AFL Anuual Report 2007 08

APEX FOODS LIMITED Annual Report 2007-08

1

CONTENTS

Notice of the 29th Annual General Meeting 2Corporate Directory 3Five years Statistics 4Corporate Governance Compliance Status Report 5Chairman’s Statement 7Directors’ Report 8Value Added Statement 16Auditors’ Report 17Balance Sheet 18Profit and Loss Account 19Cash Flow Statement 20Statement of Changes in Equity 21Notes to the Financial Statements 22Proxy FormAttendance Slip


2

NOTICE OF THE ANNUAL GENERAL MEETINGNotice is hereby given that the TWENTY NINTH ANNUAL GENERAL MEETING of APEXFOODS LIMITED will be held at the Hall Room of National Shooting Federation, Gulshan-1,Dhaka-1212 on Thursday the October 16, 2008 at 11.30 A.M. to transact the following business:

AGENDA1. To receive and adopt the Accounts for the year ended June 30, 2008 and report of the

Auditors and Directors thereon.

2. To declare Dividend @ 20% for the year 2007-08 as recommended by the Board of Directors.

3. To elect Directors.

4. To appoint Auditors for the year 2008-09 and fix their remuneration.

Dated: DhakaAugust 25, 2008.

By Order of the Board

Sd/-Serazul HoqCompany Secretary

NOTES:

1. The Share Transfer Register of the Company will remain closed from September 17, 2008 to October16, 2008 (Both days inclusive). During the period no transfer will be effected. The Shareholderswhose name will appear in the Share Register of the Company at the close of business on September16, 2008 will be entitled to the Dividend.

2. A member entitled to attend and vote at the Annual General Meeting may appoint only another memberas proxy to attend and vote in his/her stead as per Para 104 of the Articles of Association of theCompany. The Proxy Form duly stamped must be deposited at the Registered Office of the Companynot 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 16, 2008.

4. In pursuance of SEC’s Notification No. SEC/SRMI/2000-953/1950 dated October 24, 2000 gazetted onNovember 07, 2000, the Company shall hold discussions in the Annual General Meeting strictly inconformity with the provisions of the Companies Act, 1994 and no benefit in cash or kind, other than inthe 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 2007-08, if any, at the Registered Office of the Companypreferably 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 theNotice.


3

CORPORATE DIRECTORY

BOARD OF DIRECTORS

Chairman & Managing Director : Mr. Zafar AhmedVice Chairman & Deputy Managing Director : Mr. Zahur Ahmed PhDDirector : Mrs. Shawkat Ara AhmedDirector : Mr. Shahriar AhmedDirector : Mr. Ashim Kumar BaruaIndependent Director : Mr. Kazi Faruq Kader

AUDIT COMMITTEE

Chairman : Mr. Shahriar Ahmed, DirectorMember : Mr. Ashim Kumar Barua, DirectorMember : Mr. Kazi Faruq Kader, Independent Director

SENIOR CORPORATE OFFICIALS

Chief Financial Officer : Mr. S. K. HalderCompany Secretary : Mr. Serazul HoqHead of Internal Audit : Mr. Md. Shakhawat HossainExecutive Director : Mr. Mominuddin Ahmed KhanHead; Financial Accounts : Mr. M. Kamruzzaman ACAHead; Process Control : Mr. Ashish Kumar Paul ACA

LEGAL ADVISORS

K. Fazlul QuadirLee, Khan & PartnersMd. Shahjahan Khan

AUDITORS

Howladar Yunus & Co.Chartered Accountants

BANKER

Agrani Bank Limited Agrabad Corporate Branch, Jahan Building

Agrabad C/A, Chittagong

REGISTERED OFFICE FACTORY

Biman Bhaban, 5th floor 51-B Shagarika Road,100 Motijheel C/A, Dhaka-1000 Fouzderhat Industrial Estate, Pahartali,Bangladesh Chittagong, Bangladesh


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FIVE YEARS STATISTICSFigure in Thousand Taka

Particulars 2007-08 2006-07 2005-06 2004-05 2003-04Results of Operations:

Turnover 2,291,194 2,414,669 1,650,891 1,324,837 1,488,820Gross Profit 225,591 211,181 174,812 129,518 143,015Operating Profit 28,850 24,992 15,138 10,626 14,853Net Profit before Tax 44,510 32,654 21,188 14,976 18,206Net Profit after Tax 23,673 21,439 12,411 12,983 14,993Basic Earning Per Share 36.68 37.60 21.76 22.77 26.29*Dividend Per Share 20.00 18.00 16.00 15.00 13.00Financial Positions:

Total Assets 1,001,696 932,231 923,389 986,844 980,038Fixed Assets-Gross 410,982 354,236 346,572 330,022 274,863Fixed Assets- Net 132,737 107,887 125,871 139,449 107,057Gross Working Capital 812,239 761,954 735,128 785,004 810,591Net Working Capital 259,832 242,396 223,790 213,851 292,139Working Capital Loan 440,576 444,598 415,837 449,097 448,013Share Capital 57,024 57,024 57,024 57,024 57,024Share Premium 209,088 209,088 209,088 209,088 209,088Reserve and Surplus 139,605 127,337 116,163 112,876 110,116Share Holders Equity 417,122 403,714 391,399 387,541 383,642Term Loan 34,798 15,700 81,736 101,559 77,945Key Financial Ratios:

Current Ratio 1.47 1.47 1.44 1.37 1.56Debt to Total Assets 58.36 56.69 57.61 60.73 60.85Return on Equity (%) 5.68 5.31 3.17 3.35 3.91Net Asset Value Per Share 731 708 686 680 673Payout Ratio 48.18 47.88 73.51 65.88 49.44Interest Service Coverage Ratio 1.58 1.52 1.32 1.22 1.36Others:

Market Price Per Share (30th June) 1,225 571 349 520 440Price Earning Multiple 33.38 15.19 16.04 22.84 16.74Number of Employees (Including contract labor) 674 680 654 646 657Capacity Utilization (%) 49.74 57.90 40.46 36.91 46.98

The Board of Directors recommended Cash Dividend @ Tk. 20.00 per Share for the year 2007-08.


5

Corporate Governance Compliance Status Report

Status of compliance with the conditions imposed by the Securities and Exchange Commission’snotification No. SEC/CMRRCD/2006-158/Admin/02-08 dated February 20, 2006

ConditionNo.

Title ComplianceStatus

Explanation for non compliancewith the condition

1.1 Board’s Size: Board membersshould not be less than 5 (Five)and more than 20 (Twenty)

Complied

1.2 (i) Independent Director: At least1/10th

Complied

1.2 (ii) Appointment of independentDirector by elected Directors

Complied

1.3 Individual Chairman of the Board,Chief Executive, clearly definedroles and responsibilities

Not Complied Our Company (Sea Food Processing &Export Industry) requires uniqueexpertise. We are looking for acompetent person but we could not yetfind eligible individual for the purpose.However, in the mean time theChairman has been entrusted withboth the responsibilities.

1.4 The Directors report toShareholders on:

1.4 (a) Fairness of Financial Statements Complied1.4 (b) Maintenance of proper books of

accountsComplied

1.4 (c) Adaptation of appropriateAccounting policies and estimates

Complied

1.4 (d) Compliance with InternationalAccounting Standard

Complied

1.4 (e) Soundness of Internal ControlSystem

Complied

1.4 (f) Ability to Continue as GoingConcern

Complied

1.4 (g) Significant deviation from lastyear

Complied

1.4 (h) Presentation of last three yearsdata

Complied

1.4 (i) Declaration of Dividend Complied1.4 (j) Details of Board Meeting Complied1.4 (k) Shareholding Pattern Complied2.1 Appointment of CFO, Head of

Internal Audit and CompanySecretary and defining of theirrespective roles, responsibilitiesand duties.

Complied

2.2 Attendance of CFO and theCompany Secretary at Board ofDirectors meeting

Complied


6

3.00 Audit Committee Complied3.1 (i) Constitution of Committee Complied3.1 (ii) Constitution of Committee with

Board members including oneIndependent Director

Complied

3.1 (iii) Filling of Casual Vacancy inCommittee

Notapplicable

3.2 (i) Chairman of the Committee Complied3.2 (ii) Professional Qualification and

experience of the Chairman of thecommittee

Complied

3.3.1 (i) Reporting to the Board ofDirectors

Complied

3.3.1(ii)(a) Reporting of Conflict of Interest tothe Board of Directors

Notapplicable

There was no such event to report

3.3.1(ii)(b) Reporting of any fraud orirregularity to the Board ofDirectors

Notapplicable


3.3.1(ii)(c) Reporting of violation of laws tothe Board of Directors

Notapplicable


3.3.1(ii)(d) Reporting of any other matter tothe Board of Directors

Notapplicable


3.3.2 Reporting of Qualified point toCommission

Notapplicable


3.4 Reporting of activities to theShareholders and GeneralInvestors

Notapplicable


4.00 External/Statutory Auditors:4.00 (i) Non-engagement in appraisal or

valuationComplied

4.00 (ii) Non-engagement in designing ofFinancial Information System

Complied

4.00 (iii) Non-engagement in Book-Keeping

Complied

4.00 (iv) Non-engagement in Broker-dealerservice

Complied

4.00 (v) Non-engagement in ActuarialServices

Complied

4.00 (vi) Non-engagement in Internal Audit Complied4.00 (vii) Non-engagement in any other

servicesComplied


7

CHAIRMAN’S STATEMENT

Dear Shareholders,

It is an honor and pleasure for me to welcome you all to the Twenty-ninth Annual GeneralMeeting of your Company and to present the Annual Report for the year ended 30th June 2008.

Certainly, Bangladesh economy has passed through a soft patch. During financial year 2007-08,Bangladesh economy maintained a robust growth in the services and manufacturing sectorsdespite volatile oil price in the international market. The GDP was 6.00 percent, slowing downfrom 6.5 percent in the previous fiscal year.

Facing increasingly tough challenges, the shrimp industry has proven to be remarkably resilient.Shrimp is the most widely harvested and globally traded commodity, contributing to about 10percent of the total world seafood trade. Despite stagnant demand in the traditional Japanesemarket, consumption, particularly of warm water shrimp, such as black tiger and vannamei, isgrowing in other markets such the USA & EU. Shrimp is now the most popular species consumedin the USA. As a result of rapid economic development, better supply and distribution, demand forshrimp is also growing in other parts of the world, particularly in Asian and Eastern Europeancountries.

However, the challenges ahead are bigger and tougher and Bangladesh seafood industry inparticular must be well prepared in order to survive in the increasingly competitive businessenvironment. While globalization has generally been successful in reducing tariff barriers, anincreasing number of non-tariff barriers are being introduced in the developed markets, both bygovernment and non-government organizations. Various certification schemes related to productsafety, sustainability have taken centre stage in the global seafood markets, with significantimpacts to the shrimp industry.

The loss of agricultural crops, fisheries and livestock caused by the two rounds of flood andcyclone Sidr has negative impact on the production of shrimp resulting in scarcity of raw shrimpsupply during the year. On the other hand, recession in the U.S. has caused a sharp reduction ofshrimp price in the international market. As a result, in the year 2007-08 there was a slight declineof 5.00 percent in the turnover of your Company.

I sincerely thank all respectable Shareholders for extending their continuous support andconfidence in the Board of Directors of your Company. I also like to put on record my sincereappreciation to the Banks, Financial and Regulatory Agencies, Suppliers, Customers, variouspeople with whom we have interacted in the course of business, management staff and membersof the Company at all levels for their cooperation and sincere efforts in the growth of yourCompany.

Dhaka23rd August, 2008

Sd/-Zafar Ahmed

Chairman


8

REPORT OF THE DIRECTORSDear Shareholders,The Directors are pleased to submit to you the Annual Report together with the Auditors’ Reportand Audited Financial Statements of the Company for the year ended 30th June 2008.

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

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

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

(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 30th June 2008 your Company achieved a total turnover of Taka 2.29billion as against last year’s turnover of Taka 2.41billion. The decline in turnover is 5.11% witha 36.31% growth in profit (before tax). Net profit (after tax) earned during the year was 23.67million. During the year there was a slight increase in the Gross Profit Margin. Pricing is animportant factor in the international trade. To compete in the international market the pricingof the products has to be very competitive. During the year we had no other option but tobring the price at par with other exporting countries. As a result, there is a slight decline in theturnover with a consequential slight increase in Gross Profit Margin. But at the end, we wereable to maintain a moderate Net Profit (before tax).

KEY FINANCIAL DATA

TURNOVER (Taka in million)

0500

10001500200025003000

2003-04 2004-05 2005-06 2006-07 2007-08

NET PROFIT (Taka in million)

05

10152025

2003-04 2004-05 2005-06 2006-07 2007-08


9

Productivity

During the year, your Company produced 2,723 M/Ton, a decrease of 14.10% over that oflast year. Production capacity utilized during the year was 49.74% as against last year’sproduction capacity of 57.90%. The following graph reflects your Company’s productivity.

Considering the current global market scenario, during the year your Company invested Tk.56.75 million in fixed assets. Out of the total investment, Tk. 51.83 million was invested in thePlant & Machinery and Factory Equipment. At the date of the issue of this report aninvestment decision of about 18.00 million is also in the pipeline. The management of yourCompany believes that the investment in Fixed Assets will enable your Company to be morecost effective and competitive. The continuity of investment in the fixed assets is reflected inthe following graphs.

Key operating and financial data: Value in thousand Taka

2007-08 2006-07 2005-06

Profit Before PPF & Tax 46,736 34,287 22,248 Provision for PPF & Tax (23063) (12,849) (9,836)

Net Profit For The Year 23,673 21,438 12,412 Profit Brought Forward 75,567 64,393 61,105Profit Available For Appropriations 99,240 85,831 73,517

The Directors recommended the followingappropriations Proposed Dividend 11,404 10,264 9,124 Profit Carried Forward 87,836 75,567 64,393

99,240 85,831 73,517

QUANTITY IN KGs

500,000 1,500,000 2,500,000 3,500,000

2003-04

2004-05

2005-06

2006-07

2007-08

FIXED ASSET (Taka in million)

0100200300400500

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08


10

Dividend

Your Board of Directors has recommended Cash Dividend of Tk. 20.00 per Share of Tk. 100.00each for the year 2007-08. Upon your approval in this General Meeting, the dividend will be paidto the Shareholders whose names appear in the Register of Members of the Company as on 16th

September 2008, at the close of office.

Board meetings:

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

Name of Directors Meeting attended

Mr. Zafar Ahmed 6

Mr. Zahur Ahmed PhD 6

Mrs. Shawkat Ara Ahmed 6

Mr. Shahriar Ahmed 6

Mr. Ashim Kumar Barua 6

Mr. Kazi FaruqKader 5

Pattern of shareholdings:

Name wise details No. of Shares

I. Parent/Subsidiary/Associated Companies and otherrelated parties

Apex Spinning & Knitting Mills Limited

Apex Lingerie Limited

16,475

1,080

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

Mr. Zafar Ahmed– Director 132,053

Mr. Zahur Ahmed PhD– Director 16,074

Mrs. Shawkat Ara Ahmed– Director 82,300

Mr. Shahriar Ahmed– Director 56,343

Mr. Ashim Kumar Barua– Director 750

Mr. Kazi Faruq Kader– Independent Director NIL

Mr. Serazul Hoq– Company Secretary 5

Mr. S.K. Halder– Chief Financial Officer NIL

Mr. Md. Shakhawat Hossain– Head of Internal Audit NIL

III. Senior Corporate Executives NIL


11

Name wise details No. of Shares

IV. Shareholders holding ten percent (10%) or more votinginterest in the Company

Mr. Zafar Ahmed 132,053

Mrs. Shawkat Ara Ahmed 82,300

Director

Mr. Zahur Ahmed PhD and Mr. Kazi Faruq Kader are retiring from the Board in terms of theArticles of Association of the Company and being eligible, offer themselves for re-election.

Auditors

The retiring Auditors M/s. Howladar Yunus & Co., Chartered Accountants, being eligible, offerthemselves for re-appointment as Auditors of the Company for the year 2008-09.

Corporate Governance Compliance Report

In accordance with the requirement of the Securities and Exchange Commission, “CorporateGovernance Report” is annexed.

Dhaka23rd August, 2008

On behalf of the Board

Sd/-Zafar Ahmed

Chairman


12

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TURNOVER (Taka in million)

0500

10001500200025003000

2003-04 2004-05 2005-06 2006-07 2007-08

NET PROFIT (Taka in million)

05

10152025

2003-04 2004-05 2005-06 2006-07 2007-08


13

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QUANTITY IN KGs

500,000 1,500,000 2,500,000 3,500,000

2003-04

2004-05

2005-06

2006-07

2007-08

FIXED ASSET (Taka in million)

0100200300400500

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08


14

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16

VALUE ADDED STATEMENTPARTICULARS 2007-08 % 2006-07 %

VALUE ADDEDTurnover 2,291,194,337 2,414,669,218Less: Bought in Materials & Services 2,135,195,634 2,273,474,037

---------------- ----------------155,998,703 141,195,181========= =========

APPLICATIONSGovernment as Tax 17,190,920 11.02 8,361,983 5.92Employees as Salary Wages & Allowances 47,470,498 30.43 44,526,056 31.54Providers of Loan as Interest & Charges 50,007,691 32.06 47,662,216 33.75Providers of Capital as Dividend 11,404,800 7.31 10,264,320 7.27Depreciation & Retention 29,924,794 19.18 30,380,606 21.52

---------------- --------- ---------------- ---------155,998,703 100.00 141,195,181 100.00========= ===== ========= =====

Government as tax11.02%

Salary, Wages & Allowances

30.43%

Depreciation &Retention19.18%

Dividend7.31%

Interest & Charges32.06%


17

AUDITORS' REPORT TO THE SHAREHOLDERS

We have audited the annexed Balance Sheet of the Apex Foods Limited as at 30th June, 2008and its Profit and Loss Account for the year ended as on that date together with theaccompanying Cash Flow Statement, Statement of Changes in Equity and Notes thereto asprepared by the Company in due conformance with generally accepted accounting principles,procedures and also the applicable Bangladesh Accounting Standards (BAS) and produced to usby it for our examination in due conformance with the applicable Bangladesh Standards onAuditing and we report that;

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

(ii) our examination and checking of records, relevant books of accounts, registers, schedulesand financial statements were sufficient to enable us to form an informed and assessedopinion 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 relevant provisions of law and rules in managingthe affairs of the Company and that proper books of account, records and other statutorybooks have been properly maintained;

(v) the Balance Sheet, Profit and Loss Account are in agreement with the said books ofaccount maintained by the company and examined by us while the Cash Flow Statementconforms 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’sbusiness for the year.

And in our opinion the annexed Balance Sheet, Profit and Loss Account represent a true and fairview of the state of the Company’s affairs as at 30th June, 2008 and of the profit earned for theyear ended on that date and that these financial statements have been drawn up in accordancewith the requirement of applicable laws and rules containing all the information in the mannerrequired by relevant laws and rules and the Bangladesh Accounting Standards (BAS) asapplicable in Bangladesh including BAS 24.

Sd/-Howladar Yunus & Co. Dated; DhakaChartered Accountants August 23, 2008


18

BALANCE SHEETAS AT 30TH JUNE, 2008

Value in Taka

NOTES 30.06.2008 30.06.2007

APPLICATION OF FUNDS:Fixed Assets:

Gross Block 2 410,982,291 354,236,445Less: Accumulated Depreciation 278,245,782 246,349,434Net Block 132,736,509 107,887,011

Investment (At Cost) 3 56,720,190 62,390,190

Current Assets:Inventories 4 402,397,836 386,396,728Trade Debtors 5 89,252,478 77,883,282Advance, Deposits & Prepayments 6 36,483,650 21,868,654Other Receivable 7 88,252,065 201,712,117Cash & Bank Balances 8 195,853,040 74,093,467

812,239,069 761,954,248Less: Current Liabilities

Working Capital Loan (Secured) 9 440,576,222 444,598,480Long Term Loan-Current Maturity 10 7,904,041 12,509,897Short Term Loan 11 27,644,408 -Trade Creditors 12 22,502,675 27,135,680Sundry Creditors 13 24,269,410 15,854,770Income Tax Payable 27,720,991 18,004,467Other Liabilities 14 1,789,659 1,455,425

552,407,406 519,558,719

Net Current Assets 259,831,663 242,395,529

Less: Deferred Tax Liability 5,272,505 5,768,604---------------- ----------------

TOTAL ASSETS 444,015,857 406,904,126 ========== ==========

SOURCES OF FUNDS:Shareholders' Fund:

Share Capital 15 57,024,000 57,024,000Share Premium 16 209,088,000 209,088,000Reserve and Surplus 17 139,605,429 127,337,245Proposed Dividend 18 11,404,800 10,264,320

417,122,229 403,713,565Loan Fund (Secured):

Long Term Loan 19 26,893,628 3,190,561---------------- ----------------

TOTAL LIABILITIES 444,015,857 406,904,126 ========== ==========

Sd/- Sd/- Sd/-Zafar Ahmed Ashim Kumar Barua Serazul HoqManaging Director Director Company Secretary

Note: Annexed notes form part of these Accounts. This is the Balance Sheet referred to in ourreport to the Shareholders of even date.

Sd/-Dated; Dhaka Howladar Yunus & Co.August 23, 2008 Chartered Accountants


19

PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 30TH JUNE, 2008

Value in Taka

Notes 2007-08 2006-07

TURNOVER 20 2,291,194,337 2,414,669,218Cost of goods sold 21 2,065,602,942 2,203,487,848

GROSS PROFIT 225,591,395 211,181,370

OPERATING EXPENSES: 196,741,725 186,189,735Administrative & selling overhead 25 146,734,034 138,527,519Financial expenses 26 50,007,691 47,662,216

OPERATING PROFIT 28,849,670 24,991,635

Other income 27 17,885,909 9,295,183

PROFIT BEFORE PPF & WF 46,735,579 34,286,818Provision for contribution to PPF & WF 28 2,225,504 1,632,706

PROFIT BEFORE TAX 44,510,075 32,654,112Provision for tax:Current tax 29 21,333,190 10,539,474Deferred tax expenses/(income) (496,099) 675,881

NET PROFIT AFTER TAX 23,672,984 21,438,757Appropriations:

Proposed dividend (11,404,800) (10,264,320)Previous years retained earnings 75,567,340 64,392,903

Retained earnings carried forward 87,835,524 75,567,340

Basic Earning per share 30 36.68 37.60


Note: Annexed notes form part of these Accounts. This is the Profit and Loss Account referred to inour report to the Shareholders of even date.



20

CASH FLOW STATEMENTFOR THE YEAR ENDED 30TH JUNE, 2008

Value in Taka 2007-08 2006-07

CASH FLOWS FROM OPERATING ACTIVITIES:

Collection from turnover 2,279,825,141 2,418,866,877 Payment for costs and expenses (2,157,664,906) (2,375,245,506) Other income 14,450,909 9,295,183Net cash generated from operating activities (a) 136,611,144 52,916,554

CASH FOLWS FROM INVESTING ACTIVITIES: Sale of Investment 9,105,000 - Property, Plant and Equipment acquired (56,745,846) (7,664,263)Net cash used in investing activities (b) (47,640,846) (7,664,263)

CASH FLOWS FROM FINANCING ACTIVITIES:

Working capital loan received/(repaid) (4,022,258) 28,761,245 Term loan received/(repaid) 46,741,619 (66,035,468) Dividend Paid (9,930,086) (8,803,087)Net cash generated from financing activities (c) 32,789,275 (46,077,310)

Net increase/(decrease) in cash and cash equivalents (a+b+c) 121,759,573 (825,019)Cash and cash equivalents on opening 74,093,467 74,918,486Cash and cash equivalents on closing 195,853,040 74,093,467


Note: Annexed notes form part of these Accounts. This is the Cash Flow Statement referred to inour report to the Shareholders of even date.



21

STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 30TH JUNE, 2008

Value in Taka

Particulars Share Share Tax Holiday Retained Proposed Capital TotalCapital Premium Reserve Earnings Dividend Gain

As at 30th June'07 57,024,000 209,088,000 51,162,905 75,567,340 10,264,320 607,000 403,713,565Net profit after tax of2007-08 - - - 23,672,984 23,672,984Dividend paid duringthe year - - - (10,264,320) (10,264,320)

Proposed Dividend - - - (11,404,800) 11,404,800 - -

As at 30th June'08 57,024,000 209,088,000 51,162,905 87,835,524 11,404,800 607,000 417,122,229

STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 30TH JUNE, 2007

Particulars Share Share Tax Holiday Retained Proposed Capital TotalCapital Premium Reserve Earnings Dividend Gain

As at 30th June'06 57,024,000 209,088,000 51,162,905 64,392,903 9,123,840 607,000 391,398,648Net profit after tax of2006-07 - - - 21,438,757 - - 21,438,757Dividend paid duringthe year - - - - (9,123,840) - (9,123,840)

Proposed Dividend - - - (10,264,320) 10,264,320 - -

As at 30th June'07 57,024,000 209,088,000 51,162,905 75,567,340 10,264,320 607,000 403,713,565


Note: Annexed notes form part of these Accounts. This is the Statement of Changes in Equity referredto in our report to the Shareholders of even date.



22

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE, 2008FORMING 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. Sharesof the Company are listed in the Dhaka Stock Exchange Ltd. and Chittagong Stock ExchangeLtd.

b. Address of Registered Office and Principal Place of Business:The principal Place of Business is the Registered Office at Biman Bhaban, 5th Floor, 100Motijheel Commercial Area, Dhaka-1000 and the Factory is located at 51-B(1) ShagarikaRoad, Fouzderhat Industrial Estate, Pahartali, Chittagong.

c. Nature of Business Activities:The Company owns and operates a modern Shrimps Processing Plant and exports 100% ofits products in the foreign markets.

d. Accounting Convention and Basis:These Financial Statements have been prepared under the Historical Cost Convention andGoing Concern basis in accordance with applicable International Accounting Standards inBangladesh which does not vary from the requirements of the Companies Act 1994, and theListing Regulations of the Stock Exchanges, The Securities & Exchange Rules, 1987 andother laws and rules applicable in Bangladesh.

e. Compliance with local laws:

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

f. Compliance with International Accounting Standard (IAS):The Financial Statements have been prepared in compliance with requirements of IAS’sadopted by the Institute of Chartered Accountants of Bangladesh (ICAB)) and applicable inBangladesh.

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 reducingbalance 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 %Crockery 20 %


23

i. Accounting for Lease:

Due to adoption of lease accounting by the Institute of Chartered Accountants of Bangladeshaccounting for lease has been made as per BAS 17, “Leases”.

j. Inventories:

Inventories in hand except Packing Materials and Chemicals have been valued at lower ofcost and net realizable value in accordance with BAS 2 “Inventories” after making dueallowance for any obsolete or slow moving items. Packing Materials and Chemicals havebeen valued at cost.

k. Taxation:

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

l. Income Tax:

The Company is a Publicly Traded Company, as per the Income Tax Ordinance, 1984 therate of Income Tax is 27.50%. Since the company is 100% export oriented there is a taxrebate of 50% on export profit. Therefore the Corporate Tax stands at 13.75% on exportprofit. However, the tax provision has been made @ 27.50% on interest earned, 20% ondividend income and 15% on profit on sale of investment in shares as per provision of theIncome Tax Ordinance, 1984.

m. Deferred Tax:Deferred tax assets or deferred tax liabilities have been accounted for in accordance with BAS12”Income Taxes”. Deferred tax arises due to temporary difference, deductible or taxable forthe events or transaction recognized in the income statement. A temporary difference is thedifference between the tax base of an asset or liability and its carrying amount/reportedamount in the financial statement. Deferred tax asset or liability is the amount of income taxpayable or recoverable in future period(s) recognized in the current period. The deferred taxasset/income or liability/expenses does not create a legal liability/recoverability to and from theincome 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 receivedwhether or not billed by the supplier.

p. Earning Per Share:

The Company calculates Earnings Per Share (EPS) in accordance with BAS 33 “Earnings PerShare” which has been shown on the face of Income Statement and the computation of EPS isstated in Note 30.

i. Basic Earnings

This represents earnings for the year attributable to ordinary shareholders. There was nopreference dividend, minority interest but there is an extra ordinary item i.e. profit on sale ofinvestment which has been deducted.


24

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 plusthe 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 aproportion 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 ofordinary 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 dilutionduring the year under review.

q. Cash Flow Statement:Cash Flow statement has been prepared basically in accordance with BAS 7 “Cash FlowStatements” and the cash flow from the operating activities have been presented under directmethod as required by the Securities and Exchange Rules 1987 and considering theprovisions of paragraph 19 of BAS 7 which provides that “Enterprises are Encouraged toReport 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 oftransaction and the balance in hand at the close of the business, at the rate prevailing on theBalance Sheet date in accordance with BAS 21 “The Effects of Changes in Foreign ExchangeRates”.

s. Revenue Recognition:

Exports are made against confirmed L/C and firm contracts. The sale proceeds are accountedfor upon shipments and after satisfying all the conditions for revenue recognition as providedin BAS 18 “Revenue”.

t. Employee Benefit Obligations:

The Company operates a contributory provident fund and a Group insurance scheme for itspermanent 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 provisionsof the Company’s Profit (Workers’ Participation) Act, 1968 and is payable to workers’ asdefined 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 Standardsrequires management to make estimates and assumption that effect the reported amounts ofassets and liabilities and disclosures of contingent assets and liabilities at the date of thefinancial statement and revenues and expense during the period reported. Actual results coulddiffer from those estimates. Estimates are used for accounting of certain items such as longterm contracts, depreciation and amortization, employees benefit plans, taxes, reserves andcontingencies.


25

w. Responsibility for preparation and presentation of financial statements:

The Board of Directors is responsible for the preparation and presentation of FinancialStatements under section 183 of the Companies Act 1994 and as per the provision of “TheFramework for the Preparation and Presentation of Financial statements” issued by theInternational Accounting Standard Committee (IASC) as adopted by The Institute ofChartered Accountants of Bangladesh (ICAB)

x. Comparative information:Comparative information have been disclosed in respect of the year 2006-07 for all numericalinformation of the financial statements and also the narrative and descriptive informationwhen it is relevant for understanding of the current period’s financial statements.Last year's figures have been rearranged where considered necessary to conform to currentyear’s presentation.

y. Reporting currency and level of precision:The figures in the financial statements represent Bangladesh Currency (Taka), which havebeen rounded-off to nearest Taka.

z. Reporting period:Financial Statements of the Company cover one calendar year from 1st July 2007 to 30th June 2008.

aa. Others:

The Financial Statements include the following components as per BAS 1 “Presentation ofFinancial Statements”.

i) Balance Sheet as at 30th June 2008.ii) Profit and Loss account for the year ended 30th June 2008.iii) Cash Flow Statement for the year ended 30th June 2008.iv) Statement of Changes in Equity for the year ended 30th June 2008.v) Accounting Policies and explanatory notes.

2. FIXED ASSETS: TK. 132,736,509

COST DEPRECIATION

SLNO. PARTICULAR Balance

as at01.07.07

Additionduring

the year

Balanceas at

30.06.08

RATE%

Balanceas at

01.07.07 For the

year Balance

as at30.06.08

W.D.V. asat

30.06.08

1 Land & Land Development 3,392,470 - 3,392,470 - - - 3,392,470

2 Factory Building 60,451,840 4,376,443 64,828,283 20 49,095,816 3,146,493 52,242,309 12,585,974

3 Plant & Machinery 233,122,614 50,842,561 283,965,175 20 158,989,780 24,995,079 183,984,859 99,980,316

4 Factory Equipments 21,288,036 987,573 22,275,609 20 14,920,955 1,470,931 16,391,886 5,883,723

5 Furniture & Fixture 8,411,369 92,577 8,503,946 10 4,986,653 351,729 5,338,382 3,165,564

6 Office Equipments 10,765,924 434,233 11,200,157 20 6,451,663 949,699 7,401,362 3,798,795

7 Motor Vehicles 16,684,143 - 16,684,143 20 11,829,057 971,017 12,800,074 3,884,069

8 Crockeries 120,049 12,459 132,508 20 75,510 11,400 86,910 45,598

Total 354,236,445 56,745,846 410,982,291 246,349,434 31,896,348 278,245,782 132,736,509

Charged to: Manufacturing Account 29,612,503 Profit & Loss Account 2,283,845

31,896,348

Due to adoption of BAS 17, “Leases” by ICAB, the leased asset has been considered as assets of theCompany.


26

2007-08 2006-073. INVESTMENT: TK. 56,720,190

In Shares: At CostApex Spinning & Knitting Mills Limited 22,632,000 22,632,000226,320 Shares of Tk. 100.00 each at par.Amam Sea Food Industries Limited 1,048,200 1,048,20010,482 Shares of Tk. 100.00 each at parApex Weaving & Finishing Mills Limited 20,000,000 20,000,000200,000 Shares of TK. 100.00 each at par.Apex Lingerie Limited - 2,400,00024,000 Shares of TK. 100.00 each.Apex Yarn Dyeing Limited - 3,270,00032,700 Share of Tk. 100/- each.Central Depositary Bangladesh Ltd. 1,000,000 1,000,0001 Share of Tk. 1,000,000/- each. --------------- ---------------

44,680,200 50,350,200Immovable property 12,039,990 12,039,990

-------------- ---------------56,720,190 62,390,190========= =========

Immovable property represents the cost of land at Kalampur, Gazipur and its development forsetting up new industries.

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

Market Price of Listed Companies Shares (As on 30.06.08)Apex Spinning & Knitting Mills Ltd. 598 231Amam Sea Food Industries Ltd. 184 146Apex Weaving & Finishing Mills Ltd. 150 142

4. INVENTORIES: TK. 402,397,836Qty. in Kg.

Shrimps 588,087 386,325,104 371,846,492Fish 26,920 6,703,080 5,805,556Packing Materials 9,369,652 8,744,680

---------- ----------------- -----------------615,007 402,397,836 386,396,728====== ========== ==========

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

Inventories in hand except Packing Materials have been valued at lower of cost and net realizablevalue. Packing Materials have been valued at cost.

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


27

2007-08 2006-07

5. TRADE DEBTORS: TK. 89,252,478

Export Bills Receivable 89,252,478 77,883,282

Other than the following export bills, all debtors are considered good and subsequently fullyrealized.

S/L Number Invoice Number Quantity in MC US $ Taka

1. AFL/1586 1,800 304,703.98 14,466,4302. AFL/1589 1,800 275,522.85 13,080,9983. AFL/1590 1,800 304,057.96 14,435,7594. AFL/1591 1,800 275,522.85 13,080,998

--------- ---------------- ----------------7,200 1,159,807.64 55,064,185===== ========= =========

The above export bills were negotiated with Agrani Bank against the export of 7,200 MasterCartons of Shrimps to Mantrad N.V., Belgium.

After repeated attempt the bank failed to realize the amount from the Importer. The Companyhad also taken legal steps against the Importer. Since the matter is under litigation, noprovision has been made against the same.

6. ADVANCES, DEPOSITS AND PREPAYMENTS: TK. 36,483,650

Advance to Employees 99,800 187,800Deposits & Prepayments 4,886,789 5,006,805Advance Income Tax 28,084,761 16,233,949Bank Guarantee 3,412,300 440,100

--------------- ---------------36,483,650 21,868,654========= =========

Advance to Employees are realized monthly and considered good. Deposits and Prepayments are secured. Advance tax represents tax deduction at source and tax paid in advance as per Income Tax

Ordinance. 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 Limited and Customs

Authority.

7. OTHER RECEIVABLE: TK. 88,252,065

Insurance Claim Receivable 16,254,727 16,254,727Cash incentive Receivable 71,997,338 185,457,390

---------------- ---------------- 88,252,065 201,712,117 ========= =========

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


28

2007-08 2006-078. CASH & BANK BALANCES: TK. 195,853,040

Cash in Hand:Head Office 40,950 39,950Factory Office 19,367 106,913

60,317 146,863Cash at Bank with:Agrani Bank, Agrabad Corporate Br. Chittagong. 81,996,163 21,695,778National Bank Ltd., Pahartali Chittagong. - 525,000Arab Bangladesh Bank Ltd. Principal Br, Dhaka. 306,424 117,631Eastern Bank Ltd., Principal Branch, Dhaka 1,025,999 648,822HSBC, Dhaka 86,066 78,674Dhaka Bank Ltd., Fr. Exchange Branch, Dhaka 185,612 39,424Agrani Bank, Local Office, Dhaka 2,000 2,000FDR with Dhaka Bank Limited, Dhaka 112,190,459 50,839,275

195,792,723 73,946,604--------------- ---------------

195,853,040 74,093,467 ========= =========

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

9. WORKING CAPITAL LOAN: TK. 440,576,222

Against Hypothecation 83,528,425 87,324,018Against Pledge of Finished Goods 357,047,797 357,274,462

---------------- ---------------440,576,222 444,598,480========== =========

The Working Capital Loan was taken from Agrani Bank Limited, Agrabad Corporate Branch, JahanBuilding, Agrabad C/A, Chittagong, which is fully secured against 1st charge of Land, Building,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 & Pledgeof finished goods Tk. 35.00 crore) which has been fully availed. Apart from this, the Company hasno such other credit facilities. The Loan bears interest @ 7% p.a.

10. TERM LOAN-CURRENT MATURITY: TK. 7,904,041

Leased Liabilities 7,904,041 12,509,897 This represents the current portion of Lease liabilities payable in next twelve months.

11. SHORT TERM LOAN: TK. 27,644,408

Dhaka Bank Ltd., Foreign Exchange Branch, Dhaka. 27,644,408 -

12. TRADE CREDITORS: TK. 22,502,675

Raw Supply 22,502,675 27,135,680======== =========

Raw supply represents the total amount payable to 7 regular suppliers of shrimps. All supplierswere paid in full subsequently.


29

2007-08 2006-07

13. SUNDRY CREDITORS: TK. 24,269,410

Processing Labor Contractor 2,465,422 2,290,357Packing Materials Supplied 10,180,180 6,750,015Telephone 60,033 20,443Newspaper & Periodicals 1,406 1,824Power, Fuel and Water 2,567,885 735,990Repairs (Factory Machinery & Equipments) 130,109 162,671Audit Fees 60,000 60,000Clearing & Forwarding expenses 908,609 846,048Chemical 313,386 308,366Ice Supplied 403,500 29,000Contribution to PPF & WF 2,225,504 1,632,706Contribution to PF 99,252 81,738Carrying 1,135 10,800Uniform & Liveries 6,190 21,376Printing & Stationery 11,230 29,352Sanitation Expenses 59,910 39,230Salary & Allowances 415,436 80,634Insurance Premium 1,311,859 1,352,583Rent, Rates & Taxes 29,000 -Salary & Wages 270,777 299,115Traveling Expenses 13,099 11,896Sales Promotion Expenses 684,172 -Ocean Freight 1,682,167 695,728Vehicle Maintenance 3,394 9,737Factory Equipment Supplied 232,071 263,943Postage & Stamp 54,464 27,930Survey Fees & Inspection 79,220 93,288

--------------- --------------- 24,269,410 15,854,770

========= ========

All Creditors have been fully paid subsequently except PPF & WF and Audit Fees.

14. OTHER LIABILITIES: TK. 1,789,659

Unclaimed Dividend 1,789,659 1,455,425======= =======

Unclaimed dividend represents the dividend warrants of Tk. 1,789,659/- not presented to Bank bythe Shareholders with in June 30, 2008. The details of unclaimed dividend as on 30.06.2008 is asunder:

Year TakaUp to 2003-04 946,3492004-05 204,5702005-06 239,4682006-07 399,272

--------------1,789,659========


30

2007-08 2006-07

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

Authorized Capital:

1,500,000 Ordinary Shares of Tk. 100/= each 150,000,000 150,000,000========= ==========

Issued, Subscribed & Paid up Capital:

570,240 Ordinary Shares of Tk. 100/= each 57,024,000 57,024,000========= =========

Composition of Shareholdings:

Sponsors 50.42% 50.42%Institution 16.92% 17.95%Foreign Shareholders 00.01% 00.01%Public - Local 32.65% 31.62%

------------ -----------100.00% 100.00%======= =======

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

No. of ShareHolder

Holdings Total Holdings %

3,904 Less than & equal 500 Shares 108,702 19.0661 501 to 5,000 Shares 90,069 15.802 5,001 to 10,000 Shares 15,200 2.673 10,001 to 20,000 Shares 45,409 7.960 20,001 to 30,000 Shares 0 0.000 30,001 to 40,000 Shares 0 0.001 40,001 to 50,000 Shares 40,164 7.042 50,001 to 100,000 Shares 138,643 24.311 100,001 to 200,000 Shares 132,053 23.160 Over 200,000 Shares 0 0.00

-------- ------------ ---------3,974 570,240 100===== ====== =====

The Company had the following non-resident Shareholders (As on 30.06.2008):

Name Folio no. No. of shareBank Julius Baer & Co; AG 06158 45

Dividends are paid to non-resident shareholders through their local agents. There was no foreign exchange remitted to the relevant shareholders during the year 2007-08.


31

2007-08 2006-07

16. 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.

17. RESERVE AND SURPLUS: TK. 139,605,429

This represents the following:

Reserve for re-investment 51,162,905 51,162,905Retained Earnings 87,835,524 75,567,340Capital Gain 607,000 607,000

-------------- --------------139,605,429 127,337,245========= =========

18. PROPOSED DIVIDEND: TK. 11,404,800 11,404,800 10,264,320

======== ========The Board of Directors have recommended dividend for the year 2007-08 @ Tk. 20.00 per share ofGeneral Shareholders of the Company which has been provided in the Accounts.

19. LONG TERM LOAN: TK. 26,893,628

Lease liabilities 26,893,628 3,190,561--------------- ---------------26,893,628 3,190,561========= =========

Lease liabilities are with Industrial and Infrastructure Development Finance Company Limited (IIDFC)and International Leasing & Financial Services Limited.

20. TURNOVER: TK. 2,291,194,337

Qty. in Kg. US$Shrimps 2,800,357 33,329,240 2,269,907,835 2,397,905,242Fish 46,881 311.276 21,286,502 16,763,976

------------- --------------- -------------------- --------------------2,847,238 33,640,516 2,291,194,337 2,414,669,218======== ========= =========== ============

21. COST OF GOODS SOLD: TK. 2,065,602,942

Qty. in Kg. NotesOpening Stock of Finished Goods 739,093 377,652,048 425,719,400Add: Cost of Production 2,723,152 22 2,080,979,078 2,155,420,496

3,462,245 2,458,631,126 2,581,139,896Less: Closing Stock of Finished Goods 615,007 393,028,184 377,652,048

------------ -------------------- --------------------2,847,238 2,065,602,942 2,203,487,848======= ============ ============


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2007-08 2006-07

22. COST OF PRODUCTION: TK. 2,080,979,078

Qty. in Kg. Notes

Raw Materials 3,817,995 1,915,486,320 2,034,124,045Packing Materials & Chemicals 23 83,226,662 54,666,363Direct Labor 22,160,324 21,076,925Factory Overhead 24 30,493,269 22,589,178Depreciation 29,612,503 22,963,985

------------------- -------------------2,080,979,078 2,155,420,496=========== ===========

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

23. PACKING MATERIALS, CHEMICALS & ICE CONSUMED: TK. 83,226,662

Opening balance (Packing Materials) 8,744,680 4,614,540Add: Packing Materials Purchase 65,913,181 47,428,732

74,657,861 52,043,272Less: Packing Materials in hand 9,369,652 8,744,680

----------------- --------------65,288,209 43,298,592

Add: Chemical & Ice Purchase 17,938,453 11,367,771----------------- ---------------

83,226,662 54,666,363========= =========

24. FACTORY OVERHEAD: TK. 30,493,269

Wages & Salaries 8,919,151 7,989,599Bonus to Workers' 238,082 405,019Power, Fuel & Water 15,154,587 10,931,106Consumable Stores & Spares 2,054,344 1,052,833Repair & Maintenance 4,072,501 2,181,463Carriage Inward 54,604 29,158

--------------- ---------------30,493,269 22,589,178========= =========


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2007-08 2006-07

25. ADMINISTRATIVE AND SELLING OVERHEAD: TK. 146,734,034

Directors Remuneration 7,800,000 3,550,000Board meeting fees 17,500 18,000Salary & Allowances 12,269,120 11,316,215Contribution to Provident Fund 617,348 551,344Bonus to Staff 1,040,969 1,554,248Medical Expenses 24,115 26,893Staff Welfare Expenses 491,207 586,482Staff fooding 743,623 631,303Uniform & Liveries 242,291 269,770Freight & Forwarding 81,434,068 79,343,048Rent, Rates & Taxes 569,390 1,679,131Guest House Expenses 618,402 568,123Advertisement 61,488 122,603AGM Expenses 332,263 692,745Donation & Subscription 728,400 194,650Electricity & WASA Charges 234,150 234,338Entertainment 559,678 633,575General Fees & Charges 87,465 100,847Membership Subscription 35,000 143,174Insurance Premium 1,823,053 1,747,404Rejection Insurance Premium 12,081,346 10,334,318Laboratory Testing Fees 5,243,074 5,203,384License & renewals 980,194 657,105Newspaper & Periodicals 26,482 24,019Postage & Stamp 305,057 321,156Printing & Stationery 627,499 551,112Sanitation Expenses 486,153 498,530T.A & Conveyance 2,677,290 2,078,923Telephone, Telex & Fax 1,226,420 1,186,361Vehicles Maintenance 1,392,559 1,116,113Legal & Professional Fees 887,495 275,052Audit Fee 60,000 60,000Sales Promotion Expenses 8,448,357 9,328,400Laboratory Expenses 278,733 245,158Depreciation 2,283,845 2,683,995

146,734,034 138,527,519

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

Directors Remuneration paid to the Directors for their full time service rendered are: (a) Mr. Zafar Ahmed 4,800,000 (b) Mr. Ashim Kumar Barua 2,400,000

(c) Mr. Kazi Faruq Kader 600,000-------------7,800,000========

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

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


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2007-08 2006-0726. FINANCIAL EXPENSES: TK. 50,007,691

Interest 39,081,179 36,211,007Charges 10,926,512 11,451,209

--------------- ---------------50,007,691 47,662,216========= =========

27. OTHER INCOME: TK. 17,885,909

Dividend Income:Dividend from Apex Spinning & Knitting Mills Ltd 4,526,400 4,073,760Dividend from CDBL 100,000 -

4,626,400 4,073,760Interest Earned 9,824,509 5,221,423Profit on sale of Investments in Shares 3,435,000 -

17,885,909 9,295,183

28. PROVISION FOR CONTRIBUTION TO PPF & WF: TK. 2,225,504

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

29. PROVISION FOR INCOME TAX FOR THE YEAR: TK. 21,333,190

This represents estimated Income Tax on net profit for the period from 1st July 2007 to 30th

June 2008. The provision for deferred tax is made to pay future income tax liability due toaccumulated temporary differences.

30. BASIC EARNING PERSHARE (EPS)– DISCLOSURE UNDER BAS 33 “EARNINGS PER SHARE”:

Earnings attributable to Ordinary ShareholdersBasic EPS = -------------------------------------------------------------------------------------------

Weighted average number of shares outstanding during the year 2007-08

20,916,805Basic EPS = ------------------ = 36.68

570,240

Earnings attributable to Ordinary Shareholders represent the earnings only after deduction of profiton sale of investment in shares i.e. gain from extra ordinary item has not been considered.

Weighted average number of Ordinary Shares outstanding during the year represents the numberof Ordinary Shares outstanding at the beginning of the year plus the number of shares issuedduring the year multiplied by a time weighting factor. The time weighting factor is the number ofdays the specific number of shares are outstanding as a proportion of the total number of days inthe period.


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31. SUBSEQUENT EVENT:

The Dividend for the year 2007-08 recommended by the Board of Directors on 23rd August2008 has been considered in the accounts as per BAS 10, “Events after the Balance SheetDate”.

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

32. RELATED PARTY TRANSACTIONS:

Investments in Shares of Apex Lingerie Ltd has been sold at Tk. 42,00,000/- and Apex YarnDyeing Limited Tk. 4,905,000/- to Apex Textile Printing Mills Limited.

33. GENERAL:2007-08 2006-07

(a) Production capacity (Quantity in M/T):

Installed Capacity 5,475 % 5,475 %Actual Capacity utilized 2,723 49.74 3,170 57.90

-------- --------Variation 2,752 2,305

===== =====

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

(b) Production (Quantity in Kg):

Shrimps 2,678,358 3,126,589Fish 44,794 43,724

------------- -------------2,723,152 3,170,313======== ========

(c) Export (Quantity in Kg):Shrimps 2,800,357 2,957,736Fish 46,881 69,772

------------- -------------2,847,238 3,027,508======== ========

(d) Consumption: (Value in Tk.)

Item Value Consumption %

Local Shrimps & Fish 1,915,486,320 95.84Local Packing Materials, Chemicals and Ice 83,226,662 4.16

(e) Salaries & WagesNo. of Employees Taka

Up to Tk. 3,000.00 per month Above Tk. 3,000.00 per month119 3,370,249Above Tk. 3,000.00 per month 175 19,714,421

----- ---------------294 23,084,670=== =========


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34. PAYMENTS /PERQUISITES TO DIRECTORS/OFFICERS:

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

Directors Officers

Board Meeting Fee 17,500 --Salary and Allowance 7,800,000 10,481,477Provident Fund Contribution -- 541,793Bonus -- 812,760Perquisites -- 3,772,403

35. CAPITAL EXPENDITURE COMMITMENT:

There was no capital expenditure contracted or incurred or provided for as at 30th June 2008. There was no material capital expenditure authorized by the Board or contracted for as at 30th June

2008.

36. DURING THE YEAR UNDER REVIEW:

No amount of money was spent by the Company for compensating any member of the Board forspecial 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 2007-08. There was no expense on account of miscellaneous/general expenses. There was no claim against the Company not acknowledged as debt on 30th June 2008. There was no credit facility available to the Company under any contract or availed of as on 30th

June 2008 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.



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FORM OF PROXYThe DirectorApex Foods LimitedBiman Bhaban, 5th Floor100 Motijheel C/A, Dhaka-1000Bangladesh Register Folio No........……............

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

I/We..............................................................................................……………………….……..........................of.............................................................................................................................…………………………....Being a member of APEX FOODS LIMITED hereby appointsMr./Mrs./Miss.................................................………………..…………...........................................................of.....................................................................................………………........……………......…...............……as my/our proxy to attend and vote for me/us and on my/our behalf at the TWENTY NINTH ANNUALGENERAL MEETING of the Company will be held at the Hall Room of National Shooting Federation,Gulshan-1, Dhaka-1212 on Thursday the October 16, 2008 at 11.30 A.M. and or at any adjournmentthereof. As witness my/our hand this.................day of................2008.

AFFIX TEN TAKA REVENUE STAMP

.(Signature of the Proxy)Register Folio No……………Dated……………… Signature of the Shareholder(s)

Dated……………….…………… .(Signature of the Witness)Address of Witness...................................................................................................................

Note: A member entitled to attend and vote at the Annual General Meeting may appoint only anothermember as proxy to attend and vote in his/her stead. The Proxy Form duly stamped with Revenue Stampof Tk. 10.00 only, must be deposited at the Registered Office of the Company not later than 48 hoursbefore the time fixed for the meeting.

APEX FOODS LIMITEDBiman Bhaban, 5th floor, 100 Motijheel Commercial Area

Dhaka-1000, Bangladesh

SHAREHOLDERS’ ATTENDANCE SLIP

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

I/We record my attendance at the TWENTY NINTH ANNUAL GENERAL MEETING being held onThursday, October 16, 2008 at the Hall Room of National Shooting Federation, Gulshan-1, Dhaka-1212.Name of Member (s) ….............................…………………………………………............................................Register Folio No.....................holding of......................………………....................…......Ordinary Shares ofApex Foods Limited.

Signature of Shareholder(s)

N.B. : (1) Please Note that AGM can only be attended by the honorable Shareholders or properlyconstituted Proxy. Therefore, any friend or children accompanying with honorableShareholders or Proxy cannot be allowed into the meeting.

(2) Please present this slip at the reception desk.


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Documents

AFL Anuual Report 2007 08