“If you have any query about this document, you may consult issuer, issue manager and underwriter”

PROSPECTUSINITIAL PUBLIC OFFER OF 34,000,000 ORDINARY SHARES OF TK. 10/- EACH AT PAR TOTALING

TK. 340,000,000/-OF

ABC TAXTILES LIMITED

For General Public QuotaOpening date for subscription: December 17, 2015

Closing date for subscription (Cut-off date): December 27, 2015

MANAGER TO THE ISSUE

BETAONE INVESTMENTS LIMITEDGreen Delta AIMS Tower (Level-4)51-52, Mohakhali C/A, Dhaka-1212Phone: +88 02 9883820; +88 02 9887337; Fax: +88 02 9880733E-mail: info@betaone.com.bd; Website: www.betaone.com.bd

UNDERWRITERS

PRIME FINANCE CAPITAL MANAGEMENT LTD

PFI Tower (6th Floor),56-57 Dilkusha, Dhaka-1000

Tel: +88 02 9584874-6; Fax: +88 02 9584922

MTB CAPITAL LIMITEDMTB Tower (Level 3), 111 Kazi Nazrul Islam Avenue,Bangla Motor, Dhaka-1000Tel: +88 02 8321714; Fax: +88 02 8321543

NBL CAPITAL AND EQUITY MANAGEMENT LTD

Printers Building (8th Floor),5 Rajuk Avenue, Dhaka-1000

Tel: +88 02 7118869; Fax: +88 02 7118840

ICB CAPITAL MANAGEMENT LIMITEDBDBL Bhaban (Level 12-15), 8 Rajuk Avenue,Dhaka 1000Tel: +88 02 9563455; +88 02 7160326

BETAONE INVESTMENTS LIMITEDGreen Delta AIMS Tower (Level-4)51-52, Mohakhali C/A, Dhaka-1212

Phone: +88 02 9883820; Fax: +88 02 9880733

Date of Publication of the Prospectus: November 17, 2015

The Issue shall be placed in ‘N” Category

ABC TEXTILES LIMITEDHouse # 20/B, Road # 14, Sector # 04, Uttara, Dhaka-1230, Bangladesh.

1

Phone: 8950643, 8950376, Fax: 88-02-8950425E-mail: abcltd@org.com.bd , Web: www.abcltd.com

INFORMATION ABOUT THE COMPANY SECTION: I

COMPANY PROFILE

ABC Textiles Ltd. is a pioneer and well established 100% Export Oriented joint venture garment

factory in Bangladesh. It is the Manufacturer & Exporter of all kinds of Knit & Woven Garments

from CEPZ, Chittagong, Bangladesh. The Company incorporated on July 27, 2003 as a Private

Limited Company and converted into Public Limited Company on December 06, 2011 and started

its commercial operation on August 1, 2006 with vision to be an exemplary garments

manufacturer and exporter of Fashion Apparel as judged by international norms of

Professionalism, Quality and Systems. The Company has authorized share capital of Tk.

1,400,000,000 (Taka One Hundred and Forty Crore) only, divided into 140,000,000 (Fourteen

Crore) Ordinary Shares of Tk. 10.00 (Taka Ten) each. The existing paid up capital of the Company

is Tk. 1,050,623,000 (Taka One Hundred and Five Crore Six Lac Twenty Three Thousand) only.

The registered office and as well as the manufacturing plant of the company is located at Plot#

47‐48, Road# 5, Sector# 4, Chittagong Export Processing Zone, Chittagong, Bangladesh. The

corporate office of the Company is at M. L. Tower (5th Floor), 1 East Rampura, DIT Avenue,

Dhaka‐1219. The plant is built on about 3,763 sq. meters (approximately) lease land at

Chittagong Export Processing Zone. Promoted by a team of highly experienced professionals in

the Readymade Garments Manufacturer and backed by world’s most advanced management

information system, the Company fully capable to meet the specific requirements of the buyers.

Important dates

Date of Land lease Agreement signed with BEPZA: 09.05.2004

Date of Incorporation as Private Limited Company: 27.07.2003

Commencement of Commercial Operation as Private Limited Company: 01.08.2006

Conversion date from Private Limited to Public Limited Company: 06.12.2011

Date of changes in denomination of face value of share from Tk. 100 to Tk. 10: 08.12.2011

2

NATURE OF BUSINESS

The principal activities of the company are to carry on the business of manufacturing and exporting knit and woven readymade garments to USA, Canada and European countries for different product categories.

PRINCIPAL PRODUCTS AND SERVICES

Woven Product Knit Product

All Types of Short & Long Pant Fleece Top & BottomJacket/Vest Children DressSwim Trunk Sports WearsDenim Pant Wash & Non Wash

MARKET FOR THE PRODUCTS

ABC Textiles Ltd. is a 100% export oriented readymade garments manufacturing company that exports Woven and Knit Products basically to European Union, UK and USA. Dependency on a single product for overall revenue generation creates some product non diversification risk, but its widely diversified customer base and sound relationship maintenance make them a successful player in the relevant market. Most importantly their buyer composition remains more or less same over last three years.

RELATIVE CONTRIBUTION OF THE PRODUCTS CONTRIBUTING MORE THEN 10% OF THE TOTAL REVENUE

Serial No. Product Percentage (%)

1 Woven Bottoms 402 Knit Tops/Bottoms 60

ASSOCIATES, SUBSIDIARY/RELATED OR HOLDING COMPANY

ABC Textiles Ltd. has no Associates or Subsidiary company.

3

DISTRIBUTION OF PRODUCTS/SERVICES

The Company supplies its products from its own factory premises to its customers at the risk of customers against delivery order. We may demonstrate the distribution process of company production as follows:

4

Raw Material Import

Ware House

Lab for Testing

Sample Production

Garments Production

Hydro-Dry

Quality Check

Packing

Finished Ware House

Export/Delivery

COMPETITIVE CONDITIONS OF BUSINESS

There is a huge demand‐supply gap for the product of the company in the readymade garments market. The company earned good name & fame in the international market of the country for its quality. The following are the major readymade garments producers in Bangladesh:

Name of the Company

Square Fashions DADA Garments

Desh Garments Ltd Cotton Group

Al Muslim Fashions Wear Ltd. Amazone Garments Ltd.

Elegant Fashion Viyallatex Group

4 Star Fashions Ltd. Jeans Plus Ltd.

ACME Apparels (PVT) Ltd. Al‐Muslim Garments ltd.

ABC Garments Ltd. ACME Textile & garments Industries (Pvt.) Ltd.

NUMBER OF EMPLOYEES

As of December 31, 2011 the total numbers of employees of the company (Head Office & Service Center) were 1,460 as follows:

Salary Range (Monthly)

Officers & Staffs Worker (permanent)

TotalHead Office Factory

Above BDT 3,500/= 8 27 452 487Below BDT 3,500/= 8 15 950 973

Total 16 42 1,402 1,460

PRODUCTION CAPACITY AND CURRENT CAPACITY UTILIZATION

Yearly Production Capacity (Pieces)

Current Utilization Capacity (Pieces)

Percentage (%)

3,400,000 (by average product mix) 2,631,578 pieces 77.40

5

ISSUE SIZE AND PURPOSE OF PUBLIC OFFERING SECTION: II

FINANCIAL STRUCTURE OF THE COMPANY

Particulars No. of Shares Amount (BDT)

Authorized Capital 140,000,000 1,400,000,000.00

Pre-IPO Paid-up Capital* 105,062,300 1,050,623,000

Capital to be issued as IPO 34,000,000 340,000,000

Post IPO Paid-up Capital 139,062,300 1,390,623,000

* The company raised its paid up capital from Taka 99,998,000/‐ to Taka 1,050,623,000/‐ on November 24, 2013 in terms of Bangladesh Securities and Exchange Commission Consent letter no. SEC/CI/ CPLC (Pvt.)‐371/2011/936 dated December 28, 2013.

USE OF IPO PROCEEDS

ABC Textiles Limited will raise the capital through Initial Public Offering (IPO) in order to meet increasing need for fund for the purpose of expansion and repayment of its debt. Increase in turnover and saving in financial cost will lead to higher profitability. The Company will utilize the total proceeds of BDT 340,000,000 as per following schedule:

Sl. No. Particulars Amount in BDT

1. Expansion of business 250,000,000

2. Repayment of long-term loan 50,000,000

3. Working Capital 32,000,000

4. IPO Expenses 8,000,000

Total 340,000,000

IMPLEMENTATIONS SCHEDULE

Sl. No. Particulars Implementation Schedule

1. Expansion of businessWithin 15 months of receiving the IPO proceeds

2. Repayment of long-term loan As soon as the IPO Proceeds are available

3.Working Capital including enhanced capacity

As soon as the IPO Proceeds are available

4. IPO Expenses As or when required

DIRECTOR’S PROFILE SECTION: III6

DIRECTORS OF THE COMPANY

Name DesignationAge

(Years)Educational

QualificationExperience

Roksana Morshed Chairman 37 MBA 10 years

Mohammed MorshedManaging Director

44 Bachelor of Commerce 20 years

Meraj-E-Mostafa Director 36 MBA 9 years

Tabassum Karim Director 28 MBA 5 years

INFORMATION REGARDING DIRECTOR AND DIRECTORSHIP

Name DesignationDate of becoming

Director for the first time

Date of Expiration of Current Term

Roksana Morshed Chairman 07-03-2014 15-10-2015

Mohammed MorshedManaging Director

07-03-2014 15-10-2017

Meraj-E-Mostafa Director 07-03-2014 15-10-2015

Tabassum Karim Director 07-03-2014 15-10-2015

DIRECTORS’ INVOLVEMENT WITH OTHER ORGANIZATION

There is no ownership of Directors’ of ABC Textiles Limited as owner or partner in other organizations except the following:

Name Designation Name of the Organization PositionRoksana Morshed Chairman Sonar Cotton Ltd. Director

Mohammed MorshedManaging Director

IFCO Garments & Textile Ltd. Managing Director

Sonar Cotton Ltd. Managing Director

Ozir Ali Textile Ltd. Managing Director

Wajib Traders Managing Director

7

FAMILY RELATIONSHIP AMONG DIRECTORS AND TOP OFFICIALS

No family relationship exists between the members of the Board of Directors and top Officers of the Company. The relationship among board of directors is given below:

Name Position in the Company Relationship

Roksana Morshed Chairman Wife of Mr. Mohammed Morshed

Mohammed Morshed Managing Director Husband of Mrs. Roksana Morshed

Meraj-E-Mostafa Director N/A

Tabassum Karim Director N/A

FEATURES OF IPO SECTION:IV

DETERMINATION OF OFFERING PRICE

The company will issue 34,000,000 shares of BDT 10.00 each at par through IPO under fixed price method.

Sl. No. Particulars BDTa. Net Asset Value per share 11.82b. Earning based value per share 9.57

a. Net Asset Value per Share

ParticularsAmount in BDT

(31.12.2014)

Non-current Assets 965,592,646Current Assets 814,722,413

A. Total Assets 1,780,315,059Non‐current Liabilities 255,265,987Current Liabilities 282,997,882

B. Total Liabilities 538,263,869C. Net Asset Value (A‐B) 1,242,051,190D. No. of Share 105,062,300E. Net assets value per share of Tk. 10 each (C/D) 11.82

8

b. Earning based Value per Share

Particulars 2010 2011 2012 2013 2014 Aggregated

Net Profit (BDT)18,146,23

68,199,013

30,932,002

48,993,331

96,217,210 202,487,792

No. of Shares 6,000,000 6,000,000 6,000,000 6,000,000105,062,30

0129,062,300

Weight of Shares 0.046 0.046 0.046 0.046 0.814 1.00

Weighted Net Profit (BDT)

843,604 381,165 1,438,003 2,277,660 78,324,975 83,265,407

No. of Shares before IPO 105,062,300

EPS based on weighted average net profit (BDT) 0.793

DSE Market PE 12.07

Price based on Earning based Value per Share (BDT) 9.57

OFFER PRICE

Based on the above-mentioned valuation methodologies as per Securities and Exchange Commission (Public Issue) Rules, 2006, the management of the Company in consultation with the Issue Manager has set the issue price at BDT 10.00 each.

MARKET FOR THE SECURITIES BEING OFFERED

The issuer shall apply to all the stock exchanges in Bangladesh within seven working days from

the date of consent accorded by the Commission to issue prospectus.

Dhaka Stock Exchange Limited (DSE)

Stock Exchange Building, 9/F Motijheel C/A,

Dhaka.

Chittagong Stock Exchange Limited (CSE)

CSE Building, 1080, Sk. Mujib Road Agrabad,

Chittagong.

9

AUDITORS’ REPORT SECTION:V

ABC Textiles LimitedStatement of Financial Position

As at December 31, 2014

ParticularsAmount in BDT

31-12-2014 31-12-2013

ASSETS

Non-Current Assets:

Property, Plant & Equipment 962,763,048 1,034,539,388

Security Deposit 2,829,598 2,829,598

Total Non-Current Assets 965,592,646 1,037,368,986

Current Assets:

Inventories 434,708,022 444,151,223

Trade and other receivables 367,791,266 230,250,314

Advance ,Deposits and Prepayments 2,570,138 14,184,280

Cash and bank balances 9,652,987 6,598,803

Total Current Asset 814,722,413 695,184,620

TOTAL ASSETS 1,780,315,059 1,732,553,606

Capital and Reserves:

Share Capital 1,050,623,000 60,000,000

Share money deposit - 950,625,000

Retaining Earnings 191,428,190 95,210,980

1,242,051,190 1,105,835,980

Non-Current Liabilities:

Long Term Borrowings 255,265,987 251,849,189

Total Non-Current Liabilities 255,265,987 251,849,189

Current Liabilities:

Trade and other payables 84,198,571 148,596,564

Current portion of Long Term Loan 138,000,000 138,000,000

Short Term Borrowings 49,344,077 78,977,600

Provision for expenses 11,455,234 9,294,273

Total Current Liabilities 282,997,882 374,868,437

Total Liabilities 538,263,869 626,717,626

10

TOTAL EQUITY & LIABILITIES 1,780,315,059 1,732,553,606

ABC Textiles LimitedStatement of Comprehensive Income

For the Year ended December 31, 2014

ParticularsAmount in BDT

31-12-2014 31-12-2013

Sales 1,006,879,167 934,751,217

Less: Cost of goods sold 808,687,093 791,366,281

Gross Profit 198,192,074 143,384,936

Less: operating expenses 24,354,621 22,011,276

Operating Income 173,837,453 121,373,660

Less: Other operating Expenses 205,982 161,455

Net Operating Income 173,631,471 121,212,205

Financial expenses 78,259,051 73,442,699

Net operating Profit 95,372,420 47,769,506

Add: Other non-operation income 844,790 1,223,825

Net profit before tax 96,217,210 48,993,331

Provision for taxation - -

Net Profit after tax 96,217,210 48,993,331

11

ABC Textiles LimitedCash Flow Statement

For the year ended on December 31, 2014

ParticularsAmount in BDT

31-12-2014 31-12-2013

A .Cash Flow From Operating Activities:

Collection from Turnover 869,338,215 8 89,410,391

Collection from other non-operating income 844,790 1,223,825

Payment for Cost of Expenses (778,580,167) ( 885,551,597)

Paid for operating Expenses (21,301,584) ( 30,425,704)

Expenses paid for other operating activities (205,982) (161,455)

Payment for financial Expenses (78,259,051) ( 73,146,129)

Net cash flow from operating activities 8,163,779 98,650,669

B. Cash Flow From Investing Activities:

Purchase of Fixed Assets (2,563,312) (47,185,924)

Net cash flow from Investing activities (2,563,312) (47,185,924)

C. Cash Flow From Financing Activities:

Increase/ Decrease in Short term loan from bank (29,633,523) 3 9,656,844

Decrease in Long term loan from bank 3,416,798 (42,749,567)

Increase in Capital 39,998,000 -

Increase in Share money deposit - 153,800,000

Net Cash flow from financing activities 13,781,275 150,707,277

D. Increase/(Decrease) cash and cash equivalents (A+B+C) 3,054,184 4 ,870,684

E. Opening cash and cash equivalents 6,598,803 1 ,728,119

F. Closing cash and cash equivalents (E + D) 9,652,987 6 ,598,803

12

Auditors Certificate Regarding calculation of Ratios

Amount in Taka Year ended December 31, 2014, 2013, 2012, 2011 and 2010

Particulars Formula 2014 2013 2012 2011 2010

LIQUIDITY RATIO

Current Ratio (Times) Current asset/current liabilities 2.88 1.86 1.36 1.43 0.36

Quick(Acid Test) Ratio (Times)

Current assets- Inventory 1.33 0.63 3.62 1.10 0.29

Times Interest Earned Ratio(Times)

Operating profit/Net interest expense

2.22 1.65 2.48 1.44 3.90

Debt to Equity Ratio (Times)

Total debt / Total equity 0.32 0.35 .33 .36 .34

OPERATING RATIO

Accounts Receivable Turnover Ratio

Average accounts receivable/2 3.37 4.50 4.77 4.78 9.56

Inventory Turnover Ratio

Cost of goods sold / Average inventory

1.84 2.75 7.46 16.87 14.96

Total Assets Turnover Ratio

Sales / Average total assets 0.57 0.60 0.57 0.58 1.20

PROFITABILITY RATIO

Gross Profit Margin (Gross profit*100)/Sales 19.68 15.34 14.00 10.11 12.59

Operating Profit Margin

(Operating profit*100)/Sales 9.47 5.11 8.00 2.06 6.80

Net Profit Margin (%) (Net profit*100)/Sales 9.5 5.2 8 2.1 6.9

Return On Assets (ROA)%

(Net profit*100)/Average total assets

9.99 4.74 6.00 0.90 9.90

Return on Equity (ROE)%

(Net profit*100)/Average total equity

7.75 4.43 12.00 1.61 27.05

Earnings Per Share (Taka)

Net profit /Weighted Average no of shares

11.45 8.17 5.16 1.37 3.02

13

ANALYSIS OF MAJOR RATIOS SECTION:VI

Inventory Turnover:

Inventory turnover is the ratio of cost of goods sold to inventory. This ratio indicates how many times inventory is created and sold during the period that means it measures the efficiency of the firm’s inventory management.

2014 2013 2012 2011 20100

2

4

6

8

10

12

14

16

18

1.842.75

7.46

16.87

14.96

Inventory Turnover

Inve

nto

ry T

urn

ove

r

Recommendation:

As we can see, efficiency in inventory management is going downward that must turn the management concentration about identifying the underlying deficiency.

Accounts Receivable Turnover:

14

Receivables Turnover measures the effectiveness of the firm’s credit policy and alsoindicate the level of investments in receivables needed to maintain the firm’s sales level.

2014 2013 2012 2011 20100

1

2

3

4

5

6

7

8

9

10

3.37

4.5 4.774.78

9.56Receivables Turnover

Rec

eiva

ble

sTu

rno

ver

Recommendation:

Company seems to be very lenient about the credit term and policy. Collection inefficiency of the credit may cause them liquidity problem.

Current Ratio:

15

It measures a firm's ability to pay off its short-term liabilities with its current assets.

2014 2013 2012 2011 20100

0.5

1

1.5

2

2.5

32.88

1.86

1.36 1.43

0.36

Current Ratio

Cu

rren

t Rat

io

Recommendation:

Company is preserving CU3 of asset against CU1 of liability which indicates a good liquidity prospect.

Debt to Equity:

16

The debt to equity ratio shows the percentage of company financing that comes from creditors and investors.

2014 2013 2012 2011 201030%

31%

32%

33%

34%

35%

36%

32%

35%

33%

36%

34%

Debt to Equity

Deb

t to

Eq

uit

y

Recommendation:

Consistency in capital structure shows management long term planning in terms of investment and return to shareholders.

Net Profit Margin:

17

It measures the amount of net income earned with each dollar of sales generated by comparing the net income and net sales of a company. Creditors and investors use this ratio to measure how effectively a company can convert sales into net income. 

2014 2013 2012 2011 20100%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

10%

5%

8%

2%

7%

NetProfit Margin

Net

Pro

fit M

argi

n

Recommendation:.

Inconsistency in the trend of this ratio indicates that company is still struggling to achieve economic scale

Return on Equity:

18

It measures the ability of a firm to generate profits from its shareholders investments in the company. In

other words, the return on equity ratio shows how much profit each dollar of common stockholders'

equity generates.

2014 2013 2012 2011 20100

5

10

15

20

25

30

7.75

4.43

12

1.61

27

Return on Equity

Ret

urn

on

Eq

uit

y

Recommendation:

Company is loosing control over its capital utilization efficiency.

19

Return on Asset:

It measures the net income produced by total assets during a period by comparing net income to the

average total assets.

2014 2013 2012 2011 20100

1

2

3

4

5

6

7

8

9

10

9.99

4.74

6

0.9

9.9Return on Asset

Ret

urn

on

Ass

et

Recommendation:

As like return on equity company is not competent enough to maintain a steady flow of return on asset. It shows lack of efficiency in asset management.

20

CREDIT RATING REPORT SECTION: VII

Credit Rating Information and Services Limited (CRISL) has rated the Company as "AA" in the long

term and "ST-2" in the short term along with a stable outlook in consideration of its audited

financials up to December 31, 2014, unaudited financials up to March 31, 2015 and other relevant

quantitative as well as qualitative information up to the date of rating declaration.

21