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Assignment # 01 Assignment on
Annual Report 2007-2008 (Apex Spinning and Knitting Mills Limited)

Prepared For:
Ms. Nusrat Sharmin Lecturer of Accounting

Faculty of Business, ASA University Bangladesh.

Prepared By: Name:- Md. Abdulla All Shafi. ID: 082-12-0131 th Batch: 4 Section: Date of Submission: 21/ 12 /2008

Faculty of Business, ASA University Bangladesh.

UNIVERSITY Letter of Transmit B A N G LA D E S H

AS A

21st December, 2008.

The course Teacher, Ms. Nusrat Sharmin, ASA University Bangladesh. Sub: Assignment of Annual Report 2007-2008 (Apex Spinning and Knitting Mills Ltd.) Sir, I would like to inform you that you have given me an assignment of Annual Report
2007-2008. I have collected relevant information on Apex Spinning and Knitting Mills Ltd. and have completed the assignment properly.

I therefore, hope that you would be kind enough to grant my assignment and oblige thereby. Yours obediently Md. Abdulla All Shafi ID: 082-12-0131. Batch & section:- 4E.

Acknowledgement

Firstly we would like to thank our honorable course teacher Ms. Nusrat Sharmin for her co-ordination and supervision of giving this assignment. Special recognition also goes to ASA University for conducting this chance to submit this assignment.

Finally, I would like to thank Almighty Allah.

Yours obediently Md. Abdulla All Shafi ID: 082-12-0131. Batch & section:- 4E

Table of contents:-

Contents Introduction Contents of the annul report Objectives of the annual report Corporate Profile Financial highlights Summary of the chairmans statement Summary of the directors statement Summary of the audit report Agenda of the annual general meeting Name of the financial statement Summary of the value added statement Summary of the Corporate Governance CONCLUTION

Page 4 5 5 6 7 8 8 9 9 9 10 11 12

1) Introduction:-

Apex Spinning and Knitting Mills Limited (ASKML) was incorporated in 1990 as a public
limited company and listed with our national stock exchanges, which are Dhaka Stock Exchange, and Chittagong Stock Exchange. The company was initially formed for processing and export of knit garments, however subsequently, state of the art plant and equipment was added for handling all kinds of knitted fabrics and now ASKML is a leading manufacturer and exporter of all kinds of textiles knitted garments. ASKML is 100% export oriented, vertically integrated knitting, dyeing, finishing and garment manufacturing company with production capacity of about 15 million pieces of garments per year. ASKML exports to North America, EU countries and the South East Asia. The products of the Company include Pique Polo-shirts, Jersey Polo-shirts, Bubble knit Polo-shirts, Golf shirts, Sweat shirts, Hooded Sweat shirts, Polo shirts, Sweat Pants, Basic Tee-shirts, Track suits, Tank Tops, Big Tee-shirts, Heavy Tee-shirts, Jogging Suits, Turtle Neck Tee-shirts, Jackets, Underwear, Children wear, men wear, babies wear etc. ASKML has an enviable reputation as an international garment manufacturer based on a simple but unwavering philosophy of producing high quality products. All fabrics produced in ASKML's own factory are tested in it's own laboratory for wet & dry-rub fastness, wash fastness, dimensional stability, required fabric density, yarn count and composition before making finished garments. ASKML has permission to put OKO Tex label on all its garments and currently in the middle of attaining ISO 9001:2000 certification from the accreditation body of UKAS. Our Associate Company in textile apparels is Apex Lingerie Limited, a fashionable ladies brassieres and brassiere-panty sets manufacturer and exporter of Bangladesh.

2) Contents of the annual report:1. Notices of the 17th Annual General Meeting 2. Corporate Directory

6 3. Five years Statistics 4. Corporate Governance Compliance Status Report 5. Chairmans Statement 6. Directors Report 7. Value added Statement 8. Auditors Report 9. Balance Sheet 10. Profit and loss Account 11. Cash Flow Statement 12. Statement of Changes in Equity 13. Notes to the Financial Statement 14. Proxy From 15. Attendance Slip

Objectives of the annual report: To be the market leader in Apex Spinning and Knitting Mills Limited product range. Apex Spinning and Knitting Mills Limited provide there consumers with the best service & shopping experience in the country. Apex Spinning and Knitting Mills Limited provide there consumers with products of latest technology. Grow our revenue and profits at a rate above the industry norm.

3) Corporate Profile :a) Board of Directors:-

Chairman

Managing Directors

Director (2)

Director (IICB Representative)

Independent Directors

b) Audit Committee:Chairman

Member (3)

c) Senior Corporate Official:Chief Financial Officer

Company Secretary

Head of Internal Audit

Head; Financial Accounts

Head; Process Control

4) Financial highlights:-

2007-2008 Taka (Thousand)

2007-2008 Taka (Thousand

9 Results of Operation Turn over Gross profit Operating profit Profit before tax Profit after tax Basic earning per share Dividend per share Financial Position Total Assets Fixed assets gross Fixed assets net Gross working capital Net working capital working capital loan Share capital Share Premium Preserve and surplus Share holder equity Long term loan Key Financial Ratios Current ratio Debt of total assets Return on equity (%) Net asset value per share Payout Ratio Interest services coverage Ratio Others Market prices per share Prices earrings Multiple Number of employees Capacity Utilization (%) 990650 905252 392205 588824 60029 23601 84000 15000 284539 400339 79746 1.11 59.59 16.58 476.59 35.13 3.57 547 9.61 4150 94.14 864363 825957 423877 395527 (25657) 102586 84000 15000 234946 305746 107983 0.94 60.77 13.96 417.56 34.31 2.75 218 3.73 4371 90.84

1718675 191455 56436 77762 66393 56.93 20.00

1601979 200895 50654 54718 48959 58.28 20.00

NOTE: Earning per share decrease in 1.35 million. Turnover increase 116696, profit before tax 23044, profit after tax 17434, Total Assets increase 126287. Market per share at Year Ended (Taka) 329 million. (Increase Profit because Company has utilized there production capability and during this year company was invested BDT 52.03 million taka.)

5) Summary of the chairmans statement:-

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The GDP in this financial year 20007-08 was 6% slowing down from 6.5% in this
previous fiscal year. Thanks largely to the Multi-Fiber Agreement (MFA) and the Generalized System of Preferences (GSP) of the European Union that conferred significant quota benefit to the country. The garment sector now accounts for about 77% of the countrys foreign exchange earnings and 50% of its industrial work force.2007-2008 was yet another year of success for Apex Spinning & Knitting Mills Ltd. Im pleased to inform you that during the year we production as per last years strategic plan to secure export order in line with installed production capacity, which in turn increased the profitability.

6) Summary of the directors statement:Our company achieved an export turnover of taka 1,718.68 million during the year
ended 31st March 2008.Last year turnover was 1,601.98 million. The increase in turnover is 7.28% with a 42.11% growth in profit. Net profit during this year was 66.39 million. During this year your company produced 14.12 million pieces of apparel, an increase of 3.63% of last year. During this year production capacity was increased by 495,000 pieces. Your Board of Director has recommended Cash Dividend of taka 20.00 per share of taka 100.00.

7) Summary of the audit report:-

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In Auditors opinion the annexed Balance sheet, profit and loss account represent a
true and fair view of the state of the company affairs as at 31st March,2008 and of the profit earned for the year ended on that date and that those financial statement have been drawn up in accordance with the requirement of applicable laws and rules containing all information in the manner required by relevant laws and rules and the Bangladesh Accounting Standards (BAS) as applicable in Bangladesh including BAS 24.

8) Agenda of the annual general meeting report: To receive and adopt the Accounts for the year ended 31 st march 2008 and report of the Auditors and Directors thereon To declare dividend @ 20% for the year 2007- 2008 as recommended by the Board of Directors. To elect Directors To appoint Auditors for the year 2008-09 and fix their remuneration.

9) Name of the financial statement: Balance Sheet Profit and loss account Cash Flow statement Statement of Changes Equity.

10) Summary of the value added statement:-

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PARTICULARS VALUE ADDED: Turnover Less: Bought in Materials & Services

2007-2008

1718675403 1296072241 422603162

APPLICATIONS: Government as tax Employees as Salary Wages & Allowances Providers of loan as interest & Charges Providers of capital as dividend Depreciation & Retention 8280816 264093002 21995587 16800000 111433757 422603162 1.96 62.49 5.20 3.98 26.37 100.00

Depreciation & Retention 26% Interest & Charges 5%

Government as Dividend tax 4% 2%

Dividend Government as tax Salary Wages & Allowances Interest & Charges Depreciation & Retention

Salary Wages & Allowances 63%

11) Summary of the Corporate Governance:-

13 Status of compliance with the condition imposed by the Securities and Exchange Commissions notification NoSEC/CMRRCD/2006-158/Admin /02-08 dated february20.2006.

a). Apex Spinning and Knitting product Ltd. complied of

the notification of No SEC/CMRRCD they are giving below :i. ii. iii. iv. v. vi. vii. viii. ix. x. xi. xii. xiii. xiv. xv. Board's Size (number of Directors - minimum 5 and maximum 20) Independent Directors (at least one tenth of Directors should be Independent Directors) Independent Directors Appointment (should be appointed by the elected Directors) Chairman & Chief Executive Officer (preferably be different) Directors Report on Financial Statements (fairness of financial statements) Maintenance of proper books of accounts. Accounting Policies (application of appropriate accounting policies & estimates) IAS Applicable in Bangladesh (application & adequate disclosure for any departure) System of Internal Control (efficiency of Internal Control System) Going Concern (ability to continue as a going concern) Deviations in Operating Results (highlighting significant deviations from last year in operating result) Declaration of Dividend Number of Board Meetings (no. of Board Meetings held and attendance by each director) Pattern of Shareholding (disclosing aggregate number of shares) Appointment of CFO, HIA & CS and defining their respective, roles, responsibilities & duties Board Meeting Attendance (CFO & CS should attend except agenda relating to them) xvi. xvii. xviii. xix. Audit Committee (should have an audit committee as a sub-committee of the Board of Directors) Composition of Audit Committee (should be composed of at least three members) Audit Committee Members Appointment (members should nominate by the Board with at least one independent director) Terms of Service of Audit Committee (Board to ensure continuity of minimum Prescribed number of members)

14 xx. xxi. xxii. xxiii. xxiv. xxv. xxvi. xxvii. xxviii. Chairman of Audit Committee (Board to select Chairman from audit committee) Audit Committee Chairman's Qualification (professional qualification and experience of the Chairman) Reporting to the Board of Directors Financial Information System (none by the external/statutory auditor) Book Keeping or Other Services (none by the external/statutory auditor) Broker-dealer Services (none by the external/statutory auditor) Actuarial Services (none by the external/statutory auditor) Internal Audit Services (none by the external/statutory auditor) Any other Services (none by the external/statutory auditor)

b). Apex Spinning and Knitting product Ltd. does not applicable of
the notification of No SEC/CMRRCD they are giving below:i. ii. iii. iv. v. Report of Conflict of Interest Defect in the Internal Control System to the Board of Directors Suspected Infringement of Laws to the Board of Directors Reporting of Qualified point to Commission Any Other Matter (out of the above, a:c) Note: Explanation for non compliance with the condition: There was no such event to report.

12) CONCLUTION:-

Apex Spinning and Knitting product portfolio has diversified to encompass a highly
successful multi brand strategy combining products of top world marques with the companys own products across a range of household, industrial and financial categories. At last, I think this company is not risk able for investing so if any one wants to invest this company then he should invest Apex Spinning and Knitting Mills Limited (ASKML). The end.