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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: E
Date of Submission: 21/ 12 /2008

Faculty of Business,
ASA University Bangladesh.

AS A
Letter of Transmit
UNIVERSITY
BANGLADESH

21st December, 2008.

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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
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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:-
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Contents Page
Introduction 4

Contents of the annul report 5

Objectives of the annual report
5

Corporate Profile 6

Financial highlights 7

Summary of the chairman’s statement 8

Summary of the director’s statement 8

Summary of the audit report 9

Agenda of the annual general meeting 9

Name of the financial statement 9

Summary of the value added statement 10

Summary of the Corporate Governance 11

CONCLUTION 12

1) Introduction:-
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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
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3. Five years Statistics

4. Corporate Governance Compliance Status Report
5. Chairman’s Statement
6. Director’s 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:-
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Chairman

Managing Directors

Director (2) Director (IICB Independent Directors

Representative)

b) Audit Committee:-
Chairman

Member (3)

c) Senior Corporate Official:-

Chief Financial Officer

Company Secretary

Head; Financial
Head of Internal Audit Accounts Head; Process Control

4) Financial highlights:-
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2007-2008 2007-2008
Taka Taka
(Thousand) (Thousand
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Results of Operation
Turn over 1718675 1601979
Gross profit 191455 200895
Operating profit 56436 50654
Profit before tax 77762 54718
Profit after tax 66393 48959
Basic earning per share 56.93 58.28
Dividend per share 20.00 20.00
Financial Position
Total Assets 990650 864363
Fixed assets gross 905252 825957
Fixed assets net 392205 423877
Gross working capital 588824 395527
Net working capital 60029 (25657)
working capital loan 23601 102586
Share capital 84000 84000
Share Premium 15000 15000
Preserve and surplus 284539 234946
Share holder equity 400339 305746
Long term loan 79746 107983
Key Financial Ratios
Current ratio 1.11 0.94
Debt of total assets 59.59 60.77
Return on equity (%) 16.58 13.96
Net asset value per share 476.59 417.56
Payout Ratio 35.13 34.31
Interest services coverage Ratio 3.57 2.75
Others
Market prices per share 547 218
Prices earrings Multiple 9.61 3.73
Number of employees 4150 4371
Capacity Utilization (%) 94.14 90.84

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 chairman’s 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 country’s foreign exchange
earnings and 50% of its industrial work force.2007-2008 was yet another year of success for
Apex Spinning & Knitting Mills Ltd. I’m pleased to inform you that during the year we
production as per last year’s strategic plan to secure export order in line with installed
production capacity, which in turn increased the profitability.

6) Summary of the director’s 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 Auditor’s and Director’s 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 2007-2008 %

VALUE ADDED:

Turnover 1718675403

Less: Bought in Materials & Services 1296072241

422603162

APPLICATIONS:

Government as tax 8280816 1.96

Employees as Salary Wages & Allowances 264093002 62.49

Providers of loan as interest & Charges 21995587 5.20

Providers of capital as dividend 16800000 3.98

Depreciation & Retention 111433757 26.37

422603162 100.00

Government as
Depreciation &
Dividend tax
Retention
4% 2% Dividend
26%
Government as tax
Interest & Salary Wages & Allowances
Charges Interest & Charges
5% Salary Wages &
Allowances Depreciation & Retention
63%

11) Summary of the Corporate Governance:-

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Status of compliance with the condition imposed by the Securities and Exchange
Commission’s 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. Board's Size (number of Directors - minimum 5 and maximum 20)
ii. Independent Directors (at least one tenth of Directors should be Independent
Directors)
iii. Independent Directors Appointment (should be appointed by the elected Directors)
iv. Chairman & Chief Executive Officer (preferably be different)
v. Directors Report on Financial Statements (fairness of financial statements)
vi. Maintenance of proper books of accounts.
vii. Accounting Policies (application of appropriate accounting policies & estimates)
viii. IAS Applicable in Bangladesh (application & adequate disclosure for any departure)
ix. System of Internal Control (efficiency of Internal Control System)
x. Going Concern (ability to continue as a going concern)
xi. Deviations in Operating Results (highlighting significant deviations from last year in
operating result)
xii. Declaration of Dividend
xiii. Number of Board Meetings (no. of Board Meetings held and attendance by each
director)
xiv. Pattern of Shareholding (disclosing aggregate number of shares)
xv. 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. Audit Committee (should have an audit committee as a sub-committee of the Board
of Directors)
xvii. Composition of Audit Committee (should be composed of at least three members)
xviii. Audit Committee Members Appointment (members should nominate by the Board
with at least one independent director)
xix. Terms of Service of Audit Committee (Board to ensure continuity of minimum
Prescribed number of members)
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xx. Chairman of Audit Committee (Board to select Chairman from audit committee)
xxi. Audit Committee Chairman's Qualification (professional qualification and
experience of the Chairman)
xxii. Reporting to the Board of Directors
xxiii. Financial Information System (none by the external/statutory auditor)
xxiv. Book Keeping or Other Services (none by the external/statutory auditor)
xxv. Broker-dealer Services (none by the external/statutory auditor)
xxvi. Actuarial Services (none by the external/statutory auditor)
xxvii. Internal Audit Services (none by the external/statutory auditor)
xxviii. 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. Report of Conflict of Interest
ii. Defect in the Internal Control System to the Board of Directors
iii. Suspected Infringement of Laws to the Board of Directors
iv. Reporting of Qualified point to Commission
v. 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
company’s 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.