Apex Food 2006

..
,

,

ANNUAL

REPORT

2005-2006

.... .... Apex Foods Limited ---~-

-------------_---- - - --

APEX FOODS LIMITED

Annual Report 2005-06

CONTENTS

Notice of the 27th Annual General Meeting Corporate Directory

Five years Statistics

Corporate Governance Compliance Status Report Chairman's Statement

Directors' Report

Value Added Statement Auditors' Report Balance Sheet

Profit and Loss Account Statement of Changes in Equity Cash Flow Statement

Notes to the Financial Statements Proxy Form

Attendance Slip

2 3 4 5 7 8

16 17 18 19 20 21 22

APEX FOODS LIMITED,


NOTICE. OF THE ANNUAL GENERAL MEETING

Notice is hereby given that the TWENTY SEVENTH ANNUAL GENERAL MEETING of APEX FOODS LIMITED will be held at the Hall Room of National Shooting Federation, Gulshan-1, Ohaka-1212 on Thursday the September 21, 2006 at 11.00 A. M. to transact the following business:

AGENDA

.~!.,--

1. To receive and adopt the Accounts for the year ended June 30, 2006 and report of the Auditors and Directors thereon.

2. To declare Dividend @ 16% for the year 2005-2006 as recommended by the Board of Directors.

3. To elect Directors.

4. To appoint Auditors for the year 2006-2007 and fix their remuneration.

Dated: Dhaka

August 08, 2006.

By Order of the Board

Sd/-

Serazul Hoq Company Secretary

NOTES:

1. The Share Transfer Register of the Company will remain closed from September 03, 2006 to September 21, 2006 (Both days incl uslve). During the period no transfer will be effected, The Shareholders whose name will appear in the Share Register of the Company at the close of business on September 02,2006 will be entitled to the Dividend.

2. A member entitled to attend and vote at the Annual General Meeting may appoint only another member as proxy to attend and vote In h is/her stead as per Para 104 of the Articles of Association of the Company. 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 inform change of address, if any, to the Company by September 02,2006.

4. In pursuance of SEC's Notification No. S~C/SRMI/2000-953/1950 dated October 24,2000 gazetted on November 07, 2000, the Company shall hold discussions in the Annual General Meeting strictly in conformity with the provisions of the Companies Act, 1994 and no benefit in cash or kind, other than in the form of Cash dividend or Stock dividend, shall be paid to the holders of equity securities.

5. For the sake of convenience, Shareholders are requested to submit their queries on the Directors' Report and the Audited Accounts for the year 2005-06, if any, at the Registered Office of the Company preferably 3 days before the day of the Annual General Meeting.

6. Admittance to the meeting venue will be strictly on production of the Attendance Slip sent with the Notice.

2

APEX FOODS LlM{TED

Annual Report 2005~06

CORPORATE DIRECTORY

BOARD OF DIRECTORS

Chairman & Managing Director

Vice Chairman & Deputy Managing Director Director

Director

Director

Independent Director

Mr. Zafar Ahmed

Mr. Zahur Ahmed PhD Mrs. Shawkat Ara Ahmed Mr. Shahriar Ahmed

Mr. Ashim Kumar Barua Mr. Kazi Faruq Kader

AUDIT COMMITIEE

Chairman Member Member

Mr. Shahriar Ahmed, Director

Mr. Ashim Kumar Barua, Director

Mr. Kazi Faruq Kader, Independent Director

SENIOR CORPORATE OFFICIALS

Chief Financial Officer Company Secretary Head of Internal Audit

Mr. S. K. Halder Mr. Serazul Hoq Mr. Shahidul Islam

LEGAL ADVISORS

K. Fazlul Quadir Lee, Khan & Partners Md. Shahjahan Khan

AUDITORS

M. A. Malek Siddiqui Wall & Co.

Chartered Accountants

BANKER

Agrani Bank

Agrabad Corporate Branch, Jahan Building Agrabad CIA, Chittagong

REGISTERED OFFICE

FACTORY

Biman Bhaban, 5th floor

100 Motijheel CIA, Dhaka-j 000 Bangladesh

51-8 Shagarlka Road,

Fouzderhat lndustrlal Estate, Pahartall, Chittagong, Bangladesh

3

APEX FOODS LIMITED

Annual Report 2005'-06

FIV~E YEARS STATISTICS
Figure in Thousand Taka
2005·06 2004-05 2003·04 2002·03 2001·02
Results of Operations: :.
Turnover from Net Sales 1,650,891 1,324,837 1,488,820 1,278,303 965,220
Gross Profit 174,812 129,518 143,015 122,019 108,000
Operating Profit 15,138 10,626 14,853 11,574 6,057
Net Profit before Tax 21,188 14,976 18,206 14,256 9,026
Net Profit after Tax 12,411 12,983 14,993 12,972 8,509
Basic Earning Per Share 21.76 22.77 26.29 22.75 14.92
"Dividend Per Share 16.00 15.00 13.00 12.00 12.00
Financial Positions:
Total Assets 923,389 986,844 980,038 967,073 854,186
Fixed Assets-Gross 346,572 330,022 274,863 267,055 258,029
Fixed Assets- Net 125,871 139,449 107,057 117,397 128,316
Gross Working Capital 735,128 785,004 810,591 787,288 663,124
Net Working Capital 222,945 213,851 292,139 258,658 262,266
Working Capital Loan 415,837 449,097 448,013 447,009 356,387
Share Capital 57,024 57,024 57,024 57,024 57,024
Share Premium 209,088 209,088 209,088 209,088 209,088
Reserve and Surplus 116,163 112,876 110,116 102,537 95,810
Share Holders Equity 391,399 387,541 383,642 375,492 368,765
Term Loan 81,736 101,559 77,945 64,525 87,710
Key Financial Ratios:
Current Ratio 1.44 1.37 1.56 1.49 1.65
Debt to Total Assets 57.61 60.73 60.85 61.34 57.20
Return on Equity (%) 3.17 3.35 3.91 3.45 2.31
Net Asset Value Per Share 686 680 673 656 641
Payout Ratio 73.51 65.88 49.44 52.75 80.42
Interest Service Coverage Ratio 1.32 1.22 1.36 1.31 1.15
Others:
Market Price Per Share (30th June) 349 520 440 318 250
Price Earning Multiple 16.04 22.84 16.74 13.98 16.73
Number of Employees 654 646 657 604 589
Capacity Utilization (%) 40.46 36.91 46.98 45.22 35.78

• The Board of Directors recommended Cash Dividend @ Tk. 16.00 per Share for the year 2005-06 . 4

::;

APEX FOODS LIMITED


Corporate Governance Compliance Status Report

Status of compliance with the conditions imposed by the Securities and Exchange Commission's notification No. SEC/CMRRCD/2006-15BIAdmin/02-08 dated February 20,2006·

Condition Title Compliance Explanation for non compliance
No. Status with the condition
1 .1 Board's Size: Board members Complied
should not be less than 5 (Five)
and more than 20 (Twenty)
1.2 (i) Inde~endent Director: At least Complied
1/10 h
1.2 (ii) Appointment of independent Complied
Director by elected Directors
1.3 Chairman of the Board & Chief Complied
Executive, clearly defined roles
and responsibilities
1.4 The Directors report to
Shareholders on:
1.4 (a) Fairness of Financial Statements Complied
1.4 (b) Maintenance of proper books of Complied
accounts
1.4 (c) Adaptation of appropriate Complied
Accounting policies and estimates
1.4 (d) Compliance with International Complied
Accounting Standard
1.4 (e) Soundness of Internal Control Complied
System
1 .4 (f) Ability to Continue as Going Compiled
Concern
1.4 (g) Significant deviation from last Complied
year
1.4 (h) Presentation of last three years Complied
data
1.4 (i) Declaration of Dividend Complied
1.4 (j) Details of Board Meeting Complied
1.4 (k) Shareholding Pattern Complied
2.1 Appointment of CPO, Head of Complied
Internal Audit and Company
Secretary and defining of their
respective roles, responsibilities
and duties.
2.2 Attendance of CFO and the Complied
Company Secretary at Board of
Directors meeting 5

APEYOODS LIMITED


3.00 Audit Committee Complied
3.1 (i) Constitution of Committee Complied
3.1 (ii) Constitution of Committee with Complied
Board members including one
Independent Director
3.1 (iii) Filling of Casual Vacancy in Not
Committee applicable
3.2 (i) Chairman of the Committee Complied
3.2 (ii) Professional Qualification and Complied
experience of the Chairman of the
committee
3.3.1 (i) Reporting to the Board of Complied
Directors
3.3.1 (ii)(a) Reporting of Conflict of Interest to Not No report is due by the Audit
the Board of Directors applicable Committee till to the date of signing the
Directors report.
3.3.1 (ii)(b) Reporting of any fraud or Not Do
irregularity to the Board of applicable
Directors
3.3.1 (ii)(c) Reporting of violation of laws to Not Do
the Board of Directors applicable
3.3.1 (ii)(d) Reporting of any other matter to Not Do
the Board of Directors applicable
3.3.2 Reporting of Qualified point to Not Do
Commission applicable
3.4 Reporting of activities to-the No! Do
Shareholders and General applicable
Investors
4.00 Externa I/S tatu tory Au d ilors:
4.00 (i) Non-engagement in appraisal or Complied
valuation
4.00 (ii) Non-engagement in designing of Complied
Financial Information System
4.00 (iii) Non-engagement in Book- Complied
Keeping
4.00 (iv) Non-engagement in Broker-dealer Complied
service
4.00 (v) Non-engagement in Actuarial Complied
Services
4.00 (vi) Non-engagement in Internal Audit Complied
4.00 (vii) Non-engagement in any other Complied
services 6

APEX FOODS LIMITED

Annual Report 20Q5 .. 06

CHAIRMAN'S STATEMENT

Dear Shareholders,

Itis an honor and pleasure for me to welcome you all to the Twenty-seventh Annual General Meeting of your Company and to present the Annual Report for the year ended so" June 2006.

Shrimp export and cultivation in Bangladesh has undergone rapid expansion over the last two decades. This sector has benefited from a growing global demand for shrimp and a series of measures to increase Bangladesh export and diversify the export base. Shrimp has replaced our raw jute as the dominant export Item in the primary goods category, and now shrimp export contributes nearly half of our primary export items. After the garment industry, shrimp production ranks second in Bangladesh in terms of the sector's ability to earn foreign exchange.

Despite the rapid growth of this sector, the globa! frozen seafood market continues to be dominated by Thailand, Indonesia, China and Ecuador. Significant innovations in production and processing techniques in these countries have increased the value addition associated with their exports and the market share that they command. Unfortunately the same is not true for Bangladesh. Innovations in both production and processing are yet to achieve the standards of those countries. Further more, strict import and health compliance requirements in importing countries have meant that Bangladesh must invest in improving the safety and quality of their seafood exports to avoid products being detained and rejected at point of entry into foreign markets.

In order to verify that the physical facilities, production procedures, product standards etc. of Apex Foods Ltd. are of international standards, audits were carried out by foreign auditors during the year. Upon completion of these audits, Apex Foods Ltd. obtained the following certifications:

• BRC Global Standard M Food

• IFS at Higher Level ( International Food Standard)

• Best Aquaculture Practices Certificate by Aquaculture Certification Council, U.S.A.

• Food Safety System M HACCP

• ISO 9001-2000

Above certifications, being a testimony to the Company's high standards, have enabled Apex now to regularly supply to large supermarket chains such as Walmart, Migros etc.

Despite many hindrances, year 2005-06 was yet another year of success of Apex Foods Umited with a growth of 24.61 in turnover. I am pleased to inform you that during the year we progressed as per plan. The quality of our products and its competitiveness in terms of prices helped the Company to achieve such a tremendous success.

In Apex Foods Limited, we always nurture and nourish good corporate governance. The Board of Directors put highest emphasis on corporate governance.

The Company had no audit committee as on June 30., 2006 .. Subsequently, in conformity with the Corporate Governance Principles set out by the Securities and Exchange Commission, the Board constituted an Audit Committee headed by Mr. Shahriar Ahmed as Chairman.

Mr. Kazi Faruq Kader was also appointed as an Independent Director in compliance with the Corporate Governance Principles set out by the Securities and Exchange Commission ..

My sincere thanks to all the respectable Shareholders for extending their continuous support and confidence in the Board of Directors of your Company. I also like to put on record my sincere appreciation to the Banks, Financial and Regulatory Agencies, Suppliers, Customers, various people with whom we have interacted in the course of business, management staff and members of the Company at all levels for their cooperation and sincere efforts in the growth of your Company.

Dtl~ka

13 August, 2006

Sd/M Zafar Ahmed Chairman

7

APEX FOODS LIMITED


_ REPORT OF THE DIRECTORS

Dear Shareholders,

The Directors are pleased to submit to you the Annual Report together with the Auditors' Report and Audited Financial Statements of the Company for the year ended so" June 2006.

Statement of Directors on Financial Reports:

(a) The financial statements prepared by the management of the company fairly present its state of affairs, operational results, cash flows and changes in equity.

(b) Proper books of account of the company have been maintained.

(c) Appropriate accounting policies have been consistently applied in preparation of the financial

statements and that the accounting estimates are based on reasonable and prudent judgment. .::

(d) International Accounting Standards, as applicable in Bangladesh, have been followed in preparation of the financial statements and any departure therefrom has been adequately disclosed.

(e) The system of internal control is sound in design and has been effectively implemented and monitored.

(f) There are no significant doubts upon the company's ability to continue as a going concern. Operating results of the company:

Economy & Operation

During the year ended ao" June 2006, your Company achieved a total turnover of Taka 1.65 billion as against last year's turnover of 1.32 billion. The growth is 24.61 in turnover and 41.48% in profit (before tax). Net profit (after tax) earned during the year was 12.41 million. For the first time, Bangladesh Accounting Standard "BAS 12- Income Taxes" as adopted by the Institute of Chartered Accountants of Bangladesh, was applied in preparing the financial statements of the Company and as a result net profit after tax was reduced to that effect.

KEY FINANCIAL DATA

TURNOVER (Taka in million)

2000~~------------------------------------------------------

500+---------------------------------------------------------

O+-----------.---------~----------~--------~--------~

2001·02

2003·04

2002·03

2004·05

2005-06

NET PROFIT (Taka in million)

20

15r------~---_=:;==~~-------===~========~-----

10+--------~~~-~----------------~-----------------------------------------------------------~

.--

5+-----------------------------------~----------------------------------------------~---------------------

O+=----------------.------------~------------=---~----------------~------- ___

2002-03

2001-02

2003-04

2004·05

2005-06

8

APEX FOODS LIMITED


Productivity

During the year, your Company produced 2,215 M/Ton, an increase of 9.58% over that of last year. Production capacity utilized during the year was 40.46% as against last year's production ca pacity of 36.91 %. Th e fall owi n g g ra p h reflects yo u r Com pa n y' s prod u cti vity.

QUANTITY IN KGs

1,930,000 1,940,000 1,950,000 1.,960,000 1,970,000 1,980,000 1,990,000 2,000,000

Considering the current global market scenario, during the year your Company invested Tk. 16.55 million in fixed assets, Out of the total investment, Tk. 13.22 million was invested in the Plant & Machinery and Factory Equipment. The management of your Company believes that the investment in the Fixed Assets will enable your Company to be more cost effective and competitive. The continuity of investment in the fixed assets is reflected in the following graphs.

FIXED ASSET (Taka in million)

400~-------------------------------------------

300+-----------------------~~---- 200 100

o

2.000-01

2001-02

2002-03

2003-04

2004-05

2005-06

Key operating and financial data:

Value in thousand Taka

2005-06 2004-05 2003-04
22,248 15,725 19,117
(9,836) (2,742) (4,124)
12,412 12,983 14,993
61,105 58,347 51,154
73,517 71,330 66,147 Profit Before PPF & Tax Provision for PPF & Tax

Net Profit For The Year Profit Brought Forward

Profit A vaiJable For Appropriations

The Directors recommended the following appropriations

Statutory reserve for re-investment Proposed Dividend

Prior Year's Adjustment

Profit Carried Forward

387
9,124 8,554 7,413
1,671
64,393 61,105 58,347 ,
73,517 71,330 66,147 9

APEX FOODS LIMITED

Annual Report 2005·06

Dividend

You r Boa rd of D i recto rs has reco m men ded Cas h D Ivi dend of Tk. 16.00 per Sha re of Tk. 1 00. 00 eac h for the year 2005-06. Upon your approval in this General Meeting, the dividend will be paid to the Shareholders whose names appear in the Share Registers of the Company as on 2nd September 2006, at the close of office.

Board meetings:

During the year 6 Board Meetings were held. The attendance record of the Directors is as follows:

Mr. Zafar Ahmed

Mr. Zahur Ahmed PhD Mrs. Shawkat Ara Ahmed Mr. Zubair Ahmed PhD Mr. Shahriar Ahmed

Me e tin attended
6
6
5
3
6
4 Name a Directors

Mr. Ashim Kumar Barua Pattern of shareholdings:

Name wise details No. Shares

I. Parent/subsidiary/Associated Companies

and other related parties

Apex Spinning & Knitting Mills Limited

II. Directors, Chief Executive Officer, Company Secretary, Chief financial Officer, Head of Internal Audit:

12,180

Mr. Zafar Ahmed ~ Director

Mr. Zahur Ahmed PhD - Director

107,053 16,074 82,300 29,908

'750 5 NIL NIL

Mrs. Shawkat Ara Ahmed - Director

Mr. Shahriar Ahmed - Director

Mr. Ashim Kumar Barua - Director

Mr. Serazul Hoq - Company Secretary Mr. S.K. Halder - Chief Financial Officer

Mr. Shahidul Islam - Head of Internal Audit

III, Senior Corporate Executives

IV, Shareholders holding ten percent (10%) or more voting interest in the Company

Mr. Zafar Ahmed

Mrs. Shawkat Ara Ahmed

NIL

107,053 82.,300

10

APEX FOODS LIMITED


Director

I, Zafar Ahmed and Mr. Shahriar Ahmed are retiring from the Board in terms of the Articles of Association of the Company' and being eligible, offering ourselves for re-election.

Auditors

The retiring Auditors Mis. M.A. Malek Siddiqui Waif & Co., Chartered Accountants, being eligible, offer themselves for re-appointment as Auditors of the Company for the year 2006-2007.

Corporate Governance Compliance Report

In accordance with the requirement of the Securities and Exchange Commission, "Corporate Governance Report" is annexed.

D~~ka

13 1 August, 2006

On behalf of the Board

Sd/Zafar Ahmed Chairman

11

APEX FOODS LIMITED


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TURNOVER (Taka in million)

2000,...-------------------------

1500 t==::=~~:::!:...==== ... ~=::~=!::::==: .... :===

1000

500+------------------~=-----=--O+-----~-----~----~------~---~

2003·04

2001·02

2002-03

2004·05

2005·06

NET PROFIT (Taka in million)

20 15t=~------==~~~=-------~~~========~----

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2001'()2

2002-03

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2004-05

2005·06

12

APEX FOODS LIMITED


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QUANTITY IN KGs

1,930,000 1,940,000 1,950,000 1,960,000 1,970,000 1,980,000 1,990,000 2,000,000

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APEX FOODS LIMITED


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15

APEX FOODS LlMITt=D


VALUE ADDED STATEMENT

PARTICULARS 2005·06 % 2004-05 %
VALUE ADDED
Turnover 1,650,891,478 1,324,837,481
Less: Bought in Materials & Services 1,522,421,088 1,211,693,442
~~~---~~ .. ~~~~-- -_ ....... _---_ ..
Value Added 128,470,390 113,144,039
-_._------ ---------
--------- ---------
APPLICATIONS
Government as Tax. 3,006,765 2.34 1,481,555 1.31
Employees as Salary W~ges & Allowances 37,346,080 29.07 32,872,234 29.05
Providers of Loan as Interest & Charges 46,916,913 36.52 47,627,742 42.10
Providers of Capital as Dividend 9,123,840 7.10 8,553,600 7.56
Depreciation & Retention 32,076,792 24.97 22,608,908 19.98
•••• ~~M~~M~ •• ___ --------- --~-~-~--~~~~~~- II!!'_""'''''!II'''.II!!II!!O
Total 128,470,390 100.00 113.,144,039 100.00
--------- ----- ----_ .......... _- _"----
--------'- ----- ----_ ................... _- _,---- Government as tax 2.34%

Depreciation & Retention 24.97%

Salary, Wages & Allowances 29.07%

Dividend 7.10%

Interest & Charges 36.52%

16

APEX FOODS LlMIJED


AUDITORS' REPORT TO THE SHAREHOLDERS

We have audited the annexed Balance Sheet of the Apex Foods Limited as at so" June, 2006 and its Profit and Loss Account as on that date together with the accompanying, Cash Flow Statement and Notes thereto, as prepared by the Company in due conformance with qenerally accepted accounting principles, procedures and also the applicable Bangladesh Accounting Standards (BAS) ·and produced to us by it for our examination in due conformance with the applicable Bangladesh Standards on Auditing and we report that;

(i) we have conducted the audit as per applicable Bangladesh Standards on Auditing (BSA);

(ll) our examination and checking of records, relevant books of account, registers, schedules and financial statements were sufficient to enable us to form an informed and assessed opinion on the authenticity and accuracy of the accounts and financial statements;

(iii) we have obtained all the information, explanations and documents as required by us;

(iv) the Company management has followed the relevant provisions of law and rules. in managing the affairs of the Company and that proper books of accounts, records and other statutory books have been properly maintained;

(v) the Balance Sheet, Profit and Loss Account are in agreement with the said books of account maintained by the company and examined by us while the Cash Flow Statement conforms with the presentation laid out in the relevant Bangladesh Accounting Standard ; and

(vi) the expenditure incurred and payments made were for the purpose of the company's

business for the year.

And in our opinion the annexed Balance Sheet, Profit and Loss Account represent true and fair view of the state of the Company's affairs as at so" June, 2006 and of the profit earned for the year ended on that date and that these financial statements have been drawn up in accordance with the requirements of applicable laws and rules containing all the information in the manner required by relevant laws and rules and the Bangladesh Accounting Standards (BAS) as applicable in Bangladesh including BAS 24.

Dhaka

ih August, 2006

For M. A. Malek Siddiqui Wali & Co.


Sd/·

(Md. Waliullah, FCA)

17

APEX FOODS LIMITED


BALANCE SHEET AS AT 30TH JUNE, 2006

NOTES

APPLICATION OF FUNDS:

Fixed Assets:

Gross Block 2

Less: Accumulated Depreciation

Net Block

Investment (At Cost) 3

Current Assets:

.Inventories 4

Trade Debtors 5

Advances, Deposits & Prepayments 6

Other Receivable 7

Cash & Bank Balances 8

Less: Current Liabilities

Workinq Capital Loan (Secured) 9

Term loan-Current Maturity 10

Trade Creditors 11

Sundry Creditors 12

Income Tax Payable

Other Liabilities 13

Net Current Assets

Less: Deferred Tax Liability

TOTAL ASSETS

SOURCES OF FUNDS:

Shareholders' Fund:

Share Capital

Share Premium Reserve and Surplus Proposed Dividend

LOAN FUND (SECURED):

l.onq Term Loan (Net off Current Maturity)

TOT AL LIABILITIES

Sd!-

Zafar Ahmed Managing Director

Sd/-

Ashim Kumar Barua Director

Note: Annexed notes form part of these Accounts.

Dhaka

ih August, 2006

18

14 15 16 17

18

Value in Taka

30.06.2006

30.06.2005

346.572.182 330.021.908
220701 454 190572844
125,870.728 139,449.064
62,390,190 62,390,190
430.333,940 560.697,693
200,025,663 127,157,291
13,595,604 8,475,200
16,254,727 16,254,727
74918486 72419340
735.128,420 785.004.251
415.837,235 449,096.524
66,176,718 73,410,280
6,841,713 30,267,078
13,883,428 13,513.549
8,309,159 3.780.640
1134672 1 085509
512.182.925 571.153.580
222,945,495 213,850,671
4,248,557
-~.~---.-------- --_ .... __ .. _-_._ ..
406,957,856 415.689,925
---------- ==========
-_-------- 57.024.000 209,088,000 116.162.808 _9 123840

57,024.000 209.088.000 112,875,544 8553600

387.541.144 28,148,781

391.398.648 15,559,208

406,957,856

415,689,925

--------'----

-_--------

----------

----------

Sd/-


This is the Balance Sheet referred to in our report to the Shareholders of even date.

Sd/-

M. A. Malek Siddiqui Wali & Co. Chartered Accountants

APEX FOODS LIMITED .


PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30TH JUNE, 2006
Value in Taka
Notes 2005-06 2004·05
TURNOVER 19 1,650,891,478 1,324,837,481
Cost of goods sold 20 1,476,079,060 1,195,319,125
GROSS PROFIT 174,812,418 129,518,356
:-
OPERATING EXPENSES: 159,674,222 118,892,503
Administrative & selling overhead 24 112,757,310 71,264,762
Financial expenses 25 46,916,912 47,627,741
OPERATING PROFIT 15,138,196 10,625,853
Other income 26 7,109,393 5,099,225
PROFIT BEFORE PPF & WF 22,247,589 15,725,078
Provision for contribution to PPF & WF 27 1,059,409 748,813
PROFIT BEFORE TAX 21,188,180 14,976,265
Provision for tax: 28
CUrrent tax 4,528,519 1,992,883
Deferred tax 4,248,557
NET PROFIT AFTER TAX 12,411,104 12,983,382
Ap pro p rl ati on 5:
Proposed dividend (9,123,840) (8,553,600)
Prior year's adjustment (1,670,699)
Previous years retained earnings 61,105,639 58,346,556
Retained earnings carried forward 64,392,903 61,105,639
Basic Earning per share 29 2.1.1_6 22.77 Sd/-


Sd/-

Ashim KUmar Barua Director

Sd/-



This is the Profit and Loss Account referred to in our report to the Shareholders of even date.

Dhaka

7th August, 2006

Sd/-


19

APEX FOODS LIMITED


STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30TH JUNE, 2006

Value in Taka

Particulars Share Share Tax Holiday Retained Proposed. Capital Total
Capital Premium Reserve Earnings Dividend Gain
As at 30th June'05 57,024,000 209,088,OOC 51,162,900:: 61,105,639 8,553,600 607,000 387,541,144
Net profit after
ax of 2005-06 - - - 12 411,104 - - 12,4 11,104
Dividend paid
during the year - - - - (8,553,600 - (8,553,600
Proposed
dividend - - - {9,123,840 9,123,840 - -
lAs at 30th June'06 57,024,000 209,088,000 51,162,905 64,392,903 9,123,840 607,000 391,398,648 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30TH JUNE, 2005

Particulars Share Share Tax Holiday Retained Proposed Capital Total
Capital Premium Reserve Earnings Dividend Gain
As at 30th June'04 57,024,000 209,088,000 51 162,905 58,346,556 7,413,120 607,000 383,641,581
Net profit after
tax of 2004-05 - " " 12,983,382 " " 12,983,382
Dividend paid
during the year " " " - (7,413,120 - (7,413,120
Proposed
dividend " - " (8,553,600 8,553,60C - -
Prior year's
adjustment. " - - (1,670,699 . - (1,670,699
As at 30th June'05 57,024,000 209,088,000 51,162,905 61.105,639 B,553,60_(] 607,000 387,541,144 Sd/-


Sd/-


Sd/-



This is the Statement of Changes in Equity referred to in our report to the Shareholders of even date.

Dhaka

ih August, 2006

Sd/-

M. A. Malek Siddiqui Wali & Co.


20

APEX FOODS LlMfTED


CASH FLOW STATEMENT

FOR THE YEAR ENDED 30TH JUNE, 2006

CASH FLOWS FROM OPERATING ACTIVITIES:

Collection from turnover Payment for costs and expenses Other income

CASH FOLWS FROM INVESTING ACTIVITIES:

Property, plant and equipment acquired

CASH FLOWS FROM FINANCING ACTIVITIES:

Working capital loan received/(repaid)

Loan against cash incentive received/(repaid) Term loan received/(repaid)

Dividend paid

Increase/(decrease) in cash and cash equivalents Cash and cash equivalents on opening

Cash and cash equivalents on closing

Sd/-


Sd/-



2005-06

1,578,023,106 (1,504,496,218) 7,109,393 80,636,281

(16,550,274) (16,550,274)

(33,259,289)

(19,823,135) (8,504,437) (61,586,861 )

2,499,146 72,419,340 74,918,486

Value in Taka

2004-05

1,380,836,453 (1,352,386,667) 5,099,225 33,549,011

(55,158,818) (55,158,818)

1,083,386 (33,929,593) 23,614,061 (8,229,688) (17,461,834)

(39,071,641 ) 111,490,981

72,419,340

Sd/-


This is the Cash rlow Statement referred to in our report to the Shareholders of even date.

Dhaka

7th August, 2006

21

Sd/-


AP~X FOODS LIMITED


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE, 2006 FORMING AN INTEGRAL PART OF THE FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATERIAL INFORMATION:

a. Legal Form of the Enterprise:

Apex Foods Limited is a Public Limited Company registered under the Companies Act, 1913 (Repealed in 1994). The Company was incorporated in Bangladesh on 21.03.1979. Shares of the Company are listed in the Dhaka Stock Exchange Ltd. and Chittagong Stock Exchange Ltd.

b. Address of Registered Office and Principal Place of Business:

The principal Place of Business is the Registered Office at Biman Bhaban, s'' Floor, 100 Motijheel Commercial Area, Dhaka-1000 and the Factory is located at 51-B Shagarika Road, Fouzderhat Industrial Estate, Pahartali, Chittagong.

c. Nature of Business Activities:

The Company owns and operates a modern Shrimps Processing Plant and exports 100% of its products in the foreign markets.

d. Accounting Convention and Basis:

These Financial Statements have been prepared under the Historical Cost Convention and Going Concern basis in accordance with applicable International Accounting Standards in Bangladesh which does not vary from the req uirements of the Companies Act 1994, and the Listing Regulations of the Stock Exchanges, The Securities & Exchange Rules, 1987 and other laws and rules applicable in Bangladesh.

e. Compliance with local laws:

The Financial Statements have been prepared in compliance with requirements of the Companies Act 1994, The Securities & Exchange Rules, 1987 and other relevant local laws and rules.

f. Compliance with International Accounting Standard (lAS):

The Financial Statements have been prepared in compliance with requirements of lAS's adopted by the Institute of Chartered Accountants of Bangladesh (ICAB)) and applicable in Bangladesh.

g. Fixed Assets:

These are stated at historical cost less accumulated depreciation in accordance with BAS 16 "Property, Plant and Equipment".

h. Depreciation:

Depreciation is charged on all fixed assets except land and land development on reducing balance method.

The rates of depreciation of each class of assets are as follows:

Factory Building 20 %

Plant & Machinery 20 %

Factory Equipments 20 %

Furniture & Fixtures 10 %

Office Equipments 20 %

Vehicles 20 %

Other Assets 20 %

22

APEX FOODS LIMITED


i. Accounting for Lease:

Due to adoption of lease accounting by the Institute of Chartered Aooountants of Banqladesh accounting for lease has been made as per BAS 17, "Leases", and accordingly all the Operating Leases have been treated as Financial Lease for the reporting period.

j. Inventories:

Inventories in hand except Packing Materials and Chemicals have been valued at lower of cost and net realizable value in accordance with BAS 2 "Inventories" after making due allowance for any obsolete or slow moving items. Packing Materials and Chemicals have been valued at cost.

k. Taxation:

Provision for income tax has been made as per requirements of the Income Tax Ordinance, 1984.

I. Income Tax:

The Company is a Publicly Traded Company, as per the Income Tax Ordinance, 1984 the rate of Income Tax is 30%. Since the company is1 00% export oriented there is a tax rebate of 50% on export profit. Therefore the Corporate Tax stands at 15.00% on export profit. However, the tax provision has been made @ 30% on other income as per provision of the Income Tax Ordinance, 1984.

m. Deferred Tax:

Deferred tax assets or deferred tax liabilities have been accounted for in accordance with BAS 12"lncome Taxes". Deferred tax arises due to temporary difference, deductible or taxable for the events or transaction recognized in the income statement. A temporary difference is the difference between the tax base of an asset or liability and its carrying amount/reported amount in the financial statement. Deferred tax asset or liability is the amount of income tax payable or recoverable in future period(s) recognized in the current period. The deferred tax asset/income or liability/expenses does not create a legal liability/recoverability to and from the income tax authority.

n. Trade Debtors:

Export bills receivables are stated at the original invoice value.

o. Creditors and Accrued Expenses:

Liabilities are recognized for amounts to be paid in future for goods and services received, whether or not billed by the supplier.

p. Earning Per Share:

The Company calculates Earnings Per Share (CPS) in accordance with BAS 33 "Earnings Per Share" which has been shown on the face of Income Statement and the computation of EPS is stated in Note 29.

i. 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.

23

APEX FOODS LlMIT:cD


ii. 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 is outstanding as a proportion of the total number of days in the period.

iii. Basic Earnings Per Share

This has been calculated by dividing the basic earnings by the weighted average number of ordinary shares outstanding during the year.

iv. 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.

q. Cash Flow Statement:

Cash Flow statement has been prepared basically in accordance with BAS 7 "Cash Flow Statements" and the cash flow from the operating activities have been presented under direct method as required by the Securities and Exchange Rules 1987 and considering the provisions of parag raph 19 of BAS 7 which provides that "Enterprises are Encou raged to Report Cash Flow from Operating Activities using the Direct Method".

r. Foreign Exchange:

Foreign currencies are converted into Bangladesh Taka at the rates ruling on the date of transaction and the balance in hand at the close of the business, at the rate prevailing on the Balance Sheet date in accordance with BAS 21 "The Effects of Changes in Foreign Exchange Rates".

s. Revenue Recognition:

Exports are made against confirmed LlC and firm contracts. The sale proceeds are accounted for upon shipments and after satisfying all the conditions for revenue recognition as provided in BAS 18 "Revenue".

t. Employee Benefit Obligations:

The Company operates a contributory provident fund and a Group insurance scheme for its permanent employees. A Board of Trustees administrates provident fund.

u. Contribution to PPF & WF:

This is being calculated 5% of the net profit after such contribution provided as per provisions of the Company's Profit (Workers' Participation) Act, 1968 and is payable to workers' as defined in the said Act.

v. Risk and uncertainties for use of estimates in preparation of financial statements:

Preparation of Financial Statements in conformity with the Bangladesh Accounting Standards requires management to make estimates and assumption that effect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date. of the financial statement and revenues and expense during the period reported. Actual results could differ from those estimates. Estimates are used for accounting of certain items such as long term contracts, depreciation and amortization, employees benefit plans, taxes, reserves and contingencies.

24

APEX FOODS LIMITED


w. Responsibility for preparation and presentation of financial statements:

The Board of Directors is responsible for the preparation and presentation of F'inancial Statements under section 183 of the Companies Act 1994 and as per the provision of "The Framework for the Preparation and Presentation of Financial statements" issued by the International Accounting Standard Committee (IASC) as adopted by The Institute of Chartered Accountants of Bangladesh (ICAB)

I

x. Comparative information:

Comparative information have been disclosed in respect of the year 2004-05 for all numerical information of the financial statements and also the narrative and descriptive information when it is relevant for understanding of the current periods financial statements.

Last year's figures have been rearranged where considered necessary to conform to current year's presentation.

y. Reporting currency and level of precision:

The figures in the financial statements represent Bangladesh Currency (Taka), which have been rounded-off to nearest Taka.

z. Reporting period:

Financial Statements of the Campa ny cover one calendar year from 15t July 2005 to so" June 2006.

aa. Others:

The Financial Statements include the following components as per BAS 1 "Presentation of Financial Statements".

i) Balance Sheet as at 30"1 June 2006.

li) Profit and Loss account far the year ended ao" June 2006.

iii) Statement of Changes in Equity for the year ended ao" June 2006.

Iv) Cash Flow Statement for the year ended so" June 2006.

v) Accounting Policies and explanatory notes.

2. FIXED ASSETS: TK.125,870,728

SL PARTICULAR COST RATE DEPRECIATION ~ ~ W.D,V, as
NO. % at 30.06.06
Balance Addition Balance Balance For the Balance
as at during the as at as at year as at
01.07.05 year 30.06,06 01.07.05 30.06.06
1 Land & Land Development 3,392,470 - 3,392,470 - - - 3,392,470
2 Factory Building 58,483,468 1,314,891 59,798,359 20 42,871,423 3,385,387 46,256.810 13,541,549
3 Plant & Machinery 217,590,078 10,708,438 228,298,516 20 118,496,085 21,960,486 140,456,571 87,841,945
{tncluding leased machinery)
4 Factory Equipment 17,363,820 2,515,817 19,879,637 20 11,691,572 1,637,613 13,329,185 6,550,452
5 Furniture & Fixture 7,964,592 176,399 8,140,991 10 4,213,367 392,762 4,606,129 3,534,862
6 Office Equipment 9,200,868 1,077,675 10,278,543 20 4,146,737 1,226,361 5,373,098 4,905,445
7 Motor Vehicles 15,932,850 751,293 16,684,143 20 9,098,072 1,517,214 10,615,286 6,068,857
(including leased vehicles)
8 Crockeries 93,762 5,761 99,523 20 55,588 8,787 64,375 35,148
Total 330,021,908 16,550,274 346,572,182 190,572,844 30,128,610 220,701,454 125,870,728 Charged to:

Manufacturing Account Profit & Loss Account

26,983,485 3,145,125 ilQ.128.610

25

APEX FOODS LIMITED Annual R€port 2005-06

2005-06 2004·05

3. INVESTMENT: TK. 62,390,190
In Shares: At Cost
Apex Spinning & Knitting Mills Limited 22,632,000 22,632,000
226,320 Shares of Tk. 100.00 each at par.
Amam Sea Food Industries Limited 1,048,200 1,048,200
10,482 Shares of Tk. 100.00 each at par
Apex Weaving & Finishing Mills Limited 20,000,000 20,000,000
200,000 Shares of TK. 100.00 each at par.
Apex Lingerie Limited 2,400,000 2,400,000
24,000 Shares ofTK. 100.00 each.
Apex Yarn Dyeing Limited 3,270,000 3,270,000
(32,700 Share of Tk. 100/- each)
Central Depositary Bangladesh Ltd. 1,000,000 1,000,000
(1 Share of Tk. 1 ,OOO,OOO/~ each) ----_._--_._---- .. -------- ........... ~.,.. ...
50,350,200 50,350,200
Immovable property 12,039,990 12,039,990
.------""-_ .... - --- ...... ----_._---
62,390,190 62,390,190
---.------ ---------
--------- --------- • Immovable property represents the cost of land at Kalampur, Gazipur and its development for setting up new industries.

• Investment in Apex Weaving & Finishing Mills Ltd. is under litigation. As the issue Is under litigation, no dividend has yet been accounted for.

Market Price of Listed Companies Shares (As on 30.06.06) Apex Spinning & Knitting Mills Ltd.

Amam Sea Food Industries Ltd.

Apex Weaving & Finishing Mills Ltd.

231 120 121

292 120 53

4. INVENTORIES: TK. 430,333,940

Shrimps Fish

Packing Materials & Chemicals

Qty. in Kg. 541,233 55,055

411,955,650 13,763,750 4,614,540

547,357,885 8,948,610 4,391,198

596,288

430,333,940

560,697,693

------

--,----

-----------

--""""'!II!!!!!!!!~-----

-----------

---~----

• The above Inventories are as per physical checking made, valued and certified by the Management.

The Auditors have also physically checked the above Inventories.

• Inventories in hand except Packing Materials and Chemicals have been valued at lower of cost and net realizable value. Packing Materials and Chemicals have been valued at cost.

• Inventories in hand represent most of the stocks of shrimps, which are of higher grade.

• The Company is availing working capital facilities against pledge of finished goods.

26

APEX FOODS LIMITED

Annual Regort 2005-06

5. TRADE DEBTORS: TK. 200,025,663

2005-06

2004,,05

Export Bills Receivable Cash Incentive Receivable

82,080,941 117,944,722

64,568,617 62,588,674

200,025,663

127,157,291

---------

-----,----

--_._-----

---------

Other than the following export bills, all debtors are considered good and subsequently fully realized except cash incentive receivable.

SIL Number Invoice Number Quantity in Me us $ Ta.ka

1. AFLl1586 1,800 304,703.98 14,466,430
2. AFU1589 1,800 275,522.85 13,080,998
3. AFL/1590 1,800 304,057.96 14.435.759
4. AFL/1591 1,800 275,522.85 13,080,998
--------- . -~~-~~-~------- __ .. ______ ... l1li ..........
7.200 1.159.807.64 55,064,185
~-~-- ----,----- ............................................ -
-.-------- _ ............................................. The above export bills were negotiated with Agrani Bank against the export of 7,200 Master Cartons of Shrimps to Mantrad N.V., Belgium.

After repeated attempt the bank failed to realize the amount from the Importer. The Company had also taken legal steps against the Importer. Since the matter is under litigation, no provision has been made against the same.

6. ADVANCES, DEPOSITS AND PREPAYMENTS: TK. 13,595,604

Advance to Raw Suppliers Advance to Employees Deposits & Prepayments Advance Income Tax Bank Guarantee

2,510,647 360,300 2,475,564 7,808,993 440,100

348,500 2,107,884 5,394,366 624,450

13,595,604

8,475,200

-"------_._

-.--------

---------

-----,----

• Advance to Raw Suppliers are considered good.

• Advance to Employees are realized monthly and considered good.

,- • Deposits and Prepayments are made to statutory authorities and hence secured.

• Advance tax represents tax deduction at source.

• No amount was due by the Directors and other officers of the Company or by associated undertaking.

• Bank Guarantee issued by the Banks in favor of Bakhrabad Gas Systems Ltd.

7. OiHE:R RE:CEIVABLE: TK. 16,254,727

16,254,727

16,254,727

---------

---------

---------

----_-----

• This represents Insurance Claim receivable from Insurance Company against deterioration of stock because of machinery break down. Appropriate claim has been lodged with the Insurance Company and the claim is under litigation.

27

APEX FOODS LIMITED Annual Report 2005-06

8. CASH & BANK BALANCES: TK. 74,918,486

2005-06 2004-05

Cash in Hand:

Head Office Factory Office

30,00°1 43,265

73,265

Cash at Bank with:

Agrani Bank, Agrabad Corporate Br. Chittagong. National Bank Ltd., Pahartali, Chittagong.

Arab Bangladesh Bank Ltd. Principal Br, Dhaka. Eastern Bank Ltd., Principal Branch, Dhaka

The Hongkong & Shanghai Banking Corporation, Dhaka Dhaka Bank Ltd., Foreign Exchange Branch, Dhaka Agrani Bank, Local Office, Dhaka

FDR with IPDC of Bangladesh Limited, Dhaka

23,231,227 525,000 337,294 484,516

35,128 230,056 2,000 50,000,000

74,845,221

~ ..... ~- ...... ~~~~ .... -~~-

74,918,486

---------

--~----~-

30,001 34,755

64,756

42,592,642 525,000 203,516 30,116 464,684 28,536,626 2,000

72,354,584

72,419,340

• Cash in hand was physically verified. All Bank balances were reconciled and confirmed

9. WORKING CAPITAL LOAN: TK. 415,837,235

Against Hypothecation

Against Pledge of Finished Goods

61,916,018 353,921,217

415,837,235

----_.------

----------

92,088,624 357,007,900

449,096,524

.............. __ ---_ ........... _' ..... _---

• The Working Capital Loan was taken from Agrani Bank, Agrabad Corporate Branch, Jahan Building, Agra bad CIA, Ch itlagon g, wh I ch is fully secured agal n st 1 st charg e of La n d, B ui Id i ng, Plant & Machinery and all other Assets of the Company and Pledge of Finished Goods.

• The Company has Cash Credit facilities of Tk. 44,00 crore (Hypothecation Tk. 9.00 crore & Pledge of finished goods Tk. 35,00 crare) which has been fully availed. Apart from this, the Company has no such other credit facilities. The Loan bears interest @ 7% p.a.

10. TERM LOAN CURRENT MATURITY: TK. 66,176,718

Interest free Block. Account with Agrani Bank. IPDC of Bangladesh Limited

Leased Liabilities

3,111,003 50,000,000 13,065,715

66,176,718

---------

---------

12,416,997 50,000,000 10,993,283

73,410,280

_-_, __ ~_c _

---------

• This represents the current portion of Block Account, IPDC loan and Lease liabilities payable in next twelve months.

11. TRADE CREDITORS: TK. 6,841,713 Raw Supply

6,841,713

30,267,078

---------

--_ ..... _._---

• Raw supply represents the total amount payable to 14 regular suppliers of shrimps .. All suppliers were paid in full subsequently.

28

APEX FOODS LIMITED Annual Report 2005·06

12. SUNDRY CREDITORS: TK. 13,883,428

Processing Labor Contractor Packing Materials Supplied Telephone

Newspaper & Periodicals Power, Fuel and Water

Repairs (Factory Building, Machinery & Equipment) Audit Fees

Clearing & Forwarding expenses Chemical

Plant & Machinery Supplied Ice Supplied

Contribution to PPF & WF Contribution to PF Carrying

Uniform & Liveries

Printing & Stationery Sanitation Expenses

Salary & Allowances Insurance Premium

Rent, Rates & Taxes

Adve rti sement

Salary & Wages

Travelling Expenses

Ocean Freight

Vehicle Maintenance Factory Equipment Supplied Postage & Stamp

Survey Fees & Inspection

2005·06 2004·05

1,924,556 2,046,971
5,579,002 4,058,365
17,053 35,848
2,254
745,258 1,499,693
247,559 35,127
60,000 60,000
634,409 892,659
113,842 152,211
7,400
221,005
1,059,409 748,813
68,640
21,415 13,135
3,847 62,179
187,175 19,807
25,200 29,486
578,314
1,350,183 1,427,699
26,998 84,000
5,500
229,220 893,808
117,293 115,762
1,165,821 320,786
69,135 47,187
246,198 53,099
30,351 28,955
21,750 12,600
- - ~~ __ ,_ --",,-=~i::!: ::--- ---------------
13,883,428 13,513,549
--------- ---------
-----.---- --------- • All Creditors have been fully paid subsequently except PPF & WF and Audit Fees.

13. OTH.ER LIABIL.ITIES: TK. 1,134,672

Unclaimed Dividend

.'

1,134,672

1,085,509

-------

--------

-------

-------

• Unclaimed dividend represents the dividend warrants of Tk. 1,134,672.00 not presented to Bank by the Shareholders with in June 30,2006.

29

APEX FOODS LIMITED· Annual Report 2005~06

2005~06 2004~05

14. SHARE CAPITAL: TK. 57,024,000

Authorized Capital:

1,500,000 Ordinary Shares of Tk. 1001= each

150,000,000

150,000,000

---------

---------

_ ... _----_ ...... - -------.---

Issued, Subscribed & Paid up Capital:

570,240 Ordinary Shares of Tk. 1001= each

57,024,000

57,024,000

-----_ _-

-----_ '-

-_ ..... _-----

-_._ ........... ----

Composition of Shareholdings:

Sponsors institution

Foreign Shareholders Public - Local

41.40% 15.23% 00.01% 43.36%

38.10% 14.61% 00.03% 47.26%

100.00%

100.00%

=======

-------

-------

Distribution of each class of equity setting out the members of holders and percentage in the following categories.

No. of Share Holdings Total Holdings %
Holder
4,236 Less than & equal 500 Shares 118,988 20.87
71 501 to 5,000 Shares 112,339 19.70
4 5,001 to 10,000 Shares 29,850 5.23
3 10,001 to 20,000 Shares 49,618 8.70
1 20,001 to 30,000 Shares 29,908 5.25
° 30,001 to 40,000 Shares 0 0
1 40,001 to 50,000 Shares 40,184 7.05
1 50,001 to 100,000 Shares 82,300 14.43
1 100,001 to 200,000 Shares 107,053 18.77
° Over 200,000 Shares a 0
-II!!!!-- .... ""'., ,,", .. _ __IIII!! ,III",,,, "" ___
4,318 570,240 100
----- ------ --_ ..... _,
_---- ------ -----, The Company had the foHowing non-resident Shareholders (As on 30.06.2006):

Name Bank Julius Saer & Co; AG

Folio no. 06158

No. of share 65

• Dividends are paid to non-resident shareholders through their local agents.

• There was no foreign exchange remitted to the relevant shareholders during the year 2005-06.

30

APEX FOODS LIMITED


2005-06

15,. SHARE PREMIUM: TK, 209,088,000

209,088,000

----------

----------

209,088,000

• This represents premium of Tk. 1,100 per Share of 190,080 Right Shares of Tk. 100 each.

----,-----""!"'---------

16. RESERVE AND SURPLUS: TK. 116,162,808 • This represents the following:

Reserve for re-investment Retained Earnings

Capital Gain

51,162,905 64,392,903 607,000

116,162,808

-------._._

---------

1 T. PROPOSED DIVIDEND: TK. 9,123,840

9,123,840

--------

--------

51,162,905 61,105,639 607,000

112,875,544

---------

--_. __ ...... _--

8,553,600

-_ _.

_ ....... _ __ ......

The Board of Directors have recommended dividend for the year 2005"06 @ Tk. 16.00 per Share of General shareholders of the Company which has been provided in the Accounts.

18. LONG TERM LOAN: TK. 15,559,208

Agrani Sank, Agrabad Corporate Br., Chittagong (Interest free Blocked Account)

Lease liabilities

15,559,208

15,559,208

--.-------

------,-_._

19, TURNOVER: TK. 1,650,891,478

Qty. in Kg. 2,396,353 85,150

US$ 24,488,560 338,589

Shrimps Fish

1,628,154,720 22,736,758

2,481,503 24,821,149

1,650,891,478

-------- ---------

-------- ---------

-_._-,--'-----

-----------

20, COST OF GOODS SOLD: TK. 1,476,079,060 Qty. in Kg. Notes 862,660

2,215,131 21

556,306,496 1. ,345.491 ,965 1,901,798,460 425,719,400

Opening Stock of Finished Goods Add: Cost of Production

Less: Closing Stock of rinished Goods

3,077,791 596,288

2,481,503

1,476,079,060

-------

-------

--,--'-------

-----------

31

3,111,003 25,037,778

28,148,781

---------

------_ .... -

1,314,679,758 10,157,723

1,324,837,481

-----------

---_._------

480,091,133 1,271,534,487 1,751,625,620 556,.306,495

1,195,319,125

-----------

--,-------,--

APEX FOODS LIMITED . Annual Report 2005-06

2005-06 2004-05

21. COST OF PRODUCTION: TK. 1,345,491,965

Raw Materials

Packing Materials & Chemicals Direct Labor

Factory Overhead Depreciation

Qty. in Kg. Notes 2,844,991

22

1,233,788,058 47,251,303 17,059,348 20,409,771 26,983,485

1,184,041,377 30,933,448 15,568,453 20,601,723 20,389,486

23

1,345,491,965

1,271,534,487

-----------

-----------

-----------

-----------

• During the year under review no imported materials have been consumed for production.

22. PACKING MATERIALS, CHEMICALS & ICE CONSUMED: TK. 47,251,303

Opening balance (Packing Materials) 4,391,198 4,029,216
Add: Packing Materials Purchase 31 ,851,225 19,343,713
36,242,423 23,372,929
Less: Packing Materials in hand 4,614,540 4,391,198
--_ ... ---_ ... _---- -----_ ...... --_ .......
31,627,883 18,981,731
Add: Chemical & Ice Purchase 15,623,420 11,951,717
--------------- ----.----"------
47,251,303 30,933,448
--------- ---------
--------- --------.,......
23. FACTORY OVERHEAD: TK. 20,409,771
Wages & Salaries 7,476,415 6,898,100
Bonus to Workers' 161,289 159,381
Power, Fuel & Water 10,178,627 11,390,658
Consumable Stores & Spares 717,366 485,334
Repair & Maintenance 1,848,768 1,637,245
Carriage Inward 27,306 31,005
-------_ ........ . .•... _---------
20,409,771 20,601,723
___ 7 ______ ---------
------~- --------- 32

AP5X FOODS LIMITED Annual Report 2005-06

2005-06 2004-05

24. ADMINISTRATIVE AND SELLING OVERHEAD: TK. 112,757,310

Directors Remuneration 3,000,000 1,440,000
Board meeting fees 15,000
Salary & Allowances 10,402,252 8,484,789
Contribution to Provident Fund 502,139 429,195
Bonus to Staff 685,229 583,503
Medical Expenses 15,412 21,590
Staff Welfare Expenses 329,099 418,011
Staff fooding 531,961 417,266
Staff Income Tax 115,000 106,250
Uniform & Liveries 200,445 138,714
Freight & Forwarding 60,845,503 39,144,485
Rent, Rates & Taxes 868,955 1,025,083
Guest House Expenses 367,115 341,195
Advertisement 179,676 159,151
AGM Expenses 668,418 486,324
Donation & Subscription 185,600 80,800
Electricity & WASA Charges Bill 442,888 621,746
Entertainment 607,169 582,463
General Fees & Charges 115,852 99,305
Membership Subscription 45,800
Insurance Premium 3,155,273 1,720,313
Rejection Insurance Premium 10,978,495
Laboratory Testing Fees 3,915,380 2,723,6'16
License & renewals 431,494 131,568
Newspaper & Periodicals 26,374 28,534
Postage & Stamp 221,9(,)2 195,928
Printing & Stationery 606,537 623,834
Sanitation Expenses 506,093 448,815
T.A & Conveyance 966,733 772,630
Telephone, Telex & Fax 947,478 1,042,043
Vehicles Maintenance 1,586,908 1,366,693
Legal & Professional Fees 153,000 123,265
Audit Fee 60,000 60,000
Sales Promotion Expenses 5,565,279 4,749,431
Laboratory Expenses 367,666 320,684
De preciati on 3,145,125 2,377,538
.. _-------------- ----------------
112,757,310 71,264,762
---------- ---------
---------- --------- ::

• Rejection Insurance Premium represents the premium paid for rejection coverage of shipments with due permission from Bangladesh Bank.

• Directors Remuneration paid to the Directors for their full time service rendered are:

Mr. Zafar Ahmed, Managing Director 1,800,000

Mr. Ashim Kumar Barua, Director 1,200,000

3.000,000

• Audit Fee is fixed by the Shareholders in the Annual General Meeting and does not include any other remuneration to Auditors.

• There are 6(six) meetings held during the year.

33

APEX FOODS LIMITED


2005-06

2004-05

25. FINANCIAL EXPENSES: TK. 46,916,912

Interest Charges

39,467,324 7,449,588

44,466,969 3,160,772

46,916,912

47,627,741

---------

---------

---------

---------

26. OTHER INCOME: TK. 7,109,393

Dividend from Investments Apex Spinning & Knitting Mills Ltd Interest Earned

4,073,760 3,035,633

3,394,800 1,704,425

7,109,393

5,099,225

---'-----

--------

--------

----_._--

27. PROVISION FOR CONTRIBUTION TO PPF & WF: TK.1,059,409

This represents 5% of the net profit after such contribution provided as per provisions of the Company's profit (Workers' Participation) Act, 1968 and is payable to workers' as defined in the said Act.

28. PROVISION FOR INCOME TAX FOR THE YEAR: TK. 4,528,519

This represents estimated Income Tax on net profit for the period from 1 st July 2005 to so" June 2006. The provision for deferred tax is made to pay future income tax liability due to accumulated temporary differences.

29. BASIC EARNING PER SHARE (EPS) - DISCLOSURE UNDER BAS 33 "EARNINGS PER SHARE":

Earnings attributable to Ordinary Shareholders

Basic E PS = •• --.- ••• --.-.-.---------.----- ••• --- ••••• --- •••••••••• -- ••••• -- ••••• ----------------------

Weighted average number of shares outstanding during the year 2005·06

12,411,104

Basic EPS = .----- .... - .... --. = 21.76

570,240

• Weighted average number of Ordinary Shares outstanding during the year represents the number of Ordinary Shares outstanding at the beginning of the year plus the number of shares issued during the year multiplied by a time weighting factor. The time weighting factor is the number of Clays the specific number of shares are outstanding as a proportion of the total number of days in the period.

30. SUBSEQUENT EVENT:

The Dividend for the year 2005-06 recommended by the Board of Directors on th August 2006 has been considered in the accounts as per BAS 10, "Events after the Balance Sheet Date"_

There is no other significant event that has occurred between the Balance Sheet date and the date when the financial statements were authorized for issue by the Board of Directors of the Company.

There is no adjusting Balance Sheet of such importance non-discloser of, which would effect the availability to the user of the financial statement to make proper evaluation and decision.

34

APEX FOODS LIMITED .


31. RELATED PARTY TRANSACTIONS:

There was no transaction with the Associated Companies during the year.

32. GENERAL:

2005-06

2004-05

(a) Production capacity (Quantity in MIT):

Installed Capacity Actual Capacity utilized

5,475 % 5,475
2,215 40.46 2,021
3,260 3,454
----- -----
----- ----- % 36.91

Variation

• It is a seasonal business, shrimps season remains for only about 6(six) months (May to October) in a year. The Company was unable to achieve the optimum capacity due to non-availability of adequate shrimps throughout the year.

(b) Production (Quantity in Kg):

Shrimps Fish

Local Shrimps & Fish

Local Packing Materials, Chemicals and Ice

2,109,081 2,003,294
106,050 18,097
------------. ----------- .. _
2,215,131 2,021,391
-------- ----.----
-------- --------
2,3.96,353 1,897,735
85,150 35,989
-------- ..... --- .... _-_ .....
2,481,503 1,933,724
-------- ---------
-------- --------
Value Consumption
%
1,233,788,058 96.31
47,251,303 3.69
No. of EmQloyees Amount
111 3,565,477
152 15,661,847
-------------.--
263 19,227,324
--- ---------
------~-- (c) Export (Quantity in Kg):

Shrimps Fish

(d) Consumption:

(e) Salaries & Wages

Up to Tk. 3,000.00 per month Above Tk. 3,000.00 per month

35

APEX FOODS LIMITED


33. PAYMENTS IPERQUISITES TO DIRECTORS/OFFICERS:

The aggregate amounts paid / provided during the year in respect of Directors and Officers of the Company as defined in IMe Securities and Exchange Commission Rules, 1987, are disclosed below:

Directors

Officers

Board Meeting Fee

Salary and Allowance Provident Fund Contribution Bonus

Perquisites

15,000 3,000,000

7,267,441 359,718 590,600 48,44,961

34. CAPITAL EXPENDITURE COMMITMENT:

• There was no capital expenditure contracted or incurred or provided for as at 301h June 2006.

• There was no material capital expenditure authorized by the Board or contracted for as at so" June 2006.

35. DURING THE YEAR UNDER REVIEW:

• No amount of money was spent by the Company for compensating any member of the Board for

special service rendered except as stated above.

• There was no bank guarantee issued by the company on behalf of their directors.

• There was no brokerage paid against sales during the year 2005-06.

• There was no expense on account of miscellaneous/general expenses.

• There was no claim against the Company not acknowledged as debt on so" June 2006.

• There was no credit facility available to the Company under any contract or availed of as on ao" June 2006 other than trade credit available in the ordinary course of business.

• There was no expense incurred in foreign exchange on account of Royalty, Technical Experts, Professional and Advisory Fee, Interest, Brokerage and Commission etc.

Sd/-


Sd/-


Sd/-


36

APEX FOODS LIMITED


Dated .

The Director

Apex Foods Limited Biman Bhaban, s" Floor

100 Motijheel CIA, Dhaka-1000 Bangladesh

Register Folio No .

No. of Shares........... . .

FORM OF PROXY

IIVVe .

of ..

Being a member of APEX FOODS LIMITED hereby appoints

Mr.lMrs.lMiss :

of .

as my/our proxy to attend and vote for me/us and on my/our behalf at the TWENTY SEVENTH ANNUAL GENERAL MEETING of the Company will be held at the Hall Room of National Shooting Federation, Gulshan-1, Dhaka-1212 on Thursday the September 21,2006 at 11.00 A.M. and or at any adjournment

thereof. As witness my/our hand this day of 2006.

AFFIX EIGHT TAKA REVENUE STAMP

(Signature of the Proxy)

Register Folio No .

Dated .

Signature of the Shareholder(s)

(Signature of the Witness)

Address of Witness .

Note: A member entitled to attend and vote at the Annual General Meeting may appoint only another member as proxy to attend and vote in his/her stead. The proxy form duly stamped with Revenue Stamp of Tk. 8.00 only, must be deposited at the Registered Office of the Company not later than 48 hours before the time fixed for the meetin .

APEX FOODS LIMITED

Biman Bhaban, 5th floor, 100 Motijheel Commercial Area Dhaka-1000, Bangladesh

Signature of Shareholder(s)

N.B. : (1) Please Nole that AGM can only be attended by the honorable Shareholders or properly

constituted Proxy. Therefore, any friend or children accompanying with honorable Shareholders or Proxy cannot be allowed into the meeting.

Please resent this sli at the rece lion desk.

SHAREHOLDERS' ATTENDANCE SLIP

Please complete the attendance slip and hand it over at the entrance of the meeting venue.

IIVVe record my attendance at the TWENTY SEVENTH ANNUAL GENERAL MEETING being held on Thursday, September 21, 2006 al the Hall Room of National Shooting Federation, Gulshan-1, Dhaka- 1212.

Name of Member (s) .

Register Folio No holding of Ordinary Shares of

Apex Foods Limited.

Apex Food 2006

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