2013 annual report - golden harvestsub: annual report for the year ended june 30, 2013 dear sir (s),...

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Golden Harvest Agro Industries Limited

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A N N UA L R E P O RT 2013


Contents

Letter of Transmittal

Notice of 9th Annual General Meeting (AGM)

Vision

Mission

Corporate Directory

Shareholders Meeting

Board of Directors

Director’s Profile

Audit Committee

Chairman’s Message

Director’s Report

Corporate Governance

Report of the Chairman of Audit Committee

Value Added Statement

Auditor’s Report & Consolidated Financial Statements ofGolden Harvest Agro Industries Limited

Auditor’s Report & Financial Statements ofGolden Harvest Ice Cream Limited

Proxy Form and Attendance Slip 118

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Golden Harvest Agro Industries Ltd.Golden Harvest Agro Industries Ltd.

Letter of Transmittal

To

All Valued ShareholdersBangladesh Securities and Exchange CommissionRegistrar of Joint Stock Companies & FirmsDhaka Stock Exchange LimitedChittagong Stock Exchange Limited

Sub: Annual Report for the year ended June 30, 2013

Dear Sir (s),

We are pleased to enclose a copy of the Annual report together with the Audited Financial Statements for the year ended 30 June 2013 along with Auditors’ report for your record.

The Annual Report will be available in the website of Golden Harvest Agro Industries Limited (www.goldenharvestbd.com).

Thanking you,

Your sincerely

Nirmal Chandra SardarCompany Secretary

05

Notice of the9th Annual General Meeting (AGM)

Notice is hereby given that the 9th Annual General Meeting (AGM) of Golden Harvest Agro Industries Limited shall be held at Factory Premises, Bokran, Monipur, Bobanipur, Gazipur Sadar, Gazipur on 12th December 2013 at 10.00 am. to transect the following businesses:

1. To consider and approve the Company’s Financial Statements for the year ended 30 June, 2013 along with the Auditors’ and Directors’ Reports thereon.

2. To approve cash dividend at 10% and stock dividend at 5% as recommended by board of director for the year ended 30 June, 2013

3. To re-elect directors who retire by rotation at the AGM.

4. To appoint an Independent Director.

5. To approve the appointment and remuneration of auditors of the Company for the year ended 30 June 2014.

6. To transect any other business with the permission of the chair.

By the Order of the Board

Dated, Dhaka27 November 2013

Nirmal Chandra SardarCompany Secretary

Golden Harvest Agro Industries Ltd.

Notes:

1. The Record Date of the Company was 13th November 2013 and the name of Shareholders in the Register of Members on the Record Date will be eligible to attend the meeting and shall be entitled for the dividend to be approved at the AGM.

2. A shareholder may appoint a proxy to attend and vote in his/her place by filling Proxy Form. The Proxy Form duly completed and stamped, must be deposited at the share division of the Company not later than 48 hours before the time scheduled for holding the meeting and in default, Form of Proxy will be treated as invalid.

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VisionGolden Harvest puts itsrelentless effort fortaking the venture tothe next level ofexcellence, a stagewhere a synergywill be achieved throughcoordinated effort formaximization of valuesin all aspect of businessand society.

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MissionGolden Harvest takesthe mission of harvestingprofitability along withsocial responsibility bycontributing to itsstakeholders.

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Board of Directors

Chairman & DirectorMatthew Graham Stock

Managing Director & Chief Executive OfficerAhmed Rajeeb Samdani

Director & Chief Operating OfficerMohius Samad Choudhury

DirectorAhmed Mehdi Samdani

DirectorNadia Khalil Choudhury

DirectorMoqsud Ahmed Khan

DirectorAzizul Huque

Independent DirectorFaisal Ahmed Choudhury

Audit CommitteeChairmanFaisal Ahmed Choudhury

MemberNadia Khalil Choudhury

MemberAhmed Mehdi Samdani

MemberMohius Samad Choudhury

Legal AdvisorThe Legal Circle

AuditorsS F Ahmed & Co.Chartered AccountantsHouse # 51, Road # 9, Block # FBanani, Dhaka-1213, Bangladesh.

BankersMercantile Bank LimitedGulshan BranchHosna Center, Plot # 2, Block # CES(A)106, Gulshan Avenue, Dhaka.

First Security Islami Bank LimitedGulshan Branch122 Gulshan AvenueGulshan-2, Dhaka

Bank Asia LimitedTejgoan Link Road Branch186 Tejgoan I/A, Tejgoan, Dhaka.

United Commercial Bank LimitedCorporate BranchCWS(A)1, Road# 34Gulshan Avenue, Dhaka-1212

Registered OfficeSPL Western Tower, Level 5, #501 & #502, 186 Gulshan Tejgaon Link Road,

Tejgaon, Dhaka- 1208

Share DepartmentRoad# 10, House# 127, 3rd floor, Block# C, Niketon, Gulshan

Dhaka-1212, Bangladesh, Tel: +88 02 9840181

FactoryBokran, Monipur, Bobanipur, Gazipur Sadar, Gazipur.

Corporate Directory

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Senior Management Officials

Chief Financial Officer

Rojina Akhter ACA

Company Secretary

Nirmal Chandra Sardar, MBA

General Manager

Salauddin Taimur, MBA

General Manager - Factory Operations

Major Md. Mostafizur Rahman (Retd.)

Deputy General Manager, Sales

Muhammed Saiful Islam, MBA

National Sales Manager

S M Mafrose Alam, MBA

Senior Manager Factory Operations

Jens Erik Moelgaard

Assistant Vice President- Accounts & Finance

Mir Rashidul Haque

Senior Manager-Finance & PlanningMd. Faisal Hassan ACCA

Senior Manager-Finance

Faisal Mahmud Sajeeb, MBA

Manager HR, Admin & CSR

Nusrat Rabbani, MBA

Manager, Credit Control

Rahat Reza Siddiquee

Manager- Internal Audit

Sayed Rabiul Islam, ITP

Manager- Admin and Commercial

Aosafur Rahman

Factory Manager

Sk Quamrul Islam

Assistant Manager- Tax & VAT

Muhammed Nurul Islam Sarkar, MBA

Assistant Manager- Accounts

Md. Mahbub Alam- Nazrul, MBA

Assistant Manager- Supply Chain

Md. Nazmul Islam

Sr. Executive -Quality Assurance

Eng. Md. Hiron KhanBSC (Eng.)- Food Eng

Sr. Executive - Share Department

Md. Nurjalal Siddique

Maintenance Engineer

Md. Farid Uddin

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Shareholders’Meeting

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Board of Directors

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Matthew Graham StockChairman and Director

Ahmed Rajeeb SamdaniManaging Director & CEO

Mohius Samad ChoudhuryDirector & Chief Operating Officer

Ahmed Mehdi SamdaniDirector

Nadia Khalil ChoudhuryDirector

Moqsud Ahmed KhanDirector

Faisal Ahmed ChoudhuryIndependent Director

Azizul HuqueDirector

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Profile of Directors

Matthew Graham StockChairman and Director

Mr. Ahmed Rajeeb Samdani, Managing Director, is the main sponsor of Golden Harvest Group, a seasoned entrepreneur, involved in diversified business. Mr. Samdani also founder of a 100% Charitable Hospital, Alvina Samdani Trust and also holding the post of Secretary General of Human Rights Foundation of Bangladesh and the founder and trustee of Samdani Art Foundation. He is also the founding committee member of Tate Museum, United Kingdom, South Asian Acquisition Committee.


Mr. Mohius Samad Choudhury, the Chief Operating Officer of Golden Harvest Agro Industries Ltd, is an MBA from Glamorgan University of Wales, United Kingdom. Mr. Choudhury has vast experience in the Food Industry and Distribution sector in United Kingdom covering almost a decade during which time Mr. Choudhury worked for different Foods Distribution companies in UK.

Mohius Samad ChoudhuryDirector & Chief Operating Officer

Mr. Ahmed Mehdi Samdani, one of the major sponsor-Director of Golden Harvest Agro Industries Ltd. Mr. Samdani has over 8 years of experience in Food Commodities Trading, Information Technology, Real Estate Developments, Publishing House, Logistics, etc. He is one of the founders of TACM Charitable Hospital. A diligent young, hard working business leader who is continuously taking the company to new heights. His thoroughness in business operation and relentless efforts for increasing business volume is the inspiration to the company’s growth.

Ahmed Mehdi SamdaniDirector

Mr. Matthew Graham Stock, Chairman and sponsor Director of Golden Harvest Agro Industries Ltd. Mr. Stock is also Director of Stemcor UK Limited, one of the largest Steel Trading House in the world with annual turnover of in excess of 11 Billion Dollars. According to Forbes July 2010 issue, Mr. Stock has been named the Iron Man of India for his leadership role in the Steel Industry of India. Mr. Stock bring his vast experience in Cold Chain from UK is a great asset for Golden Harvest Agro Industries Ltd.

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Mrs. Nadia Khalil Choudhury, an energetic business person with innovative ideas and concepts, is a Director of Golden Harvest Agro Industries Ltd and other units of the group. Mrs. Nadia Khalil Choudhury is actively involved in different Social Businesses. She is the Founder and Director of Dhaka Art Summit and the Co- Founder and President of Samdani Art Foundation. She is an avid art collector and well known for her art philanthropy. Ms Nadia has also contributed articles for various international art magazines and art columns. She is the Director of Khalil Group, an advisor to Bangladesh Human Rights Foundation and also the Trustee of Taher Ahmed Choudhury Charitable Hospital (TACCH) & Alvina Samdani Trust.

Nadia Khalil ChoudhuryDirector

Mr. Moqsud Ahmed Khan, is the Sponsor Director of Golden Harvest Agro Industries Ltd, and has excellent track record in his own business in UK and Bangladesh. He has extensive knowledge of Food Business and an active Member of Charitable Organizations in UK and Bangladesh.

Moqsud Ahmed KhanDirector

Mr. Azizul Huque, a Director of Golden Harvest Agro Industries Ltd, holds a University Higher diploma in Computer Science from Staffordshire University. Having vast experience extended over 14 years in Bulk Food Commodities Trading as well as Information Technology business, has enabled him to have a comprehensive knowledge in the business dynamics and current local and international business policies of different countries. His in-depth understanding of all aspects of business and expertise on process cost elimination and quality assurance in business processes which is required for international business has proved to be assets for the Company.

Azizul HuqueDirector

Mr. Faisal Ahmed Choudhury is an independent Director of Golden Harvest Agro Industries Limited. Mr. Choudhury, a formal Secretary of Ministry of Shipping of the Government of Bangladesh (who was also joint secretary of the Ministry of Finance) and former Commissioner of Customs & VAT. It is expected that his expertise would help contribute to the further disclosure and protect the interest of all investors of Golden Harvest Agro Industries Limited.

Faisal Ahmed ChoudhuryIndependent Director

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Audit Committeeof the Board

Mohius Samad ChoudhuryMember

Ahmed Mehdi SamdaniMemberNadia Khalil Choudhury

Member

Faisal Ahmed ChoudhuryChairman

Matthew Graham StockChairman

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Ladies and Gentlemen Good morning and Assalamu Alaikum,

I take this opportunity to welcome you on behalf of the Board of Directors of Golden Harvest Agro Industries Limited to this 9th Annual General Meeting of your company. I am really delighted to see such a vibrant presence here today and would like to thank you all for your warm attendance.

I believe Bangladesh is a land of opportunity and has a thriving economy. With this overview, Golden Harvest has formed a partnership and in this partnership, USAID is supporting Golden Harvest in its overall operations from product development to international and local marketing and distribution under Cold Chain Management in Bangladesh.

Today Golden Harvest is one of the earliest entrants in international market; and a market leader in Bangladesh Market as well with its different varieties of Ready to Cook products line. As the market keeps on growing both globally and internally, Golden Harvest takes the project of its mega expansion plan. This is a large scale initiative introducing wide varieties of Dry Food Products, Frozen Ready to eat meals, Ice cream and above all else, the Cold Chain. With my global exposure I have seen huge potential in each of these markets.

With the economic development and prosperity along with busy lifestyles, consumers become more and more aware of hygiene and convenience of food habit. With this purview, Golden Harvest has developed a wide range of Food items at very competitive prices focusing on taste, food value and longer shelf life. These products will substitute expensive open restaurant foods and also street side food pubs meals sold at high price including health risks.

You would be happy to know that Golden Harvest is coming into the market with its world Class Ice Creams products such as Choco bar, Cups, Cones, Liters Pack and some UNIQUE Ice Cream specialties which will be offered at high quality and at a very competitive price.

A cold chain, to my opinion is a missing link in Bangladesh’s communication infrastructure, which is the third and foremost important element in the mega expansion plan of Golden Harvest. A Cold chain can have a huge impact on Bangladesh economy, since it creates uninterrupted product mobility for perishables and products requiring low temperature management. A number of industries can benefit from a proper cold chain that Golden Harvest intends to set up. I can visualize the free movement of horticulture produce, fishery, poultry, dairy, meat products and so many other products being distributed by Golden Harvest and other similar business with increased shelf life and ensured quality.

As a foreign investor I keep myself updated on the recent trends in Bangladesh and I am very much aware that a well-managed business like Golden Harvest Agro industries Limited will be the first preference for the investors in share market.

Once again, I would like to convey my sincere thanks to our customers, bankers, suppliers, government agencies, regulatory bodies and everyone with whom the company interacted in conducting its business. We are grateful to you, the shareholders, for extending at all times, your valuable support and cooperation to bring the company to the level it has reached today.

Thank you all once again.

Matthew Graham StockChairman

Chairman’s Message

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Ahmed Rajeeb Samdani Managing Director & CEO

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Dear Shareholders,

On behalf of Board of Directors of Golden Harvest Agro Industries Limited, I am very happy to welcome you all in the 9th Annual General Meeting of Golden Harvest Agro Industries Limited.

The Directors are pleased to submit to you the Annual Report together with the Auditors’ Report and Audited Financial Statements as required under the Companies Act 1994 and Regulations of Bangla-desh Securities and Exchange Commission for consideration and approval thereof by you at this 9th Annual General Meeting of the Company for the year ended 30th June 2013.

Despite many odds and obstructive situation in the Country, Company’s business, as revealed by the Financial Results/positions, has succeeded in attaining progressive growth rates over the year. It is to be noted that the growth in Gross Profit, Operating Profit, Profit before Tax and Earning per Share has exceeded the rates of growth in Turnover over the previous year.

Golden Harvest becomes pioneer in manufacturing and distributing frozen ready to cook products. As a part of our expansion plan the company has started to build its ice cream factory under the banner of its subsidiary company Golden Harvest Ice Cream Ltd.

Golden Harvest has developed a cold chain process by which the company will be able to distribute its own products to its ultimate customers as well as it can collect good quality raw materials directly from its producers. Eliminating the middleman from the chain will help the company to reduce its cost of production as well as the producers will get a better price for their products.

Business Expansion

Ice Cream:

As per the plan of the company, Golden Harvest Seafood and Fish Processing Ltd, a sister concern of Golden Harvest Agro has been converted into Golden Harvest Ice Cream Ltd, and the company is work-ing on establishing a Premium Ice Cream Plant (99.9998% of the Company owned by Golden Harvest Agro Industries Ltd.) with a capacity to Produce 24,000 Liter of Ice Cream per day and all the Brand new State of the Art European Machineries including a Packaging Line will be imported from TETR PACK-HOYER- Sweden.

Cold Chain

The Company is maintaining robust system of managing risks relating to material supply by establishing strong base through contract farming, well-built distribution channel and also flawless credit control system and ensuring power backup support for uninterrupted production through setting up appropri-ate capacity of backup Generators.

As we promised to establish a Cold Chain system in Bangladesh, we have started our cold chain system with the Partnership of USAID. Cold chain is a logistics system, which helps in maintaining and provid-ing a series of facilities for ensuring ideal storage conditions for the perishables from the point of origin to the point of sale. Bangladesh has a population of 160 million, and availability of different foods in different season, therefore, there is extreme price variation. Although our neighboring countries like India, Nepal, Pakistan, Myanmar has the Cold Chain as well as Cold Storages already in place, but Bangladesh unfortunately has neither proper Cold Chain nor infrastructure throughout the country.

Directors’ Report

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The current post harvest loss in the horticulture sector in Bangladesh is at a staggering 40%-50% of the produce, which is the primary cause for such drastic variation in price, but this could be easily avoided with Cold Chain management, thus enabling prices to be lower which in turn increases the market size and translating into bigger sales volume.

Food Processing

Golden Harvest Agro Industries Limited has introduced new technologies. The factory has improved its capability to produce a wider variety of high standard products with proper process that ensures consistency and quality and committed to provide pure, safe, essential, healthy food products for ensuring a perfect healthy life of customer.

Golden Harvest Brand is active in the consumer market through products that highlight taste and quality will continue to pursue initiatives that drive growth for its customers. Its success will hinge on its ability to continuously improve in areas such as product and service quality, employee engagement and workplace safety, and efficiency.

In coming years, team members will strive to help their customers strengthen margins, build strong brands, and continue to play a key role in the company’s mission to delight consumers with an unmatched food experience that delivers superior value.

As the company has started its expansion as per the plan, the shareholders will get the benefit of the expanded business in 2013-2014 fiscal year.Segment-wise or product-wise performance:

As Golden Harvest Agro Industries Limited produces Ready to Cook Frozen vegetables, snacks & fish there is no scope for Product wise performance reporting in the Annual Report and also no geographical report is required as the company operates in a single geographical area.

Risks and concerns

Risk and uncertainness are the indispensable elements of business. Golden Harvest is also inheriting risks like materials supply, distribution, operational and power. For minimizing risks, the Company is maintaining robust system of managing risks relating to material supply by establishing strong base through contract farming, well-built distribution channel and also flawless credit control system and ensuring power backup support for uninterrupted produc-tion through setting up appropriate capacity of backup Generators.

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Analysis of Cost of Goods sold, Gross Profit Margin and Net Profit Margin

Cost of Goods Sold

The financial performance of the company was moderate during the period of 2012-13. In this year, consolidated sales of GHAIL was Tk.625.68 million which is 12% higher than 2011-12 (Tk.558.67 million) and the company itself was 15.23% higher than previous year.

Gross Profit

Gross profit earned during the year was Tk. 280.72 million as against last year’s gross profit of Tk. 254.94 million.

Gross Profit (BDT Million)

2013 2012 2011 2010 20090

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100

150

200

250

300

Operating Profit (BDT Million)

2013 2012 2011 2010 20090

50

100

150

200

250

Sales (BDT Million)

2013 2012 2011 2010 20090

100

200

300

400

500

600

700

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Net Profit

Net profit (after tax) earned during the year was Tk. 148.20 million as compared to last year’s Net Profit (after tax) of Tk. 78.33 million.

Extra-Ordinary gain or loss

During the year the company earned interest income of Tk60.81 million mainly from its un utilized IPO proceeds. Besides this there was no extraordinary- gain or loss during the year of 2012-13.

Related party transactions

The Company carried out a number of transactions with related parties. The information as required by BAS 24 “Related party Disclosure” has been disclosed in the note no. 32.3 of notes to the financial statements.

Utilization of proceeds from public issues and/ or rights issues

The Company has started using its IPO proceeds in the proposed business. Ice Cream project is yet to complete and the cold chain project has been started. The shareholders will enjoy the impact of IPO Proceeds in 2013 – 2014 fiscal year.

Net Profit (BDT Million)

2013 2012 2011 2010 20090

20

40

60

80

100

120

140

160

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Variance between Quarterly Financial performance and Annual Financial Statements

There is no significant variance between the Quarterly Financial performance and the Annual Financial Statements.

Remuneration to directors

The remunerations of Directors are as follows

Name of the Directors Director Yearly Remuneration

Ahmed Rajeeb Samdani Managing Director & CEO 2,860,000

Mohius Samad Choudhury Director, COO 1,327,950

Statement of Directors on Financial Statements

The financial statements prepared by the management of the issuer company present fairly its state of affairs, the result of its operations, cash flows and changes in equity.

Proper books of account of the issuer company have been maintained.

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.

International Accounting Standards (IAS)/Bangladesh Accounting Standards (BAS)/ International Financial Reporting Standards (IFRS)/Bangladesh Financial Reporting Standards (BFRS), as applicable in Bangladesh, have been followed in preparation of the financial statements and any departure there-from has been adequately disclosed.

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

There are no significant doubts upon the issuer company's ability to continue as a going concern.

Deviation from the last year’s operating results

Both the consolidated and stand alone financial performance of GHAIL was found to be moderate. The consolidated performance of GHAIL revealed that the company fetched a gross profit of Tk. 280.72 million. in FY 2012-13 from Tk. 254.91 million in FY 2011-12. The consolidated net profit margin in FY 2012-13 increased to 23.69% against 14.02% in FY 2011-12. In stand-alone basis the net profit margin increased to 25.87% in FY 2012-13 against 12.71% in FY 2011-12. The above increase was due to moderate business growth and interest income from un utilized IPO proceeds.

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Key operating and financial data of last preceding 5 (five) years are summarized bellow:

Results of Operations

Sl # Particular 2012-13 2011-12 2010-2011 2009-2010 2008-2009

Amount in Taka

1 Turnover 558,666,376 519,285,940 387,783,620 61,611,094

2 Gross Profit 254,941,888 274,301,403 189,299,140 26,144,574

3 Profit/Loss from operation 183,482,822 231,081,190 158,857,379 17,983,181

4 Net Profit/loss before tax 123,598,145 204,350,329 140,685,737 16,569,104

5 Net Profit/loss after tax 78,325,639 132,269,451 67,520,169 13,169,104

6 Earning Per Share (EPS) 1.64 3.78 6.75 3.51

7 Dividend per share 2.00 - 3.33 -

8 No of Share 35,000,000 35,000,000 10,000,000 3,750,000

625,680,209

280,715,606

210,837,460

210,764,632

148,196,246

2.43

1.50

78,000,000

Total Assets (BDT Million)

2013 2012 2011 2010 20090

500

1,000

1,500

2,000

2,500

3,000

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Amount in Taka

1 Total Assets 1,549,432,414 1,283,278,696 749,291,019 275,928,593

2 Property, Plant and Equipment-Gross 666,092,185 958,592,384 510,744,211 224,454,485

3 Property, Plant and Equipment-Net 589,288,309 905,764,222 472,595,261 208,803,685

4 Gross Working Capital 569,726,182 349,702,345 272,751,764 61,201,209

5 Net Working Capital 62,180,938 49,526,281 54,881,323 (18,571,462)

6 Short term Loan 337,479,853 132,188,555 146,296,775 11,986,577

7 Share Capital 350,000,000 350,000,000 100,000,000 37,500,000

8 Share Premium - - - -

9 Reserve and Surplus 608,272,329 318,269,063 182,824,730 23,057,984

10 Shareholders Equity 958,272,329 893,616,252 482,639,743 169,930,902

11 Term Loan 78,496,163 91,209,232 45,118,734 23,881,277

12 Lease Obligation 18,077,150 11,082,877 3,662,100 2,343,743

2,614,274,834

988,465,578

882,826,487

1,321,162,367

767,444,343

367,790,679

780,000,000

408,766,054

806,559,393

1,995,325,447

63,481,569

11,704,869

Reserves & Surplus (BDT Million)

2013 2012 2011 2010 20090

100200300400500600700800900

0

500

1000

1500

2000

Shareholders Equity (BDT Million)

2013 2012 2011 2010 2009

Sl # Particular 2012-13 2011-12 2010-2011 2009-2010 2008-2009

Financial Position

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Dividend

Board of Directors has recommended Cash Dividend of 10% i.e. Tk 1.00 (one) per share of Tk 10 each and Stock Dividend of 5% i.e. one bonus share for 20 shares for the year 2012-13. Upon your approval in the General Meeting, the dividend will be paid to the Shareholders whose names appear in the Share Registers of the Company or in the Depository as on 13th November 2013 at the close of office.

Board meetings

During the year 7 Board Meetings were held. The attendance record of the Directors is as follows:

Name of Director Meeting attended

Matthew Graham Stock 4

Ahmed Rajeeb Samdani 7

Mohius Samad Choudhury 7

Ahmed Mehdi Samdani 7

Nadia Khalil Choudhury 6

Moqsud Ahmed Khan 4

Azizul Haque 7

Faisal Ahmed Choudhury 4

1 Current Ratio 1.12 1.16 1.25 0.77

2 Debt to Total Assets(%) 38.15% 30.36 35.59 38.41

3 Return on Equity(%) 8.46% 20.61 37.80 12.13

4 Net Asset Value Per Share 19.96 25.53 38.99 45.31

5 Interest Service Coverage Ratio 3.34 8.40 5.95 3.95

2.39

23.67%

10.03%

25.58

4.13

Key Financial Ratios

Sl # Particular 2012-13 2011-12 2010-2011 2009-2010 2008-2009

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Directors Retirement

The Directors, Mr. Azizul Huque and Mr. Ahmed Mehdi Samdani retire at this AGM and being eligible offered themselves for re-election.

Auditors

The retiring Auditors M/s. S F Ahmed & Co, Chartered Accountants, being eligible, offer themselves for re-appointment as Auditors of the Company for the year 2013-14.

Corporate Governance Compliance Report

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

Dividend

Board of Directors has recommended Cash Dividend of 10% i.e. Tk 1.00 (one) per share of Tk 10 each and Stock Dividend of 5% i.e. one bonus share for 20 shares for the year 2012-13. Upon your approval in the General Meeting, the dividend will be paid to the Shareholders whose names appear in the Share Registers of the Company or in the Depository as on 13th November 2013 at the close of office.

Board meetings

During the year 7 Board Meetings were held. The attendance record of the Directors is as follows:

Name of Director Meeting attended

Matthew Graham Stock 4

Ahmed Rajeeb Samdani 7

Mohius Samad Choudhury 7

Ahmed Mehdi Samdani 7

Nadia Khalil Choudhury 6

Moqsud Ahmed Khan 4

Azizul Haque 7

Faisal Ahmed Choudhury 4

Chairman, Directors, Company Secretary, Chief Financial Officerand other Corporate officials:

Matthew Graham Stock-Chairman & Director 1,560,000

Ahmed Rajeeb Samdani - Managing Director 17,403,200

Mohius Samad Choudhury- Director &COO 1,560,000

Ahmed Mehdi Samdani- Director 1,560,000

Nadia Khalil Choudhury-Director 1,560,000

Moqsud Ahmed Khan-Director 1,920,000

Azizul Huque-Director 1,762,560

Shareholders holding ten percent (10%) or more voting interest inthe Company:Ahmed Rajeeb Samdani 17,403,200

The pattern of shareholding

Name wise shareholding details with number of Shares

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Credit Ratings

CRISL has reaffirmed the Long Term rating to ‘A+’ (pronounced as Single A plus) and the Short Term rating to ‘ST-3’ of Golden Harvest Agro Industries Limited on the basis of its financials and other relevant quantitative and qualitative information up to the date of rating. CRISL placed the company with “Positive Outlook” with the Credit rating History:Golden Harvest Agro Industries Ltd.

Enitity Rating outlook validity rating rating assigned

A+ Positive 2013–2014 CRISL

A+ Positive 2012-2013 CRISL

A+ Positive 2011-2012 CRISL

Acknowledgement

The Board of Directors would like to extend its gratitude and appreciation to the valued shareholders and other stakeholders of the company for their wholehearted support and guidance that led the company to hold strong position in the market. The Board also recognizes the contributions received from the National Board of Revenue (NRB), Bangladesh Securities and Exchange Commission (BSEC), Dhaka Stock Exchange (DSE), Chittagong Stock Exchange (CSE), Central Depository Bangladesh Limited (CDBL), Financial Institutions, Venders and other business partners.

We also like to thank each of our customers, Distributors and Key Outlets for their continued support to keep strong foundation in this competitive market. We are also proud of our employees whose dedication and relentless work make the company leading in frozen food market.

Thank you all and with best regard for and on behalf of Directors of Golden Harvest Agro Industries Ltd.


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15 Pcs15 Pcs

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Corporate Governance

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Corporate governance is the framework of rules and practices by which the Board of Directors ensures accountability, fairness, and transparency in a company's relationship with its all stakeholders (financiers, customers, management, employees, government, and the commu-nity).

Golden Harvest Agro Industries Ltd. (GHAIL) is committed to continually reviewing all corpo-rate governance policies and practices to ensure the ongoing transparency of the company’s practices and the delivery of high standards and quality information to stakeholders through it financial reporting.

Statement of Compliance

Securities and Exchange Commission’s notification on Corporate Governance.

As GHAIL is listed on the Stock Exchanges in Bangladesh, we comply with the Compliance of Notification No. SEC/CMRRCD/2006-158/134/Admin/44 dated 7th August 2012. For the year ended 30th June 2013, we have complied with the relevant provisions set out in Annexure 1 in this report.

1. Board of Directors:1.1 Board Size:

The number of members of the Board of Directors stands at 8(including one Independent Directors) which is within the limits given by Bangladesh Securities and Exchange Commission (BSEC) The Directors of the Board are appointed by the Shareholders at the Annual general Meeting (AGM) and accountable to the shareholders. The Board is responsible for ensuring that the business activities are soundly administered and effectively controlled.

The Directors of the Board keep themselves informed about the Company’s financial position and ensure that its activities, accounts and asset management are subject to adequate control. The Board also ensures that GHAIL Policies & Procedures and Codes of Conduct are implemented and maintained, and the Company adheres to generally accepted principles for good governance and effective control of Company activities.

Board Meeting

The meetings of the Board of Directors of GHAIL are normally held at the Registered Corpo-rate Head Office of the Company. The meetings are held frequently, at least once in a quarter, to discharge its responsibilities and functions as mentioned above. Meeting is scheduled well in advance and the notice of each Board meeting is given, in writing to each director by the Company secretary. The Board meets for both scheduled meeting and on other occasions to deal with urgent and important matters that require attention.

The Board met seven times during the year 2012-2013 and took decisions on key matters.The details of Board Meeting and attendance are given on Director’s report.

36


Retirement and Re-election of Directors

As per the Article of Association of the company, one-third of the directors to retire in every year shall be those who have been longest in office since their last election, but remains eligible for re-election.

The Directors, Mr. Azizul Huque and Mr. Ahmed Mehdi Samdani retire at this AGM and being eligible offered themselves for re-election.

1.2 Independent Director:

In 8th Annual General Meeting an indepandent director has been appointed.

1.3 Chairman of the Board and Chief Executive officer:

The position of the Chairman of the Board and the the Chief Executive Officer stand separated. The responsibilities of the Chairman and CEO/Managing Director are clearly defined.

1.4 Directors Report to Shareholders: All the requirement have been fulfilled

2. Chief Financial Officer (CFO), Head of Internal Audit (HIA) and Company Secretary (CS).

The Company has appointed a Company Secretary to separate its function from Chief Financial Officer (CFO).The company has also appointed Head of Internal Audit who is reportable to the Audit Committee.

3. Audit Committee:

The Audit Committee, as a Sub-Committee of the Board, has been formed on 12th October 2012 comprising three Directors. The Company Secretary acts as Secretary to the Committee. Role of Audit Committee as per provision of the BSEC regulation have been duly adopted by the Board. The Independent director is the chairman of Audit Committee.

4. External /Statutory Auditors:

The Statutory audit is governed by the Companies Act, 1994, The Bangladesh Securities and Exchange Commission’s Ordinance, 1969 and Bangladesh Securities and Exchange Commission’s Rules 1987 which explicitly provides guidelines for the appointment, scope of work and retirement of auditors.

5. Subsidiary Company:

The Guidelines provided by the BSEC is followed relating to the appointment of Directors and composition thereon. Other rules and regulations are being followed.

6. Duties of CEO & CFO:

The provisions of BSEC guidelines to be complied relating the certification of the Financial statements.

7. Reporting and Compliance of Corporate Governance: Requirements on the above are being complied with.

37

Certificate on compliance of conditions ofCorporate Governance guidelines

to the shareholders ofGolden Harvest Agro Industries Ltd.

Certificate on compliance of conditions of Corporate Governance guidelines to the shareholders of Golden Harvest Agro Industries Ltd.

We have checked the relevant documents, information and explanation given to us regarding the compliance of the provisions of Corporate Governance Guidelines issued by the Bangladesh Securities and Exchange Commission (BSEC) under Notifi-cation No-SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012 for the year ended 30 June 2013.

Management is responsible to ensure the compliances of conditions of the Corporate Governance guidelines as stated in the aforesaid notification and reporting the status of compliances. Our responsibility was limited to checking of relevant documents, verifying procedures and implementation therefore, adopted by the company for ensuring the compliances of the said conditions.

In our opinion except for matters reported on the attached compliance report the Company has complied with the condition of corporate governance guidelines of Bangladesh Securities & Exchange Commission.

Snehasish Mahmud & Co.Chartered Accountants

Date: 24 November 2013

38


Annexure-1

Golden Harvest Agro Industries LimitedCompliance Report on SEC Notification

Status of compliance of corporate Governance(Report under Condition No. 7.00)

Status of compliance with the conditions imposed by theCommission’s Notification No.SEC/CMRRCD/2006-158/134/Admin/44

dated 07 August 2012 issued under section 2CC of the Securities and Exchange Ordinance, 1969:

ConditionNo.

1.1 Board's size

1.2 (i)

1.2 (ii) a)

1.2 (ii) b)

1.2 (ii) c)

Number of independent directors

The independent director does not hold any share in thecompany' or holds less than one percent (1%) shares ofthe total paid-up shares of the company

The independent directors not a sponsor of the companyand is not connected with the company's any sponsor ordirector or shareholder who holds one percent (1%) ormore shares of the total paid-up shares of the company onthe basis of family relationship. His/her family members alsoshould not hold above mentioned shares in the company:

The independent director does not have any otherrelationship, whether pecuniary or otherwise, with thecompany or its subsidiary/ associated companies;

1.2 (ii) d) The independent director is not a member, director. orofficer of any stock exchange

1.2 (ii) e) The independent director is not a shareholder, director orofficer of any member of stock exchange or anintermediary of the capital market

1.2 (ii) f) The independent director is not a partner or an executiveor was not a Partner or an executive during the preceding3 (three) years of the concerned company's statutoryaudit firm

1.2 (ii) g) The independent director shall not be an independentdirector in more than 3 (three) listed companies

1.2 (ii) h) The independent director has not been convicted by a courtof competent jurisdiction as a defaulter in payment of anyloan to a bank or a Non-Bank Financial Institution (NBFI)

1.2 (ii) i) The independent director has not been convicted for acriminal offence involving moral turpitude

1.2 (iii) The independent director(s) shall be appointed by the boardof directors and approved by the shareholdersin the Annual General Meeting (AGM)

1.2 (iv) The post of independent director(s) can not remainvacant for more than 90(ninety) days.

1.2 (v) The Board shall lay down, a code of conduct of all Boardmembers and annual compliance of the code to be recorded.

GHAIL has 1(one) independentdirector at the moment butin the upcoming AGM GHAILwill take another independentdirector to comply withthe rule.

Title

Compliance Status(Put in the

appropriate column)

Complied NotComplied

Remarks(if any)

39

ConditionNo.

1.2 (vi)

1.3 (i)

The tenure of office of an independent director shall be fora period of 3(three) years, which may be extended for1(one) term only.

Independent director shall be a knowledgeable individualwith integrity who is able to ensure compliance withfinancial, regulatory and corporate laws and can makemeaningful contribution to business.

1.3 (ii) The person should be a Business Leader/ Corporate Leader/Bureaucrat/University Teacher with Economics or BusinessStudies or Law background/Professionals like CharteredAccountants, Cost & Management Accountants, CharteredSecretaries. The independent director must have a least12 (twelve) years of corporate management /professionalexperiences.

1.3 (iii) In special cases the above qualifications may be relaxedsubject to prior approval of the Commission.

Title


appropriate column)

Complied

N/A

N/A

1.4 Chairman of the Board and Chief Executive Officer

1.5 (i) Industry outlook and possible future developmentsin the industry.

1.5 (ii) Segment-wise or product-wise performance.

1.5 (iii) Risks and concerns.

1.5 (iv) A discussion on Cost of Goods sold, Gross Profit Marginand Net Profit Margin.

1.5 (v) Discussion on continuity of any Extra-Ordinary gain or loss.

1.5 (vi) Basis for related party transactions-a statement of allrelated party transactions should be disclosedin the annual report.

1.5 (vii) Utilization of proceeds from public issues, rights issuesand/or through any others instruments.

1.5 (viii) An explanation if the financial results deteriorate after thecompany goes for Initial Public Offering (IP0), Repeat PublicOffering (RPO). Rights Offer, Direct Listing, etc.

1.5 (ix) If significant variance occurs between Quarterly FinancialPerformance and Annual Financial Statements themanagement shall explain about the variance ontheir Annual Report.

1.5 (x) Remuneration to directors including independent directors.

1.5 (xi) The financial statements prepared by the management ofthe issuer company present fairly its state of affairs,the result of its operations, cash flows and changesin equity.

1.5 (xii) Proper books of account of the issuer companyhave been maintained.

1.5 (xiii) Appropriate accounting policies have been consistentlyapplied in preparation of the financial statements andthat the accounting estimates are based on reasonableand prudent judgment.

No Such case

NotComplied

Remarks(if any)

40


ConditionNo.

1.5 (xiv) International Accounting Standards (IAS)/BangladeshAccounting Standards (BAS)/International FinancialReporting Standard (IFRS)/Bangladesh Financial ReportingStandards (BFRS), as applicable in Bangladesh, have beenfollowed in preparation of the financial statements and anydeparture there-from has been adequately disclosed.

1.5 (xv) The system of internal control is sound in design and hasbeen effectively implemented and monitored.

1.5 (xvi) There are no significant doubts upon the issuer company'sability to continue as a going concern. If the issuercompany is not considered to be a going concern,the fact along with reasons thereof should be disclosed.

1.5 (xvii) Significant deviations from the last year's operating resultsof the issuer company shall be highlighted and the reasonsthereof should be explained.

1.5 (xviii) Key operating and financial data of at least preceding5 (five) years shall be summarized.

1.5 (xix) If the issuer company has not declareddividend (cash or stock) for the year,the reasons thereof shall be given.

1.5 (xx) The number of Board meetings held during the year andattendance by each director shall be disclosed.

1.5 (xxi) a) Parent/Subsidiary/Associated Companies and other relatedparties (name wise details);

1.5 (xxi) b) Directors, Chief Executive Officer, Company Secretary,Chief Financial Officer, Head of Internal Audit and theirspouses and minor children (name wise details);

1.5 (xxi) c) Executives;

1.5 (xxi) d) Shareholders holding ten percent (10%) or more votinginterest in the company (name wise details).

1.5 (xxii) a) a brief resume of the director;

1.5 (xxii) b) nature of his/her expertise in specific functional areas;

1.5 (xxii) c) Names of companies in which the person also holds thedirectorship and the membership of committeesof the board.

2.1 Appointment of CFO, Head of Internal audit &company secretary.

2.2 Requirement to attend Board meeting

3 (i) The company shall have an Audit Committee as asub-committee of the Board of Directors.

3 (ii) The Audit Committee shall assist the Board of Directors inensuring that the financial statements reflect true and fairview of the state of affairs of the company and in ensuringa good monitoring system within the business.

3 (iii) The Audit Committee shall be responsible to the Board ofDirectors. The duties of the Audit Committee shall heclearly set forth in writing.

3.1 (i) Number of member of Audit committee

3.1 (ii) Inclusion of independent director in the audit committee

Title


appropriate column)


Remarks(if any)

41

ConditionNo.

3.1 (iii) All members of the audit committee should be"financially literate" and at least I (one) member shall haveaccounting or related financial management experience,

3.1 (iv) When the term of service of the Committee membersexpires or there is any circumstance causing any Committeemember to be unable to hold office until expiration of theterm of service, thus making the number of the Committeemembers to be lower than the prescribed number of3 (three) persons, the Board of Directors shall appoint thenew Committee member(s) to fill up the vacancy(ies)immediately or not later than 1 (one) month from the dateof vacancy(ies) in the Committee to ensure continuity of theperformance of work of the Audit Committee.

3.1 (v) The company secretary shall act as the secretaryof the Committee.

3.1 (vi) The quorum of the Audit Committee meeting shall notconstitute without at least 1 (one) independent director.

3.2 (i) Selection of the Chairman of audit committee

3.2 (ii) Chairman of the Audit Committee shall remain present inthe Annual General Meeting (AGM).

3.3 (i) Oversee the financial reporting process.

3.3 (ii) Monitor choice of accounting policies and principles.

3.3 (iii) Monitor Internal Control Risk management process.

3.3 (iv) Oversee hiring and performance of external auditors.

3.3 (v) Review along with the management, the annual financial,statements before submission to the board for approval.

3.3 (vi) Review along with the management, the quarterly and halfyearly financial statements before submission to theboard for approval.

3.3 (vii) Review the adequacy of internal audit function.

3.3 (viii) Review statement of significant 'related party transactionssubmitted by the management.

3.3 (ix) Review Management Letters/ Letter of Internal Controlweakness issued by statutory auditors.

3.3 (x) When money is raised through Initial Public Offering.(IPO)/Repeat Public Offering (RPO)/Rights Issue the companyshall disclose to the Audit Committee about theuses/applications of funds by major, category(capital expenditure, sales and marketing expenses,working capital, etc), on a quarterly basis, as a part oftheir quarterly declaration of financial results. Further, onan annual basis, the company shall prepare a statement offunds utilized for the purposes other than those stated inthe offer document/prospectus.

3.4.1 (i) The Audit Committee shall report on its activities to theBoard of Directors.

Title


appropriate column)


Remarks(if any)

42


ConditionNo.

Title


appropriate column)

Complied

5 (i) Provisions relating to the composition of the Board ofDirectors of the holding company shall be made applicableto the composition of the Board of Directors of thesubsidiary company.

GHICL is a Private LimitedCompany. It has Sponsors only.There is no GeneralShareholders. So, compositionof the Board of Directors ofsubsidiary company, GHICLis not similar to thecomposition of the Board ofDirectors of theholding company.

The Shareholders of thesubsidiary company appointedMr. Faisal Ahmed Choudhuryas an Independent Director at9th AGM dated17 November 2013.

5 (ii)

At least 1 (one) independent director of the Board ofDirectors of the holding company shall be a director on theBoard of Directors of the subsidiary company.

5 (iii) The minutes of the Board meeting of the subsidiarycompany shall be placed for review at the followingBoard meeting of the holding company.

5 (iv) The minutes of the respective Board meeting of the holdingcompany shall state that they have reviewed the affairs ofthe subsidiary company also.

NotComplied

Remarks(if any)

3.4.2 Reporting to the Authorities. N/A

3.4.1 (ii) a) report on conflicts of interests N/A

3.4.1 (ii) b) suspected or presumed fraud or irregularity or materialdefect in the internal control system

N/A

3.4.1 (ii) c) suspected infringement of laws, including securities relatedlaws, rules and regulations;

N/A

3.4.1 (ii) d) any other matter which shall be disclosed to the Board ofDirectors immediately.

N/A

3.5 Reporting to the Shareholders and General Investors N/A

4 (i) Appraisal or valuation services or fairness opinions.

4 (ii) Financial information system design and implementation

4 (iii) Book-keeping or other services related to the accountingrecords or financial statement

4 (iv) Broker -dealer services

4 (v) Actuarial services

4 (vi) Internal audit services

4 (vii) Any other services that the audit committee determines.

4 (viii) No partner or employees of the external audit firms shallpossess any share of the company they audit at least duringthe tenure of their audit assignment of that company.

43

5 (v) The. Audit Committee of the holding company shall alsoreview the financial statements, in particular, theinvestments made by the subsidiary company.

6 (i) a) These statements do not contain any materially untruestatement or omit any material fact or contain statementsthat might be misleading;

6 (i) b) These statements together present a true and fair view ofthe company’s affairs and are in compliance with existingaccounting standards and applicable laws.

6 (ii) There are, to the best of knowledge and belief, notransactions entered into by the company diving the yearwhich are fraudulent illegal or violation of the company'scode of conduct.

7 (i) The company shall obtain a certificate from a practicingProfessional Accountant/Secretary (CharteredAccountant/Cost and Management Accountant/CharteredSecretary) regarding compliance of conditions of CorporateGovernance Guidelines of the Commission and shall sendthe same to the shareholders along with theAnnual Report on a yearly basis.

7 (ii) The directors of the company shall state, in accordance withthe Annexure attached, in the directors' report whetherthe company has complied with these conditions.

ConditionNo.

Title


appropriate column)


Remarks(if any)

44


Report of the Chairmanof the Audit Committee

45

The audit committee, as a subcommittee of the board of directors, consists of the following members;

SL Name & Designation Position in the Committee

1. Faisal Ahmed Choudhury- Independent Director Chairman

2. Ahmed Mehdi Samdani- Director Member

3. Nadia Khalil Choudhury- Director Member

4. Mohius Samad Choudhury- Director Member

The Committee submits its report directly to the Board of Directors.

The Committee held two (2) meetings during the year 2012 – 2013 details of which is as follows:

Name of the Meeting Meeting held Date of meeting Attendance

Audit Committee meeting 2 (two) 25.06.2013 100%

25.04.2013 100%

Company Secretary who acts the Secretary to the Committee was also present in the meeting

Activities of the Audit Committee

• The Audit Committee reviewed the integrity of the financial statements of the company to ensure that these reflects a true and fair view of the company’s state of affairs for the year ended on June 30, 2013

• The Audit Committee also reviewed the quarterly and half yearly financial statements for their proper presentation and accuracy

• The Audit Committee discussed with the statutory auditors about the nature and scope of audit as well as post audit discussions to address areas of concern.

• Reviewed the internal Auditor’s reports and suggested appropriate actions where needed

• Approved the Internal Audit Plan and reviewed all independent assessments carried out by the internal audit function

• Reviewed the risk management process adopted by the company and the major risks facing the business along with related mitigation plans

• Reviewed the management of self assessment of the key controls of the business and the action plan put forward to address any issues.

The Audit Committee is of the view that risk management associated with the business is adequately controlled.

ChairmanAudit Committee

46


Value Added Statement

47

Source of Value Addition: 2012-2013 2011-2012

Revenue 625,680,209 558,666,376

Financial Expenses (70,741,354) (55,388,068)

Sub Total 554,938,855 503,278,308

Non-Operating Income 81,202,332 1,680,703

Sub Total 636,141,187 504,959,011

Operating Expenses

(excluding salary, allowances and

depreciation) (347,564,669) (320,219,410)

Total 288,576,518 184,739,601

Distribution of Added Value: 2012-2013 2011-2012

Salary & allowances 48,976,751 37,165,808

Provision for Tax 62,568,386 45,272,506

Depreciation 28,835,215 23,975,715

Dividend 130,000,000 -

Retained Earnings 18,196,166 78,325,572

Total 288,576,518

573

184,739,601

No of Employees 543

Value addition per employee 503,624 340,220

Salaries & Benefit to employees17%

22%

45%

16%

Paid to Govt. as Tax

Dividend to Shareholders

Retained by the Company

48


GOLDEN HARVEST AGRO INDUSTRIES LIMITED

Auditor’s Report&

Consolidated Financial Statementsfor the year ended 30 June 2013

Independent Auditor’s Reportto

The Shareholders ofGolden Harvest Agro Industries Limited

We have audited the accompanying consolidated financial statements of Golden Harvest Agro Industries Limited (“the company”) which comprise statement of financial position as at 30 June 2013 and the statement of comprehensive income, statement of changes in equity and statement of cash flows and also consolidated financial statements of the company and its subsidiary which comprise consolidated statement of financial position as at 30 June 2013 and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended and a summary of significant accounting policies and other explanatory notes.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Bangladesh Financial Reporting Standards (BFRS) and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judg-ment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

49

50


In our opinion, the financial statements of the company and the consolidated financial statements, give a true and fair view of the financial position of Golden Harvest Agro Industries Limited and its subsidiary, and of the results of their financial performance and cash flows for the year then ended in accordance with Bangladesh Financial Reporting Standards (BFRS) and comply with the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations.

We also report that:

a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof;

b) in our opinion, proper books of account as required by law have been kept by the company and its subsidiary so far as it appeared from our examination of these books;

c) the consolidated statement of financial position and the statement of comprehensive income dealt with by the report are in agreement with the books of account; and

d) the expenditure incurred was for the purposes of the company's business.

Dated: Dhaka; S. F. Ahmed & Co.28 October 2013 Chartered Accountants

51

2013 2012

ASSETS

Non-Current Assets 1,293,112,467 979,706,232

5 882,826,487 589,288,309

Leased Assets 6 20,088,937 22,321,040

Capital Work in Progress 7 390,197,043 368,096,883

Current Assets 1,321,162,367 569,726,182

Inventories 9 126,314,355 105,026,719

Advances, Deposits and Prepayments 10 457,966,239 282,941,071

Trade & Other Receivables 11 211,834,450 176,876,541

Fixed Deposits with Banks 100,000,000 -

Cash and Cash Equivalents 12 425,047,323 4,881,851

TOTAL ASSETS 2,614,274,834 1,549,432,414

EQUITY AND LIABILITIES

Shareholders' Equity 1,995,325,447 958,272,329

Share Capital 13 780,000,000 350,000,000

Share Premium 14 408,766,054 -

Revaluation Surplus 15 393,712,023 219,364,973


Non Controlling Interest 16 734 551 Total Equity 1,995,326,181 958,272,880

Non-Current Liabilities 65,230,629 83,614,290

Term Loan against Machinery 17 45,443,013 63,265,665

Deferred Tax Liability 18 14,079,495 8,643,756

Lease Obligation 19 5,708,121 11,704,869

Current Liabilities 553,718,024 507,545,244

Accounts and Other Payables 20 45,061,560 45,646,398

Accruals and Provisions 21 116,830,481 102,816,214

Short Term Loan 22 367,790,679 337,479,853

Current portion of Term Loan against Machinery 17 18,038,556 15,230,498

Current portion of Lease Obligation 19 5,996,748 6,372,281

TOTAL EQUITY AND LIABILITIES 2,614,274,834 1,549,432,414

Net Asset Value per Share 23 25.58 19.96

Director Managing Director

Dated, Dhaka28 October 2013

S. F. Ahmed & Co.Chartered Accountants

Amount in BDTNotes

The accompanying notes form an integral part of this financial statement and are to be read in conjunction therewith.

Property, Plant and Equipment

Signed in terms of our separate report of even date annexed

Director

Golden Harvest Agro Industries LimitedConsolidated Statement of Financial Position

As at June 30, 2013

52


2013 2012

Amount in BDTNotes

Golden Harvest Agro Industries LimitedStatement of Financial Position

As at June 30, 2013

ASSETS

Non-Current Assets 1,348,085,175 1,011,008,359

5A 656,752,982 428,852,265

Leased Assets 6A 20,088,937 22,321,040

Capital Work in Progress 7A 304,499,176 284,399,016

Investment in Subsidiary Company 8 366,744,080 275,436,038

Current Assets 1,162,527,391 378,949,692

Inventories 9A 71,421,299 59,183,694

Advances, Deposits and Prepayments 10A 350,294,475 206,164,957

Trade & Other Receivables 11A 216,616,557 112,836,417

Fixed Deposits with Banks 100,000,000 -

Cash and Cash Equivalents 12A 424,195,060 764,624

TOTAL ASSETS 2,510,612,566 1,389,958,051


Shareholders' Equity 1,995,325,447 958,272,329

Share Capital 13 780,000,000 350,000,000

Share Premium 14 408,766,054 -

Revaluation Surplus 15A 393,712,023 219,364,973


Total Equity 1,995,325,447 958,272,329


Term Loan against Machinery 17A 35,723,748 49,406,883

Deferred Tax Liability 18A 11,997,326 6,847,615

Lease Obligation 19 5,708,121 11,704,869


Accounts and Other Payables 20A 28,335,499 27,563,656

Accruals and Provisions 21A 45,698,465 36,992,007

Short Term Loan 22A 367,790,679 280,932,823

Current portion of Term Loan against Machinery 17A 14,036,533 11,865,588

Current portion of Lease Obligation 19 5,996,748 6,372,281

TOTAL EQUITY AND LIABILITIES 2,510,612,566 1,389,958,051

Net Asset Value per Share 23A 25.58 19.96



Dated, Dhaka;28 October 2013




Director

53

2013 2012

Amount in BDTNotes

Golden Harvest Agro Industries LimitedConsolidated Statement of Comprehensive Income

For the year ended June 30, 2013

Revenue 24 625,680,209 558,666,376 Cost of Goods Sold 25 (344,964,603) (303,724,488) Gross Profit 280,715,606 254,941,888

Operating Expenses (69,878,146) (71,459,066) Administrative Expenses 26 (43,995,827) (36,908,243) Selling & Distribution Expenses 27 (25,882,319) (34,550,823)

Profit from Operation 210,837,460 183,482,822

Interest & Other Income 28 81,202,332 1,680,703 Financial Expenses 29 (70,741,354) (55,388,068) Net Profit from Operation 221,298,438 129,775,457

Provision for Workers' Profit Participation Fund (10,533,806) (6,177,312) Net Profit before Tax 210,764,632 123,598,145

Provision for Income Tax (62,568,386) (45,272,506) Current Tax Expense 21.01 (57,132,646) (41,349,584) Deferred Tax Expense 18 (5,435,740) (3,922,922)

Net Profit after Tax 148,196,246 78,325,639

(80) (67)

148,196,166 78,325,572

Other Comprehensive Income

Revaluation Surplus of the Company 128,671,642 - Share of revaluation surplus from subsidiary 51,419,256 - Revaluation Surplus of Subsidiary Company 51,419,359 - Non controling Interest (103) - Total Comprehensive Income 328,287,064 78,325,572

1.53 1.62 0.90 0.02

Earning Per Share for the year 30 2.43 1.64




Non Controlling Interest

Earning Per Share (EPS) on net operating profit after tax

Director



Earning Per Share (EPS) on other Income after tax

Net Profit after tax attributable to Ordinary

Shareholders of the Company

54


2013 2012

Amount in BDTNotes

Golden Harvest Agro Industries LimitedStatement of Comprehensive Income


Revenue 24A 418,690,575 351,919,570

Cost of Goods Sold 25A (219,950,833) (178,038,240)

Gross Profit 198,739,742 173,881,330

Operating Expenses (60,204,411) (60,824,669)

Administrative Expenses 26A (36,682,249) (30,172,971)

Selling & Distribution Expenses 27A (23,522,162) (30,651,698)


Interest & Other Income 28A 79,615,582 1,029,714

Financial Expenses 29A (61,629,475) (38,775,702)

Net Profit from Operation 156,521,438 75,310,673

Provision for Workers' Profit Participation Fund (7,450,420) (3,584,789)

Net Profit before Tax 149,071,018 71,725,884

Provision for Income Tax (40,763,638) (27,006,415)

Current Tax Expense 21A.01 (35,613,926) (23,574,222)

Deferred Tax Expense 18A (5,149,712) (3,432,193)

Net Profit after Tax 108,307,380 44,719,469


Revaluation Surplus of the Company 128,671,642 -

Share of profit from subsidiary 39,888,786 33,606,103

Share of revaluation surplus from subsidiary 51,419,256

Revaluation Surplus of Subsidiary Company 51,419,359 -

Non controling Interest (103) -

Total Comprehensive Income 328,287,064 78,325,572

1.53 1.62

0.90 0.02

Earning Per Share for the year 30A 2.43 1.64




Earning Per Share (EPS) on net operating profit after tax

Earning Per Share (EPS) on other Income after tax


Director


55

Amount in BDT

Particulars Total

Balance as at 01.07.2011 350,000,000 - 225,346,706 318,269,063 893,615,769

Deferred expenses written off (retrospective effect BAS-8)

- - - (13,669,012) (13,669,012)

Restated Opening Balance as at 01.07.2011

350,000,000 - 225,346,706 304,600,051 879,946,757

Depreciation adjustment on revaluation surplus - - (5,981,733) 5,981,733 -

Net Profit after Tax - - - 78,325,639 78,325,639Share of non controlling Interest - - - (67) (67)Balance as at 30.06.2012 350,000,000 - 219,364,973 388,907,356 958,272,329

Balance as at 01.07.2012 350,000,000 - 219,364,973 388,907,356 958,272,329Depreciation adjustment on revaluation surplus - - (5,743,848) 5,743,848 -

Issuance of odinary share (IPO) 300,000,000 408,766,054 - - 708,766,054 Issuance of Bonus Share 130,000,000 - - (130,000,000) -Net Profit after Tax - - - 148,196,246 148,196,246Revaluation surplus on fixed asset during the year - - 180,091,001 - 180,091,001 Share of non controlling interest - - (103) (80) (183) Balance as at 30.06.2013 780,000,000 408,766,054 393,712,023 412,847,370 1,995,325,447

Director Director



RevaluationSurplus

Managing Director

SharePremium

Golden Harvest Agro Industries LimitedConsolidated Statement of Changes in Equity


Share CapitalRetainedEarnings

(Restated)


56


Balance as at 01.07.2011 350,000,000 - 225,346,706 318,269,063 893,615,769

Deferred Expenses Written off (retrospective effect IAS-8)

- - - (13,669,012) (13,669,012)

Restated Opening Balance as at 01.07.2011

350,000,000 - 225,346,706 304,600,051 879,946,757

Depreciation Adjustment onRevaluation Surplus

- - (5,981,733) 5,981,733 -

Net Profit after Tax - - - 78,325,572 78,325,572Balance as at 30.06.2012 350,000,000 - 219,364,973 388,907,356 958,272,329

Balance as at 01.07.2012 350,000,000 - 219,364,973 388,907,356 958,272,329Depreciation Adjustment on Revaluation Surplus

- - (5,743,848) 5,743,848-

Issuance of Ordinary Shares (IPO) 300,000,000 408,766,054 - - 708,766,054Issuance of Bonus Shares 130,000,000 - - (130,000,000) -Net Profit after Tax - - - 108,307,380 108,307,380Share of Profit from Subsidiary - - - 39,888,786 39,888,786

Revaluation Surplus on Fixed Asset during the year :

The Company - - 128,671,642 - 128,671,642Share of Subsidiary Company - - 51,419,256 - 51,419,256Balance as at 30.06.2013 780,000,000 408,766,054 393,712,023 412,847,370 1,995,325,447

Director Director Managing Director



Signed in terms of our separate report of even date annexed.

Golden Harvest Agro Industries LimitedStatement of Changes in EquityFor the year ended June 30, 2013

Amount in BDT

Particulars TotalRevaluation

SurplusShare

Premium Share CapitalRetainedEarnings

(Restated)

57

2013 2012

Amount in BDT

Cash Flows from Operating Activities

Collections from Customers 590,411,807 543,285,206

Payments for Operating Costs & Other Expenses (355,742,202) (396,814,088)

Tax paid (58,381,748) (65,957,605)

Net Cash generated from Operating Activities 176,287,857 80,513,513

Cash Flows from Investing Activities

Acquisitions of Property, Plant and Equipment (142,282,392) (75,222,040)

Capital Work in Progress (22,100,160) (374,644)

Short Term Investment (100,000,000) -

Advance Finance to Contract Farmers & others (138,688,486) (132,546,434)

Net Cash used in Investing Activities (403,071,038) (208,143,118)

Cash Flows from Financing Activities

Payment against finance lease (6,372,281) (5,372,394)

Borrowings from Banks/Financial Institutions 15,296,234 192,578,227

Share Premium 408,766,054 -

Issuane of ordinary share 300,000,000 -


Net cash provided by financing activities 646,948,653 131,817,765

Net changes in cash and cash equivalents 420,165,472 4,188,160

Cash and cash equivalents at the beginning of the year 4,881,851 693,691

Cash and cash equivalents at the end of the year 425,047,323 4,881,851

Operating Cash flow Per Share 2.26 1.68




Signed in terms of our separate report of even date annexed.

Golden Harvest Agro Industries LimitedConsolidated Statement of Cash Flows


58


2013 2012

Amount in BDT



Payments for Operating Costs & Other Expenses (266,116,600) (217,460,425)

Tax paid (39,427,309) (65,854,375)



Acquisitions of Property, Plant and Equipment (122,872,992) (73,766,690)

Capital Work in Progress (20,100,160) (374,644)

Short Term Investment (100,000,000) -

Advance Finance to Contract Farmers & others (138,688,486) (132,546,434)



Payment against finance lease (6,372,281) (5,372,394)

Borrowings from Banks/Financial Institutions 75,345,666 188,753,264

Share Premium 408,766,054 -

Issuane of ordinary share 300,000,000 -


Net cash provided by financing activities 716,109,964 144,605,168

Net changes in cash and cash equivalents 423,430,436 318,119

Cash and cash equivalents at the beginning of the year 764,624 446,505

Cash and cash equivalents at the end of the year 424,195,060

1.14

764,624

Operating Cash flow Per Share 1.30




Golden Harvest Agro Industries LimitedStatement of Cash Flows



59

Golden Harvest Agro Industries LimitedNotes to the Consolidated Financial Statements

For the year ended on June 30, 2013

1. Reporting Entity

Company profile

Golden Harvest Agro Industries Limited was incorporated on August 10, 2004 as a Private Limited Company; vide Reg. No.-C-53850(515)/2004 under the Companies Act, 1994 and converted to public limited company on 30 June 2010.The company has been listed to both Dhaka and Chittagong Stock Exchange on 04 March 2013. The principal place of business and the registered office of the Company is at SPL Western Tower, Level # 5, Space Code # 502, 186, Gulshan,-Tejgaon Link Road, Tejgaon Industrial Area, Dhaka-1208. The factory is located at Bokran, Monipur, Bobanipur, Gazipur Sadar, Gazipur.

Nature of Business Activities

The Company owns and operates the business of growing, procuring, purchasing, processing, packaging, warehousing, transporting, exporting, importing, distributing and selling agriculture based food, food products, The company manufactures, imports and exports all kinds of food items, frozen & dry foods, jam jelly, sauce, pick-les, fruits and all kinds of allied products, vegetables, candy and any other allied prod-ucts for the benefit of the company. As per the object clause of the Memorandum the company could also establish any industrial processing unit based on agro based raw materials products within the country and export the same or meet local demand.

1.2 Subsidiary Company

1.2.1 Golden Harvest Ice Cream Limited (Previous name was Golden Harvest Fish Processing Limited)

Golden Harvest Ice Cream Limited formerly known as Golden Harvest Sea Food and Fish Processing Limited was incorporated on January 05, 2005, vide Reg. No.-C-55601(2285)/05 under the Companies Act, 1994. The objectives of the company are to carry out the business, promote & establish factories and chain shop or shops; manufacture and manage food and food items, Dairy, Ice Cream, baby food, soft drink, mineral water, salt & iodised salt and allied products in Bangladesh and setting ventures and business is in connection therewith. Golden Harvest Agro Industries Limited acquired 99.9998% of shares of Golden Harvest Sea Food and Fish Processing Limited by exchanging its own shares and acquired its 4,99,999 Ordinary Shares.

60


Golden Harvest Sea Food and Fish Processing Limited’ (GHSFFPL), has been converted into Golden Harvest Ice Cream Limited (GHICL) on 16th May 2013 through the office of Registrar of Joint Stock Companies and Firms.

Golden Harvest Ice Cream will launch a wide range of Ice Creams including new varie-ties alongside regulars such Ice Pop, Lollies (Bi Flavours, Tri flavours and Twisters), variety of Choc-bars and Cones, Cups, Liters and Ice Cream Cakes, Sorbets etc. Also the Golden Harvest Agro is the Parent company of Golden Harvest Ice Cream Ltd.

2. Basis of Preparation of Financial Statements

2.1 Basis of Measurement of Elements of Financial Statements

The financial statements have been prepared under the Historical Cost convention as modified to include the revaluation of certain fixed assets which are stated at revalued amount. Accordingly, historical cost is employed to determine the monetary amounts at which the elements of the financial statements are to be recognized and carried in the statement of financial position and statement of comprehensive income.

Under the Historical Cost, assets are recorded at the amount of cash equivalents paid or the fair value of the consideration given to acquire them at the time of their acquisi-tion. Liabilities are recorded at the amount of proceeds received in exchange for the obligation, or in some circumstances (for example, income taxes), at the amounts of cash or cash equivalents expected to be paid to satisfy the liability in the normal course of business.

2.2 Statement on Compliance with Local Laws The financial statements have been prepared in compliance with the requirements of

the Companies Act, 1994, Securities and Exchange Rules, 1987 and other relevant local laws as applicable.

2.3 Statement on Compliance of Bangladesh Accounting Standards The financial statements have been prepared in accordance with the applicable

Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standard (BFRS) adopted by the Institute of Chartered Accountants of Bangladesh (ICAB) based on International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS).

2.4 Going Concern At each year end management of the Company makes assessment of going concern

as required by BAS-1. The company has adequate resources to continue in operation for the foreseeable future and has wide coverage of its liabilities. For this reason, the directors continue to adopt going concern assumption while preparing the financial statements.

61

2.5 Accrual Basis of Accounting The financial statements have been prepared, except cash flow information, using the

accrual basis of accounting.

2.6 Functional and presentation currency

The financial statements are prepared and presented in Bangladesh Taka/BDT, which is the company’s functional currency. The Company earns its major revenues in BDT and all other incomes/expenses and transactions are in BDT and the competitive forces and regulations of Bangladesh determine the sale prices of its goods and services. Further, the entire funds from financing activities are generated in BDT.

2. Basis of Preparation of Financial Statements (Contd.)

2.7 Use of Estimates and Judgments

The preparation of financial statements in conformity with Bangladesh Financial Reporting Standards requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses and for contingent assets and liabilities that require disclosure, during and at the date of the financial statements.

Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions of accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected as required by BAS 8: “Accounting Policies, Changes in Accounting Estimates and Errors”.

2.8 Basis of Consolidation of Operations of Subsidiary

The financial statements of the company and its subsidiaries, as mentioned in note-1.2, have been consolidated in accordance with Bangladesh Accounting Standard (BAS) 27 “Consolidated and Separate Financial Statements” and Bangladesh Financial Reporting Standard 3 “Business Combination”. Figures used in the consolidated financial statements are based on the audited financial statements of Golden Harvest Ice Cream Limited. Intra-group balances and unrealized income and expenses arising from intra-group transactions, have been eliminated in preparing the consolidated financial statements.

2.9 Equity Accounting

The investment in the subsidiary company has been accounted for under Equity Accounting Method in terms of paragraph 38(b) of BAS 27, “Consolidated and Separate Financial Statements.

62


2.10 Structure, Content and Presentation of Financial Statements

Being the general purpose financial statements, the presentation of these financial statements is in accordance with the guidelines provided by BAS 1: “Presentation of

Financial Statements”. A complete set of financial statements comprise:

i) Statement of Financial Position as at June 30, 2013;ii) Statement of Comprehensive Income for the year ended June 30, 2013;iii) Statement of Changes in Equity for the year ended June 30, 2013;іv) A statement of Cash Flows for the year ended June 30, 2013; andv) Notes comprising a summary of significant accounting policies and other explanatory

information to the accounts for the year ended June 30, 2013

2.11 Reporting Period

The reporting period of the company covers one year from 1 July to 30 June.

3. Significant accounting policies

3.1 Revenue In compliance with requirements of BAS-18: Revenue, revenue receipts from

customers against sales is recognized when significant risk and rewards of ownership have been transferred to buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably and there is no continuing management involvement with the goods. Revenue is recognized net of value added tax, supplementary duty and service charge collectible from clients as well as rebate and discount allowed to customers in compliance with the requirements of BAS 18: “Revenue”.

3.2 Property, Plant and Equipment

Initial Recognition and Measurement

An item shall be recognized as property, plant and equipments if, and only it is prob-able that future economic benefits associated with the item will flow to the entry, and the cost of the item can be measured reliably.

Property, plant and equipment are initially recognized at cost and subsequently land, buildings & civil constructions and plant & machineries are stated at fair value. The property, plant and equipment are presented at cost/fair value, net of accumulated depreciation and/or accumulated impairment losses, if any. The cost of an item of property, plant and equipment comprises its purchase price, import duties and non-refundable taxes, after deducting trade discount and rebates, and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the intended manner. The cost also includes the cost of replacing part of the property, plant and equipment and borrowing costs for long-term debt availed for the construction/Implementation of the PPE, if the recognition criteria are met.

63

Subsequent costs

The cost of replacing part of an item of property, plant and equipments is recognised in the carrying amount of an item if it is probable that the future economic benefits embodied within the part will flow to the company and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in the profit and loss account as `Repair & Maintenance ‘when it is incurred.

Subsequent Measurement

Property, Plant and equipment are disclosed at cost less accumulated depreciation consistently over years. On 30 June 2009, 30 June 2011 and 30 June 2013. Land and Land Developments, Building and other constructions and Plant and Machinery have been revalued to reflect fair value (prevailing market price) thereof following “Current Cost Method”.

Depreciation on Property, Plant and Equipment

Depreciation is provided to amortize the cost or valuation of the assets after commissioning, over the period of their expected useful lives, in accordance with the provisions of BAS 16: Property Plant and Equipment. Depreciation of an asset begins when it is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. Depreciation of an asset begins when it is available for use. Depreciation is charged on all Property, Plant and Equipment except land and land developments on reducing balance method at the following rates:

Particular of Assets Rate of Depreciation

Buildings and other constructions 2.5% Plant & Machinery 5% Office Equipment 10% Furniture and Fixtures 10% Vehicle 10% Freezer 10%

Impairment

At each year end, the company assesses whether there is any indication that the carrying amount of an asset exceeds its recoverable amount. An impairment loss is recognized as an expense in the statement of comprehensive income in accordance with the provision of Bangladesh Accounting Standards BAS 36 unless the asset is carried at revalued amount in accordance with BAS 16. No impairment loss was recognized for the year ended 30 June 2013 as there were no such indication existed as on the that date.

64


Revaluation of Property Plant and Equipment of Golden Harvest Agro Industries Limited

The Company made revaluation of the Company’s Land and Land developments, Buildings and Plant and Machinery as of 30 June 2009, 30 June 2011 and 30 June 2013 to reflect fair value thereof in terms of Depreciated current cost thereof.

Revaluation of Property, Plant and Equipment of Golden Harvest Ice Cream Limited

The Company made revaluation of the Company’s Land and Land developments and Plant and Machinery as of 30 June 2009, 30 June 2011 and 30 June 2013 to reflect fair value thereof in terms of Depreciated current cost thereof.

The increase in the carrying amount of revalued assets is recognized in the separate component of equity under the head Revaluation Surplus. Other Fixed Assets were kept outside the scope of revaluation works. These are expected to be realizable at written down value (WDV) thereof mentioned in the statement of financial position of the company.

3.3 Capital work-in-progress:

Property, plant and equipment under construction/acquisition have been accounted for as capital work-in-progress until construction/acquisition is completed and measured at cost.

3.4 Inventories Inventories stated at lower of cost and net realizable value as prescribed by BAS-2:

Inventories. The cost is calculated on FIFO method in a consistent manner. Costs comprise of cost incurred in the normal course of business in bringing out the inventories to its location and conditions. Where necessary, provision is made for obsolete, slow moving and defective inventories identifies at the time if physical verification of inventories.

Net realizable value is based on estimated selling price less any further costs expected to be incurred to make the sale effective.

3.5 Cash and Cash Equivalents

Cash and cash equivalents consists of cash in hand and with banks on current, deposit accounts and short term investments (FDR for the period of 1 to 3 months) which are held and available for use by the company without any restriction. There is insignificant risk of change in value of the same.

65

3.6 Earnings Per Share (EPS)

Basic Earnings per share

Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary equity holders of the entity by the weighted average number of ordinary shares outstanding during the year.

Diluted Earnings per Share

For the purpose of calculating diluted earnings per shares, the company adjust profit or loss attributable to each ordinary equity holders, and weighted average number of shares outstanding, for the effects of all dilutive potential ordinary shares. As the company has no dilutive potential ordinary shares during the reporting period, diluted earnings per share has not been calculated.

3.7 Foreign Currency Transactions

Foreign currency transactions are recorded, on initial recognition in the functional currency at the spot exchange rate ruling at the transaction date.

At the end of each reporting period in compliance with the provision of BAS 21: The Effects of Changes in Foreign Exchange Rates.

(a) Foreign currency monetary items are translated using the closing rate.(b) Non-monetary items that are measured in terms of historical costs in a foreign

currency are translated using the exchange rate at the date of the transaction.(c) Non-monetary items that are measured at fair value in a foreign currency is translated

using the exchange rate at the date when the fair value is determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rate different from those at which they were translated on initial recognition during the period or in previous financial statements is recognized in profit or loss in the period in which they arise.

3.8 Borrowing Cost In compliance with the requirement of BAS-23 (borrowing cost), borrowing cost that

are directly attributable to the acquisition, construction or production of a qualifying asset form part of the cost of the asset and, therefore capitalised. Other borrowing costs are recognised as an expense

3.9 Workers’ Profit Participation Fund (WPPF)

The Company provides 15% of its profit before Tax after charging contribution to WPPF in accordance with the Bangladesh Labour Act, 2006.

3.10 Provisions, Accrued Expenses and Other Payables

Provisions and accrued expenses are recognized in the financial statements in line with the Bangladesh Accounting Standard (BAS) 37 “Provisions, Contingent Liabilities and Contingent Assets” when

66


• the Company has a legal or constructive obligation as a result of past event. • it is probable that an outflow of economic benefit will be required to settle the

obligation. • a reliable estimate can be made of the amount of the obligation.

Other Payables are not interest bearing and are stated at their nominal value

3.11 Financial Instruments

Financial assets include available for sale assets, held to maturity assets, assets held for trading, loans and receivable and cash and cash equivalent.

Financial liabilities include borrowings, others financing and bank loan and accounts payables.

Recognition

An entity recognizes a financial assets or liabilities in its statement of financial position when, and only when, the entity becomes a party to the contractual provision of the instrument.

Subsequent Measurement

Asset Category

Available for saleFinancial assets:1. FDR

Financial assets thatare either electivelydesignated into thecategory or do notfall into any othercategory.

Fair Value i) Realized gain-loss/Dividend Income/Interest income to Statement of comprehensive income.

ii) Unrealized gain-loss to Statement of Comprehensive Income.

Loans and receivables:

1. Trade Receivable2. Other Receivable3. Advance Deposit and prepayment

Unquoted financialassets with fixed ordeterminable payments.

Amortizedcost/cost

Realized gain-loss/Interest Incomeforeign currency gain loss toStatement of ComprehensiveIncome.

DescriptionMeasurementafter initialrecognition

Recognition

Financial liabilities atcost/amortized cost:

1. Short term loan.2. Trade creditors3. Others payables.

All financial liabilitiesother than those at fairvalue through profitand loss.

Amortized cost Realized gain-loss/Interest Incomeforeign currency gain loss toStatement of ComprehensiveIncome.

67

3.12 Leases

Leases are classified as per BAS-17.

Finance Lease

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incident to ownership.

• at commencement of the lease term, finance leases is recorded as an asset and a liability at the lower of the fair value of the asset and the present value of the mini-mum lease payments (discounted at the interest rate implicit in the lease)

• finance lease payments should be apportioned between the finance charge and the reduction of the outstanding liability (the finance charge to be allocated so as to produce a constant periodic rate of interest on the remaining balance of the liability)]

• the depreciation policy for assets held under finance leases is consistent with that for owned assets

Operating Lease

For operating leases, the lease payment has been recognized as an expense in the income statement over the lease term on a straight-line basis.

3.13 Segment Reporting

No geographical segment reporting is applicable for the Company as required by BAS 14:”Segment reporting”, as the Company operates in a single geographical area.

3.14 Statement of Cash Flows

The Statement of Cash Flows has been prepared in accordance with the requirements of BAS 7: Statement of Cash Flows. The cash generating from operating activities has been reported using the Direct Method as prescribed by the Securities and Exchange Rules, 1987 and as the benchmark treatment of BAS 7 whereby major classes of gross cash receipts and gross cash payments from operating activities are disclosed.

3.15 Related Party Disclosures

The Company carried out a number of transactions with related parties. The informa-tion as required by BAS 24: “Related party Disclosure” has been disclosed in a sepa-rate notes to the accounts (Note-32.3).

3.16 Taxation

Current Tax

Current Tax is calculated and provision is made in accordance the Income Tax Ordinance, 1984. The corporate tax rate for the Company is 27.5%.

68


Deferred Tax

Deferred Tax is calculated and provision is made in accordance with BAS-12. Deferred Tax has been provided for on temporary timing deference on depreciation during the year at 27.50% with effect from 1st July 2010.

Deferred tax assets and liabilities are measured at the tax rate that are expected to apply to the periods when the assets and liabilities giving rise to them are realized or settled, based on the tax rates (tax law) that have been enacted or substantively enacted by the reporting date. The measurement reflects the consequences that would follow from the manner in which the group, at the reporting date, recovers or settles the carrying amount of its assets and liabilities.

3.17 Contingent Assets and Liabilities

A Contingent asset is disclosed when it is a possible asset that arises from the past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.

A contingent liability is disclosed when it is a possible obligation that arises from the past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.

The Company has no contingent assets or liabilities which require disclosures under BAS:37. Contingent assets and contingent liabilities are not recognized in the financial statements.

3.18 Comparative Information

Comparative information has been disclosed in respect of the previous year for all numerical information in the current financial statement. Narrative and descriptive information for comparative information have also been disclosed whenever it is relevant for understanding of current year’s financial statements.

4 Risk Exposure

4.1 Interest Rate Risk

Interest rate is concerned with borrowed funds of short term & long-term maturity. Interest rate risk is the risk that Company faces due to unfavorable movements in the interest rates. Volatility in money market & increase demand for loans /investment funds raise the rate of interest. A change in the government’s policy also tends to increase the interest rate. High rate of interest enhances the cost of fund of a com-pany. Such rises in interest rates however mostly affect companies having floating rate loans.

69

Management Perception

Golden Harvest Agro Industries Ltd. maintains low debt/ equity ratio; and accordingly, adverse impact of interest rate fluctuation is insignificant. The project was started with the Company’s own funds and the capacity was also expanded with own funds. Addi-tionally, the management of the Company emphasizes on equity base financing to reduce the dependency on borrowing. Therefore, management perceives that the fluctuation of interest rate on borrowing would have little impact upon the perfor-mance of the Company.

4.2 Exchange Rate Risk

If exchange rate is increased against local currency opportunity is created for getting more revenue against sale in local currency. On the other hand if exchange rate goes down margin is squeezed in local currency.


The products of the company are sold against foreign (1.66%) as well as local currency (98.34%) and payments for raw materials are also made mostly in local currency. The exchange rate of the country traditionally witnessed upward trends, which makes ample opportunity of export. If foreign exchange rate rises, export will increase and local sales will be less and vice versa. Therefore, volatility of exchange rate will have no impact on profitability of the Company.

4.3 Industry Risks

Industry risk refers to the risk of increased competition from foreign and domestic sources leading to lower prices, revenues, profit margin, and market share which could have an adverse impact on the business, financial condition and results of operation. Agro industry in Bangladesh is an emerging sector with vast local demand for its different product lines. Locally produced frozen products now play a significant role in this sector, which has been dominated by imports in the past. However, the infrastructure required for this industry is inadequate in Bangladesh, as can be noted below:

• No organized collection centers for agricultural produce exist in Bangladesh; as a result, there is a high fluctuation in prices both for the growers and for processors.

• Absence of Cold Storage or Cold Chains although the whole process of collection, processing and distribution depends on cold temperature maintenance due to the nature of the finished product.


Golden Harvest Agro Industries Ltd. has established its brand name in Frozen Food market with its quality products, range of products and customer services. However,

70


to develop an infrastructure, both public and private sector participation is required. This is the focal point of Golden Harvest’s future expansion plans. To eliminate fluctua-tion in prices both for the growers and for the processors, Golden Harvest will organ-ize collection centers to eliminate intermediary cost for both the parties. Deploying 15,000 refrigerators with 24 cold storages at -30 degree Celsius nationwide, Golden Harvest will have infrastructure backbone of Cold Chain which will ensure proper supply of Frozen Foods all over the country through its 50 temperature controlled transport. Our neighboring country like India has over 50 cold chains, generating revenue over US$3.5 billion which is targeted to reach US$8.5 Billion by 2015.

4.4 Market Risks

Market risk refers to the risk of adverse market conditions affecting the sales and profitability of the company. Mostly, the risk arises from falling demand for the product or service which would harm the performance of the company. On the other hand, strong marketing and brand management would help the company to increase their customer base.


Market for Ready to Cook frozen foods in Bangladesh is growing at an exponential rate with growth of urbanization and incremental income level of consumers along with their preference to convenience. In spite of high growth of this market, there is scarcity of investment in this sector which creates a huge demand-supply gap result-ing in very expensive imports. International market for Ready to Cook frozen food sector is already matured and is growing further at a high rate. Golden Harvest Agro Industries Ltd. is one of the earliest entrants in international market with very promis-ing and loyal customer base in USA, Canada, Australia, Europe and Middle East. In Bangladesh market, Golden Harvest has made a rapid penetration and has captured the leading position with its unique branding and positioning strategy taking opportu-nity of this fast growing market.

4.5 Operational Risks

The core business operation of Golden Harvest Agro Industries Ltd. is directly related to very low temperature maintenance. Country wide shortage of power is compelling the company to utilize captive power which builds up cost. Also port congestion and inland immobility due to political instability poses a great operational risk to Golden Harvest Agro Industries Ltd.

71


Bangladesh Government is meeting this challenge by opening the energy generation to private sector; and also making massive investment, which is expected to ensure availability of energy for uninterrupted operation. The company perceives that allocation of its resources properly with contingency approaches can reduce this risk factor to great extent. However, in order to minimize the operational risks due to shortage of power supply, Golden Harvest Agro Industries Ltd. itself has own captive sources of power Generators in addition of existing REB (Rural Electrification Board) sources that will support production and also planning to engage more capacity of power generation to cope with the coming needs. Moreover proposed projects will have requisite back up captive power support to run their daily operation without any hindrance.

4.6 Liquidity Risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price.


he Company's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation. Typically, management ensures that it has sufficient cash and cash equivalent to meet expected operational expenses, including the servicing of financial obligation through preparation of the cash forecast, prepared based on time line of payment of the financial obligation and accordingly arrange for sufficient liquidity/fund to make the expected payment within due date.

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75

30 June 2013

7. Capital Work in Progress

Opening Balance 368,096,883 367,722,239Add: Addition during the year 22,100,160 374,644Less : Transferred to Property, Plant and Equipment - - Closing Balance 390,197,043 368,096,883

7A. Capital Work in Progress

Opening Balance 284,399,016 284,024,372Add: Addition during the year 20,100,160 374,644 Less : Transferred to Property Plant and Equipment - - Closing Balance 304,499,176 284,399,016

8. Investment in Subsidiary Company

Golden Harvest Ice Cream Ltd. 275,436,038 241,829,935Add: Share of net profit after tax of subsidiary 39,888,786 33,606,103Add: Share of revaluation Surplus during the year of subsidiary 51,419,256 -

366,744,080 275,436,038

9. Inventories

Finished Goods 62,952,143 52,355,964 Raw Materials 36,959,789 28,672,938 Packing Materials 25,337,792 23,997,816 Stores in Transit 1,064,631 -

126,314,355 105,026,719

9A. Inventories

Finished Goods 36,706,898 29,089,250Raw Materials 21,524,525 20,308,320Packing Materials 12,125,245 9,786,124Stores in Transit 1,064,631 -

71,421,299 59,183,694

10. Advances, Deposits and Prepayments

Advance to Contract Farmer, Suppliers & Service Providers 420,175,965 276,584,007 25,892,315 -

Advance Taxes 10,065,431 2,843,692Advance VAT 1,096,058 2,707,862Lease Deposits 736,470 805,510

457,966,239 282,941,071

10A. Advances, Deposits and Prepayments

Advance to Contract Farmer, Suppliers & Service Providers 339,449,008 200,691,483- -

Advance Taxes 9,012,939 1,960,102Advance VAT 1,096,058 2,707,862Lease Deposits 736,470 805,510

350,294,475 206,164,957This is unsecured and considered good.(a) The maximum amount due from the Suppliers & Service Providers.(b) No amount was due by the directors, managing agent, managers and other officers of the company a nd any of them severally or jointly with any other person.

11. Trade and Other ReceivableTrade Receivable (Note - 11.01) 191,132,573 165,425,324Other Receivable (Note - 11.02) 20,701,877 11,451,216

211,834,450 176,876,541

Amount in BDT

Golden Harvest Agro Industries Ltd. (GHAIL) acquired 99.9998% shares ofGolden Harvest Ice Cream Ltd (GHICL) on 30 June 2010 in exchangefor its own shares.

Advance against Land

Advance against Land

30 June 2012

76


11.01 Trade Receivable

Export ReceivablesLocal Sales Receivables

7,842,720 7,021,263 183,289,853 158,404,061

191,132,573 165,425,324

SLConsolidate

Amount in BDT 2013

ConsolidateAmount in BDT

2012

I- -

II 190,607,123 164,759,400

III 525,450 665,924

IV - -

V - -

VI- -

191,132,573 165,425,324

11.02 Other Receivable:

Export Incentive Receivable 11,933,383 11,451,216Interest Receivable 8,768,494 -Inter Company Transaction -

20,701,877 11,451,216

This is unsecured, considered good and is falling due within one year.

11A. Trade and Other ReceivableTrade Receivable (Note - 11A.01) 118,680,421 105,355,018Other Receivable (Note - 11A.02) 97,936,136 7,481,399

216,616,557 112,836,417

11A.01 Trade Receivable

Export Receivables 7,842,720 7,021,263Local Sales Receivables 110,837,701 98,333,755

118,680,421 105,355,018

11A.02 Other Receivable:

Export Incentive Receivable 7,654,816 7,481,399Interest Receivable: 8,768,494 -Inter Company Transaction (Note - 11A.03) 81,512,826 -

97,936,136 7,481,399

11A.03 Inter Company Transaction

Golden Harvest Ice Cream Ltd. 81,512,826 -

81,512,826 -

This is unsecured and considered good.

12. Cash and Cash Equivalents

Cash in hand: 81,061 17,95229,783 9,91051,278 8,042

Cash at bank (Note # 12.01) 18,394,279 4,863,899Fixed Deposits with Banks (Period 1 to 3 months) (Note # 12.02) 406,571,983 -

425,047,323 4,881,851

Accounts Receivable considered doubtful or bad

This is unsecured, considered good except for the portion of doubtful debtors and is fallingdue within one year. Classification schedule as required by schedule XI of CompaniesAct 1994 are as follows:

The maximum amount of receivable due by any director or other officerof the company

Accounts Receivable considered good in respect of which the companyis fully secured

TOTAL

Cash in hand at Head Office

Accounts Receivable considered good in respect of which the company holds nosecurity other than the debtor personal security

Accounts Receivable due by any director or other officer of the company

Accounts Receivable due by Common management

Particulars

Cash in hand at Factory Office

30 June 2013Amount in BDT

30 June 2012

77


30 June 2012

12.01 Cash at Banks

Golden Harvest Agro Industries Ltd

First Security Islami bank Ltd.

United Commercial Bank Ltd.

Bankasia Ltd


The City Bank Ltd.

The City Bank Ltd.

The City Bank Ltd.

The City Bank Ltd.

The City Bank Ltd.

Dutch Bangla Bank Ltd.

Mercantile Bank Ltd.

17,580,499

213,609

4,112,557

180,225

499,694

274,667

10,949,114

717,434

50,342

6,839

524,001

52,017

753,101

2,944

-

680,751

-

-

-

-

-

-

67,602

1,804

Golden Harvest Ice Cream Ltd.


First Security Islami bank Ltd.

Mercantile Bank Ltd.

813,780

16,214

12,644

784,922

18,394,279

4,110,798

17,364

4,010,139

83,295

4,863,899

CD A/c # 111000 14404

CD A/c # 11100000897

CD A/c # 012911100002037

12.02 Fixed Deposits with Banks (Period 1 to 3 months) 406,571,983 -

Mercatile Bank Limited










First Security Islami Bank Limited

Lankabangla Finance Limited





United Commercial Bank Limited








10,221,194

10,221,194

10,221,194

10,221,194

10,221,194

10,221,194

10,221,194

10,221,194

10,221,194

10,221,194

14,360,043

20,000,000

20,000,000

20,000,000

20,000,000

20,000,000

20,000,000

20,000,000

20,000,000

20,000,000

20,000,000

30,000,000

30,000,000

30,000,000

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

12A. Cash and Cash Equivalents

Cash in hand: 42,578 11,52312,752 6,58729,826 4,936

Cash at bank (Note - 12A.01) 17,580,499 753,101Fixed Deposits with Banks (Period 1 to 3 months)(Note - 12.02) 406,571,983 -

424,195,060 764,624

Cash in hand at Head OfficeCash in hand at Factory Office

A/C No.

CD-111 00 000 880

CD-111 000 14410

CD-05633000010

CD-111 000000739

CD -11010046870001

HVT-2921004687001

USD-5121004687001

EURO 5121004687002

GBP 2151004687003

CD- 13813

CD-012911100002020

78


79

30 June 2013 30 June 2012Amount in BDT

12A.01 Cash at Banks

Golden Harvest Agro Industries LtdFirst Security Islami bank Ltd. CD-111 00 000 880 213,609 2,944United Commercial Bank Ltd. CD-111 000 14410 4,112,557 -Bankasia Ltd CD-05633000010 180,225 680,751United Commercial Bank Ltd. CD-111 000000739 499,694 -The City Bank Ltd. CD -11010046870001 274,667 -The City Bank Ltd. HVT-2921004687001 10,949,114 -The City Bank Ltd. USD-5121004687001 717,434 -The City Bank Ltd. EURO 5121004687002 50,342 -The City Bank Ltd. GBP 2151004687003 6,839 -Dutch Bangla Bank Ltd. CD- 13813 524,001 67,602Mercantile Bank Ltd. CD-012911100002020 52,017 1,804

17,580,499 753,101

13. Share Capital

Authorized Share Capital 1,000,000,000 1,000,000,000

1,000,00,000 ordinary Shares of BDT 10 each

Issued, Subscribed and Paid up Capital58,750,000 Ordinary Share @ Tk. 10 each fully paid-up against cash 587,500,000 287,500,000

142,500,000 12,500,000

50,000,000 50,000,000780,000,000 350,000,000

The above balance has been received from the following :

30-06-2013 30-06-2012 30-06-2013 30-06-2012DirectorsMr. Matthew Graham Stock Chairman 2.00 3.71 1,560,000 1,300,000Mr. Ahmed Rajeeb Samdani Managing Director 22.31 41.44 17,403,200 14,502,667Mr. Ahmed Mehdi Samdani Director 2.00 3.71 1,560,000 1,300,000Ms. Nadia Khalil Choudhury Director 2.00 3.71 1,560,000 1,300,000Mr. Azizul Huque Director 2.26 4.20 1,762,560 1,468,800Mr. Moqsud Ahmed Khan Director 2.46 4.57 1,920,000 1,600,000Mr. Mohius Samad Choudhury Director 2.00 3.71 1,560,000 1,300,000

35.03 65.06 27,325,760 22,771,467OthersForeign Investors 0.01 - 3,900 -Institutions 19.94 - 15,554,981 -Genaral Shareholders 45.02 34.94 35,115,359 12,228,533

64.97 34.94 50,674,240 12,228,533

100 100 78,000,000 35,000,000

Range with Shareholding Position:

Range of HoldingsIn number of Shares 2013 2012 2013 2012 2013 2012

28,992 - 0.89 - 8,544,527 -2,590 - 0.08 - 4,221,294 -

407 - 0.01 - 2,813,100 -231 1 0.01 0.02 3,200,160 10,00095 3 0.00 0.06 2,326,000 75,00036 - 0.00 - 1,259,400 -30 4 0.00 0.08 1,343,640 195,00063 13 0.00 0.27 4,307,920 1,240,00058 17 0.00 0.35 14,164,240 7,076,00013 10 0.00 0.21 35,819,719 26,404,000

32,515 48 1.00 1.00 78,000,000 35,000,000

20,001 to 30,000

50,001 to 100,000100,001 to 1,000,000

Over 1,000,000Total

No. of Shareholders

1 to 499500 to 5,000

5,001 to 10,00010,001 to 20,000

30,001 to 40,00040,001 to 50,000

A/C No.

Number of Shares% of Shareholders

5,000,000 Ordinary Share @ Tk. 10 each fully paid-up against shares of Golden Harvest Ice Cream Limited

14,250,000 Bonus Share @ Tk. 10 each

No. of Shares% of SharesName Designation

80


Shareholding position of Golden Harvest Ice Cream Ltd:

Value of Shares@ BDT 10

2013 2012 2013 2012

Mr. Ahmed Rajeeb SamdaniGolden Harvest Agro Industries Ltd.

Managing DirectorParent Company

0.0002% 0.0002% 100 10099.9998% 99.9998% 49,999,900 49,999,900

100% 100% 50,000,000 50,000,000

14. Share Premium

Share Premium Received 450,000,000 -IPO Expenses: (41,233,946) -Income Tax (3% on premium) (13,500,000) -IPO Cost (25,927,742) -Exchange Gain / (Loss) (1,806,204) -

408,766,054 -

15. Revaluation Surplus

Opening Balance:Golden Harvest Agro Industries Ltd. 219,364,973 225,346,706Golden Harvest Ice Cream Ltd. - -

219,364,973 225,346,706Revaluation surplus of Fixed Assets during the year 128,671,642 -

51,419,256-

51,419,359 -(103) -

(5,743,848) (5,981,733)(4,074,392) (4,224,411)(1,669,456) (1,757,322)

393,712,023 219,364,973

15A. Revaluation Surplus

Opening Balance:Golden Harvest Agro Industries Ltd. 219,364,973 225,346,706Golden Harvest Ice Cream Ltd. - -

219,364,973 225,346,706Revaluation surplus of Fixed Assets during the year 128,671,642 -

51,419,256 -

51,419,359 (103) -

(5,981,733)(5,743,848)(4,224,411)(1,757,322)

(4,074,392)(1,669,456)

393,712,023 219,364,973

16. Non Controlling Interest

Opening Balance 551 484Share of Net Profit after Tax for the year 80 67Share of revaluation surplus for the year 103 -

734 551

Depreciation of Golden Harvest Ice Cream Ltd.

Share of the Company on Revaluation Surplus of Fixed Assets of Subsidiary company GoldenHarvest Ice Cream Ltd.

Revaluation Surplus of Fixed Assets of Subsidiary companyShare of Non Controlling interest

The Company revalued its Lands, Buildings, and Plant & Machinery as of 30 June 2013 by its Valuer, Ata Khan & Co, Chartered

Accountantsfollowing "CurrentCost Method",resulting in a revaluation surplus at BDT 128,671,642 forGolden Harvest Agro Industries

Ltd. and BDT 51,419,359 for Golden Harvest Ice Cream Ltd. which include non controlling interest part BDT 103.

Depreciation on Revaluation Surplus transferred to retained earningsDepreciation of the Company

Depreciation of Golden Harvest Ice Cream Ltd.

Share of the Company on Revaluation Surplus of Fixed Assets of Subsidiary company GoldenHarvest Ice Cream Ltd.

% of Shares

Revaluation Surplus of Fixed Assets of Subsidiary companyShare of Non Controlling interestDepreciation on Revaluation Surplus transferred to retained earningsDepreciation of the Company

DesignationName


30 June 2012

Value of Share@ BDT 100

81

17. Term Loan against Machinery

Golden Harvest Agro Industries Limited 49,760,281 61,272,472Mercantile Bank Ltd., Gulshan Branch A/C No. 77100000072 12,324,363 15,449,894Mercantile Bank Ltd., Gulshan Branch A/C No. 72700000300 37,435,918 45,822,579

Golden Harvest Ice Cream LimitedMercantile Bank Ltd., Gulshan Branch A/C No. 77100000066 13,721,288 17,223,690

63,481,569 78,496,163Current Maturity of Term Loan (18,038,556) (15,230,498)

45,443,013 63,265,665

No. of Loans: 03 NosRate of Interest : 17.00% p.a (17.00% p.a : 2012)Tenor : 5 yearsMoratorium Period : 06 MonthsSecurity : a. Hypothecation of the imported capital

Machineries valued at BDT 134,849,398/-b. Personal Guarantee of all the directorsc. Undated Cheques covering debts

17A. Term Loan against Machinery

Golden Harvest Agro Industries LimitedMercantile Bank Ltd., Gulshan Branch A/C No. 77100000072 12,324,363 15,449,893Mercantile Bank Ltd., Gulshan Branch A/C No. 72700000300 37,435,918 45,822,579

49,760,281 61,272,471Current Maturity of Term Loan (14,036,533) (11,865,588)

35,723,748 49,406,883

18. Deferred Tax Liability

Opening Balance 8,643,756 4,720,834Deferreed Tax Expenses 5,435,740 3,922,922Closing Balance 14,079,495 8,643,756

18A. Deferred Tax Liability

Opening Balance 6,847,615 3,415,422Deferreed Tax Expenses 5,149,712 3,432,193Closing Balance 11,997,326 6,847,615

Calculation of deferred taxation

The Company

Value as perTax Ordinance

Tax@ 27.5%

Depreciation for the year 30.06.2013 23,643,917 42,370,138 (18,726,221) (5,149,711.68)Deferred Tax expenses as on 30.06.2013 (18,726,221) (5,149,712)

Subsidiary Company

Particulars Value as perTax Ordinance

Tax@ 37.5%

Depreciation for the year 30.06.2012 5,191,298 5,954,040 (762,742) (286,028)Deferred Tax expenses as on 30.06.2013 (762,742) (286,028)

2013 2012

Consolidated deferred Tax Expenses (5,435,740) (3,922,922)

Value as per company policyTaxable

Temporarydifference

Value as per company policyTaxable

Temporarydifference

Particulars

Particulars

The Company is enjoying term loan facility against imported machineries from MercantileBank, Gulshan Branch. Terms & Conditions of the loan is as below:

Terms & Conditions of Term Loan:


30 June 2012

82


19. Lease Obligations

IDLC Finance Ltd 1,562,388 3,347,856

United Leasing Co Ltd. 10,142,481 14,729,294

11,704,869 18,077,150

Current Maturity of Lease Obligation (5,996,748) (6,372,281)5,708,121 11,704,869

20. Accounts & Other Payables

Sundry Creditors for Goods & Service 13,394,243 29,426,268Sundry Creditors -Others 5,894,211 1,941,460Undistributed Refund Warrant 7,337,575 -Advance Against Export 15,497,031 11,628,210IDLC Factoring Loan - 1,241,710Security Deposits for Freezer 2,938,500 1,408,750

45,061,560 45,646,398

20A. Accounts & Other Payables

Sundry Creditors for Goods & Service 9,853,932 19,248,350Sundry Creditors -Others 5,894,211 1,941,460Undistributed Refund Warrant 7,337,575 -Advance Against Export 2,311,281 3,723,386IDLC Factoring Loan - 1,241,710Security Deposits for Freezer 2,938,500 1,408,750

28,335,499 27,563,656

21. Accruals and Provisions

Salary & Wages 1,697,026 4,880,170Utility Bills 923,940 920,411Audit Fees 600,000 300,000Mobile Phone Bill 25,212 16,127TA/DA & Incentive 403,238 228,588Provision for Tax (Note - 21.01) 94,154,439 89,793,606Provision for Workers Profit Participation Fund (Note - 21.02) 17,443,275 6,177,312Provision for others 1,583,350 500,000

116,830,481 102,816,213

21.01 Provision for Tax

Opening Balance 89,793,606 111,733,435Tax for the year 57,132,646 41,349,584

(52,771,813) (63,289,414)AIT Adjustment - -Paid during the year (52,771,813) (63,289,414)Closing Balance 94,154,439 89,793,606

21.02 Provision for Workers Profit Participation Fund

Opening Balance 6,177,312 -Addition during the year 10,533,806 6,177,312Interest Charged for the year 732,157 -Paid during the year - -Closing Balance 17,443,275 6,177,312

Necessary provision was made for income tax considering the depreciation effect as per Incometax Ordinance 1984 and Export sale benefit.


30 June 2012

83

21A. Accruals and provisions

Salary & Wages 1,100,226 3,530,170Utility Bills 923,940 920,412Audit Fees 500,000 200,000Mobile Phone Bill 25,212 16,127TA/DA & Incentive 403,238 228,588Provision for Tax (Note - 21A.01) 29,639,572 28,011,922Provision for Workers Profit Participation Fund (Note - 21A.02) 11,572,926 3,584,789Provision for others 1,533,350 500,000

45,698,465 36,992,007

21A.01 Provision for Tax

Opening Balance 28,011,922 67,727,113Tax for the year 35,613,926 23,574,222

(33,986,276) (63,289,414)AIT Adjustment - -Paid during the year (33,986,276) (63,289,414)Closing Balance 29,639,572 28,011,922

21A.02 Provision for Workers Profit Participation Fund

Opening Balance 3,584,788 -Addition during the year 7,450,420 3,584,788Interest Charged for the year 537,718

- -Adjustment - -Paid during the year - -Closing Balance 11,572,926 3,584,788

22. Short Term Loan

Golden Harvest Agro Industries Limited (Note - 22.01) 367,790,679 280,932,823Golden Harvest Ice Cream Limited (Note - 22.02) - 56,547,030

367,790,679 337,479,853

22.01 Golden Harvest Agro Industries Limited

Marcantile Bank Limited CC 012972900000075 (12,959,738) 42,578,375Mercantile Bank Limited Agri- SOD(G) -73900000039 - 203,545,489Mercantile Bank Limited Agri- SOD(G) -73900000051 302,817,818 -Mercantile Bank Limited SOD-71500000814 73,498,367 -United Commercial Bank SOD-74800000188 4,434,232 -First Security Islami Bank Limited CC- 11273800010038 - 34,808,959

367,790,679 280,932,823

22.02 Golden Harvest Ice Cream LimitedFirst Security Islami Bank Limited CC (Hypo) 738 000 000 21 - 56,547,030

- 56,547,030

22A. Short Term Loan

Golden Harvest Agro Industries Limited (Note # 22A.01) 367,790,679 280,932,823367,790,679 280,932,823

22A.01 Golden Harvest Agro Industries LimitedMarcantile Bank Limited CC 012972900000075 (12,959,738) 42,578,375Mercantile Bank Limited Agri- SOD(G) -73900000039 - 203,545,489Mercantile Bank Limited Agri- SOD(G) -73900000051 302,817,818 -Mercantile Bank Limited SOD-71500000814 73,498,367 -United Commercial Bank SOD-74800000188 4,434,232 -First Security Islami Bank Limited CC- 11273800010038 - 34,808,959

367,790,679 280,932,823

Necessary provision was made for income tax considering the depreciation effect as perIncome tax Ordinance 1984 and Export sale benefit.


84



23. Net Asset Value (NAV) per share

Shareholders Equity 1,995,325,447 958,272,329

No of paid up share capital 78,000,000 48,000,000Net Asset Value per share 25.58 19.96

Last year NAV is restated by including bonus shares issued during the year

23A. Net Asset Value (NAV) per share

Shareholders Equity 1,995,325,447 958,272,329

No of paid up share capital 78,000,000 48,000,000Net Asset Value per share 25.58 19.96

24. Sales Revenue

Sales (Export) 19,286,666 35,221,015Sales (Local) 606,416,634 523,652,981Exchange (Loss) / Gain (23,091) (207,620)

625,680,209 558,666,376

24A. Sales Revenue

Sales (Export) 6,936,664 9,181,444Sales (Local) 412,177,361 341,537,758Exchange (Loss) /Gain (423,450) 1,200,368

418,690,575 351,919,570

The products are exported to the market of USA, UK, UAE, Canada, Malaysia, KSA and Australia.

25. Cost of Goods Sold

Raw & Packing Materials:Opening Stock 52,670,754 45,185,259Purchase (Note # 25.01) 292,308,212 262,392,974

344,978,966 307,578,233Closing Stock (Note # 9.) (62,297,581) (52,670,754)

282,681,385 254,907,479Manufacturing Expenses (Note # 25.02) 72,879,397 58,918,026Cost of Goods Manufactured 355,560,782 313,825,505Opening Stock of Finished Goods 52,355,964 42,254,947

407,916,746 356,080,452Closing Stock of Finished Goods (Note # 9.) (62,952,143) (52,355,964)

344,964,603 303,724,488

25.01 Purchase

Raw Materials 267,765,731 243,543,206Packing Materials 23,603,377 17,402,281Processing Materials 939,104 1,447,487

292,308,212 262,392,974

25.02 Manufacturing Expenses

Salary & Wages 30,971,794 24,203,630Insurance Premium 1,068,300 621,688Factory Maintenance 2,394,506 1,704,755Transportation 87,899 86,731Entertainment 230,631 54,181Fuel for Vehicle 55,064 -Cleaning & Uniform 61,333 19,588Miscellenous Expenses 808,559 332,251Utility Bills 12,347,456 10,730,538Depreciation of Lease Assets 1,785,683 1,984,092Depreciation of Fixed Assets 23,068,172 19,180,572

72,879,397 58,918,026

85

25A. Cost of Goods Sold

Raw & Packing Materials:Opening Stock 30,094,444 21,976,197Purchase (Note # 25A.01) 178,644,696 156,038,838

208,739,140 178,015,035Closing Stock (Note # 9A.) (33,649,770) (30,094,444)

175,089,370 147,920,591Manufacturing Expenses (Note # 25A.02) 52,479,111 41,081,426Cost of Goods Manufactured 227,568,481 189,002,017Opening Stock of Finished Goods 29,089,250 18,125,473

256,657,731 207,127,490Closing Stock of Finished Goods (Note # 9A.) (36,706,898) (29,089,250)

219,950,833 178,038,240

25A.01 Purchase

Raw Materials 160,823,492 141,865,749Packing Materials 17,257,955 13,751,947Processing Materials 563,249 421,142

178,644,696 156,038,838

25A.02 Manufacturing Expenses

Salary & Wages 18,004,957 12,962,178Insurance Premium 1,068,300 621,688Factory Maintenance 1,542,461 1,502,922Transportation 87,899 86,731Entertainment 230,631 54,181Fuel for Vehicle 55,064 -Cleaning & Uniform 61,333 19,588Miscellenous Expenses 808,559 332,251Utility Bills 9,919,090 8,369,819Depreciation of Lease Assets 1,785,683 1,984,092Depreciation of Fixed Assets 18,915,134 15,147,976

52,479,111 41,081,426

26. Administrative Expenses

Salaries & Wages 16,815,152 14,402,420Directors Remuneration 4,187,950 4,187,950Insurance Premium 487,530 115,706Bank Charges 158,387 609,643Traveling, Conveyance, Tour 4,171,177 1,536,746Audit Fees 600,000 400,000Rates, Taxes, Renewal 1,001,377 718,320Vehicle Maintenance 1,703,019 1,627,479Office Maintenance 358,472 204,000Donation, Subscription & Gift 366,128 501,226Office Stationeries 719,765 366,895Telephone & Mobile Bill 443,346 300,827Miscellaneous Expenses 1,423,841 3,318,594Deferred Expenses Written off - 1,708,627Entertainment Expenses 860,670 625,244Consultancy Fees 629,300 -Utility Bill 1,835,146 993,400AGM Expenses 2,021,103 -Depreciation of Lease Assets 446,421 496,023Depreciation of Fixed Assets 5,767,043 4,795,143

43,995,827 36,908,243

From 1 July 2012 to 30 June 2013, all of the 414 factory employees includingsubsidiary (241 nos.) received annual salary and allowances of BDT 36,000 and above.


86



Salaries & Wages 12,492,873 10,461,452 Directors Remuneration 4,187,950 4,187,950 Insurance Premium 487,530 -Bank Charges 132,146 579,119 Traveling, Conveyance, Tour 3,326,994 1,075,722 Audit Fees 500,000 300,000 Rates, Taxes, Renewal 810,047 370,755 Vehicle Maintenance 1,703,019 1,627,479 Office Maintenance 358,472 204,000 Donation, Subscription & Gift 218,890 337,926 Office Stationeries 679,778 353,003 Telephone & Mobile Bill 443,346 300,827 Miscellaneous Expenses 917,781 2,764,450 Deferred Expenses Written off - 1,708,627 Entertainment Expenses 860,670 625,244 Consultancy Fees 531,300 -Utility Bill 1,835,146 993,400 AGM Expenses 2,021,103 -Depreciation of Lease Assets 446,421 496,023 Depreciation of Fixed Assets 4,728,783 3,786,994

36,682,249 30,172,971

27. Selling & Distribution Expenses

26A. Administrative Expenses

Ocean Freight 1,672,093 3,234,156 C & F Expenses 215,703 172,240 Shipment Expenses 333,569 963,072 Courier Charges 91,703 75,999 TA/DA Expenses 3,103,603 2,431,489 Promotional Expenses 2,229,739 828,621 Distribution expenses 152,488 876,819 Tours and Travel 567,526 99,386 Sample 92,982 17,776 Vehicle Fuel and Maintanence 4,023,186 1,968,706 Entertainment 209,851 -Miscelleneous Expenses 459,883 1,361,144 DITF Expenses 6,499,812 7,959,595 Advertisement & Publicity 6,230,181 14,561,820

25,882,319 34,550,823

27A. Selling & Distribution Expenses

Ocean Freight 567,838 1,087,639 C & F Expenses 112,363 121,314 Shipment Expenses 52,258 524,435 Courier Charges 73,794 50,279 TA/DA Expenses 3,103,603 2,431,489 Promotional Expenses 2,229,739 828,621 Distribution expenses 152,488 876,819 Tours and Travel 567,526 99,386 Sample 92,982 17,776 Vehicle Fuel and Maintanence 4,023,186 1,968,706 Entertainment 209,851 -Miscelleneous Expenses 459,883 1,361,144 DITF Expenses 6,499,812 7,959,595 Advertisement & Publicity 5,376,839 13,324,495

23,522,162 30,651,698

(a) Auditors' fees represents audit fee for auditing the accounts for the year ended 30 June, 2013. Auditors were not paid any other fees.(b) The Company did not pay any remuneration to any Director who was not an officer of the Company.(c) No board meeting attendance fee was paid to the directors of the Company.

87

Scrap sale 8,112,325 800,178Export Incentive 482,167 880,525Interest received from IPO A/c 60,813,486 -Interest received from FDR A/c 11,794,354 -

81,202,332 1,680,703

28A. Interest & Other Income

28. Interest and Other Income

Scrap sale 6,834,325 800,178Export Incentive 173,417 229,536Interest received from IPO A/c 60,813,486 -Interest received from FDR A/c 11,794,354 -

79,615,582 1,029,714

29. Financial Expenses

Interest on Cash Credit (Hypo) 54,600,895 38,482,784Interest on Term Loan 12,204,658 13,148,130Interest on Finance Lease 2,350,525 2,930,268Interest on Operating Lease 841,632 824,972Interest on others 11,487 1,914 Interest against WPPF 732,157 -

70,741,354 55,388,068

29A. Financial ExpensesInterest on Cash Credit (Hypo) 48,353,753 24,625,644Interest on Term Loan 9,534,360 10,392,904Interest on Finance Lease 2,350,525 2,930,268Interest on Operating Lease 841,632 824,972Interest on others 11,487 1,914 Interest against Workers Profit Participation Fund 537,718 -

61,629,475 38,775,702

30. Earning Per Share (EPS)

30.0193,359,357 77,563,482

No of weighted average shares 60,986,301 48,000,000 EPS for the year 1.53 1.62

30.02 Earning Per Share (EPS) on Other Income54,836,809 762,090

Number of weighted average shares 60,986,301 48,000,000 EPS for the year 0.90 0.02

30A. Earning Per Share (EPS)

30A.01 Earning Per Share (EPS) on operating net profit after tax53,470,570 43,957,379

Share of profit from subsidiary 39,888,786 33,606,103 Number of weighted average shares 60,986,301 48,000,000 EPS for the year 1.53 1.62

30A.02 Earning Per Share (EPS) on Other Income54,836,809 762,090

No of weighted average shares 60,986,301 48,000,000 EPS for the year 0.90 0.02

Net Profit after Tax attributable to Ordinary Shareholders of the Company

Net Profit after tax attributable to Ordinary Shareholders of the Company

Net Profit after tax attributable to Ordinary Shareholders of the Company

Net Profit after tax attributable to Ordinary Shareholders of the CompanyEarning Per Share (EPS) on operating net profit after tax


88



Issue Date No of SharesOutstanding Days Calculation Weight of Share

Opening Ordinary Share 01.07.2012 35,000,000 365 35000000*365/365 35,000,000Ordinary Share issued during the period 24.01.2013 30,000,000 158 30000000*158/365 12,986,301Bounus share issued during the period 28.03.2013 13,000,000 365 13000000*365/365 13,000,000Total 78,000,000 60,986,301

31. Operating Cash flow per Share

30A.03 Weighted Average Shares (For the year ended June 30, 2013):

Net Cash generated / (used) from Operating Activities 176,287,857 80,513,513

No of outstanding shares at the end of the year 78,000,000 48,000,0002.26 1.68

31A. Operating Cash flow per Share

Net Cash generated / (used) from Operating Activities 88,982,110 62,400,719

No of outstanding shares at the end of the year 78,000,000 48,000,0001.14 1.30

Particulars

89


32. Other Information

32.1 Transaction in foreign currency

Particulars

Golden Harvest Agro Industries Ltd.CIF Value of import:Raw Materials 6,732,283 43,143,345Spare Parts - -Capital Machinery - -FOB value of export 6,936,664 9,181,444Golden Harvest Ice Cream Ltd.FOB value of export 12,350,002 26,039,571

Exchange Rate on June 30GBP 118.21 128.15USD 77.78 81.80

32.2 Contingent Liabilities and commitments

Particulars Amount/BDT Amount/BDT

Letters of credit/ LCA - -Income Tax - -Total - -

32.3 Related Party Transactions

The company has entered into transactions with other entities that fall within the definition of related party as contained in BAS-24“Related Party Disclosures" Total transactions of the significant related party as of 30 June, 2013 are as follows:

Transaction with Key Management Personals

No. 30-Jun-13 30-Jun-12

(a)4,187,950 4,187,950

(b)

- -

(c) - -(d) -

- -- -

Other allowances and commission including guarantee commission

Pensions etc.(i) Pensions(ii) Gratuities(iii) Payments from a provident funds, in excess of own subscription and interest thereon

Particulars

Managerial Remuneration paid or payable during the year to the directors,including managing directors.

Any other perquisite or benefits in cash or in kind stating,approximate money value where applicable.

- -

(e) - -Share Based payments

Name of Company OpeningBalance

Nature ofTransactionRelationship

SubsidiaryCompany - 122,451,416

- 122,451,416

Golden Harvest IceCream Ltd.

Current Account withSister Concern

Total

Addition

40,938,590

40,938,590

Adjustment

81,512,826

81,512,826

ClosingBalance

90


32.4 Quantitative details of opening stock, purchases/ production, consumption/sales and closing stock of


32.5 Capacity Utilization


%ItemCapacity in KGPer Year

Utilization in KGAverage Per year

Snacks 750,000 427,041 56.94%

Vegetable 2,500,000 1,654,671 66.19%

32.6 Capital Expenditure Commitment

There was no capital expenditure contracted but not incurred orprovided for at 30 June 2013.

32.7 Term Loan Commitment Consolidated The Company Ice Cream

At 30 June 2013 the company had annual commitment underTerm Loan as set out below:

Term Loan principal due within 1 year 18,038,556 14,036,533 4,002,023

Term Loan principal due within 2 to 5 years 45,443,013 35,723,748 9,719,265

32.8 Finance Lease Commitment

At 30 June 2013 the company had annual commitment underfinance lease as set out below:Lease expires within 1 year 5,996,748 5,996,748 -

Lease expires within 2 to 5 years 5,708,121 5,708,121 -

32.9 Claim not Acknowledged as Debt

There was no claim against the company not acknowledged as debt as on June 30, 2013.

32.10 Un-availed Credit Facilities

The Company has no credit facilities available to the company under any contract, other than trade credit available inthe ordinary course of business as on June 30, 2013.

Purchases/Production

Consumption/Sales

ClosingStock

Unit Kg Kg Kg Kg

Raw Materials: Kg

For the year 2012-2013 919,449 5,005,269 4,563,623 1,361,095

For the year 2011-2012 671,131 4,278,008 4,029,689 919,449

Finished Goods:

Vegetable & Snacks Kg

For the year 2012-2013 189,003 2,727,663 2,675,732 240,934

For the year 2011-2012 118,127 2,306,666 2,235,790 189,003

Item

Openingstock


Purchases/Production

Consumption/Sales

ClosingStock

Unit Kg Kg Kg Kg

Raw Materials: Kg

For the year 2012-2013 36,659 644,210 622,112 58,757

For the year 2011-2012 37,688 541,353 542,382 36,659

Finished Goods:

Fish Kg

For the year 2012-2013 52,151 926,453 897,395 81,209

For the year 2011-2012 54,087 762,324 764,261 52,151

Item

Openingstock


%ItemCapacity in KGPer Year

Utilization in KGAverage Per year

Fish processing 1,779,664 1,184,374 66.55%

Consolidated The Company Ice Cream

91

32.11 Employee Details:

i) During the year, there were 214 employees employed for the full year and 96 employees less than the full year at a remuneration of BDT 3,000 per month and above.

ii) At the end of the year, there were 294 employees in the Company.

32.12 Rounding off

Amounts appearing in these financial statements have been rounded off to the nearest BDT and, wherever considered necessary.

32.13 Rearrange of last year figures

To facilitate comparison, certain relevant balances pertaining to the previous year have been rearranged or reclassified and restated whenever considered necessary to conform to current year presentation.

32.14 Authorization date for issuing Financial Statements

The financial statements were authorized by the Board of Directors on 28 October 2013 for issue after completion of review.

32.15 Event after reporting period

The Board of Director of the Company in their 87th board meeting held on 28 October 2013 proposed dividend @ 10% cash and 5% stock for the year ended 30 June 2013 for approval by the shareholders in the 9th AGM of the company.


GOLDEN HARVEST ICE CREAM LIMITED

Auditor’s Report&

Financial Statementsfor the year ended 30 June 2013

92


93

Independent Auditor’s Report to

the Shareholders ofGolden Harvest Ice Cream Limited

We have audited the accompanying financial statements of Golden Harvest Ice Cream Limited, which comprise the statement of financial position as at 30 June 2013, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Bangladesh Financial Reporting Standards (BFRS) and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of Golden Harvest Ice Cream Limited as at 30 June 2013, and its financial performance and its cash flows for the year then ended in accordance with Bangladesh Financial Reporting Standards and comply with the Companies Act, 1994, the Securities and Exchange Rules, 1987 and other applicable laws and regulations.

We also report that:

a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof;

b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from our examination of these books;

c) the Company's statement of financial position and statement of comprehensive income dealt with by the report are in agreement with the books of account and returns; and

d) the expenditure incurred was for the purposes of the Company's business.

Dated: Dhaka; S. F. Ahmed & Co.27 October 2013 Chartered Accountants

95

2013 2012

ASSETS

Non-Current Assets 311,771,369 244,133,910

5.00 226,073,502 160,436,043

6.00 85,697,867 83,697,867

Current Assets 240,147,802 190,776,486

Inventories 7.00 54,893,056 45,843,024

Advances, Deposits and Prepayments 8.00 107,671,764 76,776,114

Trade and Other Receivables 9.00 76,730,719 64,040,121

Cash and Bank Balances 10.00 852,263 4,117,227

TOTAL ASSETS 551,919,171 434,910,396


Shareholders' Equity 366,744,814 275,436,589

Issued, Subscribed and Paid up Capital 11.00 50,000,000 50,000,000

Revaluation Surplus 12.00 139,875,624 90,125,721



Term Loan against Machinery 13.00 9,719,265 13,858,780

Deferred tax liability 14.00 2,082,169 1,796,141


Accounts and Other Payables 15.00 98,238,886 18,082,740

Accruals and Provisions 16.00 71,132,014 65,824,206

Current Maturity of Term Loan 13.00 4,002,023 3,364,910

Short Term Loan 17.00 - 56,547,030

TOTAL EQUITY AND LIABILITIES 551,919,171 434,910,396

Managing Director



Director




Capital Work in Progress

Golden Harvest Ice Cream Ltd.Statement of Financial Position

As at June 30, 2013

NotesAmount in BDT

Director

96


Revenue 18.00 206,989,634 206,746,806

Cost of Goods Sold 19.00 (125,013,770) (125,686,248)

Gross Profit 81,975,864 81,060,558

Operating Expenses (9,673,735) (10,634,396)

Administrative Expenses 20.00 (7,313,578) (6,735,271)

Selling Expenses 21.00 (2,360,157) (3,899,125)


Other Income 1,586,750 650,989

Financial Expenses 22.00 (9,111,880) (16,612,366)

Net Profit from Operation 64,776,999 54,464,785

Provision for Workers Profit Participation Fund (3,083,385) (2,592,524)

Net profit before tax 61,693,614 51,872,261

Less: Provision for Income Tax (21,804,748) (18,266,091)

Provision for tax (21,518,720) (17,775,362)

Deferred tax expenses (286,028) (490,729)

39,888,866 33,606,170


Revaluation Surplus of the Company 12.00 51,419,359 -

Total Comprehensive Income 91,308,225 33,606,170

Earning Per Share for the year (BDT) 7.98 6.72

Director Director




Golden Harvest Ice Cream Ltd.Statement of Comprehensive Income


Managing Director


Net Profit after tax attributable to Ordinary Shareholders of

the Company

2013 2012Notes

Amount in BDT

97

Particulars Share Capital Retained Earnings Total

Balance at 01.07.11 50,000,000 91,883,043 99,947,376 241,830,419

Depreciation on Revaluation Surplus transferred to retained earnings

- (1,757,322) 1,757,322 -

Net Profit after tax - - 33,606,170 33,606,170

Balance at 30.06.12 50,000,000 90,125,721 135,310,868 275,436,589

Balance at 01.07.12 50,000,000 90,125,721 135,310,868 275,436,589

Revaluation surplus of fixed assets

during the year- 51,419,359 - 51,419,359

Depreciation on Revaluation Surplus transferred to retained earnings

- (1,669,456) 1,669,456 -

Net Profit after tax - - 39,888,866 39,888,866

Balance at 30.06.13 50,000,000 139,875,624 176,869,190 366,744,814

- - -

Golden Harvest Ice Crream Ltd.Statement of Changes in EquityFor the year ended June 30, 2013

Amount in BDT

Revaluation Surplus

Director Director



Managing Director


98




Payments for Costs & Expenses (89,625,600) (179,353,664)

Tax Paid (18,954,439) (103,230)



Acquisitions of Property Plant and Equipment (19,409,400) (1,455,350)

Capital Work in Progress (2,000,000) -



Working Capital Borrowings from / (Repayments to) Banks (56,547,030) 7,242,438

Long Term Borrowings from / (Repayments to) Banks (3,502,403) (3,417,474)


Net cash (used in) / provided by financing activities (69,161,313) (12,787,402)

Net changes in cash and cash equivalents (3,264,964) 3,870,040

Cash and cash equivalents at the beginning of the year 4,117,227 247,187

Cash and cash equivalents at the end of the year 852,263 4,117,227

Director Director



Managing Director


Golden Harvest Ice Cream Ltd.Statement of Cash Flows


2013 2012

Amount in BDT

99

Golden Harvest Ice Cream LimitedNotes to the Financial StatementsFor the year ended on June 30, 2013

1. Reporting entity

1.1 Company profile

Legal status of the company

Golden Harvest Ice Cream Limited formerly known as Golden Harvest Sea Food and Fish Processing Limited was incorporated on January 05, 2005, vide Reg. No.-C-55601(2285)/05 under the Companies Act, 1994 as a Private Limited Company.

Golden Harvest Sea Food and Fish Processing Limited’ (GHSFFPL), has been converted into Golden Harvest Ice Cream Limited (GHICL) on 16th May 2013 through the office of Registrar of Joint Stock Companies and Firms.

Address of registered office and principal place of business:

The principal place of business and the registered office of the Company is at SPL Western Tower, Level # 5, Space Code # 502, 186, Gulshan-Tejgaon Link Road, Tejgaon Industrial Area, Dhaka-1208. The factory is located at Bokran, Monipur, Baba-nipur, Gazipur Sadar, Gazipur.

Nature of business activities

The objectives of the company are to carry out the business, promote & establish factories and chain shop or shops, manufacture and manage food and food items, Dairy, Ice Cream, baby food, soft drink, mineral water, salt & iodised salt and allied products in Bangladesh and setting ventures and business is in connection therewith. Golden Harvest Agro Industries Limited acquired 99.9998% of shares of Golden Harvest Sea Food and Fish Processing Limited by exchanging its own shares and acquired its 4,99,999 Ordinary Shares.

Golden Harvest Ice Cream will launch a wide Range of Ice Creams including new varieties alongside regulars such Ice Pop, Lollies (Bi Flavours, Tri flavours and Twisters), variety of Choc-bars and Cones, Cups, Liters and Ice Cream Cakes, Sorbets etc. Golden Harvest Agro is the Parent company of Golden Harvest Ice Cream Ltd.

2. Basis of preparation of financial statements

2.1 Basis of measurement of elements of financial statements

The financial statements have been prepared on the historical cost basis, and there-fore, do not take into consideration the effect of inflation except that arising from revaluation of lands, buildings & machinery. The accounting policies, unless otherwise stated, have been consistently applied by the Company and are consistent with those of the previous year.

100


2.2 Statement on compliance with local laws The financial statements have been prepared in compliance with the requirements of

the Companies Act, 1994 and other relevant local laws and regulations of the Country.

2.3 Statement on compliance of Bangladesh accounting standards The financial statements have been prepared in accordance with the applicable Bang-

ladesh Accounting Standard (BASs) and Bangladesh Financial Reporting Standard (BFRSs) adopted by the Institute of Chartered Accountants of Bangladesh (ICAB) based on International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs).

2.4 Going concern As per BAS-1, a company is required to make assessment at the end of each year to

make assessment of its capability to continue as going concern. Management of the Company makes such assessment each year. The company has adequate resources to continue in operation for the foreseeable future and has wide coverage of its liabili-ties. For this reason, the directors continue to adopt going concern assumption while preparing the financial statements.

2.5 Accrual basis The financial statements have been prepared using the accrual basis of accounting.

2.6 Structure, content and presentation of financial statements

Being the general purpose financial statements, the presentation of these financial statements is in accordance with the guidelines provided by BAS 1: “Presentation of Financial Statements”. A complete set of financial statements comprise:i) Statement of Financial Position as at June 30, 2013; ii) Statement of Comprehensive Income for the year ended June 30, 2013;iii) Statement of Changes in Equity as at June 30, 2013;іv) A statement of Cash Flows for the year ended June 30, 2013; and v) Notes comprising a summary of significant accounting policies and other explanatory information to the accounts for the year ended June 30, 2013.

2.7 Reporting period

The reporting period of the company covers one year from 1 July to 30 June.

3. Significant accounting policies

3.1 Revenue

In compliance with requirements of BAS-18: (Revenue), revenue receipts from customers against sales is recognized when products are dispatched to customers, that is, when the significant risk and rewards of ownership have been transferred to buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably and there is no continuing management

101

involvement with the goods. Revenue is recognized net of value added tax, supplementary duty and service charge collectible from clients as well as rebate and discount allowed to customers.

3.2 Property, plant and equipment

Initial recognition and measurement

Property, plant and equipment are capitalized at cost of acquisition and subsequently stated at cost or valuation less accumulated depreciation in compliance with the requirements of BAS 16: Property, Plant and Equipment. The cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the assets to its working condition for its intended use inclusive of inward freight, duties, non-refundable taxes and un-allocated expenditures etc.

Subsequent costs

The cost of replacing part of an item of property, plant and equipments is recognised in the carrying amount of an item if it is probable that the future economic benefits embodied within the part will flow to the company and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in the statement of comprehensive income as `Repair & Maintenance ‘when it is incurred.

Subsequent measurement

Property, Plant and equipment are disclosed at cost less accumulated depreciation consistently over years. On 30 June, 2009 and 30 June 2011 Land and Land Develop-ments, Building and other constructions, Plant and Machinery and Other Property, Plant and Equipment have been revalued to reflect fair value (prevailing market price) thereof following “Current Cost Method”.

Depreciation on property, plant and equipment

Depreciation is provided to amortize the cost or valuation of the assets after commis-sioning, over the period of their expected useful lives, in accordance with the provi-sions of BAS 16: Property Plant and Equipment. Depreciation of an asset begins when it is available for use. Depreciation of an asset begins when it is available for use. Depreciation is charged on all Property, Plant and Equipment except land and land developments on reducing balance method at the following rates:

Particular of Assets Rate of Depreciation Plant & Machinery 5% Office Equipment 10% Furniture and Fixtures 10% Vehicle 10%

102


Impairment

At each year end, the company assesses whether there is any indication that the carry-ing amount of an asset exceeds its recoverable amount. An impairment loss is recog-nized as an expense in the profit and loss statement in accordance with the provision of Bangladesh Accounting Standards BAS 36 unless the asset is carried at revalued amount in accordance with BAS 16. No impairment loss was recognized for the year ended 30 June 2013 as there were no such indication existed as on the that date.

Revaluation of property, plant and equipment

The Company made revaluation of the Company’s Land and Land developments and Plant and Machinery as of 30 June 2009, 30 June 2011 and 30 June 2013 to reflect fair value thereof in terms of Depreciated current cost thereof.

The increase in the carrying amount of revalued assets is recognized in the separate component of equity under the head Revaluation Surplus.

3.3 Inventories

Inventories stated at lower of cost and net realizable value as prescribed by BAS-2: Inventories. The cost is calculated on FIFO method in a consistent manner. The cost comprised the cost incurred in the normal course of business in bringing out such inventories to its present location and conditions. Where necessary, provision is made for obsolete, slow moving and defective inventories (if any) identifies at the time of physical verification of inventories.

Net realizable value is based on estimated selling price less any further costs expected to be incurred to make the sale effective.

3.4 Cash and cash equivalents Cash and cash equivalents consist of cash in hand and with banks on current and

deposit accounts and short term investments which are held and available for use by the company without any restriction. There is insignificant risk of change in value of the same.

3.5 Earnings Per Share (EPS)

Basic earnings per share

Basic Earnings per Share (BEPS) is calculated in accordance with Bangladesh Account-ing Standard BAS–33 “Earnings per Share” by dividing the profit or loss attributable to ordinary equity holders of the entity by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share

For the purpose of calculating diluted earnings per shares , an entity adjust profit or loss attributable to each ordinary equity holders of the entity, and weighted average

103

number of shares outstanding, for the effects of all dilutive potential ordinary shares. As the company has no dilutive potential ordinary shares, so diluted earnings per share is same as basic earning per share.

3.6 Borrowing cost

In compliance with the requirement of BAS-23 (borrowing cost), borrowing cost that are directly attributable to the acquisition, construction or production of a qualifying asset form part of the cost of the asset and, therefore capitalised. Other borrowing costs are recognised as an expense.

3.7 Foreign currency transactions

Foreign currency transactions are recorded, on initial recognition in the functional currency at the spot exchange rate ruling at the transaction date.

At the end of each reporting period in compliance with the provision of BAS 21: The Effects of Changes in Foreign Exchange Rates.

(a) Foreign currency monetary items are translated using the closing rate.

(b) Non-monetary items that are measured in terms of historical costs in a foreig currency are translated using the exchange rate at the date of the transaction.

(c) Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rate at the date when the fair value is deter mined.Exchange differences arising on the settlement of monetary items or on trans lating monetary items at rate different from those at which they were translated on initial recognition during the period or in previous financial statements is recognized in profit or loss in the period in which they arise.

3.8 Authorization date for issuing financial statements

The financial statements were authorized by the Board of Directors on 27 October 2013 for issue after completion of review.

3.9 Reporting currency

The financial statements are prepared and presented in Bangladesh Taka (BDT), which is the company’s functional currency.

3.10 Risk and uncertainty for use of estimates and judgments

The preparation of financial statements in conformity with Bangladesh Accounting Standards requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses and for contingent assets and liabilities that require disclosure, during and at the date of the financial statements.

104


Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions of accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected as required by BAS 8: “Accounting Policies, Changes in Accounting Estimates and Errors”.

3.11 Provisions and other payables

Provisions and accrued expenses are recognised in the financial statements in line with the Bangladesh Accounting Standard (BAS) 37 “Provisions, Contingent Liabilities and Contingent Assets” when

• the Company has a legal or constructive obligation as a result of past event.• it is probable that an outflow of economic benefit will be required to settle the obligation.• a reliable estimate can be made of the amount of the obligation. Other Payables are not interest bearing and are stated at their nominal value

3.12 Financial instruments

Non-derivative financial instruments comprise financial assets, trade receivables, Advance Deposit & Prepayments, Export Incentive Receivable, cash and cash equiva-lents and other payables and are shown at transaction cost:

3.13 Operating segments

No geographical segment reporting is applicable for the Company as required by BFRS 8:” Operating Segments”, as the Company operates in a single geographical and industrial area.

3.14 Statement of cash flows

The Statement of Cash Flow has been prepared under `Direct Method’ in accordance with the requirements of BAS 7: Statement of Cash Flows.

3.15 Related party disclosures

The Company carried out a number of transactions with related parties. The informa-tion as required by BAS 24: “Related Party Disclosure” has been disclosed in a sepa-rate note to the accounts (Note-23.02).

3.16 Taxation

a) Income Tax is calculated and provision is made in accordance with BAS-12. The corporate tax rate for the Company is 37.5%. Provision for current tax expenses has been made and calculated on the above basis, which is adequate under Income Tax Ordinance, 1984.

b) Deferred Tax has been provided for on temporary timing deference on depreciation arose during the year at 37.50% with effect from 1st July 2010.

105

3.17 Contingent assets and liabilities

A Contingent asset is disclosed when it is a possible asset that arises from the past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.

A contingent liability is disclosed when it is a possible obligation that arises from the past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.

The Company has no contingent assets or liabilities which require disclosures under BAS: 37. Contingent assets and contingent liabilities are not recognized in the finan-cial statements.

3.18 Comparative information

Comparative information has been disclosed in respect of the previous period for all numerical information in the current financial statements. Narrative and descriptive information for comparative information have also been disclosed whenever it is relevant for understanding of the current year’s financial statements.

4. Risk exposure

4.1 Interest rate risks

Interest rate is concerned with borrowed funds of short term & long-term maturity. Interest rate risk is the risk that Company faces due to unfavorable movements in the interest rates. Volatility in money market & increase demand for loans /investment funds raise the rate of interest. A change in the government’s policy also tends to increase the interest rate. High rate of interest enhances the cost of fund of a com-pany. Such rises in interest rates however mostly affect companies having floating rate loans.

Management perception

Golden Harvest Ice Cream Ltd. (GHICL) maintains low debt/ equity ratio; and accord-ingly, adverse impact of interest rate fluctuation is insignificant. The project was started with the Company’s own funds and the capacity was also expanded with own funds. Additionally, the management of the Company emphasizes on equity base financing to reduce the dependency on borrowing. Therefore, management perceives that the fluctuation of interest rate on borrowing would have little impact upon the performance of the Company.

4.2 Exchange rate risks

If exchange rate is increased against local currency opportunity is created for getting more revenue against sale in local currency. On the other hand if exchange rate goes down margin is squeezed in local currency.

106



The products of the company are sold against foreign (5.98%) as well as local currency (94.02%) and payments for raw materials are also made mostly in local currency. The exchange rate of the country traditionally witnessed upward trends, which makes ample opportunity of export. If foreign exchange rate rises, export will increase and local sales will be less and vice versa. Therefore, volatility of exchange rate will have no impact on profitability of the Company.

4.3 Industry risks

Industry risk refers to the risk of increased competition from foreign and domestic sources leading to lower prices, revenues, profit margin, and market share which could have an adverse impact on the business, financial condition and results of operation. Frozen food industry in Bangladesh is an emerging sector with vast local demand for its different product lines. Locally produced frozen products now play a significant role in this sector, which has been dominated by imports in the past. How-ever, the infrastructure required for this industry is inadequate in Bangladesh, as can be noted below:

• No organized collection centers for agricultural produce exist in Bangladesh; as a result, there is a high fluctuation in prices both for the growers and for processors.• Absence of Cold Storage or Cold Chains although the whole process of collection, processing and distribution depends on cold temperature maintenance due to the nature of the finished product.


Golden Harvest Ice Cream Ltd. (GHICL) has established its brand name in Frozen Food market with its quality products, range of products and customer services. However, to develop an infrastructure, both public and private sector participation is required. This is the focal point of the company’s future expansion plans. To eliminate fluctua-tion in prices both for the growers and for the processors, Golden Harvest will organ-ize collection centers to eliminate intermediary cost for both the parties. Deploying 15,000 refrigerators with 24 cold storages at -30 degree Celsius nationwide, the com-pany will have infrastructure backbone of Cold Chain which will ensure proper supply of Frozen Foods all over the country through its 50 temperature controlled transport. Our neighboring country like India has over 50 cold chains, generating revenue over US$3.5 billion which is targeted to reach US$ 8.5 Billion by the year 2015.

4.4 Market risks

Market risk refers to the risk of adverse market conditions affecting the sales and prof-itability of the company. Mostly, the risk arises from falling demand for the product or service which would harm the performance of the company. On the other hand, strong marketing and brand management would help the company to increase their customer base.

107


Market for Ready to Cook frozen foods in Bangladesh is growing at an exponential rate with growth of urbanization and incremental income level of consumers along with their preference to convenience. In spite of high growth of this market, there is scarcity of investment in this sector which creates a huge demand-supply gap result-ing in very expensive imports. International market for Ready to Cook frozen food sector is already matured and is growing further at a high rate. The company is one of the earliest entrants in international market with very promising and loyal customer base in USA, Canada, Australia, Europe and Middle East. In Bangladesh market, Golden Harvest has made a rapid penetration and has captured the leading position with its unique branding and positioning strategy taking opportunity of this fast grow-ing market.

4.5 Operational risks

The core business operation of GHICL is directly related to very low temperature main-tenance. Country wide shortage of power is compelling GHICL to utilize captive power which builds up cost. Also port congestion and inland immobility due to politi-cal instability poses a great operational risk to the company.


Bangladesh Government is meeting this challenge by opening the energy generation to private sector; and also making massive investment, which is expected to ensure availability of energy for uninterrupted operation. GHICL perceives that allocation of its resources properly with contingency approaches can reduce this risk factor to great extent. However, in order to minimize the operational risks due to shortage of power supply, GHICL itself has own captive sources of power Generators in addition of exist-ing REB (Rural Electrification Board) sources that will support production and also planning to engage more capacity of power generation to cope with the coming needs. Moreover proposed projects will have requisite back up captive power support to run their daily operation without any hindrance.

108


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6.00 Capital Work in Progress

Opening Balance 83,697,867 83,697,867Add: Addition during the year 2,000,000 -Less : Transferred to Property Plant and Equipment - -Closing Balance 85,697,867 83,697,867

7.00 Inventories

White Fishes 26,245,245 23,266,714Raw Fish 15,435,264 8,364,618Packing Materials 13,212,547 14,211,692

54,893,056 45,843,024

8.00 Advances, Deposits and Prepayments

Advance Taxes 1,052,492 883,590

Advance Against Land Purchaes 25,892,315 -Advances to Suppliers & Service Providers 80,726,957 75,892,524

107,671,764 76,776,114

9.00 Trade and Other Receivables

Trade Receivables (Note - 9.01) 72,452,152 60,070,306Export Incentive Receivable 4,278,567 3,969,815

76,730,719 64,040,121

9.01 Trade Receivables

Trade Receivables 72,452,152 60,070,306

72,452,152 60,070,306

SL Amount in BDT

2013Amount in BDT

2012

I - -

II 72,452,152 60,070,306

III - -

IV - -

V - -

VI - -

72,452,152 60,070,306

10.00 Cash and cash equivalents

Cash in hand: 38,483 6,429

Head Office 17,031 3,323

Factory 21,452 3,106

Cash at bank in current accounts (Note # 10.01) 813,780 4,110,798852,263 4,117,227

10.01 Cash at bank

First Security Bank Ltd. CD A/c # 11100000897 12,644 4,010,139

United Commercial Bank Ltd. CD A/c # 111000 14404 16,214 17,364

Mercantile Bank Ltd. CD A/c # 012911100002037 784,922 83,295813,780 4,110,798

Particulars

This is unsecured, considered good and is falling due within one year. Classification scheduleas required by schedule XI of Companies Act 1994 are as follows:

Accounts Receivable considered good in respect of which the company isfully securedAccounts Receivable considered good in respect of which the company holdsno security other than the debtor personal securityAccounts Receivable considered doubtful or bad

Accounts Receivable due by any director or other officer of the company

Accounts Receivable due by Common management

The maximum amount of receivable due by any director or other officerof the company

TOTAL

Provision against accounts receivable has been made by the company as accountsreceivable are good and the amount is not a material item.

2013Amount in BDT

2012

111

11.00 Share CapitalAuthorized Share Capital100,000,000 ordinary Shares of BDT 10 each 1,000,000,000 100,000,000

Issued, Subscribed and Paid up Capital

2013 2012

Mr. Ahmed Rajeeb Samdani Managing Director 0.0002% 0.0002% 100 100Golden Harvest Agro Industries Ltd. Parent company 99.9998% 99.9998% 49,999,900 49,999,900

100% 100% 50,000,000 50,000,000

12.00 Revaluation surplus

Opening Balance 90,125,721 91,883,043Add: Revaluation surplus on fixed assets during the year 51,419,359 -Less : Transferred to Retained Earnings 1,669,456 1,757,322Closing Balance 139,875,624 90,125,721

13.00 Term Loan against Machinery

Mercantile Bank Ltd., Gulshan Branch A/C No. 77100000066 13,721,288 17,223,690Less: Current Maturity of Long Term Loan 4,002,023 3,364,910

9,719,265 13,858,780

14.00 Deferred Tax Liability

Opening Balance 1,796,141 1,305,412During the year 286,028 490,729Adjustment during the year - -Closing Balance 2,082,169 1,796,141

Calculation of deferred taxation

ParticularsValue as per

TaxOrdinance

Value as percompany

policy

Tax@ 37.5%

5,191,298 5,954,040 (762,742) (286,028)(286,028)

15.00 Accounts and Other Payables

Sundry Creditors for Goods & Service 3,540,310 10,177,916

Advance Against Export 13,185,750 7,904,824

Inter Company Transaction (Note - 15.01) 81,512,826 -

98,238,886 18,082,740

15.01 Inter Company Transaction


The Company has changed its name to "Golden Harvest Ice Cream Lilimted" and increased Authorised Capital to BDT 1,000 milliondevided into 100 million ordinery shares @ BDT 10 each in their Extra Ordinery General Meeting held on May 16, 2013 and dulyfiled with Registrar of Joint Stock Companies.

Depreciation for the year

The Company revalued its Lands and Plant & Machinery as of 30 June 2013 by its Valuer Ata Khan & Co, Chartered Accountantsfollowing "Current Cost Method" resulting in a revaluation surplus at BDT 51,419,359

% of SharesName Designation

2013Amount in BDT

2012

2013Value of Shares in BDT

2012

81,512,826 -

-

DeductibleTemporarydifference

81,512,826

112


16.00 Accruals & Provisions

Salary & Allowances 596,800 1,350,000Audit Fees 100,000 100,000Provision for Tax (Note - 16.01) 64,514,866 61,781,683Provision for Worker Profit Participation Fund (Note - 16.02) 5,870,348 2,592,523Provision for Others 50,000 -

71,132,014 65,824,206

16.01 Provision for Tax

Opening Balance 61,781,683 44,006,322Tax for the year 21,518,720 17,775,362AIT Adjustment - -Paid during the year 18,785,537 -Closing Balance 64,514,866 61,781,684

16.02 Provision for Workers Profit Participation Fund

Opening Balance 2,592,523 -Addition during the year 3,083,385 2,592,523Interest Charged for the year 194,440 -Closing Balance 5,870,348 2,592,523

17.00 Short Term Loan

Account No:Cash Credit (Hypo) Account No:738 000 000 21, - 56,547,030First Security Islami Bank Ltd., Gulshan BranchInterest Rate:18% (In 2012: 18.00%)& Limit 50,000,000

- 56,547,030

18.00 Revenue

Sales (Export) 12,350,002 26,039,571Local Sales 194,239,273 182,115,223Exchange Gain/(Loss) 400,359 (1,407,988)

206,989,634 206,746,806

19.00 Cost of goods sold

Raw Materials:Opening stock 22,576,310 23,209,062Purchases (Note - 19.01) 113,663,516 106,354,136

136,239,826 129,563,198Closing Stock (28,647,811) (22,576,310)

107,592,015 106,986,888Add: Manufacturing expenses (Note - 19.02) 20,400,286 17,836,600Cost of Goods Manufactured 127,992,301 124,823,488

Finished Goods:Opening stock 23,266,714 24,129,474

151,259,015 148,952,962Closing Stock (26,245,245) (23,266,714)Cost of Goods Sold 125,013,770 125,686,248

19.01 Purchases

Raw Materials 106,942,239 101,677,457Packing Materials 6,345,422 3,650,334Processing Materials 375,855 1,026,345

113,663,516 106,354,136

2013Amount in BDT

2012

113

19.02 Manufacturing Expenses

Salary & Wages 12,966,837 11,241,452Repair & Maintenance 852,045 201,833Electricity and Gas bill 2,428,366 2,360,719Depreciation of Fixed Assets 4,153,038 4,032,596

20,400,286 17,836,600

20.00 Administrative ExpensesSalary & Wages 4,322,279 3,940,968Insurance Premium - 115,706Bank Charges 26,241 30,524Audit Fees 100,000 100,000Rates, Taxes, Renewal & Association Fees 191,330 347,565Printing & Stationery 39,987 13,892Traveling, Conveyance & Tour Expenses 844,183 461,023Miscellaneous Expenses 506,060 554,144Consultancy Fees 98,000 -Donation, Subscription & Gift 147,238 163,300Depreciation of Fixed Assets 1,038,260 1,008,149

7,313,578 6,735,271

21.00 Selling Expenses

Ocean Freight 1,104,255 2,146,517C & F Expenses 103,340 50,926Shipment Expenses 281,311 438,637Courier Charges 17,909 25,720Advertisement & Publicity 853,342 1,237,325

2,360,157 3,899,125

22.00 Financial Expenses

Interest of Term Loan 2,670,298 2,755,226Interest of Cash Credit Loan 6,247,142 13,857,140Interest against Workers' Profit Participation Fund 194,440 -

9,111,880 16,612,366

2013Amount in BDT

2012

114


2012

23. Other information

23.01 Transaction in foreign currency CIF value of import Capital machinery - - FOB value of export 12,350,002 26,039,571

Exchange rate on June 30 GBP 118.21 119.04 USD 77.78 74.10

23.02 Related party transaction

The company has entered into transactions with other entities that fall within the definition of related party as contained in BAS-24 “Related Party Disclosures". Total transactions of the significant related party as at 30 June 2013 are as follows:

23.03 Transaction with key management personnels

Amount in BDT

2013

Name of company Relation ship Opening Addition Adjustment Closing balance balance

Golden Harvest Agro Industries Ltd. Parent company - 122,451,416 40,938,590 81,512,826

- 122,451,416 40,938,590 81,512,826

Particulars 30-Jun-13 30-Jun-12

Managerial Remuneration paid or payable during the year to the directors,

including managing directors. - -

Any other perquisite or benefits in cash or in kind stating, approximate

money value where applicable. - -

Other allowances and commission including guarantee commission - -

Pensions etc. -

(i) Pensions - -

(ii) Gratuities - -

(iii) Payments from a provident funds, in excess of own subscription and

interest thereon - -

Share Based payments - -

115

23.04 Quantitative details of opening stock, purchases/ production, consumption/ sales and closing

stock of raw materials and finished goods:

23.05 Capacity utilization

23.06 Capital expenditure commitment

There was no capital expenditure contracted but not incurred or provided for at 30 June,2013.

23.07 Term loan commitment

At 30 June 2013 the company had annual commitment under term loan as set out below: Term loan principal due within 1 year 4,002,023 Term loan principal due within 2 to 5 years 9,719,265

23.08 Claim not acknowledged as debt

There was no claim against the company not acknowledged as debt as on 30-06-2013.

23.09 Un-availed credit facilities

The Company has no credit facilities available to the company under any contract,

other than trade credit available in the ordinary course of business as on 30-06-2013

Closingstock

Consumption/ salesItem

Opening stock

Purchases/production

Kg Kg

Raw materials

For the year 2012-2013 36,659 644,210 622,112 58,757

For the year 2011-2012 37,688 541,353 542,382 36,659

Kg

Item

Kg

Finished goods

Fish

For the year 2012-2013 52,151

926,453 897,395 81,209

For the year 2011-2012 54,087 762,324 764,261 52,151For the year 2011-2012

%

Fish processing 66.55%1,779,664 1,184,374

Item

Capacity inKG

Per year

Utilization in KG

Average per year

116



23.10 Post-balance sheet events

The Company obtained consent from the Bangladesh Security and Exchange Commission for raising capital through its existing shareholders on August 19, 2013 vide letter reference number SEC/CI/CPLC (Pvt.) 513/2013/2544

23.11 Employee details

i) During the year, there were 227 employees employed for the full year and 31 employees less than the full year at a remuneration of BDT 3,000 per month and above.

ii) At the end of the year, there were 279 employees in the Company.

23.12 Rounding off

Amounts appearing in these financial statements have been rounded off to the nearest BDT and, wherever considered necessary.

23.13 Rearrange of last year figures

To facilitate comparison, certain relevant balances pertaining to the previous year have been rearranged or reclassified whenever considered necessary to conform to current year presentation.

PROXY FORM

ATTENDANCE SLIP

Golden Harvest Agro Industries Ltd.Corporate Head Office: SPL Western Tower, Level 5, #501 & 502, 186 Tejgaon-Gulshan Link RoadTejgaon, Dhaka-1208, Bangladesh, Tel: +8802 8878784-7, Fax: +8802 8878204, www.goldenharvestbd.com

Share Department: Road# 10, House# 127, 3rd floor, Block# C, Niketon, Gulshan, Dhaka-1212, BangladeshTel: +88 02 9840181, E-mail: [email protected]

Factory: Bokran, Monipur, Bobanipur, Gazipur Sadar, Gazipur, Bangladesh

Golden Harvest Agro Industries Ltd.Corporate Head Office: SPL Western Tower, Level 5, #501 & 502, 186 Tejgaon-Gulshan Link RoadTejgaon, Dhaka-1208, Bangladesh, Tel: +8802 8878784-7, Fax: +8802 8878204, www.goldenharvestbd.com

Share Department: Road# 10, House# 127, 3rd floor, Block# C, Niketon, Gulshan, Dhaka-1212, BangladeshTel: +88 02 9840181, E-mail: [email protected]

Factory: Bokran, Monipur, Bobanipur, Gazipur Sadar, Gazipur, Bangladesh

I/We

of being a shareholder of

Golden Harvest Agro Industries Ltd. do hereby appoint

Mr./Ms

of

to attend and vote on my/our behalf at the 9th Annual General Meeting of the Company to be held on December 12, 2013 Thursday at 10:00 am

at Factory: Bokran, Monipur, Bobanipur, Gazipur Sadar, Gazipur, Bangladesh or at any adjournment thereof or any ballot to be taken in consequence

thereof.

Signed this day of December 2013

Signature of the proxy

BO ID No

No of shares being held Signature of the Shareholder (s)

I/We hereby record my/our attendance at the 9th Annual General Meeting of the Company to be held on December 12, 2013 Thursday at 10:00

am at Factory: Bokran, Monipur, Bobanipur, Gazipur Sadar, Gazipur, Bangladesh

Name of the Shareholder (s) / Proxy (In Block Letters)

BO ID No.

Signature of the Shareholder(s)/ Proxy

N.B. Shareholders attending the meeting in person or by proxy are requested to complete the Attendence Slip and deposit the same at the entrance of the meeting hall.

Notes:

1. This form of Proxy, duly completed must be deposited at least 48 hours before the meeting of the Company Share Department office.

Proxy is invalid if not signed and stamped as indicated above.

2. Signature of the Shareholder should agree with the specimen signature registered with the Company or BO Account/CDBL Record

Revenue Stamp ofTk. 10.00

Golden Harvest Agro Industries LimitedCorporate Head Office

SPL Western Tower, Level 5, #501 & 502186 Tejgaon-Gulshan Link Road

Tejgaon, Dhaka-1208, BangladeshTel: +8802 8878784-7, Fax: +8802 8878204

www.goldenharvestbd.com

Share DepartmentRoad# 10, House# 127, 3rd floor, Block# C, Niketon

Gulshan, Dhaka-1212, BangladeshTel: +88 02 9840181, E-mail: [email protected]

FactoryBokran, Monipur, Bobanipur, Gazipur Sadar

Gazipur, Bangladesh

conc

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2013 annual report - golden harvestsub: annual report for the year ended june 30, 2013 dear sir (s),...

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