Golden Harvest Agro Industries Limited

Statement of Financial Position

As at June 30, 2012

ASSETS
Non-Current Assets 1,024,677,371 927,686,981
Property, Plant & Equipment 713,251,281 658,044,917
Leased Assets 6 22,321,040 12,434,489
Deferred Expenses 7 13,669,0 12 15,377,639
Investment in Subsidiary Company 8 275,436,038 241,829,935

Current Assets 375,226,305 224,301,088

Inventories 9 59,183,694 43,330,434
Advances, Deposits and Prepayments l0 206,164,957 71,053,563
Trade Receivable 11 101,631,631 102,218,723
Export Incentive Receivable 12 7,481,399 7,251,863
Cash dt Bank Balances 13 764,624 446,505
TOTAL ASSETS 1399,903,676 l,i5I988,069

EQUITY AND LIABILITIES

Shareholders’ Equity 971,94l,341 893,615,769
Share Capital 14 350,000,000 350,000,000
Revaluation Surplus 15 219,364,973 225,346,706
Retained Earnings Id 402,57d,368 318.269,063
Total Equity 971,941,341 893,615,769

Long-term Liabilities 67,959,367 71,134,236

Term Loan against Machinery l7 49,406,883 60,466,447
Deferred tax Liability 18 6,847,615 3,415,422
Lease Obligation 19 1 1,704,869 7,252,367

Current Liabilities 360,002,968 187,238,064

Accounts & Other Payables 20 23,840,270 18,980,147
Accruals and Provisions 21 8,980,085 3,714,711
Provision for Income Tax 22 28,011,921 67,727,113
Cash Credit Loan 23 280,932,823 82,883,962
Current portion of Long Term Loan 17 i 1,865,59 io,l0l,621
Ciment ponion of Lease Obligation 19 6,372,281 3,830,510
TOTAL EQUTY AND LIABILTIES 1,399,903,676 1,151,988,069

Net Asset Value per Share 24 27.77 25.53

Director ' “ Managing Director

Signed in terms of our separate report of even date annexed.

 Golden Harvest Agro Industries Limited
Statement of Comprehensive Income
For the year ended June 30, 2012

Amount in BDT
Notes
2012 2011

Revenue 25 350,719,202 304,353,982

Cost of Goods Sold 26 (177,394,409) (129,360,471)
173,324,793 174,993,511

Operating Expenses (60,268,133) (38,152,655)

Administrative Expenses 27 38,400,743 31,129,305
Exchange Gain (1,200,367) (2,660,936)
Selling & Distribution Expenses 28 23,067,757 9,684,286

Profit from Operation 1 13,056,661 136,840,856

1,029,714 3,844,485
Export Incentive 29 229,536 1,945,724
Other Income 30 800,178 l,898,761
Loss from Investment in Quoted Shares - (4,442,103)
Finance Cost S1 (38,775,702) (5,409,474)
Profit before WPPF 75,310,672 130,833,765
Provision for WPPF (3,584,788) -
Net Profit before Tax 71,72s.gs4 130,833,765

Provision for Income Tax (27,006,415) (47,669,047)

Current Tax Expense 22 23,574,223 44,253,625
Deferred Tax Expense 18 3,432,193 3,415,422
Profit after tax anributable to Ordinary Shareholders of
the Company 44,719,469 83,164,718

Other Comprehensive Income

Share of profit from subsidiary 33,606,103 49,104,733
Total Comprehensive Income 78,325,572 132,269,451
Warning Per Share for the year 32 2.24 3.78
The annexed notes form an integral part of the financial statements

Director "”“ na g’Director

Signed in tetms of our separate report of even date annexed.

Dated, Dhaka; S. F. Ahmed & Co.

23 October 2012 Chartered Accountants
 Golden Harvest Agro Industries Limited
Statezoezst of Cbaoges ia Equity
F’or tBe year eaded June 30, 2012

Revalnatioo Retained
Share Capital
Surplus Earnings

Balance at 01.07.10 100,000,000 107,064,709 182,824,730 389,889,439

Depreciation adjustment on Revaluation
- (3,174,882) 3,174,882
Total comprehensive income for the year 132,269,451 132,269,451
Issuance of Ordinary Share 250,000,000 250,000,000
The Company - 81,248,695 81,248,695
Share of Subsidiary Company - 40,208,184 40,208,184
Balance at 30.06.11 350,0ft0,000 225,346,706 318,269,063 893,615,769

Balance at 01.07.11 350,000,000 225,346,706 318,269,063 893,615,769

Depreciation adjustment on Revaluation - (5,981,733) 5,981,733
Surplus
Total comprehensive income for the year 78,325,572 78,325,572
Balance at 30.06.12 350,000,000 219,364,973 402,576,368 971,941,341

The annexed notes form an integral part of the financial statements

Man ng Director

Signed in terms ofour separate report of even date annexed.

Dated, Dhaka; S. F. Ahmed & Co.

23 October 2012 Chartered Accountants
 Golden Harvest Agro Industries Limited
Statement of Cash Flows
For the year ended June 30, 2012

Amouot ia BDT
2012 1 2011

Cash Flows from Operating Activities

Collections from Customers 351,306,294 315,673,051

Collections from Cash Incentive and others 800,178 4,159,761
Payments for Operating Costs & Other Expenses (223,851,379) (249,515,279)
Tax paid (65,854,374) (6,114,228)
Net Cash generated from Operating Activities 62,400,719 64,203,305

Cash Flows from Investing Activities

Acquisitions of Property, Plant and Equipment (74,141,334) (271,056,487)
Loss on investment in quoted shares (4,442,103)
Advance Finance to Contract Farmers (132,546,434)

Net Cash used in Investing Activities (206,687,768) (275,498,590)

Cash Flows from Financing Activities

Payment against finance lease (5s372,394) (2,451,328)
Borrowings from Banks/Financial Institutions 188,753,264 129,840,555
Payments to Related Parties (80,703,195)
Finance Cost (38,775,702) (5,409,474)
Issue of 157,250,000
share
Net cash provided by financing activities I 44,605,168 98,466,558

Net changes in cash and cash equivalents 318,119 (12,828,727)

Cash and cash equivalents at the beginning of the year 446,505 13,275,232

Cash and cash equivalents at the end of the year 764,624 446,505

Operating Cash flow Per Share 1.78 1.83

Mao flsg Director

Signed in terms of our separate report of even date annexed.

Dated, Dhaka; S. F. Abmed & Co.

23 October 2012 Chartered Accountant
 CREDIT RISK GRADING SCORE
SHEET

Reference No: Date:

Borrower:
Group Name (if any): Golden Hervest Aggregate Score: 90
Branch:
Industry/Sector: Food Industry
Risk Grading: Good
Date of Financials: 31 June 2012
Completed by:
Approved by:

Number Grading Short Score

1 Superior SUP Fully cash secured, secured by
Government/International Bank
Guarantee
2 Good GD 85+
3 Acceptable ACCPT 75-84
4 Marginal/Watchlist MG/WL 65-74
5 Special Mention SM 55-64
6 Substandard SS 45-54
7 Doubtful DF 35-44
8 Bad & Loss BL <35

Criteria Weight Score

Actual Score
Parameter
A. Financial Risk 50% Parameter Obtained
1. Leverage: (15%)  Less than 0.25× 15 .30 14
 0.26× to 0.35 x 14
Debt Equity Ratio (×) - Times  0.36× to 0.50 x 13
Total Liabilities to Tangible Net worth  0.51× to 0.75 x 12
 0.76× to 1.25 x 11
All calculations should be based on  1.26× to 2.00 x 10
annual financial statements of the  2.01× to 2.50 x 8
borrower (audited preferred).  2.51× to 2.75 x 7
 More than 2.75× 0
2. Liquidity: (15%)  Greater than 2.74× 15 1.45 11
 2.50× to 2.74 x 14
Current Ratio (×) - Times  2.00× to 2.49 x 13
Current Assets to Current Liabilities  1.50× to 1.99 x 12
 1.10× to 1.49 x 11
 0.90× to 1.09 x 10
 0.80× to 0.89 x 8
 0.70× to 0.79 x 7
 Less than 0.70× 0
3. Profitability: (15%)  Greater than 25% 15 32.25% 15
Operating Profit Margin (%)  20% to 24% 14
 15% to 19% 13
Operating Profit  10% to 14% 12
×100  7% to 9% 10
Sales  4% to 6% 9
 1% to 3% 7
 Less than 1% 0
4. Coverage: (5%)  More than 2.00× 5 20 5
Interest Coverage Ratio (×)-Times  More than 1.51× Less than 2.00× 4
 More than 1.25× Less than 1.50× 3
Earning Before Interest & Tax (EBIT)  More than 1.00× Less than 1.24× 2
Interest on debt  Less than 1.00× 0
Total Score–Financial Risk 50 45
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 Criteria Weight Score
Parameter Actual Score
B. Business/Industry Risk
Parameter Obtained
18%
1. Size of Business (Sales in BDT crore)  > 60.00 5 35 4
 30.00 – 59.99 4
The size of the borrower’s business  10.00 – 29.99 3
measured by the most recent year’s  5.00 - 9.99 2
total sales. Preferably based on audited  2.50 - 4.99 1
financial statements  < 2.50 0
2. Age of Business  > 10 years 3 10 4
 > 5 - 10 years 2
The number of years the borrower has  2 - 5 years 1
been engaged in the primary line of  < 2 years 0
business.
3. Business Outlook  Favorable 3 Favorable 3
 Stable 2
A critical assessment of the medium  Slightly Uncertain 1
term prospects of the borrower, taking  Cause for Concern 0
into account the industry, market share
and economic factors.
4. Industry Growth  Strong (10%+) 3 Good 2
 Good (>5% - 10%) 2
 Moderate (1% - 5%) 1
 No Growth (<1%) 0

5. Market Competition  Dominant Player 2 Dominant 2

 Moderately Competitive 1 Player
 Highly Competitive 0

6. Entry/Exit Barriers  Difficult 2 Diffcult 2

 Average 1
 Easy 0
Total Score-Business/Industry Risk 18 17

Criteria Weight Score Actual Score

C. Management Risk 12% Parameter
Parameter Obtained
1. Experience  More than 10 years in the related 5 5 - 10years 4
(Management & Management Team) line of business
The quality of management based on  5–10 years in the related line of 3
business
the aggregate number of years that
 1–5 years in the related line of 2
the Senior Management Team has
business
been in the industry.
 No experience 0
2. Second Line/ Succession  Ready Succession 4 Ready 4
 Succession within 1-2 years 3 succession
 Succession within 2-3 years 2
 Succession in question 0
3. Team Work  Very Good 3 Very good 3
 Moderate 2
 Poor 1
 Regular Conflict 0
Total Score-Management Risk 12 11

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 Criteria Weight Score
Actual Score
D. Security 10% Parameter
Parameter Obtained
Risk
1. Security Coverage (Primary)  Fully pledged facilities/substantially 4 Registered 3
cash covered/Reg. Mortg, for HBL Hypothecation
 Registered Hypothecation 3 (1st charge/1st
(1st charge/1st Pari passu charge) Pari passu
 2nd Charge/Inferior charge 2 charge)
 Simple hypothecation/negative lien 1
on assets.
 No security 0
2. Collateral Coverage  Registered Mortgage on Municipal 4 Registered 3
(Property Location) Corporation/Prime area property. Mortgage on
 Registered Mortgage on 3 Pourashava/Se
Pourashava/semi-urban area mi-Urban area
property property
 Equitable Mortgage or No property but 2
plant & machinery as collateral
 Negative lien on collateral 1
 No collateral 0
3. Support (Guarantee)  Personal guarantee with high net 2 Personal 2
worth or Strong Corporate Guarantee guarantee
 Personal Guarantees or Corporate
Guarantee with average financial
strength 1
 No Support/Guarantee

0
Total Score- Security Risk 10 8

Criteria Weight Actual Score

Parameter Score
E. Relationship Risk 10% Parameter Obtained
1. Account Conduct  More than 3 (three) years accounts 5 More then 3 5
with faultless record years.
 Less than 3 (three) years accounts 4
with faultless record
 Accounts having satisfactory 2
dealings with some late payments
 Frequent Past dues & Irregular 0
dealings in account
2. Utilization of Limit  More than 60% 2 60% 2
(actual/projection)  40% - 60% 1
 Less than 40% 0
3. Compliance of  Full Compliance 2 Full 2
Covenants / Conditions  Some Non-Compliance 1 compliance
 No Compliance 0

4. Personal Deposits  Personal accounts of the key 1 No depository 0

business Sponsors/ Principals are
The extent to which the bank maintained in the bank, with
maintains a personal banking significant deposits
relationship with the key business  No depository relationship 0
sponsors/principals.
Total Score-Relationship Risk 10 9
Grand Total- All Risk 100 90

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