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DIRECTORS REPORT
It is a pleasure and privilege on the part of the Board of Directors to present herewith the Directors' Report
and Auditors' Report together with the audited Financial Statements of Advanced Chemical Industries
Limited (ACI) for the first fiscal year (1 July 2016 - 30 June 2017) as the financial year of the Company
ended on 30 June 2017 prepared based on the provisions of the Companies Act 1994, Finance Act 2015
and the Notifications issued time to time by Bangladesh Securities & Exchange Commission (BSEC).
Overview
ACI Group had a very successful year in 2016-2017 with revenue earnings of Taka 47,668 million
registering a growth of 52%. This achievement had been a synchronized effort of our sales and marketing
team supported by corporate services and factories. There was strong growth across almost all of the
strategic business units leading to a robust and well rounded performance for the ACI group. Bangladesh
economy grew by 7.1%, exceeding the 7.0% growth target and the 6% growth trajectory. This strong
growth was mainly supported by industry and service sectors. Annual average CPI inflation continued to
decline to 5.9% in June 2016, below the target of 6.2%. The declining trend in average CPI inflation is
mainly driven by favorable food inflation. Export grew by 8.9%, while import by 5.5% in FY 16. Remittance,
however, ended up with a negative growth of 3% during the same period. The current account surplus of
USD 3.7 billion led to an overall balance of USD 5.0 billion, building net foreign assets. Import benefited
from subdued global commodity prices. Despite some initial competitiveness concerns from appreciation
in REER (Real Effective Exchange Rate), exports held up well, despite weak external demand. Foreign
exchange reserves reached USD 30.2 billion at the end of FY 16, around 8 months of prospective import.
Nominal Taka-USD exchange rate remained broadly stable. Lending interest rate was firm with slight
upper trend. Due to the exceptional growth, ACI had to adapt to this situation by adding new manpower,
increased training and productivity improvement. A substantial increase in marketing expenses and fields
force strength were made in order to support the growth. The external environment was stable enough
to allow us to focus on good execution of our planned business strategy. ACI took advantage of this period
and invested on growth and market share gain. ACI celebrated some noteworthy achievements during
2016-2017. Our pharmaceutical business started ACI Healthcare USA Inc. with a view to develop sales and
distribution capability. ACI Biotech became a separate subsidiary, further strengthening our healthcare
portfolio. Consumer Brands had started high quality rice processing and sales. Mobile telephones were
added to our consumer electronics business under the brand name "Stylus". Agribusiness expanded their
portfolio brought in combine harvesters and reapers. Our retail chain Shwapno continued its rapid sales
growth, as well as backward linkage development with farmers. Through these and many more
achievements, ACI has been able to deliver high quality sustainable growth.
Subsidiary Companies
ACI Formulations Limited
ACI Salt Limited
ACI Pure Flour Limited
ACI Foods Limited
ACI Agrolink Limited
Premiaflex Plastics Limited
ACI Motors Limited
Creative Communication Limited
ACI Logistics Limited
ACI Edible Oils Limited
ACI HealthCare Limited
ACI Chemicals Limited
INFOLYTX Bangladesh Limited
ACI Biotech Limited
Joint Venture Companies
Tetly ACI (Bangladesh) Ltd.
ACI Godrej Agrovet Pvt. Ltd.
Asian Consumer Care Pvt. Ltd.
Associate Companies
Stochastic Logic Ltd.
Assets
Property, plant and equipment
Investments
Intangible assets
Non-current assets
8
9
10
7,882,028,036
2,068,658,731
703,033
9,951,389,800
6,596,603,946
1,902,534,456
985,105
8,500,123,507
6,540,146,827
1,858,500,465
322,505
8,398,969,797
Inventories
11
Trade receivables
12
Other receivables
13
Inter-company receivables
14
Advances, deposits and prepayments
15
Cash and cash equivalents
16
Current assets
Total assets
4,812,712,892
3,424,250,145
671,756,230
5,244,723,445
2,252,581,504
3,954,270,304
2,249,796,350
557,976,730
3,423,518,581
1,801,490,477
3,949,039,201
1,950,274,156
264,994,676
3,013,956,327
1,255,666,334
699,121,707
17,105,145,923
27,056,535,723
619,500,180
12,606,552,622
21,106,676,129
525,674,020
10,959,604,714
19,358,574,511
Equity
Share capital
Share premium
Reserves
Retained earnings
Total equity
17
18
19
438,204,010
402,310,367
3,378,793,454
8,773,168,786
12,992,476,617
398,367,290
402,310,367
3,280,407,906
7,868,234,438
11,949,320,001
398,367,290
402,310,367
3,267,777,314
7,646,699,029
11,715,154,000
20
21
22
714,518,731
8,849,819
453,162,012
1,176,530,562
590,798,572
53,115,317
468,670,449
1,112,584,338
547,555,895
42,522,004
505,368,235
1,095,446,134
23
24
25
26
27
28
536,895,307
7,271,860,274
667,713,019
1,756,008,202
1,478,731,674
1,176,320,068
12,887,528,544
14,064,059,106
27,056,535,723
1,112,583,550
2,960,437,984
589,428,656
1,668,071,770
648,506,965
1,065,742,865
8,044,771,790
9,157,356,128
21,106,676,129
622,572,152
2,824,962,899
756,742,199
1,442,310,177
118,788,291
782,598,660
6,547,974,378
7,643,420,512
19,358,574,511
Liabilities
Employee benefits
Long term bank loan
Deferred tax liabilities
Non-current liabilities
Bank overdraft
Loans and borrowings
Trade payables
Other payables
Inter-company payables
Current tax liabilities
Current liabilities
Total liabilities
Total equity and liabilities
Revenue
29
Cost of sales
30
Gross profit
Administrative, selling and
distribution expenses
Other income
31
32
Operating profit
18,305,730,559 22,508,056,043 7,941,212,395
(10,109,829,839) (12,685,263,589)
(4,380,426,988)
14,566,843,648
(8,304,836,601)
8,195,900,720
9,822,792,454 3,560,785,407
(6,671,589,171)
(7,670,068,879)
(2,932,028,705)
6,262,007,047
(4,738,040,174)
66,324,095
181,362,534
94,094,936
87,267,598
1,590,635,644
2,334,086,109
722,851,638
1,611,234,471
2,812,902,006
292,900,000
2,520,002,006
Gain from sale of brands
29.2
403,900,000
Investment impairment
provision
9
(30,000,000)
(50,000,000)
(20,000,000)
(30,000,000)
Net finance costs
33
(202,802,570)
(115,368,466)
(22,382,361)
(92,986,105)
1,761,733,074
4,981,619,649
Profit before contribution
to WPPF
Contribution to WPPF
26.1
Profit before tax
Income tax expense
Deferred tax
income/(expense)
Profit after tax
Basic earnings per share
(123,080,882)
(48,668,464)
924,700,813
4,008,250,372
(74,412,418)
1,673,646,420
4,858,538,767
3,933,837,954
(456,540,049)
(675,516,705)
(283,144,205)
(392,372,500)
26,440,165
(319,832,355)
38,101,185
(357,933,540)
(430,099,884)
(995,349,060)
(245,043,020)
(750,306,040)
1,243,546,536
3,863,189,707
34
Current tax
Earnings per share
(88,086,654)
973,369,277
679,657,793
3,183,531,914
35
28.38
88.23
15.51
72.72
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