Malek Spinning Mills Ltd.

Transcription

1 Malek Spinning Mills Ltd. Annual Report

2 25 th ANNUAL REPORT TH ANNUAL REPORT INDEX Subject Page Transmittal Letter 2 Notice to the Shareholders 3 Corporate Governance 4 Audit Committee of Board 5 Executive Management 6 Corporate Review 7 Corporate operational Result for 5 years 8 Message from the Chairman 9 Directors Report Corporate Governance Compliance Status Report Consolidated Auditors Report 24 Statement of Consolidated Financial Position as at 30th June, Statement of Consolidated Comprehensive Income for the year ended 30th June, Statement of Consolidated Cash Flows for the year ended 30th June, Consolidated Statement of Changes in Equity 28 Notes of Consolidated Financial Statements Auditors Report of Malek Spinning Mills Ltd. 41 Statement of Financial Position as at 30th June, Statement of Comprehensive Income for the year ended 30th June, Statement of Cash Flows for the year ended 30th June, Statement of Changes in Equity 45 Notes of Financial Statements SUBSIDIARY REPORT Salek Textile Limited Directors Report Auditors Report 55 Statement of Financial Position as at 30th June, Statement of Comprehensive Income for the year ended 30th June, Statement of Cash Flows for the year ended 30th June, Statement of Changes in Equity 59 NewAsia Synthetics Limited Directors Report 60 Auditors Report 61 Statement of Financial Position as at 30th June, Statement of Comprehensive Income for the year ended 30th June, Statement of Cash Flows for the year ended 30th June, Statement of Changes in Equity 65 J.M. Fabrics Limited Directors Report Auditors Report 68 Statement of Financial Position as at 30th June, Statement of Comprehensive Income for the year ended 30th June, Statement of Changes in Equity 71 Statement of Cash Flows for the year ended 30th June, Titas Spinning & Denim Company Limited Auditors Report 73 Statement of Financial Position as at 31st March, Statement of Comprehensive Income for the period from 1st July 2013 to 31st March, Statement of Cash Flows for the period from 1st July 2013 to 31st March, Statement of Changes in Equity 77 Form of Proxy 79 Malek Spinning Mills Limited Registered Office: 117/A, Tejgaon Industrial Area, Dhaka-1208, Bangladesh Corporate & Share Office: Mehnaj Monsur Tower House No-11A, Road No-130, Gulshan-1, Dhaka-1212 Tel: , , Fax: , allabj@dhaka.net, Website:

3 MALEK SPINNING MILLS LIMITED TRANSMITTAL LETTER The Shareholders Bangladesh Securities and Exchange Commission Registrar of Joint Stock Companies & Firms Dhaka Stock Exchange Ltd. Chittagong Stock Exchange Ltd. Sub: Annual Report for the year ended 30th June, Dear Sir (s), We are pleased to enclose herewith a copy of Annual Report together with the Audited Financial Statements comprising Consolidated and Separate Statement of Financial Position as at June 30, 2014, Statement of Comprehensive Income, Statement of Cash Flows and Statement of Changes in Equity for the year ended June 30, 2014 along with notes thereon of Malek Spinning Mills Limited and its Subsidiaries for your information and record. Yours sincerely (Syed Saiful Haque) Company Secretary Dated: November 06, 2014 MALEK SPNNING MILLS LIMITED 2

4 Annual Report 2014 MALEK SPINNING MILLS LIMITED NOTICE OF THE 25TH ANNUAL GENERAL MEETING Notice is hereby given that the 25TH ANNUAL GENERAL MEETING of the shareholders of the Company will be held on Thursday, 18th December, 2014 at a.m. at Trust Milonayaton, 545, Puraton Biman Bandar Sarak (Adjacent to Shahid Bir Shresta Jahangir Gate), Dhaka Cantonment, Dhaka-1206 to transact the following business: Agenda-1. To receive, consider and adopt the Audited Financial Statements for the year ended 30th June, 2014 together with the Report of the Directors and the Auditors thereon. Agenda-2. To declare dividend for the year ended 30th June, Agenda-3. Agenda-4. To elect Directors in terms of the relevant provision of the Articles of Association of the Company. To appoint Auditors for the year ended 30th June, 2015 and to fix their remuneration. By order of the Board Syed Saiful Haque Company Secretary Dated: November 06, 2014 Notes: (i) (ii) (iii) The Shareholders whose names would appear in the Share Register of the Company and/or Depository Register of CDBL as on record date i.e. November 18, 2014 would be entitled to attend at the AGM and to receive the dividend. The Proxy form must be affixed with requisite revenue stamp and be deposited at the Corporate & Share Office of the Company not less than 72 hours before the time fixed for the meeting. Admittance to the meeting venue will be on production of the attendance slip sent with the Annual Report. (iv) (v) The Annual Report is available in the Company s website at No benefit in cash or kind, other than in the form of cash dividend or stock dividend, shall be paid to the holders of equity securities in terms of the Notification No. SEC/SRMI/ /1950 dated 24th October, 2000 for attending this AGM of the company. 3

5 CORPORATE GOVERNANCE: Corporate Governance involves decision making processes for any corporate body as a going concern for the benefit of all concerned, present and future. These decisions may be categorized as policy & strategic, operational and executing, performance & evaluation and sharing of the accretional assets between present and future cohorts. The involvement of the entrepreneur in all these areas invokes decisions making governance on a continuous basis, the degree of involvement being variable with the extent of delegation of authority top down and reporting for accountability bottom up of the management echelon. These aspects of governance are shared by the Board of Directors, Executive Management, operational participants and workers and others in fulfillment of the common goals that converge in increasing the benefits of the stakeholders. To this end entire corporate governance efforts are blended with good governance practices as ethically and morally acceptable standards under a given socio politico environmental phenomenon of our society in which we work, live and exist. The organs through which the corporate governance functions are carried out: BOARD OF DIRECTORS: (a) Constitution: The Board of Directors, the top Management echelon, consisting of the founder entrepreneurs/ successors and two Independent Directors, provides the policy and strategic support and direction for the entire range of the corporate activities. The Board of Directors consist of Eight (8) members including two Independent Directors with varied education and experience which provides a balancing character in decision making process. The Board is re-constituted every year at each Annual General Meeting when one-third of the members retire and seek re- election. A director is liable to be removed if the conditions of the Articles of Association and the provisions of the Companies Act 1994 are not fulfilled. (b ) Role & Responsibilities: The main role of the Board of Directors, which is the highest level of authority, is to provide general superintendence, oversee the operations and control the affairs of the Company through appropriate delegation and accountability processes via the lines of command. However the Board of Directors hold the ultimate responsibility & accountability with due diligence for conducting the activities of the Company as per provisions of law in the interest of the shareholders, the stakeholders, the state and the society. The Board of Directors, in fulfillment of its responsibility hold periodic meetings, at least once a quarter and provides appropriate decisions/directions to the Executive Management. Such meetings usually consider operational performance, financial results, review of budgets, capital expenditure, proposals for BMRE or new projects/divisions/product lines, procurement of funds by issue of shares or borrowing, procurement of raw materials, plant & machinery, pricing of products/discounts, recruitment, training and promotion of officers, approval of audited accounts and distribution of dividends and other interest of the stakeholders including the employees and workers. The Board of Directors take special care in designing and articulating productivity and compensation plans of employees and workers and rewarding them appropriately on the basis of quality and quantity of performance as an incentive. Board also remains responsible for removal of operational hazards to life and health of workers, friendly environmental work condition and social relationship as demanded of good citizen in a country. (c) Relationship with Shareholders and Public: The shareholders as owners are required to be provided with material information on the Company s operation quarterly, half-yearly and annually, the latter at the AGM. They are also provided routine services by the Company Secretary. The Board is, however, responsible to the public for publication of any Price Sensitive Information as per BSEC Regulation. A qualified & experienced person is in charge for all these responsibilities as Company Secretary. (d) Relationship with Government: In its role on accountability to the government, the Board of Directors ensure payments of all dues to government in the form of import duty, custom duty and port charges, VAT, Corporate Taxes and other levies as and when they become due on the basis of actual operations and make sure to avoid corruption. This has enabled the Company to enhance its contribution to the National Exchequer on a progressive rate year after year. (e) Relationship with Financiers/ Bankers: The Board of Directors oversees the financial transactions and ensures to meet company s commitments to the lenders without default. (f) Relationship with Suppliers: As the Company has to import almost all the raw materials from abroad, it maintains cordial and mutually beneficial interest with its international as well as local suppliers. This has enabled the company to avoid any legal disputes in international/local courts and enhanced the Company s image as a good customer. MALEK SPNNING MILLS LIMITED 4

6 Annual Report 2014 (g) Corporate Social Responsibilities (CSR): The Board of Directors is also aware of the Corporate Social Responsibilities (CSR) especially in the areas of gender equality, race-religion- regional equality, non- employment of child labour, human rights, environmental pollution, social marketing and social-activities. SEPARATE ROLE OF THE CHAIRMAN AND MANAGING DIRECTOR: The positions of Chairman and Managing Director are held by separate persons. The Chairman is responsible for the functions of the Board while the Managing Director serves as the Chief Executive Officer (CEO) of the Company. CHIEF FINANCIAL OFFICER, HEAD OF INTERNAL AUDIT AND COMPANY SECRETARY: The Company has appointed Mr. B. K. Chaki, as Chief Financial Officer, Md. Rakibul Islam, as Head of Internal Audit and Mr. Syed Saiful Haque, as Company Secretary of the Company as per requirement of Bangladesh Securities and Exchange Commission. AUDIT COMMITTEE OF BOARD: The Board of Directors has constituted an Audit Committee of the Board consisting of three Directors. The Audit Committee is headed by the Independent Director, Mr. M. Sekander Ali, an MBA and a Senior Development and Investment Banker of the Country. Other members are Dr. Shamim Matin Chowdhury, Director and Mr. Azizur Rahim Chowdhury, Director. The Audit Committee carries out its responsibilities as per the provisions of law and submits its report to the Board of Directors from time to time. The Audit Committee shall also co-ordinates with the Internal and External Auditors as and when required. The Audit Committee ensures that adequate internal checks & balances supported by adequate MIS are in place for detection of errors, frauds and other deficiencies. The other responsibilities include inter alia, not being limited to, the prevention of conflict of interest between the Company and its Directors, officials, customers, suppliers, government and any other interest groups and detect or remove any scope of insider trading in the Company s stock. The Audit Committee also ensures compliance of requirements of BSEC and other agencies. OTHER GOVERNANCE APPARATUS: The Company, in its efforts for Corporate Good Governance Practices, uses a series of top ranking professional service providers including Bankers, Insurers and Technical experts who continuously assist the Board of Directors and the Executive Management in properly discharging their duties to all the shareholders, stakeholders, the Government, and the Public as highlighted below: (a) Independent Directors: In compliance of the BSEC Regulations on Good Governance, the Board of Directors as empowered by the Regulations, appointed Mr. M. Sekander Ali, one of the Senior Development/Investment Bankers of the country, former Managing Director of Bangladesh Shilpa Bank/Bangladesh Shilpa Rin Sangstha/Investment Corporation of Bangladesh and Senior Adviser, the Bangladesh Securities and Exchange Commission and Md. Qamrul Huda, one of the Senior Bankers of the country, former Managing Director of Pubali Bank Limited/Eastern Bank Limited and former Chief Executive of BCCI and additional Managing Director of Uttara Bank Limited and General Manager of Janata Bank, as the non-shareholder Independent Directors. It is expected that their expertise would help contribute to the further disclosure and protect the interest of all investors in general and smaller investors in particular. (b) Bankers: The degree of efficient business operation largely depends on the quality of efficiency of banking services received by the company. Efficient banking service brings down cost of operations. On the other hand, cost of financial services and interest on the lending by the banks are also required to be the minimum. With this end of view, the company has established long term business relationship with the banks namely Eastern Bank Limited, Dhaka Bank Limited, HSBC, One Bank Limited and Trust Bank Limited who provide most efficient service at minimum cost/interest that benefit the shareholders. The company has neither ever defaulted in any commitment with its Bankers nor did get entangled in legal dispute at any court premises. (c) Insurer: Insurance services cover certain operational risks which are required by law/business practices to be covered by legitimate insurance service providers for protection of the interest of the company, the investors. To this end, the company has to select insurer with the most efficient, reputed and financially sound history so that claims, if any, are settled promptly and the premium rates are market competitive. The Company, based on these considerations, is maintaining 5

7 insurance business relationship with the highly reputed and publicly listed insurance companies namely Pioneer Insurance Co. Ltd, Eastland Insurance Co. Ltd., Central Insurance Co. Ltd and Reliance Insurance Co. Ltd. The company has not yet faced any dispute over any claims and the company enjoys special premium rates which protects the interest of the investors. (d) Auditors: The role of the auditors in certification of the financial statement is the most significant aspect of Corporate Governance and protection of interest of investors. As evident from the Annual Reports, the company rigidly follows the code of International Accounting Standards (IAS) and International Standard of Auditing (ISA) with legally required disclosures of Accounts and Financial Statements. This has been possible due to the high level capability and integrity of M/S. Malek Siddiqui Wali, Chartered Accountants whose performance has played a very trustworthy role in the protection of interest of the investors. EXECUTIVE MANAGEMENT: The Executive Management is led by the Managing Director (CEO) who is appointed by the Board of Directors for a term of 5 years (renewable) with the approval of shareholders in the Annual General Meeting. The Managing Director is supported by professional, well educated, trained and experienced team consisting of Mr. Moshiur Rahman, Director and Mr. Azizur Rahim Chowdhury, Director, Mr. Ghaus Mohammad, Director-HR & Admin, Mr. Hasan Mahmood, Executive Director and Mr. B. K. Chaki, Chief Financial Officer and a host of Senior Executives in the hierarchy of management. SEGMENT REPORT: The company s operations are carried out on a single business and geographic segment within which the company operates as such no segment reporting is felt necessary. RISK PERCEPTION: The Company Management perceives investment risk within the national and international economic situation in relation to legal and moral requirements involving inter alia, intellectual property right, scientific invention, WTO Regulation etc and monetary and fiscal investment policies and has prepared its production & marketing strategy to meet the challenges from these risks. WE STRIVE FOR We in Malek Spinning Mills Ltd., strive, above all, for top quality products at an appropriate cost. We owe our shareholders and strive for protection of their capital as well as ensure highest return and growth of their assets. We strive for best compensation to all the employees who constitute the back-bone of the management and operational strength of the Company. We strive for the best co-opeartion of the creditors and debtors the banks & financial institutions who provide financial support when we need them, the suppliers of raw materials & suppliers who offer them at the best prices at the opportune moments, the providers of utilities- power, gas & water etc. and the customers who buy our products and services by redeeming their claim in time by making prompt payment and by distributing proper product on due dates to our customers. We strive for fulfillment of our responsibility to the Government through payment of entire range of due taxes, duties and claims by various public agencies like municipalities etc. We strive, as responsible citizen, for a social order devoid of malpractices, anti environmental behaviors, unethical and immoral activities and corruptive dealings. We strive for practicing good-governance in every sphere of activities covering inter alia not being limited to, disclosure & reporting to shareholders, holding AGM in time, distribution of dividends and other benefits to shareholders, reporting/dissemination of price sensitive information etc. We strive for equality between sexes, races, religions and regions in all sphere of operation without any discriminatory treatment. We strive for an environment free from pollution and poisoning. MALEK SPNNING MILLS LIMITED 6

8 Annual Report 2014 CORPORATE REVIEW I. MANAGEMENT APPARATUS: (a) (b) (c) (d) (e) BOARD OF DIRECTORS: Mr. A.F.M. Zubair Mr. A. Matin Chowdhury Dr. Shamim Matin Chowdhury Mr. Azizur Rahim Chowdhury Ms. Saima Matin Chowdhury Mr. Moshiur Rahman Mr. M. Sekander Ali Md.Qamrul Huda AUDIT COMMITTEE: Mr. M. Sekander Ali Dr. Shamim Matin Chowdhury Mr. Azizur Rahim Chowdhury MANAGEMENT COMMITTEE: Mr. A. Matin Chowdhury Mr. Moshiur Rahman Mr. Azizur Rahim Chowdhury Mr. Ghaus Mohammad Mr. Hasan Mahmood Mr. B. K. Chaki SENIOR CORPORATE OFFICIALS: Mr. Ghaus Mohammad Mr. Hasan Mahmood Mr. B. K. Chaki Mr. Syed Saiful Haque Md. Rakibul Islam AUDITORS: Malek Siddiqui Wali Chairman Managing Director Director Director Director Director (Nominee of Paragon Poultry Ltd.) Independent Director Independent Director Chairman Member Member Chairman Member Member Member Member Member Director HR & Admin Executive Director Chief Financial Officer Company Secretary Head of Internal Audit Chartered Accountants (f) BANKERS: i. Eastern Bank Ltd. Principal Br, Dhaka ii. Dhaka Bank Ltd. Karwan Bazar Br, Dhaka iii. The Trust Bank Ltd. Sena Kalyan Br, Dhaka iv. HSBC Main Br, Dhaka v. One Bank Ltd. Principal Br, Dhaka vi. AB Bank Ltd. Principal Br, Dhaka vii. BRAC Bank Ltd. Head Office, Dhaka (g ) INSURERS: i. Pioneer Insurance Co. Ltd. ii. Reliance Insurance Co. Ltd. iii. Eastland Insurance Co. Ltd. iv. Central Insurance Co. Ltd. ( h) LISTING: Dhaka Stock Exchange Ltd. Chittagong Stock Exchange Ltd. (i) (j) (k) REGISTERED OFFICE: 117/A, Tejgaon Industrial Area, Dhaka CORPORATE AND SHARE OFFICE: Mehnaj Monsur Tower House # 11A, Road # 130, Gulshan-1, Dhaka. FACTORY: Shafipur, Kaliakoir, Gazipur. 7

9 II. CORPORATE HISTORY: Year of Incorporation : 02 November, 1989 Year of Commencement of Production : 01 January, 1991 Year of Conversion to Public Ltd. Co. : 14 September, 2008 Year of Initial Public Offering (IPO) : 2010 Stock Exchange Listing date : 2nd August, 2010 (DSE & CSE) Authorized Capital : Tk.3,000 Million Paid Up Capital : Tk.1,936 Million Product Lines : Combed and carded yarn of various Counts Number of Employees (30th June 2014) : a. Executive & staff : 250 b. Workers : 1,299 Subsidiary Companies : a. Salek Textile Ltd. b. NewAsia Synthetics Ltd. c. J.M. Fabrics Ltd. III. FIVE YEARS OPERATIONAL RESULTS: (Figures in thousand Tk.) Turnover 3,065,013 3,262,553 2,966,197 3,509,105 1,978,824 Gross Profit 395, ,463 10, , ,937 Net Profit (Before Tax) 249, ,158 (351,237) 131, ,044 Net Profit (After Tax) 215, ,442 (351,237) 101, ,189 Shareholder s Equity 5,483,097 5,461,466 5,402,999 4,806,251 20,169,468 Total Assets 7,113,508 7,504,000 7,927,057 7,254,501 20,926,009 Total Current Assets 3,043,633 3,353,939 4,540,220 4,722,005 18,782,534 Total Current Liabilities 1,405,194 1,766,205 1,875,701 2,332, ,540 Current Ratio ** Number of shares outstanding 193,600, ,600, ,000, ,000, ,000,000 Face Value per share Shareholder s Equity per Share *** Earning per share (MSML) (1.81) Earning per share (Consolidated) (1.31) **** Dividend Declared Per Share (Stock) Nil Nil 10% (s) 10% (s) Nil Dividend Declared Per Share (Cash) Nil Nil 1.00 Net Operating Cash Flow per Share (6.78) Number of Shareholders * 27,537 30,699 30,947 25, Human Resources: Executives & Staff Workers ,342 1,356 1,343 1,160 * Number of shareholders considered as on 30th June, ** Current Ratio is calculated in the year excluding IPO share money deposit. *** Shareholders Equity per share in the year is excluding IPO share money deposit. **** In Earning per share (consolidated) number of share considered 193,600,000 shares. MALEK SPNNING MILLS LIMITED 8

10 Annual Report 2014 MESSAGE FROM THE CHAIRMAN Dear Shareholders, It is a great pleasure for me to welcome you on behalf of the Board of Directors to the 25thAnnual General Meeting of Shareholders of the Company. The Directors report containing inter alia Audited Accounts and Auditors report thereon for the year ended 30th June 2014 is enclosed for your perusal. The year under review had passed through socio-politico turbulence having a deep scar on the economy and industry which had just started to stabilize after the socio-politico stabilization since 2008 election. In addition, the country was hit by the terrible tragedy of the collapse of Rana Plaza, which resulted in widespread panic amongst buyers and affected the Bangladesh industry s image and reliability to our customers. This tragedy and other violence in the RMG sector caused international buyers and Agencies to impose various conditions of compliance through BGMEA/BKMEA including fire and building safety, for which we had to make extensive investments in order to remain fully compliant. Our sincere efforts were rewarded positively through recognition from our buyers who have vetted our factories to be safe and compliant and in turn, resulted in increased sales over previous years in our RMG concerns. However, the spinning industry was hard hit by increased cotton prices in the international market and lower selling price (in deemed export market) due to less demand in the market as many other RMG concerns had less orders after the Rana Plaza tragedy. In addition, the unreliable gas supply has been a constant headache for the industry and has resulted in increased energy costs to produce power using diesel fuel. We hope that with improvement of power situation in the country and stabilization of socio-politico situation, the industrial performance in future would lead us to a new height on the record to Middle Income Nations. I would also like to take this opportunity to thank our Bankers, Bangladesh Securities and Exchange Commission, Stock Exchanges and our shareholders for their cooperation and support to our Company. Looking forward to better days ahead. A. F. M. Zubair Chairman 9

11 MALEK SPINNING MILLS LIMITED DIRECTORS REPORT TO THE SHAREHOLDERS FOR THE YEAR Dear Shareholders, In terms of provisions of section 184 of the Companies Act 1994, Rule 12 of the Securities and Exchange Rules 1987, SEC Notification dated 07 August, 2012 and IAS (International Accounting Standards) codes as adopted by the Institute of Chartered Accountants of Bangladesh (ICAB), it is the pleasure of the Board of Directors to submit its Report to the Shareholders for the year ended 30 June, 2014 in the following paragraphs: The company currently owns 3 (three) subsidiaries as follows: 1. Salek Textile Limited- An open end yarn and weaving manufacturing unit with a capacity of 14,621 tons per annum yarn and 9,600,000 yards fabrics. 2. New Asia Synthetics Limited- A project promoted for setting up a polyester staple fibre and chips plant the implementation of which has since been kept in abeyance due to non-availability of energy/fuel & gas. 3. J.M. Fabrics Limited- A knitting, dyeing and garments factory located at South Nayapara, 6 No. Dogri, P.O. Bhawal, Mirzapur, Gazipur with a capacity of million pcs. of T-Shirt & Intimate garments per annum which has been acquired on Titas Spinning & Denim Company Ltd.- A subsidiary of Malek Spinning Mills Limited have been amalgamated with our another subsidiary company Salek Textile Limited as per order of the Hon ble High Court Division of the Supreme Court of Bangladesh in the Company Matter No.248 of 2013 dated COMPANY S OPERATIONS: TEXTILE SECTOR: (i) Industry outlook and possible future developments in the industry: Bangladesh has emerged as a very strong supplier in the global textile and clothing industry. This is proven by the fact that even after socio-politico turbulence and a disaster like the Rana Plaza collapse, the industry still remains vibrant, although it went through a temporary slump. The possibilities of growth in this area are enormous and the challenges that need to be sorted out urgently and efficiently are: (a) Labor relations (b) Labor productivity (c) Energy (d) Other infrastructures (e) Law and order (f) Financial costs If these issues are appropriately addressed in time, the growth is expected to improve substantially as Bangladesh has already attained the name for being a quality manufacturer who is very reasonably priced. CAPACITY/PRODUCTION (ii) Segment-wise or product wise performance: Our capacity utilization was almost same as the previous year. However, the ratio of cost of goods sold rose to 87.10% compared to previous year 84.05% due to decrease of selling price by approximately 6%. The financial expenses decreased from Tk million in to Tk million in (6.14% -3.51%) by 2.63% of sales which helped us to attain a reasonable profit. The installed production capacity of the company is 35,000 kgs. Yarn per day with 360 working days of 63,624 Spindles. Comparative positions of its operating performance are given below: Sl. No. Description (Kg.) (Kg.) (Kg.) 01 Production capacity 12,600,000 12,600,000 12,600, Actual Production 10,640,598 10,643,465 10,286, Capacity Utilization 84.45% 84.47% 81.64% 04 Quantity Sold (kg) 10,708,092 10,707,591 9,309, Sales Revenue (Tk.) 3,065,012,791 3,262,553,013 2,966,197, Average selling price (Tk.) From the above we can notice the following: (a) The revenue earning had decreased from Tk billion to Tk billion because of mainly decrease in selling price. (iii) Risk and concerns: All sectors of the textile industry face many of the similar challenges. These are lack of power, labor unrest, political unrest resulting hartal causing disruption of production and cost of fund. Gas price has not yet been increased for the industries but erratic supply had affected production. (iv) Analysis of Cost of Goods Sold, Gross Profit Margin and Net Profit Margin: (a) Cost of Goods Sold: The cost of goods sold was 87.10% during the year as compared to 84.05% during the previous year, an increase of 3.05% due to decrease of sales. The decrease in production quantity was 2,867 kg over the last year. Production capacity utilized during the year was 84.45% compared to 84.47% from previous year, a fall by 0.02%. (b) Export: The company had achieved an export turnover of Tk.3, million during the year ended 30th June Last year s export turnover was Tk. 3, million. The turnover had decreased by 6.05% over the last year. (c) Gross Profit: Gross Profit earned during the year was Tk million as against last year s gross profit of Tk million. Gross profit decreased due to decreased of selling price compared to last year. MALEK SPNNING MILLS LIMITED 10

12 11 Annual Report 2014 (d) Net Profit/(Loss): The company had succeeded in earning a lower Net Profit of Tk million as compared to last year s Net Profit of Tk million. The gross profit and the operating profit declined during the year over the previous year due to reduced production/sales and lower selling prices. However, the Net Operating Profit marginally increased due to higher non-operating income. However, due to increased provision for Corporate Taxes during the year, the Net Profit after tax had decreased substantially with resultant fall in EPS from Tk.1.24 in to Tk.1.11 during the year. (v ) Extra-Ordinary gain or loss: During the year extra-ordinary gain of Tk.41,477,984 was earned from cash incentive & interest income from bank which has been shown as Non Operating Income in the Statement of Comprehensive Income and in the note no.22.1 in the Notes of Account. (vi) Related party transactions: Related party transactions are depicted in Note no.27.1 in the Notes of Account. (vii) Utilization of proceeds from public issues and/or right issues: There were no public issues and/or right issues during the year. (viii) Financial results after the company goes for Initial Public Offering (IPO), Repeat Public Offering (RPO), Rights Offer, Direct Listing, etc.: Initial Public Offering was made on There were no Repeat Public Offering, Rights Offer, Direct Listing, etc. in the history of the company. (ix) Variance between Quarterly Financial performance and Annual Financial Statements: The company s earnings in quarter 2 & 3 was lower that of quarter 1 because of higher cost of goods sold in the quarters 2 & 3 from quarter 1. Profitability had increased during quarter 3 due to lower cost of goods sold and non-operating income in last quarter resulted in higher profitability during quarter 4. (x) Remuneration to directors including independent directors: The remuneration of Directors including Independent Directors are depicted in Note no.3.35 in the Notes of Account. (xi) to (xvi) Statement of Directors on Financial Reports: The above reports are depicted in Annexure-I. (xvii) Significant deviations from the last year s operating results: The company s Operating Profit ratio during the year , had marginally fallen to 7.19% of sales as compared to last year s Operating Profit ratio of 7.88% i.e. 0.69%, an insignificant decrease of Operating Profit on sales compared to last year. (xviii) Key operating and financial data of last 5 (five) years have been presented in summarized form in page no.08. (xix) Dividend: Board of Directors has recommended for declaration of a Cash 10% i.e. Tk.1.00 (one) per share of Tk each for ordinary shares held by the shareholders as on the Record Date. (xx) The number of Board Meeting and the Attendance of Directors during the year , stated in Annexure-I. (xxi) The pattern of shareholding as required by clause 1.5 (xxi) of the BSEC Notification dated 07 August 2012, stated in Annexure-II. (xxii) Appointment/re-appointment of the directors: Brief resume and other required information of the directors who seek re-appointed in the ensuing AGM are stated in Annexure-III. CAPITAL EXPENDITURES: The following Capital Expenditure was incurred during the last three years , & Description (Tk.) (Tk.) (Tk.) Land and Land Development 1,825, ,994 69,900 Plant & Machinery 34,933,578 41,102, ,000 Furniture & Fixtures 19, ,550 76,500 Office Equipments 322, ,120 1,228,040 Motor Vehicles 2,910,000 1,860, Telephone (PABX) installation -- 90, Generator -- 26,814, Total 40,011,053 70,786,630 2,324,440 SUBSIDIARY OPERATION: Salek Textile Limited, NewAsia Synthetics Limited and J.M. Fabrics Limited are subsidiaries and as such Directors Report along with, Auditors Report and Audited Accounts containing Statement of Financial Position, Statement of Comprehensive Income, Statement of Cash Flows & Statement of Changes in Equity have been included as part of this report. It may be noted that due to Amalgamation of Titas Spinning & Denim Company Limited with Salek Textile Limited 09 (nine) months audited financial statements of Titas Spinning & Denim Company Limited i.e. 1st July 2013 to 31st March 2014 have been annexed. (a) Salek Textile Limited: Titas Spinning & Denim Company Ltd. was amalgamated with Salek Textile Limited with effect from as per order of the Hon ble High Court Division of the Supreme Court of Bangladesh dated , Company Matter No. 248 of 2013 and for raising of paid up capital consent order No. BSEC/CI/CPLC (Pvt)-333/2011/446 dated June 24, 2014 of Bangladesh Securities and Exchange Commission (BSEC) the paid up capital of the company increased from Tk. Tk.400,000, to Tk.482,608, by issue and allotment of 826,087 ordinary shares of Tk each in favors of the shareholders of Titas Spinning & Denim Company Ltd. The share exchange ratio was 01 (One) share of Salek Textile Limited for every 4.60 (Four point six zero) shares of Titas Spinning & Denim Company Ltd. (TSDL), as approved by the shareholders of Malek Spinning Mills Ltd. (MSM) in the 24th Annual General Meeting held on 24th December, 2013.

13 As a result the Company (MSM) holds 97.93% share of Salek Textile Limited i.e. 4,725,970 shares of Tk each amounting to Tk. 472,597, out of 4,826,087 shares of Tk each amounting to Tk.482,608, To comply the condition No. 9 of capital raising consent order No. BSEC/CI/CPLC (Pvt)-333/2011/446 dated June 24, 2014 of Bangladesh Securities and Exchange Commission (BSEC) and Notification No. SEC/CMRRCD/ /36/Admin/03-44 dated May 05, 2010 published in the Bangladesh Gazette dated the status of the Company was converted from Private Limited Company to Public Limited Company on 23rd August, Subsequently the par value of share also was changed from Tk per share to Tk per share. After amalgamation production capacity stood as follows: Yarn 14,621,000 kg. and Fabric 9,600,000 yards per annum. The project had started commercial operation in April The project has 10 Schlafhorst Autocoro machines of 360 Rotors each with production capacity of 14,621,000 kgs yarn per annum and 9,600,000 yards fabric. The company made additional investment of Tk.21,662,000 in Land & land development, Motor vehicle and in Gas line installation during the year The company is producing open end yarn for knitting, denim and home textile products and fabric. The Company s operating results as on and are given below: Description Production (Kg) Yarn 10,455,062 11,145,027 Production (Yards) Fabric for 3 months 1,596, Sales Revenue (Tk.) 2,178,916,498 2,291,717,388 Gross Profit (Tk.) 342,496, ,083,571 Net Profit after tax holiday reserve (Tk.) 135,713, ,749,214 Gross Margin 15.72% 15.84% Net Margin 6.23% 6.27% EPS (Tk.) * NAV (Tk.) * Earning per share has been restated. (b) NewAsia Synthetics Limited: The Company (MSM) holds % share of the NewAsia Synthetics Ltd. i.e. 4,964,650 shares of Tk each amounting to Tk. 496,465, out of 5,000,000 shares of Tk each amounting to Tk.500,000, as on 30th June, The company had increased its paid up capital from Tk.93,715, to Tk.500,000, after obtaining capital raising consent from Bangladesh Securities and Exchange Commission (BSEC) vide their letter SEC/CI/CPLC-442/2013/2903 Dated December 19, Due to non-availability of Gas connection from Titas Gas Transmission & Distribution Company Ltd. the project has been shelved until the situation changes regarding the availability of gas connection. The Company made additional investment of Tk.20,102, during the year under Land & Land Development. The Net Assets Value (NAV) per share of the company stood at Tk (c) J.M. Fabrics Limited: The Company (MSM) holds 99.99% share of J.M. Fabrics Limited i.e. 3,999,900 shares of Tk each amounting to Tk. 399,990, out of 4,000,000 shares of Tk each amounting to Tk.400,000, The Company is engaged in the production of 100% export oriented garments and knit fabric with a production capacity of 12 (twelve) M. Tons of knitted and dyed fabric and 68 (sixty eight) lines of cutting and sewing operation with all necessary facilities, storage etc. The company was acquired on and during the year additional investment of Tk million has been made for BMRE. The investments made during the year as follows: Particulars Taka Factory Structures, Shades & Building 6,578,366 Plant & Machinery 83,628,482 Other Assets 13,308,650 The Company s operating results as on and are given below: Description Production (Pcs) 16,983,987 6,436,574 Sales Revenue (Tk.) 2,653,244,545 1,486,848,703 Gross Profit (Tk.) 116,721,267 93,122,622 Net Profit (Tk.) 72,365,854 63,678,226 Gross Margin 4.40% 6.26% Net Margin 2.73% 4.28% EPS (Tk.) NAV (Tk.) (d) Titas Spinning & Denim Company Ltd.: As per order of the Hon ble High Court Division of the Supreme Court of Bangladesh dated of Company Matter No. 248 of 2013 Titas Spinning & Denim Company Ltd. was dissolved automatically with effect from FINANCIAL RESULTS: The company s (MSM) operating financial results, as compared to the previous year are summarized as follows: (Tk. in million) Description Sales Cost of goods sold Gross profit Operating expenses Financial expenses MALEK SPNNING MILLS LIMITED 12

14 Annual Report 2014 Operating profit Non -operating Income Net Operating Profit/(Loss) Contribution to WPPF Provision for Income Tax Net profit (after tax) Gross Margin 12.90% 15.95% Net Margin 7.02% 7.37% Earning per share EPS (Tk.) Return on Equity (ROE) 3.93% 4.43% No. of shares outstanding 193,600, ,600,000 Face value per share (Tk.) Consolidated Earning per share EPS (Tk.) Observation on Financial Result: 1. Turnover had marginally decreased due to lower selling price and lower output. 2. Gross Profit and Net Profit had marginally decreased due to marginal increase in Cost of Goods Sold/Operating expenses. APPROPRIATION OF PROFIT: The Board of Directors recommended for appropriation of profit as follows: Retained Earnings brought forward from previous year : Tk. 202,019, Less: Dividend Distribution for the year : (Tk. 193,600,000.00) Balance surplus brought forward : Tk. 8,419, Add: Net Profit (after tax) during the year : Tk. 215,231, Add: Adjustment of revaluation surplus of fixed assets : Tk. 71,176, Total net free surplus available for appropriation : Tk. 294,827, Appropriation Proposed: (a) Cash 10% i.e. Tk.1.00 (one) per share of Tk each : (Tk. 193,600,000.00) Retained Earnings after payment of Dividend : Tk. 101,227, DECLARATION OF DIVIDEND: In the line of proposed appropriation of profit, the Board of Directors proposed and recommended for declaration of Cash Dividend at the rate of 10% i.e Tk.1.00 (one) per share of Tk each for the year This will involve an amount of Tk.193,600,000 out of Reserve & Surplus/Retained Earnings (free reserves). The cash dividend will be available to the Shareholders whose names appear in the Share Registers of the Company or in the Depository on the record date. CONSOLIDATION OF ACCOUNTS: In terms of BSEC Regulations, the Company has consolidated the Accounts following the codes of International Accounting Standard -28 & IFRS-10 reflecting shareholders gross benefits/value of investments. ELECTION OF DIRECTORS: Rotation of Directors: Pursuant to Article 110 of the Articles of Association of the Company Dr. Shamim Matin Chowdhury, Director and Mr. A. F. M. Zubair, Director would retire by rotation and being eligible as per Article 112 of the Articles of Association of the Company they offered themselves for re-election. Brief resume and other information of the above mentioned directors as per clause 1.5 (xxii) of BSEC notification dated 7th August, 2012 are depicted in Annexure III. APPOINTMENT OF AUDITORS: M/s. Malek Siddiqui Wali, Chartered Accountants, existing auditors of the company, will retire at this Annual General Meeting and being eligible offered themselves for re-appointment as auditors of the company for the year The Board recommended M/s. Malek Siddiqui Wali, Chartered Accountants, 9-G, Motijheel C/A, Dhaka-1000 for re-appointment as auditors of the Company of the year with fixation of their remuneration. CORPORATE GOVERNANCE: Corporate Governance is the practice of good citizenship, through which the Company is governed by the Board, keeping in view its accountability to the stakeholders and to the society. A statement in pursuance to clause 1.5, report of compliance, audit committee report as per clause 3.5, certificate from professional accountant as per clause 7(i) and a status of compliance as per clause 7(ii) of the BSEC Notification No.SEC/CMRRCD/ /134/Admin/44 dated 07th August 2012 are depicted/disclosed in the ANNEXURE -I, II, III, IV, V and VI respectively. ACKNOWLWDGEMENT: The Directors are pleased to record with appreciation and gratitude the co-operation and support provided by Shareholders, Customers, Bankers, Insurance Companies, Suppliers, BSEC, DSE, CSE, CDBL and dedication by Workers and Employees of the company without whose active support the result achieved would not have been possible. Looking forward for a bright future for all of us. On behalf of the Board of Directors, A. F. M. Zubair Chairman In the event of conflict between English text and Bangla text of this report, English text shall prevail. 13

15 FINANCIAL PERFORMANCE 3,500,000 SALES & PROFITABILITY OVER 3 YEARS TIME 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 Sales Gross Profit Net Profit 500, , Particulars Sales 2,966,197 3,262,553 3,065,013 Gross Profit 10, , ,471 Net Profit (351,237) 240, ,231 (Tk. in,000) PRODUCTION VS. SALES FIGURES TABLE 11,000 10,500 10,000 9,500 Production Sales 9,000 8, Particulars Production 10,286 10,643 10,640 Sales 9,309 10,707 10,708 (Quantity in, 000 Kg.) EARNING PER SHARE (EPS) Earning Per Share Particulars Earning Per Share (1.81) MALEK SPNNING MILLS LIMITED 14

16 Annual Report 2014 gv jk w úwbs wgjm& wjwg UW eq ii Rb kqvi nvìvie `i cöwz cwipvjbv cl `i cöwz e`b m vwbz kqvi nvìvie `t cwipvjbv cl ` Avb `i mv _ Kv úvbx AvBb 1994 Gi 184 bs cwi Q`, wmwkdwiwur GÛ G PÄ iæjm& 1987 Gi 12 bs wewa Ges Zdwmj Abyhvqx kz vbymv i, wegmbwm bvwuwd Kkb ZvwiL 07 AvMó 2012 Ges w` BbwówUDU Ae PvUvW GKvD U v Um Ae evsjv `k (AvBwmGwe) KZ K M nxz AvB.G.Gm (Avš ÍRvwZK wnmve gvb`û) Abymv i 30 k Ryb, 2014 Zvwi L mgvß Avw_ K eq ii cöwz e`b m vwbz kqvi nvìvie `i Kv Q wb gœv³ cwi Q` jv Z ck Ki Qb:- Kv úvbxi wb œ ewy Z 3wU mvewmwwqvix Kv úvbx Av Q t 1) mv jk U UvBj wjwg UW- hv GKwU I cb GÛ Bqvb Ges DBwfs cö ZKviK BDwbU hvi Drcv`b ÿgzv evrmwik Ub myzv Ges 9,600,000 MR dweªk 2) wbd Gwkqv wmb _wu wjwg UW- c j vi vcj dvbevi Ges wpcm cøv U vc bi Rb cö R±wU ev Íevq bi cwikíbv Kiv n ji R vjvbx/m v mi Ach vßzvi Rb cö R±wU wmz ivlv n q Q 3) R. Gg. dweª wjwg UW- hv GKwU wbwus, WvB Ges Mv g Um d v±ix `wÿy bqvcvov, 6bs WMix, cvt fviqvj, wgr vcyi, MvRxcy i Aew Z hvi evrmwik Drcv`b ÿgzv wgwjqb wcm wu-kvu I Bw U gu Mv g Um, hv Zvwi L AwaMÖnb Kiv n q Q wzzvm w úwbs GÛ Wwbg Kv úvbx wjwg UW- hv gv jk w úwbs wgjm& wjwg UW Gi GKwU mvewmwwqvix Kv úvbx wqj evsjv `k mywcög Kv U i m vwbz nvb KvU wwwfk bi AW vi Abyhvqx Kv úvbx g vuvi bs. 248, 2013 Gi ZvwiL Abyhvqx gv jk w úwbs wgjm& wjwg U Wi Av ikwu mvewmwwqvix Kv úvbx mv jk U UvBj wjwg U Wi mv _ GKwÎKiY (Amalgamated) n q Q Kv úvbxi Kvh µg t U UvBj m±it 1. wkí m úwk Z avibv Ges GB wk íi fwel r Dbœq bi m vebvt wek e vcx U UvBj I e mieiv n evsjv `k AZ ší iæz c~y Bnv mz h, Av_ -mvgvwrk Ges ivr bwzk Mvj hvm I ivbv cøvrv wewìs aÿm BZ vw` Kvi Y ez gv b wk íi Ae v AZ ší Aw wzkxj hw`i Bnv ÿy vqx GB ÿ Î e emv m úªmvi bi wekvj m vebv _vkvq wb œ ewy Z P v jä mg~n wpwýz K i Riæix wfwë Z `ÿzvi mwnz e e v MÖnb Kiv cö qvrb t (K) köwgk m úk (L) köwgk Drcv`bkxjZv (M) R vjvbx I we`ÿ r (N) Ab vb AeKvVv gv (O) AvBb k Ljv cwiw wz (P) Avw_ K e q Dc iv³ welq jv `ÿzvi mv _ guv bv m e n j G m± i e emv cömv ii m vebv wecyj, h nzz evsjv `k BwZg a YMZ gvbm úbœ cy hšw³kg~ j DrcbœKvix `k wn m e cwiwpwz jvf K i Q Drcv`b ÿgzv/drcv`bt 2. LvZIqvix A_ev cb wfwë djvdj t Avgv `i Drcv`b ÿgzvi e envi c~e ez x eq ii gz cövq GKB ikg wqj we ep eq i Drcvw`Z c Y i e q e w c q Q 87.10% hv wemz eqi wqj 84.05%, hv g~jz wewµz c Y i weµq g~j cövq 6% n«vm cviqvi Rb n q Q Avw_ K e q K g Q eq i wgwjqb UvKv n Z eq i wgwjqb UvKvq (6.14%-3.51%) weµ qi 2.63% hv Avgv `i K h_vh_ gybvdv AR b Ki Z mnvqzv K i Q Kv úvbxi cöwzwôz cöv wjz Drcv`b ÿgzv n jv 35,000 KwR Bqvb cöwzw`b hv 360 Kg w`e m 63,624 w úûjm&g cwipvjbvmz Kvh µ gi ZzjbvMZ Ae v wb œ ck Kiv nj t µ.bs weeib ( KwR) ( KwR) ( KwR) 1 Drcv`b gzv 12,600,000 12,600,000 12,600,000 2 cök Z Drcv`b 10,640,598 10,643,465 10,286,565 3 Drcv`b gzvi e envi 84.45% 84.47% 81.64% 4 weµ qi cwigvb ( KwR) 10,708,092 10,707,591 9,309,164 5 weµqg~j (UvKv) 3,065,012,791 3,262,553,013 2,966,197,047 6 gvu weµq (Mo UvKv) Dc ii cöwÿ Z Avgiv ej Z cvwi h, ivr ^ Avq wewjqb UvKv n Z wewjqb UvKvq b g G m Q g~jz wewµz c Y i weµq g~j K g hviqvi Rb 3. SuzwK I DwØMœZv mg~nt U UvBj m± i mkj wkí K GKB ikg mgm v gvkv ejv Ki Z n Q hvi g a we`ÿ r NvUwZ, köwgk Am šívl, ivr bwzk Aw wzkxjzv djköæwz Z nizvj Avnevb Drcv`b wewnœz K i Znwej e q evwo q w` Q hw`i GLb ch ší wkí ÿ Î M v mi g~j e w N U bvb Z e AwbqwgZ mieivn Drcv`b K ÿwzmö Ki Q 4. wewµz c b i e q we køly, gvu cövwšík gybvdv Ges bxu cövwšík gybvdv t (K) wewµz c b i e q t PjwZ eq i wewµz c b i e q wqj 87.10% hv wemz eq i wqj 84.05%, weµq K g hviqvi Rb wewµz c Y i e q 3.05% e w c q Q wemz eq ii Zyjbvq Drcv` bi cwigvb 2,867 KwR n«vm c q Q PjwZ eq i Drcv`b ÿgzvi e envi n q Q 84.45% hv wemz eq i wqj 84.47%, Drcv`b ÿgzvi e envi n«vm c q Q 0.02% (L) ißvbx t 30 k Ryb 2014 Zvwi L mgvß eq i ißvbx Uvb Ifvi n q Q 3, wgwjqb UvKv, hv wemz eq i wqj 3, wgwjqb UvKv wemz eq ii Zzjbvq Uvb Ifvi n«v mi nvi 6.05% 15

17 (M) gvu gybvdv t PjwZ eq i gvu gybvdv AwR Z n q Q wgwjqb UvKv hv wemz eq i wqj wgwjqb UvKv wemz eq ii Zzjbvq wewµz c b i weµq g~j n«vm cviqvq gvu gybvdv K g Q (N) bxu gybvdv/(ÿwz) t PjwZ eq i Kv úvbx bxu gybvdv K i Q wgwjqb UvKv hlv b wemz eq i bxu gybvdv wqj wgwjqb UvKv c~e ez x eq ii Zzjbvq gvu gybvdv Ges cwipvjbv gybvdv n«vm cviqvi Kvib n Q Drcv`b/weµq K g hviqv Ges wewµz c Y i g~j K g hviqv hv nvk bxu cwipvjbv gybvdv e w c q Q bb-acv iwus Av qi Rb PjwZ eq ii K c v iu U v cöwfkb e w cviqvi Rb Ki ciez x bxu gybvdv K g Q d j BwcGm eq i 1.24 UvKv _ K K g PjwZ eq i 1.11 UvKv n q Q 5. A ^vfvwek jvf ev ÿwz t PjwZ eq i Kv úvbx 41,477,984 UvKv bm` cö Yv`bv Ges e vs Ki mỳ eve` bb-acv iwus BbKvg wn m e DcvR b K i Q, hv bb-acv iwus Avq wnmv e Avq-weeiYx Z I wnmv ei bvu bs 22.1G cö`k b Kiv n q Q 6. AvšÍtm ú wkz Kv úvbxi jb `b mg~n t wnmv ei bvu bs 27.1 Z AvšÍtm úwk Z jb `bmg~n eb bv Kiv n q Q 7. cvewjk Bmÿ A_ev ivbu Bmÿ n Z cövß Znwe ji e envi t G eqi Kvb cvewjk Bmÿ A_ev ivbu Bmÿ Kiv nq bvb 8. Bbwmqvj cvewjk Advwis (AvBwcI), wiwcu cvewjk Advwis (AviwcI), ivbu Advi, WvB i± wjw s BZ vw` _ K A_ ev Znwej cövwßi ci Kv úvbxi Avw_ K Ae v t Bbwmqvj cvewjk Advwis (AvBwcI) m úbœ n q Q 2010 mv j ciez x Z Kvb wiwcu cvewjk Advwis (AviwcI), ivbu Advi, WvB i± wjw s BZ vw` Kiv nq bvb 9. evwl K Avw_ K weeibx I ˆÎgvwmK Avw_ K Ae vi weeibxi g a cv_ K t 2q Ges 3q cövwšík KvqvU v i Kv úvbxi Avq cö_g KvqvU vi A cÿv Kg n q Q wewµz c Y i e q e w cviqvi Rb 3q KvqvU vi cövwšík n Z gybvdv e w cviqv ïiæ K i Q wewµz c Y i e q Kg Z _vkvq Ges 4_ KvqvU v i Zv bb-acv iwus Av qi Rb D P nv i e w c q Q 10. ^Zš cwipvjkmn cwipvjk `i cvwiköwgk t wnmv ei bvu bs 3.35G ^Zš cwipvjkmn cwipvjk `i cvwiköwgk eb bv Kiv n q Q 11. Avw_ K cöwz e` bi Dci cwipvjkm Yi wee wz t Dc iv³ wi cvu mg~n G b vi-1 G eb bv Kiv n q Q 12. MZ eq ii cwipvjbvmz djvd ji mwnz PjwZ eq ii e eavb t Kv úvbxi cwipvjbv gybvdvi nvi wemz eq ii Zzjbvq mvgvb n«vm c q Q hv eq i weµ qi Dci 7.19% wemz eq i hv nvi wqj 7.88% A_ vr weµ qi Dci cwipvjbv gybvdv n«vm c q Q wemz eq ii Zzjbvq 0.69% hv LyeB bmb 13. wemz 05 (cuvp) eq ii gyl cwipvjb Ges Avw_ K WvUvmg~n mswÿß AvKv i c ôv bs 08 G eb bv Kiv n q Q 14. jf vsk t cwipvjbv cl ` 10% bm` jf vsk A_ vr cöwz UvKvi mvaviy kqv ii wecix Z 1.00 UvKv bm` jf vsk Nvlbvi Rb AÎ mvavib mfvq mycvwik K i Qb eq ii evw wgwus qi msl v Ges cwipvjk `i Dcw wz G b vi-1g eb bv Kiv n q Q 16. kqvi nvwìs msµvší weeiy aviv 1.5 Abyhvqx wegmbwm bvwuwd Kkb ZvwiL 07 AvMó 2012 Abyhvqx G b vi-2 G eb bv Kiv n q Q 17. Kv úvbxi cwipvjke `i wb qvm/cybtwb qvm msµvší cwipvjk `i mswÿß Rxeb e ËvšÍ G b vi-3 G eb bv Kiv n q Q gyjabx e q: , I wzb eq ii gyjabx e q wbgœiæc n q Q: weeiy (UvKv) (UvKv) (UvKv) Rwg I Rwg Dbœqb 1,825, ,994 69,900 cøv U I gwkbvix 34,933,578 41,102, ,000 dvwb Pvi I wd Pvi ,500 Awdm mvgmöx 322, ,120 1,228,040 gvui Mvox 2,910,000 1,860, Uwj dvb vcbv (wcgweg ) -- 90, Rbv iui -- 26,814, gvu 40,011,053 70,786,630 2,324,440 Aaxb Kv úvbx: mv jk U UvBj wjwg UW, wbd Gwkqv wmb _wukm wjwg UW Ges R. Gg. dweªkm wjwg UW mvewmwwqvwi Kv úvbx niqvq cwipvjke `i cöwz e`b GKB mv _ wbix Ki cöwz e`b, Avw_ K weeibx, Avq-weeiYx, K vk- d v weeiyx I BKÿ BwU cwiez b m úwk Z weeiyx GB wi cv U i Ask wn m e mshy³ Kiv n q Q D jøl h, wzzvm w úwbs GÛ Wwbg Kv úvbx wjt, mv jk U UvBj wjt Gi mv _ GKwÎKiY (Amalgamated) niqvi `iæb wzzvm w úwbs GÛ Wwbg Kv úvbx wjt Gi 09 (bq) gv mi wbixwÿz Avw_ K weeiyx A_ vr 1jv RyjvB 2013 _ K 31B gvp 2014 Zvwi Li Avw_ K weeibx mshy³ Kiv n q Q (K) mv jk U UvBj wj: evsjv ` ki gnvgvb mywcög Kv U i nvb KvU wwwfk bi AW vi Abyhvqx Kv úvbx g vuvi bs 248, 2013 Gi ZvwiL Abyhvqx wzzvm w úwbs GÛ Wwbg Kv úvbx wjt, mv jk U UvBj wjt Gi mv _ GKwÎKiY (Amalgamated) n q Q, hv ZvwiL _ K Kvh Ki n q Q evsjv `k wmwkdwiwur GÛ GK PÄ Kwgk bi (wegmbwm) m wzcî bs BSEC/CI/CPLC (Pvt)-333/2011/446 ZvwiL Ryb 24, 2014 Abyhvqx Kv úvbxi cwi kvwaz g~jab 400,000, UvKv n Z e w K i 482,608, UvKvq e w Kiv n q Q Gi Rb wzzvm w úwbs GÛ Wwbg Kv úvbx wjt Gi kqvi nvìvi `i bv g cöwzwu UvKv g~ j i 826,087 wu mvavib kqvi Bmÿ Kiv n q Q kqvi wewbgq nvi wqj mv jk U UvBj wjt Gi 01 (GK) wu kqv ii wecix Z wzzvm w úwbs GÛ Wwbg Kv úvbx wjt Gi 4.60 (Pvi `kwgk Qq k~y ) kqvi, hv gv jk w úwbs wgjm& wjt Gi 24 ww m ^i 2013 Zvwi L AbywôZ kqvi nvìvi `i 24Zg evwl K mvaviy mfv q Aby gvw`z n q Q djköæwz Z Kv úvbx (GgGmGg) mv jk U UvBj wj: Gi 97.93% kqvi A_ vr gvu 482,608, UvKvi cöwzwu 100/- UvKv gyj gv bi 4,826,087 kqvi _ K 472,597, UvKvi cöwzwu 100/- UvKv gyj gv bi 4,725,970 wu kqvi avib K i wegmbwmi g~jab e w i m wz cî bs BSEC/CI/CPLC (Pvt)-333/2011/446 ZvwiL Ryb 24, 2014 Gi 09 (bq) bs kz vbyhvqx Ges evsjv `k wmwkdwiwur GÛ GK PÄ Kwgk bi (wegmbwm) MALEK SPNNING MILLS LIMITED 16

18 17 Annual Report 2014 bvwuwd Kkb bs SEC/CMRRCD/ /36/Admin/03-44 ZvwiL g 05, 2010 evsjv `k MÖ R Ui cökvwkz ZvwiL Abyhvqx Kv úvwb K cövb fu wjt Kv úvbx n Z cvewjk wjt Kv úvbx Z iæcvšíi Kiv n q Q 23 k AvMó 2014 Zvwi L GKB mv _ Kv úvbxi cöwzwu UvKvi kqvi g~j K UvKvq cwiez b Kiv n q Q GKwÎKiY (Amalgamation) Gi ci Kv úvbxi evrmwik Drcv`b ÿgzv `vwo q Q myzv 14,621,000 KwR Ges dweªk 9,600,000 MR cökíwui evwywr K Acv ikb ïiæ nq GwcÖj 2009G GB cök í i q Q cöwzwu 360 ivu ii 10 wu Schlafhorst A Uv Kv iv gwkb hvi Drcv`b ÿgzv eq i 14,621,000 KwR BqvY Ges 9,600,000 MR dweªk eq i f wg I f wg Dbœqb, gvuimvox Ges M vmjvbb vcbv eve` wewb qvm Kiv n q Q 21,662, UvKv I mv ji Kv úvbxi cwipvjbv djvdj wbgœiæc: weeiy Drcv`b ( KwR) Bqvb 10,455,062 11,145,027 Drcv`b (MR) dweª 3 gv mi Rb 1,596, weµq iwfwbd (UvKv) 2,178,916,498 2,291,717,388 MÖm jvf (UvKv) 342,496, ,083,571 wbu jvf Ki AeKvk wirvf ciez x (UvKv) 135,713, ,749,214 MÖm gvwr b 15.72% 15.84% wbu gvwr b 6.23% 6.27% BwcGm (UvKv) GbGwf (UvKv) BwcGm wi UW Kiv n q Q L) wbdgwkqv wmb _wuk wjwg UW: Kv úvbx (GgGmGg) wbdgwkqv wmb _wuk wjwg UW Gi % kqvi aviy K i A_ vr cöwzwu 100/- UvKv gyj gv bi 5,000,000 wu kqv ii g a cöwzwu 100/- UvKv gyj gv bi 4,964,650 kqvi avib K i evsjv `k wmwkdwiwur GÛ GK PÄ Kwgk bi (wegmbwm) m wzcî bs SEC/CI/CPLC-442/2013/2903 ZvwiL ww m ^i 19, 2013 Abyhvqx Kv úvbxi cwi kvwaz g~jab 93,715, UvKv n Z e w K i 500,000,000,00 UvKvq DwbœZ Kiv n q Q wzzvm M vm UªvÝwgkb GÛ www ªweDkb Kv úvbx _ K M vm ms hvm bv cviqvi Rb cökíwu wmz i q Q Kv úvbxwu eq i f~wg I f~wg Dbœqb I iÿbv eÿb eve` 20,102, UvKv wewb qvm K i Q Kv úvbxi cöwz kqv ii bxu G mu f vjy UvKv (M) R. Gg. dweªkm wjwg UW t Kv úvbx (GgGmGg) R. Gg. dweªkm wjwg UW Gi 99.99% kqvi aviy K i A_ vr cöwzwu 100/- UvKv gyj gv bi 4,000,000 kqv ii g a cöwzwu 100/- UvKv gyj gv bi 3,999,900 kqvi avib K i Kv úvbxwu 100% ißvbxgylx Mv g Um Ges bxu dweªk Drcv` b wb qvwrz, hvi Drcv`b gzv 12 gwuªk Ub bx UW I WvBW dweªk Ges 68 jvbb KvwUs I mÿ Bs Acv ikb mv _ cö qvrbxq mkj d vwmwjwur I `vgrvzkiy myweav we` vgvb Kv úvbxwu Zvwi L AwaMÖnb Kiv nq Ges PjwZ eq i wewb qvm Kiv n q Q wgwjqb UvKv eq ii wewb qvm wb œiæc : weeib UvKv d v±ix KvVv gv, kw I wewìs 6,578,366 cøv U I gwkbvix 83,628,482 Ab vb m ú` 13,308, Ges mv ji Kv úvbxi cwipvjbv djvdj wb œiæc: weeib Drcv`b (wcq) 16,983,987 6,436,574 weµq iwfwbd (UvKv) 2,653,244,545 1,486,848,703 MÖm jvf (UvKv) 116,721,267 93,122,622 wbu jvf (UvKv) 72,365,854 63,678,226 MÖm gvwr b 4.40% 6.26% wbu gvwr b 2.73% 4.28% BwcGm (UvKv) GbGwf (UvKv) (N) wzzvm w úwbs GÛ Wwbg Kv úvbx wjt- evsjv ` ki gnvgvb mywcög Kv U i nvb KvU wwwfk bi AW vi Kv úvbx g vuvi bs 248, 2013 Gi ZvwiL Abyhvqx wzzvm w úwbs GÛ Wwbg Kv úvbx wjt ^qswµqfv e Aemvqb N U Q hv ZvwiL _ K Kvh Ki n q Q Avw_ K djvdj : wemz eq ii mv _ Kv úvbxi ZzjbvgyjK Avw_ K djvdj wb œ mswÿßkv i Dc vcb Kiv n jv: (wgwjqb UvKvq) weeib weµq wewµz c Y i e q gvu jvf cwipvjb e q Avw_ K e q cwipvjbv gybvdv bb-acv iwus Avq bxu Acv iwus gybvdv/( jvkmvb) WweøDwcwcGd G Pvù v

19 AvqKi cöwfkb bxu jvf (Ki ciez x) gvu Av qi nvi 12.90% 15.95% bxu Av qi nvi 7.02% 7.37% kqvi cöwz Avq-BwcGm (UvKv) wiuvb Ab BKÿ BwU 3.93% 4.43% AvDU vwûs kqvi msl v 193,600, ,600,000 kqv ii AwfwnZ g~j (UvKv) Kbmwj W UW kqvi cöwz Avq-BwcGm (UvKv) Avw_ K cöwz e` bi Dci gšíe t 1 wewµz c Y i g~j K g hviqvi Rb weµq Kg n q Q 2 wewµz c Y i e q/cwipvjbv LiP e w cviqvq gvu gybvdv I bxu gybvdv K g Q gybvdv e Ub: cwipvjbv cl ` wb gœv³ Dcv q gybvdv e U bi mycvwik K i Qb: c~e ez x eq ii wi UBb Avwb sm UvKv 202,019, ev` : eq ii jf vsk weziy UvKv (193,600,000.00) DØ Ë vbvšíi UvKv 8,419, hvm: bxu gybvdv (Ki ciez x) mv ji UvKv 215,231, hvm: m úwë cyb:g~j vq bi AePq mgš^q UvKv 71,176, Ave U bi Rb gvu wd«znwej UvKv 294,827, cö ÍvweZ jf vsk: bm` jf vsk 10% cöwz (`k) UvKvi mvavib kqv ii Rb 1.00 (GK) UvKv UvKv (193,600,000.00) jf vsk cö`v bi ci DØ Ëc Î vbvšíi UvKv 101,227, jf vsk Nvlbv: cö ÍvweZ gybvdv Ave Ub Abyhvqx cwipvjbv cl ` eq ii Rb 10% bm` jf vsk Nvlbvi Rb mycvwik K i Qb, Gi Rb cöwzwu (`k) UvKvi mvaviy kqv ii wecix Z 1.00 (GK) UvKv jf vsk cö`vb Ki Z n e hvi Rb cö qvrb n e 193,600, UvKv hv wi UBb Avwb s (wd«-wirvf ) n Z cö`vb Kiv n e ikw W U h mkj kqvi nvìvi `i bvg Kv úvbxi kqvi iwróvi A_ev ww cvwruwi iwróv i _vk e Zviv Dc iv³ jf vsk cv eb wnmv ei GKÎxKiY t wegmbwm Gi wewagvjv I B Uvib vkbvj G vkvdw Us vûvw -28 Ges AvBGdAviGm -10 Gi wbqgvejx AbymiY K i kqvi nvìvie `i gvu myweav/wewb qvm g~j wba viy Kiv n q Q cwipvjk wbev Pb: Kv úvbxi AvwU Kjm Ae G mvwm qk bi 110 Aby Q` gvzv ek Wv: kvgxg gwzb PŠayix, cwipvjk I Rbve G.Gd.Gg. hvev qi, cwipvjk cwipvjbv cl ` n Z iv Ukb Abyhvqx Aemi wb Qb Ges hvm weavq 112 Aby Q` gvzv ek Zviv c~b: wbev wpz niqvi Rb AvMÖn cökvk K i Qb Dc i ewy Z cwipvjk e `i mswÿß Rxeb e ËvšÍ I Z_ vw` wegmbwm bvwuwd Kkb ZvwiL 07 AvMó, 2012 Gi aviv 1.5 Abyhvqx G b vi-3 G mwbœ ewkz Kiv n q Q wbix K wb qvm: gmvm gv jk wmwïkx Iqvjx, PvU vw GKvD U v Um AÎ mfvq Aemi MÖnb Ki eb Ges hvm weavq eq ii Rb AwWUi wn m e wb qvm c Z AvMÖn cökvk K i Qb cwipvjbv cl ` gmvm gv jk wmwïkx Iqvjx, PvU vw GKvD U v Um, 9-wR, gwzwsj ev/g, XvKv K eq ii Rb Kv úvbx AwWUi wn m e wb qvm Kivi mycvwik K i Qb Ges Zv `i cvwiköwgk wba vi bi mycvwik K i Qb K cv iu Mf bý cöwz e`b: wmwkdwiwur GÛ GK PÄ Kwgkb Gi bvwuwd Kkb bs GmBwm/wmGgAviAviwmwW/ /134/GWwgb/44 ZvwiL: 07 AvMó 2012 Gi wbwi L GKwU weeibx 1.5 aviv Abymv i cöwzcvjb cöwz e`b, AwWU KwgwU cöwz e`b 3.5 aviv Abymv i, aviv 7(1) Abymv i cö dkbvj GKvDb U U KZ K mvwu wd KU Ges K cv iu Mf bý cöwzcvjb 7(2) Gi Ae v h_vµ g mshyw³- I, II, III, IV, V, Ges VI Gi g a eb bv/cökvk Kiv n jv ab ev` Ávcb : cwipvjbv cl `i c _ K Kv úvbxi kqvi nvìvi, MÖvnK, e vsk, BÝÿ iý Kv úvbx, mieivnkvix, wegmbwm, wwgmb, wmgmb, wmwwwegj I Ab vb cöwzôv bi mn hvmxzv I Dc ` ki Rb ab ev` Rvbvw Q ZvQvov Kv úvbxi kªwgk, Kg Pvix `i wbôv I HKvwšÍK Kg DÏxcbvi Rb m šívl cökvk Ges ab ev` Rvbvw Q cwipvjbv cl `i c ÿ, G. Gd. Gg. Rvev qi Pqvig vb MALEK SPNNING MILLS LIMITED 18

20 Annual Report 2014 ANNEXURE I The Directors also report that: Related Party Transactions are depicted in Note no in the Notes of Account. Remuneration of Directors including Independent Director have been shown in Note no in the Notes of Account. The Financial Statement of the Company present true and fair view of the Company s state of affairs, result of its operations, cash flows and changes in equity. Proper books of accounts as required by the prevailing law have been maintained. Appropriate accounting policies have been followed in formulating the financial statements and accounting estimates were reasonable and prudent. The financial statement was prepared in accordance with IAS/BAS/IFRS/BFRS. The internal control system is sound in design and is effectively implemented and monitored. There is no significant doubt about the company s ability to continue as a going concern. Significant deviation from the operating result compared to the last year is depicted in page no.11 clause (xvii) above. Key operating and financial data of last five years have been presented in summarized form in page no.08 The number of Board Meeting and the Attendance of Directors during the year were as follows: Name of Directors Position Meeting Held Attended Mr. A. F. M. Zubair Chairman Mr. A. Matin Chowdhury Managing Director Dr. Shamim Matin Chowdhury Director Ms. Saima Matin Chowdhury Director Mr. Azizur Rahim Chowdhury Director Mr. Moshiur Rahman Director Mr. M. SekanderAli Independent Director Md. Qamrul Huda Independent Director The pattern of shareholding as required by clause 1.5 (xxi) of the BSEC Notification dated 07th August, 2012, stated in Annexure-II. Information of Directors who seek appointment/re-appointment as required by clause 1.5 (xxii) of the BSEC Notification dated 07 August, 2012, stated in Annexure-III. Status of compliance with the conditions imposed by the Securities and Exchange Commission is enclosed as Annexure VI. ANNEXURE II Pattern of Shareholding as on June 30, 2014 Name of the Shareholders Status Shares held % i. Parent/Subsidiary/Associated Companies and other related parties Nil Nil Nil ii. Directors: Mr. A.F.M. Zubair Chairman 8,470, % Mr. A. Matin Chowdhury Managing Director 13,358, % Dr. Shamim Matin Chowdhury Director 13,310, % Mr. Azizur Rahim Chowdhury Director 18,585, % Ms. Saima Matin Chowdhury Director 15,004, % Mr. Moshiur Rahman Director (Nominated by Paragon Poultry Ltd.) 12,100, % Mr. M. Sekander Ali Independent Director Nil Nil Md. Qamrul Huda Independent Director Nil Nil Mr. Shyan Zubair Sponsor Shareholder 3,872, % iii. Chief Executive Officer, Chief Financial Officer, Company Secretary, Head of Internal Audit and their Spouses and Minor Childrens: Mr. A. Matin Chowdhury Chief Executive Officer 13,358, % Mr. B. K. Chaki Chief Financial Officer Nil Nil Mr. Syed Saiful Haque Company Secretary Nil Nil Md. Rakibul Islam Head of Internal Audit Nil Nil iv. Executives Nil Nil Nil v. Shareholders holding 10% or more voting interest in the Company Nil Nil Nil 19

21 ANNEXURE-III Brief Resume of the Directors Directors who seek re-appointment: Dr. Shamim Matin Chowdhury: Dr. Shamim Matin Chowdhury is a Sponsor Director of the Company since 1991, wife of Mr. A. Matin Chowdhury. She has more than 32 (thirty two) years experience in the textile sector. She completed M.B.B.S from Dhaka Medical College and postgraduate studies from the U.K. Mrs. Chowdhury is a famous Child and Adolescent Psychiatrist. She is the former Chief Consultant of Pabna Mental Hospital. She is also the Chairperson of Special Olympics in Bangladesh. She is the Director of Rahim Textile Mills Limited (listed company), Salek Textile Limited, Knit Asia Limited, J.M. Fabrics Limited, Hejaz Publications Limited, Fatehbagh Tea Company Limited and also the Managing Director of NewAsia Synthetics Limited. She is the Member of Audit Committee of Malek Spinning Mills Limited and Rahim Textile Mills Limited. Mr. A. F. M. Zubair: Mr. A. F. M. Zubair is a Director of the Company since He is a renowned and dynamic personality in the Textile Sector of Bangladesh. By profession Mr. Zubair is a Textile Engineer. He has done Post Graduate from Leeds University, U.K. He has vast knowledge in the Textile Sector in the country. He is the Chairman and Director of Malek Spinning Mills Limited and Chairman & Director of Salek Textile Limited and Director of Knit Asia Limited, New Asia Synthetics Limited, Hejaz Publications Limited and also the Managing Director of Design Asia Limited. ANNEXURE-IV AUDIT COMMITTEE REPORT For the Year Malek Spinning Mills Limited having an Audit Committee as a sub committee of the Board of Directors in order to assist the Board of Directors in ensuring and fulfilling its oversight responsibilities. The Audit Committee consists of the following persons: Mr. M. Sekander Ali, Independent Director Chairman Dr. Shamim Matin Chowdhury, Director Member Mr. Azizur Rahim Chowdhury, Director Member Mr. Syed Saiful Haque, Company Secretary Secretary The scope of Audit Committee was defined as under: a. Review and recommend to the Board to approve the quarterly, half yearly and annual financial statements prepared for statutory purpose; b.monitor and oversee choice of accounting policies and principles, internal control risk management process, auditing matter, hiring and performance of external auditors; c. Review statement of significant related party transactions submitted by the management; d. Carry on a supervision role to safeguard the system of governance and independence of statutory auditors; and e. Review and consider the report of internal auditors and statutory auditors observations on internal control. Activities carried out during the year: The Committee reviewed the integrity of the quarterly, half yearly and annual financial statements and recommended to the Board for consideration. The Committee had overseen, reviewed and approved the procedure and task of the internal audit, financial report preparation and the external audit reports. The Committee found adequate arrangement to present a true and fair view of the activities and the financial status of the company and didn t find any material deviation, discrepancies or any adverse finding/observation in the areas of reporting. M. Sekander Ali Chairman Audit Committee Date: 27th October, MALEK SPNNING MILLS LIMITED 20

22 Annual Report 2014 ANNEXURE-V CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE GOVERNANCE GUIDELINES. To the Members of Malek Spinning Mills Limited, This is to certify that Malek Spinning Mills Limited has Complied with the conditions of Corporate Governance Guidelines imposed by the Bangladesh Securities and Exchange Commission vide their Notification No. SEC/CMRRCD/ /134/Admin/44 dated 07th August Dated: 30th October, 2014 Dhaka Ramendra Nath Basak, FCA Partner Shiraz Khan Basak & Co. Chartered Accountants DECLARATION BY THE CEO & CFO The Board of Directors Malek Spinning Mills Limited 117/A, Tejgaon Industrial Area Dhaka Dear Sirs: In compliance with the condition no.6 imposed by the Bangladesh Securities and Exchange Commission s Notification No. SEC/CMRRCD/ /134/Admin/44 dated 07 August 2012 issued under Section 2CC of the Securities and Exchange Ordinance, 1969, we do hereby certify to the Board of Directors that; (i) We have reviewed the financial statements of the company for the year 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. (ii) 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 company s code of conduct. (B. K. Chaki) (A. Matin Chowdhury ) Chief Financial Officer Managing Director Dated: 12th October, 2014 Dhaka 21

23 ANNEXURE-VI Corporate Governance Compliance Status Report Status of compliance with the conditions imposed by the Bangladesh Securities and Exchange Commission s Notification No. SEC/CMRRCD/ /134/Admin/44 dated 07 August 2012.(Report under Condition No.7.00) Condition No. Title Complied Not Complied Remarks (if any) 1.1 Board Size : The number of the Board members shall not be less than 5 (Five) and more than 20 (Twenty) 1.2 Independent Directors: 1.2 (i) One fifth (1/5th) of the total number of directors 1.2 (ii) a) Does not hold any share or holds less than 1% shares of the total paid up shares 1.2 (ii) b) Not connected with any sponsor/ director/shareholder who holds 1% or more shares of the total paid up shares on the basis of family relationship. 1.2 (ii) c) Does not have any other relationship, whether pecuniary or otherwise, with the company or its subsidiary/associated companies 1.2 (ii) d) Not a member, director or officer of any stock exchange 1.2 (ii) e) Not a shareholder, director or officer of any member of stock exchange or an intermediary of the capital market 1.2 (ii) f) Not a partner or an executive or was not a partner or an executive during the preceeding 3 (three) years of any statutory audit firm 1.2 (ii) g) Not be an independent director in more than 3 (three) listed companies 1.2 (ii) h) Not been convicted by a court of competent jurisdiction as a defaulter in payment of any loan to a bank or a NBFI 1.2 (ii) i) Not been convicted for a criminal offence involving moral turpitude 1.2 (iii) Appointed by the Board of Directors and approved by the shareholders in the AGM 1.2 (iv) Not remain vacant for more than 90 (ninety) days 1.2 (v) Board shall lay down a code of conduct of all Board members and annual compliance of the code to be recorded 1.2 (vi) 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 1.3 Qualification of Independent Director (ID) 1.3 (i) Knowledge of Independent Directors 1.3 (ii) Background of Independent Directors 1.3 (iii) Special cases for qualifications 1.4 Individual Chairman of the Board and Chief Executive Officer 1.5 The Directorʼs Report to Shareholders: 1.5 (i) Industry outlook and possible future developments in the industry 1.5 (ii) Segment-wise or product-wise performance 1.5 (iii) Risks and concerns 1.5 (iv) Discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin 1.5 (v) Discussion on continuity of any Extra-Ordinary gain or loss 1.5 (vi) Basis for related party transactions 1.5 (vii) Utilization of proceeds from public issues, rights issues and/or through any others 1.5 (viii) Explanation if the financial results deteriorate after the company goes for IPO, RPO, Rights Offer, Direct Listing 1.5 (ix) Explanation about significant variance occurs between Quarterly Financial performance and Annual Financial Statements 1.5 (x) Remuneration to directors including independent directors 1.5 (xi) Fairness of Financial Statements 1.5 (xii) Maintenance of proper books of accounts 1.5 (xiii) Adoption of appropriate accounting policies and estimates 1.5 (xiv) Followed IAS, BAS, IFRS and BFRS in preparation of financial statements 1.5 (xv) Soundness of internal control system 1.5 (xvi) Ability to continue as a going concern 1.5 (xvii) Significant deviations from the last yearʼs 1.5 (xviii) Key operating and financial data of at least preceding 5 (five) years 1.5 (xix) Reasons for not declared dividend 1.5 (xx) Number of Board meetings held during the year and attendance 1.5 (xxi) Pattern of shareholding: 1.5 (xxi) a) Parent/Subsidiary/Associated Companies and other related parties 1.5 (xxi) b) Directors, CEO, CS, CFO,HIA and their spouses and minor children 1.5 (xxi) c) Executives 1.5 (xxi) d) 10% or more voting interest 1.5 (xxii) Appointment/re-appointment of director: 1.5(xxii) a) Resume of the director MALEK SPNNING MILLS LIMITED 22 N/A N/A N/A N/A

24 Annual Report 2014 Condition No. Title Complied Not Complied Remarks (if any) 1.5(xxii)b) Expertise in specific functional areas 1.5(xxii) c) Holding of directorship and membership of committees of the board other then this company 2.1 Appointment of CFO, HIA and CS: 2.2 Attendance of CFO and CS at the meeting of the Board of Directors 3.0 Audit Committee: 3 (i) Constitution of Audit Committee 3 (ii) Assistance of the Audit Committee to Board of Directors 3 (iii) Responsibility of the Audit Committee 3.1 Constitution of the Audit Committee: 3.1 (i) At least 3(three) members 3.1 (ii) Appointment of members of the Audit Committee 3.1 (iii) Qualification of Audit Committee members 3.1 (iv) Term of Service of Audit Committee members 3.1 (v) Secretary of the Audit Committee 3.1 (vi) Quorum of the Audit Committee meeting 3.2 Chairman of the Audit Committee: 3.2 (i) Board of Directors shall select the Chairman 3.2 (ii) Chairman of the audit committee shall remain present in the AGM 3.3 Role of Audit Committee: 3.3 (i) Oversee the financial reporting process 3.3 (ii) Monitor choice of accounting policies and principles 3.3 (iii) Monitor Internal Control Risk management process 3.3 (iv) Oversee hiring and performance of external auditors 3.3 (v) Review the annual financial statements before submission to the board for approval 3.3 (vi) Review the quarterly and half yearly financial statements before submission to the board for approval 3.3 (vii) Review the adequacy of internal audit function 3.3 (viii) Review statement of significant related party transactions 3.3 (ix) Review Management Letters/Letter of Internal Control weakness issued by statutory auditors 3.3 (x) Disclosure about the uses/applications of funds raised by IPO/RPO/Rights Issue N/A 3.4 Reporting of the Audit Committee: Reporting to the Board of Directors: (i) Activities of Audit Committee (ii)a) Conflicts of interest (ii)b) Material defect in the internal control system (ii)c) Infringement of laws, rules and regulations (ii)d) Any other matter Reporting to the Authorities 3.5 Reporting to the Shareholders and General Investors 4 Engagement of External/Statutory Auditors: 4 (i) Appraisal or valuation services or fairness opinions 4 (ii) Financial information systems design and implementation 4 (iii) Book-keeping 4 (iv) Broker-dealer services 4 (v) Actuarial services 4 (vi) Internal audit services 4 (vii) Services that the Audit Committee determines 4 (viii) Audit firms shall not hold any share of the company they audit. 4 (ix) Audit/certification services on compliance of corporate governance 5 Subsidiary Company: 5 (i) Composition of the Board of Directors 5 (ii) At least 1 (one) independent director to the subsidiary company 5 (iii) Submission of Minutes to the holding company 5 (iv) Review of Minutes by the holding company 5 (v) Review of Financial Statement by the holding company 6 Duties of Chief Executive Officer and Chief Financial Officer: 6 (i) a) Reviewed the materially untrue of the financial statement 6 (i) b) Reviewed about compliance of the accounting standard 6 (ii) Reviewed about fraudulent, illegal or violation of the companyʼs code of conduct 7 Reporting and Compliance of Corporate Governance: 7 (i) Obtain certificate about compliance of conditions of Corporate Governance Guidelines 7 (ii) Annexure attached, in the directorʼs report 23

25 Malek Siddiqui Wali CHARTERED ACCOUNTANTS AUDITORS REPORT to the shareholders of Malek Spinning Mills Limited 9-G, MOTIJHEEL, C/A, Dhaka-1000, Bangladesh We have audited the accompanying Consolidated Statement of Financial Position of Malek Spinning Mills Limited as at 30th June 2014 and the related Consolidated Statement of Comprehensive Income, Consolidated Statement of Cash Flow, Consolidated Statement of Change in Equity and Notes for the period from July 1, 2013 to June 30, Management s Responsibility for the Financial Statements: The Management is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Accounting Standard/Bangladesh Financial Reporting Standards (BFRS), the companies Act 1994 and other applicable laws and regulation and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, where due to fraud or error. Auditor s Responsibility: Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance where the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments the auditor consider internal control relevant to the entity s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing and opinion on the effectiveness of the entity s internal control. An audit also includes evaluation the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion: In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standard/Bangladesh Financial Reporting Standards (BFRS), give a true and fair view of the state of the company s affairs as of 30th June 2014 and of the results of its operations and its cash flows for the period then ended and comply with the Companies Act 1994 and other applicable laws and regulations. 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; c) The Company s Statement of Financial Position and Statement of Comprehensive Income dealt with by the report are in agreement with the books of accounts; d) The expenditures incurred and payments made were for the purpose of the company s business. Dated: Dhaka October 27, 2014 Malek Siddiqui Wali Chartered Accountants MALEK SPNNING MILLS LIMITED 24

26 Annual Report 2014 MALEK SPINNING MILLS LIMITED STATEMENT OF CONSOLIDATED FINANCIAL POSITION AS AT 30TH JUNE 2014 Notes JUNE'14 JUNE'13 ASSETS : Taka Taka Non-Current Assets : 8,398,494,042 8,630,382,998 Property, Plant and Equipment 4 8,398,494,042 8,630,382,998 Current Assets : 7,008,235,816 6,847,016,087 Inventories 5 3,375,478,913 2,997,282,138 Accounts Receivable 6 2,804,027,102 3,273,459,578 Advances,Deposits and Pre-payments 7 293,622, ,894,920 Cash and Cash Equivalents 8 535,107, ,379,451 TOTAL ASSETS : 15,406,729,858 15,477,399,085 SHAREHOLDER'S EQUITY AND LIABILITIES: Shareholder's Equity : 8,723,317,999 8,417,743,889 Share Capital 9 1,936,000,000 1,936,000,000 Share Premium 10 1,500,000,000 1,500,000,000 Retained Earnings ,865, ,712,962 Tax Holiday Reserve ,883, ,647,436 Re-valuation Surplus of Fixed Assets 13 4,297,568,262 4,363,383,492 Minority Interest 14 52,628,362 97,757,791 Non Current Liabilities: 1,716,232,504 2,106,771,482 Long Term Loan 15 1,471,625,227 1,847,962,051 Deferred Tax Liabilities ,607, ,809,431 Current Liabilities : 4,914,550,994 4,855,125,924 Short Term Loan 17 1,044,440, ,110,097 Current Portion of Long Term Loan ,544, ,799,650 Security Deposit against Sales 19-5,000,000 Bank Acceptance Liabilities 20 1,920,390,417 2,265,137,023 Credirors and Accruals ,175, ,079,154 TOTAL SHAREHOLDER'S EQUITY AND LIABILITIES : 15,406,729,858 15,477,399,085 Net Assets Value Per Share (NAV) Par Value Tk.10 The annexed notes 1 to 32 form an integral part of these financial statement. A. Matin Chowdhury Azizur Rahim Chowdhury B.K. Chaki Syed Saiful Haque Managing Director Director Chief Financial Officer Company Secretary As per our report of same date Dhaka ( Malek Siddiqui Wali ) October 27, 2014 Chartered Accountants 25

27 MALEK SPINNING MILLS LIMITED STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME FOR THE YEAR ENDED 30TH JUNE 2014 Notes JUNE'14 JUNE'13 Taka Taka Sales 22 8,239,372,911 7,737,869,878 Cost of Goods Sold 23 7,227,818,707 6,566,163,598 Gross Profit : 1,011,554,205 1,171,706,280 Operating Expenses ,548, ,516,957 Financial Expenses ,696, ,733,923 Operating Profit/(Loss) : 504,308, ,455,399 Non-operating Income/(Loss) 26 41,302,851 5,057,668 Net Operating Profit/(Loss) : 545,611, ,513,068 Provision for Contribution to WPPF 27 26,174,608 29,229,285 Profit/(Loss) before Tax : 519,437, ,283,783 Provision for Income Tax : 65,392,536 33,101,937 Current Tax 28 79,594,690 47,628,324 Deferred Tax 29 (14,202,154) (14,526,387) Net Profit/(Loss) after tax for the year 454,044, ,181,846 Provision for Tax Holiday Reserve 30 6,490,430 60,068,176 Net Profit/(Loss) after Tax Holiday Reserve 447,554, ,113,670 Minority Interest 31 3,579,700 5,916,032 Net Profit/(Loss) Balance 443,974, ,197,638 (Transferred to the Statement of Changes in Equity) Earnings Per Share (EPS) Par Value Tk.10 Number of Shares used to compute EPS 193,600, ,600,000 The annexed notes 1 to 32 form an integral part of these financial statement. A. Matin Chowdhury Azizur Rahim Chowdhury B.K. Chaki Syed Saiful Haque Managing Director Director Chief Financial Officer Company Secretary As per our report of same date Dhaka ( Malek Siddiqui Wali ) October 27, 2014 Chartered Accountants MALEK SPNNING MILLS LIMITED 26

28 Annual Report 2014 CASH FLOW FROM OPERATING ACTIVITIES : MALEK SPINNING MILLS LIMITED STATEMENT OF CONSOLIDATED CASH FLOWS FOR THE YEAR ENDED 30TH JUNE 2014 JUNE'14 Taka JUNE'13 Taka Collection from Turnover & Bills Receivable 8,708,805,388 7,160,222,216 Non-operating Income/(Loss) 46,786,887 5,057,668 Payment for Raw Materials, Indirect Materials and other expenses (7,603,577,071) (6,233,112,194) Payment for Operating Expenses (132,385,529) (101,602,126) Payment of Financial Expenses (363,696,687) (442,733,923) Payment for Income Tax (68,987,191) (7,096,325) Net Cash provided/(used) by Operating Activities 586,945, ,735,315 CASH FLOW FROM INVESTING ACTIVITIES : Acquisition of Fixed Assets (216,680,131) (595,573,352) Acquisition of Capital work in progress - 177,072,526 Disposal of Fixed Assets 1,612,469 1,043,232 Pre-operating expenses - 25,551,245 Advance realised 247,352 - Net cash provided/(used) in Investing Activities (214,820,310) (391,906,349) CASH FLOW FROM FINANCING ACTIVITIES : Bank Loan Increase/(Decrease) 28,738,392 40,327,955 Advance, Deposit & Prepayments - (105,321,184) Refundable IPO Share Money paid (175,002) (325,001) Dividend Paid (175,960,624) (32,408) Security Deposit against Sales - 3,500,000 Net cash provided/(used) in Financing Activities (147,397,235) (61,850,638) Increase/(Decrease) in Cash and Cash Equivalents 224,728,251 (73,021,672) Cash & Cash Equivalents at 1st July ,379, ,401,123 Cash and Cash Equivalents at 30th June ,107, ,379,451 Net Operating Cash Flow Per Share (NOCFPS) Par Value Tk.10 A. Matin Chowdhury Azizur Rahim Chowdhury B.K. Chaki Syed Saiful Haque Managing Director Director Chief Financial Officer Company Secretary As per our report of same date Dhaka ( Malek Siddiqui Wali ) October 27, 2014 Chartered Accountants 27

29 MALEK SPINNING MILLS LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30TH JUNE 2014 Particulars Share Share Revaluation Tax holiday Retained Total Capital Premium Surplus of Reserve Earnings Fixed Assets Balance as at 1st July ,936,000,000 1,500,000,000 4,363,383, ,647, ,712,962 8,417,743,889 Net Profit/(Loss) during the year 443,974, ,974,551 Revaluation Surplus of Fixed Assets (110,401,870) 110,401,870 - Tax Holiday Reserve 6,490,430 6,490,430 Adjustment of Minority Interest 44,586, ,005 3,376,482 48,709,128 Cash Dividend for (193,600,000) (193,600,000) As at 30th June ,936,000,000 1,500,000,000 4,297,568, ,883, ,865,865 8,723,317,999 FOR THE YEAR ENDED 30TH JUNE 2013 Particulars Share Share Revaluation Tax holiday Retained Total Capital Premium Surplus of Reserve Earnings Fixed Assets Balance as at 1st July ,760,000,000 1,500,000,000 4,566,486, ,176, ,602,328 8,248,265,786 Net Profit/(Loss) during the year 483,197, ,197,638 Revaluation Surplus of Fixed Assets (137,054,038) 137,054,038 - Adjustment of Deferred Tax Liabilities up to (273,335,818) (273,335,818) Tax Holiday Reserve 60,068,176 60,068,176 Adjustment of "Sub-sidiary co. reserve" for new ratio 1,402,623 (35,805,225) (34,402,602) Minority Interest (66,049,292) (66,049,292) Issuance of Stock Dividend for ,000,000 (176,000,000) - As at 30th June ,936,000,000 1,500,000,000 4,363,383, ,647, ,712,962 8,417,743,889 A. Matin Chowdhury Azizur Rahim Chowdhury B.K. Chaki Syed Saiful Haque Managing Director Director Chief Financial Officer Company Secretary As per our report of same date Dhaka ( Malek Siddiqui Wali ) October 27, 2014 Chartered Accountants MALEK SPNNING MILLS LIMITED 28

30 Annual Report 2014 MALEK SPINNING MILLS LIMITED NOTES OF CONSOLIDATED FINANCIAL STATEMENT FOR THE YEAR ENDED 30TH JUNE COMPANY AND ITS ACTIVITIES: Malek Spinning Mills Limited was incorporated as a Private Limited Company on 2nd November, 1989 under Companies Act It was converted into Public Ltd. Company in the year The share of the company is denominated from Tk.100/- to Tk.10/- per share as on 14th September, Its subsidiary companies are Salek Textile Limited, Newasia Synthetics Limited and J.M. Fabrics Limited. Titas Spinning & Denim Company Ltd. one of the subsidiary company has been Merged and Amalgamated with another subsidiary company Salek Textile Ltd. as per order of the Hon ble High Court Division of the Supreme Court of Bangladesh dated in the Company Matter No. 248 of All of the companies are incorporated with registrar of joint stock companies and firms, Dhaka, except J.M. Fabrics Limited which is registered with RJSC Chittagong, Bangladesh under Companies Act Registered office of the Companies are at 117/A, Tejgaon I/A, Dhaka-1208, while Factories are situated at Shafipur, Kaliakoir, Bhawal Mirzapur, Gazipur & Mahna Bhabanipur, Gazipur respectively. 2. NATURE OF BUSINESS: The Company has got the capacity of 63,624 spindles to spin high quality Cotton hosiery yarns by using modern machinery including state-of-the-art yarn testing laboratory. Annual production capacity of the company is 12,600,000 Kgs. 3. SIGNIFICANT ACCOUNTING POLICIES: 3.1 Basis of Accounting: The financial statements of the company under reporting have been prepared under historical cost convention in a going concern concept and on accrual basis in accordance with generally accepted accounting principles and practice in Bangladesh in compliance with the Companies Act 1994, The Securities and Exchange Rules 1987, Listing Regulations of Dhaka Stock Exchange Ltd (DSE) & Chittagong Stock Exchange Ltd. (CSE) and International Accounting Standards (IAS) as adopted by the Institute of Chartered Accountants of Bangladesh (ICAB), as Bangladesh Accounting Standard (BAS). 3.2 Principal Accounting Policies: Specific accounting policies were selected and applied by the company s management for significant transactions and events that have a material effect within the framework of BAS-1 Preparation of Financial Statement in preparation and presentation financial statements. The previous year s figures were presented according to the same accounting principles. 3.3 Basis of Consolidation: The consolidated financial statements incorporate the financial statements of the company and entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other member of the group. All intra group transaction, balances, income and expenses are eliminated in full on consolidation. Minority interests in the net assets of consolidated subsidiaries are identified separately from the group equity therein. These consolidate financial statements have been prepared in consolidation with the audited accounts of the company and the audited accounts of Salek Textile Limited, Newasia Synthetics Limited, J.M. Fabrics Limited and Titas Spinning & Denim Company Ltd. for the period ended June 30, 2014, according to the relevant IFRS or IAS. 3.4 Percentage of Holding on Subsidiary Company: Name of Company Total No. Shares Total Holding Percentage of Holding Salek Textile Ltd. 48,26,087 47,25, % Newasia Synthetics Ltd. 50,00,000 49,64, % J.M. Fabrics Ltd. 40,00,000 39,99, % 3.5 Application of Bangladesh Accounting Standards (BAS): The following BAS are applicable for the financial statements for the year under review BAS 1 Presentation of Financial Statement BAS 2 Inventories BAS 7 Statement of Cash Flows BAS 8 Accounting Policies, Changes in Accounting Estimates and Errors BAS 10 Events after the Balance Sheet Date BAS 12 Income Tax BAS 16 Property, Plant & Equipment BAS 17 Leases BAS 18 Revenue BAS 20 Accounting for Government Grants and Disclosure of Government Assistance BAS 21 The effect of changes in Foreign Exchange rate BAS 23 Borrowing Cost BAS 24 Related Party Discloser BAS 27 Consolidated Financial Statements and Accounting for Investment in Subsidiary BAS 33 Earnings per share BAS 37 Provisions, Contingent Liabilities and Contingent Assets BAS 38 Intangible Assets 29

31 3.6 Recognition of Property, Plant & Equipment and Depreciation: Property, Plant & Equipment are stated at cost less accumulated depreciation in accordance with BAS-16 Property, Plant & Equipment. Cost represents cost of acquisition or construction and include purchase price and other directly attributable cost of bringing the assets to working conditions for its intended use, but do not include any capitalized borrowing cost. Revaluation of Land, Building, Plant & Machineries were made by registered renowned Company Asian Surveyors Ltd. as on Depreciation on all other fixed assets is computed using the reducing balance method in amount sufficient to write-off depreciable assets over their estimated useful life. Full year depreciation is charged at the year of purchase and none in the year of disposal. Expenditure for maintenance and repairs are expenses; major replacements, renewals and betterment are capitalized. The cost and accumulated depreciation of depreciable assets retired or otherwise disposed off are eliminated from the assets and accumulated depreciation and any gain or loss on such disposal is reflected in operations for the year. The annual depreciation rates applicable to the principal categories are: Building 5% Plant & Machinery 7.5% Generator 10% Furniture & Fixture 10% Motor Vehicles 15% Office Equipments 15% Electrical Installation 15% Gas Line Installation 15% Fire Installation 15% Loose Tools 15% 3.7 Inventories: Inventories comprise of Raw Materials, Raw Materials in Transit, Work-In-Process, Finished Goods and Stores and Spare Parts. They are stated at the lower of cost or market or net realizable value in accordance with the Para of 21 & 25 of BAS-2 Inventories after making due allowance for any obsolete or slow moving item. 3.8 Trade Debtors: These are carried at original invoice amount, they are unsecured and considered good and collectible. 3.9 Cash and Cash Equivalents: According to BAS-7 Cash flow Statements cash comprises of cash-in-hand and demand deposits. BAS-1 Presentation of Financial Statements provides that cash and cash equivalents are not restricted in use. Considering the provisions of BAS-7 and BAS-1, Cash in hand and Bank balances have been considered as cash and cash equivalents 3.10 Creditors and Accruals: Liabilities are recognized for amounts to be paid in the future for goods and services received, whether or not billed by the supplier Income Tax: Provision for Tax has been calculated 15% as per SRO No. 221-AIN/IT/2011 because of carry forward of loss for previous year Cash Flow Statement: Cash Flow Statement is prepared in accordance with BAS-7 under direct method as outlined in the Securities and Exchange Rules Risk and Uncertainties for use of Estimates in Preparation of Financial Statements: The preparation of financial statements in conformity with the international accounting standards requires management to make estimates and assumption that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of affecting financial statements and revenues and expenses during the reported year. Actual results could differ from those estimates. Estimates are used for accounting of certain items such as long-term contracts; depreciation and employees benefit plans, taxes, reserves and contingencies Compliance with Local Laws: The financial statements have been prepared in compliance with requirements of the Companies Act 1994, Securities and Exchange Rules 1987 and other relevant local laws and rules Compliance with Bangladesh Accounting Standards: The financial statements have been prepared in compliance with requirement of BAS as adopted by The Institute of Chartered Accountants of Bangladesh (ICAB) and applicable in Bangladesh Contingent Liabilities and Assets: Current or possible obligations or assets arising from past events and whose existence is due to the occurrence or non-occurrence of one or more uncertain events which are not within the control of the group Transaction with Related Parties: In the period under review the company has transactions with related party in the normal course of business Reporting Year: Financial statements of the company cover from 1st July 2013 to 30th June Reporting Currency and Level of Precision: The figures in the financial statements represent Bangladesh Currency (Taka), which have been rounded off to the nearest Taka except where indicates otherwise. MALEK SPNNING MILLS LIMITED 30

32 Annual Report Comparative Information: Comparative information have been disclosed in respect of year June 2013 for all numerical information in the financial statements and also the narrative and descriptive information when it is relevant for understanding of the current years financial statements. Figures of the year 2013 have been rearranged whenever considered necessary to ensure comparability with the current year Foreign Currency Transaction: Transactions in foreign currencies are translated into Bangladeshi Taka at the Exchange rate prevailing on the date of transactions in accordance with BAS- 21 The Effects of Changes in Foreign Exchange Rate. Bank deposit in foreign currency has been translated into taka at the year end at the rate of exchange ruling on that date Revenue Recognition: The Company recognizes revenue when risk and rewards associated with ownership has been transferred to buyer, which satisfied all the condition for the revenue recognition as provided in BAS-18 Revenue Recognition Accounting for Government Grants and Disclosure of Government Assistance: Cash Incentive recognize as per BAS-20 as non-operating income Responsibility for Preparation and Presentation of Financial Statements: The Board of Directors is responsible for the preparation and presentation of Financial Statements under Section 183 of the Companies Act 1994 and as per the provision of The Framework for the Preparation and Presentation of Financial Statements issued by the International Accounting Standards Board (IASB) Components of the Financial Statements: According to the Bangladesh Accounting Standard BAS-1 Presentation of Financial Statements the complete set of Financial Statements includes the following components: i. Statement of Financial Position as at 30th June ii. Statement of Comprehensive Income for the period from 1st July 2013 to 30th June iii. Statement of Cash flows for the period from 1st July 2013 to 30th June iv. Statement of changes in Equity for the period from 1st July 2013 to 30th June v. Accounting Policies and Explanatory Notes Earnings per Share: Earnings per share (EPS) is calculated in accordance with the Bangladesh Accounting Standard BAS-33 Earnings per share. Basic Earnings per Share: Basic Earnings per share is calculated by dividing the net profit or loss for the year attributable to ordinary shareholders by the number of ordinary shares outstanding during the year Share Premium: The balance in share premium account shall be utilized in accordance with provisions of the Companies Act 1994 and as directed by the Bangladesh Securities and Exchange Commission in this respect Lease Assets: In Compliance with the BAS-17, Leases, cost of assets acquired under finance lease along with related obligation has been accounted for as assets and liabilities respectively of the company Subsequent Disclosure of Events occurring after the Financial Position date: The status of the subsidiary company Salek Textile Limited has been converted from Private Limited Company to Public Limited Company on 23rd August 2014 and face value of per share of the Company also changed from Tk each to Tk each Impairment of Assets: The company reviews the recoverable amount of its assets at each reporting date. If there exist any indication that the carrying amount of assets exceeds the recoverable amount, the company recognizes such impairment loss in accordance with BAS-36 Impairment of Assets Credit Facility Not Availed: There was no credit facility available to the company under any contract, other than trade credit available in the ordinary course of business Segment Reporting: As there is a single business and geographic segment within the company operates as such no segment reporting is felt necessary General Comments & Observations: a. Previous year s figures have been regrouped/reclassified wherever considered necessary to confirm to current year s presentation. Figures have been rounded off to the nearest taka, as the currency represented in this financial statement. b. All shares have been fully called and paid up. c. There was no preference share issued by the company. d. The company has not incurred any expenditure in foreign currency against royalties and technical fees. e. Auditors are paid only statutory audit fees. f. No foreign exchange remitted to the relevant shareholders during the year under audit. g. No amount of money was expended by the company for compensating any members of the Board for special service rendered. h. No brokerage was paid against sales during the year under audit. i. There was no bank guarantee issued by the company on behalf of directors. 31

33 3.34 Attendance Status of Board Meeting of Directors: During the year nine Board Meetings were held. The attendance status of all the meetings is as follows: Name of Directors Position Meeting Held Attended Mr. A.F.M Zubair Chairman 6 5 Mr. A. Matin Chowdhury Managing Director 6 6 Dr. Shamim Matin Chowdhury Director 6 6 Mr. Azizur Rahim Chowdhury Director 6 6 Ms. Saima Matin Chowdhury Director 6 5 Mr. Moshiur Rahman Director 6 6 Mr. M. Sekander Ali Independent Director 6 6 Md. Qamrul Huda Independent Director Discloser as per requirement of Schedule XI, Part II of Company Act 1994 Employee Position for Malek Spinning Mills Ltd. (as per 30th June 2014) Salary Range Officer & Staff Worker Total Employee Head Office Factory Below 3, Above 3, Total Employee Position for Salek Textile Ltd. (as per 30th June 2014) Salary Range Officer & Staff Worker Total Employee Head Office Factory Below 3, Above 3, Total Employee Position for J.M. Fabrics Limited (as per 30th June 2014) Salary Range Officer & Staff Worker Total Employee Head Office Factory Below 3, Above 3, Total Discloser as per requirement of schedule XI, part II, Para 4 Payment to Directors (From 1ST July 2013 to 30th June 2014) Tk. 65,69,000 Discloser as per requirement of schedule XI, part II, Para 7 Detail of Production Capacity Utilization Particulars Licence Capacity Installed Capacity Actual Production Capacity Utilization Annual Production Capacity Not Mentioned of Yarn in KG. in the Licence 1,26,00,000 1,06,40, % Discloser as per requirement of schedule XI, part II, Para 8 Value of Raw Cotton, Spare Parts, Packing Materials and Capital Machinery (BDT) Particulars Local Purchase Import Total Purchase Consumed Raw Cotton - 2,381,138,212 2,381,138,212 2,274,035,501 Spare Parts - 42,094,007 42,094,007 45,364,174 Packing Materials 27,043,924-27,043,924 27,043,924 Capital goods - 34,933,578 34,933,578 - MALEK SPNNING MILLS LIMITED 32

34 Annual Report 2014 MALEK SPINNING MILLS LIMITED NOTES OF CONSOLIDATED FINANCIAL STATEMENT FOR THE YEAR ENDED 30TH JUNE 2014 Amount in Taka JUNE'14 JUNE'13 4. CONSOLIDATED FIXED ASSETS: Tk 8,398,494,042 COST: Cost as at ,489,168,774 5,871,770,901 Addition during the year 191,229, ,573,352 6,680,398,267 6,467,344,253 Sales/Adjustment during the year 10,009,400 3,626,117 Total Cost as at ,670,388,867 6,463,718,136 Accumulated Depreciation as at ,311,163,415 1,933,246,346 Adjustments during the year 2,912,895 2,582,885 Depreciation during the year 268,065, ,104,461 Total Depreciation as at ,576,315,792 2,262,767,922 Written Down Value as at ,094,073,075 4,200,950,214 REVALUATION: Revaluated Assets as at ,814,879,388 4,814,879,388 Addition of Revaluated Assets - - Total Revaluated Assets 4,814,879,388 4,814,879,388 Accumulated Depreciation as at ,056, ,392,566 Depreciation during the year 110,401, ,054,038 Total Depreciation 510,458, ,446,604 Written Down Value of Revaluated Assets as at ,304,420,967 4,429,432,784 Total Written Down Value as at ,398,494,042 8,630,382,998 Allocation of depreciation charges for the year has been made in the accounts as follows: Factory Overhead 368,257, ,802,152 Administrative Overhead 10,209,480 9,356, ,467, ,158,500 Note- Details of Fixed Assets and Depreciation are shown in the Annexure-1 5. CONSOLIDATED INVENTORIES : Tk. 3,375,478,913 Raw Materials 1,454,364,012 1,136,960,910 Stock-in-Transit 133,819, ,533,236 Work-in-Process 274,931, ,142,051 Finished Goods 1,354,057,196 1,230,201,094 Stores and Accessories 158,306, ,444,847 3,375,478,913 2,997,282, CONSOLIDATED ACCOUNTS RECEIVABLE : Tk 2,804,027,102 i) Malek Spinning Mills Limited 954,189,301 1,378,710,075 ii) Salek Textile Limited 1,532,995,661 1,087,306,811 iii) J.M. Fabrics Limited 316,842, ,408,888 iv) Titas Spinning & Denim Company Ltd ,033,805 2,804,027,102 3,273,459, CONSOLIDATED ADVANCE, DEPOSIT & PRE-PAYMENTS: 293,622,098 Advance against construction materials, Suppliers & Others 107,073, ,786,659 Security Deposit on REB 487, ,875 Security Deposit on Titas Gas T&D Co. 24,462,211 24,150,911 Advance against Income Tax Note: 7-A 137,025,656 80,797,527 Security Deposit to CDBL 500, ,000 Advance to CEGIS(Centre Environment & Geographics) - 410,000 Advance to M/S Maznu Traders(For Land purchase) 73,073 73,073 Advance to M/S Maznu Traders(For Land Development) - 600,000 Advance against Office Rent 5,516,678 2,979,174 Security Deposit to United Leasing Co. Ltd. 101, ,887 Security Deposit against LC margin 14,701,340 6,461,814 Advance to Sharif & Brothers(Land Purchase-Ashugonj) 2,615,000 2,615,000 Advance to M/S MR Traders (Land purchase-ashugonj) 1,065,148 - Advance to Shajadul Islam Bhuiyan (Advocate) - 50,000 Advance to Mr. Abdus Salam(Land) - 190, ,622, ,894,920 7-A. CONSOLIDATED ADVANCE INCOME TAX: 137,025,656 Opening Balance 80,797,527 34,325,203 Payment/Adjustment for prior year Income 12,759,062 7,096,325 Last year Balance after adjustment- 68,038,465 27,228,878 Advance Income Tax paid (Against Export Proceeds) 65,190,504 51,897,388 Advance Income Tax paid (Against Interest Income) 481, ,432 Advance Income Tax paid (Against Cash Incentive) 3,267,565 1,059,829 Advance Income Tax paid (Against Vehicle Fitness) 48,000 15,000 Total AIT paid for the year: 68,987,191 53,568,650 Total- 137,025,656 80,797,527 33

35 8. CONSOLIDATED CASH AND CASH EQUIVALENTS: Tk. 535,107,702 Cash in Hand at Head Office 1,923,353 1,105,468 Cash at Banks : AB Bank Ltd. STD A/C: (MSML) 225, ,196 Brac Bank STD A/C: (Deposit with IPO) MSML 53,365 19,537,390 Brac Bank (Dividend) A/C: (MSML) 13,501,189 12,656,489 Citibank N.A CD A/C: G (MSML) - 27,602 CITI Bank N.A A/C :G (STL) - 887,665 The City Bank Ltd.-CD A/c 383, ,076 The City Bank Ltd.-FBPAR A/c 147,192 5,603,447 The City Bank Ltd.-ERQ A/C 35,804,459 - Dhaka Bank Ltd A/C: (STL) 318,400 9,303,136 Dhaka Bank USD Margin A/C:0032 (STL) 778,287 1,634,334 Dhaka Bank Ltd A/C: (NSL) 1,082,627 1,178,702 Dhaka Bank Ltd. CD A/C: ,352,241 - Dhaka Bank Ltd. STD A/C: ,304,164 - Dhaka Bank Ltd.- Margin Account: (MSML) 21,546,504 6,053 Eastern Bank CD A/C: 5745 (NSL) 94,126 95,396 Eastern Bank Ltd.- Margin Account: USD (MSML) 25,460,635 24,048,926 Eastern Bank USD Margin A/C: (STL) - 3,527 Eastern Bank CD A/C: (STL) 193, ,654 Eastern Bank FC A/C: (Deposit-NRB IPO) MSML 1,283,358 1,383,360 Eastern Bank STD A/C: BDT (Deposit IPO) MSML 24,622,938 23,347,020 HSBC Bank CD A/C: (NASL) 840,581 21,846,310 HSBC Bank CD A/C: (MSML) - 838,490 HSBC Bank USD Margin A/C: 091 (STL) 24,088,206 4,373,642 HSBC Bank-Margin A/C:091 USD (MSML) 37,010,698 1,870,202 HSBC Bank-R.Q A/C:095 USD (MSML) 320,680 42,694 Islami Bank-CD A/C: (Titas) - 3,924,288 Islami Bank-Margin A/C: 58(Titas) 3,952 1,020,172 Islami Bank-Margin A/C: 59(Titas) 389, ,725 Islami Bank-FC A/C: 80 (USD)(Titas) 68,376 19,208,466 Islami Bank-FDR A/C: (Titas) 10,392,138 10,283,668 Islami Bank-FDR A/C: (Titas) 5,151,070 5,099,252 Islami Bank-FDR A/C: 3301(Titas) 1,092,024 1,000,000 Islami Bank-ERQ A/C: 71(Titas) 228,096 - One Bank Ltd CD A/C: (MSML) 3,074,035 - One Bank- Margin Account : USD (MSML) 8,303,740 20,044,559 Shahjalal Islami Bank A/C: (MSML) 15,998 17,148 Trust Bank Ltd A/C: (STL) 1,506,457 1,038,881 Trust Bank Ltd - Margin A/C: (MSML) 42, ,659 Trust Bank Ltd - Margin A/C: (STL) 368, ,789 Trust Bank Ltd.- CD A/C: (NSL) 541, ,233 Eastern Bank Limited FC- Margin-JM 83,486,134 1,264,614 Eastern Bank Ltd. CD A/C (JM) , ,148 Eastern Bank Ltd. CD A/C (JM) ,327,746 Eastern Bank Ltd. ERQ A/C-JM 1,784,014 - HSBC Ltd. CD A/c(JM) 43,430 8,646 HSBC Ltd.Margin A/c(JM) 19,108 20,112 UCBL- FC Margin-JM 182,585, ,356,761 UCBL- Banani Branch-JM 139,288 - UCBL- ERQ A/C, Banani Branch-JM - 399, ,184, ,273, ,107, ,379, CONSOLIDATED SHARE CAPITAL: It represents 19,36,00,000 ordinary shares of Tk.10 each. Tk. 1,936,000,000 1,936,000, CONSOLIDATED SHARE PREMIUM: It represents premium of 100,000,000 ordinary shares of Tk.15 each. Tk. 1,500,000,000 1,500,000, CONSOLIDATED RETAINED EARNINGS: Tk. 778,865,865 Balance as on ,712, ,602,328 Add: Net Profit/(Loss) during this period 443,974, ,197, ,687, ,799,966 Add: Depreciation of Reserve for Revaluation of Fixed Assets 110,401, ,054,038 Less: Declared Cash Dividend 193,600,000 - Less: Declared Stock Dividend - 176,000,000 Add: Adjustment Minority Interest of Retained Earnings 3,376,482 (35,805,225) Less: Deferred Tax for the period up to ,335,818 Total 778,865, ,712, CONSOLIDATED TAX HOLIDAY RESERVE: Tk. 210,883,871 Opening Balance 203,647, ,176,637 Add: Adjustment Minority Interest of Tax Holiday Reserve 746,005 1,402,623 Add: Provided during the year 6,490,430 60,068,176 Closing Balance 210,883, ,647, CONSOLIDATED RE-VALUATION SURPLUS OF FIXED ASSETS: Tk. 4,297,568,262 Particulars Balance as on ,363,383,492 4,566,486,822 Add: Addition of Revaluated Assets - - 4,363,383,492 4,566,486,822 Less: Depreciation for the year on Revaluated Assets 110,401, ,054,038 Written Down Value- 4,252,981,622 4,429,432,784 Add: Adjustment Minority Interest of revaluation surplus Assets 44,586,641 - Less: Adjustment Minority Interest of revaluation surplus Assets - 66,049,292 Net Revaluated Surplus Asset Value 4,297,568,262 4,363,383,492 Note: Detail of Re-valuation Surplus of Fixed Assets is given in the annexed Annexure-1.1 MALEK SPNNING MILLS LIMITED 34

36 Annual Report MINORITY INTEREST: TK. 52,628,362 Paid-up Capital- (i) Salek Textile Ltd % 10,011,700 9,990,000 (ii) Newasia Synthetics Ltd % 3,535,000 3,535,000 (iii) J.M Fabrics Ltd % 10,000 10,000 (iv) Titas Spinning & Denim Ltd % - 100,000 Total: 13,556,700 13,635,000 Retained Earningsi) Salek Textile Ltd % 13,181,852 13,043,688 (ii) Newasia Synthetics Ltd % (48,054) (103,427) (iii) J.M Fabrics Ltd % 4,844 3,130 (iv) Titas Spinning & Denim Ltd % - (86,266) Total: 13,138,642 12,857,125 Tax Holiday reserve- (i) Salek Textile Ltd % 4,470,368 5,216,374 Total: 4,470,368 5,216,374 Revaluation Surplus- (i) Salek Textile Ltd % 11,972,689 15,313,450 (ii) Newasia Synthetics Ltd % 9,485,468 50,608,057 (iii) J.M Fabrics Ltd % 4,494 4,575 (iv) Titas Spinning & Denim Ltd % - 123,210 Total: 21,462,651 66,049,292 Total Minority Interest: 52,628,362 97,757,791 Note: This represents minority interest of Salek Textile Limited, Newasia Synthetics Limited, J.M. Fabrics Limited 15. CONSOLIDATED LONG TERM LOAN: Tk. 1,471,625,227 Eastern Bank Limited 646,681, ,735,845 Dhaka Bank Limited 479,558, ,394,851 Trust Bank Limited 82,867, ,817,545 HSBC Limited 43,750,000 95,210,153 Islami Bank-A/C: ,126, ,492,961 Islami Bank-A/C: ,881,378 29,456,358 Islami Bank-A/C: ,554,554 11,579,656 Islami Bank-A/C: ,908,301 2,197,719 Islami Bank-A/C: ,278, ,779,578 The City Bank-A/C: 276,522, ,379,331 UCBL-A/C: 429,925, ,676,126 United Leasing Co. Ltd.: 115,491 1,041,579 2,463,169,887 2,744,761,701 Less: Current Portion of Long Term Loan Note: ,544, ,799,650 1,471,625,227 1,847,962, DEFERRED TAX LIABILITIES: Tk. 244,607,277 Opening Balance as at ,809, ,335,818 Add: Provision for the year (14,202,154) (14,526,387) Add: Provision for 9 month(titas Spinning) - - Total- 244,607, ,809, CONSOLIDATED SHORT TERM LOAN: Tk. 1,044,440,303 Import Loan: Eastern Bank Ltd (JM) 236,247,974 27,729,012 Islami Bank Ltd.(Titas) 308,594, ,418,000 One Bank Ltd (MSML) - 18,102,765 United Commercial Bank Ltd.(J.M) 147,942, ,531 The City Bank Ltd. JM) 80,170,990 14,987, ,955, ,226,200 Bank Overdraft: Eastern Bank Ltd A/C: & 11 (MSML) 29,463,601 45,886,486 Eastern Bank Ltd A/C: (STL) 6,447,921 12,971,509 Eastern Bank Ltd A/C:(J.M) - 38,750,767 Dhaka Bank Ltd A/C: (MSML) - 29,676,943 The city Bank Ltd. A/C:(JM) 10,361,914 12,380,082 United Commercial Bank Ltd.(J.M) 43,483, ,117,087 Islami Bank Ltd. (Titas) 115,161,474 63,436,467 One Bank Ltd A/C: (MSML) - 8,643,536 TBL CD/OD A/C: (MSML) 8,199,148 31,149,697 HSBC OD A/C : (MSML) 2,669,721 - HSBC A/C: (STL) 55,698,005 51,871, ,485, ,883, CONSOLIDATED CURRENT PORTION OF LONG TERM LOAN : 1,044,440, ,110,097 Eastern Bank Ltd. 193,194, ,245,483 Dhaka Bank Ltd. 291,600, ,751,616 HSBC Ltd. 43,750,000 52,547,110 Islami Bank Bangladesh Ltd. 164,400, ,831,292 Trust Bank Ltd. 82,867, ,224,149 The City Bank Ltd. 104,221,539 42,400,000 UCBL 111,395, ,800,000 United Leasing Co. Ltd. 115, ,544, ,799,650 35

37 Note- According to Bangladesh Accounting Standard (BAS) 1 "Preparation of Financial Statements", Current portion of Long Term Loan that are due for settlement within twelve month after the balance sheet date are current liabilities, therefore, the above amount has been shown in current liabilities. 19. SECURITY DEPOSIT AGAINST SALES: - 5,000, CONSOLIDATED BANK ACCEPTANCE LIABILITIES: TK. 1,920,390,417 Raw Materials: Eastern Bank Limited 466,458, ,135,544 HSBC Ltd. 580,358, ,662,379 The City Bank Ltd. 14,067,896 19,892,980 Islami Bank Ltd. 244,294, ,023,537 UCBL 14,258,264 69,199,086 Dhaka Bank Limited 582,881, ,356,532 1,902,319,612 2,197,270,057 Machinery & Spare parts: Eastern Bank Ltd. 18,070,805 67,866,966 18,070,805 67,866,966 1,920,390,417 2,265,137, CONSOLIDATED CREDITORS & ACCRUALS: Tk. 958,175,613 Gas Bill Payable 10,883,652 13,348,521 Electricity Bill Payable 114,084 1,625,334 Telephone Bill Payable 118,216 - Audit Fee Payable 227, ,475 Legal Fee Payable 10,000 10,000 Office Rent Payable 107,900 9,100 Tax Deduction at Source 3,500,968 9,310,335 VAT Payable 999,987 7,997,361 Income Tax Payable Note: 21-A 114,463,952 47,628,324 Salary & Wages Payable 63,166,303 48,185,641 Contribution to WPPF Payable 141,330, ,155,942 Director's Remuneration Payable 684, ,729 Accounts Payable for Goods Suppliers & Others 170,411, ,118,190 Accounts Payable for Waste Cotton Purchase 158,016, ,480,250 Accounts Payable against Sales 5,000,000 - Interest accrued Note: 21-B 248,122, ,723,703 Dividend Payable 27,975,881 10,336,505 Refundable IPO Share money 13,040,743 13,215, ,175, ,079, A. CONSOLIDATED TAX PAYABLE: Balance as on ,967,277 7,096,325 Provision for the year (Current Tax): Note: 28 79,594,690 47,628,324 Less: Adjustment Tax provision of Titas for 9 month 7,161, ,400,848 54,724,648 Payment/Adjustment for prior year balance: 5,936,896 7,096,325 Total Payment/Adjustment for last year Income: 5,936,896 7,096,325 Total Payable- 114,463,952 47,628, B. INTERST ACCRUED: Tk. 248,122,969 On Import Loan: Islami Bank Bangladesh Ltd. 36,731,195 34,501,134 36,731,195 34,501,134 On Long Term Loan: Islami Bank Bangladesh Ltd. 211,391, ,222, ,391, ,222, ,122, ,723, CONSOLIDATED SALES: Tk. 8,239,372,911 Export Sales 8,659,013,092 7,982,740,183 Less: Inter Co. Sales 419,640, ,870,305 8,239,372,911 7,737,869, CONSOLIDATED COST OF GOODS SOLD: Tk. 7,227,818,707 Raw Material Consumed Note: 23-A. 6,274,423,518 5,812,625,021 Direct Expenses Note: 23-B. 517,240, ,596,380 Factory Overhead Note: 23-C. 1,033,114, ,137,316 Total Manufacturing Cost 7,824,778,818 7,104,358,717 Work-in-Process- Opening 282,142, ,065,813 Cost of Goods available for use 8,106,920,869 7,224,424,530 Work-in-Process- Closing 309,939, ,142,051 Cost of Production 7,796,980,888 6,942,282,479 Finished Goods- Opening 1,230,201,094 1,098,952,517 Cost of Goods Available for Sales 9,027,181,982 8,041,234,996 Finished Goods- Closing 1,397,940,480 1,230,201,094 Finished Goods- Inter Company 419,640, ,870,305 Loss on Fire 18,217,385 - Cost of Goods Sold: 7,227,818,707 6,566,163, A. CONSOLIDATED RAW MATERIALS CONSUMED: 5,778,961,148 Opening Inventory of Raw Materials 1,174,964, ,547,686 Add: Purchase of Raw Materials 6,058,360,992 6,153,038,244 Less: Closing Stock of Raw Materials 1,454,364,012 1,136,960,910 Raw Materials Consumption: 5,778,961,148 5,812,625,021 Raw Materials Consumption(Titas 9 month) 495,462,370 - Total Raw Materials Consumption: 6,274,423,518 5,812,625,021 MALEK SPNNING MILLS LIMITED 36

38 Annual Report B. CONSOLIDATED DIRECT EXPENSE: Tk. 517,240,423 Direct Wages/Labour 406,673, ,165,773 Overtime Wages 110,567,230 22,430,607 Total 517,240, ,596, C. CONSOLIDATED FACTORY OVERHEAD: Tk. 1,033,114,877 Factory Salary and Allowances 64,390,309 53,848,835 Festival Bonus 2,231, ,450 Electricity Charges 3,824,182 5,347,555 Gas Charges 140,749, ,648,099 Gardening Expenses 18,158 68,888 Repairs & Maintenance 92,962,333 47,474,819 Air Freight/Courier charges 33,077 1,906,500 Packing Materials 51,989,724 59,515,307 Fuel, Oil & Lubricant 30,222,629 35,667,242 Insurance Premium- Fire 11,795,657 11,312,775 Insurance Premium- (Group) 48,440 - Stores & Accessories consump. Note:23(C)-i 80,154,024 53,512,833 Entertainment 8,792,394 5,053,285 Telephone, Mobile & Fax 1,491,739 1,291,484 Stationery charges 2,186,339 1,474,237 Printing Charges 453, ,859 Other Carrying Charges 13,823,558 5,286,793 Others Factory Office Expenses 361, ,389 Dyeing, Printing, Washing, Embroidary, Finishing Exp. 53,594,957 4,504,920 C&F agent commission 6,280,086 4,279,200 Lab test & Inspection charges 20,029,522 2,012,365 Factory Rent 3,900,000 - Vehicles Maintenance 6,699,463 5,813,783 Medical Expenses 744, ,233 Uniform & Leverage 72,550 22,630 Miscellaneous 1,358,265 1,133,364 Conveyances 2,511,058 1,746,632 House Rent for Worker Shed 2,092, ,687 Depreciation Note: ,302, ,802,152 1,033,114, ,137,316 23(C )-i. CONSOLIDATED CONSUMPTION OF STORES AND ACCESSORIES: Opening Stock of Stores and Accessories 123,749,259 99,736,903 Opening Stock of Stores and Accessories(from Titas) 15,658,089 - Add: Purchase during the year 82,661, ,220,777 Less: Closing Stock of Stores and Accessories 158,306, ,444,847 Stores and Accessories Consumed 63,762,278 53,512,833 Stores and Accessories Consumed(Titas 9 month) 16,391,746 - Total Stores and Accessories Consumed 80,154,024 53,512, CONSOLIDATED OPERATING EXPENSES : Tk. 143,548,543 Salaries & Allowances 42,341,468 35,501,191 Festival Bonus 6,892,042 4,184,270 Director's Remuneration 10,334,000 10,534,000 Fees, Forms & Others 7,425,481 5,275,962 Audit Fees 229, ,000 Printing & Stationery 2,545,490 1,345,841 Electricity Charges - 28,381 Telephone,Mobile & Internet Expenses 2,188,383 1,211,725 Postage & Stamp 427, ,708 Vehicle Maintenance 6,538,923 4,849,093 Miscellaneous Expenses 16,546,665 9,630,337 Business Development Exp. 8,687,212 7,176,890 Office Rent 2,314,488 1,362,504 Rates & Taxes 2,035,291 2,293,425 Carriage Outward, Selling & Distribution, C&F exp., Sample charges 12,059,825 8,990,130 Travelling & Conveyance 2,806,115 2,485,035 Entertainments 1,811,764 1,182,957 Office Expenses 275,332 72,878 Fuel & Oil for Head Office 287, ,788 Advertisement/ Publicity Expenses 723, ,061 AGM Expenses 2,377,808 2,278,896 Security Charges 459, ,525 Gardening Expenses 29,455 21,605 Uniform & Leverage Security 378,954 99,320 Repairs & Maintenance 2,232,422 1,221,819 Donation & Subscription 80,000 - Software Maintenance Expenditure 277, ,000 Trial and Operation Loss - 11,537,269 Credit Rating Charges 73,478 - Depreciation Note: 4 11,169,647 9,356, ,548, ,516,957 37

39 25. CONSOLIDATED FINANCIAL EXPENSES : Tk. 363,696,687 EASTERN BANK LTD. : Interest on Long Term Loan 21,979,667 41,088,461 Interest on Short Term Loan 4,371,470 1,545,921 Interest on Overdraft 6,862,168 6,517,184 Bank Charges & Commission 9,348,551 11,331,584 Export L/C Negotiation Commission 100,582 1,052,210 Interest on Bill Discount 1,850,053 11,627,013 TOTAL 44,512,491 73,162,372 HSBC LTD. : Interest on Long Term Loan 9,490,816 24,540,022 Interest on Short Term Loan 13,843,835 7,548,828 Interest on Overdraft 4,624,939 4,821,532 Bank Charges & Commission 8,189,966 4,214,764 Export L/C Negotiation Commission - 2,646,025 Interest on Bill Discount 27,233,458 39,929,660 TOTAL 63,383,014 83,700,830 DHAKA BANK LTD. : Interest on Long Term Loan 85,862, ,378,315 Interest on Short Term Loan 1,608,076 1,321,913 Interest on Overdraft 2,038,903 2,679,276 Bank Charges & Commission 5,617,080 1,470,168 Export L/C Negotiation Commission 147,104 - Interest on Bill Discount 4,496,252 14,203,854 TOTAL 99,770, ,053,527 ONE BANK LTD. : Interest on Short Term Loan 1,060, ,116 Interest on Overdraft 1,223,467 1,075,496 Bank Charges & Commission 1,170, ,289 Interest on Bill Discount - 2,543 TOTAL 3,454,599 1,960,445 TRUST BANK LTD. : Interest on Long Term Loan 18,610,078 32,215,559 Bank Charges & Commission 1,260,972 1,401,712 Interest on Overdraft 3,173,733 1,867,944 Interest on Bill Discount - 380,371 TOTAL 23,044,783 35,865,586 SHAHJALAL ISLAMI BANK LTD. : Bank Charges & Commission 1,150 1,150 TOTAL 1,150 1,150 CITIBANK N.A : Bank Charges & Commission 1,620 1,810 TOTAL 1,620 1,810 ISLAMI BANK BANGLADESH LTD.: Interest on Long Term Loan 81,901,624 64,567,452 Interest on Short Term Loan 23,620,197 43,876,908 Bank Charges & Commission 5,596,866 3,610,867 Export Bill Negotiation Commission 254, ,649 Interest on Bill Discount 9,484,310 6,827,060 TOTAL 120,857, ,440,936 UNITED LEASING CO./UTTARA FINANCE & INVENSTMENT LTD.: Interest on Lease Finance 92, ,416 TOTAL 92, ,416 AB BANK LTD : Bank Charges & Commission 57,232 3,000 TOTAL 57,232 3,000 BRAC BANK LTD: Bank Charges and Commission 11,380 11,150 TOTAL 11,380 11,150 THE CITY BANK LTD.: Bank Charges and Commission 1,014,930 1,647,852 Interest on Long Term Loan 4,796,787 - TOTAL 5,811,717 1,647,852 UCBL: Interest on Term Loan 1,257,397 - Bank Charges & Commission 1,440,363 4,644,849 TOTAL 2,697,760 4,644, ,696, ,733,923 MALEK SPNNING MILLS LIMITED 38

40 Annual Report NON-OPERATING INCOME/(LOSS): Tk. 41,302,851 CASH INCENTIVE: 37,185,368 - OTHER INCOME/(LOSS): Interest Received from Dividend A/C with BRAC Bank Ltd. 1,010, ,853 Interest Received from Dividend A/C with Dhaka Bank Ltd. 730,492 - Interest Income from STD A/C with AB Bank Ltd. 4,383 8,576 Interest Income from STD A/C witth BRAC Bank Ltd. 746,055 1,326,482 Interest Income from STD A/C witth Eastern Bank Ltd. 1,507,854 1,884,236 Interest Received from CD A/C-Islami Bank - 440,005 3,999,314 4,607,153 Interest Received from Overdue Bill - 490,489 Foreign currency exchange Gain 393,674 - Gain on Sale of Assets 63,264 16, , ,342 Less: Loss on Sale of Assets 338,769 56, ,769 56,827 Total Other Income- 4,117,483 5,057,668 Total 41,302,851 5,057, CONSOLIDATED PROVISION FOR WORKER'S PROFIT PARTICIPATION FUND: Provision for Contribution to WPPF(MSML) 12,473,497 12,457,900 Provision for Contribution to WPPF(STL) 8,104,203 10,792,322 Provision for Contribution to WPPF(JM) 3,940,365 3,498,363 Provision for Contribution to WPPF(TITAS) 1,656,543 2,480,699 26,174,608 29,229, CONSOLIDATED INCOME TAX PROVISION (CURRENT TAX): On operating Income: Malek Spinning Mills Ltd. 37,776,361 15,087,903 Salek Textile Ltd. 25,145,038 15,728,565 J.M Fabrics Ltd. 5,064,137 5,936,896 Titas Spinning & Denim Co. Ltd.( for 9 month) 7,161,120 10,686,869 75,146,656 47,440,234 On Cash Incentive: Malek Spinning Mills Ltd. 1,859,268 - J.M Fabrics Ltd. 1,408,297-3,267,565 - On other Income: Malek Spinning Mills Ltd. 1,180,469 23,088 Salek Textile Ltd ,002 1,180, ,090 TOTAL 79,594,690 47,628, CONSOLIDATED INCOME TAX PROVISION (DEFERRED TAX): Malek Spinning Mills Ltd. (6,577,569) (6,395,612) Salek Textile Ltd. (5,402,104) (5,238,136) J.M Fabrics Ltd. (30,989) 352,134 Titas Spinning & Denim Co. Ltd. (2,191,492) (3,244,773) (14,202,154) (14,526,387) 30. CONSOLIDATED TAX HOLIDAY RESERVE: 6,490,430 Salek Textile Ltd % 6,490,430 60,068,176 6,490,430 60,068, MINORITY INTEREST: Tk. 3,579,700 On Net Profit/(Loss) after tax Salek Textile Ltd % 2,952,862 5,128,767 Newasia Synthetics Ltd % (28,668) (103,427) J.M. Fabrics Limited % 1,809 1,592 Titas Spinning & Denim Co. Ltd % - 11,170 2,926,002 5,038,102 On Revaluation Reserve Salek Textile Ltd % 653, ,150 J.M. Fabrics Limited % Titas Spinning & Denim Co. Ltd. - 5, , ,930 3,579,700 5,916, CONSOLIDATED BASIC EARNINGS PER SHARE (EPS): 2.33 (a) Consolidated Net Profit/(Loss) after tax for the year 454,044, ,181,846 (b) Consolidated Minority Interest for the year 3,579,700 5,916,032 Consolidated Net Profit/(Loss): (a-b) 450,464, ,265,814 (c) Number of total share 193,600, ,600,000 Basic Earnings per Share (EPS): [(a-b)/c]

41 SL PARTICULARS MALEK SPINNING MILLS LIMITED CONSOLIDATED FIXED ASSETS SCHEDULE AS AT 30TH JUNE 2014 ANNEXURE : 1 COST RATE DEPRECIATION WRITTEN DOWN AS AT ADDITION ADJUSTMENT AS AT AS AT THIS YEAR ADJUSTMENTS AS AT VALUE AS AT A. Malek Spinning Mills Ltd., Salek Textile, Newasia Synthetics Ltd. & JM Fabrics Ltd. 1 Land and Land Development 728,669,681 29,526, ,195, ,195,834 2 Factory Building 1,249,174,981 10,283,420 4,500,000 1,254,958,401 5% 352,322,400 39,890, ,213, ,745,295 3 Plant and Machinery 3,975,672, ,229,607-4,095,902,451 10% 1,685,733, ,679,118-1,877,412,925 2,218,489,526 4 Lease Assets(Plant and Machinery) 12,753, ,753,116 10% 5,222, ,059-5,975,587 6,777,529 5 Electrical Installation 125,417,732 3,390, ,808,612 10%,15% 70,823,123 7,531,882-78,355,005 50,453,607 6 Tubewell and Water Pump 10,185, ,185,308 10%,15% 5,589, ,669-6,095,444 4,089,864 7 Furniture and Fixtures 25,247,164 4,299,968 1,021,000 28,526,132 10% 6,369,288 2,088,599-8,457,888 20,068,245 8 Office Equipments 19,301,202 1,598,797-20,899,999 15% 8,968,715 1,613,354-10,582,069 10,317,930 9 Gas Line Installation 25,515,257 2,337,592-27,852,849 15% 12,853,892 2,214,360-15,068,253 12,784, Cargo Lift 4,679, ,679,223 0% 467, , ,052 3,790, Loose Tools and Equipment 14,731, ,166-15,355,041 15% 4,853,500 1,061,968-5,915,468 9,439, Motor Vehicle 60,062,797 18,905,000 4,488,400 74,479,397 15% 23,730,291 7,190,235 2,912,895 28,007,631 46,471, Telephone (PABX) Installation 790, ,975 15% 418,131 28, , , Crockaries and Cutlaries 84,091 34, ,001 15% 52,059 10,041-62,100 56, Generator 236,629, ,629,429 15% 133,562,555 13,068, ,631,026 89,998, Fire Installation 253, ,100 15% 195,428 8, ,079 49,021 Total (A) 6,489,168, ,229,493 10,009,400 6,670,388,867 2,311,163, ,065,272 2,912,895 2,576,315,792 4,094,073,075 MALEK SPINNING MILLS LIMITED AND ITS SUBSIDIARIES CONSOLIDATED REVALUATED ASSETS SCHEDULE AS AT 30TH JUNE 2014 COST RATE DEPRECIATION WRITTEN DOWN PARTICULARS AS AT ADDITION ADJUSTMENT AS AT AS AT THIS YEAR ADJUSTMENTS AS AT VALUE AS AT Sl B. REVALUATION OF FIXED ASSETS : 1 Land and Land Development 2,859,354, ,859,354, ,859,354,760 2 Factory Building 348,907, ,907,426 5% 43,487,981 15,116,084-58,604, ,303,361 3 Plant and Machinery 1,448,886, ,448,886, % 317,864,187 82,295, ,160,078 1,048,726,829 4 Generator 157,730, ,730,295 10% 38,704,383 12,989,895-51,694, ,036,017 Total (B) 4,814,879, ,814,879, ,056, ,401, ,458,421 4,304,420,967 GRAND TOTAL ( A+B ) 11,304,048, ,229,493 10,009,400 11,485,268,255 2,711,219, ,467,142 2,912,895 3,086,774,213 8,398,494,042 Depreciation Charges to: Factory Overhead: 368,257,662 Operating Expenses: 10,209,480 Tk. 378,467,143 MALEK SPNNING MILLS LIMITED 40

42 Annual Report 2014 Malek Siddiqui Wali CHARTERED ACCOUNTANTS 9-G, MOTIJHEEL, C/A, Dhaka-1000, Bangladesh AUDITORS REPORT to the shareholders of Malek Spinning Mills Limited We have audited the accompanying Statement of Financial Position of Malek Spinning Mills Limited as at 30th June 2014 and the related Statement of Comprehensive Income, Statement of Cash Flow, Statement of Change in Equity and Notes for the period from 1st July 2013 to 30th June Management s Responsibility for the Financial Statements: The Management is responsible for the preparation and fair presentation of these financial statements is accordance with Bangladesh Accounting Standard/Bangladesh Financial Reporting Standards (BFRS), the companies Act 1994 and other applicable laws and regulation and for such internal control as management determines is necessary to enable the prepatation of financial statements that are free from material misstatement, where due to fraud or error. Auditor s Responsibility: Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance where the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments the auditor consider internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing and opinion on the effectiveness of the entity s internal control. An audit also includes evaluation the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion: In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standard/Bangladesh Financial Reporting Standards (BFRS), give a true and fair view of the state of the company s affairs as of 30th June 2014 and of the results of its operations and its cash flows for the period then ended and comply with the Companies Act 1994 and other applicable laws and regulations. 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 there of; 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; c) The Company s Statement of Financial Position and Statement of Comprehensive Income dealt with by the report are in agreement with the books of accounts; d) The expenditures incurred and payments made were for the purpose of the company s business. Dated : Dhaka October 27, 2014 Malek Siddiqui Wali Chartered Accountants 41

43 MALEK SPINNING MILLS LIMITED STATEMENT OF FINANCIAL POSITION AS AT 30TH JUNE 2014 Notes JUNE'14 JUNE'13 Taka Taka ASSETS : Non-Current Assets: 4,069,874,426 4,150,061,479 Property, Plant and Equipment 1.1 2,403,509,426 2,483,696,479 Investment in Subsidiary Company 2.1 1,666,365,000 1,260,080,000 Share Money Deposit to Subsidiary Company ,285,000 Current Assets : 3,043,633,395 3,353,938,944 Inventories 4.1 1,620,225,789 1,518,380,701 Accounts Receivable 5.1 1,152,092,612 1,378,710,075 Advances, Deposits and Pre-payments ,017, ,755,380 Cash and Cash Equivalents ,297, ,092,788 TOTAL ASSETS : 7,113,507,820 7,504,000,423 SHAREHOLDER'S EQUITY AND LIABILITIES : Shareholder's Equity : 5,483,097,155 5,461,465,752 Share Capital 8.1 1,936,000,000 1,936,000,000 Share Premium 9.1 1,500,000,000 1,500,000,000 Retained Earnings ,827, ,019,642 Re-valuation Surplus of Fixed Assets ,752,269,720 1,823,446,110 Non-Current Liabilities: 225,216, ,329,500 Long Term Loan ,213, ,748,630 Deferred Tax Liabilities ,003, ,580,870 Current Liabilities : 1,405,194,186 1,766,205,171 Short Term Loan ,332, ,459,426 Current Portion of Long Term Loan ,616, ,050,030 Bank Acceptance Liabilities ,348,689 1,223,532,143 Creditors and Accruals ,896, ,163,572 TOTAL SHAREHOLDER'S EQUITY AND LIABILITIES : 7,113,507,820 7,504,000,423 Net Assets Value Per Share (NAV) Par Value Tk.10 The annexed notes 1.1 to 27.1 form an integral part of these financial statement. A. Matin Chowdhury Azizur Rahim Chowdhury B.K. Chaki Syed Saiful Haque Managing Director Director Chief Financial Officer Company Secretary As per our report of same date Dhaka ( Malek Siddiqui Wali ) October 27, 2014 Chartered Accountants MALEK SPNNING MILLS LIMITED 42

44 Annual Report 2014 MALEK SPINNING MILLS LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30TH JUNE 2014 Notes JUNE'14 JUNE'13 Taka Taka Sales ,065,012,791 3,262,553,013 Cost of Goods Sold ,669,542,115 2,742,089,807 Gross Profit/(Loss) : 395,470, ,463,206 Operating Expenses ,516,947 63,220,782 Financial Expenses ,488, ,244,180 Operating Profit/(Loss) : 220,465, ,998,244 Non-operating Income/(Loss) ,477,984 4,617,663 Net Operating Profit/(Loss) : 261,943, ,615,907 Provision for Contribution to WPPF ,473,497 12,457,900 Profit/(Loss) before Tax : 249,469, ,158,007 Provision for Income Tax : 34,238,530 8,715,379 Current Tax ,816,099 15,110,991 Deferred Tax 25.1 (6,577,569) (6,395,612) Net Profit/(Loss) after tax for this year 215,231, ,442,628 (Transferred to the Statement of Changes in Equity) Earnings Per Share (EPS) Par Value Tk.10 Number of Shares used to compute EPS 193,600, ,600,000 The annexed notes 1.1 to 27.1 form an integral part of these financial statement. A. Matin Chowdhury Azizur Rahim Chowdhury B.K. Chaki Syed Saiful Haque Managing Director Director Chief Financial Officer Company Secretary As per our report of same date Dhaka ( Malek Siddiqui Wali ) October 27, 2014 Chartered Accountants 43

45 MALEK SPINNING MILLS LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30TH JUNE 2014 JUNE'14 JUNE'13 Taka Taka CASH FLOW FROM OPERATING ACTIVITIES : Collection from Turnover & Accounts Receivable 3,291,630,253 3,017,580,540 Payment for Raw Materials, Indirect Materials and other expenses (2,625,122,472) (2,479,523,748) Non-operating Income/(Loss) 41,441,020 4,617,663 Payment for Operating Expenses (64,680,408) (60,645,930) Payment for Income Tax (28,733,050) - Payment for Financial Expenses (107,488,284) (200,244,180) Net Cash provided/(used) by Operating Activities 507,047, ,784,345 CASH FLOW FROM INVESTING ACTIVITIES : Acquisition of Fixed Assets (40,011,053) (70,786,630) Disposal of Fixed Assets 400,000 1,043,232 Share Money Deposit to Subsidiary Company - 6,665,000 Investment to Subsidiary Company - (826,673,100) Net cash used in Investing Activities (39,611,053) (889,751,498) CASH FLOW FROM FINANCING ACTIVITIES : Bank Loan Increase/(Decrease) (241,095,472) (815,130,190) Refundable IPO Share Money paid (175,002) (325,001) Dividend Paid (175,960,624) (32,408) Advance realised - 1,369,258,860 Net Cash provided/(used) by Financing Activities (417,231,098) 553,771,261 Increase/(Decrease) in Cash and Cash Equivalents 50,204,908 (54,195,892) Cash & Cash Equivalents at 1st July ,092, ,288,680 Cash and Cash Equivalents at 30th June ,297, ,092,788 Net Operating Cash Flow Per Share (NOCFPS) Par Value Tk.10 A. Matin Chowdhury Azizur Rahim Chowdhury B.K. Chaki Syed Saiful Haque Managing Director Director Chief Financial Officer Company Secretary As per our report of same date Dhaka ( Malek Siddiqui Wali ) October 27, 2014 Chartered Accountants MALEK SPNNING MILLS LIMITED 44

46 Annual Report 2014 MALEK SPINNING MILLS LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30TH JUNE 2014 Particulars Share Share Revaluation Surplus Retained Total Capital Premium of Fixed Assets Earnings Balance as at 1st July ,936,000,000 1,500,000,000 1,823,446, ,019,642 5,461,465,752 Net Profit/(Loss) during the year - 215,231, ,231,403 Adjustment of Revaluation surplus of Fixed Assets (71,176,390) 71,176,390 - Issuance of Cash Dividend for (193,600,000) (193,600,000) As at 30th June ,936,000,000 1,500,000,000 1,752,269, ,827,434 5,483,097,155 FOR THE YEAR ENDED 30TH JUNE 2013 Particulars Share Share Revaluation Surplus Retained Total Capital Premium of Fixed Assets Earnings Balance as at 1st July ,760,000,000 1,500,000,000 1,900,426, ,573,526 5,402,999,606 Net Profit during the year 240,442, ,442,628 Adjustment of Revaluation surplus of Fixed Assets (76,979,970) 76,979,970 - Adjustment of Deferred Tax Liabilities up to (181,976,482) (181,976,482) Issuance of Stock Dividend for ,000,000 (176,000,000) - As at 30th June ,936,000,000 1,500,000,000 1,823,446, ,019,642 5,461,465,752 A. Matin Chowdhury Azizur Rahim Chowdhury B.K. Chaki Syed Saiful Haque Managing Director Director Chief Financial Officer Company Secretary As per our report of same date Dhaka ( Malek Siddiqui Wali ) October 27, 2014 Chartered Accountants 45

47 MALEK SPINNING MILLS LIMITED NOTES OF FINANCIAL STATEMENT FOR THE YEAR ENDED 30TH JUNE 2014 Amount in Taka JUNE'14 JUNE' FIXED ASSETS: Tk. 2,403,509,426 COST: Cost as at ,890,598,036 1,823,437,523 Addition during the year 40,011,053 70,786,630 1,930,609,089 1,894,224,153 Sales/Adjustment during the year 1,567,400 3,626,117 Total Cost as at ,929,041,689 1,890,598,036 Accumulated Depreciation as at ,230,347,666 1,183,383,213 Depreciation during the year 48,658,681 49,547,338 Adjustments during the year 1,204,364 2,582,885 Total Depreciation as at ,277,801,983 1,230,347,666 Written Down Value as at ,239, ,250,369 - REVALUATION: Revaluated Assets as at ,148,818,646 2,148,818,646 Addition of Revaluated Assets - - Total Revaluated Assets 2,148,818,646 2,148,818,646 Accumulated Depreciation as at ,372, ,392,566 Depreciation during the year 71,176,390 76,979,970 Total Depreciation 396,548, ,372,536 Written Down Value of Revaluated Assets as at ,752,269,720 1,823,446,110 Total Written Down Value as at ,403,509,426 2,483,696,479 Allocation of depreciation charges for the period has been made in the accounts as follows: i) Factory Overhead 116,998, ,952,456 ii) Administrative Overhead 2,836,539 2,574,852 Total 119,835, ,527,308 Note- Details of Fixed Assets and Depreciation are shown in the Annexure INVESTMENT IN SUBSIDIARY COMPANY : Tk. 1,666,365,000 Salek Textile Limited 769,910, ,010,000 Newasia Synthetics Limited (49,64,650 Shares of Tk.100/- each) 496,465,000 90,180,000 J.M. Fabrics Limited (39,99,900 Shares of Tk.100/- each) 399,990, ,990,000 Titas Spinning & Denim Co. Ltd ,900,000 1,666,365,000 1,260,080,000 Note- Salek Textile Ltd. issued 39,00,100 and 8,25,870 Share of Tk.460 each including Primium Tk SHARE MONEY DEPOSIT TO SUBSIDIARY COMPANY: Tk. 0 Newasia Synthetics Ltd ,285, ,285,000 Note- Share money deposit of Newasia Synthetics Ltd. 100 has been issued as paid up capital in this period. 4.1 INVENTORIES: Tk. 1,620,225,789 Raw Materials Note: 4.1-A 720,627, ,524,850 Stock-in-Transit Note: 4.1-B 62,433, ,026,938 Work-in-Process Note: 4.1-C 51,406,004 47,604,120 Finished Goods Note: 4.1-D 687,474, ,670,370 Stores and Accessories Note: 4.1-E 98,284, ,554,423 Total 1,620,225,789 1,518,380,701 Note- (i) Inventory of Raw Materials at the end of the year are equivalent to aprox. 120 days consumption based on current year's Raw Materials consumption. (ii) A team, consisting of Auditors and Management staff, carried out physical verification of the inventories as of June 30, (iii) Inventories were hyphothecated to Dhaka Bank Ltd., HSBC Ltd., Eastern Bank Ltd., Trust Bank Ltd. and One Bank Ltd as security of workings capital loan. 4.1-A RAW MATERIALS : Tk. 720,627,561 Raw Cotton USA 568,299, ,194,294 Raw Cotton Indian 152,327,847 78,330,556 Total 720,627, ,524, B STOCK IN TRANSIT : Tk. 62,433,043 Raw Material 62,433, ,026,938 Total 62,433, ,026, C WORK-IN-PROCESS : Tk. 51,406,004 Direct Materials 49,167,404 45,555,711 Direct Labour 767, ,955 Factory Overhead 1,471,470 1,346,454 Total 51,406,004 47,604, D FINISHED GOODS INVENTORY:Tk. 687,474, ,670, E STORES & ACCESSORIES: Tk. 98,284,256 Spare Parts & Accessories 98,284, ,554,423 98,284, ,554,423 MALEK SPNNING MILLS LIMITED 46

48 Annual Report ACCOUNTS RECEIVABLE: Tk. 1,152,092,612 1,378,710,075 Note: (i) A/C Receivable occurred in the ordinary course of business. (ii) The A/C Receivable are secured against confirmed Export L/C (Deferred period is 120 days). (iii) Aging of the Receivables: Below 120 Days: Tk. 974,041,504 Above 120 Days: Tk. 178,051,108 (iv)receivable from other company:tk. 819,973,825 (v) Receivable from related party:- Knit Asia Limited: Tk. 111,251,722 Salek Textile Ltd.: Tk. 111,761,582 J.M. Fabrics Ltd.: Tk. 109,105, ADVANCES, DEPOSITS & PRE-PAYMENTS: Tk. 116,017,297 Advance against construction materials, suppliers and others 30,104,384 46,431,130 Advance to Salek Textile Ltd ,962,662 Advance to Newasia Synthatics Ltd. 1,000,000 - Advance to J.M Fabrics Ltd. - 86,141,729 Advance to Titas Spinning & Denim Co. Ltd. - 7,040,000 Advance against Office Rent 1,166,678 2,166,674 Security Deposit to United Leasing Co. Ltd. 101, ,887 Security Deposit on REB 178, ,875 Security Deposit on Titas Gas T&D Co. 7,038,761 7,038,761 Advance Income Tax Note: 6.1-A 75,926,712 47,193,662 Security Deposit to CDBL 500, , ,017, ,755,380 a) All the advances & deposits amount is considered good and recoverable. b) In the opinion of Directors, all current assets, investments, loans and advance have, on realization in the ordinary course of business, a value at least equal to the amount at which they are stated in the Financial Position. c) There is no agreement amount due from Directors or officers of the Company. d) Advance against construction materials, supplies and others various party for construction materials, supplies and other Indirect materials procurement. e) Partial advance given to Subsidiary Co. shall be realised in future. 6.1-A. ADVANCE INCOME TAX: Tk. 75,926,712 Opening Balance 47,193,662 20,984,551 Payment/Adjustment for prior year Income - - Last year Balance after adjustment- 47,193,662 20,984,551 Advance Income Tax paid (Against Export Proceeds) 26,362,660 25,678,679 Advance Income Tax paid (Against Cash Incentive) 1,859,268 - Advance Income Tax paid (Against Vehicle Fitness) 30,000 - Advance Income Tax paid (Against Interest Income) 481, ,432 Total AIT paid for the year: 28,733,050 26,209,111 Total- 75,926,712 47,193, CASH AND CASH EQUIVALENTS: Tk. 155,297,696 Cash in Hand at Head Office: 180, ,000 Cash at Banks: AB Bank Ltd.-STD Account: , ,196 BRAC Bank STD A/C: ,365 19,537,390 BRAC Bank CD A/C: (Dividend) 13,501,189 12,656,489 Citibank N.A CD A/C: G ,602 Dhaka Bank Ltd. CD A/C: ,352,241 - Dhaka Bank Ltd. STD A/C: (Dividend) 18,304,164 - Dhaka Bank Ltd. Margin A/C: : US$ 2,79, ,546,504 6,053 Eastern Bank Ltd.-Margin A/C: : US$ 3,29, ,460,635 24,048,926 Eastern Bank Ltd.-FC A/C: (NRB IPO) 1,283,358 1,383,360 Eastern Bank Ltd.-STD A/C : BDT-(IPO) 24,622,938 23,347,020 HSBC Ltd.-Margin A/C : US$ 4,79, ,010,698 1,870,202 HSBC Ltd.-R.Q A/C ,680 42,694 HSBC Ltd.-CD A/C: ,490 One Bank Ltd.- CD A/C: ,074,035 - One Bank Ltd.- Margin A/C: ,US$ 1,07, ,303,740 20,044,559 Shahjalal Islami Bank Ltd.-CD A/C: ,998 17,148 Trust Bank Ltd.-Margin A/C : $ , , ,117, ,912, ,297, ,092,788 Note: a) Cash balance is physically verified and Bank balances are reconciled and found in order. b) Export proceeds are realised in the Margin A/C and is utilized for Payment of Deferred L/C Payment for Raw Cotton. 8.1 SHARE CAPITAL : Tk. 1,936,000,000 AUTHORISED CAPITAL: Tk. 3,000,000,000 2,000,000, ,000,000 Tk. 10/- each Authorized Capital has been increased from Tk. 200 crore to Tk. 300 crore as on ISSUED, SUBSCRIBED AND PAID-UP CAPITAL: Tk. 1,936,000,000 1,936,000,000 19,36,00,000 Ordinary Tk.10/- each issued and paid-up. 47

49 Share Holding Composition of Malek Spinning Mills Ltd. as at are as follows: SL Shareholder's Group No. of Shares held % of Shares No. of Shareholders 1 Sponsors & Directors 84,700, % 7 2 Institutions 44,255, % Foreign Shareholders % 0 4 General Public 64,644, % Total 193,600, % 27,537 Classification of shareholders by holding Distribution schedule of each class of equity security setting out the number of holders and percentage as at SL Range of Holdings No. of Holders Holdings Percentage 1 Less than 500 shares 6, , % to 5,000 shares 18,965 20,210, % 3 5,001 to 10,000 shares 925 6,705, % 4 10,001 to 20,000 shares 487 7,005, % 5 20,001 to 30,000 shars 154 3,782, % 6 30,001 to 40,000 shares 90 3,090, % 7 40,001 to 50,000 shares 45 2,067, % 8 50,001 to 100,000 shares 102 7,330, % 9 100,001 to 1,000,000 shares 99 26,025, % 10 Over 1,000,000 shares ,549, % Total 27, ,600, % 9.1 SHARE PREMIUM: 1,500,000, ,000,000 This represents issuance of 10,000,000 ordinary shares in September 2008 for Tk.25 each including premium of Tk. 15/- each in compliance with The Securities and Exchange Commission (SEC) consent No.SEC/CI/CPLC (PVT.)-95/06/337 dated on and further Placement issuance of 50,000,000 ordinary shares October 2009 for Tk.25/- each including premium of Tk.15 each in compliance with The Securities and Exchange Commission (SEC) consent No. SEC/CI/CPLC(PVT.)-95/dated on June 03, 2009 and further issuance of IPO of 4,00,00,000 ordinary shares on July 2010 for Tk. 25/- each including Premium of Tk. 15/- each in compliance with the Securities and Exchange Commission (SEC) consent No. SEC/CI/IPO-118/2010/462 dated April 15, RETAINED EARINGS: Tk. 294,827,434 Balance as on ,019, ,573,526 Add: Net Profit/(Loss) for the year 215,231, ,442, ,251, ,016,154 Add: Depreciation of Reserve for Revaluation of Fixed Assets 71,176,390 76,979,970 Less: Declared Cash Dividend 193,600,000 - Less: Declared Stock Dividend - 176,000,000 Less: Deferred Tax for the period up to ,976, ,827, ,019, RE-VALUATION SURPLUS OF FIXED ASSETS: Tk. 1,752,269,720 Balance as on ,823,446,110 1,900,426,080 Less: Depreciation for the year on Revaluated Assets 71,176,390 76,979,970 Written Down Value as at ,752,269,720 1,823,446,110 Note: Details of Re-valuation Surplus of Fixed Assets is given in the Annexure LONG TERM LOAN: Tk. 56,213,179 Eastern Bank Limited 95,097, ,189,536 HSBC Limited 43,750,000 93,750,000 Trust Bank Limited 82,867, ,817,545 United Leasing Co. Ltd. 115,491 1,041,579 Total 221,830, ,798,660 Less: Current Portion of Long Term Loan Note: ,616, ,050,030 56,213, ,748, DEFERRED TAX LIABILITIES: Tk. 169,003,301 Opening Balance as on ,580, ,976,482 Add: Provision for the year (6,577,569) (6,395,612) Total Liabilities: 169,003, ,580,870 Deferred Tax Calculation: Written Down Value Accounts Base 651,239,706 Tax Base 430,801,928 Difference 220,437,778 Revaluation Surplus of Fixed Assets (without land) 906,250, ,250,896 Total 1,557,490, ,801,928 1,126,688,674 Deferred 15% 169,003, SHORT TERM LOAN : Tk. 40,332,469 Import Loan: One Bank Ltd. - 18,102,765-18,102,765 Bank Overdraft: Eastern Bank Ltd A/C:180 & ,463,601 45,886,486 Dhaka Bank Ltd OD A/C: ,676,943 One Bank Ltd OD A/C: ,643,536 HSBC OD A/C: ,669,721 - TBL OD A/C: ,199,148 31,149,697 40,332, ,356,661 40,332, ,459,426 Note: The above Import Loan and Overdraft loans are secured against hypothecation of Stocks and Book Debts. MALEK SPNNING MILLS LIMITED 48

50 Annual Report CURRENT PORTION OF LONG TERM LOAN: Tk. 165,616,966 Eastern Bank Limited 38,883, ,738,923 HSBC Limited 43,750,000 51,086,957 Trust Bank Limited 82,867, ,224,149 United Leasing Co. Ltd. 115,491 - Total 165,616, ,050, BANK ACCEPTANCE LIABILITIES: 973,348,689 Raw Cotton: Eastern Bank Limited 112,348, ,948,160 Dhaka Bank Limited 262,571, ,356,316 HSBC Limited 580,358, ,360,701 = 955,277,884 1,155,665,177 Machinery: Eastern Bank Limited 18,070,805 67,866,966 18,070,805 67,866, ,348,689 1,223,532,143 Note: Acceptance liability represents the deferred payment of L/C for Imported Raw Materials for the period of 180 Days CREDITORS AND ACCRUALS: Tk. 225,896,061 Gas Bill Payable 4,598,669 3,984,637 Electricity Bill Payable 114,084 1,625,334 Audit Fees Payable 86,250 86,250 Office Rent Payable 98,800 - Salary & Wages Payable 12,121,298 12,441,108 Tax Deduction at Source Payable 558, ,339 VAT Payable 395, ,313 Income Tax Payable Note: 17.1-A 55,927,090 15,110,991 Contribution to WPPF Payable 81,997,337 69,523,840 Directors Remuneration Payable 435, ,146 Accounts Payable for Goods Supplies & Others 28,546,489 12,669,364 Dividend Payable 27,975,881 10,336,505 Refundable IPO Share money Note: 17.1-B 13,040,743 13,215, ,896, ,163,572 a) Accounts Payable for Goods Supplies and others represents regular suppliers of packing materials, ball-bearing, belts, fuel & lubricants, stationary items and others. b) Factory Salary and Wages payable for the month of 30th June 2014 c) We observed that the WPPF has not been paid to the beneficiaries/employees or invested outside the business for earning profit as specified in the companies WPPF & WF Act, However, the management agreed to settle this issue soon A. INCOME TAX PAYABLE: Balance as on ,110,991 - Provision for this year (Current Tax): Note: ,816,099 15,110,991 Total Payable- 55,927,090 15,110, B. REFUNDABLE IPO SHARE MONEY: Eastern Bank FC A/C: (Deposit- NRB IPO) 1,283,358 1,383,360 Eastern Bank STD A/C: BDT (Deposit IPO) 11,757,385 11,832,385 Total- 13,040,743 13,215, SALES: Tk. 3,065,012,791 Export Sales 3,065,012,791 3,262,553, COST OF GOODS SOLD: Tk. 2,669,542,115 Raw Material Consumed Note: 19.1-(A) 2,274,035,501 2,283,725,885 Direct Expenses Note: 19.1-(B) 103,170,644 88,277,847 Factory Overhead Note: 19.1-(C). 358,942, ,394,214 Total Manufacturing Cost 2,736,148,554 2,693,397,946 Work-in-Process- Opening 47,604,120 55,970,825 Cost of Goods available for use 2,783,752,674 2,749,368,770 Work-in-Process- Closing 51,406,004 47,604,120 Cost of Production 2,732,346,671 2,701,764,650 Finished Goods- Opening 624,670, ,995,527 Cost of Goods Available for Sales 3,357,017,041 3,366,760,177 Finished Goods- Closing 687,474, ,670,370 Cost of Goods Sold: 2,669,542,115 2,742,089, (A) RAW MATERIALS CONSUMED: 2,274,035,501 Opening Inventory Raw Materials 613,524, ,287,808 Add: Purchase during the year 2,381,138,212 2,340,962,928 Less: Closing Inventory of Raw Materials 720,627, ,524,850 Raw Materials Consumed 2,274,035,501 2,283,725, (B) DIRECT EXPENSES: TK.103,170,644 Direct Labour/Wages 99,685,431 84,336,034 Overtime Wages 3,485,213 3,941, ,170,644 88,277, (C) FACTORY OVERHEAD: Tk. 358,942,409 Factory Salary and Allowances 25,658,492 25,197,591 Festval Bonus Factory 2,231,676 2,154,450 Electricity Charges 3,448,028 5,217,623 Gas Charges 63,654,931 52,901,042 Repairs & Maintenance 49,143,199 22,114,688 Packing Materials 27,043,924 29,506,467 49

51 Fuel,Oil & Lubricant 17,193,174 20,775,938 Insurance Premium 2,166,044 2,161,545 Insurance Premium (Group) 32,940 - Stores & Accessories consump. Note: 19.1( C)-i 45,364,174 32,431,292 Entertainment Factory 523, ,408 Telephone, Mobile & Fax 222, ,222 Statonery Charges 472, ,135 Printing Charges 330, ,406 Other Carrying Charges 1,337, ,329 Others Factory Office Expenses 21,653 8,144 Vehicles Maintenance 2,120,998 2,264,690 Conveyances Factory 36,063 37,055 House Rent for Worker Shed 490, ,350 Medical Expenses 91,293 55,844 Uniform & Leverage 72,550 22,630 Miscellaneous Exp. 288, ,909 Depreciation Note: 1 116,998, ,952,456 Total Factory Overhead- 358,942, ,394, ( C)-i STORES & ACCESSORIES CONSUMED: Tk. 45,364,174 Opening Balance as on ,554,423 74,233,247 Add: Purchase during the year 42,094,007 59,752,467 Less: Closing Balance as on ,284, ,554,423 Total Consumed- 45,364,174 32,431, OPERATING EXPENSES: Tk. 67,516,947 Salaries & Allowances 25,426,837 24,322,373 Festival Bonus 2,036,756 1,593,787 Director's Remuneration 6,569,000 6,569,000 Fees, Forms & Others 2,168,637 2,176,054 Audit Fees 86,250 86,250 Printing & Stationery 1,995,533 1,013,886 Electricity Charges - 28,381 Telephone,Mobile & Internet Expenses 1,558, ,322 Postage & Stamp 346,808 96,274 Vehicle Maintenance 5,840,739 4,655,662 Miscellaneous Expenses 2,846,888 6,272,670 Office Rent 1,326,520 1,362,504 Rate & Taxes 753,514 2,037,965 Carriage Outwards, Selling & Distribution exp. 3,213,960 2,938,620 Entertainment 911, ,614 Fuel for Head Office Generator 281, ,788 Advertisement & Publicity Expenses 723, ,061 AGM Expenses 2,377,808 2,278,896 Security Charges 459, ,525 Gardening Expenses 29,455 21,605 Travelling & Conveyance 1,515,168 1,266,518 Uniform / Leveries Security 36,740 11,520 Repairs & Maintenance 1,087, ,655 Dination & Subscription 20,000 - Business Development Exp. 2,811,089 Credit Rating Charges 73,478 - Software Maintenance Expenditure 184,096 83,000 Depreciation Note: 1 2,836,539 2,574,852 67,516,947 63,220, FINANCIAL EXPENSES: Tk. 107,488,284 EASTERN BANK LTD.: Interest on Long Term Loan 13,110,125 31,691,451 Interest on Short Term Loan 4,371,470 1,028,174 Interest on Overdraft 4,982,918 4,691,200 Bank Charges & Commission 6,231,762 5,880,238 Interest on Bill Discount 626,814 7,154,380 Total 29,323,088 50,445,443 HSBC LTD.: Interest on Long Term Loan 9,483,921 20,895,381 Interest on Short Term Loan 9,387,505 5,919,490 Bank Charges & Commission 4,862,824 2,103,827 Export L/C Negotiation Commission - 1,529,012 Interest on Overdraft 683,895 2,707,801 Interest on Bill Discount 15,167,439 23,528,061 Total 39,585,584 56,683,572 DHAKA BANK LTD.: Interest on Long Term Loan 1,858,561 45,872,866 Interest on Short Term Loan 1,608, ,470 Interest on Overdraft 2,038,903 2,679,276 Bank Charges and Commission 3,693, ,210 Export L/C Negotiation Commission 140,963 - Interest on Bill Discount 2,583,120 6,264,887 Total 11,923,432 56,260,709 ONE BANK LTD.: Interest on Short Term Loan 1,060, ,116 Interest on Overdraft 1,223,467 1,075,496 Bank Charges & Commission 1,170, ,289 Interest on Bill Discount - 2,543 Total 3,454,599 1,960,445 MALEK SPNNING MILLS LIMITED 50

52 Annual Report 2014 TRUST BANK LTD.: Interest on Long Term Loan 18,610,078 31,038,708 Bank Charges and Commission 1,254,530 1,350,462 Interest on Overdraft 3,173,733 1,867,944 Interest on Bill Discount - 380,371 Total 23,038,341 34,637,485 SHAHJALAL ISLAMI BANK LTD.: Bank Charge and Commission Total 1,150 1,150 1,150 1,150 CITIBANK NA: Bank Charges and Commission Total UNITED LEASING CO. LTD., UTTARA FINANCE & INVENSTMENT LTD Interest on Lease Finance Total 92,783 92, , ,416 AB BANK LTD. Bank Charges and Commission Total 57,232 57,232 3,000 3,000 BRAC BANK LTD. Bank Charges and Commission 11,380 11,150 Total 11,380 11,150 Total Financial Expenses- 107,488, ,244, NON-OPERATING INCOME/(LOSS): 41,477,984 CASH INCENTIVE: 37,185,368 - OTHER INCOME/(LOSS): Interest Received from BRAC Bank Ltd., STD A/C ( ) 1,010, ,853 Interest Received from Dhaka Bank Ltd., STD A/C ( ) 730,492 - Interest Received from AB Bank Ltd., STD A/C ( ) 4,383 8,576 Interest Received from BRAC Bank Ltd., STD A/C ( ) 746,055 1,326,482 Interest Received from Eastern Bank Ltd., STD A/C ( ) 1,507,854 1,884,236 3,999,314 4,167,148 Interest Received from Overdue Bill - 490,489 Foreign currency exchange Gain 256,338 - Gain on Sale of Assets 36,964 16, , ,342 Less: Loss on Sale of Assets - 56,827-56,827 Total Other Income/(Loss) 4,292,616 4,617,663 Total 41,477,984 4,617, PROVISION FOR WORKER'S PROFIT PARTICIPATION FUND: Tk. 12,473,497 Provision for Contribution to WPPF 12,473,497 12,457,900 12,473,497 12,457,900 Note: This represents 5% of net profit before tax of the company and is payable to workers as per provision defined in the Labour Law INCOME TAX PROVISION (CURRENT TAX) : Tk. 40,816,099 Income Tax Tax i) On Operating Income 15% 251,842,408 37,776,361 15,087,903 ii) On Cash Incentive 5% 37,185,368 1,859,268 - iii) On Other Income 27.50% 4,292,616 1,180,469 23,088 Total 256,135,024 40,816,099 15,110,991 Taxable Operating Income Calculation: Net operating Profit before Tax 207,991,949 Add: Accounting Depreciation 119,835,071 Less: Tax Depreciation 75,984,612 Taxable Operating Income: 251,842, INCOME TAX PROVISION (DEFERRED TAX) : Tk. (6,577,569) (6,395,612) 26.1 BASIC EARNINGS PER SHARE (EPS): Tk (a) Net Profit/(Loss) after Tax for this period 215,231, ,442,628 (b) Number of Total Share 193,600, ,600,000 Basic Earnings per Share (a/b): RELATED PARTY TRANSACTION: SL # Related Party Nature of Relationship Nature of Transaction Transation Amount Balance as at Knit Asia Limited Common Director Receivable 110,995,384 sales 1,454,735,920 Invesment in equity 769,910,000 2 Salek Textile Limited Subsidiary Receivable 111,761,582 sales 109,683,134 3 Newasia Synthetics Limited Subsidiary Invesment in equity 496,465,000 Invesment in equity 399,990,000 4 J.M. Fabrics Limited Subsidiary Receivable 109,105,484 sales 307,756,758 51

53 MALEK SPINNING MILLS LIMITED FIXED ASSETS SCHEDULE AS AT 30TH JUNE 2014 ANNEXURE: 1.1 PARTICULARS COST RATE DEPRECIATION WRITTEN DOWN AS AT ADDITION ADJUSTMENT AS AT AS AT THIS YEAR ADJUSTMENTS AS AT VALUE AS AT (A)- 1 Land and Land Development 70,406,170 1,825,257 72,231,427 0% ,231,427 2 Factory Building 313,271, ,271,373 5% 220,975,430 4,614, ,590,227 87,681,146 3 Plant and Machinery 1,266,335,080 34,933,578 1,301,268, % 858,154,799 33,233, ,388, ,880,320 4 Lease Assets (Plant & Machinery) 12,753,116 12,753,116 10% 5,222, ,059 5,975,587 6,777,529 5 Electrical Installation 47,054,626 47,054,626 15% 36,036,985 1,652,646 37,689,632 9,364,994 6 Tubewell and Water Pump 2,463,406 2,463,406 15% 2,064,721 59,803 2,124, ,882 7 Furniture and Fixtures 3,315,868 19,310 3,335,178 10% 1,745, ,971 1,904,439 1,430,739 8 Office Equipments 10,101, ,908 10,424,587 15% 5,883, ,190 6,564,509 3,860,078 9 Gas Line Installation 10,618,384 10,618,384 15% 5,935, ,459 6,637,786 3,980, Loose Tools and Equipment 1,254,088 1,254,088 15% 1,160,291 14,070 1,174,360 79, Motor Vehicle 25,537,782 2,910,000 1,567,400 26,880,382 15% 13,707,636 1,975,912 1,204,364 14,479,184 12,401, Telephone (PABX) Installation 490, ,000 15% 365,138 18, , , Crockaries and Cutlaries 50,777 50,777 15% 39,204 1,736 40,940 9, Generator 126,692, ,692,586 10% 78,861,391 4,783,119 83,644,511 43,048, Fire Installation 253, ,100 15% 195,428 8, ,079 49,021 Total (A) 1,890,598,036 40,011,053 1,567,400 1,929,041,689 1,230,347,666 48,658,681 1,204,364 1,277,801, ,239,706 REVALUATED FIXED ASSETS SCHEDULE AS AT 30TH JUNE 2014 PARTICULARS COST RATE DEPRECIATION WRITTEN DOWN AS AT ADDITION ADJUSTMENT AS AT AS AT THIS YEAR ADJUSTMENTS AS AT VALUE AS AT (B)- REVALUATION OF FIXED ASSETS : 1 Land and Land Development 846,018, ,018, ,018,824 2 Factory Building 219,355, ,355,567 5% 36,849,466 9,125,305-45,974, ,380,797 3 Plant and Machinery 951,297, ,297, % 253,656,230 52,323, ,979, ,318,246 4 Generator 132,146, ,146,678 10% 34,866,840 9,727,984-44,594,824 87,551,854 Total (B) 2,148,818, ,148,818, ,372,536 71,176, ,548,926 1,752,269,720 GRAND TOTAL ( A+B) 4,039,416,681 40,011,053 1,567,400 4,077,860,335 1,555,720, ,835,071 1,204,364 1,674,350,909 2,403,509,426 Depreciation Charged to: Operating Expenses: 2,836,539 Factory Overhead: 116,998,532 Tk. 119,835,071 MALEK SPNNING MILLS LIMITED 52

54 Annual Report 2014 SALEK TEXTILE LIMITED DIRECTORS REPORT TO THE SHAREHOLDERS FOR THE YEAR ENDED 30TH JUNE, 2014 Dear Shareholders, In terms of provisions of section 184 of Companies Act 1994 and IAS (International Accounting Standards) codes as adopted by the Institute of Chartered Accountants of Bangladesh (ICAB), the Board of Directors is pleased to submit its Report to the Shareholders together with Audited Accounts and Auditors Report thereon, containing Statement of Financial Position, Statement of Comprehensive Income, Statement of Cash Flows & Statement of Changes in Equity for the year ended 30 June BACKGROUND: The Company was incorporated with RJSC on 9th day of September 2007 as a Private Limited Company. The Authorized Share Capital of the company was increased from Tk.500,000, divided into 5,000,000 ordinary shares of Tk each to Tk. 3,000,000, divided into 30,000,000 ordinary shares of Tk each on 14th August, The paid-up capital as on 30th June, 2014 stood at Tk.482,608, consisting of 4,826,087 ordinary shares of Tk each. As per decision of the Board of Directors Meeting held on 17th November, 2013 and Extra-ordinary General Meeting (EGM) of the shareholders of the Company held on 26th December, 2013 and as per order of the Hon ble High Court Division of the Supreme Court of Bangladesh dated in the Company Matter No.248 of 2013 Titas Spinning & Denim Company Ltd. was Amalgamated with Salek Textile Limited. Salek Textile Limited has issued & allotted 826,087 ordinary shares of Tk each on 25th June, 2014 in favour of the shareholders of Titas Spinning & Denim Company Ltd. as per approved Scheme of Amalgamation. The Company also obtained Consent for raising of Paid-up Capital from Bangladesh Securities and Exchange Commission (BSEC) vide their letter No. BSEC/CI/CPLC (Pvt)-333/2011/446 dated June 24, To comply the condition No. 9 of the Consent Letter of Bangladesh Securities and Exchange Commission (BSEC) dated June 24, 2014 and to comply the provisions of the Commission s Notification No. SEC/CMRRCD/ /Admin/03-44 dated published in the Bangladesh Gazette dated though the paid up capital of the company exceeds Tk.400,000, (Forty crore) the status of the Company has been converted from Private Limited Company to Public Limited Company on 23rd August, 2014 and the face value of per share of the Company also changed from Tk each to Tk each per share. The Company is a subsidiary company of Malek Spinning Mills Limited which holds 97.93% share & other sponsors of Malek Spinning Mills Ltd. hold 2.07% share of the company as on 30th June As a subsidiary of Malek Spinning Mills Limited and to comply with the Corporate Governance Guidelines of the Bangladesh Securities and Exchange Commission (BSEC) Notification No. SEC/CMRRCD/ /134/Admin/44 dated 07 August 2012 the holding of positions of Chairman and Managing Director of the company has been separated. Mr. A. F. M. Zubair has been elected as Chairman by the Board of Directors and Mr. A. Matin Chowdhury has been retained as the Managing Director of the company. Mr. M. Sekander Ali, Independent Director of Malek Spinning Mills Limited has been appointed as Director (Non Shareholding). COMMERCIAL OPERATION: Salek Textile Limited started its commercial operation from 1st day of April The project has 10 Schlafhorst Autocoro machines of 360 Rotors each with production capacity of 14,621,000 kgs of yarn per annum and 9,600,000 yards fabric. The Company manufactures open end yarn for denim and home textile markets. COMPANY S OPERATIONS: The position of its operating performance for the year ended 30th June, 2014 is given below: ( 1 ) CAPACITY/PRODUCTION The Company s installed estimated production capacity is 14,621,000 kg of yarn per annum with 10 Schlafhorst Autocoro Machine of 360 Rotors each and 9,600,000 yards fabric per annum. A comparative position of its operating performance are given below: Sl. No. Description (Kg.) (Kg.) (Kg.) 01 Production capacity (Yarn) 14,621,000 14,621,000 14,621, Production capacity (Fabric) yds for 3 months 2,400, Actual Production (Yarn) 10,455,062 11,145,027 5,336, Actual Production (Fabric) yds for 3 months 1,596, Capacity Utilization (Yarn) 71.51% 76.23% 36.50% 06 Capacity Utilization (Fabric) 66.53% Quantity Sold (kg) Yarn for 3 months 9,955,798 10,840,938 7,361, Quantity Sold (yds) Fabric for 3 months 1,450, Sales Revenue (Tk.) Yarn 1,940,147,376 2,291,717,388 1,663,517, Sales Revenue (Tk.) Fabric for 3 months 238,769, Average selling price (Tk.) Yarn Average selling price (Tk.) Fab CAPITAL EXPENDITURES: The following Capital Expenditure was incurred during the last three years: Description (Tk.) (Tk.) (Tk.) Land and Land Development 7,598, Factory Building 3,705,054 3,412, Plant and Machinery 1,667, ,000 Motor Vehicle 13,495, Office Equipments 18, Furniture & Fixtures 19,410 29, Electrical Installation 96, Gas Line Installation 1,000, Total 27,600,093 3,441, ,000 53

55 SHAREHOLDING: The Shareholding Position of different shareholders as at 30th June 2014 as follows: Name of Shareholders No. of share hold % of Holding Malek Spinning Mills Limited 4,725,970 shares 97.93% Mr. A. Matin Chowdhury 48,978 shares 1.01% Dr. Shamim Matin Chowdhury 33,934 shares 0.70% Mr. A.F.M. Zubair 17,048 shares 0.35% Ms. Saima Matin Chowdhury 41 shares 0.001% Mr. Azizur R. Chowdhury 51 shares 0.001% Mr. Moshiur Rahman 65 shares 0.001% Total 4,826,087 shares 100% FINANCIAL RESULTS: The company s operating financial results, as compared to the previous year are summarized as follows Tk. in million Description Sales Cost of goods sold Gross profit Operating expenses Financial Expenses Operating profit Provision for WPPF Provision for Income Tax Provision for Tax Holiday Reserve Net profit Gross Margin Ratio 15.72% 15.84% Net Margin Ratio 6.23% 6.27% Earnings per share (Tk.)* Earning per share has been restated. APPROPRIATION OF PROFIT: The Board of Directors recommended for appropriation of profit as follows: Net Profit after tax holiday reserve Tk. 135,713,206 Add: Balance of profit B/F from previous year Tk. 463,696,968 Add: Adjustment of revaluation surplus of fixed assets Tk. 36,014,024 Total net free surplus available for appropriation Tk. 635,424,199 Appropriation Proposed: Proposed Dividend Nil Balance carried forward to Balance Sheet as Retained Earnings Tk. 635,424,199 DECLARATION OF DIVIDEND: In order to strengthen the financial position of the company no dividend be and is recommended by the Board for the year ended 30th June, APPOINTMENT OF DIRECTORS: Rotation of Directors: Pursuant to Article 117 of the Articles of Association of the Company Mr. A. F. M. Zubair, Director and Mr. A. Matin Chowdhury, Director will retire by rotation and being eligible as per Article 119 of the Articles of Association of the Company they offered themselves for re-election. APPOINTMENT OF AUDITORS: The existing Auditor, M/s Malek Siddiqui Wali, Chartered Accountants would retire at the 7th Annual General Meeting and being eligible, they offered themselves for re-appointment as Auditors for the year with re-fixation of their remuneration. BOARD MEETINGS: During the period , 09 (Nine) Board meetings were held. The attendance record of the Directors are as follows: Name of Directors Position Meeting held Attended Mr. A.F.M. Zubair Chairman Mr. A. Matin Chowdhury Managing Director Dr. Shamim Matin Chowdhury Director Mr. Azizur Rahim Chowdhury Director Ms. Saima Matin Chowdhury Director Mr.Moshiur Rahman Director (Nominated by Malek Spinning Mills Ltd.) Mr. M. Sekander Ali Director (Non Shareholding) ACKNOWLWDGEMENT: The Directors are pleased to record with appreciation and gratitude the co-operation and support provided by Shareholders, Customers, Bankers, Suppliers, Workers and Employees of the company without whose active support the result would not have been possible. Looking forward for a bright future for all of us. On behalf of the Board of Directors, (A.F.M. Zubair) Chairman MALEK SPNNING MILLS LIMITED 54

56 Annual Report 2014 Malek Siddiqui Wali CHARTERED ACCOUNTANTS 9-G, MOTIJHEEL, C/A, Dhaka-1000, Bangladesh AUDITORS REPORT to the shareholders of Salek Textile Limited We have audited the accompanying Statement of Financial Position of Salek Textile Limited as at 30th June 2014 and the related Statement of Comprehensive Income, Statement of Cash Flow, Statement of Change in Equity and Notes for the period from 1st July 2013 to 30th June Management s Responsibility for the Financial Statements: The Management is responsible for the preparation and fair presentation of these financial statements is accordance with Bangladesh Accounting Standard/Bangladesh Financial Reporting Standards (BFRS), the companies Act 1994 and other applicable laws and regulation and for such internal control as management determines is necessary to enable the prepatation of financial statements that are free from material misstatement, where due to fraud or error. Auditor s Responsibility: Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance where the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments the auditor consider internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing and opinion on the effectiveness of the entity s internal control. An audit also includes evaluation the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion: In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standard/Bangladesh Financial Reporting Standards (BFRS), give a true and fair view of the state of the company s affairs as of 30th June 2014 and of the results of its operations and its cash flows for the period then ended and comply with the Companies Act 1994 and other applicable laws and regulations. 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 there of; 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; c) The Company s Statement of Financial Position and Statement of Comprehensive Income dealt with by the report are in agreement with the books of accounts; d) The expenditures incurred and payments made were for the purpose of the company s business. Dated : Dhaka October 27, 2014 Malek Siddiqui Wali Chartered Accountants 55

57 SALEK TEXTILE LIMITED STATEMENT OF FINANCIAL POSITION AS AT 30TH JUNE 2014 ASSETS : JUNE'14 Taka JUNE'13 Taka Non-Current Assets: 2,817,894,343 1,618,842,499 Property, Plant and Equipment 2,649,294,323 1,618,842,499 Goodwill 168,600,020 - Current Assets : 2,862,300,219 1,796,525,626 Inventories 1,157,600, ,568,428 Advance, Deposit and Pre-Payments 126,157,734 77,822,758 Accounts Rceivable 1,532,995,661 1,087,306,811 Cash and Cash Equivalents 45,546,120 17,827,628 TOTAL ASSETS : 5,680,194,562 3,415,368,125 SHAREHOLDER'S EQUITY AND LIABILITIES: Shareholder's Equity : 2,512,416,588 1,685,711,941 Share Capital 482,608, ,000,000 Share Premium 601,754,814 - Retained Earnings 635,424, ,696,968 Re-valuation Surplus of Fixed Assets 577,137, ,151,163 Tax Holiday Reserve 215,491, ,863,809 Non-Current Liabilities: 602,590, ,424,417 Long Term Loan 527,307, ,089,728 Deferred Tax Liabilities 75,282,831 53,334,689 Current Liabilities : 2,565,187,745 1,269,231,767 Short Term Loan 485,901,471 64,842,833 Current Portion of Long Term Loan 456,000, ,518,329 Bank Acceptance Liabilities 905,158, ,076,258 Creditors and Accruals 718,127, ,794,348 TOTAL SHAREHOLDER'S EQUITY AND LIABILITIES : 5,680,194,562 3,415,368,125 Net Assets Value Per Share (NAV) Par Value Tk.100 A. Matin Chowdhury Azizur R. Chowdhury B.K. Chaki Syed Saiful Haque Managing Director Director Chief Financial Officer Company Secretary As per our report of same date Dhaka ( Malek Siddiqui Wali ) October 27, 2014 Chartered Accountants MALEK SPNNING MILLS LIMITED 56

58 Annual Report 2014 SALEK TEXTILE LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30TH JUNE 2014 JUL'13-MAR'14 APR'14-JUN'14 JUNE'14 JUNE'13 Taka Taka Taka Taka Sales 1,485,859, ,056,549 2,178,916,498 2,291,717,388 Cost of Goods Sold 1,278,943, ,477,145 1,836,420,243 1,928,633,817 Gross Profit/(Loss) : 206,916, ,579, ,496, ,083,571 Operating Expenses 13,905,186 14,081,790 27,986,977 23,963,171 Financial Expenses 89,137,167 55,008, ,145, ,481,628 Operating Profit/(Loss) : 103,874,499 66,488, ,363, ,638,772 Non-operating Income/(Loss) (312,469) 137,336 (175,133) - Net Operating Profit/(Loss) : 103,562,030 66,626, ,188, ,638,772 Provision for Contribution to WPPF 4,946,405 3,157,799 8,104,203 10,792,322 Profit/(Loss) before Tax : 98,615,625 63,468, ,084, ,846,450 Provision for Income Tax : 10,243,268 9,499,666 19,742,934 10,490,429 Current Tax 13,787,837 11,357,201 25,145,038 15,728,565 Deferred Tax (3,544,569) (1,857,535) (5,402,104) (5,238,136) Net Profit/(Loss) after tax for this year 88,372,357 53,968, ,341, ,356,020 Provision for Tax Holiday Reserve 6,627,927-6,627,927 61,606,806 Net Profit/(Loss) Balance 81,744,430 53,968, ,713, ,749,214 (Transferred to the statement of Changes in Equity.) Earnings Per Share (EPS) Par Value Tk.100 Number of Shares used to compute EPS 4,826,087 4,826,087 4,826,087 4,826,087 A. Matin Chowdhury Azizur R. Chowdhury B.K. Chaki Syed Saiful Haque Managing Director Director Chief Financial Officer Company Secretary As per our report of same date Dhaka ( Malek Siddiqui Wali ) October 27, 2014 Chartered Accountants 57

59 SALEK TEXTILE LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30TH JUNE 2014 JUNE'14 JUNE'13 Taka Taka CASH FLOW FROM OPERATING ACTIVITIES : Collection from Turnover & Bills Receivable 2,209,755,108 2,103,416,211 Payment for Raw Materials, Indirect Materials and other expenses (1,904,790,357) (1,601,321,123) Non-operating Income/(Loss) (175,133) - Payment for Operating Expenses (24,944,273) (11,051,592) Payment for Income Tax (14,887,267) (1,077,422) Payment of Financial Expenses (144,145,875) (112,481,628) Net Cash provided/(used) by Operating Activities 120,812, ,484,445 CASH FLOW FROM INVESTING ACTIVITIES : Acquisation of Fixed Assets (27,600,093) (3,441,180) Disposal of Fixed Assets 1,212,469 - Net cash used in Investing Activities (26,387,624) (3,441,180) CASH FLOW FROM FINANCING ACTIVITIES : Advance, Deposits and Pre-payments - (62,522,827) Bank Loan Increase/(Decrease) (35,984,367) 289,964,876 Issuance of Share Capital - 110,173,100 Advance received from Malek Spinning Mills Ltd. (50,241,080) (747,860,103) Net cash provided/(used) by Financing Activities (86,225,447) (410,244,954) Increase/(Decrease) in Cash and Cash Equivalents 8,199,131 (36,201,689) Cash and Cash Equivalents at 1st July ,346,988 54,029,318 Cash and Cash Equivalents at 30th June ,546,120 17,827,628 Net Operating Cash Flow Per Share (NOCFPS) Par Value Tk.100 A. Matin Chowdhury Azizur R. Chowdhury B.K. Chaki Syed Saiful Haque Managing Director Director Chief Financial Officer Company Secretary As per our report of same date Dhaka ( Malek Siddiqui Wali ) October 27, 2014 Chartered Accountants MALEK SPNNING MILLS LIMITED 58

60 Annual Report 2014 SALEK TEXTILE LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30TH JUNE 2014 Particulars Share Share Tax Holiday Revaluation Retained Total Capital Premium Reserve Surplus of Earnings Fixed Assets Balance as at 1st July ,000, ,863, ,151, ,696,968 1,685,711,941 Net Profit/(Loss) during the year 135,713, ,713,206 Issuance of Share Capital 82,608,700 82,608,700 Issuance of Share Premium 601,754, ,754,814 Adjustment of Revaluation surplus of Fixed Assets (36,014,024) 36,014,024 - Tax Holiday Reserve 6,627,927 6,627,927 As at 30th June ,608, ,754, ,491, ,137, ,424,199 2,512,416,588 FOR THE YEAR ENDED 30TH JUNE 2013 Particulars Share Share Tax Holiday Revaluation Retained Total Capital Premium Reserve Surplus of Earnings Fixed Assets Balance as at 1st July ,826, ,257, ,072, ,599,673 1,428,755,646 Issuance of Shares Capital 110,173, ,173,100 Net Profit during the year 143,749, ,749,214 Adjustment of Revaluation surplus of Fixed Assets (34,920,906) 34,920,906 - Adjustment of Deferred Tax Liabilities up to (58,572,825) (58,572,825) Tax Holiday Reserve 61,606,806 61,606,806 As at 30th June ,000, ,863, ,151, ,696,968 1,685,711,941 A. Matin Chowdhury Azizur R. Chowdhury B.K. Chaki Syed Saiful Haque Managing Director Director Chief Financial Officer Company Secretary As per our report of same date Dhaka ( Malek Siddiqui Wali ) October 27, 2014 Chartered Accountants 59

61 NEWASIA SYNTHETICS LIMITED DIRECTORS REPORT TO THE SHAREHOLDERS FOR THE YEAR ENDED 30TH JUNE, 2014 Dear Shareholders, The directors are pleased to present their report on the activities of the company together with the Audited Accounts and Auditors Report thereon containing Statement of Financial Position, Statement of Comprehensive Income, Statement of Cash Flows & Statement of Changes in Equity for the year ended 30 June REFERRAL: In terms of the provisions of section 184 of the Companies Act 1994 and IAS (International Accounting Standards) codes as adopted by the Institute of Chartered Accountants of Bangladesh (ICAB), it is the pleasure of the Board of Directors to submit its report to the Shareholders for year ended 30 June 2014 in the following paragraphs: BACKGROUND: The Company was incorporated with RJSC on 30th day of July 2008 as a Private Limited Company and subsequently on October 24, 2009 it has been converted into a Public Limited Company. The Authorized Share Capital of the company has also been increased from Tk. 500,000, to Tk.5,000,000, divided into 50,000,000 ordinary shares of Tk each. The paid-up capital as on 30th June, 2014 stood at Tk.500,000, consisting of 5,000,000 ordinary shares of Tk each. The paid up capital of the company has been raised after receiving capital raising consent from Bangladesh Securities and Exchange Commission (BSEC) vide their letter No. SEC/CI/CPLC-442/2013/2903 dated December 19, The Company is a subsidiary company of Malek Spinning Mills Limited which holds 99.30% share & other sponsors of Malek Spinning Mills Ltd. hold 0.70% share of the company. As a subsidiary of Malek Spinning Mills Limited and to comply the Corporate Governance Guidelines of Bangladesh Securities and Exchange Commission (BSEC) Notification No. SEC/CMRRCD/ /134/Admin/44 dated 07 August 2012 the Chairman and Managing Director of the company has been separated. Mr. M. Sekander Ali, Independent Director of Malek Spinning Mills Limited has been appointed as Director (Non Shareholding). COMPANY OPERATION AND FINANCIAL RESULTS: The following capital expenditure was incurred in the year , & Description (Tk.) (Tk.) (Tk.) Land and Land Development 20,102,849 53,367,617 44,535,938 Pre-operating expenses ,832,180 Current Assets (3,732,391) Total 20,102,849 53,367,617 44,635,727 IMPLEMENTATION SCHEDULE: The project was undertaken to set up a PET Granule (Bottle grade & Industrial grade) and Polyster Staple Fibre manufacturing unit in the name of NewAsia Synthetics Ltd. As on 30th June 2014, MSML is the holder of 99.30% shares of NewAsia Synthetics Limited i.e. 4,964,650 shares of Tk each total Tk.496,465, out of 5,000,000 shares of Tk each total Tk.500,000, Due to failure of Gas connection by Titas Gas Transmission & Distribution Company Ltd. the project has been shelved until the Gas connection is provided. APPOINTMENT OF DIRECTORS: Rotation of Directors: Pursuant to Article 117 of the Articles of Association of the Company Mr. A. Matin Chowdhury, Director and Mr. A. F. M. Zubair, Director will retire by rotation and being eligible as per Article 119 of the Articles of Association of the Company they offered themselves for re-election. APPOINTMENT OF AUDITORS: The existing Auditor, M/S Malek Siddiqui Wali, Chartered Accountants would retire at the 6th Annual General Meeting and being eligible, have offered themselves for re-appointment as Auditors for the year with re-fixation of their remuneration. APPOINTMENT OF MANAGING DIRECTOR: In terms of the provisions of Section 110 of the Companies Act.1994 the current tenure of the Managing Director (Dr. Shamim Matin Chowdhury) expired on 24th October, The Board of Directors have recommended for renewal of his appointment for a further period of 5 (Five) years with effect from 24th October, 2014 on the existing terms and conditions for consideration by the shareholders. BOARD MEETINGS: During the year , 07 (Seven) Board meetings were held. The attendance record of the Directors are as follows: Name of Directors Position Meeting held Attended Mr. A. Matin Chowdhury Chairman Dr. Shamim Matin Chowdhury Managing Director Mr. A. F. M. Zubair Director Mr.Moshiur Rahman Director Mr. M. Sekander Ali Director (Non Shareholding) FINANCIAL ACCOUNTS: As the Company did not commence production & marketing but due to operating and financial expenses Net Loss incurred Tk.4,054,933 in the Statement of Comprehensive Income for the year ended on 30th June, ACKNOWLWDGEMENT: The Directors are pleased to record with appreciation and gratitude the co-operation and support provided by Shareholders of the company. Looking forward for a bright future for all of us. On behalf of the Board of Directors, (A. Matin Chowdhury) Chairman MALEK SPNNING MILLS LIMITED 60

62 Annual Report 2014 Malek Siddiqui Wali CHARTERED ACCOUNTANTS 9-G, MOTIJHEEL, C/A, Dhaka-1000, Bangladesh AUDITORS REPORT to the shareholders of Newasia Synthetics Ltd. We have audited the accompanying Statement of Financial Position of Newasia Synthetics Ltd. as at 30th June 2014 and the related Statement of Comprehensive Income, Statement of Cash Flow, Statement of Change in Equity and Notes for the period from 1st July 2013 to 30th June Management s Responsibility for the Financial Statements: The Management is responsible for the preparation and fair presentation of these financial statements is accordance with Bangladesh Accounting Standard/Bangladesh Financial Reporting Standards (BFRS), the companies Act 1994 and other applicable laws and regulation and for such internal control as management determines is necessary to enable the prepatation of financial statements that are free from material misstatement, where due to fraud or error. Auditor s Responsibility: Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance where the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments the auditor consider internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing and opinion on the effectiveness of the entity s internal control. An audit also includes evaluation the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion: In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standard/Bangladesh Financial Reporting Standards (BFRS), give a true and fair view of the state of the company s affairs as of 30th June 2014 and of the results of its operations and its cash flows for the period then ended and comply with the Companies Act 1994 and other applicable laws and regulations. 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 there of; 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; c) The Company s Statement of Financial Position and Statement of Comprehensive Income dealt with by the report are in agreement with the books of accounts; d) The expenditures incurred and payments made were for the purpose of the company s business. Dated : Dhaka October 27, 2014 Malek Siddiqui Wali Chartered Accountants 61

63 NEWASIA SYNTHETICS LIMITED STATEMENT OF FINANCIAL POSITION AS AT 30TH JUNE 2014 JUNE'14 JUNE'13 Taka Taka ASSETS : Non-Current Assets : 1,828,918,423 1,810,628,063 Property Plant & Equipment 1,828,918,423 1,810,628,063 Current Assets : 7,062,288 28,414,214 Advance, Deposit and Pre-Payments 4,503,221 4,750,573 Cash and Cash Equivalents 2,559,067 23,663,641 TOTAL ASSETS : 1,835,980,711 1,839,042,277 SHAREHOLDER'S EQUITY AND LIABILITIES: Shareholder's Equity : 1,834,853,519 1,838,908,452 Share Capital 500,000,000 93,715,000 Share Money Deposit - 406,285,000 Retained Earnings (6,796,846) (2,741,913) Re-valuation Surplus of Fixed Assets 1,341,650,365 1,341,650,365 Current Liabilities : 1,127, ,825 Creditors & Accruals 1,127, ,825 TOTAL SHAREHOLDER'S EQUITY AND LIABILITIES : 1,835,980,711 1,839,042,277 Net Assets Value Per Share (NAV) , Par Value Tk.100 A. Matin Chowdhury Dr. Shamim Matin Chowdhury B.K. Chaki Syed Saiful Haque Chairman Managing Director Chief Financial Officer Company Secretary As per our report of same date Dhaka October 27, 2014 (Malek Siddiqui Wali) Chartered Accountants MALEK SPNNING MILLS LIMITED 62

64 Annual Report 2014 NEWASIA SYNTHETICS LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30TH JUNE 2014 JUNE'14 Taka JUNE'13 Taka Sales - - Cost of Goods Sold - - Gross Profit/(Loss) : - - Operating Expenses 4,040,323 2,730,616 Financial Expenses 14,610 11,297 Operating Profit/(Loss) : (4,054,933) (2,741,913) Provision for Contribution to WPPF - - Profit/(Loss) before Tax : (4,054,933) (2,741,913) Provision for Income Tax : - - Current Tax - - Deferred Tax - - Net Profit/(Loss) after tax for this year (4,054,933) (2,741,913) (Transferred to the statement of Changes in Equity.) Earnings Per Share (EPS) (0.81) (0.55) Par Value Tk.100 Number of Shares used to compute EPS 5,000,000 5,000,000 A. Matin Chowdhury Dr. Shamim Matin Chowdhury B.K. Chaki Syed Saiful Haque Chairman Managing Director Chief Financial Officer Company Secretary As per our report of same date Dhaka October 27, 2014 (Malek Siddiqui Wali) Chartered Accountants 63

65 NEWASIA SYNTHETICS LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30TH JUNE 2014 JUNE'14 JUNE'13 Taka Taka CASH FLOW FROM OPERATING ACTIVITIES : Payment for Operating Expenses (2,234,467) (443,789) Payment for Financial Expenses (14,610) (11,297) Net Cash provided/(used) by Operating Activities (2,249,077) (455,086) CASH FLOW FROM INVESTING ACTIVITIES : Acqusition of Fixed Assets (20,102,849) (53,367,617) Pre-operating Expenses - 25,551,245 Advance, deposits and pre-payments 247,352 2,850,000 Net Cash used in Investing Activities (19,855,497) (24,966,372) CASH FLOW FROM FINANCING ACTIVITIES : Share Money Deposit - 396,285,000 Advance from Malek Spinning Mills Ltd 1,000,000 (348,390,823) Net cash provided/(used) by Financing Activities 1,000,000 47,894,177 Increase/(Decrease) in Cash and Cash Equivalents (21,104,574) 22,472,719 Cash and Cash Equivalents at 1st July ,663,641 1,190,922 Cash and Cash Equivalents at 30th June ,559,067 23,663,641 Net Operating Cash Flow Per Share (NOCFPS) (0.45) (0.49) Par Value Tk.100 A. Matin Chowdhury Dr. Shamim Matin Chowdhury B.K. Chaki Syed Saiful Haque Chairman Managing Director Chief Financial Officer Company Secretary As per our report of same date Dhaka October 27, 2014 (Malek Siddiqui Wali) Chartered Accountants MALEK SPNNING MILLS LIMITED 64

66 Annual Report 2014 NEWASIA SYNTHETICS LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30TH JUNE 2014 Particulars Share Revaluation Surplus Share Money Retained Total Capital of Fixed Assets Deposit Earnings Balance as on 1st July ,715,000 1,341,650, ,285,000 (2,741,913) 1,838,908,452 Isuance of Share Capital 406,285,000 (406,285,000) - - Net Profit/(Loss) during the year (4,054,933) (4,054,933) As at 30th June ,000,000 1,341,650,365 - (6,796,846) 1,834,853,519 FOR THE YEAR ENDED 30TH JUNE 2013 Particulars Share Revaluation Surplus Share Money Retained Total Capital of Fixed Assets Deposit Earnings Balance as at 1st July ,715,000 1,341,650,365 10,000,000 1,445,365,365 Share Money Deposit 396,285, ,285,000 Net Profit/(Loss) during the year (2,741,913) (2,741,913) As at 30th June ,715,000 1,341,650, ,285,000 (2,741,913) 1,838,908,452 A. Matin Chowdhury Dr. Shamim Matin Chowdhury B.K. Chaki Syed Saiful Haque Chairman Managing Director Chief Financial Officer Company Secretary As per our report of same date Dhaka October 27, 2014 (Malek Siddiqui Wali) Chartered Accountants 65

67 J.M. FABRICS LIMITED DIRECTORS REPORT TO THE SHAREHOLDERS FOR THE YEAR ENDED 30TH JUNE, 2014 Dear Shareholders, In terms of provisions of section 184 of Companies Act 1994 and BAS (Bangladesh Accounting Standards) codes as adopted by the Institute of Chartered Accountants of Bangladesh (ICAB), the Board of Directors is pleased to submit its Report to the Shareholders together with Audited Accounts and Auditors Report thereon, containing Statement of Financial Position, Statement of Comprehensive Income, Statement of Cash Flows & Statement of Changes in Equity for the year ended 30 June BACKGROUND: The Company was incorporated with RJSC on 25th day of May 2005 as a Private Limited Company. The Authorized Share Capital of the company is Tk.500,000, divided into 5,000,000 ordinary shares of Tk each. The paid-up capital as on 30th June, 2014 stood at Tk.400,000, consisting of 4,000,000 ordinary shares of Tk each of which 3,999,900 shares of Tk each was held by Malek Spinning Mills Limited. The Company is a subsidiary company of Malek Spinning Mills Limited which holds 99.99% share & another sponsor of Malek Spinning Mills Ltd. holds 0.01% share of the company as on 30th June As a subsidiary of Malek Spinning Mills Limited and to comply the Corporate Governance Guidelines of Bangladesh Securities and Exchange Commission (BSEC) Notification No. SEC/CMRRCD/ /134/Admin/44 dated 07 August 2012, Mr. M. Sekander Ali, Independent Director of Malek Spinning Mills Limited has been appointed as Director (Non Shareholding). COMMERCIAL OPERATION: J. M. Fabrics Limited started its commercial operation from 18th day of August The Company is engaged in the production of 100% export oriented garments and knit fabric with a production capacity of 12 (twelve) M. Tons of knitted and dyed fabric and 68 (sixty eight) lines of cutting and sewing operation with all necessary facilities, storage etc. COMPANY S OPERATIONS: The position of its operating performance for the year ended 30th June, 2014 is given below: ( 1 ) CAPACITY/PRODUCTION The Company s installed estimated production capacity is 22,000,000 Pcs. of Basic T-Shirt & Intimate Garments per annum. A comparative position of its operating performance is given below: Sl. Description (Pcs.) (Pcs.) (Pcs.) 01 Production capacity 22,000,000 9,000,000 6,500, Actual Production 16,983,987 6,436,574 4,544, Capacity Utilization 77.20% 71.52% 69.91% 04 Quantity Sold (Pcs.) 16,983,987 6,436,574 4,544, Sales Revenue (Tk.) 2,653,244,545 1,486,848,703 1,030,369, Average selling price (Tk.) CAPITAL EXPENDITURES: The following Capital Expenditure was incurred during the year Description (Tk.) (Tk.) Factory Building 6,578, ,493,251 Plant and Machinery 83,628, ,036,015 Office Equipments 1,257,799 1,311,956 Furniture & Fixtures 4,261,248 7,117,602 Electrical Installation 3,293,935 2,219,788 Gas Line Installation 1,337, ,611 Tools and Equipment 623,166 2,213,839 Cargo Lift ,000 Motor Vehicle 2,500, Cookeries & Cutleries 34, Total 103,515, ,905,062 SHAREHOLDING: The Shareholding Position of different shareholders as at 30th June 2014 as follows: Name of Shareholders Malek Spinning Mills Limited Mr. A.F.M. Zubair Total No. of share hold 3,999,900 shares 100 shares 4,000,000 shares MALEK SPNNING MILLS LIMITED 66

68 Annual Report 2014 FINANCIAL RESULTS: The company s operating financial results, as compared to the previous year are summarized as follows: Tk. in million Description Turnover 2, , Cost of goods sold 2, , Gross profit General and Administrative Expenses Operating profit Provision for Worker s Profit Participation Fund Net Profit before tax Provision for Income Tax Net profit after tax Gross Margin Ratio 4.40% 6.26% Net Margin Ratio 2.73% 4.28% Earnings per share (Tk.) APPROPRIATION OF PROFIT: The Board of Directors recommended for appropriation of profit as follows: Net Profit (after tax provision) during the year Tk. 72,365,854 Add: Profit brought forward from previous year balance sheet Tk.125,192,894 Add: Adjustment of revaluation surplus of fixed assets Tk. 3,211,456 Less: Adjustment of Tax (Tk. 7,004,257) Total net free surplus available for appropriation Tk.193,765,946 Appropriation Proposed: Proposed Dividend Nil Balance carried forward to Balance Sheet as Retained earnings Tk.193,765,946 DECLARATION OF DIVIDEND: In order to strengthen the financial position of the company no dividend be and is recommended by the Board for the year ended 30th June, APPOINTMENT OF AUDITORS: The existing Auditor, M/s. Das Chowdhury Dutta & Co., Chartered Accountants would retire at the 9th Annual General Meeting and being eligible, have offered themselves for re-appointment as Auditors for the year with re-fixation of their remuneration. ACKNOWLWDGEMENT: The Directors are pleased to record with appreciation and gratitude the co-operation and support provided by Shareholders, Customers, Bankers, Suppliers, Workers and Employees of the company without whose active support the result would not have been possible. Looking forward for a bright future for all of us. On behalf of the Board of Directors, (A. Matin Chowdhury) Chairman 67

69 DAS CHOWDHURY DUTTA & CO. Chartered Accountants Well Tower (Ist Floor), Flat-A/1 12/A Purana Paltan Line, Dhaka AUDITORS REPORT to the shareholders of J.M Fabrics Limited We have audited the accompanying Financial Statements of J. M. Fabrics Limited which comprises of the statement of Financial Position as at 30 June 2014 and the related Statement of Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flows for the year then ended together with a summary of significant accounting policies and other explanatory notes. Management s Responsibility for the Financial Statements: Management is responsible for the preparation of financial statements that give a true and fair view in accordance with Bangladesh Financial Reporting Standards (BFRS) and other applicable laws and regulations and for such internal control as management determines is necessary to enable the prepatation of these financial statements that are free from material misstatement whether due to fraud or error. Auditor s Responsibility: Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation of the financial statements that give a true and fair view 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 entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion: In our opinion, the financial statements give a ture and fair view of the financial position of J.M. Fabrics Limited as at 30 June 2014 and of its financial performance and its cash flows for the year then ended in accordance with Bangladesh Financial Reporting Standards, the Companies Act 1994 and other applicable laws and regulations. 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 account as required by law have been kept by the Company so far as it appeared from our examination of those books; and c) the company s statement of financial position and statement of comprehensive income dealt with by the report are in agreement with the books of account; d) the expenditure incurred was for the purpose of the Company s business. Dhaka, 27 October 2014 Das Chowdhury Dutta & Co. Chartered Accountants MALEK SPNNING MILLS LIMITED 68

70 Annual Report 2014 J. M. Fabrics Limited Statement of Financial Position as at 30 June 2014 Taka ASSETS: Non-Current Assets 1,516,771,870 1,531,943,192 Property, plant and equipment 1,336,997,956 1,348,957,822 Revalued fixed assets 179,773, ,985,370 Current Assets 1,287,138, ,653,839 Inventories 597,652, ,322,251 Advance, deposits and pre-payments 40,939,588 37,436,345 Accounts receivable 316,842, ,408,888 Cash and cash equivalents 331,704, ,486,356 Total 2,803,910,837 2,523,597,031 SHARE HOLDERS' EQUITY AND LIABILITIES: Shareholders' Equity 773,539, ,178,264 Share capital 400,000, ,000,000 Revaluation reserve 179,773, ,985,370 General reserve and surplus 193,765, ,192,894 Non-Current Liabilities 888,425, ,800,846 Long term loan from bank 888,104, ,448,712 Deferred tax liabilities 321, ,134 Current Liabilities 1,141,945, ,617,921 Short term loan 518,206, ,953,371 Current portion of term loan 369,927, ,400,000 Accounts payable 147,554, ,568,213 Bank acceptance liabilities 41,883, ,505,085 Liabilies for expenditure 64,373,683 58,191,252 Total 2,803,910,837 2,523,597,031 Net Assets Value (NAV) Per Share (Including Revaluation surplus) A. Matin Chowdhury Azizur R.Chowdhury B. K. Chaki Syed Saiful Haque Chairman Managing Director Chief Financial Officer Company Secretary Signed in terms of our report of even date annexed Dhaka, 27 October 2014 Das Chowdhury Dutta & Co. Chatered Accountants 69

71 J. M. Fabrics Limited Statement of Comprehensive Income for the year ended on 30 June 2014 Particulars Taka Turnover Export earnings 2,653,244,545 1,486,848,703 Less: Cost of goods sold 2,536,523,277 1,393,726,081 Gross Profit / (Loss) 116,721,267 93,122,622 General and Administrative Expenses 33,973,604 19,657,003 Administrative expenses 15,115,357 8,026,101 Selling and distribution expenses 2,721,223 1,075,020 Financial expenses 16,137,024 10,555,882 Operating Profit / (Loss) 82,747,663 73,465,619 Provision for WPPF 3,940,365 3,498,363 Net Profit Before Tax 78,807,298 69,967,256 Provision for Income Tax 6,441,444 6,289,030 Provision for tax - current year 6,472,433 5,936,896 Provision for deferred tax (30,989) 352,134 Net Profit 72,365,854 63,678,226 Earnings Per Share (EPS) Number of shares used to compute EPS 4,000,000 4,000,000 A. Matin Chowdhury Azizur R.Chowdhury B. K. Chaki Syed Saiful Haque Chairman Managing Director Chief Financial Officer Company Secretary Signed in terms of our report of even date annexed Dhaka, 27 October 2014 Das Chowdhury Dutta & Co. Chatered Accountants MALEK SPNNING MILLS LIMITED 70

72 Annual Report 2014 J. M. Fabrics Limited Statement of Changes in Equity For the year ended 30 June 2014 Particulars Share Capital General Reserve Revaluation Total and Surplus Reserve Balance as at 01 July ,000, ,192, ,985, ,178,264 Net profit / (loss) for the year - 72,365,853-72,365,853 Tax adjustment - (7,004,257) - (7,004,257) Transfer to general reserve and surplus for depreciation charged on revalued assets - 3,211,456 (3,211,456) - Balance as at 30 June ,000, ,765, ,773, ,539,860 For the year ended 30 June 2013 Particulars Share Capital General Reserve Revaluation Total and Surplus Reserve Balance as at 01 July ,500,000 57,993, ,506, ,000,039 Capital increased by adjustment of: Share money deposit 308,750, ,750,000 Accounts payable 28,750, ,750,000 Net profit / (loss) for the year - 63,678,225-63,678,225 Transfer to general reserve and surplus for depreciation charged on revalued assets - 3,521,345 (3,521,345) - Balance as at 30 June ,000, ,192, ,985, ,178,264 A. Matin Chowdhury Azizur R.Chowdhury B. K. Chaki Syed Saiful Haque Chairman Managing Director Chief Financial Officer Company Secretary Signed in terms of our report of even date annexed Dhaka, 27 October 2014 Das Chowdhury Dutta & Co. Chatered Accountants 71

73 J. M. Fabrics Limited Statement of Cash Flows For the year ended on 30 June Cash Flow from Operating Activities: Collection from turnover and bills receivable 2,610,811,293 1,344,219,503 Payment for purchase of raw materials (2,476,587,184) (1,600,158,493) Payment for operating expenses (15,318,831) (6,839,517) Payment for financial expenses (16,137,024) (10,555,882) Increase in advance, deposit and prepayment (3,503,244) - Decrease in provision of tax (7,004,257) - Decrease in liabilities (114,484,414) (5,233,594) Net Cash Provided/ (Used) by Operating Activities (22,223,661) (278,567,983) Cash Flow from Investing Activities: Acquisition of fixed assets (103,515,498) (312,905,062) Adjustment of assets for fire incidence 5,521,000 - Capital work-in-progress - 177,072,526 Net Cash Used by Investing Activities (97,994,498) (135,832,536) Cash Flow from Financing Activities: Share money deposit - (308,750,000) Capital increase - 337,500,000 Loan received from bank 329,436, ,847,862 Decrease in advance, deposit and prepayment - 1,684,906 Loan received from malek spinning mills limited - (18,800,000) Net Cash Provided by Financing Activities 329,436, ,482,768 Increase/(Decrease) in Cash and Cash Equivalents 209,218,464 (11,917,751) Cash and Cash Equivalents at 01 July ,486, ,404,107 Cash and Cash Equivalents at 30 June ,704, ,486,356 Net Operating Cash Flow Per Share (NOCFPS) (5.56) (69.64) Taka A. Matin Chowdhury Azizur R.Chowdhury B. K. Chaki Syed Saiful Haque Chairman Managing Director Chief Financial Officer Company Secretary Signed in terms of our report of even date annexed Dhaka, 27 October 2014 Das Chowdhury Dutta & Co. Chatered Accountants MALEK SPNNING MILLS LIMITED 72

74 Annual Report 2014 Malek Siddiqui Wali CHARTERED ACCOUNTANTS 9-G, MOTIJHEEL, C/A, Dhaka-1000, Bangladesh AUDITORS REPORT to the shareholders of Titas Spinning & Denim Co. Ltd. We have audited the accompanying Statement of Financial Position of Titas Spinning & Denim Co. Ltd. as at 31st March 2014 and the related Statement of Comprehensive Income, Statement of Cash Flow, Statement of Change in Equity and Notes for the period from 1st July 2013 to 31st March Management s Responsibility for the Financial Statements: The Management is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Accounting Standard/Bangladesh Financial Reporting Standards (BFRS), the companies Act 1994 and other applicable laws and regulation and for such internal control as management determines is necessary to enable the prepatation of financial statements that are free from material misstatement, where due to fraud or error. Auditor s Responsibility: Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance where the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments the auditor consider internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing and opinion on the effectiveness of the entity s internal control. An audit also includes evaluation the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion: In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standard/Bangladesh Financial Reporting Standards (BFRS), give a true and fair view of the state of the company s affairs as of 31st March 2014 and of the results of its operations and its cash flows for the period then ended and comply with the Companies Act 1994 and other applicable laws and regulations. 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 there of; 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; c) The Company s Statement of Financial Position and Statement of Comprehensive Income dealt with by the report are in agreement with the books of accounts; d) The expenditures incurred and payments made were for the purpose of the company s business. Dated : Dhaka October 27, 2014 Malek Siddiqui Wali Chartered Accountants 73

75 TITAS SPINNING & DENIM COMPANY LTD. STATEMENT OF FINANCIAL POSITION AS AT 31ST MARCH 2014 MAR'14 JUNE'13 Taka Taka ASSETS : Non-Current Assets: 1,147,717,962 1,185,272,763 Property, Plant and Equipment 1,147,717,962 1,185,272,763 Current Assets : 968,788, ,627,856 Inventories 421,574, ,010,757 Advance, Deposit and Pre-Payments 51,167,582 42,274,255 Accounts Rceivable 476,527, ,033,805 Cash and Cash Equivalents 19,519,360 41,309,039 TOTAL ASSETS : 2,116,506,656 2,109,900,619 SHAREHOLDER'S EQUITY AND LIABILITIES: Shareholder's Equity : 515,763, ,602,269 Share Capital 380,000, ,000,000 Retained Earnings (317,826,334) (360,597,505) Re-valuation Surplus of Fixed Assets 453,589, ,199,775 Non-Current Liabilities: 403,031, ,216,718 Long Term Loan 375,681, ,674,980 Deferred Tax Liabilities 27,350,246 29,541,738 Current Liabilities : 1,197,711,868 1,203,081,631 Short Term Loan 327,528, ,854,467 Current Portion of Long Term Loan 143,532, ,831,292 Security Deposit against Sales 5,000,000 5,000,000 Bank Acceptance Liabilities 393,580, ,023,537 Creditors and Accruals 328,070, ,372,335 TOTAL SHAREHOLDER'S EQUITY AND LIABILITIES : 2,116,506,656 2,109,900,619 Net Assets Value Per Share (NAV) Par Value Tk.100 A. Matin Chowdhury A.F.M. Zubair B.K.Chaki Syed Saiful Haque Chairman Managing Director Chief Financial Officer Company Secretary As per our report of same date Dhaka October 27, 2014 (Malek Siddiqui Wali) Chartered Accountants MALEK SPNNING MILLS LIMITED 74

76 Annual Report 2014 TITAS SPINNING & DENIM COMPANY LTD. STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD FROM 1ST JULY 2013 TO 31ST MARCH 2014 JUL'13-MAR'14 Taka JUL'12-MAR'13 Taka Sales 761,839, ,053,885 Cost of Goods Sold 604,973, ,985,157 Gross Profit/(Loss) : 156,866, ,068,728 Operating Expenses 26,167,717 15,401,672 Financial Expenses 95,910,894 66,458,777 Operating Profit/(Loss) : 34,787,395 27,208,280 Non-operating Income/(Loss) - 802,606 Net Operating Profit/(Loss) : 34,787,395 28,010,886 Provision for Contribution to WPPF 1,656,543 1,360,414 Profit/(Loss) before Tax : 33,130,853 26,650,472 Provision for Income Tax : 4,969,628 4,178,157 Current Tax 7,161,120 6,611,737 Deferred Tax (2,191,492) (2,433,580) Net Profit/(Loss) after tax for this year 28,161,225 22,472,315 (Transferred to the statement of Changes in Equity.) Earnings Per Share (EPS) Par Value Tk.100 Number of Shares used to compute EPS 3,800,000 3,800,000 A. Matin Chowdhury A.F.M. Zubair B.K.Chaki Syed Saiful Haque Chairman Managing Director Chief Financial Officer Company Secretary As per our report of same date Dhaka October 27, 2014 (Malek Siddiqui Wali) Chartered Accountants 75

77 TITAS SPINNING & DENIM COMPANY LTD. STATEMENT OF CASH FLOWS FOR THE PERIOD FROM 1ST JULY 2013 TO 31ST MARCH 2014 MAR'14 MAR'13 Taka Taka CASH FLOW FROM OPERATING ACTIVITIES : Collection from Turnover & Bills Receivable 818,345, ,407,041 Payment for Raw Materials, Indirect Materials and other expenses (663,219,821) (470,435,738) Non-operating Income/(Loss) - 802,606 Payment for Operating Expenses (25,207,550) (15,040,294) Payment for Income Tax (6,727,986) (785,309) Payment of Financial Expenses (95,910,894) (61,909,967) Net Cash provided/(used) by Operating Activities 27,279,352 1,038,340 CASH FLOW FROM INVESTING ACTIVITIES : Acquisation of Fixed Assets (25,450,638) (134,826,725) Net cash used in investing activities (25,450,638) (134,826,725) CASH FLOW FROM FINANCING ACTIVITIES : Advance paid - (17,631,156) Bank Loan Increase/(Decrease) (23,618,393) 152,697,399 Loan from Directors - 18,695,168 Share money deposit - 284,800,000 Advance from Malek Spinning Mills Ltd. - (285,500,000) Net cash provided/(used) in financing activities (23,618,393) 153,061,411 Increase/(Decrease) in cash and cash equivalents (21,789,679) 19,273,026 Cash and Cash Equivalents at 1st July ,309,039 34,488,096 Cash and Cash Equivalents at 31st March ,519,360 53,761,122 Net Operating Cash Flow Per Share (NOCFPS) Par Value Tk.100 A. Matin Chowdhury A.F.M. Zubair B.K.Chaki Syed Saiful Haque Chairman Managing Director Chief Financial Officer Company Secretary As per our report of same date Dhaka October 27, 2014 (Malek Siddiqui Wali) Chartered Accountants MALEK SPNNING MILLS LIMITED 76

78 Annual Report 2014 TITAS SPINNING & DENIM COMPANY LTD. STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD FROM 1ST JULY 2013 TO 31ST MARCH 2014 Particulars Share Capital Revaluation surplus Retained Total of Fixed Assets Earnings Balance as at 1st July ,000, ,199,775 (360,597,505) 487,602,269 Net Profit/(Loss) during this period 28,161,225 28,161,225 Adjustment of Revaluation surplus of Fixed Assets (14,609,947) 14,609,947 - As at 31st March ,000, ,589,828 (317,826,334) 515,763,494 FOR THE PERIOD FROM 1ST JULY 2012 TO 31ST MARCH 2013 Particulars Share Capital Revaluation surplus Retained Total of Fixed Assets Earnings Balance as at 1st July ,000, ,831,593 (391,889,698) 98,941,895 Net Profit/(Loss) during this period 22,472,315 22,472,315 Profit & Loss appropriation A/c (Adjustment) 4,548,810 4,548,810 Adjustment of Deferred Tax Liabilities up to (32,786,511) (32,786,511) Adjustment of Revaluation surplus of Fixed Assets (16,223,863) 16,223,863 - As at 31st March ,000, ,607,729 (381,431,220) 93,176,509 A.Matin Chowdhury A.F.M. Zubair B.K.Chaki Syed Saiful Haque Chairman Managing Director Chief Financial Officer Company Secretary As per our report of same date Dhaka October 27, 2014 (Malek Siddiqui Wali) Chartered Accountants 77

79 24th Annual General Meeting MALEK SPNNING MILLS LIMITED 78

80 Malek Spinning Mills Limited Registered Office: 117/A, Tejgaon Industrial Area, Dhaka-1208, Bangladesh Corporate & Share Office: Mehnaj Monsur Tower, House # 11A, Road # 130 Gulshan-1, Dhaka PROXY FORM Annual Report 2014 I/We of being a shareholder(s) of Malek Spinning Mills Limited and a holder of shares hereby appoint Mr/Mrs/Miss of as my/our proxy to attend and vote on my/our behalf at the 25th Annual General Meeting of the Company to be held on Thursday, December 18, 2014 at a.m. at Trust Milonayaton, 545, Puraton Biman Bandar Sarak (Adjacent to Shahid Bir Shresta Jahangir Gate), Dhaka Cantonment, Dhaka-1206 and at any adjournment thereof. Signed this day of December, 2014 Afix Revenue Stamp Signature shareholder(s) Signature of Proxy Name of shareholder (s) Folio/BO ID No. Name of Proxy Folio/BO ID No. of Proxy (if any): Note: A member entitled to attend and vote at the Annual General Meeting may appoint proxy to attend and vote in his/her stead. The proxy from should reach the Corporate & Share Office of the Company not less than 72 hours before the time fixed for the meeting Malek Spinning Mills Limited Registered Office: 117/A, Tejgaon Industrial Area, Dhaka-1208, Bangladesh Corporate & Share Office: Mehnaj Monsur Tower, House # 11A, Road # 130 Gulshan-1, Dhaka Attendance Slip I hereby record my attendance at the 25th Annual General Meeting of Malek Spinning Mills Limited being held today, the December 18, 2014 at a.m. at Trust Milonayaton, 545, Puraton Biman Bandar Sarak (Adjacent to Shahid Bir Shresta Jahangir Gate), Dhaka Cantonment, Dhaka-1206 as a holder of shares of the Company. Signature of Shareholder/Proxy Name of Shareholder/Proxy Folio/BO ID No. Note: Shareholder (s) attending the meeting in person or by proxy are requested to complete the Attendance Slip and hand it over at the entrance of the meeting hall. 79

81 MALEK SPNNING MILLS LIMITED 80