Committed to ExcellenceCommitted to Excellence

Annual Report 2011

Health Care | Consumer Brands | Agribusinesses | Logistics

ACI's Mission is to enrich the quality of life through responsible application of knowledge, skills and technology. ACI is committed to the pursuit of excellence through world-class products, innovative processes and empowered employees, to provide the highest level of satisfaction to our customers.

Our MissionOur Mission

Quality

Customer Focus

Fairness

Transparency

Innovation

Continuous Improvement

To realise the Mission, ACI will :

Endeavour to attain a position of leadership in each category of our business.

Provide products and services of high and consistent quality, ensuring value for money to our customers.

Promote an environment for learning and personal growth.

Attain a high level of productivity in all our operations through effective utilisation of time and adoption of appropriate technology.

Develop our employees by encouraging empowerment and rewarding innovation.

Ensure superior return on investment through judicious use of resources and efficient operations, utilising our core competencies.

Encourage and assist qualitative improvement of the services of our distributors and suppliers.

Our VisionOur Vision

Our ValuesOur Values

01

Ann

ual R

epor

t 201

1

Health Care | Consumer Brands | Agribusinesses | Logistics

Strategic Business Units

and Subsidiaries

Strategic Business Units

and SubsidiariesACI remains committed to providing customers with

a broad range of quality products from its business operations.

13

Ann

ual R

epor

t 201

1

Auditors Report & AuditedFinancial Statements as at and

for the year ended 31 December 2011

Auditors Report & AuditedFinancial Statements as at and

for the year ended 31 December 2011

Advance Chemical Industries LimitedAdvance Chemical Industries Limited

41

Ann

ual R

epor

t 201

1

Report of the Directors andAudited Financial Statements of the

Subsidiary Companies for the year 2011

Report of the Directors andAudited Financial Statements of the

Subsidiary Companies for the year 2011

Advance Chemical Industries LimitedAdvance Chemical Industries Limited

98

Ann

ual R

epor

t 201

1

Advanced Chemical Industries LimitedConsolidated Statement of Cash Flows

for the year ended 31 December 2010

Note 2010 2009 Taka Taka

A Cash flows from operating activities Cash receipts from customers 14,318,411,990 11,481,092,771 Cash receipts from other income 85,764,387 52,515,033 Receipts from (payments to) other receivables (55,964,368) 12,242,647 14,348,212,009 11,545,850,451 Cash paid for: Purchase of inventories (10,705,135,957) (7,867,645,469) Operating expenses (2,905,243,150) (2,451,995,598) Other payables (66,357,858) 49,477,441 Advances, deposits and prepayments 97,283,724 (525,419,259) Workers' profit participation fund (24,259,093) (64,642,426) (13,603,712,334) (10,860,225,311) Cash generated from operations 744,499,675 685,625,140 Financing costs (575,158,489) (586,140,672) Income tax paid (289,175,394) (170,806,754) (864,333,883) (756,947,426) Net cash used in operating activities (119,834,208) (71,322,286) B Cash flows from investing activities Acquisition of property, plant and equipment (254,306,225) (432,802,469) Acquisition of intangible assets (2,335,201) - Payments for capital work in progress (762,281,056) (343,108,643) Investments (154,607,192) (53,939,466) Sale proceeds from property, plant and equipment 7,235,600 2,278,799 Proceeds from sales of shares of subsidiary - 672,255,160 Net cash used in investing activities (1,166,294,074) (155,316,619) C Cash flows from financing activities Paid to non-controlling interest (32,187,357) (7,982,575) Inter-company debts received/(paid) (911,441) (140,339) Dividend paid (194,716,557) (157,425,483) Short term loan received 959,228,238 137,876,110 Long term loan received/(paid) (94,066,651) 734,156,312 Proceeds from sale of Zero Coupon Bonds 400,006,924 600,010,386 Issue of shares - 42,000,000 Repayment of lease obligation (1,315,809) (5,718,890) Net cash from financing activities 1,036,037,347 1,342,775,521 D Net decrease in cash and cash equivalents (A+B+C) (250,090,935) 1,116,136,616 E Cash and cash equivalents 1 January 138,554,430 (977,582,186)F Cash and cash equivalents at 31 December (D+E) 13 (a) (111,536,505) 138,554,430 Closing balance represents: Cash and cash equivalents 276,000,118 847,873,411 Bank overdraft (387,536,623) (709,318,981) (111,536,505) 138,554,430

52

Ann

ual R

epor

t 201

1

1. Reporting entity Advanced Chemical Industries Limited (ACI Limited) is a public limited company domiciled in Bangladesh which was incorporated on 24 January 1973 as ICI Bangladesh Manufacturers Limited. The address of the Company's registered office is 245 Tejgaon Industrial Area, Dhaka-1208. The consolidated financial statements of the Company as at and for the year ended 31 December 2010 comprise the Company's and its subsidiaries (together referred to the "Group" and individually as "Group entities") and the Group's interest in Associates and jointly controlled entities. The Group primarily is involved in manufacturing of pharmaceuticals, consumer brands, livestock & fisheries products and marketing them along with fertilizer, seeds and other agricultural items. The Company is listed with both Dhaka Stock Exchange Limited (DSE) and Chittagong Stock Exchange Limited (CSE).

1.1 Description of subsidiaries 1.1.1 ACI Formulations Limited

The Company was incorporated on 29 October 1995 as a private limited company under the Companies Act 1994. The principal activities of the Company are manufacturing and marketing of a number of agrochemical and consumer products. The Company became a publicly listed company through direct listing process effective from 18 November 2008 with Dhaka Stock Exchange Limited and with Chittagong Stock Exchange Limited.

1.1.2 ACI Salt Limited

The Company was incorporated on 13 June 2004 as a private limited company under the Companies Act 1994. The principal activity of the Company is manufacturing and marketing of edible branded salt.

1.1.3 ACI Foods Limited

The Company was incorporated on 14 September 2006 as a private limited company under the Companies Act 1994. The main objectives of the Company are manufacturing, processing and marketing of different food items including spices and different snacks items.

1.1.4 ACI Pure Flour Limited

The Company was incorporated on 29 August 2006 as a private limited company under the Companies Act 1994. The main objectives of the Company are to carry on the business of milling, processing, packaging and marketing of wheat flour products.

1.1.5 Apex Leather craft Limited

The Company was incorporated on 22 May 1990 as a private limited company under the Companies Act 1994. There was no business activity of the Company other than letting out its property to ACI Limited.

Advanced Chemical Industries LimitedNotes to the Financial Statements

as at and for the year ended 31 December 2010

53

Ann

ual R

epor

t 201

1

Designed and Production-Creative Communication Ltd.