Table of Contents Transmittal Letter Notice of the 9° Annual General Meeting Our Vision (Our Mission ‘Our Objectives Performance at a Glance Corporate Directory Financial Highlights Introduction the Directors Message from Chairman Message from Managing Director Report of the Board of Directors to the Shareholders Corporate Governance ‘CEO/MD & CFO Declaration to the Board Auditor’s Report & Audited Financial Statements Proxy Form Attendance Slip ANNUAL REPORT 2018-2019 10 2 B 14 16 36 37 62 62 @ AFC Agro Biotech LimitedTransmittal Lotter4, To ‘The Shareholders Bangladesh Securities and Exchange Commission Registrar of Joint Stock Companies & Firms Dhaka Stock Exchange Commission Chittagong Stock Exchange Commission Subject: Annual Report for the year ended 30th June, 2019. Dear Sir (s) We are pleased to enclose a copy of the Annual Report together with the Audited Financial Statements for the year ended 30th June, 2019 along with the Auditor's Report and Director's Report for your record. Yours Sincerely, Aabele Nb Sabekun Nahar Company Secretary [or ANNUAL REPORT @ AFC Agro Biotech Limited 2018-2019Notice is hereby given that the 9th Annual General Meeting of the Shareholders of AFC Agro Biotech Limited will be held on Tuesday, 31st December 2019 at 11.00 A.M at Institution of Diploma Engineers, 160/A, Kakrail VIP Road, Dhaka-1000 to transact the following business: 1 To receive, consider and adopt the Directors’ and Auditors’ Report and Audited Financial Statements for the year ended 30th june, 2019, 2, To approve Dividend for the year ended 30th June, 2019. 3, To appoint Auditor of the Company and fixation of their remuneration for the year 2019-2020, 4.To elect the Directors of the Company. 5. To approve appointment of Compliance Auditor. Date: Dhaka 28% November, 2019 By order of the Board of Directors Sabekun Nahar Company Secretary Notes: 1. The Shareholders, whose names shall appear in the Share Register of the Company or in the Depository Register on the “Record Date” ie 19th December, 2019 will be entitled to attend the AGM and receive the Dividend. 2. A Member eligible to attend at the Annual General Meeting may appoint a proxy to attend on his/her behalf. The proxy form must be affixed with requisite revenue stamp and submitted to the Registered Office of the Company not later than 48 (Forty eight) hours before the time fixed for the Annual General Meeting. 3. Admission to the meeting will be strictly on production of the attendance slip attached with the Annual Report. 4, Shareholders and Proxies are requested to record their entry in time 5. As per BSEC Notification no. BSEC/CMRRCD/2006-158/208/Admin/81, dated 20 June 2018 Annual Report 2018-2019 of AFC Agro Biotech Limited, in soft form shall be transmitted to the respective shareholders of the Company through their e-mail ID available in their beneficial owner (BO) account with the depository. This Annual Report shall also be published on our website (wwwafcagrobiotech.com) 6. No food or gift will be served in the meeting in compliance of Bangladesh Securities and Exchange Commission notification # SEC/SRMI/2000-953/1950 dated 24/10/2000 and subse- quent circular # SEC/CMRRCD/2009-193/154 dated October 24, 2013. san ero ee 20182019 rl @ Ate Agro Biotech Limitedails II, po Our Vision To be the leader in biotech sector @ AFC Agro Biotech Limited tal 18-20194 Our Mission To establish AFCABL as a major biotech products manufacturer on the world map. AFCABL will be emerging as a backward supply chain industry to local pharma sector, food sector etc. Nh RT jos soon 90 lol @ ARC Agro Biotech LimitedOur Objectives 66 Using locally available agricultural outputs such as corn starch, potato starch, molasses, we will produce various products that are very important for pharma, food, textile sectors. Thus these manufacturing will save a lot of foreign currencies and create new plenty of white collar jobs. AFCABL will create a positive high impact on national economy. @ AFC Agro Biotech Limited fst 018-2019Net turnover 2018-2019 Tk. 109.1crore A Net turnover 2017-2018 Tk. 103.5 crore Operating Profit 2018-2019 Tk. 34.69 crore A Operating Profit 2017-2018 Tk. 34.37 crore Net profit after tax Net profit after tax ANNUAL REPORT 2018-2019 Tk. 33.73 crore Tk. 35.67 crore Gross profit 2018-2019 Tk. 42.75 crore A Gross profit 2017-2018 Tk. 40.41 crore Net profit before tax 2018-2019 Tk. 34.03 crore A Net profit before tax 2017-2018 Tk, 31.62 crore @ AFC Agro Biotech LimitedCorporate Directory ‘Corporate & Registered Office ‘AFC Agro Biotech Limited ‘Navana Osman@Link 214/D, Gulshan-Tejgaon Link Road, Dhaka-1208. Phone: 8836830, 8836843,8836875 Fax: 088-02-9531023 Web Site: www.afcagrobiotech.com Share Office Tanaka Tower (2™ Floor), 42/1/Gha, Segun Bagicha, Dhaka Phone: 9531023, 9531190 Email. afe.es2018@gmail.com Factory Uttar Shoilmary, Koiya Bazar, Batiaghata, Khulna, Memorable events Date of Incorporation 317 August, 2010 Date of Commercial Production 7 October, 2012 Consent for IPO from SEC £27" October, 2013 Listing with Stock Exchanges(DSE & CSE) — : 3" February, 2014 Business Line ‘Manufacturer of antibioties, proteins, vaccines, enzymes ete. ‘Capital Structure ‘Authorized Capital BDT 300 Crore Paid-up Capital BDT 104.74 Crore Last AGM Held 13" December, 2018 ‘Auditor MIS Shafiq Basak & Co, Legal Advisor Haque, Hasan, Ahmed & Associates, Advocate & Consultants Bankers Janata Bank Ltd Eastern Bank Lid South Bangla Agriculture & Commerce Bank Ltd. Premier Bank Lid. Dutch Bangla Bank Led. Islami Bank Bangladesh Ltd \o7| ANNUAL EFORT @ ALC Agro Biotech Limited "2018-2019te, OR” ‘ABM Ghulam Mostafa Chairman Ma. Afzal ‘Managing Director ‘SM. Saifur Rahman, Director Ma. Zia Uddin Director Jewel Khan Director ‘Tanvir Shariar Ghani Director Ma, Sobel Independent Director Nazmul Anwar Independent Director Nazmul Anwar Chairman Md. Zia Uddin Member Jewel Khan Member Ma. Sohel Chairman ‘SIM, Saifur Rahman Member Jewel Khan Member Sabekun Nahar Ma Jasimuddin Chief Financial Officer Md. Khalilur Rahman Head of Internal Audit ‘Mohammad Qutub Uddin Head of Plant Operation Md. Yaseer Arafat ‘Asst Manager of Microbiology ‘Aktaruzzaman khan Asst. Manager of Quality Control Mir Md. Harun-or-Rashid ead of Marketing ‘Abul Kashem SeManager-Admin Laila Noor Head of Human Resources (oa) ‘Mul seront @ AFC Agro Biotech LimitedParticulars Tuly, 2018 Tuly, 2017 July, 2016] January, 2015 | January-2014 To To To To To June, 2019 Tune, 2018 June, 2017 June, 2016 | December-2014 ‘Non-Current assets 1,600,853,367 | 1,311,747,579 | 1,089,801,660 | 835,709,292. 619,895,484 Investment 11,000,000 22,600,000 43,820,000 31,573,839. 22,993,365 Current Assets 715,884,763 592,431,157 | _ 419,250,384 | 364,366,907 166,974,227, Total Assets 2,327,738,130 | 1,926,778,736 | 1,552,872,044 | 1,231,650,038 809,863,076 Share Holders’ Equity | 2,019,998,179 | 1,682,597,994 [_1,325,704,095 | 1,061,294,922 [737,362,340 Non-Current Liabilities 16,968,035 16,968,035, 22,798,895 16,968,035, = Current Liabilities’ 290,771,916 |__ 227,212,708 | 204,369,054 |__1,53,387,081 72,569,801 Total Share Holders’ | 2,327,738,130 | 1,926,778,736 | 1,552,872,044 | 1,231,650,038 | 809,863,076 Equity & Liabilities ‘Net Tumover 1,091,567, 738 | _1,035,593,945 [992,501,929 | 864,155,813 | 599,617,852 Gross Profit 427,501,875 | 404,165,886 378,618,697 | 329,602,732| 196,895,337 ‘Net Profit before Tax 340,361,963 [316,224,333 | 302,374,227 | 263,472,594 | 148,594,693, ‘Net Profit after Tax 337,398,047 | 356,775,411 | 264,601,358] 224,328,456 | 148,566,166 Eamings Per Share: 3.22 341 3.32 2.96 235 (Restated): @ Arc Agro Biotech Limited |oo| Ie 2019introducing the Directors * ABM Ghulam Mostafa, Chairman Mr. ABM Ghulam Mostafa is an ex-minister and ex-member of parliament of Government of Bangladesh, He was the chairman of parliamentary standing committee. He joined the former Civil Service of Pakistan in 1956. He was the member-secretary of the first Pay Commission in 1972 and was secretaries in various ministries and represented Bangladesh Government at numerous international Organizations and Conferences like - WHO, ITU, GATT, ITO ete, and became a Minister in 1988 and held the portfolios of Energy and Natural Resources and Flood Control and Water Resource ministry. became a Minister in 1988 and held the portfolios of Energy and Natural Resources and Flood Control and Water Resource ministry. + Md. Afzal, Managing Director Md, Afzal is a Managing Director of the Company. He was born in 1976 at Dhaka, He completed his bachelor degree in Business Administration, major in marketing and minor in Management from Independent University Bangladesh in 2001.This Company is looking forward to utilize his experience and insight in marketing and management. He is also a Director of Active Fine Chemicals Limited, and Director of AFC Capital Limited & AFC Health Limited, * SM. Saifur Rahman, Director SM Saifur Rahman isa Director of the Company. He was born in 1979 at Dhaka in a reputed business family. The key visionary founder of this company has a very strong background in scientific research in chemicals technology. He holds the position of Managing Director and Chief Scientist at Active Fine Chemicals Ltd, Mr. Rahman completed his bachelor degree from University of Rochester, USA on Chemical Engineering in 2000, and a master degree on Chemical Engineering in 2001. He ‘was enlisted in the Dean of Engineering School's honor list for his outstanding academic achievements, He also won 2001 prestigious Forbes Young Entrepreneur award for his high-tech Business proposal on a futuristic drug discovery system. He worked on a collaborative research program with Merck Pharmaceuticals and University of Rochester as a PhD candidate for 3 years until before he left for Bangladesh. The concept of this project was generated during his tenure as a Process Development Scientist at UofR. Over there he worked to improve the manufacturing process of critical drugs. Later on he got selected as a PhD research scientist at University of Rochester, where he published many research articles in scientific journals. To explore the great potential of such a high-tech project requires leadership with cutting edge knowledge in relevant technology. The leadership's in-depth knowledge in future of therapeutic industry, vision and hard work will propel this organization to a 21st century's standard true global company. He is also a Director of AFC Health Limited & AFC Capital Limited. ‘Md. Zia Uddin, Director Mr. Md. Zia Uddin has been the Chairman of Active Fine Chemicals Limited since 2012. Soon after graduation in Business Administration; he started his career with diversified business and took control of his family business, Hamid Industrial Corporation (Pvt. Ltd, which has been running successfully with excellent reputation since 1970, He concurrently serves asa Chairman of Nakazia Holdings (Pvt Ltd, Managing Director of Faijun Industries (Pvt) Limited, Director of AFC Agro Biotech Limited, AFC Capital Limited and Hamid Industrial Corporation (Pvt.) Ltd. as well as Proprietor of Ziauddin Metal Industries, Mr. Zia is a prominent business magnate, investor and philanthropist within the business community. He is serving the position of Secretary General in Bangladesh API & Intermediaries Manufacturing Association (BAIMA) and as Convener in Standing Committee on Industrial Relations, Factory Compliance, Dhaka Chamber of Commerce & Industries (DCI) He is also the Integration Chair of Entrepreneur's Organization Bangladesh, the biggest global network exclusively for entrepreneurs and is a Life Member of SAARC CCI, The Federation of Bangladesh Chambers of Commerce and Industry (FBCCr) He has participated various national and international seminars and workshops in the UK, German, India, Singapore, Dubai, China, Korea sun ero 10 20182019 (nl @ Ate Agro Biotech Limited*Mr. Jewel Khan, Director He is one of the Directors of AFC Agro Biotech Limited. Mr. Jewel completed his BBA from University of Windsor, Windsor, Canada and has been associated with Jewel Khan Traders the Textile Chemical Seller and played a key role at Jewel Sons Garments the Kids Wear Manufacturer as an entrepreneur and enriched the garments sector with his, business background and valuable professional experience in the exciting space of Garments sector. He has a deep commitment to making a difference in this sector. The creation of strategic alliances and strategic planning of his, to indicator of our continuous efforts to develop the core team to help achieve the mission of the Company. ‘Mr. Tanvir Shahriar Ghani, Director ‘Tanvir Shahriar Ghani is a highly accomplished investment banker, He has been working in investment banking sector from many years. He served as an investment banker at Goldman Sachs, USA. He served as Head of Asian Hedge fund & Private Equity Capital Market Group. He graduated from Colombia University USA. He worked as a speech writer of Kofi Anan (the then General Secretary of UN). *Mr. Ma. Sohel, Independent Director Md. Sohel is an Independent Director of AEC Agro Biotech Ltd. He obtained BBA degree, major in Accounting and minor in Management from Independent University Bangladesh (IUB). He is a very dynamic and resourceful person for the company. He is the Managing Director of M/S Sohel Enterprise, Director of Super Grip Plastic Ind, (Pvt) Ltd. and also an independent Director of Active Fine Chemicals Ltd. He isthe prestigious member of Rotary Club of Dhaka, Moulovi Bazar Merchant Association and Dhaka Chamber of Commerce and Industry. * Mr. Nazmul Anwar, Independent Director Nazmul Anwar isan Independent Director of AFC Agro Biotech Ltd. He completed his Masters of Business Administration (MBA) from University of Dhaka, He has a vast experience and visible achievements in business development which adding a great value to the board and company. He is the Adviser of RAK Ceramics (Bangladesh) and an Independent Director of Active Fine Chemicals Ltd, I" ANNUAL REPORT @ Arc Agro Biotech Limited In| 2018-2019,MESSAGE FROM THE CHAIRMAN Dear Shareholders, I welcome you all and take immense pleasure in addressing the 9th Annual General Meeting of the company. I would like to take this opportunity to present before you the Annual Report together with the Audited Financial Statements and Auditors Report thereon for the financial period July 2018 to June 2019 for your kind consideration and approval. Our mission is to establish AFC Agro Biotech Limited as a major biotech products manufacturer on the world map. AFC Agro Biotech Ltd. is a first and only agro biotech company in Bangladesh has been facing challenges from its inception and finding innovative ways to sort them out too, Despite such a challenge, your company turned in a good performance and was able to manage and operate the business and to keep the growth rate upward. In all aspects of our business, we place emphasis on maintaining the highest standards of quality to ensure that our products deliver the maximum. potential benefit to our customer. We also aim to reap the benefits of friendlier mobilization of capital and labor. Further development of our employees will continue to be our priority. Through organized feedback systems, career planning, training & development, we are fast progressing to achieve our strategic objective of "forming the best team” ‘The performance of the year 2018-2019 is a satisfactory rate of growth, Net Turnover stand on Tk. 109.1 crore, Net Profit after Tax is Tk. 33.73 crore and Earning per Share is Tk 3.22. On behalf of the Directors, | would like to thank each of our shareholders and all other stakeholders for their continued support and confidence in our management team as we continue our path towards sustainable and towards growth. Sincerely, patio ABM Ghulam Mostafa Chairman ssaun ero 12 20182019 rl @ Ate Agro Biotech LimitedMESSAGE FROM MANAGING DIRECTOR Dear Shareholders, ‘At AFC Agro Biotech Limited, we are guided by our commitment to facilitate growth of our stakeholders, the industry and the nation, promoting ‘Inclusive Growth’. We have achieved BDT 33.73 crore in Profit after Tax in Financial year July 2018 to June 2019 for your kind consideration and approval. Your Company's innovation-led business approach helped improve market access, convert market challenges into opportunities and weather the storm of uncertainty. With only few years that we have ventured into the pharmaceutical industry in Bangladesh, we have made very good progress. Facility up gradation and expansion projects at other sites and locations have also been undertaken during the fiscal year 2018-19. To keep us ahead of competition, we expand our product range and have set up a R&D division in Khulna Government of Bangladesh has approved a set of policies to support API & Reagent manufacturing sectors in 2018. These set of policies will definitely make a lot of difference. For instance, 20% cash incentive for export will add a lt of fuel for growth. This will also help us to compete with the foreign competitions. The export market size is over USD 250 billion. TRIPS treaty and ince1 will help us to capture a good size of this market in the coming future. For local market growth GOB has approved VAT and AIT exemption until 2022 with some condition until 2032. Unfortunately new policy approved by the cabinet has yet to be materialized by NBR. Exemption related SROs are yet to be published, though there are lots of progresses. We are working closely with relevant ministries to sort these issues out. Overall, your Company has made good progress and is poised to grow and expand in future, On behalf of the entire AFC Agro Biotech Limited team, I would like to thank you for your valuable trust and seek your continued support for all future endeavors. Sincerely Yours, $a Md. Afzal Managing Director c . @ AFC Agro Biotech Limited hal 018-2019Report of the Board of Directors to the Shareholders Dear Shareholders, Welcome to the 9th Annual General Meeting of AFC Agro Biotech Limited, The Directors are immensely pleasured to present the Annual Report together with Directors’ Report and the Audited Financial Statements for the year ended 30th June, 2019 in accordance with the prevailing Rules and Regulations, Corporate Status and Background: AFC Agro Biotech Limited (AFCABL) was established on 31st August, 2010 as a public limited company with a vision to produce the antibiotics, proteins, vaccines, enzymes etc, AFCABL has set up a multi-purpose chemicals manufacturing facility at Uttar Shoilmary, Koiya Bazar, Batiaghata, Khulna. The plant is established on the 3.00 acre land. The company has started its commercial production on 7th October, 2012. Business Activities: AFCABL has been established with the target to manufacture antibiotics, proteins, vaccines, enzymes etc. from agricultural ingredients like molasses, glucose, potato starch and other nutrients and to sell those products to local markets, Raw materials will be procured mostly from local suppliers. The company is producing following products as Biological Assets. SLNo. | Name of the Products 1.__| Macrolide Protein Acetic Acid LeLysine ‘Mono sodium Glutamate ‘Methonione Industrial Enzyme Jo |ea] = |oo| ps Net Turnover forthe year ended 30th june, 2019 is Taka 109.15 crore and last year's turnover of Taka 103.55 crore, Profit after tax for the year ended 30th june, 2019 is Taka 33,73 crore and last year’s profit after tax was Taka 35.67 crore. Industry outlook and possible future development in the industry: Biotech sector has a very strong outlook in the world economy in the coming days, Bangladesh imports a very large amount of biotech products every year ranging from pharmaceuticals, food, textile etc. Estimated Bangladesh market size of biotech products are over Tk. 5000 crore. Since raw materials to manufacture these products are locally and readily available, this sector seems to hold very strong potentials, Particularly pharma products are very important to emphasize on. Al bialogical products such as macrolide group antibiotics, cephalosporin group antibiotics, penicillin group antibiotics, all kind of steroids, most of the cancer drugs, human insulin, human growth hormone, immunosuppressive drugs, and vaccines are born out of fermentation or single cell biotechnology. We need to realize trips treaty will put us in very difficult situation after 2031 if we do not have our own robust manufacturing sector of these products. Hence it is important to invest into these critical industries and make it sustainable. Biopesticides and Biofertilizers will launch very soon which has very great agricultural potentiality Risks and Concerns: Ability to achieve every milestone on time is a concern. Financial risks are associated if each goal is not achieve on time. ‘The market is mature and ready to be served, Delivering the right products on time isa big challenge, Building up large pool of knowledge work force is also a matter of concer, Success of such knowledge based industry largely depends on strong force. We will put a lot of emphasize build our human resource to achieve our goals on time. Discussion on Cost of Goods Sold, Gross Profit Margin and Net Profit Margin: ‘The Statement of Comprehensive Income shows that the Cost of Goods Sold for the year ended 30th June, 2019 is Tk. 66.40 crore against Tk. 63.14 crore for the last year. Gross Profit for the year ended 30th June, 2019 is Tk. 42.75 crore against Tk. 40.41 crore for the last year, Net Profit after tax for the year ended 30th June, 2019 is Tk, 33,73 crore against ‘Tk. 35.67 crore for the last year. Continuity of any Extra-Ordinary Gain or Loss: ARC Agro Biotech Limited has no any Extra-Ordinary Gain or Loss for the year ended 30th June, 2019. sn ter i ani sna gor hal @ AFC Agro Biotech LimitedRelated Party Transaction: (@) Related party transaction took place for investment in shares and short term loan this year by AFC Agro Biotech Limited with AFC Health Ltd. The name of the related parties transaction have been set out in accordance with the provision of IAS 24 Related party disclosures are as follows: ‘Name of the Company Total Tk. Date AFC Health Ltd. Cinvestment) 11,000,000 ‘AFC Health Lid. (Short term loan) 62,767,068, 30.06.2019 ‘Total 73,767,068 (b) Further Active Fine Chemicals Limited is one ofthe customer of AFC Agro Biotech Limited, During this year AFC Agro Biotech Limited sold products Tk. 4,62,88,872/- to Active Fine Chemicals Limited and received Tk 4,23,47,761/- against sales after adjusting due balance of Tk. 40,42,998/-and balance due from Active Fine Chemicals Limited as on 30.06.2019 was Tk. 39,41,111/- (©) Related party transaction took place during normal course of business with Active Fine ‘Chemicals Limited. (d) Short term benefits to the related party: Name Remuneration | Remuneration _| Board Mesting Fee ‘Md, Golam Mostafa 50,000 600,000 32,500 ‘Mad. Saifur Rahman 100,000 1,200,000 50,000 Ma. Zia Uddin 100,000 1,200,000 52.500 Mad. Afral 50,000 600,000 52,500 ‘Mad. Jewel Khan 100,000, 1,200,000 52,500 ‘Total 400,000 4,800,000 260,000 ©) The monthly remuneration as stated above has been approved in AGM. (O No other related party exists. Directors Remuneration: Only five Directors take remuneration from the company. Total remuneration expenses of the Directors have been disclosed as an expense under the head of Administrative Expenses in the notes 22.00 of financial statements. Independent Directors do not take any remuneration from the company, Corporate and Financial Reporting: The Directors are pleased to confirm the following: 1) The financial statements prepared by the management of the company present fairly its statements state of affairs, the result of its operations, cash flows and changes in equity. 2) Proper books and accounts of the company have been maintained. 3) Appropriate accounting policies have been consistently applied in preparation of the financial statements and the accounting estimates are based on reasonable and prudent judgment. 4) International Accounting Standards (IAS) / International Financial Reporting Standards ERS) as applicable in Bangladesh have been followed in preparation of the financial statements and any departure there from has been adequately disclosed, 5) The system of Internal Control is sound in design and has been effectively implemented and monitored. 6) There are no signi concern. 7) There are no significant deviations from last year in operating results but normal growth is there. 8) The financial data for the last five years are annexed. 9) No bonus shares or stock dividend has been or shall be declared as interim dividend, @ AFC Agro Biotech Limited cant doubts upon the Company’s ability to continue as a going Isl 2018-2019Acquisition of Assets: During the year under review, the Company invested a sum of Tk. 51.32 crore for acquisition of Fixed Assets such as land, building, plant and machinery, furniture & fixture and lab equipment. Investment: This is made up as follows: Investment in Securities-Listed Company(Fair Value)- Annex-A, - 11,600,000 Investment in Securitics-Unlisted Company Annex.-A 11,000,000 11,000,000 Total 11,000,000 22,600,000 Shareholding Pattern: Shareholding patterns of the company for the 2018-2019 is shown in Annexure-II ofthis report, Minority Shareholders: Minority shareholders have been protected fiom abusive actions by, or in the interest of, controlling shareholders acting either directly or indirectly and have effective means of redress. Corporate Governance Compliance Report: AFC Agro Biotech Limited adheres to appropriate Corporate Governance principles. ‘The Company has also complied with all requirements of Corporate Governance as required by the Bangladesh Securities & Fachange Commission, Accordingly to Bangladesh Securities and Exchange Commission's notification no... SEC/CMRRCD/2006-158/207/Admin/80; dated 3" June, 2018 a Corporate Governance Compliance Report is shown Annexure-V of this report. Credit Ratings: The summery of the up to date credit rating done by National Credit Ratings Limited (NCR) is presented below: Long Term: A. Short Term: S We express our warm thanks to all our customers and stakeholders for their continued support and cooperation Financial Result: ‘The Directors are pleased to report the financial results for the year 2018-2019: Tuly 2018 Tuly 2017 Particulars To To June 2019 June 2018 Net Profit After Tax 337,398,047 356,775,411 ‘Add: Profit brought forward from previous year 524,251,117 256,475,292, Less: Dividend 136,620,000 151,800,000. Less: Tax Holiday Reserve = 62,800,413 Profit Available for Appropriation 725,029,163, 524,251,117 Less: Proposed Dividend 104,742,000. 136,620,000 ‘Un-appropriated Profit Carried Forward (620,287,163, 387,631,117 Dividend: During the year company earned Net Profit after Tax is Tk. 33.73 crore. The earnings per share (EPS) is Tk. 3.22. Considering the satisfaction of shareholders, the Board of Directors has recommended 10% Stock Dividend (10 Bonus Shares for existing 100 Shares) for the year ended 30" June, 2019, ANNUAL REPORT 6) 2018-2019 hel © AKC Agro Biotech LimitedInterim Dividend: No dividend was declared during the period under review as interim dividend. Capital Structure: Authorized capital of AFC Agro Biotech Limited is Tk.300,00,00,000/- divided into 30,00,00,000 Ordinary shares of Tk.10.00 cach, Paid up capital of the Company as on 30" June 2019 is Tk.1,04,74,20,000/- divided into 10,47,42,000 Ordinary shares of Tk.10.00 each. After considering proposed 10% Stock Dividend the capital will be at Tk.1,15,21,62,000/- divided into 11,52,16,200 Ordinary shares of Tk.10.00 each. Management Discussion and Analysis: ‘The Year of 2018-2019 was a new horizon for Bangladeshi manufacturers of APIs and related products has emerged last year despite it being extremely competitive and snagging in all the sectors in Bangladesh because of internal and external effect. It may be cited that wages hike, price of raw materials increases, insufficient utilities support, Global recession, unfavorable trade deal and others make the business very difficult and troublesome and create obstacle keeping the pace of business growth consistent for business houses. All the effect ultimately impact on margin shrinkage. To fight that, the Government of Bangladesh has approved a new set of policies to support this sector. These set of policies will definitely make a lot of difference. For instance, 20% cash incentive for export will add a lot of fuel for growth. This will also help us to compete with the foreign competitions. The export market size is over USD 250 billion, TRIPS treaty and incentive will help us to capture a good size of this market in the coming future. For local market growth GOB has approved VAT and AIT exemption until 2022 with some condition until 2032 This will help us to compete with the foreign competitors to gain local market share. The management is also like to inform on the following issues: a) The company followed accounting policies and procedure for the preparation of Financial Statements with relevant International Accounting Standard (IAS), International Financial Reporting Standard (IFRS) as adopted by the Institute of Chartered Accountants of Bangladesh (ICAB) which has been disclosed in the notes to the Financial Statements. b) During the reporting period 2018-2019 accounting policies and procedures were followed on consistently basis in maintaining financial records and presentation. No changes were made during the financial year in the accounting policies and procedures. c) Comparative analysis (including effects of inflation) of financial performance or results and financial position as well as cash flows for current financial year with immediately preceding five years have been presented at the directors report. d) In discussion of financial and economic scenario of the country and the globe, Bangladesh sustained strong growth in fiscal year 2018-2019.The API sector is one of the fastest growing sectors of Bangladesh economy. It is also one of the largest foreign exchange earning sectors of Bangladesh. According to IMS Health Care Report, in 2012, the local market size stood at about Tk. 9,390. In 2017, it stood at Tk. 18,755.6 crore. Bangladesh’s medicine exports soared 25.60 percent year-on-year to $130 million last fiscal year thanks to continuous improvement of product quality and government support. The sector has built up skilled manpower and improved quality and at the same time more effort is being put to win the global market ©) About risks and concern issue, it has also been discussed in detailed in the Directors’ report. f) The world business environment is now volatile and sluggish. The company is very much aware about the world business environment and compete with these challenges. 7 ANNUAL REPORT @ AFC Agro Biotech Limited bal 2018-2019Appointment of Auditor: ‘The autor M’S Shafiq Basak & Co. Chartered Accountants will tire at the conclusion of ensuing th Annual General Mecting 1s per Bangladesh Securities & Exchange Commission Notification No. SEC/CMRRCD/2009-193/104/Admin dated 27th July 2011, We have received an offer from M/S Khan Wahab Shafique & Co, Chartered Accountants for appointment as statutory auditor of the company for the year 2019 2020. The Board of Directors & Audit committe reviewed the offer letter of MIS Khan Wahab Shafique & Co. Chartered Accountants regarding appointment as statutory auditor and the Board recommended the proposal for appointment of M'S Khan Wahab Shafique & Co, Chartered Accountants as statutory auditor forthe year 2019-2020 Subject othe approval of sharcholders in 9th Annual General Meeting ofthe company, Appointment of Professional Firm for the certifiate on compliance with the Corporate Governance Code of BSEC: [M/S Mazumdar Sikdcr and Associates, Cost and Management Accountants, wll eie atthe conclusion of ensuing th expressed ‘Annual Gencral Mecting. We have received an offer from M/S Muglb Rahman & Co, Cost and Management Accountants for appointment as compliance auditor ofthe company forthe year 2019 -2020. The Board of Directors reviewed the offer letter of MIS Mujib Rahman & Co. Costand Management Accountants and the Board recommended the proposal fr appointment of M/S Mujib Rahman & Co. Cost and Management Accountants as the compliance auditor ofthe Company forthe year 2019-2020 subject to the approval of shareholders in th Annual General Meeting of the company Environmental Role: ‘The company maintsns «high standard of pollution free environment as per Government laws, The company doesn’t have any activity which is harmfil to the environment or society. Human Resources Development: ‘The human resources ar actual asset ofthe company and the Board recommended maintaining regular training and development ofthe company personnel, The company also provides continuously relevant training forthe employees to encourage self-devel ‘opment and to improve their efficiency as well as productivity, Excellent intermingle of young and skilled people ensure thet best efforts towards growth of busines Compliance with Laws and Regulations: The company always trying to comply the provision ofthe applicable laws and regulations of the country Board Meetings & Attendance: During the year, 21 (Twenty One) Board Meetings were held, The attendance record of the Directors is shown in Annexure-I of this report, The Board of Directors did not take attendance fees for the year 2018 -2019. Going Concern: ‘The Board of Directors has reviewed & analyzed the Company’s business plans and is satisfied thatthe Company has adequate resourees to continue ils operations inthe foreseeable future. Accordingly the Financial Statements is prepared based on the soing concem concept Election of Directors: Mr. $.M. Saifur Rahman and Mr, Jewel Khan retired from the position of Director by rotation and Mr. $.M. Saifur Rahman and. Mr. Jewel Khan were re-elected as Directors of the company. Acknowledgements: ‘The Board of Directors expresses their sincere gratitude and appreciation for the assistance, cooperation and guidance received by the Company from Drug Administration, Bangladesh Securities & Exchange Commission, Dhaka Stock Exchange Limited, Chittagong Stock Exchange Limited, Bangladesh Bank, Commercial Banks, all other regulators, suppliers, clients, shareholders ‘and employees of AFC Agro Biotech Limited for their contribution and their continued support and confidence. Thank you all ‘On behalf of the Board of Directors doxtee ABM Ghulam Mostafa Chairman sven ero 13 20182019 Il @ Ate Agro Biotech LimitedAnnexure-1 Attendance of Board Meeting Tegal) | oem | a ‘Md. Afzal. Managing Director 21 21 S.M. Saifur Rahman Director 21 21 Mad. Zia Uddin Director 21 19 Jewel Khan Director 21 19 Tanvir Shariar Ghani Director 21 11 Md. Sohel Independent Director 21 19 Nazmul Anwar Independent Director 21 19 Pattern of Shareholding No. of Shares % of Shares Name of Directors Position upto as on 30-06-2019 30-06-2019 1. Parent/Subsidiary/Associate companies and other related s parties. Sponsor 1,25,79,514 12.01 Active Fine Chemicals Limited 2.Directors, CEO, CS, CFO, HIA and their spouses and minor children: 2.A. Directors ABM Ghulam Mostafa Chairman’ 31,42,260 3.00 (Rep: By AFC Capital Ltd.) Md. Afzal Managing Director 2314TOR 221 SM. Saifur Rahman Director 31,71,061 3.03 Md. Zia Uddin Director 23,14, 798 221 Jewel Khan’ Director 33,51, 744 3.20 Tanvir Shariar Ghani Director 20,94,840 2.00 Ma. Sohel Tndependent Director 5 - Nazmul Anwar Independent Director = - 2.B. CEO, CS, CFO, HIAC: Sabekun Nahar ‘Company Secretar = = Md Jasimuddin Chief Financial Officer Md. Khalilur Rahman Head of Internal Audit = = xecutive (Top 5 persons other CEO/CS/CFO/HIAC) ‘Arun Kakadia Sr, Vice President = = Kutub Uddin AVP (Production) 5 5 Mir Md. Harun-or-Rashid AVP (Marketing) - 7 Md. Abul Kashem ‘Sr. Manager (Admin) F 7 4, Shareholding 10% or more - - voting right ‘Active Fine Chemicals Limited Sponsor 1,25,79,514 12.01 {19) ‘ANNUAL REPORT © Arc Agro Biotech Limited 2018-2019Annexure-IIl Brief resume of the Directors who seek appointment / re- appointment in the ensuing Annual General Meeting (AGM) *S.M. Saifur Rahman, Director ‘SM Saifur Rahman isa Director of the Company. He was born in 1979 at Dhaka in a reputed business family. The key visionary founder of this company has a very strong background in scientific research in chemicals technology. He holds the position of Managing Director and Chief Scientist at Active Fine Chemicals Ltd. Mr. Rahman completed his bachelor degree from University of Rochester, USA on Chemical Engineering in 2000, and a master degree on Chemical Engineering in 2001. He was enlisted in the Dean of Engineering School's honor list for his outstanding academic achievements, He also won 2001 prestigious Forbes Young Entrepreneur award for his high-tech Business proposal on a futuristic drug discovery system, He worked on a collaborative research program with Merck Pharmaceuticals and University of Rochester as a PhD candidate for 3 years until before he left for Bangladesh. The concept of this project was generated during his tenure as a Process Development Scientist at UofR. Over there he worked to improve the manufacturing process of critical drugs. Later ‘on he got selected as a PhD research scientist at University of Rochester, where he published many research articles in scientific journals. To explore the great potential of such a high-tech project requires leadership with cutting edge knowledge in relevant technology. The leadership's in-depth knowledge in future of therapeutic industry, vision and hard work will propel this organization to a 21st century's standard true global company. He is also a Director of ARC Health Limited & AFC Capital Limited. *Mr. Jewel Khan, Director He is one of the Directors of AFC Agro Biotech Limited. Mr. Jewel completed his BBA from University of Windsor, Windsor, Canada and has been associated with Jewel Khan Traders the Textile Chemical Seller and played a key role at Jewel Sons Garments the Kids Wear Manufacturer as an entrepreneur and enriched the garments sector with hi business background and valuable professional experience in the exciting space of Garments sector. He has a deep commitment to making a difference in this sector. The creation of strategic alliances and strategic planning of his, to indicator of our continuous efforts to develop the core team to help achieve the mission of the Company, sun ero 20 20182019 ol © Ate Agro Biotech LimitedD ASSOCIATES Cost & Management Accountants Report to the Sharcholders of AFC Agro Biotech Limited on compliance on the Corporate Governance Code \We have examined the compliance status to the Corporate Governance Code by AFC Agro Biotech Limited for the year ended on June 30, 2019. This Code relates 10 the Notification No. BSEC/CMRRCD2006-IS8/207/Admin/80, Daied: 3 June 2019 of the Bangladesh Securities and Exchange Commission, ‘Such compliance with the Corporate Govemance Cade is the responsibility of the Company. Our {examination was limited to the procedares wd implementation thereof as adopted by the Manggement in ensuring compliance tothe conditions ofthe Corporate Governance Code. this is scrutiny and verification and an independent audit on compliance of the conditions of the Corporate Governance Code as well asthe provisiors of relevant Bangladesh Secretarial Surdards (BSS) ‘as tdopted by Institue of Chartered Secretaries of Bangladesh ((CSB) in so fara those standards are not ‘consistent with any eondiion ofthis Corporate Governance Code. We state that ye have obtained all the information and explanetions, which we have required, and afer ‘ue senitiny and verification thereof, we repon tha, In our opinion: (4) The Company has complied with the cenditions of the Corporate Governance Cade as stipulated ‘nthe above-mentioned Corporate Govemunce Cede issued by the Commission. (&) The Company has cornplied with the provisions of the relevant Bangladesh Secretarial Standards (BSS) as adopted by the Institue of Chartered Secretaries of Bangladesh (ISB) as required by this Codes (€) Proper books and records have been kept by the company as required under the Companis Act, 1994, the securities law and other relevant laws; and (4) The governance of the company is satisctory For Mazumdar Sikder and Associates Cost & Management Accountants ——— Place -Dhaka, ‘Md, Salauddin Sikder FCMA Date- December 08, 2019 ‘Senior Partner “ax: 02-8300375 @ AFC Agro Biotech Limited rel 018-2019Status of Compliance Status of Compliance with the conditions imposed by the Commission's Notification No, BSEC/CMRRCD/2006-158/207/ ‘Admin/80 dated 03 June 2018, issued under section 2CC of the Securities and Exchange Ordinance, 1969: ‘Compliance Status (Put V in the appropriate column) ‘Non- complied Condition No. Title Complied I Board of Directors ii Size of the Board of Directors ‘The total number of the board members of the company shall not be less than 5 (five) and more than 20 (twenty) 12 Independent Directors 12) [AE least on fifth (1/5) of the Total number of directors in the ‘company's board shall be independent directors, For the purpose of this clause ‘independent director means a director- ‘Who either does not hold any share in the company or holds Tess 1.2(b)()__ | than one percent (1%) shares of the total paid-up shares of the Y company: ‘who is nota sponsor of the company or is not connected with the company's any sponsor or director or nominated director or shareholder of the company or any of its associates, sister concerns, subsidiaries and parents or holding entities who holds fone percent (1%) or more shares of the total paid-up shares of the company on the basis of family relationship and his or her family members shall not hold above mentioned shares in the company Y 12) 1.2 yi, who has not been an executive of the company in immediately 12 ©)GH) | preceding 2 (two) financial years; who does not have any other relationship, whether pecuniary or 1.2() (iv) | otherwise, with the company ot its subsidiary or associated y companies; who is not a member or TREC (Trading Right Entitlement Certificate) holder, director or officer of any stock exchange: 120) who is not a shareholder, director excepting independent director 1.2 (b\vi) | or officer of any member or TREC holder of stock exchange or y an intermediary of the capital market ‘who is not a partner oF an excoutive or was not a partner oF an executive during the preceding 3 (three) years of the concerned 1.2 (by(vii) | company’s statutory audit firm or audit firm engaged in internal v audit services or audit firm conducting special audit or professional certifying compliance of this Code; who is not independent director in more than 5 (five) listed 1.2.) | Companies v ‘Who has not been convicted by a court of competent jurisdiction 1.2 (b)(ix) | asa defaulter in payment of any loan or any advance to a bank or v a Non-Bank Financial Institution (NBFI); who has not been convicted for a criminal offence involving i 12©)00 | moral turpitude: ‘ Independent director shall be appointed by the Board of 1.2(@) | Directors and approved by the shareholders in the Annual v General Meeting (AGM); T2(@)___ | The post of independent director cannot remain vacant for more 1 than 90 (ninety) days; y ANNUAL REPORT (22| 2018-2019 @ AFC Agro Biotech Limited12@ The tenure of office of an independent director shall be for a period of 3 (three) years, which may be extended for 1 (one) term only; 13 ‘Qualification of Independent Director(ID) 13@) Independent Director shall be a knowledgeable individual with integrity who is able to ensure ‘compliance with financial laws, regulatory requirements and corporate laws and can make meaningful contribution to business; 13() Independent Director shall have following qualifications 13 Mi) Business leader who is or was a promoter or director of an unlisted company having minimum paid up capital of Tk. 100.00 million or any listed company or a member of any national or international chamber of ‘commerce ot business association; or 1300Gi) ‘Corporate leader who is or was a top level executive not lower than Chief Executive Officer or Managing Director or Deputy Managing Director or Chief Financial Officer or Head of Finance or Accounts or Company Secretary or Head of Internal Audit and Compliance or Head of Legal Service or a candidate with equivalent position of an unlisted company having ‘minimum paid up capital of Tk. 100,00 million or of @ listed company; 1.3(b)4ii) Former official of government or statutory or autonomous or regulatory body in the position not below Sth Grade of the national pay scale, who has at least educational background of bachelor degree in ‘economies or commerce or business or law; 1.3 @yiv) University Teacher who has educational background in Economics or Commerce or Business Studies or Law; 13 Ov) jonal who is or was an advocate practicing at st in the High Court Division of Bangladesh Supreme Court or a Chartered Accountant or Cost and Management Accountant or Chartered Financial Analyst or Chartered Certified Accountant or Certified Public Accountant ot Chartered Management Accountant ot Chartered Secretary or equivalent qualification; 13), ‘The independent director shall have at Teast 10 (en) years of experiences in any field. 13@ In special cases the above qualifications may be relaxed subject to prior approval of the Commission; No such issue arose 14 Duality of Chairperson of the Board of Directors and Managing Director or Chief Executive Officer 14@) The positions of the Chairperson of the Board and the Managing Director and/ or Chief Executive Officer (CEO) of the company shall be filled by different individuals; @& AFC Agro Biotech Limited [23 2018-201914(b) The Managing Director (MD) and’ or Chief Executive Officer (CEO) of a listed company shall not hold the same position in another listed company: 14 The Chairperson of the Board shall be elected from among the non-executive directors of the company; v 14d), The Board shall clearly define respective roles and responsibilities of the chairperson and the Managing Director and/ or Chief Executive Officer; v 14(e) Tn the absence of the chairperson of the Board, the remaining members may elect one of themselves from non-executive directors as Chairperson for that particular Board's meeting; the reason of absence of the regular Chairperson shall be duly recorded in the minutes. No such issue arose ‘The Directors’ Report to Shareholders The Board of the company shall include the following additional statements or disclosures in the Directors’ Report prepared under section 184 of the Companies ‘Act, 1994 (Act No. XVIII of 1994):- 15@ ‘An industry outlook and possible future developments in the industry, 15 Gi) The Segment-wise or product-wise performance; v 1.5 (ii) Risks and concems including intemal and external risk factors, threat to sustainability and negative impact on environment, if any; 15 (iv) ‘A discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin: 15(v) ‘A discussion on continuity of any Extra-Ordinary activities and their implications (gain or loss); 15 (vi) ‘A detailed discussion on related party transactions along with a statement showing amount, nature of related party, nature of transactions and basis of transactions of all related party transactions: 15 (vii) ‘A statement of utilization of proceeds raised through public issues, rights issues and/or any other instruments; No such 15 (viii) ‘An explanation if the financial results deteriorate after the company goes for Initial Public Offering (IPO), Repeat Public Offering (RPO), Rights Offer, Direct Listing, ete.s No such issue arose 15 (ix) ‘An explanation on any significant variance that occurs between Quarterly Financial performance and Annual Financial statements; No such matter to explain 15@), A statement of remuneration paid to the directors including independent directors v 15 (xi) The financial statements prepared by the management of the issuer company present fairly its state of affairs, the result of its operations, cash flows and changes in equity: v 1.5 (xii) Proper books of account of the issuer company have been maintained; q 2018-2019 |e4| © AFC Agro Biotech Limited“Appropriate accounting policies have been consistently applied in preparation of the financial statements and 1.5 i) | that the accounting estimates are based on reasonable and prudent judgment International Accounting Standards (IAS) _ or International Financial Reporting Standards (IFRS), as 1.5 (xiv) | applicable in Bangladesh, have been followed. in preparation of the financial statements and any departure there-from has been adequately disclosed; Tsou) | fis sstem of intemal control is sound in design and has been effectively implemented and monitored: Minority shareholders have been protected ffom Ls aviy | sbusive actions by, or in the interest of, controlling ‘ shareholders acting either directly or indirectly and have effective means of redre ‘There are no significant doubis upon the issuer 1 savin | comanys ability to continue asa going concern, Ifthe issuer company is not considered to be a going concern, the fact along with reasons thereof should be disclosed: ‘An explanation that significant deviations from the Tast No such 1.5 (xviii) | year’s operating results of the issuer company shall be issue arose inighlighted and the reasons thereof shall be explained: Tan) | Rey operating and financial data of at fast preceding 5 (five) years shal be summarized: 1.5 cax) | At explanation on the reasons ifthe issuer company has ee Beard not declared dividend (cash or stock) for the year; vs doris Board statement to the effect that no bonus share or 1.5 (xxi) | stock dividend has been or shall be declared as interim dividend: Ts eoxiy | The total number of Board meetings held daring the ‘ year and attendance by each director; A report on the pattern of shareholding disclosing 1.5 (xxi) | the aggregate number of shares (along with name- wise details where stated below) held by:= 13 __ | Parent/Subsidiany/Associated Companies and other (xxiii(a)_| related parties (name wise details); Directors, Chief Executive Officer, Company Scerelary, 1.5 | Chief Financial Officer, Head of Internal Audit and (xxii(6) | Compliance and their spouses and minor children (name wise details) 1S (xxiii)(c) Frecutives: 1.5 Shareholders holding fen percent (10%) or more voting (xxii)(d) | interest in the company (name wise details); Tn case of the appointmentire-appointment of a director No such 1.3 (xxiv) _| the company shall disclose the following information to issue arose the shareholders is aainyay | Abrtiet resume ofthe director @ AFC Agro Biotech Limited (25| 2018-2019TS (xxiv}(b), Nature of his/her expertise in specific functional areas; 1S (xxivy(o) ‘Names of companies in which the person also holds the directorship and the membership of committees of the board; 1.5 (xv) ‘A Management's Discussion and Analysis signed by CEO or MD presenting detailed analysis of the company’s position and operations along with a brief discussion of changes in the financial statements, among others, focusing on: 1.5 (xxv\(a) ‘Accounting policies and estimation for preparation of financial statements, 1.5 (xxvy(b) ‘Changes in accounting policies and estimation, if any, clearly describing the effect on financial performance and financial position as well as cash flows in absolute figure for such changes: 15 Gxlo) ‘Comparative analysis (including effects of inflation) of financial performance or results and financial position as well as cash flows for current financial year with immediate preceding five years explaining reasons thereof; 15 Gay) ‘Compare such financial performance or results and financial position as well as cash flows with the peer industry scenario; 15 (xxvy(e) ‘The financial and economic scenario of the country and the globe; 15 Gow) incial ss and concerns issues related to the statements, explaining such risk and con mitigation plan of the company; 15 Gave) Future plan or projection or forecast for company’s operation, performance and financial position, with justification thereof, i.e., actual position shall be ‘explained to the shareholders in the next AGM; 1.5 (xvi) Declaration or certification by the CEO and the CFO to the Board as required under condition No. 3(3) shall be disclosed as per Annexure-A; 1.5 (xxvii) ‘The report as well as certificate regarding compliance of conditions of this Code as required under condition No. 9 shall be disclosed as per Annexure-B and Annexure-C 16 ‘Meetings of the Board of Directors ‘The company shall conduct its Board meetings and record the minutes of the meetings as well as keep required books and records in line with the provisions of the relevant Bangladesh Secretarial Standards (BSS) as adopted by the Institute of Chartered Secretaries of Bangladesh (ICSB) in so far as those standards are not inconsistent with any condition of this code. 17 Code of Conduct for the Chairperson, other Board members and Chief Executive Officer [ANNUAL REPORT 2018-2019 |26| @ AFC Agro Biotech Limited17@) The Board shall lay down a code of conduct, based on the recommendation of the Nomination and Remuneration Committee (NRC) at condition No. 6, for the Chairperson of the Board, other board members and Chief Executive Officer of the company; V 17) The code of conduct as determined by the NRC shall be posted on the website of the company including, among others, prudent conduct and behavior; confidentiality; conflict of interest; compliance with laws, rules and regulations; prohibition of insider trading; relationship with environment, employees, customers and suppliers; and independency. Governance of Board of Directors of Subsidiary Company 24a) Provisions relating to the composition of the Board of the holding company shall be made applicable to the composition of the Board of the subsidiary company; 20) ‘At least 1 (one) independent director on the Board of the holding company shall be a director on the Board of the subsidiary company; NIA 2 The minutes of the Board meeting of the subsidiary company shall be placed for review at the following Board meeting of the holding company; NIA 2@) The minutes of the respective Board meeting of the holding company shall state that they have reviewed the affairs of the subsidiary company also; NIA 20) The Audit Committee of the holding company shall also review the financial Statements, in particular the investments made by the subsidiary company NIA ‘Managing Director (MD) or Chief Executive Officer (CEO), Chief Financial Officer (CFO), Head of Internal Audit and Compliance (HIAC) and Company Secretary (CS): 31 Appointment The Board shall appoint a Managing Director (MD) or 3.14@)__ | Chief Executive Officer (CEO), a Company Seoretary | y ° (CS), a Chief Financial Officer (CFO) and a Head of Internal Audit and Compliance (HIAC); The positions of the Managing Director (MD) or Chief Executive Officer (CEO), Company Secretary (CS), 3.1(b) | Chief Financial Officer (CFO) and Head of Intemal q Audit and Compliance (HIAC) shall be filled by different individuals; The MD or CEO, CS, CFO and HIAC of a listed 3.1 (©) | company shall not hold any executive position in any | other company at the same time; The Board shall clearly define respective roles, 3.1(@) _ | responsibilities and duties of the CFO, the HIAC and] —V the CS; 319 | IB MD of CEO, CS, CFO and HIAC stall not be removed from their position without approval of the] Commission and stock exchange(s). © Arc Agro Biotech Limited lev) ANNUAL REPORT 2018-2019Requirement fo attend the Board Meetings The MD or CEO, CS, CFO and HIAC of the companies shall attend the meetings of the Board provided that the CS, CFO and /or the HIAC shall not attend such part of a meeting of the Board of Directors which involves consideration of an agenda item relating of their personal matters 33 Duties of Managing Director (MD) or Chief Executive Officer (CEO) and Chief Financial Officer (CFO) 33a) ‘The MD of CEO and CFO shall certified to the Board that they have reviewed financial statements for the ‘year to the best of their knowledge and belief; 33 @a These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading: 3.3 (Mii) These statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards and applicable laws; 3300) The MD or CEO and CFO shall also certified that there are, to the best of knowledge and belief no transactions entered into by the company during the year which are fraudulent, illegal or in violation of the code of conduct for the company’s Board or its members: 3310) The certification of the MD or CEO and CFO shall be disclosed in the Annual Report Board of Directors’ Committee For ensuring good governance in the company, the Board shall have at least following subcommittees: 4a Audit Committee; 4 iii) ‘Nomination and Remuneration Committee; Audit Committee 5.1 _ | Responsibility to the Board of Directors s.1(q)__ | The company shall have an Audit Committee as a sub- 51 | committee of the Board of Directors; The Audit Committee shall assist the Board in ensuring 5.1(p) _ | thatthe financial statements reflect true and fit view of the state of affairs of the company and in ensuring @ ‘200d monitoring system within the business; The Audit Committee shall be responsible to the Board 5.1 (6) | of Directors. The duties of the Audit Committee shall be clearly set forth in writing S2__| Constitution of the Audit Committee 5.2(a) _| The Audit Committee shall be composed of at east 3 (three) members; [ANNUAL REPORT 2018-2019 |28| @ AFC Agro Biotech Limited5.2(b) The Board shall appoint members of the Audit Committee who shall be non-executive directors of the company excepting Chairperson of the Board and shall include at least 1 (one) independent director; v 520) All members of the audit committee should be “financially literate” and at least 1 (one) member shall have accounting or related financial management background and 10 (ten) years of such experience: 52 When the term of service of the Committee members expires or there is any circumstance causing any Committee member to be unable to hold office until expiration of the term of service, thus making the number of the Committee members to be lower than the prescribed mumber of 3 (three) persons, the Board shall appoint the new Committee member to fill up the vacancy immediately or not later than 1 (one) month from the date of vacancy in the Committee to ensure continuity of the performance of work of the Audit Committee There was no such case 520), The company secretary shall act as the secretary of the Committee; v 520 The quorum of the Audit Committee meeting shall not constitute without at least 1 (one) independent director. Y 5 Chairperson of the Audit Committee 53a) The Board of Directors shall select 1 (one) member of the Audit Committee to be Chairperson of the Audit Committee, who shall be an independent director; 5.3. (b) Tn the absence of the Chairperson of the Audit Committee, the remaining members may elect one of themselves as Chairperson for that particular meeting, in that case there shall be no problem of constituting a quorum as required under condition No. 5(4)(b) and the reason of absence of the regular Chairperson shall be duly recorded in the minutes. No such incident arose 5310) Chairperson of the audit committee shall remain present in the Annual General Meeting (AGM). 5a Meeting of the Audit Committee 5.4 (a) The Audit Committee shall conduct at least its four meetings in a financial year; 5.4 (b) The quorum of the meeting of the Audit Committee shall be constituted in presence of either two members or two third of the members of the Audit Committee, whichever is higher, where presence of an independent director is a must. v Role of Audit Committee shall include the following: (Oversee the financial reporting process; v Monitor choice of accounting policies and principles; 1 Monitor Internal Audit and Compliance process to ensure that it is adequately resourced, including approval of the Internal Audit and Compliance Plan and review of the Internal Audit and Compliance Report; 1 © Arc Agro Biotech Limited lea) ANNUAL R:PORT 2018-2019550) Oversee hiring and performance of external auditors; Hold mesting with the extemal or statutory auditors for 5.5(@) | review of the annual financial statements before submission to the Board for approval or adoption; Review along with the management, the annual 5.5 (| financial statements before submission to the board for approval Review along with the management, the quarterly and 5.5 (g) | half ycarly financial statements before submission to the board for approval; 5.5 (h) | Review the adequacy of internal audit function; 550 _| Review ihe Management's Discussion and Analysis 5 bofore disclosing in the Annual Report s5q) [Review statement of significant related party © | transactions submitted by the management; 55g _ | Review Management Letters/ Later of Internal Contol ©) | weakness issued by statutory auditors; ‘Oversee the determination of audit fees based on Scope 55) [aid aagnitude, level of expertise deployed and time required for effective audit and evaluate the performance of external auditors: Oversee whether the proceeds raised through Initial Public Offering (IPO) or Repeat Public Offering (RPO) 5.5(m) | or Rights Share Offer have been utilized as per the purposes stated in relevant offer document or prospectus approved by the Commission: 5.6 _ | Reporting of the Audit Committee 5.6 (a) _ | Reporting to the Board of Directors yp | The Audit Commitice shall report on its activities to the 56@@ | poord. * soa) | The Audit committee shall immediately report to the 5.6 @)GH) | Board on the following findings, if any, No such 5.6 (a(i)(a) | Report on conflicts of interests incident Sa | Suspected or presimed fraud or iregularty or maternal No such finney | asf identified in the internal audit and compliance incident process or in the financial statements: arose “| Suspected infringement of laws, regulatory compliance No such 5-6(@) | ineluding securities related laws, rules and regulations; incident CO | and arose 5.6(a) | Any other matter which the Audit Committee deems Nosuch (i(@)__ | necessary shall be disclosed to the Board immediately arose 2018-2019 [30 © AFC Agro Biotech Limited3.60) Reporting to the Authorities If the Audit Committee has reported to the Board of Directors about anything which has material impact on the financial condition and results of operation and has discussed with the Board and the management that any rectification is necessary and if the Audit Committee finds that such rectification has been unreasonably ignored, the Audit Committee shall report such finding to the Commission, upon reporting of such matters to the Board for three times or completion of a period of 6 (six) months from the date of first reporting to the Board of Directors, whichever is earlier. No such incident 87 Reporting to the Shareholders and General Investors Report on activities carried out by Audit Committee, including any report made to the Board of Directors under condition 5(6)(a)ii) above during the year shall be signed by the Chairman of the Audit Committee and disclosed in the annual report of the issuer company. and Remuneration Committee (NRC) 61 ity to the Board of Directors 6.1@) The company shall have a Nomination and Remuneration Committee (NRC) as a subcommittee of, the Board: 6.10b) The NRC shall assist the Board in formulation of the nomination criteria or policy for determining qualifications, positive attributes, experiences and independence of directors and top level executive as well as a policy for formal process of considering remuneration of directors, top level executive 6.1) The Terms of Reference (ToR) of the NRC shall be clearly set forth, 62 Constitution of the NRC 6.2 (a) The Committee shall comprise of at least three members including an independent director: 62(b) All members of the Committee shall be nom directors; ecutive 6.2 (0) Members of the Committee shall be nominated and appointed by the Board: 62d) The Board shall have authority to remove and appoint any member of the Committee; 6.2 (0) Tn case of death, resignation, disqualification, or removal of any member of the Committee ot in any other cases of vacancies, the board shall fil the vacancy within 180 (one hundred eighty) days of occurring such vacancy in the Committee: No such incident arose 6219 The Chairperson of the Committee may appoint or co opt any external expert and/or member(s) of staff to the Committee as advisor who shall be non-voting member, if the Chairperson feels that advice or suggestion from such external expert and/or member(s) of staff shall be required or valuable for the Committee; No such incident @ AFC Agro Biotech Limited (34 2018-2019The company secretary shall act as the secretary of the 62) | committee: v G2 dy | Te auorum oF the NRC meeting shall nor constinte | . without attendance of at least an independent director; ‘No member of the NRC shall receive either directly or indirectly any remuneration for any advisory role or 621) | otherwise, other than Director's fees or honorarium fiom the companys 63__| Chairperson of the NRC The Board shall select 1 (one) member of the NRC to 63 (@) | be Chairperson of the Committee, who shall be an} independent director: Tn the absence of the Chairperson of the NRG, the remaining members may elect one of themselves as No such 6.3 (0) | Chairperson for that particular meeting, the reason of incident absence of the regular Chairperson shall be duly arose recorded in the minutes; The Chairperson of the NRC shall aitend the annual 6.3 (©) | general meeting (AGM) to answer the queries of the Y sharcholders. €a__| Meeting of the NRC Gata | Tis NRC stall conduc a Test one mesing 8] The Chairperson of the NRC may convene any cme ney 6.4(b) | emergency meeting upon request by any member of the 'gency nee meeting conveyed The quonam of the meeting of the NRC shall be constituted in presence of either two members or two 6.4 (©) | third of the members of the Committee, whichever is] Y higher, where presence of an independent director is must as required under condition No. 6(2)(h): The proceedings of each meeting of the NRC shall duly 6.4 (@ | be recorded in the minutes and such minutes shall be} confirmed in the next meeting of the NRC. 65__| Role of the NRC Gs [SRC shall be independent and responsible or accountable to the Board and to the shareholders; NRC shal oversee, among others, the following matters 65 0) | and make report with recommendation to the Board Formulating the eriteria for determining qualifications, positive attributes and independence of a director and 65 (\i) | recommend a policy to the Board relating to the} remuneration of the directors, top level executive, considering the following: The level and composition of remuneration Ts 6.5 (b)G)(a) | reasonable and sufficient to attract, retain and motivate | suitable directors to run the company successfully: The relationship of remuneration to performance | 6.5 (OP) | clear and meets appropriate performance benchmarks; y Gs ctine | Remuneration to decors, top level executive involves | a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals; 2018-2019 [32 @ AFC Agro Biotech LimitedDevising a policy on Board's diversity taking into 6.5 (b\{i)_| consideration age, gender, experience, ethnic 1 educational background and nationality; Identifying persons who are qualified to become directors and who may be appointed in top level 6.5 (b\ii)_| executive position in accordance with the criteria laid | down, and recommend their appointment and removal to the Board; 65 coxiv) | Fornulating the criteria For evaluation of performance | of independent directors and the Board; Identifying the company’s needs for employees at 6.5 (b\(v)_| different levels and determine their selection, transfer or replacement and promotion criteria; 5 exw | Developing, recommending and reviewing annually the | company’s human resources and training policies: The company shall disclose the nomination and 65 remuneration policy and the evaluation criteria and | 5 activities of NRC during the ycar at a glance in its annual report 1 External/Statutory Auditors. The issuer company shall not engage ls external or 7.1 | statutory auditors to perform the following services of the company, namely:- 7.1 @)__| Appraisal or valuation servives or faimess opinions; 7 Financial information systems design and | 71) [implementation ‘ ) | Bookkeeping or other services related to the i 7-1 Gi) | accounting records of financial statements; ‘ TL) _| Broker-dealer services, v T.1(v) | Actuarial services; v 7.1 (vi) __| Internal audit services or special audit services; q 7.1 (vii) | any service that the Audit Committee determines; Vv ‘Auditor certification services on compliance of 7.1 (viti)_| corporate governance as required under clause (i) of | condition No. 9 (1 7.1 (ix) | Any other service that creates conflict of interest; y No partner or employees of the external audit firms shall possess any share of the company they audit at 12 Jeast during the tenure of their audit assignment of that v company; his or her family members also shall not hold any shares in the said compan; Representative of external or statutory auditors shall 73 | remain present in the Shareholders’ Meeting (Annual | General Meeting or Extraordinary General Meeting) to answer the queries of the shareholders. a “Maintaining a website by the Company 3.1 | The company shall have an official website Tinked with | _ the website of the stock exchange; The company shall keep the website functional rom the ; 82 1 date of listing; @ AFC Agro Biotech Limited (33| 2018-2019The company shall_ make available the detailed 83 disclosures on ils website as required under the listing regulations of the concerned stock exchange(s) Reporting and Compliance of — Corporate Governance The company shall oblain a cerlilicate from a practicing Professional Accountant or Secretary (Chartered Accountant or Cost and Management Accountant or Chartered Secretary) other than its statutory auditors or audit firm on yearly basis regarding compliance of conditions of Corporate Governance Code of the Commission and shall such certificate shall be disclosed in the Annual Report. The professional who will provide the cerlificate on compliance of this Corporate Governance Code shall be appointed by the shareholders in the annual General meeting, The directors of the company shall state, in accordance with the Annexure attached, in the directors’ report whether the company has complied with these conditions or not. 9 92 9.3 Annexure-VI AUDIT COMMITTEE REPORT. The Board of Directors of AFC Agro Biotech Limited has constituted an Audit Committee according to the conditions of Bangladesh Securities and Exchange Commi: (BSEC) guidelines. All members of the Audit Committee are financially literate and are able to analyze and interpret financial statements to effectively discharge their duties and responsibilities as members of the Audit Committee. During this year 4 nos. of meetings were held and all the members were present in all meetings. ‘The Audit Committee consists of the following members: ‘Name of the Directors Designation Position of Audit Committee ‘Nazmul Anwar Independent Director ‘Chairman of Audit Committee Md, Zia Uddin Director Member Jewel Khan Director Member ‘Sabekun Nahar ‘Company Secretary Seeretary The scope of Audit Committee was defined as under: a) Review and recommend to the Board to approve the financial statements prepared for statutory purpose; b) Report to the Board of Directors on internal audit findings from time to time considering the significance of the issues; ©) Carry on a supervisory role to safeguard the systems of governance and independence of statutory auditors; and 4) Review and consider the internal auditor’s report and statutory auditor’s observations on internal control. Acti carried out during the year The Committee reviewed the internal audit reports, quarterly, half yearly, annual financial statements and the external audit report and recommended to the board for consideration. The ‘Committee did not find any material deviation, discrepancies or any adverse finding /observation in the areas of reporting. Sd/- Nazmul Anwar Chairman, Audit Committee sven ero 4 20182019 ml © Ate Agro Biotech LimitedNOMINATION AND REMUNERATION COMMITTEE (NRC) The Board of Directors of AFC Agro Biotech Limited has constituted a Nomination and Remuneration Committee according to the conditions of Bangladesh Securities and Exchange Commission’s (BSEC) guidelines. The NRC Committee consists of the following members: Name of the Directors Designation Position of NRC Committee Mr. Md. Sohel Independent Director Chairman of the Committee Mr. S. M. Saifur Rahman Director Member Mr. Jewel Khan Director Member Ms. Sabekun Nahar Company Secretary Secretary During the year the members of the NRC meet in one meeting he scope of NRC was defined as under: a) NRC shall be independent and responsible or accountable to the Board and to the Shareholders; b) NRC shall oversee, among others, the following matters and make report with recommendation to the Board; i) formulating the criteria for determining qualifications, positive attributes and independence of a director and recommend a policy to the Board, relating to the remuneration of the directors, top level executives, considering the following: a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate suitable directors to run the company successfully; b) the relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and c) remuneration to directors, top level executive involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to working of the company and its goals; ii) devising a policy on Board’s diversity taking into consideration age, gender, experience, ethnicity, educational background and nationality; iii) Identifying persons who are qualified to become directors and who may be appointed in top evel executive position in accordance with the criteria laid down, and recommend their appointment and removal to the Board; iv) formulating the criteria for evaluation of performance of independent directors and the Board; v) developing, recommending, and reviewing annually the company’s human resources and training policies; Activities carried out during the year The Committee assists the Board in formulation of the nomination criteria or policy for determining qualifications, positive attributes, experiences and independence of directors and top level executives as well as a policy for formal process of considering remuneration of directors, top level executives. Sd/- Md. Sohel ‘hairman Nomination and Remuneration Committee 35 cr © Arc Agro Biotech Limited bs 018-2019Declaration by MD and CFO 28" November, 2019 ‘The Board of Directors AFC Agro Biotech Limited Navana Osman@Link 214/D, Gulshan-Tejgaon Link Road Tejgaon, Dhaka-1208. Sub: Declaration on Financial Statements for the year ended on 30" June, 2019. Dear Sir, Pursuant to the conditi mmission’s Notification No, n No. 1(5) (xvi) imposed vide the BSEC/CMRRCD/2006- 158/207/Admin/80 dated 3" June, 2018 under section 2CC of Securities and Exchange Ordinance, 1969, we do hereby declare that: y 2) 4) 5) 6) The Financial Statements of AFC Agro Biotech Limited for the year ended on 30" June, 2019 have been prepared in compliance with International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS), as applicable in the Bangladesh and any departure there from has been adequately disclosed; The estimates and judgments related to the financial statements were made on a prudent and reasonable basis, in order for the financial statements to reveal a true and fair view; The form and substance of transactions and the Company's state of affairs have been reasonably and fairly presented in its financial statements; To ensure above, the company has taken proper and adequate care in installing a system of internal control and maintenance of accounting records; Our internal auditors have conducted periodic audits to provide reasonable assurance that the established policies and procedures of the company were consistently followed; and The management’s use of the going concern basis of accounting in preparing the financial statements is appropriate and there exists no material uncertainty related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. In this regards, we also certify that:~ i We have reviewed financial statements for the year ended on 30 June, 2019 and that to the best of our knowledge and belief: a) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading ; b) these statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards and applicable laws. ‘There are, to the best of knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violation of the code of conduct for the company’s Board of Directors or its members. Soo Jas Ma. Afzal ‘Md Jasim Uddin Managing Director Chief Financial Officer sven ero 6 20182019 i © Ate Agro Biotech LimitedINDEPE NDENT AUDITOR'S REPORT TO THE SHAREHOLD! AFC AGRO BIOTECH LIMITED Report on the Audit of the Financial Statements Qualified Opinion We have audited the financial statements of AFC Agro Biotech Limited (the “Company"), which comprise the statement of financial position as at 30 June 2019 and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flow for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, except for the possible effects of the matter described in the "Basis for Qualified Opinion’ section of our report, the accompanying financial statements give a true and fair view, in all material respects, of the financial position of the Company as of 30 june 2019, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS) Basis for Qualified Opinion 1. Provision for current income tax and deferred tax required as per para 12 & 15 of IAS 12 has not been made except for other income, as disclosed in note # 16, based on gazette No- 26.00.0000,100.42,008.17-54 dated 14-05-2018 by Commerce Ministry under the caption "National Active Pharmaceutical Ingredients (API) & Laboratory Reagents Production and Export Policy” regarding tax exemption against which SRO from National Board of Revenue (NER) is yet to be obtained We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethies for Professional Accountants (IESBA Cade) together with the ethical requirements that are relevant to our audit of the financial statements in Bangaldesh, and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code and the Institute of Chartered Accountants of Bangladesh (ICAB) Bye Laws, We believe that the audit ‘evidence we have obtained is sufficient and appropriate to provide a basis for our opinion, Emphasis of Matter We draw users’ attention to the note # 17.01 to the financial statements regarding utilization of Workers Profit Participation Fund (WPPF). Our opinion is not modified in respect of the matters. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements for the year ended 30 June 2019, These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters, We have fulfilled the responsibilities described in the Auditors’Responsibilities of the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment ofthe risk of material misstatements of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for ‘our audit opinion on the accompanying financial statements. Is7) © Arc Agro Biotech Limited 018-2019Description of key audit matters ‘Our Response to the key audit matters T_Approprateness of revenue recoganion and disclosure onthe impact of the initial application of IFRS 15, Revenue of BDT 1,091,567,738 is recognised in the statoment of profit or loss and other comprehensive income of the Company. This material item is subject to considerable inherent risk due to the complexity of the system necessary for proper recognition, measurement, land recording considering the application of the new standard on revenue recognition, International Financial Reporting Standard 15 "Revenue from Contracts with Customers”. Therefore, there isa nsk of revenue being misstated asa result of faully estimations over ‘There is also a risk that revenue may be overstated due {o fraud through manipulation of the invoices, discounts, incentives and rebates recognised resuting trom the Pressure local management may feel to achieve Performance targets. TIGHT oT The Tact Thal the high dogres of comploxly and ‘estimates and assumplions give rige to and ineroaged risk of ‘accounting misstatements, we assessed the Company's Processes and controls for recognizing revenue as part of our jai Furthermor, In order to mitigate the inherent risk in this ‘usit area, our audit approach included tasting of the controls, ‘and substantive audit procedures, including: = Assessing the environment of the measurement as welt as other relevant systems supporting the accounting of = Assessing controls for systems and procedures supporting revenue recognition. = Assessing the Invoicing and measurement system up to entries in the general ledger. + Examining customer invoices and receipts of payment on a tost baste. = Testing the revenue charging mods! against the regulatory guidelines on a sample basis Furthermore, we assessed the accounting effects of now business and price models. We assured ourselves of tho ‘appropriateness of the sysioms, Processes, and Controls In Place and that the estimates “and assumptions made by Management are sufficiently documented and substantiated 19 ‘ongure that revenue is properly recognised. With regard to the impact of the initial application of IFRS 15 {rom the financial year 2018 onward, We assessed the Impact determined after the implementation of the new standard. Our ‘audit approach included, among other teams: J+ Assessing the accounting estimates made of the different businoes modele of the company, J. Assessing the design of the processes set up to account for the transaction in accordance with the new standard Please refer to the note # 20 to the financial statements. 2. Impairment of property, plant and equipment Property, plant and equipment (PPE) represents about 188% of total assets of the Company which is thus a ‘material items to the financial statements. PPE includes plant and machinery being of total PPE which are Sophisticated in nature and most of them are custom made assets. Being different in nature, there Is a risk whether market value of those assets could materially {all because of non-marketabilly and arise risk of impairment. Management's review regarding determination of Impairment involves forecasting and discounting future cash flows and estimation of recoverable amounts Which are inherenty uncertain. This Is one of the key judgmental areas that our audit has concentrated on. + Reviewed the management's assossmont of impairment taking consideration af the future econamic Benefits of the assole = Reviewed the internal control system implemented by management for safeguarding of those assets. = Tested the operating effectiveness of key controls over assets, including observing the process of management's year-end physical count. + Tested on sample basis the physical condition of the assols whether the assole become idle, absolosces, Jamage and there is a plant to discontinue or restructure tho oporation to which the assets belongs: Ploase refer to note #2 to the financial statements. 3. Accounts Receivable Accounts receivable BDT 365,165,628 being about 16% of the total assets of the Company is a material item to the financial statements. There is a significant risk regarding recoverabilly of the amounts and misstatement of the items. As such management is required to make judgements. in determining whether accounts receivable are being appropriately valued and also need to make provision for aged accounts recivablo, if required, > Tasted the operaiing effeciveness of Key convo over accounts receivable. ‘= Boing a part of auditor's responsibilty as regarding external confirmation as per ISA S05, we requested for external ‘confirmation, ‘+ Tested on a sample basis the value disclosed according to the reply obtained, + Assessed whether appropriate provisions have been recognised Yor aged accounts receivable, if required and evaluating management's basis for determining the. Fecoverabily. Please refer to note # 7to the financial statements. 2018-2019 i bal @ AFC Agro Biotech LimitedOther Information included in the Company's June 30, 2019 Annual Report Management is responsible for the other information. The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The Annual Report is expected to be made available to us after the date of this auditor's report, (ur opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon, In connection with our audit of the financial statements of the Company, our responsibility is to read the other information identified above when it becomes available and, in doing So, consider whether the other information is materially inconsistent with the financial statements or our knowledge obiained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed on the other information obtained prior to the date of the auditor's report, we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance. Responsibilities of Management and Those Charged with Governance for the Financial Statements and Internal Controls Management is responsible for the preparation and fair presentation of the financial statements of the Company in accordance with IFRSs as explained in note # 1, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements of the Company, management is responsible for assessing the Company's, ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company's financial reporting process, Auditor's Responsibilities for the Audit of the Financial Statements (Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the ‘economic decisions of users taken on the basis of these financial statements. ‘As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also: + Identity and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control + Oblain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of, the Company's internal control. + Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management, + Conclude on the appropriateness of management's use of the going concem basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Company's abilty to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements of, if such disclosures are inadequate, to modify aur opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. + Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. + Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business: activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion 39 ANNUAL REPORT @ AFC Agro Biotech Limited bl 2018-2019We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit ofthe financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on other Legal and Regulatory Requirements In accordance with the Companies Act, 1994, the Securities and Exchange Rules 1987, we also report that: a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof, b) in our opinion, proper books of accounts as required by law have been kept by the Company so far as it appeared from our examination of those books; ©) the statement of financial position and statement of profit or loss and other comprehensive income together with the annexed notes dealt with by the report are in agreement with the books of account and returns; and d) the expenditures incurred were for the purpose of the Company's business for the year, Ea oeenn Dated, Dhaka SHAFIQ BASAK & CO, November 28, 2019 Chartered Accountants ANNUAL REPORT |40| 2018-2019 © AKC Agro Biotech LimitedAFC AGRO BIOTECH LIMITED STATEMENT OF FINANCIAL POSITION As at 30 June 2019 Particulars Notes AMOUNT (BDT) socunts | seme Mee Non Curent Assets ssvo.ss3367 1311747579 propery, Plants Equipment 2 [asenosnor] [4 aatenna7 Bloiel esas 3 Steasooes [[ ““arazs tae curent Assets: 15904763 __s02.431,157 twentones 8 | ssaerae || steaerers pocounis Reoelvabie 7 | desrose00 || donasoore Shar tenn loan to AEC Heath Li 3 | “Ceveroes || “sovooe 00 Gach and Gann Equivalent > L_veaersas || eu rareor TOTAL ASSETS Same aT SHARE HOLOERS' EQUITY & LIABILITIES: Shareholders’ Equity : 2,019,998,179 _1,682,597,994 Ruined earings 1s | “yosega tea |] seaasny7 Tax Hotty Reverve te | asrsioery|| zersaoary Unvatead Foreign Exchange gains) 1302 ae ° Non Curent Li Deferred Tax Lit 14 t63260,025 16,968,008 Curent Lables: asornisis _227212,708 Libis for Exoenoe & Serces 18 [ aeeraare] | aaaatres brovon for Covent Tae to | zestrosr|| zesearrn Gtner Lioites 17 | asauneos|] decor aoe IPO Share apteaon Money to L’rsesors|L_“ysesors TOTAL SHARE HOLDERS’ EQUITY AND LIABILITIES Net Assets Value per Share (NAVPS) 27 19.29 18.47 Doe be asim Babehe Nob chief nan oncer caeay ana AUDITORS’ REPORT TO THE SHAREHOLDERS please see annexed report of date Dated: Dhaka November 28, 2019 @ AFC Agro Biotech Limited Eo ACR 'SHAFIQ BASAK & CO. Chartered Accountants ‘a) 2018-2019AFC AGRO BIOTECH LIMITED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the year ended 30 June 2019 ‘Amount (BOT) Particulars Notes |[ 20201 [[ July 2017 June 2019 June 2016 Net Tumover 20 7,091,567,738 1,035,593,945 Cost of Goods Sold 2 (664,065,863) ___(631.428,059) Gross Profit 427,501,875 404,165,886 Operating Expenses (80,502,196) (60,425,756) Administrative Expenses 22 (65,849,602)][ (45,867,788) Selling & Distribution Expenses 23 (14,652,594)| (14,567,968)| Profit from Operation 346,999,679 343,740,130 Finance Cost 24 (18,865,398) (11,780,498) Other Income 25 29,248,780 75,919 Profit Before WPPF 367,380,061 392,035,564 Provision for WPPF 7 (17,018,098) (15,811,217) Profit before Tax 340,361,963 316,224,333 Income Tax Expenses: (2,963,916) 40,551,078 Provision for Current Tax 16 (2,963,916)]| 34,720,218 Provision for Doferred Tax 4 - 5,830,860 Not Profit After Tax 337,398,067 356,775,411 Other Comprehensive Income 2.139 110,487 Unrealised (Loss)/gain on Marketable Securities 1301 - 118,487 Unrealised Foreign Gain/(Loss) 13.02 2.139 : Total Comprehensive Income 337,400,106 356,005,008 Earnings per Share (Restated): 26 3.22 3.41 a D Dex oo hp ha Chairman Managing Director Director Balelo— Neb Jas Chief Financial Officer [ANNUAL REPORT 2018-2019 Company Secretary dha Aiploarae SHAFIQ BASAK & CO. Chartered Accountants @ ALC Agro Biotech Limited‘AFC AGRO BIOTECH LIMITED STATEMENT OF CHANGES IN EQUITY For the year ended June 30, 2019 Particulars Share Retained | Tax Holiday | Gain/(Loss) Total are ne conprnanive nme asco] ais Balance 30 June 2019 1,047,420,000 | 725,029,163 | 247,546,877 2,139 | 2,019,998,179 wotanea | Tox totsoy] Sarit Particulars: ‘Share Capital Earnings Reserve ‘on MKT Total Stock Dividend (2016-17) 151,800,000 | (151,800,000)} ‘Tax Holiday Reserve 62,800,413 | (62,800,413)] - tn: Congreve nem Pee ac: = — Lig. hos Jasin Babel hb 49 INUAL Re?0RT © Arc Agro Biotech Limited wel 018-2019AFC AGRO BIOTECH LIMITED STATEMENT OF CASH FLOWS For the year ended 30 June 2019 ‘Amount (BDT) Particulars July 2018 To || July 2017 To June 2019 June 2018 A) Gash Flows from Operating Activities: Collection from Sales 4,021,267,927 859,274,745 Payment to Suppliers (426,555,665) (497,648,977) Payment for Expenses (114,931,517) (46,856,414) Other Income 262,252 276,310 Payment for WPPF (4,450,000) (8,758,000) ‘Advance Payment (45,731,608) Net Cash flow from Operating Activities 429,861,389 B) Cash Flows from Investing Activities: Purchase of Fixed Assets (513,245,926) (393,859,919) Capital Gain on Sale of Share 28,983,528 - Sale of Share 11,600,000 21,220,000 Short term loan to AFC Health Ltd. (12,767,068) __ (50,000,000) Net Cash Used in Investing Acti C) Cash Flows from Financing Activities: ‘Short term Loan IPO Share Application Money Net Cash Flows Provided by Financial Activities D) Net Cash inflow! (Out Flow) (A+B+C) (11,292,428) (67,979,026) E) Opening Cash & Cash Equivalents 84,731,627 152,710,654 F) Add: Unrealised Foreign Exchange Gain/(Loss) 2,139 - G) Cash and Cash Equivalents at the end (D+E+F) Net Operating Cash Flows Per Share (Note-28) 410 3.35 Mo 9 Poe — he ba Chairman Managing Director Ditector dae Babs Nob Chief Financial Officer Eompany Secretary ANNUAL REPORT (44 2018-2019 © ARC Agro Biotech LimitedAFC AGRO BIOTECH LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 1,00. SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATERIAL INFORMATION: 1.01 Legal form of the Enterpris The AFC Agro Biotech Limited (AFCABL) was incorporated in Bangladesh on 3ist August, 2010 as a Public Limited Company under the Companies Act, 1994. 1.02. Registered Office and Factory: The Company's registered office is situated at Navana Osman @ Link,214/D,Tejgaon-Gulshan Link Road, Tejgaon, Dhaka 1208, Bangladesh and its factory is located at Uttar Shoilmary, Koiya Bazar, Batiaghata, Khulna, 1.03 Nature of Business Operation: AFCABL has been established with the target to manufacture antibiotics, proteins, vaccines, enzymes etc. from agricultur- al ingredients like, molasses, glucose, potato starch, and other nutrients and to sell those products to local markets, Raw materials are procured mostly from local market. Si, No, | Name of the products i Macrolide Protein [Acetic Acid ii. _[ L-Lysine iv. | Mono Sodium Glutamate v. | Calcium Hydrogen Orthophosphate vi.__| Magnesium Carbonate vii, | Sodium Carbonate vill, [Industrial Enzyme 1.04 Commercial Production: The company started its commercial production from 7th October, 2012. 1.05 Components of Financial Statements: 1. Statement of Financial Position as at 30th June, 2019. 2, Statement of Profit or Loss and Other Comprehensive Income for the year ended 30th June, 2019. 3, Statement of Changes in Equity For the year ended 30th June, 2019. 4. Statement of Cash Flows for the year ended 30th June, 2019. 5. Accounting policies and explanatory notes to the Financial Statements for the year then ended, 1.06 Application of Bangladesh Accounting Standards (BAS's): Following BAS's are applicable for the preparation and presentation of financial statements for the year under report. BAS- 1 Presentation of Financial Statements BAS. 2 Inventories BAS-7 Statements of Cash Flows BAS- 12 Income Taxes BAS - 16 Property, Plant and Equipment BAS- 18 Revenue BAS- 19 Employee Benefits BAS~ 24 Related Party Disclosures BAS - 33 Earning Per Share BAS - 37 Provisions, Contingent Liabilities and Contingent Assets BAS- 38 Intangible Assets BAS-41 Agriculture 1.07 Basis of preparation and presentation of Financial Statements: 1) Statement of compliance The financial statements have been prepared on going concern basis under the “Historical Cost” convention in accordance with International Accounting Standards (IAS), International Financial Reporting Standards (IFRS) and the Companies Act 1994, Securities & Exchange Rules 1987, Listing Regulations of Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) and other applicable laws and regulations. ii) Basis of measurement: ‘The financial statements have been prepared on accrual basis of accounting, 4s cr © Arc Agro Biotech Limited Ws 18-2019ii) Functional and presentational currency and level of precision: ‘These financial statements are prepared in Bangladeshi Taka (Taka/Tk), which is the company’s functional currency. All financial information is presented in Taka currency and has been rounded off to the nearest taka except where indicated otherwise Iv) Use of estimates and judgments: ‘The preparation of financial statements requires management to make judgment, estimates and assumptions that affect the applicable accounting policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates, Estimates and underlying assumptions are reviewed on an ongoing basis, Revision of accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. In particular, the key areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements include depreciation, accrued expenses and other payables. v) Reporting Period: The period of financial statements of the company cover 12th months from Ist July 2018 to 30th June, 2019and is, followed consistently. vi) Presentation of Financial Statement: The presentation of this financial statement is done in accordance with the guidelines provided by BAS 1: Presentation of Financial Statements. vil) Comparative Figure: ‘Comparative figures have been taken from last year audited Financial Statements. vili) Regulatory Compliance: ‘As required, AFC Agro Biotech Limited complied with following major legal provision in addition to the Companies ‘Act, 1994 and other applicable laws and regulations: The Income Tax Ordinance, 1984 The Income Tax Rules, 1984 The Value Added Tax Act, 1991 The Value Added Tax Rules, 1991 Securities & Exchange Rules 1987 1.08 Significant Accounting Policies: ‘The accounting policies set out below has been applied in presenting these financial statements. 4) Inventories: Inventories are valued at the lower of cost or net realizable value as prescribed by IAS 2: Inventories, The cost is assigned following weighted average cost formula and includes expenditure incurred for acquiring the inventories, production or conversion costs and other costs in bringing them to their existing location and condition. In the case ofmafacturing inventories and work-in-progress cost includes an appropriate share of production overheads based on normal operation capacity, Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion of sales and selling expenses. Inventories are consisting as follows! a) Raw Materials. b) Work-in Process. ) Finished Goods. d) Packing Materials il Property, Plant & Equipment: ‘The cost of assets comprises its purchase price and any directly attributable costs in bringing the assets to its working condition for its intended use as per International Accounting Standard (IAS) - 16 “Property, Plant & Equipments” Fixed Assets are stated at cost less accumulated depreciation, Depreciation is charged on the cost of fixed assets in order to write off such amounts over the estimated useful lives, using the straight-line method in accordance with IAS - 16, Depreciation is charged on additions made during the year from the date in which those assets are available for use according to IAS 16 Para 55. ANNUAL REPORT las] 2018-2019 © AKC Agro Biotech Limited‘No depreciation is charged on land and land development, The rates of depreciation used to write off the amount of assets are as follows: Building 3% Plant & Machinery 10% Furniture & Fixture 10% Office Equipment 20% Lab Equipment 20% Motor Vehicle 20% Interior Decoration, 20% ii. Impairment of Assets: Financial Asset: A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on these assets. However, no such conditions that might be suggestive of a heightened risk of impairment of assets existed at the reporting date. No1 carrying amounts of the entity’s non financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. if any such indication exists, the asset's recoverable amount is estimated. However, no such conditions that might be suggestive of a heightened risk of impairment of assets existed at the reporting date. al Assets: inancial Assets: ‘The company has measured “Biological Assets" in its Statement of Financial Position initially at cost in accordance with paragraph 30 of 1AS-41, The details of Biological Assets and its type & products are disclosed as under: Name of the Biological | Agriculture | _ Products Related Reference Assets (Scientific Name) from the Bacteria's Saccharopolyspora Bacteria | Erythromycin | A text book of Biotechnology erythraea (by RC Dubey) ‘Acetobacter aceti for Bacteria | Aceticacid | Atext book of Biotechnology Aceticacid (oy RC Dubey) Corynebacterium Bacteria | Monosodium | Atext book of Biotechnology glutamicum for Glutamate (by RC Dubey) Monosodium glutamate Gordonia rubrepertincta | Bacteria___| Flysine ‘iext book of Biotechnology for Hlysine (by RC Dubey) ‘These Biological Assets and products from Bacteria have also been certified by Professor Dr. Abdul Khair; Dean, Faculty of Biological Science, Jahangirnagar University, Savar, Dhaka, 1¢ management has been amortizing the Biological Assets @ 2.5% in each year on the current strain stocks, from the date of commencement of commercial production. y, Financial Instruments: AA financial instrument is any contract that gives rise to a financial asset to one entity and a financial liability or equity instrument to another entity as per IAS-39 “Financial Instruments: Recognition and Measurement.” Financial Assets: Financial assets of the company include cash and cash equivalents, investments in share, accounts receivables and other receivables, The company initially recognizes receivable on the date they are originated. All other financial assets are recognized initially in the date at which the company becomes a party to the contractual provisions of the transaction. ‘The company derecognizes a financial asset when, and only when the contractual rights or probabilities of receiving the cash flows from the asset expire or it transfer the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risk and reward of ownership of the financial assets are transferred. Available for Sale of Financial Assets: Investments in marketable securities are classified as "Available for Sale” (AS). These are valued at fair value and the change in fair value of investment available for sale is presented in other comprehensive income and in statement of financial position. This as per Bangladesh Financial Reporting Standard 7 Financial Instruments: Disclosures, International Accounting Standard 32 Financial instruments: Presentation, 39 Financial instruments: Recognition and Measurement, a7 ANNUAL REPORT @ AFC Agro Biotech Limited vel 2018-2019Financial Liabilities: Financial liabilities are recognized initially on the transaction date at which the Company becomes a party to the contractual provisions of the liability. The company derecognizes a financial liability when its contractual obligation are discharged or cancelled or expire. Financial liabilities include payable for expenses, liabilities for capital expenditure, bank loans and other current liabilities, vi, Financial risk management ‘AFC Agro biotech Ltd's activities expose it toa variety of financial risk and those activities involve the analysis, evaluation, acceptance and management of some degree of risk or combination of risk. Taking risk is core to the financial business, and operational risks are an inevitable consequence of being in business. AFC Agro biotech Ltd's aim is therefore to achieve an appropriate balance between risk and return and minimize potential adverse effects on AFC Agro biotech Ltd's financial performance. AFC Agro biotech Ltd's risk management policies are designed to identify and analyze these risks, to set appropriate risk limits and controls, and to monitor the risk and adherence to limits by means of reliable and up- to- date information systems. AFC Agro biotech Ltd regularly reviews its risk management policies and systems to reflect changes in markets, products and emerging best practices. vii, Advances, Deposits and Prepayments: ‘Advances are initially measured at cost, After initial recognition advances are carried at cost less deductions, adjustments or charges to other related account heads such as property, plant and machinery or expenses. Deposits are measured at payment value. Prepayments are initially measured at cost. After initial recognition, prepayments are carried at cost less charges to income statement, ii, Cash and Cash Equivalents: Cash and Gash equivalents include cash in hand, cash at banks which are held and available for use by the company without any restriction, There is insignificant risk of change in value of the same. Cash in hand has been verified by Management at the close ofthe year and a cash custody certificate was furnished to the auditors. The bank balances have been duly reconciled with respective bank statements. {x) Statement of Cash Flows: Statement of Cash flows has been prepared in accordance with [AS-7: Statement of Cash Flows. Cash generated from oper- ating activities has been reported using the Direct Method as prescribed by the Securities and Exchange Rule, 1987 and as the benchmark treatment of IAS 7, whereby major classes of gross cash receipt and gross cash payments from aperat- ing activates are disclosed, x) Income Tax: AFC Agro Biotech Limited has been enjoying tax holiday from its commercial operation start 7th October 2012 moreover as per Government gazette no- 26,00.0000.100.42.008,17-54 dated 14-05-2018 no provision is required for income tax ‘on this company’s profit as the company has received exemption from all such taxes which was effective from financial year 2016-2017, Xii) Related Party Disclosures: 1). As per Para 17 of BAS-24 Related Party Disclosure the company shall disclose key ‘management personne] compensation in total and for each of the following categories: a). Short-term employee benefits: AFC Agro biotech Ltd, Provide Short term employee benefits such as wages, salaries and bonuses '). Post-employment benefits: AFC Agro biotech Lid, has no post -employment benefit such as pensions, other retirement benefit, post ~employ ‘ment life insurance and post-employment medical care, ©). Other long-term benefits: AFC Agro Biotech Ltd, has no Other long-term benefits such as long-service leave or sabbatical leave, jubilee or other long-service benefits 4). Termination. benefits: [AFC Agro Biotech Ltd, has no termination benefits ¢). Share-based payments: AFC Agro Biotech Ltd. has no share ~based payment. 2). As per para 18 of IAS-24 Related Party Disclosure are as follows: (a) Related party transaction took place for investment in shares this year by AFC Agro Biotech Limited with AFC Health Ltd, Related party details are as follows: ANNUAL REPORT ss 2018-2019 bal © AKC Agro Biotech LimitedNumb Face fame of the Compan} lumber | value | Total Taka ate Name of the Company ofshares | pevulte,,| Total Tak Dat AFC Health Ltd.( Investment) 11,00,000 | 10 1,10,00,000 30.06.2019 ‘AFC Health Ltd. (Short Term Loan) : 627,67,068 Total 7,37,67,068 (b) Further Active Fine Chemicals Limited is one of the customer of AFC Agro Biotech Limited, During this year AFC Agro Biotech Limited sold products Tk. 4,62,88,872/- to Active Fine Chemicals Limited and received Tk. 4,23,47,761/- against sales after adjusting due balance of Tk, 40,42,998/-and balance due from Active Fine Chemicals Limited as on 30.06.2019 was Tk 39,41,1L1/- () Related party transaction took place during normal course of business with Active Fine Chemicals Limited, Contingencies: Contingencies arising from claims, litigation, assessment, fines, penalties etc. are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated, xiv. Segment Reportiny ‘As there is a single business and geographic segment within which the company operates, as such, no segment reporting is felt necessary. xv, Revenue Recognition Tncompliance with the requirements of IFRS - 15: Revenue, revenue receipts from customers against sales is recognized ‘when products are dispatched to customers, that is, when the significant risk and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods, Sales price represents inclusive of VAT, but sales less VAT are recognized as “Revenue xvi, Workers’ Profit Participation Fund: This represents 5% of net profit before tax after charging the contribution as per provision of the Bangladesh Labor (amendment) Act 2013 and is payable to workers as defined in said Law, The company regularly distributes 2/3 of 80% ‘of WPPF to its employees and rest amount of utilization as per provision of law is under process. xvii, Foreign Currency Transactions: Foreign Currencies are transacted into taka at the exchange rates ruling on the date of transactions in accordance with BAS-21 "The effects of changes in foreign exchange rates”. xviii, Borrowing Cost/Finance Cost: Finance cost comprises interest expenses on bank loan, bank charge and others. All finance expenses are recognized in the Statement of Comprehensive Income. xix, Earnings Per Share (EPS): Earnings Per Share (EPS) are calculated in accordance with the International Accounting Standard IAS-33 "Earning Per Share”, Basic earnings per share: Earnings per Share (EPS)" has been calculated by dividing the earning attributable to ordinary shareholders of the company by the weighted average number of ordinary shares outstanding during the year. Xx Provisions: Provisions are made considering risk and uncertainties at best estimate of the probable expenditure that would require ‘meeting the current obligation on the Balance Sheet date, xxi. Accounts Receivables: ‘Accounts receivables are initially recognized at cost which is the fair value of the consideration given for them. After initial recognition these are carried at cost, impairment losses due to uncollectible of any amount so recognized is written off, firstly against any provision available and then to the Statement of Comprehensive Income, Subsequent recoveries of amounts previously provided for credited to the Statement of Comprehensive Income. 9 ANNUAL REPORT @ AFC Agro Biotech Limited (| 2018-2019‘Amount (Taka) 30-Jun-18 1,406, 167,552 303,859,918 7,800,027,470 47,767,325 17,767,325 444,183 17,323,142 11,600,000 11,000,000 22,600,000 24,198,264 1,930,160 47,383,275 43,451,699 629,841 1,046,000 463,948 3,041,751 18,956,724 24,138,264 2.00 Property, Plant & Equipment: Tk. 1,583,963,304 Sostun-t8 This consists of as follows: Opening Balance 1,800,027,470 ‘Add: Addition during the year 513,245,926 2,313,273,396 Less: Accumulated Depreciation Written Down Value Dotails have been shown in Annexuro-8 3,00 Biological Assets: Tk. 16,890,063 This consists of as follows: Opening Balance 17,923,142 ‘Add: Addition during the year 17,323,142 Loss: Amortization 433,079 16,890,063 ‘The management has decided to amortize the biological assets @2.5% in each year on the current strain stocks , since the date of commencement of commercial production. 4.00 Investment: Tk. 11,000,000 This is made up as follows: lnvestment in Securitis-Listed Company(Fair Value)-Annex-A - Investment in Secutities-Unlisted Company Annex.-A, 414,000,000 Total 717,000,000 5.00 Advances, Deposits and Prepayments: Tk.89,183,307 This is made-up as follows: Advances (5.01) 54,434,542 Deposits: Security Money 4,930,160 Propayments: Prepayments to parties 32,818,605 Total 89,183,307 a) This is considered good. b) No amount was due from the Managing Director, Managing Agent, Directors, Managers and Officers of the company and any of thom severally with any other porson except as stated in 5.01 below. ©) No amount was due by the related party 5.01 Advances: Tk. 4,434,542 This is made-up as follows: Salary 1,239,981 Rent 986,000 VAT (6.01.01) 125,435 ‘Advance Income Tax (5.01.02) 4,950,015 Others Advance 47,163,111 Total 54,434,542 ANNUAL REPORT |s0| 2018-2019 @ AFC Agro Biotech Limited5.01.01 5.01.02 6.00 7.00 8.00 ‘Amount (Taka) Advance VAT: Tk. 125,435 30-Jun-19 30-Jun-18 This consists of as follows: Opening Balance 463,948 109,586 ‘Add: Paid during the year 4,413,112, 7,019,364 1,877,060 7,128,950 Less: Adjust during the year 4,751,625 6,665,002 Total Advance Income Tax: This is made-up as follows: Opening Balance 3,041,751 3,707,874 ‘Add: Deducted during the year 908,264 3,465,087 4,950,015 7,172,961 Less: Adjusted during the year : 4,131,210 Total Inventories: Tk. 125,327,221 This is made-up as follows: Raw Materials 63,421,182 59,924,567 Packing Materials, 4,797,530 1,814,259 Work in Process 17,099,087 16,867,345 Finished Goods 43,009,412 40,775,642 Total: ___ 119,381,813 In view of innumerable items of inventory and diversified quantities, itis not practical to disclose quantities against each item of inventory. Accounts Receivable: Tk. 365,165,829 365,165,829 294,866,018 Aging of accounts receivables More than six months 10,871,791 8,712,504 Less than six months 354,294,038 286,153,513 365,165,829 294,866,018 No amount was due from the Managing Director, Managing Agent, Directors, Managers and Officers of the company and any of them severally or jointly with any other person. This amount consider as good. Short term loan to AFC Health Lt This is made up as follows: ‘Short term loan to AFC Health Ltd 62,767,068 50,000,000 Total 62,767,068 50,000,000, Tk. 62,767,068 This short term loan represents the company’s temporary investment with AFC Health Ltd. carrying interest 15% applicable after 2 years from the date of disbursement and this investment is returnable as when required by the company. 51 INUAL Re?0RT > Agro Biotech Limited il aeoie-2019AMOUNT (BDT) 9.00 Cash & Cash Equivalents: Tk. 73,441,338 30-Jun-19 30-Jun-18 This is made up as follows Cash in Hand 619,837 222,026 Cash at Bank: 72,821,501 84,509,601 Current Accounts 62,596,890 74,402,634 SND Accounts 1,720,630 1,818,399 IPO Related Accounts 8,503,981 8,288,568 Total 73,441,338 (84,731,627 10,00 Share Capital : This is made-up as follows: a) Authorized Capital : 30,00,00,000 Ordinary Shares of Tk. 10 each 3,000,000,000 b) _[ssued Subscribed and Paid-up Capital: Tk. 1,047,420,000 ‘34,000,000 Shares of Tk.10 each fully called and paid up in cash 340,000,000 340,000,000 4,000,000 shares of Tk, 10 each paid up otherwise than in cash (i.e. in consideration of land) 40,000,000 40,000,000 41,20,00,000 shares of Tk. 10 each paid up in IPO 120,000,000 120,000,000 '50,00,000 shares of Tk. 10 each (Bonus 10% 2013) 0,000,000 50,000,000 £82,50,000 shares of Tk. 10 each (Bonus 15% 2014) 82,500,000 82,500,000 1,26,50,000 shares of Tk.10 each (Bonus 20% 2015-16) 126,500,000 126,500,000 1,51,80,000 shares of Tk.10 each (Bonus 20% 2016-17) 151,800,000 151,800,000 1,96,62,000 shares of Tk.10 each (Bonus 15% 2017-18) 136,620,000 1,047,420,000 ‘910,800,000 ¢) Issued and paid up capital of the entity is 104,742,000 no. of shares of Tk.10 each as follows: No. of Shares ‘% of Shares No. of Shares Directors/Sponsors 31,723,729 Institutions 12,579,514 General Shareholders 60,438,757 Balance as on 30th June, 2018 104,742,000. A Distribution schedule of the above shares are given below 30,29 37.30 32.41 7100.00 as required by the Listing Rules: 27,585,853 28,590,012 34,904,135 ‘91,080,000 2018-2019 Shareholdings No. of Number % of total Shareholders of Shares Shareholding Less than 500 shares 1270 230,236| 0.22 1501 to 5000 shares 2175 4,058,569} 3.87 5,001 to 10,000 shares 385 2,800,956] 2.87 110,001 to 20,000 shares 237 3,426,794] 3.27 120,001 to 30,000 shares 113 2,772,704) 265 130,001 to 40,000 shares a“ 1,441,462} 1.38 140,001 to 50,000 shares 32 1,461,638 14 150,001 to 1,00,000 shares m 5,077,186] 4.85 1,00,001 to 10,00,000 shares 75 20,249,875] 19.33 lover 10,00,000 shares 24 63,222,580] 60.36 Total “4420 104,742,000} 100.00 [ANNUAL REPORT [52] @ AFC Agro Biotech Limited11.00 12.00 13.00 13.01 13.02 14.00 ‘AMOUNT (DT) Retained Earnings: Tk. 725,029,163 30-Jun-19 30juni8 This is made up as follows: Opening Balance 524,251,117 256,475,292 Not Profit for the year 337,398,047 356,775,412 Previous Year Tax Holiday Reserve adjustment - 62,800,413 Stock Dividend Issued 136,620,000) 151,800,000) Total 725,029,163. 524,251,117, ‘Tax Holiday Reserve: Tk. 247,546,877 This is made up as follows: Opening Balance 247,546,877 310,347,290 Add: Provision during the year 247,546,877 310,347,290 Less. Adjustment during the year 62,800,413 Total 247,546,877 247,546,877 Provision for tax holiday reserve has not been made based on gazette No- 26.00.0000.100.42. 008.17- 54 dated 14-05-2018 by Commerce Ministry under the caption “National Active Pharmaceutical Ingredients (API) & Laboratory Reagents Production and Export Policy” regarding tax exemption to be effected from financial year 2016-17 to 2031-32 and the meeting minute in Ministry of Commerce no: 26.00.0000. 10042.008.17-177. Unrealised Gain/ (Loss) on Investment in Securities(13.01) - Unrealised Foreign Exchange Gain (Loss)(13.02) 2.139 - Unrealised Gain/ (Loss) on Investment in Securities The break-up is as follows: Opening Balance - (118,487) Add: Provision during the year (118,487) Less: Adjust during the year 118,487 Closing Balance Unrealised Foreign Exchange Gain! (Loss): Tk. 2,139 The break-up is as follows: Opening Balance ‘Add: Provision during the year 2.139 : 2,139 Less: Adjust during the year Closing Balance Deferred Tax Liabilities: Tk. 16,968,035, ‘The break-up is as follows: Opening Balance 16,968,035 22,798,895 ‘Add: Provision during the year 2 : 76,968,035, Less: Adjust during the year - 5,830,860 Total Provision for tax holiday reserve has not been made based on gazette No- 26,00.0000,100,42, 008.17- 54 dated 14-05-2018 by Commerce Ministry under the caption “National Active Pharmaceutical Ingredients (API) & Laboratory Reagents Production and Export Policy" regarding tax exemption to be effected from financial year 2016-17 to 2031-32 and the meeting minute in Ministry of Commerce no: 26.00.0000.10042.008.17-177. 59 INUAL Re?0RT > Agro Biotech Limited ‘sl aeoie-2019‘AMOUNT (BDT) 30-Jun-19 30-Jun-18 15.00 ios for Expense & Services: Tk. 25,873,279 The break-up is as follows: Wages, Salaries & Allowance Expenses 2,113,577 2,143,922 Utility Bil 229,408 192,533 AGM Expenses 475,000 475,000 ‘Audit Fee 700,000 630,000 3,517,085 3,441,455 Accounts Payable & Other Payable 22,355,204 Total Accounts payable represents to regular suppliers of raw materials, packing materials, ete. All suppliers were paid on a regular basis, 16.00 Provision for Current Tax: Tk. 25,317,087 The break-up is as follows: Opening Balance 363,171 57,817,096 ‘Add: Provision made during the year/(adjustment during the year) 2,963,916 35,463,925) Total 25,317,087 22,353,174 Provision adjusted during the year - (35,463,925) Adjustment for the assessment settled 743,707 Provision disclosed in the profit and loss account - (34,720,218) Provision for tax holiday reserve has not been made except for other income based on gazette No- 26.00.0000.100.42. 008.17-54 dated 14-05-2018 by Commerce Ministry under the caption “National Active Pharmaceutical Ingredients (API) & Laboratory Reagents Production and Export Policy" regarding tax exemption to be effected from financial year 2016-17 to 2031-32 and the meeting minute in Ministry of Commerce no: 26,00.0000.10042.008. 17-177. Provision made during the year: Other Income Capital Gain from share sale 28,983,528 Bank commission 262, 252 Total 29,245,780 Income Tax Capital Gain (10%) 2,898,353 Bank commission (25%) 65,563 Total: 17.00 Other Workers Profit Participation Fund (Note 17.01) 45,249,596 32,681,498 45,249,596 32,681,498 17.01 Workers Profit Participation Fund(WPPF): TI This is made-up as follows: Opening Balance 32,681,498 25,628,281 ‘Add: Provision during the year 17,018,098 4 17 49,699,596 41,439,498 Less: Paid 4,450,000 8,758,000, Total This represents 5% of net profit before tax after charging the contribution as per provisions of the Companies Profit (Workers' Participation) Act,1968 and is payable to workers as defined in the said Act. The company has separate Trustee for WPPF. During the year AFCABL has been transferred fund to separate WPPF Bank Accounts partially and remaining balance keep as liabilty as on 30th June 2019 which will be transfer earlier. 10% of the fund to be transferred to Bangladesh Workers Welfare Foundation as per section 234 of the Bangladesh Labor Act, 2006 (amended in 2013) will be made as soon as possible AxnUAL REPORT By 2018-2019 il © AKC Agro Biotech Limited‘AMOUNT (BDT) 30-Jun-19 30-Jun-18 18.00 Short Term Loans: Tk. 186,966,943 This is made-up as follows: Loan from Bank (C. C) Janata Bank Ltd. A/C No. 87 (Note 18.01) 98,229,299 92,555,183 Loan from Bank (Time Loan) Mutual Trust Bank Ltd. A/c No- 087 (Note 18.02) 52,635,144 50,136,111 Term Loan Uttara Finance (Note 18.03) 36,102,500 Total 186,966,943 142,691,294 18.01 Janata Bank A/c # 45004887: ‘The details of above bank accounts are appended below: Nature CC (HYPO) Sanction Limit Tk. 9.00 Crore Expiry date 30/04/2019 Interest Rate 13,00% (Variable) Renewal Status Renewed Security 150 Decimal land at Uttar Sholmari, Khulna. 18,02 Mutual Trust Bank Ltd. A/c # 178000087: The details of above bank accounts are appended below: Nature Time Loan Sanction Limit Tk. 5.00 Crore Expiry date 30/06/2019 Interest Rate 14.00% (Variable) 18,03 Uttara Finance and Investments Li ‘The details of above bank accounts are appended below: Nature Short Term Loan Sanction Limit Tk. 3.50 Crore Expiry date 10/04/2020 Interest Rate 14.00% (Variable) 19,00 IPO Share Application Money: Tk. 7,365,011 This is made up as follows: Opening Balance 7,365,011 7,375,011 Adjust/(Paid) during the year = 10,000) Closing Balance 7,365,011 65,011 IPO Share Applicant Money represents IPO over subscription money payable as related applicants not withdrawn their share applicant money till date, Though un distributed money has been keep in separate Easter Bank Principal Branch A/c, No-3844,3854,3865 and 3876, 20.00 Net Turnover: Tk. 1,091,567,738 This is made-up as follows: Sales VAT able Items 13,429,126 51,098,347 Less: VAT 15% 4,751,625 6,665,002 Net Revenue 11,677,501 44,433,345 Non VAT able Items Local Sales 55 ANNUAL REPORT @ AFC Agro Biotech Limited bs] 2018-2019AMOUNT (BDT) 30-Jun-19 30-Jun-18 21.00 Cost of Goods Sold: Tk. 664,065,863 This is arrived as follows: Opening W IP 16,867,345 15,234,750 Raw Material consumed 418,117,229 436,610,068 Packing Material consumed _(Note:21.02) 8,876,965 8,956,518 Less: Closing W IP. 17,099,097 16,867,345 Total Consumed “426,762,442 443,933,991 ‘Add: Factory Overhead (Note:21.03) 239,780,591 190,634,600 Cost of Production (666,543,033 634,568,591 ‘Add: Opening Finished Goods 40,775,642 37,890,780 Finished Goods Available 707,318,675 672,459,371 Less; Closing Finished Goods 43,009,412 40,775,642 Less: Cost of Sample 243,400 255,670 Cost of Goods Sold (664,065,863 631,428,059. 21.01 Raw Material Consumed: Tk. 41 The break-up Is as follows: Opening Raw Materials 59,924,567 51,034,507 ‘Add: Purchase Raw Materials 421,613,844 445,500,128 481,538,411 "496,534,635 Less: Closing Raw Materials 63,421,182 59,924,567 Total 418,117,229 436,610,068 21.02 Packing Material Consumed: Tk. 8,876,965 The break-up is as follows: (Opening Packing Materials 1,814,259 1,793,565 ‘Add: Purchase Packing Materials 8,860,236 8.977.212 10,674,495, 10,770,777 Less: Closing Packing Materials 4,797,530 4,814,259 Total 21.03 Factory Overhead: Tk. 239,780,591 This consists of as follows: Wages & Salary 33,779,640 24,600,701 Fuel, Patrol & Lubricant 5,555,959 5,494,251 Car Maintenance Exp. 1,028,556 282,104 Depreciation 190,151,001 145,749,343 Biological Assets (Written off) 433,079 444,183 Entertainment Expenses 1,166,862 41,168,321 Lab Materials 572,385 752,238 Medical Expense 4,568 3,355 News Paper Bill 472 2,604 Printing & Stationery Expenses 282,674 327,440 Rent 1,009,200 1,179,500 Repair & Maintenance Expenses 4,156,027 1,569,527 Research & Development Exp. - 3,917,011 Telephone & Postage Expenses 315,338 395,507 Conveyance Expenses 1,925,793 2,405,469 Utility Bil 2,100,372 2,050,097 Other Exp. 298,665 292.949 Total ANNUAL REPORT 6 2018-2019 bel © AKC Agro Biotech Limited22.00 23.00 24.00 25.00 @ AFC Agro Biotech Limited This consists of as follows: Salary & Allowance Audit Fees AGM Expenses Bank Charge Car Maintenance Exp. Depreciation Director Remuneration & Fee Entertainment Expenses Printing & Stationery Expenses Registration & Renewal Fees Repair & Maintenance Rent Research & Development Exp. Regulatory Fee Telephone & Postage Expenses Traveling & Conveyance Expenses Other Expenses Utility Bill Total Selling & Distribution Expenses: Tk. 14,652,594 This consists of as follows: Salary & Allowance Advertisement Exp. Carrying Exp. Director Remuneration & Fee Entertainment Expenses Marketing Promotional Expenses Printing & Stationery Expenses Rent ‘Sample Expenses Telephone & Postage Expenses Traveling & Conveyance Expenses Utility Bill Total nance Cost: Tk. 18,865,398 This is made-up as follows: Bank Interest on JBL CC Loan Bank Interest on MTBL Loan Uttara Finance and Investment Ltd STL. Other Income: Tk. 29,245,780 This is made-up as follows: Bank Interest received Gair/(Loss) on Investment in Marketable Securities (s7| ‘AMOUNT (BDT) 30-Jun-19 30-Jun-18 7,698,452 6,321,285 700,000 630,000 475,000 475,000 150,711 148,635, 464,314 469,229 33,556,059 25,720,472 2,530,000 3,052,500 492,244 550,568 1,016,650 4,174,968 306,593 294,632 543,028 679,713 2,232,130 2,225,811 11,441,468 2,209,755 41,774,024 426,150 533,061 4,124,570 1,387,668 192,337 158,195 290,141 312,027 3,518,663 4,034,537 461,275 598,906 3,610,458 3,407,728 2,530,000 2,402,500 273,314 195,677 213,080 129,276 737,075 167,745 2,163,158 2,562,780 243,400 255,670 44,600 68,889 628,704 444,368 10,649,116 11,644,387 7,086,559 136,111 4,129,723 2 718,865,398 262,252 28,983,528 (200,391 276,310 2018-2019AMOUNT (BDT) 30-Jun-19 30-Jun-18 26,00 Basic Earning Per Share: ‘The computation is given below: 26.01 Basic EPS Normal Operation: Net Profit After Tax 337,398,047 356,775,411 Number of share outstanding during the year 104,742,000 104,742,000 Earning Per Share Normal Operation 26,02 Number of shares is calculated below : Opening balance of outstanding number of shares 91,080,000 Add; Bonus shares issued for the year 2017-2018 (15%) 13,662,000 Tots No diluted EPS was required to be calculated for the year since there was No scope for dilution. 27.00 Net Assets Value Per Share: Net Assets 27.01 2,019,998,179 1.682,597,994 Number of share outstanding during the year 26.02 104,742,000 91,080,000 Not Assets Value Per Share 19.29 18.47 27.01 Net Assets : Total Assets: 2,327,738,130 1,926,778,736 Total Liabilities 307,739,951 244,180,742 Net Assets (019,998,179 __1,682,597,994 28.00 Net Operating Cash Flow Per Share: Net cash generated from operating activities 429,861,389 304,875,275 Number of share outstanding during the year 26.02 104,742,000 191,080,000 Net Operating Cash Flows Per Share 4.10 3.35 29.00 Reconciliation of Net Profit with Cash Flow from Operating Activities: Profit/(Loss) before tax 340,361,963 Adjustment for Non-Cash Items: (10,118,130) Finance Cost 18,865,398 Other Income: Capital Gain on Sale of Share (28,983,528)| Adjustment for Non-Operating Items: 224,140,138, Depreciation Charge 223,707,059 Amortisation Charge 433,079 Adjustment for the Net changes in Operating Accruals: (103,748,920) (Increase)/Decrease in inventories (6,945,408) (Increase)/Decrease in trade and other receivables (70,299,811)| (Increase)/Decrease in Prepayments (43,823,344)| Increase/(Decrease) in Liabilities for expenses & Services 3,751,545 Increase/(Decrease) in Other Liabilities 12,568,098 ‘Cash Generated from operations ‘450,635,051 Less: Tax Paid (1,908,264) Less: Interest Paid 18,865,398) Net Cash from / used in operating activities 30,00 Capital Expenditure Commitment : ‘There was no material capital expenditure authorized by the Board but net contracted for at 30th June 2019, 31.00 Claim not acknowledged as Debt There was no claim against the company not acknowledged as debt as on 30th June 2019. 32,00 _Un-availed credit Facilities There was no credit facility available to the company under any contract, other than trade credit available in the ordinary course of business and not availed of as on 30th June 2019. [ANNUAL REPORT: |s8| 2018-2019 © ARC Agro Biotech Limited33.00 34.00 35.00 36.00 Number of Employees : The number of employees engaged for the whole year who received a total remuneration of Tk.3,000/- and above per month was 171 for the whole year. Contingent lability There has been no contingent liabilities to the company except some negligible letter of credits in the ordinary course of business. Related party Transaction: (a) Related party transaction took place for investment in shares and short term loan this year by AFC ‘Agro Biotech Limited with AFC Health Ltd. The name of the related parties transaction have been set out in accordance with the provision of IAS - 24: Related party details are as follows: Name of the Company Total Tk. Date AFC Health Ltd. (Investment) 11,000,000) [AFC Health Ltd. (Short term loan) 62,767,068]| 30.06.2019 Total 73,767,068] (b) Further Active Fine Chemicals Limited is one of the customer of AFC Agro Biotech Limited, During this year AFC Agro Biotech Li ited sold products Tk. 4,62,88,872/- to Active Fine Chemicals Limited and received Tk. 42347,761)- against sales alter adjusting due balance of Tk. 40,42,998/-and balance due from Active Fine Chemicals Limited as on 30.06.2019 was Tk. 39,41,111/- (c) Related party transaction took place during normal course of business with Active Fine Chemicals Limited (d) Short term benefits to the related part Name Monthly, Yearly Board Meeting Remuneration || Remuneration Fee IMd. Golam Mostafa 50,000 (600,000 52,500 Md. Saifur Rahman 100,000, 1,200,000 000 Md. Zia Uddin 100,000) 1,200,000 52,500 Md. Afzal 50,000 600,000 52,500 Md. Jewel Khan 100,000) 7,200,000 Total 400,000 4,800,000 260,000 (@) The Monthly remuneration as stated above has been approved in AGM (f) No other related party exists, Events after the balance sheet date : Date of Authorization: (a) The Board of Directors of AFC Agro Biotech Limited authorized these Financial Statements for the year ended June, 2019 in its 110th Board Meeting held on 28 November 2019. (b) The Board of Directors at the 110th Board Meeting held on 28 November 2019 recommended 10% Stock dividend (1Obonus shares for existing 100 shares). This will be considered for approval by the shareholders at the 9th Annual General Meeting (AGM). docks Chalrman Jasin © Arc Agro Biotech Limited Oo a Managing Director {53| Babslo Nol Gompany Secretary Lin hoa Director ANNUAL REPORT 2018-2019z z 00 OOO z z z DooTOOTT | OOT'OOTT TOL 7 7 (007000"rF 7 7 covo0TrY [OOO PHIGESH Oa 109 peIsrrun| 35017 Ue 3501 Ue aeTS porteosun | emeAveW | anrenrseo | GupICK | Correos | emreAHEW | emIenrsod | Joo fueduop jo ouey 7 21eys 10% 8107 90°08, 6107 9006 :mojaq uanIB axe 6¢-S¥ Jad se pasojssip uaaq seu senunoag ajqelarsew uo (ss07)/UIED 7 Jeak aly Buung senunoag aiqeiaxiew uo (8807) Med uopesjesy uo sBuiuieg paurejey oj 19jsueN), : (Gujuado)uonsog (ss07)juiep pezjeaiun, : (Gulso19)uonysoe (s807)/uIeD pazieasun Xpezyjeos-up) somunaog e|qejoyseW wo (s807)/UIeD = = DOOTOOST = = = 5 TOT - - ‘o0T00g FF - - = 5 “INSAGY| 09 Pash ‘80 /ule6 ‘$80|/ uleB perteoun | emeAmweW | antenysoo | Buplon | Oerieaiun | amiearueN | omieArson | soxeys aria] 2184S 10% JOON 810 900, 610 900, V eunxouy -mojoq UaAIB o1e SonUNDag a1qe}OIeW POSIT JO @ AFC Agro Biotech Limited (60 [ANNUAL REPORT 2018-2019eaoTareee | sor ss 35508 a1 | eo oNTETSUTUPY| Tooter ost | wee | samvedrs Buarerwew unowy —[—wonsodorg | —s1uneooy 0 Peon TBBA Buy BuLNp PaBIeys LONE SIEp }O UONEOO IY Lavrevvec [scoeosses | swears [uiceervee cuvzzoo08 | svsresecer [esszsreorr | eocarosw se eouiea vortoowest [eovueee: ]osozocece [sco canses sereeee | sessveeis [ov Zev 008 me ors'te cose ewes [ereree [wozlooree | - vesser _focruiee voreio9e0 sven] & sees [soseies [oeerorr [aussi [oz oereers | - ooo'ses | ocwne's spuenreion| Z sarseezn [evseecore [receoria [ssresvecr [woe |eoresscer | - a woudrbs 467] & vsvsevz [sezeore | zoerszor [escro's | xoz[arese's | - sere | raveae's wowdinba eouio| § wer'sn0' —[veceovy [arezros [arovese [nor |escesvo | - oov'oss | zsr'erron emma e emnuna » ucesco'ver's [ecousroar |ecceeaver | roereze'ese [nor [oereervess | - eivooriiy | arezeren't Zeouoon # wera] & seseo'es: [acescese [zevers |rovesez | xe [eeoserenr | - sev'e0e's | eee'sive Supima] @ esaireor | — : = = [esarveor | - vere. [vireo _fuowdoronea purrs pury] © soko An reokou | soko an ssozounr o¢ | suoz ounr ot | “Simp |uoee eountea |, | S202 0U00 0 | “Suump | “Bump” | woe ese bow aucseenien [uoseecueea) prey | sumed (H|Yo** 9S | uounsnipy| uonipey | Buluedo sminomea bag Torivissy asa Tso5 Fa 6107 eunf o£ 1e sy siassy paxid Jo aInpayss, ALIN HO3LOIa OYDV 24V ANNUAL REPORT 2018-2019 [61] © Arc Agro Biotech LimitedAFC AGRO BIOTECH LIMITED Revenue Stamp 1/We of being a Member of AFC Agro Biotech Limited, hereby appoint Mr/Mrs, of as my proxy in my/our absence to attend and vote for me/us and on my/our behalf at the 9th Annual General Meeting of the Company to be held on Tuesday, 315t December, 2019 and at any adjournment thereof. As witness my hand this Day of December 2019 Signature of Proxy. Signature of Member Register Folio of Member Note: The proxy form duly completed must be deposited at the Company's Share Office, Tanaka Tower (2nd Floor), 42/1/Gha, Segun Bagicha, Dhaka-1000, not later than 48 hours before the time fixed for the meeting. Name of Member / Proxy Register Folio No./BO ID of Member I/We here by record my/our presence at the 9°" Annual General Meeting of AFC Agro Biotech Limited on ‘Tuesday, 313t December, 2019 at 11,00 A.M, at Institution of Diploma Engineers, 160/A Kakrail, VIP Road, Dhaka. Signature of Proxy. Signature of Member Note: Shareholders attending the meeting in person or by proxy are requested to deposit the attendance slip duly filled in at the entrance of the meeting hall. Seats in the auditorium are reserved only for the shareholders/proxies. ANNUAL REPORT 2 2018-2019 lel © AKC Agro Biotech Limited