Golden Harvest Agro Industries Ltd. - Dhaka Stock Exchange
Golden Harvest Agro Industries Ltd. - Dhaka Stock Exchange
Golden Harvest Agro Industries Ltd. - Dhaka Stock Exchange
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Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
2
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
ISSUER COMPANY<br />
INFORMATION MEMORANDUM FOR ROAD SHOW<br />
FOR<br />
INITIAL PUBLIC OFFERING (IPO)<br />
OF<br />
3,00,00,000 (THREE CRORE) ORDINARY SHARES OF TAKA 10 (TEN) EACH AT<br />
AN INDICATIVE PRICE OF TAKA (*)‐ INCLUDING A PREMIUM OF TAKA (*)‐ TOTALLING TAKA (*)<br />
UNDER BOOK BUILDING METHOD<br />
MANAGER TO THE ISSUE<br />
CREDIT RATING AT A+ BY CREDIT RATING INFORMATION AND SERVICES LIMITED (CRISL)<br />
CREDIT RATING BY CRISL<br />
LONG TERM SHORT TERM<br />
A+ ST‐3<br />
DATE OF RATING: OCTOBER 24, 2010<br />
GOLDEN HARVEST AGRO INDUSTRIES LTD<br />
CORPORATE HEAD OFFICE<br />
SPL WESTERN TOWER<br />
LEVEL 5, #501 & #502<br />
186 GULSHAN TEJGAON LINK ROAD, TEJGAON 1208, DHAKA<br />
BANCO FINANCE & INVESTMENT LIMITED<br />
ISPAHANI BUILDING (3RD FLOOR),<br />
14‐15 MOTIJHEEL C/A<br />
DHAKA<br />
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Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
General Information<br />
• Banco Finance and Investment Limited, the Issue manager, has prepared this Information Memorandum<br />
(“IM”) based on the information provided by <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. (the Company/the Issuer)<br />
and also upon several discussions with the Managing Director and concerned executives of the issuer<br />
company. The Directors, including Managing Director of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. and Banco<br />
Finance and Investment Limited collectively and individually, having made all reasonable inquires, confirm<br />
that to the best of their knowledge and belief, the information contained herein is true and correct in all<br />
material aspects and that there are no other material facts, the omission of which would make any statement<br />
herein misleading.<br />
• No person is authorized to give any information or to make any representation not contained in this<br />
prospectus, and if given or made, any such information or representation must not be relied upon as having<br />
been authorized by the Issuer or Issue Manager.<br />
• The Issue as contemplated in this document is made in Bangladesh and is subject to the exclusive<br />
jurisdiction of the courts of Bangladesh. Forwarding this prospectus to any person resident outside<br />
Bangladesh in no way implies that the Issue is made in accordance with the laws of that country or is subject<br />
to the jurisdiction of the laws of that country.<br />
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Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Table of Contents<br />
Particulars Page No<br />
Section 1: Risk Factors 6-8<br />
Section 2: Financial Structure 9-10<br />
Section 3: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>: An Overview 11-12<br />
Section 4: Business Details 13-14<br />
Section 5: Competitive Condition 15-17<br />
Section 6: Business Expansion/Diversification Plan 18-20<br />
Section 7: Directors of the Company 21-24<br />
Section 8: Description of Management 25-26<br />
Section 9: Description of Property 27-28<br />
Section 10: Plan of Operations & Discussion of Financial Condition 29-31<br />
Section 11: Determination of Offering Price 32-34<br />
Section 12: Book Building Method 35-36<br />
Section 13: Market for Securities Being Offered 37<br />
Section 14: Description of Securities Outstanding or Being Offered 38-40<br />
Section 15: Availability of Securities 41<br />
Section 16: Involvement of directors and officers in certain legal proceedings 42<br />
Section 17: Certain Relationships and Related Transactions 43<br />
Annexure: 01 Bankers to the Issue 44<br />
Annexure: 02 Corporate Directory 44<br />
Annexure: 03 Financial Statements as at and for the Period Ended 30th September 2010 45-63<br />
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Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Section – I Risk Factors<br />
An investment in equity shares involves a high degree of risk. The Company is operating in an industry involving both external<br />
and internal risk factors having direct as well as indirect effects on the investment by the investors. All the investor should<br />
carefully consider all of the information in this memorandum, including the risk factors, both external and internal, and<br />
management perception thereabout enumerated hereunder before making an investment decision. If any of following risks<br />
actually occurs, their business, result of operations and financial condition could suffer, the trading price of their equity shares<br />
decline, and investors may lose all or part of their investment.<br />
(a) Interest rate risks:<br />
Interest rate is concerned with borrowed funds of short term & long‐term maturity. Interest rate risk is the risk that Company<br />
faces due to unfavorable movements in the interest rates. Volatility in money market & increase in demand for loans<br />
/investment funds raise the rate of interest. A change in the government’s policy also tends to increase the interest rate. High<br />
rate of interest enhances the cost of fund of a company. Such rises in interest rates however mostly affect companies having<br />
floating rate loans.<br />
Management perception<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> Limited (<strong>Golden</strong> <strong>Harvest</strong>) maintains low debt/ equity ratio; and accordingly, adverse impact of<br />
interest rate fluctuation is insignificant. The project was started with the Company’s own funds and the capacity was also<br />
expanded with own funds. Additionally, the management of the Company emphasizes on equity base financing to reduce the<br />
dependency on borrowing. Therefore, management perceives that the fluctuation of interest rate on borrowing would have<br />
little impact upon the performance of the Company.<br />
(b) Industry risks:<br />
Industry risk refers to the risk of increased competition from foreign and domestic sources leading to lower prices, revenues,<br />
profit margin, and market share which could have an adverse impact on the business, financial condition and results of<br />
operation. <strong>Agro</strong> industry in Bangladesh is an emerging sector with vast local demand for its different product lines. Locally<br />
produced frozen food products now play a significant role in this sector, which has been dominated by imports in the past.<br />
However, the infrastructure required for this industry is inadequate in Bangladesh, as can be noted below:<br />
• No organized collection centers for agricultural produce exist in Bangladesh; as a result, there is a high fluctuation in<br />
prices both for the growers and for processors.<br />
• Absence of Cold Chains, although the whole process of collection, processing and distribution depends on cold<br />
temperature maintenance due to the nature of business.<br />
Management perception<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. (<strong>Golden</strong> <strong>Harvest</strong>) has established its brand name in Frozen Food market with its quality<br />
products, range of products and customer services. However, to develop an infrastructure, both public and private sector<br />
participation is required. This is the focal point of <strong>Golden</strong> <strong>Harvest</strong>’s future expansion plans. To eliminate fluctuation in prices<br />
both for the growers and for the processors, <strong>Golden</strong> <strong>Harvest</strong> will organize collection centers to eliminate intermediary cost for<br />
both the parties. Deploying 15,000 refrigerators with 24 cold storages at ‐30 degree Celsius nationwide, <strong>Golden</strong> <strong>Harvest</strong> will<br />
have infrastructure backbone of Cold Chain which will ensure proper supply of Frozen Foods all over the country through its 60<br />
temperature controlled transport. Our neighboring country like India has over 50 cold chains, generating revenue over US$3.5<br />
billion which is targeted to reach US$8 .5 Billion by 2015.<br />
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Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
(c) Market Risks:<br />
Market risk refers to the risk of adverse market conditions affecting the sales and profitability of the company. Mostly, the risk<br />
arises from falling demand for the product or service which would harm the performance of the company. On the other hand,<br />
strong marketing and brand management would help the company increase their customer base.<br />
Management perception<br />
Market for Ready to Cook frozen foods in Bangladesh is growing at an exponential rate with growth of urbanization and<br />
incremental income level of consumers along with their preference to convenience. In spite of high growth of this market, there<br />
is scarcity of investment in this sector which creates a huge void resulting in very expensive imports. International market for<br />
Ready to Cook frozen food sector is already matured and is growing further at a high rate. <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>.<br />
(<strong>Golden</strong> <strong>Harvest</strong>) is one of the earliest entrants in international market with very promising and loyal customer base in USA,<br />
Canada, Australia, Europe, Middle East, and South Asia. In Bangladesh market, <strong>Golden</strong> <strong>Harvest</strong> has made a rapid penetration<br />
and has captured the leading position with its unique branding and positioning strategy taking opportunity of this fast growing<br />
market.<br />
(d) Technologyrelated Risks:<br />
Technology always plays a vital role for the existence of any industrial concern, ensuring better services to the customers and<br />
minimizing the cost in various aspects. The production facilities of the Company are based on currently available technology.<br />
Any invention of new and more cost involving technology may cause technological obsolescence and negative operational<br />
efficiency. Any serious defects in the plant and machinery may affect production and profitability calling for additional<br />
investment for replacement. Since <strong>Golden</strong> <strong>Harvest</strong> deals in food processing, health risk is the most critical factor to be<br />
addressed.<br />
Management perception<br />
The key to securing market share in FMCG (Fast Moving Consumer Goods) is by satisfying the needs of the customers. <strong>Golden</strong><br />
<strong>Harvest</strong> utilizes a fully equipped Research & Development (R & D) setup that is continuously working for in‐depth<br />
understanding of the customer needs and preferences and accordingly blending its product range. The product line is carefully<br />
developed for the consumers with longer shelf life, creating a true niche market in Bangladesh.<br />
USAID is the major partner of R & D of <strong>Golden</strong> <strong>Harvest</strong>. A team of USAID experts in Food Engineering and Microbiology with<br />
foreign and local expertise are involved in the R & D continuously. Quality is ensured at every stage of the process, starting from<br />
receiving raw material, different stages of processing up to finished packaged frozen foods. The in‐house fully equipped Quality<br />
Assurance Laboratory is carrying out all types of Physical, Chemical and Biological tests using most modern European testing<br />
equipment. Hygiene factors are uncompromised at all level of the process.<br />
7
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
(e) Regulationrelated Risks:<br />
The Company operates under Companies Act 1994 and other related regulation, Income‐tax Ordinance 1984, Income Tax Rules<br />
1984, Value Added Tax (VAT) Act 1991 and Value Added Tax (VAT) Rules 1991. Any abrupt changes of the policies made by the<br />
regulatory authorities may adversely affect the business of the Company.<br />
Government incentives given to <strong>Agro</strong> Industry are insufficient compared to other countries. <strong>Agro</strong> based Frozen Food sector is<br />
exempted from VAT in many countries, whereas it is imposed in Bangladesh. Incentives are also sporadic and non categorized<br />
and sometimes, discriminated in similar categories.<br />
Management perception<br />
Unless any policy change that may negatively and materially affect the industry as a whole, the business of the Company is<br />
expected not to be affected significantly. <strong>Agro</strong> industry in Bangladesh is an emerging sector with considerable local demand for<br />
different product lines. Therefore, it is highly unlikely that the Government will initiate any fiscal measure that may have<br />
adverse effect on the growth of the industry.<br />
(f) Operational Risks:<br />
The core business operation of <strong>Golden</strong> <strong>Harvest</strong> is directly related to very low temperature maintenance. Country wide severe<br />
power shortage is compelling <strong>Golden</strong> <strong>Harvest</strong> to utilize captive power which builds up cost. Also port congestion and inland<br />
immobility due to political instability poses a great operational risk to <strong>Golden</strong> <strong>Harvest</strong><br />
Management perception<br />
Bangladesh Government is meeting this challenge by opening the energy generation to private sector; and also making massive<br />
investment, which is expected to ensure availability of energy for uninterrupted operation. <strong>Golden</strong> <strong>Harvest</strong> perceives that<br />
allocation of its resources properly with contingency approaches can reduce this risk factor to great extent.<br />
(g) Input Cost Risks:<br />
Input cost risk is the risk of a business when procuring materials or commodities in high global demand. Increasing demand<br />
and supply shortages create volatility in these commodity values; and therefore, the timing, quantity and price of purchase must<br />
be closely planned.<br />
Management Perception:<br />
Management of <strong>Golden</strong> <strong>Harvest</strong> would hedge their exposure to input price volatility by making purchases of inputs in season;<br />
and providing for contingency against such inputs in its selling price.<br />
(h) Distribution Risk:<br />
For any company, the most crucial wing is the distribution channel. Wide distribution network and monitoring over the<br />
network is essential to make its product available to the consumer at right time and price. <strong>Golden</strong> <strong>Harvest</strong> every now and then<br />
faces this challenge from non accessibility for its wide range of products.<br />
Management perception<br />
<strong>Golden</strong> <strong>Harvest</strong> offers a wide range of frozen food products both in global and local market. Its distribution strategy comprises<br />
of distributors for international markets and distribution network of dealers and outlets for domestic market. <strong>Golden</strong> <strong>Harvest</strong><br />
plans to eliminate distribution risk implications by smartly planning its distribution network with great flexibility.<br />
8
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Section – II Financial Structure<br />
Issue Size and Purpose of Public Offering<br />
Capital Structure<br />
The capital structure of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> Limited before and after IPO will be as under:<br />
Particulars<br />
Capital structure prior to IPO<br />
No. of Shares Amount (Taka)<br />
Issued, subscribed and paid up capital as on 30 September 2010<br />
(as per audited accounts)<br />
10,000,000 100,000,000<br />
Share money deposits converted into paid up capital* 25,000,000 250,000,000<br />
Paid up capital (Pre IPO) 35,000,000 350,000,000<br />
Capital Raising: Proposed<br />
Through IPO under Book Building Method 30,000,000 300,000,000<br />
Paid up capital after IPO 65,000,000 650,000,000<br />
* The Company raised its paid up capital from Taka 100,000,000 to Taka 350,000,000 on 13 October 2010 in terms of Securities and<br />
<strong>Exchange</strong> Commission Consent letter no. SEC/CI/ CPLC‐250/2010‐301 dated September 26, 2010.<br />
Use of Proceeds from IPO<br />
Future Plan of IPO Fund Utilization<br />
Sources of Fund: Taka<br />
Issue size (Number of share to be issued) 30,000,000<br />
Issue price (including premium Taka 70 each) 80<br />
2,400,000,000<br />
Less: Income Tax‐3% 63,000,000<br />
2,337,000,000<br />
Application of Fund:<br />
Establishment of Cold Chain 1,212,631,200<br />
Establishment of Ice Cream Factory 408,673,903<br />
Term Loan Repayment 224,451,329<br />
Equipments for new “Ready to Eat” product line 101,427,883<br />
Working Capital requirement 389,815,685<br />
Notes:<br />
2,337,000,000<br />
1. Source of fund will primarily be used for establishing Cold Chain. The Company is planning to set up county wide cold chain,<br />
covering six divisions. A central cold storage depot in <strong>Dhaka</strong> will link 24 Cold Storages at ‐30 Degree Centigrade and 15,000<br />
freezers/refrigerators with retail outlets across the country. In line with this, a Central warehouse in <strong>Dhaka</strong> city, is planned to be<br />
set up. Necessary transportation system will be engaged to carry frozen products. The estimated cost for establishing Cold Chain<br />
Project is as follows:‐<br />
9
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Taka<br />
a) Ware House<br />
‐ Land & Building 350,000,000<br />
‐ Infrastructures 20,000,000<br />
b) Depot‐ 24 nos. all over the country at ‐30 Degree Centigrade 113,911,200<br />
c) Freezers/Refrigerators ‐15,000 nos. 550,000,000<br />
d) Refrigerator Truck (up to ‐30 Degree Centigrade) ‐ 46 nos. 178,720,000<br />
Total 1,212,631,200<br />
The cold chain is expected to be fully in place within March 2012.<br />
2. The Company is also planning to establish an Ice cream factory which has huge potential market in the country. The total set up<br />
cost has been estimated as below:<br />
Building Construction Taka Taka<br />
Renovation of existing building for Ice Cream factory 25,000,000<br />
Construction of new Cold Storage 10,000,000<br />
Other construction 4,000,000 39,000,000<br />
Machineries & Equipments<br />
Imported Machineries<br />
260,165,622<br />
Local Machineries & Equipments 57,000,000 317,165,622<br />
Duties, Taxes & Installation of machineries 25,508,281<br />
Power Generator 12,000,000<br />
Voltage Stabilizer 3,000,000<br />
Contingencies 12,000,000<br />
Total 408,673,903<br />
The ice cream project is expected to be completed and operative from January 2012. The project is expected to fetch an<br />
annual net profit of Taka 275.62 million on a turnover of Taka 818.17 million in 2012‐13.<br />
3. To enhance the market, the Company is planning to add new product line “Ready to Eat” in addition to Ready to Cook line. The<br />
cost of Machineries (including Duties, Taxes & Installation of machineries) has been estimated to be Taka101.43 million. The<br />
“Ready to Eat” line is expected to be completed and operative from October 2011.<br />
4. An aggregate sum of Taka 224.45 million will be used for repayment of Bank Loans and other lease finance liabilities. These loans<br />
and obligations are expected to be repaid within September 2011.<br />
5. The remaining Taka 389.82 million will be used for meeting the IPO‐related costs and working capital. These funds are expected<br />
to be used within September 2011.<br />
6. After full utilization of IPO fund within March 2012, the Company expects to fetch an annual net profit of Taka 453.06 million<br />
(i.e., an EPS of Taka 6.97) on a turnover of Taka 1,335.38 million in 2012‐13.<br />
10
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Section – III <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>: An Overview<br />
A Group Overview:<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong> is a member of <strong>Golden</strong> <strong>Harvest</strong> Group which is a diversified Group of companies, having operation<br />
in various sectors. The Group excels in Information Technology, <strong>Agro</strong> Products, Commodities Trading, Real Estate, Design/Publication<br />
& Consultancy, and Logistics.<br />
The Group's activities range from being one of the leading IT service provider, digitizing data and software development for US<br />
companies, setting up a successful joint venture partnership business with Denmark, UK, Japan and Singapore based companies,<br />
providing comprehensive financial solutions to 26 commercial banks, processing information from photogram metric equipment to<br />
logistic services and air cargo etc.<br />
The Group has an experienced team of Traders, selling different commodities directly from Chicago Board of Trade (CBOT), Bursa<br />
Malaysia Derivates (BMD), New York Board of Trade (NYBOT) at present Intercontinental <strong>Exchange</strong> (ICE), and London Metal <strong>Exchange</strong><br />
(LME). The Group represents world largest commodity suppliers such as Louis Dreyfus Commodities Suisse SA, Adani Wilmar, Noble<br />
Grain, Inter‐Continental Oils and Fats <strong>Ltd</strong> & Stemcor UK <strong>Ltd</strong> for supplying Crude Edible Oils, Food Grains, Cottons, Oil Seeds, Raw &<br />
Refined Sugar, and Steels in Bulk Quantity.<br />
<strong>Golden</strong> <strong>Harvest</strong> Group also has an Architectural designing studio with modern, premium quality and value added real estate projects.<br />
Publication house and carbon credit trading consultancies are newest in the Group’s business portfolio.<br />
The thriving Group has benchmarked itself in each of the sectors establishing itself as a market leader with a highly satisfied clientele.<br />
At <strong>Golden</strong> <strong>Harvest</strong> “Perfection and Excellence” are the main focuses along with the acknowledgement that “business organizations<br />
are members of society”, and are thus highly aware of their social responsibilities towards the greater community. With this purview<br />
the Group activities encompasses a wide array of CSR initiatives such as Charitable Hospital, supporting mentally challenged children,<br />
providing aid in any natural disaster, scholarship for under privileged meritorious students, leadership role in a Human Rights<br />
foundation giving legal aid to victims of social abuses.<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong> (<strong>Golden</strong> <strong>Harvest</strong>):<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong> (<strong>Golden</strong> <strong>Harvest</strong>) is located in Monipur, Gazipur and came into operation in May 2006. It is the<br />
first ever purpose built frozen vegetables and snack food processing plant in Bangladesh. The entire Plant was designed and<br />
supervised by the Danish experts with the full technical assistance from DANIDA (Danish International Development Agency under the<br />
Danish Embassy). <strong>Golden</strong> <strong>Harvest</strong> is set up on a 54,261 square feet state‐of‐the‐art purpose built, fully computerized processing<br />
facility built in international standards with the capacity to expand by additional 100,000 SFT.<br />
<strong>Golden</strong> <strong>Harvest</strong> is a BRC‐Food certified (British Retail Consortium‐Food) food processing facility. BRC Food is regarded as the highest<br />
global standard for best practice in the food processing Industry. <strong>Golden</strong> <strong>Harvest</strong> is also the only TESCO approved Food Processing<br />
factory in Bangladesh .TESCO is the third largest retail chain superstores in the world. <strong>Golden</strong> <strong>Harvest</strong> is also a member of SEDEX<br />
which upholds Ethics in industry in all aspects.<br />
<strong>Golden</strong> <strong>Harvest</strong> is processing over sixty varieties of frozen food products, such as Chicken Nuggets, Chicken Burger Patty, Beef Burger<br />
Patty, French Fries, Tortilla, Tempura, Chicken Cutlet, Fish Cutlet, Meat Ball, Lentil stuffed Tortilla, Potato stuffed Tortilla, Somosas,<br />
Vegetable Puff, Stuffed Potato Balls, Fish Fingers, Fish Ball, Spring Roll, Pop Corn Chicken, Pop Corn Shrimp, Hash Brown and different<br />
kinds of Vegetables and Fruits. All products are hygienically processed and packed in frozen Ready‐to‐Cook form.<br />
<strong>Golden</strong> <strong>Harvest</strong>’s procurement, production/processing and marketing are well structured and clearly defined meeting the<br />
international standards. These include food safety certification such as Hazard Analysis Critical Control Points (HACCP) and Good<br />
Manufacturing Practice (GMP). Safety control mechanism is of high standard specially by conforming to standards of European Union<br />
(EU), Australian Quarantine Inspection Services (AQIS) and United States Food & Drug Administration (USFDA) food quality<br />
benchmarking. <strong>Golden</strong> <strong>Harvest</strong> is approved by EU, USA, UAE, Australia and Russian Health and Quarantine authority for export of<br />
Frozen Foods from Bangladesh.<br />
11
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
The Refrigeration System of <strong>Golden</strong> <strong>Harvest</strong> is imported from Grasso Netherlands, Freezing Systems from KM Denmark, DSI Denmark,<br />
Geneglace France, Helpmann Belgium. The Processing Machines are procured from Crown Canada, Nilma Italy, Anko Taiwan. Power<br />
is connected through a fully automatic voltage stabilizer and full back‐up power generator from Duetz Germany capable of running<br />
the entire factory during power disruptions.<br />
There are 3 separate large Cold Storages within the factory premises, built using entirely imported Insulated Panels capable of<br />
maintaining ‐30 Degree Celsius. Additionally, there are 3 separate chiller rooms built using imported Insulated Panels capable of<br />
maintaining +4 Degree Celsius.<br />
The entire factory has installation of fully exposed Stainless Steel water piping through out the plant fitted with US origin UV Water<br />
Purification Plant. The plant is equipped with Stainless Steel Tables and Utensils, food grade anti‐bacterial Epoxy Paints on all exposed<br />
walls and fully Tiled floors and man height walls as required by the latest EU and USA food safety regulations.<br />
In the frozen food sector, <strong>Golden</strong> <strong>Harvest</strong> for the very first time in Bangladesh started utilization of a fully computerized operation<br />
system from Siemens Germany which enables automatic control of all aspects of freezing ensuring absolute quality. This control<br />
system is based on Siemens S7‐300 PLC which is connected to a wonder ware in touch SCADA system over the MPI network. All<br />
equipment controlled by the connected PLC system is visualized on the computer screen in clear and user‐friendly graphics which can<br />
be monitored from the Factory office or from any part of the world using Internet connection.<br />
Towards workers health concerns, <strong>Golden</strong> <strong>Harvest</strong> within its premises has a fully equipped infirmary to provide screening of<br />
employees for diseases as well as preventive cures enabling us to ensure safety from contamination.<br />
In line with proper transportation of Frozen Foods, <strong>Golden</strong> harvest has its own fleet of temperature controlled refrigerated trucks<br />
of ‐30 Degree Celsius and in addition <strong>Golden</strong> <strong>Harvest</strong> is the only frozen food processing industry in Bangladesh to own and operate<br />
full sized 40 feet articulated freezer truck with temperature controlled down to ‐30 Degree Celsius which has the capacity to fit in a<br />
full 40 feet shipping container load in a single load as required for export.<br />
Quality is ensured at every stage of the process starting from receiving raw material, different stages of processing upto finished<br />
packaged frozen foods. The in‐house fully equipped Laboratory is carrying out all types of Physical, Chemical and Biological tests using<br />
most modern European testing equipments.<br />
<strong>Golden</strong> <strong>Harvest</strong> has a fully‐owned subsidiary, <strong>Golden</strong> <strong>Harvest</strong> Sea Food and Fish Processing <strong>Ltd</strong>. it processes, markets and exports sea<br />
foods and fishes.<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>, a partner of USAID ‐PRICE Project<br />
USAID (United States Agency for Development) – PRICE (Poverty Reduction by Increasing the Competitiveness of Enterprises) is<br />
closely working with <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong> by providing direct assistance in order to promote the flourishment of Frozen<br />
Food processing sector in the greater interest of the people of Bangladesh.<br />
Equivocally with US Government’s pledge of at least $3.5 Billion aid towards addressing the needs of small farmers and agri‐business,<br />
USAID Administrator Mr. Rajiv Shah visited Bangladesh to launch the Feed the Future initiative. To assist Bangladesh in this process,<br />
the United States will enhance agriculture and nutrition teams in the country and will supplement $400 million over five years to<br />
support ongoing food security program. In total, these commitments represent a 20‐fold increase for agriculture and nutrition over<br />
the previous year’s US spending.<br />
<strong>Golden</strong> <strong>Harvest</strong> was the first ever company from Bangladesh to participate in the Gulf food exhibitions at the ‘’Gulf Food 2010’’,the<br />
largest food exhibition in the entire middle east which attracted more than 45,000 trade professionals from more than 150 countries.<br />
The participation of <strong>Golden</strong> <strong>Harvest</strong> was supported by USAID‐PRICE project. The U.S. Ambassador James F. Moriarty was given a<br />
presentation by <strong>Golden</strong> <strong>Harvest</strong> at the US Embassy on the 4 May 2010 on the progress on follow up of “Gulf food” 2010.<br />
Ms. Alyssa Ayres, US Deputy Assistant Secretary of State; is one of the high ranking dignitaries from US Government appreciating<br />
<strong>Golden</strong> <strong>Harvest</strong> At a recent meeting, Managing Director <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> Limited briefed her about the future<br />
expansion plan of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> Limited and she was pleased to learn about the Group’s activities. Mr. Atman<br />
Trivedi, a member of US Senate Foreign Relations Committee; and Ms Nisha Desai Biswal, the Assistant Administrator, USAID<br />
Washington officially visited <strong>Golden</strong> <strong>Harvest</strong> Plant in Gazipur. They all expressed their high satisfaction viewing the present progress<br />
and future business plan of <strong>Golden</strong> <strong>Harvest</strong>.<br />
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Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Section – IV Business in Details<br />
Location of Business, Logistic Support and Resources<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong> (<strong>Golden</strong> <strong>Harvest</strong>) is located at a very strategic place, with linkage to national Highways enabling<br />
smooth transportation.<br />
1. Location of processing plant<br />
The processing facility is located at a place called Monipur, in the district of Gazipur. The place is about Fifty Kilometers from <strong>Dhaka</strong><br />
city. An Asphalt road leading to Mymensingh town from <strong>Dhaka</strong> town connects the place. <strong>Golden</strong> <strong>Harvest</strong> is the first ever <strong>Agro</strong> based<br />
plant in the District of Gazipur and first of its kind in terms of International Standards in Bangladesh.<br />
2. Electricity<br />
Electricity is supplied by the Rural Electrification Board (REB). There is also a stand‐by generator of a capacity that can support 100%<br />
of the factories’ requirement under full production load during power disruption. It may be mentioned that the Government of<br />
Bangladesh under its policy has provided with a rebate of 20% on the Electricity Bill only for <strong>Agro</strong> based exporting companies such as<br />
ours. As <strong>Golden</strong> <strong>Harvest</strong> has already made several exports, therefore application has already been placed with the REB office for<br />
claiming the rebate on the bills paid as well as future bills.<br />
3. Water<br />
Plenty of water is required to clean and wash the vegetables. Water supply is obtained by installation of its own deep tube‐well within<br />
the factory premises with proper regulatory and environmental approval. The water prior to use is subjected to USA origin Filtration<br />
at 15 Micron and Ultraviolet treatment, enabling us to get rid of suspended minerals, particles and germs.<br />
4. Gas<br />
Gas supply is connected from the national grid of the Titas Gas company for Pre‐production processing.<br />
5. Waste Water Disposal / Effluent Water Treatment<br />
Since the waste water is non‐toxic as no chemicals are used in the process of the factory, yet, we are chlorinating the waste water<br />
including straining for solid particles before discharging back to the environment.<br />
With respect to environmental issues, <strong>Golden</strong> <strong>Harvest</strong> is meeting all laws and regulations. Under the Pest Control Products Act and<br />
regulations pursuant to this Act, <strong>Golden</strong> <strong>Harvest</strong> check pesticide residue levels in their products to ensure that they are within<br />
regulation levels.<br />
6. Employment<br />
Due to modern machineries with mostly automated processes, <strong>Golden</strong> <strong>Harvest</strong> is not a labor intensive unit. The factory houses 120<br />
employees of various levels of competence and responsibilities with accommodation facility within its premises. Another 480 workers<br />
are accommodated in rented houses with close proximity to the factory. Accommodation is limited and prevents migration of<br />
workers who are trained in‐house. <strong>Golden</strong> <strong>Harvest</strong> is an Equal Opportunity Employer in reality.<br />
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Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
7. Source of Raw Material<br />
<strong>Golden</strong> <strong>Harvest</strong>’s Primary source of raw material is all over Bangladesh on contract farming basis directly with the farmers. <strong>Golden</strong> <strong>Harvest</strong><br />
also has a contract with USAID (PRICE), who is also supporting the farmers with direct forward linkage to <strong>Golden</strong> <strong>Harvest</strong> which enables<br />
the farmers to get premium price for premium quality by eliminating middle man/brokers.<br />
<strong>Golden</strong> <strong>Harvest</strong> Organic Aquaculture holding <strong>Ltd</strong>, a sister organization of <strong>Golden</strong> <strong>Harvest</strong> is working as backward linkage with different<br />
farmers groups. As Vegetable production needs a close relationship between growers and frozen food processors in this sector, crops<br />
for processing are grown under contracts which often specify varieties, sizes, and colors, tolerance levels for blemishes and bruising<br />
as well as price.<br />
Through USAID‐PRICE support program, specialists are providing technical advice, expertise, and direction on spraying crops with<br />
pesticides. Thus, <strong>Golden</strong> <strong>Harvest</strong> exercises some control over the conditions under which fruits and vegetables are planted, grown,<br />
harvested and delivered to the processing plant.<br />
<strong>Golden</strong> <strong>Harvest</strong> also procures other items from reputed business house such as BRAC, Bangladesh Edible Oil, City Group.<br />
8. Refrigerated Transportation<br />
<strong>Golden</strong> <strong>Harvest</strong> has a fleet of Refrigerated Transports which maintain ‐30 Degree Celsius and can accommodate a full load equivalent to a<br />
40 Feet Reefer container for export, enabling <strong>Golden</strong> <strong>Harvest</strong> to make export shipment to load the container in Chittagong port.<br />
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Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Section – V Competitive Condition<br />
1. Market Size and Growth:<br />
As per market research, Bangladesh market for convenient frozen food has grown at a staggering rate of 37% during 2009‐2010; and<br />
is further growing at greater pace with expected total turnover of Taka 850 million by the fiscal year 2010‐2011.<br />
According to various surveys, international market for processed frozen food is growing at a rate of over 26%; and has become a<br />
multi‐billion dollar industry.<br />
2. Market Segmentation:<br />
Market segments include International and Local market.<br />
The International Market segment consists of processed ready to cook food and processed packaged vegetables. Demand for frozen<br />
foods with regular addition of different varieties in the international market is enormous; also the international market is established<br />
and emerging at a prospering rate with the growing numbers of customers from different part of socio cultural taste who prefer the<br />
domestic flavor in their daily food. The buyers are mostly from UK, USA, Australia, Canada and the Middle Eastern Countries.<br />
In Bangladesh, products are consumed by the households, city dwellers, busy families, young adults, who look for convenient cooking.<br />
The number of potential buyers is increasing at a fast rate because of the various promotional campaigns by <strong>Golden</strong> <strong>Harvest</strong> and also<br />
for its unique product attributes that attract people from all walks of life, irrespective of age, occupation and locality.<br />
3. Market Share and Competition:<br />
<strong>Golden</strong> <strong>Harvest</strong> enjoys majority of the total processed ready to cook food market in Bangladesh, fulfilling a prerequisite of a market<br />
leader.<br />
The competition scenario is somewhat sporadic and there is hardly any direct competition with <strong>Golden</strong> <strong>Harvest</strong> due to its multiplicity<br />
of products. The competitors include Aftab, <strong>Harvest</strong> Rich brands which have their low range of product line up and imported French<br />
15
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Fries like McCain, Lamb Weston, and imported chicken nuggets like Doux and imported range of frozen products from Al Kabeer<br />
Group are also competing in the local market.<br />
However, <strong>Golden</strong> <strong>Harvest</strong>’s competitive advantage allows it to carefully select its profitable yet high demanding product lines in a<br />
market Niche and at the same time, enjoys a high degree of independence. Thus, <strong>Golden</strong> <strong>Harvest</strong> is benchmarking itself in the Ready<br />
to cook frozen food industry in terms of quality, pricing and the exotic brand flavors with customer satisfaction.<br />
4. Market distribution:<br />
4.1 International Market:<br />
Products are regularly distributed to the entry port of respective buyer’s country conforming to all export regulations prevailing in<br />
Bangladesh. From the entry port, assigned distributors are taking the products to the end users abroad. <strong>Golden</strong> <strong>Harvest</strong> has a number<br />
of high performing distributors for each of its global destinations. British Retail Consortium (BRC) is giving us certified access to<br />
distribute our product to internationally reputed retail chains like TESCO.<br />
4.2 Domestic Market:<br />
Domestic Market requires <strong>Golden</strong> <strong>Harvest</strong> to set up a distribution channel throughout the country. Products are sold nation wide via<br />
dealers nominated for various districts. Technology based temperature controlled logistics is made available for transportation of<br />
products from manufacturing plant to the dealer’s/outlets across the country.<br />
a. Dealer Management:<br />
<strong>Golden</strong> <strong>Harvest</strong> has appointed 28 dealers for a comprehensive coverage in Bangladesh. The dealers in turn sell to around 5,000<br />
retailers with retail price tagged by <strong>Golden</strong> <strong>Harvest</strong>. The basis of business for both the wholesaler and the retailer is pre‐agreed<br />
commission.<br />
b. Key retail outlet Management:<br />
Considering large business volume, <strong>Golden</strong> <strong>Harvest</strong> keeps a close tie up with the large retail stores in Bangladesh. Supplies to major<br />
retail chain stores such as, Nondon, Agora, Meena Bazaar, PQS, Swapno, Lavender, Prince Bazaar, fall under this category. High<br />
volume consumers include 5 star Hotels like Radisson, University campuses like North South University, AIUB, Stamford University,<br />
Hospitals, Restaurants are distributed directly from own network resources. <strong>Golden</strong> <strong>Harvest</strong> regularly devises promotional programs<br />
for generating thrust to boost up revenues; current activities include already distributed 500 refrigerators deployed country wide and<br />
this number will grow over 15,000 along with <strong>Golden</strong> <strong>Harvest</strong>’s expansion.<br />
16
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
c. Distribution Logistics:<br />
<strong>Golden</strong> <strong>Harvest</strong> has a full backup of logistic equipments and transportations required for its distribution activity. A fleet of 9 (nine)<br />
large refrigerated trucks of various capacities are continuously utilized for distributing to the channels of both internal and external<br />
buyers at home and abroad maintaining temperature of ‐30 degree Celsius.<br />
d. E‐ Commerce:<br />
E‐commerce enables companies to interact with consumers, suppliers, and retailers. Over the past few years, websites have become<br />
a dominant media to provide brand promotion, product information, recipes, and industry related information, customer queries and<br />
comments.<br />
e. Media campaign:<br />
With media campaign, new consumers and new products are added at an exponential rate in the local market. After the campaign,<br />
French fry has created a huge response in the local market. Previously, French fry market in Bangladesh was absolutely dependent on<br />
import as a backward linkage to the fast food sector. French fry has now become a household necessity.<br />
17
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Section‐VI Business Expansion/Diversification Plan<br />
Bangladesh has a population of 160 million and growing at a rate of 1.55%. Distribution channels for perishables, such as Agricultural,<br />
Fisheries, Dairies, Pharmaceuticals, Livestock and Poultry produces are highly scattered and uneven in Bangladesh creating imbalance<br />
in supply and demand regularly. Vaccination programs are always become difficult and stagnant due to lack of proper logistical<br />
infrastructure. Also because of deficiency of transportation and storage most of our horticultural produce goes to a waste. It has been<br />
surveyed that the Horticulture segment of Bangladesh suffers a loss of up to 44%. These post harvest loss of 44% and seasonal<br />
availability of horticultural produce are the main resultant of extreme price variation prevailing in the market. <strong>Golden</strong> <strong>Harvest</strong> aims at<br />
fulfilling this vacuum by devising and implementing its mega business expansion plan.<br />
a. Cold Chain:<br />
Introduction of a cold chain seems to be the only solution to the problem stated above. A cold chain is a logistics system, which helps<br />
in maintaining and providing a series of facilities for ensuring ideal storage conditions for the perishables from the point of origin to<br />
the point of sale. A well developed and efficiently organized cold chain reduces wastage, spoilage and helps keep the perishables<br />
intact thereby helping to maintain the quality of the harvested food products ultimately making the whole system cost effective<br />
which ensures highest quality to the end user. Our neighboring countries like India, Nepal, Pakistan, Myanmar has the Cold Chain<br />
infrastructure already in place, but Bangladesh unfortunately has no Cold Chain or the related infrastructure for operation throughout<br />
the country.<br />
Post harvest loss of agricultural, fisheries, dairies, livestock and poultry sector in Bangladesh is at a very alarming stage, just alone in<br />
the horticulture sector in Bangladesh it is at an alarming 44% of the total produce, which is the primary cause for such drastic<br />
variation in price in the local market. Fishery sector suffers massive threat of usage of Formalin, also growth of poultry and dairy<br />
sector suffers due to absence of temperature controlled transportation. Pharmaceuticals sector being the second largest sector after<br />
RMG industry requires very low temperature controlled maintenance for it’s raw material and finished product this sector is facing<br />
huge setback due absence of Cold Chain. Vaccination programs in Bangladesh often becomes stagnant and sluggish due to absence<br />
of proper logistics for it’s maintenance and transportation. These sector wise losses could be easily avoided with Cold Chain<br />
management, enabling prices to be lower which in turn increases the market size and translating into bigger sales volume as a normal<br />
consequence.<br />
<strong>Golden</strong> <strong>Harvest</strong> will set up a Country Wide Network covering 7 divisions and 22 districts with cold storage facility maintaining ‐30<br />
degree centigrade for preserving perishables like frozen food, poultry, dairy, fisheries, pharmaceutical and horticultural products.<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> Limited will set up a central depot in <strong>Dhaka</strong> and will sequentially link with 24 depots at ‐30 degree<br />
Celsius and 15,000 freezers in retail outlets all over Bangladesh from its own resources. For Cross Country Transportation a Fleet of 50<br />
refrigerated trucks maintaining temperature at ‐30 degree will be deployed to facilitate transportation for this logistics network.<br />
The cold chain will generate revenues mainly from the storage space and longer shelf life of perishable products of <strong>Golden</strong> <strong>Harvest</strong> as<br />
well as product from similar business operators from other industries like poultry, fisheries, pharmaceuticals, dairy etc, which will be<br />
maintained and distributed by this network. Rental charges for cross country transportation will also generate revenues from internal<br />
cost savings and external service rendered commercially to other operators requiring low temperature management logistics.<br />
The entire cold chain operation model is being designed and will be operated under technical supervision and assistance from USAID.<br />
b. Ready‐to‐Eat Line of Frozen Food Products<br />
Rapid growth of urbanization in Bangladesh and life style and upward mobility of income class, need for convenience and hygiene is<br />
driving the demand for ready to eat products. In Bangladesh most of the street side restaurants are unhygienic, or proper restaurants<br />
are very expensive or home made food in hot pot is highly inconvenient.<br />
Day by day, people are being more and more aware on food hygiene, as can be seen from the exponential growth in the bottled<br />
mineral water sector which in the past was thought to be a luxury but today it has proved to be a necessity. <strong>Golden</strong> <strong>Harvest</strong> has<br />
identified the potential for Ready‐to‐Eat line of frozen food products for the corporate offices and working people which alone are a<br />
massive market opportunity.<br />
<strong>Golden</strong> <strong>Harvest</strong> intends to serve local and exotic dishes from daily meals to cuisines at very affordable price. Convenience of longer<br />
shelf life and round the year availability will be ensured at international hygiene standard.<br />
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Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
<strong>Golden</strong> <strong>Harvest</strong> is presently developing the process line with technical assistance from Foreign Experts provided through assistance by<br />
USAID. Some of the Ready‐to‐Eat line of products planned for launching includes Deshi Food line such as Steamed Rice with Chicken,<br />
Dal and Bhaji, Chinese Food, Thai Food and etc. Other than food designed for office, <strong>Golden</strong> <strong>Harvest</strong> will also launch special foods like<br />
Murog Pulau, Elish Pulau, Kachchi Biryani, Mutton Tehari, assorted gravy dishes such as Rezala, Bhuna and wide range of Kababs and<br />
etc. These products will be marketed at an affordable yet competitive price than the prices charged by the general restaurants. The<br />
products will have a shelf life of 2 years and will be made available through out the country through cold chain of <strong>Golden</strong> <strong>Harvest</strong>.<br />
c. Premium Ice Cream Products<br />
Bangladesh being a tropical country and the winter lasting between 4 to 6 weeks, the annual market demand for Ice Cream<br />
throughout the country is huge. According to a Market Survey, in 2010, the Ice cream Market size of Bangladesh is of approximately<br />
Taka 360 Crore and is growing at a promising rate of 36%, which is still untapped with only 2 major brands dominating the market.<br />
ICE Cream Market Growth<br />
Total Size of Ice Cream Market in 2009 (Both Branded & Non Branded)<br />
Category Revenue in Crore Taka Share<br />
Branded<br />
Non‐branded<br />
Total (approx.)<br />
208.00 58%<br />
150.00 42%<br />
358.00 100%<br />
According to market survey, branded ice creams controls 58% share of total revenue against the non branded 42%.With the cold<br />
chain logistics the ice cream business can make a quick penetration with products for customers all over Bangladesh.<br />
Due to lack of logistical support, branded ice creams cannot provide nationwide coverage. The most competitive advantage of <strong>Golden</strong><br />
<strong>Harvest</strong> is the infrastructure backbone of cold chain which is under the frame work of this expansion plan which can create large scale<br />
competition in the Ice cream industry.<br />
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Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Currently the manufacturers of Ice cream in Bangladesh run their processes with poor machineries and process control system. As a<br />
result, new products developed in the international markets are not present in Bangladesh. For this reason, the import based ice<br />
creams have curved a niche market for themselves in Bangladesh which includes Movenpick, Baskin Robins, Andersons, Hagen Dazs.<br />
Considering this, <strong>Golden</strong> <strong>Harvest</strong> is in the process of setting up a world class European Ice Cream plant with globally standardized<br />
process control systems for such a sensitive delicacy.<br />
Major Category and their Contribution<br />
Category Type Size<br />
Stick<br />
Cup &<br />
Cone<br />
Liter<br />
Price<br />
segment<br />
Normal Taka 8 – 18 22%<br />
Premium Taka 20 –<br />
30<br />
Contribution<br />
12%<br />
Cup 100 ml 12%<br />
Cone 100 ml 18%<br />
Normal ½, 1, 2 & 5 liter 26%<br />
Premium 1 liter 5%<br />
Cake ‐ 1 & 1½ liter 5%<br />
Total 100%<br />
Premium Branded Ice Cream Sector is by far the fastest growing of the ice cream market showing an increase of 36% over the period<br />
2007‐8 compared to a static market for non branded ice cream over the same period.<br />
<strong>Golden</strong> <strong>Harvest</strong> intends to launch some new line like Ice Pop, Lollies (bi flavors, tri flavors and twisters), variety of Choc‐bar and Cone,<br />
Cups, Liters and Ice Cream cakes, Sorbets etc., <strong>Golden</strong> <strong>Harvest</strong> will also launch for the very first time in Bangladesh a wide range and<br />
variety of Premium and Specialty Ice Cream products. <strong>Golden</strong> <strong>Harvest</strong> expects to secure 30% of the Bangladesh market with wide<br />
variety of ice cream products, higher quality and lower distribution cost.<br />
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Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Section‐VII Directors of the Company<br />
Name Designation Age<br />
Mr. Matthew Graham <strong>Stock</strong> Chairman<br />
Mr. Ahmed Rajeeb Samdani<br />
Managing Director & CEO<br />
42 yrs<br />
36 yrs<br />
Mr. Mohius Samad Choudhury Director & COO 41 yrs<br />
Mr. Ahmed Mehdi Samdani<br />
Ms. Nadia Khalil Choudhury<br />
Mr. Azizul Huque<br />
Director<br />
Director<br />
Director<br />
30 yrs<br />
29 yrs<br />
39 yrs<br />
Mr. Moqsud Ahmed Khan Director 65 yrs<br />
Information regarding directors and directorship<br />
Name Designation<br />
Date of becoming<br />
Director for the first<br />
time<br />
Mr. Matthew Graham <strong>Stock</strong> Chairman 20 November 2004<br />
Mr. Ahmed Rajeeb Samdani<br />
Managing Director & CEO<br />
Mr. Mohius Samad Choudhury Director & COO<br />
Mr. Ahmed Mehdi Samdani<br />
Ms. Nadia Khalil Choudhury<br />
Mr. Azizul Huque<br />
Director<br />
Director<br />
Director<br />
Mr. Moqsud Ahmed Khan Director<br />
10 August 2004<br />
10 August 2004<br />
10 August 2004<br />
30 June 2010<br />
10 August 2004<br />
20 November 2004<br />
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Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Directors’ involvement in other organization:<br />
Name<br />
Designation in the Company Directorship/Sponsorship/Ownership with other Organization<br />
Position<br />
Matthew Graham <strong>Stock</strong> Chairman<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Chairman<br />
Greenfields Distribution UK <strong>Ltd</strong>.<br />
Chairman<br />
Ahmed Rajeeb Samdani Managing Director & CEO<br />
Ahmed Mehdi Samdani Director<br />
Mohius Samad Choudhury Director & COO<br />
Stemcor UK Limited Director<br />
Stemcor India Pvt <strong>Ltd</strong>. Managing Director<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong><br />
Managing Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Commodities <strong>Ltd</strong>. Managing Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Logistics <strong>Ltd</strong> Managing Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Cottons <strong>Ltd</strong> Managing Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Developers <strong>Ltd</strong> Managing Director<br />
Futurescape Developments <strong>Ltd</strong> Managing Director<br />
<strong>Golden</strong> <strong>Harvest</strong> InfoTech <strong>Ltd</strong> Managing Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Seafood and Fish Processing <strong>Ltd</strong> Managing Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Organic and Aquaculture Holdings <strong>Ltd</strong>. Managing Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Scankort GIS <strong>Ltd</strong> Managing Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Aviation <strong>Ltd</strong><br />
Managing Director<br />
The City Bank Limited<br />
Director<br />
Climate Action BD <strong>Ltd</strong><br />
Director<br />
Brain Train <strong>Ltd</strong><br />
Managing Director<br />
Bangladesh Electronic Payment Systems <strong>Ltd</strong><br />
Director<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong> Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Commodities <strong>Ltd</strong>. Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Logistics <strong>Ltd</strong> Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Cottons <strong>Ltd</strong> Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Developers <strong>Ltd</strong> Director<br />
Futurescape Developments <strong>Ltd</strong> Director<br />
<strong>Golden</strong> <strong>Harvest</strong> InfoTech <strong>Ltd</strong> Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Sea Food and Fish Processing <strong>Ltd</strong> Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Organic and Aquaculture Holdings <strong>Ltd</strong>. Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Scankort GIS <strong>Ltd</strong> Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Aviation <strong>Ltd</strong> Director<br />
Brain Train <strong>Ltd</strong> Director<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong> Chief Operating Officer<br />
<strong>Golden</strong> <strong>Harvest</strong> Commodities <strong>Ltd</strong>. Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Logistics <strong>Ltd</strong> Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Cottons <strong>Ltd</strong> Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Developers <strong>Ltd</strong> Director<br />
Futurescape Developments <strong>Ltd</strong> Director<br />
<strong>Golden</strong> <strong>Harvest</strong> InfoTech <strong>Ltd</strong> Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Sea Food and Fish Processing <strong>Ltd</strong> Director<br />
22
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Ms. Nadia Khalil Choudhury<br />
Azizul Huque<br />
Moqsud Ahmed Khan<br />
Family relationship among directors and top officials:<br />
<strong>Golden</strong> <strong>Harvest</strong> Organic and Aquaculture Holdings <strong>Ltd</strong>. Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Scankort GIS <strong>Ltd</strong> Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Aviation <strong>Ltd</strong> Director<br />
Director <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong> Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Sea Food and Fish Processing <strong>Ltd</strong> Director<br />
Khalil and Khalil Investments <strong>Ltd</strong> Director<br />
KRC Composite Director<br />
ATIA Trading Director<br />
Futurescape Developments <strong>Ltd</strong> Director<br />
Brain Train <strong>Ltd</strong> Director<br />
Director <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong> Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Commodities <strong>Ltd</strong>. Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Cottons <strong>Ltd</strong> Director<br />
<strong>Golden</strong> <strong>Harvest</strong> InfoTech <strong>Ltd</strong> Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Organic and Aquaculture Holdings <strong>Ltd</strong>. Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Scankort GIS <strong>Ltd</strong> Director<br />
<strong>Golden</strong> <strong>Harvest</strong> Aviation <strong>Ltd</strong> Director<br />
Director <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong> Director<br />
There are no family ties among the directors and top officials of the company, except Mr. Ahmed Rajeeb Samdani who is brother of<br />
Ahmed Mehdi Samdani and spouse of Mrs. Nadia Khalil Choudhury<br />
Short bio‐data of the directors:<br />
Mr. Matthew Graham <strong>Stock</strong>, Chairman and sponsor Director<br />
Mr. Matthew Graham <strong>Stock</strong> is the Chairman and sponsor Director of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Mr. <strong>Stock</strong>, Chairman of<br />
Greenfields Distribution UK <strong>Ltd</strong>, a leading Cold Chain with extensive network in the UK and Europe. Mr. <strong>Stock</strong> is also Director of<br />
Stemcor UK Limited, one of the largest Steel Trading House in the world with annual turnover of more than of 11 Billion US Dollars.<br />
Also Mr. <strong>Stock</strong> is the Managing Director of Stemcor India Limited. According to Forbes July 2010 issue, Mr. <strong>Stock</strong> for his outstanding<br />
performance has been awarded Iron Man 2 of India recognition for his leadership role in the Steel Industry of India. Mr. <strong>Stock</strong> brings<br />
his vast experience in Cold Chain from UK which is a great asset for <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Mr. <strong>Stock</strong> is holding an honors<br />
degree in Economics from University College London.<br />
Mr. Ahmed Rajeeb Samdani, Managing Director & CEO<br />
Mr. Ahmed Rajeeb Samdani is the Managing Director & CEO of the <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>., and the Managing Director of<br />
<strong>Golden</strong> <strong>Harvest</strong> Group, a seasoned, creative and visionary entrepreneur, involved in diversified business, holding several key positions<br />
in the financial sector of Bangladesh including Director of The City Bank <strong>Ltd</strong>, he has a number of Joint venture projects that are<br />
currently operating in Bangladesh and few are waiting commissioning. He always looks to the future, believes in himself. He is driven<br />
by his dreams of creating business that are models of not only excellence and success, but also of profitability, innovation and social<br />
responsibility. Mr. Samdani also a founder of a 100% Charitable Hospital, Alvina Samdani Trust and also holding the post of Secretary<br />
General of Human Rights Foundation of Bangladesh.<br />
23
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Mr. Mohius Samad Choudhury, Director & Chief Operating Officer<br />
Mr. Mohius Samad Choudhury is a Director and the Chief Operating Officer of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Mr. Choudhury, is<br />
an Associate Member of the Association of Business Executive United Kingdom (AMBE) and a qualified MBA (Business Administration)<br />
from Glamorgan University, United Kingdom. He has vast experience in the Food Industry and Distribution sector in United Kingdom<br />
covering almost a decade when Mr. Choudhury worked for Food Service and Distribution and handling international brands. Mr.<br />
Choudhury joined <strong>Golden</strong> <strong>Harvest</strong> Group in 2000 on his return from UK. As a primary sponsor and initial member of the company,<br />
Mr. Choudhury is nurturing the company from it’s cradle to the present thriving growth stage. With his global exposure, Mr.<br />
Choudhury has contributed the company in the core business areas of finance, production and international business including overall<br />
operation.<br />
Mr. Ahmed Mehdi Samdani , Director<br />
Mr. Ahmed Mehdi Samdani , one of the major sponsor‐Director of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Mr. Samdani has over 7 years<br />
of experience in Food Commodities Trading , Information Technology, Real Estate Developments, Publishing House, Logistics, etc. He<br />
is one of the founders of TACM Charitable Hospital. A diligent young, hard working business leader who is continuously taking the<br />
company to new heights. His thoroughness in business operation and relentless efforts for increasing business volume is the<br />
inspiration to the company’s growth.<br />
Mrs. Nadia Khalil Choudhury, Director<br />
Mrs. Nadia Khalil Choudhury, an energetic business person with innovative ideas and concepts, is a Director of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong><br />
<strong>Industries</strong> <strong>Ltd</strong> and other units of the group. Mrs. Nadia Khalil Choudhury is actively involved in different Social Businesses. She is also<br />
Director of a Publishing House, Real Estate Company and Director of Khalil and Khalil Investments <strong>Ltd</strong>, KRC Composite. Mrs. Nadia<br />
Choudhury is also an internationally renowned Art collector. Mrs. Nadia Choudhury is an advisor of Bangladesh Human Rights<br />
Foundation; and a kind hearted charity worker.<br />
Mr. Moqsud Ahmed Khan, Director<br />
Mr. Moqsud Ahmed Khan, is the Sponsor Director of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>, and has excellent track record in his own<br />
business in UK and Bangladesh. He has extensive knowledge of Food Business and an active Member of Charitable Organizations in<br />
UK and Bangladesh.<br />
Mr. Azizul Huque, Director<br />
Mr. Azizul Huque, a Director of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>, holds a University Higher diploma in Computer Science from<br />
Staffordshire University. Having vast experience extended over 14 years in Bulk Food Commodities Trading as well as Information<br />
Technology business, has enabled him to have a comprehensive knowledge in the business dynamics and current local and<br />
international business policies of different countries. His in‐depth understanding of all aspects of business and expertise on process<br />
cost elimination and quality assurance in business processes which is required for international business has proved to be assets for<br />
the Company.<br />
Credit information Bureau (CIB) Report<br />
Neither the Company nor any of its directors or shareholders who hold 5% or more shares in the paid‐up capital of the issuer is loan<br />
defaulter in terms of the CIB Report of the Bangladesh Bank.<br />
24
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Section‐VIII Description of Management<br />
Mr. Matthew Graham <strong>Stock</strong>, Chairman<br />
Mr. Matthew Graham <strong>Stock</strong>, Chairman and sponsor Director of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Mr. <strong>Stock</strong>, Chairman of<br />
Greenfields Distribution UK <strong>Ltd</strong>, a leading Cold Chain with extensive network in the UK and Europe. Mr. <strong>Stock</strong> is also Director of<br />
Stemcor UK Limited, one of the largest Steel Trading House in the world with annual turnover of more than of 11 Billion US Dollars.<br />
According to Forbes July 2010 issue, Mr. <strong>Stock</strong> for his outstanding performance has been awarded Iron Man 2 of India recognition for<br />
his leadership role in the Steel Industry of India.<br />
Mr. Faisal Ahmed Chowdhury, Adviser<br />
Mr. Faisal Ahmed Chowdhury, an Adviser of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>, is a Former Secretary of Ministry of Shipping and<br />
Ministry of Water Resource, Government of Bangladesh and a Former Vice Chairman of Export Promotion Bureau. Mr. Chowdhury<br />
provides a valuable edge over other competitors in the market with his extensive experience in the export policy areas of the<br />
Government of Bangladesh.<br />
Mr Ahmed Rajeeb Samdani, Managing Director & CEO<br />
Mr. Ahmed Rajeeb Samdani is the Managing Director & CEO of the <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>, and the <strong>Golden</strong> <strong>Harvest</strong><br />
Group. A seasoned, creative and visionary entrepreneur, Mr Samdani is involved in diversified business, holding several key positions<br />
in the industrial/financial sector of Bangladesh including Director of The City Bank <strong>Ltd</strong>. Mr. Samdani is also a founder of a 100%<br />
Charitable Hospital, Alvina Samdani Trust and holding the post of Secretary General of Human Rights Foundation of Bangladesh.<br />
Mr. Mohius Samad Choudhury, Chief Operating Officer<br />
Mr. Mohius Samad Choudhury is the Chief Operating Officer of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Mr. Choudhury worked for Food<br />
Service and Distribution and handled international brands. Mr. Choudhury joined <strong>Golden</strong> <strong>Harvest</strong> Group in 2000 on his return from<br />
UK. Mr. Choudhury has contributed the company in the core business areas of finance, production and international business<br />
including overall operation.<br />
Mr. Imam Hassan, FCA, Chief Financial Officer<br />
Mr. Imam Hassan, FCA, the Chief Financial Officer of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Mr. Imam Hassan is a professionally qualified<br />
Chartered Accountant from the Institute of Chartered Accountants of Bangladesh (ICAB). He has about 18 years of practical<br />
experience in the field of accounting, finance, auditing, administration and public relation. He has held core finance position of a<br />
number of local conglomerate and multinational companies in Bangladesh.<br />
Mr. Mamun Monowar, Head of Marketing<br />
Mr. Mamun Monowar –Head of Marketing of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Mr Mamun started his career in a software<br />
company named <strong>Dhaka</strong> Soft. In the year 2000, he joined Partex Beverage <strong>Ltd</strong> under Partex Group. He worked in Partex as Market<br />
Development Manager and Brand Manager. During his stay at Partex, his first assignment was to look after the Sales and Marketing<br />
Department of MUM Drinking Water. He also looked after the Brand Department of RC Cola and other soft drinks brands of Partex.<br />
Mr Mamun also worked in James Finlay (former British owned Multinational Company) as Brand Manager over four years. At Finlay,<br />
he led both sales & marketing team.<br />
Mr. Riazul Al Nawaz, Head of Human Resource Management<br />
Mr. Riazul Al Nawaz – Head of Human Resource Management of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Mr. Riaz, post graduated in<br />
English and MBA in Marketing from <strong>Dhaka</strong> University, obtained his post graduation diploma in HRM. He has about 12 years<br />
experience in Human Resources Management and worked for different multinational companies at home and abroad. Mr. Riaz<br />
conducted large number of training programs on Personal Effectiveness, Team Building, Performance Management and<br />
contemporary HR issues in various leading MNCs and local conglomerates.<br />
25
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Mr. Babul Aktar, Head of Accounts & Finance<br />
Mr. Babul Aktar is the Head of Accounts & Finance of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Mr. Babul Aktar is an MBA with BBA Hons<br />
(Major in Accounting). He has about 10 years of practical experience in the fields of accounting, finance, auditing, costing, company<br />
law and taxation. He held core finance position of a number of local conglomerate and multinational companies in Bangladesh.<br />
Mr. Sheikh Qumrul Islam, Factory Manager<br />
Mr. Sheikh Qumrul Islam is the Factory Manager of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Mr. lslam , a graduate, joined <strong>Golden</strong> <strong>Harvest</strong><br />
Group in 2004. He has about 6 years of practical experience in the field of production as well as administration. He held core<br />
responsibilities for supervising and managing all the operational aspects of the factory.<br />
Mr. Md. Faisal MSc, Quality Assurance Manager<br />
Md. Faisal MSc is the Quality Assurance Manager of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Mr. Faisal has completed his Graduation and<br />
Post Graduation from Bangladesh Agricultural University, Mymensing, obtaining the merit position 1st class 1st . He held the<br />
responsibility to maintain the world standard product quality; and to supervise to ensure the food safety. As a part of his professional<br />
development program, he participated in HACCP, BRC Global Standard and other important training programs, in the area of Food<br />
Safety and Quality Assurance. He is experienced in working with the International Organization like USAID‐PRICE.<br />
Mr. Kamruzzaman – Consultant‐ Plant Management<br />
Md. Kamruzzaman is the Consultant‐ Plant Management of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Mr. Md. Kamruzzaman, BSc. Engineer,<br />
MBA is a professionally qualified Engineer; and is a Member & Life Fellow of IEB. He has about 20 years of practical experience in the<br />
field of Engineering and Factory Management. He held core engineering positions & been COO of a number of local conglomerates in<br />
Bangladesh. He got several overseas Training on Engineering & Management.<br />
Mr. Aktheruzzaman Khan‐ Consultant‐ Food Development<br />
Mr. Aktheruzzaman Khan is the Consultant‐ Food Development of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Mr. Aktheruzzaman, MSc (Bio<br />
Chemistry), <strong>Dhaka</strong> University, is a professionally qualified Food Technologist. He has about 33 years of practical experience in the field<br />
of Dairy, Food & Beverage and Administration. He held core positions of Production & Administration of a number of local<br />
conglomerate and multinational companies in Bangladesh & Abroad. He has got several overseas Training on Food Processing,<br />
Dairy & Management<br />
26
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Section‐IX Description of Property<br />
Location of principal plants and other properties of the company and their condition:<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong> has its factory located in at Bokran Monipur, Bobanipur, Gazipur Sadar, Gazipur measuring land<br />
area at 215.50 Decimal. The Factory is set up on a 54,261 SFT (square feet) state –of‐the‐art purpose built processing facility built in<br />
international standards with capacity to expand by additional 100,000 SFT. The fixed assets of the company have been revalued to<br />
their fair market value as on 30 June 2009. The company has acquired its Corporate Office space around 7,000 square feet at SPL<br />
Western Tower, Tejgaon Link Road, Level#5, Gulshan, <strong>Dhaka</strong> and registration of which is under process.<br />
Description of land<br />
(Amount in Taka)<br />
SL. Description Value Location<br />
No.<br />
1 Area of the land is 99 Decimals ( in the name of <strong>Golden</strong><br />
<strong>Harvest</strong> <strong>Agro</strong> industries Limited)<br />
2 Area of the land is 115 decimals ( in the name of<br />
<strong>Golden</strong> <strong>Harvest</strong> Sea Fish and Food Processing Limited)<br />
Deed references of Lands are mentioned hereunder:<br />
39,600,000 Bokran, Monipur,<br />
Bobanipur, Gazipur Sadar,<br />
Gazipur<br />
46,000,000 Pirujali<br />
Monipur,<br />
& Bokran,<br />
Bobanipur,Gazipur Sadar,<br />
Gazipur<br />
85,600,000<br />
i) Deed No. : 17345, Date: 15.08.2004 : 99.00 decimals<br />
ii) Deed No. : 23887, Date: 29.09.2005 : 80.00 decimals<br />
iii) Deed No. : 20361, date: 07.08.2005 : 36.50 decimals<br />
215.50 decimals<br />
The Company owns the following operating fixed assets and they are situated at Company’s office and factory premises; and written<br />
down value are given below:<br />
(Written Down Value in Taka as per Audited Accounts)<br />
Particulars As at September 30, 2010 (Taka) As at June 30, 2010 (Taka)<br />
Lands and Development 85,600,000 85,600,000<br />
Buildings and other constructions 117,977,543 118,606,469<br />
Plant and machinery 110,419,749 111,274,967<br />
Office Equipment 2,789,984 2,825,301<br />
Furniture and Fixtures 16,016,546 16,219,287<br />
Vehicle 10,522,664 8,297,476<br />
Capital Work in Progress 117,455,180 115,514,140<br />
The Company uses latest and most modern machineries and equipments for its production process.<br />
27
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Lease or Charge over Assets:<br />
1. The Company is having Term Loan facility with Mercantile Bank Limited, Gulshan Branch, <strong>Dhaka</strong>. According to sanction term, Land,<br />
Buildings and Plant & Machineries are mortgaged with them.<br />
2. The following assets have been procured through leasing arrangement from the following leasing companies:<br />
Leasing Company List of Assets Amount Outstanding<br />
United Leasing Co <strong>Ltd</strong>. 2 Refrigerated Cover Van, Taka 1,717,430<br />
1 Sedan Car<br />
IDLC Finance <strong>Ltd</strong>. 1 Refer Van and 1 Sedan car Taka 1,706,585<br />
28
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Section‐X Plan of Operation & Discussion of Financial Condition<br />
1. Internal and external source of cash<br />
(As per Audited Accounts ‐Amount in Taka)<br />
The internal sources of the cash of the company are the share capital, share money deposit and retained profit and the external<br />
sources of cash are the bank loans.<br />
Internal Source of Cash<br />
Jul’10‐Sep’10<br />
Jul’09‐Jun’10<br />
Jul’08‐Jun’09<br />
Jul’07‐Jun’08<br />
Share Capital 100,000,000 100,000,000 37,500,000 37,500,000<br />
Capital Reserve 102,687,892 102,687,892 ‐ ‐<br />
Share Money Deposit 250,000,000 92,750,000 ‐ ‐<br />
Retained earnings 113,816,696 78,073,777 23,057,984 9,888,880<br />
Sub Total 566,504,588 373,511,669 60,557,984 47,388,880<br />
External Sources of cash<br />
Term Loan 43,658,878 45,118,734 23,881,277 28,908,269<br />
Leasehold Obligation 3,424,015 3,662,100 2,343,743 ‐<br />
Sub Total 47,082,893 48,780,834 26,225,020 28,908,269<br />
Grand Total 613,587,481 422,292,503 86,783,004 76,297,149<br />
2. Material commitments for capital expenditure<br />
The Company has an Allotment Agreement with Shanta Properties Limited for approximately 7,000 square feet of Office Space at<br />
Level‐5 of SPL Western Tower located at 186, Gulshan‐Tejgaon Link Road, Tejgaon Industrial Area, <strong>Dhaka</strong>‐1208. Registration<br />
formalities are in process.<br />
3. Causes for any material changes from period to period<br />
(As per Audited Accounts‐Amount in Taka)<br />
From 01‐07‐2010<br />
to 30‐09‐2010<br />
(3 Months)<br />
From 01‐07‐2009 to<br />
30‐06‐2010<br />
From 01‐07‐2008<br />
to 30‐06‐2009<br />
Sales Revenue 137,750,137 387,783,620 61,611,094<br />
Cost of Goods Sold (72,990,640) (205,838,233) (35,466,519)<br />
Gross Profit 64,759,497 181,945,387 26,144,575<br />
Add: 3,295,815 9,798,795 4,203,997<br />
Export Incentive 1,411,026 7,759,159 3,594,181<br />
Other Income 1,884,789 2,039,636 609,816<br />
Less: Administrative & Selling<br />
Expenses: 9,808,451 23,102,417 8,161,393<br />
Administrative Expenses 6,125,648 15,807,143 4,107,475<br />
Selling & Distribution Expenses 3,682,803 7,295,274 4,053,918<br />
29
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Financial Expenses 5,904,603 27,970,438 5,618,075<br />
Net Profit before Tax 52,342,259 140,671,328 16,569,104<br />
Provision for Tax (16,599,340) (34,800,000) (3,400,000)<br />
Net Profit 35,742,919 105,871,328 13,169,104<br />
The Company starts its operation in the year of 2006 with the objective of 100% export‐oriented frozen food export. Gradually local<br />
market has been created and present response of the market is very encouraging. In the latest financial year, <strong>Golden</strong> <strong>Harvest</strong> has<br />
concentrated on local sales more vigorously. In that regard, the Company has taken various steps to increase local sales through<br />
qualitative improvement, engagement of efficient manpower, installation of new machineries, sales through distributors and<br />
appropriate promotional activities that enabled the Company to enhance its local sales significantly. In the year ended 30 June 2010,<br />
consolidated local sales amounted to Taka 317.54 million. Gross profit also increased in this year by Taka 181.95 million. Net Profit<br />
margin rose significantly to Taka105.86 million.<br />
4. Seasonal aspects of the company’s business<br />
The nature of business is not directly associated with season.<br />
5. Known trends, events or uncertainties<br />
Political unrest, hartal, natural calamities and power crisis are the known events that may affect the Company's future business.<br />
6. Change in the assets of the Company used to pay off any liabilities<br />
No asset of the Company has been used to pay off the liabilities.<br />
7. Future contractual liabilities<br />
The Company does not have any plan within next one year to contract any new liabilities.<br />
8. Future capital expenditure<br />
The Company always adopts latest technology for providing better quality product and new product line. With the continuing growth<br />
of business, the Company has the plan for adding “Ready to Eat” product line. Setting up of new Ice cream factory and establishing<br />
Cold Chain all over the country are also intended projects of the Company.<br />
9. VAT, income tax, custom duty or other tax liability<br />
(a) VAT:<br />
The Company has no outstanding VAT as on 30 September, 2010.<br />
30
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
(b) Tax:<br />
The Company's Income Tax related information is as follows:<br />
Accounting<br />
Year<br />
Assessment Year Status<br />
2005‐2006 2006‐2007 Assessment Completed.<br />
2006‐2007 2007‐2008 Assessment Completed at DCT level. Appeal to Appellate Tribunal is in progress.<br />
2007‐2008 2008‐2009 Assessment is in progress at DCT level.<br />
2008‐2009 2009‐2010 Assessment is in progress at DCT level.<br />
10. Personnel related scheme<br />
Management of the Company always values its employees as human resources. In this respect, there are continuing in‐house training<br />
program arranged by the Company. Employees of the Company are also deputed for training arranged by various professional bodies<br />
in Bangladesh and abroad.<br />
31
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Section‐XI Determination of the offering price<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. is a leading processed food company of Bangladesh. The Company is enjoying a high growth in<br />
revenue, net profit and net assets in the past 4.25 years. Thus, Net Asset Value (NAV) and Earning‐Based Value (EBV) may be used in<br />
determining the indicative price of the shares of the Company. Net Asset Value (NAV) gives asset‐backing to the shares of the<br />
Company. Earnings Per Share (EPS) indicates profitability against shares of the Company. Earnings‐based Value and Book Value‐based<br />
Value of similar stocks have been taken to estimate a theoretical fair price, considering market demand for the shares of the<br />
Company. The weighted average price derived from the four valuation methods, giving equal weight, is the indicative offer price for<br />
the shares of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. to be issued through the IPO under Book Building Method.<br />
Different methods to determine the fair price per share of the Company are presented below:<br />
Method 1 –Price based on Net Asset Value (NAV) based price per share:<br />
Particulars Amount<br />
A. Share Capital as at 30 September 2010 100,000,000<br />
B. Reserve and Surplus as at 30 September 2010 325,877,505<br />
C. Share Money Deposit as at 30 September 2010 250,000,000<br />
D. Total Shareholders' Equity as at 30 September 2010 (A+B+C) 675,877,505<br />
E. Number of shares as of 30 September 2010 35,000,000<br />
F. Net Asset Value (NAV) Per Share as of 30 September 2010 (D/E) 19.31<br />
Method 2 –Price based on Earning per Share (EPS):<br />
The Company’s operational performances and financial results reflect its growth, financial strength, earning and prospects that help<br />
investors in making informed investment decision. These are summarized as follows:<br />
Financial Years Net Profit<br />
(Taka)<br />
Paid‐up Capital<br />
(Taka)<br />
No. of<br />
outstanding<br />
shares<br />
Earning per<br />
share (EPS)<br />
(Taka)<br />
30‐Sep‐10 (Diluted and Annualized) 35,742,919 350,000,000 35,000,000 4.08<br />
30‐Jun‐10 (Diluted) 105,871,328 192,750,000 19,275,000 5.49<br />
30‐Jun‐09 13,169,104 37,500,000 3,750,000 3.51<br />
30‐Jun‐08 10,502,894 37,500,000 3,750,000 2.80<br />
30‐Jun‐07 ‐602,331 37,500,000 3,750,000 ‐0.16<br />
Weighted Average 38,749,156 655,250,000 65,525,000 2.51<br />
The weighted average net profit for last 4.25 (four and one quarter) years stands at Taka 3.87 Crore and weighted average EPS stands<br />
at Taka 2.51. If we consider the share price on the basis of price/earning multiple of 20, the earning‐based value of shares of the<br />
Company at a weighted average EPS of 2.51 stands at Taka 50.27.<br />
32
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Method 3 ‐ Price Based On P/E Ratio of Similar <strong>Stock</strong>s:<br />
Sl. Company Face Value EPS Market Price<br />
(Taka) (Taka) (6‐Mon Av)<br />
No. (Taka)<br />
P/E Ratio<br />
1 Apex Foods Limited 100 15.01 1147.00 76.42<br />
2 Fine Foods Limited 10 0.88 95.93 109.02<br />
3 Rahima Foods Limited 100 3.03 552.71 182.41<br />
4 National Tea Co <strong>Ltd</strong> 100 156.78 4658.71 29.71<br />
5 Beach Hatchery <strong>Ltd</strong> 10 1.53 90.32 59.03<br />
6 Fu‐Wang Foods Limited 10 1.07 77.13 72.09<br />
Simple Average 88.11<br />
(Source: DSE Monthly Review, June‐<br />
Nov'10)<br />
Determining the Fair Value of share of GOLDEN HARVEST AGRO INDUSTRIES LIMITED:<br />
Average EPS 2.51<br />
Representative P/E Multiple (X) 88.11<br />
Fair Value (Taka) 221.45<br />
Sl.<br />
No.<br />
Method 4 ‐ Price based on P/BV Ratio of Similar <strong>Stock</strong>s:<br />
Company Face Value<br />
(Taka)<br />
NAV (Taka) Market Price<br />
(6‐Mon Av)<br />
(Taka)<br />
P/BV Ratio<br />
1 Apex Foods Limited 100 703.63 1147.00 1.63<br />
2 Fine Foods Limited 10 11.15 95.93 8.60<br />
3 Rahima Foods Limited 100 49.53 552.71 11.16<br />
4 National Tea Co <strong>Ltd</strong> 100 502.87 4658.71 9.26<br />
5 Beach Hatchery <strong>Ltd</strong> 10 11.15 90.32 8.10<br />
6 Fu‐Wang Foods Limited 10 12.64 77.13 6.10<br />
Simple Average 7.48<br />
(Source: DSE Monthly Review, June‐<br />
Nov'10)<br />
Determining the Fair Value of share of GOLDEN HARVEST AGRO INDUSTRIES LIMITED:<br />
NAV (Diluted) 19.31<br />
Representative P/BV Multiple (X) 7.48<br />
Fair Value (Taka) 144.38<br />
33
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Finding and Calculation of the fair Price of share of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>.:<br />
Particulars Amount<br />
Price based on Net Asset Value (NAV) 19.31<br />
Price based on Earning Per Share (EPS) 50.27<br />
Price Based on P/E Ratio of Similar <strong>Stock</strong>s 221.45<br />
Price Based on P/BV Ratio of Similar <strong>Stock</strong>s 144.38<br />
Average 108.85<br />
Based on the above calculation the fair value of the <strong>Stock</strong> of the Company stands at Taka 108.85 and we conservatively<br />
fix up the price @ Taka 80.00 per share including a premium of Taka 70.00 per share.<br />
Disclaimer: Information presented herein, while obtained from sources we believe to be reliable, is not guaranteed either as to<br />
accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation of the purchase or sale<br />
of any security. As it acts for public companies from time to time, BANCO may have a relationship with the above mentioned<br />
company(s). This report is intended for distribution in only those jurisdictions in which BANCO is registered. Redistribution of this<br />
report in any format, to any recipient other than initially intended by the Firm, is strictly prohibited.<br />
34
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Section‐XII Book Building Method<br />
Book Building is a process through which an issuer attempts to determine the price to offer its security based on demand from<br />
institutional investors. Under the process, the price of an IPO share will be determined through an automated bidding to be<br />
participated by different financial institutions and then the share will be opened for the IPO participant at the cut‐off price<br />
determined during the book building process. The bidding will be handled through a uniform and integrated automated system of the<br />
stock exchanges, or any other organization as decided by the Commission, especially developed for book building method. The entire<br />
procedure of price discovery under book building method is delineated below:<br />
a) The issuer/issue manager shall issue invitation to the eligible institutional investors, both in writing and through publication<br />
in at least 5 (five) widely circulated national dailies, giving at least 10 (ten) working days time, to the road show/presentation/seminar<br />
indicating time and venue of such event.<br />
b) The invitation letter shall accompany an information document containing all relevant information covering the proposed<br />
issue of the issuer. The eligible institutional investors shall submit indicative price to the issuer/issue manager, signed jointly by the<br />
Chief Executive Officer (CEO) and the Financial Analyst, highlighting the factors taken into consideration in support of the indicative<br />
price, within the next 3(three) working days of the said road show/presentation/seminar;<br />
c) The indicative price band will be fixed based on the past performance, expected future earnings of the issuer and the P/E<br />
ratio of other peer companies in the industry and the determination of indicative price involves the following institutional investors<br />
registered with or approved by SEC in this regard:‐<br />
- Merchant Bankers except the issue manager of the proposed issue;<br />
- Foreign institutional investors;<br />
- Recognized pension funds and provident funds;<br />
- Banks and NBFIs under regulatory control of Bangladesh Bank;<br />
- Insurance Companies regulated under Insurance Act, 1938;<br />
- Institutional venture capital and institutional investors;<br />
- <strong>Stock</strong> Dealers; and<br />
- Any other artificial judicial person permitted by the SEC for this purpose.<br />
d) Issuer in association with issue manager and eligible institutional investors quote an indicative price in the prospectus with<br />
the rationale for such price and submit the prospectus to the Commission with copy to the stock exchanges.<br />
e) The indicative price range shall be determined as per price indications obtained from at least 15 (fifteen) eligible<br />
institutional investors covering at least 3 (three) different categories including at least 5 (five) merchant banks of such investors.<br />
f) Eligible institutional investors bidding shall commence after getting consent from the Commission for this purpose.<br />
Institutional bidding period will be 3 to 5 (Three to Five) working days which may be changed with the approval of the Commission.<br />
35
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
g) Eligible institutional investors (EIIs) shall not be allowed to participate in the bidding unless they participate and quote in the<br />
Road Show for setting the indicative price. The EII participating in the Road Show and quote price must also participate in the bidding.<br />
The issuer and issue manager will jointly submit the attendance sheet and the quoted price by the EII along with the draft prospectus<br />
to SEC.<br />
h) Prospectus will be posted on the Websites of the Commission, stock exchanges, issue<br />
manager and issuer at least 2 (two) weeks prior to the start of the bidding to facilitate investors to know about the company and all<br />
aspect of offering.<br />
i) The indicative price shall be the basis for formal price building with an upward and downward band of 20% (Twenty<br />
Percent) of indicative price within which eligible institutional investors shall bid for the allocated amount of security.<br />
j) If institutional quota is not cleared at 20% (Twenty Percent) below indicative price, the issue will be considered cancelled<br />
unless the floor price is further lowered within the face value of security. Provided that the issuer’s chance to lower the price shall not<br />
be more than once.<br />
k) No institutional investor shall be allowed to quote for more than 10% (Ten Percent) of<br />
the total security offered for sale, subject to maximum of 5 (Five) bids.<br />
l) The volume and value of bid at different prices will be displayed on the monitor of the said system without identifying the<br />
bidder.<br />
m) The institutional bidders will be allotted security on pro‐rata basis at the weighted average price of the bids that would clear<br />
the total number of securities being issued to them.<br />
n) Institutional bidders shall deposit their bid with 20% (Twenty Percent) of the amount of bid in advance to the designated<br />
bank account and the rest amount to settle the dues against security to be issued to them shall be deposited within 5 (Five) working<br />
days prior to the date of opening subscription for general investors.<br />
o) In case of failure to deposit remaining amount that is required to be paid by institutional bidders for full settlement of the<br />
security to be issued in their favor, 50% (Fifty Percent) of bid money deposited by them shall be forfeited by the Commission. The<br />
securities earmarked for the bidder who defaulted in making payment shall be added to the general investor quota.<br />
p) The time gap between closure of bidding by Eligible Institutional Investors and subscription opening for general investors is<br />
25 working days or as may be determined by the Commission.<br />
q) The securities will be offered to the general investors, NRBs and Mutual Funds at the cut‐off price determined during the<br />
book building process.<br />
36
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Section‐XIII Market for Securities Being Offered<br />
The issuer shall apply to all the stock exchanges in Bangladesh within seven working days from the date of consent accorded by the<br />
Commission to issue prospectus.<br />
DECLARATION ABOUT THE LISTING OF SHARES WITH THE STOCK EXCHANGE(S)<br />
None of the stock exchange(s), if for any reason, grants listing within 75 days from the closure of subscription, any allotment in terms<br />
of this Prospectus shall be void and the Company shall refund the subscription money within fifteen days from the date of refusal for<br />
listing by the stock exchange(s), or from the date of expiry of the said 75 days, as the case may be.<br />
In case of non‐refund of the subscription money within the aforesaid fifteen days, the Company’s Directors, in addition to the issuer<br />
company, shall be collectively and severally liable for refund of the subscription money, with interest at the rate of 2% (two percent)<br />
per month above the bank rate, to the subscribers concerned.<br />
The issue manager, in addition to the issuer company, shall ensure due compliance of the above mentioned conditions and shall<br />
submit compliance report thereon to the Securities and <strong>Exchange</strong> Commission within seven days of expiry of the aforesaid fifteen<br />
days time period allowed for refund of the subscription money.<br />
37
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Section‐XIV Description of Securities Outstanding or Being Offered<br />
a) Dividend, Voting and Preemption Right<br />
In case of any declaration of cash/stock dividend by the Company or distribution of any property of the Company, all the shareholders<br />
shall be entitled to it in proportion to their shareholdings on the date of the book closure or record date for the purpose. The<br />
Company will follow a dividend policy, which will allow it to provide a fair return on its shareholders’ investment and simultaneously<br />
allow for building up of the retained earnings and reserves as a rule that would sustain growth of the Company. The share capital of<br />
the Company is divided into Ordinary Shares, carrying equal rights to vote and receive dividend in terms of the relevant provisions of<br />
the Companies Act 1994 and the Articles of Association of the Company. All shareholders shall have the usual voting right in person or<br />
by proxy in connection with, among others, election of Directors and Auditor(s) and other usual agenda of General Meeting –<br />
Ordinary or Extra ordinary. On a show of hand, every shareholder present in person and every duly authorized representative of a<br />
shareholder present at a General Meeting shall have one vote and on a poll every shareholder present in person or by proxy shall<br />
have one vote for every share held by him or her. In case of any additional issue of shares for raising further capital the existing<br />
shareholders shall be entitled to Rights Issue of shares in terms of the guidelines issued by the Securities and <strong>Exchange</strong> Commission<br />
from time to time.<br />
b) Conversion and Liquidation Right<br />
The Company in its General Meeting may convert paid‐up shares to any denomination. No special preferences or privileges shall be<br />
attached to this conversion. If the company at any time issues Preference Shares or Debentures or Bonds with the consent of SEC,<br />
such holders of securities shall be entitled to convert such securities into ordinary shares if it is so determined by the company. In<br />
case of winding‐ up or liquidation of the Company, all shareholders have the same privileges and advantages as ordinary shareholder<br />
as regards participation in profits and voting at meetings of the Company.<br />
c) Right for Transfer<br />
In terms of the provisions of the Companies Act, 1994, Articles of Association of the Company and other relevant rules in force, the<br />
shares of the Company are transferable. The Company shall not charge any fee other than Government duties for registering transfer<br />
of shares. No shares shall be transferred to an infant or a person of unsound mind.<br />
d) Dividend Policy<br />
I. The profits of the Company, subject to any special right relating thereto created or authorized to be created by the<br />
Memorandum of Association and subject to the provision of the Articles of Association, shall be divisible among the<br />
members in proportion to the amount of capital paid ‐up on the shares held by them respectively.<br />
II. No larger dividend shall be declared than is recommended by the directors, but the<br />
38
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Company in its General meeting may declare a smaller dividend. If preference share dividend is not paid in one year,<br />
such unpaid dividend shall be carried forward to the next year or years; and become cumulative.<br />
III. The declaration of directors as to the amount of net profit of the company shall be conclusive.<br />
IV. No dividends shall be paid otherwise than out of the profits of the year or any other undistributed profits and general<br />
reserves. Dividend shall not carry interest as against the Company.<br />
V. The Directors may from time to time pay off the members such interim dividend as appear to the Directors to be justified<br />
by the profits of the Company.<br />
VI. A transfer of shares shall not pass the right to any dividend declared thereon after such transfer and before the registration<br />
of the transfer.<br />
VII. There is no limitation on the payment of dividends to the common stockholders.<br />
e) Other Rights of Shareholders<br />
The shareholders shall have the right to receive all periodic reports and statements, audited as well as unaudited, published by the<br />
company from time to time. The directors shall present the financial statements as required under the law and International<br />
Accounting Standards and International Financial Reporting Standards as adopted by the Institute of Chartered Accountants of<br />
Bangladesh. Financial statements will be prepared in accordance with International Financial Reporting/Accounting Standards,<br />
consistently applied throughout the subsequent periods and present with the objective of providing maximum disclosure as per law<br />
and international Financial Reporting/Accounting Standard to the shareholders regarding the Financial and operational position of the<br />
company.<br />
In case of any declaration of stock dividend through issue of Bonus Shares, all shareholders shall be entitled to it in proportion to their<br />
shareholdings on the date of book closure or record date for the purpose.<br />
The shareholders holding not less than 10% of the issued/fully paid up capital of the Company shall have the right to make requisition<br />
of Extra‐Ordinary General Meeting (EGM) of the Company as provided under Section 84 of the Companies Act, 1994.<br />
Lock‐in Provision<br />
All issued shares of the issuer at the time of according consent to public offering shall be subject to a lock‐in period of 3 (Three) years<br />
from the date of issuance of prospectus or commercial operation, whichever comes later. Provided that the persons, other than<br />
directors and those who hold 5% or more, who have subscribed to the shares of the Company within immediately preceding 2 (Two)<br />
years of according consent, shall be subject to a lock‐in period of 1 (One) year from the date of issuance of prospectus or commercial<br />
operation, whichever comes later.<br />
39
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Subscription and Refund<br />
a) Refund of Subscription Money<br />
As per SEC Notification dated February 9, 2010, the issuer shall refund application money to the unsuccessful applicant of the public<br />
offer by any of the following manner based on the option given by the applicant in the application form:<br />
• Through banking channel for onward deposit of the refund money into the applicant’s bank account as provided<br />
in the respective application form for subscription;<br />
or<br />
• Through issuance of refund warrant in the name and address of the applicant as provided in the respective<br />
application form for subscription;<br />
“Provided that, in case of deposit into the applicant’s bank account, the applicant will bear the applicable service charge, if any, of the<br />
applicant’s banker, and the issuer shall simultaneously issue a letter of intimation to the applicant containing, among others, the date<br />
and amount remitted with details of the bank through and to which bank such remittance has been effected.<br />
b) Subscription by and Refund to Non‐Resident Bangladeshi (NRB)<br />
i) A Non‐Resident Bangladeshi shall apply either directly by enclosing a foreign demand draft drawn on a bank<br />
payable at <strong>Dhaka</strong>, or through a nominee by paying out of foreign currency deposit account maintained in<br />
Bangladesh or in Taka, supported by foreign currency encashment certificate issued by the concerned bank, for<br />
the value of securities applied for through crossed bank cheque marking “Account Payee only”.<br />
ii) The value of securities applied for by such person may be paid in Taka or US dollar or UK pound sterling or EURO<br />
at the rate of exchange mentioned in the securities application form.<br />
iii) Refund against oversubscription shall be made in the currency in which the value of securities was paid for by the<br />
applicant through Account Payee bank cheque payable at <strong>Dhaka</strong> with bank account number, Bank’s name and<br />
Branch as indicated in the securities application form. If the applicants’ bank accounts as mentioned in their IPO<br />
Application Forms are maintained with the Bankers to the Issue and other banks as mentioned, refund amount of<br />
those applicants will be directly credited into the respective bank accounts as mentioned in their IPO Application<br />
Forms.<br />
40
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Section‐XV Availability of Securities<br />
Sl. Number Particulars Number of Shares<br />
1 20% of IPO of Ordinary Shares are reserved for Eligible Institutional<br />
Investors through Book Building Method 6,000,000<br />
2 10% of IPO of Ordinary Shares are reserved for Mutual Funds 3,000,000<br />
3<br />
4<br />
10% of IPO of Ordinary Shares are reserved for Non‐Resident<br />
Bangladeshis (NRB) 3,000,000<br />
Remaining 60% of IPO of Ordinary Shares are reserved for General<br />
Public 18,000,000<br />
Total 30,000,000<br />
1) 20% of the total public offering shall be reserved for the Eligible Institutional Investors (EII), 10% shall be reserved for mutual<br />
funds, 10% for non‐resident Bangladeshi (NRB) and the remaining 60% shall be open for subscription by the general public.<br />
2) The Institutional Investors will be allotted security on a pro‐rata basis at the weighted average price of the bids that would clear the<br />
total number of securities being offered to the Institutional investors.<br />
3) The securities offered to the Mutual Funds, NRBs and General Public will be at the cut‐off price determined during the Book<br />
Building Process.<br />
4) In case of over‐subscription under any of the categories mentioned in the above table, the Issue Manger shall conduct an open<br />
lottery of all the applications received under each category separately in accordance with the letter of consent issued by the<br />
Securities and <strong>Exchange</strong> Commission.<br />
5) In case of under‐subscription under any of Mutual Funds or NRB category as mentioned in the above table, the unsubscribed<br />
portion shall be added to the general public category, and, if after such addition there is over‐subscription in the general public<br />
category the issuer and the issue manager shall jointly conduct an open lottery of all the applicants added together.<br />
6) In case of under‐subscription of the public offering, the unsubscribed portion of shares shall be taken up by the underwriter(s).<br />
7) The lottery as stated in clause (5) and (6) should be conducted in the presence of the representatives of Issuer, <strong>Stock</strong> <strong>Exchange</strong>(s)<br />
and the applicants, if there be any.<br />
41
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Section-XVI Involvement of directors and officers in certain legal proceedings<br />
No Director or officer of GOLDEN HARVEST AGRO INDUSTRIES LTD was involved in any of the following types of legal proceedings in<br />
the last 10 (ten) years:<br />
a. Any bankruptcy petition filed by or against any company of which any officer or director of the Issuer Company filing the<br />
prospectus was a director, officer or partner at the time of the bankruptcy.<br />
b. Any conviction of director, officer in a criminal proceeding or any criminal proceeding pending against him.<br />
c. Any order, judgment or decree of any court of competent jurisdiction against any director, officer permanently or temporarily<br />
enjoining, barring, suspending or otherwise limiting the involvement of any director or officer in any type of business, securities or<br />
banking activities.<br />
d. Any order of the Securities and <strong>Exchange</strong> Commission, or other regulatory authority or foreign financial regulatory authority,<br />
suspending or otherwise limiting the involvement of any director or officer in any type of business, securities or banking activities.<br />
42
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Section-XVII Certain Relationships and Related Transactions<br />
The Company has neither entered into during the last 2 (two) years nor have any plan to enter into any transaction with the following<br />
parties:<br />
1. Any executive director or executive officer of the company;<br />
2. Any director or officer;<br />
3. Any person owning 5% or more of the outstanding stock of the issuer;<br />
4. Any members of the immediate family (including spouse, parents, brothers, sisters, children and in‐laws) of any above persons;<br />
5. Any transactions or arrangement entered into by the Company for a person who is currently a director or in any way connected<br />
with a director of either the issuer company or any of its subsidiaries/associate companies, or who was a director or connected in any<br />
way with director at any time during the last three years prior to the publication of Information document; and<br />
6. Any director holding any position, apart from being a director in the issuer company, in any company, society, trust, organization<br />
or proprietorship or partnership firm.<br />
43
Issuer Company: <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. Issue Manager: Banco Finance & Investment <strong>Ltd</strong>.<br />
Annexure<br />
Annexure 1: Bankers’ to the Issue<br />
Will be finalized before submission of prospectus to Security <strong>Exchange</strong> Commission (SEC)<br />
Miscellaneous Information:<br />
Annexure 2: Corporate Directory<br />
Registered Office: SPL Western Tower, Level‐5, #501 & #502<br />
186 Gulshan‐Tejgaon Link Road,<br />
Tejgaon<br />
<strong>Dhaka</strong>‐1208<br />
Auditors:<br />
S.F. Ahmed & Co<br />
Chartered Accountants<br />
Banker Mercantile Bank Limited<br />
First Security Islami Bank <strong>Ltd</strong>.<br />
Manager to the Issue Banco Finance and Investment Limited<br />
Ispahani Building (3 rd Floor),<br />
14‐15 Motijheel Commercial Area<br />
<strong>Dhaka</strong>‐1000<br />
Company’s Compliance Officer Mr. Imam Hassan FCA<br />
Company Secretary<br />
44
Address:<br />
Annexure 3: Financial Statements as at and for the period ended 30 September 2010<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>.<br />
AUDITOR’S REPORT & FINANCIAL STATEMENTS (CONSOLIDATED)<br />
For the period ended 30 September 2010<br />
November 2010<br />
S. F. Ahmed & Co.<br />
Chartered Accountants<br />
(Representative of ERNST & YOUNG Global in Bangladesh since 1975)<br />
House # 25, Road # 13A<br />
Block‐D, Banani,<br />
<strong>Dhaka</strong>‐1213, Bangladesh.<br />
Contacts:<br />
Phones<br />
Fax<br />
E‐mails<br />
:<br />
:<br />
:<br />
(880‐2) 9894026, 8815102 & 8833327<br />
(880‐2) 8825135<br />
sfali@connectbd.com<br />
sfacoali@btcl.net.bd<br />
sfaco@dhaka.net<br />
45
S F AHMED & CO.<br />
CHARTERED ACCOUNTANTS<br />
AUDITOR’S REPORT<br />
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF<br />
GOLDEN HARVEST AGRO INDUSTRIES LTD.<br />
We have audited the accompanying Consolidated Balance Sheet of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong><br />
<strong>Ltd</strong>. as of 30 September 2010 and the related Consolidated Profit & Loss Statement and Consolidated Cash<br />
Flow Statement along with the explanatory notes and schedules thereto for the period then ended. The<br />
preparation of these financial statements is the responsibility of the company’s management. Our<br />
responsibility is to express an independent opinion on these financial statements based on our audit.<br />
We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards<br />
require that we plan and perform the audit to obtain reasonable assurance about whether the financial<br />
statements are free of material misstatement. An audit includes examining, on a test basis, evidence<br />
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the<br />
accounting principles used and significant estimates made by the management, as well as evaluating the<br />
overall financial statement presentation. We believe that our audit provides a reasonable basis for our<br />
opinion.<br />
In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standards (BAS),<br />
give a true and fair view of the state of the company’s affairs as of 30 September 2010 and of the results of<br />
its operations and its cash flow for the period then ended and complied with the Companies Act, 1994 (as<br />
amended up to 2004) and other applicable laws and regulations.<br />
Subject to the above, we also report that:<br />
a) we have obtained all the information and explanations which to the best of our knowledge and belief<br />
were necessary for the purpose of our audit and made due verification thereof;<br />
b) in our opinion, proper books of account as required by law have been kept by the company so far as it<br />
appeared from our examination of those books; and<br />
c) the company’s Consolidated Balance Sheet and Consolidated Profit & Loss Statement dealt with by the<br />
report are in agreement with the books of account.<br />
d) The expenditures incurred were for the purpose of the company’s business.<br />
Dated: <strong>Dhaka</strong>;<br />
28 November,2010<br />
.........Since 1958<br />
House 25, Road 13A<br />
Block D, Banani<br />
<strong>Dhaka</strong> 1213<br />
Bangladesh<br />
Telephone: (880-2)9894026, 8833327<br />
8815102,<br />
Fax: (880-2)8825135<br />
E-mail: sfail@connectbd.com<br />
sfacoali@btcl.net.bd<br />
sfaco@dhaka.net<br />
Sd/-<br />
S. F. Ahmed & Co.<br />
Chartered Accountants<br />
46
Auditor’s Report on the Consolidated Financial Statements of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. 2010<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> Limited<br />
Consolidated Balance Sheet<br />
As of 30 September, 2010<br />
47<br />
Figures in BDT<br />
Consolidated The Company<br />
Source of Fund<br />
Notes<br />
30.09.2010 30.06.2010 30.09.2010 30.06.2010<br />
Shareholders' Equity<br />
Share Capital 3 100,000,000 100,000,000 100,000,000 100,000,000<br />
Revaluation Surplus 4 109,372,918 109,372,918 109,372,918 109,372,918<br />
Capital Reserve 5 102,687,892 102,687,892 - -<br />
Retained Earnings 6 113,816,696 78,073,777 100,733,753 78,073,777<br />
425,877,505 390,134,587 310,106,671 287,446,695<br />
Share Money Deposit 7 250,000,000 92,750,000 250,000,000 92,750,000<br />
675,877,505 482,884,587 560,106,671 380,196,695<br />
Long-term Liabilities<br />
Term Loan against Machinery 8 43,658,878 45,118,734 20,624,326 21,312,233<br />
Leasehold Obligation 9 3,424,015 3,662,100 3,424,015 3,662,100<br />
47,082,893 48,780,834 24,048,341 24,974,333<br />
722,960,398 531,665,421 584,155,012 405,171,028<br />
A.<br />
Application of Fund<br />
Long-term Assets<br />
Fixed Assets 10 460,781,666 458,337,639 317,338,267 314,482,466<br />
Preliminary Expenses 11 241,342 244,945 73,281 74,375<br />
Pre-operational expenses 12 17,933,945 18,201,616 5,439,050 5,520,230<br />
Investment in shares 13 40,000,000 - 40,000,000 -<br />
Inter-Company investment 14 - - 50,000,000 50,000,000<br />
518,956,953 476,784,200 412,850,598 370,077,071<br />
B. Current Assets 496,013,714 272,751,663 325,405,574 158,180,421<br />
<strong>Stock</strong>s in hand 15 67,241,693 47,185,348 36,593,070 21,251,803<br />
Advances, Deposits and repayments 16 77,278,710 7,672,723 74,273,486 5,209,390<br />
Accounts Receivable 17 207,238,941 193,081,597 74,057,105 110,876,857<br />
Export Incentive Receivable 18 11,757,791 10,932,969 8,181,863 7,567,139<br />
Cash & Bank Balances 19 132,496,579 13,879,026 132,300,050 13,275,232<br />
C. Current Liabilities 292,010,269 217,870,442 154,101,160 123,086,464<br />
Accounts Payable 20 42,608,959 19,051,225 12,888,429 9,711,585<br />
Accruals and Provisions 21 70,054,430 52,522,442 42,215,126 30,312,442<br />
Cash Credit Loan 22 179,346,880 146,296,775 20,456,705 2,299,242<br />
Inter Company Balances 23 - - 78,540,900 80,763,195<br />
D. Net Current Assets (B-C) 204,003,445 54,881,221 171,304,414 35,093,957<br />
E. Total Assets (A+D) 722,960,398 531,665,421 584,155,012 405,171,028<br />
NAV per Share- Taka 24 42.59 39.01 31.01 28.74<br />
The annexed notes form an integral part of the financial statements.<br />
Sd/- Sd/- Sd/-<br />
Director Director Managing Director<br />
Signed in terms of our separate report of even date annexed.<br />
Sd/-<br />
Dated, <strong>Dhaka</strong>; S. F. Ahmed & Co.<br />
28 November 2010 Chartered Accountants
Auditor’s Report on the Consolidated Financial Statements of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. 2010<br />
Particulars:<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> Limited<br />
Consolidated Income Statement<br />
For the period of 1 July 2010 to 30 September 2010<br />
Notes<br />
Consolidated The Company<br />
01.07.2010 to<br />
30.09.2010<br />
48<br />
01.07.2010 to<br />
30.09.2010<br />
Figures in BDT<br />
01.07.2009 to<br />
30.09.2009<br />
Sales Revenue 25 137,750,137 76,647,102 43,518,432<br />
Less: Cost of Goods Sold 26 72,990,640 36,820,584 20,112,422<br />
Gross Profit 64,759,497 39,826,518 23,406,010<br />
Add: 3,295,815 2,231,217 1,813,133<br />
Export Incentive 27 1,411,026 673,992 1,500,493<br />
Other Income 28 1,884,789 1,557,225 312,640<br />
68,055,313 42,057,735 25,219,143<br />
Administrative & Selling Expenses: 9,808,451 6,854,042 4,077,384<br />
Administrative Expenses 29 6,125,648 4,383,204 2,407,769<br />
Selling & Distribution Expenses 30 3,682,803 2,470,838 1,669,615<br />
Financial Expenses 31 5,904,603 1,573,681 1,332,889<br />
Net Profit before Tax 52,342,259 33,630,012 19,808,870<br />
Provision for Tax 32 16,599,340 10,970,037 6,338,000<br />
Net Profit 35,742,919 22,659,975 13,470,870<br />
EPS for the period-Taka 3.57 2.27 3.59<br />
EPS annualized -Taka 33 14.30 9.06 14.37<br />
The annexed notes form an integral part of the financial statements.<br />
Sd/- Sd/- Sd/-<br />
Director Director Managing Director<br />
Signed in terms of our separate report of even date annexed.<br />
Dated, <strong>Dhaka</strong>;<br />
Sd/-<br />
S. F. Ahmed & Co.<br />
28 November 2010 Chartered Accountants
Auditor’s Report on the Consolidated Financial Statements of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. 2010<br />
Particulars<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> Limited<br />
Consolidated Cash Flow Statement<br />
For the period of 01 July 2010 to 30 September 2010<br />
Notes<br />
49<br />
Consolidated The Company<br />
01.07.2010 to<br />
30.09.2010<br />
01.07.2010 to<br />
30.09.2010<br />
Amount in BDT<br />
01.07.2009 to<br />
30.09.2009<br />
Cash Flows from Operating Activities<br />
Collections from Customers 126,063,785 115,083,347 31,563,848<br />
Payments for Costs & Expenses (145,052,182) (122,147,671) (40,619,970)<br />
Interest paid 31 (5,904,603) (1,573,681) (1,332,889)<br />
Net Cash generated / (used) from Operating Activities (24,893,000) (8,638,005) (10,389,011)<br />
Cash Flows from Investing Activities<br />
Acquisitions of Fixed Assets 10 (5,091,612) (4,596,352) -<br />
Investment in Shares 13 (40,000,000) (40,000,000) -<br />
Net Cash used in Investing Activities (45,091,612) (44,596,352) -<br />
Cash Flows from Financing Activities<br />
Receipts from Share Money Deposits 157,250,000 157,250,000 -<br />
Lease Finance from / (repaid to) Financial Institutions (925,992) (925,992) (115,553)<br />
Borrowings from / (Repayments to) Banks 32,278,157 18,157,463 4,123,730<br />
Receipts from Related Companies - (2,222,296) 8,484,539<br />
Net cash (used in) / provided by financing activities 188,602,165 172,259,175 12,492,716<br />
Net changes in cash and cash equivalents 118,617,553 119,024,818 2,103,705<br />
Cash and cash equivalents at the beginning of the year 13,879,026 13,275,232 111,836<br />
Cash and cash equivalents at the end of the period 132,496,579 132,300,050 2,215,541<br />
Operating Cash flow Per Share (2.49) (0.86) (2.77)<br />
The annexed notes form an integral part of the financial statements.<br />
(37,610,001)<br />
Sd/- Sd/- Sd/-<br />
Director Director Managing Director<br />
Signed in terms of our separate report of even date annexed.<br />
Dated, <strong>Dhaka</strong>; Sd/-<br />
28 November 2010 S. F. Ahmed & Co.<br />
Chartered Accountants
Auditor’s Report on the Consolidated Financial Statements of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. 2010<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> Limited<br />
Statement of Changes in Equity<br />
For the period from 1 July 2010 to 30 September 2010<br />
The Company Amount in Taka<br />
Particulars Share Capital<br />
Capital<br />
Reserve<br />
Revaluation<br />
Surplus<br />
Retained<br />
Earnings<br />
Total<br />
Balance at 01.07.08 37,500,000 - - 9,888,880 47,388,880<br />
Net Profit for the year - - - 13,169,104 13,169,104<br />
Revaluation surplus on<br />
Lands, Building &<br />
Machinery - - 109,372,918 - 109,372,918<br />
Balance at 30.06.09 37,500,000 - 109,372,918 23,057,984<br />
Sd/- Sd/- Sd/-<br />
Director Director Managing Director<br />
Signed in terms of our separate report of even date annexed.<br />
Sd/-<br />
Dated, <strong>Dhaka</strong>; S. F. Ahmed & Co.<br />
28 November 2010 Chartered Accountants<br />
50<br />
169,930,902<br />
Balance at 01.07.09 37,500,000 - 109,372,918 23,057,984 169,930,902<br />
Net Profit for the period 13,470,870<br />
Balance at 30.09.09 37,500,000 - 109,372,918 36,528,854<br />
Balance at 01.07.09 37,500,000 - 109,372,918 23,057,984<br />
13,470,870<br />
183,401,772<br />
169,930,902<br />
Net Profit for the year - - - 67,515,794 67,515,794<br />
Issuance of Bonus Share 12,500,000 - - (12,500,000) -<br />
Issuance of Ordinary Share 50,000,000 - - - 50,000,000<br />
Balance at 30.06.10 100,000,000 - 109,372,918 78,073,778<br />
287,446,696<br />
Balance at 01.07.10 100,000,000 - 109,372,918 78,073,778 287,446,696<br />
Net Profit for the period - - 22,659,975 22,659,975<br />
Balance at 30.09.10 100,000,000 - 109,372,918 100,733,753 310,106,671<br />
Consolidated<br />
Balance at 01.07.09 75,000,000 - 162,985,616 46,277,644 284,263,260<br />
Net Profit for the year - - - 105,871,327<br />
Issuance of Bonus Share 25,000,000 - - (25,000,000)<br />
105,871,327<br />
Capital Reserve - 102,687,891 (53,612,698) (49,075,193)<br />
-<br />
Balance at 30.06.10 100,000,000 102,687,891 109,372,918 78,073,778 390,134,587<br />
Balance at 01.07.10 100,000,000 102,687,891 109,372,918 78,073,778 390,134,587<br />
Net Profit for the period - - 35,742,919 35,742,919<br />
Balance at 30.09.10 100,000,000 102,687,891 109,372,918 113,816,697<br />
-<br />
425,877,506
Consolidated<br />
Auditor’s Report on the Consolidated Financial Statements of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. 2010<br />
Cost/Valuation<br />
Schedule of Fixed Assets<br />
51<br />
Rate<br />
Depreciation<br />
Particulars Balance on Addition Disposal Balance on Balance on Charged Disposal Balance on<br />
01.07.10 during year during year 30.09.10 01.07.10 during year during year 30.09.10<br />
Land and Land Development 85,600,000 - - 85,600,000 0.0% - - - - 85,600,000<br />
Buildings and other constructions 127,629,248 113,072 - 127,742,320 2.5% 9,022,780 741,997 - 9,764,777 117,977,543<br />
Plant and machinery 135,868,535 542,500 - 136,411,035 5.0% 24,593,568 1,397,719 - 25,991,287 110,419,749<br />
Office Equipment 3,269,147 - - 3,269,147 5.0% 443,847 35,316 - 479,163 2,789,984<br />
Furniture and Fixtures 17,412,920 - - 17,412,920 5.0% 1,193,633 202,741 - 1,396,374 16,016,546<br />
Vehicle 10,809,738 2,495,000 - 13,304,738 10.0% 2,512,262 269,812 - 2,782,074 10,522,664<br />
Capital Work in Progress 115,514,140 1,941,040 - 117,455,180 0.0% - - - - 117,455,180<br />
Total of 30.09.10 496,103,728 5,091,612 - 501,195,340 37,766,090 2,647,585 - 40,413,675 460,781,666<br />
Total of 30.06.10 351,000,350 145,103,378 - 496,103,728 26,944,032 10,822,057 - 37,766,089 458,337,639<br />
Charged to:<br />
Administrative expenses 20% 529,517<br />
Manufacturing expenses<br />
The Company<br />
80% 2,118,068<br />
2,647,585<br />
Cost/Valuation<br />
Rate<br />
Depreciation<br />
Particulars Balance on Addition Disposal Balance on Balance on Charged Disposal Balance on<br />
01.07.10 during year during year 30.09.10 01.07.10 during year during year 30.09.10<br />
Land and Land Development 39,600,000 - - 39,600,000 0.0% - - - - 39,600,000<br />
Buildings and other constructions 127,629,248 113,072 - 127,742,320 2.5% 9,022,780 741,997 - 9,764,777 117,977,543<br />
Plant and machinery 58,412,373 542,500 - 58,954,873 5.0% 11,597,952 591,962 - 12,189,914 46,764,959<br />
Office Equipment 1,848,142 - - 1,848,142 5.0% 130,345 21,472 - 151,817 1,696,325<br />
Furniture and Fixtures 16,347,995 - - 16,347,995 5.0% 981,998 192,075 - 1,174,073 15,173,922<br />
Vehicle 6,129,516 2,495,000 - 8,624,516 10.0% 902,734 193,045 - 1,095,779 7,528,737<br />
Capital Work in Progress 87,151,000 1,445,780 - 88,596,780 0.0% - - - - 88,596,780<br />
Total of 30.09.10 337,118,274 4,596,352 - 341,714,626 22,635,809 1,740,551 -<br />
W D V as of<br />
30.09.10<br />
W D V as of<br />
30.09.10<br />
24,376,360 317,338,267<br />
Total of 30.06.10 224,454,484 112,663,790 - 337,118,274 15,650,799 6,985,009 - 22,635,809 314,482,466<br />
1/07/2010 to 1/07/2009 to<br />
Charged to: 30/09/2010 30/09/2009<br />
Administrative expenses 20% 348,110 349,251<br />
Manufacturing expenses 80% 1,392,440 1,397,002<br />
1,740,551 1,746,253
Auditor’s Report on the Consolidated Financial Statements of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. 2010<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> Limited<br />
Notes to the Consolidated Accounts<br />
For the period of 1 July 2010 to 30 September 2010<br />
1.00 Legal Status and Principal Activity<br />
The <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> Limited (GHAIL) was incorporated on August 10, 2004,<br />
vide Reg. No.-C-53850(515)/2004 as private limited company under the Companies Act, 1994<br />
and subsequently on 30 June 2010, the Company was converted into public limited company<br />
after observance of required formalities as per law. The objects of the Company are to carry out<br />
the business of growing, procuring, purchasing, processing, packaging, warehousing,<br />
transporting, exporting, importing, distributing and selling agriculture based food, food products,<br />
machinery and equipments related to foods any where in the world. The Company may establish<br />
any industrial processing unit based on agro based raw materials products within the country and<br />
export the same or meet local demand.<br />
Consolidation<br />
The Consolidated financial statements as at and for the period ended 30 September 2010<br />
comprise those of the Company and its subsidiary, <strong>Golden</strong> <strong>Harvest</strong> Sea Food & Fish Processing<br />
<strong>Ltd</strong>.<br />
Address of registered office and principal place of business:<br />
The principal place of business is the registered office at SPL Western Tower, Level-5, # 502,<br />
Gulshan Tejgaon Link Road, Tejgoan <strong>Dhaka</strong>-1208 and the factory is located at Bokran, Monipur,<br />
Bhabanipur, Gazipur Sadar, Gazipur.<br />
Number of employees:<br />
The number of permanent employees of the group at the period end of September 2010 were 502<br />
(in June 2010: 439)<br />
2.00 Significant Accounting Policies<br />
These financial statements have been prepared under historical cost convention in accordance<br />
with generally accepted accounting principles as laid down in the International Accounting<br />
Standerds (IASs)/ International Financial Reporting Standards(IFRSs), applicable to the<br />
company, adopted by the Institute of Chartered Accountants of Bangladesh as Bangladesh<br />
Accounting Standards(BASs)/ Bangladesh Financial Reporting Standards.Disclosure of<br />
information made in these financial statements are in accordance with the requirements of<br />
Companies Act 1994. The financial statements have been prepared in accordance with BAS-<br />
1/IAS-1 (presentation of financial statement) based on accrual basis following going concern<br />
concept.<br />
In the preparation of these interim financial statements, management requires information to<br />
make judgment, estimate and assumption that affect the application of accounting policies and<br />
the reported amounts of assets and liabilities, income and expenses. Actual results may differ<br />
from those estimate. Moreover, significant judgment made by the management in applying the<br />
52
Auditor’s Report on the Consolidated Financial Statements of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. 2010<br />
Company's accounting policies and the key source of information of estimates were the same for<br />
the preparation of these interim financial statements as those were applied for the preparation of<br />
financial statements as at and for the year ended June 30, 2010.<br />
2.01 Reporting Period<br />
The financial statements of the company have been prepared for the period from 01 July 2010 to<br />
30 September 2010. The usual reporting period covers one full financial year, i.e., 01 July to 30<br />
June.<br />
2.02 Consistency<br />
The accounting policies and methods of computation used in preparation of financial statements<br />
for the period from 1st July to 30 September 2010 are consistent with those policies and methods<br />
adopted in preparing the financial statements for the year ended 30 June 2010.<br />
2.03 Transactions in Foreign Currencies<br />
Foreign currency transactions are recorded in BDT at applicable rates of exchange ruling at the<br />
transaction date in accordance with BAS-21/IFRS-22 (effects of changes in foreign exchange<br />
rates). <strong>Exchange</strong> differences at the balance sheet date are charged/ credited to income statement.<br />
Other monetary assets & liabilities, if any, denominated in foreign currencies at the Balance<br />
Sheet date are translated at the applicable rates of exchange ruling at that date and the related<br />
exchange differences are charged off as revenue expenditure.<br />
2.04 Investments<br />
Investments in subsidiary and associate companies are recorded at cost.<br />
2.05 Fixed Assets<br />
The fixed assets of the company is initially recorded at historical cost. Historical cost includes its<br />
purchase price and any directly attributed cost of bringing the assets to its working condition for<br />
its intended use inclusive of inward freight, duties, non-refundable taxes and (a) the cost of site<br />
preparation; (b) initial delivery and handling costs; (c) installation costs; (d) professional fees<br />
such as for architects and engineers; and (e) the estimated cost of dismantling and removing the<br />
asset and restoring the site, to the extent applicable in line with the provisions under 'BAS 16',<br />
'BAS 37: Provisions, Contingent Liabilities and Contingent Assets'.<br />
The fixed assets as on 30 June 2009 have been revalued to its fair market value as per decisions<br />
of the Board of Directors. All fixed assets under Fixed Assets available on the cut-off date 30<br />
June 2009 were revalued by an independent valuer. The basis of valuation of assets has been the<br />
fair market value of those assets as on the cut-off date after allowing depreciation at applicable<br />
rates against the revalued amount. The carrying amount shown in the balance sheet represents<br />
53
Auditor’s Report on the Consolidated Financial Statements of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. 2010<br />
revalued amount of fixed assets less restated depreciation. The depreciation has also been<br />
calculated by the independent valuer considering the useful life of individual class of assets.<br />
Upon disposal of items of property, plant and equipment, the cost of those assets and their related<br />
accumulated depreciation are eliminated up to the date of disposal and any gain or loss there<br />
from are reported in the income statement of that year.<br />
2.06 Depreciation on Fixed Assets<br />
All fixed assets have been depreciated on Diminishing Balance Method. Depreciation on<br />
additions are charged at 100% of normal rate in the period of addition and no depreciation is<br />
charged on disposal. Depreciation rates are varying from 2.5% to 10% depending on the<br />
estimated useful lives of assets. No depreciation is charged for land.<br />
Rates of depreciation on various classes of fixed assets are as under:<br />
Category of fixed asset Rate (%)<br />
Factory Building 2.50<br />
Plant and Machinery 5.00<br />
Office Equipment 5.00<br />
Furniture and Fixtures 5.00<br />
Vehicles 10.00<br />
2.07<br />
Land is not depreciated as it deemed to have an infinite life.<br />
Capital Work in Progress<br />
Capital work in progress is recorded at cost on the basis of the percentage of work completed at<br />
the balance sheet date. The amount of capital work in progress is transferred to appropriate asset<br />
category and depreciated when the asset is completed and commissioned.<br />
2.08 Intangible Asset<br />
Intangible assets like preliminary expenses and pre-operational expenditures are initially<br />
recognized at cost and deferred to amortize over 20 years effective from 01 July 2007.<br />
2.09 Valuation of inventories<br />
Inventories of raw and packing materials are valued at the average cost which is lower than the<br />
net realisable value. Finished goods are valued at the lower of cost and estimated net realisable<br />
value. The cost is assigned to the items following FIFO (First In First Out) cost formula.<br />
2.10 Employee retirement benefits<br />
Employee retirement benefits are accounted for on accrual basis of accounting.<br />
2.11 Revenue recognition<br />
54
Auditor’s Report on the Consolidated Financial Statements of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. 2010<br />
The revenue during the year represents revenue arising from the sale of processed frozen<br />
vegetables and snacks items like alu puri, dalpuri, singara, paratha etc., which are recognised<br />
when invoices are made, satisfying all the conditions for revenue recognition as provided in IAS<br />
18 "Revenue Recognition"/ IFRS-7 (Revenue).<br />
2.12 Borrowing Cost<br />
In compliance with the requirement of BAS-23(borrowing cost), borrowing cost relating to<br />
operational period on long term loans and overdraft facilities was charged to revenue account as<br />
an expenses as incurred.<br />
2.13 Taxation<br />
Provision for corporate income tax is made @ 37.50% on estimated taxable profit considering<br />
depreciation as per 3rd Schedule to the Income-tax Ordinance, 1984 and export sales benefit as<br />
mentioned in Part A of the 6th Schedule of the Income Tax Ordinance 1984. The Corporate<br />
income tax assessment of the Company is completed unto the assessment year 2006-07.<br />
Corporate income tax returns up to assessment year 2009-2010 was filed with the Tax Authority<br />
which are under assessment.<br />
2.14 Creditors and accruals<br />
Liabilities are recorded at the level of estimated amount payable in settlement.<br />
2.15 Cash and Cash Equivalents<br />
Cash and Cash equivalents include cash in hand, cash at bank, term deposits, etc which are<br />
available for use by the company without any restrictions. There is no significant risk of change<br />
in value of the same.<br />
2.16 Cash Flows Statements:<br />
Cash Flows Statement is prepared on the basis of Direct method.<br />
2.17 Capital Reserve<br />
Capital Reserve represents the difference between (i) the excess of assets over liabilities as at 30<br />
June 2009 of <strong>Golden</strong> <strong>Harvest</strong> Sea Food & Fish Processing Limited (GHSF&FPL) and (ii) the<br />
value of shares issued to the shareholders of GHSF&FP.<br />
2.18 General:<br />
i) Figures in the annexed Financial Statements & Notes have been rounded off to the nearest<br />
Taka.<br />
ii) Where ever considered necessary, previous year's figures have been rearranged for the<br />
purpose of comparison.<br />
55
Auditor’s Report on the Consolidated Financial Statements of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. 2010<br />
3.00 Share Capital<br />
56<br />
Figures in BDT<br />
Consolidated The Company<br />
30.09.2010 30.06.2010 30.09.2010 30.06.2010<br />
Authorized Share Capital 1,000,000,000 1,000,000,000 1,000,000,000<br />
10,00,00,000 ordinary Shares of Tk.10 each<br />
Issued, Subscribed and Paid up Capital<br />
1,00,00,000 Ordinary Shares @ Tk.10 each fully paid up<br />
The above balance has been received from the following Directors/Shareholders:-<br />
1,000,000,000<br />
Name Designation<br />
Mr. Ahmed Rajeeb Samdani Managing Director 44,512,000 44,512,000 44,512,000 44,512,000<br />
Mr. Ahmed Mehdi Samdani Director 2,800,000 2,800,000 2,800,000 2,800,000<br />
Ms. Nadia Khalil Choudhury Director 1,500,000 1,500,000 1,500,000 1,500,000<br />
Mr. Azizul Huque Director 14,089,000 14,089,000 14,089,000 14,089,000<br />
Mr. Moqsud Ahmed Khan Director 16,000,000 16,000,000 16,000,000 16,000,000<br />
Mr. Matthew Graham <strong>Stock</strong> Director 10,000,000 10,000,000 10,000,000 10,000,000<br />
Mr. Mohius Samad Choudhury Director 3,100,000 3,100,000 3,100,000 3,100,000<br />
<strong>Golden</strong> <strong>Harvest</strong> Organic Aquaculture Holdings <strong>Ltd</strong>. share<br />
holder 7,999,000 7,999,000 7,999,000 7,999,000<br />
100,000,000<br />
100,000,000<br />
Shareholding position:<br />
Name Designation No. of Shares %<br />
Mr. Ahmed Rajeeb Samdani Managing Director 4,451,200 44.5%<br />
Mr. Ahmed Mehdi Samdani Director 280,000 2.8%<br />
Ms. Nadia Khalil Choudhury Director 150,000 1.5%<br />
Mr. Azizul Huque Director 1,408,900 14.1%<br />
Mr. Moqsud Ahmed Khan Director 1,600,000 16.0%<br />
Mr. Matthew Graham <strong>Stock</strong> Director 1,000,000 10.0%<br />
Mr. Mohius Samad Choudhury Director 310,000 3.1%<br />
<strong>Golden</strong> <strong>Harvest</strong> Organic Aquaculture Holdings <strong>Ltd</strong>. 799,900 8.0%<br />
10,000,000 100%<br />
4.00 Revaluation Surplus<br />
100,000,000<br />
100,000,000<br />
Revaluation surplus of Fixed Assets revalued on 30-06-2009 109,372,918 109,372,918 109,372,918 109,372,918<br />
Add:Revaluation Surplus of Fixed Assets of Subsidiary company 53,612,698 53,612,698 - -<br />
Less: Transfer of Pre-Acquisition Revaluation Surplus to Capital<br />
Reserve (53,612,698) (53,612,698) - -<br />
109,372,918 109,372,918 109,372,918 109,372,918<br />
The Company revalued its Lands, Buildings, and Plant & Machinery as of 30 June 2009 by its Valuer, Ata Khan & Co, Chartered<br />
Accountants following "Current Cost Method", resulting in a revaluation surplus at Tk.109,372,918.
Auditor’s Report on the Consolidated Financial Statements of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. 2010<br />
5.00 Capital Reserve<br />
The amount comprises as below:<br />
Revaluation Surplus of subsidiary company<br />
(<strong>Golden</strong> <strong>Harvest</strong> Sea Food & Fish processing <strong>Ltd</strong>.)<br />
upto 30-06-2010<br />
Retained Earnings of subsidiary company<br />
(<strong>Golden</strong> <strong>Harvest</strong> Sea Food & Fish processing <strong>Ltd</strong>.)<br />
upto 30-06-2010<br />
6.00 Retained Earnings<br />
Opening Balance 78,073,777 46,277,644 78,073,778<br />
Less: Issue of Bonus Share - (25,000,000) -<br />
57<br />
78,073,777 21,277,644 78,073,778<br />
23,057,983<br />
(12,500,000)<br />
10,557,983<br />
Add: Net Profit during the period/year<br />
Less: Transfer of Pre-Acquisition Profit to<br />
35,742,919 105,871,328 22,659,975 67,515,794<br />
Capital Reserve<br />
(49,075,195) - -<br />
Closing Balance 113,816,696 78,073,777 100,733,753<br />
7.00 Share Money Deposit<br />
Share Money Deposit 250,000,000 92,750,000 250,000,000<br />
78,073,777<br />
92,750,000<br />
250,000,000 92,750,000 250,000,000 92,750,000<br />
8.00<br />
The deposits have been received from existing shareholders against which shares have been subsequently allotted, on receipt of SEC's<br />
consent to make such allotment.<br />
Term Loan against Machinery<br />
Mercantile Bank <strong>Ltd</strong>., Gulshan Branch<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> Limited<br />
<strong>Golden</strong> <strong>Harvest</strong> Sea Food & Fish Processing Limited<br />
43,658,878 45,118,734 20,624,326 21,312,233<br />
Maximum tenor<br />
: 7 years from the date of drawdown of principal repayment<br />
Repayment : Amount outstanding will be repaid in 68 equal quarterly installments<br />
9.00 Leasehold Obligations<br />
United Leasing Co <strong>Ltd</strong>. for Cover Van 296,857 330,856 296,857 330,856<br />
United Leasing Co <strong>Ltd</strong>. for Probox & Cover Van 1,420,573 1,521,939 1,420,573 1,521,939<br />
IDLC for Probox & Cover Van 1,706,585 1,809,305 1,706,585 1,809,305<br />
3,424,015 3,662,100 3,424,015 3,662,100<br />
10.00 Fixed Assets<br />
Written down value 460,781,666 458,337,639 317,338,267 314,482,466<br />
Details are shown in Schedule of Fixed Assets<br />
11.00 Preliminary Expenses:<br />
53,612,698 53,612,698 - -<br />
49,075,194 49,075,194 - -<br />
102,687,892<br />
102,687,892<br />
460,781,666 458,337,639 317,338,267<br />
- -<br />
20,624,326 21,312,233 20,624,326 21,312,233<br />
23,034,552 23,806,501 - -<br />
314,482,466<br />
Opening Balance 244,944 259,353 74,375 78,750<br />
Less : Written off during the period/year 3,602 14,408 1,094 4,375<br />
Closing Balance 241,342 244,945 73,281 74,375
12.00<br />
Auditor’s Report on the Consolidated Financial Statements of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. 2010<br />
Pre- Operational Expenses<br />
Opening Balance<br />
18,201,616 19,272,299 5,520,230 5,844,949<br />
Less : Written off during the period/year 267,671 1,070,683 81,180 324,719<br />
Closing Balance 17,933,945 18,201,616 5,439,050 5,520,230<br />
13.00 Investment in shares<br />
An amount of Tk. 400,00,000 ( Taka Four Crore ) has been invested in the shares of the City Bank Limited through IDLC Finance <strong>Ltd</strong>.<br />
Investment in shares 40,000,000 - 40,000,000 -<br />
40,000,000 40,000,000 -<br />
14.00 Inter-Company investment<br />
<strong>Golden</strong> <strong>Harvest</strong> Sea Food & Fish<br />
Processing <strong>Ltd</strong>. -<br />
58<br />
- 50,000,000 50,000,000<br />
- 50,000,000<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. (GHAIL) acquired 100% shares of <strong>Golden</strong> <strong>Harvest</strong> Sea Food & Fish Processing <strong>Ltd</strong> (GHSF&FPL)<br />
on 30 June 2010 in exchange for its own shares.<br />
15.00 <strong>Stock</strong>s in Hand<br />
50,000,000<br />
<strong>Stock</strong> of Finished Goods 36,360,323 34,734,665 18,514,610 14,603,740<br />
<strong>Stock</strong> of Raw Materials 12,488,253 3,091,940 9,188,493 2,792,070<br />
<strong>Stock</strong> of Packing Materials 16,987,811 9,260,883 7,484,661 3,758,132<br />
Stores in Transit 1,405,306 97,861 1,405,306 97,861<br />
16.00 Advances, Deposits & Prepayments<br />
67,241,693 47,185,349 36,593,070 21,251,803<br />
Advance to Suppliers & Service Providers 75,765,044 6,198,195 73,254,382 4,202,202<br />
Lease Deposit<br />
United Leasing Co <strong>Ltd</strong> for Probox &<br />
Cover Van<br />
United Leasing Co <strong>Ltd</strong> for Small Cover<br />
Van<br />
IDLC for Refer Van & Probox<br />
IDLC for Machinery<br />
Security Deposit<br />
Advance Taxes<br />
Advance Income Tax<br />
Advance Turn Over Tax<br />
This is unsecured and considered good.<br />
(a) The maximum amount due from the Suppliers & Service Providers.<br />
(b) No amount was due by the directors, managing agent, managers and other officers of the company and<br />
any of them severally or jointly with any other person.<br />
(c) No amount was due by any related party.<br />
75,765,044 6,198,195 73,254,382 4,202,202<br />
53,312 53,312 53,312 53,312<br />
15,728 15,728 15,728 15,728<br />
54,390 54,390 54,390 54,390<br />
68,470 68,470 68,470 68,470<br />
20,000 20,000 - -<br />
211,900 211,900 191,900 191,900<br />
1,057,917 1,018,779 691,360 679,444<br />
243,849 243,849 135,844 135,844<br />
1,301,766 1,262,628 827,204 815,288<br />
77,278,710 7,672,723 74,273,486 5,209,390
17.00<br />
Auditor’s Report on the Consolidated Financial Statements of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. 2010<br />
Accounts Receivable<br />
Receivable from Super shops 13,298,488 3,242,743 13,298,488 3,242,743<br />
Receivable from Retailer Shops 11,378,187 1,055,865 11,378,187 1,055,865<br />
Receivable from Distributors 27,750,750 21,588,621 27,750,750 21,588,621<br />
Receivable for Deemed Export 96,846,745 136,561,598 283,637 71,472,155<br />
Export Sales Receivable (Note-17.01) 57,964,771 30,632,770 21,346,043 13,517,473<br />
207,238,941 193,081,597 74,057,105 110,876,857<br />
17.01<br />
Accounts receivable has been stated at its original invoiced amount after deducting credit balance that have a legally enforceable right to<br />
set off or are intended either to be settled.<br />
This is unsecured, considered good and is falling due within one year.<br />
No amount was due by the directors, managing agent, managers and other officers of the company and any of them severally or jointly<br />
with any other person.<br />
Export Sales Receivable<br />
Details are as follows:<br />
Green Fields Distribution (UK) <strong>Ltd</strong>. 34,568,145 14,366,948 12,823,967 2,848,485<br />
Premium Foods USA Inc 13,741,964 5,125,157 2,528,733 2,528,733<br />
AFK International <strong>Ltd</strong>.<br />
433,469 1,403,265 433,469 1,403,265<br />
Mexim Australia Pty <strong>Ltd</strong>. 5,567,741 4,558,316 1,927,460 1,557,906<br />
AMS Foods <strong>Ltd</strong>. 59,613 1,945,153 59,613 1,945,153<br />
Aromatic(BD) <strong>Ltd</strong>. 2,748,213 3,233,931 2,748,213 3,233,931<br />
Laxmiben Patel, Canada. 21,038 - - -<br />
Sasco UK 824,588 - 824,588 -<br />
This is unsecured, considered good and is falling due within one year.<br />
18.00 Export Incentive Receivable<br />
59<br />
57,964,771 30,632,770 21,346,043 13,517,473<br />
Opening Balance 10,932,968 11,792,308 7,567,139<br />
Add: Accrued during the period 2,682,758 7,759,159 1,945,724<br />
13,615,726 19,551,467 9,512,863<br />
Less: Received during the period 1,857,935 8,618,498 1,331,000<br />
4,745,668<br />
6,401,970<br />
11,147,638<br />
3,580,499<br />
Closing Balance<br />
This is unsecured and considered good.<br />
11,757,791 10,932,969 8,181,863 7,567,139<br />
19.00 Cash and Bank Balances<br />
The above balance is made up as follows:<br />
Cash in hand: 74,986 1,171,991 51,947 1,149,788<br />
Cash in hand at Head Office 48,189 70,271 43,711 61,318<br />
Cash in hand at Factory Office 26,797 1,101,720 8,236 1,088,470<br />
Cash at bank ( Note- 19.01) 132,421,593 12,707,035 132,248,103 12,125,444<br />
132,496,579 13,879,026 132,300,050 13,275,232<br />
19.01 Cash at Banks<br />
The amount comprises as below:<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong><br />
First Security Islami bank <strong>Ltd</strong>. 132,243,010 12,120,351 132,243,010 12,120,351<br />
United Commercial Bank <strong>Ltd</strong>. 2,577 2,577 2,577 2,577<br />
The City Bank <strong>Ltd</strong>. 756 756 756 756<br />
Mercantile Bank <strong>Ltd</strong>.<br />
<strong>Golden</strong> <strong>Harvest</strong> Sea Food & Fish Processing <strong>Ltd</strong>.<br />
1,760 1,760 1,760 1,760<br />
United Commercial Bank <strong>Ltd</strong>. 20,113 328,000 - -<br />
First Security Islami bank <strong>Ltd</strong>. 148,117 248,117 - -<br />
Mercantile Bank <strong>Ltd</strong>. 5,260 5,474 - -<br />
132,421,593 12,707,035 132,248,103 12,125,444
Auditor’s Report on the Consolidated Financial Statements of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. 2010<br />
20.00 Accounts Payable<br />
Sundry Creditors for Raw Material Supplies 26,814,164 15,113,494 6,328,781<br />
Sundry Creditors for Packing Material Supplies 10,011,051 1,711,238 5,978,694<br />
Sundry Creditors for C&F Agents 76,048 226,681 76,048<br />
60<br />
6,954,142<br />
662,600<br />
226,981<br />
Sundry Creditors for Processing contractors 5,166,790 - - -<br />
<strong>Dhaka</strong>com <strong>Ltd</strong>. 36,000 - - -<br />
Sundry Creditors -Others 393,115 845,254 393,115<br />
Sundry Creditors for Fuel Supply 108,011 1,130,778 108,011<br />
Sundry Creditors for Printing & Stationery 3,780 23,780 3,780<br />
These are unsecured, and falling due within one year.<br />
42,608,959 19,051,225 12,888,429<br />
713,304<br />
1,130,778<br />
23,780<br />
9,711,585<br />
21.00 Accruals and provisions<br />
The above balance is made up as follows:<br />
Provision for Tax & others 66,511,234 49,450,000 39,881,930 28,450,000<br />
Salary & Wages 2,900,869 2,372,442 1,690,869 1,162,442<br />
Electricity Bill 392,327 450,000 392,327 450,000<br />
Provision for others 250,000 250,000 250,000 250,000<br />
70,054,430 52,522,442 42,215,126 30,312,442<br />
22.00 Cash Credit Loan<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> Limited 20,456,705 2,299,242 20,456,705 2,299,242<br />
<strong>Golden</strong> <strong>Harvest</strong> Sea Food & Fish Processing Limited 158,890,175 143,997,533 - -<br />
179,346,880 146,296,775 20,456,705 2,299,242<br />
23.00 Inter Company Balances<br />
<strong>Golden</strong> <strong>Harvest</strong> Sea Food & Fish Processing Limited - - 78,540,900 80,763,195<br />
- - 78,540,900 80,763,195<br />
24.00 Net Asset Value (NAV) per share<br />
Shareholders Equity 425,877,505 390,134,588 310,106,671 287,446,696<br />
No of paid up share capital 10,000,000 10,000,000 10,000,000 10,000,000<br />
NAV per share- Taka 42.59 39.01 31.01 28.74<br />
Consolidated The Company<br />
01.07.2010 to<br />
30.09.2010<br />
01.07.2010<br />
to 30.09.2010<br />
01.07.2009 to<br />
30.09.2009<br />
25.00 Sales Revenue<br />
Sales (Export) 19,624,092 4,206,201 9,876,506<br />
Sales (Local) 118,126,045 72,440,901 33,641,926<br />
137,750,137 76,647,102 43,518,432<br />
The products are exported to the market of USA, UK, UAE, Canada and Australia.<br />
26.00 Cost of Goods Sold<br />
Raw materials:<br />
Opening <strong>Stock</strong> 12,352,823 6,550,202 5,525,623<br />
Purchase (Note: 26.01) 78,117,940 41,817,017 10,702,354<br />
90,470,763 48,367,219 16,227,977<br />
Closing <strong>Stock</strong> (Note:15.00) 29,476,064 16,673,154 5,125,482<br />
60,994,699 31,694,065 11,102,495<br />
Add: Manufacturing Expenses (Note 26.02) 13,621,600 9,037,390 5,876,007<br />
Cost of Goods Manufactured 74,616,299 40,731,455 16,978,502<br />
Add: Opening <strong>Stock</strong> of Finished Goods 34,734,665 14,603,741 15,814,030<br />
109,350,964 55,335,196 32,792,532<br />
Less: Closing <strong>Stock</strong> of Finished Goods (Note:15.00) 36,360,324 18,514,612 12,680,110<br />
72,990,640 36,820,584 20,112,422
Auditor’s Report on the Consolidated Financial Statements of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. 2010<br />
26.01 Purchase<br />
Raw Materials 67,701,671 34,388,539 8,741,166<br />
Packing Materials 10,272,710 7,284,919 1,875,941<br />
Processing Materials 143,559 143,559 85,247<br />
78,117,940 41,817,017 10,702,354<br />
The value of imported raw materials consumed at Tk. 1,383,996 (in 2009-2010 Tk.2,124,374) is included in Raw materials consumed<br />
including margarine and spices premix.<br />
26.02 Manufacturing Expenses<br />
Salary & Wages 7,814,826 5,366,434 3,193,063<br />
Insurance Premium 100,000 100,000 81,325<br />
Factory Overhead 1,226,902 437,752 33,654<br />
Depreciation 2,118,068 1,392,440 1,397,002<br />
Other Expenses 203,497 46,033 20,940<br />
Repair & Maintenance 289,126 193,500 169,597<br />
Electricity & Fuel 1,869,181 1,501,231 980,426<br />
13,621,600 9,037,390 5,876,007<br />
From 1 July 2010 to 30 September 2010, all of the factory employees (392 nos.) received annual salary and allowances of Tk. 36,000 and<br />
above.<br />
Other expenses does not include any item exceeding 1% of total revenue.<br />
27.00 Export Incentive<br />
The Company is entitled to receive cash incentive according to Bangladesh Bank Circular reference no FE-15 dated 6 October, 2005 on<br />
export amount of <strong>Agro</strong> (Vegetables/ Fruits) and <strong>Agro</strong> processed products. Incentive amount has been accrued complying the terms &<br />
condition of this circular.<br />
Export Incentive amount 1,411,026 673,992 1,500,493<br />
1,411,026 673,992 1,500,493<br />
28.00 Other Income<br />
This income represents sale proceeds of wastages generated during manufacturing process<br />
Wastage sale 1,884,789 1,557,225 312,640<br />
29.00 Administrative Expenses<br />
61<br />
1,884,789 1,557,225 312,640<br />
Salaries & Wages 1,190,536 596,270 390,896<br />
Bank Charges 36,403 20,019 22,032<br />
Depreciation 529,517 348,110 349,251<br />
Audit Fees 200,000 100,000 42,210<br />
Rates, Taxes & Renewal 650,216 616,861 241,000<br />
Vehicle Maintenance 603,067 603,067 155,387<br />
Donation, Subscription & Gift 300,000 150,000 100,000<br />
Printing & Stationeries 48,195 42,864 29,875<br />
Telephone & Mobile Bill 104,239 104,239 83,124<br />
Miscellaneous Expenses 561,193 131,330 260,532<br />
Electricity & Fuel 119,895 79,012 206,405<br />
Traveling, Conveyance & Tour 353,771 351,815 117,000<br />
Amortization of Preliminary Expenses 3,602 1,094 1,094<br />
Amortization of Pre Operational Expenses 267,671 81,180 81,180<br />
Training Fees 25,000 25,000 -<br />
Local Sales Expenses 1,076,493 1,076,493 327,783<br />
Business Promotion Expenses 55,850 55,850 -<br />
6,125,648 4,383,204 2,407,769
Auditor’s Report on the Consolidated Financial Statements of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. 2010<br />
(a) From 1 July to September 30,2010, all employees (44 nos.) of Administrative and General Services received annual salary and allowances<br />
of Tk. 36,000 and above.<br />
(b) Auditors' fees represents audit fee for auditing the accounts for the period ended 30 September, 2010. Auditors were not paid any other fees.<br />
(c) During the period under reporting, Tk.674,000 paid to the Directors and Officers for rendering their services to the company.<br />
(d) The Company did not pay any remuneration to any Director who was not an officer of the Company.<br />
(e) No board meeting attendance fee was paid to the directors of the Company.<br />
30.00 Selling & Distribution Expenses<br />
Ocean Freight<br />
C & F Expenses<br />
Shipment Transportation Expenses<br />
Shipment Expenses<br />
Other Shipment Expenses<br />
Advertisement & Publicity<br />
62<br />
2,712,237 2,059,082 1,424,262<br />
219,330 155,901 51,354<br />
293,240 98,240 49,571<br />
145,125 145,125 71,254<br />
89,871 12,490 11,245<br />
223,000 - 61,929<br />
3,682,803 2,470,838 1,669,615<br />
From 1 July to September 2010, 66 employees relating to selling and distribution received annual salary and allowances of Tk. 36,000 and<br />
above.<br />
31.00 Financial Expenses<br />
Interest on Cash Credit (Hypo) 4,101,844 543,973 467534<br />
Interest on Term Loan 1,465,145 692,093 773788<br />
Interest on Finance Lease 337,615 337,615 73244<br />
Interest on others - - 18,323<br />
5,904,603 1,573,681 1,332,889<br />
32.00 Income Tax<br />
Necessary provision was made for income tax considering the depreciation effect as per Income tax Ordinance 1984 and Export sale<br />
Benefit.<br />
33.00 Earning Per Share (EPS)<br />
Net Profit during the period<br />
No of shares<br />
EPS for the period<br />
Annualized EPS in Taka<br />
34.03 Contingent Liabilities and commitments<br />
Particulars Amount/Taka<br />
Letters of credit/ LCA 12,807,188<br />
35,742,919 22,659,975 13,470,870<br />
10,000,000 10,000,000 3,750,000<br />
3.57 2.27 3.59<br />
14.30 9.06 14.37<br />
34.00 Operating Cashflow per Share<br />
Net Cash generated / (used) from Operating Activities (24,893,000) (8,638,005) (10,389,011)<br />
No of shares 10,000,000 10,000,000 3,750,000<br />
Operating Cashflow per Share (2.49) (0.86) (2.77)<br />
34.01 Other information<br />
34.02 Transaction in foreign currency<br />
Particulars Amount/Taka<br />
30-09-2010 2009-2010<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>.<br />
CIF Value of import:<br />
Raw Materials 1,316,993 1,430,371<br />
Spare Parts 271,575 295,431<br />
Capital Machinery - 2,671,198<br />
FOB value of export<br />
<strong>Golden</strong> <strong>Harvest</strong> Sea Food & Fish Processing <strong>Ltd</strong>.<br />
4,282,072 28,497,604<br />
Capital Machinery - 735,632<br />
FOB value of export 7,435,081 30,738,472
Auditor’s Report on the Consolidated Financial Statements of <strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>. 2010<br />
Income Tax 4,086,398<br />
Total 16,893,586<br />
34.04 Related Party Transactions:<br />
The Company carried out a number of transactions with related parties in the normal course of business and on arms length basis. The<br />
nature of transactions and their total value is shown below :<br />
Name of Related Parties<br />
<strong>Golden</strong> <strong>Harvest</strong> Sea Food & Fish Processing <strong>Ltd</strong>.<br />
Nature of Relationship :<br />
The Company and the parties are subject to common control from same source i.e., <strong>Golden</strong> <strong>Harvest</strong> Group.<br />
34.05 Quantitative details of opening stock, purchases/ production, consumption/sales and closing stock of raw materials<br />
<strong>Golden</strong> <strong>Harvest</strong> <strong>Agro</strong> <strong>Industries</strong> <strong>Ltd</strong>.<br />
Item<br />
Raw Materials<br />
Current Period<br />
For the year 2009-2010<br />
Finished Goods:<br />
Vegetable & Snacks<br />
Current Period<br />
For the year 2009-2010<br />
<strong>Golden</strong> <strong>Harvest</strong> Sea Food & Fish processing <strong>Ltd</strong><br />
Item<br />
Raw Materials<br />
Current Period<br />
For the year 2009-2010<br />
Finished Goods:<br />
Vegetable & Snacks<br />
Current Period<br />
For the year 2009-2010<br />
34.06 Capacity Utilization<br />
The company manufactures various items having mutually exclusive nature, not enabling it to determine its capacity and<br />
34.07 Capital Expenditure Commitment<br />
There was no capital expenditure contracted but not incurred or provided for at 30 September,2010.<br />
34.08 Finance Lease Commitment<br />
At 30 September, 2010 the company had annual commitment under finance lease as set out below<br />
Lease expires within 1 year 1,481,160<br />
Lease expires within 2 to 5 years 1,942,855<br />
Opening stock Purchases/ Consumption/ Closing <strong>Stock</strong><br />
Production Sales<br />
Unit Kg Kg Kg Kg<br />
Kg<br />
Kg<br />
218,341<br />
184,188<br />
58,415<br />
79,070<br />
Opening stock Purchases/<br />
Production<br />
34.09 Claim not acknowledged as Debt<br />
There was no claim against the company not acknowledged as debt as on 30-09-2010.<br />
34.10 Un-availed Credit Facilities<br />
The Company has no credit facilities available to the company under any contract, other than trade credit available in the ordinary course<br />
of business as on 30-09-2010.<br />
34.11 Post-balance sheet events<br />
The Company has allotted 2,50,00,000 ordinary shares of Tk. 10 each to existing shareholders in terms of SEC's Consent letter<br />
no.SEC/CI/CPLC-250/2010-301 dated September 26, 2010, on 13 October 2010 and the company was converted in a public limited<br />
company from private limited company on June 30, 2010.<br />
63<br />
1,993,901<br />
2,148,341<br />
322,231<br />
908,889<br />
Consumption/<br />
Sales<br />
1,656,470<br />
2,114,188<br />
306,588<br />
912,940<br />
Closing <strong>Stock</strong><br />
Unit Kg Kg Kg Kg<br />
Kg<br />
Kg<br />
17,196<br />
43,763<br />
63815<br />
99,752<br />
284,988<br />
108,735<br />
337,231<br />
87,251<br />
267,792<br />
117,506<br />
357,283<br />
555,772<br />
218,341<br />
74,058<br />
75,019<br />
29,697<br />
17,196<br />
34,992<br />
43,763