Golden Harvest

Issuer Company: Golden Harvest Agro Industries Ltd.
Issue Manager: Banco Finance & Investment Ltd.
INFORMATIONMEMORANDUMFORROADSHOW
FOR
INITIALPUBLICOFFERING(IPO)
OF
3,00,00,000(THREECRORE)ORDINARYSHARESOFTAKA10(TEN)EACHAT
ANINDICATIVEPRICEOFTAKA(*)INCLUDINGAPREMIUMOFTAKA(*)TOTALLINGTAKA(*)
UNDERBOOKBUILDINGMETHOD
CREDITRATINGATA+BYCREDITRATINGINFORMATIONANDSERVICESLIMITED(CRISL)
CREDITRATINGBYCRISL
LONGTERM SHORTTERM
A+ ST3
DATEOFRATING:OCTOBER24,2010
ISSUERCOMPANY
GOLDENHARVESTAGROINDUSTRIESLTD
CORPORATEHEADOFFICE
SPLWESTERNTOWER
LEVEL5,#501&#502
186GULSHANTEJGAONLINKROAD,TEJGAON1208,DHAKA
MANAGERTOTHEISSUE
BANCOFINANCE&INVESTMENTLIMITED
ISPAHANIBUILDING(3RDFLOOR),
1415MOTIJHEELC/A
DHAKA
GeneralInformation
BancoFinanceandInvestmentLimited,theIssuemanager,haspreparedthisInformationMemorandum
(IM)basedontheinformationprovidedbyGoldenHarvestAgroIndustriesLtd.(theCompany/theIssuer)
and also upon several discussions with the Managing Director and concerned executives of the issuer
company. The Directors, including Managing Director of Golden Harvest Agro Industries Ltd. and Banco
Finance and Investment Limited collectively and individually, having made all reasonable inquires, confirm
that to the best of their knowledge and belief, the information contained herein is true and correct in all
materialaspectsandthattherearenoothermaterialfacts,theomissionofwhichwouldmakeanystatement
hereinmisleading.
No person is authorized to give any information or to make any representation not contained in this
prospectus,andifgivenormade,anysuchinformationorrepresentationmustnotberelieduponashaving
beenauthorizedbytheIssuerorIssueManager.
The Issue as contemplated in this document is made in Bangladesh and is subject to the exclusive
jurisdiction of the courts of Bangladesh. Forwarding this prospectus to any person resident outside
BangladeshinnowayimpliesthattheIssueismadeinaccordancewiththelawsofthatcountryorissubject
tothejurisdictionofthelawsofthatcountry.
TableofContents
Particulars
Page No
Section 1: Risk Factors
6-8
Section 2: Financial Structures
9-10
Section 3: Golden Harvest Agro Industries Ltd: An Overview
11-12
Section 4: Business Details
13-14
Section 5: Competitive Condition
15-17
Section 6: Business Expansion/Diversification Plan
18-20
Section 7: Directors of the Company
21-24
Section 8: Description of Management
25-26
Section 9: Description of Property
27-28
Section 10: Plan of Operations & Discussion of Financial Condition
29-31
Section 11: Determination of Offering Price
32-34
Section 12: Book Building Method
35-36
Section 13: Market for Securities Being Offered
37
Section 14: Description of Securities Outstanding or Being Offered
38-40
Section 15: Availability of Securities
41
Section 16: Involvement of directors and officers in certain legal proceedings
42
Section 17: Certain Relationships and Related Transactions
43
Annexure: 01 Bankers to the Issue

Annexure: 02 Corporate Directory
Annexure: 03 Financial Statements as at and for the Period Ended 30th September 2010
44
44
45-63
SectionI
RiskFactors
Aninvestmentinequitysharesinvolvesahighdegreeofrisk.TheCompanyisoperatinginanindustryinvolvingbothexternal
and internal risk factors having direct as well as indirect effects on the investment by the investors. All the investor should
carefully consider all of the information in this memorandum, including the risk factors, both external and internal, and
management perception thereabout enumerated hereunder before making an investment decision. If any of following risks
actuallyoccurs,theirbusiness,resultofoperationsandfinancialconditioncouldsuffer,thetradingpriceoftheirequityshares
decline,andinvestorsmayloseallorpartoftheirinvestment.
(a)Interestraterisks:
Interestrateisconcernedwithborrowedfundsofshortterm&longtermmaturity.InterestrateriskistheriskthatCompany
faces due to unfavorable movements in the interest rates. Volatility in money market & increase in demand for loans
/investmentfundsraisetherateofinterest.Achangeinthegovernmentspolicyalsotendstoincreasetheinterestrate.High
rateofinterestenhancesthecostoffundofacompany.Suchrisesininterestrateshowevermostlyaffectcompanieshaving
floatingrateloans.
Managementperception
GoldenHarvestAgroIndustriesLimited(GoldenHarvest)maintainslowdebt/equityratio;andaccordingly,adverseimpactof
interest rate fluctuation is insignificant. The project was started with the Companys own funds and the capacity was also
expandedwithownfunds.Additionally,themanagementoftheCompanyemphasizesonequitybasefinancingtoreducethe
dependency on borrowing. Therefore, management perceives that the fluctuation of interest rate on borrowing would have
littleimpactupontheperformanceoftheCompany.
(b)Industryrisks:
Industryriskreferstotheriskofincreasedcompetitionfrom foreignanddomesticsourcesleadingtolowerprices,revenues,
profit margin, and market share which could have an adverse impact on the business, financial condition and results of
operation. Agro industry in Bangladesh is an emerging sector with vast local demand for its different product lines. Locally
produced frozen food products now play a significant role in this sector, which has been dominated by imports in the past.
However,theinfrastructurerequiredforthisindustryisinadequateinBangladesh,ascanbenotedbelow:
NoorganizedcollectioncentersforagriculturalproduceexistinBangladesh;asaresult,thereisahighfluctuationin
pricesbothforthegrowersandforprocessors.
Absence of Cold Chains, although the whole process of collection, processing and distribution depends on cold
temperaturemaintenanceduetothenatureofbusiness.
GoldenHarvestAgroIndustriesLtd.(GoldenHarvest)hasestablisheditsbrandnameinFrozenFoodmarketwithitsquality
products, range of products and customer services. However, to develop an infrastructure, both public and private sector
participationisrequired.ThisisthefocalpointofGoldenHarvestsfutureexpansionplans.Toeliminatefluctuationinprices
bothforthegrowersandfortheprocessors,GoldenHarvestwillorganizecollectioncenterstoeliminateintermediarycostfor
boththeparties.Deploying15,000refrigeratorswith24coldstoragesat30degreeCelsiusnationwide,GoldenHarvestwill
haveinfrastructurebackboneofColdChainwhichwillensurepropersupplyofFrozenFoodsalloverthecountrythroughits60
temperaturecontrolledtransport.OurneighboringcountrylikeIndiahasover50coldchains,generatingrevenueoverUS$3.5
billionwhichistargetedtoreachUS$8.5Billionby2015.
(c)MarketRisks:
Marketriskreferstotheriskofadversemarketconditionsaffectingthesalesandprofitabilityofthecompany.Mostly,therisk
arisesfromfallingdemandfortheproductorservicewhichwouldharmtheperformanceofthecompany.Ontheotherhand,
strongmarketingandbrandmanagementwouldhelpthecompanyincreasetheircustomerbase.
Market for Ready to Cook frozen foods in Bangladesh is growing at an exponential rate with growth of urbanization and
incrementalincomelevelofconsumersalongwiththeirpreferencetoconvenience.Inspiteofhighgrowthofthismarket,there
isscarcityofinvestmentinthissectorwhichcreatesahugevoidresultinginveryexpensiveimports.Internationalmarketfor
ReadytoCookfrozenfoodsectorisalreadymaturedandisgrowingfurtheratahighrate.GoldenHarvestAgroIndustriesLtd.
(GoldenHarvest)isoneoftheearliestentrantsininternationalmarketwithverypromisingandloyalcustomerbaseinUSA,
Canada, Australia, Europe, Middle East, and South Asia. In Bangladesh market, Golden Harvest has made a rapid penetration
andhascapturedtheleadingpositionwithitsuniquebrandingandpositioningstrategytakingopportunityofthisfastgrowing
market.
(d)TechnologyrelatedRisks:
Technologyalwaysplaysavitalrolefortheexistenceofanyindustrialconcern,ensuringbetterservicestothecustomersand
minimizingthecostinvariousaspects.TheproductionfacilitiesoftheCompanyarebasedoncurrentlyavailabletechnology.
Any invention of new and more cost involving technology may cause technological obsolescence and negative operational
efficiency. Any serious defects in the plant and machinery may affect production and profitability calling for additional
investment for replacement. Since Golden Harvest deals in food processing, health risk is the most critical factor to be
addressed.
ThekeytosecuringmarketshareinFMCG(FastMovingConsumerGoods)isbysatisfyingtheneedsofthecustomers.Golden
Harvest utilizes a fully equipped Research & Development (R & D) setup that is continuously working for indepth
understandingofthecustomerneedsandpreferencesandaccordinglyblendingitsproductrange.Theproductlineiscarefully
developedfortheconsumerswithlongershelflife,creatingatruenichemarketinBangladesh.
USAIDisthemajorpartnerofR&DofGoldenHarvest.AteamofUSAIDexpertsinFoodEngineeringandMicrobiologywith
foreignandlocalexpertiseareinvolvedintheR&Dcontinuously.Qualityisensuredateverystageoftheprocess,startingfrom
receivingrawmaterial,differentstagesofprocessinguptofinishedpackagedfrozenfoods.TheinhousefullyequippedQuality
AssuranceLaboratoryiscarryingoutalltypesofPhysical,ChemicalandBiologicaltestsusingmostmodernEuropeantesting
equipment.Hygienefactorsareuncompromisedatallleveloftheprocess.
(e)RegulationrelatedRisks:
TheCompanyoperatesunderCompaniesAct1994andotherrelatedregulation,IncometaxOrdinance1984,IncomeTaxRules
1984,ValueAddedTax(VAT)Act1991andValueAddedTax(VAT)Rules1991.Anyabruptchangesofthepoliciesmadebythe
regulatoryauthoritiesmayadverselyaffectthebusinessoftheCompany.
GovernmentincentivesgiventoAgroIndustryareinsufficientcomparedtoothercountries.AgrobasedFrozenFoodsectoris
exemptedfromVATinmanycountries,whereasitisimposedinBangladesh.Incentivesarealsosporadicandnoncategorized
andsometimes,discriminatedinsimilarcategories.
Unless any policy change that may negatively and materially affect the industry as a whole, the business of the Company is
expectednottobeaffectedsignificantly.AgroindustryinBangladeshisanemergingsectorwithconsiderablelocaldemandfor
different product lines. Therefore, it is highly unlikely that the Government will initiate any fiscal measure that may have
adverseeffectonthegrowthoftheindustry.
(f)OperationalRisks:
ThecorebusinessoperationofGoldenHarvestisdirectlyrelatedtoverylowtemperaturemaintenance.Countrywidesevere
powershortageiscompellingGoldenHarvesttoutilizecaptivepowerwhichbuildsupcost.Alsoportcongestionandinland
immobilityduetopoliticalinstabilityposesagreatoperationalrisktoGoldenHarvest
BangladeshGovernmentismeetingthischallengebyopeningtheenergygenerationtoprivatesector;andalsomakingmassive
investment,whichisexpectedtoensureavailabilityofenergyforuninterruptedoperation.GoldenHarvestperceivesthat
allocationofitsresourcesproperlywithcontingencyapproachescanreducethisriskfactortogreatextent.
(g)InputCostRisks:
Inputcostriskistheriskofabusinesswhenprocuringmaterialsorcommoditiesinhighglobaldemand.Increasingdemand
andsupplyshortagescreatevolatilityinthesecommodityvalues;andtherefore,thetiming,quantityandpriceofpurchasemust
becloselyplanned.
ManagementPerception:
ManagementofGoldenHarvestwouldhedgetheirexposuretoinputpricevolatilitybymakingpurchasesofinputsinseason;
andprovidingforcontingencyagainstsuchinputsinitssellingprice.
(h)DistributionRisk:
For any company, the most crucial wing is the distribution channel. Wide distribution network and monitoring over the
networkisessentialtomakeitsproductavailabletotheconsumeratrighttimeandprice.GoldenHarvesteverynowandthen
facesthischallengefromnonaccessibilityforitswiderangeofproducts.
GoldenHarvestoffersawiderangeoffrozenfoodproductsbothinglobalandlocalmarket.Itsdistributionstrategycomprises
ofdistributorsforinternationalmarketsanddistributionnetworkofdealersandoutletsfordomesticmarket.GoldenHarvest
planstoeliminatedistributionriskimplicationsbysmartlyplanningitsdistributionnetworkwithgreatflexibility.
SectionII
FinancialStructure
IssueSizeandPurposeofPublicOffering
CapitalStructure
ThecapitalstructureofGoldenHarvestAgroIndustriesLimitedbeforeandafterIPOwillbeasunder:
Particulars
No.ofShares
Amount(Taka)
CapitalstructurepriortoIPO
Issued,subscribedandpaidupcapitalason30September2010
10,000,000
100,000,000
(asperauditedaccounts)
Sharemoneydepositsconvertedintopaidupcapital*
25,000,000
250,000,000
Paidupcapital(PreIPO)
35,000,000
350,000,000
CapitalRaising:Proposed
ThroughIPOunderBookBuildingMethod
30,000,000
300,000,000
PaidupcapitalafterIPO
65,000,000
650,000,000
*TheCompanyraiseditspaidupcapitalfromTaka100,000,000toTaka350,000,000on13October2010intermsofSecuritiesand
ExchangeCommissionConsentletterno.SEC/CI/CPLC250/2010301datedSeptember26,2010.
UseofProceedsfromIPO
FuturePlanofIPOFundUtilization
SourcesofFund:
Issuesize(Numberofsharetobeissued)
Issueprice(includingpremiumTaka70each)
Less:IncomeTax3%
ApplicationofFund:
EstablishmentofColdChain
Taka
30,000,000
80
2,400,000,000
63,000,000
2,337,000,000
1,212,631,200
EstablishmentofIceCreamFactory
408,673,903
TermLoanRepayment
224,451,329
EquipmentsfornewReadytoEatproductline
101,427,883
WorkingCapitalrequirement
389,815,685
2,337,000,000
Notes:
1. Source of fund will primarily be used for establishing Cold Chain. The Company is planning to set up county wide cold chain,
covering six divisions. A central cold storage depot in Dhaka will link 24 Cold Storages at 30 Degree Centigrade and 15,000
freezers/refrigeratorswithretailoutletsacrossthecountry.Inlinewiththis,aCentralwarehouseinDhakacity,isplannedtobe
setup.Necessarytransportationsystemwillbeengagedtocarryfrozenproducts.TheestimatedcostforestablishingColdChain
Projectisasfollows:
Taka
a)WareHouse
Land&Building
350,000,000
Infrastructures
20,000,000
b)Depot24nos.alloverthecountryat30DegreeCentigrade
113,911,200
c)Freezers/Refrigerators15,000nos.
550,000,000
d)RefrigeratorTruck(upto30DegreeCentigrade)46nos.
178,720,000
Total
1,212,613,200
ThecoldchainisexpectedtobefullyinplacewithinMarch2012.
2.TheCompanyisalsoplanningtoestablishanIcecreamfactorywhichhashugepotentialmarketinthecountry.Thetotalsetup
costhasbeenestimatedasbelow:
BuildingConstruction
Taka
Taka
25,000,000
ConstructionofnewColdStorage
10,000,000
Otherconstruction
4,000,000
39,000,000
RenovationofexistingbuildingforIceCreamfactory
Machineries&Equipments
260,165,622
ImportedMachineries
LocalMachineries&Equipments
57,000,000
Duties,Taxes&Installationofmachineries
25,508,281
PowerGenerator
12,000,000
VoltageStabilizer
3,000,000
Contingencies
12,000,000
Total
408,673,903
317,165,622
TheicecreamprojectisexpectedtobecompletedandoperativefromJanuary2012.Theprojectisexpectedtofetchan
annualnetprofitofTaka275.62milliononaturnoverofTaka818.17millionin201213.
3. Toenhancethemarket,theCompanyisplanningtoaddnewproductlineReadytoEatinadditiontoReadytoCookline.The
costofMachineries(includingDuties,Taxes&Installationofmachineries)hasbeenestimatedtobeTaka101.43million.The
ReadytoEatlineisexpectedtobecompletedandoperativefromOctober2011.
4. AnaggregatesumofTaka224.45millionwillbeusedforrepaymentofBankLoansandotherleasefinanceliabilities.Theseloans
andobligationsareexpectedtoberepaidwithinSeptember2011.
5. TheremainingTaka389.82millionwillbeusedformeetingtheIPOrelatedcostsandworkingcapital.Thesefundsareexpected
tobeusedwithinSeptember2011.
6. AfterfullutilizationofIPOfundwithinMarch2012,theCompanyexpectstofetchanannualnetprofitofTaka453.06million
(i.e.,anEPSofTaka6.97)onaturnoverofTaka1,335.38millionin201213.
10
SectionIIIGoldenHarvestAgroIndustriesLtd:AnOverview
AGroupOverview:
GoldenHarvestAgroIndustriesLtdisamemberofGoldenHarvestGroupwhichisadiversifiedGroupofcompanies,havingoperation
invarioussectors.TheGroupexcelsinInformationTechnology,AgroProducts,CommoditiesTrading,RealEstate,Design/Publication
&Consultancy,andLogistics.
The Group's activities range from being one of the leading IT service provider, digitizing data and software development for US
companies, setting up a successful joint venture partnership business with Denmark, UK, Japan and Singapore based companies,
providingcomprehensivefinancialsolutionsto26commercialbanks,processinginformationfromphotogrammetricequipmentto
logisticservicesandaircargoetc.
The Group has an experienced team of Traders, selling different commodities directly from Chicago Board of Trade (CBOT), Bursa
MalaysiaDerivates(BMD),NewYorkBoardofTrade(NYBOT)atpresentIntercontinentalExchange(ICE),andLondonMetalExchange
(LME).TheGrouprepresentsworldlargestcommoditysupplierssuchasLouisDreyfusCommoditiesSuisseSA,AdaniWilmar,Noble
Grain,InterContinentalOilsandFatsLtd&StemcorUKLtdforsupplyingCrudeEdibleOils,FoodGrains,Cottons,OilSeeds,Raw&
RefinedSugar,andSteelsinBulkQuantity.
GoldenHarvestGroupalsohasanArchitecturaldesigningstudiowithmodern,premiumqualityandvalueaddedrealestateprojects.
PublicationhouseandcarboncredittradingconsultanciesarenewestintheGroupsbusinessportfolio.
ThethrivingGrouphasbenchmarkeditselfineachofthesectorsestablishingitselfasamarketleaderwithahighlysatisfiedclientele.
AtGoldenHarvestPerfectionandExcellencearethemainfocusesalongwiththeacknowledgementthatbusinessorganizations
aremembersofsociety,andarethushighlyawareoftheirsocialresponsibilitiestowardsthegreatercommunity.Withthispurview
theGroupactivitiesencompassesawidearrayofCSRinitiativessuchasCharitableHospital,supportingmentallychallengedchildren,
providing aid in any natural disaster, scholarship for under privileged meritorious students, leadership role in a Human Rights
foundationgivinglegalaidtovictimsofsocialabuses.
GoldenHarvestAgroIndustriesLtd(GoldenHarvest):
GoldenHarvestAgroIndustriesLtd(GoldenHarvest)islocatedinMonipur,GazipurandcameintooperationinMay2006.Itisthe
first ever purpose built frozen vegetables and snack food processing plant in Bangladesh. The entire Plant was designed and
supervisedbytheDanishexpertswiththefulltechnicalassistancefromDANIDA(DanishInternationalDevelopmentAgencyunderthe
Danish Embassy). Golden Harvest is set up on a 54,261 square feet stateoftheart purpose built, fully computerized processing
facilitybuiltininternationalstandardswiththecapacitytoexpandbyadditional100,000SFT.
GoldenHarvestisaBRCFoodcertified(BritishRetailConsortiumFood)foodprocessingfacility.BRCFoodisregardedasthehighest
globalstandardforbestpracticeinthefoodprocessingIndustry.GoldenHarvestisalsotheonlyTESCOapprovedFoodProcessing
factory in Bangladesh .TESCO is the third largest retail chain superstores in the world. Golden Harvest is also a member of SEDEX
whichupholdsEthicsinindustryinallaspects.
GoldenHarvestisprocessingoversixtyvarietiesoffrozenfoodproducts,suchasChickenNuggets,ChickenBurgerPatty,BeefBurger
Patty,FrenchFries,Tortilla,Tempura,ChickenCutlet,FishCutlet,MeatBall,LentilstuffedTortilla,PotatostuffedTortilla,Somosas,
VegetablePuff,StuffedPotatoBalls,FishFingers,FishBall,SpringRoll,PopCornChicken,PopCornShrimp,HashBrownanddifferent
kindsofVegetablesandFruits.AllproductsarehygienicallyprocessedandpackedinfrozenReadytoCookform.
Golden Harvests procurement, production/processing and marketing are well structured and clearly defined meeting the
international standards. These include food safety certification such as Hazard Analysis Critical Control Points (HACCP) and Good
ManufacturingPractice(GMP).SafetycontrolmechanismisofhighstandardspeciallybyconformingtostandardsofEuropeanUnion
(EU), Australian Quarantine Inspection Services (AQIS) and United States Food & Drug Administration (USFDA) food quality
benchmarking. Golden Harvest is approved by EU, USA, UAE, Australia and Russian Health and Quarantine authority for export of
FrozenFoodsfromBangladesh.
11
TheRefrigerationSystemofGoldenHarvestisimportedfromGrassoNetherlands,FreezingSystemsfromKMDenmark,DSIDenmark,
GeneglaceFrance,HelpmannBelgium.TheProcessingMachinesareprocuredfromCrownCanada,NilmaItaly,AnkoTaiwan.Power
isconnectedthroughafullyautomaticvoltagestabilizerandfullbackuppowergeneratorfromDuetzGermanycapableofrunning
theentirefactoryduringpowerdisruptions.
There are 3 separate large Cold Storages within the factory premises, built using entirely imported Insulated Panels capable of
maintaining 30 Degree Celsius. Additionally, there are 3 separate chiller rooms built using imported Insulated Panels capable of
maintaining+4DegreeCelsius.
TheentirefactoryhasinstallationoffullyexposedStainlessSteelwaterpipingthroughouttheplantfittedwithUSoriginUVWater
PurificationPlant.TheplantisequippedwithStainlessSteelTablesandUtensils,foodgradeantibacterialEpoxyPaintsonallexposed
wallsandfullyTiledfloorsandmanheightwallsasrequiredbythelatestEUandUSAfoodsafetyregulations.
Inthefrozenfoodsector,GoldenHarvestfortheveryfirsttimeinBangladeshstartedutilizationofafullycomputerizedoperation
system from Siemens Germany which enables automatic control of all aspects of freezing ensuring absolute quality. This control
system is based on Siemens S7300 PLC which is connected to a wonder ware in touch SCADA system over the MPI network. All
equipmentcontrolledbytheconnectedPLCsystemisvisualizedonthecomputerscreeninclearanduserfriendlygraphicswhichcan
bemonitoredfromtheFactoryofficeorfromanypartoftheworldusingInternetconnection.
Towards workers health concerns, Golden Harvest within its premises has a fully equipped infirmary to provide screening of
employeesfordiseasesaswellaspreventivecuresenablingustoensuresafetyfromcontamination.
InlinewithpropertransportationofFrozenFoods,Goldenharvesthasitsownfleetoftemperaturecontrolledrefrigeratedtrucks
of30DegreeCelsiusandinadditionGoldenHarvestistheonlyfrozenfoodprocessingindustryinBangladeshtoownandoperate
fullsized40feetarticulatedfreezertruckwithtemperaturecontrolleddownto30DegreeCelsiuswhichhasthecapacitytofitina
full40feetshippingcontainerloadinasingleloadasrequiredforexport.
Quality is ensured at every stage of the process starting from receiving raw material, different stages of processing upto finished
packagedfrozenfoods.TheinhousefullyequippedLaboratoryiscarryingoutalltypesofPhysical,ChemicalandBiologicaltestsusing
mostmodernEuropeantestingequipments.
GoldenHarvesthasafullyownedsubsidiary,GoldenHarvestSeaFoodandFishProcessingLtd.itprocesses,marketsandexportssea
foodsandfishes.
GoldenHarvestAgroIndustriesLtd,apartnerofUSAIDPRICEProject
USAID (United States Agency for Development) PRICE (Poverty Reduction by Increasing the Competitiveness of Enterprises) is
closelyworkingwithGoldenHarvestAgroIndustriesLtdbyprovidingdirectassistanceinordertopromotetheflourishmentofFrozen
FoodprocessingsectorinthegreaterinterestofthepeopleofBangladesh.
EquivocallywithUSGovernmentspledgeofatleast$3.5Billionaidtowardsaddressingtheneedsofsmallfarmersandagribusiness,
USAIDAdministratorMr.RajivShahvisitedBangladeshtolaunchtheFeedtheFutureinitiative.ToassistBangladeshinthisprocess,
the United States will enhance agriculture and nutrition teams in the country and will supplement $400 million over five years to
supportongoingfoodsecurityprogram.Intotal,thesecommitmentsrepresenta20foldincreaseforagricultureandnutritionover
thepreviousyearsUSspending.
GoldenHarvestwasthefirstevercompanyfromBangladeshtoparticipateintheGulffoodexhibitionsattheGulfFood2010,the
largestfoodexhibitionintheentiremiddleeastwhichattractedmorethan45,000tradeprofessionalsfrommorethan150countries.
The participation of Golden Harvest was supported by USAIDPRICE project. The U.S. Ambassador James F. Moriarty was given a
presentationbyGoldenHarvestattheUSEmbassyonthe4May2010ontheprogressonfollowupofGulffood2010.
Ms.AlyssaAyres,USDeputyAssistantSecretaryofState;isoneofthehighrankingdignitariesfromUSGovernmentappreciating
Golden Harvest At a recent meeting, Managing Director Golden Harvest Agro Industries Limited briefed her about the future
expansion plan of Golden Harvest Agro Industries Limited and she was pleased to learn about the Groups activities. Mr. Atman
Trivedi, a member of US Senate Foreign Relations Committee; and Ms Nisha Desai Biswal, the Assistant Administrator, USAID
WashingtonofficiallyvisitedGoldenHarvestPlantinGazipur.Theyallexpressedtheirhighsatisfactionviewingthepresentprogress
andfuturebusinessplanofGoldenHarvest.
12
SectionIV
BusinessinDetails
LocationofBusiness,LogisticSupportandResources
GoldenHarvestAgroIndustriesLtd(GoldenHarvest)islocatedataverystrategicplace,withlinkagetonationalHighwaysenabling
smoothtransportation.
1.Locationofprocessingplant
TheprocessingfacilityislocatedataplacecalledMonipur,inthedistrictofGazipur.TheplaceisaboutFiftyKilometersfromDhaka
city.AnAsphaltroadleadingtoMymensinghtownfromDhakatownconnectstheplace.GoldenHarvestisthefirsteverAgrobased
plantintheDistrictofGazipurandfirstofitskindintermsofInternationalStandardsinBangladesh.
2.Electricity
ElectricityissuppliedbytheRuralElectrificationBoard(REB).Thereisalsoastandbygeneratorofacapacitythatcansupport100%
of the factories requirement under full production load during power disruption. It may be mentioned that the Government of
Bangladeshunderitspolicyhasprovidedwitharebateof20%ontheElectricityBillonlyforAgrobasedexportingcompaniessuchas
ours. As Golden Harvest has already made several exports, therefore application has already been placed with the REB office for
claimingtherebateonthebillspaidaswellasfuturebills.
3.Water
Plentyofwaterisrequiredtocleanandwashthevegetables.Watersupplyisobtainedbyinstallationofitsowndeeptubewellwithin
thefactorypremiseswithproperregulatoryandenvironmentalapproval.ThewaterpriortouseissubjectedtoUSAoriginFiltration
at15MicronandUltraviolettreatment,enablingustogetridofsuspendedminerals,particlesandgerms.
4.Gas
GassupplyisconnectedfromthenationalgridoftheTitasGascompanyforPreproductionprocessing.
5.WasteWaterDisposal/EffluentWaterTreatment
Sincethewastewaterisnontoxicasnochemicalsareusedintheprocessofthefactory,yet,wearechlorinatingthewastewater
includingstrainingforsolidparticlesbeforedischargingbacktotheenvironment.
Withrespecttoenvironmentalissues,GoldenHarvestismeetingalllawsandregulations.UnderthePestControlProductsActand
regulationspursuanttothisAct,GoldenHarvestcheckpesticideresiduelevelsintheirproductstoensurethattheyarewithin
regulationlevels.
6.Employment
Duetomodernmachinerieswithmostlyautomatedprocesses,GoldenHarvestisnotalaborintensiveunit.Thefactoryhouses120
employeesofvariouslevelsofcompetenceandresponsibilitieswithaccommodationfacilitywithinitspremises.Another480workers
areaccommodatedinrentedhouseswithcloseproximitytothefactory.Accommodationislimitedandpreventsmigrationof
workerswhoaretrainedinhouse.GoldenHarvestisanEqualOpportunityEmployerinreality.
13
7.
SourceofRawMaterial
GoldenHarvestsPrimarysourceofrawmaterialisalloverBangladeshoncontractfarmingbasisdirectlywiththefarmers.GoldenHarvest
alsohasacontractwithUSAID(PRICE),whoisalsosupportingthefarmerswithdirectforwardlinkagetoGoldenHarvestwhichenables
thefarmerstogetpremiumpriceforpremiumqualitybyeliminatingmiddleman/brokers.
GoldenHarvestOrganicAquacultureholdingLtd,asisterorganizationofGoldenHarvestisworkingasbackwardlinkagewithdifferent
farmersgroups.AsVegetableproductionneedsacloserelationshipbetweengrowersandfrozenfoodprocessorsinthissector,crops
forprocessingaregrownundercontractswhichoftenspecifyvarieties,sizes,andcolors,tolerancelevelsforblemishesandbruising
aswellasprice.
ThroughUSAIDPRICEsupportprogram,specialistsareprovidingtechnicaladvice,expertise,anddirectiononsprayingcropswith
pesticides.Thus,GoldenHarvestexercisessomecontrolovertheconditionsunderwhichfruitsandvegetablesareplanted,grown,
harvestedanddeliveredtotheprocessingplant.
GoldenHarvestalsoprocuresotheritemsfromreputedbusinesshousesuchasBRAC,BangladeshEdibleOil,CityGroup.
8.
RefrigeratedTransportation
GoldenHarvesthasafleetofRefrigeratedTransportswhichmaintain30DegreeCelsiusandcanaccommodateafullloadequivalenttoa
40FeetReefercontainerforexport,enablingGoldenHarvesttomakeexportshipmenttoloadthecontainerinChittagongport.
14
SectionV
CompetitiveCondition
1.MarketSizeandGrowth:
Aspermarketresearch,Bangladeshmarketforconvenientfrozenfoodhasgrownatastaggeringrateof37%during20092010;and
isfurthergrowingatgreaterpacewithexpectedtotalturnoverofTaka850millionbythefiscalyear20102011.
According to various surveys, international market for processed frozen food is growing at a rate of over 26%; and has become a
multibilliondollarindustry.
2.MarketSegmentation:
MarketsegmentsincludeInternationalandLocalmarket.
TheInternationalMarketsegmentconsistsofprocessedreadytocookfoodandprocessedpackagedvegetables.Demandforfrozen
foodswithregularadditionofdifferentvarietiesintheinternationalmarketisenormous;alsotheinternationalmarketisestablished
andemergingataprosperingratewiththegrowingnumbersofcustomersfromdifferentpartofsocioculturaltastewhopreferthe
domesticflavorintheirdailyfood.ThebuyersaremostlyfromUK,USA,Australia,CanadaandtheMiddleEasternCountries.
InBangladesh,productsareconsumedbythehouseholds,citydwellers,busyfamilies,youngadults,wholookforconvenientcooking.
ThenumberofpotentialbuyersisincreasingatafastratebecauseofthevariouspromotionalcampaignsbyGoldenHarvestandalso
foritsuniqueproductattributesthatattractpeoplefromallwalksoflife,irrespectiveofage,occupationandlocality.
3.MarketShareandCompetition:
GoldenHarvestenjoysmajorityofthetotalprocessedreadytocookfoodmarketinBangladesh,fulfillingaprerequisiteofamarket
leader.
ThecompetitionscenarioissomewhatsporadicandthereishardlyanydirectcompetitionwithGoldenHarvestduetoitsmultiplicity
ofproducts.ThecompetitorsincludeAftab,HarvestRichbrandswhichhavetheirlowrangeofproductlineupandimportedFrench
15
FrieslikeMcCain,LambWeston,andimportedchickennuggetslikeDouxandimportedrangeoffrozenproductsfromAlKabeer
Grouparealsocompetinginthelocalmarket.
However,GoldenHarvestscompetitiveadvantageallowsittocarefullyselectitsprofitableyethighdemandingproductlinesina
marketNicheandatthesametime,enjoysahighdegreeofindependence.Thus,GoldenHarvestisbenchmarkingitselfintheReady
tocookfrozenfoodindustryintermsofquality,pricingandtheexoticbrandflavorswithcustomersatisfaction.
4.Marketdistribution:
4.1InternationalMarket:
Productsareregularlydistributedtotheentryportofrespectivebuyerscountryconformingtoallexportregulationsprevailingin
Bangladesh.Fromtheentryport,assigneddistributorsaretakingtheproductstotheendusersabroad.GoldenHarvesthasanumber
ofhighperformingdistributorsforeachofitsglobaldestinations.BritishRetailConsortium(BRC)isgivinguscertifiedaccessto
distributeourproducttointernationallyreputedretailchainslikeTESCO.
4.2DomesticMarket:
DomesticMarketrequiresGoldenHarvesttosetupadistributionchannelthroughoutthecountry.Productsaresoldnationwidevia
dealersnominatedforvariousdistricts.Technologybasedtemperaturecontrolledlogisticsismadeavailablefortransportationof
productsfrommanufacturingplanttothedealers/outletsacrossthecountry.
a.
DealerManagement:
Golden Harvest has appointed 28 dealers for a comprehensive coverage in Bangladesh. The dealers in turn sell to around 5,000
retailers with retail price tagged by Golden Harvest. The basis of business for both the wholesaler and the retailer is preagreed
commission.
b. KeyretailoutletManagement:
Consideringlargebusinessvolume,GoldenHarvestkeepsaclosetieupwiththelargeretailstoresinBangladesh.Suppliestomajor
retail chain stores such as, Nondon, Agora, Meena Bazaar, PQS, Swapno, Lavender, Prince Bazaar, fall under this category. High
volumeconsumersinclude5starHotelslikeRadisson,UniversitycampuseslikeNorthSouthUniversity,AIUB,StamfordUniversity,
Hospitals,Restaurantsaredistributeddirectlyfromownnetworkresources.GoldenHarvestregularlydevisespromotionalprograms
forgeneratingthrusttoboostuprevenues;currentactivitiesincludealreadydistributed500refrigeratorsdeployedcountrywideand
thisnumberwillgrowover15,000alongwithGoldenHarvestsexpansion.
16
c.
DistributionLogistics:
GoldenHarvesthasafullbackupoflogisticequipmentsandtransportationsrequiredforitsdistributionactivity.Afleetof9(nine)
largerefrigeratedtrucksofvariouscapacitiesarecontinuouslyutilizedfordistributingtothechannelsofbothinternalandexternal
buyersathomeandabroadmaintainingtemperatureof30degreeCelsius.
d. ECommerce:
Ecommerceenablescompaniestointeractwithconsumers,suppliers,andretailers.Overthepastfewyears,websiteshavebecome
adominantmediatoprovidebrandpromotion,productinformation,recipes,andindustryrelatedinformation,customerqueriesand
comments.
e.
Mediacampaign:
Withmediacampaign,newconsumersandnewproductsareaddedatanexponentialrateinthelocalmarket.Afterthecampaign,
Frenchfryhascreatedahugeresponseinthelocalmarket.Previously,FrenchfrymarketinBangladeshwasabsolutelydependenton
importasabackwardlinkagetothefastfoodsector.Frenchfryhasnowbecomeahouseholdnecessity.
17
SectionVI
BusinessExpansion/DiversificationPlan
Bangladeshhasapopulationof160millionandgrowingatarateof1.55%.Distributionchannelsforperishables,suchasAgricultural,
Fisheries,Dairies,Pharmaceuticals,LivestockandPoultryproducesarehighlyscatteredanduneveninBangladeshcreatingimbalance
insupplyanddemandregularly.Vaccinationprogramsarealwaysbecomedifficultandstagnantduetolackofproperlogistical
infrastructure.Alsobecauseofdeficiencyoftransportationandstoragemostofourhorticulturalproducegoestoawaste.Ithasbeen
surveyedthattheHorticulturesegmentofBangladeshsuffersalossofupto44%.Thesepostharvestlossof44%andseasonal
availabilityofhorticulturalproducearethemainresultantofextremepricevariationprevailinginthemarket.GoldenHarvestaimsat
fulfillingthisvacuumbydevisingandimplementingitsmegabusinessexpansionplan.
a.
ColdChain:
Introductionofacoldchainseemstobetheonlysolutiontotheproblemstatedabove.Acoldchainisalogisticssystem,whichhelps
inmaintainingandprovidingaseriesoffacilitiesforensuringidealstorageconditionsfortheperishablesfromthepointoforiginto
the point of sale. A well developed and efficiently organized cold chain reduces wastage, spoilage and helps keep the perishables
intact thereby helping to maintain the quality of the harvested food products ultimately making the whole system cost effective
which ensures highest quality to the end user. Our neighboring countries like India, Nepal, Pakistan, Myanmar has the Cold Chain
infrastructurealreadyinplace,butBangladeshunfortunatelyhasnoColdChainortherelatedinfrastructureforoperationthroughout
thecountry.
Postharvestlossofagricultural,fisheries,dairies,livestockandpoultrysectorinBangladeshisataveryalarmingstage,justalonein
the horticulture sector in Bangladesh it is at an alarming 44% of the total produce, which is the primary cause for such drastic
variation in price in the local market. Fishery sector suffers massive threat of usage of Formalin, also growth of poultry and dairy
sectorsuffersduetoabsenceoftemperaturecontrolledtransportation.Pharmaceuticalssectorbeingthesecondlargestsectorafter
RMGindustryrequiresverylowtemperaturecontrolledmaintenanceforitsrawmaterialandfinishedproductthissectorisfacing
hugesetbackdueabsenceofColdChain.VaccinationprogramsinBangladeshoftenbecomesstagnantandsluggishduetoabsence
of proper logistics for its maintenance and transportation. These sector wise losses could be easily avoided with Cold Chain
management,enablingpricestobelowerwhichinturnincreasesthemarketsizeandtranslatingintobiggersalesvolumeasanormal
consequence.
GoldenHarvestwillsetupaCountryWideNetworkcovering7divisionsand22districtswithcoldstoragefacilitymaintaining30
degreeCelsiusforpreservingperishableslikefrozenfood,poultry,dairy,fisheries,pharmaceuticalandhorticulturalproducts.Golden
HarvestAgroIndustriesLimitedwillsetupacentraldepotinDhakaandwillsequentiallylinkwith24depotsat30degreeCelsiusand
15,000freezersinretailoutletsalloverBangladeshfromitsownresources.ForCrossCountryTransportationaFleetof50
refrigeratedtrucksmaintainingtemperatureat30degreewillbedeployedtofacilitatetransportationforthislogisticsnetwork.
ThecoldchainwillgeneraterevenuesmainlyfromthestoragespaceandlongershelflifeofperishableproductsofGoldenHarvestas
wellasproductfromsimilarbusinessoperatorsfromotherindustrieslikepoultry,fisheries,pharmaceuticals,dairyetc,whichwillbe
maintainedanddistributedbythisnetwork.Rentalchargesforcrosscountrytransportationwillalsogeneraterevenuesfrominternal
costsavingsandexternalservicerenderedcommerciallytootheroperatorsrequiringlowtemperaturemanagementlogistics.
TheentirecoldchainoperationmodelisbeingdesignedandwillbeoperatedundertechnicalsupervisionandassistancefromUSAID.
b.
ReadytoEatLineofFrozenFoodProducts
RapidgrowthofurbanizationinBangladeshandlifestyleandupwardmobilityofincomeclass,needforconvenienceandhygieneis
drivingthedemandforreadytoeatproducts.InBangladeshmostofthestreetsiderestaurantsareunhygienic,orproperrestaurants
areveryexpensiveorhomemadefoodinhotpotishighlyinconvenient.
Day by day, people are being more and more aware on food hygiene, as can be seen from the exponential growth in the bottled
mineral water sector which in the past was thought to be a luxury but today it has proved to be a necessity. Golden Harvest has
identifiedthepotentialforReadytoEatlineoffrozenfoodproductsforthecorporateofficesandworkingpeoplewhichalonearea
massivemarketopportunity.
GoldenHarvestintendstoservelocalandexoticdishesfromdailymealstocuisinesatveryaffordableprice.Convenienceoflonger
shelflifeandroundtheyearavailabilitywillbeensuredatinternationalhygienestandard.
18
GoldenHarvestispresentlydevelopingtheprocesslinewithtechnicalassistancefromForeignExpertsprovidedthroughassistanceby
USAID.SomeoftheReadytoEatlineofproductsplannedforlaunchingincludesDeshiFoodlinesuchasSteamedRicewithChicken,
DalandBhaji,ChineseFood,ThaiFoodandetc.Otherthanfooddesignedforoffice,GoldenHarvestwillalsolaunchspecialfoodslike
MurogPulau,ElishPulau,KachchiBiryani,MuttonTehari,assortedgravydishessuchasRezala,BhunaandwiderangeofKababsand
etc.Theseproductswillbemarketedatanaffordableyetcompetitivepricethanthepriceschargedbythegeneralrestaurants.The
productswillhaveashelflifeof2yearsandwillbemadeavailablethroughoutthecountrythroughcoldchainofGoldenHarvest.
c.
PremiumIceCreamProducts
Bangladesh being a tropical country and the winter lasting between 4 to 6 weeks, the annual market demand for Ice Cream
throughoutthecountryishuge.AccordingtoaMarketSurvey,in2010,theIcecreamMarketsizeofBangladeshisofapproximately
Taka360Croreandisgrowingatapromisingrateof36%,whichisstilluntappedwithonly2majorbrandsdominatingthemarket.
ICECreamMarketGrowth
TotalSizeofIceCreamMarketin2009(BothBranded&NonBranded)
Category
RevenueinCroreTaka
Share
208.00
58%
150.00
42%
358.00
100%
Branded
Nonbranded
Total(approx.)
Accordingtomarketsurvey,brandedicecreamscontrols58%shareoftotalrevenueagainstthenonbranded42%.Withthecold
chainlogisticstheicecreambusinesscanmakeaquickpenetrationwithproductsforcustomersalloverBangladesh.
Duetolackoflogisticalsupport,brandedicecreamscannotprovidenationwidecoverage.ThemostcompetitiveadvantageofGolden
Harvestistheinfrastructurebackboneofcoldchainwhichisundertheframeworkofthisexpansionplanwhichcancreatelargescale
competitionintheIcecreamindustry.
19
CurrentlythemanufacturersofIcecreaminBangladeshruntheirprocesseswithpoormachineriesandprocesscontrolsystem.Asa
result, new products developed in the international markets are not present in Bangladesh. For this reason, the import based ice
creamshavecurvedanichemarketforthemselvesinBangladeshwhichincludesMovenpick,BaskinRobins,Andersons,HagenDazs.
Considering this, Golden Harvest is in the process of setting up a world class European Ice Cream plant with globally standardized
processcontrolsystemsforsuchasensitivedelicacy.
MajorCategoryandtheirContribution
Category
Stick
Cup
Cone
&
Type
Size
Price
segment
Contribution
Normal
Taka 8 18
22%
Premium
Taka 20
30
12%
Cup
100ml
12%
Cone
100ml
18%
Normal
,1,2&5liter
26%
Premium
1liter
5%
1&1liter
5%
Liter
Cake
Total
100%
PremiumBrandedIceCreamSectorisbyfarthefastestgrowingoftheicecreammarketshowinganincreaseof36%overtheperiod
20078comparedtoastaticmarketfornonbrandedicecreamoverthesameperiod.
GoldenHarvestintendstolaunchsomenewlinelikeIcePop,Lollies(biflavors,triflavorsandtwisters),varietyofChocbarandCone,
Cups,LitersandIceCreamcakes,Sorbetsetc.,GoldenHarvestwillalsolaunchfortheveryfirsttimeinBangladeshawiderangeand
variety of Premium and Specialty Ice Cream products. Golden Harvest expects to secure 30% of the Bangladesh market with wide
varietyoficecreamproducts,higherqualityandlowerdistributioncost.
20
SectionVII
DirectorsoftheCompany
Name
Designation
Age
Mr.MatthewGrahamStock
Chairman
Mr.AhmedRajeebSamdani
ManagingDirector&CEO
36yrs
Mr.MohiusSamadChoudhury
Director&COO
41yrs
Director
30yrs
Mr.AhmedMehdiSamdani
Ms.NadiaKhalilChoudhury
Director
29yrs
Mr.AzizulHuque
Director
39yrs
Mr.MoqsudAhmedKhan
Director
65yrs
42yrs
Informationregardingdirectorsanddirectorship
Dateofbecoming
Name
Designation
Mr.MatthewGrahamStock
Chairman
Mr.AhmedRajeebSamdani
Mr.MohiusSamadChoudhury
Director&COO
Mr.AhmedMehdiSamdani
Mr.AzizulHuque
Mr.MoqsudAhmedKhan
Director
Director
Director
Director
Directorforthefirst
time
20November2004
10August2004
10August2004
10August2004
30June2010
10August2004
20November2004
21
Directorsinvolvementinotherorganization:
Name
DesignationintheCompany
Directorship/Sponsorship/OwnershipwithotherOrganization
GoldenHarvestAgroIndustriesLtd.
Position
Chairman
MatthewGrahamStock
Chairman
StemcorUKLimited
Director
ManagingDirector
AhmedRajeebSamdani
StemcorIndiaPvtLtd.
GoldenHarvestAgroIndustriesLtd
AhmedMehdiSamdani
Director
MohiusSamadChoudhury
Director&COO
GreenfieldsDistributionUKLtd.
Chairman
GoldenHarvestCommoditiesLtd.
ManagingDirector
ManagingDirector
GoldenHarvestLogisticsLtd
ManagingDirector
GoldenHarvestCottonsLtd
ManagingDirector
GoldenHarvestDevelopersLtd
ManagingDirector
FuturescapeDevelopmentsLtd
ManagingDirector
GoldenHarvestInfoTechLtd
ManagingDirector
GoldenHarvestSeafoodandFishProcessingLtd
ManagingDirector
GoldenHarvestOrganicandAquacultureHoldingsLtd.
ManagingDirector
GoldenHarvestScankortGISLtd
ManagingDirector
GoldenHarvestAviationLtd
TheCityBankLimited
ClimateActionBDLtd
ManagingDirector
Director
BrainTrainLtd
BangladeshElectronicPaymentSystemsLtd
Director
ManagingDirector
Director
Director
Director
Director
Director
Director
Director
Director
GoldenHarvestSeaFoodandFishProcessingLtd
Director
Director
Director
Director
BrainTrainLtd
Director
ChiefOperatingOfficer
Director
Director
Director
Director
Director
Director
Director
22
AzizulHuque
MoqsudAhmedKhan
Director
Director
Director
Director
Director
Director
KhalilandKhalilInvestmentsLtd
Director
KRCComposite
Director
ATIATrading
Director
Director
BrainTrainLtd
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Familyrelationshipamongdirectorsandtopofficials:
Therearenofamilytiesamongthedirectorsandtopofficialsofthecompany,exceptMr.AhmedRajeebSamdaniwhoisbrotherof
AhmedMehdiSamdaniandspouseofMrs.NadiaKhalilChoudhury
Shortbiodataofthedirectors:
Mr.MatthewGrahamStock,ChairmanandsponsorDirector
Mr. Matthew Graham Stock is the Chairman and sponsor Director of Golden Harvest Agro Industries Ltd. Mr. Stock, Chairman of
Greenfields Distribution UK Ltd, a leading Cold Chain with extensive network in the UK and Europe. Mr. Stock is also Director of
StemcorUKLimited,oneofthelargestSteelTradingHouseintheworldwithannualturnoverofmorethanof11BillionUSDollars.
AlsoMr.StockistheManagingDirectorofStemcorIndiaLimited.AccordingtoForbesJuly2010issue,Mr.Stockforhisoutstanding
performancehasbeenawardedIronMan2ofIndiarecognitionforhisleadershiproleintheSteelIndustryofIndia.Mr.Stockbrings
hisvastexperienceinColdChainfromUKwhichisagreatassetforGoldenHarvestAgroIndustriesLtd.Mr.Stockisholdinganhonors
degreeinEconomicsfromUniversityCollegeLondon.
Mr.AhmedRajeebSamdani,ManagingDirector&CEO
Mr.AhmedRajeebSamdaniistheManagingDirector&CEOoftheGoldenHarvestAgroIndustriesLtd.,andtheManagingDirectorof
GoldenHarvestGroup,aseasoned,creativeandvisionaryentrepreneur,involvedindiversifiedbusiness,holdingseveralkeypositions
inthefinancialsectorofBangladeshincludingDirectorofTheCityBankLtd,hehasanumberofJointventureprojectsthatare
currentlyoperatinginBangladeshandfewarewaitingcommissioning.Healwayslookstothefuture,believesinhimself.Heisdriven
byhisdreamsofcreatingbusinessthataremodelsofnotonlyexcellenceandsuccess,butalsoofprofitability,innovationandsocial
responsibility.Mr.Samdanialsoafounderofa100%CharitableHospital,AlvinaSamdaniTrustandalsoholdingthepostofSecretary
GeneralofHumanRightsFoundationofBangladesh.
23
Mr.MohiusSamadChoudhury,Director&ChiefOperatingOfficer
Mr.MohiusSamadChoudhuryisaDirectorandtheChiefOperatingOfficerofGoldenHarvestAgroIndustriesLtd.Mr.Choudhury,is
anAssociateMemberoftheAssociationofBusinessExecutiveUnitedKingdom(AMBE)andaqualifiedMBA(BusinessAdministration)
fromGlamorganUniversity,UnitedKingdom.HehasvastexperienceintheFoodIndustryandDistributionsectorinUnitedKingdom
coveringalmostadecadewhenMr.ChoudhuryworkedforFoodServiceandDistributionandhandlinginternationalbrands.Mr.
ChoudhuryjoinedGoldenHarvestGroupin2000onhisreturnfromUK.Asaprimarysponsorandinitialmemberofthecompany,
Mr.Choudhuryisnurturingthecompanyfromitscradletothepresentthrivinggrowthstage.Withhisglobalexposure,Mr.
Choudhuryhascontributedthecompanyinthecorebusinessareasoffinance,productionandinternationalbusinessincludingoverall
operation.
Mr.AhmedMehdiSamdani,Director
Mr.AhmedMehdiSamdani,oneofthemajorsponsorDirectorofGoldenHarvestAgroIndustriesLtd.Mr.Samdanihasover7years
ofexperienceinFoodCommoditiesTrading,InformationTechnology,RealEstateDevelopments,PublishingHouse,Logistics,etc.He
isoneofthefoundersofTACMCharitableHospital.Adiligentyoung,hardworkingbusinessleaderwhoiscontinuouslytakingthe
companytonewheights.Histhoroughnessinbusinessoperationandrelentlesseffortsforincreasingbusinessvolumeisthe
inspirationtothecompanysgrowth.
Mrs.NadiaKhalilChoudhury,Director
Mrs.NadiaKhalilChoudhury,anenergeticbusinesspersonwithinnovativeideasandconcepts,isaDirectorofGoldenHarvestAgro
IndustriesLtdandotherunitsofthegroup.Mrs.NadiaKhalilChoudhuryisactivelyinvolvedindifferentSocialBusinesses.Sheisalso
Director of a Publishing House, Real Estate Company and Director of Khalil and Khalil Investments Ltd, KRC Composite. Mrs. Nadia
Choudhury is also an internationally renowned Art collector. Mrs. Nadia Choudhury is an advisor of Bangladesh Human Rights
Foundation;andakindheartedcharityworker.
Mr.MoqsudAhmedKhan,Director
Mr.MoqsudAhmedKhan,istheSponsorDirectorofGoldenHarvestAgroIndustriesLtd,andhasexcellenttrackrecordinhisown
businessinUKandBangladesh.HehasextensiveknowledgeofFoodBusinessandanactiveMemberofCharitableOrganizationsin
UKandBangladesh.
Mr.AzizulHuque,Director
Mr. Azizul Huque, a Director of Golden Harvest Agro Industries Ltd, holds a University Higher diploma in Computer Science from
Staffordshire University. Having vast experience extended over 14 years in Bulk Food Commodities Trading as well as Information
Technology business, has enabled him to have a comprehensive knowledge in the business dynamics and current local and
internationalbusinesspoliciesofdifferentcountries.Hisindepthunderstandingofallaspectsofbusinessandexpertiseonprocess
costeliminationandqualityassuranceinbusinessprocesseswhichisrequiredforinternationalbusinesshasprovedtobeassetsfor
theCompany.
CreditinformationBureau(CIB)Report
NeithertheCompanynoranyofitsdirectorsorshareholderswhohold5%ormoresharesinthepaidupcapitaloftheissuerisloan
defaulterintermsoftheCIBReportoftheBangladeshBank.
24
SectionVIII
DescriptionofManagement
Mr.MatthewGrahamStock,Chairman
Mr.MatthewGrahamStock,ChairmanandsponsorDirectorofGoldenHarvestAgroIndustriesLtd.Mr.Stock,Chairmanof
GreenfieldsDistributionUKLtd,aleadingColdChainwithextensivenetworkintheUKandEurope.Mr.StockisalsoDirectorof
StemcorUKLimited,oneofthelargestSteelTradingHouseintheworldwithannualturnoverofmorethanof11BillionUSDollars.
AccordingtoForbesJuly2010issue,Mr.StockforhisoutstandingperformancehasbeenawardedIronMan2ofIndiarecognitionfor
hisleadershiproleintheSteelIndustryofIndia.
Mr.FaisalAhmedChowdhury,Adviser
Mr.FaisalAhmedChowdhury,anAdviserofGoldenHarvestAgroIndustriesLtd,isaFormerSecretaryofMinistryofShippingand
MinistryofWaterResource,GovernmentofBangladeshandaFormerViceChairmanofExportPromotionBureau.Mr.Chowdhury
providesavaluableedgeoverothercompetitorsinthemarketwithhisextensiveexperienceintheexportpolicyareasofthe
GovernmentofBangladesh.
MrAhmedRajeebSamdani,ManagingDirector&CEO
Mr.AhmedRajeebSamdaniistheManagingDirector&CEOoftheGoldenHarvestAgroIndustriesLtd,andtheGoldenHarvest
Group.Aseasoned,creativeandvisionaryentrepreneur,MrSamdaniisinvolvedindiversifiedbusiness,holdingseveralkeypositions
intheindustrial/financialsectorofBangladeshincludingDirectorofTheCityBankLtd.Mr.Samdaniisalsoafounderofa100%
CharitableHospital,AlvinaSamdaniTrustandholdingthepostofSecretaryGeneralofHumanRightsFoundationofBangladesh.
Mr.MohiusSamadChoudhury,ChiefOperatingOfficer
Mr.MohiusSamadChoudhuryistheChiefOperatingOfficerofGoldenHarvestAgroIndustriesLtd.Mr.ChoudhuryworkedforFood
ServiceandDistributionandhandledinternationalbrands.Mr.ChoudhuryjoinedGoldenHarvestGroupin2000onhisreturnfrom
UK.Mr.Choudhuryhascontributedthecompanyinthecorebusinessareasoffinance,productionandinternationalbusiness
includingoveralloperation.
Mr.ImamHassan,FCA,ChiefFinancialOfficer
Mr.ImamHassan,FCA,theChiefFinancialOfficerofGoldenHarvestAgroIndustriesLtd.Mr.ImamHassanisaprofessionallyqualified
Chartered Accountant from the Institute of Chartered Accountants of Bangladesh (ICAB). He has about 18 years of practical
experience in the field of accounting, finance, auditing, administration and public relation. He has held core finance position of a
numberoflocalconglomerateandmultinationalcompaniesinBangladesh.
Mr.MamunMonowar,HeadofMarketing
Mr. Mamun Monowar Head of Marketing of Golden Harvest Agro Industries Ltd. Mr Mamun started his career in a software
company named Dhaka Soft. In the year 2000,he joined Partex Beverage Ltdunder Partex Group. He worked in Partex as Market
DevelopmentManagerandBrandManager.DuringhisstayatPartex,hisfirstassignmentwastolookaftertheSalesandMarketing
DepartmentofMUMDrinkingWater.HealsolookedaftertheBrandDepartmentofRCColaandothersoftdrinksbrandsofPartex.
MrMamunalsoworkedinJamesFinlay(formerBritishownedMultinationalCompany)asBrandManageroverfouryears.AtFinlay,
heledbothsales&marketingteam.
Mr.RiazulAlNawaz,HeadofHumanResourceManagement
Mr.RiazulAlNawazHeadofHumanResourceManagementofGoldenHarvestAgroIndustriesLtd.Mr.Riaz,postgraduatedin
EnglishandMBAinMarketingfromDhakaUniversity,obtainedhispostgraduationdiplomainHRM.Hehasabout12years
experienceinHumanResourcesManagementandworkedfordifferentmultinationalcompaniesathomeandabroad.Mr.Riaz
conductedlargenumberoftrainingprogramsonPersonalEffectiveness,TeamBuilding,PerformanceManagementand
contemporaryHRissuesinvariousleadingMNCsandlocalconglomerates.
25
Mr.BabulAktar,HeadofAccounts&Finance
Mr.BabulAktaristheHeadofAccounts&FinanceofGoldenHarvestAgroIndustriesLtd.Mr.BabulAktarisanMBAwithBBAHons
(MajorinAccounting).Hehasabout10yearsofpracticalexperienceinthefieldsofaccounting,finance,auditing,costing,company
lawandtaxation.HeheldcorefinancepositionofanumberoflocalconglomerateandmultinationalcompaniesinBangladesh.
Mr.SheikhQumrulIslam,FactoryManager
Mr.SheikhQumrulIslamistheFactoryManagerofGoldenHarvestAgroIndustriesLtd.Mr.lslam,agraduate,joinedGoldenHarvest
Groupin2004.Hehasabout6yearsofpracticalexperienceinthefieldofproductionaswellasadministration.Heheldcore
responsibilitiesforsupervisingandmanagingalltheoperationalaspectsofthefactory.
Mr.Md.FaisalMSc,QualityAssuranceManager
Md.FaisalMScistheQualityAssuranceManagerofGoldenHarvestAgroIndustriesLtd.Mr.FaisalhascompletedhisGraduationand
PostGraduationfromBangladeshAgriculturalUniversity,Mymensing,obtainingthemeritposition1stclass1st.Heheldthe
responsibilitytomaintaintheworldstandardproductquality;andtosupervisetoensurethefoodsafety.Asapartofhisprofessional
developmentprogram,heparticipatedinHACCP,BRCGlobalStandardandotherimportanttrainingprograms,intheareaofFood
SafetyandQualityAssurance.HeisexperiencedinworkingwiththeInternationalOrganizationlikeUSAIDPRICE.
Mr.KamruzzamanConsultantPlantManagement
Md.KamruzzamanistheConsultantPlantManagementofGoldenHarvestAgroIndustriesLtd.Mr.Md.Kamruzzaman,BSc.Engineer,
MBAisaprofessionallyqualifiedEngineer;andisaMember&LifeFellowofIEB.Hehasabout20yearsofpracticalexperienceinthe
fieldofEngineeringandFactoryManagement.Heheldcoreengineeringpositions&beenCOOofanumberoflocalconglomeratesin
Bangladesh.HegotseveraloverseasTrainingonEngineering&Management.
Mr.AktheruzzamanKhanConsultantFoodDevelopment
Mr.AktheruzzamanKhanistheConsultantFoodDevelopmentofGoldenHarvestAgroIndustriesLtd.Mr.Aktheruzzaman,MSc(Bio
Chemistry),DhakaUniversity,isaprofessionallyqualifiedFoodTechnologist.Hehasabout33yearsofpracticalexperienceinthefield
of Dairy, Food & Beverage and Administration. He held core positions ofProduction & Administrationof a number of local
conglomerate and multinational companies in Bangladesh & Abroad. He has got several overseas Training on Food Processing,
Dairy&Management
26
SectionIX
DescriptionofProperty
Locationofprincipalplantsandotherpropertiesofthecompanyandtheircondition:
GoldenHarvestAgroIndustriesLtdhasitsfactorylocatedinatBokranMonipur,Bobanipur,GazipurSadar,Gazipurmeasuringland
areaat215.50Decimal.TheFactoryissetupona54,261SFT(squarefeet)stateoftheartpurposebuiltprocessingfacilitybuiltin
internationalstandardswithcapacitytoexpandbyadditional100,000SFT.Thefixedassetsofthecompanyhavebeenrevaluedto
their fair market value as on 30 June 2009. The company has acquired its Corporate Office space around 7,000 square feet at SPL
WesternTower,TejgaonLinkRoad,Level#5,Gulshan,Dhakaandregistrationofwhichisunderprocess.
Descriptionofland
(AmountinTaka)
SL. Description
Value
No.
1
Areaofthelandis99Decimals(inthenameofGolden 39,600,000
HarvestAgroindustriesLimited)
2
Area of the land is 115 decimals ( in the name of 46,000,000

GoldenHarvestSeaFishandFoodProcessingLimited)
DeedreferencesofLandsarementionedhereunder:
i)
DeedNo.:
17345,Date:15.08.2004
ii)
DeedNo.:
23887,Date:29.09.2005
iii) DeedNo.:
20361,date:07.08.2005
Location
Bokran,
Monipur,
Bobanipur,GazipurSadar,
Gazipur
Pirujali
&
Bokran,
Monipur,
Bobanipur,Gazipur Sadar,
Gazipur
85,600,000
99.00decimals
80.00decimals
36.50decimals
215.50decimals
TheCompanyownsthefollowingoperatingfixedassetsandtheyaresituatedatCompanysofficeandfactorypremises;andwritten
downvaluearegivenbelow:
(WrittenDownValueinTakaasperAuditedAccounts)
Particulars
AsatSeptember30,2010(Taka)
AsatJune30,2010(Taka)
LandsandDevelopment
85,600,000
85,600,000
Buildingsandotherconstructions
117,977,543
118,606,469
Plantandmachinery
110,419,749
111,274,967
OfficeEquipment
2,789,984
2,825,301
FurnitureandFixtures
16,016,546
16,219,287
Vehicle
10,522,664
8,297,476
CapitalWorkinProgress
117,455,180
115,514,140
TheCompanyuseslatestandmostmodernmachineriesandequipmentsforitsproductionprocess.
27
LeaseorChargeoverAssets:
1.TheCompanyishavingTermLoanfacilitywithMercantileBankLimited,GulshanBranch,Dhaka.Accordingtosanctionterm,Land,
BuildingsandPlant&Machineriesaremortgagedwiththem.
2.Thefollowingassetshavebeenprocuredthroughleasingarrangementfromthefollowingleasingcompanies:
ListofAssets
AmountOutstanding
LeasingCompany
UnitedLeasingCoLtd.
2RefrigeratedCoverVan,
Taka1,717,430
1SedanCar
IDLCFinanceLtd.
1ReferVanand1Sedancar
Taka1,706,585
28
SectionXPlanofOperation&DiscussionofFinancialCondition
1. Internalandexternalsourceofcash
(AsperAuditedAccountsAmountinTaka)
The internal sources of the cash of the company are the share capital, share money deposit and retained profit and the external
sourcesofcasharethebankloans.
InternalSourceofCash
Jul10Sep10
Jul09Jun10
Jul08Jun09
Jul07Jun08
ShareCapital
100,000,000
100,000,000
37,500,000
37,500,000
CapitalReserve
102,687,892
102,687,892
ShareMoneyDeposit
250,000,000
92,750,000
Retainedearnings
113,816,696
SubTotal
78,073,777
566,504,588
9,888,880
60,557,984
ExternalSourcesofcash
TermLoan
23,057,984
373,511,669
47,388,880
45,118,734
LeaseholdObligation
3,424,015
3,662,100
2,343,743
SubTotal
47,082,893
48,780,834
26,225,020
28,908,269
613,587,481
422,292,503
86,783,004
76,297,149
GrandTotal
23,881,277
43,658,878
28,908,269
2. Materialcommitmentsforcapitalexpenditure
The Company has an Allotment Agreement with Shanta Properties Limited for approximately 7,000 square feet of Office Space at
Level5 of SPL Western Tower located at 186, GulshanTejgaon Link Road, Tejgaon Industrial Area, Dhaka1208. Registration
formalitiesareinprocess.
3. Causesforanymaterialchangesfromperiodtoperiod
(AsperAuditedAccountsAmountinTaka)
SalesRevenue
CostofGoodsSold
GrossProfit
Add:
ExportIncentive
OtherIncome
Less:Administrative&Selling
Expenses:
AdministrativeExpenses
Selling&DistributionExpenses
From01072010
From01072009to
to30092010
30062010
(3Months)
From01072008
to30062009
137,750,137
(72,990,640)
64,759,497
387,783,620
(205,838,233)
181,945,387
3,295,815
1,411,026
1,884,789
9,798,795
7,759,159
2,039,636
9,808,451
6,125,648
3,682,803
23,102,417
15,807,143
7,295,274
61,611,094
(35,466,519)
26,144,575
8,161,393
4,107,475
4,053,918
4,203,997
3,594,181
609,816
29
5,904,603
FinancialExpenses
NetProfitbeforeTax
52,342,259
27,970,438
140,671,328
5,618,075
16,569,104
ProvisionforTax
(16,599,340)
(34,800,000)
(3,400,000)
NetProfit
105,871,328
13,169,104
35,742,919
TheCompanystartsitsoperationintheyearof2006withtheobjectiveof100%exportorientedfrozenfoodexport.Graduallylocal
market has been created and present response of the market is very encouraging. In the latest financial year, Golden Harvest has
concentrated on local sales more vigorously. In that regard, the Company has taken various steps to increase local sales through
qualitative improvement, engagement of efficient manpower, installation of new machineries, sales through distributors and
appropriatepromotionalactivitiesthatenabledtheCompanytoenhanceitslocalsalessignificantly.Intheyearended30June2010,
consolidatedlocalsalesamountedtoTaka317.54million.GrossprofitalsoincreasedinthisyearbyTaka181.95million.NetProfit
marginrosesignificantlytoTaka105.86million.
4. Seasonalaspectsofthecompanysbusiness
Thenatureofbusinessisnotdirectlyassociatedwithseason.
5. Knowntrends,eventsoruncertainties
Politicalunrest,hartal,naturalcalamitiesandpowercrisisaretheknowneventsthatmayaffecttheCompany'sfuturebusiness.
6. ChangeintheassetsoftheCompanyusedtopayoffanyliabilities
NoassetoftheCompanyhasbeenusedtopayofftheliabilities.
7. Futurecontractualliabilities
TheCompanydoesnothaveanyplanwithinnextoneyeartocontractanynewliabilities.
8. Futurecapitalexpenditure
TheCompanyalwaysadoptslatesttechnologyforprovidingbetterqualityproductandnewproductline.Withthecontinuinggrowth
ofbusiness,theCompanyhastheplanforaddingReadytoEatproductline.SettingupofnewIcecreamfactoryandestablishing
ColdChainalloverthecountryarealsointendedprojectsoftheCompany.
9. VAT,incometax,customdutyorothertaxliability
(a)VAT:
TheCompanyhasnooutstandingVATason30September,2010.
30
(b)Tax:
TheCompany'sIncomeTaxrelatedinformationisasfollows:
Accounting
AssessmentYear
Year
Status
20052006
20062007
AssessmentCompleted.
20062007
20072008
AssessmentCompletedatDCTlevel.AppealtoAppellateTribunalisinprogress.
20072008
20082009
AssessmentisinprogressatDCTlevel.
20082009
20092010
AssessmentisinprogressatDCTlevel.
10. Personnelrelatedscheme
ManagementoftheCompanyalwaysvaluesitsemployeesashumanresources.Inthisrespect,therearecontinuinginhousetraining
programarrangedbytheCompany.EmployeesoftheCompanyarealsodeputedfortrainingarrangedbyvariousprofessionalbodies
inBangladeshandabroad.
31
SectionXI
Determinationoftheofferingprice
GoldenHarvestAgroIndustriesLtd.isaleadingprocessedfoodcompanyofBangladesh.TheCompanyisenjoyingahighgrowthin
revenue,netprofitandnetassetsinthepast4.25years.Thus,NetAssetValue(NAV)andEarningBasedValue(EBV)maybeusedin
determining the indicative price of the shares of the Company. Net Asset Value (NAV) gives assetbacking to the shares of the
Company.EarningsPerShare(EPS)indicatesprofitabilityagainstsharesoftheCompany.EarningsbasedValueandBookValuebased
Value of similar stocks have been taken to estimate a theoretical fair price, considering market demand for the shares of the
Company.Theweightedaveragepricederivedfromthefourvaluationmethods,givingequalweight,istheindicativeofferpricefor
thesharesofGoldenHarvestAgroIndustriesLtd.tobeissuedthroughtheIPOunderBookBuildingMethod.
DifferentmethodstodeterminethefairpricepershareoftheCompanyarepresentedbelow:
Method1PricebasedonNetAssetValue(NAV)basedpricepershare:
Particulars
Amount
A.ShareCapitalasat30September2010
100,000,000
B.ReserveandSurplusasat30September2010
325,877,505
C.ShareMoneyDepositasat30September2010
250,000,000
D.TotalShareholders'Equityasat30September2010(A+B+C)
675,877,505
E.Numberofsharesasof30September2010
35,000,000
F.NetAssetValue(NAV)PerShareasof30September2010(D/E)
19.31
Method2PricebasedonEarningperShare(EPS):
TheCompanysoperationalperformancesandfinancialresultsreflectitsgrowth,financialstrength,earningandprospectsthathelp
investorsinmakinginformedinvestmentdecision.Thesearesummarizedasfollows:
FinancialYears
30Sep10(DilutedandAnnualized)
NetProfit
(Taka)
PaidupCapital
(Taka)
No.of
outstanding
shares
Earningper
share(EPS)
(Taka)
35,742,919
350,000,000
35,000,000
4.08
105,871,328
192,750,000
19,275,000
5.49
30Jun09
13,169,104
37,500,000
3,750,000
3.51
30Jun08
10,502,894
37,500,000
3,750,000
2.80
30Jun07
602,331
37,500,000
3,750,000
38,749,156
655,250,000
65,525,000
0.16
2.51
30Jun10(Diluted)
WeightedAverage
Theweightedaveragenetprofitforlast4.25(fourandonequarter)yearsstandsatTaka3.87CroreandweightedaverageEPSstands
at Taka 2.51. If we consider the share price on the basis of price/earning multiple of 20, the earningbased value of shares of the
CompanyataweightedaverageEPSof2.51standsatTaka50.27.
32
Method3PriceBasedOnP/ERatioofSimilarStocks:
Sl.
Company
FaceValue
(Taka)
EPS
(Taka)
No.
MarketPrice
(6MonAv)
(Taka)
P/ERatio
1 ApexFoodsLimited
100
15.01
1147.00
76.42
2 FineFoodsLimited
10
0.88
95.93
109.02
3 RahimaFoodsLimited
100
3.03
552.71
182.41
4 NationalTeaCoLtd
100
156.78
4658.71
29.71
5 BeachHatcheryLtd
10
1.53
90.32
59.03
6 FuWangFoodsLimited
10
1.07
77.13
72.09
88.11
SimpleAverage
(Source:DSEMonthlyReview,June
Nov'10)
DeterminingtheFairValueofshareofGOLDENHARVESTAGROINDUSTRIESLIMITED:
AverageEPS
2.51
RepresentativeP/EMultiple(X)
88.11
FairValue(Taka)
Method4PricebasedonP/BVRatioofSimilarStocks:
221.45
Sl.
No.
Company
FaceValue
(Taka)
NAV(Taka)
MarketPrice
(6MonAv)
(Taka)
P/BVRatio
1 ApexFoodsLimited
100
703.63
1147.00
1.63
2 FineFoodsLimited
10
11.15
95.93
8.60
3 RahimaFoodsLimited
100
49.53
552.71
11.16
4 NationalTeaCoLtd
100
502.87
4658.71
9.26
5 BeachHatcheryLtd
10
11.15
90.32
8.10
6 FuWangFoodsLimited
10
12.64
77.13
6.10
SimpleAverage
7.48
(Source:DSEMonthlyReview,June
Nov'10)
DeterminingtheFairValueofshareofGOLDENHARVESTAGROINDUSTRIESLIMITED:
NAV(Diluted)
RepresentativeP/BVMultiple(X)
FairValue(Taka)
19.31
7.48
144.38
33
FindingandCalculationofthefairPriceofshareofGoldenHarvestAgroIndustriesLtd.:
Particulars
Amount
PricebasedonNetAssetValue(NAV)
19.31
PricebasedonEarningPerShare(EPS)
50.27
PriceBasedonP/ERatioofSimilarStocks
221.45
PriceBasedonP/BVRatioofSimilarStocks
144.38
Average
108.85
BasedontheabovecalculationthefairvalueoftheStockoftheCompanystandsatTaka108.85andweconservatively
fixuptheprice@Taka80.00pershareincludingapremiumofTaka70.00pershare.
Disclaimer: Information presented herein, while obtained from sources we believe to be reliable, is not guaranteed either as to
accuracyorcompleteness.Neithertheinformationnoranyopinionexpressedhereinconstitutesasolicitationofthepurchaseorsale
of any security. As it acts for public companies from time to time, BANCO may have a relationship with the above mentioned
company(s). This report is intended for distribution in only those jurisdictions in which BANCO is registered. Redistribution of this
reportinanyformat,toanyrecipientotherthaninitiallyintendedbytheFirm,isstrictlyprohibited.
34
SectionXII
BookBuildingMethod
Book Building is a process through which an issuer attempts to determine the price to offer its security based on demand from
institutional investors. Under the process, the price of an IPO share will be determined through an automated bidding to be
participated by different financial institutions and then the share will be opened for the IPO participant at the cutoff price
determinedduringthebookbuildingprocess.Thebiddingwillbehandledthroughauniformandintegratedautomatedsystemofthe
stockexchanges,oranyotherorganizationasdecidedbytheCommission,especiallydevelopedforbookbuildingmethod.Theentire
procedureofpricediscoveryunderbookbuildingmethodisdelineatedbelow:
a)
Theissuer/issuemanagershallissueinvitationtotheeligibleinstitutionalinvestors,bothinwritingandthroughpublication
inatleast5(five)widelycirculatednationaldailies,givingatleast10(ten)workingdaystime,totheroadshow/presentation/seminar
indicatingtimeandvenueofsuchevent.
b)
Theinvitationlettershallaccompanyaninformationdocumentcontainingallrelevantinformationcoveringtheproposed
issueoftheissuer.Theeligibleinstitutionalinvestorsshallsubmitindicativepricetotheissuer/issuemanager,signedjointlybythe
ChiefExecutiveOfficer(CEO)andtheFinancialAnalyst,highlightingthefactorstakenintoconsiderationinsupportoftheindicative
price,withinthenext3(three)workingdaysofthesaidroadshow/presentation/seminar;
c)
Theindicativepricebandwillbefixedbasedonthepastperformance,expectedfutureearningsoftheissuerandtheP/E
ratioofotherpeercompaniesintheindustryandthedeterminationofindicativepriceinvolvesthefollowinginstitutionalinvestors
registeredwithorapprovedbySECinthisregard:
-
MerchantBankersexcepttheissuemanageroftheproposedissue;
Foreigninstitutionalinvestors;
Recognizedpensionfundsandprovidentfunds;
BanksandNBFIsunderregulatorycontrolofBangladeshBank;
InsuranceCompaniesregulatedunderInsuranceAct,1938;
Institutionalventurecapitalandinstitutionalinvestors;
StockDealers;and
AnyotherartificialjudicialpersonpermittedbytheSECforthispurpose.
d)
Issuerinassociationwithissuemanagerandeligibleinstitutionalinvestorsquoteanindicativepriceintheprospectuswith
therationaleforsuchpriceandsubmittheprospectustotheCommissionwithcopytothestockexchanges.
e)
The indicative price range shall be determined as per price indications obtained from at least 15 (fifteen) eligible
institutionalinvestorscoveringatleast3(three)differentcategoriesincludingatleast5(five)merchantbanksofsuchinvestors.
f)
Eligible institutional investors bidding shall commence after getting consent from the Commission for this purpose.
Institutionalbiddingperiodwillbe3to5(ThreetoFive)workingdayswhichmaybechangedwiththeapprovaloftheCommission.
35
g)
Eligibleinstitutionalinvestors(EIIs)shallnotbeallowedtoparticipateinthebiddingunlesstheyparticipateandquoteinthe
RoadShowforsettingtheindicativeprice.TheEIIparticipatingintheRoadShowandquotepricemustalsoparticipateinthebidding.
TheissuerandissuemanagerwilljointlysubmittheattendancesheetandthequotedpricebytheEIIalongwiththedraftprospectus
toSEC.
h)
ProspectuswillbepostedontheWebsitesoftheCommission,stockexchanges,issue
managerandissueratleast2(two)weekspriortothestartofthebiddingtofacilitateinvestorstoknowaboutthecompanyandall
aspectofoffering.
i)
The indicative price shall be the basis for formal price building with an upward and downward band of 20% (Twenty
Percent)ofindicativepricewithinwhicheligibleinstitutionalinvestorsshallbidfortheallocatedamountofsecurity.
j)
Ifinstitutionalquotaisnotclearedat20%(TwentyPercent)belowindicativeprice,theissuewillbeconsideredcancelled
unlessthefloorpriceisfurtherloweredwithinthefacevalueofsecurity.Providedthattheissuerschancetolowerthepriceshallnot
bemorethanonce.
k)
Noinstitutionalinvestorshallbeallowedtoquoteformorethan10%(TenPercent)of
thetotalsecurityofferedforsale,subjecttomaximumof5(Five)bids.
l)
Thevolumeandvalueofbidatdifferentpriceswillbedisplayedonthemonitorofthesaidsystemwithoutidentifyingthe
bidder.
m)
Theinstitutionalbidderswillbeallottedsecurityonproratabasisattheweightedaveragepriceofthebidsthatwouldclear
thetotalnumberofsecuritiesbeingissuedtothem.
n)
Institutionalbiddersshalldeposittheirbidwith20%(TwentyPercent)oftheamountofbidinadvancetothedesignated
bankaccountandtherestamounttosettletheduesagainstsecuritytobeissuedtothemshallbedepositedwithin5(Five)working
dayspriortothedateofopeningsubscriptionforgeneralinvestors.
o)
Incaseoffailuretodepositremainingamountthatisrequiredtobepaidbyinstitutionalbiddersforfullsettlementofthe
securitytobeissuedintheirfavor,50%(FiftyPercent)ofbidmoneydepositedbythemshallbeforfeitedbytheCommission.The
securitiesearmarkedforthebidderwhodefaultedinmakingpaymentshallbeaddedtothegeneralinvestorquota.
p)
ThetimegapbetweenclosureofbiddingbyEligibleInstitutionalInvestorsandsubscriptionopeningforgeneralinvestorsis
25workingdaysorasmaybedeterminedbytheCommission.
q)
Thesecuritieswillbeofferedtothegeneralinvestors,NRBsandMutualFundsatthecutoffpricedeterminedduringthe
bookbuildingprocess.
36
SectionXIIIMarketforSecuritiesBeingOffered
TheissuershallapplytoallthestockexchangesinBangladeshwithinsevenworkingdaysfromthedateofconsentaccordedbythe
Commissiontoissueprospectus.
DECLARATIONABOUTTHELISTINGOFSHARESWITHTHESTOCKEXCHANGE(S)
Noneofthestockexchange(s),ifforanyreason,grantslistingwithin75daysfromtheclosureofsubscription,anyallotmentinterms
ofthisProspectusshallbevoidandtheCompanyshallrefundthesubscriptionmoneywithinfifteendaysfromthedateofrefusalfor
listingbythestockexchange(s),orfromthedateofexpiryofthesaid75days,asthecasemaybe.
Incaseofnonrefundofthesubscriptionmoneywithintheaforesaidfifteendays,theCompanysDirectors,inadditiontotheissuer
company,shallbecollectivelyandseverallyliableforrefundofthesubscriptionmoney,withinterestattherateof2%(twopercent)
permonthabovethebankrate,tothesubscribersconcerned.
The issue manager, in addition to the issuer company, shall ensure due compliance of the above mentioned conditions and shall
submit compliance report thereon to the Securities and Exchange Commission within seven days of expiry of the aforesaid fifteen
daystimeperiodallowedforrefundofthesubscriptionmoney.
37
SectionXIVDescriptionofSecuritiesOutstandingorBeingOffered
a)
Dividend,VotingandPreemptionRight
Incaseofanydeclarationofcash/stockdividendbytheCompanyordistributionofanypropertyoftheCompany,alltheshareholders
shall be entitled to it in proportion to their shareholdings on the date of the book closure or record date for the purpose. The
Companywillfollowadividendpolicy,whichwillallowittoprovideafairreturnonitsshareholdersinvestmentandsimultaneously
allowforbuildingupoftheretainedearningsandreservesasarulethatwouldsustaingrowthoftheCompany.Thesharecapitalof
theCompanyisdividedintoOrdinaryShares,carryingequalrightstovoteandreceivedividendintermsoftherelevantprovisionsof
theCompaniesAct1994andtheArticlesofAssociationoftheCompany.Allshareholdersshallhavetheusualvotingrightinpersonor
by proxy in connection with, among others, election of Directors and Auditor(s) and other usual agenda of General Meeting
OrdinaryorExtraordinary.Onashowofhand,everyshareholderpresentinpersonandeverydulyauthorizedrepresentativeofa
shareholderpresentataGeneralMeetingshallhaveonevoteandonapolleveryshareholderpresentinpersonorbyproxyshall
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
shareholdersshallbeentitledtoRightsIssueofsharesintermsoftheguidelinesissuedbytheSecuritiesandExchangeCommission
fromtimetotime.
b)
ConversionandLiquidationRight
TheCompanyinitsGeneralMeetingmayconvertpaidupsharestoanydenomination.Nospecialpreferencesorprivilegesshallbe
attachedtothisconversion.IfthecompanyatanytimeissuesPreferenceSharesorDebenturesorBondswiththeconsentofSEC,
suchholdersofsecuritiesshallbeentitledtoconvertsuchsecuritiesintoordinarysharesifitissodeterminedbythecompany.In
caseofwindinguporliquidationoftheCompany,allshareholdershavethesameprivilegesandadvantagesasordinaryshareholder
asregardsparticipationinprofitsandvotingatmeetingsoftheCompany.
c)
RightforTransfer
IntermsoftheprovisionsoftheCompaniesAct,1994,ArticlesofAssociationoftheCompanyandotherrelevantrulesinforce,the
sharesoftheCompanyaretransferable.TheCompanyshallnotchargeanyfeeotherthanGovernmentdutiesforregisteringtransfer
ofshares.Nosharesshallbetransferredtoaninfantorapersonofunsoundmind.
d)
DividendPolicy
I.
The profits of the Company, subject to any special right relating thereto created or authorized to be created by the
MemorandumofAssociationandsubjecttotheprovisionoftheArticlesofAssociation,shallbedivisibleamongthe
membersinproportiontotheamountofcapitalpaiduponthesharesheldbythemrespectively.
II.
Nolargerdividendshallbedeclaredthanisrecommendedbythedirectors,butthe
38
CompanyinitsGeneralmeetingmaydeclareasmallerdividend.Ifpreferencesharedividendisnotpaidinoneyear,
suchunpaiddividendshallbecarriedforwardtothenextyearoryears;andbecomecumulative.
III. Thedeclarationofdirectorsastotheamountofnetprofitofthecompanyshallbeconclusive.
IV. No dividends shall be paid otherwise than out of the profits of the year or any other undistributed profits and general
reserves.DividendshallnotcarryinterestasagainsttheCompany.
V.
TheDirectorsmayfromtimetotimepayoffthememberssuchinterimdividendasappeartotheDirectorstobejustified
bytheprofitsoftheCompany.
VI. Atransferofsharesshallnotpasstherighttoanydividenddeclaredthereonaftersuchtransferandbeforetheregistration
ofthetransfer.
VII. Thereisnolimitationonthepaymentofdividendstothecommonstockholders.
e)
OtherRightsofShareholders
Theshareholdersshallhavetherighttoreceiveallperiodicreportsandstatements,auditedaswellasunaudited,publishedbythe
company from time to time. The directors shall present the financial statements as required under the law and International
Accounting Standards and International Financial Reporting Standards as adopted by the Institute of Chartered Accountants of
Bangladesh. Financial statements will be prepared in accordance with International Financial Reporting/Accounting Standards,
consistentlyappliedthroughoutthesubsequentperiodsandpresentwiththeobjectiveofprovidingmaximumdisclosureasperlaw
andinternationalFinancialReporting/AccountingStandardtotheshareholdersregardingtheFinancialandoperationalpositionofthe
company.
IncaseofanydeclarationofstockdividendthroughissueofBonusShares,allshareholdersshallbeentitledtoitinproportiontotheir
shareholdingsonthedateofbookclosureorrecorddateforthepurpose.
Theshareholdersholdingnotlessthan10%oftheissued/fullypaidupcapitaloftheCompanyshallhavetherighttomakerequisition
ofExtraOrdinaryGeneralMeeting(EGM)oftheCompanyasprovidedunderSection84oftheCompaniesAct,1994.
LockinProvision
Allissuedsharesoftheissueratthetimeofaccordingconsenttopublicofferingshallbesubjecttoalockinperiodof3(Three)years
from the date of issuance of prospectus or commercial operation, whichever comes later. Provided that the persons, other than
directorsandthosewhohold5%ormore,whohavesubscribedtothesharesoftheCompanywithinimmediatelypreceding2(Two)
yearsofaccordingconsent,shallbesubjecttoalockinperiodof1(One)yearfromthedateofissuanceofprospectusorcommercial
operation,whichevercomeslater.
39
SubscriptionandRefund
a)
RefundofSubscriptionMoney
AsperSECNotificationdatedFebruary9,2010,theissuershallrefundapplicationmoneytotheunsuccessfulapplicantofthepublic
offerbyanyofthefollowingmannerbasedontheoptiongivenbytheapplicantintheapplicationform:
Throughbankingchannelforonwarddepositoftherefundmoneyintotheapplicantsbankaccountasprovided
intherespectiveapplicationformforsubscription;
or
Through issuance of refund warrant in the name and address of the applicant as provided in the respective
applicationformforsubscription;
Providedthat,incaseofdepositintotheapplicantsbankaccount,theapplicantwillbeartheapplicableservicecharge,ifany,ofthe
applicantsbanker,andtheissuershallsimultaneouslyissuealetterofintimationtotheapplicantcontaining,amongothers,thedate
andamountremittedwithdetailsofthebankthroughandtowhichbanksuchremittancehasbeeneffected.
b)
SubscriptionbyandRefundtoNonResidentBangladeshi(NRB)
i)
A NonResident Bangladeshi shall apply either directly by enclosing a foreign demand draft drawn on a bank
payable at Dhaka, or through a nominee by paying out of foreign currency deposit account maintained in
BangladeshorinTaka,supportedbyforeigncurrencyencashmentcertificateissuedbytheconcernedbank,for
thevalueofsecuritiesappliedforthroughcrossedbankchequemarkingAccountPayeeonly.
ii)
ThevalueofsecuritiesappliedforbysuchpersonmaybepaidinTakaorUSdollarorUKpoundsterlingorEURO
attherateofexchangementionedinthesecuritiesapplicationform.
iii)
Refundagainstoversubscriptionshallbemadeinthecurrencyinwhichthevalueofsecuritieswaspaidforbythe
applicant through Account Payee bank cheque payable at Dhaka with bank account number, Banks name and
Branchasindicatedinthesecuritiesapplicationform.IftheapplicantsbankaccountsasmentionedintheirIPO
ApplicationFormsaremaintainedwiththeBankerstotheIssueandotherbanksasmentioned,refundamountof
thoseapplicantswillbedirectlycreditedintotherespectivebankaccountsasmentionedintheirIPOApplication
Forms.
40
SectionXVAvailabilityofSecurities
Sl.Number
Particulars
NumberofShares
20%ofIPOofOrdinarySharesarereservedforEligibleInstitutional
InvestorsthroughBookBuildingMethod
10%ofIPOofOrdinarySharesarereservedforMutualFunds
6,000,000
3,000,000
10%ofIPOofOrdinarySharesarereservedforNonResident
Bangladeshis(NRB)
3,000,000
Remaining60%ofIPOofOrdinarySharesarereservedforGeneral
Public
18,000,000
1
2
Total
30,000,000
1) 20% of the total public offering shall be reserved for the Eligible Institutional Investors (EII), 10% shall be reserved for mutual
funds,10%fornonresidentBangladeshi(NRB)andtheremaining60%shallbeopenforsubscriptionbythegeneralpublic.
2)TheInstitutionalInvestorswillbeallottedsecurityonaproratabasisattheweightedaveragepriceofthebidsthatwouldclearthe
totalnumberofsecuritiesbeingofferedtotheInstitutionalinvestors.
3) The securities offered to the Mutual Funds, NRBs and General Public will be at the cutoff price determined during the Book
BuildingProcess.
4)Incaseofoversubscriptionunderanyofthecategoriesmentionedintheabovetable,theIssueMangershallconductanopen
lottery of all the applications received under each category separately in accordance with the letter of consent issued by the
SecuritiesandExchangeCommission.
5) In case of undersubscription under any of Mutual Funds or NRB category as mentioned in the above table, the unsubscribed
portion shall be added to the general public category, and, if after such addition there is oversubscription in the general public
categorytheissuerandtheissuemanagershalljointlyconductanopenlotteryofalltheapplicantsaddedtogether.
6)Incaseofundersubscriptionofthepublicoffering,theunsubscribedportionofsharesshallbetakenupbytheunderwriter(s).
7)Thelotteryasstatedinclause(5)and(6)shouldbeconductedinthepresenceoftherepresentativesofIssuer,StockExchange(s)
andtheapplicants,iftherebeany.
41
Section-XVI
Involvementofdirectorsandofficersincertainlegalproceedings
NoDirectororofficerofGOLDENHARVESTAGROINDUSTRIESLTDwasinvolvedinanyofthefollowingtypesoflegalproceedingsin
thelast10(ten)years:
a. Any bankruptcy petition filed by or against any company of which any officer or director of the Issuer Company filing the
prospectuswasadirector,officerorpartneratthetimeofthebankruptcy.
b.Anyconvictionofdirector,officerinacriminalproceedingoranycriminalproceedingpendingagainsthim.
c. Any order, judgment or decree of any court of competent jurisdiction against any director, officer permanently or temporarily
enjoining,barring,suspendingorotherwiselimitingtheinvolvementofanydirectororofficerinanytypeofbusiness,securitiesor
bankingactivities.
d. Any order of the Securities and Exchange Commission, or other regulatory authority or foreign financial regulatory authority,
suspendingorotherwiselimitingtheinvolvementofanydirectororofficerinanytypeofbusiness,securitiesorbankingactivities.
42
Section-XVII
CertainRelationshipsandRelatedTransactions
TheCompanyhasneitherenteredintoduringthelast2(two)yearsnorhaveanyplantoenterintoanytransactionwiththefollowing
parties:
1.Anyexecutivedirectororexecutiveofficerofthecompany;
2.Anydirectororofficer;
3.Anypersonowning5%ormoreoftheoutstandingstockoftheissuer;
4.Anymembersoftheimmediatefamily(includingspouse,parents,brothers,sisters,childrenandinlaws)ofanyabovepersons;
5.AnytransactionsorarrangemententeredintobytheCompanyforapersonwhoiscurrentlyadirectororinanywayconnected
withadirectorofeithertheissuercompanyoranyofitssubsidiaries/associatecompanies,orwhowasadirectororconnectedinany
waywithdirectoratanytimeduringthelastthreeyearspriortothepublicationofInformationdocument;and
6.Anydirectorholdinganyposition,apartfrombeingadirectorintheissuercompany,inanycompany,society,trust,organization
orproprietorshiporpartnershipfirm.
43
Annexure
Annexure1:BankerstotheIssue
WillbefinalizedbeforesubmissionofprospectustoSEC.
Annexure2:CorporateDirectory
MiscellaneousInformation:
RegisteredOffice:
SPLWesternTower,Level5,#501&#502
186GulshanTejgaonLinkRoad,
Tejgaon
Dhaka1208
Auditors:
S.F.Ahmed&Co
CharteredAccountants
Banker
MercantileBankLimited
FirstSecurityIslamiBankLtd.
ManagertotheIssue
BancoFinanceandInvestmentLimited
IspahaniBuilding(3rdFloor),
1415MotijheelCommercialArea
Dhaka1000
CompanysComplianceOfficer
Mr.ImamHassanFCA
CompanySecretary
44
Annexure3:FinancialStatementsasatandfortheperiodended30September2010
GoldenHarvestAgroIndustriesLtd.
AUDITORSREPORT&FINANCIALSTATEMENTS(CONSOLIDATED)
Fortheperiodended30September2010
November2010
S.F.Ahmed&Co.
(RepresentativeofERNST&YOUNGGlobalinBangladeshsince1975)
Address:
House#25,Road#13A
BlockD,Banani,
Dhaka1213,Bangladesh.
Contacts:
Phones : (8802)9894026,8815102&8833327
Fax
: (8802)8825135
Emails : sfali@connectbd.com
sfacoali@btcl.net.bd
sfaco@dhaka.net
45
S F AHMED & CO.

CHARTERED ACCOUNTANTS
.........Since 1958
House 25, Road 13A

Block D, Banani
Dhaka 1213
Bangladesh
Telephone: (880-2)9894026, 8833327

8815102,
Fax:
(880-2)8825135
E-mail:
sfail@connectbd.com
sfacoali@btcl.net.bd
sfaco@dhaka.net
AUDITORSREPORT
TOTHEBOARDOFDIRECTORSANDSHAREHOLDERSOF
GOLDENHARVESTAGROINDUSTRIESLTD.
We have audited the accompanying Consolidated Balance Sheet of Golden Harvest Agro Industries
Ltd. asof30September2010andtherelatedConsolidatedProfit&LossStatementandConsolidatedCash
Flow Statement along with the explanatory notes and schedules thereto for the period then ended. The
preparation of these financial statements is the responsibility of the companys management. Our
responsibilityistoexpressanindependentopiniononthesefinancialstatementsbasedonouraudit.
We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by the management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
Inouropinion,thefinancialstatementspreparedinaccordancewithBangladeshAccountingStandards(BAS),
giveatrueandfairviewofthestateofthecompanysaffairsasof30September2010andoftheresultsof
itsoperationsanditscashflowfortheperiodthenendedandcompliedwiththeCompaniesAct,1994(as
amendedupto2004)andotherapplicablelawsandregulations.
Subjecttotheabove,wealsoreportthat:
a) wehaveobtainedalltheinformationandexplanationswhichtothebestofourknowledgeandbelief
werenecessaryforthepurposeofourauditandmadedueverificationthereof;
b) inouropinion,properbooksofaccountasrequiredbylawhavebeenkeptbythecompanysofarasit
appearedfromourexaminationofthosebooks;and
c) thecompanysConsolidatedBalanceSheetandConsolidatedProfit&LossStatementdealtwithbythe
reportareinagreementwiththebooksofaccount.
d) Theexpendituresincurredwereforthepurposeofthecompanysbusiness.
Sd/-
Dated:Dhaka;
S.F.Ahmed&Co.
28November,2010
46
Auditors Report on the Consolidated Financial Statements of Golden Harvest Agro Industries Ltd. 2010
Golden Harvest Agro Industries Limited
Consolidated Balance Sheet
As of 30 September, 2010
Figures in BDT
Consolidated
Source of Fund
Notes
The Company
30.09.2010
30.06.2010
30.09.2010
30.06.2010
Shareholders' Equity
Share Capital
100,000,000
100,000,000
100,000,000
100,000,000
Revaluation Surplus
109,372,918
109,372,918
109,372,918
109,372,918
Capital Reserve
102,687,892
102,687,892
Retained Earnings
Share Money Deposit
113,816,696
78,073,777
100,733,753
78,073,777
425,877,505
390,134,587
310,106,671
287,446,695
250,000,000
92,750,000
250,000,000
92,750,000
675,877,505
482,884,587
560,106,671
380,196,695
43,658,878
45,118,734
20,624,326
21,312,233
Long-term Liabilities
A.
B.
C.
Term Loan against Machinery
Leasehold Obligation
3,424,015
3,662,100
3,424,015
3,662,100
47,082,893
48,780,834
24,048,341
24,974,333
722,960,398
531,665,421
584,155,012
405,171,028
314,482,466
Application of Fund
Long-term Assets
Fixed Assets
10
460,781,666
458,337,639
317,338,267
Preliminary Expenses
11
241,342
244,945
73,281
74,375
Pre-operational expenses
12
17,933,945
18,201,616
5,439,050
5,520,230
Investment in shares
13
40,000,000
40,000,000
Inter-Company investment
14
50,000,000
50,000,000
Current Assets
518,956,953
476,784,200
412,850,598
370,077,071
496,013,714
272,751,663
325,405,574
158,180,421
Stocks in hand
15
67,241,693
47,185,348
36,593,070
21,251,803
Advances, Deposits and repayments
16
77,278,710
7,672,723
74,273,486
5,209,390
Accounts Receivable
17
207,238,941
193,081,597
74,057,105
110,876,857
Export Incentive Receivable
18
11,757,791
10,932,969
8,181,863
7,567,139
Cash & Bank Balances
19
Current Liabilities
132,496,579
13,879,026
132,300,050
13,275,232
292,010,269
217,870,442
154,101,160
123,086,464
Accounts Payable
20
42,608,959
19,051,225
12,888,429
9,711,585
Accruals and Provisions
21
70,054,430
52,522,442
42,215,126
30,312,442
Cash Credit Loan
22
179,346,880
146,296,775
20,456,705
2,299,242
Inter Company Balances
23
78,540,900
80,763,195
D.
Net Current Assets (B-C)
204,003,445
54,881,221
171,304,414
35,093,957
E.
Total Assets (A+D)
722,960,398
531,665,421
584,155,012
405,171,028
42.59
39.01
31.01
24
NAV per Share- Taka
The annexed notes form an integral part of the financial statements.
28.74
Sd/-
Sd/-
Sd/-
Director
Director
Managing Director
Signed in terms of our separate report of even date annexed.
Sd/-
Dated, Dhaka;
28 November 2010
S. F. Ahmed & Co.

Chartered Accountants
47

Consolidated Income Statement
For the period of 1 July 2010 to 30 September 2010
Figures in BDT
Particulars:
Notes
Sales Revenue
Less: Cost of Goods Sold
Consolidated
01.07.2010 to
30.09.2010
25
26
137,750,137
72,990,640
Gross Profit
Add:
Export Incentive
Other Income
64,759,497
The Company
01.07.2010 to
01.07.2009 to
30.09.2010
30.09.2009
76,647,102
36,820,584
43,518,432
20,112,422
39,826,518
23,406,010
3,295,815
1,411,026
1,884,789
2,231,217
673,992
1,557,225
1,813,133
1,500,493
312,640
68,055,313
42,057,735
25,219,143
27
28
Administrative & Selling Expenses:

Administrative Expenses
Selling & Distribution Expenses
29
30
9,808,451
6,125,648
3,682,803
6,854,042
4,383,204
2,470,838
4,077,384
2,407,769
1,669,615
Financial Expenses
31
5,904,603
1,573,681
1,332,889
52,342,259
33,630,012
19,808,870
32
16,599,340
10,970,037
6,338,000
33
35,742,919
3.57
14.30
Net Profit before Tax

Provision for Tax
Net Profit
EPS for the period-Taka
EPS annualized -Taka
22,659,975
2.27
9.06
13,470,870
3.59
14.37
Sd/-
Sd/-
Sd/-
Director
Director
Managing Director
Sd/-
Dated, Dhaka;
28 November 2010
S. F. Ahmed & Co.

48

Consolidated Cash Flow Statement
Amount in BDT
Particulars
Cash Flows from Operating Activities
Collections from Customers
Payments for Costs & Expenses
Interest paid
Net Cash generated / (used) from Operating Activities
Consolidated
01.07.2010 to
30.09.2010
Notes
The Company
01.07.2010 to
01.07.2009 to
30.09.2010
30.09.2009
126,063,785
(145,052,182)
(5,904,603)
(24,893,000)
115,083,347
(122,147,671)
(1,573,681)
(8,638,005)
(5,091,612)
(40,000,000)
(45,091,612)
(4,596,352)
(40,000,000)
(44,596,352)
Cash Flows from Financing Activities

Receipts from Share Money Deposits
Lease Finance from / (repaid to) Financial Institutions
Borrowings from / (Repayments to) Banks
Receipts from Related Companies
Net cash (used in) / provided by financing activities
157,250,000
(925,992)
32,278,157
188,602,165
157,250,000
(925,992)
18,157,463
(2,222,296)
172,259,175
(115,553)
4,123,730
8,484,539
12,492,716
Net changes in cash and cash equivalents
118,617,553
119,024,818
2,103,705
13,879,026
13,275,232
111,836
132,496,579
132,300,050
2,215,541
(2.49)
(0.86)
(2.77)
31
31,563,848
(40,619,970)
(1,332,889)
(10,389,011)
Cash Flows from Investing Activities

Acquisitions of Fixed Assets
Investment in Shares
Net Cash used in Investing Activities
10
13
Cash and cash equivalents at the beginning of the year

Cash and cash equivalents at the end of the period
Operating Cash flow Per Share
(37,610,001)

Sd/-
Sd/-
Sd/-
Director
Director
Managing Director
Dated, Dhaka;
28 November 2010
Sd/-
S. F. Ahmed & Co.

49
Statement of Changes in Equity
For the period from 1 July 2010 to 30 September 2010
The Company
Particulars
Balance at 01.07.08
Net Profit for the year
Revaluation
surplus
Lands,
Building
Machinery
Revaluation
Surplus
Capital
Reserve
-
Share Capital
37,500,000
-
Amount in Taka
Retained
Total
Earnings
9,888,880
47,388,880
13,169,104
13,169,104
on
&
-
109,372,918
109,372,918
Balance at 30.06.09
37,500,000
109,372,918
23,057,984
169,930,902
Balance at 01.07.09
37,500,000
109,372,918
23,057,984
169,930,902
13,470,870
13,470,870
Net Profit for the period

Balance at 30.09.09
37,500,000
109,372,918
36,528,854
183,401,772
Balance at 01.07.09
37,500,000
109,372,918
23,057,984
169,930,902

Issuance of Bonus Share
Issuance of Ordinary Share
12,500,000
50,000,000
67,515,794
(12,500,000)
-
67,515,794
50,000,000
Balance at 30.06.10
100,000,000
109,372,918
78,073,778
287,446,696
Balance at 01.07.10
Balance at 30.09.10
100,000,000
109,372,918
109,372,918
78,073,778
22,659,975
100,733,753
287,446,696
22,659,975
310,106,671
75,000,000
162,985,616
46,277,644
284,263,260
105,871,327
105,871,327
(25,000,000)
100,000,000
Consolidated
Balance at 01.07.09
Issuance of Bonus Share
25,000,000
Capital Reserve
Balance at 30.06.10
100,000,000
102,687,891
102,687,891
(53,612,698)
109,372,918
(49,075,193)
78,073,778
390,134,587
Balance at 01.07.10
100,000,000
102,687,891
-
109,372,918
-
78,073,778
35,742,919
390,134,587
35,742,919
Balance at 30.09.10
100,000,000
102,687,891
109,372,918
113,816,697
425,877,506
Sd/Director
Sd/Director
Sd/Managing Director

Sd/-
Dated, Dhaka;
28 November 2010
S. F. Ahmed & Co.

50
Schedule of Fixed Assets
Consolidated
Depreciation
Particulars
Land and Land Development
Balance on
Addition
Disposal
Balance on
01.07.10
during year
during year
30.09.10
Rate
Cost/Valuation
Balance on
Charged
Disposal
Balance on
01.07.10
during year
during year
30.09.10
W D V as of
30.09.10
85,600,000
85,600,000
0.0%
85,600,000
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
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
3,269,147
3,269,147
5.0%
443,847
35,316
479,163
2,789,984
17,412,920
17,412,920
5.0%
1,193,633
202,741
1,396,374
16,016,546
Office Equipment
Furniture and Fixtures
Vehicle
10,809,738
2,495,000
13,304,738
10.0%
2,512,262
269,812
2,782,074
10,522,664
Capital Work in Progress
115,514,140
1,941,040
117,455,180
0.0%
117,455,180
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
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
Charged to:
Administrative expenses
20%
529,517
Manufacturing expenses
80%
2,118,068
2,647,585
The Company
Particulars
Land and Land Development

Buildings and other constructions
Plant and machinery
Office Equipment
Vehicle
Depreciation
Balance on
Addition
Disposal
Balance on
01.07.10
during year
during year
30.09.10
Rate
Cost/Valuation
Balance on
Charged
Disposal
Balance on
01.07.10
during year
during year
30.09.10
W D V as of
30.09.10
39,600,000
39,600,000
0.0%
39,600,000
127,629,248
113,072
127,742,320
2.5%
9,022,780
741,997
9,764,777
117,977,543
58,412,373
542,500
58,954,873
5.0%
11,597,952
591,962
12,189,914
46,764,959
1,848,142
1,848,142
5.0%
130,345
21,472
151,817
1,696,325
16,347,995
16,347,995
5.0%
981,998
192,075
1,174,073
15,173,922
6,129,516
2,495,000
8,624,516
10.0%
902,734
193,045
1,095,779
7,528,737
87,151,000
1,445,780
88,596,780
0.0%
88,596,780
Total of 30.09.10
337,118,274
4,596,352
341,714,626
22,635,809
1,740,551
24,376,360
317,338,267
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
1/07/2010 to
1/07/2009 to
30/09/2010
30/09/2009
Charged to:
Administrative expenses
20%
348,110
349,251
Manufacturing expenses
80%
1,392,440
1,740,551
1,397,002
1,746,253
51
Notes to the Consolidated Accounts
1.00
Legal Status and Principal Activity

The Golden Harvest Agro Industries Limited (GHAIL) was incorporated on August 10, 2004,
vide Reg. No.-C-53850(515)/2004 as private limited company under the Companies Act, 1994
and subsequently on 30 June 2010, the Company was converted into public limited company
after observance of required formalities as per law. The objects of the Company are to carry out
the business of growing, procuring, purchasing, processing, packaging, warehousing,
transporting, exporting, importing, distributing and selling agriculture based food, food products,
machinery and equipments related to foods any where in the world. The Company may establish
any industrial processing unit based on agro based raw materials products within the country and
export the same or meet local demand.
Consolidation
The Consolidated financial statements as at and for the period ended 30 September 2010
comprise those of the Company and its subsidiary, Golden Harvest Sea Food & Fish Processing
Ltd.
Address of registered office and principal place of business:
The principal place of business is the registered office at SPL Western Tower, Level-5, # 502,
Gulshan Tejgaon Link Road, Tejgoan Dhaka-1208 and the factory is located at Bokran, Monipur,
Bhabanipur, Gazipur Sadar, Gazipur.
Number of employees:
The number of permanent employees of the group at the period end of September 2010 were 502
(in June 2010: 439)
2.00
Significant Accounting Policies

These financial statements have been prepared under historical cost convention in accordance
with generally accepted accounting principles as laid down in the International Accounting
Standerds (IASs)/ International Financial Reporting Standards(IFRSs), applicable to the
company, adopted by the Institute of Chartered Accountants of Bangladesh as Bangladesh
Accounting Standards(BASs)/ Bangladesh Financial Reporting Standards.Disclosure of
information made in these financial statements are in accordance with the requirements of
Companies Act 1994. The financial statements have been prepared in accordance with BAS1/IAS-1 (presentation of financial statement) based on accrual basis following going concern
concept.
In the preparation of these interim financial statements, management requires information to
make judgment, estimate and assumption that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expenses. Actual results may differ
from those estimate. Moreover, significant judgment made by the management in applying the
52
Company's accounting policies and the key source of information of estimates were the same for
the preparation of these interim financial statements as those were applied for the preparation of
financial statements as at and for the year ended June 30, 2010.
2.01
Reporting Period
The financial statements of the company have been prepared for the period from 01 July 2010 to
30 September 2010. The usual reporting period covers one full financial year, i.e., 01 July to 30
June.
2.02
Consistency
The accounting policies and methods of computation used in preparation of financial statements
for the period from 1st July to 30 September 2010 are consistent with those policies and methods
adopted in preparing the financial statements for the year ended 30 June 2010.
2.03
Transactions in Foreign Currencies

Foreign currency transactions are recorded in BDT at applicable rates of exchange ruling at the
transaction date in accordance with BAS-21/IFRS-22 (effects of changes in foreign exchange
rates). Exchange differences at the balance sheet date are charged/ credited to income statement.
Other monetary assets & liabilities, if any, denominated in foreign currencies at the Balance
Sheet date are translated at the applicable rates of exchange ruling at that date and the related
exchange differences are charged off as revenue expenditure.
2.04
Investments
Investments in subsidiary and associate companies are recorded at cost.
2.05
Fixed Assets
The fixed assets of the company is initially recorded at historical cost. Historical cost includes its
purchase price and any directly attributed cost of bringing the assets to its working condition for
its intended use inclusive of inward freight, duties, non-refundable taxes and (a) the cost of site
preparation; (b) initial delivery and handling costs; (c) installation costs; (d) professional fees
such as for architects and engineers; and (e) the estimated cost of dismantling and removing the
asset and restoring the site, to the extent applicable in line with the provisions under 'BAS 16',
'BAS 37: Provisions, Contingent Liabilities and Contingent Assets'.
The fixed assets as on 30 June 2009 have been revalued to its fair market value as per decisions
of the Board of Directors. All fixed assets under Fixed Assets available on the cut-off date 30
June 2009 were revalued by an independent valuer. The basis of valuation of assets has been the
fair market value of those assets as on the cut-off date after allowing depreciation at applicable
rates against the revalued amount. The carrying amount shown in the balance sheet represents
53
revalued amount of fixed assets less restated depreciation. The depreciation has also been
calculated by the independent valuer considering the useful life of individual class of assets.
Upon disposal of items of property, plant and equipment, the cost of those assets and their related
accumulated depreciation are eliminated up to the date of disposal and any gain or loss there
from are reported in the income statement of that year.
2.06
Depreciation on Fixed Assets

All fixed assets have been depreciated on Diminishing Balance Method. Depreciation on
additions are charged at 100% of normal rate in the period of addition and no depreciation is
charged on disposal. Depreciation rates are varying from 2.5% to 10% depending on the
estimated useful lives of assets. No depreciation is charged for land.
Rates of depreciation on various classes of fixed assets are as under:
Category of fixed asset
Rate (%)
Factory Building
2.50
Plant and Machinery
5.00
Office Equipment
5.00
5.00
Vehicles
10.00
Land is not depreciated as it deemed to have an infinite life.

2.07

Capital work in progress is recorded at cost on the basis of the percentage of work completed at
the balance sheet date. The amount of capital work in progress is transferred to appropriate asset
category and depreciated when the asset is completed and commissioned.
2.08
Intangible Asset
Intangible assets like preliminary expenses and pre-operational expenditures are initially
recognized at cost and deferred to amortize over 20 years effective from 01 July 2007.
2.09
Valuation of inventories
Inventories of raw and packing materials are valued at the average cost which is lower than the
net realisable value. Finished goods are valued at the lower of cost and estimated net realisable
value. The cost is assigned to the items following FIFO (First In First Out) cost formula.
2.10
Employee retirement benefits

Employee retirement benefits are accounted for on accrual basis of accounting.
2.11
Revenue recognition
54
The revenue during the year represents revenue arising from the sale of processed frozen
vegetables and snacks items like alu puri, dalpuri, singara, paratha etc., which are recognised
when invoices are made, satisfying all the conditions for revenue recognition as provided in IAS
18 "Revenue Recognition"/ IFRS-7 (Revenue).
2.12
Borrowing Cost
In compliance with the requirement of BAS-23(borrowing cost), borrowing cost relating to
operational period on long term loans and overdraft facilities was charged to revenue account as
an expenses as incurred.
2.13
Taxation
Provision for corporate income tax is made @ 37.50% on estimated taxable profit considering
depreciation as per 3rd Schedule to the Income-tax Ordinance, 1984 and export sales benefit as
mentioned in Part A of the 6th Schedule of the Income Tax Ordinance 1984. The Corporate
income tax assessment of the Company is completed unto the assessment year 2006-07.
Corporate income tax returns up to assessment year 2009-2010 was filed with the Tax Authority
which are under assessment.
2.14
Creditors and accruals

Liabilities are recorded at the level of estimated amount payable in settlement.
2.15
Cash and Cash Equivalents

Cash and Cash equivalents include cash in hand, cash at bank, term deposits, etc which are
available for use by the company without any restrictions. There is no significant risk of change
in value of the same.
2.16
Cash Flows Statements:

Cash Flows Statement is prepared on the basis of Direct method.
2.17
Capital Reserve
Capital Reserve represents the difference between (i) the excess of assets over liabilities as at 30
June 2009 of Golden Harvest Sea Food & Fish Processing Limited (GHSF&FPL) and (ii) the
value of shares issued to the shareholders of GHSF&FP.
2.18
General:
i) Figures in the annexed Financial Statements & Notes have been rounded off to the nearest
Taka.
ii) Where ever considered necessary, previous year's figures have been rearranged for the
purpose of comparison.
55
Consolidated
30.09.2010
30.06.2010
3.00
Figures in BDT
The Company
30.09.2010
30.06.2010
Share Capital
Authorized Share Capital

10,00,00,000 ordinary Shares of Tk.10 each
1,000,000,000
1,000,000,000
1,000,000,000
1,000,000,000
44,512,000
44,512,000
44,512,000
44,512,000
Issued, Subscribed and Paid up Capital

1,00,00,000 Ordinary Shares @ Tk.10 each fully paid up
The above balance has been received from the following Directors/Shareholders:Name
Mr. Ahmed Rajeeb Samdani
Designation
Managing Director
Mr. Ahmed Mehdi Samdani
Director
2,800,000
2,800,000
2,800,000
2,800,000
Ms. Nadia Khalil Choudhury
Director
1,500,000
1,500,000
1,500,000
1,500,000
Mr. Azizul Huque
Director
14,089,000
14,089,000
14,089,000
14,089,000
Mr. Moqsud Ahmed Khan
Director
16,000,000
16,000,000
16,000,000
16,000,000
Mr. Matthew Graham Stock
Director
10,000,000
10,000,000
10,000,000
10,000,000
Mr. Mohius Samad Choudhury

Director
Golden Harvest Organic Aquaculture Holdings Ltd. share
holder
3,100,000
3,100,000
3,100,000
3,100,000
7,999,000
7,999,000
7,999,000
7,999,000
100,000,000
100,000,000
100,000,000
100,000,000
No. of Shares
4,451,200
280,000
150,000
1,408,900
1,600,000
1,000,000
310,000
799,900
10,000,000
%
44.5%
2.8%
1.5%
14.1%
16.0%
10.0%
3.1%
8.0%
100%
109,372,918
109,372,918
109,372,918
109,372,918
53,612,698
53,612,698
(53,612,698)
(53,612,698)
109,372,918
109,372,918
109,372,918
109,372,918
Shareholding position:
Name
Designation
Mr. Ahmed Rajeeb Samdani
Managing Director
Mr. Ahmed Mehdi Samdani
Director
Ms. Nadia Khalil Choudhury
Director
Mr. Azizul Huque
Director
Mr. Moqsud Ahmed Khan
Director
Mr. Matthew Graham Stock
Director
Mr. Mohius Samad Choudhury
Director
Golden Harvest Organic Aquaculture Holdings Ltd.
4.00
Revaluation Surplus
Revaluation surplus of Fixed Assets revalued on 30-06-2009
Add:Revaluation Surplus of Fixed Assets of Subsidiary company
Less: Transfer of Pre-Acquisition Revaluation Surplus to Capital
Reserve
The Company revalued its Lands, Buildings, and Plant & Machinery as of 30 June 2009 by its Valuer, Ata Khan & Co, Chartered
Accountants following "Current Cost Method", resulting in a revaluation surplus at Tk.109,372,918.
56
5.00
Capital Reserve
The amount comprises as below:
Revaluation Surplus of subsidiary company
(Golden Harvest Sea Food & Fish processing Ltd.)
upto 30-06-2010
Retained Earnings of subsidiary company
(Golden Harvest Sea Food & Fish processing Ltd.)
upto 30-06-2010
6.00
53,612,698
53,612,698
49,075,194
49,075,194
102,687,892
102,687,892
Retained Earnings
Opening Balance
78,073,777
46,277,644
78,073,778
23,057,983
(25,000,000)
(12,500,000)
78,073,777
21,277,644
78,073,778
10,557,983
35,742,919
105,871,328
22,659,975
67,515,794
(49,075,195)
113,816,696
78,073,777
100,733,753
78,073,777
250,000,000
92,750,000
250,000,000
92,750,000
Less: Issue of Bonus Share
Add: Net Profit during the period/year

Less: Transfer of Pre-Acquisition Profit to
Capital Reserve
Closing Balance
7.00
Share Money Deposit

Share Money Deposit
250,000,000
92,750,000
250,000,000
92,750,000
The deposits have been received from existing shareholders against which shares have been subsequently allotted, on receipt of SEC's
consent to make such allotment.
8.00
Term Loan against Machinery

Mercantile Bank Ltd., Gulshan Branch
Golden Harvest Sea Food & Fish Processing Limited
Maximum tenor
Repayment
9.00
21,312,233
20,624,326
21,312,233
23,034,552
23,806,501
43,658,878
45,118,734
20,624,326
21,312,233
7 years from the date of drawdown of principal repayment
Amount outstanding will be repaid in 68 equal quarterly installments
Leasehold Obligations
United Leasing Co Ltd. for Cover Van
10.00
20,624,326
296,857
330,856
296,857
330,856
United Leasing Co Ltd. for Probox & Cover Van
1,420,573
1,521,939
1,420,573
1,521,939
IDLC for Probox & Cover Van
1,706,585
3,424,015
1,809,305
3,662,100
1,706,585
3,424,015
1,809,305
3,662,100
460,781,666
458,337,639
317,338,267
314,482,466
460,781,666
458,337,639
317,338,267
314,482,466
Opening Balance
Less : Written off during the period/year
244,944
3,602
259,353
14,408
74,375
1,094
78,750
4,375
Closing Balance
241,342
244,945
73,281
74,375
Fixed Assets
Written down value
Details are shown in Schedule of Fixed Assets

11.00
Preliminary Expenses:
57
12.00
13.00
Pre- Operational Expenses

Opening Balance
Less : Written off during the period/year
18,201,616
267,671
19,272,299
1,070,683
5,520,230
81,180
5,844,949
324,719
Closing Balance
17,933,945
18,201,616
5,439,050
5,520,230
An amount of Tk. 400,00,000 ( Taka Four Crore ) has been invested in the shares of the City Bank Limited through IDLC Finance Ltd.
14.00
40,000,000
40,000,000
Inter-Company investment
Golden Harvest Sea Food & Fish
Processing Ltd.
40,000,000
40,000,000
50,000,000
50,000,000
50,000,000
50,000,000
Golden Harvest Agro Industries Ltd. (GHAIL) acquired 100% shares of Golden Harvest Sea Food & Fish Processing Ltd (GHSF&FPL)
on 30 June 2010 in exchange for its own shares.
15.00
Stocks in Hand
Stock of Finished Goods
36,360,323
34,734,665
18,514,610
14,603,740
Stock of Raw Materials
12,488,253
3,091,940
9,188,493
2,792,070
Stock of Packing Materials
16,987,811
9,260,883
7,484,661
3,758,132
1,405,306
97,861
1,405,306
97,861
67,241,693
47,185,349
36,593,070
21,251,803
75,765,044
6,198,195
73,254,382
4,202,202
75,765,044
6,198,195
73,254,382
4,202,202
Lease Deposit
United Leasing Co Ltd for Probox &
Cover Van
United Leasing Co Ltd for Small Cover
Van
53,312
53,312
53,312
53,312
15,728
15,728
15,728
15,728
IDLC for Refer Van & Probox
54,390
54,390
54,390
54,390
IDLC for Machinery
68,470
68,470
68,470
68,470
Security Deposit
20,000
20,000
211,900
211,900
191,900
191,900
1,057,917
1,018,779
691,360
679,444
243,849
243,849
135,844
135,844
1,301,766
1,262,628
827,204
815,288
77,278,710
7,672,723
74,273,486
5,209,390
Stores in Transit
16.00
Advances, Deposits & Prepayments
Advance to Suppliers & Service Providers
Advance Taxes
Advance Income Tax
Advance Turn Over Tax
This is unsecured and considered good.

(a) The maximum amount due from the Suppliers & Service Providers.
(b) No amount was due by the directors, managing agent, managers and other officers of the company and
any of them severally or jointly with any other person.
(c) No amount was due by any related party.
58
17.00
Accounts Receivable
Receivable from Super shops
Receivable from Retailer Shops
Receivable from Distributors
Receivable for Deemed Export
Export Sales Receivable (Note-17.01)
13,298,488
11,378,187
27,750,750
96,846,745
57,964,771
3,242,743
1,055,865
21,588,621
136,561,598
30,632,770
13,298,488
11,378,187
27,750,750
283,637
21,346,043
3,242,743
1,055,865
21,588,621
71,472,155
13,517,473
207,238,941
193,081,597
74,057,105
110,876,857
Accounts receivable has been stated at its original invoiced amount after deducting credit balance that have a legally enforceable right to
set off or are intended either to be settled.
This is unsecured, considered good and is falling due within one year.
No amount was due by the directors, managing agent, managers and other officers of the company and any of them severally or jointly
with any other person.
17.01
Export Sales Receivable

Details are as follows:
Green Fields Distribution (UK) Ltd.
Premium Foods USA Inc
34,568,145
13,741,964
14,366,948
5,125,157
12,823,967
2,528,733
2,848,485
2,528,733
AFK International Ltd.

Mexim Australia Pty Ltd.
AMS Foods Ltd.
Aromatic(BD) Ltd.
433,469
5,567,741
59,613
2,748,213
1,403,265
4,558,316
1,945,153
3,233,931
433,469
1,927,460
59,613
2,748,213
1,403,265
1,557,906
1,945,153
3,233,931
Laxmiben Patel, Canada.

Sasco UK
21,038
824,588
824,588
57,964,771
30,632,770
21,346,043
13,517,473
10,932,968
11,792,308
7,567,139
4,745,668
2,682,758
7,759,159
1,945,724
6,401,970
13,615,726
19,551,467
9,512,863
11,147,638
1,857,935
8,618,498
1,331,000
3,580,499
11,757,791
10,932,969
8,181,863
7,567,139
74,986
1,171,991
51,947
1,149,788
Cash in hand at Head Office
48,189
70,271
43,711
61,318
Cash in hand at Factory Office
26,797
1,101,720
8,236
1,088,470
132,421,593
132,496,579
12,707,035
13,879,026
132,248,103
132,300,050
12,125,444
13,275,232
First Security Islami bank Ltd.
132,243,010
12,120,351
132,243,010
12,120,351
United Commercial Bank Ltd.
2,577
2,577
2,577
2,577
This is unsecured, considered good and is falling due within one year.
18.00
Export Incentive Receivable

Opening Balance
Add: Accrued during the period
Less: Received during the period
19.00
Closing Balance
This is unsecured and considered good.
Cash and Bank Balances
The above balance is made up as follows:
Cash in hand:
Cash at bank ( Note- 19.01)

19.01
Cash at Banks
The amount comprises as below:
Golden Harvest Agro Industries Ltd
The City Bank Ltd.

Mercantile Bank Ltd.
756
756
756
756
1,760
1,760
1,760
1,760
20,113
148,117
5,260
328,000
248,117
5,474
132,421,593
12,707,035
132,248,103
12,125,444
Golden Harvest Sea Food & Fish Processing Ltd.

United Commercial Bank Ltd.
First Security Islami bank Ltd.
Mercantile Bank Ltd.
59
20.00
Accounts Payable
Sundry Creditors for Raw Material Supplies
26,814,164
15,113,494
6,328,781
6,954,142
Sundry Creditors for Packing Material Supplies
10,011,051
1,711,238
5,978,694
662,600
76,048
226,681
76,048
226,981
5,166,790
36,000
Sundry Creditors -Others
393,115
845,254
393,115
713,304
Sundry Creditors for Fuel Supply
108,011
1,130,778
108,011
1,130,778
3,780
23,780
3,780
23,780
42,608,959
19,051,225
12,888,429
9,711,585
Sundry Creditors for C&F Agents

Sundry Creditors for Processing contractors
Dhakacom Ltd.
Sundry Creditors for Printing & Stationery
These are unsecured, and falling due within one year.

21.00
Accruals and provisions

The above balance is made up as follows:
Provision for Tax & others
Salary & Wages
Electricity Bill
Provision for others
22.00
23.00
24.00
Cash Credit Loan

66,511,234
49,450,000
39,881,930
28,450,000
2,900,869
392,327
250,000
70,054,430
2,372,442
450,000
250,000
52,522,442
1,690,869
392,327
250,000
42,215,126
1,162,442
450,000
250,000
30,312,442
20,456,705
158,890,175
179,346,880
2,299,242
143,997,533
146,296,775
20,456,705
20,456,705
2,299,242
2,299,242
78,540,900
78,540,900
80,763,195
80,763,195
425,877,505
10,000,000
42.59
390,134,588
10,000,000
39.01
310,106,671
10,000,000
31.01
287,446,696
10,000,000
28.74
Inter Company Balances

Net Asset Value (NAV) per share
Shareholders Equity
No of paid up share capital
NAV per share- Taka
Consolidated
01.07.2010 to
30.09.2010
25.00
Sales Revenue
Sales (Export)
Sales (Local)
19,624,092
118,126,045
137,750,137
The Company
01.07.2010
01.07.2009 to
to 30.09.2010
30.09.2009
4,206,201
72,440,901
76,647,102
9,876,506
33,641,926
43,518,432
The products are exported to the market of USA, UK, UAE, Canada and Australia.
26.00
Cost of Goods Sold

Raw materials:
Opening Stock
Purchase (Note: 26.01)
Closing Stock (Note:15.00)
Add: Manufacturing Expenses (Note 26.02)
Cost of Goods Manufactured
Add: Opening Stock of Finished Goods
Less: Closing Stock of Finished Goods (Note:15.00)
60
12,352,823
78,117,940
90,470,763
29,476,064
60,994,699
13,621,600
74,616,299
34,734,665
109,350,964
6,550,202
41,817,017
48,367,219
16,673,154
31,694,065
9,037,390
40,731,455
14,603,741
55,335,196
5,525,623
10,702,354
16,227,977
5,125,482
11,102,495
5,876,007
16,978,502
15,814,030
32,792,532
36,360,324
72,990,640
18,514,612
36,820,584
12,680,110
20,112,422
26.01
Purchase
Raw Materials
Packing Materials
Processing Materials
67,701,671
10,272,710
143,559
78,117,940
34,388,539
7,284,919
143,559
41,817,017
8,741,166
1,875,941
85,247
10,702,354
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
including margarine and spices premix.
26.02
Manufacturing Expenses
Salary & Wages
Insurance Premium
Factory Overhead
Depreciation
Other Expenses
Repair & Maintenance
Electricity & Fuel
7,814,826
100,000
1,226,902
2,118,068
203,497
289,126
1,869,181
13,621,600
5,366,434
100,000
437,752
1,392,440
46,033
193,500
1,501,231
9,037,390
3,193,063
81,325
33,654
1,397,002
20,940
169,597
980,426
5,876,007
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
above.
Other expenses does not include any item exceeding 1% of total revenue.
27.00
Export Incentive
The Company is entitled to receive cash incentive according to Bangladesh Bank Circular reference no FE-15 dated 6 October, 2005 on
export amount of Agro (Vegetables/ Fruits) and Agro processed products. Incentive amount has been accrued complying the terms &
condition of this circular.
Export Incentive amount
1,411,026
673,992
1,500,493
1,411,026
673,992
1,500,493
28.00
Other Income
This income represents sale proceeds of wastages generated during manufacturing process
Wastage sale
29.00
1,884,789
1,884,789
1,557,225
1,557,225
312,640
312,640
1,190,536
596,270
390,896
36,403
20,019
22,032
Administrative Expenses
Salaries & Wages
Bank Charges
Depreciation
529,517
348,110
349,251
Audit Fees
200,000
100,000
42,210
Rates, Taxes & Renewal
650,216
616,861
241,000
Vehicle Maintenance
603,067
603,067
155,387
Donation, Subscription & Gift
300,000
150,000
100,000
48,195
42,864
29,875
Telephone & Mobile Bill
104,239
104,239
83,124
Miscellaneous Expenses
561,193
131,330
260,532
Electricity & Fuel
119,895
79,012
206,405
Traveling, Conveyance & Tour
353,771
351,815
117,000
Printing & Stationeries
Amortization of Preliminary Expenses

Amortization of Pre Operational Expenses
Training Fees
Local Sales Expenses
Business Promotion Expenses
61
3,602
1,094
1,094
267,671
81,180
81,180
25,000
25,000
1,076,493
1,076,493
327,783
55,850
55,850
6,125,648
4,383,204
2,407,769
(a) From 1 July to September 30,2010, all employees (44 nos.) of Administrative and General Services received annual salary and allowances
of Tk. 36,000 and above.
(b) Auditors' fees represents audit fee for auditing the accounts for the period ended 30 September, 2010. Auditors were not paid any other fees.
(c) During the period under reporting, Tk.674,000 paid to the Directors and Officers for rendering their services to the company.
(d) The Company did not pay any remuneration to any Director who was not an officer of the Company.
(e) No board meeting attendance fee was paid to the directors of the Company.
30.00
31.00
Selling & Distribution Expenses

Ocean Freight
C & F Expenses
Shipment Transportation Expenses
Shipment Expenses
Other Shipment Expenses
Advertisement & Publicity
2,712,237
2,059,082
1,424,262
219,330
155,901
51,354
293,240
98,240
49,571
145,125
145,125
71,254
89,871
12,490
11,245
223,000
61,929
3,682,803
2,470,838
1,669,615
From 1 July to September 2010, 66 employees relating to selling and distribution received annual salary and allowances of Tk. 36,000 and
above.
Financial Expenses
Interest on Cash Credit (Hypo)
4,101,844
543,973
467534
Interest on Term Loan
1,465,145
692,093
773788
Interest on Finance Lease

Interest on others
337,615
5,904,603
337,615
1,573,681
73244
18,323
1,332,889
32.00
Income Tax
Necessary provision was made for income tax considering the depreciation effect as per Income tax Ordinance 1984 and Export sale
Benefit.
33.00
Earning Per Share (EPS)

Net Profit during the period
No of shares
EPS for the period
Annualized EPS in Taka

34.00
Operating Cashflow per Share

Net Cash generated / (used) from Operating Activities
No of shares
Operating Cashflow per Share
34.01
Other information
34.02
Transaction in foreign currency

Particulars
22,659,975
13,470,870
10,000,000
3.57
10,000,000
2.27
3,750,000
3.59
14.30
9.06
14.37
(24,893,000)
10,000,000
(2.49)
Amount/Taka
30-09-2010
2009-2010
Golden Harvest Agro Industries Ltd.

CIF Value of import:
Raw Materials
Spare Parts
Capital Machinery
FOB value of export
Capital Machinery
FOB value of export
34.03 Contingent Liabilities and commitments

Particulars
Letters of credit/ LCA
35,742,919
Amount/Taka
12,807,188
62
1,316,993
271,575
4,282,072
1,430,371
295,431
2,671,198
28,497,604
7,435,081
735,632
30,738,472
(8,638,005)
10,000,000
(0.86)
(10,389,011)
3,750,000
(2.77)
Income Tax
Total
34.04
4,086,398
16,893,586
Related Party Transactions:

The Company carried out a number of transactions with related parties in the normal course of business and on arms length basis. The
nature of transactions and their total value is shown below :
Name of Related Parties
Nature of Relationship :
The Company and the parties are subject to common control from same source i.e., Golden Harvest Group.
34.05
Quantitative details of opening stock, purchases/ production, consumption/sales and closing stock of raw materials
Golden Harvest Agro Industries Ltd.
Opening stock
Purchases/
Production
Kg
Item
Unit
Raw Materials
Current Period
For the year 2009-2010
Finished Goods:
Vegetable & Snacks
Current Period
Kg
Kg
Consumption/
Sales
Kg
Closing Stock
Kg
218,341
184,188
1,993,901
2,148,341
1,656,470
2,114,188
555,772
218,341
58,415
79,070
322,231
908,889
306,588
912,940
74,058
75,019
Kg
Golden Harvest Sea Food & Fish processing Ltd

Opening stock
Purchases/
Production
Item
Unit
Raw Materials
Current Period
Finished Goods:
Vegetable & Snacks
Current Period
34.06
34.07
34.08
34.10
34.11
Kg
Kg
Kg
17,196
99,752
284,988
87,251
267,792
29,697
17,196
43,763
63815
108,735
337,231
117,506
357,283
34,992
43,763
Kg
Kg
Closing Stock
Capacity Utilization
The company manufactures various items having mutually exclusive nature, not enabling it to determine its capacity and
Capital Expenditure Commitment
There was no capital expenditure contracted but not incurred or provided for at 30 September,2010.
Finance Lease Commitment
At 30 September, 2010 the company had annual commitment under finance lease as set out below
Lease expires within 1 year
Lease expires within 2 to 5 years
34.09
Kg
Consumption/
Sales
1,481,160
1,942,855
Claim not acknowledged as Debt

There was no claim against the company not acknowledged as debt as on 30-09-2010.
Un-availed Credit Facilities
The Company has no credit facilities available to the company under any contract, other than trade credit available in the ordinary course
of business as on 30-09-2010.
Post-balance sheet events
The Company has allotted 2,50,00,000 ordinary shares of Tk. 10 each to existing shareholders in terms of SEC's Consent letter
no.SEC/CI/CPLC-250/2010-301 dated September 26, 2010, on 13 October 2010 and the company was converted in a public limited
company from private limited company on June 30, 2010.
63

Golden Harvest

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Golden Harvest

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Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Section 1: Risk Factors

Section 2: Financial Structures

Section 3: Golden Harvest Agro Industries Ltd: An Overview

Section 4: Business Details

Section 5: Competitive Condition

Section 6: Business Expansion/Diversification Plan

Section 7: Directors of the Company

Section 8: Description of Management

Section 9: Description of Property

Section 10: Plan of Operations & Discussion of Financial Condition

Section 11: Determination of Offering Price

Section 12: Book Building Method

Section 13: Market for Securities Being Offered

Section 14: Description of Securities Outstanding or Being Offered

Section 15: Availability of Securities

Section 16: Involvement of directors and officers in certain legal proceedings

Section 17: Certain Relationships and Related Transactions

Annexure: 01 Bankers to the Issue

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.

Issue Manager: Banco Finance & Investment Ltd.

Issuer Company: Golden Harvest Agro Industries Ltd.