Apex Adelchi Footwear Limited

Annual Report

CONTENTS

Corporate Directory Notice of Annual General Meeting Financial Highlights Value Added Statement Report of the Directors Status of Securities and Exchange Commission Compliance Auditors’ Report to the Shareholders Balance Sheet Profit & Loss Account Cash Flow Statement Statement of Changes in Equity Notes to the Accounts

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Apex Adelchi Footwear Limited

Annual Report

CORPORATE DIRECTORY
BOARD OF DIRECTORS
Syed Manzur Elahi Syed Nasim Manzur Munize Manzur Khasru Syed Gias Hussain Niaz Ahmed Choudhury Adelchi Sergio Samson H. Chowdhury Chairman Managing Director Director Director Director Director Independent Director Managing Director Deputy Managing Director & CFO Executive Director Executive Director Company Secretary Financial Controller General Manager General Manager Head of Human Resources General Manager

MANAGEMENT TEAM
Syed Nasim Manzur Syed Gias Hussain Abdul Momen Bhuiyan A.A. Mosaddeque S.M. Shahjahan Dilip Kajuri Atiqul Islam Syed Md. Mustaque Md. Mominul Ahsan Pradip Kanti Saha

AUDITORS
Shiraz Khan Basak & Co. Chartered Accountants

TAX ADVISER
Khandker Fazlul Quadir

LEGAL ADVISER
Muhammad Mohsen Rashid Advocate, Supreme Court of Bangladesh

BANKERS
Janata Bank Limited Bank Asia Limited Prime Bank Limited City Bank Limited Bank Al Falah Limited

REGISTERED OFFICE
House No. 06, Road No. 137 Block - SE(D) , Gulshan-1 Dhaka-1212, Bangladesh

Email: info@apexadelchi.com FACTORY
Chandra, P.S. Kaliakoir Dist. Gazipur Bangladesh

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NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 21ST ANNUAL GENERAL MEETING of Apex Adelchi Footwear Limited will be held at Bangabandhu International Conference Centre, Agargaon, Dhaka on Tuesday, May 03, 2011 at 11:00 a.m. to transact the following business:

1.

To receive and adopt the Accounts for the year ended December 31, 2010 and the Reports of the Auditors and Directors thereon.

2. 3. 4.

To declare dividend To elect Directors To appoint auditors and fix their remuneration

By Order of the Board March 24, 2011 Gulshan-1 Dhaka-1212 Sd/(S.M. Shahjahan)
Company Secretary

Notes: 1. 2. The Record Date of the Company is Sunday, 10 April, 2011. The Proxy Form, duly stamped with a revenue stamp of Tk. 10.00 must be deposited at the registered office of the company not later than 48 hours before meeting.

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FINANCIAL HIGHLIGHTS: 2006 - 2010
Tk in thousand Particulars Authorized Capital Issued, Subscribed & Paid up Capital Sales Gross Profit Profit before Ta x Net Profit after Tax Fixed Assets Current Assets Current Liabilities Net Current Assets Current Ratio Cash Dividend Stock Dividend Earnings per Share - Taka Book value per Share - Taka Price Earning Ratio - Times 2010 500,000 112,500 6,961,116 1,092,044 273,630 228,227 418,372 4,258,672 3,950,978 307,694 1.08 45,000 0 202.87 645 20.27 2009 500,000 112,500 5,834,073 907,580 247,618 211,532 537,110 2,950,021 2,752,039 197,982 1.07 39,375 0 188.03 653 13.74 2008 500,000 112,500 5,629,744 657,168 223,613 189,828 478,105 2,770,329 2,685,499 84,830 1.03 33,750 0 168.74 500 10.37 2007 500,000 75,000 4,441,134 514,686 201,736 169,358 328,189 2,466,120 2,424,952 41,168 1.02 18,750 37,500 225.81 485 9.61 2006 500,000 75,000 2,939,715 264,015 59,672 49,916 271,885 1,500,605 1,486,478 14,127 1.01 18,750 0 66.56 334 7.20

6,961

7000
5,834

6000 5000 4000

5,630

4,441

Sales Gross Profit Pre-tax Profit
2,940

Tk. in Million

3000 2000
1,092 908 657 274 248 224 515 202 264 60

1000 0 2010

2009

2008

2007

2006

Financial Year

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Apex Adelchi Footwear Limited

Annual Report

VALUE ADDED STATEMENT For the year ended 31 December, 2010
Tk. in thousand
Sales & other income Bought in materials and services 6,961,700 (6,161,259) 800,441 Applications National exchequer Services (salaries & other benefits to employees) Interest and charges Shareholders ’ dividend Retained earnings 75,002 258,784 276,621 45,000 145,034 800,441 9% 32% 35% 6% 18% 100%

18% 6%

9%

National exchequer Services 32% Interest & charges

9% 32% 35%

Shareholders' dividend 6% 35% Retained earnings 18%

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Annual Report

I‡qbSz cÖ‡`‡k cv`yKv wbg©vZv‡`i m¤¢ve¨ Mš—e¨ (†deª“qvix 12, 2010) Px‡bi I‡qbSz cÖ‡`‡ki †ek wKQy RyZv wbg©vZvi g‡Z, Pxb I wf‡qZbv‡gi RyZvi Dci BD‡ivcxq BDwbq‡bi Gw›UWvw¤ús Ki Av‡iv‡ci d‡j MZ `yB eQ‡i Px‡bi RyZv ißvbxi cwigvY K‡g †M‡Q| hvB †nvK, Zv‡`i GKUv eo Ask DËi Av‡gwiKv I Gwkqv‡K Zv‡`i bZzb m¤¢ve¨ ißvbx Mš—e¨ wn‡m‡e †e‡Q wb‡q‡Q g~jZt Ki †_‡K cwiÎv‡Yi Dcvq wn‡m‡e| wf‡qZbv‡gi RyZv wk‡í Kgx© msKU (†d«eª“qvix 10, 2010) wf‡qZbv‡gi Pvgov I RyZv wk‡íi mv¤cÖwZK ißvbxi wbgœg~Lx cÖe„w×i Rb¨ Kgx©i ¯^íZv‡K Ab¨Zg cÖavb KviY wn‡m‡e we‡ePbv Kiv n‡”Q| A‡bKw`b †_‡K †nvwP wgb wmwU Ges `w¶‡Yi cÖ‡`kmg~n `¶ Kgx©i msK‡U fyM‡Q| Avevi ißvbxi wbgœg~Lx cÖe„w×i Kvi‡YI A‡bK cÖwZôvb Zv‡`i Kgx©evwnbxi A‡a©‡Ki †ewk Qu vUvB K‡i †d‡j‡Q Ges A‡b‡Ki avibv, Drcv`b LiP I Kgx© e¨q evovi Kvi‡Y mvg‡b AviI Lvivc mgq A‡c¶v Ki‡Q| Px‡bi gRyix weZK© cy‡iv Gwkqv‡Z Qwo‡q c‡o‡Q (RyjvB 04, 2010) `w¶Y-c~e© Gwkqvi †`k¸‡jv‡ZI Px‡bi gZ kªwgK Am‡š—vl †`Lv ‡`q hviv Kg `vgx cY¨ mieiv‡n Px‡bi mv‡_ cÖwZØw›ØZvq †b‡gwQj| Avi GB Am‡š—vl g~jZt AviI fvj †eZb I myweavw`i `vex‡Z| G gv‡m b~¨bZg gRyixi weZ‡K© K‡¤^vwWqvi kªwgKiv wZb w`‡bi ag©NU †W‡K‡Q| Avevi wf‡qZbv‡gi GK ZvBIqvbxR gvwjKvaxb RyZvi KviLvbvq †ewk gRyixi `vex‡Z nvRv‡iv kªwgK ag©NU K‡i‡Q| Px‡bI GKB Kvi‡Y GB NUbv N‡U‡Q †hLv‡b kªwgK‡`i nZvkv wk‡í Aw¯’iZv I ‡ewk gRyixi `vex‡K Z¡ivwš^Z K‡i‡Q| d‡j we‡`kx KviLvbvi gvwjKiv Òc„w_exi KviLvbvÓ e‡j cwiwPZ `w¶Y Ges c~e© Pxb †_‡K Zv‡`i Drcv`b Px‡bi Ab¨vb¨ ¯’v‡b Ges Gwkqvi Ab¨vb¨ Dbœqbkxj †`‡k mwi‡q wb‡”Q| K‡¤^vwWqv, wf‡qZbvg Ges jvI‡m kªg e¨q GLbI Px‡bi ‡P‡q Kg| wKš‘ hLb Zv‡`i miKvi we‡`kx Drcv`K‡`i AvK…ó Ki‡Z hy× K‡i hv‡”Q ZLb kªwgK msN¸‡jv Zv‡`i m`m¨‡`i myi¶vi Rb¨ cy‡ iv GjvKve¨vcx b~¨bZg gRyixi `vwe‡Z kªwgK Av‡›`vj‡bi w`‡K avweZ n‡”Q| fviZ RyZv ißvbx‡Z D‡j-L‡hvM¨ cÖe„w× AR©b K‡i‡Q (A‡±vei 06, 2010) 2010 A_© eQ‡ii cÖ_g cuvP gv‡m (GwcÖj-AvMó) fviZxq Pvgovi ißvbx‡Z 16.3% cÖe„w× ‡`Lv hvq| c~e©eZx© eQ‡ii GKB mg‡qi ‡P‡q G eQi fvi‡Zi †gvU Pvgov ißvbx 1.2 wewjqb †_‡K 1.4 wewjqb Wjv‡i DbœxZ n‡q‡Q| Pvgovi cv`yKv ißvbx 441.40 wgwjqb Wjvi †_‡K 16.70% †e‡o 515.10 wgwjqb Wjv‡i DbœxZ n‡q‡Q| Ab¨w`‡K Pvgovwenxb RyZvi ißvbx 6.9 wgwjqb †_‡K 9.2% †e‡o 7.6 wgwjqb Wjvi n‡q‡Q| wf‡qZbv‡gi RyZvi KviLvbv¸‡jv Kvh©v‡`k wdwi‡q w`‡Z eva¨ n‡”Q (A‡±vei 04, 2010) wf‡qZbv‡gi Pvgov I cv`yKv msMV‡bi g‡Z, Zv‡`i †`‡ki cv`yKv wbg©vZviv Kvh©v‡`‡ki cwigvY evovi mv‡_ mv‡_ wb‡R‡`i Drcv`b evov‡bvi †Póv Pvwj‡q †h‡Z ‡c‡i DV‡Q bv| Zv‡`i g‡Z Px‡bi kªg e¨q e„w×i Kvi‡Y A‡bK eªv‡Ûi Drcv`b eQ‡ii ïi“ †_‡KB wf‡qZbv‡g P‡j G‡m‡Q| 2010 mv‡ji cÖ_g bq gv‡m RyZv ißvbx 18% †e‡o 3.70 wewjqb Wjv‡i DcbxZ n‡q‡Q| 2010 mv‡j wf‡qZbv‡gi RyZv ißvbxi j¶¨gvÎv 2009 mvj †_‡K 13 kZvsk evwo‡q 4.6 †_‡K 4.7 wewjqb Wjv‡i wba©viY Kiv n‡q‡Q| msMV‡bi cÖavb WvK _yqv‡bi fvl¨g‡Z eZ©gvb AbyK‚j cwi‡e‡ki Kvi‡Y ißvbxi cwigvY nqZ 5.00 wewjqb Wjvi Qvwo‡q hv‡e| wZwb AviI e‡j‡Qb †h, AwZwi³ Drcv`b ¶gZv bv _vKvq RyZvi Drcv`Kiv A‡bK Kvh©v‡`k MÖnY Ki‡Z AcivMZv Rvbv‡Z eva¨ n‡”Q|

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cÖwZ eQi Px‡bi 2 wewjqb †Rvov AwZwi³ RyZvi cÖ‡qvRb n‡e (A‡±vei 01, 2010) Px‡bi Pvgov wkí msMV‡bi fvl¨g‡Z mvg‡bi eQi¸‡jv‡Z Px‡bi AwZwi³ 2.00 wewjqb †Rvov RyZvi cÖ‡qvRb n‡e| Px‡bi Pvgov wkí msMVb cÖavb e‡j‡Qb, hw`I miKvwifv‡e ejv KwVb Z‡e Zvi msMV‡bi wnmve Abyhvqx Px‡bi RbMY eZ©gv‡b M‡o 1.5 †Rvov RyZv wK‡b _v‡K| Zvi g‡Z GUv c~‡e©i †P‡q cÖvq wظY| hvi A_© mvg‡bi eQi¸‡jv‡Z Px‡bi AviI 2.00 wewjqb †Rvov AwZwi³ RyZvi cÖ‡qvRb n‡e Ges RyZv wbg©vZv‡`i fve‡Z n‡e GB mieivn wKfv‡e Kiv m¤¢e| G cÖm‡½ ejv hvq †h, GB AwZwi³ Pvwn`v BZvjxi 2009 mv‡ji †gvU Drcv`‡bi cÖvq `k¸Y| Drcv`K †`kmg~‡ni gRyix e„w× Ges KuvPvgv‡ji e¨q e„w×i Kvi‡Y we‡µZv‡`i gybvdv a‡i ivL‡Z n‡j Zv‡`i c‡Y¨i `vg bv evwo‡q mvc-vB †PBb‡K AviI Kg©`¶ wn‡m‡e M‡o Zzj‡Z n‡e| cÖavb cÖavb LyPiv we‡µZviv †h †Kvb Kvi‡YB †nvK Zv‡`i mg¯— cY¨‡K cwi‡ek `~lYgy³ wn‡m‡e Drcv`‡bi j‡¶¨ KvR K‡i hv‡”Q| BD‡ivc I hy³iv‡óªi †µZv‡`i mieivn Ae¨vnZ ivL‡Z n‡j Gwkqvi Drcv`K‡`i AviI DbœwZ NUv‡Z n‡e| fwel¨‡Z cwi‡ek msµvš— bvbv mb` †µZv‡`i mieivnKvix †e‡Q wb‡Z cÖavb †hvM¨Zv wn‡m‡e we‡ewPZ n‡Z cv‡i| cwienb I RvnvRxKi‡Y Rjevqyi cwieZ©b I cwi‡e‡ki cÖfve we‡ePbvq G‡b Drcv`bKvj Kgv‡Z weKí Dr‡mi ¸i“Z¡ †e‡o P‡j‡Q| 2010 mv‡ji Kvh©µ‡gi D‡j-L‡hvM¨ djvdjmg~n t ‡gvU ißvbx †e‡o‡Q (cwigv‡Y) 19.10 kZvsk ‡gvU ißvbx †e‡o‡Q (BD‡iv‡Z) 18.60 kZvsk BD‡ivi wecix‡Z UvKvi Mo cZb 05.50 kZvsk ‡gvU ißvbx †e‡o‡Q (UvKvq) 12.10 kZvsk Avf¨š—ixY weµq †e‡o‡Q 59.90 kZvsk ‡gvU gybvdv †e‡o‡Q 20.30 kZvsk bxU gybvdv †e‡o‡Q 10.50 kZvsk 2010 mv‡j BD‡iv‡ci evRvi A_©bxwZi g›`vi Kvi‡Y BD‡ivi µgvMZ g~j¨cZ‡bi d‡j Avgv‡`i weµq I gybvdvq eo ai‡bi cÖwZK‚j cÖfve c‡o‡Q| evsjv‡`k e¨vsK BD‡ivi Pjgvb `icZ‡bi wel‡q h‡_ó DwØMœ †Kbbv † ›`ªxq e¨vs‡Ki 10 wewjqb Wjv‡ii K ˆe‡`wkK gy`ªvi wiRv‡f©i 15 kZvskB wewb‡qvM Kiv Av‡Q BD‡iv‡Z| evsjv‡`k e¨vsK Avkv K‡i EU Ges IMF BD‡iv‡K euvPv‡Z Kvh©Kix c`‡¶c †b‡e| Daily Star May 23, 2010 `yf©vM¨ekZt eQ‡ii wØZxq fv‡M BD‡iv msµvš— mgm¨v AviI †e‡o †M‡Q MÖx‡m D™¢yZ mgm¨vi Kvi‡Y| me wgwj‡q 2010 mv‡j BD‡ivi g~j¨cZ‡bi Kvi‡Y Avgv‡`i ivR¯^ I gybvdvq UvKvi As‡K eo ai‡bi cÖfve c‡o‡Q| 2010 mv‡ji Kvh©µ‡gi djvdj †_‡K GUv ¯úó nq †h, 2009 mv‡ji Zzjbvq G eQi Avgv‡`i gRy‡Zi cwigvY D‡j-L‡hvM¨ cwigvY evov‡Z n‡q‡Q| GUv g~jZt `ywU Kvi‡Y Ki‡Z n‡q‡Q- (1) 2009 mv‡j KuvPv Pvgov, GW&‡nwmf, wUwcAvi †Kbvmn me ai‡bi KuvPvgv‡ji `vg c‡o wM‡qwQj| 2010 mv‡ji †klva© †_‡K me ai‡bi KuvPvgvj, we‡klZt KuvPv Pvgovi `vg evo‡Z ïi“ K‡i| d‡j Avgiv evowZ Li‡Pi fvimvg¨ ivLvi D‡Ï‡k¨ Avgv‡`i cÖ‡qvR‡bi AwZwi³ KuvPvgvj µ‡qi Pzw³ Kwi| (2) 2010 mv‡j Avgv‡`i LyPiv Ges cvBKvix Dfq ai‡bi †`vKv‡bi msL¨v D‡j-L‡hvM¨ nv‡i e„w× cvIqvq RyZvi D”P gRyZ cwijw¶Z n‡q‡Q|

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• • • • •

‡`bv`vi (Trade Debtor) cÖvq 172 wgwjqb UvKv e„w× †c‡q‡Q g~jZt wW‡m¤^‡ii D”P cwigv‡Y wkc‡g‡›Ui Rb¨| †h¸‡jvi ißvbx wej wW‡m¤^‡i Avgv‡`i cvIbv (Receivable) wn‡m‡e †`Lv‡bv n‡q‡Q| Gme cvIbv UvKv †deª“qvix 2011 mv‡ji †kl w`‡K G‡m c‡o‡Q| GWfvÝ wW‡cvwRU Ges AwMÖg cwi‡kva cÖvq 205 wgwjqb UvKv †e‡o‡Q g~jZt ¸Wm& Bb UªvbwR‡U Ges Gjwm gvwR©‡b 175 wgwjqb UvKv †e‡o hvIqvq| Gme n‡q‡Q g~jZt gRyZ evov‡bvi Kvi‡Y hv c~‡e© Av‡jvPbv Kiv n‡q‡Q| PjwZ gyja‡bi cwigvY 433 wgwjqb UvKv †e‡o‡Q g~jZt Avf¨š— ixY weµq evov‡bvi Rb¨ bZzb FY †bqvq Ges gRyZ evov‡Z GjwUAvi Ges wcGwW myweavw`i c~Y© mبenvi Kivq| wewea cvIbv`vi (Sundry Creditor) cÖvq 715 wgwjqb UvKv †e‡o‡Q g~jZt - mieivnKvix Ges Ab¨vb¨‡`i cvIbv †e‡o‡Q 329 wgwjqb UvKv (cÖavbZt KuvPv Pvgov mieivnKvix) - e‡Kqv Li‡Pi cwigvY †e‡o‡Q 262 wgwjqb UvKv (g~jZt wW‡m¤^‡ii Dcwi e¨q I e‡Kqv Li‡Pi Kvi‡Y) 2010 mv‡j Ab¨vb¨ cwiPvjbv e¨q †e‡o‡Q 214 wgwjqb UvKv, g~jZt - bZzb †`vKvbmg~‡n Kg©Pvixi msL¨v e„w× I evwl©K †eZb e„w×i Kvi‡Y 20.30 wgwjqb UvKv - ‡`vKvb cwiPvjbv e¨q †e‡o‡Q 26.50 wgwjqb UvKv - ißvbx Dbœqb e¨q †e‡o‡Q 3.20 wgwjqb UvKv - weÁvcb e¨q †e‡o‡Q 33.00 wgwjqb UvKv - ‡`vKv‡bi fvov eve` f¨vU †e‡o‡Q 34.20 wgwjqb UvKv - AePq †e‡o‡Q 66.90 wgwjqb UvKv

e¨vsK my` I PvR©
2009 mv‡j Avgiv 1,417.40 wgwjqb UvKv F‡Yi wecix‡Z Avw_©K e¨q K‡iwQjvg 23.53 kZvsk A_©vr 333.50 wgwjqb UvKv| 2010 mv‡j 1,850.50 wgwjqb UvKv F‡Yi wecix‡Z Avw_©K e¨q n‡q‡Q cÖvq 14.95 kZvsk A_©vr 276.60 wgwjqb UvKv| GUv GKUv D‡j-L‡hvM¨ NUbv| GUv g~jZt m¤¢e n‡q‡Q Ad ‡kvi †_‡K Ab †kvi G 7.00 wgwjqb BD‡iv FY cvevi Kvi‡Y hv Avgiv e¨vsK Gwkqv wjt Gi gva¨‡g MÖnY K‡iwQjvg BD‡ivwjei + 3.5% my‡`| G Kvi‡YB my‡`i Li‡Pi cwigvY A‡bK K‡g‡Q|

gRyZmg~n
2009 mv‡ji Zzjbvq G eQi gRy‡Zi cwigvY cÖvq 89.60 †KvwU UvKv ‡e‡o‡Q| g~jZt Avf¨š—ixY evRv‡ii Pvwn`v Ges †`ke¨vcx mKj †`vKv‡b ch©vß gRy‡Zi Kvi‡Y| 2009 mv‡ji wW‡m¤^‡ii Zzjbvq Pvgovi gRyZ 5.00 wgwjqb UvKv †e‡o‡Q| GQvov e„nr gRyZ g~j Zt cÖZxqgvb nq AvDU‡mvj wefv‡M| Avgv‡`i KviLvbvi wfZ‡iB cÖPi z cwigv‡Y AvDU †mvj ˆZix nq, d‡j TPR Gi D”P gRy‡Zi cÖ‡qvRb nq| wdwbkW& RyZvi gRy‡Zi cwigvY 56 †KvwU UvKv e„w× †c‡q‡Q hv g~jZt bZzb bZzb LyPiv wecYx¸‡jvi b~¨bZg gRyZ msi¶‡Yi Rb¨ cÖ‡qvRb| 2010 mv‡ji †k‡l gRy‡Zi cwigvY wQj 117 w`‡bi Mo weµ‡qi mgcwigvY hv 2009 mv‡j wQj 84 w`‡bi weµ‡qi mgZzj¨|

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Annual Report

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Annual Report

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Apex Adelchi Footwear Limited

Annual Report

REPORT OF THE DIRECTORS
Dear Shareholders,
On behalf of your Board of Directors I welcome you all to this 21st Annual General Meeting of your Company and have the pleasure of presenting the Annual Report along with the audited accounts for the year ended December 31, 2010.

Performance
2010 2009 (Taka in ‘000) Sales Gross Profit Financial Expenses Other Fixed Expenses Net Profit before Tax 6,961,116 1,092,044 276,621 528,697 273,630 5,834,073 907,580 333,521 314,569 247,618

Change (+/-) 2010-9 +19% +20% - 17% +68% +11%

YEAR 2010 IN REVIEW
2010 saw the beginning of limited recovery in the global economy after the global financial crisis of 2009. Although consumption and business confidence remained significantly weaker than the pre-crisis levels, it seemed that the various stimuli and recovery programmes initiated by governments were beginning to make their mark. However, record levels of unemployment in Germany as well as the US continued to depress consumer spending and retailers were constrained to seek newer sourcing options to protect and grow margins. The continuation of the anti-dumping duties in 2010 imposed by the EU on footwear imports from China and Vietnam helped drive European business to other sources such as India, Indonesia and some extent Bangladesh. Chinese manufacturers however responded by targeting new export destination in North America and Asia to counter the effects of the duties. Overall we witnessed certain global trends in the footwear industry in 2010, some of which are highlighted below : India’s shoe exports expected to grow (Feb 11, 2010, CLE) According to the Indian Council for Leather Exports (CLE), the country’s leather sector is looking to increase both production and export levels. The CLE says the new target for exports by 2013-14 is $ 7 billion, by which time more than a million jobs are expected to be created within the industry. The Indian government believes exports will be significantly higher than the 2009-10 totals of $ 4.2 billion. It predicts that finished leather exports will rise to $ 1.4 billion, footwear exports will reach $ 3.4 billion, leather garment exports will hit $ 492 million and leather glove exports will total $ 1.8 billion. Wenzhou shoemakers broaden their horizons (Feb 12, 2010) According to a number of shoemakers in Wenzhou, China, footwear exports from the region have fallen in the last couple of years as a result of the EU anti-dumping duties imposed on leather shoes from both China and Vietnam.

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However, many have decided to focus on new export destination in North America and Asia in a bid to counter the effects of the duties. Staff shortages affect Vietnam shoe sector (Feb 10, 2010) Vietnam’s leather and footwear manufacturers are concerned by the recent downturn in footwear exports and believe staff shortages are one of the driving factors behind the decline. Many firms in Ho Chi Minh City and southeastern provinces have been facing a real lack of workers, and particularly skilled workers, for many months now. Since the downturn began, many firms have seen their workforce reduced by more than half and many fear the worst is yet to come as production and labour costs continue to rise. Chinese pay Disputes Mirrored Across Region (FT, July 04, 2010)

• • •

Chinese labour unrest is being replicated in south-east Asia where factories that compete with China to supply low-costs goods face walkouts as employees demand better pay and benefits. In Cambodia, workers are poised to stage a three-day strike this month in a dispute over the minimum wage while in Vietnam, thousands of workers at a Taiwanese-owned shoe factory staged and strike demanding higher salaries. The disputes match similar action in China, where growing worker dissatisfaction has led to industrial unrest and higher wages. As a result, foreign factory owners are increasingly moving production from southern and eastern China – long seen as the “workshop of the world” – to the interior and other Asian developing nations. Labour costs in countries such as Cambodia, Vietnam and Laos remain a fraction of those in China. But, while their governments have been jostling to attract foreign manufacturers, unions are keen to protect their members and industrial action is on the rise, together with minimum wages across the region.

India records higher shoe exports (October 06, 2010) Indian leather exports grew 16.3% during the first five months of the 2010 financial year (April-August). The country’s leather exports totaled to $ 1.4 billion compared with $ 1.2 billion during the corresponding period last year. Leather footwear exports rose 16.7% to $ 515.1 million from $ 441.4 million, while nonleather footwear exports grew 9.2% to $ 7.6 million from $ 6.9 million. Vietnamese footwear sector forced to turn orders down (Oct 04, 2010) According to the Vietnam Leather and Footwear Association (LEFASO), footwear manufacturers in the country are struggling to cope with increasing order levels. It claims higher labour costs in China have seen many brands transfer production to Vietnam since the start of the year. During the first nine months of 2010, shoe export revenues have rose 18% to $ 3.7 billion. “In 2010, Vietnam planned to export $ 4.6 to 4.7 billion worth of footwear products, an increase of 13% over 2009”, said LEFASO Chairman Nguyen Duc Thuan. “However, with the current favourable conditions, the export revenue may reach over $ 5 billion”, Thuan said. Reports suggest many shoe makers have had to turn down orders as they simply do not have the extra capacity to fulfill them.

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Apex Adelchi Footwear Limited China will need two billion extra pairs of shoes a year, claims CLIA (October 01, 2010)

Annual Report

Footwear consumption in China will double in the coming years, the China Leather Industry Association (CLIA) has predicted. In comments she made at the All China Leather Exhibition in Shanghai at the start of the move, CLIA president, Madam Zhang Shu Hua, said that, although official figures are hard to put together, her organization estimates that Chinese consumers buy an average of 1.5 pairs of shoes each per year. She said that this was likely to double, which means that the global footwear industry will soon have to find a way of supplying China with an extra 2 billion pairs of shoes a year. To give the figure a bit of context, this is ten times the total number of shoes produced in Italy in 2009. Therefore, rising costs in South China along with labour shortages and capacity constraints in Vietnam and increased shift to India and general labour and material costs increases were the predominant trends in 2010. With wage inflation in sourcing countries and rising raw materials costs, retailers needed to optimize the efficiency of their supply chain to keep their level of margins without increasing prices to the consumers. A growing number of major retailers are also working on reducing the environmental footprint of their whole supply chain & products, either being pushed by regulation or not. Manufacturers in Asia know they have to raise their games when it comes t sustainability if they want to keep supplying their o products to clients in Europe & USA. In the future environmental credentials may also be a major criteria for retailer to choosing their suppliers. Importance of proximity is increasing due to more awareness of climate change & environmental impact of transport & shipping and as companies look how to reduce their lead times. PERFORMANCE HIGHLIGHTS IN 2010 Total export in pairage terms increased Total export in Euros increased by Average Taka per Euro Conversion rate decreased by Total export in Taka terms increased by Domestic sales revenues increased by Gross profit increased by Net profits increased by 19.1 18.6 5.5 12.1 59.9 20.3 10.5 % % % % % % %

The continuous decline of the Euro in 2010 adversely impacted our revenues and profits as the currency continued to slide due to weaknesses in the EU economy. “Bangladesh Bank is concerned with the continuous decline of the Euro, as really 15% of the central bank’s $ 10 billion foreign exchange reserve is invested in the tumbling European Currency, Bangladesh Bank Officials said. We are very concerned. We hope the European Union and International Monetary Fund will come forward to save the Euro “said an official of the Foreign Exchange Reserve & Treasury Management Department of the Bangladesh Bank” -- The Daily Star, May 23, 2010. Unfortunately the problems for the Euro were exacerbated by the new crisis that emerged in Greece in 2010 and the weakness of the Euro continued to affect the revenue and profitability of our company in Taka terms.

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Apex Adelchi Footwear Limited l

Annual Report

There has been a significant build up of Inventories in 2010 compared to 2009, because : a) 2009 saw record collapse of almost all raw material prices such as raw hides, leather, adhesives & TPR granules for outsoles. From the second half of 2010 we began to see rising raw material prices especially in raw hides, and as a result we booked forward contracts to try and minimize cost increases. b) 2010 we increased our number of stores both at retail and whole sale, significantly, and as a result had to hold a much higher level of finished shoes as inventory.

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Trade Debtors increased by Tk. 172 million mainly due to typically high December shipments, export bills for which were receivable as of 31 December. All receivables were collected within end February 2011. Advance Deposits & Prepayments increased by Tk. 205 million mainly because of significant increase of Goods in Transit against L/C and L/C Margins totaling Tk. 175 million. These were due to stock build up of materials post June 2010 as explained under inventories previously. Total working capital facilities increased by Tk. 433 million with the major increases coming from new facilities for local sales and increased LTR & PAD facilities utilized for inventory build up. Sundry Creditors increased by Tk. 715 million with the major components being - Suppliers, contractors and others increased by Tk. 329 million (mainly raw hide suppliers) - Outstanding expenses increased by Tk. 262 million (mainly for December overhead expenses & provisions) Other Operating Expenses Increased by Tk. 214 million in 2010 due to mainly: - Staff costs for new Outlets & annual increment increased by Tk. 20.3 million - Store operating expenses increased by Tk. 26.5 million - Export Promotion expenses increased by Tk. 03.2 million - Advertisement expenses increased by Tk. 33.0 million - VAT on Shop rentals Tk. 34.2 million - Depreciation increased by Tk. 66.9 million Bank Interest & Charges

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In 2009 we incurred Tk. 333.50 million financial expenses on total financing of Tk. 1 ,417.40 million approximately 23.53%. In 2010 we incurred Tk. 276.60 million financial expenses on total financing of Tk. 1850.50 million approximately 14.95%. This is remarkable and mainly due to the first off shore to on shore Euro denominated facility arranged by RSA Capital that enabled us to borrow at premium over EURIBOR interest rates. This significantly reduced our average cost of capital.

INVENTORIES
There has been an increase in inventory by Tk. 896 million compared to 2009. This is mainly due to higher level of inventory required to meet increased local sales demand and to maintain stock availability in all outlets throughout the country. Stock of leather has gone up by Tk. 5 million compared to December 2009. The increase is also reflected due to higher level of in-house production of outsoles which required higher inventory of TPR raw material. Finished shoe inventory has increased by Tk. 560 million to maintain minimum stock level in an increased number of retail outlets. Overall the closing inventory in 2010 was 117 days of sales as compared to 84 days of sales in 2009.

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FINANCIAL RESULTS
Net Profit after Tax Add: Prior Year’s Surplus Less : Prior Year’s Adjustment Add : Reserve for Re-investment Write back Add : Write back of FMO Loan Balance of Profit Available for Appropriation Appropriation Recommended: Proposed Cash Dividend Dividend Equalization Fund Balance Carried Forward

Tk. in ‘000 31 Dec ‘10 228,227 520,037 (192,253) 0 0 556,011 31 Dec ‘09 211,532 347,880 0 0 0 559,412 31 Dec ‘08 189,828 207,848 0 12,206 5,498 415,380

45,000 0 511,011 556,011

39,375 0 520,037 559,412

33,750 33,750 347,880 415,380

DIVIDEND
The Board of Directors are pleased to report to you that for the year 2010, a cash dividend of Tk. 40/per share of Tk. 100/- each has been recommended, and after your approval in this Annual General Meeting will be paid to the shareholders.

CSR
AAFL have a Board level committee on CSR that has an annual budget for CSR activity and working in areas of education especially vocational training and healthcare. I 2010 AAFL continued its program n using its factory premises to train fresh individuals as skilled sewing operators and subsequent recruitment by the industry. AAFL is a regular contributor to support education in schools and madrasas, Knowledge centers, DU Alumni Association, IBA, Chittagong University. Also as part of the celebration of 20 years of operations, AAFL launched a yearlong medical awareness campaign for its workers including free medical advise and medicines where required.

FUTURE l The future holds exciting opportunities for AAFL. The relocation of manufacturing out of China and the declining capacity in China for footwear production for export, is driving buyers to look towards new sources such as Bangladesh. The arrival of major shoe manufacturers in Bangladesh to set up manufacturing facilities here, is already attracting backward linkage factories such as shoe lasts and PU soles. These will help reduce costs and lead times for the industry overall. It will also lead to the footwear industry in Bangladesh achieving the critical mass that is essential to attract more major shoe buyers to Bangladesh. The strong winter in Europe and North America in 2010 led to very strong retail sales especially of boots and a lot of the excess inventory that had piled up in retail has been cleared. So buyers will be looking to replenish inventory levels which may lead to stronger sales. However the increased demand from existing clients as well as the arrival of new buyers means that our capacity utilization is reaching maximum levels. If we are not able to ramp up capacity soon, we may have to turn away orders which could limit our growth. There has been a complete turnaround from finished leather prices in 2009 which were at record low levels to r ecord high levels in 2011. Price of cowhides in the domestic market has almost doubled in 2011 from 2009. Therefore there is a huge increase in the cost of finished leather both locally and foreign, and it is not possible to pass on the total increase to finished product prices.

l

l

l

l

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Annual Report

l l

l l

Similarly the prices of TPR granules, which are directly related to petroleum prices are showing an increase of almost 40% from 2010 January levels already. 2011 has also seen the emergence of inflationary pressures as a global phenomenon. Skyrocketing petroleum costs as well as cost increases in almost all major import commodities has raised inflation in Bangladesh and the central bank has responded with a tightened monetary stance. Recently, the lending rate caps in Bangladesh have been withdrawn and already banks have raised their prime lending rates by at least 1%. So cost of capital has increased and there is a tightening of credit. Chittagong port turnaround time has increased again and buyers are already expressing concern about the knock on effects on lead times for orders. The devastating earthquake in Japan will definitely impact the overall footwear exports of Bangladesh since it is the single largest destination for most Bangladeshi footwear exporters. In what is being called the biggest economic crisis in Japan since WW II, consumer spending & confidence will probably be depressed in Japan at least in the year ahead. Our sales in the local market continued to grow but we need to develop better product offerings in ladies & children’s segments to accelerate growth. Rising real estate costs and more price sensitivity in high volume segments need also to be managed more efficiently to protect profitability. Compliance and environmental pressures will grow every passing day and we need to continuously invest and train to be able to be a supplier of choice for major retailers. Last, but not least, the power situation for us has not shown any improvement in 2010. Total expenses for purchase of diesel for standby generator alone was Tk. 46.3 million in 2010 against Tk. 24.8 million in 2009. We hope that the power supply situation will improve in the second half of 2011 as these extra costs are adversely affecting profitability.

l

l l

In conclusion, AAFL and Bangladesh footwear industry have a remarkable opportunity to benefit from the partial relocation of footwear production from China. In fact the China Leather Industry Association has predicted that footwear consumption in China will double in the coming years. The global footwear industry will soon have to figure out a way of supplying China with an extra 2 billion pair of shoes a year (Footwear news , Oct 01, 2010). So increased demand from new markets such as China and India as well as recovering demand from traditional markets such as Europe and North America offer a window of opportunity for countries like Bangladesh. If we can scale up capacity, improve skills and efficiency and overcome the challenges of rising raw material prices, increased cost of capital and power shortage, AAFL can continue its trajectory of growth.

ELECTION OF DIRECTOR
Mr. Syed Nasim Manzur and Mr. Niaz Ahmed Choudhury retire at this Annual General Meeting as per Articles 113 and 114 of Articles of Association of the Company. Mr. Syed Nasim Manzur and Mr. Niaz Ahmed Choudhury both remain eligible for re-election. However, Mr. Niaz Ahmed Choudhury expressed his inability to continue due to health reason and will not seek reelection. Mr. Syed Nasim Manzur offered himself for re-election.

APPOINTMENT OF AUDITOR
M/s. Shiraz Khan Basak & Co., Chartered Accountants, the present auditor of the Company, retire at this Annual General Meeting, being eligible, offer themselves for re-appointment.

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AUDIT COMMITTEE
During the year under review the Audit Committee met and reviewed the internal audit plan of the company. It has highlighted proper attention and timely preparation of production plan, continuous reporting and review of short collections, claim adjustments, overdue interest for delayed collection of export bills, regular review of control on discount in case of local sales, manpower strength and technological development of HR department, concentration on inventory management, improvement in supply chain and merchandising department activities, re-looking into existing JV agreements, etc. The Committee has put forward some recommendations to the Board and the Board has duly accepted the same. The Committee also reviewed the half-yearly and annual accounts for accuracy and proper disclosure prior to their approval by the Board of Directors for publication. The Audit Committee comprised of: (a) Ms. Munize Manzur Khasru, Chairperson (b) Mr. Samson H. Chowdhury, Member (Independent Director) (c) Mr. Niaz Ahmed Chowdhury, Member

SECURITIES AND EXCHANGE COMMISSION COMPLIANCE
The compliance status report required to be presented by the Company in pursuance to Clause 5.00 of Notification No. SEC/CMRRCD/2006-158/Admin/02-08 of 20th February 2006 issued by Securities and Exchange Commission under Section 2CC of Securities and Exchange Ordinance of 1969 is attached.

CREDIT RATING REPORT
“Credit Rating Information and Services Limited (CRISL) has assigned “AA” (pronounced as double A) rating in the Long Term and “ST- 2” rating in the Short Term to Apex Adelchi F ootwear Limited (hereinafter referred “AAFL”) based on financials and other relevant quantitative and qualitative information. The above ratings have been done on the basis of its market leadership in footwear export, good market image, sound debt servicing history, experienced management team, improved costefficiency, etc. However, the ratings are constrained to some extent by seasonal effect on raw material sourcing, high leverage ratio, dependency on bank borrowing for working capital finance and business performance sensitive to world market demand. Entities rated in this category are adjudged to be of high quality, offer higher safety and have high credit quality. This level of rating indicates a corporate entity with a sound credit profile and without significant problems. Risks are modest and may vary slightly from time to time because of economic conditions. The short term rating indicates high certainty of timely payment. Liquidity factors are strong and supported by good fundamental protection factors. Risk factors are very small.” Credit Rating Report # RR/343/2010 Dated 4th April 2010, Page – 1.

ACKNOWLEDGEMENT
On Behalf of the Board I would like to acknowledge the continued support and cooperation from our valued shareholders, and the confidence and trust our customers have bestowed in our products and company. I would like to particularly thank all our employees for their commitment and hard work that have enabled us to achieve our results in 2010. We look forward to your continued cooperation and support as the driving force of growth of your company, in the future. On behalf of the Board

March 24, 2011 Dhaka

Syed Manzur Elahi Chairman

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Status of Securities and Exchange Commission Compliance
Status of compliance with the conditions imposed by the Commission's Order No. SEC/CMRRDC/2006158/Admin/02-08 dated 20th February, 2006 issued under section 2CC of the Securities and Exchange Ordinance, 1969: (Report under condition No. 5)

Condition or Clause Number

Title

1.1 1.2 (i) 1.2 (ii) 1.3 1.4 (a)

1.4 (b) 1.4(c)

1.4(d) 1.4(e)

1.4(f) 1.4(g)

1.4(h)

1.4(i)

Board size should be between 5 and 20 Independent Director should be 1/10th of Board size. Independent Director appointed by elected Directors. Chairman and CEO positions filled by different persons. Financial statement should present fairly its state of affairs, the result of its operations, cash flow and changes in equity. Proper books of accounts have been maintained by the company. Appropriate accounting policies have been followed consistently and estimates are based on reasonable and prudent judgment. IAS as applicable in Bangladesh has been followed. A sound Internal Control system has been effectively implemented and monitored. That the company is a going concern Significant deviations in operating results from last year should be highlighted and explained. Key operating and financial data of at least last three years should be summarized. Give reasons for not declaring dividend

Compliance Status (Put v in the appropriate column) Complied Not Complied v v v v v

Explanation for noncompliance with the condition

v v

v v

v v

v

N/A

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Condition or Clause Number

Title

1.4(j)

1.4(k)

2.1

2.2

3.00

3.1(i) 3.1(ii)

3.1(iii)

3.2(i) 3.2(ii)

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

Number of Board meetings held during the year and attendance of the Directors. The pattern of shareholding should be reported disclosing the aggregate number of shares along with name wise details. Appoint CFO, Head of Internal Audit, and a Company Secretary and define their respective roles and duties. The CFO and Company Secretary should attend meetings of the Board of Directors. The company should have an AUDIT COMMITTEE as a subcommittee of the Board of Directors, which should be responsible to the Board of Directors. The Audit Committee should be composed of at least three members. The Board of Directors should appoint the Audit Committee from among the Directors of the company of whom at least one should be Independent nonshareholder Director. The Board of Directors are responsible for filling up any vacancy in the Audit Committee due to expiry, retirement or resignation within one month of such vacancy. The Board of Director will select the Chairman of the Audit Committee The Chairman of the Audit Committee should have a professional qualification and knowledge and experience in accounting and finance. The Audit Committee should report on its activities to the Board of Directors. Report on conflict of interests Suspected or presumed fraud or irregularity or material defect in the internal control system.

Compliance Status (Put v in the appropriate column) Complied Not Complied v

Explanation for noncompliance with the condition

v

v

v

v

v v

v

v v

v N/A N/A

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Condition or Clause Number

Title

3.3.1(ii)(c)

3.3.1(ii)(d)

3.3.2

3.4

4.00(i)

4.00(ii) 4.00(iii)

4.00(iv) 4.00(v) 4.00(vi) 4.00(vii) 5.00

Suspected infringement of laws, including securities related laws, rules and regulations. Any other matter, which should be disclosed to the Board of Directors immediately. Any report by the Audit Committee to the Board of Director which has material impact on the financial condition and results of operation and has agreed with the Board on the rectification measures within a certain period but unreasonably ignored by the Board, then the Audit Committee should report such findings to SEC. Any report by the Audit Committee to the Board of Directors under section 3.3.1.(ii) should be signed by the Chairman of the Audit Committee and disclosed in the Annual Report. The External / Statutory Auditors should not give appraisal or valuation services, or give fairness opinions. OR Give financial information systems designs and implementation. OR Bookkeeping or other services related to the accounting records or financial statements. OR Broker-dealer services OR Actuarial Services, OR Internal Audit services OR Any other service that the Audit Committee determines. REPORTING THIS COMPLIANCE IN THE DIRECTOR'S REPORT.

Compliance Status (Put v in the appropriate column) Complied Not Complied v

Explanation for noncompliance with the condition

v

v

v

v

v v

v v v v v

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AUDITORS’ REPORT TO THE SHAREHOLDERS OF APEX ADELCHI FOOTWEAR LIMITED
We have audited the accompanying Balance Sheet of Apex Adelchi Footwear Limited as at 31 December, 2010 and the related Profit & Loss Account, Statement of Changes in Equity and Cash Flow Statement for the year ended 31 December, 2010. Respective Responsibilities of Directors and Auditors: The preparation of these financial statements is the responsibility of the Company’s management. Our responsibility is to express an independent opinion on these financial statements based on our audit. Basis of Audit Opinion: 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion. Opinion: In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS), give a true and fair view of the state of the Company’s affairs as at 31 December, 2010 and of the results of its operations and its cash flows for the year then ended and comply with the Companies Act, 1994 and other laws and regulations where applicable. We also report that: a) We obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof; b) In our opinion, the Company has kept proper books of accounts as required by law so far as it appeared from our examination of those books; c) The Company’s Balance Sheet and Profit & Loss Account dealt with by the report are in agreement with the books of accounts;

d) The expenditure incurred was for the purposes of the Company’s business;

March 24, 2011 Dhaka

for Shiraz Khan Basak & Co. Chartered Accountants

Sd/(Ramendra Nath Basak, F.C.A)

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AS AT 31 DECEMBER 20 10
Year Ended 31 Dec. 10 Taka 418,371,710 2,239,199,979 881,553,360 1,032,526,768 8,240,059 97,151,909 4,258,672,075 Less: Current Liabilities Working capital loan Sundry creditors Provision for income-tax Proposed cash dividend Net Current Assets Net Assets Financed by: Shareholders’ equity: Share capita l Share premium Dividend equalization fund Retained earnings Total Shareholders’ Equity 11 112,500,000 68,804,919 33,750,000 511,011,149 726,066,068 112,500,000 68,804,919 33,750,000 520,037,265 735,092,184 9 10 1,850,501,474 1,912,941,015 142,535,228 45,000,000 3,950,977,717 307,694,358 726,066,068 1,417,382,739 1,198,149,514 97,132,208 39,375,000 2,752,039,461 197,982,298 735,092,184 Year Ended 31 Dec. 09 Taka 537,109,886 1,343,434,430 709,941,378 827,374,934 4,574,002 64,697,015 2,950,021,759

BALANCE SHEET

Notes Fixed Assets Current Assets Inventories Trade debtors Advances, deposits and prepayments Investments Cash & bank balances 3 4 5 6 7 8

Sd/(Syed Nasim Manzur) Managing Director

Sd/(Syed Gias Hussain) Deputy Managing Director

Sd/(S.M. Shahjahan) Company Secretary

Sd/-

This is the Balance Sheet referred to in our report of same date. The annexed notes form part of these accounts.

(Shiraz Khan Basak & Co.)
Chartered Accountants March 24, 2011

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PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2010
Year Ended 31 Dec. 10 Taka 6,961,115,608 29,598,986 6,931,516,622 13 14 5,804,093,279 35,378,905 5,839,472,184 1,092,044,438 15 521,156,825 276,620,946 6,945,000 595,000 805,317,771 Operating Income Other Income Profit before WPPF Provision for contribution to WPPF Profit before tax Provision for tax (export sales) Provision for tax (local sales) Net profit after tax Appropriations Prior years’ retained earnings Prior years’ adjustment Cash dividend Retained Earnings Earning per share (per value Tk. 100/-) 3 17 286,726,667 584,504 287,311,171 (13,681,484) 273,629,687 (30,486,582) (14,916,438) 228,226,667 520,037,265 (192,252,783) (45,000,000) 282,784,482 511,011,149 202.87 Year Ended 31 Dec. 09 Taka 5,834,073,431 13,203,884 5,820,869,547 4,883,463,949 29,826,050 4,913,289,999 907,579,548 307,866,159 333,520,762 5,490,000 1,212,500 648,089,421 259,490,127 509,037 259,999,164 (12,380,913) 247,618,251 (29,594,128) (6,491,872) 211,532,251 347,880,014 0 (39,375,000) 308,505,014 520,037,265 188.03

Notes Sales Less: VAT Cost of Sales Cost of goods sold Freight & forwarding Gross Profit Fixed Operating Expenses Marketing & administration Bank interest & charges Directors' remuneration Legal & audit fee 12

16

Sd/(Syed Nasim Manzur) Managing Director

Sd/(Syed Gias Hussain) Deputy Managing Director

Sd/(S.M. Shahjahan) Company Secretary

Sd/-

This is the Profit & Loss Account referred to in our report of same date. The annexed notes form part of these accounts

(Shiraz Khan Basak & Co.)
Chartered Accountants March 24, 2011

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CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2010

Year Ended 31 Dec. 10 Taka CASH FLOW FROM OPERATING ACTIVITIES Collections from turnover, bills receivable and other income Payments for purchase of leather, accessories, components, payments to creditors and other expenses 6,790,088,130

Year Ended 31 Dec. 09 Taka 6,030,012,454

(6,932,275,491) (6,017,855,391)

CASH FLOW FROM INVESTING ACTIVITIES Acquisition of fixed assets (219,101,480) (114,706,071)

CASH FLOW FROM FINANCING ACTIVITIES Loan received/(repaid) Dividend paid 433,118,735 (39,375,000) 137,427,133 (33,750,000)

Net cash inflow/ (outflow) for the period Opening cash and bank balances Closing cash and bank balances

32,454,894 64,697,015 97,151,909

1,128,125 63,568,890 64,697,015

Sd/(Syed Nasim Manzur) Managing Director

Sd/(Syed Gias Hussain) Deputy Managing Director

Sd/(S.M. Shahjahan) Company Secretary

This is the Cash Flow Statement referred to in our report of same date. The annexed notes form part of these accounts

(Shiraz Khan Basak & Co.)
Chartered Accountants March 24, 2011

Sd/-

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Annual Report

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2010

Particulars

Share Capital Taka 112,500,000 112,500,000

Share Premium Taka 68,804,919 68,804,919

Dividend Equalization Taka 33,750,000 33,750,000

Retained Earnings Taka 520,037,265 (192,252,783) 228,226,667 (45,000,000) 511,011,149

Total Taka 735,092,184 (192,252,783) 228,226,667 (45,000,000) 726,066,068

As at January 01, 2010 Prior years’ adjustment Net profit after tax Proposed cash dividend As at December 31, 2010

Sd/(Syed Nasim Manzur) Managing Director

Sd/(Syed Gias Hussain) Deputy Managing Director

Sd/(S.M. Shahjahan) Company Secretary

Sd/-

This is the Statement of Changes in Equity referred to in our report of same date. The annexed notes form part of these accounts

(Shiraz Khan Basak & Co.)
Chartered Accountants March 24, 2011

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NOTES TO THE ACCOUNTS
For the year ended 31 December 2010 1. REPORTING ENTITY : Company Profile Apex Adelchi Footwear Limited was incorporated on 4 January 1990 as a Public Limited Company with the Registrar of Joint Stock Companies and Firms in Bangladesh. It was listed with Dhaka Stock Exchange Limited on 11 July 1993 and with Chittagong Stock Exchange Limited on 22 October 1995. The registered office of the company is at House No. 6, Road No. 137, Block SE (D), Gulshan -1, Dhaka 1212, Bangladesh and its factory at Chandra , shafipur, Kaliakoir, Gazipur. Nature of Business The Company is an export oriented leather shoe and shoe components manufacturer producing and selling leather shoes and other leather products in international market. It also sells its products in local market through outlets named Gallerie Apex. 2. BASIS OF PRE PARATION: 2.1 Statement of C ompliance The financial statements have been prepared in accordance with Bangladesh Accounting Standards and Bangladesh Financial Reporting Standards and as per the requirement of Companies Act 1994, the Securities and Exchange Rules 1987 and other relevant local laws and rules. Basis of Measurement The financial statements have been prepared on the basis of historical cost convention and accrual basis. Reporting C urrency and Level of P recision The financial statements are presented in Bangladesh Taka (BDT), which is the company’s functional currency. All financial information presented in BDT have been rounded off to the nearest BDT except where indicated otherwise. Use of Estimates and J udgments The preparation of financial statements in conformity with the Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS) requires management to make judgments, estimates and assumptions that affects the reported amounts of the assets and liabilities and disclosure of the contingent assets and liabilities at the date of the financial statements, and revenue and expenses during the year reported. Actual results may differ from these estimates. Going Concer n The company has adequate resources to be in operation for a foreseeable future and the Directors continue to adopt going concern basis in preparing the accounts. The current resources of the company provide sufficient fund to meet the present requirements of its existing business. Reporting Period The financial period of the company covers one year from 1 January 2010 to 31 December 2010 consistently.

2.2

2.3

2.4

2.5

2.6

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Annual Report

Foreign Currency Translation Transactions in foreign currencies are translated to BDT at the foreign exchange rate ruling at the date of the transactions in accordance with provisions of IAS 21. Foreign currency gains and losses are reported on a net basis. Transactions with Related Parties The company has carried out transactions with Apex Tannery Limited, Pioneer Insurance Company Limited, Grey Advertising Bangladesh Limited and Apex Enterprises Limited in the normal course of business. Comparative Information Comparative information have been disclosed in respect of the year 2009 for all numerical data in the financial statements and also the narrative and descriptive information where it is relevant for understanding of the current period financial statements. Figures of the year 2009 have been rearranged whenever considered necessary to ensure comparability with the current period.

2.8

2.9

2.10 Cash Flow Statement Cash flow statement is prepared in accordance with IAS 7 and it has been presented under direct method as prescribed by the Securities and Exchange Rules 1987. 2.11 Revenue Recognition The Company recognizes revenue when risk of ownership has been transferred to the buyer, which satisfies all the conditions for revenue recognition as provided in IAS 18. 2.12 Recognition of Property, Plant, Equipment and its Depreciation: i. Recognition and Measurement of Cost Property, plant and equipments are stated at cost less accumulated depreciation in accordance with IAS 16. Cost represents cost of acquisition, purchase price and other directly attributable cost of bringing the assets to working conditions for its intended use. Expenditure for maintenance and repairs are treated as revenue expense, major replacements, renewals and betterment are capitalized. ii. Depreciation During the year depreciation policy has been changed from reducing balance method to straight line method. Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value. Full year’s depreciation has been charged on additions irrespective of date when the related assets are put into use and no depreciation has been charged on assets during the year of disposal. Depreciation is charged on all property and equipment on straightline basis over the estimated usefull lives of each part of an item of property, plant and equipment, since this reflects most closely the expected pattern of consumption of future economic benefits embodied in the assets. Current depreciation rates are as follows: Category Buildings Plant & machinery Furniture & fixture Motor vehicles Office equipment Computers & printers Outlet decoration Rate (%) 10% 15% 20% 20% 20% 33.33% 33.33%

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Depreciation charges have been apportioned to production & administrative and marketing expense on a consistent basis. As a result of the change in depreciation policy, current year profit has been decreased by Tk. 83,482,074 and previous years’ retained earnings decreased by Tk. 192,252,783. All the necessary adjustments have been made in accordance with IAS 8. 2.13 Inventory Valuation Inventories comprise of raw materials, packing materials, work-in-process and finished goods. They are stated at the lower of cost or net realizable value in accordance with IAS 2, after making reasonable allowance for any obsolete or slow moving items. The cost of inventories is assigned by using weighted average method. 2.14 Trade Receivable Trade receivables are carried at o riginal invoice amount considered good and collectible. 2.15 Concentration on Credit Risk Management believes that there was no significant concentration of credit risk in the company’s receivables . 2.16 Cash and Cash Equivalents Cash and cash equivalent comprise cash in hand and cash at bank held and available for use of the company without any restriction. 2.17 Creditors and Accruals Liabilities are recognized for amounts to be paid in future for goods and services received. 2.18 Provisions A provision is recognized in the balance sheet when the company has a legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation and accordingly provision for expenses has been made in the accounts. 2.19 Contingencies Contingencies arising from claims, litigations, assessments, fines, penalties, etc. are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. 2.20 Taxation Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of previous years. Sufficient provision has been made during the year as per Income Tax Ordinance 1984 amended on the basis of Finance Act 2010. 2.21 Contribution to Workers Profit Participation Fund The company has provided @ 5% of net profit before tax after charging the contribution to WPPF as per provision of the companies’ profit (Workers Participation Act, 1968). 2.22 Earnings Per Share (EPS) The company calculates earnings per share (EPS) in accordance with IAS 33. This has been calculated by dividing the net profit after tax for the year by the number of ordinary shares issued by the company. 2.23 Events after the Balance Sheet date Events after the balance sheet date provide additional information about the company’s position at the balance sheet date as reflected in the financial statements. Events after the balance sheet date are non-adjusting events are disclosed in the notes when material.

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3. FIXED ASSETS
Particulars Land
103,051,290

Buildings
242,405,933

Plant & Machinery
399,988,712

Vehicles
16,878,083

Office Equipment
70,476,583

Computers & Printers
10,315,890

Furniture & Fittings
88,932,129

Outlet Decoration
232,936,408

Total 2010
1,164,985,028

Total 2009
945,883,547

Cost Less: Depreciation Written down value

0
103,051,290

144,832,685
97,573,248

335,402,255
64,586,457

13,362,754
3,515,329

39,247,567
31,229,016

7,963,524
2,352,366

73,469,131
15,462,998

132,335,402
100,601,006

746,613,318
418,371,710

408,773,661
537,109,886

SCHEDULE OF FIXED ASSETS AS AT 31 DECEMBER 2010
Sl. No. 1 2 3 4 5 6 7 8 Particulars Cost As at 01.01.10 Addition this year As at 31.12. 10 (1+2) Depreciation Rate (%) During the year As at 31.12.09 Prior years’ Adjustment As at 31.12.10 (5+6+7) Land Buildings Plant & Machinery
364,330,117 35,658,595 399,988,712 15% 28,745,925 241,150,413 65,505,917 335,402,255

Vehicles

Office Equipment
52,255,917 18,220,666 70,476,583 20% 10,928,690 10,395,430 17,923,447 39,247,567

Computers & Printers
8,722,458 1,593,432 10,315,890 33.33% 2,736,349 1,735,186 3,491,989 7,963,524

Furniture & Fittings
85,847,030 3,085,099 88,932,129 20% 8,087,955 40,324,471 25,056,705 73,469,131

Outlet Decoration
104,388,357 128,548,051 232,936,408 33.33% 77,645,469 11,933,717 42,756,216 132,335,402

Total 2010
945,883,547 219,101,481 1,164,985,028

Total 2009
831,177,476 114,706,071 945,883,547

100,683,790 2,367,500 103,051,290 0% 0 0 0 0

213,547,795 28,858,138 242,405,933 10% 15,507,679 94,942,491 34,382,515 144,832,685

16,108,083 770,000 16,878,083 20% 1,934,807 8,291,953 3,135,994 13,362,754

145,586,874 408,773,661 192,252,783 746,613,318

55,701,347 353,072,314 0 408,773,661

Depreciation charged to production Depreciation charged to marketing & administration

64,544,335 81,042,539 145,586,874

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Apex Adelchi Footwear Limited

Annual Report

4.

INVENTORIES

Finished leather Wet blue leather Accessories & Components: Outsole components Other components Other a ccessories Packing materials Finished Stock: Finished shoes Finished u pper Work in Process: Finished leather Outsole Other a ccessories Packing materials

Year Ended 31 Dec. 10 Taka 265,755,889 39,825,251 139,083,699 321,597,804 38,472,757 58,553,921 789,714,113 121,243 423,711,643 60,753,237 50,258,060 51,352,362 2,239,199,979 Basis of Valuation

Year Ended 31 Dec. 09 Taka 253,200,882 47,020,205 111,469,750 220,416,852 45,133,680 35,609,521 229,367,902 0 266,401,091 57,642,825 43,661,618 33,510,104 1,343,434,430

Stock Finished Leather Wet Blue Components Accessories Packing Materials

:

Valued at weighted average cost price

Finished Stock: Complete Shoe & Shoe Upper : Work in Process :

Valued at average cost price (ex-factory cost price) Work-in-process includes direct materials and proportionate cost of labor with other direct expenses based upon average cost price.

•

Inventories were hypothecated to Janata Bank, Janata Bhaban Corporate Branch, Dhaka as security against working capital loan.

5. TRADE DEBTORS Export bills receivable Export incentive receivable 654,078,940 227,474,420 881,553,360 466,104,038 243,837,340 709,941,378

•

Export bills receivable represent approximately 45 days CAD export bills under colle ction, a substantial portion of which has been realized by February 2011.

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Apex Adelchi Footwear Limited
6. ADVANCE, DEPOSIT & PREPAYMENTS Year Ended 31 Dec. 10 Taka 647,464,148 42,540,821 232,898,567 104,051,033 1,625,056 3,947,143 1,032,526,768

Annual Report

L/C accounts (Goods-in-transit) Advance income tax Sundry advance L/C margin deposit Security deposits & demand note Insurance premium prepaid

Year Ended 31 Dec. 09 Taka 531,839,090 30,200,917 215,762,830 44,817,931 1,650,056 3,104,110 827,374,934

7.

INVESTMENTS Investment in CDBL Fixed deposit

4,416,700 3,823,359 8,240,059

1,000,000 3,574,002 4,574,002

8.

CASH AND BANK BALANCES Cash in Hand : Head office Factory Cash at Bank : Mercantile Bank, Gulshan, Dhaka Dhaka Bank, Banani, Dhaka Janata Bank, Gazipur Mutual Trust Bank, Shafipur State Bank of India, Dilkusha, Dhaka Agrani Bank, Amin Court, Dhaka Prime Bank, Elephant Road, Dhaka Janata Bank, CD A/C, J. Bhaban Corp. Branch, Dhaka Janata Bank, FC E uro, J. Bhaban Corp. Branch, Dhaka Janata Bank, FC USD A/C, J. Bhaban Corp. Branch, Dhaka Janata Bank, Kaliakoir Bank Al Falah, Dhanmondi, Dhaka Agrani Bank, Ramna, Dhaka Mutual Trust Bank, Shafipur Bank Asia, FC Euro A/C, Principal Branch, Dhaka Bank Asia, STD A/C, Principal Branch, Dhaka Bank Asia, RAD A/C, Principal Branch, Dhaka Bank Asia, CD A/C, Principal Branch, Dhaka

1,159,231 6,346,438 9,158,542 0 45,455 101,279 0 6,361 1,493,379 18,854,671 32,818,059 15,107,478 5,027 33,047 67,728 606,464 11,130,398 182,139 32,325 3,888 97,151,909

2,459,647 352,399 832,518 18,426 29,657 3,607 77,430 6,361 5,051,168 12,434,165 19,948,231 9,668,334 1,207,177 47,679 494,863 0 10,629,019 1,436,334 0 0 64,697,015

•

Cash balance was physically checked and verified and Bank balances were reconciled and found in order.

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Apex Adelchi Footwear Limited
9. WORKING CAPITAL LOAN Year Ended 31 Dec. 10 Taka The working capital loan has been taken from the following Banks : Janata Bank, ECC A/C, J. Bhaban Corp . Branch, Dhaka Bank Asia, OD A/C, CEPZ Prime Bank, Elephant Road, Dhaka Bank Al Falah, Dhanmondi, Dhaka Janata Bank, Qurbani A/C, J. Bhaban Corp. Branch, Dhaka Bank Asia , LTR, Principal Branch, Dhaka Janata Bank, PAD, J. Bhaban Corp. Branch, Dhaka Bank Asia , PAD, Principal Branch, Dhaka City Bank, Gulshan, Dhaka 490,943,282 270,266,204 141,331,336 97,500,000 252,929,902 182,314,673 376,211,317 2,660,255 36,344,505 1,850,501,474

Annual Report
Year Ended 31 Dec. 09 Taka 502,791,285 301,802,924 112,714,313 0 201,426,667 66,505,062 119,847,501 89,660,983 22,634,004 1,417,382,739

10.

SUNDRY CREDITORS Suppliers, contractors & others Printing & stationery Clearing & forwarding Outstanding expenses Royalty payable Audit fee 1,137,335,044 957,323 50,236,464 307,780,062 416,577,122 55,000 1,912,941,015 808,466,078 331,162 43,026,358 45,742,159 300,528,757 55,000

1,198,149,514

• •
11.

Outstanding expenses represent accrued salary and wages for the month of December 2010 and other utility bills for the month of November and December 2010. Royalty and Commission amount were provided as per Royalty and Commission agreement approved by the regulatory authorities.

SHARE CAPITAL Authorized Capital 5,000,000 shares @ Tk. 100/- each Issued, Subscribed & Fully paid-up Capital 1,125,000 shares @ Tk. 100/- each Composition of shareholding: As on 28 Feb. 2011 9.09% 8.42% 56.83% 25.66% As on 15 March 2010 9.09% 3.35% 19.34% 68.22% 500,000,000 500,000,000

112,500,000

112,500,000

Sponsors Investment Corporation of Bangladesh Public Local Financial Institutions

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Apex Adelchi Footwear Limited

Annual Report

Distribution schedule of each class of equity setting out the number of share holders and percentage in the following categories: Shareholders 2,294 115 17 8 4 3 2 2 1 2,446 Number of Holdings Less than & equal 500 shares 501 shares to 5,000 shares 5,001 shares to 10,000 shares 10,001 shares to 20,000 shares 20,001 shares to 30,000 shares 30,001 shares to 40,000 shares 40,001 shares to 50,000 shares 50,001 shares to 100,000 shares Over 100,000 shares Holdings 133,688 196,310 115,995 96,960 103,393 68,200 85,560 180,272 144,622 1,125,000 % 11.88 17.45 10.31 8.62 9.19 6.06 7.61 16.02 12.86 100.00

Pattern of Shareholding as on February 28, 2011
Shareholders Name (1) Syed Manzur Elahi (2) Syed Nasim Manzur (3) Munize Manzur Khasru (4) Syed Gias Hussain (5) Niaz Ahmed Choudhury (6) Adelchi Sergio (7) Apex Tannery Limited (8) Niloufer Manzur Designation/Relationship Chairman Managing Director Director Deputy Managing Director Director Director Associated Company Wife of Chairman Number of Shares 24,750 15,480 1,500 1,500 1,500 1,500 13,670 42,330 1,02,230

12.

TURNOVER

Year Ended 31 Dec. 10 4,336,624 5,546,541,634 18.59 8,929 6,652,200 10.05 0 0 0

Year Ended 31 Dec. 09 3,640,216 4,947,796,892 19.87 7,150 5,047,720 10.17 6,689 969,860 2.12

Export: Shoe in Prs Value in Taka Average value in US$ Shoe Upper in Prs Value in Taka Average value in US$ Components in Prs Value in Taka Average value in US$ Local: Shoe in prs Value in Taka Average value in Taka

1,864,797 1,407,921,774 755 6,961,115,608

951,828 880,258,959 925 5,834,073,431

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Apex Adelchi Footwear Limited
13. COST OF GOODS SOLD Year Ended 31 Dec. 10 Taka 630,583,540 6,063,419,542 486,000,855 1,375,910,658 5,804,093,279 2,940,652,541 2,144,347,211 209,980,587 340,004,825 363,890,043 64,544,335 6,063,419,542

Annual Report
Year Ended 31 Dec. 09 Taka 537,094,486 4,697,653,066 279,299,937 630,583,540 4,883,463,949 2,351,001,905 1,644,429,780 160,837,667 248,882,712 250,951,756 41,549,246 4,697,653,066

Opening stock Add: Cost of production Add: Cost of royalty/commission/design & development Less: Closing stock Cost of Production: Leather consumption Accessories & components Packing materials Direct labour Factory overhead Depreciation Notes 18 19(a+b) 20 21 3

14.

FREIGHT & FORWARDING ON EXPORT Air freight Ocean freight Export forwarding Sample forwarding 1,512,826 5,984,281 25,500,484 2,381,314 35,378,905 2,811,849 3,839,875 21,392,897 1,781,429 29,826,050

15.

MARKETING & ADMINISTRATION Salary & allowances Conveyance Staff welfare Entertainment Printing & stationery Postage Rent, rates & taxes Telephone & fax charges Office maintenance Advertisement Fuel & lubricant Vehicle maintenance Insurance premium Repairs & maintenance Export promotion Outlet expenses Travelling expenses AGM expenses Depreciation 98,932,239 3,766,955 3,090,839 2,279,243 7,664,137 946,694 102,250,458 4,601,380 27,377,014 54,076,706 3,363,769 3,561,093 8,082,926 3,578,910 13,940,712 87,918,066 13,481,007 1,202,138 81,042,539 521,156,825 78,607,937 2,898,217 3,058,145 2,179,243 3,841,246 773,878 68,054,532 3,908,695 19,582,781 21,079,126 2,468,513 2,056,845 424,535 2,091,546 10,776,563 61,407,075 9,765,181 740,000 14,152,101 307,866,159

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Apex Adelchi Footwear Limited

Annual Report

• • • • • •
16.

Salary & Allowances increased due to new staff costs for new outlets and regular increments. Rent, rates & taxes increased due to increase in number of outlets, increase in rent of existing outle ts and 15% VAT paid on rent as per Govt. new legislation. Office maintenance, printing & stationery and outlet expenses increased mainly for 14 new outlets opened during the year. Advertisement expenses increased mainly due to increased promotional acit ivity during Eid festivals. Conveyance increased due to continuous internal audit of local outlets throughout the country. Travelling and export promotion expenses have gone up due to increased travel for sourcing materials at lower cost and finding new markets for our products. Year Ended 31 Dec. 10 Taka 540,000 55,000 595,000 Year Ended 31 Dec. 09 Taka 1,157,500 55,000 1,212,500

LEGAL & AUDIT FEE

Legal fees & charges Audit fee

17.

OTHER INCOME Interest on fixed deposit Dividend on CDBL investment 484,504 100,000 584,504 259,037 250,000 509,037

18.

LEATHER CONSUMPTION Opening stock Purchase during the year Less: Closing stock Consumption

300,221,087 3,034,243,432 393,811,978 2,940,652,541

286,225,174 2,364,997,818 300,221,087 2,351,001,905

19.

ACCESSORIES AND COMPONENTS CONSUMPTION (a) Accessories and Components (Import) Opening stock Purchase during the year Less: Closing stock Consumption (b) Accessories and Components (Local) Opening stock Purchase during the year Less: Closing stock Consumption

320,596,036 2,048,896,305 345,031,897 2,024,460,444 56,424,246 129,003,727 65,541,205 119,886,768

286,714,248 1,586,303,223 320,596,036 1,552,421,435 49,819,946 98,612,645 56,424,246 92,008,345

20.

PACKING MATERIALS CONSUMPTION Opening stock Purchase during the year Less: Closing stock Consumption 35,609,521 233,275,307 58,904,241 209,980,587 21,320,687 175,126,501 35,609,521 160,837,667

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Apex Adelchi Footwear Limited
21. FACTORY OVERHEAD Year Ended 31 Dec. 10 Taka 134,830,998 487,153 28,179,765 84,304,375 702,429 14,334 7,288,105 54,802,935 859,256 321,315 2,845,549 1,675,490 2,191,936 44,262,775 1,123,628 363,890,043

Annual Report

Salary & allowances Medical expenses Factory maintenance Power, fuel & water Staff uniform Paper & periodicals Insurance premium Repairs & maintenance Conveyance Entertainment Printing & stationery Vehicle maintenance Guest house expenses Rent, rates & taxes Telephone, telex & fax charges

Year Ended 31 Dec. 09 Taka 95,712,129 235,141 12,903,918 51,392,888 364,948 11,175 5,184,904 44,766,572 672,179 230,363 1,896,649 1,008,488 1,685,977 34,047,000 839,425 250,951,756

• •

Salary and allowances increased due to annual increment given to employees and increase in number of staff. Repairs and maintanance expenses increased mainly for using spares parts in various machines at factory.

GENERAL: i. Director remuneration represents remuneration paid to two Directors ii. iii. iv. There is no contingent liability of the Company at the date of Balance Sheet. In the course of making payments to suppliers against services, supplies, etc. the company has deducted tax at source as per income tax law and deposited to Bangladesh Bank in time. During the year 6 Board Meetings were held and 6 Resolutions by circulation were passed. All Directors attended except one Director was absent in four meetings, one Director was absent in three meetings and two directors were absent in one meeting who were granted leave of absence. The Board of Directors proposed 40% cash dividend for the year at the Board Meeting held on March 24, 2011. There has been no claim against the company not acknowledged as debt by the company. The company has no aggregate amount of contract for capital expenditure to be executed and not provided for in the accounts. There was no Bank Guarantee issued by the company on behalf of their Directors or the company itself except for bank loans. No brokerage was paid against sales during the year under audit. Auditors are paid only statutory audit fee approved by the shareholders in the last Annual General Meeting. There was no foreign exchange remitted to the relevant shareholders during the year under audit.
No amount of money was expended by the company for compensating any member of the Board for special service rendered.

v. vi. vii. viii. ix. x. xi. xii. 39