Apex Tannery Limitedapextannery.com/resources/AR-2015.pdf · Apex Tannery Limited Our Vision, Mission, Values and Objectives 04 Corporate Directory 05 Directors and Management Team

Apex Tannery Limited

38th Annual General Meeting of the Company held on 23rd September, 2014

A partial view of the Shareholdes at the 38th Annual General Meeting


Annual Report 20152

A partial view of the Shareholders at the 38th Annual General Meeting

Annual Report 2015 3


Our Vision, Mission, Values and Objectives 04

Corporate Directory 05

Directors and Management Team 06

Directors’ Profile 07

Report of the Directors 10

Financial Highlights 18

Financial Highlights (Graphical presentation) 19

Statement of Value Addition 20

Report on Corporate Social Responsibilities (CSR) 21

Report on Corporate Governance 23

Corporate Governance Compliance Report 26

Pattern of Shareholding 33

Audit Committee Report 34

Auditors’ Report 37

Statement of Financial Positon 38

Statement of Comprehensive Income 39

Statement of Cash Flow 40

Statement of Changes in Equity 41

Notes to the Financial Statements 42

Notice of the AGM 59

Attendance slip and Proxy form 61

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Annual Report 20154

OUR VISION, MISSION, VALUES AND OBJECTIVES

Our VisionOur vision is to attain 100% customer satisfaction world wide through continual quality improvement of our products.

Our MissionTo understand and satisfy customer’s wants and needs, we always try to add value, reduce costs and provide innovative thinking for improvement of our product quality, with world class compliance and working standards.

Our ValuesTo our customers we offer

•Acommitmenttoprovidebestqualityproductandtimelydelivery•Productionofworld-classqualityleather,meettherequirementsofcustomerswithcompetitivepriceand

up to date fashion trends •Quickresponsetotheexpectationsofourvaluedcustomersintermsofqualityandproductdevelopment

To our employees we offer• Adesirableandrewardingplacetowork• Providemotivationforteamworkandcareerdevelopment• Theopportunitytogrowtoemployee’smaximumpotential• Sufficientoffsiteandonthejobtraining

To our shareholders we offer• Attractivereturnwithminimumriskoftheirinvestment•A commitment to continuous improvement and adding value through all activities and managing

resources

To our suppliers we offer• Easytermsoftrade• Paymentwithinduetime

Our Objectives• 100%ontimedeliveryoftheservicestoourvaluedcustomers• 100%accuracyindocumentation•100%customersacceptanceofourservicesasvalidandusablesinaccordancewiththeirrequirements• Overallreductionofcostby2%everyyear• Reductionofcustomercomplaintsby10%everyyear.


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CORPORATE DIRECTORY

BOARD OF DIRECTORS

ChairmanSyedManzurElahi

Managing DirectorMd.Rahmatullah

DirectorsSyedNasimManzurMd.HedayetullahMd.FayekuzzamanFaruqAhmadSiddiqiSayedAlamgirFarroukChowdhury

AUDIT COMMITTEE

ChairmanFaruqAhmadSiddiqi

MembersSyedNasimManzurMd.HedayetullahSayedAlamgirFarroukChowdhury

MANAGEMENT COMMITTEE

ChairmanSyedManzurElahi

MembersMd.RahmatullahMd.HedayetullahAnsarul Islam M.AbdulMajedAnupKumarMukherjee

HUMAN RESOURCES COMMITTEE

ChairmanMd.Hedayetullah

MembersAnsarul Islam M.AbdulMajedAnupKumarMukherjeeMd.GolamSarwar

COMPANY SECRETARYJagadishKumarBhanja

AUDITORSChowdhuryBhattacharjee&Co.CharteredAccountants

CORPORATE GOVERNANCE AUDITOR

ARTISANCharteredAccountants

CHIEF FINANCIAL OFFICER

AnupKumarMukherjee

TAX ADVISER

KhandkerFazlulQuadir

LEGAL ADVISER

MohsenRashidAdvocate,SupremeCourt

BANKERS

Agrani Bank Ltd.AminCourtCorp.Branch,MotijheelC/A,Dhaka-1000

REGISTERED OFFICE

127HazaribaghT/ADhaka-1209

FACTORY

Unit I 127HazaribaghT/A,Dhaka-1209

Unit II ShafipurKaliakoir,Gazipur


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Annual Report 20156

DIRECTORS AND MANAGEMENT TEAM

SyedManzurElahiChairman

SyedNasimManzurDirector

FaruqAhmadSiddiqiIndependent Director

Md.HedayetullahDirector

SayedAlamgirFarroukChowdhuryIndependent Director

Md.RahmatullahManagingDirector

M.AbdulMajedExecutiveDirector

AnupKumarMukherjeeChiefFinancialOfficer

JagadishKumarBhanjaCompanySecretary

Ansarul IslamExecutiveDirector

Md.FayekuzzamanDirector

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DIRECTORS’ PROFILE

Chairman• ApexFootwearLtd.• ApexInvestmentsLtd.• QuantumConsumerSolutionsLtd.• BlueOceanFootwearLtd.• ApexPharmaLtd.• GreyAdvertisingBangladeshLtd.

Director• InternationalPublicationsLtd.(FinancialExpress)• PioneerInsuranceCo.Ltd.• MutualTrustBankLtd.

Trustee• EastWestUniversity

Other Activities• Former Advisor, Caretaker Government of

Bangladesh,1996and2001• FormerDirector,BangladeshKrishiBank• FormerDirector,ExportPromotionBureau• FormerDirector,BangladeshBank• Former President, Metropolitan Chamber of

CommerceandIndustry• FormerDirector,SonaliBank• Former President, Bangladesh Employers

Association

EducationB. A. (Distinction) in 1962 from St. Xavier’sCollege, Kolkata &M. A. (Economics) in 1964from Dhaka University.

Chairman• Parliamentary Standing committee for

ministryofInformation(2009totilldate)• PioneerInsuranceCompanyLtd.• FBFootwearLtd.• FootbedFootwearLtd.

Managing Director• DaichipexTextileMillsLtd.• ApexPropertyDevelopmentLtd.

Member• Central working committee, Bangladesh

Awami League• Parliamentary Standing Committee on

MinistryofLiberationWarAffairs• ParliamentaryPublicAccountscommittee• Bangladesh Jatiya Sangshad (1986, 1988,

1996,2008totilldate)• Senate,DhakaUniversity

Chief Adviser• BangladeshFinishedLeather,Leathergoods

andFootwearExporters’Association• DhakaMahanagarSamity(DhakaSamity)

Founder• A. K. M. Rahmatullah University College,

Beraid,Gulshan,Dhaka• Roushan Ara Girls High School, Beraid,

Gulshan,Dhaka

EducationBachelorofArtsfromChittagongUniversity.

Syed Manzur ElahiChairman

Md. RahmatullahManaging Director

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Md. HedayetullahDirector

Syed Nasim ManzurDirector

President• MetropolitanChamberofCommerceandIndustry

(MCCI)

Chairman• LandmarkFootwearLtd.

Managing Director• ApexFootwearLtd.

Founding Director• ApexFootwearLtd.• QuantumConsumerSolutionsLtd.• BlueOceanFootwearLtd.• ApexInvestmentsLtd.• GuardianLifeInsuranceLtd.

Director• ApexPharmaLtd.

• GreyAdvertisingBangladeshLtd.

• ApexEnterpriseLtd.

• PioneerInsuranceCo.Ltd.

• InternationalPublicationsLtd.

• Bangladesh Association of Publicly ListedCompanies(BAPLC)

• FRIENDSHIP (An Internationally acclaimed NonGovernment Organization which provides health andeducationalserviceinremoteandinaccessiblecharsofthenorthernregionoftheCountry)

• BangladeshBusinessLimited

Independent Director• WesternMarineShipyardLtd.

Education Graduated in Economics in EntrepreneurialManagement from the Wharton School of theUniversityofPennsylvania,USAin1990.

Chairman• HedayetullahSecuritiesLtd.

• ExecutiveCommitteeofMutualTrustBankLtd.

Managing Director• RMMPowerandEnergyLtd.

Director• MutualTrustBankLtd.

• DaichipexTextileMillsLtd.

• ApexPropertyDevelopmentLtd.

• FBFootwearLtd.

• FootbedFootwearLtd.

EducationB.Sc(Honors)inLeatherTechnologyfromtheBritish

School of Leather Technology, Northampton, UK

& M. A. in international Business from Webster

University, Regents College, London, United

Kingdom.

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Md. FayekuzzamanDirector

Faruq Ahmad SiddiqiIndependent Director

Chairman• ICBCapitalManagementLtd.

Managing Director• InvestmentCorporationofBangladesh(ICB)

Director• Industrial and Infrastructure Development

FinanceCompanyLtd.(IIDFC)• BangladeshDevelopmentBankLtd.(BDBL)• StandardBankLtd.• British American Tobacco Bangladesh Ltd.

(BATB)• LindeBangladeshLtd.• GlaxoSmithKlineBangladeshLtd.• ACILtd.• RenataLtd.• Credit Rating Information and Services Ltd.

(CRISL)• Credit Rating Agency of Bangladesh Ltd.

(CRAB)• BangladeshInstituteofCapitalMarket(BICM)• CentralDepositoryBangladeshLtd.(CDBL)• NationalTeaCompanyLtd.• ApexFootwearLtd.• SBLCapitalManagementLtd.

Member• TheInstituteofBankers,Bangladesh(IBB)• Bangladesh Krishi Gobeshona Endowment

Trust(BKGET)

Past Responsibilities• DeputyManagingDirector,AgraniBankLtd.• GeneralManager,InvestmentCorporationof

Bangladesh(ICB)

EducationB.Com(Hons),M.CominManagement.PostGraduation Studies in Investment Planning,Appraisal and management of Development FinanceInstitutionfromBradfordUniversity,United Kingdom. Attended CambridgeLeadership Program organized by theUniversity of Cambridge, United Kingdomand Leadership Essential Program arrangedbytheColumbiaUniversity,USA.

Former Chairman• Bangladesh Securities and Exchange

Commission (March 2006 to March

2009)

Retired secretary to the Govt. ofBangladesh (2002 to 2006)• MinistryofEducation

• MinistryofCommerce

• MinistryofPost&Telecommunication

• MemberofNationalBoardofRevenue

EducationB.A.(Hons).M.A.EnglishLanguageand

Literature from the University of Dhaka.

Retired Secretary to the Govt. of Bangladesh• MinistryofHealthandFamilyWelfare• MinistryofCommerce• MinistryofLocalGovernment

Former President• NationalTennisFederation

Former Vice President• Bangladesh National Football and

CricketFederation

Former Chairman• SelectionCommitteefortheBangladesh

NationalCricketandSoccerteams

Former Commissioner• RajshahiDivision

Former Director General• IndustriesandFood

Former Advisor• BangladeshEnterpriseInstituteand

FBCCI

Former Partite consultant • CIDA,CUTS,EU,DFID,OxfordPolicy

Management,OPM,USAID

EducationMasters Degree in Economics from

UniversityofDhakain1964andMasters

Degree in Economics from Williams

College,USAin1978.

Sayed Alamgir Farrouk ChowdhuryIndependent Director

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Annual Report 201512




DIVIDENDS

DuringtheyearEPSofyourCompanywasTaka6.25.DirectorsdecidedintheBoardMeetingheldonAugust16,2015torecommenddividendofTaka4.50pershareofTaka10/-each.AfteryourapprovalinthisGeneralMeeting,thedividendwillbepaidtotheShareholders.

EMPLOYMENT

Although the labour situation in the RMG sector was unsatisfactory, if not violent sometimes, the labourenvironmentintheleathersectorwasquiet.LabourrelationinyourCompanywascordialandmoraleoftheworkerswashigh.ThebreakdownofyourCompany’shumanresourcesare:

This YearTotal

Previous YearTotal

Workers 657 733

Staff 179 181

Management 32 32

INDUSTRY OUTLOOK AND POSSIBLE FUTURE DEVELOPMENTS

TherecessioninEuropecontinues,whichadverselyaffectedthedemandforleather,and,asexplainedlastyear,weexploredChinaandfoundtooursatisfactionthatthedemandforleatherinChinaissatisfactoryduetotheriseofthemiddleclass.PurchasingpowerinChinahasincreaseddramatically,withtheirgovernmentpushingitfurther.Consequently,thedemandforourleatherhasincreasedamongstthelocalshoeindustryinChina.

RISKS AND CONCERNS

During the year, the international and local media were highly critical of the environmental situation in Hazaribagh,whichwefeelisjustified.Nowhereintheworld,atannerywillbeallowedtofunctionwithouttheirownEffluentTreatmentPlant(ETP)oraCentralizedEffluentTreatmentPlant(CETP).WearecertainthatwithoutaCETPthereisnofutureforthissector.WefeelthatifwedonotrelocatetoSavarbyendofnextyear,EuropeandevenChinawillstopimportinganyleatherfromBangladesh.Inotherwords,thesoonerwerelocatetoSavar,thebetterfortheCompanyandtheCountry.

WehavebeenassuredbytheGovernmentofBangladeshthattheCETPwillbefullyfunctionalbymiddleof2016.YourCompanystartedtheconstructionofthenewtanneryinSavarabout06(six)monthsagoandtheprogressofconstructionissatisfactory.Hopefully,wewillbeabletogointocommercialproductionbyJune,2016.

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DIRECTORS ELECTIONMr.SyedManzurElahiandMr.SyedNasimManzurretire fromtheBoard intermsofArticlesofAssociation,andbeingeligible,offer them for re-election.TheBoardofDirectorsnominatedMr.SayedAlamgirFarroukChowdhury for appointment as an Independent Director, his appointment require approval in this AGMaccordingtoBSECCorporateGovernanceNotification.

BOARD MEETINGS AND ATTENDANCEDuringtheyearfourBoardMeetingswereheldandtheattendancebyeachDirectorwasasfollow:

Name of Directors No. of Meetings AttendedSyedManzurElahi 4Md.Rahmatullah 4SyedNasimManzur 3Md.Hedayetullah 4Md.Fayekuzzaman 4FaruqAhmadSiddiqi 4SayedAlamgirFarroukChowdhury 1TheDirectorswhocouldnotattendthemeetingsweregrantedleaveofabsence.

AUDIT COMMITTEETheAuditCommitteewassetuptoreviewthefinancialresults,auditandcompliancewiththestatutoryandregulatory requirements.TheCommittee recommended to theBoardofDirectors, the appointmentof theCompany’sauditorsandreviewedthescopeofinternalaudit.Auditcommitteereportisannexed.TheAuditCommitteewasformedbyfollowingDirectors:

1. FaruqAhmadSiddiqi,IndependentDirector Chairman2. Mr.SyedNasimManzur,Director Member3. Mr.Md.Hedayetullah,Director&HeadofInternalAudit Member4. SayedAlamgirFarroukChowdhury,IndependentDirector Member

CORPORATE & FINANCIAL REPORTINGTheCompanyhascompliedwithalltherequirementsofCorporateGovernanceasrequiredbytheBangladeshSecuritiesandExchangeCommission:

AccordinglytheDirectorsarepleasedtoconfirmthefollowing:

(a) Thefinancial statements togetherwith thenotes thereonhavebeendrawnup in conformitywith theCompanies Act 1994 and Securities and Exchange Rules 1987. These statements present fairly theCompany’sstateofaffairs,theresultsofitsoperations,cashflowandchangesinequity.

(b) ProperbooksofaccountsoftheCompanyhavebeenmaintained.

(c) Appropriateaccountingpolicieshavebeenconsistentlyappliedinthepreparationoffinancialstatementsandtheaccountingestimatesarebasedonreasonableandprudentjudgment.

(d) TheInternationalAccountingStandards,asapplicableinBangladesh,havebeenfollowedinpreparationoffinancialstatements.

(e) Thesystemsofinternalcontrolaresoundandhavebeeneffectivelyimplementedandmonitored.

(f ) ThecompanyhascarriedontransactionswithApexFootwearLimited,MutualTrustBankLtdandPioneerInsuranceCompanyLimitedinthenormalcourseofbusiness.

(g) TherearenosignificantdoubtsupontheCompany’sabilitytocontinueasagoingconcern.

(h) Thekeyoperatingandfinancialdataforlastfiveyearsisannexed.

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SHARE HOLDING

In accordance with the requirement of the Bangladesh Securities and Exchange Commission, pattern ofshareholdingsasof30thJune2015aregiveninAnnexureI.

REMUNERATION OF DIRECTORSinaccordancewiththerequirementoftheBangladeshSecuritiesandExchangeCommission,remunerationofdirectorsfortheyearended30thJune2015aregiveninnotenumber38.

CORPORATE GOVERNANCE COMPLIANCE REPORTIn accordance with the requirement of the Bangladesh Securities and Exchange Commission, “CorporateGovernanceComplianceReport”isannexed.

EXTERNAL AUDITORS APPOINTMENTM/SChowdhuryBhattacharjee&Co.,CharteredAccountants,AuditorsretiresatthisAnnualGeneralMeeting.M/S.MalekSiddiquiWali,CharteredAccountants,Auditorsofferthemselvesforappointmentfortheyear2015-2016.TheBoardofDirectorsrecommendsM/S.MalekSiddiquiWali,CharteredAccountantsforappoinment.

ACKNOWLEDGEMENTTheDirectorstakethisopportunitytoacknowledgethecontinuedsupportandeffortsofallmembersofthecompany, as well as all customers, suppliers and associates during the past year. Our performance would not havebeenpossiblewithouttheirsupport. OnbehalfoftheBoard,

August 16, 2015 Syed Manzur ElahiDhaka. Chairman.

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FINANCIAL HIGHLIGHTS

Taka in thousand

Particulars 2015 2014 2013 2012 2011

Sales 3,771,638 3,793,167 3,248,799 3,067,208 2,515,867

Grossprofit 273,390 225,764 253,309 271,157 225,046

Profitbeforetax 117,843 106,931 126,047 131,981 119,361

Netprofitaftertax 95,269 84,024 100,157 107,676 96,843

Authorizedcapital 500,000 500,000 500,000 500,000 500,000

Issued and paid up capital 152,400 152,400 152,400 152,400 152,400

Property,plant&equipment 270,134 277,953 280,531 241,175 209,719

Investment&NonCurrentAssets 608,940 375,989 323,791 283,146 218,508

Currentassets 1,144,001 1,109,035 1,112,356 1,313,429 1,394,792

Currentliabilities 542,389 313,070 311,474 525,849 651,702

Netcurrentassets 601,612 795,965 800,882 787,580 743,090

Dividend 68,580 68,580 60,960 53,340 45,720

Earningspershare(Taka) 6.25 5.51 6.57 7.07 6.35

Dividendpershare(Taka) 4.50 4.50 4.00 3.50 3.00

Marketvaluepershareatyearend(Taka) 110.70 142.60 86.70 103.10 136.20

NetAssetvaluepershare(Taka) 73.48 71.67 69.38 66.44 60.10

Netoperatingcashflowpershare(Taka) 6.05 4.97 31.12 9.35 (4.48)

PriceearningsRatio(Times) 17.71 25.88 13.20 14.58 21.43

Dividendyieldratio(%) 4.07 3.16 4.61 3.39 2.20

Currentratio 2.11 3.54 3.57 2.50 2.14

Quickratio 1.14 2.10 2.28 1.00 0.99

ReturnonShareholder’sFund(%) 8.87 8.02 9.77 11.01 10.57

Interest coverage ratio 3.23 3.70 3.34 2.79 2.95


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Profit before tax (Tk. in million)

Net profit after tax (Tk. in million)

Net asset value per share (Tk.) at year end

Market value per share (Tk.) at year end

Return on Shareholder’s fund (%)

Components of EPS (Tk.)

Net operating income Net other income



STATEMENT OF VALUE ADDITIONTaka in thousand

Year Ended Year Ended

June 30, 2015 June 30, 2014

Value addedSales 3,771,638 3,793,167Bought in materials and services (3,479,616) (3,544,679)

292,022 248,488Other income 56,456 62,064Available for distribution 348,478 310,552

Distribution of value additionToGovernment(IncomeTax) 23,066 06.62% 24,770 07.98%ToEmployees&Workers(Salary,wagesandotherbenefits) 200,408 57.51% 185,026 59.58%ToBanks(Interestandcharges) 30,227 08.67% 18,595 05.99%ToShareholders(Dividend) 68,580 19.68% 68,580 22.08%

322,281 92.48% 296,971 95.63%Retained for reinvestment and future growth 26,197 07.52% 13,580 04.37%

348,478 100.00% 310,552 100.00%


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Employees&workers To Banks ToShareholders Retained for reinvestment ToGovernment

Distribution of Value Addition in 2014-2015

Distribution of Value Addition in 2013-2014

Employees&workers To Banks ToShareholders Retained for reinvestment ToGovernment



REPORT ON CORPORATE SOCIAL RESPONSIBILITIES

ExecutiveDirectorM.A.Majedhandingover a cheque for financial assistancetoRozinaBegumofHazaribaghforherdaughter marriage.

Executive Director M. A. Majedhanding over a cheque for financialassistance to Kohinur Begum of Hazaribaghforherdaughtermarriage.

Executive Director M. A. Majedhandingoverachequeforfinancialassistance to Golam Mahiuddin ofHazaribaghforhistreatment.

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The Company gifted an air coolerto the Pashchimpara Mosque atChandertake,Beraid,Badda,Dhaka.

Executive Director M. A. Majedhanding over a cheque for financialassistance to Safiullah ofHazaribaghfor his treatment.

Executive Director M. A. Majedhanding over a cheque for financialassistance to Faruq Hossain (officeassistant of the Company) for hisson’s treatment.

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REPORT ON CORPORATE GOVERNANCECorporateGovernanceclearlydefinestherightsandresponsibilitiesoftheBoardofDirectors,Management,ShareholdersandotherStakeholders.TheBoardsupportsManagement, InternalandExternalAuditorsandother related parties including the Shareholders. A good corporate reputation is the most valuable andcompetitiveassetofacompany.ApexTanneryLimitedbelievesinthecontinuedimprovementofcorporategovernance.The Board of Directors and theManagementTeam of ApexTannery Limited is committed tomaintainingeffectiveCorporateGovernancethroughacultureofaccountabilityandtransparency.

Board of Directors

TheBoardofDirectorscomprisesof07(Seven)membersincludingtwoIndependentDirectors.AllDirectorshave soundknowledge in theareaof tannery,managerial expertise and soundacademicandprofessionalknowledge. They are well conversant with corporate governance.

Appointment of Board Members

The Directors of the Board are appointed by the Shareholders in the Annual General Meeting who areaccountabletotheShareholders.

Appointment of Independent Director

The Board of Directors in its 38th Annual General Meeting held on September 23, 2014 appointed anIndependentDirector. InselectingIndependentDirector,theCompanyalwayslookedforanindividualwhopossessesexperience,stronginterpersonalskillsandindependence. IndependentDirectorisconsideredbytheBoardtobeindependentoftheCompanyandfreeofanybusinessorotherrelationshipthatcouldinterferewiththeexerciseofhisindependentjudgment.TheBoardbelievesthathisexperienceandknowledgeassistsinprovidingbotheffectiveandconstructivecontributiontotheBoard.

The Role of the Chairman and Managing Director

PositionoftheChairmanandManagingDirector(CEO)areclearlyidentified.TheChairmanisresponsibleforleadingtheBoardanditseffectiveness.TheManagingDirectorservesastheChiefExecutiveoftheCompany.

Audit Committee

TheAuditCommitteewasestablishedasasub-committeeoftheBoardandhasjurisdictionoverApexTanneryLimited.TheauditcommitteeiscomprisedoffourmembersoftheBoardincludingtwoIndependentDirectorsoneofthemistheChairmanoftheCommittee.TheAuditCommitteeassiststheBoard.

Company Secretary

JagadishKumarBhanjahasbeenappointedas theCompanySecretaryof theCompany.Heprovides legalmatterstotheBoard.Amongotherfunctions,theCompanySecretary:

BridgesbetweentheBoardofDirectorsandShareholdersonstrategicandstatutorydecision

ActsasaqualityassuranceagentinallinformationtowardstheShareholdersandBoard

IsresponsibleforensuringthattheappropriateBoardproceduresarefollowed

Acts as the “Disclosure Officer” of the Company and monitors the compliance of the Acts, rules,regulations,notifications,guidelines,orders/directivesetc. issuedbytheBangladeshSecuritiesandExchangeCommission,StockExchange(s)applicabletotheconductofthebusinessactivitiesoftheCompany

The Company Secretary keeps the records of the Company’s compliance/noncompliance status of theconditionsimposedbyBSECwhichhasbeenshowninthecompliancereportonBSECNotification.

Chief Financial Officer

AnupKumarMukherjeehasbeenappointedastheChiefFinancialOfficeroftheCompany.HelooksaftertheoverallfinancialaffairsoftheCompany.Amongotherfunctions,theChiefFinancialOfficer:

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Preparesquarterlyandannuallyfinancialstatements

FinancialreportingproceduresinlinewiththerequirementofBangladeshAccountingStandards

ReportsfinancialpositionoftheCompanyinitsBoardmeeting

Financial Reporting and Transparency

Financial Statements have beenprepared in linewith the International Accounting Standards, BangladeshAccountingStandardsandotherlegislationsasapplicableinBangladesh.Timelypublicationofquarterlyandannualfinancialstatementswithcomprehensivedetailsbeyondthestatutoryrequirement.

Compliance with Applicable Rules and Regulations

TheCompany’sbusinessactivitiesareguidedandsupervisedbylocallawsandregulations:

TheCompaniesAct1994

TheBangladeshSecuritiesandExchangeCommission

ListingrulesofDhakaandChittagongStockExchangeLimited

BangladeshAccountingStandards

Purchase Committee

Apurchasecommitteeisfunctioningwithagroupofexecutives,headedbyaseniormostexecutivetoexaminethepurchaseproposalofgoods.Amongothers,thefollowingsarethemainresponsibilitiesoftheCommittee:

Toevaluatethereceivedproposalandfindouttheeffectivenessofeachproposal

Toprepareareportonthebasisofevaluationofthepurchaseproposalwithrecommendationandsenttoconcerneddepartmentsforobtainingapprovalfromthecompetentauthority

To supervise the entire activities of procurement

Statutory Audit

StatutoryAuditoftheCompanyisgovernedbytheCompaniesAct1994.TheCompanyActprovidesguidelinesfor theappointment, scopeofworkandretirementofauditors.Shareholdersappointauditorsandfix theirremunerationintheAnnualGeneralMeeting.

Internal Audit

InternalAuditsupporttheCompanytoachieveitsobjectivesbybringingasystematic,disciplinedapproachtoevaluateandimprovetheeffectivenessofitsriskmanagementandcontrol.InternalAuditactivityisgovernedbytheInternalTeam,whichisapprovedbytheBoard.

Internal Control

TheCompanyhasanInternalAuditdepartmentconsistingoffivemembersandheadedbytheHeadofInternalAuditor.TheInternalcontrolsystemismaintainedandreviewedbyaninternalauditfunctionthatreportstoManagementandtheAuditCommittee.

InternalControlmechanismisbuiltbytheCompany’ssystemsandprocedurestoreducetheriskoferrorandfraud.Itmaybeabletoreducetheriskthatfinancialstatementcontains.TheBoardofDirectorsensuressoundinternalcontroltoprovidereasonableassuranceregardingtheachievementoftheCompanyobjectivesintheareasof:

Effectivenessandefficiencyofoperations Reliabilityoffinancialreporting CompliancewithlawsandregulationsRE

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Code of Conduct

ApexTanneryLimitedhasadoptedCodesofConduct for securinggoodbusinessethicsandconduct inallaspectsoftheCompany’sactivities.TheCodeofConductisproperlycommunicatedtoandwithallemployeesandotheractivities,andisstrictlyrequiredtoabidebyit.

Management Committee

Theday-to-dayManagementoftheCompanyisentrustedwiththeManagingDirectorandtheManagementCommittee.TheManagementCommitteeservestheinterestoftheCompanyandachievessustainablegrowth.The members of the Management Committee are jointly accountable for the entire management of theCompanyanddecideonthebasicissuesofbusinesspolicyandcorporatestrategies.

Restrictions on dealing in the Company’s share by insiders

TheCompanyhasestablishedpolicyrelatingtotradingsharesbytheDirectors,employeesandotherinsiders.The securities laws also impose restrictions on similar sort of transaction.

Group Term Life Insurance Policy

The Board ofDirectors has approved for GroupTerm Life Insurance Policy for employees of ApexTanneryLimitedwithPrimeIslamiLifeInsuranceCompanyLimited.

Going Concern

TheCompanyhasadequate resources tocontinueoperationalexistence for the future.For this reason, theCompanycontinuestoadoptthegoingconcernbasisinpreparingthefinancialstatements.

Communication with Shareholders

Accountableto

Accountableto

The Company encourages communication with shareholders throughout the year and welcomes theirparticipationat shareholdersmeeting.TheCompany is transparentwith the stakeholdersof theCompany.Fourtimeseachyear,ApexTanneryLimitedreportstoitsshareholdersregardingitsbusiness,financialpositionand earnings. These include:

QuarterlyandAnnualfinancialstatements

AnnualGeneralMeeting

Price–SensitiveDisclosuresandotherdisclosurestotheBSECandStockExchanges

Inadditionalinformation,theCompanyisunderalegalandregulatoryrequirementtopublishviathewidlyforcasteddailyBanglaandEnglishnewspapers.ApexTanneryLimitedbelievesintransparencyandaccountabilitytothesocietyasawholethroughestablishmentofanefficientandeffectiveCorporateGovernanceprocedure.

Shareholders

Board of Directors

Management

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CORPORATE GOVERNANCE COMPLIANCE REPORTStatus of compliance with the conditions imposed by the Commissions Notification No. SEC/CMRRCD/2006-158/134/Admin/44dated07thAugust2012issuedundersection2CCoftheSecuritiesandExchangeOrdinance,1969(ReportunderConditionNo.7.00)

Condition No. Title Compliance

statusRemarks(If any)

1 Board of Directors:

1.1 Board’s Size:ThenumberoftheBoardmembersshallnotbelessthan5(five)andmorethan20(twenty);

CompliedThe ATL Board is comprised of 07(Seven)Directors

1.2 Independent Director:

(i) Atleastonefifth(1/5)oftotalnumberofdirectorsshallbeIndependentDirector;

Complied

There are two Independent Directors in the Board of ATL namely:Mr.FaruqAhmadSiddiqiandMr.SayedAlamgirFarroukChowdhury

(ii) For the purpose of this clause “independent director”meansadirector; Complied

(ii)a) Does not hold any share or holds less than 1% shares of thetotalpaid-upsharesoftheCompany; Complied The Independent Directors

declared their compliances.

(ii)b) Who is not a sponsor and not connected with anysponsor/director/ shareholder who hold 1% or moresharesofthetotalpaid-upsharesonthebasisoffamilyrelationship;

Complied DO

(ii)c) Does not have any other relationship, whether pecuniary or otherwise, with the company or its subsidiary/associatedcompanies;

Complied DO

(ii)d) Notamember,directororofficerofanystockexchange; Complied DO

(ii)e) Notashareholder,directororofficerofanymemberofstockexchangeoranintermediaryofthecapitalmarket; Complied DO

(ii)f ) Notapartneroranexecutiveorwasnotapartneroranexecutive during the preceding 3 (three) years of anystatutoryauditfirm;

Complied DO

(ii)g) Notbean independentdirector inmore than3 (three)listedcompanies; Complied DO

(ii)h) NotbeenconvictedbyacourtofcompetentjurisdictionasadefaulterinpaymentofanyloantoabankoraNon-BankingFinancialInstitution(NBFI);

Complied DO

(ii)i) Notbeenconvictedforacriminaloffenceinvolvingmoralturpitude; Complied DO

(iii) Nominatedby theBoardofDirectors andapprovedbytheshareholdersintheAGM; Complied In practice

(iv) The post of Independent Director can not remain vacant formorethan90(ninety)days; Complied

There was no vacancy in the position of Independent Director

(v) Board shall lay down a code of conduct of all Board members and annual compliance of the code to berecorded;

CompliedEveryDirectorsignedandconfirmedastoitscompliance

(vi) TenureofofficeofanIndependentDirectorshallbeforaperiodof3(three)years,whichmaybeextendedfor1(one)termonly;

CompliedThe Independent Directors are intheirfirsttermofofficeCO

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1.3 Qualification of Independent Director:(i) ShallbeaKnowledgeableindividualwithintegritywhois

abletoensurecompliancewithfinancial,regulatoryandcorporatelawsandcanmakemeaningfulcontributiontothebusiness;

Complied Qualificationandbackgroundjustified

(ii) Should be a Business Leader/Corporate Leader/Bureaucrat/University Teacher with Economics orBusiness Studies or Law background/Professionalslike Chartered Accountants, Cost and ManagementAccountants, Chartered Secretaries. Must have at least12(twelve)yearsofcorporatemanagement/professionalexperiences;

Complied

ExistingIndependentDirectorsare Bureaucrat having more than12(Twelve)yearsofexperience

(iii) InspecialcasestheabovequalificationsmayberelaxedsubjecttopriorapprovaloftheCommission;

Notapplicable

1.4 Chairman of the Board and CEO:ChairmanandCEOshallbefilledbydifferentindividuals.ChairmanshallbeelectedfromamongtheDirectors.TheBoardofDirectorsshall clearly define respective roles and responsibilities of theChairmanandtheCEO.

CompliedBotharedifferentindividuals.TherolesandresponsibilitiesareapprovedbytheBoard

1.5 The Directors’ Report to Shareholders:(i) Industry outlook and possible future developments in

theindustry; Complied The Directors report complies withtheGuidelines

(ii) Segment-wiseorproduct-wiseperformance; Complied Do(iii) RisksandConcerns; Complied Do(iv) Discussiononcostofgoodssold,GrossProfitMarginand

NetprofitMargin; Complied Do

(v) Discussion on continuity of any Extra-ordinary gain orloss; Complied Do

(vi) Disclosureforrelatedpartytransactions; Complied Do(vii) Utilizationofproceeds frompublic issues, rights issues

and/orthroughanyothers;Not

applicable(viii) Explanation if thefinancial resultsdeteriorate after the

company goes for IPO, RPO, Rights Offer and DirectListing;

Notapplicable

(ix) Explanation about significant variance occurs betweenQuarterly Financial performance and Annual FinancialStatements;

Complied TheDirectorsReportComplieswiththeGuideline

(x) Remuneration to directors including independent directors; Complied Disclosed in the annual report

(xi) Fairnessoffinancialstatement; Complied(xii) Maintenanceofproperbooksofaccount; Complied(xiii) Application of appropriate accounting policies and

estimates; Complied

(xiv) FollowedIAS,BAS, IFRS,andBFRSinpreparationofthefinancialstatements; Complied

(xv) Soundnessofinternalcontrolsystem; Complied(xvi) Abilitytocontinueasagoingconcern; Complied(xvii) Significantdeviationsfromthelastyear; Complied(xviii) Key operating and financial data of at least preceding

5(five)years; Complied

(xix) Reasonsfornotdeclareddividend;Complied

Dividendhasbeendeclaredand mentioned in the Directors’ Report

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(xx) Number of Board meetings held during the year andattendance; Complied Disclosed in the Directors

Report(xxi) Patternofshareholdingsandnamewisedetailsdisclosing

aggregatenumberofshares; Complied Disclosed in the Annual Report

(xxi)a) Parent/Subsidiary/Associated Companies and otherrelatedparties(NamewiseDetails); Complied Do

(xxi)b) Directors,CEO,CS,CFO,HIAandtheirspousesandminorchildren(Namewisedetails); Complied Do

(xxi)c) Executives(namewisedetails); Complied Do(xxi)d) Shareholdersholdingtenpercent(10%)ormorevoting

interest(Namewisedetails); Complied Do

(xxii) Directorappointment/re-appointment; Complied Do(xxii)a) Abriefresumeofthedirector; Complied Do(xxii)b) Expertiseinspecificfunctionalareas; Complied Do(xxii)c) Holding the directorship and the membership of

committeesoftheboardotherthanthiscompany; Complied Do

2 Chief Financial Officer (CFO), Head of Internal Audit (HIA), Company Secretary (CS):1 The company shall appoint a Chief Financial Officer

(CFO), a Head of Internal Audit (Internal Control andCompliance) and aCompanySecretary (CS).TheBoardof Directors should clearly define respective roles,responsibilitiesanddutiesofCFO,TheHeadof InternalAuditandtheCS;

Complied

TheCompanyhasappointedCFO,CS,andHeadofInternalAudit.Thereareclearlydefinedroles,responsibilitiesanddutieswhichapprovedbytheBoard as per requirement of BSECnotification

2 The Chief Financial Officer (CFO) and the CompanySecretary(CS)oftheCompanyshallattendthemeetingsoftheBoardofDirectors;

Complied In practice

3 Audit Committee:(i) ThecompanyshallhaveanAuditCommitteeasa sub-

committeeoftheBoardofDirectors; Complied Already in place

(ii) Assistance of the Audit Committee to the Board ofDirectors; Complied In practice

(iii) TheAuditCommitteeshallberesponsibletotheBoardofDirectors.ThedutiesoftheAuditCommitteeshallbeclearlysetforthinwriting.;


3.1 Constitution of the Audit Committee:(i) Compositions (At least three members should be in

AuditCommittee); Complied TheAuditCommitteeiscomposedof4(four)members

(ii) Appointment of Members of the Audit Committee(Members should be appointed by the Board with atleastoneIndependentDirector); Complied

ThemembersoftheAuditCommitteeappointedbythe Board who are Directors including02(two)IndependentDirectors

(iii) Qualification of Members of the Audit Committee(Membersshouldbe“financiallyliterate”andatleastone(01)member shall have accountingor relatedfinancialmanagementexperience);

Complied

Based on the academic qualificationandprofessionalexperiences,theBoardreviewed and considered thatalltheexistingmembersoftheAuditCommitteeare“FinanciallyLiterate”andtheyhave“RelatedFinancialManagementexperience”asperBSECnotificationCO

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(iv) CasualvacancyintheAuditCommitteeshallbefilledbytheBoard; Complied

(v) TheCompanySecretaryshallactastheSecretaryofthecommittee; Complied In practice

(vi) ThequorumoftheAuditCommittee(AC)meetingshallnot constitute without at least 1 (one) IndependentDirector;


3.2 Chairman of the Audit Committee:(i) The Board of Directors shall select 1 (one) member

of the Audit Committee to be Chairmen of the AuditCommittee,whoshallbeanIndependentDirector; Complied

Mr.FaruqAhmadSiddiqiappointed as Independent Director who is also the ChairmanoftheAuditCommittee

(ii) ChairmanoftheAuditCommitteeshallremainpresentintheAnnualGeneralMeeting(AGM); Complied In practice

3.3 Role of the Audit Committee:(i) Overseethefinancialreportingprocess; Complied In practice

(ii) Monitorchoiceofaccountingpoliciesandprinciples; Complied In practice

(iii) MonitorInternalControlRiskmanagementprocess; Complied In practice

(iv) Overseehiringandperformanceofexternalauditors; Complied In practice

(v) Review the annual financial statements beforesubmissiontotheboardforapproval; Complied In practice

(vi) Reviewthequarterlyandhalfyearlyfinancialstatementsbeforesubmissiontotheboardforapproval; Complied In practice

(vii) Reviewtheadequacyofinternalauditfunction; Complied In practice

(viii) Review statement of significant related partytransactions; Complied In practice

(ix) ReviewManagement Letters/ Letter of InternalControlweaknessissuedbystatutoryauditors; Complied In practice

(x) Disclosureabout theuses/ applicationsof funds raisedbyIPO/RPO/RightIssue;

Notapplicable

3.4.1 Reporting of the Audit Committee:(i) TheAuditCommitteeshallreportonitsactivitiestothe

BoardofDirectors; Complied In practice

(ii)a) ReportonconflictsofinteresttotheBoardofDirectors; Notapplicable

Therewasnoreportablecaseofconflictofinterestin2015

((ii)b) Will report any suspected or presumed fraud orirregularities or material defect in the internal control systemtotheBoard;

Complied Do

((ii)c) Willreportanysuspectedinfringementoflaws,includingsecuritiesrelatedlaws,rulesandregulationstotheBoard;

Notapplicable Do

((ii)d) WillreportanyothermatterswhichshallbedisclosedtotheBoardofDirectorsimmediately;

Notapplicable Do

3.4.2 Reporting to the Authorities (BSEC):If any materials impact on the financial condition & results ofoperation,unreasonablyignoredbythemanagement;

Notapplicable Do

3.5 Reporting to the Shareholders and General Investors:ReportonactivitiescarriedoutbytheAuditCommittee,includingany report made to the Board of Directors under condition 3.4.1 (ii)aboveduringtheyear,shallbesignedbytheChairmanoftheAuditCommitteeanddisclosedintheannualreportoftheissuercompany;

Complied

TheAuditCommitteereportdisclosed in the Annual Report andsignedbytheChairmanoftheCommittee

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CEO AND CFO’s CERTIFICATION TO THE BORAD

Dated : 16 August, 2015

The Board of Directors

ApexTanneryLimited

127,HazaribaghT/A

Dhaka-1209

DearSir,

(1)Wehavereviewedfinancialstatementsofthecompanyfortheyearended30thJune,2015andtothebestofourknowledgeandbelief.

(a)Thesestatementsdonotcontainanymateriallyuntruestatementsoromitanymaterialfactorcontainstatementsthatmightbemisleading.

(b)Thesestatementstogetherpresenttrueandfairviewofthecompany’saffairsandareincompliancewithBangladeshAccountingStandards(BAS)andotherapplicablelaws.

(2) Thereare,tothebestofourknowledgeandbelief,notransactionenteredintobythecompanyduringtheyear which is fraudulent, illegal or violation of the company’s code of conducts.

Md. Rahmatullah Anup Kumar Mukherjee FCA

ChiefExecutiveOfficer ChiefFinancialOfficer

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PATTERN OF SHAREHOLDINGAs of June 30, 2015

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BSEC BHABAN (Level-10),102,KaziNazrulIslamAvenueKawranBazar,Dhaka-1215Tel:028189885Mobile#01922797851

Certificate of Compliance to the Shareholders of

APEX TANNERY LIMITED

OntheConditionsofCorporateGovernanceGuidelines

We have reviewed the statement of compliance of Conditions of Corporate Governance guidelinesprepared by theManagement ofAPEX TANNERY LIMITED to complywith theNotificationNo. SEC/CMRRCD/2006-158/134/Admin/44 dated 7th August 2012 of Bangladesh Securities and ExchangeCommission(BSEC).

TheresponsibilityforcompliancewiththeConditionsofCorporateGovernanceGuidelineisthatoftheBoardofDirectorsofthecompany.Ourresponsibilityistoreview,totheextentwheresuchcompliancecanbeobjectivelyverified,whether thestatementofcompliance reflects thestatusof theCompany’scompliancewiththeprovisionsoftheconditionsofCorporateGovernanceguidelinesandreportifitdoesnot.

Based on our review, we certify that nothing has come to our attention except as stated in statusof Compliance statement which causes us to believe that the Statement of Compliance does notappropriatelyreflecttheCompany’scompliance,inallmaterialrespects,withthebestpracticescontainedintheConditionsofCorporateGovernanceasapplicabletotheCompanyfor theyearendedJune30,2015.

Md. Selim Reza FCA FCSDhaka,17August2015 Partner ARTISAN CharteredAccountants



Summary of Activities

TheAuditCommitteecarriedoutthefollowingactivitiesduringthefinancialyearendedJune30,2015

Regulatory Compliance

TheCommitteeexaminedwhethertheCompany‘sproceduresareinplacetoensurecompliancewith

thelawsandregulationsframedbytheregulatoryAuthorities (BSEC,DSE,CSEandRJSC)

InternalregulationsapprovedbytheBoardofDirectors.

TheCompany isduly following the rules and regulationsof theRegulatorybodiesandalso strictly followsareaswithconflictofinterest.TheCommitteewassatisfiedthattheCompanysubstantiallycompliedwiththeseregulatory requirements

Financial Reporting

The Committee assisted the Board of Directors and the management to carryout their responsibilities ofpreparing true and fair financial statements in accordance with the books of accounts and BangladeshAccountingStandardsby:

Reviewingtheadequacyandeffectivenessoftheinternalcontrolsystemandproceduresinordertoprovidereasonableassurancethatalltransactionsareaccuratelyandcompletelyrecordedinthebooksof account.

Reviewingtheintegrityoftheprocessbywhichfinancialstatementsarepreparedfromthebooksofaccount

ReviewingtheprocessbywhichcomplianceofprovisionofBangladeshAccountingStandards.

TheCommitteealsoreviewed:

Thequarterly,annualandinterimfinancialstatementsoftheCompanypriortorecommendingthem fortheapprovalbytheBoard.

Theannualauditedfinancialstatementsof thecompanywithexternalauditorsprior tosubmissionto the Board for approval. The review focused particularly on changes of accounting policy and compliance with applicable accounting standards as adopted in Bangladesh and other legal &regulatory requirements.

Internal Control

TheCommitteeexaminedwhetherthemanagementhassetuptheappropriatecompliancecultureacrosstheCompanyinordertoensurethatallemployeeshaveaclearunderstandingoftheirrolesandresponsibilities.TheCommitteereviewedthearrangementsmadebythemanagementforbuildingupasuitableManagementInformationSystem(MIS)includingcomputerizedsystemsanditsapplicationsthereof.

Internal Audit

TheCommitteereviewedanddiscussedtherelevantreportsofspecialinvestigationswhichweresubmittedbytheAuditTeam.Theyareasfollows:

The annual audit plan for adequacy of scope and comprehensive coverage of these activities of the Company.

the audit programs, resources requirements for the year and assessed the performance of the internal audit functions A

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The internal audit reports, audit recommendations and management responses to these recommendations and actions taken to improve the system of internal control and procedures.

ExerciseInternalAuditofApexTanneryLimited.ReviewtheeffectivenessofInternalAuditfunctionsincluding performance and compliance with professional standards. Examine audit findings andmaterial weakness and monitor implementation of audit action plans.

TheCommitteeadvisedthemanagementtotakeeffectivestepsforrectificationofallthelapsesandweaknessesidentifiedbyinternalauditandtotakeutmostcare,sothatsuchweaknessesandlapsesshallnotberepeatedinfuture. Department heads attended the meetings when their reports were discussed.

External Audit

TheCommitteemetwiththeexternalauditorsattheconclusionoftheannualauditandexchangedviewsontheirAuditReport.TheCommitteereviewedthefindingsandrecommendationsmadebytheexternalauditorsinordertoremovetheweaknessesasdetectedintheexternalauditingprocess.

TheCommitteereviewedtheperformanceoftheExternalAuditorsandrecommendedtotheBoardontheirappointment and fees.

Approval of Financial Statements

The Audit Committee reviewed and examined the Annual Financial Statements 2015 prepared by theManagementandauditedby theExternalAuditorsChoudhuryBhattacharjee&Co.,CharteredAccountantsandrecommendedtoplacethesamebeforetheBoardforconsideration.

The Board approved the same at its 274th meeting held on 16th August 2015.

Acknowledgement

TheAuditCommitteeexpressedofsincerethankstotheChairmanandmembersoftheBoard,managementandtheAuditorsfortheirsupportincarryingoutitsdutiesandresponsibilitieseffectively.

On behalf of the Audit Committee,

Faruq Ahmad SiddiqiChairmanofAuditCommittee

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AUDITORS’ REPORT To The Shareholders of Apex Tannery Limited

We have audited the accompanying Financial statements of“Apex Tannery Limited” which comprises thestatementoffinancialpositionasof30June,2015statementofComprehensiveIncome,StatementofChangesinEquityandStatementofCashFlowsfortheyearthenendedandasummaryofsignificantaccountingpoliciesandotherexplanatorynotes.

Management’s Responsibilities for the Financial StatementsManagementisresponsibleforthepreparationandfairpresentationofthesefinancialstatementsinaccordancewithBangladeshFinancialReportingStandards(BFRS),theCompaniesAct1994,theSecuritiesandExchangesRules1987andotherapplicablelawsandregulations.Thisresponsibilityincludes:designing,implementing,andmaintaining internal control relevant to the preparation and fair presentation of financial statementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror;selectingandapplyingappropriateaccountingpolicies;andmakingaccountingestimatesthatarereasonableinthecircumstances.

Auditors Responsibility Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.Weconductedouraudit inaccordancewithBangladeshStandardsonAuditing(BSA).Thosestandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassurancewhetherthefinancialstatements are free from material misstatement.Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancialstatements.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoserisk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation ofthefinancialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstances,butnot for thepurposeof expressinganopinionon theeffectivenessof theentity’s internal control.Anauditalso includesevaluatingappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationofthefinancialstatements.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouraudit opinion.

OpinionIn our opinion, the Financial Statements prepared in accordance with Bangladesh Financial ReportingStandards,giveatrueandfairviewofthestateofthecompany’saffairsasof30June,2015andoftheresultsof itsoperationsand its cashflows for theyear thenendedandcomplywith thecompaniesAct1994, theSecuritiesandExchangesRules1987andotherapplicablelawsandregulations.

Further to our opinion in the above paragraph, we state that1. Wehaveobtainedalltheinformationandexplanationswhichtothebestofourknowledgeandbelief

werenecessaryforthepurposeofourauditandmadedueverificationthereof;2. Inouropinion,properbooksofaccountasrequiredbylawhavebeenkeptby“Apex Tannery Limited”

sofarasitappearedfromourexaminationofthosebooks;3. Thecompany’sStatementofFinancialPosition,StatementofComprehensiveIncomeanditsStatement

ofCashFlowsdealtwithbythereportareinagreementwiththebooksofaccountandreturns;4. Theexpenditureincurredwasforthepurposeofthecompany’sbusiness

Dated: Dhaka B. K. Bhattacharjee, FCAAugust 16, 2015 PARTNER ChowdhuryBhattacharjee&Co. (CharteredAccountants)

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APEX TANNERY LIMITEDStatement of Financial Position as of June 30, 2015 Taka in thousand As of As of Notes June 30, 2015 June 30, 2014

Assets Non current assets Property,plantandequipment 4 270,134 277,953 Capitalwork-in-progress 5 223,074 - AdvanceforLandatSavar 6 57,431 41,034 Investments 7 52,764 51,957 Deferredtaxassets 8 5,537 5,045 608,940 375,989Current assets Inventories 9 525,785 450,624 Tradeandotherreceivables 10 163,829 161,361 Advances, deposits and prepayments 11 120,455 130,153 Cash&cashequivalents 12 333,932 366,897 1,144,001 1,109,035Total Assets 1,752,941 1,485,024

Equity and LiabilitiesShareholders’ equity Sharecapital 13 152,400 152,400 Sharepremium 425,333 425,333 Dividendequalizationfund 44,888 44,888 Retainedearnings 451,933 425,244 Fairvaluationsurplusofinvestment14 45,208 44,401 1,119,762 1,092,266

Non Current liabilities Retirementbenefitobligations 15 90,790 79,688 Current liabilities Short-termloan 16 - 90,957 Workingcapitalloan 17 423,488 139,219 Tradepayables 18 42,300 6,159 Otherpayables 19 19,255 16,722 Provisionforincome-tax 20 57,346 60,013 542,389 313,070Total Equity and Liabilities 1,752,941 1,485,024

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B. K. Bhattacharjee, FCAPARTNER

ChowdhuryBhattacharjee&Co.(CharteredAccountants)

Place : DhakaDate : August 16, 2015

Theannexednotesformanintegralpartofthesefinancialstatements.ForandonbehalfoftheBoardofDirectors

Md. Rahmatullah Md. Fayekuzzaman Jagadish Kumar Bhanja ManagingDirector Director CompanySecretary

Signedintermsofourannexedreportofevendate.



APEX TANNERY LIMITEDStatement of Comprehensive Income for the year ended June 30, 2015

Taka in thousand

Year Ended Year Ended Notes June 30, 2015 June 30, 2014

Sales 22 3,771,638 3,793,167Cost of sales Costofgoodssold 23 (3,431,702) (3,497,402)Freight&forwarding 24 (66,546) (70,001) (3,498,248) (3,567,403)Gross profit 273,390 225,764Operating expenses Administrativeexpenses 25 (40,399) (34,515)Marketingexpenses 26 (118,525) (107,080)Directors’remuneration (10,260) (8,550)Legal&auditfees 27 (513) (513)Depreciation(Sehedule-A-01) (6,187) (6,300) (175,884) (156,958)Operating Profit 97,506 68,806

Bankinterestexpenses&charges 28 (30,227) (18,595)

Non operating incomeOtherincome 29 56,456 62,064Profit for the year 123,735 112,275Contributiontoworkers’profitparticipationfund (5,892) (5,344)

Profit before income tax 117,843 106,931Income taxCurrenttaxexpenses 30 (23,066) (24,770)Deferredtaxincome 31 492 1,863 (22,574) (22,907)Net profit after tax 95,269 84,024Other Comprehensive IncomeFairvaluationsurplusofinvestments(unrealized) 807 11,879Total comprehensive Income 96,076 95,903Earnings per share without fair valuation surplus 32 6.25 5.51ST

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APEX TANNERY LIMITEDStatement of cash Flow for the year ended june 30, 2015

Taka in thousand

Year Ended Year Ended June 30, 2015 June 30, 2014

A. Cash flow from operating activities Collectionsfromturnover/billsreceivableandotherincome 3,823,445 3,876,454 Paymentsforpurchaseofleather,chemicals,spare-parts, paymentsofcreditorsandotherexpenses (3,664,501) (3,734,631) Interestpaid (30,227) (18,595) Paymentstoworkers’profitparticipationfund (4,878) (6,350) Incometaxpaid (31,695) (41,177) Net cash generated by operating activities 92,144 75,701 B. Cash flow from investing activities Acquisitionofproperty,plantandequipment (12,550) (20,067) Capitalwork-in-progress (223,074) - AdvancepaymentforlandatSavar (16,397) - Net cash used in investing activities (252,021) (20,067) C. Cash flow from financing activities Loansreceived/(paid) 193,312 15,249 Dividendreceived/(paid) (66,400) (58,780)

Net cash used in financing activities 126,912 (43,531) Increase/(decrease) in cash and cash equivalents (A+B+C) (32,965) 12,103 Openingcashandcashequivalents 366,897 354,794 Closing cash and cash equivalents 333,932 366,897

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APEX TANNERY LIMITEDStatement of changes in equity

For the year ended June 30, 2015

Taka in thousand

Particulars Share Capital

Share Premium

Dividend Equalization

Fund

Retained Earnings

Fair Valuation Surplus Total

As at June 30, 2014 152,400 425,333 44,888 425,244 44,401 1,092,266

Netprofit 95,269 - 95,269

Cashdividendfor2013-2014 (68,580) - (68,580)

Fairvaluationsurplus 807 807

As at June 30,2015 152,400 425,333 44,888 451,933 45,208 1,119,762

For the year ended June 30, 2014

Taka in thousand

Particulars Share Capital

Share Premium

Dividend Equalization

Fund

Retained Earnings

Fair Valuation Surplus Total

As at June 30, 2013 152,400 425,333 44,888 402,180 32,522 1,057,323

Netprofit 84,024 - 84,024

Cashdividendfor2012-2013 (60,960) - (60,960)

Fairvaluationsurplus 11,879 11,879

As at June 30,2014 152,400 425,333 44,888 425,244 44,401 1,092,266

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APEX TANNERY LIMITEDNotes to the financial Statements for the year ended June 30, 2015

1. Reporting entitya) Company profile

ApexTanneryisthelargesttanneryinBangladeshandoneofthelargestinSouthAsia.Itisa100%exportorientedcompany.TheCompany isusingstateoftheartmachineries fromItaly,FranceandGermany. ApexTanneryLimitedwas incorporatedasaprivate limitedcompanyon26th day of July 1976underCompaniesAct1913andwasconvertedintoapubliclimitedcompanyin1986.ThesharesoftheCompanyarepubliclytradedatDhakaStockExchangeLimitedandChittagongStockExchangeLimited.Theaddressoftheregisteredofficeis127HazaribaghT/A,Dhaka-1209.

b) Nature of business

TheprincipalactivitiesofApexTanneryaretoproducehighqualityleather,byusingItalianchemicals,technology,complyingwithworldfashionstandardsandspecifications. Itsannualcapacityisabout26millionSft.offinishedgoatandcowleather.ApexexportstoEurope,China,SouthAmericaandallmajorleathermarketoftheworld.Ithastwomanufacturingfacilities;UnitIsituatedatHazaribaghandUnitIIsituatedatShafipur,Gazipurbothengagedinprocessingandfinishingcowandgoatleatherfor100%export.UnitIIhasbeenleasedouttoApexFootwearLtd.for10yearsfrom01.10.2011.

2. Basis of preparation of financial statements a) Statement of compliance

ThefinancialstatementshavebeenpreparedinaccordancewithBangladeshAccountingStandards(BAS), Bangladesh Financial Reporting Standards (BFRS), Companies Act 1994, The Securities andExchangeRules,1987andotherapplicablelawsandregulations.

b) Basis of measurement

ThefinancialstatementshavebeenpreparedonhistoricalcostbasisexceptI. Note7: InvestmentinmarketablesecuritieswhichismeasuredatfairvalueII. Note15: Retirementbenefitobligations

c) Date of authorizationTheboardofdirectorshasauthorizedthesefinancialstatementsonAugust16,2015

d) Functional and presentation currency

These financial statements are presented in Bangladesh Taka which is the company’s functionalcurrency.All financial informationpresented inTakahavebeen roundedoff to thenearestTaka inThousand(Taka000).

e) Use of estimates and judgmentsThe preparation of financial statements requires management tomake judgments, estimates andassumptions that affect the application of accounting policies and reported amounts of assets,liabilities,incomeandexpenses.Estimatesandunderlyingassumptionsarereviewedonanongoingbasis.Revisionsofaccountingestimatesarerecognizedintheperiodinwhichtheestimatesarerevisedoranyfutureperiodsaffected.

Inparticular,informationaboutsignificantareasofestimatesandjudgmentsinapplyingaccountingpoliciesthathavethemostsignificanteffectontheamountrecognizedinthefinancialstatementsaredescribedinthefollowingnotes:

i. Note8: Deferredtaxassetsii. Note9: Inventoryvaluationiii.Note20: Provisionfortax

f) Reporting periodThe reporting period of the company covers one year from July 1, 2014 to June 30, 2015.

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3. Significant accounting policies

Theaccountingpoliciessetoutbelowhavebeenappliedconsistentlytoallperiodpresentedinthesefinancialstatements.

a. Property, plant & equipmentI. Recognition and measurement: Property,plant&equipment(PPE)areinitiallymeasuredatcost.

AfterinitialrecognitionanitemofPPEcarriedatcostlessaccumulateddepreciationinaccordancewithBAS16“Propertyplant&equipment”.CostofPPErepresentscostofpurchaseprice,importdutiesandnonrefundablepurchasetaxesafterdeductingtradediscountsandrebatesandanycostdirectlyattributabletobringingtheassetstothelocationandconditionnecessaryforittobecapableofoperatinginthemannerintendedbymanagement.

II. Subsequent cost: Thecostsoftheday-to-dayservicingofPPEarerecognizedintheStatementofComprehensiveIncome.ThecostsofreplacingofPPEarerecognizedinthecarryingamountoftheitemifitisprobablethatthefutureeconomicbenefitsembodiedwithinthepartwillflowtotheCompanyanditscostcanbemeasuredreliably.

III. Depreciation: The Company uses reducing balance method to depreciate property, plant &equipment. No depreciation is charged on Land and Land development. Depreciation of anassetbeginswhenitisavailableforusei.e.whenitisinthelocationandconditionnecessaryforittobecapableofoperatinginthemannerintendedbymanagement.Depreciationofanassetceasesattheearlierofthedatethattheassetisclassifiedasheldforsale(orincludedinadisposalgroupthatisclassifiedasheldforsale)inaccordancewithBFRS5andthedatethattheassetsarederecognized.The ratesofdepreciationandcategoryofproperty,plant andequipmentare asfollows:

Building 10%Plant&machinery 15%Furniture&fittings 10%Vehicles 20%

Depreciationhasbeenchargedtocostofgoodssold&administrativeexpensesconsistently.b. Inventories

Inventoriescompriseofrawmaterials,work-in-processandfinishedgoods,chemicalsandspare-parts.Theyarestatedatalowerofcostandnetrealizablevalue,inaccordancewithBAS2“Inventories”.Thecostofinventoriesismeasuredbyusingtheweightedaveragecostformula.Thecostofinventoriesrepresentsallcostsofpurchase,costsofconversionandothercostsincurredinbringingtheinventoriestotheirpresentlocationandcondition.Netrealizablevalueistheestimatedsellingpriceintheordinarycourseofbusinesslesstheestimatedcostofcompletionandsellingexpenses.

c. Trade and other receivables

Thesearecarriedatoriginalinvoicevalueconsideredgoodandcollectible.d. Cash and cash equivalents

Cashandcashequivalentscomprisescashinhand,cashatBankandFDRwhichisreadilyconvertibletoaknownamountofcashandbesubjecttoaninsignificantriskofchangesinvalue.

e. Trade and other payables

Thesearerecognizedforamountstobepaidinthefutureforgoodsandservices.f. Income Taxes

I) Current Income Tax

The corporate tax rate for publicly listed companies is 25%. However companies deriving incomefromexportareentitledtoexemptionof50%taxonsuchincome.Sincethecompanyis100%export-oriented,50%oftradingincomewillnotbesubjecttotaxunderparagraph28ofPartAoftheSixthScheduleoftheITOrdinance,1984.Theprovisionmadehasbeencalculatedontheabovebasis,whichis adequate.

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II) Deferred Income Tax

Deferredtax is recognizedondifferencesbetweenthecarryingamountsofassetsand liabilities forfinancialreportingpurposeandthecorrespondingtaxbasesusedfortaxationpurpose.Deferredtaxliabilitiesaregenerally recognized forall taxable temporarydifferences,anddeferredtaxassetsaregenerally recognized for all deductible temporarydifferences to theextent that it is probable thattaxableprofitwillbeavailableagainstwhichthosedeductibletemporarydifferencescanbeutilized.

g. Employee Benefits

The Company maintains both defined contribution plan and defined benefit plan for its eligiblepermanent employees.

I) Definedcontributionplan(Providentfund)

TheCompanyoperatesacontributoryProvidentfundforitseligiblepermanentemployees.ThefundisapprovedbytheNationalBoardofRevenue(NBR).ThefundisadministeredbyaBoardofTrusteeandisfundedbycontributionpartlyfromtheemployeeandpartlyfromtheCompanyatpredeterminedrates.ThecontributionisinvestedseparatelyfromtheCompany’sassets.

II) Contributiontoworkers’profitparticipation/welfarefunds

TheCompanyprovides5%ofitsprofitasacontributiontoworkersprofitparticipation/welfarefundsbefore tax and charging such expenses in accordance with the Bangladesh Labour Act 2006 (asamendmentin2013).

III)Definedbenefitplan(Gratuity)

TheCompanymaintainsanunrecognizedgratuityfundforitspermanentemployees,underwhichanemployeeisentitledtothebenefitsdependingonthelengthofservicesandlastdrawnbasicsalary.

h. Statement of Cash Flow

StatementofCashflowispreparedinaccordancewithBAS-7underdirectmethodandasoutlinedintheSecuritiesandExchangeRule,1987.

i. Transaction with related parties

ThecompanyhascarriedinarmslengthtransactionswithApexFootwearLimited,PioneerInsuranceCompanyLimitedandMutualTrustBankLtd.inthenormalcourseofbusiness.

j. Comparative information

Figures of the year 2013-2014 have been rearranged whenever considered necessary to ensurecomparabilitywiththecurrentperiod.

k. Foreign currency transaction

TransactionsinforeigncurrenciesareconvertedintoBangladeshTakaattheexchangerateprevailingonthedateoftransactioninaccordancewithprovisionsofBAS21“Theeffectsofchangesinforeigncurrencyrates”.

l. Revenue recognition

I. Saleofgoods:TheCompanyrecognizesrevenuewhenriskandrewardsassociatedwithownershiphasbeentransferredtothebuyer,whichsatisfiedalltheconditionsfortherevenuerecognitionasprovidedinBAS18“RevenueRecognition”.

II. Dividendincomeisrecognizedwhentherighttoreceivedpaymentisestablished

III.Interestincomeisrecognizedwhenaccruedonatimeproportionbasis

IV.RentalIncomerecognitionwhenaccruedonthetenancyagreementbasism. Earnings per share (EPS)

TheCompanycalculatesearningspershare(EPS)inaccordancewithBAS33“Earningspershare”whichhasbeenshownonthefaceofStatementofComprehensiveIncome.N

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As ofJune 30, 2015

Taka

As ofJune 30, 2014

Taka10. TRADE AND OTHER RECEIVABLES

Exportbillsreceivable 155,612,462 152,772,984Rentalincomereceivable 5,000,000 5,000,000InterestonFDR 3,216,578 3,587,296

163,829,040 161,360,280

•MostoftheabovebillsreceivableremainedfromthesalesofJune2015andwereconsideredgoodwhichwillbecollectedwithin90days.

•RentalincomereceivablefromApexFootwearLimited.

11. ADVANCE, DEPOSITS & PREPAYMENTSL/Caccounts(Goodsintransit) 9,075,084 9,783,973Advanceincome-tax 100,957,226 94,996,148Advance rent 1,566,833 1,451,833Advancetostaffandworkers 559,250 912,700Advancetosuppliers&Contractors 1,163,652 15,875,181Bank guarantee margin 731,764 731,764Securitydeposit 6,401,200 6,401,200

120,455,009 130,152,799

• L/Caccounts(goods-in-transit)representcostincurredonimportofchemicals,sparepartswhichwillbeadjustedagainstrespectiveinventoryitems

• Advanceincometaxesaremadetostatutoryauthorities• Rent agreement made with Rana Leather Industries Ltd. for using their premises• Advanceduefromstaff&workersareregularlybeingrealizedthroughtheirsalaries• Advancestosuppliersmainlygavetosuppliersofrawhidesandskins.Advancesconsideredgoodbuthave

no security other than personal security of the concerned suppliers• IntheopinionoftheDirectors,allcurrentassets,investments,loansandadvanceshave,onrealizationinthe

ordinarycourseofbusiness,avalueatleastequaltotheamountsatwhichtheyarestatedintheStatementofFinancialPosition

• There is no amount of loans and advances due for payment for a period of more than 12 months from the dateofStatementofFinancialPosition

• ThereisnoaggregateamountduefromDirectors,OfficersoftheCompanyorbyanyassociatedcompanies.• Therearenoclaimsagainstthecompany,whichcanbeacknowledgedasbaddebt

12. CASH AND CASH EQUIVALENTSCash in hand

HeadOffice 5,439,561 3,560,827Factory 204,544 242,262

Cash at BanksAgrani Bank Ltd. 34,604,455 24,996,762Rupali Bank Ltd. 17,346 10,010,186MercantileBankLtd. 3,366,651 5,554,296MutualTrustBankLtd. 325,830 163,729StateBankofIndia 4,235,866 5,749,650

FDR 285,737,430 316,619,345333,931,683 366,897,057

• Cashbalanceswerephysicallyverifiedandbankbalanceswerereconciled NO

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Total Takaas of

June 30, 2015

Total Takaas of

June 30, 2014

17. WORKING CAPITAL LOAN

Agrani Bank Ltd. 423,488,039 139,219,061

The company has taken cash-credit (hypothecation) facilities fromAgrani Bank Ltd. Amin CourtCorp.Branch,MotijheelC/A,Dhaka-1000againstexistingfixedassetsandinventoriesassecurities.Apartfromtheabove,companyhasnoothershorttermcreditfacilities.

18. TRADE PAYABLES

Hides&Skins 42,300,011 6,158,818

• Thisrepresentstheamountpayableforrawskins&hides

• Inordertoimprovethecashflowposition,tradepayablesweredeferred

• Therearenopayablesduemorethan12months

19. OTHER PAYABLES

ContributiontoWPP&WF 6,961,012 5,412,341

Liabilitiesforfreights,spareparts&otherexpenses 12,140,758 11,155,811

Audit fees 153,333 153,333

19,255,103 16,721,485

• Payment against outstanding expensesweremade subsequently in due time. For other credits,paymentsaregenerallymadebyduedate

• Therearenoliabilitiesforexpensesduemorethan12months

• IntheopinionoftheDirectors,noliabilitiesintheStatementofFinancialPositionareatavaluelessthantheamountatwhichitisrepayableatthedateoftheStatementofFinancialPosition

20. PROVISION FOR INCOME TAX

Balance as per last year 60,013,469 58,580,903

Add: During the year 23,066,073 24,769,819

83,079,542 83,350,722

Adjustmentofincometaxforassessmentyear2011-2012 - (23,337,253)

Adjustmentofincometaxforassessmentyear2012-2013 (25,733,586) -

57,345,956 60,013,469

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Year EndedJune 30, 2015

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Taka

21. Proposed Dividend 68,580,000 68,580,000

TheBoardofDirectorsproposeddividend@45%fortheyearattheBoardMeetingheldonAugust16,2015.

Theproposeddividend isnot recognizedasa liabilityat theStatementofFinancialPositiondate inaccordancewithBangladeshAccountingStandard(BAS)10“EventsaftertheReportingDate”.

BangladeshAccountingStandard(BAS)1“PresentationofFinancialStatements”alsorequirethatthedividendproposedaftertheStatementofFinancialPositiondatebutbeforethefinancialstatementsareauthorizedforissue,bedisclosedeitheronthefaceoftheStatementofFinancialPositionasaseparatecomponentofequityorinthenotestothefinancialstatements.

TheprovisionofCompaniesAct,1994,requiresthatdividendstatedtobeinrespectofperiodcoveredbythefinancialstatementsandthatareproposedordeclaredaftertheStatementofFinancialPositiondatebutbeforeapprovalofthefinancialstatementsshouldbeeitheradjustedordisclosed.

ConsideringtherequirementsofBAS-1,BAS-10andCompaniesAct1994,proposeddividendhasbeendisclosedinthefinancialstatementsandnotshownasliability.

22. SALES

Sft. Taka Taka

FinishedCowLeather 17,744,467 3,105,350,707 3,086,144,472

FinishedGoatLeather 5,533,818 666,287,095 707,022,209

23,278,285 3,771,637,802 3,793,166,681

23. COST OF GOODS SOLD

Opening stock 935,777 115,783,500 112,563,808

Add:Costofproduction 23,561,193 3,460,056,617 3,500,621,039

Less:Closingstock 1,218,685 144,138,138 115,783,500

Costofgoodssold 23,278,285 3,431,701,979 3,497,401,347

Cost of production

Goatskinsconsumed 33 311,852,899 407,255,243

Cowhidesconsumed 34 2,017,914,642 2,002,540,536

Chemicalconsumed 35 859,612,385 806,964,567

Sparepartsconsumed 36 21,070,852 14,842,900

Packingmaterials 4,966,773 5,636,400

Directlabour 99,910,579 95,595,704

Depreciation(Schedule-A-01) 10,766,092 12,473,201

Factoryoverhead 37 133,962,395 155,312,488

3,460,056,617 3,500,621,039

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24. FREIGHT & FORWARDING 66,545,992 70,001,293

• Freight and forwarding represents cost of shipment of finished leather

25. ADMINISTRATIVE EXPENSES

Salary & allowances 21,941,201 19,336,295

Gratuity 5,121,923 2,162,823

Staff welfare 3,000,084 2,395,198

Telephone, telex & fax 186,106 221,393

Repairs & maintenance 219,830 274,550

Printing & stationery 196,032 199,203

Postage 39,137 40,875

Vehicle maintenance 1,515,222 1,227,857

Fuel & lubricant 1,755,171 1,767,418

Electricity & water 1,100,503 1,457,057

Social responsibilities (CSR) 1,150,223 882,690

Renewal & registration 1,010,784 770,966

Advertisement 998,235 803,985

Entertainment 233,868 229,852

AGM and EGM expenses 930,813 1,793,719

Forms & fees 309,667 303,954

Membership subscription 333,455 329,367

Board meeting fees 356,500 317,400

40,398,754 34,514,602

• Salary & allowances, Gratuity and Staff welfare increased because of annual increment

• Vehicle maintenance increased because of aged vehicles

• Social responsibilities (CSR) expenses increased because of more activities on CSR incurred during the year

• Renewal & registration increased due to increase of Bond License fee

• Advertisement expenses increased because of rate increase

• Entertainment expenses increased due to increased cost of food

26. MARKETING EXPENSES

Sales commission 104,304,311 89,802,711

Sales promotion 14,220,033 17,277,391

118,524,344 107,080,102

• Sales commission increased due to increase of sales volume of finished leather

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Sales commission

Wecertifythatthelocal&foreignagents,whosedetailsaregivenbelow,havenoconnectionwhatsoeverwithany Director.

Local/Foreign Agent Address Amount in Taka

ABCLeather House#50/1(1stfloor)Road#11/A,Dhanmondi,Dhaka-1209 7,823,805AbedinCorporation House#50/1(1stfloor)Road#11/A,Dhanmondi,Dhaka-1209 4,992,258Al-FallahLeather 6/C,Sher-E-BanglaRoad,Hazaribagh,Dhaka 287,232AshokLalLala A-15,Sector-9,Noida,India 3,427,931ConceriaEverest AGCastanoPrimo,Itally 6,256,923ChengHuiShan No.24,Alley-2,Lane–104,wenhuaS.Rd.Nantow,Taiwan 3,618,190KemaTrading 77,HazaribaghT/A,Dhaka 4,618,401LeeJeYong 191-28,KyohgsinriNammyeonYongju-City,Korea 2,521,910Schmenger SchmengerLederGMBH&Co.ZweibruckerStrabe29,Germany 5,382,681ShampanTradingcorp 49HazaribaghTanneryArea,Dhaka-1209 4,530,489SarmLeatherInternaional AponNibash,42/8,JigatalaNewRoad,Dhaka-1209 1,655,808DairathCo.Ltd. Vill:Chamta,PO:PuranDinaraHat.PS:Naria,Dist.:Shariatpur 488,699FairInternational 86,Shere-e-BanglaRoad,Dhaka-1209 52,052FamazInternational ViaGrande,22-24SantaCroce,Italy 8,671,075PRPInternational 594/C,KhilgaonPoliceLineKhilgaon,Dhaka-1219 4,978,438RidgeInternational 87/1,MoneshwarRoad,Dhaka-1209. 3,894,258MegumiInternational 66/14,WestRazabazar(1stfloor),Dhaka 4,066,846ProgressiveLeatherAgency 298/ATaliOfficeRoad,RayerBazar,Dhaka-1209 688,178UniversalLeatherCorporation 27DilkushaC/A,5thFloor,Dhaka-1000 8,161,036UnionLeather 262/1,Road-19,WestDhanmondi,Dhaka-1209 124,601TechnologistsLeatherTrader 96/4,MoneswarRd.,Jigatala,Dhaka-1209 30,599WorldTopTradeInt. 202,NewPaltanLine,Azimpur,Dhaka-1205 2,339,146WorldTradeLeather 68/7/A,Jigatala(3rdfloor),Dhaka-1209 1,103,308Interkid AGCastanoPrimo,Itally 957,731Inleather ViaDiPelle,2956029S.CroceSullArno(PI),Italy 1,551,241GlobalUnion House#25/A,Road#96,Gulshan,Dhaka 180,685GlobalLeatherExport House-86,Rd-17,Sector-14,UttaraModelTown,Dhaka-1230 75,683J.M.Corporation 20,Hazaribagh,Dhaka 187,456KashemEnterprise 68/7/A,Jigatala(3rdfloor),Dhaka-1209 55,672AmbicoTrade(Pvt.)Ltd. 124,Hazaribagh,Dhaka 1,932,230YeungHaiYing House#8,Narcissuspath,Phase1E,PalmSpringsYuenLong,HK 554,915KeywinTradingCorporation ConcordTower,123KaziNazrulIslamAvenue,Dhaka 13,701,624Md.Babul 202,NewPaltanLine,Azimpur,Dhaka-1205 3,955,323BanglaLeatherCorporation 124HazaribaghT/A,Room43-44,Dhaka-1209 1,345,869LeatherSource 10,MitfordRoad(ShoaibMarket),Dhaka-1100 61,909ZhichengCo. 69,ManesharRoad,Jigatala,Dhaka 30,109

Total 104,304,311

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27. LEGAL & AUDIT FEES

Legalfees(Professionalfees) 360,000 360,000

Audit fees 153,333 153,333

513,333 513,333

28. BANK INTEREST EXPENSES AND CHARGES

Bank interest 29,312,280 17,639,363

Bank charges 914,535 955,778

30,226,815 18,595,141

BankinterestandchargesincreasedduetotheCompanyavailedmoreamountofloanduringtheyear under audit as compared to the previous year.

29. OTHER INCOME

Dividendincome-Cash 2,179,803 2,179,803

InterestonFDR 28,863,885 34,630,377

Rental income 30,000,000

Less:Depreciation(4B) 3,415,914

Rent,rates&taxes 110,722

Insurance premium 1,061,302 (4,587,938) 25,412,062 25,254,009

Total 56,455,750 62,064,189

• CashdividendamountingTaka2,179,803includedcashdividendfromApexFootwearLimitedTk.751,850andTk.1,427,953fromCentralDepositoryBangladeshLimited.RentalincomeofUnitIIwasreceived/[email protected],500,000.

30. CURRENT TAX EXPENSES

Rate of Tax Taxable Profit Tax Tax

Onexportprofitafter 25 % on 50 % 61,387,413 9,061,125 7,865,652

adjustmentofgratuity of income

On other income

Dividend on investment (Cash) 20 % 2,179,803 435,961 435,961

Rental income 25 % 25,412,062 6,353,016 6,944,852

InterestonFDR 25 % 28,863,885 7,215,971 9,523,354

117,843,163 23,066,073 24,769,819

31. DEFERRED TAX EXPENSES / (INCOME)

DeferredTaxassetsclosing (5,537,353) (5,045,074)

DeferredtaxassetsOpening 5,045,074 3,181,848

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Taka32. EARNINGS PER SHARE

COMPONENTS OF EARNINGS PER SHARE ARE AS FOLLOWS :Earnings per share without fair valuation surplus of investment:Netoperatingincome 3.46 2.55Netotherincome 2.79 2.96Earnings per share (Tk.) 6.25 5.51

33. GOATSKINS CONSUMED (RAW & WETBLUE)Sft. Taka Taka

Openingstock(raw) 185,325 12,694,732 10,084,368Add:Purchasethisyear 4,782,050 330,562,273 418,476,843Less:Closingstock 273,381 18,863,289 12,694,732

4,693,994 324,393,716 415,866,479Add:Openingstock(wetblue) 420,355 32,577,536 25,587,284Less:Closingstock 555,493 41,661,975 32,577,536

4,558,856 315,309,277 408,876,227Add:OpeningWIP 108,498 8,625,566 7,004,582Less:ClosingWIP 152,936 12,081,944 8,625,566

4,514,418 311,852,899 407,255,24334. COWHIDES CONSUMED (RAW & WETBLUE)

Openingstock(raw) 293,641 29,951,337 33,467,431Add:Purchasethisyear 19,371,598 2,054,086,427 1,992,272,367Less:Closingstock 411,807 42,416,121 29,951,337

19,253,432 2,041,621,643 1,995,788,461Add:Openingstock(wetblue) 634,948 73,812,674 80,571,997Less:Closingstock 802,968 93,144,288 73,812,674

19,085,412 2,022,290,029 2,002,547,784Add:OpeningWIP 108,606 14,471,718 14,464,470Less:ClosingWIP 147,243 18,847,105 14,471,718

19,046,775 2,017,914,642 2,002,540,536

35. CHEMICAL CONSUMEDOpeningStock 139,461,034 106,324,950Add:Purchasethisyear 853,773,034 840,100,651Less:Closingstock 133,621,683 139,461,034

859,612,385 806,964,567

Chemicalpurchaseduringtheyear:MT US$ Euro Taka Taka

Imported 5,706 5,711,248 3,538,673 746,264,522 813,438,900Local 879 00 00 107,508,512 26,661,751

6,585 5,711,248 3,538,673 853,773,034 840,100,651

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36. SPARE-PARTS CONSUMED

Opening stock 23,246,078 11,693,559

Add:Purchasethisyear 18,835,534 26,395,419

Less:Closingstock 21,010,760 23,246,078

21,070,852 14,842,900

37. FACTORY OVERHEAD

Salary&allowances 57,205,708 50,987,114

Gratuity 6,112,210 5,315,805

Staffwelfare 2,198,739 2,817,553

Entertainment 1,261,695 884,809

Postage 166,440 135,235

Printing&stationery 457,413 355,149

Repair&maintenance 11,177,430 12,059,151

Insurance premium 7,559,535 10,309,854

Telephone&fax 195,162 249,709

Vehiclemaintenance 2,065,210 2,143,867

Carriageinward 11,823,555 11,937,517

Power,gas&water 29,427,873 53,863,004

Consumablestore 576,759 496,239

Rent,rates&taxes 3,469,904 3,484,792

Conveyance 237,751 239,865

Sundryexpenses 27,011 32,825

133,962,395 155,312,488

• Salary&allowancesandgratuityincreasedbecauseofannualincrement

• Entertainmentexpensesincreasedduetoforeignersentertainment

• Postageincreasedduetorateincrease

• Printingandstationeryincreasedduetorateincrease

38. AGGREGATE AMOUNT PAID TO THE DIRECTORS Aggregate amount paid to the Directors for their services rendered are as follows:

Name Designation Per Year Amount (Taka) Remarks

SyedManzurElahi Chairman 3,600,000 Fulltimework Md.Rahmatullah ManagingDirector 3,600,000 Fulltimework Md.Hedayetullah Director 3,060,000 Fulltimework AnsarulIslam ExecutiveDirector 2,826,288 Fulltimework M.AbdulMajed ExecutiveDirector 2,826,288 Fulltimework

SyedManzurElahiistheChairmanoftheassociatecompaniesofApexTanneryGroupbutasafulltimeDirector,hedrawsremunerationfromApexTanneryLimited.

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39. NUMBER OF EMPLOYEESNumberofemployeesandtheirsalaryandwagesrangearegivenbelow:

No. of Employees

EqualandaboveTaka3000permonth 868BelowTaka3000permonth -

40. PRODUCTION CAPACITY AND UTILIZATION

Particulars Sft. per year %

InstalledCapacity 18,500,000 71.00RentedCapacity(Wetblueonly) 7,500,000 29.00 Total Capacity 26,000,000 100.00 Actual Production 23,561,193 90.62

41. Allshareshavebeenfullycalledandpaidup.42. Therewerenopreferencesharesissuedbythecompany.43. Therewasnobankguaranteeissuedbythecompanyonbehalfoftheirdirectorsorthecompanyitself

exceptbankloans.44. NoexpensewaspaidasroyaltyandsalarytoTechnicalExpertsetc.[aspara-8(KHA)ofpart-II]inforeign

currencies.45. Nobrokeragewaspaidagainstsalesduringtheyearunderaudit.46. TherewasnosumforwhichthecompanywascontingentlyliableasonJune30,2015.47. Duringtheyearunderreview,4(Four)BoardMeetingswereheldandDirectorspresentwerepaid@Taka

10,000.00 per head per meeting.48. AuditorsarepaidstatutoryauditfeesasapprovedbytheshareholdersinthelastAnnualGeneralMeeting.49. ThecompanyearnedforeigncurrenciesofUS$49,233,533.99.50. Therewasnoforeignexchangeremitted,astherearenoforeignshareholders.51. Thereisnoclaimagainstthecompanynotacknowledgedasdebtexceptclaim,whichmayhavearisenas

insurance claim.52. NocompensationwaspaidtoanymemberoftheBoardforspecialservicerendered.

Md.Rahmatullah Md.Fayekuzzaman JagadishKumarBhanjaManagingDirectorDirector CompanySecretary

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ry

113

,940

,412

-

-

113

,940

,412

15

106

,215

,850

1,158

,684

-

107

,374

,534

6,565

,878

Furniture&fixture

883

,041

-

-

883

,041

10

7

22,7

64

16,02

8-

73

8,79

2144

,249

Veh

icles

486

,500

-

-

486

,500

20

483

,122

676

-

48

3,79

8

2,70

2

Tot

al 2

014-

2015

24

9,27

5,54

0 -

- 24

9,27

5,54

0 -

206,

212,

817

3,41

5,91

4 -

209,

628,

731

39,6

46,8

09

Tot

al 2

013-

2014

249,

275,

540

-

-

249,

275,

540

- 20

2,34

1,53

3 3,

871,

284

-

206,

212,

817

43,0

62,7

23

Dep

reciationofUnitIITaka3,41

5,91

4ch

arge

dag

ainstren

talincom

e

•Ad

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achine

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presen

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intang

ibleassets

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ASS

SET



NOTICE OF ANNUAL GENERAL MEETING

Noticeisherebygiventhatthe39thAnnualGeneralMeetingofApexTanneryLimitedwillbeheldonSunday,October 04, 2015 at 10:00 a.m. at Spectra Convention Centre Ltd., House No. 19, Road No. 7, Gulshan-1,Dhaka-1212totransactthefollowingbusiness:

1 To receive and adopt the Audited Accounts for the year ended June 30, 2015 and the Reports of the Auditors and Directors thereon

2 To declare dividend3 To elect Director4. To appoint Independent Director5. Toappointauditorsfortheyear2015-2016andfixtheirremuneration

By Order of the BoardSeptember9,2015127HazaribaghT/A Dhaka-1209 (Jagadish Kumar Bhanja FCS) CompanySecretary

Notes:

1. September9,2015 is therecorddate.Shareholderswhosenameswillappear in theMembers registeroftheCompanyorintheDepositoryRegisteronthatdatewilleligibletoattendattheAnnualGeneralMeetingandreceivedividend.

2. AmemberentitledtoattendandvoteattheAnnualGeneralMeetingmayappointaproxyinhisstead.Theproxyform,dulystampedmustbedepositedattheCorporateOfficeoftheCompanynotlaterthan48(fortyeight)hoursbeforethetimefixedforthemeeting.Annualreportandproxyformcanbeavailableonthewebsitewww.apextannery.com.

3. Admissiontothehallwillbeonlyonproductionoftheattendanceslipsentwiththenotice.

4. In compliance with the Bangladesh Securities and Exchange Commission Circular No. SEC/CMRRCD/2009-193/154dated24October,2013noGift/GiftCoupon/FoodBox/BiscuitBox/CashorCashkindsshallbedistributedattheAnnualGeneralMeeting.

5. TheShareholdersarerequestedtosendtheir12digite-TINCertificatecopywithinSeptember28,2015fordeductionofTax@10%otherwiseTaxwillbededucted@15%ondividendasperFinanceAct2014.

NO

TICE

OF

AN

NU

AL

GEN

ERA

L M

EETI

NG



Notes



APEX TANNERY LIMITEDRegistered and Corporate Office:127HazaribaghT/A,Dhaka-1209,Bangladesh

PROXY FORM

I /We . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . … … … . . . . . . . . . .

o f . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .……….. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .…

beingMemberofApex Tannery Limited,herebyappoint...................................................................................................................................................of .......…...........................................................................................................................................................................................................................................................................……….............

asmy/ourproxytoattendandvoteforme/usandonmy/ourbehalfatthe39thAnnualGeneralMeetingofthecompanytobeheldonSunday,October04,2015at10:00a.m.and/oratanyadjournmentthereof.

As witness my hand this ........…......................………...... day of ..............……...........................................………........... 2015

--------------------------Signature of Proxy

-------------------------------------Signature of the Shareholder

No.ofsharesheld---------------------------------------------

RegisterFolio/BOIDNo.

Note : A Member entitled to attend and vote at the General Meeting may appoint a proxy to attend and vote on his behalf. The proxy form duly completed must be deposited at the registered office of the Company not later than 48 hours before the time fixed for the meeting.

APEX TANNERY LIMITEDRegistered and Corporate Office:127HazaribaghT/A,Dhaka-1209,Bangladesh

ATTENDANCE SLIP

Iherebyrecordmyattendanceatthe39thAnnualGeneralMeetingbeingheldonSunday,October04,2015at10:00a.m.atSpectraConventionCentreLtd.,HouseNo.19,RoadNo.7,Gulshan-1,Dhaka-1212.

Nameofmember/proxy........…......................………..............…......................………...... ........…......................………...... ........….........................................………......

RegisterFolio/BOIDNo.

Signature ........…......................……….......

Note: Shareholders attending meeting in person or proxy are requested to complete the attendance slip and hand it over at the entrance of the meeting hall.

AffixRevenueStampofTk. 10.00

PRO

XY

FORM

ATTE

ND

AN

CE S

LIP

Documents

Apex Tannery Limitedapextannery.com/resources/AR-2015.pdf · Apex Tannery Limited Our Vision, Mission, Values and Objectives 04 Corporate Directory 05 Directors and Management Team