Overview of Gemini Sea Food Limited

Gemini Sea Food Limited, established in 1982, is mainly

engaged in the production of seafood products to
customers worldwide. The brand is known, both locally
and abroad, for its wide qualitative product. Gemini Sea
Food Limited owns and operates a shrimps processing
plant and exports its products in the foreign markets .The
Company is the pioneer in exporting certified organic
shrimp from Bangladesh to many counties abroad Gemini
people have believed in “Hygienic Product Healthy Trade”
and made it a part of their core values at work. Quality,
Delivery Security, Social Responsibility and Respect to Nature are the corner stones of Gemini’s
Business, which has made Gemini the most admired seafood processing companies in
Bangladesh.
Gemini's plant is equipped with Cooking and Counter Cooling system, IQF Spiral Freezer,
Vibrating Glazer and IQF after Freezer/Hardener into the processing line. And therefore also has
a water treatment plants to supply clean water to the processing line, which allows the company
to have a competitive advantage over others. The reason why Gemini Sea has such a strong
consumer appeal is due to the fact that their product are superior in quality. And hence Gemini is
maintaining products quality as per USFDA KLN 14, Codex Alimentations HACCP, E.U.
directives, Latest International Rules & Regulation and country FIQC Rules & Regulation.
Some of the products offered by Gemini include Silver Pomfret, Black Tiger, Snaper, Sea Bass,
Chaka, Harina Shrimp, Scampi etc.
 Primary Focus of GHAIL’s Management Letter

In the letter it was it was addressed that Gemini had a continuous growth up to 2016-17 and thereafter
the company was unable to maintain the growth as the same way it did before. In the letter it said that
this was due to the external factors that persisted in the business outer environment. According to
Export Promotion Bureau of Bangladesh (EPB), overall shrimp exports from Bangladesh decreased.
Country’s export earnings from shrimp stood at 361.14 million USD in the fiscal year (July to June 2018-
19) showing –11.64 % decline compared to that of 2017-18 fiscal’s 408.71 million USD. And it is believed
that the performance of Gemini was also affected, with the drop in demand for Bangladesh's exports. It
was found that the shrimp sector failed to reach the target of 400 million USD by a deviation of -9.72%,
mainly because of impact of new species Vannamei shrimp, Global economic recession, devaluation of
Euro and Pounds, and hence Brexit. With the instability in the international market looming large, they
assured to their stakeholders that they are trying their best to overcome these challenges with their
long experience prudence and market cutting strategies.
The Income Statement:
Gemini Seafood Limited
Income Statement
2018 2019
Revenue 795,547,680 671,678,923
Cost of goods sold -710,077,463 -592,253,460
Gross Profit 85470217 79425463
Administrative Expense -23,052,094 -20,174,038
Selling and Marketing Expense -9,359,351 -11,618,161
Total Operating Expenses -32,411,445 -31,792,199
Operating Profit 53058772 47633264
Other income 657,251 553,404
Other Expenses -44,163,214 -42,521,859
Profit before WPPF 9552809 5664809
Contribution to WPPF -454,896 -269,753
Profit before tax 9097913 5395056
Income Tax -6,481,653 -3,794,811
Net Profit after tax 2616260 1600245
EPS 0.37 0.61

Gemini Sea food use a condensed income statement to disclose its company's financial
performance every year. For an investors to better interpret the income statement, the elements of
the income statement are given in a descriptive manner in the company's foot notes.

For the year 2018 and 2019, there were no extraordinary items, discontinued items or any
cumulative effects of changes in accounting principle. The company has not made any changes
in terms of accounting principles and they have strictly followed the consistency principle by
heart.

During the span of 2 years, there was no realized/unrealized extra-ordinary gain or loss made by
the Company as there was no investment elsewhere that Company could generate gain or loss.

In the above table we can see that the company has incurred other income and expenses that are
not directly related to the business's operation. The other income section comprises of Interest
income and wastage sales, while the other expenses section mostly comprises of financial
expenses like; Bank Charges & Commission, Bill Negotiation & FCC Charges etc..

If we compare the above two income statements than we can see that the EPS has decreased
from 0.61 to 0.37 compared to previous year. The reason is mainly for the significant fall in
revenue compared with previous year as the demand and price of BT Shrimps were under
pressure in the global competitive market because of aggression of newer spices Venami.

The Balance Sheet:

2018 2019
Current Assets
Cash and cash equivalents 18,338,061 23,130,547
Bills receivable 69,842,358 98,118,129
Advances,diposits and pre-payments 20,494,310 34,897,998
Intercompany Receivables 5,400,000 5,400,000
Inventories 352,585,269 238,485,223
Total current assets 466,659,998 400,031,897
Non- Current Asset
Property Plant and equipment 43,856,384 67,052,999
Intangible Assets 0 166,500
Total Non-Current assets 43856384 67219499
Total Assets 510516382 467251396
Liabilities and Stockholders' Equity
Current Liability
Short term loans (Notes Payable) 416,050,926 401,330,225
Trading Liabilities (Accounts Payables) 34,102,857 3,017,591
Liabilities for Expense (Accruals) 2,417,307 4,808,980
Other Payables 668,930 668,930
Workers Profit Participation Funds 5,301,444 4,119,247
Total current liability 458,541,464 413,944,973
Long- term debt 0 0
Non- Current Liability
Deferred tax liability 6,405,073 6,136,333
Total liabilities 464,946,537 420,081,306
Stockholders' equity
Share capital 37,125,000 42,693,750
Retained Earnings 8,444,845 4,476,340
Total Stockholders' equity 45,569,845 47,170,090
Total Liabilities and Stockholder's equity 510,516,382 467,251,396
If we see the Balance sheet above, the company's net worth has increased by Tk 1,600,245
between 2018 and 2019.

In compliance with IAS-16 Gemini, has recorded its asset at cost less accumulated depreciation,
excluding land as it has measured it at cost. The cost of an item of PPE comprises its purchase
price, import duties and non-refundable taxes after deducting trade discount and rebates and any
costs directly attributable to bringing the assets to the location and condition necessary for it to
be capable of operating in the intended manner

Intangible assets includes IT software which is used to maintain Company's accounts. Intangible
assets are measured at cost less accumulated amortization and accumulated impairment loss, if
any. The cost of the Intangible assets comprises its purchase price and any costs directly
attributable to the assets.

Cash & cash equivalents include cash in hand, cash at banks, term deposits which are available
for use by the Company without any restrictions

Receivables are carried at original invoice amount. Furthermore no amount was written off as
bad debt and no debt was considered to be doubtful for both of the years

There are also no unpaid income taxes for both of the years, as Gemini as a company is very
sincere in terms of meeting its legal obligation.

According to the existing policy Gemini can issue up to 40,000,000 Ordinary Shares
(authorized), with the par value being Tk. 10 per each share. In 2018 the company issued
3,712,500 Ordinary Shares, and as of 2019 4,269,375 shares were issued @ TK 10 per share.
Therefore if the company wishes, then they can again legally issue 35,730,625 ordinary shares
Notes to the Financial Statements
The subject of the first three notes are 1) The Company and its Operation 2) Summary of
Significant Accounting & Valuation Principles 3) Property, Plant & Equipment

The financial statements have been prepared and the disclosures of information were made in
accordance with the requirements of the Companies Act, 1994 and IAS and IFRS. The Statement
of Financial Position and Statement of Profit or Loss and Other Comprehensive Income have
been prepared according to IAS-1 “Presentation of Financial Statements "are based on accrual
basis of accounting following going concern assumption under generally accepted accounting
principles and practices in Bangladesh. And therefore financial statements are prepared under the
historical cost convention.
The Company’s inventories comprises of processed Shrimps and stock consumable stores which
are kept at factory’s stores and production floors. Inventories are stated at the lower of cost or net
realizable value in compliance to the requirements of IAS-2. Costs including an appropriate
portion of fixed and variable overhead expenses are assigned inventories by the method most
appropriate to the particular class of inventory. Net realizable value represents the estimated
selling price for the inventories less all estimated cost of completion and cost necessary to make
the sale.
Items valuations are as follows:
Category of Inventories Basis of Valuation

Packing & Consumable Stores At Weighted Average Cost

Finished Goods At Standard Cost
( It comprises of materials, standard activity cost
and Overheads)

When taking Property plant and equipment into account. The Company’s policy is to recognize
property, plant and equipment at cost less cumulative depreciation. No depreciation has been
charged on land and land development. Consistently, depreciation is provided on diminishing
balance method based on written down value at which the asset is carried in the books of
account. Depreciation continues to be provided until such time as the written down value is
reduced to Taka one. Each item of PPE is depreciated from the date in which the asset comes
into use or capitalized. In case of disposals, no depreciation is charged in the month of disposal.

The Rates are charged as follows:

 Particular of Assets Rate of Depreciation

Land & Land Development 0%

Plant and Machinery 10%

Buildings and construction 5%

Electrical Fittings 10%

Deep tube well 10%

Furniture & Fixture 5%

Vehicles 15%

Loose tools 10%

Firefighting Equipment 10%

Office equipment 15%

Laboratory instruments 20%

Dividend policy :