APEX FOODS LIMITED

Annual Report 2007-08

CONTENTS

Notice of the 29th Annual General Meeting Corporate Directory Five years Statistics Corporate Governance Compliance Status Report Chairmans Statement Directors Report Value Added Statement Auditors Report Balance Sheet Profit and Loss Account Cash Flow Statement Statement of Changes in Equity Notes to the Financial Statements Proxy Form Attendance Slip

2 3 4 5 7 8 16 17 18 19 20 21 22

APEX FOODS LIMITED

Annual Report 2007-08

NOTICE OF THE ANNUAL GENERAL MEETING

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

AGENDA
1. To receive and adopt the Accounts for the year ended June 30, 2008 and report of the Auditors and Directors thereon. 2. To declare Dividend @ 20% for the year 2007-08 as recommended by the Board of Directors. 3. To elect Directors. 4. To appoint Auditors for the year 2008-09 and fix their remuneration. Dated: Dhaka August 25, 2008. By Order of the Board Sd/Serazul Hoq Company Secretary
NOTES: 1. The Share Transfer Register of the Company will remain closed from September 17, 2008 to October 16, 2008 (Both days inclusive). During the period no transfer will be effected. The Shareholders whose name will appear in the Share Register of the Company at the close of business on September 16, 2008 will be entitled to the Dividend. 2. A member entitled to attend and vote at the Annual General Meeting may appoint only another member as proxy to attend and vote in his/her stead as per Para 104 of the Articles of Association of the Company. The Proxy Form duly stamped must be deposited at the Registered Office of the Company not later than 48 hours before the time fixed for the Meeting. 3. Members are requested to inform change of address, if any, to the Company by September 16, 2008. 4. In pursuance of SECs Notification No. SEC/SRMI/2000-953/1950 dated October 24, 2000 gazetted on November 07, 2000, the Company shall hold discussions in the Annual General Meeting strictly in conformity with the provisions of the Companies Act, 1994 and no benefit in cash or kind, other than in the form of Cash dividend or Stock dividend, shall be paid to the holders of equity securities. 5. For the sake of convenience, Shareholders are requested to submit their queries on the Directors Report and the Audited Accounts for the year 2007-08, if any, at the Registered Office of the Company preferably 3 days before the day of the Annual General Meeting. 6. Admittance to the meeting venue will be strictly on production of the Attendance Slip sent with the Notice.

APEX FOODS LIMITED

Annual Report 2007-08

CORPORATE DIRECTORY
BOARD OF DIRECTORS
Chairman & Managing Director Vice Chairman & Deputy Managing Director Director Director Director Independent Director : : : : : : Mr. Zafar Ahmed Mr. Zahur Ahmed PhD Mrs. Shawkat Ara Ahmed Mr. Shahriar Ahmed Mr. Ashim Kumar Barua Mr. Kazi Faruq Kader

AUDIT COMMITTEE Chairman Member Member : : : Mr. Shahriar Ahmed, Director Mr. Ashim Kumar Barua, Director Mr. Kazi Faruq Kader, Independent Director

SENIOR CORPORATE OFFICIALS Chief Financial Officer Company Secretary Head of Internal Audit Executive Director Head; Financial Accounts Head; Process Control : : : : : : Mr. S. K. Halder Mr. Serazul Hoq Mr. Md. Shakhawat Hossain Mr. Mominuddin Ahmed Khan Mr. M. Kamruzzaman ACA Mr. Ashish Kumar Paul ACA

LEGAL ADVISORS K. Fazlul Quadir Lee, Khan & Partners Md. Shahjahan Khan AUDITORS Howladar Yunus & Co. Chartered Accountants BANKER Agrani Bank Limited Agrabad Corporate Branch, Jahan Building Agrabad C/A, Chittagong REGISTERED OFFICE Biman Bhaban, 5th floor 100 Motijheel C/A, Dhaka-1000 Bangladesh FACTORY 51-B Shagarika Road, Fouzderhat Industrial Estate, Pahartali, Chittagong, Bangladesh
3

APEX FOODS LIMITED

Annual Report 2007-08

FIVE YEARS STATISTICS

Figure in Thousand Taka Particulars Results of Operations: Turnover Gross Profit Operating Profit Net Profit before Tax Net Profit after Tax Basic Earning Per Share *Dividend Per Share Financial Positions: Total Assets Fixed Assets-Gross Fixed Assets- Net Gross Working Capital Net Working Capital Working Capital Loan Share Capital Share Premium Reserve and Surplus Share Holders Equity Term Loan Key Financial Ratios: Current Ratio Debt to Total Assets Return on Equity (%) Net Asset Value Per Share Payout Ratio Interest Service Coverage Ratio Others:
Market Price Per Share (30th June) Price Earning Multiple Number of Employees (Including contract labor) Capacity Utilization (%)

2007-08
2,291,194 225,591 28,850 44,510 23,673 36.68 20.00 1,001,696 410,982 132,737 812,239 259,832 440,576 57,024 209,088 139,605 417,122 34,798 1.47 58.36 5.68 731 48.18 1.58 1,225 33.38 674 49.74

2006-07
2,414,669 211,181 24,992 32,654 21,439 37.60 18.00 932,231 354,236 107,887 761,954 242,396 444,598 57,024 209,088 127,337 403,714 15,700 1.47 56.69 5.31 708 47.88 1.52 571 15.19 680 57.90

2005-06
1,650,891 174,812 15,138 21,188 12,411 21.76 16.00 923,389 346,572 125,871 735,128 223,790 415,837 57,024 209,088 116,163 391,399 81,736 1.44 57.61 3.17 686 73.51 1.32 349 16.04 654 40.46

2004-05
1,324,837 129,518 10,626 14,976 12,983 22.77 15.00 986,844 330,022 139,449 785,004 213,851 449,097 57,024 209,088 112,876 387,541 101,559 1.37 60.73 3.35 680 65.88 1.22 520 22.84 646 36.91

2003-04
1,488,820 143,015 14,853 18,206 14,993 26.29 13.00 980,038 274,863 107,057 810,591 292,139 448,013 57,024 209,088 110,116 383,642 77,945 1.56 60.85 3.91 673 49.44 1.36 440 16.74 657 46.98

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

APEX FOODS LIMITED

Annual Report 2007-08

Corporate Governance Compliance Status Report

Status of compliance with the conditions imposed by the Securities and Exchange Commissions notification No. SEC/CMRRCD/2006-158/Admin/02-08 dated February 20, 2006 Condition No. 1.1 Title Boards Size: Board members should not be less than 5 (Five) and more than 20 (Twenty) Independent Director: At least th 1/10 Appointment of independent Director by elected Directors Individual Chairman of the Board, Chief Executive, clearly defined roles and responsibilities Compliance Status Complied Explanation for non compliance with the condition

1.2 (i) 1.2 (ii) 1.3

Complied Complied Not Complied Our Company (Sea Food Processing & Export Industry) requires unique expertise. We are looking for a competent person but we could not yet find eligible individual for the purpose. However, in the mean time the Chairman has been entrusted with both the responsibilities.

1.4 1.4 (a) 1.4 (b) 1.4 (c) 1.4 (d) 1.4 (e) 1.4 (f) 1.4 (g) 1.4 (h) 1.4 (i) 1.4 (j) 1.4 (k) 2.1

2.2

The Directors report to Shareholders on: Fairness of Financial Statements Maintenance of proper books of accounts Adaptation of appropriate Accounting policies and estimates Compliance with International Accounting Standard Soundness of Internal Control System Ability to Continue as Going Concern Significant deviation from last year Presentation of last three years data Declaration of Dividend Details of Board Meeting Shareholding Pattern Appointment of CFO, Head of Internal Audit and Company Secretary and defining of their respective roles, responsibilities and duties. Attendance of CFO and the Company Secretary at Board of Directors meeting

Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied

Complied

APEX FOODS LIMITED

Annual Report 2007-08

3.00 3.1 (i) 3.1 (ii)

3.1 (iii) 3.2 (i) 3.2 (ii)

3.3.1 (i) 3.3.1(ii)(a) 3.3.1(ii)(b)

3.3.1(ii)(c) 3.3.1(ii)(d) 3.3.2 3.4

4.00 4.00 (i) 4.00 (ii) 4.00 (iii) 4.00 (iv) 4.00 (v) 4.00 (vi) 4.00 (vii)

Audit Committee Constitution of Committee Constitution of Committee with Board members including one Independent Director Filling of Casual Vacancy in Committee Chairman of the Committee Professional Qualification and experience of the Chairman of the committee Reporting to the Board of Directors Reporting of Conflict of Interest to the Board of Directors Reporting of any fraud or irregularity to the Board of Directors Reporting of violation of laws to the Board of Directors Reporting of any other matter to the Board of Directors Reporting of Qualified point to Commission Reporting of activities to the Shareholders and General Investors External/Statutory Auditors: Non-engagement in appraisal or valuation Non-engagement in designing of Financial Information System Non-engagement in BookKeeping Non-engagement in Broker-dealer service Non-engagement in Actuarial Services Non-engagement in Internal Audit Non-engagement in any other services

Complied Complied Complied

Not applicable Complied Complied

Complied Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable There was no such event to report There was no such event to report

There was no such event to report There was no such event to report There was no such event to report There was no such event to report

Complied Complied Complied Complied Complied Complied Complied

APEX FOODS LIMITED

Annual Report 2007-08

CHAIRMANS STATEMENT
Dear Shareholders, It is an honor and pleasure for me to welcome you all to the Twenty-ninth Annual General Meeting of your Company and to present the Annual Report for the year ended 30th June 2008. Certainly, Bangladesh economy has passed through a soft patch. During financial year 2007-08, Bangladesh economy maintained a robust growth in the services and manufacturing sectors despite volatile oil price in the international market. The GDP was 6.00 percent, slowing down from 6.5 percent in the previous fiscal year. Facing increasingly tough challenges, the shrimp industry has proven to be remarkably resilient. Shrimp is the most widely harvested and globally traded commodity, contributing to about 10 percent of the total world seafood trade. Despite stagnant demand in the traditional Japanese market, consumption, particularly of warm water shrimp, such as black tiger and vannamei, is growing in other markets such the USA & EU. Shrimp is now the most popular species consumed in the USA. As a result of rapid economic development, better supply and distribution, demand for shrimp is also growing in other parts of the world, particularly in Asian and Eastern European countries. However, the challenges ahead are bigger and tougher and Bangladesh seafood industry in particular must be well prepared in order to survive in the increasingly competitive business environment. While globalization has generally been successful in reducing tariff barriers, an increasing number of non-tariff barriers are being introduced in the developed markets, both by government and non-government organizations. Various certification schemes related to product safety, sustainability have taken centre stage in the global seafood markets, with significant impacts to the shrimp industry. The loss of agricultural crops, fisheries and livestock caused by the two rounds of flood and cyclone Sidr has negative impact on the production of shrimp resulting in scarcity of raw shrimp supply during the year. On the other hand, recession in the U.S. has caused a sharp reduction of shrimp price in the international market. As a result, in the year 2007-08 there was a slight decline of 5.00 percent in the turnover of your Company. I sincerely thank all respectable Shareholders for extending their continuous support and confidence in the Board of Directors of your Company. I also like to put on record my sincere appreciation to the Banks, Financial and Regulatory Agencies, Suppliers, Customers, various people with whom we have interacted in the course of business, management staff and members of the Company at all levels for their cooperation and sincere efforts in the growth of your Company.

Dhaka 23rd August, 2008

Sd/Zafar Ahmed Chairman

APEX FOODS LIMITED

Annual Report 2007-08

REPORT OF THE DIRECTORS

Dear Shareholders, The Directors are pleased to submit to you the Annual Report together with the Auditors Report and Audited Financial Statements of the Company for the year ended 30th June 2008. Statement of Directors on Financial Reports: (a) The financial statements prepared by the management of the company fairly present its state of affairs, operational results, cash flows and changes in equity. (b) Proper books of account of the company have been maintained. (c) Appropriate accounting policies have been consistently applied in preparation of the financial statements and that the accounting estimates are based on reasonable and prudent judgment. (d) International Accounting Standards, as applicable in Bangladesh, have been followed in preparation of the financial statements and any departure therefrom has been adequately disclosed. (e) The system of internal control is sound in design and has been effectively implemented and monitored. (f) There are no significant doubts upon the companys ability to continue as a going concern. Operating results of the company: Economy & Operation During the year ended 30th June 2008 your Company achieved a total turnover of Taka 2.29 billion as against last years turnover of Taka 2.41billion. The decline in turnover is 5.11% with a 36.31% growth in profit (before tax). Net profit (after tax) earned during the year was 23.67 million. During the year there was a slight increase in the Gross Profit Margin. Pricing is an important factor in the international trade. To compete in the international market the pricing of the products has to be very competitive. During the year we had no other option but to bring the price at par with other exporting countries. As a result, there is a slight decline in the turnover with a consequential slight increase in Gross Profit Margin. But at the end, we were able to maintain a moderate Net Profit (before tax).
KEY FINANCIAL DATA
TURNOVER (Taka in million)
3000 2500 2000 1500 1000 500 0 2003-04 2004-05 2005-06 2006-07 2007-08

NET PROFIT (Taka in million)

25 20 15 10 5 0 2003-04 2004-05 2005-06 2006-07 2007-08

APEX FOODS LIMITED Productivity

Annual Report 2007-08

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

QUANTITY IN KGs 2007-08 2006-07 2005-06 2004-05 2003-04 500,000 1,500,000 2,500,000 3,500,000

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

FIXED ASSET (Taka in million)

500 400 300 200 100 0 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Key operating and financial data:

Value in thousand Taka 2007-08 2006-07 34,287 (12,849) 21,438 64,393 85,831 2005-06 22,248 (9,836) 12,412 61,105 73,517

Profit Before PPF & Tax Provision for PPF & Tax Net Profit For The Year Profit Brought Forward Profit Available For Appropriations The Directors recommended the following appropriations Proposed Dividend Profit Carried Forward

46,736 (23063) 23,673 75,567 99,240

11,404 87,836 99,240

10,264 75,567 85,831

9,124 64,393 73,517

APEX FOODS LIMITED Dividend

Annual Report 2007-08

Your Board of Directors has recommended Cash Dividend of Tk. 20.00 per Share of Tk. 100.00 each for the year 2007-08. Upon your approval in this General Meeting, the dividend will be paid to the Shareholders whose names appear in the Register of Members of the Company as on 16th September 2008, at the close of office. Board meetings: During the year 6 Board Meetings were held. The attendance record of the Directors is as follows: Name of Directors Mr. Zafar Ahmed Mr. Zahur Ahmed PhD Mrs. Shawkat Ara Ahmed Mr. Shahriar Ahmed Mr. Ashim Kumar Barua Mr. Kazi Faruq Kader Pattern of shareholdings: Name wise details I. Parent/Subsidiary/Associated Companies and other related parties Apex Spinning & Knitting Mills Limited Apex Lingerie Limited II. Directors, Chief Executive Officer, Company Secretary, Chief financial Officer, Head of Internal Audit: Mr. Zafar Ahmed Director Mr. Zahur Ahmed PhD Director Mrs. Shawkat Ara Ahmed Director Mr. Shahriar Ahmed Director Mr. Ashim Kumar Barua Director Mr. Kazi Faruq Kader Independent Director Mr. Serazul Hoq Company Secretary Mr. S.K. Halder Chief Financial Officer Mr. Md. Shakhawat Hossain Head of Internal Audit III. Senior Corporate Executives 132,053 16,074 82,300 56,343 750 NIL 5 NIL NIL NIL 16,475 1,080 No. of Shares Meeting attended 6 6 6 6 6 5

10

APEX FOODS LIMITED Name wise details IV. Shareholders holding ten percent (10%) or more voting interest in the Company Mr. Zafar Ahmed Mrs. Shawkat Ara Ahmed Director 132,053 82,300

Annual Report 2007-08 No. of Shares

Mr. Zahur Ahmed PhD and Mr. Kazi Faruq Kader are retiring from the Board in terms of the Articles of Association of the Company and being eligible, offer themselves for re-election. Auditors The retiring Auditors M/s. Howladar Yunus & Co., Chartered Accountants, being eligible, offer themselves for re-appointment as Auditors of the Company for the year 2008-09. Corporate Governance Compliance Report In accordance with the requirement of the Securities and Exchange Commission, Corporate Governance Report is annexed.

Dhaka 23rd August, 2008

On behalf of the Board Sd/Zafar Ahmed Chairman

11

APEX FOODS LIMITED

Annual Report 2007-08

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TURNOVER (Taka in million)
3000 2500 2000 1500 1000 500 0 2003-04 2004-05 2005-06 2006-07 2007-08

NET PROFIT (Taka in million)

25 20 15 10 5 0 2003-04 2004-05 2005-06 2006-07 2007-08

12

APEX FOODS LIMITED

Annual Report 2007-08

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QUANTITY IN KGs 2007-08 2006-07 2005-06 2004-05 2003-04 500,000 1,500,000 2,500,000 3,500,000

wekevRvii PjwZ Aev weePbv Ki Avcbv`i Kvvbx G ermi 56.75 wgwjqb UvKv vqx mwZ wewbqvM KiQ | gvU wewbqvMi 51.83 wgwjqb UvKv cvU I gwkbvixR Ges KviLvbvi hcvwZZ wewbqvM KiQ | GB cwZe`b Bmyi ZvwiL 18.00 wgwjqb UvKv vqx m` wewbqvMi wmv cwqvaxb AvQ| Avcbv`i Kvvbxi eevcbv cl` wekvm Kib h, vqx m` wewbqvM Avcbv`i KvvbxK Aviv eq-mvkqx I cwZhvMx Kie | vqx m`i wbiwewQb wewbqvMi cwZdjb wbgv wP iqQ |
FIXED ASSET (Taka in million)
500 400 300 200 100 0 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

g~L cwiPvjb I Avw_K Dcv: 2007-08 46,736 (23,063) 23,673 75,567 99,240 11,404 87,836 99,240 2006-07 34,287 (12,849) 21,438 64,393 85,831 10,264 75,567 85,831 (UvKv mnm g~j) 2005-06 22,248 (9,836) 12,412 61,105 73,517 9,124 64,393 73,517

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13

APEX FOODS LIMITED

Annual Report 2007-08

jfvsk: Avcbv`i Kvvbxi cwiPvjKgjx 2007-08 wnmve ermi cwZ 100/- (GKkZ) UvKvi kqvii Rb 20.00 UvKv nvi bM` jfvsk c`vbi mycvwik KiQb | GB evwlK mvaviY mfvq Avcbv`i Abygv`b mvc mB mg kqvinvvi`i c`vb Kiv ne hv`i bvg Kvvbxi m`m ewnZ 16 B m^i 2008 Bs ZvwiL Kvh mgv mgq Af~ _vKe | evWi mfv G ermi evWi 6wU mfv AbywZ nqQ | cwiPvjKMYi DcwwZi ZvwjKv wbg c` nj: cwiPvjKe`i bvg mfvq DcwwZ Rbve Rvdi Avng` 6 Rbve Ri Avng` wcGBPwW 6 Rbvev kIKZ Aviv Avng` 6 Rbve kvnwiqvi Avng` 6 Rbve Amxg Kzgvi eoqv 6 Rbve KvRx dviK Kv`i 5 kqvinvwsm msKv weeiY: bvg Abymvi weeiY 1. cviU/ mvewmwWqvix/ GmvwmqUW Kvvbx Ges Abvb mwKZ cvwUmgyn: Gc wwbs G bxwUs wgjm& wjwgUW Gc jvbRvix wjwgUW 2. cwiPvjKe`, cavb wbevnx KgKZv, Kvvbx mwPe, cavb A_ KgKZv, Afixb wbixv cavb: Rbve Rvdi Avng` cwiPvjK 1,32,053 Rbve Ri Avng` wcGBPwW cwiPvjK 16,074 Rbvev kIKZ Aviv Avng` cwiPvjK 82,300 Rbve kvnwiqvi Avng` cwiPvjK 56,343 Rbve Amxg Kzgvi eoqv cwiPvjK 750 Rbve KvRx dviK Kv`i BbwWcU WvBii Rbve wmivRyj nK Kvvbx mwPe 5 Rbve Gm. K. nvj`vi cavb A_ KgKZv Rbve gvt mvLvIqvZ nvmb Afixb wbixv cavb 3. DaZb KicviU wbevnxMY 14

kqvi msLv

16,475 1,080

APEX FOODS LIMITED

Annual Report 2007-08

bvg Abymvi weeiY 4. KvvbxZ 10 kZvsk A_ev Zvi Pq ekx fvUi AwaKvix kqvinvvi: Rbve Rvdi Avng` Rbvev kIKZ Aviv Avng` cwiPvjK:

kqvi msLv

1,32,053 82,300

Rbve Ri Avng` wcGBPwW I Rbve KvRx dviK Kv`i Kvvbxi msN wewa gvZveK evW _K c`ZvM I hvM weavq cyb:wbevPb BQv cKvk KiQb | wbixK: Aemi MnYKvix wbixK gmvm nvIjv`vi BDbym Gv Kvvbx, PvUvW GvKvDUvUm hvM weavq 2008-09 wnmve ermii Rb Zvnv`iK wbixK wbqvMi Rb Ave`b KiQb| KicviU Mfb cwZe`b: wmwKDwiwUR Ges GP Kwgkbi Pvwn`v Abyhvqx KicviU Mfb cwZe`b mshy Kiv nj | XvKv 23 k AvM, 2008 evWi c ^v/Rvdi Avng` mfvcwZ

15

APEX FOODS LIMITED

Annual Report 2007-08

VALUE ADDED STATEMENT

PARTICULARS VALUE ADDED Turnover Less: Bought in Materials & Services 2007-08 2,291,194,337 2,135,195,634 ---------------155,998,703 ========= 17,190,920 11.02 47,470,498 30.43 50,007,691 32.06 11,404,800 7.31 29,924,794 19.18 ---------------- --------155,998,703 100.00 ========= ===== % 2006-07 2,414,669,218 2,273,474,037 ---------------141,195,181 ========= 8,361,983 44,526,056 47,662,216 10,264,320 30,380,606 ---------------141,195,181 ========= 5.92 31.54 33.75 7.27 21.52 --------100.00 ===== %

APPLICATIONS Government as Tax Employees as Salary Wages & Allowances Providers of Loan as Interest & Charges Providers of Capital as Dividend Depreciation & Retention

Depreciation & Retention 19.18% Dividend 7.31%

Government as tax 11.02%

Salary, Wages & Allowances 30.43% Interest & Charges 32.06%

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APEX FOODS LIMITED

Annual Report 2007-08

AUDITORS' REPORT TO THE SHAREHOLDERS

We have audited the annexed Balance Sheet of the Apex Foods Limited as at 30th June, 2008 and its Profit and Loss Account for the year ended as on that date together with the accompanying Cash Flow Statement, Statement of Changes in Equity and Notes thereto as prepared by the Company in due conformance with generally accepted accounting principles, procedures and also the applicable Bangladesh Accounting Standards (BAS) and produced to us by it for our examination in due conformance with the applicable Bangladesh Standards on Auditing and we report that; (i) (ii) we have conducted the audit as per applicable Bangladesh Standards on Auditing (BSA); our examination and checking of records, relevant books of accounts, registers, schedules and financial statements were sufficient to enable us to form an informed and assessed opinion on the authenticity and accuracy of the accounts and financial statements; we have obtained all the information, explanations and documents as required by us; the Company management has followed relevant provisions of law and rules in managing the affairs of the Company and that proper books of account, records and other statutory books have been properly maintained; the Balance Sheet, Profit and Loss Account are in agreement with the said books of account maintained by the company and examined by us while the Cash Flow Statement conforms with the presentation laid out in the relevant Bangladesh Accounting Standard ; and the expenditure incurred and payments made were for the purpose of the companys business for the year.

(iii) (iv)

(v)

(vi)

And in our opinion the annexed Balance Sheet, Profit and Loss Account represent a true and fair view of the state of the Companys affairs as at 30th June, 2008 and of the profit earned for the year ended on that date and that these financial statements have been drawn up in accordance with the requirement of applicable laws and rules containing all the information in the manner required by relevant laws and rules and the Bangladesh Accounting Standards (BAS) as applicable in Bangladesh including BAS 24.

Sd/Howladar Yunus & Co. Chartered Accountants

Dated; Dhaka August 23, 2008

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APEX FOODS LIMITED

Annual Report 2007-08

BALANCE SHEET
AS AT 30TH JUNE, 2008
Value in Taka NOTES APPLICATION OF FUNDS: Fixed Assets: Gross Block Less: Accumulated Depreciation Net Block Investment (At Cost) Current Assets: Inventories Trade Debtors Advance, Deposits & Prepayments Other Receivable Cash & Bank Balances Less: Current Liabilities Working Capital Loan (Secured) Long Term Loan-Current Maturity Short Term Loan Trade Creditors Sundry Creditors Income Tax Payable Other Liabilities Net Current Assets Less: Deferred Tax Liability TOTAL ASSETS SOURCES OF FUNDS: Shareholders' Fund: Share Capital Share Premium Reserve and Surplus Proposed Dividend Loan Fund (Secured): Long Term Loan TOTAL LIABILITIES Sd/Sd/Ashim Kumar Barua
Director

30.06.2008

30.06.2007

410,982,291 278,245,782 132,736,509 56,720,190 402,397,836 89,252,478 36,483,650 88,252,065 195,853,040 812,239,069 440,576,222 7,904,041 27,644,408 22,502,675 24,269,410 27,720,991 1,789,659 552,407,406 259,831,663 5,272,505 ---------------444,015,857 ==========

354,236,445 246,349,434 107,887,011 62,390,190 386,396,728 77,883,282 21,868,654 201,712,117 74,093,467 761,954,248 444,598,480 12,509,897 27,135,680 15,854,770 18,004,467 1,455,425 519,558,719 242,395,529 5,768,604 ---------------406,904,126 ========== 57,024,000 209,088,000 127,337,245 10,264,320 403,713,565 3,190,561 ---------------406,904,126 ========== Sd/Serazul Hoq
Company Secretary

3 4 5 6 7 8 9 10 11 12 13 14

15 16 17 18 19

57,024,000 209,088,000 139,605,429 11,404,800 417,122,229 26,893,628 ---------------444,015,857 ==========

Zafar Ahmed
Managing Director

Note: Annexed notes form part of these Accounts.

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

Dated; Dhaka August 23, 2008

18

Sd/Howladar Yunus & Co. Chartered Accountants

APEX FOODS LIMITED

Annual Report 2007-08

PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED 30TH JUNE, 2008 Value in Taka Notes TURNOVER Cost of goods sold GROSS PROFIT OPERATING EXPENSES: Administrative & selling overhead Financial expenses OPERATING PROFIT Other income PROFIT BEFORE PPF & WF Provision for contribution to PPF & WF PROFIT BEFORE TAX Provision for tax: Current tax Deferred tax expenses/(income) NET PROFIT AFTER TAX Appropriations: Proposed dividend Previous years retained earnings Retained earnings carried forward Basic Earning per share Sd/30 Sd/Ashim Kumar Barua
Director

2007-08 2,291,194,337 2,065,602,942 225,591,395 196,741,725 146,734,034 50,007,691 28,849,670

2006-07 2,414,669,218 2,203,487,848 211,181,370 186,189,735 138,527,519 47,662,216 24,991,635 9,295,183 34,286,818 1,632,706 32,654,112 10,539,474 675,881 21,438,757 (10,264,320) 64,392,903 75,567,340 37.60 Sd/Serazul Hoq
Company Secretary

20 21

25 26

27

17,885,909 46,735,579 2,225,504 44,510,075 21,333,190 (496,099) 23,672,984 (11,404,800) 75,567,340 87,835,524 36.68

28

29

Zafar Ahmed
Managing Director

Note: Annexed notes form part of these Accounts.

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

Dated; Dhaka August 23, 2008

Sd/Howladar Yunus & Co. Chartered Accountants

19

APEX FOODS LIMITED

Annual Report 2007-08

CASH FLOW STATEMENT

FOR THE YEAR ENDED 30TH JUNE, 2008 Value in Taka 2006-07

2007-08 CASH FLOWS FROM OPERATING ACTIVITIES: Collection from turnover Payment for costs and expenses Other income Net cash generated from operating activities (a) CASH FOLWS FROM INVESTING ACTIVITIES: Sale of Investment Property, Plant and Equipment acquired Net cash used in investing activities (b) CASH FLOWS FROM FINANCING ACTIVITIES: Working capital loan received/(repaid) Term loan received/(repaid) Dividend Paid Net cash generated from financing activities (c)
Net increase/(decrease) in cash and cash equivalents (a+b+c)

2,279,825,141 (2,157,664,906) 14,450,909 136,611,144 9,105,000 (56,745,846) (47,640,846)

2,418,866,877 (2,375,245,506) 9,295,183 52,916,554 (7,664,263) (7,664,263)

(4,022,258) 46,741,619 (9,930,086) 32,789,275 121,759,573 74,093,467 195,853,040

28,761,245 (66,035,468) (8,803,087) (46,077,310) (825,019) 74,918,486 74,093,467

Cash and cash equivalents on opening Cash and cash equivalents on closing

Sd/-

Zafar Ahmed
Managing Director

Sd/Ashim Kumar Barua Director

Sd/Serazul Hoq
Company Secretary

Note: Annexed notes form part of these Accounts.

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

Dated; Dhaka August 23, 2008

Sd/Howladar Yunus & Co. Chartered Accountants

20

APEX FOODS LIMITED

Annual Report 2007-08

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30TH JUNE, 2008

Value in Taka

Particulars

Share Capital 57,024,000 57,024,000

Share Premium 209,088,000 209,088,000

Tax Holiday Reserve 51,162,905 51,162,905

Retained Earnings 75,567,340 23,672,984

Proposed Dividend 10,264,320

Capital Gain 607,000

Total

As at 30th June'07 Net profit after tax of 2007-08 Dividend paid during the year Proposed Dividend As at 30th June'08

403,713,565 23,672,984

(10,264,320) (11,404,800) 87,835,524 11,404,800 11,404,800 607,000

(10,264,320) 417,122,229

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30TH JUNE, 2007
Particulars Share Capital 57,024,000 57,024,000 Share Premium 209,088,000 209,088,000 Tax Holiday Reserve 51,162,905 51,162,905 Retained Earnings 64,392,903 21,438,757 Proposed Dividend 9,123,840 (9,123,840) Capital Gain 607,000 607,000 Total

As at 30th June'06 Net profit after tax of 2006-07 Dividend paid during the year Proposed Dividend As at 30th June'07

391,398,648 21,438,757 (9,123,840) 403,713,565

(10,264,320) 10,264,320 75,567,340 10,264,320

Sd/-

Zafar Ahmed
Managing Director

Sd/Ashim Kumar Barua

Director

Sd/Serazul Hoq
Company Secretary

Note: Annexed notes form part of these Accounts.

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

Dated; Dhaka August 23, 2008

Sd/Howladar Yunus & Co. Chartered Accountants

21

APEX FOODS LIMITED

Annual Report 2007-08

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE, 2008 FORMING AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATERIAL INFORMATION:

a. Legal Form of the Enterprise: Apex Foods Limited is a Public Limited Company registered under the Companies Act, 1913 (Repealed in 1994). The Company was incorporated in Bangladesh on 21.03.1979. Shares of the Company are listed in the Dhaka Stock Exchange Ltd. and Chittagong Stock Exchange Ltd. b. Address of Registered Office and Principal Place of Business: The principal Place of Business is the Registered Office at Biman Bhaban, 5th Floor, 100 Motijheel Commercial Area, Dhaka-1000 and the Factory is located at 51-B(1) Shagarika Road, Fouzderhat Industrial Estate, Pahartali, Chittagong. c. Nature of Business Activities: The Company owns and operates a modern Shrimps Processing Plant and exports 100% of its products in the foreign markets. d. Accounting Convention and Basis: These Financial Statements have been prepared under the Historical Cost Convention and Going Concern basis in accordance with applicable International Accounting Standards in Bangladesh which does not vary from the requirements of the Companies Act 1994, and the Listing Regulations of the Stock Exchanges, The Securities & Exchange Rules, 1987 and other laws and rules applicable in Bangladesh. e. Compliance with local laws: The Financial Statements have been prepared in compliance with requirements of the Companies Act 1994, The Securities & Exchange Rules, 1987 and other relevant local laws and rules. f. Compliance with International Accounting Standard (IAS): The Financial Statements have been prepared in compliance with requirements of IASs adopted by the Institute of Chartered Accountants of Bangladesh (ICAB)) and applicable in Bangladesh. g. Fixed Assets: These are stated at historical cost less accumulated depreciation in accordance with BAS 16 Property, Plant and Equipment. h. Depreciation: Depreciation is charged on all fixed assets except land and land development on reducing balance method. The rates of depreciation of each class of assets are as follows:
Factory Building Plant & Machinery Factory Equipments Furniture & Fixtures Office Equipments Vehicles Crockery 22 20 % 20 % 20 % 10 % 20 % 20 % 20 %

APEX FOODS LIMITED i. Accounting for Lease:

Annual Report 2007-08

Due to adoption of lease accounting by the Institute of Chartered Accountants of Bangladesh accounting for lease has been made as per BAS 17, Leases. j. Inventories: Inventories in hand except Packing Materials and Chemicals have been valued at lower of cost and net realizable value in accordance with BAS 2 Inventories after making due allowance for any obsolete or slow moving items. Packing Materials and Chemicals have been valued at cost. k. Taxation: Provision for income tax has been made as per requirements of the Income Tax Ordinance, 1984. l. Income Tax: The Company is a Publicly Traded Company, as per the Income Tax Ordinance, 1984 the rate of Income Tax is 27.50%. Since the company is 100% export oriented there is a tax rebate of 50% on export profit. Therefore the Corporate Tax stands at 13.75% on export profit. However, the tax provision has been made @ 27.50% on interest earned, 20% on dividend income and 15% on profit on sale of investment in shares as per provision of the Income Tax Ordinance, 1984. m. Deferred Tax: Deferred tax assets or deferred tax liabilities have been accounted for in accordance with BAS 12Income Taxes. Deferred tax arises due to temporary difference, deductible or taxable for the events or transaction recognized in the income statement. A temporary difference is the difference between the tax base of an asset or liability and its carrying amount/reported amount in the financial statement. Deferred tax asset or liability is the amount of income tax payable or recoverable in future period(s) recognized in the current period. The deferred tax asset/income or liability/expenses does not create a legal liability/recoverability to and from the income tax authority. n. Trade Debtors: Export bills receivables are stated at the original invoice value. o. Creditors and Accrued Expenses: Liabilities are recognized for amounts to be paid in future for goods and services received whether or not billed by the supplier. p. Earning Per Share: The Company calculates Earnings Per Share (EPS) in accordance with BAS 33 Earnings Per Share which has been shown on the face of Income Statement and the computation of EPS is stated in Note 30. i. Basic Earnings This represents earnings for the year attributable to ordinary shareholders. There was no preference dividend, minority interest but there is an extra ordinary item i.e. profit on sale of investment which has been deducted.
23

APEX FOODS LIMITED

Annual Report 2007-08

ii. Weighted Average Number of Ordinary Shares Outstanding During The Year This represents the number of ordinary shares outstanding at the beginning of the year plus the number of ordinary shares issued during the year multiplied by a time-weighting factor. The time-weighting factor is the number of days the specific shares is outstanding as a proportion of the total number of days in the period. iii. Basic Earnings Per Share This has been calculated by dividing the basic earnings by the weighted average number of ordinary shares outstanding during the year. iv. Diluted Earnings Per Share No diluted EPS is required to be calculated for the year, as there was no scope for dilution during the year under review. q. Cash Flow Statement: Cash Flow statement has been prepared basically in accordance with BAS 7 Cash Flow Statements and the cash flow from the operating activities have been presented under direct method as required by the Securities and Exchange Rules 1987 and considering the provisions of paragraph 19 of BAS 7 which provides that Enterprises are Encouraged to Report Cash Flow from Operating Activities using the Direct Method. r. Foreign Exchange: Foreign currencies are converted into Bangladesh Taka at the rates ruling on the date of transaction and the balance in hand at the close of the business, at the rate prevailing on the Balance Sheet date in accordance with BAS 21 The Effects of Changes in Foreign Exchange Rates. s. Revenue Recognition: Exports are made against confirmed L/C and firm contracts. The sale proceeds are accounted for upon shipments and after satisfying all the conditions for revenue recognition as provided in BAS 18 Revenue. t. Employee Benefit Obligations: The Company operates a contributory provident fund and a Group insurance scheme for its permanent employees. A Board of Trustees administrates provident fund. u. Contribution to PPF & WF: This is being calculated 5% of the net profit after such contribution provided as per provisions of the Companys Profit (Workers Participation) Act, 1968 and is payable to workers as defined in the said Act. v. Risk and uncertainties for use of estimates in preparation of financial statements: Preparation of Financial Statements in conformity with the Bangladesh Accounting Standards requires management to make estimates and assumption that effect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statement and revenues and expense during the period reported. Actual results could differ from those estimates. Estimates are used for accounting of certain items such as long term contracts, depreciation and amortization, employees benefit plans, taxes, reserves and contingencies.
24

APEX FOODS LIMITED

Annual Report 2007-08

w. Responsibility for preparation and presentation of financial statements: The Board of Directors is responsible for the preparation and presentation of Financial Statements under section 183 of the Companies Act 1994 and as per the provision of The Framework for the Preparation and Presentation of Financial statements issued by the International Accounting Standard Committee (IASC) as adopted by The Institute of Chartered Accountants of Bangladesh (ICAB) x. Comparative information: Comparative information have been disclosed in respect of the year 2006-07 for all numerical information of the financial statements and also the narrative and descriptive information when it is relevant for understanding of the current periods financial statements. Last year's figures have been rearranged where considered necessary to conform to current years presentation. y. Reporting currency and level of precision: The figures in the financial statements represent Bangladesh Currency (Taka), which have been rounded-off to nearest Taka. z. Reporting period: Financial Statements of the Company cover one calendar year from 1st July 2007 to 30th June 2008. aa. Others: The Financial Statements include the following components as per BAS 1 Presentation of Financial Statements.
i) ii) iii) iv) v) Balance Sheet as at 30 June 2008. th Profit and Loss account for the year ended 30 June 2008. th Cash Flow Statement for the year ended 30 June 2008. th Statement of Changes in Equity for the year ended 30 June 2008. Accounting Policies and explanatory notes.
th

2.

FIXED ASSETS: TK. 132,736,509

COST DEPRECIATION Balance as at 30.06.08
3,392,470 64,828,283 283,965,175 22,275,609 8,503,946 11,200,157 16,684,143 132,508 410,982,291 20 20 20 10 20 20 20

SL NO.

PARTICULAR

Balance as at 01.07.07
3,392,470 60,451,840 233,122,614 21,288,036 8,411,369 10,765,924 16,684,143 120,049 354,236,445

Addition during the year

4,376,443 50,842,561 987,573 92,577 434,233 12,459 56,745,846

RATE %

Balance as at 01.07.07
49,095,816 158,989,780 14,920,955 4,986,653 6,451,663 11,829,057 75,510 246,349,434

For the year

Balance as at 30.06.08
52,242,309 183,984,859 16,391,886 5,338,382 7,401,362 12,800,074 86,910 278,245,782

W.D.V. as at 30.06.08

1 2 3 4 5 6 7 8

Land & Land Development Factory Building Plant & Machinery Factory Equipments Furniture & Fixture Office Equipments Motor Vehicles Crockeries Total

3,146,493 24,995,079 1,470,931 351,729 949,699 971,017 11,400 31,896,348

3,392,470 12,585,974 99,980,316 5,883,723 3,165,564 3,798,795 3,884,069 45,598 132,736,509

Charged to: Manufacturing Account Profit & Loss Account

29,612,503 2,283,845 31,896,348

Due to adoption of BAS 17, Leases by ICAB, the leased asset has been considered as assets of the Company. 25

APEX FOODS LIMITED

Annual Report 2007-08 2007-08 2006-07

3.

INVESTMENT: TK. 56,720,190 In Shares: At Cost Apex Spinning & Knitting Mills Limited 226,320 Shares of Tk. 100.00 each at par. Amam Sea Food Industries Limited 10,482 Shares of Tk. 100.00 each at par Apex Weaving & Finishing Mills Limited 200,000 Shares of TK. 100.00 each at par. Apex Lingerie Limited 24,000 Shares of TK. 100.00 each. Apex Yarn Dyeing Limited 32,700 Share of Tk. 100/- each. Central Depositary Bangladesh Ltd. 1 Share of Tk. 1,000,000/- each. Immovable property

22,632,000 1,048,200 20,000,000 1,000,000 --------------44,680,200 12,039,990 -------------56,720,190 =========

22,632,000 1,048,200 20,000,000 2,400,000 3,270,000 1,000,000 --------------50,350,200 12,039,990 --------------62,390,190 =========

Immovable property represents the cost of land at Kalampur, Gazipur and its development for setting up new industries. Investment in Apex Weaving & Finishing Mills Ltd. is under litigation. As the issue is under litigation, no dividend has yet been accounted for.

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

598 184 150

231 146 142

4.

INVENTORIES: TK. 402,397,836 Shrimps Fish Packing Materials

Qty. in Kg. 588,087 26,920

---------615,007

======

386,325,104 6,703,080 9,369,652 ----------------402,397,836 ==========

371,846,492 5,805,556 8,744,680 ----------------386,396,728 ==========

The above Inventories are as per physical checking made, valued and certified by the Internal Auditor and Management. Inventories in hand except Packing Materials have been valued at lower of cost and net realizable value. Packing Materials have been valued at cost. The Company is availing working capital facilities against pledge of finished goods.

26

APEX FOODS LIMITED

Annual Report 2007-08 2007-08 2006-07

5.

TRADE DEBTORS: TK. 89,252,478 Export Bills Receivable 89,252,478 77,883,282

Other than the following export bills, all debtors are considered good and subsequently fully realized.
S/L Number 1. 2. 3. 4. Invoice Number AFL/1586 AFL/1589 AFL/1590 AFL/1591 Quantity in MC 1,800 1,800 1,800 1,800 US $ 304,703.98 275,522.85 304,057.96 275,522.85 Taka 14,466,430 13,080,998 14,435,759 13,080,998

--------7,200

---------------=========

1,159,807.64

---------------=========

55,064,185

=====

The above export bills were negotiated with Agrani Bank against the export of 7,200 Master Cartons of Shrimps to Mantrad N.V., Belgium. After repeated attempt the bank failed to realize the amount from the Importer. The Company had also taken legal steps against the Importer. Since the matter is under litigation, no provision has been made against the same. 6. ADVANCES, DEPOSITS AND PREPAYMENTS: TK. 36,483,650 Advance to Employees Deposits & Prepayments Advance Income Tax Bank Guarantee 99,800 4,886,789 28,084,761 3,412,300 --------------36,483,650 ========= 187,800 5,006,805 16,233,949 440,100 --------------21,868,654 =========

Advance to Employees are realized monthly and considered good. Deposits and Prepayments are secured. Advance tax represents tax deduction at source and tax paid in advance as per Income Tax Ordinance. No amount was due by the Directors and other officers of the Company or by associated undertaking. Bank Guarantee issued by the Banks in favor of Bakhrabad Gas Systems Limited and Customs Authority.

7.

OTHER RECEIVABLE: TK. 88,252,065 16,254,727 71,997,338 ---------------88,252,065 ========= 16,254,727 185,457,390 ---------------201,712,117 =========

Insurance Claim Receivable Cash incentive Receivable

Insurance Claim receivable from Insurance Company against deterioration of stock because of machinery break down. Appropriate claim has been lodged with the Insurance Company and the claim is under litigation. 27

APEX FOODS LIMITED

Annual Report 2007-08 2007-08 2006-07

8.

CASH & BANK BALANCES: TK. 195,853,040 Cash in Hand: Head Office Factory Office Cash at Bank with: Agrani Bank, Agrabad Corporate Br. Chittagong. National Bank Ltd., Pahartali Chittagong. Arab Bangladesh Bank Ltd. Principal Br, Dhaka. Eastern Bank Ltd., Principal Branch, Dhaka HSBC, Dhaka Dhaka Bank Ltd., Fr. Exchange Branch, Dhaka Agrani Bank, Local Office, Dhaka FDR with Dhaka Bank Limited, Dhaka

40,950 19,367 60,317 81,996,163 306,424 1,025,999 86,066 185,612 2,000 112,190,459 195,792,723 --------------195,853,040 =========

39,950 106,913 146,863 21,695,778 525,000 117,631 648,822 78,674 39,424 2,000 50,839,275 73,946,604 --------------74,093,467 =========

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

9. WORKING CAPITAL LOAN: TK. 440,576,222 Against Hypothecation Against Pledge of Finished Goods 83,528,425 357,047,797 ---------------440,576,222 ========== 87,324,018 357,274,462 --------------444,598,480 =========

The Working Capital Loan was taken from Agrani Bank Limited, Agrabad Corporate Branch, Jahan Building, Agrabad C/A, Chittagong, which is fully secured against 1st charge of Land, Building, Plant & Machinery and all other Assets of the Company and Pledge of Finished Goods. The Company has Cash Credit facilities of Tk. 44.00 crore (Hypothecation Tk. 9.00 crore & Pledge of finished goods Tk. 35.00 crore) which has been fully availed. Apart from this, the Company has no such other credit facilities. The Loan bears interest @ 7% p.a.

10. TERM LOAN-CURRENT MATURITY: TK. 7,904,041 Leased Liabilities 11. SHORT TERM LOAN: TK. 27,644,408 Dhaka Bank Ltd., Foreign Exchange Branch, Dhaka. 12. TRADE CREDITORS: TK. 22,502,675 Raw Supply 22,502,675 ======== 27,135,680 ========= 27,644,408 7,904,041 12,509,897

This represents the current portion of Lease liabilities payable in next twelve months.

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

28

APEX FOODS LIMITED

Annual Report 2007-08 2007-08 2006-07

13. SUNDRY CREDITORS: TK. 24,269,410 Processing Labor Contractor Packing Materials Supplied Telephone Newspaper & Periodicals Power, Fuel and Water Repairs (Factory Machinery & Equipments) Audit Fees Clearing & Forwarding expenses Chemical Ice Supplied Contribution to PPF & WF Contribution to PF Carrying Uniform & Liveries Printing & Stationery Sanitation Expenses Salary & Allowances Insurance Premium Rent, Rates & Taxes Salary & Wages Traveling Expenses Sales Promotion Expenses Ocean Freight Vehicle Maintenance Factory Equipment Supplied Postage & Stamp Survey Fees & Inspection 2,465,422 10,180,180 60,033 1,406 2,567,885 130,109 60,000 908,609 313,386 403,500 2,225,504 99,252 1,135 6,190 11,230 59,910 415,436 1,311,859 29,000 270,777 13,099 684,172 1,682,167 3,394 232,071 54,464 79,220 --------------24,269,410 ========= 2,290,357 6,750,015 20,443 1,824 735,990 162,671 60,000 846,048 308,366 29,000 1,632,706 81,738 10,800 21,376 29,352 39,230 80,634 1,352,583 299,115 11,896 695,728 9,737 263,943 27,930 93,288 --------------15,854,770 ========

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

14. OTHER LIABILITIES: TK. 1,789,659 Unclaimed Dividend 1,789,659 ======= 1,455,425 =======

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

Year
Up to 2003-04 2004-05 2005-06 2006-07

Taka
946,349 204,570 239,468 399,272 -------------1,789,659 ========

29

APEX FOODS LIMITED

Annual Report 2007-08 2007-08 2006-07

15. SHARE CAPITAL: TK. 57,024,000 Authorized Capital: 1,500,000 Ordinary Shares of Tk. 100/= each Issued, Subscribed & Paid up Capital: 570,240 Ordinary Shares of Tk. 100/= each Composition of Shareholdings: Sponsors Institution Foreign Shareholders Public - Local 50.42% 16.92% 00.01% 32.65% -----------100.00% ======= 50.42% 17.95% 00.01% 31.62% ----------100.00% ======= 57,024,000 ========= 57,024,000 ========= 150,000,000 ========= 150,000,000 ==========

Distribution of each class of equity setting out the members of holders and percentage in the following categories. No. of Share Holder 3,904 61 2 3 0 0 1 2 1 0 -------3,974 ===== Holdings Less than & equal 500 Shares 501 to 5,000 Shares 5,001 to 10,000 Shares 10,001 to 20,000 Shares 20,001 to 30,000 Shares 30,001 to 40,000 Shares 40,001 to 50,000 Shares 50,001 to 100,000 Shares 100,001 to 200,000 Shares Over 200,000 Shares Total Holdings 108,702 90,069 15,200 45,409 0 0 40,164 138,643 132,053 0 -----------570,240 ====== % 19.06 15.80 2.67 7.96 0.00 0.00 7.04 24.31 23.16 0.00 --------100 =====

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

Name Bank Julius Baer & Co; AG

Folio no. 06158

No. of share 45

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

30

APEX FOODS LIMITED

Annual Report 2007-08 2007-08 2006-07

16. SHARE PREMIUM: TK. 209,088,000 209,088,000 ========== 209,088,000 ==========

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

17. RESERVE AND SURPLUS: TK. 139,605,429 This represents the following: Reserve for re-investment Retained Earnings Capital Gain 51,162,905 87,835,524 607,000 51,162,905 75,567,340 607,000

-------------139,605,429

-------------127,337,245

=========
18. PROPOSED DIVIDEND: TK. 11,404,800 11,404,800 ========

=========
10,264,320 ========

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

19. LONG TERM LOAN: TK. 26,893,628 Lease liabilities 26,893,628 --------------26,893,628 ========= 3,190,561 --------------3,190,561 =========

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

20. TURNOVER: TK. 2,291,194,337 Qty. in Kg. Shrimps Fish

2,800,357 46,881 2,847,238

US$
33,329,240 311.276 33,640,516

------------- --------------======== ========= 21. COST OF GOODS SOLD: TK. 2,065,602,942 Qty. in Kg. Notes Opening Stock of Finished Goods Add: Cost of Production
Less: Closing Stock of Finished Goods 739,093 2,723,152 3,462,245 615,007

2,269,907,835 21,286,502 -------------------2,291,194,337 ===========

2,397,905,242 16,763,976 -------------------2,414,669,218 ============

22

-----------2,847,238

=======
31

377,652,048 2,080,979,078 2,458,631,126 393,028,184 -------------------2,065,602,942 ============

425,719,400 2,155,420,496 2,581,139,896 377,652,048 -------------------2,203,487,848 ============

APEX FOODS LIMITED

Annual Report 2007-08 2007-08 2006-07

22. COST OF PRODUCTION: TK. 2,080,979,078 Qty. in Kg. Notes Raw Materials Packing Materials & Chemicals Direct Labor Factory Overhead Depreciation
3,817,995

23 24

1,915,486,320 83,226,662 22,160,324 30,493,269 29,612,503 ------------------2,080,979,078 ===========

2,034,124,045 54,666,363 21,076,925 22,589,178 22,963,985 ------------------2,155,420,496 ===========

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

23. PACKING MATERIALS, CHEMICALS & ICE CONSUMED: TK. 83,226,662 Opening balance (Packing Materials) Add: Packing Materials Purchase Less: Packing Materials in hand 8,744,680 65,913,181 74,657,861 9,369,652 ----------------65,288,209 17,938,453 ----------------83,226,662 ========= 4,614,540 47,428,732 52,043,272 8,744,680 -------------43,298,592 11,367,771 --------------54,666,363 =========

Add: Chemical & Ice Purchase

24. FACTORY OVERHEAD: TK. 30,493,269 Wages & Salaries Bonus to Workers' Power, Fuel & Water Consumable Stores & Spares Repair & Maintenance Carriage Inward 8,919,151 238,082 15,154,587 2,054,344 4,072,501 54,604 --------------30,493,269 ========= 7,989,599 405,019 10,931,106 1,052,833 2,181,463 29,158 --------------22,589,178 =========

32

APEX FOODS LIMITED

Annual Report 2007-08 2007-08 2006-07

25. ADMINISTRATIVE AND SELLING OVERHEAD: TK. 146,734,034 Directors Remuneration Board meeting fees Salary & Allowances Contribution to Provident Fund Bonus to Staff Medical Expenses Staff Welfare Expenses Staff fooding Uniform & Liveries Freight & Forwarding Rent, Rates & Taxes Guest House Expenses Advertisement AGM Expenses Donation & Subscription Electricity & WASA Charges Entertainment General Fees & Charges Membership Subscription Insurance Premium Rejection Insurance Premium Laboratory Testing Fees License & renewals Newspaper & Periodicals Postage & Stamp Printing & Stationery Sanitation Expenses T.A & Conveyance Telephone, Telex & Fax Vehicles Maintenance Legal & Professional Fees Audit Fee Sales Promotion Expenses Laboratory Expenses Depreciation 7,800,000 17,500 12,269,120 617,348 1,040,969 24,115 491,207 743,623 242,291 81,434,068 569,390 618,402 61,488 332,263 728,400 234,150 559,678 87,465 35,000 1,823,053 12,081,346 5,243,074 980,194 26,482 305,057 627,499 486,153 2,677,290 1,226,420 1,392,559 887,495 60,000 8,448,357 278,733 2,283,845 146,734,034 3,550,000 18,000 11,316,215 551,344 1,554,248 26,893 586,482 631,303 269,770 79,343,048 1,679,131 568,123 122,603 692,745 194,650 234,338 633,575 100,847 143,174 1,747,404 10,334,318 5,203,384 657,105 24,019 321,156 551,112 498,530 2,078,923 1,186,361 1,116,113 275,052 60,000 9,328,400 245,158 2,683,995 138,527,519

Rejection Insurance Premium represents the premium paid for rejection coverage of shipments with due permission from Bangladesh Bank. Directors Remuneration paid to the Directors for their full time service rendered are: (a) Mr. Zafar Ahmed 4,800,000 (b) Mr. Ashim Kumar Barua 2,400,000 (c) Mr. Kazi Faruq Kader 600,000

------------7,800,000 ========
Audit Fee is fixed by the Shareholders in the Annual General Meeting and does not include any other remuneration to Auditors. There are 6(six) meetings held during the year.

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APEX FOODS LIMITED 26. FINANCIAL EXPENSES: TK. 50,007,691 Interest Charges

Annual Report 2007-08 2007-08 39,081,179 10,926,512 --------------50,007,691 ========= 2006-07 36,211,007 11,451,209 --------------47,662,216 =========

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

Dividend Income: Dividend from Apex Spinning & Knitting Mills Ltd Dividend from CDBL Interest Earned Profit on sale of Investments in Shares

4,526,400 100,000 4,626,400 9,824,509 3,435,000 17,885,909

4,073,760 4,073,760 5,221,423 9,295,183

28. PROVISION FOR CONTRIBUTION TO PPF & WF: TK. 2,225,504 This represents 5% of the net profit after such contribution provided as per provisions of the Companys profit (Workers Participation) Act, 1968 and is payable to workers as defined in the said Act. 29. PROVISION FOR INCOME TAX FOR THE YEAR: TK. 21,333,190 This represents estimated Income Tax on net profit for the period from 1st July 2007 to 30th June 2008. The provision for deferred tax is made to pay future income tax liability due to accumulated temporary differences. 30. BASIC EARNING PER SHARE (EPS) DISCLOSURE UNDER BAS 33 EARNINGS PER SHARE:
Earnings attributable to Ordinary Shareholders Basic EPS = ------------------------------------------------------------------------------------------Weighted average number of shares outstanding during the year 2007-08 20,916,805 Basic EPS =

------------------ = 36.68
570,240

Earnings attributable to Ordinary Shareholders represent the earnings only after deduction of profit on sale of investment in shares i.e. gain from extra ordinary item has not been considered. Weighted average number of Ordinary Shares outstanding during the year represents the number of Ordinary Shares outstanding at the beginning of the year plus the number of shares issued during the year multiplied by a time weighting factor. The time weighting factor is the number of days the specific number of shares are outstanding as a proportion of the total number of days in the period.

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APEX FOODS LIMITED 31. SUBSEQUENT EVENT:

Annual Report 2007-08

The Dividend for the year 2007-08 recommended by the Board of Directors on 23rd August 2008 has been considered in the accounts as per BAS 10, Events after the Balance Sheet Date. There is no other significant event that has occurred between the Balance Sheet date and the date when the financial statements were authorized for issue by the Board of Directors of the Company. 32. RELATED PARTY TRANSACTIONS: Investments in Shares of Apex Lingerie Ltd has been sold at Tk. 42,00,000/- and Apex Yarn Dyeing Limited Tk. 4,905,000/- to Apex Textile Printing Mills Limited. 33. GENERAL: 2007-08 (a) Production capacity (Quantity in M/T): Installed Capacity Actual Capacity utilized Variation 5,475 2,723 -------2,752 ===== % 49.74 5,475 3,170 -------2,305 ===== % 57.90 2006-07

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

(b) Production (Quantity in Kg): Shrimps Fish 2,678,358 44,794 ------------2,723,152 ======== 2,800,357 46,881 ------------2,847,238 ======== Value 1,915,486,320 83,226,662 3,126,589 43,724 ------------3,170,313 ======== 2,957,736 69,772 ------------3,027,508 ======== Consumption % 95.84 4.16 Taka 3,370,249 19,714,421 --------------23,084,670 =========

(c) Export (Quantity in Kg): Shrimps Fish

(d) Consumption: (Value in Tk.) Item Local Shrimps & Fish Local Packing Materials, Chemicals and Ice (e) Salaries & Wages Up to Tk. 3,000.00 per month Above Tk. 3,000.00 per month No. of Employees Above Tk. 3,000.00 per month 119 175 ----294 ===
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APEX FOODS LIMITED 34. PAYMENTS /PERQUISITES TO DIRECTORS/OFFICERS:

Annual Report 2007-08

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

Directors Board Meeting Fee Salary and Allowance Provident Fund Contribution Bonus Perquisites 35. CAPITAL EXPENDITURE COMMITMENT: 17,500 7,800,000 ----

Officers -10,481,477 541,793 812,760 3,772,403

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

th

36. DURING THE YEAR UNDER REVIEW:

No amount of money was spent by the Company for compensating any member of the Board for special service rendered except as stated above. There was no bank guarantee issued by the company on behalf of their directors. There was no brokerage paid against sales during the year 2007-08. There was no expense on account of miscellaneous/general expenses. th There was no claim against the Company not acknowledged as debt on 30 June 2008. th There was no credit facility available to the Company under any contract or availed of as on 30 June 2008 other than trade credit available in the ordinary course of business. There was no expense incurred in foreign exchange on account of Royalty, Technical Experts, Professional and Advisory Fee, Interest, Brokerage and Commission etc.

Sd/-

Zafar Ahmed
Managing Director

Sd/Ashim Kumar Barua

Director

Sd/Serazul Hoq
Company Secretary

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APEX FOODS LIMITED

Annual Report 2007-08

FORM OF PROXY
The Director Apex Foods Limited th Biman Bhaban, 5 Floor 100 Motijheel C/A, Dhaka-1000 Bangladesh

Register Folio No.................... No. of Shares.................. ..........

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

. (Signature of the Proxy) Register Folio No Dated . (Signature of the Witness) Address of Witness.............................................

Signature of the Shareholder(s) Dated.

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

APEX FOODS LIMITED

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

SHAREHOLDERS ATTENDANCE SLIP

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

I/We record my attendance at the TWENTY NINTH ANNUAL GENERAL MEETING being held on Thursday, October 16, 2008 at the Hall Room of National Shooting Federation, Gulshan-1, Dhaka-1212. Name of Member (s) ......................................................................... Register Folio No.....................holding of................................................Ordinary Shares of Apex Foods Limited. Signature of Shareholder(s) N.B. : (1) Please Note that AGM can only be attended by the honorable Shareholders or properly constituted Proxy. Therefore, any friend or children accompanying with honorable Shareholders or Proxy cannot be allowed into the meeting. (2) Please present this slip at the reception desk. 37

APEX FOODS LIMITED

Annual Report 2007-08

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