ha%urpara, 1o ills