Malek Spinning Mills Ltd.

Transcription

1 Malek Spinning Mills Ltd. Annual Report

2 26 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 Consolidated Statement of Financial Position as at 30th June, Consolidated Statement of Profit or Loss and other Comprehensive Income for the year ended 30th June, Consolidated Statement of Changes in Equity 27 Consolidated Statement of Cash Flows for the year ended 30th June, Notes of Consolidated Financial Statement Auditors Report of Malek Spinning Mills Ltd. 42 Statement of Financial Position as at 30th June, Statement of Profit or Loss and other Comprehensive Income for the year ended 30th June, Statement of Changes in Equity 45 Statement of Cash Flows for the year ended 30th June, Notes of Financial Statement SUBSIDIARY REPORT Salek Textile Limited Directors Report Auditors Report 58 Statement of Financial Position as at 30th June, Statement of Profit or Loss and other Comprehensive Income for the year ended 30th June, Statement of Changes in Equity 61 Statement of Cash Flows for the year ended 30th June, Newasia Synthetics Limited Directors Report Auditors Report 65 Statement of Financial Position as at 30th June, Statement of Profit or Loss and other Comprehensive Income for the year ended 30th June, Statement of Changes in Equity 68 Statement of Cash Flows for the year ended 30th June, J.M. Fabrics Limited Directors Report Auditors Report 72 Statement of Financial Position as at 30th June, Statement of Comprehensive Income for the year ended 30th June, Statement of Changes in Equity 75 Statement of Cash Flows for the year ended 30th June, 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, 2015, Statement of Profit or Loss and other Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year ended June 30, 2015 along with notes thereon of Malek Spinning Mills Limited and its Subsidiaries for your information and records. Yours sincerely Syed Saiful Haque Company Secretary Dated: November 16, 2015 MALEK SPINNING MILLS LIMITED 2

4 Annual Report 2015 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 NOTICE OF THE 26TH ANNUAL GENERAL MEETING Notice is hereby given that the 26TH ANNUAL GENERAL MEETING of the shareholders of the Company will be held on Sunday, 27th December, 2015 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, 2015 together with the Report of the Directors and the Auditors thereon. Agenda - 2. To declare dividend for the year ended 30th June, Agenda - 3. To elect Directors in terms of the relevant provision of Articles of Association of the Company. Agenda - 4. To appoint Auditors for the year and to fix their remuneration. Agenda - 5. To re-appoint the Managing Director. Agenda - 6. To re-appoint the Independent Director. By order of the Board Syed Saiful Haque Company Secretary Dated: November 16, 2015 Notes: (i) (ii) The Shareholders whose names would appear in the Share Register of the Company and/or Depository Register of CDBL on the record date i.e. November 18, 2015 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. (iii) Admittance to the meeting venue will be on production of the attendance slip sent with the Annual Report. (iv) The Annual Report is available in the Company s website at (v) Members are requested to submit to the Company s Share Office on or before 28th December, 2015 their written option to receive dividend. In case of non-submission of such option within the stipulated time, the dividend will be paid off as deemed appropriate by the Company. N.B: No gift or benefit in cash or kind shall be paid/offered to the hon ble Shareholders in the 26th AGM of the Company as per BSEC Circular under reference No. SEC/CMRRCD/ /154 dated

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, 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 payment 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 contribute to the National Exchequer. (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 SPINNING MILLS LIMITED 4

6 Annual Report 2015 (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 insurance business relationship with the highly reputed and publicly listed insurance companies namely Pioneer Insurance Co. Ltd, Eastland 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. 5

7 (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 business and its geographic location is single and as such no segment reports are applicable. The company has 3 (Three) subsidiary companies of which Salek Textile Limited has been producing Yarn, Fabric & RMG products, J.M. Fabrics Limited has been producing RMG product and Newasia Synthetics Limited has not yet gone to operation. The financial statement of the subsidiary companies has been shown separately and attached to this report. 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 Regulations 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-operation 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 SPINNING MILLS LIMITED 6

8 Annual Report 2015 CORPORATE REVIEW I. MANAGEMENT APPARATUS: (a) BOARD OF DIRECTORS: 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 (Nominee of Paragon Poultry Ltd.) Mr. M. Sekander Ali Independent Director Md.Qamrul Huda Independent Director (b) AUDIT COMMITTEE: Mr. M. Sekander Ali Chairman Dr. Shamim Matin Chowdhury Member Mr. Azizur Rahim Chowdhury Member (c) MANAGEMENT COMMITTEE: Mr. A. Matin Chowdhury Chairman Mr. Moshiur Rahman Member Mr. Azizur Rahim Chowdhury Member Mr. Ghaus Mohammad Member Mr. Hasan Mahmood Member Mr. B. K. Chaki Member (d) SENIOR CORPORATE OFFICIALS: Mr. Ghaus Mohammad Director HR & Admin Mr. Hasan Mahmood Executive Director Mr. B. K. Chaki Chief Financial Officer Mr. Syed Saiful Haque Company Secretary Md. Rakibul Islam Head of Internal Audit (e) AUDITORS: Malek Siddiqui Wali 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. ( h) LISTING: Dhaka Stock Exchange Ltd. Chittagong Stock Exchange Ltd. (i) REGISTERED OFFICE: 117/A, Tejgaon Industrial Area, Dhaka (j) CORPORATE AND SHARE OFFICE: Mehnaj Monsur Tower House # 11A, Road # 130, Gulshan-1, Dhaka. (k) INVESTORS RELATION DEPARTMENT: Md. Kamruzzaman, Fax No , kamruzzaman@knitasia.com, Tel: , Ext-282, Cell: (k) 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 2015) : a. Executive & staff : 269 b. Workers : 1,007 Subsidiary Companies : a. Salek Textile Ltd. b. Newasia Synthetics Ltd. c. J.M. Fabrics Ltd. III. FIVE YEARS OPERATIONAL RESULTS: (Figures in thousand Tk.) Particulars Turnover 2,994,446 3,065,013 3,262,553 2,966,197 3,509,105 Gross Profit 372, , ,463 10, ,489 Net Profit (Before Tax) 261, , ,158 (351,237) 131,625 Net Profit (After Tax) 225, , ,442 (351,237) 101,958 Shareholder s Equity 5,387,791 *5,356,194 5,461,466 5,402,999 4,806,251 Total Assets 6,942,375 7,113,508 7,504,000 7,927,057 7,254,501 Total Current Assets 2,959,887 3,043,633 3,353,939 4,540,220 4,722,005 Total Current Liabilities 1,216,712 1,405,194 1,766,205 1,875,701 2,332,535 Current Ratio Number of shares outstanding 193,600, ,600, ,600, ,000, ,000,000 Face Value per share Shareholder s Equity per Share * Earning per share (MSML) (1.81) 0.64 Earning per share (Consolidated) (1.31) 1.72 Dividend Declared Per Share (Stock) Nil Nil Nil 10% (s) 10% (s) Dividend Declared Per Share (Cash) Nil Nil Net Operating Cash Flow per Share (6.78) 3.79 Number of Shareholders **23,249 27,537 30,699 30,947 25,717 Human Resources: Executives & Staff Workers ,342 1,356 1,343 * Shareholder s Equity and Shareholder s Equity per share for the year has been restated. ** Number of shareholders considered as on 30th June, MALEK SPINNING MILLS LIMITED 8

10 Annual Report 2015 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 26th Annual 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 2015 is enclosed for your perusal. The operations and performance of the Company during the year under review had not been smooth due to socio-politico disorders for over six months despite which the Management had largely succeeded in attaining output level with marginal revenue decline. However, the Company finished the year with a net profit of Tk.225,196,724 as against Tk.215,231,403 during the previous year, constituting a net profit (after tax) growth of 4.63% over the previous year. During the year sales revenue of the company had decreased by 2.30% from Tk.3,065,012,791 in to Tk.2,994,445,635 in due to reduction of selling price in the face of stiff competition and consequent fall in prices in international market. In spite of decrease in Gross Profit, Net Profit had increased due to reduction in financial expenses by 1.60% over the previous year (3.51% of sales in the year & 1.91% of sales in the year ). As you may be aware, the textile sector in general, though RMG sector in particular, had faced various external difficulties including, not being limited to political turmoil, shipment delays, enhanced compliance standards from customers, new regulations in regard to building and fire safety, negative publicity due to political chaos among others, all had direct impact on production, making exporting as well as price for products. Our sincere efforts were rewarded positively through recognition from our buyers who had vetted our factories to be safe and compliant for which we had succeeded in retaining our production and export levels. Because of political turmoil during the month of July-December 2014 and January-March 2015, RMG sector was seriously affected. However, we retained our share in the market by reducing the sale price within the tolerable limit. Bangladesh Securities and Exchange Commission (BSEC) has introduced mandatory Guidelines on Corporate Governance. The Board of Directors of the Company is committed to provide good governance and exercise best practices in all respects, good governance is our core philosophy for managing the business effectively and responsibly and in a way which is honest, transparent and abiding by the laws of the land. I would also like to take this opportunity to thank our Shareholders, Regulatory Bodies including Bangladesh Securities and Exchange Commission, Dhaka Stock Exchange Ltd., Chittagong Stock Exchange Ltd., Central Depository Bangladesh Limited, our Bankers, Insurers and different facilitators for their cooperation and support to our Company. 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 Bangladesh Securities and Exchange Rules 1987, BSEC 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, 2015 in the following paragraphs: The company owns 3 (three) subsidiaries as follows: 1. Salek Textile Limited- A composite mill of the Textile sector with three operational units. The rotor unit produces open end yarn of various counts having a capacity of 14,621 tons yarn per annum. The fabric unit produces denim fabric of various size and grade having capacity of 9,600,000 yards and the RMG unit produces denim products having capacity of 1,800,000 pcs per annum. 2. J.M. Fabrics Limited- A knitting, dyeing, finishing and garments factory located at South Nayapara, 6 No. Dogri, P.O. Bhawal, Mirzapur, Gazipur with a capacity of million pcs. T-Shirt & Intimate garments per annum. 3. Newasia 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. COMPANY S OPERATIONS: (i) Industry outlook and possible future developments in the industry: Our Company falls within the primary textile sector producing world class yarn of various counts. Bangladesh is the 2nd largest exporter of RMG product and depend on domestic supply of quality yarn. Spinning mill is labour oriented industry. Since Bangladesh does not produce enough basic raw materials i.e. cotton, we have to depend largely on imported raw cotton and supply of skilled labour. The growth & challenges of the company depends on: (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 with a very reasonably priced supplier. CAPACITY/PRODUCTION (ii) Segment-wise or product wise performance: Our company produces 100% export oriented Knit Yarn. The installed production capacity of the company is 12,600,000 kg. yarn per annum with 63,624 Spindles. Comparative position of its operating/financial performance for the year and are given below: Sl. No. Description (Kg.) (Kg.) 01 Production capacity 12,600,000 12,600, Actual Production 10,858,524 10,640, Capacity Utilization 86.18% 84.45% 04 Quantity Sold (kg) 11,420,968 10,708, Sales Revenue (Tk.) 2,994,445,635 3,065,012, Average selling price (Tk.) (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 with hartal causing disruption of production and increased cost of fund. Since a Spinning Mill has to depend on imported raw materials and local supply of labour. Price variation of raw material and labour due to political turmoil are the main risk for this type of industry. Uninterrupted power supply due to irregular gas supply and price variation also affects this type of industry. (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 87.54% during the year as compared to 87.10% during the previous year, an insignificant increase of 0.44%. (b) Export: The company had achieved an export turnover of Tk.2, million during the year ended 30th June Last year s export turnover was Tk. 3, million. The turnover had decreased by 2.30% over the last year due marginal fall in export prices. (c) Gross Profit: Gross Profit earned during the year amounted to Tk million as against Tk million during the previous year. Gross profit decreased due to decrease of selling price compared to last year. (d) Net Profit/(Loss): The company had succeeded in earning a Net Profit of Tk million compared to last year s Net Profit of Tk million. The Net Profit increased marginally due to decrease in financial expenses. (v ) Extra-Ordinary gain or loss: During the year extra-ordinary gain of Tk.34,730,375 was earned from cash incentive & interest income from banks as against Tk.41,477,984 during the previous year which has been shown as Other Income in the Statement of Profit or Loss and other Comprehensive Income and in the note no.21.1 in the Notes of Account. (vi) Related party transactions: Related party transactions are depicted in Note no.27.1 in the Notes of Account. MALEK SPINNING MILLS LIMITED 10

12 Annual Report 2015 (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 the year 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 per share (EPS) in all quarter were almost same. There was no major fluctuation in EPS in between the quarters during the year. Profitability had marginally increased in the 4th quarter due to receipt of cash incentives as other income in last quarter. (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 increased by 0.81% i.e. 8.00% on sales as compared to last year s Operating Profit ratio of 7.19%. This is due to mainly decrease of financial expenses, although operating expenses had increased marginally. (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 12% i.e. Tk.1.20 (one point two zero) 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 years & Description (Tk.) (Tk.) Land and Land Development 12,415,760 1,825,257 Factory Building 419, Plant & Machinery 10,760,640 34,933,578 Furniture & Fixtures 5,300 19,310 Office Equipments 775, ,908 Electrical Installation 724, Motor Vehicles --- 2,910,000 Total 25,101,486 40,011,053 The capital expenditures were financed by internal generation of fund. 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 Profit or Loss and other Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows have been included as part of this report. Salek Textile Limited (STL): The Company (MSM) holds % share of Salek Textile Limited i.e. 47,259,700 shares of Tk each amounting to Tk. 472,597, out of 48,260,870 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 was changed from Tk per share to Tk per share. The production capacity of STL is 14,621,000 kgs yarn, 9,600,000 yards fabric and 1,800,000 Pcs RMG products per annum. The company made additional investment of Tk.165,352,825 during the year The Company s operating results as on and are given below: Description Production (Kg) Yarn 10,888,027 10,455,062 Production (Yards) Fabric 5,980,426 *1,596,792 Production (Pcs) RMG 1,642, Sales Revenue (Tk.) 2,977,370,517 2,178,916,498 Gross Profit (Tk.) 375,923, ,496,255 Net Profit after tax provision (Tk.) 117,564, ,713,206 Gross Margin 12.63% 15.72% Net Margin 3.95% 6.23% EPS (Tk.) 2.44 **2.95 NAV (Tk.) ***

13 * Production of Fabric in the year was 3 (three) months only. ** Earning per share (EPS) in the year has been calculated considering the face value of share Tk each. ***NAV in the year has been restated. (b) Newasia Synthetics Limited (NSL): 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. 60,377, during the year under Land & Land Development. The Net Assets Value (NAV) per share of the company as on 30th June 2015 stood at Tk (c) J.M. Fabrics Limited (JMFL): The Company (MSM) holds % 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 15 M.Tons dyed fabric and 68 (sixty eight) lines of cutting and sewing operation with all necessary facilities, storage etc. During the year additional investment of Tk million has been made. The investments made during the year as follows: Particulars Taka Factory Structures, Shades & Building 9,120,131 Plant & Machinery 85,226,967 Other Assets 13,918,127 Total 108,265,225 The Company s operating results as on and are given below: Description Production (Pcs) 25,094,084 16,983,987 Sales Revenue (Tk.) 2,522,840,505 2,625,078,615 Gross Profit (Tk.) 152,981,663 88,555,338 Net Profit (Tk.) 57,800,157 72,365,854 Gross Margin 6.06% 3.37% Net Margin 2.29% 2.76% EPS (Tk.) NAV (Tk.) During the year figures have been restated and rearranged. FINANCIAL RESULTS: The company s (MSM) operating financial results, as compared to the previous year are summarized as follows: (Tk. in million) Description Sales 2, , Cost of goods sold 2, , Gross profit Operating expenses Financial expenses Operating profit Other Income Net Operating Profit/(Loss) Contribution to WPPF Provision for Income Tax Net profit (after tax) Gross Margin 12.46% 12.90% Net Margin 7.52% 7.02% Earning per share EPS (Tk.) Return on Equity (ROE) 4.19% 3.93% 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. 2. Gross Profit had marginally decreased due to marginal increase in Cost of Goods Sold/Operating expenses. MALEK SPINNING MILLS LIMITED 12

14 Annual Report 2015 APPROPRIATION OF PROFIT: The Board of Directors recommended for appropriation of profit as follows: Retained Earnings brought forward from previous year : Tk. 294,827, Less: Dividend Distribution for the year :( Tk.193,600,000.00) Balance surplus brought forward : Tk. 101,227, Add: Net Profit (after tax) during the year : Tk. 225,196, Add: Transfer of excess depreciation of revalued assets : Tk. 65,823, Total net free surplus available for appropriation :Tk. 392,247, Appropriation Proposed: (a) Cash 12% i.e. Tk.1.20 (One point two zero) per share of Tk each :(Tk.232,320,000.00) Retained Earnings after payment of Dividend Tk. 159,927, 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 12% i.e Tk.1.20 (One point two zero) per share of Tk each for the year This will involve an amount of Tk.232,320, out of Reserve & Surplus/Retained Earnings (free reserves). The cash dividend will be available to the Shareholders whose names would appear in the Share Register 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 Mr. A. Matin Chowdhury, Director and Mr. Azizur Rahim Chowdhury, 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: The existing Auditors of the company M/s. Malek Siddiqui Wali, Chartered Accountants retires at this Annual General Meeting on completion of consecutive three years. As they are not eligible for re-appointment as per clause 15(2) & (3) of the Dhaka Stock Exchange & Chittagong Stock Exchange (Listing) Regulations, 2015, a new Firm of Chartered Accountants have to be appointed as Auditors for the year M/s. Shiraz Khan Basak & Co., Chartered Accountants (a panel auditor of BSEC), expressed their interest to be appointed as auditors of the company for the year The Board recommended M/s. Shiraz Khan Basak & Co, Chartered Accountants, R.K. Tower, 86, Bir Uttam C.R. Datta Road, (312 Sonargaon Road), Level-10, Hatirpool, Dhaka-1205 for appointment as auditors of the Company of the year with fixation of their remuneration. RE-APPOINTMENT OF MANAGING DIRECTOR: The current tenure of the Managing Director, Mr. A. Matin Chowdhury would expire on 31st December The Board of Directors in its meeting held on 27th October 2015 decided to re-appoint him for a further period of 5 (five) years with effect from 1st January, 2016 on the existing terms and conditions. Accordingly, the Board of Directors had recommended for approval of re-appointment of Mr. A. Matin Chowdhury by the shareholders in the ensuing Annual General Meeting. Brief resume and other information of the Managing Director is depicted in ANNEXURE-III. RE-APPOINTMENT OF INDEPENDENT DIRECTOR: The Board of Directors in its meeting held on 12th July, 2015 decided to re-appoint Mr. M. Sekander Ali as Independent Director of the Company for a further period of 3 (three) years with effect from 24th September, 2015 as per BSEC Regulations and recommended for approval by the shareholders in the ensuing Annual General Meeting. Brief resume and other information of the above mentioned director is depicted in ANNEXURE-III. 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. ACKNOWLEDGEMENT: The Board of 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, RJSC 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 SALES & PROFITABILITY OVER 2 YEARS TIME 3,500,000 3,000,000 2,500,000 2,000,000 1,500, ,000, ,000 0 Sales Gross Profit Net Profit Particulars Sales 3,065,013 2,994,446 Gross Profit 395, ,972 Net Profit 215, ,196 (Tk. in,000) PRODUCTION VS. SALES FIGURES TABLE 11,600 11,400 11,200 11,000 10,800 10,600 Production Sales 10,400 10, Particulars Production 10,640 10,859 Sales 10,708 11,421 (Quantity in, 000 Kg.) EARNING PER SHARE (EPS) Earning Per Share Particulars Earning Per Share MALEK SPINNING MILLS LIMITED 14

16 m vwbz kqvi nvìvie `, gv jk w úwbs wgjm& wjwg UW eq ii Rb kqvi nvìvie `i cöwz cwipvjbv cl `i cöwz e`b Annual Report 2015 cwipvjbv cl ` Avb `i mv _ Kv úvbx AvBb 1994 Gi 184 bs cwi Q`, wmwkdwiwur GÛ G PÄ i jm& 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 RvwZK wnmve gvb`û) Abymv i 30 k Ryb, 2015 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- U UvBj m± ii GKwU K úvwru wgj hvi wzbwu cwipvjb BDwbU Av Q ivui BDwb Ui e vrmwik Drcv`b gzv I cb G Û Bqvb Ub myzv dweªkª BDwb Ui e vrmwik Drcv`b gzv 9,600,000 MR dweªk Ges AviGgwR BDwb Ui e vrmwik Drcv`b gzv 1,800,000 wcm Wwbg cy 2) R. Gg. dweª wjwg UW- hv GKwU wbwus, WvB, wdwbwks Ges Mv g Um d v±ix `w Y bqvcvov, 6bs WMix, cvt fviqvj, wgr vcyi, MvRxcy i Aew Z hvi evrmwik Drcv`b gzv wgwjqb wcm wu-kvu I Bw U gu Mv g Um 3) wbd Gwkqv wmb _wu wjwg UW- c j vi vcj dvbevi Ges wpcm c v U vc bi Rb cö R±wU ev evq bi cwikíbv Kiv n ji R vjvbx/m v mi Ach vßzvi Rb cö R±wU wmz ivlv n q Q Kv úvbxi Kvh µg t 1. wkí m úwk Z avibv Ges GB wk íi fwel r Dbœq bi m vebvt Avgv `i Kv úvbx U UvBj m± ii cöv_wgk wk íi Aš f~ ³ niqvq wek gv bi wewfbœ KvD Ui myzv Drcv`b Ki Q evsjv `k AviGgwR c Y i wøzxq e nëg ißvbxkvik niqv m Ë I gvbm Z myzv mieiv n Avf š ixy mieiv ni Dci wbf ikxj w úwbs wgj&m kªg wbf ikxj wkí hw`i evsjv `k ch vß cwigvy KvPvgvj hgb Zzjv Drcv`b K i bv Avgv `i K Avg`vbxK Z Zzjv Ges ` kªwg Ki Dci wbf i Ki Z nq GB wk íi cömvi Ges P v jä mg~n wb œ ewy Z wel qi Dci wbf ikxjt (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 ` Zvi 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 m vg~ j DrcbœKvix Ges mieivnkvix `k wn m e cwiwpz jvf K i Q Drcv`b gzv/drcv`bt 2. LvZIqvix A_ev cb wfwëk djvdj t Avgv `i Kv úvbx 100% ißvbxgylx bxu myzv Drcv`b Ki Q Kv úvbxi evrmwik Drcv`b gzv 12,600,000 KwR Bqvb 63,624 w úûjm&g Ges mv ji Kv úvbxi cwipvjbvmz/avw_ K Kvh µ gi ZzjbvMZ Ae v wb œ ck Kiv nj t µ.bs weeib ( KwR) ( KwR) 1 Drcv`b gzv 12,600,000 12,600,000 2 cök Z Drcv`b 10,858,524 10,640,598 3 Drcv`b gzvi e envi 86.18% 84.45% 4 weµ qi cwigvb ( KwR) 11,420,968 10,708,092 5 weµqg~j (UvKv) 2,994,445,635 3,065,012,791 6 weµqg~j (Mo UvKv) 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 š vl, ivr bwzk Aw wzkxjzv djkö wz Z nizv j Drcv`b wewnœz niqvq Znwej e q evwo q w` Q w úwbs wgj Avg`vbxK Z KvPvgvj I vbxqfv e mieivnk Z kªwg Ki Dci wbf ikxj ivr bwzk Aw nizvi Kvi Y KvPvgvj Ges kªg g~ j i DVv-bvgv Gai Yi wk íi Rb cöavb SzuwK AwbqwgZ we`ÿ Z mieivn d j AwbqwgZ M vm mieivn Ges g~ j i DVv-bvgvI Gai Yi wkí K wzmö K i 4. wewµz c b i e q we k ly, gvu cövwš K gybvdv Ges bxu cövwš K gybvdv t (K) wewµz c b i e q t PjwZ eq i wewµz c b i e q wqj 87.54% hv wemz eq i wqj 87.10%, hv e w i nvi 0.44% hv LyeB AZvrch cyy (L) ißvbx t 30 k Ryb 2015 Zvwi L mgvß eq i ißvbx Uvb Ifvi n q Q 2, wgwjqb UvKv, hv wemz eq i wqj 3, wgwjqb UvKv wemz eq ii Zzjbvq Uvb Ifvi n«v mi nvi 2.30% hv wewµz c Y i weµq g~j n«vm cviqvi Rb n q Q (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 gvu gybvdv n«vm cviqvq KviY wewµz c b i weµq g~j n«vm cviqv 15

17 (N) bxu gybvdv/( wz) t PjwZ eq i Kv úvbx bxu gybvdv K i Q wgwjqb UvKv hlv b wemz eq i bxu gybvdv wqj wgwjqb UvKv bxu gybvdv mvgvb e w cviqvi KviY wemz eq ii ZzjbvB Avw_ K e q n«vm cviqv 5. A ^vfvwek jvf ev wz t PjwZ eq i Kv úvbx 34,730,375 UvKv bm` cö Yv`bv Ges e vs Ki mỳ eve` bb-acv iwus BbKvg wn m e DcvR b K i Q hv wemz eq ii wqj 41,477,984 UvKv, hv Ab vb Avq wnmv e Avq-weeiYx Z I wnmv ei bvu bs 21.1G cö`k b Kiv n q Q 6. Avš tm úwk Z Kv úvbxi jb `b mg~n t wnmv ei bvu bs 27.1 Z Avš tm 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 mkj KvqvU v i Kv úvbxi kqvi cöwz Avq cövq GKB ikg wqj PjwZ eq i wewfbœ KvqvU v i kqvi cöwz Av q D j L hvm ZviZg nqwb 4_ KvqvU v i gybvdv mvgvb e w cviqvi KviY bm` cö Yv`bvi UvKv I Ab vb Avq kl KvqvU v i cövß niqv 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 A_v r 0.81% e w c q Q hv eq i weµ qi Dci 8.00% wemz eq i h nvi wqj 7.19% hvi cöavb KviY Avw_ K e q wemz eq ii Zzjbvq K g hviqv hw`i cwipvjbvmz e q mvgvb e w c q Q 13. wemz 05 (cuvp) eq ii gyl cwipvjb Ges Avw_ K WvUvmg~n msw ß AvKv i c ôv bs 08 G eb bv Kiv n q Q 14. jf vsk t cwipvjbv cl ` 12% bm` jf vsk A_ vr cöwz UvKvi mvaviy kqv ii wecix Z 1.20 UvKv bm` jf vsk Nvlbvi Rb AÎ mvavib mfvq mycvwik K i Qb, ikw W U h mkj kqvi nvìvie ` kqvi aviy Ki eb Zv `i Rb 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 msµvš 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 msµvš cwipvjk `i msw ß Rxeb e Ëvš G b vi-3 G eb bv Kiv n q Q gyjabx e q: Ges eq ii gyjabx e q wbgœi c n q Q: weeiy (UvKv) (UvKv) Rwg I Rwg Dbœqb 12,415,760 1,825,257 d v±ix wewìs 419, c v U I gwkbvix 10,760,640 34,933,578 dvwb Pvi I wd Pvi 5,300 19,310 Awdm mvgmöx 775, ,908 B jkwuªk vcbv 724, gvui Mvox -- 2,910,000 gvu 25,101,486 40,011,053 Dc iv³ g~jabx e q Kv úvbxi Avf š ixy Avw_ K Drm n Z Kiv n q Q 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 (K) mv jk U UvBj wjwg UW (GmwUGj): Kv úvbx (GgGmGg) mv jk U UvBj wj: Gi % kqvi A_ vr gvu 482,608, UvKvi cöwzwu 10/- UvKv gyj gv bi 48,260,870 kqvi _ K 472,597, UvKvi cöwzwu 10/- UvKv gyj gv bi 47,259,700 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) bvwuwd Kkb bs SEC/CMRRCD/ /36/Admin/03-44 ZvwiL g 05, 2010 hv evsjv `k MÖ R U cökvwkz ZvwiL Abyhvqx Kv úvwb K cövb fu wjt Kv úvbx n Z cvewjk wjt Kv úvbx Z i cvš i 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 Kv úvbxi (GmwUGj) evrmwik Drcv`b gzv myzv 14,621,000 KwR, dweªk 9,600,000 MR Ges RMG cb 1,800,000 wcm eq i Kv úvbx gvu wewb qvm K i Q 165,352,825 UvKv MALEK SPINNING MILLS LIMITED 16

18 17 Annual Report 2015 Kv úvbxi I mv ji cwipvjbv djvdj wbgœi c: ey bv Drcv`b ( KwR) Bqvb 10,888,027 10,455,062 Drcv`b (MR) dweª 5,980,426 *1,596,792 Drcv`b (wcm) AviGgwR 1,642, weµq iwfwbd (UvKv) 2,977,370,517 2,178,916,498 MÖm jvf (UvKv) 375,923, ,496,255 wbu jvf Ki cöwfkb ciez x (UvKv) 117,564, ,713,206 MÖm gvwr b 12.63% 15.72% wbu gvwr b 3.95% 6.23% BwcGm (UvKv) 2.44 **2.95 GbGwf (UvKv) *** mv ji dweª Drcv`b ïay 3 gv mi ** mv ji Avwb s cvi kqvi (BwcGm) wba vi Y kqvi g~j UvKv we epbv Kiv n q Q *** eq i GbGwf wi q UW Kiv n q Q L) wbdgwkqv wmb _wuk wjwg UW (GbGmGj): 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 i bv e b eve` 60,377, UvKv wewb qvm K i Q 30 k Rb 2015 Zvwi L Kv úvbxi cöwz kqv ii bxu G mu f vjy UvKv (M) R. Gg. dweªkm wjwg UW ( RGgGdGj) t Kv úvbx (GgGmGg) R. Gg. dweªkm wjwg UW Gi % 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 15 gwuªk Ub WvBW dweªk Ges 68 jvbb KvwUs I mÿ Bs Acv ikb mv _ cö qvrbxq mkj d vwmwjwur I `vgrvzkiy myweav we` vgvb Kv úvbxwu PjwZ eq i wewb qvm K i Q wgwjqb UvKv eq ii wewb qvm wbgœi c: weeib UvKv d v±ix KvVv gv, kw I wewìs 9,120,131 c v U I gwkbvix 85,226,967 Ab vb m ú` 13,918,127 gvu 108,265, Ges mv ji Kv úvbxi cwipvjbv djvdj wbgœi c: ey bv Drcv`b (wcq) 25,094,084 16,983,987 weµq iwfwbd (UvKv) 2,522,840,505 2,625,078,615 MÖm jvf (UvKv) 152,981,663 88,555,338 wbu jvf (UvKv) 57,800,157 72,365,854 MÖm gvwr b 6.06% 3.37% wbu gvwr b 2.29% 2.76% BwcGm (UvKv) GbGwf (UvKv) * eq ii wewfbœ As Ki cwigvb wi q UW Ges wig v iäw Kiv n q Q Avw_ K djvdj : wemz eq ii mv _ Kv úvbxi (GgGmGg) ZzjbvgyjK Avw_ K djvdj wb œ msw ßKv i Dc vcb Kiv n jv: (wgwjqb UvKvq) weeiy weµq 2, , wewµz c Y i e q 2, , gvu jvf cwipvjb e q Avw_ K e q cwipvjbv gybvdv Ab vb Avq bxu Acv iwus gybvdv/( jvkmvb) Wwe DwcwcGd G Pvu`v AvqKi cöwfkb bxu jvf (Ki ciez x) gvu Av qi nvi 12.46% 12.90% bxu Av qi nvi 7.52% 7.02% kqvi cöwz Avq-BwcGm (UvKv) wiuvb Ab BKÿ BwU 4.19% 3.93% AvDU vwûs kqvi msl v 193,600, ,600,000 kqv ii AwfwnZ g~j (UvKv) Kbmwj W UW kqvi cöwz Avq-BwcGm (UvKv)

19 Avw_ K cöwz e` bi Dci gš e t 1 wewµz c Y i g~j K g hviqvi Rb weµq mvgvb Kg n q Q 2 wewµz c Y i e q/cwipvjbv LiP mvgvb e w cviqvq gvu gybvdv mvgvb 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 294,827, ev` : eq ii jf vsk weziy UvKv (193,600,000.00) DØ Ë vbvš i UvKv 101,227, hvm: bxu gybvdv (Ki ciez x) mv ji UvKv 225,196, hvm: m úwë cyb:g~j vq bi AePq mgš^q UvKv 65,823, Ave U bi Rb bxu wd«znwej UvKv 392,247, cö vwez jf vsk: bm` jf vsk 12% cöwz (`k) UvKvi mvavib kqv ii Rb 1.20 (GK `kwgk `yb k~b ) UvKv UvKv (232,320,000.00) jf vsk cö`v bi ci DØ Ëc Î vbvš i UvKv 159,927, jf vsk Nvlbv: cö vwez gybvdv Ave Ub Abyhvqx cwipvjbv cl ` eq ii Rb 12% bm` jf vsk Nvlbvi Rb mycvwik K i Qb Gi Rb cöwzwu (`k) UvKvi mvaviy kqv ii wecix Z 1.20 (GK `kwgk `yb k~b ) UvKv jf vsk cö`vb Ki Z n e hvi Rb cö qvrb n e 232,320, 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 wjwce _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 AvB Gd Avi Gm -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 Rbve G. gwzb PŠayix, cwipvjk I Rbve AvwRRyi iwng PŠayix, 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 msw ß Rxeb e Ëvš I Ab vb 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: Kv úvbxi ez gvb wbix K, gmvm gv jk wmwïkx Iqvjx, PvU vw GKvD U v Um avivevwnk fv e 3 eqi wbix v Kvh m úv`b Kivi ci AÎ evwl K mvavib mfvq Aemi MÖnb Ki eb h nzy XvKv K G PÄ I PÆMÖvg K G PÄ (wjw s) i jmbm&, 2015 Gi aviv 15(2) Ges (3) Abyhvqx Zviv cyb-bevq bi hvm bq weavq eq ii Rb GKwU bzzb AwWU dvg wb qvm Ki Z n e gmvm wmivr Lvb emvk GÛ Kvs., PvU vw GKvD U v Um (wegmgwm Gi c v bjf~³ AwWU dvg ) eq ii Rb AwWUi wn m e wb qvm c Z AvMÖn cökvk K i Qb hvm weavq, cwipvjbv cl ` gmvm wmivr Lvb emvk GÛ Kvs., PvU vw GKvD U v Um, Avi. K. UvIqvi, 86, exi DËg wm. Avi. `Ë ivw, (312 mvbvimv ivw), j fj-10, nvwzicyj, XvKv-1205 Õ 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 e e vcbv cwipvj Ki cyb:wb qvm: ez gvb e e vcbv cwipvjk, Rbve G. gwzb PŠayixi wb qv Mi gqv` 31 k ww m ^i 2015 Zvwi L kl n e cwipvjbv cl ` 27 A ±vei 2015 Zvwi L AbywôZ evw mfvq Zv K cybivq 5 (cvup) eq ii Rb ez gvb envj K Z k Z wb qv Mi wm vš MÖnb K i Qb hv Rvbyqvwi 01, 2016 ZvwiL _ K Kvh Ki n e cwipvjbv cl ` Rbve G. gwzb PŠayixi, e e vcbv cwipvjk wn m e cyb:wb qv Mi welqwu AÎ evwl K mvavib mfvq kqvi nvìvie `i Aby gv` bi Rb mycvwik K i Qb e e vcbv cwipvjk, Rbve G. gwzb PŠayixi Rxeb e Ëvš I Ab vb Z_ vw` msw ßKv i G b vi-3 G mwbœ ewkz Kiv n q Q ^Zš cwipvj Ki cyb:wb qvm: cwipvjbv cl ` 12B RyjwB, 2015 Zvwi L AbywôZ mfvq Rbve Gg. m K `vi Avjx K cybivq 3 (wzb) eq ii Rb ^Zš cwipvjk wn m e wegmbwmi i jkb Abyhvqx wb qv Mi wm vš MÖnb K i Qb hv m Þ ^i 24, 2015 ZvwiL _ K Kvh Ki nq, hv AÎ evwlk mvavib mfvq kqvi nvìvie `i Aby gv` bi Rb mycvwik K i Qb Rbve Gg. m K `vi Avjxi Rxeb e Ëvš I Ab vb Z_ vw` msw ßKv i G b vi-3 G mwbœ ewkz Kiv n q Q 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 gva g 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, Avi RGmwm I Ab vb cöwzôv bi mn hvmxzv I Dc ` ki Rb ab ev` Rvbvw Q ZvQvov Kv úvbxi kªwgk, Kg Pvix `i wbôv I HKvwš K Kg DÏxcbvi Rb m š vl cökvk Ges ab ev` Rvbvw Q cwipvjbv cl `i c, G. Gd. Gg. Rvev qi Pqvig vb MALEK SPINNING MILLS LIMITED 18

20 ANNEXURE I 19 Annual Report 2015 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 Bangladesh Securities and Exchange Commission is enclosed as Annexure VI. ANNEXURE II Pattern of Shareholding as on June 30, 2015 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

21 ANNEXURE-III Brief Resume of the Directors Directors who seek re-appointment: Mr. A. Matin Chowdhury: Mr. A. Matin Chowdhury is a Sponsor Director of the Company since He is a renowed and dynamic personality in the Textile Sector of Bangladesh. After his active participation in the liberation War of Bangladesh in 1971, he voluntarily retired from the Bangladesh Army as a Major. He entered into the family business with his brother late Mr. A. Malek Chowdhury into Graphics Limited, a company that pioneered printing, office equipment and other technology equipment. In the last many years, he moved from indenting to the manufacturing and is currently the Managing Director of Malek Spinning Mills Ltd, New Asia Ltd, Rahim Textile Mills Ltd, Salek Textile Ltd, Knit Asia Ltd, Hejaz Publications Ltd, Fatehbagh Tea Co. Ltd, and the Chairman of J.M. Fabrics Ltd. and Newasia Synthetics Ltd. He is the former Chairman of Bangladesh Textile Mills Association (BTMA) and Under Previleged Children s Programs (UCEP). He is also involved with many other non-profit organizations including Diabetic Association of Bangladesh (DAB) as a Member of the National Council, Founder Trustee of Independent University Bangladesh (IUB), Founder Member, Board of Governors of Bangladesh Enterprise Institute (BEI) and many other voluntary organizations. He has more than 43(forty three) years experience in the textile sector. Mr. Azizur Rahim Chowdhury: Mr. Azizur Rahim Chowdhury is a Director of the Company since 2007, son of Mr. A. Matin Chowdhury. He obtained graduation from Purdue University in the U.S.A. with a major in Computer Science and Business Management. He is the Member of Audit Committee of RahimTextile Mils Limited and Malek Spinning Mills Limited. He has more than 8 (eight) years working experience in the textile sector. He is also the Director of Rahim Textile Mills Limited (listed company), Salek Textile Limited, Knit Asia Limited, Hejaz Publications Limited, Fatehbagh Tea Company Limited and also the Managing Director of J.M. Fabrics Limited and Director of Bangladesh Textile Mills Association (BTMA). Re-Appointment of Independent Director: Mr. M. Sekander Ali Mr. M. Sekander Ali, B.Com (Hons), Dhaka University (1960), MBA (IBA), Karachi University (1962), having Capital Market Training in USA ( ). Mr. M. Sekander Ali, one of the Senior Development/Investment Bankers of the country, former (retired) Managing Directors of Investment Corporation of Bangladesh, erstwhile Bangladesh Shilpa Bank & Bangladesh Shilpa Rin Shangstha (now Bangladesh Development Bank Ltd.), and Former Senior Adviser of the Bangladesh Securities and Exchange Commission ( ). He is the Independent Director and Chairman of Audit Committee of Malek Spinning Mills Ltd. and Independent Director of Square Pharmaceuticals Ltd. & Square Textile Ltd. 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: 26th October, MALEK SPINNING MILLS LIMITED 20

22 Annual Report 2015 ANNEXURE-V CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE GOVERNANCE GUIDELINES To the Members of Malek Spinning Mills Limited, We have examined the compliance of the conditions of corporate governance guidelines of the Bangladesh Securities and Exchange Commission (BSEC) of Malek Spinning Mills Limited for the year ended on 30th June, 2015 as stipulated in clause 7(i) of the BSEC Notification No. SEC/CMRRCD/ /134/Admin/44 dated 07 August The compliance of the conditions of corporate governance guidelines as stated in the aforesaid notification and reporting of the status of compliance is the responsibility of the management of Malek Spinning Mills Limited. Our examination for the purpose of issuing this certification was limited to the checking the procedures and implementation thereof, adopted by Malek Spinning Mills Limited for ensuring the compliance of conditions of corporate governance and correct reporting of compliance status on the attached statement on the basis of evidence gathered and representation received. To the best of our information and according to the explanations given to us, we certify that, as reported on the attached status of compliance statement, Malek Spinning Mills Limited has complied with conditions of corporate governance stipulated in the above mentioned BSEC notification dated 07 August, 2012 and subsequent amendment made thereon. Dated: 08th November, 2015 Dhaka Ramendra Nath Basak, FCA Partner Shiraz Khan Basak & Co. Chartered Accountants CEO & CFO s DECLARATION TO THE BOARD OF DIRECTORS The Board of Directors Malek Spinning Mills Limited 117/A, Tejgaon Industrial Area Dhaka Subject: CEO & CFO s Declaration to the Board of Directors. 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) (a) (b) (ii) We have reviewed the financial statements of the company for the year ended on 30th June 2015 and that to the best of our knowledge and belief: these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; these statements together present a true and fair view of the company s affairs and are in compliance with existing accounting standards and applicable laws. There are, to the best of knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violation of the company s code of conduct. Sincerely yours, (B. K. Chaki) Chief Financial Officer (A. Matin Chowdhury) Managing Director Dated: 12th October, 2015 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 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 SPINNING MILLS LIMITED 22 N/A N/A N/A N/A

24 Annual Report 2015 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 audit committee of 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 PHONE: OFF : CHARTERED ACCOUNTANTS RES: : Partners: Md. Waliullah, FCA FAX: Swadesh Ranjan Saha, FCA Md. Habibur Rahman Sarker, FCA Anjan Mallik, FCA AUDITORS REPORT to the shareholders of Malek Spinning Mills Limited wali@satcombd.com 9-G, Motijheel C/A, 2 nd Floor Dhaka-1000, Bangladesh We have audited the accompanying Consolidated Statement of Financial Position of Malek Spinning Mills Limited as at 30th June 2015 and the related Consolidated Statement of Profit or Loss and Other Comprehensive Income, Consolidated Statement of Changes in Equity, Consolidated Statement of Cash Flow and Notes for the year then ended, and a summary of significant accounting policies and other explanatory notes. 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(BAS)/Bangladesh Financial Reporting Standards (BFRS), the companies Act 1994, Bangladesh Securities and Exchanges Commission Rules 1987 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 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 2015 and of the results of its operations and its cash flows for the period then ended and comply with the Companies Act 1994, relevant schedule of Bangladesh Securities and Exchanges Commission Rules 1987 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 Profit or Loss and Other 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, 2015 Malek Siddiqui Wali Chartered Accountants MALEK SPINNING MILLS LIMITED 24

26 Annual Report 2015 MALEK SPINNING MILLS LIMITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30TH JUNE 2015 Notes JUNE'15 JUNE'14 ASSETS : Taka Taka Restated Non-Current Assets : 8,424,462,567 8,398,494,042 Property, Plant and Equipment 4 8,335,293,067 8,398,494,042 Capital Work-in-Progress 5 89,169,500 - Current Assets : 6,949,968,530 7,008,235,816 Inventories 6 3,219,844,567 3,375,478,913 Accounts Receivable 7 2,861,288,832 2,804,027,102 Advances,Deposits and Pre-payments 8 337,222, ,622,098 Cash and Cash Equivalents 9 531,613, ,107,702 TOTAL ASSETS : 15,374,431,097 15,406,729,858 SHAREHOLDER'S EQUITY AND LIABILITIES: Shareholder's Equity : 8,679,053,244 8,495,662,340 Share Capital 10 1,936,000,000 1,936,000,000 Share Premium 11 1,500,000,000 1,500,000,000 Tax Holiday Reserve ,883, ,883,871 Re-valuation Surplus of Fixed Assets 13 3,955,129,899 4,069,912,604 Retained Earnings 14 1,077,039, ,865,865 Non Controlling Interest 15 53,402,347 52,628,362 Non Current Liabilities: 2,512,915,215 1,943,888,163 Long Term Loan 16 2,053,740,431 1,471,625,227 Deferred Tax Liabilities ,174, ,262,936 Current Liabilities : 4,129,060,291 4,914,550,993 Short Term Loan ,117,440 1,044,440,303 Current Portion of Long Term Loan ,622, ,544,660 Loan from Director 20 50,000,000 - Bank Acceptance Liabilities 21 1,982,303,036 1,920,390,417 Creditors and Accruals ,016, ,175,613 TOTAL SHAREHOLDER'S EQUITY AND LIABILITIES : 15,374,431,097 15,406,729,858 Net Assets Value Per Share (NAV) Par Value Tk.10 The annexed notes 1 to 33 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, 2015 Chartered Accountants 25

27 MALEK SPINNING MILLS LIMITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30TH JUNE 2015 Notes JUNE'15 JUNE'14 Taka Taka Sales 23 8,297,896,015 8,239,372,911 Cost of Goods Sold 24 7,396,018,441 7,227,818,707 Gross Profit : 901,877,574 1,011,554,205 Operating Expenses ,736, ,548,543 Financial Expenses ,668, ,696,687 Operating Profit/(Loss) : 363,471, ,308,974 Other Income/(Loss) ,117,994 41,302,851 Net Operating Profit/(Loss) : 484,589, ,611,825 Provision for Contribution to WPPF 28 23,209,411 26,174,608 Profit/(Loss) before Tax : 461,380, ,437,217 Provision for Income Tax : 63,626,790 65,392,536 Current Tax 29 77,517,808 79,594,690 Deferred Tax 30 (13,891,018) (14,202,154) Net Profit/(Loss) after tax for this period 397,753, ,044,681 Provision for Tax Holiday Reserve 31-6,490,430 Net Profit/(Loss) after Tax Holiday Reserve 397,753, ,554,251 Non Controlling Interest ,985 3,579,700 Net Profit/(Loss) Balance 396,979, ,974,551 (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 33 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, 2015 Chartered Accountants MALEK SPINNING MILLS LIMITED 26

28 Annual Report 2015 MALEK SPINNING MILLS LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30TH JUNE 2015 Particulars Share Capital Share Revaluation Tax holiday Retained Total Premium Surplus of Reserve Earnings Fixed Assets Balance as at 1st July ,936,000,000 1,500,000,000 4,069,912, ,883, ,865,865 8,495,662,340 Net Profit/(Loss) during this year 396,979, ,979,482 Transfer of excess depreciation of Revalued Assets (114,782,705) 114,782,705 - Deferred Tax of Adjustment (J.M. Fabrics Ltd.) (802,865) (802,865) Advance Income Tax adjustment (J.M. Fabrics Ltd.) (19,185,713) (19,185,713) Cash Dividend for (193,600,000) (193,600,000) As at 30th June ,936,000,000 1,500,000,000 3,955,129, ,883,871 1,077,039,474 8,679,053,244 FOR THE YEAR ENDED 30TH JUNE 2014 Restated Particulars Share Capital Share Revaluation Tax holiday Retained Total Premium Surplus of Reserve Earnings Fixed Assets Balance as at 1st July ,936,000,000 1,500,000,000 4,135,727, ,647, ,712,962 8,190,088,231 Net Profit/(Loss) during this year 443,974, ,974,551 Transfer of excess depreciation of Revalued 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 4,069,912, ,883, ,865,865 8,495,662,340 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, 2015 Chartered Accountants 27

29 MALEK SPINNING MILLS LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30TH JUNE 2015 JUNE'15 JUNE'14 Taka Taka CASH FLOW FROM OPERATING ACTIVITIES : Collection from Turnover & Bills Receivable 8,240,634,285 8,708,805,388 Other Income/(Loss) 123,455,008 46,786,887 Payment for Raw Materials, Indirect Materials and other expenses (7,072,602,520) (7,603,577,071) Payment for Operating Expenses (146,696,159) (132,385,529) Payment for Financial Expenses (380,668,943) (363,696,687) Payment for Income Tax (44,799,734) (68,987,191) Net Cash provided/(used) by Operating Activities 719,321, ,945,796 CASH FLOW FROM INVESTING ACTIVITIES : Acquisition of Fixed Assets (254,255,999) (216,680,131) Acquisition of Capital work in progress (89,169,500) - Advance realised - 247,352 Disposal of Fixed Assets 5,866,200 1,612,469 Net cash provided/(used) in Investing Activities (337,559,299) (214,820,310) CASH FLOW FROM FINANCING ACTIVITIES : Bank Loan Increase/(Decrease) (244,129,385) 28,738,392 Loan from Directors 50,000,000 - Refundable IPO Share Money paid (92,507) (175,002) Dividend Paid (191,035,331) (175,960,624) Net cash provided/(used) in Financing Activities (385,257,224) (147,397,235) Increase/(Decrease) in Cash and Cash Equivalents (3,494,586) 224,728,251 Cash & Cash Equivalents at 1st July ,107, ,379,451 Cash and Cash Equivalents at 30th June ,613, ,107,702 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, 2015 Chartered Accountants MALEK SPINNING MILLS LIMITED 28

30 Annual Report 2015 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-ofthe-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 and J.M. Fabrics Limited for the period ended June 30, 2015, 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. 48,260,870 47,259, % Newasia Synthetics Ltd. 5,000,000 4,964, % J.M. Fabrics Ltd. 4,000,000 3,999, % 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. 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. Depreciation on Current years addition is charged as and when the assets are ready for operation. 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 A/C Receivable: Accounts Receivable represents the amounts due from export sales both to local and foreign buyers. All transaction related to export sales is performed through letter of credit, they are secured 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: a) Current Tax: The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported is the statement of Profit or Loss and other Comprehensive income because it excludes items of income or expenses that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group s liability for current tax is calculated using tax rates that have been enacted on date of Statement of Financial Position. b) Deferred Tax: The company has recognized deferred tax using balance sheet method in compliance with the provisions of IAS-12 Income Taxes. The company s policy of recognition of deferred tax assets/liabilities is based on temporary difference (Taxable or deductible) between the carrying amount (Book Value) of assets and liabilities for Financial Reporting purpose and its tax base, and accordingly, deferred tax income/expenses has been considered to determine net profit after tax and earnings per share (EPS) Statement of Cash Flows: Statement of Cash Flows 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. MALEK SPINNING MILLS LIMITED 30

32 Annual Report 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 2014 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 Comparative Information: Comparative information have been disclosed in respect of year June 2014 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 2014 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 in accordance with BAS-21 The Effects of Changes in Foreign Exchange Rate. Foreign Currencies are converted into taka at the rates ruling on the transaction dates. Monetary assets and liabilities are converted at the rates prevailing at the balance sheet date, non-monitory assets and liabilities are reported using the exchange rate at the date of transaction. Exchange currency difference if any in the comprehensive income 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 other 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 Profit or Loss and other Comprehensive Income for the period from 1st July 2014 to 30th June (iii) Statement of Cash flows for the period from 1st July 2014 to 30th June (iv) Statement of changes in Equity for the period from 1st July 2014 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 for Malek Spinning Mills Ltd. But its subsidiaries Salek Textile Ltd. has geographic and product segment by Rotor, Fabrics & RMG unit and the financial statement has reported according to BFRS-8. The discloser of segment reporting is also disclosed in financial of Salek Textile Ltd. 31

33 3.33 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 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 7 4 Mr. A. Matin Chowdhury Managing Director 7 5 Dr. Shamim Matin Chowdhury Director 7 6 Mr. Azizur Rahim Chowdhury Director 7 7 Ms. Saima Matin Chowdhury Director 7 4 Mr. Moshiur Rahman Director 7 7 Mr. M. Sekander Ali Independent Director 7 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 2015) 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 2015) 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 2015) 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 1 st July 2014 to 30th June 2015) Tk. 58,20,000 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 1,08,58, % 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 - 2,069,741,925 2,069,741,925 2,129,067,111 Spare Parts - 26,833,724 26,833,724 47,086,900 Packing Materials 28,061,675-28,061,675 28,061,675 Capital goods - 10,760,640 10,760,640 - MALEK SPINNING MILLS LIMITED 32

34 Annual Report 2015 MALEK SPINNING MILLS LIMITED NOTES OF CONSOLIDATED FINANCIAL STATEMENT FOR THE YEAR ENDED 30TH JUNE Amount in Taka 4. CONSOLIDATED PROPERTY, PLANT AND EQUIPMENT: Tk. 8,335,293,067 COST: Opening Balance JUNE'15 6,670,388,867 JUNE'14 6,489,168,774 Addition during the year 359,097, ,229,493 7,029,485,917 6,680,398,267 Sales/Adjustment during the year 16,794,032 10,009,400 Closing Balance 7,012,691,885 6,670,388,867 Accumulated Depreciation: Opening Balance 2,576,315,792 2,311,163,415 Adjustments during the year 8,590,818 2,912,895 Depreciation during the year 299,312, ,065,272 Closing Balance 2,867,037,079 2,576,315,792 Written Down Value at cost: 4,145,654,805 4,094,073,075 REVALUATION: Opening Balance 4,814,879,388 4,814,879,388 Addition of Revaluated Assets - - Total Revaluated Assets: 4,814,879,388 4,814,879,388 Accumulated Depreciation: Opening Balance 510,458, ,056,551 Depreciation during the year 114,782, ,401,870 Closing Balace 625,241, ,458,421 Written Down Value of Revaluated Assets: 4,189,638,262 4,304,420,967 Total Written Down Value: 8,335,293,067 8,398,494,042 Allocation of depreciation charges for the year has been made in the accounts as follows: Factory Overhead 403,054, ,257,662 Administrative Overhead 11,040,798 10,209, ,094, ,467,143 Details of Fixed Assets and Depreciation are shown in the Annexure-1 5. CONSOLIDATED CAPITAL WORK-IN-PROGRESS: 89,169, CONSOLIDATED INVENTORIES : Tk. 3,219,844,567 Raw Materials 1,347,535,686 1,454,364,012 Stock-in-Transit 20,944, ,819,384 Work-in-Process 449,819, ,931,478 Finished Goods 1,226,304,070 1,354,057,196 Stores and Accessories 175,240, ,306,844 3,219,844,567 3,375,478, CONSOLIDATED ACCOUNTS RECEIVABLE : Tk 2,861,288,832 i) Malek Spinning Mills Limited 1,136,946,335 1,152,092,612 ii) Salek Textile Limited 1,504,486,243 1,532,995,661 iii) J.M. Fabrics Limited 511,140, ,842,140 3,152,572,581 3,001,930,413 Less: Inter Company Receivable 291,283, ,903,311 Total: 2,861,288,832 2,804,027, CONSOLIDATED ADVANCE, DEPOSIT & PRE-PAYMENTS: 337,222,015 Advance against construction materials, Suppliers & Others 136,113, ,073,910 Security Deposit on REB 178, ,195 Security Deposit on Titas Gas T&D Co. 24,462,211 24,462,211 Advance against Income Tax (Note: 8-A) 156,167, ,025,656 Security Deposit to CDBL 500, ,000 Advance to EME Consultants & Engineers 150,000 - Advance to M/S Maznu Traders(For Land purchase) 73,073 73,073 Advance against Office Rent 4,350,000 5,516,678 Security Deposit to United Leasing Co. Ltd ,887 Security Deposit against LC margin/ Bank Guarantee 4,679,570 14,701,340 Advance to Sharif & Brothers(Land Purchase-Ashugonj) - 2,615,000 Advance to M/S MR Traders (Land purchase-ashugonj) 1,065,148 1,065,148 Advance to Mr. Abdus Salam(Land) 340,569 - Advance to Mr. Karim(For Land purchase) 9,142, ,222, ,622,098

35 8-A. CONSOLIDATED ADVANCE INCOME TAX: 156,167,244 Opening Balance 137,025,656 80,797,527 Payment/Adjustment for prior year Income 25,658,146 12,759,062 Last year Balance after adjustment- 111,367,510 68,038,465 Advance Income Tax paid (Against Export Proceeds) 40,503,374 65,190,504 Advance Income Tax paid (Against Interest Income) 381, ,122 Advance Income Tax paid (Against Cash Incentive) 3,659,693 3,267,565 Advance Income Tax paid (Against Vehicle Fitness) 255,000 48,000 Total AIT paid for the year: 44,799,734 68,987,191 Total- 156,167, ,025, CONSOLIDATED CASH AND CASH EQUIVALENTS: Tk. 531,613,116 Cash in Hand: 1,510,255 1,923,353 Cash at Banks : AB Bank Ltd. STD A/C: (MSML) 231, ,416 Brac Bank STD A/C: (Deposit with IPO) MSML 42,450 53,365 Brac Bank A/C: (MSML) 14,228,893 13,501,189 The City Bank Ltd.-CD A/c(JM) 103, ,324 The City Bank Ltd.-FBPAR A/c(JM) 18,708, ,192 The City Bank Ltd.-ERQ A/C(JM) 45,657 35,804,459 Dhaka Bank Ltd A/C: (STL) - 318,400 Dhaka Bank USD Margin A/C:0032 (STL) 10, ,287 Dhaka Bank Ltd A/C: (NSL) 627,733 1,082,627 Dhaka Bank Ltd. CD A/C: (MSML) 5,651,390 1,352,241 Dhaka Bank Ltd. STD A/C: (MSML) 22,039,257 18,304,164 Dhaka Bank Ltd.- Margin Account: (MSML) 2,787,893 21,546,504 Eastern Bank CD A/C: 5745 (NSL) 92,856 94,126 Eastern Bank Ltd.- Margin Account: USD (MSML) 101,603 25,460,635 Eastern Bank USD Margin A/C: (STL) 4,435,620 - Eastern Bank CD A/C: (STL) 11, ,385 Eastern Bank FC A/C: (Deposit-NRB IPO) MSML 1,233,351 1,283,358 Eastern Bank STD A/C: BDT (Deposit IPO) MSML 25,548,215 24,622,938 HSBC Bank CD A/C: (NASL) 1,058, ,581 HSBC Bank USD Margin A/C: 091 (STL) 148,391,291 24,088,206 HSBC Bank USD Margin A/C: 047 (STL) 12,052,665 - HSBC Bank-Margin A/C:091 USD (MSML) 108,714,761 37,010,698 HSBC Bank-R.Q A/C:095 USD (MSML) 1,758, ,680 Islami Bank-CD A/C: (STL) 869,658 - Islami Bank-CD A/C: (STL) 284,033 - Islami Bank-Margin A/C: 58(STL) 60,296 3,952 Islami Bank-Margin A/C: 59(STL) 89, ,110 Islami Bank-Margin A/C: 119(STL) 128,663 - Islami Bank-FC A/C: 80 (USD)(STL) 149,375 68,376 Islami Bank-FC A/C: 84 (USD)(STL) 8,214,668 - Islami Bank-FDR A/C: (STL) 10,748,245 10,392,138 Islami Bank-FDR A/C: (STL) - 5,151,070 Islami Bank-FDR A/C: 3301(STL) 1,177,280 1,092,024 Islami Bank-ERQ A/C: 71(STL) 30, ,096 Islami Bank-ERQ A/C: 74(STL) 77,462 - One Bank Ltd CD A/C: (MSML) - 3,074,035 One Bank- Margin Account : USD (MSML) 22,471,078 8,303,740 Pubali Bank-CD A/C: (STL) 42,445 - Shahjalal Islami Bank A/C: (MSML) 14,848 15,998 Trust Bank CD A/C: (MSML) 39,236 - Trust Bank Ltd A/C: (STL) 134,158 1,506,457 Trust Bank Ltd - Margin A/C: (MSML) 42,069 42,735 Trust Bank Ltd - Margin A/C: (STL) 368, ,266 Trust Bank Ltd.- CD A/C: (NSL) 540, ,733 Eastern Bank Limited FC- Margin-JM 103,296,629 83,486,134 Eastern Bank Ltd. CD A/C: (JM) 428, ,242 Eastern Bank Ltd. CD A/C: (JM) - 26,327,746 Eastern Bank Ltd. ERQ A/C (JM) 184,713 1,784,014 HSBC Ltd. CD A/C(JM) 38,430 43,430 HSBC Ltd.Margin A/C(JM) 18,988 19,108 UCBL- FC Margin(JM) 10,601, ,585,883 UCBL- Banani Branch(JM) - 139,288 UCBL- ERQ A/C, Banani Branch(JM) 2,175, ,102, ,184, ,613, ,107,702 MALEK SPINNING MILLS LIMITED 34

36 Annual Report CONSOLIDATED SHARE CAPITAL: Tk. 1,936,000,000 1,936,000,000 It represents 19,36,00,000 ordinary shares of Tk.10 each. 11. CONSOLIDATED SHARE PREMIUM: Tk. 1,500,000,000 1,500,000,000 It represents premium of 100,000,000 ordinary shares of Tk.15 each. 12. CONSOLIDATED TAX HOLIDAY RESERVE: Tk. 210,883,871 Opening Balance 210,883, ,647,436 Add: Adjustment Minority Interest of Tax Holiday Reserve - 746,005 Add: Provided during the year - 6,490,430 Closing Balance 210,883, ,883, CONSOLIDATED RE-VALUATION SURPLUS OF FIXED ASSETS: Tk. 3,955,129,899 Opening Balance 4,069,912,604 4,363,383,492 Less: Prior year adjustment - 227,655,659 Restated Balance 4,069,912,604 4,135,727,833 Add: Addition of Revaluated Assets - - 4,069,912,604 4,135,727,833 Less: Transfer to Retained Earnings of excess depreciation 114,782, ,401,870 Written Down Value- 3,955,129,899 4,025,325,963 Add: Adjustment Non controlling Interest of revaluation Assets - 44,586,641 Net Written Down Value: 3,955,129,899 4,069,912,604 Detail of Re-valuation Surplus of Fixed Assets is given in the annexed Annexure CONSOLIDATED RETAINED EARNINGS: Tk. 1,077,039,474 Opening Balance 778,865, ,712,962 Add: Net Profit/(Loss) during the year 396,979, ,974,551 1,175,845, ,687,512 Add: Transfer of excess depreciation of revaluated assets 114,782, ,401,870 Less: Declared Cash Dividend 193,600, ,600,000 Less: Declared Stock Dividend - - Less: Advance Income Tax adjustment 19,185,713 - Less: Adjustment of Deferred Tax 802,865 - Add: Adjustment Non Controlling Interest of Retained Earnings - 3,376,482 Total: 1,077,039, ,865, NON CONTROLLING INTEREST: TK. 53,402,347 Paid-up Capital- (i) Salek Textile Ltd % 10,011,700 10,011,700 (ii) Newasia Synthetics Ltd % 3,535,000 3,535,000 (iii) J.M Fabrics Ltd % 10,000 10,000 Total: 13,556,700 13,556,700 Retained Earnings- (i) Salek Textile Ltd % 16,575,598 13,181,852 (ii) Newasia Synthetics Ltd % (67,906) (48,054) (iii) J.M Fabrics Ltd % 6,038 4,844 Total: 16,513,729 13,138,642 Tax Holiday reserve- (i) Salek Textile Ltd % 4,470,368 4,470,368 Total: 4,470,368 4,470,368 Revaluation Surplus- (i) Salek Textile Ltd % 9,372,196 11,972,689 (ii) Newasia Synthetics Ltd % 9,485,468 9,485,468 (iii) J.M Fabrics Ltd % 3,885 4,494 Total: 18,861,550 21,462,651 Total Non Controlling Interest: 53,402,347 52,628,362 This represents minority interest of Salek Textile Limited, Newasia Synthetics Limited, J.M. Fabrics Limited 16. CONSOLIDATED LONG TERM LOAN: Tk. 2,053,740,431 Eastern Bank Limited 916,037, ,681,206 Dhaka Bank Limited 344,948, ,558,805 Trust Bank Limited - 82,867,623 HSBC Limited 695,246,661 43,750,000 Islami Bank Limited - 503,748,593 The City Bank Ltd. 375,263, ,522,227 United Commercial Bank Ltd. 363,866, ,925,942 United Leasing Co. Ltd ,491 2,695,363,365 2,463,169,887 Less: Current Portion of Long Term Loan Note: ,622, ,544,660 2,053,740,431 1,471,625,227 35

37 17. DEFERRED TAX LIABILITIES: Tk. 459,174,784 Opening Balance 472,262, ,809,431 Add: Prior year adjustment - 227,655,659 Restated Balance 472,262, ,465,090 Addition during the year for prior year adjustment 802,865 - Add: Provision for the year (13,891,018) (14,202,154) Total- 459,174, ,262, CONSOLIDATED SHORT TERM LOAN: Tk. 568,117,440 Import Loan: Eastern Bank Ltd. 153,168, ,247,974 Islami Bank Ltd ,594,071 The City Bank Ltd. 47,555,091 80,170,990 United Commercial Bank Ltd. 226,819, ,942, ,543, ,955,138 Bank Overdraft: Eastern Bank Ltd A/C: & 11 (MSML) 4,976,473 29,463,601 Eastern Bank Ltd A/C: (STL) 10,662,859 6,447,921 Eastern Bank Ltd A/C:(J.M) 8,706,054 - Dhaka Bank Ltd A/C: (STL) 5,565,225 - The city Bank Ltd. A/C:(JM) 10,346,025 10,361,914 United Commercial Bank Ltd.(J.M) 41,160,703 43,483,381 Islami Bank Ltd. (Titas) - 115,161,474 One Bank Ltd A/C: (MSML) 4,158,904 - TBL CD/OD A/C: (MSML) - 8,199,148 HSBC OD A/C : (MSML) 17,791,511 2,669,721 HSBC A/C: (STL) 37,206,468 55,698, ,574, ,485, ,117,440 1,044,440, CONSOLIDATED CURRENT PORTION OF LONG TERM LOAN : Eastern Bank Ltd. 155,863, ,194,307 Dhaka Bank Ltd. 121,162, ,600,000 HSBC Ltd. 152,403,458 43,750,000 Islami Bank Bangladesh Ltd ,400,000 Trust Bank Ltd. - 82,867,623 The City Bank Ltd. 103,333, ,221,539 United Commercial Bank Ltd. 108,859, ,395,700 United Leasing Co. Ltd , ,622, ,544,660 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. 20. LOAN FROM DIRECTOR: TK. 50,000, CONSOLIDATED BANK ACCEPTANCE LIABILITIES: TK. 1,982,303,036 Raw Materials: Eastern Bank Limited 760,273, ,458,619 HSBC Ltd. 612,103, ,358,417 The City Bank Ltd. 30,398,049 14,067,896 Islami Bank Ltd ,294,836 United Commercial Bank Ltd. 39,393,694 14,258,264 Dhaka Bank Limited 417,222, ,881,581 1,859,391,181 1,902,319,612 Machinery: Dhaka Bank Limited 3,054,440 - Eastern Bank Ltd. 119,857,415 18,070, ,911,855 18,070,805 1,982,303,036 1,920,390, CONSOLIDATED CREDITORS & ACCRUALS: Tk. 887,016,882 Gas Bill Payable 14,152,509 10,883,652 Electricity Bill Payable 587, ,084 Telephone & Mobile Bill Payable - 118,216 Audit Fee Payable 241, ,675 Legal Fee Payable - 10,000 Office Rent Payable 98, ,900 Tax Deduction at Source 4,459,570 3,500,968 Vat Deduction at Source 1,463, ,987 Income Tax Payable (Note: 22-A) 185,509, ,463,952 Salary & Wages Payable 76,361,588 63,166,303 Contribution to WPPF Payable 164,539, ,330,549 Director's Remuneration Payable 553, ,729 MALEK SPINNING MILLS LIMITED 36

38 Annual Report 2015 Payable for Goods Suppliers & Others 156,455, ,411,596 Payable for Waste Cotton Purchase 239,104, ,016,411 Payable against Sales - 5,000,000 Interest accrued (Note: 22-B) - 248,122,969 Dividend Payable 30,540,550 27,975,881 Refundable IPO Share money 12,948,235 13,040, ,016, ,175, A. CONSOLIDATED TAX PAYABLE: Opening Balance 114,463,952 47,967,277 Provision for the period (Current Tax): (Note: 29) 77,517,808 79,594,690 Less: Adjustment Tax provision of Titas for 9 month - 7,161, ,981, ,400,848 Payment/Adjustment for prior year balance: 6,472,433 5,936,896 Total Payment/Adjustment for last year Income: 6,472,433 5,936,896 Total Payable- 185,509, ,463, CONSOLIDATED SALES: Tk. 8,297,896,015 Export Sales 8,494,656,657 8,659,013,092 Less: Inter Co. Sales 196,760, ,640,180 8,297,896,015 8,239,372, CONSOLIDATED COST OF GOODS SOLD: Tk. 7,396,018,441 Raw Material Consumed (Note: 24-A) 5,627,715,894 6,274,423,518 Direct Expenses (Note: 24-B) 819,991, ,240,423 Factory Overhead (Note: 24-C) 1,191,391,022 1,033,114,877 Total Manufacturing Cost 7,639,098,547 7,824,778,818 Work-in-Process- Opening 274,931, ,142,051 Cost of Goods available for use 7,914,030,025 8,106,920,869 Work-in-Process- Closing 449,819, ,939,981 Cost of Production 7,464,210,731 7,796,980,888 Finished Goods- Opening 1,354,057,196 1,230,201,094 Cost of Goods Available for Sales 8,818,267,927 9,027,181,982 Finished Goods- Closing 1,226,304,070 1,397,940,480 Finished Goods- Inter Company 196,760, ,640,180 Loss on Fire 815,226 18,217,385 Cost of Goods Sold: 7,396,018,441 7,227,818, A. CONSOLIDATED RAW MATERIALS CONSUMED: Tk. 5,627,715,894 Opening Inventory of Raw Materials 1,454,364,012 1,174,964,168 Add: Purchase of Raw Materials 5,520,887,569 6,058,360,992 Less: Closing Stock of Raw Materials 1,347,535,686 1,454,364,012 Raw Materials Consumption: 5,627,715,894 5,778,961,148 Raw Materials Consumption (Titas) - 495,462,370 Total Raw Materials Consumption: 5,627,715,894 6,274,423, B. CONSOLIDATED DIRECT EXPENSE: Tk. 819,991,631 Direct Wages/Labour 639,710, ,673,193 Overtime Wages 180,280, ,567,230 Total 819,991, ,240, C. CONSOLIDATED FACTORY OVERHEAD: Tk. 1,191,391,022 Factory Salary and Allowances 119,401,921 64,390,309 Festival Bonus 5,069,421 2,231,676 Electricity Charges 4,966,880 3,824,182 Gas Charges 131,711, ,749,513 Gardening Expenses 50,722 18,158 Repairs & Maintenance 94,681,930 92,962,333 Air Freight/Courier charges 1,997,253 33,077 Packing Materials 68,424,646 51,989,724 Fuel, Oil & Lubricant 30,100,794 30,222,629 Insurance Premium- Fire 14,815,256 11,795,657 Insurance Premium- (Group) 48,440 48,440 Stores & Accessories consump. (Note: 24-C-i) 161,803,531 80,154,024 Entertainment 11,710,742 8,792,394 Telephone, Mobile & Fax 1,829,077 1,491,739 Stationery charges 3,240,496 2,186,339 Printing Charges 2,248, ,911 Other Carrying Charges 12,867,468 13,823,558 Factory Office Expenses others 221, ,772 Dyeing, Printing, Washing, Embroidary, Finishing Exp. 63,051,179 53,594,957 C&F and others expenses 6,154,824 6,280,086 Lab test & Inspection charges 21,754,954 20,029,522 Factory Rent 15,600,000 3,900,000 37

39 Vehicles Maintenance 8,417,098 6,699,463 Medical Expenses 585, ,152 Uniform & Leverage 196,455 72,550 Miscellaneous 3,116,540 1,358,265 Conveyances 3,210,609 2,511,058 House Rent for Worker Shed 1,060,133 2,092,455 Depreciation 403,054, ,302,934 1,191,391,022 1,033,114,877 24(C )-i. CONSOLIDATED CONSUMPTION OF STORES AND ACCESSORIES: Opening Stock of Stores and Accessories 158,306, ,749,259 Opening Stock of Stores and Accessories(Titas) - 15,658,089 Add: Purchase during the year 178,737,255 82,661,774 Less: Closing Stock of Stores and Accessories 175,240, ,306,844 Stores and Accessories Consumed 161,803,531 63,762,278 Stores and Accessories Consumed(Titas) - 16,391,746 Total Stores and Accessories Consumed 161,803,531 80,154, CONSOLIDATED OPERATING EXPENSES: Tk. 157,736,957 Salaries & Allowances 62,138,039 42,341,468 Festival Bonus 7,923,755 6,892,042 Director's Remuneration 8,220,000 10,334,000 Fees, Forms & Others 4,773,205 7,425,481 Audit Fees 241, ,250 Legal Fees 459,945 - Printing & Stationery 1,320,549 2,545,490 Telephone,Mobile & Internet Expenses 2,078,478 2,188,383 Postage & Stamp 410, ,173 Vehicle Maintenance 9,500,531 6,538,923 Miscellaneous Expenses 13,264,380 16,546,665 Business Development expenses 4,435,130 8,687,212 Office Rent 2,511,706 2,314,488 Rates & Taxes 2,095,695 2,035,291 Carriage Outward, Selling & Distribution, C&F exp., Sample charges 11,745,233 12,059,825 Travelling & Conveyance 3,671,738 2,806,115 Entertainments 1,486,181 1,811,764 Office Expenses 131, ,332 Fuel & Oil for Head Office 209, ,570 Advertisement/ Publicity Expenses 569, ,511 AGM Expenses 2,192,494 2,377,808 Marketing Expenses 3,163,538 - Security Charges 415, ,200 Gardening Expenses 12,101 29,455 Agriculture expenses - - Uniform & Leverage Security 339, ,954 Repairs & Maintenance 3,198,284 2,232,422 Donation & Subscription - 80,000 Software Maintenance Expenditure 60, ,596 Credit Rating Charges 128,500 73,478 Depreciation 11,040,798 11,169, CONSOLIDATED FINANCIAL EXPENSES : Tk. 380,668, ,736, ,548,543 EASTERN BANK LTD.: Interest on Long Term Loan 74,133,368 21,979,667 Interest on Short Term Loan 8,644,363 4,371,470 Interest on Overdraft 2,598,026 6,862,168 Bank Charges & Commission 24,531,749 9,348,551 Export L/C Negotiation Commission - 100,582 Interest on Bill Discount 13,481,270 1,850,053 TOTAL 123,388,777 44,512,491 HSBC LTD.: Interest on Long Term Loan 55,010,088 9,490,816 Interest on Short Term Loan - 13,843,835 Interest on Overdraft 3,828,407 4,624,939 Bank Charges & Commission 14,798,351 8,189,966 Interest on Bill Discount 15,969,773 27,233,458 TOTAL 89,606,619 63,383,014 DHAKA BANK LTD. : Interest on Long Term Loan 51,449,814 85,862,900 Interest on Short Term Loan - 1,608,076 Interest on Overdraft 69,462 2,038,903 MALEK SPINNING MILLS LIMITED 38

40 Annual Report 2015 Bank Charges & Commission 7,193,583 5,617,080 Export L/C Negotiation Commission 878, ,104 Interest on Bill Discount 3,108,025 4,496,252 TOTAL 62,699,302 99,770,315 ONE BANK LTD. : Interest on Short Term Loan - 1,060,899 Interest on Overdraft 144,332 1,223,467 Bank Charges & Commission 196,452 1,170,234 TOTAL 340,783 3,454,599 TRUST BANK LTD. : Interest on Long Term Loan 3,016,228 18,610,078 Bank Charges & Commission 35,205 1,260,972 Interest on Overdraft 3,174,790 3,173,733 TOTAL 6,226,223 23,044,783 SHAHJALAL ISLAMI BANK LTD. : Bank Charges & Commission 2,300 1,150 TOTAL 2,300 1,150 CITIBANK N.A : Bank Charges & Commission - 1,620 TOTAL - 1,620 ISLAMI BANK BANGLADESH LTD.: Interest on Long Term Loan 24,213,555 81,901,624 Interest on Short Term Loan 5,940,400 23,620,197 Bank Charges & Commission 3,015,372 5,596,866 Export Bill Negotiation Commission 97, ,846 Interest on Bill Discount 6,039,579 9,484,310 TOTAL- 39,306, ,857,843 UNITED LEASING CO./UTTARA FINANCE & INVENSTMENT LTD.: Interest on Lease Finance - 92,783 TOTAL - 92,783 AB BANK LTD : Bank Charges & Commission 1,899 57,232 TOTAL 1,899 57,232 BRAC BANK LTD: Bank Charges and Commission 11,150 11,380 TOTAL 11,150 11,380 THE CITY BANK LTD.: Bank Charges and Commission 1,739,769 1,014,930 Interest on Long Term Loan 26,134,524 4,796,787 Interest on Short Term Loan 3,022,473 - TOTAL 30,896,765 5,811,717 UCBL: Interest on Short Term Loan 1,685,664 - Interest on Term Loan 24,412,978 1,257,397 Bank Charges & Commission 2,090,434 1,440,363 TOTAL 28,189,077 2,697, ,668, ,696, OTHER INCOME/(LOSS): Tk. 121,117,994 CASH INCENTIVE: 120,095,230 37,185,368 OTHER INCOME/(LOSS): Interest Received from Dividend A/C with BRAC Bank Ltd. 983,534 1,010,529 Interest Received from Dividend A/C with Dhaka Bank Ltd. 1,188, ,492 Interest Income from STD A/C with AB Bank Ltd. 7,935 4,383 Interest Income from STD A/C witth BRAC Bank Ltd. 1, ,055 Interest Income from STD A/C witth Eastern Bank Ltd. 1,076,586 1,507,854 Interest Received from FDR A/C-Islami Bank 544,358-3,802,006 3,999,314 Income from Agriculture - - Foreign currency exchange Gain 811, ,674 Gain on Sale of Assets 20,250 63, , ,938 Less: Foreign currency exchange Loss 1,253,565 - Less: Loss on Sale of Assets 2,357, ,769 3,610, ,769 Total Other Income/(Loss) 1,022,765 4,117,483 Total Non-operating Income/(Loss) 121,117,994 41,302,851 39

41 28. CONSOLIDATED PROVISION FOR WORKER'S PROFIT PARTICIPATION FUND: Provision for Contribution to WPPF(MSML) 13,057,751 12,473,497 Provision for Contribution to WPPF(STL) 6,795,386 8,104,203 Provision for Contribution to WPPF(NSL) - - Provision for Contribution to WPPF(JM) 3,356,274 3,940,365 Provision for Contribution to WPPF(TITAS) - 1,656,543 23,209,411 26,174, CONSOLIDATED INCOME TAX PROVISION (CURRENT TAX): On Operating Income: Malek Spinning Mills Ltd. 40,851,986 37,776,361 Salek Textile Ltd. 24,229,094 25,145,038 J.M Fabrics Ltd. 7,568,521 5,064,137 Titas Spinning & Denim Co. Ltd. - 7,161,120 72,649,601 75,146,656 On Cash Incentive: Malek Spinning Mills Ltd. 976,613 1,859,268 Salek Textile Ltd. 827,932 - J.M Fabrics Ltd. 1,855,149 1,408,297 3,659,693 3,267,565 On other Income: Malek Spinning Mills Ltd. 1,017,988 1,180,469 Salek Textile Ltd. 190,525-1,208,514 1,180,469 TOTAL 77,517,808 79,594, CONSOLIDATED INCOME TAX PROVISION (DEFERRED TAX): Malek Spinning Mills Ltd. (6,888,289) (6,577,569) Salek Textile Ltd. (6,904,375) (5,402,104) J.M Fabrics Ltd. (98,354) (30,989) Titas Spinning & Denim Co. Ltd. - (2,191,492) (13,891,018) (14,202,154) 31. CONSOLIDATED TAX HOLIDAY RESERVE: Salek Textile Ltd % - 6,490,430-6,490, NON CONTROLLING INTEREST: Tk. 773,985 On Net Profit/(Loss) after tax Salek Textile Ltd % 2,438,872 2,952,862 Newasia Synthetics Ltd % (19,852) (28,668) J.M. Fabrics Limited % 1,445 1,809 2,420,465 2,926,002 On Revaluation Reserve Salek Textile Ltd % (1,645,944) 653,617 J.M. Fabrics Limited % (536) 80 (1,646,480) 653, ,985 3,579, CONSOLIDATED BASIC EARNINGS PER SHARE (EPS): 2.05 (a) Consolidated Net Profit/(Loss) after tax for the year 397,753, ,044,681 (b) Consolidated Minority Interest for the year 773,985 3,579,700 Consolidated Net Profit/(Loss): (a-b) 396,979, ,464,981 (c) Number of total share 193,600, ,600,000 Basic Earnings per Share (EPS): [(a-b)/c] MALEK SPINNING MILLS LIMITED 40

42 Annual Report 2015 MALEK SPINNING MILLS LIMITED CONSOLIDATED FIXED ASSETS SCHEDULE AS AT 30TH JUNE 2015 ANNEXURE : 1 SL PARTICULARS 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 758,195,834 72,877, ,073,071 0% ,073,071 2 Factory Building 1,254,958,401 13,802,668-1,268,761,069 5% 392,213,106 43,315, ,528, ,232,380 3 Plant and Machinery 4,108,655, ,543,185 9,031,642 4,321,167, %,10% 1,883,388, ,296,968 5,143,816 2,100,541,664 2,220,625,446 4 Electrical Installation 128,808,612 8,331, ,140,528 10%,15% 78,355,005 6,296,384-84,651,389 52,489,139 5 Tubewell and Water Pump 10,185, ,185,308 15% 6,095, ,480-6,708,924 3,476,384 6 Furniture and Fixtures 28,526,132 9,336,315-37,862,447 10% 8,457,888 2,421,781-10,879,668 26,982,779 7 Office Equipments 20,899,999 10,832,507-31,732,506 15% 10,582,069 2,309,817-12,891,885 18,840,620 8 Gas Line Installation 27,852, ,260-28,046,109 15% 15,068,253 1,932,184-17,000,436 11,045,672 9 Cargo Lift 4,679, ,600-5,552,823 10% 889, ,537-1,333,589 4,219, Loose Tools and Equipment 15,355, ,000-16,085,041 15% 5,915,468 1,008,749-6,924,217 9,160, Motor Vehicle 74,479,397 16,014,000 7,762,390 82,731,007 15% 28,007,631 7,057,228 3,447,002 31,617,857 51,113, Telephone (PABX) Installation 790, ,975 15% 446,160 51, , , Crockaries and Cutlaries 119,001 22, ,371 15% 62,100 9,181-71,281 70, Generator 236,629, ,629,429 15% 146,631,026 11,347, ,978,383 78,651, Fire Installation 253,100 4,539,991-4,793,091 15% 204, , ,214 4,381,877 Total (A) 6,670,388, ,097,049 16,794,032 7,012,691,885 2,576,315, ,312,105 8,590,818 2,867,037,079 4,145,654,805 MALEK SPINNING MILLS LIMITED AND ITS SUBSIDIARIES CONSOLIDATED REVALUATED ASSETS SCHEDULE AS AT 30TH JUNE 2015 SL PARTICULARS COST RATE DEPRECIATION WRITTEN DOWN AS AT ADDITION ADJUSTMENT AS AT AS AT THIS YEAR ADJUSTMENTS AS AT VALUE AS AT B. Malek Spinning Mills Ltd., Salek Textile, Newasia Synthetics Ltd. & JM Fabrics Ltd. 1 Land and Land Development 2,859,354, ,859,354, ,859,354,760 2 Factory Building 348,907, ,907,426 5% 58,604,066 14,515,168-73,119, ,788,193 3 Plant and Machinery 1,448,886, ,448,886, % 400,160,078 88,739, ,899, ,987,102 4 Generator 157,730, ,730,295 10% 51,694,278 11,527,810-63,222,088 94,508,207 Total (B) 4,814,879, ,814,879, ,458, ,782, ,241,126 4,189,638,262 GRAND TOTAL ( A+B ) 11,485,268, ,097,049 16,794,032 11,827,571,273 3,086,774, ,094,810 8,590,818 3,492,278,205 8,335,293,067 Depreciation Charges to: Factory Overhead: 403,054,012 Operating Expenses: 11,040,798 Tk. 414,094,810 41

43 Malek Siddiqui Wali PHONE: OFF : CHARTERED ACCOUNTANTS RES: : Partners: Md. Waliullah, FCA FAX: Swadesh Ranjan Saha, FCA Md. Habibur Rahman Sarker, FCA Anjan Mallik, FCA AUDITORS REPORT to the shareholders of Malek Spinning Mills Limited wali@satcombd.com 9-G, Motijheel C/A, 2 nd Floor Dhaka-1000, Bangladesh We have audited the accompanying Statement of Financial Position of Malek Spinning Mills Limited as at 30th June 2015 and the related Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flow and Notes for the year then ended, and a summary of significant accounting policies and other explanatory notes. 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(BAS)/Bangladesh Financial Reporting Standards (BFRS), the companies Act 1994, Bangladesh Securities and Exchanges Commission Rules 1987 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 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 2015 and of the results of its operations and its cash flows for the period then ended and comply with the Companies Act 1994, relevant schedule of Bangladesh Securities and Exchanges Commission Rules 1987 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 Profit or Loss and Other 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, 2015 Malek Siddiqui Wali Chartered Accountants MALEK SPINNING MILLS LIMITED 42

44 Annual Report 2015 MALEK SPINNING MILLS LIMITED STATEMENT OF FINANCIAL POSITION AS AT 30TH JUNE 2015 Notes JUNE'15 JUNE'14 Taka Taka ASSETS : Restated Non-Current Assets: 3,982,488,140 4,069,874,426 Property, Plant and Equipment 1.1 2,316,123,140 2,403,509,426 Investment in Subsidiary Company 2.1 1,666,365,000 1,666,365,000 Current Assets : 2,959,886,900 3,043,633,395 Inventories 3.1 1,417,928,634 1,620,225,789 Accounts Receivable 4.1 1,136,946,335 1,152,092,612 Advances, Deposits and Pre-payments ,926, ,017,297 Cash and Cash Equivalents ,085, ,297,696 TOTAL ASSETS : 6,942,375,040 7,113,507,820 SHAREHOLDER'S EQUITY AND LIABILITIES : Shareholder's Equity : 5,387,791,055 5,356,194,330 Share Capital 7.1 1,936,000,000 1,936,000,000 Share Premium 8.1 1,500,000,000 1,500,000,000 Re-valuation Surplus of Fixed Assets 9.1 1,559,543,803 1,625,366,896 Retained Earnings ,247, ,827,434 Non-Current Liabilities: 337,871, ,119,304 Long Term Loan ,853,970 56,213,179 Deferred Tax Liabilities ,017, ,906,125 Current Liabilities : 1,216,712,179 1,405,194,186 Short Term Loan ,926,889 40,332,469 Current Portion of Long Term Loan ,113, ,616,966 Bank Acceptance Liabilities ,711, ,348,689 Creditors and Accruals ,960, ,896,061 TOTAL SHAREHOLDER'S EQUITY AND LIABILITIES : 6,942,375,040 7,113,507,820 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, 2015 Chartered Accountants 43

45 MALEK SPINNING MILLS LIMITED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30TH JUNE 2015 Notes JUNE'15 JUNE'14 Taka Taka Sales ,994,445,635 3,065,012,791 Cost of Goods Sold ,621,473,160 2,669,542,115 Gross Profit/(Loss) : 372,972, ,470,676 Operating Expenses ,225,631 67,516,947 Financial Expenses ,264, ,488,284 Operating Profit/(Loss) : 239,482, ,465,446 Other Income/(Loss) ,730,375 41,477,984 Net Operating Profit/(Loss) : 274,212, ,943,429 Provision for Contribution to WPPF ,057,751 12,473,497 Profit/(Loss) before Tax : 261,155, ,469,933 Provision for Income Tax : 35,958,298 34,238,530 Current Tax ,846,587 40,816,099 Deferred Tax 24.1 (6,888,289) (6,577,569) Net Profit/(Loss) after tax for this period 225,196, ,231,403 (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, 2015 Chartered Accountants MALEK SPINNING MILLS LIMITED 44

46 Annual Report 2015 MALEK SPINNING MILLS LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30TH JUNE 2015 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 1,625,366, ,827,434 5,356,194,331 Net Profit/(Loss) during this period - 225,196, ,196,724 Transfer of excess depreciation of Revalued Assets (65,823,094) 65,823,094 - Declared Cash Dividend for financial year (193,600,000) (193,600,000) As at 30th June ,936,000,000 1,500,000,000 1,559,543, ,247,252 5,387,791,055 FOR THE YEAR ENDED 30TH JUNE 2014 Restated 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 1,696,543, ,019,642 5,334,562,928 Net Profit/(Loss) during the period 215,231, ,231,403 Transfer of excess depreciation of Revalued Assets (71,176,390) 71,176,390 - Cash Dividend for financial year (193,600,000) (193,600,000) As at 30th June ,936,000,000 1,500,000,000 1,625,366, ,827,434 5,356,194,330 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, 2015 Chartered Accountants 45

47 MALEK SPINNING MILLS LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30TH JUNE 2015 JUNE'15 JUNE'14 Taka Taka CASH FLOW FROM OPERATING ACTIVITIES : Collection from Turnover & Accounts Receivable 3,009,591,912 3,291,630,253 Payment for Raw Materials, Indirect Materials and other expenses (2,463,594,333) (2,625,122,472) Other Income/(Loss) 34,766,013 41,441,020 Payment for Operating Expenses (74,342,307) (64,680,408) Payment for Income Tax (18,642,284) (28,733,050) Payment for Financial Expenses (57,264,445) (107,488,284) Net Cash provided/(used) by Operating Activities 430,514, ,047,059 CASH FLOW FROM INVESTING ACTIVITIES : Acquisition of Fixed Assets (32,456,151) (40,011,053) Disposal of Fixed Assets 2,125, ,000 Net cash used in Investing Activities (30,331,151) (39,611,053) CASH FLOW FROM FINANCING ACTIVITIES : Bank Loan Increase/(Decrease) (159,268,208) (241,095,472) Refundable IPO Share Money paid (92,507) (175,002) Dividend Paid (191,035,331) (175,960,624) Net Cash provided/(used) by Financing Activities (350,396,046) (417,231,098) Increase/(Decrease) in Cash and Cash Equivalents 49,787,358 50,204,908 Cash & Cash Equivalents at 1st July ,297, ,092,788 Cash and Cash Equivalents at 30th June ,085, ,297,696 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, 2015 Chartered Accountants MALEK SPINNING MILLS LIMITED 46

48 MALEK SPINNING MILLS LIMITED NOTES OF FINANCIAL STATEMENT FOR THE YEAR ENDED 30TH JUNE 2015 Annual Report 2015 Amount in Taka JUNE'15 JUNE' PROPERTY, PLANT AND EQUIPMENT: Tk. 2,316,123,140 COST: Opening Balance 1,929,041,689 1,890,598,036 Addition during the year 25,101,486 40,011,053 1,954,143,175 1,930,609,089 Sales/Adjustment during the year 5,227,390 1,567,400 Closing Balance 1,948,915,785 1,929,041,689 Accumulated Depreciation: Opening Balance 1,277,801,983 1,230,347,666 Depreciation during the year 44,504,040 48,658,681 Adjustments during the year 3,066,752 1,204,364 Closing Balance 1,319,239,272 1,277,801,983 Written Down Value at cost: 629,676, ,239,706 REVALUATION: Opening Balance 2,148,818,646 2,148,818,646 Addition of Revaluated Assets - - Total Revaluated Assets 2,148,818,646 2,148,818,646 Accumulated Depreciation: Opening Balance 396,548, ,372,536 Depreciation during the year 65,823,094 71,176,390 Closing Balance 462,372, ,548,926 Written Down Value of Revaluated Assets: 1,686,446,626 1,752,269,720 Total Written Down Value: 2,316,123,140 2,403,509,426 Allocation of depreciation charges for the period has been made in the accounts as follows: i) Factory Overhead 108,443, ,998,532 ii) Administrative Overhead 1,883,324 2,836,539 Total 110,327, ,835,071 - Land, Building, Plant & Machinery are registared Mortgage (Pari Passu charges among the existing lender Bank, Eastern Bank Ltd., HSBC, Dhaka Bank Ltd. & One Bank Ltd.) Details of Fixed Assets and Depreciation are shown in the Annexure INVESTMENT IN SUBSIDIARY COMPANY : Tk. 1,666,365,000 Salek Textile Limited (39,00,100 and 8,25,870 Share of Tk.460 each including Primium Tk.360) 769,910, ,910,000 Newasia Synthetics Limited (49,64,650 Shares of Tk.100/- each) 496,465, ,465,000 J.M. Fabrics Limited (39,99,900 Shares of Tk.100/- each) 399,990, ,990,000 1,666,365,000 1,666,365, INVENTORIES: Tk. 1,417,928,634 Raw Materials (Note: 3.1-A) 661,302, ,627,561 Stock-in-Transit (Note: 3.1-B) - 62,433,043 Work-in-Process (Note: 3.1-C) 50,302,658 51,406,004 Finished Goods (Note: 3.1-D) 628,292, ,474,926 Stores and Accessories (Note: 3.1-E) 78,031,079 98,284,256 Total 1,417,928,634 1,620,225,789 (i) The inventory counting was taken place at the year end in the presence of company management and auditors. (ii) 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. 3.1-A RAW MATERIALS : Tk. 661,302,375 Raw Cotton USA 4,667,940 Kg 661,302, ,299,714 Raw Cotton Indian - 152,327,847 Total 661,302, ,627, B STOCK IN TRANSIT : Tk. Raw Material - 62,433,043 Total - 62,433, C WORK-IN-PROCESS : Tk. 50,302,658 Direct Materials 335,644 Kg 47,550,376 49,167,404 Direct Labour 943, ,130 Factory Overhead 1,809,122 1,471,470 Total 50,302,658 51,406, D FINISHED GOODS INVENTORY: 2,550,589 Kg 628,292, ,474, E STORES & ACCESSORIES: Tk. 78,031,079 Spare Parts & Accessories 78,031,079 98,284,256 78,031,079 98,284,256 47

49 4.1 ACCOUNTS RECEIVABLE: Tk. 1,136,946,335 1,152,092,612 (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. 933,627,248 Above 120 Days: Tk. 203,319,087 (iv)receivable from other company: Tk. 953,557,778 (v) Receivable from related party: Knit Asia Limited: Tk. 119,023,527 Salek Textile Ltd.: Tk. 8,568,098 J.M. Fabrics Ltd.: Tk. 55,796, ADVANCES, DEPOSITS & PRE-PAYMENTS: Tk. 199,926,877 Advance against materials, suppliers and others 28,140,244 30,104,384 Advance to Newasia Synthatics Ltd. 69,500,000 1,000,000 Advance against Office Rent - 1,166,678 Security Deposit to United Leasing Co. Ltd ,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-5.1-A) 94,568,997 75,926,712 Security Deposit to CDBL 500, , ,926, ,017,297 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 amount due from Directors or officers of the Company. d) Advance against 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. f) From the above advance security deposit to Titas Gas, REB and CDBL will be realised after one year. 5.1-A. ADVANCE INCOME TAX: Opening Balance 75,926,712 47,193,662 Payment/Adjustment for prior year Income - - Last year Balance after adjustment- 75,926,712 47,193,662 Advance Income Tax paid (Against Export Proceeds) 17,144,004 26,362,660 Advance Income Tax paid (Against Cash Incentive) 976,613 1,859,268 Advance Income Tax paid (Against Vehicle Fitness) 140,000 30,000 Advance Income Tax paid (Against Interest Income) 381, ,122 Total AIT paid for the period: 18,642,284 28,733,050 Closing Balance 94,568,997 75,926, CASH AND CASH EQUIVALENTS: Tk. 205,085,054 Cash in Hand: 180, ,000 Cash at Banks: AB Bank Ltd.-STD Account: , ,416 BRAC Bank STD A/C: ,450 53,365 BRAC Bank CD A/C: ,228,893 13,501,189 Dhaka Bank Ltd. CD A/C: ,651,390 1,352,241 Dhaka Bank Ltd. STD A/C: ,039,257 18,304,164 Dhaka Bank Ltd. Margin A/C: : US$ 36, ,787,893 21,546,504 Eastern Bank Ltd.-Margin A/C: :US$1, ,603 25,460,635 Eastern Bank Ltd.-FC A/C: (NRB IPO) 1,233,351 1,283,358 Eastern Bank Ltd.-STD A/C: ,548,215 24,622,938 HSBC Ltd.-Margin A/C: : US$ 14,08, ,714,761 37,010,698 HSBC Ltd.-R.Q A/C: ,758, ,680 One Bank Ltd.- CD A/C: ,074,035 One Bank Ltd.- Margin A/C: ,US$ 2,91, ,471,078 8,303,740 Shahjalal Islami Bank Ltd.-CD A/C: ,848 15,998 Trust Bank Ltd.-CD A/C: ,236 - Trust Bank Ltd.-Margin A/C : $ ,069 42, ,905, ,117, ,085, ,297,696 a) Cash balance was physically counted at the year ended and Bank balances were 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. 7.1 SHARE CAPITAL : Tk. 1,936,000,000 AUTHORISED CAPITAL: Tk. 3,000,000,000 3,000,000, ,000,000 Tk. 10/- each MALEK SPINNING MILLS LIMITED 48

50 49 Annual Report 2015 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. Share Holding Composition of Malek Spinning Mills Ltd. as at are as follows: Shareholder's Group No. of Shares held % of Shares No. of Shareholders Sponsors & Directors 84,700, % 7 Government % 0 Institutions 51,783, % 328 Foreign Shareholders 5,819, % 6 General Public 51,296, % Total 193,600, % 23,249 Classification of shareholders by holding: Distribution schedule of each class of equity security setting out the number of holders and percentage as at Range of Holdings No. of Holders Holdings Percentage Less than 500 shares 5, , % 500 to 5,000 shares 16,288 17,170, % 5,001 to 10,000 shares 765 5,605, % 10,001 to 20,000 shares 388 5,616, % 20,001 to 30,000 shars 143 3,565, % 30,001 to 40,000 shares 70 2,419, % 40,001 to 50,000 shares 45 2,038, % 50,001 to 100,000 shares 84 6,200, % 100,001 to 1,000,000 shares 85 26,541, % Over 1,000,000 shares ,746, % Total 23, ,600, % 8.1 SHARE PREMIUM: 1,500,000,000 1,500,000,000 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, RE-VALUATION SURPLUS OF FIXED ASSETS: Tk. 1,559,543,803 Opening Balance 1,625,366,896 1,823,446,110 Less: Prior year adjustment (Note-25.1) - 126,902,824 Restated Balance 1,625,366,896 1,696,543,286 Less: Transfer to Retained Earnings of excess depreciation 65,823,094 71,176,390 Written Down Value: 1,559,543,803 1,625,366,896 Details of Re-valuation Surplus of Fixed Assets is given in the Annexure RETAINED EARINGS: Tk. 392,247,252 Opening Balance 294,827, ,019,642 Add: Net Profit/(Loss) for the year 225,196, ,231, ,024, ,251,045 Add: Transfer of excess depreciation of revaluated assets 65,823,094 71,176,390 Less: Declared Cash Dividend 193,600, ,600, ,247, ,827, LONG TERM LOAN: Tk. 48,853,970 Eastern Bank Limited 75,967,518 95,097,031 HSBC Limited - 43,750,000 Trust Bank Limited - 82,867,623 United Leasing Co. Ltd ,491 Total 75,967, ,830,145 Less: Current Portion of Long Term Loan (Note-14.1) 27,113, ,616,966 48,853,970 56,213, DEFERRED TAX LIABILITIES: Tk. 289,017,836 Opening Balance 295,906, ,580,870 Add: Prior year adjustment (Note-25.1) - 126,902,824 Restated Balance 295,906, ,483,694 Add: Provision for the year (6,888,289) (6,577,569) Total Liabilities: 289,017, ,906,125 Deferred Tax Calculation: Particulars Accounts Base (WDV) Tax Base (WDV) Excess/(Short) value Written Down Value of Fixed Assets at cost 629,676, ,337, ,338,944 WDV Revaluation Surplus of Fixed Assets 1,686,446,626-1,686,446,626 Total 2,316,123, ,337,569 1,926,785,571 Deferred Tax 15% 289,017, SHORT TERM LOAN : Tk. 26,926,889 Bank Overdraft: Eastern Bank Ltd A/C:180 & 011 4,976,473 29,463,601 One Bank Ltd OD A/C: ,158,904 - HSBC OD A/C: ,791,511 2,669,721 TBL OD A/C: ,199,148 26,926,889 40,332,469 26,926,889 40,332,469 The above Import Loan and Overdraft loans are secured against hypothecation of Stocks and Book Debts

51 14.1 CURRENT PORTION OF LONG TERM LOAN: Tk. 27,113,548 Eastern Bank Limited 27,113,548 38,883,852 HSBC Limited - 43,750,000 Trust Bank Limited - 82,867,623 United Leasing Co. Ltd ,491 Total 27,113, ,616, BANK ACCEPTANCE LIABILITIES: Tk. 891,711,562 Raw Cotton: Eastern Bank Limited 313,070, ,348,163 Dhaka Bank Limited 174,258, ,571,305 HSBC Limited 393,666, ,358, ,995, ,277,884 Machinery: Dhaka Bank Limited 3,054,440 - Eastern Bank Limited 7,661,700 18,070,805 10,716,140 18,070, ,711, ,348,689 Acceptance liability represents the deferred payment of L/C for Imported Raw Materials for the period of 180 Days CREDITORS AND ACCRUALS: Tk. 270,960,180 Gas Bill Payable 4,614,918 4,598,669 Electricity Bill Payable 114, ,084 Audit Fees Payable 86,250 86,250 Office Rent Payable 98,800 98,800 Salary & Wages Payable 15,027,013 12,161,298 Tax Deduction at Source Payable 844, ,559 Vat Deduction at Source Payable 39, ,716 Income Tax Payable (Note-16.1-A) 98,773,677 55,927,090 Contribution to WPPF Payable 95,055,088 81,997,337 Directors Remuneration Payable 395, ,146 Payable for Goods Supplies & Others 12,422,284 28,546,489 Dividend Payable (Note-16.1-C) 30,540,550 27,975,881 Refundable IPO Share money (Note-16.1-B) 12,948,235 13,040, ,960, ,896,061 a) 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 A. INCOME TAX PAYABLE: Opening Balance 55,927,090 15,110,991 Provision for the year (Current Tax): (Note-23.1) 42,846,587 40,816,099 Total Payable- 98,773,677 55,927, B. REFUNDABLE IPO SHARE MONEY: Eastern Bank FC A/C: (Deposit- NRB IPO) 1,233,351 1,283,358 Eastern Bank STD A/C: BDT (Deposit IPO) 11,714,885 11,757,385 Total- 12,948,235 13,040, C. DIVIDEND PAYABLE: Brac Bank A/C ,226,255 10,328,405 Dhaka Bank A/C ,314,295 17,647,476 Total- 30,540,550 27,975, SALES: Tk. 2,994,445,635 Export Sales 2,994,445,635 3,065,012, COST OF GOODS SOLD: Tk. 2,621,473,160 Raw Material Consumed (Note:18.1-A) 2,129,067,111 2,274,035,501 Direct Expenses (Note:18.1-B) 108,113, ,170,644 Factory Overhead (Note:18.1-C) 324,006, ,942,409 Total Manufacturing Cost 2,561,187,411 2,736,148,554 Work-in-Process- Opening 51,406,004 47,604,120 Cost of Goods available for use 2,612,593,414 2,783,752,674 Work-in-Process- Closing 50,302,658 51,406,004 Cost of Production 2,562,290,756 2,732,346,671 Finished Goods- Opening 687,474, ,670,370 Cost of Goods Available for Sales 3,249,765,682 3,357,017,041 Finished Goods- Closing 628,292, ,474,926 Cost of Goods Sold: 2,621,473,160 2,669,542,115 MALEK SPINNING MILLS LIMITED 50

52 Annual Report (A) RAW MATERIALS CONSUMED: 2,129,067,111 Opening Inventory Raw Materials 720,627, ,524,850 Add: Purchase during the period 2,069,741,925 2,381,138,212 Less: Closing Inventory of Raw Materials 661,302, ,627,561 Raw Materials Consumed 2,129,067,111 2,274,035, (B) DIRECT EXPENSES: TK. 108,113,667 Direct Labour/Wages 105,683,877 99,685,431 Overtime Wages 2,429,790 3,485,213 Total 108,113, ,170, (C) FACTORY OVERHEAD: Tk. 324,006,633 Factory Salary and Allowances 30,100,246 25,658,492 Festval Bonus Factory 5,069,421 2,231,676 Electricity Charges 1,374,019 3,448,028 Gas Charges 57,622,802 63,654,931 Repairs & Maintenance 28,791,948 9,143,199 Packing Materials 28,061,675 27,043,924 Fuel,Oil & Lubricant 10,911,857 17,193,174 Insurance Premium 1,927,274 2,166,044 Insurance Premium (Group) 32,940 32,940 Stores & Accessories consump. (Note:18.1-C-i) 47,086,900 45,364,174 Entertainment Factory 455, ,591 Telephone, Mobile & Fax 251, ,103 Statonery Charges 344, ,344 Printing Charges 343, ,071 Other Carrying Charges 70,740 1,337,550 Others Factory Office Expenses 30,646 21,653 Vehicles Maintenance 1,938,377 2,120,998 Conveyances Factory 8,955 36,063 House Rent for Worker Shed 547, ,150 Medical Expenses 97,632 91,293 Uniform & Leverage - 72,550 Miscellaneous Exp. 494, ,929 Depreciation 108,443, ,998,532 Total Factory Overhead- 324,006, ,942, ( C)-i STORES & ACCESSORIES CONSUMED: Tk. 47,086,900 Opening Balance 98,284, ,554,423 Add: Purchase during the year 26,833,724 42,094,007 Less: Closing Balance 78,031,079 98,284,256 Total Consumed- 47,086,900 45,364, OPERATING EXPENSES: Tk. 76,225,631 Salaries & Allowances 34,696,057 25,934,837 Festival Bonus 2,430,262 2,277,756 Director's Remuneration 5,820,000 5,820,000 Fees, Forms & Others 2,043,573 2,168,637 Audit Fees 86,250 86,250 Legal Fees 6,620 - Printing & Stationery 591,242 1,995,533 Telephone,Mobile & Internet Expenses 1,473,380 1,558,309 Postage & Stamp 145, ,808 Vehicle Maintenance 5,066,618 5,840,739 Miscellaneous Expenses 4,501,767 2,846,888 Office Rent 1,414,666 1,326,520 Rate & Taxes 725, ,514 Carriage Outwards, Selling & Distribution exp. 4,158,030 3,213,960 Entertainment 816, ,425 Fuel for Head Office Generator 209, ,570 Advertisement & Publicity Expenses 561, ,511 AGM Expenses 2,192,494 2,377,808 Security Charges 415, ,200 Gardening Expenses 12,101 29,455 Travelling & Conveyance 2,472,768 1,515,168 Uniform / Leveries Security ,740 Repairs & Maintenance 1,148,098 1,087,117 Donation & Subscription - 20,000 Business Development Exp. 3,279,068 2,811,089 Credit Rating Charges 74,750 73,478 Software Maintenance Expenditure - 184,096 Depreciation 1,883,324 2,836,539 Total Operating expenses 76,225,631 67,516,947 51

53 20.1 FINANCIAL EXPENSES: Tk. 57,264,445 EASTERN BANK LTD.: Interest on Long Term Loan 11,369,880 13,110,125 Interest on Short Term Loan - 4,371,470 Interest on Overdraft 857,988 4,982,918 Bank Charges & Commission 7,307,969 6,231,762 Interest on Bill Discount 3,908, ,814 Total 23,443,977 29,323,088 HSBC LTD.: Interest on Long Term Loan 4,914,616 9,483,921 Interest on Short Term Loan - 9,387,505 Bank Charges & Commission 6,597,918 4,862,824 Interest on Overdraft 45, ,895 Interest on Bill Discount 8,258,912 15,167,439 Total 19,816,455 39,585,584 DHAKA BANK LTD.: Interest on Long Term Loan - 1,858,561 Interest on Short Term Loan - 1,608,076 Interest on Overdraft 69,462 2,038,903 Bank Charges and Commission 4,576,721 3,693,809 Export L/C Negotiation Commission 567, ,963 Interest on Bill Discount 2,215,853 2,583,120 Total 7,429,308 11,923,432 ONE BANK LTD.: Interest on Short Term Loan - 1,060,899 Interest on Overdraft 144,332 1,223,467 Bank Charges & Commission 196,452 1,170,234 Total 340,783 3,454,599 TRUST BANK LTD.: Interest on Long Term Loan 3,016,228 18,610,078 Bank Charges and Commission 27,555 1,254,530 Interest on Overdraft 3,174,790 3,173,733 Total 6,218,573 23,038,341 SHAHJALAL ISLAMI BANK LTD.: Bank Charge and Commission 2,300 1,150 Total 2,300 1,150 CITIBANK NA: Bank Charges and Commission Total UNITED LEASING CO. LTD., UTTARA FINANCE & INVENSTMENT LTD.: Interest on Lease Finance - 92,783 Total - 92,783 AB BANK LTD. Bank Charges and Commission 1,899 57,232 Total 1,899 57,232 BRAC BANK LTD. Bank Charges and Commission 11,150 11,380 Total 11,150 11,380 Total Financial Expenses- 57,264, ,488, OTHER INCOME/(LOSS): 34,730,375 CASH INCENTIVE: 30,658,422 37,185,368 OTHER INCOME/(LOSS): Interest Received from BRAC Bank Ltd., STD A/C ( ) 983,534 1,010,529 Interest Received from Dhaka Bank Ltd., STD A/C ( ) 1,188, ,492 Interest Received from AB Bank Ltd., STD A/C ( ) 7,935 4,383 Interest Received from BRAC Bank Ltd., STD A/C ( ) 1, ,055 Interest Received from Eastern Bank Ltd., STD A/C ( ) 1,076,586 1,507,854 3,257,648 3,999,314 Foreign currency exchange Gain 849, ,338 Gain on Sale of Assets - 36, , ,302 Less: Loss on Sale of Assets (Note: 21.1-A) 35,638 - Total Other Income/(Loss) 4,071,953 4,292,616 Total 34,730,375 41,477, (A). GAIN/LOSS ON SALE OF ASSETS: Sale Price 2,125, ,000 Less: Written down value of Motor Vehicle: 2,160, ,036 Total Gain/(Loss) on Sale of Assets: (35,638) 36,964 MALEK SPINNING MILLS LIMITED 52

54 Annual Report PROVISION FOR WORKER'S PROFIT PARTICIPATION FUND: Provision for Contribution to WPPF 13,057,751 12,473,497 13,057,751 12,473,497 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. 42,846,587 Income Tax Tax i) On Operating Income 15% 272,346,575 40,851,986 37,776,361 ii) On Cash Incentive 3% 30,658, ,613 1,859,268 iii) On Other Income 25% 4,071,953 1,017,988 1,180,469 Total 307,076,949 42,846,587 40,816,099 Taxable Operating Income Calculation: Net Operating Profit before Tax 226,424,648 Add: Accounting Depreciation 110,327,134 Less: Tax Depreciation 64,405,207 Taxable Operating Income: 272,346, INCOME TAX PROVISION (DEFERRED TAX): Tk. (6,888,289) (6,577,569) 25.1 RESTATEMENT OF FINANCIAL STATEMENT: The company previously did not recognize the deferred tax on Revauation Surplus of Land. For more compliance with Accounting Standard the company is going to recognise this in the current year. The opening balance of the last year's financial statement has been restated, in accordance with BAS-8, "Accounting Policies. Changes in Accounting Estimates and errors" Section-42. However, this restatement has no impact on the profit or loss for the reporting year. It has impact only on the equity and deferred tax liability. The statement is as follows: Revaluation Surplus: Opening Balance (as present in last year financial statements) 1,625,366,896 1,823,446,110 Less: Deferred on Revaluation Surplus of Land - 126,902,824 Restated opening balance 1,625,366,896 1,696,543,286 Deferred tax (Assets)/Liability: Opening Balance (as present in last year financial statements) 295,906, ,580,870 Add: Deferred on Revaluation Surplus of Land - 126,902,824 Restated opening balance 295,906, ,483, BASIC EARNINGS PER SHARE (EPS): Tk (a) Net Profit/(Loss) after Tax for the year 225,196, ,231,403 (b) Number of Total Share 193,600, ,600,000 Basic Earnings per Share (a/b): RELATED PARTY TRANSACTION: Related Party Nature of Relationship Nature of Transaction Transation Amount Balance as at Knit Asia Limited Common Director Receivable 119,023,527 Sales 1,139,542,530 Salek Textile Limited Subsidiary Invesment in equity 769,910,000 Receivable 8,568,098 Sales 28,432,289 Newasia Synthetics Limited Subsidiary Invesment in equity 496,465,000 J.M. Fabrics Limited Subsidiary Invesment in equity 399,990,000 Receivable 55,796,932 Sales 168,328,353 - Directors Director Remuneration 5,820,000 - Payable 395,146 53

55 MALEK SPINNING MILLS LIMITED FIXED ASSETS SCHEDULE AS AT 30TH JUNE 2015 (A)- PARTICULARS ANNEXURE : 1.1 COST RATE DEPRECIATION WRITTEN DOWN AS AT ADDITION ADJUSTMENT AS AT AS AT THIS YEAR ADJUSTMENT AS AT VALUE AS AT Land and Land Development 72,231,427 12,415,760 84,647,187 0% ,647,187 2 Factory Building 313,271, , ,690,859 5% 225,590,227 4,389, ,979,528 83,711,331 3 Plant and Machinery 1,314,021,775 10,760,640 1,324,782, % 897,363,926 31,854, ,218, ,563,864 4 Electrical Installation 47,054, ,800 47,779,426 15% 37,689,632 1,404,749 39,094,381 8,685,045 5 Tubewell and Water Pump 2,463,406-2,463,406 15% 2,124,524 50,832 2,175, ,050 6 Furniture and Fixtures 3,335,178 5,300 3,340,478 10% 1,904, ,206 2,047,646 1,292,832 7 Office Equipments 10,424, ,500 11,200,087 15% 6,564, ,650 7,211,160 3,988,927 8 Gas Line Installation 10,618,384-10,618,384 15% 6,637, ,090 7,234,876 3,383,509 9 Loose Tools and Equipment 1,254,088-1,254,088 15% 1,174,360 11,959 1,186,320 67, Motor Vehicle 26,880,382-5,227,390 21,652,992 15% 14,479,184 1,076,071 3,066,752 12,488,503 9,164, Telephone (PABX) Installation 490, ,000 15% 383,867 15, ,787 90, Crockaries and Cutlaries 50,777-50,777 15% 40,940 1,476 42,415 8, Generator 126,692, ,692,586 10% 83,644,511 4,304,808 87,949,318 38,743, Fire Installation 253, ,100 15% 204,079 7, ,432 41,668 Total (A) 1,929,041,689 25,101,486 5,227,390 1,948,915,785 1,277,801,983 44,504,040 3,066,752 1,319,239, ,676,513 REVALUATED FIXED ASSETS SCHEDULE AS AT 30TH JUNE 2015 PARTICULARS COST RATE DEPRECIATION WRITTEN DOWN AS AT ADDITION ADJUSTMENT AS AT AS AT THIS YEAR ADJUSTMENT AS AT VALUE AS AT (B) REVALUATION OF FIXED ASSEST: 1 Land and Land Development 846,018, ,018, ,018,824 2 Factory Building 219,355, ,355,567 5% 45,974,771 8,669,040-54,643, ,711,757 3 Plant and Machinery 951,297, ,297, % 305,979,331 48,398, ,378, ,919,378 4 Generator 132,146, ,146,678 10% 44,594,824 8,755,185-53,350,009 78,796,668 Total (B) 2,148,818, ,148,818, ,548,926 65,823, ,372,019 1,686,446,626 GRAND TOTAL ( A+B) 4,077,860,335 25,101,486 5,227,390 4,097,734,431 1,674,350, ,327,134 3,066,752 1,781,611,291 2,316,123,140 Depreciation Charged to: Operating Expenses: 1,883,324 Factory Overhead: 108,443,810 Tk. 110,327,134 MALEK SPINNING MILLS LIMITED 54

56 SALEK TEXTILE LIMITED DIRECTORS REPORT TO THE SHAREHOLDERS FOR THE YEAR ENDED 30TH JUNE, Annual Report 2015 Dear Shareholders, In terms of 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), 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 Profit or Loss and other Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows 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, Subsequently the par value of share has been changed from Tk per share to Tk per share. The paid-up capital as on 30th June, 2015 stood at Tk.482,608, consisting of 48,260,870 ordinary shares of Tk each. The Company 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 % share & other sponsors of Malek Spinning Mills Ltd. hold 2.08% 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 production capacity of the project is 14,621,000 kgs of yarn, 9,600,000 yards fabric and 1,800,000 Pcs RMG products per annum. The Company manufactures open end yarn for denim and home textile markets and denim RMG. COMPANY S OPERATIONS: The position of its operating performance for the year ended 30th June, 2015 compared to previous year is given below: Sl. No. Description (Kg.) (Kg.) 01 Production capacity (Yarn) 14,621,000 14,621, Production capacity (Fabric) yds 9,600,000 *2,400, Production capacity (RMG) Pcs 1,800, Actual Production (Yarn) 10,888,027 10,455, Actual Production (Fabric) yds 5,980,426 *1,596, Actual Production (RMG) Pcs 1,642, Capacity Utilization (Yarn) 74.47% 71.51% 08 Capacity Utilization (Fabric) 62.30% 66.53% 09 Capacity Utilization (RMG) Pcs 91.27% Quantity Sold (kg) Yarn 11,336,861 9,955, Quantity Sold (yds) Fabric 5,980,426 *1,450, Quantity Sold (RMG) Pcs 1,642, Sales Revenue (Tk.) Yarn 1,843,211,252 1,940,147, Sales Revenue (Tk.) Fabric 942,824,470 *238,769, Sales Revenue (Tk.) RMG 686,664, Average selling price (Tk.) Yarn Average selling price (Tk.) Fab Average selling price (Tk.) RMG Note: In the year Production capacity (Fabric), Actual Production (Fabric), Quantity sold (yds) fabric and Sales revenue (Tk) fabric have been considered for 3 (three) months only due to amalgamation of Titas Spinning & Denim Company Ltd.

57 CAPITAL EXPENDITURES: The following Capital Expenditure was incurred during the last two years: Description (Tk.) (Tk.) Land and Land Development 83,964 7,598,047 Factory Building 4,263,051 3,705,054 Plant and Machinery 125,555,578 1,667,547 Motor Vehicle 12,634,000 13,495,000 Office Equipments 4,178,994 18,090 Furniture & Fixtures 7,154,100 19,410 Electrical Installation 6,943,147 96,945 Gas Line Installation --- 1,000,000 Fire Installation 4,539, Total 165,352,825 27,600,093 SHAREHOLDING: The Shareholding Position of different shareholders as at 30th June 2015 as follows: Name of Shareholders No. of share hold % of Holding Malek Spinning Mills Limited 47,259,700 shares % Mr. A. Matin Chowdhury 489,780 shares % Dr. Shamim Matin Chowdhury 339,340 shares % Mr. A.F.M. Zubair 169,830 shares % Ms. Saima Matin Chowdhury 410 shares % Mr. Azizur R. Chowdhury 510 shares % Mr. Moshiur Rahman 650 shares % Mr. Shyan Zubair 650 shares % Total 48,260,870 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 12.63% 15.72% Net Margin Ratio 3.95% 6.23% Earnings per share (Tk.) 2.44 *2.95 * Earning per share in the year has been restated. APPROPRIATION OF PROFIT: The Board of Directors recommended for appropriation of profit as follows: Net Profit after tax provision Tk. 117,564,540 Add: Balance of profit B/F from previous year Tk. 635,424,199 Add: Transfer of excess depreciation of revalued assets Tk. 46,029,167 Total net free surplus available for appropriation Tk. 799,017,906 Appropriation Proposed: Proposed Dividend Nil Balance carried forward to Balance Sheet as Retained Earnings Tk. 799,017,906 MALEK SPINNING MILLS LIMITED 56

58 Annual Report 2015 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 Dr. Shamim Matin Chowdhury, Director and Mr. Azizur R. 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 8th 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 , 08 (Eight) Board meetings were held. The attendance record of the Directors is 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 R. Chowdhury Director Ms. Saima Matin Chowdhury Director Mr. Shyan Zubair Director 08 *01 Mr.Moshiur Rahman Director (Nominated by Malek Spinning Mills Ltd.) Mr. M. Sekander Ali Independent Director (Non Shareholding) Mr Shyan Zubair appointed as Director on 25th February, ACKNOWLEDGEMENT: 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 57

59 Malek Siddiqui Wali PHONE: OFF : CHARTERED ACCOUNTANTS RES: : Partners: Md. Waliullah, FCA FAX: Swadesh Ranjan Saha, FCA Md. Habibur Rahman Sarker, FCA Anjan Mallik, FCA AUDITORS REPORT to the shareholders of Salek Textile Limited wali@satcombd.com 9-G, Motijheel C/A, 2 nd Floor Dhaka-1000, Bangladesh We have audited the accompanying Statement of Financial Position of Salek Textile Limited as at 30th June 2015 and the related Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flow and Notes for the year then ended, and a summary of significant accounting policies and other explanatory notes. 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(BAS)/Bangladesh Financial Reporting Standards (BFRS), the companies Act 1994, Bangladesh Securities and Exchanges Commission Rules 1987 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 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 2015 and of the results of its operations and its cash flows for the period then ended and comply with the Companies Act 1994, relevant schedule of Bangladesh Securities and Exchanges Commission Rules 1987 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 Profit or Loss and Other 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, 2015 Malek Siddiqui Wali Chartered Accountants MALEK SPINNING MILLS LIMITED 58

60 Annual Report 2015 SALEK TEXTILE LIMITED STATEMENT OF FINANCIAL POSITION AS AT 30TH JUNE 2015 JUNE' 15 JUNE' 14 Taka Taka ASSETS : Restated Non-Current Assets: 2,873,831,044 2,817,894,343 Property, Plant and Equipment 2,616,061,524 2,649,294,323 Capital Work-in-Progress 89,169,500 - Goodwill 168,600, ,600,020 Current Assets : 3,016,710,971 2,862,300,219 Inventories 1,173,902,397 1,157,600,705 Advance, Deposit and Pre-Payments 150,701, ,157,734 Accounts Rceivable 1,504,486,243 1,532,995,661 Cash and Cash Equivalents 187,620,694 45,546,120 TOTAL ASSETS : 5,890,542,015 5,680,194,562 SHAREHOLDER'S EQUITY AND LIABILITIES: Shareholder's Equity : 2,550,654,915 2,433,090,375 Share Capital 482,608, ,608,700 Share Premium 601,754, ,754,814 Re-valuation Surplus of Fixed Assets 451,781, ,810,926 Tax Holiday Reserve 215,491, ,491,736 Retained Earnings 799,017, ,424,199 Non-Current Liabilities: 1,278,805, ,916,442 Long Term Loan 1,131,100, ,307,398 Deferred Tax Liabilities 147,704, ,609,044 Current Liabilities : 2,061,081,677 2,565,187,745 Short Term Loan 53,434, ,901,471 Current Portion of Long Term Loan 300,610, ,000,000 Bank Acceptance Liabilities 1,006,789, ,158,616 Creditors and Accruals 700,247, ,127,658 TOTAL SHAREHOLDER'S EQUITY AND LIABILITIES : 5,890,542,015 5,680,194,562 Net Assets Value Per Share (NAV) Par Value Tk.10 Note: Per value of share was Tk. 100/- in June'2014, which was converted to Tk. 10/- in August'2014. 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, 2015 Chartered Accountants 59

61 SALEK TEXTILE LIMITED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30TH JUNE 2015 Figures in Taka Rotor Unit Fabrics Unit RMG Unit JUNE'15 JUNE'14 Sales 1,843,211, ,824, ,664,078 2,977,370,517 2,178,916,498 Cost of Goods Sold 1,612,378, ,039, ,358,677 2,601,447,081 1,836,420,243 Gross Profit/(Loss) : 230,832, ,785,350 21,305, ,923, ,496,255 Operating Expenses 20,265,109 23,968,639 6,476,644 50,710,392 27,986,977 Financial Expenses 110,571,610 91,308,204 8,753, ,633, ,145,875 Operating Profit/(Loss) : 99,995,966 8,508,507 6,074, ,579, ,363,403 Other Income/(Loss) (18,355) 28,142, ,123,738 (175,133) Net Operating Profit/(Loss) : 99,977,612 36,650,600 6,074, ,703, ,188,270 Provision for Contribution to WPPF 4,760,839 1,745, ,280 6,795,386 8,104,203 Profit/(Loss) before Tax : 95,216,773 34,905,333 5,785, ,907, ,084,067 Provision for Income Tax : 14,285,269 2,032,944 2,024,963 18,343,176 19,742,934 Current Tax 18,552,811 4,669,777 2,024,963 25,247,551 25,145,038 Deferred Tax (4,267,542) (2,636,833) - (6,904,375) (5,402,104) Net Profit/(Loss) after tax for this period 80,931,504 32,872,390 3,760, ,564, ,341,133 Provision for Tax Holiday Reserve ,627,927 Net Profit/(Loss) Balance 80,931,504 32,872,390 3,760, ,564, ,713,206 (Transferred to the statement of Changes in Equity.) Earnings Per Share (EPS) Par Value Tk.10 Number of Shares used to compute EPS 48,260,870 48,260,870 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, 2015 Chartered Accountants MALEK SPINNING MILLS LIMITED 60

62 Annual Report 2015 SALEK TEXTILE LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30TH JUNE 2015 Particulars Share Capital Share Tax holiday Revaluation Retained Total Premium Reserve Surplus of Earnings Fixed Assets Balance as at 1st July ,608, ,754, ,491, ,810, ,424,199 2,433,090,375 Net Profit/(Loss) during the year 117,564, ,564,540 Transfer of excess depreciation of Revalued Assets (46,029,167) 46,029,167 - As at 30th June ,608, ,754, ,491, ,781, ,017,906 2,550,654,915 FOR THE YEAR ENDED 30TH JUNE 2014 Restated Particulars Share Capital Share Tax holiday Revaluation Retained Total Premium Reserve Surplus of Earnings Fixed Assets Balance as at 1st July ,000, ,863, ,824, ,696,968 1,606,385,728 Net Profit/(Loss) during this period 135,713, ,713,206 Issuance of Share Capital 82,608,700 82,608,700 Issuance of Share Premium 601,754, ,754,814 Transfer of excess depreciation of Revalued Assets (36,014,024) 36,014,024 - Tax Holiday Reserve 6,627,927 6,627,927 As at 30th June ,608, ,754, ,491, ,810, ,424,199 2,433,090,375 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, 2015 Chartered Accountants 61

63 SALEK TEXTILE LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30TH JUNE 2015 CASH FLOW FROM OPERATING ACTIVITIES : JUNE'15 Taka JUNE'14 Taka Collection from Turnover & Bills Receivable 3,005,879,934 2,209,755,108 Payment for Raw Materials, Indirect Materials and other expenses (2,587,966,355) (1,904,790,357) Other Income/(Loss) 28,103,488 (175,133) Payment for Operating Expenses (45,723,488) (24,944,273) Payment for Income Tax (16,750,987) (14,887,267) Payment of Financial Expenses (210,633,680) (144,145,875) Net Cash provided/(used) by Operating Activities 172,908, ,812,203 CASH FLOW FROM INVESTING ACTIVITIES : Acquisation of Fixed Assets (53,157,110) (27,600,093) Aquisition of Capital work in progress (89,169,500) - Disposal of Fixed Assets 2,175,000 1,212,469 Net cash used in Investing Activities (140,151,610) (26,387,624) CASH FLOW FROM FINANCING ACTIVITIES : Bank Loan Increase/(Decrease) 15,936,832 (35,984,367) Advance received from Malek Spinning Mills Ltd. 93,380,440 (50,241,080) Net cash provided/(used) by Financing Activities 109,317,271 (86,225,447) Increase/(Decrease) in Cash and Cash Equivalents 142,074,574 8,199,131 Cash and Cash Equivalents at 1st July ,546,120 37,346,988 Cash and Cash Equivalents at 30th June ,620,694 45,546,120 Net Operating Cash Flow Per Share (NOCFPS) Par Value Tk.10 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, 2015 Chartered Accountants MALEK SPINNING MILLS LIMITED 62

64 Annual Report 2015 NEWASIA SYNTHETICS LIMITED DIRECTORS REPORT TO THE SHAREHOLDERS FOR THE YEAR ENDED 30TH JUNE, 2015 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 Profit or Loss and other Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows & 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 2015 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, 2015 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 % share & other sponsors of Malek Spinning Mills Ltd. hold 0.707% 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.) Land and Land Development 60,377,513 20,102,849 Pre-operating expenses Total 60,377,513 20,102,849 IMPLEMENTATION SCHEDULE: The project was undertaken to set up a PET Granule (Bottle grade & Industrial grade) and Polyester Staple Fibre manufacturing unit in the name of Newasia Synthetics Ltd. As on 30th June 2015, MSML is the holder of % 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 Dr. Shamim Matin Chowdhury, Director and Mr. Moshiur Rahman, 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, have offered themselves for re-appointment as Auditors for the year with re-fixation of their remuneration. 63

65 BOARD MEETINGS: During the year , 06 (Six) Board meetings were held. The attendance record of the Directors is 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.2,807,954 in the Statement of Profit or Loss and other Comprehensive Income for the year ended on 30th June, ACKNOWLEDGEMENT: 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 SPINNING MILLS LIMITED 64

66 Annual Report 2015 Malek Siddiqui Wali PHONE: OFF : CHARTERED ACCOUNTANTS RES: : Partners: Md. Waliullah, FCA FAX: Swadesh Ranjan Saha, FCA Md. Habibur Rahman Sarker, FCA Anjan Mallik, FCA AUDITORS REPORT to the shareholders of Newasia Synthetics Limited wali@satcombd.com 9-G, Motijheel C/A, 2 nd Floor Dhaka-1000, Bangladesh We have audited the accompanying Statement of Financial Position of Newasia Synthetics Limited as at 30th June 2015 and the related Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flow and Notes for the year then ended, and a summary of significant accounting policies and other explanatory notes. 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(BAS)/Bangladesh Financial Reporting Standards (BFRS), the companies Act 1994, Bangladesh Securities and Exchanges Commission Rules 1987 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 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 2015 and of the results of its operations and its cash flows for the period then ended and comply with the Companies Act 1994, relevant schedule of Bangladesh Securities and Exchanges Commission Rules 1987 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 Profit or Loss and Other 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, 2015 Malek Siddiqui Wali Chartered Accountants 65

67 NEWASIA SYNTHETICS LIMITED STATEMENT OF FINANCIAL POSITION AS AT 30TH JUNE 2015 JUNE'15 JUNE'14 Taka Taka ASSETS : Non-Current Assets : 1,887,845,945 1,828,918,423 Property Plant & Equipment 1,887,845,945 1,828,918,423 Current Assets : 13,840,374 7,062,288 Advance, Deposit and Pre-Payments 11,520,790 4,503,221 Cash and Cash Equivalents 2,319,584 2,559,067 TOTAL ASSETS : 1,901,686,319 1,835,980,711 SHAREHOLDER'S EQUITY AND LIABILITIES: Shareholder's Equity : 1,832,045,565 1,834,853,519 Share Capital 500,000, ,000,000 Re-valuation Surplus of Fixed Assets 1,341,650,365 1,341,650,365 Retained Earnings (9,604,800) (6,796,846) Current Liabilities : 69,640,754 1,127,192 Creditors & Accruals 69,640,754 1,127,192 TOTAL SHAREHOLDER'S EQUITY AND LIABILITIES : 1,901,686,319 1,835,980,711 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, 2015 (Malek Siddiqui Wali) Chartered Accountants MALEK SPINNING MILLS LIMITED 66

68 Annual Report 2015 NEWASIA SYNTHETICS LIMITED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30TH JUNE 2015 JUNE'15 Taka JUNE'14 Taka Sales - - Cost of Goods Sold - - Gross Profit/(Loss) : - - Operating Expenses 2,797,629 4,040,323 Financial Expenses 10,325 14,610 Operating Profit/(Loss) : (2,807,954) (4,054,933) Other Income/(Loss) - - Net Operating Profit/(Loss) : (2,807,954) (4,054,933) Provision for Contribution to WPPF - - Profit/(Loss) before Tax : (2,807,954) (4,054,933) Provision for Income Tax : - - Current Tax - - Deferred Tax - - Net Profit/(Loss) after tax for this period (2,807,954) (4,054,933) (Transferred to the statement of Changes in Equity.) Earnings Per Share (EPS) (0.56) (0.81) 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, 2015 (Malek Siddiqui Wali) Chartered Accountants 67

69 NEWASIA SYNTHETICS LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30TH JUNE 2015 Particulars Share Capital Revaluation Surplus of Share Money Retained Total Fixed Assets Deposit Earnings Balance as on 1st July ,000,000 1,341,650,365 - (6,796,846) 1,834,853,519 Net Profit/(Loss) during the year (2,807,954) (2,807,954) As at 30th June ,000,000 1,341,650,365 - (9,604,800) 1,832,045,565 FOR THE YEAR ENDED 30TH JUNE 2014 Particulars Share Capital Revaluation Surplus of Share Money Retained Total 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 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, 2015 (Malek Siddiqui Wali) Chartered Accountants MALEK SPINNING MILLS LIMITED 68

70 Annual Report 2015 NEWASIA SYNTHETICS LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30TH JUNE 2015 JUNE'15 JUNE'14 Taka Taka CASH FLOW FROM OPERATING ACTIVITIES : Payment for Operating Expenses (1,334,076) (2,234,467) Payment for Financial Expenses (10,325) (14,610) Net Cash provided/(used) by Operating Activities (1,344,401) (2,249,077) CASH FLOW FROM INVESTING ACTIVITIES : Acqusition of Fixed Assets (67,395,082) (19,855,497) Net Cash used in Investing Activities (67,395,082) (19,855,497) CASH FLOW FROM FINANCING ACTIVITIES : Advance received from Malek Spinning Mills Ltd 68,500,000 1,000,000 Net cash provided/(used) by Financing Activities 68,500,000 1,000,000 Increase/(Decrease) in Cash and Cash Equivalents (239,483) (21,104,574) Cash and Cash Equivalents at 1st July ,559,067 23,663,641 Cash and Cash Equivalents at 30th June ,319,584 2,559,067 Net Operating Cash Flow Per Share (NOCFPS) (0.27) (0.45) 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, 2015 (Malek Siddiqui Wali) Chartered Accountants 69

71 J.M. FABRICS LIMITED DIRECTORS REPORT TO THE SHAREHOLDERS FOR THE YEAR ENDED 30TH JUNE, 2015 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 Changes in Equity and Statement of Cash Flows 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, 2015 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 % share & another sponsor of Malek Spinning Mills Ltd. holds 0.002% 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 15 M. Tons 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, 2015 is given below: ( 1 ) CAPACITY/PRODUCTION The Company s installed estimated production capacity is 29,640,000 Pcs. of Basic T-Shirt & Intimate Garments per annum. A comparative position of its operating performance is given below: Sl. No. Description (Pcs.) (Pcs.) 01 Production capacity 29,640,000 22,000, Actual Production 25,094,084 16,983, Capacity Utilization 84.66% 77.20% 04 Quantity Sold (Pcs.) 22,936,668 16,983, Sales Revenue (Tk.) 2,522,840,505 *2,625,078, Average selling price (Tk.) * In the year Sales revenue & average selling price have been rearranged. CAPITAL EXPENDITURES: The following Capital Expenditure was incurred during the year Description (Tk.) (Tk.) Factory Building 9,120,131 6,578,366 Plant and Machinery 85,226,967 83,628,482 Office Equipments 5,878,013 1,257,799 Furniture & Fixtures 2,176,915 4,261,248 Electrical Installation 663,969 3,293,935 Gas Line Installation 193,260 1,337,592 Tools and Equipment 730, ,166 Cargo Lift 873, Motor Vehicle 3,380,000 2,500,000 Cookeries & Cutleries 22,370 34,910 Total 108,265, ,515,498 MALEK SPINNING MILLS LIMITED 70

72 Annual Report 2015 SHAREHOLDING: The Shareholding Position of different shareholders as at 30th June 2015 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 FINANCIAL RESULTS: The company s operating financial results, as compared to the previous year are summarized as follows: Tk. in million Description Turnover 2, *2, Cost of goods sold 2, , Gross profit *88.56 General and Administrative Expenses Operating profit *54.58 Provision for Worker s Profit Participation Fund Net Profit before tax Provision for Income Tax Net profit after tax Gross Margin Ratio 6.06% *3.37% Net Margin Ratio 2.29% *2.76% Earnings per share (Tk.) In the year Turnover, Gross Profit, Operating Profit, Gross Margin Ratio and Net Margin Ratio have been rearranged. APPROPRIATION OF PROFIT: The Board of Directors recommended for appropriation of profit as follows: Net Profit (after tax provision) during the year Tk. 57,800,157 Add: Profit brought forward from previous year balance sheet Tk.193,765,946 Add: Transfer of excess depreciation of revalued assets Tk. 2,930,444 Less: Adjustment of Tax (Tk. 12,181,455) Less: Adjustment of Deferred Tax (Tk. 802,865) Total net free surplus available for appropriation Tk. 241,512,227 Appropriation Proposed: Proposed Dividend Nil Balance carried forward to Balance Sheet as Retained earnings Tk. 241,512,227 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 10th Annual General Meeting and being eligible, have offered themselves for re-appointment as Auditors for the year with re-fixation of their remuneration. ACKNOWLEDGEMENT: 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 71

73 DAS CHOWDHURY DUTTA &CO. Offices: Chartered Accountants Well Tower (1st Floor), Flat - A/1 Jahan Building No. 5 (2nd Floor) 12/A Purana Paltan Line, Dhaka 74 Agrabad Com. Area, Chittagong Tel: Tel: Fax: Fax: dcddhaka@f-lix.net dcdctg@iolbd.net 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 2015 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 preparation 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 true and fair view of the financial position of J. M. Fabrics Limited as at 30 June 2015 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 2015 Das Chowdhury Dutta & Co. Chartered Accountants MALEK SPINNING MILLS LIMITED 72

74 Annual Report 2015 J. M. Fabrics Limited Statement of Financial Position as at 30 June ASSETS: Restated Non-Current Assets 1,515,262,459 1,516,771,870 Property, plant and equipment 1,338,418,988 1,336,997,956 Revalued fixed assets 176,843, ,773,914 Current Assets 1,320,314,034 1,287,138,967 Inventories 628,013, ,652,419 Advance, deposits and pre-payments 44,572,710 40,939,588 Accounts receivable 511,140, ,842,140 Cash and cash equivalents 136,587, ,704,820 Total 2,835,576,493 2,803,910,837 SHARE HOLDERS' EQUITY AND LIABILITIES: Shareholders' Equity 796,929, ,113,237 Share capital 400,000, ,000,000 Revaluation reserve 155,416, ,347,291 General reserve and surplus 241,512, ,765,946 Non-Current Liabilities 896,237, ,852,419 Long term loan from bank 873,785, ,104,650 Deferred tax liabilities 22,452,279 21,747,769 Current Liabilities 1,142,409,431 1,141,945,181 Short term loan 487,755, ,206,362 Current portion of term loan 313,898, ,927,694 Accounts payable 143,529, ,554,330 Loan from director 50,000,000 - Bank acceptance liabilities 83,802,152 41,883,112 Liabilies for expenditure 63,422,300 64,373,683 Total 2,835,576,493 2,803,910,837 Net Assets Value (NAV) Per Share (Including Revaluation surplus) Taka A. Matin Chowdhury Azizur R.Chowdhury Amit Kumar Saha Syed Saiful Haque Chairman Managing Director Chief Financial Officer Company Secretary Signed in terms of our report of even date annexed. Dhaka, 27 October 2015 Das Chowdhury Dutta & Co. Chartered Accountants 73

75 J. M. Fabrics Limited Statement of Comprehensive Income for the year ended on 30 June 2015 Particulars Taka Turnover Export earnings 2,522,840,505 2,625,078,615 Less: Cost of goods sold 2,369,858,842 2,536,523,277 Gross Profit / (Loss) 152,981,663 88,555,338 General and Administrative Expenses 140,763,798 33,973,604 Administrative expenses 24,839,767 15,115,357 Selling and distribution expenses 3,163,538 2,721,223 Financial expenses 112,760,493 16,137,024 Operating Profit / (Loss) 12,217,865 54,581,733 Other income 58,263,882 28,165,930 Net profit Before provision of WPPF 70,481,746 82,747,663 Provision for WPPF 3,356,274 3,940,365 Net Profit Before Tax 67,125,473 78,807,298 Provision for Income Tax 9,325,315 6,441,444 Provision for tax - current year 9,423,670 6,472,433 Provision for deferred tax (98,354) (30,989) Net Profit 57,800,157 72,365,854 Earnings Per Share (EPS) Number of shares used to compute EPS 4,000,000 4,000,000 A. Matin Chowdhury Azizur R.Chowdhury Amit Kumar Saha Syed Saiful Haque Chairman Managing Director Chief Financial Officer Company Secretary Signed in terms of our report of even date annexed. Dhaka, 27 October 2015 Das Chowdhury Dutta & Co. Chartered Accountants MALEK SPINNING MILLS LIMITED 74

76 Annual Report 2015 J. M. Fabrics Limited Statement of Changes in Equity For the year ended 30 June 2015 Particulars Share Capital General Reserve Revaluation Total and Surplus Reserve Balance as at 01 July ,000, ,765, ,347, ,113,237 Net profit / (loss) for the year - 57,800,157-57,800,157 Tax adjustment - (12,181,455) - (12,181,455) Deferred Tax opening balance adjustment - (802,865) - (802,865) Transfer to general reserve and surplus for depreciation charged on revalued assets - 2,930,444 (2,930,444) - Balance as at 30 June ,000, ,512, ,416, ,929,075 For the year ended 30 June 2014 Restated 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 - 72,365,854-72,365,854 Transfer of excess depreciation of Revalued Assets - - (21,426,623) (21,426,623) 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, ,347, ,113,237 A. Matin Chowdhury Azizur R.Chowdhury Amit Kumar Saha Syed Saiful Haque Chairman Managing Director Chief Financial Officer Company Secretary Signed in terms of our report of even date annexed. Dhaka, 27 October 2015 Das Chowdhury Dutta & Co. Chartered Accountants 75

77 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 2,389,128,150 2,610,811,293 Payment for purchase of raw materials (2,309,735,316) (2,476,587,184) Payment for operating expenses (25,282,726) (15,318,831) Payment for financial expenses (112,760,493) (16,137,024) Increase in advance, deposit and prepayment (3,633,122) (3,503,244) Decrease in provision of tax (12,181,455) (7,004,257) Decrease in liabilities 36,844,964 (114,484,414) Net Cash Provided/ (Used) by Operating Activities (37,619,998) (22,223,661) Cash Flow from Investing Activities: Acquisition of fixed assets (108,265,226) (103,515,498) Disposal of fixed assets 1,566,200 - Adjustment of assets for fire incidence - 5,521,000 Net Cash Used by Investing Activities (106,699,026) (97,994,498) Cash Flow from Financing Activities: Loan received from bank (100,798,011) 329,436,623 Loan received from Directors 50,000,000 - Net Cash Provided by Financing Activities (50,798,011) 329,436,623 Increase/(Decrease) in Cash and Cash Equivalents (195,117,035) 209,218,464 Cash and Cash Equivalents at 01 July ,704, ,486,356 Cash and Cash Equivalents at 30 June ,587, ,704,820 Net Operating Cash Flow Per Share (NOCFPS) (9.40) (5.56) Taka A. Matin Chowdhury Azizur R.Chowdhury Amit Kumar Saha Syed Saiful Haque Chairman Managing Director Chief Financial Officer Company Secretary Signed in terms of our report of even date annexed. Dhaka, October 27, 2015 Das Chowdhury Dutta & Co. Chartered Accountants MALEK SPINNING MILLS LIMITED 76

78 Annual Report th Annual General Meeting 77

79 MALEK SPINNING MILLS LIMITED 78