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Rahim Textile Mills Ltd.

Annual Report2 0 1 4 - 2 0 1 5

RAHIM TEXTILE MILLS LIMITED 2

RAHIM TEXTILE MILLS LIMITED

TRANSMITTAL LETTER

The ShareholdersBangladesh Securities and Exchange CommissionRegistrar of Joint Stock Companies & FirmsDhaka Stock Exchange Ltd.

Sub: Annual Report for the year ended 30th June, 2015.

Dear Sir (s),

We are pleased to enclose a copy of Annual Report together with the Audited Financial Statements comprising Statement of Financial Position as at 30th June, 2015, Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year ended 30th June, 2015 along with notes thereon for your information and records.

Yours sincerely

Syed Saiful HaqueCompany Secretary

Dated: November 16, 2015

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Annual Report 2015

RAHIM TEXTILE MILLS LIMITEDRegistered Office: 134, New Eskaton Road, Dhaka-1000

Corporate & Share Office: Mehnaj Monsur TowerHouse #11A, Road #130, Gulshan-1, Dhaka-1212

NOTICE OF THE 34th ANNUAL GENERAL MEETING

Notice is hereby given that the 34th ANNUAL GENERAL MEETING of the Shareholders of the Company will be held on Sunday, 27th December, 2015 at 9.00 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 Directorsʼ and the Auditorsʼ thereon.

Agenda-2. To declare dividend for the year ended 30th June, 2015.

Agenda-3. To elect Directors in terms of the relevant provision of Articles of Association.

Agenda-4. To appoint Auditors for the year 2015-2016 and to fix their remuneration.

Agenda-5. To re-appoint the Independent Director.

By order of the Board

Syed Saiful HaqueCompany Secretary Dated: November 16, 2015

Notes: (i) 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 17, 2015 would be entitled to attend at the AGM and to receive the dividend.

(ii) The Proxy form must be affixed with requisite revenue stamp and be deposited at the Corporate & Share Office of the Company not less than 48 hours before the time fixed for the meeting.

(iii) Admittance to the meeting venue will be on production of attendance slip sent with the Annual Report.

(iv) The Annual Report is available in the Companyʼs website at www.rahimtextile.com

N.B: No gift or benefit in cash or kind shall be paid/offered to the honʼble Shareholders in the 34th AGM of the Company as per BSEC Circular under reference No. SEC/CMRRCD/2009-193/154 dated 24.10.2013.


Corporate Philosophy:VisionWe view business as a means to the material and social well being of the investors, employees and society at large, leading to accretion of wealth through financial and moral gains as a part of the process of the human civilization. Mission:Our mission is to produce and provide world class textile and garments products and services and position the country in the higher value segment in the international market.Objectives:Our objectives are to conduct transparent business operation based on market mechanism within the legal & social frame work with aims to attain the mission reflected by our vision.Quality Policy:Rahim Texile Mills Ltd. is committed to be a provider of world class textile products and services by offering unrivalled quality and satisfying the customers. The Company is committed to avoid use of dyes and chemicals those are health hazard and harmful for the mankind and environment. Corporate Governance:Corporate Governance involves decisions making process for any corporate body as a going concern for the benefit of all concerned, present and future. These decisions may be categorised 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 decision making governance on a continuous basis, the degree of involvement being variable with the extent of delegation of authority top down and reporting for accountability bottom up of the management echelon. These aspects of governance are shared by the Board of Directors, Executive Management, operational participants and workers and others in fulfillment of the common goals that converge in increasing the benefits of the stakeholders. To this end entire corporate governance efforts are blended with ʻgood governance practicesʼ as ethically and morally acceptable standards under a given socio politico environmental phenomenon of our society in which we work live and exist. The organisms through which the corporate governance functions are carried out are:

BOARD OF DIRECTORS:(a) Constitution: The Board of Directors, the top Management echelon, consisting of the founder entrepreneurs/ successors and Independent Directors, provides the policy and strategic support and direction for the entire range of the corporate activities. The Board of Directors consist of Seven (7) 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 retires 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 holds periodic meetings, at least once a quarter and provides appropriate decisions/directions to the Executive Management. Such meeting 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 Companyʼs 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 Shareholders as well as investors for publication of any Price Sensitive Information as per BSEC Regulations. A qualified & experienced Company Secretary is in charge to discharge all these responsibilities. The Company has also a web site to provide permissible information/notices/price sensitive information/financial reports and others for the Shareholders and interested investors.

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Annual Report 2015

(d) Relationship with Government:In its role on accountability to the government, the Board of Directors is to ensure payments of all dues to government in the form of import duty, custom duty, port charges, VAT, Corporate Taxes and other levies as and when they become due on the basis of actual operations and make sure to avoid corruption. This has enabled the Company to enhance its contribution to the National Exchequer on a progressive rate year after year. (e) Relationship with Financiers/ Bankers:The Board oversees the financial transactions and ensures to meet companyʼs commitments to the lenders without default. (f) Relationship with Suppliers:The Company has to import plant and machinery and the raw materials from abroad, it has to maintains cordial relationship for 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 Companyʼs image as a good customer. (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 separate persons. The Chairman is responsible for functions of the Board while the Managing Director serves as the Chief Executive Officer (CEO) of the Company to implement the decision of the Board and to oversee the day to day functions as permitted by the Articles of Association.CHIEF FINANCIAL OFFICER, HEAD OF INTERNAL AUDIT AND COMPANY SECRETARY:The Company has appointed Mohammad Sakhawat Hossain, as Chief Financial Officer, Md. Rakibul Islam, as Head of Internal Audit and 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, Dr. Sultan Hafeez Rahman, a renowned economist and former Director General, South Asia of Asian Development Bank (ADB). Other members are Mr. Azizur Rahim Chowdhury, Director and Dr. Shamim Matin 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 Companyʼs stock. The Audit Committee also ensures compliance of requirements of BSEC and other agencies. The Audit Committee of the Board held 4 (four) Meetings during the year 2014-2015.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 Director:In compliance of the BSEC Regulations on Good Governance, the Board of Directors as empowered by the Regulations, appointed Dr. Sultan Hafeez Rahman, one of the renowned economist and former Director General, South Asia of Asian Development Bank (ADB) and Senior Research Fellow of Bangladesh Institute of Development Studies (BIDS), Adviser/consultant to the Ministry of Jute, Industry and Commerce and Finance and Planning of Govt. of Bangladesh, Member of the Board of Directors of Agrani Bank 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 & 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 AB Bank Limited and The City 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.(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. and Bangladesh General Insurance Co. Ltd. The company has not yet faced any dispute over any claims and the company enjoys special premium rates which protects the interest of the investors.(d) Auditors:The role of the auditors in certification of the financial statement is the most significant aspect of Corporate Governance and protection of interest of investors. As evident from the Annual Reports, the company rigidly follows the code of International Accounting Standards (IAS) and Bangladesh Accounting Standards (BAS) 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.MANAGEMENT COMMITTEE:The Management Committee is led by the Managing Director (CEO) who has been 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. Ghaus Mohammad, Director-HR & Admin, Mr. Saiful Haq, Executive Director and Mohammad Sakhawat Hossain, Chief Financial Officer.SEGMENT REPORT:The companyʼs operations are carried out on a single business and geographic segment within which the company operates and as such no segment reporting is felt necessary.RISK PERCEPTION:The Company Management perceives investment risk within the national and international economic perspectives in relation to legal and moral requirements involving inter alia, intellectual property right, scientific invention, WTO Regulation etc. and monetary and fiscal investment policies and has prepared its production & marketing strategies to meet the challenges from these risks.

WE STRIVE FOR• We in Rahim, strive, above all, for top quality products at the least 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 in sexes, races, religions and regions in all sphere of operation without any discriminatory treatment.

• We strive for an environment free from pollution and poisoning.• We strive for the achievement of Millennium development goals for the Human Civilization.

Annual Report 2015

CORPORATE REVIEWI. MANAGEMENT APPARATUS:

(a) BOARD OF DIRECTORS: Mr. Didar A. Husain Chairman Mr. A. Matin Chowdhury Managing Director Dr. Shamim Matin Chowdhury Director Ms. Saima Matin Chowdhury Director Mr. Azizur Rahim Chowdhury Director Dr. Sultan Hafeez Rahman Independent Director Md. Qamrul Huda Independent Director

(b) AUDIT COMMITTEE: Dr. Sultan Hafeez Rahman Chairman Dr. Shamim Matin Chowdhury Member Mr. Azizur Rahim Chowdhury Member

(c) MANAGEMENT COMMITTEE: Mr. A. Matin Chowdhury Chairman Mr. Ghaus Mohammad Member Mr. Saiful Haq Member Mohammad Sakhawat Hossain Member

(d) SENIOR CORPORATE OFFICIALS: Mr. Ghaus Mohammad Director, HR & Admin Mr. Saiful Haq Executive Director Mr. Mohammad Sakhawat Hossain Chief Financial Officer Mr. Syed Saiful Haque Company Secretary Mr. Md. Hedayet ullah General Manager Md. Rakibul Islam Head of Internal Audit

(e) AUDITORS: Malek Siddiqui Wali Chartered Accountants

(f ) COMPANY SECRETARY: Mr. Syed Saiful Haque

(g) BANKERS: i. AB Bank Ltd.

ii. The City Bank Ltd.

(h) INSURERS: i. Pioneer Insurance Co. Ltd. ii. Bangladesh General Insurance Co. Ltd.

(i) LISTING: Dhaka Stock Exchange Ltd.

(j) REGISTERED OFFICE: 134, New Eskaton Road, Dhaka-1000.

(k) CORPORATE HEAD OFFICE: Mehnaj Monsur Tower , House # 11A, Road # 130,Gulshan-1, Dhaka-1212.

(l) INVESTORSʼ RELATION DEPARTMENT: Md. Kamruzzaman, Fax No-880-2-8828953, E-mail: [email protected], Tel: 880-2-8832771-82, Ext-282, Cell: 8801729272080

(m) FACTORY: Shafipur, Kaliakoir, Gazipur.

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II. CORPORATE HISTORY:

• Year of Incorporation : 31 December, 1981• Year of Commencement of Production : 01 July, 1987• Year of Initial Public Offering (IPO) : 1988• Stock Exchange Listing date : 29 March, 1988• Awarded Oeko-Tex Certificate : 20.09.2010• Authorized Capital : Tk.500 Million• Paid Up Capital : Tk.34.685 Million• Product Lines : Dyeing, Printing of Woven & Knit Fabrics• Number of Shareholders (30th June 2015) : 2641• Number of Employees (30th June 2015) : 423

III. FIVE YEARS OPERATIONAL RESULTS: (Figures in thousand Tk.)

Particulars 2014-15 2013-14 2012-13 2011-12 2010-11Turnover 598,622 575,293 572,483 470,214 409,222Gross Profit 92,310 70,211 83,094 68,151 69,112Operating Profit 35,291 14,675 19,276 2,859 8,171Net Profit before Tax 33,723 27,069 15,623 5,225 9,013Net Profit after Tax 23,565 23,180 12,795 4,418 7,652Total Assets 624,344 710,654 571,726 644,672 686,274Fixed Assets 448,491 485,851 432,308 467,306 515,872Total Bank Loan 236,787 380,228 272,338 339,883 399,151Total Current Assets 175,853 224,802 139,418 177,366 170,401Total Current Liabilities 327,935 416,828 325,056 333,527 230,220Current Ratio 0.54:1 0.54:1 0.43:1 0.53:1 0.74:1 Authorised Capital 500,000 500,000 500,000 500,000 500,000Paid up Capital 34,685 27,527 22,022 20,020 18,200Number of shares outstanding 3,468,465 2,752,750 2,202,200 2,002,000 182,000Shareholderʼs Equity 190,954 *167,390 156,024 147,899 147,507Face Value per Share 10 10 10 10 100Cash Dividend Per Share (%) - - - - 5.00Stock Dividend (%) 40 26 25 10 10Return on Paid up Capital 40% 26% 25% 10% 15%Net Assets Value per Share (NAV) 55.05 *60.81 70.85 73.88 810.48Net Operating Cash Flow per Share 26.89 20.13 24.58 72.36 349.60Earning per share (Tk.) 6.79 *6.68 *4.65 0.51 42.05Number of Shareholders 2641 2,429 2,423 1,257 1,162Number of Employees 423 363 351 328 394Production (In Lac yards) 220.20 195.92 199.78 162.00 151.26• Shareholderʼs Equity, Net Assets Value per share (NAV) and Earning per share for the year 2013-14 has been restated.

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Annual Report 2015

MESSAGE

FROM THE CHAIRMAN

Dear Shareholders, I consider it a great honor to welcome you on behalf of the Board of Directors to the 34th Annual General Meeting of Shareholders of Rahim Textile Mills Ltd. and to present before you the Annual Report along with the Audited Financial Statements and the Auditorsʼ and Directorsʼ Report thereon of the Company for the year ended 30th June, 2015.

During the financial year 2014-2015 we have experienced substantial change in business environments, developments and opportunities. The increasing rates of GDP growth had been an encouraging factor though socio-politico factors had adverse effects during the year. Despite this, The Company succeeded in making the net profit during the year due to increase in turnover of Tk.23.33 million compared to previous year and decrease in cost of goods sold by 3.22% (Tk.505.08 million i.e. 87.80% of turnover in 2013-14 and Tk.506.31 million i.e. 84.58% of turnover in 2014-15) and decrease of financial expenses by 0.62% compared to previous year.

The Board of Directors earlier in a meeting held on 08th November 2010 had approved a BMRE plan for Tk.35.00 crore, Later, after a careful review, a partial BMRE has been completed upto June, 2014 utilizing Bank Loan. As a result our production capacity has been increased from 231.40 lac yards to 265.20 lac yards during the fiscal year of 2014-2015. Thus as against our earlier BMRE plan, we spent Tk.9.58 crore (without interest) and got a new sanction from bank of Tk.5.64 crore in the month of August, 2015 which was scheduled to be spent during the financial year 2015-2016 and onward. Last year we had forecast an increase of annual production capacity at 296.40 lac yards for the year 2014-2015 but the actual capacity had increased to 265.20 lac yards. The shortfall was due to not completion of the projected BMRE.

Bangladesh Securities and Exchange Commission (BSEC) has introduced mandatory Guidelines on Corporate Governance. The Board of Directors of the Company is committed to deliver good governance and exercise best practices in all respects, for us, good governance is about managing the business effectively and responsibly and in a way which is honest, transparent, showing accountability and abiding by the laws of the land.

As you are aware, though the global recession which began in 2008-09 has gradually weakened over the years, the negative impacts however still remains. In fact, the world economic trend was never in our favor during this period. In spite of this our GDP growth has been 6.51 percent. The vital export market for Ready Made Garments (RMG) products from Bangladesh is under watchful scrutiny of USA and EU. We are striving to ensure that our compliance standards improve and we remain competitive and continue to grow and gain further access to the markets abroad.

We take the opportunity to thank our Shareholders, Bangladesh Securities and Exchange Commission, Dhaka Stock Exchange Ltd., CDBL, RJSC, Bankers, Customers, Employees and other stake holders for their whole hearted support to our Company.

Didar A. HusainChairman


RAHIM TEXTILE MILLS LIMITEDDIRECTORSʼ REPORT TO THE SHAREHOLDERS

FOR THE YEAR 2014-2015Dear 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 30th June, 2015 in the following paragraphs.TEXTILE SECTOR:Industry outlook and possible future developments in the industry: Although we are not getting uninterrupted power supply, our production has increased by 12.39% due to installation of additional plant & machinery. At present our installed production capacity has been increased from 231.40 lac yards to 265.20 lac yards. Last year we forecast for increase of annual production capacity at 296.40 lac yards for the year 2014-2015 but the actual capacity has increased to 265.20 lac yards. The shortfall was due to non-completion of the projected BMRE. The turnover growth of our company during the past few years are given below: Year Companyʼs Growth Rate 2014-2015 4.06% 2013-2014 0.49% 2012-2013 21.75% 2011-2012 14.90% 2010-2011 8.03%COMPANYʼS OPERATIONS:Segment-wise or product wise performance: The actual production performance for the year under review has been affected due to political unrest and uninterrupted power supply. As a result utilization of production capacity has decreased from 84.67% to 83.03%. In spite of these constraints, we are pleased to inform you that we have performed well in net profits and are regular in debt servicing. Earlier we got sanction from bank Tk.15.00 crore as project loan for BMRE of which Tk.9.58 crore (without interest) has utilized upto 30th June, 2015. The unutilized portion of the loan can not be utilized due to elapse of time.Thus as against our earlier BMRE plan of Tk.35.00 crore, we spent Tk.9.58 crore (without interest) and got a new sanction from bank of Tk.5.64 crore in the month of August, 2015 which will be spent during the financial year 2015-2016 and onward. A comparative statement of productions position are given below: Particulars 2014-2015 2013-2014 % Increase/(decrease)01 Production Capacity:a) Dyeing, Printing & Finishing unit (Lac yards) 265.20 231.40 14.61%02 Actual Production:a) Dyeing, Printing & Finishing unit (Lac yards) 220.20 195.92 12.39%03 Capacity Utilization:a) Dyeing, Printing & Finishing unit (Lac yards) 83.03 84.67 (1.94%)Risk and concerns:All segments of the textile industry have been facing similar challenges, which are adversely affecting production and growth. Price hike in energy is effected. Physical parameter requirement and chemical restriction are more stringent. Manufacturers of raw materials for dyeing, printing and finishing have increased their price. We have to be prepared to meet the new challenges in order to survive and move forward. Analysis of Cost of Goods sold, Gross Profit Margin and Net Profit Margin:(a) Cost of Goods Sold:This yearʼs cost of goods sold was Tk.506.31 million (84.58% of turnover) as compared to last yearʼs cost of goods sold of Tk.505.08 million (87.80% of turnover). This is due to the fact that there has been decrease in average production cost by Tk.2.78 per yds (Tk.23.00 in 2014-2015 per yds and Tk.25.78 in 2013-2014 per yds). The increase in production quantity is 24.28 Lac yards over the last year. Production capacity utilized during the year was 83.03%. (b) Gross Profit:The turnover of the company during the year was Tk.598.622 million as against last yearʼs turnover of Tk.575.293 million. The increase in turnover is 4.06% over the last year. Gross Profit earned during the year was Tk.92.310 million (15.42% of turnover) as against last yearʼs gross profit of Tk.70.210 million (12.20% of turnover). The increase in Gross Profit ratio is due to decrease in prices of Gray fabric (Raw- materials) and other overheads. The Gross profit ratio has increased by 3.22% over the previous year due to turnover quantity has increased compared to the previous year.(c) Net Profit:Net profit (after tax) earned during the year was Tk.23.565 million as compared to last yearʼs Net profit (after tax) of Tk.23.180 million. During the year net profit after tax has marginally increased due to decrease of financial expenses on turnover by 0.62% compared to previous year and adjustment of provision for prior years tax Tk.5.074 million.

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Annual Report 2015

Extra-Ordinary gain or loss:During the year the company earned interest income on FDR at Tk.177,010 and after adjustment of Tk.58,723 as loss on foreign currency exchange rate and balance amount of Tk.118,287 has been shown as Non Operating Income which has been shown in note no.25.02 in the Notes of Account.Related party transactions:Related party transactions are depicted in Note no. 3.24 in the Notes of Account.Utilization of proceeds from public issues and/or right issues:There were no public issues and/or right issues offered during the year.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 1988. There were no Repeat Public Offering, Rights Offer, Direct Listing, etc. in the history of the company.Variance between Quarterly Financial performance and Annual Financial Statements:The unaudited Earning per share (EPS) for 1st quarter was Tk.3.46, 2nd quarter Tk.4.99 and 3rd quarter Tk.7.25. After Audit the Annual Earning per share (EPS) stood at Tk.6.79. The quarterly variance between 1st quarter to 2nd quarters occurred due to allotment of 715,715 number Bonus share for the year 2013-14 and the Audited Annual EPS was calculated after adjustment of shortfall in corporate tax liabilities. Remuneration to directors including independent directors:The remuneration of Directors including Independent Directors are depicted in Note no.23.01 in the Notes of Account.Statement of Directors on Financial Reports:The above reports are depicted in Annexure-ISignificant deviations from the last yearʼs operating results:Turnover increased by 4.06% over the last year. However, the Cost of goods sold (COGS) decreased by 3.22% due to decrease in price of Gray fabric, reduction of overhead cost and increase of sales quantity. Financial expenses decreased by 0.62% due to repayment of term loan in time. As a result, operating profit has increased by 3.35% on sales compared to last year (2013-2014 was 2.55% and 2014-2015 is 5.90%).FINANCIAL RESULTS:The comparative statements of financial results of the Company for the year 2014-2015 as compared to previous year are summarized as follows: (Tk. in Thousand)Particulars 2014-15 2013-14 % Increase/(Decrease)Turnover 598,622 575,293 4.06%Cost of goods sold 506,312 505,082 (3.22%)Gross profit 92,310 70,211 3.22%Operating expenses 26,517 22,608 0.50%Financial expenses 30,501 32,928 (0.62%)Operating profit 35,291 14,675 3.35%Net profit (AT) 23,565 23,180 1.66%Gross profit margin 15.42% 12.20% 3.22%Net profit margin 3.94% 4.03% (0.09%)Earning per share (Tk.) 6.79 *6.68 --Face value per share 10 10 --*Earning per share restated in the year 2013-14.Key operating and financial data of last 5 (five) years have been presented in summarized form at page no. 08Dividend:Board of Directors has recommended for declaration of Stock Dividend @ 40% i.e. 0.40 (Zero point four zero) Bonus Share for every 01 (One) ordinary shares held by the shareholders on the Record date. MARKETING: The shift towards trends and demand for uncommon structured fabric and constraints continue to pose new challenges in our quest for greater market share. Innovation in print techniques on Knit, woven and denim fabric greatly contributed to our growth and stability. We need to quickly address buyerʼs requirements alongwith the intense competition from other print & dyeing factories. Digital printing requirement is rapidly increasing. We have to get into this trend of digital printing. We are happy to inform that in spite of the impediments we have made progress and coped with the competition. Determination, sincerity and guidance helped us in achieving our objectives.CAPITAL EXPENDITURES:During the year 2014-15 the following capital expenditure were incurred by us with own finance: (Tk. in million)Particulars 2014-2015 2013-2014 2012-2013Land/civil construction ----- 1.24 2.70Plant & Machinery 2.54 110.89 9.41Other Fixed Assets 1.31 7.66 0.85Total 3.85 119.79 12.96


LONG TERM LOAN REPAYMENT:During the year the company has repaid the Term Loan amounting to Tk.89,203,030 and Directorʼs loan amounting to Tk.10,000,000. As a result the Term Loan position and Directorʼs loan position as on 30th June, 2015 stood at Tk.119,629,574 and Tk.14,953,649 respectively.APPROPRIATION OF PROFIT:The Board of Directors recommended for appropriation of profit as follows:Retained Earnings brought forward from previous year : Tk. 49,046,000.00Less: Dividend distribution for the year 2013-2014 : (Tk. 7,157,150.00)Balance surplus brought forward : Tk. 41,888,850.00Add: Net Profit (after tax) during the year 2014-2015 : Tk. 23,564,710.00Add: Transfer to retained earnings : Tk. 2,623,905.00Total net free surplus available for appropriation : Tk. 68,077,465.00Appropriation Proposed: (i) Stock Dividend (Bonus Shares) in the ratio of 1:0.40 (40%) i.e. 0.40 (Zero point four zero) Bonus Share for every 01(One) ordinary share held on Record Date :(Tk.13,873,860.00) Retained Earnings after payment of Dividend Tk. 54,203,605.00DECLARATION OF DIVIDEND:In the line of proposed appropriation of profit, the Board of Directors proposed and recommended for declaration of Stock Dividend (Bonus Share) @ 40% for the year 2014-2015. This will need issuance of 1,387,386 Ordinary Shares of Tk.10.00 each by capitalization of Tk. 13,873,860.00 out of Retained Earnings (free reserves). The stock dividend will be available to the Shareholders whose names would appear in the Share Registers of the Company or in the Depository on the record date.ELECTION OF DIRECTORS:Rotation of Directors:Pursuant to Article clause 120 of the Articles of Association of the Company Dr. Shamim Matin Chowdhury, Director and Mr. Azizur Rahim Chowdhury, Director shall retire by rotation and being eligible as per Article 121 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 date 7th August, 2012 are depicted in Annexure –III.APPOINTMENT OF AUDITORS:M/s. Malek Siddiqui Wali, Chartered Accountants, Auditors of the Company, will retire at this Annual General Meeting (AGM) and being eligible offered themselves for re-appointment as auditors of the company for the year 2015-2016. M/s. Malek Siddiqui Wali, Chartered Accountants, is a panel auditors of BSEC. The Board recommended M/s. Malek Siddiqui Wali., Chartered Accountants, 9-G, Motijheel C/A, Dhaka-1000 for re-appointment as auditors of the Company of the year 2015-2016 with fixation of their remuneration.RE-APPOINTMENT OF INDEPENDENT DIRECTOR:The Board of Directors in its meeting held on 09th July, 2015 decided to re-appoint Dr. Sultan Hafeez Rahman as Independent Director of the Company for a further period of 3 (three) years with effect from 23rd 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 shareholders 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/2006-158/134/Admin/44 dated 07 August 2012 are depicted/disclosed in the ANNEXURE -I, II, III, IV, V and VI respectively.ACKNOWLEDGEMENT:The Directors are pleased to express their gratitude for the co-operation and support provided by the Shareholders, Customers, Bankers, Insurance Companies, Suppliers, BSEC, DSE, CDBL and dedication by Workers and Employees of the company without whose active support the result would not have been possible.Looking forward to a bright future for all of us.On behalf of the Board of Directors,

Didar A. HusainChairman• In the event of conflict between English text and Bangla text of this report, English text shall be prevailed.

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Annual Report 2015

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15

Annual Report 2015

g~jabx e¨q:2014-15 mv‡j †Kv¤úvbxi g~jabx e¨q wbgœiæc hv wbR¯^ Znwej †_‡K †gUv‡bv n‡q‡Q: (wgwjqb UvKvq) weeib 2014-2015 2013-2014 2012-2013f~wg I BgviZ ---- 1.24 2.70hš¿cvwZ 2.54 110.89 9.41Ab¨vb¨ ¯’vqx m¤úwË 1.31 7.66 0.85‡gvU 3.85 119.79 12.96`xN© †gqv`x FY cwi‡kva:PjwZ eQi ‡Kv¤úvbx Uvg© †jvb eve` 89,203,030 UvKv Ges WvB‡i±im FY eve` 10,000,000 UvKv cwi‡kva K‡i‡Q| djkÖæwZ‡Z 30 †k Ryb 2015 Zvwi‡L Uvg© †jvb Ges WvB‡i±im F‡Yi w¯’wZ `vwo‡q‡Q h_vµ‡g 119,629,574 UvKv Ges 14,953,649 UvKv| gybvdv e›Ub:cwiPvjbv cl©` wb‡gœv³ Dcv‡q gybvdv e›U‡bi mycvwik K‡i‡Qb:c~e©eZx© eQ‡ii wi‡UBb Avwb©sm UvKv 49,046,000.00ev`: 2013-2014 eQ‡ii jf¨vsk weZiY (UvKv 7,157,150.00)DØ„Ë ¯’vbvšÍi UvKv 41,888,850.00†hvM : bxU gybvdv (Ki cieZx) 2014-2015 eQ‡ii UvKv 23,564,710.00†hvM: wi‡UBb Avwb©s‡m ¯’vbvšÍ‡ii mgš^q UvKv 2,623,905.00Ave›U‡bi Rb¨ bxU wd« Znwej UvKv 68,077,465.00cÖ¯ÍvweZ jf¨vsk: óK wWwe‡WÛ 40% (†evbvm †kqvi) cÖwZ 01wU mvavib †kqv‡ii wecix‡Z 0.40wU †evbvm †kqvi ( UvKv 13,873,860.00)jf¨vsk cÖ`v‡bi ci DØ„Ëc‡Î ¯’vbvšÍi UvKv 54,203,605.00jf¨vsk †Nvlbv:cÖ¯ÍvweZ gybvdv Ave›Ub Abyhvqx cwiPvjbv cl©` 2014-2015 eQ‡ii Rb¨ 40% ÷K wWwf‡WÛ (†evbvm †kqvi) †Nvlbvi Rb¨ mycvwik K‡i‡Qb| Gi Rb¨ cÖwZwU 10 UvKv wn‡m‡e 1,387,386 mvavib †kqvi Bmy¨ eve` 13,873,860.00 UvKv wi‡UBb Avwb©s (wd«-wiRvf©) n‡Z g~jab wnmv‡e ¯’vbvšÍ‡ii cÖ‡qvRb| ‡iKW© ‡W‡U †h mKj †kqvi‡nvìvi‡ì bvg †Kv¤úvbxi †kqvi †iwRóvi A_ev wW‡cvwRUwi †iwRóv‡i wjwce× _vK‡e Zviv Dc‡iv³ ÷K jf¨vsk cv‡eb|cwiPvjK wbev©Pb:†Kv¤úvbxi AvwU©‡Kjm Ae G‡mvwm‡qk‡bi 120 aviv †gvZv‡eK W: kvgxg gwZb ‡PŠayix, cwiPvjK I Rbve AvwRRyi iwng †PŠayix, cwiPvjK, cwiPvjbv cl©` n‡Z Aemi wb‡”Qb Ges †hvM¨ weavq 121 aviv †gvZv‡eK c~b: wbev©wPZ nIqvi AvMÖn cÖKvk K‡i‡Qb| Zv‡ì m¤úwK©Z Z_¨ Ges Rxebe„ËvšÍ weGmBwm †bvwUwd‡Kkb Abyhvqx Gbv·vi-3 G mswÿßKv‡i mshy³ 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& AÎ mfvq Aemi MÖnb Ki‡eb Ges ‡hvM¨ weavq Zviv 2015-2016 eQ‡ii Rb¨ cybivq AwWUi wn‡m‡e wb‡qvM †c‡Z wjwLZfv‡e AvMÖn cÖKvk K‡i‡Qb| †gmvm© gv‡jK wmwÏKx Iqvjx, PvU©vW GKvD›U¨v›Um&, weGmBwmi c¨v‡bjf‚³ AwWUi| cwiPvjbv cl©` †gmvm© gv‡jK wmwÏKx Iqvjx, PvU©vW GKvD›U¨v›Um&, 9-wR, gwZwSj ev/G, XvKv-1000 ‡K Zv‡ì cvwikÖwgK wba©vib mn 2015-2016 mv‡ji Rb¨ AwWUi wn‡m‡e wb‡qvM †c‡Z mycvwik K‡i‡Qb|¯^Zš¿ cwiPvj‡Ki cyb:wb‡qvM: cwiPvjbv cl©` 09 RyjvB, 2015 Zvwi‡L AbywóZ mfvq W: myjZvb nvwdR ingvb ‡K cybivq 3 (wZb) eQ‡ii Rb¨ ¯^Zš¿ cwiPvjK wn‡m‡e weGmBwmi †i¸‡jkb Ab~qvqx wb‡qv‡Mi wm×všÍ MÖnb K‡i‡Qb hv †m‡Þ¤î 23, 2015 ZvwiL †_‡K Kvh©Ki nq, hv AÎ evwl©K mvavib mfvq †kqvi‡nvìvie„‡›ì Aby‡gv`‡bi Rb¨ mycvwik K‡i‡Qb| W: myjZvb nvwdR ingv‡bi Rxebe„ËvšÍ I Ab¨vb¨ Z_¨vw` mswÿßKv‡i Gbv·vi-3 G mshy³ Kiv n‡q‡Q|K‡cv©‡iU Mf©‡bÝ cÖwZ‡e`b: wmwKDwiwUR GÛ GK‡PÄ Kwgkb Gi †bvwUwd‡Kkb bs GmBwm/wmGgAviAviwmwW/2006-158/134/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|eë¯’vcbv KZ©„c‡¶i ¯^xK„wZ:cwiPvjbv cl©‡ì c¶ †_‡K †Kv¤úvbxi †kqvi‡nvìvi, MÖvnK, e¨vsKvi, BÝy¨‡iÝ †Kv¤úvbx, mieivnKvix, weGmBwm, wWGmB, wmwWweGj I Ab¨vb¨ cÖwZôv‡bi mn‡hvMxZv I Dc‡`‡ki Rb¨ abëv` Rvbvw”Q| ZvQvov †Kv¤úvbxi kªwgK, Kg©Pvix‡ì wbôv I HKvwšÍK Kg© DÏxcbvi Rb¨ m‡šÍvl cÖKvk Ges abëv` Rvbvw”Q|

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ANNEXURE –IThe Directors also report that:• Related Party Transactions are depicted in Note no.3.24 in the Notes of Account.• Remuneration of Directors including Independent Director have been shown in Note no.23.01 in the Notes of Account.• The Financial Statement of the Company present true and fair view of the Companyʼs 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 companyʼs ability to continue as a going concern.• Significant deviation from the operating result compared to the last year is depicted in page no 11• 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 2014-2015 were as follows:

Name of Directors Position Meeting Held Attended Didar A. Husain Chairman 07 03 A. Matin Chowdhury Managing Director 07 05 Dr. Shamim Matin Chowdhury Director 07 06 Saima Matin Chowdhury Director 07 04 Azizur Rahim Chowdhury Director 07 07 Dr. Sultan Hafeez Rahman Independent Director 07 06 Md. Qamrul Huda Independent Director 07 06

• The pattern of shareholding as required by clause 1.5 (xxi) of the BSEC Notification dated 07 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-IIPattern of Shareholding as on 30th June, 2015:Name of the Shareholders Status Shares held %i. Parent/Subsidiary/Associated Companies and other related parties Nil Nil Nilii. Directors: Didar A. Husain Chairman 656,034 18.91 A. Matin Chowdhury Managing Director 675,300 19.47 Dr. Shamim Matin Chowdhury Director 509,787 14.70 Saima Matin Chowdhury Director 695,979 20.06 Azizur Rahim Chowdhury Director 125,492 3.62 Dr. Sultan Hafeez Rahman Independent Director Nil Nil Md. Qamrul Huda Independent Director Nil Niliii. Chief Executive Officer, Chief Financial Officer, Company Secretary, Head of Internal Audit and their Spouses and Minor Childrens: A. Matin Chowdhury Chief Executive Officer 675,300 19.47 Mohammad Sakhawat Hossain Chief Financial Officer Nil Nil Syed Saiful Haque Company Secretary Nil Nil Md. Rakibul Islam Head of Internal Audit Nil Nil Shirin Didar Husain Wife of Mr. Didar A. Husain 105,053 3.03 Dr. Shamim Matin Chowdhury Wife of Mr. A. Matin Chowdhury 509,787 14.70iv. Executives Nil Nil Nilv. Shareholders holding 10% or more voting interest in the Company Didar A. Husain Chairman 656,034 18.91 A. Matin Chowdhury Managing Director 675,300 19.47 Dr. Shamim Matin Chowdhury Director 509,787 14.70 Saima Matin Chowdhury Director 695,979 20.06

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Annual Report 2015

ANNEXURE-IIIBrief Resume of the Directors

Directors who seek re-appointment:Dr. Shamim Matin Chowdhury:Dr. Shamim Matin Chowdhury is a Sponsor Director of the Company since 1981, wife of Mr. A. Matin Chowdhury. She has more than 34(thirty four) years experience in the textile sector. She completed M.B.B.S from Dhaka Medical College and postgraduate studies from the U.K. Mrs. Chowdhury is a famous Child and Adolescent Psychiatrist. She is the former Chief Consultant of Pabna Mental Hospital. She is also the Chairperson of Special Olympics in Bangladesh. She is the Director of Malek Spinning Mills Limited (listed company), Salek Textile Limited, Knit Asia Limited, J.M. Fabrics Limited, Hejaz Publications Limited, Fatehbagh Tea Company Limited and also the Managing Director of NewAsia Synthetics Limited. She is the Member of Audit Committee of Rahim Textile Mills Limited and Malek Spinning Mills Limited.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 Malek Spinning 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:Dr. Sultan Hafeez Rahman:Dr. Sultan Hafeez Rahman has nearly 40 years of professional experience, which span across the transport / communications, energy, financial (banking and capital markets), urban development, education, natural resources, environmental and agricultural sectors.He is currently the Executive Director of BRAC Institute of Governance and Development (BIGD), which has recently merged with the International Growth Centre (IGC), an institution backed by DFID and the London School of Economics and Political Science. Previously, Dr. Rahman served a 20-year tenure at the Asian Development Bank (ADB) from 1992 to 2012. He retired as Director General of the South Asia Department – ADBʼs largest department, which accounted for nearly 40% of ADBʼs total assistance operations at the time. He was also Director General of the Pacific Department from 2008 to 2009. Before joining the ADB, he worked as a Senior Research Fellow at the Bangladesh Institute of Development Studies (BIDS). He also served as a member of several high-level government, regional and international expert panels, task forces and committees, including the expert panels of the 3rd and 4th Five Year Plans of Bangladesh. He was also adviser/consultant to the Ministries of Jute, Industry and Commerce, and Finance and Planning, Government of Bangladesh. He served as member of the Board of Directors of Agrani Bank from 1988-91. Dr. Rahman holds a PhD in Economic Development from Stanford University, and an MSc in Economics from Vanderbilt University. He is a highly-respected economist and has published on a wide range of economic issues.

ANNEXURE-IVAUDIT COMMITTEE REPORT

For the Year 2014-2015Rahim Textile 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: Dr. Sultan Hafeez Rahman, Independent Director Chairman Dr. Shamim Matin Chowdhury, Director Member Mr. Azizur Rahim Chowdhury, Director Member Mr. Syed Saiful Haque, Company Secretary SecretaryThe 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 auditorsʼ 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 didnʼt find any material deviation, discrepancies or any adverse finding/observation in the areas of reporting.

Dr. Sultan Hafeez RahmanChairmanAudit CommitteeDate: 25th October, 2015.


ANNEXURE-V

CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE GOVERNANCE GUIDELINES

To the Members of Rahim Textile Mills Limited,We have examined the compliance of the conditions of corporate governance guidelines of the Bangladesh Securities and Exchange Commission (BSEC) of Rahim Textile Mills Limited for the year ended on 30th June, 2015 as stipulated in clause 7(i) of the BSEC Notification No. SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012.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 Rahim Textile Mills Limited. Our examination for the purpose of issuing this certification was limited to the checking the procedures and implementation thereof, adopted by Rahim Textile 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, Rahim Textile 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 Ramendra Nath Basak, FCA Dhaka Partner Shiraz Khan Basak & Co. Chartered Accountants

CEO & CFOʼs DECLARATION TO THE BOARD OF DIRECTORS

The Board of DirectorsRahim Textile Mills Limited134, New Eskaton Road, Dhaka-1000.Subject: CEO & CFOʼs Declaration to the Board of Directors.Dear Sirs:In compliance with the condition no.6 imposed by the Bangladesh Securities and Exchange Commissionʼs Notification No. SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012 issued under Section 2CC of the Securities and Exchange Ordinance, 1969, we do hereby certify to the Board of Directors that;(i) We have reviewed the financial statements of the company for the year ended on 30th June 2015 and that to the best of

our knowledge and belief:(a) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might

be misleading;(b) these statements together present a true and fair view of the companyʼs affairs and are in compliance with existing

accounting standards and applicable laws.(ii) There are, to the best of knowledge and belief, no transactions entered into by the company during the year which are

fraudulent, illegal or violation of the companyʼs code of conduct.

Sincerely yours,

(Mohammad Sakhawat Hossain) (A. Matin Chowdhury) Chief Financial Officer Managing Director

Dated: 11th October, 2015Dhaka

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Annual Report 2015

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/2006-158/134/Admin/44 dated 07 August 2012.Condition No. Title Complied Not Complied Remarks (if any)

√

√ √ √

√

√

√ √

√

√

√ √ √

√

√

√√

N/A

√

√ √ √ √ √ √ N/A

N/A

√

√√√ √ √ √ √ √√ N/A√ √√ √ √

√

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 shares1.2 (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 companies1.2 (ii) d) Not a member, director or officer of any stock exchange1.2 (ii) e) Not a shareholder, director or officer of any member of stock exchange or an

intermediary of the capital market1.2 (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 firm1.2 (ii) g) Not be an independent director in more than 3 (three) listed companies1.2 (ii) h) Not been convicted by a court of competent jurisdiction as a defaulter in payment of

any loan to a bank or a NBFI1.2 (ii) i) Not been convicted for a criminal offence involving moral turpitude1.2 (iii) Appointed by the Board of Directors and approved by the shareholders in the AGM1.2 (iv) Not remain vacant for more than 90 (ninety) days1.2 (v) Board shall lay down a code of conduct of all Board members and annual compliance of

the code to be recorded1.2 (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 only1.3 Qualification of Independent Director (ID)1.3 (i) Knowledge of Independent Directors1.3 (ii) Background of Independent Directors1.3 (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 industry1.5 (ii) Segment-wise or product-wise performance 1.5 (iii) Risks and concerns1.5 (iv) Discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin1.5 (v) Discussion on continuity of any Extra-Ordinary gain or loss1.5 (vi) Basis for related party transactions1.5 (vii) Utilization of proceeds from public issues, rights issues and/or through any others1.5 (viii) Explanation if the financial results deteriorate after the company goes for IPO, RPO,

Rights Offer, Direct Listing1.5 (ix) Explanation about significant variance occurs between Quarterly Financial performance

and Annual Financial Statements1.5 (x) Remuneration to directors including independent directors1.5 (xi) Fairness of Financial Statements 1.5 (xii) Maintenance of proper books of accounts 1.5 (xiii) Adoption of appropriate accounting policies and estimates1.5 (xiv) Followed IAS, BAS, IFRS and BFRS in preparation of financial statements1.5 (xv) Soundness of internal control system1.5 (xvi) Ability to continue as a going concern1.5 (xvii) Significant deviations from the last yearʼs 1.5 (xviii) Key operating and financial data of at least preceding 5 (five) years1.5 (xix) Reasons for not declared dividend 1.5 (xx) Number of Board meetings held during the year and attendance1.5 (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) Executives1.5 (xxi) d) 10% or more voting interest 1.5 (xxii) Appointment/re-appointment of director:1.5(xxii) a) Resume of the director


Condition No. Title Complied Not Complied Remarks (if any)√ √ √√ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ N/A

√ √ √ √ √ √ √ √

√ √ √ √√ √ √ √√ N/A N/A N/A N/A N/A N/A √ √ √

√ √

1.5(xxii)b) Expertise in specific functional areas1.5(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 Directors3.0 Audit Committee: 3 (i) Constitution of Audit Committee 3 (ii) Assistance of the Audit Committee to Board of Directors3 (iii) Responsibility of the Audit Committee 3.1 Constitution of the Audit Committee:3.1 (i) At least 3(three) members3.1 (ii) Appointment of members of the Audit Committee3.1 (iii) Qualification of Audit Committee members 3.1 (iv) Term of Service of Audit Committee members3.1 (v) Secretary of the Audit Committee3.1 (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 AGM3.3 Role of Audit Committee:3.3 (i) Oversee the financial reporting process3.3 (ii) Monitor choice of accounting policies and principles3.3 (iii) Monitor Internal Control Risk management process3.3 (iv) Oversee hiring and performance of external auditors3.3 (v) Review the annual financial statements before submission to the board for approval3.3 (vi) Review the quarterly and half yearly financial statements before submission to the

board for approval3.3 (vii) Review the adequacy of internal audit function3.3 (viii) Review statement of significant related party transactions3.3 (ix) Review Management Letters/Letter of Internal Control weakness issued by statutory auditors3.3 (x) Disclosure about the uses/applications of funds raised by IPO/RPO/Rights Issue 3.4 Reporting of the Audit Committee:3.4.1 Reporting to the Board of Directors:3.4.1 (i) Activities of Audit Committee 3.4.1 (ii)a) Conflicts of interest3.4.1 (ii)b) Material defect in the internal control system3.4.1 (ii)c) Infringement of laws, rules and regulations3.4.1 (ii)d) Any other matter3.4.2 Reporting to the Authorities3.5 Reporting to the Shareholders and General Investors4 Engagement of External/Statutory Auditors:4 (i) Appraisal or valuation services or fairness opinions4 (ii) Financial information systems design and implementation4 (iii) Book-keeping4 (iv) Broker-dealer services4 (v) Actuarial services4 (vi) Internal audit services4 (vii) Services that the Audit Committee determines4 (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 Directors5 (ii) At least 1 (one) independent director to the subsidiary company 5 (iii) Submission of Minutes to the holding company5 (iv) Review of Minutes by the holding company5 (v) Review of Financial Statement by the audit committee of the holding company6 Duties of Chief Executive Officer and Chief Financial Officer:6 (i) a) Reviewed the materially untrue of the financial statement6 (i) b) Reviewed about compliance of the accounting standard6 (ii) Reviewed about fraudulent, illegal or violation of the companyʼs code of conduct7 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

21

Annual Report 2015

Malek Siddiqui Wali PHONE: OFF : +88029513471

CHARTERED ACCOUNTANTS RES: 8615256: 8622175 Partners: Md. Waliullah, FCA FAX: +88029516236

Swadesh Ranjan Saha, FCA Email: [email protected]

Md. Habibur Rahman Sarker, FCA 9-G, Motijheel C/A, 2nd Floor

Anjan Mallik, FCA Dhaka-1000, Bangladesh

AUDITORS’ REPORTto the shareholders of

Rahim Textile Mills Limited

We have audited the accompanying Statement of Financial Position of Rahim Textile Mills Limited as at 30th June 2015 and the related Statement of Comprehensive Income, Statement of Change 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 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 Malek Siddiqui WaliOctober 26, 2015 Chartered Accountants


RAHIM TEXTILE MILLS LIMITEDSTATEMENT OF FINANCIAL POSITION

AS AT 30TH JUNE, 2015 Figures in Taka Notes June 30,2015 June 30,2014 RestatedASSETS: Non Current Assets : 448,490,698 485,851,375Property Plant & Equipment 4 448,490,698 485,851,375 Current Assets: 175,853,303 224,802,260Inventories 5 49,008,794 68,283,198 Accounts Receivable 6 86,527,620 124,555,295Advances, Deposits & Pre-Payments 7 16,959,776 22,738,792 Cash & Bank Balances 8 23,357,113 9,224,974 TOTAL ASSETS 624,344,002 710,653,635

SHARE HOLDER'S EQUITY & LIABILITIES:Shareholder's Equity: 190,954,365 167,389,655Share Capital 9 34,684,650 27,527,500Retained Earnings 68,077,465 49,046,000 Revaluation Surplus of Fixed Assets 10 88,192,250 90,816,155 Non-Current Liabilities: 105,454,189 126,436,175Long Term Loan 11 88,894,890 109,256,054Deferred Tax Liabilities. 13 16,559,299 17,180,121

Current Liabilities: 327,935,448 416,827,806Accounts Payable 14 140,205,094 98,454,458Current Portion of Long Term Loan 15 30,734,684 75,820,884Short Term Loan From Bank 16 117,157,755 195,151,243Short Term Loan From Others 12 14,953,649 24,953,649Other Liabilities 17 11,107,030 10,126,550Provision for WPPF & WF 18 6,935,689 5,249,515Unclaim Dividend 19 1,135,691 1,050,150Provision for Income Tax 20 5,705,855 6,021,359 TOTAL SHARE HOLDER'S EQUITY & LIABILITIES: 624,344,002 710,653,635

Net Asset Value (NAV ) 55.05 60.81Par Value Tk.10

The annexed notes are integral part of these financial statement. These financial statements were approved by the Board of Directors on October 26,2015 and were signed on it's behalf by.

Syed Saiful Haque Mohammad Sakhawat Hossain Azizur Rahim Chowdhury A. Matin Chowdhury Company Secretary Chief Financial Officer Director Managing Director

Signed in terms of our separate report of even date annexed.

Dhaka Malek Siddiqui Wali October 26, 2015 Chartered Accountants

23

Annual Report 2015

RAHIM TEXTILE MILLS LIMITEDSTATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED JUNE 30, 2015 Figures in Taka

Particulars Notes June 30,2015 June 30,2014

Turnover 21 598,621,652 575,292,598Cost of Goods Sold 22 506,311,834 505,082,052

Gross Profit 92,309,818 70,210,546

Operating Expenses: Administrative & Selling Expenses 23 26,517,063 22,607,582

Operating Profit before Financial Expenses 65,792,755 47,602,963Financial Expenses 24 30,501,381 32,927,640

Operating Profit 35,291,374 14,675,323Non Operating Income 25 118,287 13,746,612Net Profit before WPPF & WF 35,409,661 28,421,936

Provision for Contribution to WPPF & WF 26 1,686,174 1,353,426

Net Profit / (Loss) for the year 33,723,487 27,068,510

Provision For Tax 10,158,777 3,888,410Current Tax 27 5,705,855 2,725,328Prior years tax 5,073,744 - Deferred Tax 28 (620,822) 1,163,082

Net Profit / (Loss) for the year after tax 23,564,710 23,180,100 ( Transferred to the Statement of Change in Equity)

Earning per share (Restated in 2014). 30 6.79 6.68Par Value Tk.10

Number of shares used to compute EPS 3,468,465 3,468,465

The annexed notes are integral part of these financial statement.These financial statements were approved by the Board of Directors on October 26,2015 and were signed on its behalf by





RAHIM TEXTILE MILLS LTD.STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED JUNE 30, 2015

Figures in Taka

Particulars Share Capital Revaluation Surplus Retained Earnings Total of Fixed Assets As at July 1, 2014 27,527,500 90,816,155 49,046,000 167,389,655Net Profit this year - - 23,564,710 23,564,710 Stock Dividend 7,157,150 (7,157,150) - Transfer to Retained Earnings (2,623,905) 2,623,905 - As at June 30, 2015 34,684,650 88,192,250 68,077,465 190,954,365

STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED JUNE 30, 2014

Restated Particulars Share Capital Revaluation Surplus Retained Earnings Total of Fixed AssetsAs at July 1, 2013 22,022,000 106,692,435 27,309,191 156,023,626Prior Year adjustments (Note-29) (11,814,071) (11,814,071)Restated Balance 22,022,000 94,878,364 27,309,191 144,209,555Net Profit this year - 23,180,100 23,180,100Stock Dividend 5,505,500 (5,505,500) -Transfer to Retained Earnings (2,835,118) 2,835,118 -Transfer to Gain/ ( Loss) assets (1,227,091) 1,227,091 -As at June 30, 2014 27,527,500 90,816,155 49,046,000 167,389,655 The annexed notes are integral part of these financial statement.These financial statements were approved by the Board of Directors on October 26,2015 and were signed on its behalf by




Annual Report 2015

25

RAHIM TEXTILE MILLS LIMITEDSTATEMENT OF CASH FLOWS

FOR THE YEAR ENDED JUNE 30, 2015

Figures in Taka June 30,2015 June 30,2014I. CASH FLOW FROM OPERATING ACTIVITIES Collections from turnover, bills receivable and other receipts. 636,767,614 516,556,665 Payment for purchase of raw materials, accessories, creditors and other expenses (543,505,721) (461,146,106) Net cash generated from operating activities 93,261,893 55,410,559

II. CASH FLOW FROM INVESTING ACTIVITIES

Acquisition of fixed assets (3,767,931) (119,793,950)Disposal of Fixed Assets - 36,562,760Net cash used in investing activities (3,767,931) (83,231,190)

III. CASH FLOW FROM FINANCING ACTIVITIES Loan received/(repayment) from Bank Short term (65,447,363) 37,804,102Loan received/(repayment) from Directors (10,000,000) (6,209,320)Sale of Faction share against stock dividend 236,738 85,102Dividend Paid (151,197) (64,480)Net cash generated from financing activities (75,361,823) 31,615,405 Net Cash Inflow / ( Outflow ) { I + II + III } 14,132,139 3,794,774 CASH & CASH EQUIVALENTS AS AT JULY 01, 2014 9,224,974 5,430,199CASH & CASH EQUIVALENTS AS AT JUNE 30, 2015 23,357,113 9,224,974

Net Operating Cash Flow Per Share ( NOCFPS ) 26.89 20.13Par Value Tk.10

The annexed notes are integral part of these financial statement. These financial statements were approved by the Board of Directors on October 26,2015 and were signed on it's behalf by.





RAHIM TEXTILE MILLS LIMITEDNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015

1.0 Significant Accounting Policies And Relevant Information:1.1 Legal form of the enterprise: Rahim Textile Mills Limited (RTML) was incorporated as a Private Limited Company on 31st December 1981, under the

Companies Act 1913 (Repealed in 1994) with Registered of Joint Stock Companies and Firms, Bangladesh bearing Certificate of Incorporation # C - 9702/528 of December 31, 1981. Subsequently the company was converted into Public Limited Company in the year of 1988. The Company was listed in the Dhaka Stock Exchange Limited on 29th March 1988.

1.2 Address of registered office & factory: The Registered office of the company is situated at 134, New Eskaton Road, Dhaka-1000 and its factory office is located at

Shafipur,Kaliakair, Gazipur, Bangladesh.1.3 Nature of business activities: Rahim Textile Mills Limited is a 100% export-oriented industry of textile sector engaged in dyeing, printing & finishing fabrics. The

company has pioneered the printing of knit and others fabrics. Our fabric product in the factory is Oeko-Tex @ Standard 100, Class 1 certified. Our major customer includes H&M, C&A, SANSBURY, MATALAN,/GOODMAN, AVON, LINDEX, S.OLIVER, COTTON: ON, AEROPOSTALE MODISTE, ALDI(Aus), CARREFOUR etc.

2.0 Basis of Preparation:2.1 Statement of compliance: The financial statements of the company under reporting have been prepared under historical cost convention other than land

& building which stated at revalued amount as 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, International Accounting Standards (IAS) so far adopted by the Institute of Chartered Accountants of Bangladesh (ICAB) as Bangladesh Accounting Standard (BAS), Bangladesh Financial Reporting Standard (BFRS) and other applicable laws and regulations.

2.2 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) and completion with the requirement of Bangladesh Security Exchange Commission rules 1987 and International Accounting Standards (IAS).

2.3 Reporting period: Financial statements of the company cover the period from 01 July 2014 to 30 June 2015.2.4 Components of the financial statements: Financial Statements includes the following components in accordance with the Bangladesh Accounting Standard BAS-1

“Presentation of Financial Statements” the complete set of: i) Statement of Financial Position as on 30 June 2015; ii) Statement of Comprehensive Income for the year ended 30 June 2015; iii) Statement of Changes in Equity for the year ended 30 June 2015; iv) Statement of Cash Flows for the year ended 30 June 2015; v) Accounting Policies and Explanatory Notes.2.5 Comparative information: Comparative information has been provided in accordance with in respect of the year 2013-14 for all numerical information in

the financial statements and also the narrative and descriptive information when it is relevant for understanding of the current period's financial statement.

Figures of the year 2013-14 have been rearranged whenever considered necessary to restated ensure comparability or in accordance with International Accounting Standards (IAS).

2.6 Reporting currency and level of precision: The figures in the financial statements are represents in Bangladesh currency (Taka) which has been rounded off to the nearest

Bangladeshi Taka.2.7 Foreign currency translation: Transactions in foreign currencies are translated into Bangladeshi Taka at the exchange rate prevailing on the date of transactions

in accordance with BAS- 21 "The Effects of Changes in Foreign Exchange Rate." Foreign Currency balance have been translated into taka at prevailing rate of cutoff date and the difference between translation value or realization value and initial recognition is recognized in the face in statement of comprehensive income .

2.8 Statement of cash flows: Statement of Cash Flows is prepared principally in accordance with BAS-7 "Cash Flow Statement" and the cash flows from operating

activities have been presented under direct method as required by the Securities and Exchange Rules 1987 and considering the provisions that "Enterprises are Encouraged to Report Cash Flow From Operating Activities Using the Direct Method".

2.9 Net Asset Value (NAV) per share: This has been calculated on the basis of available net worth. However, current year's NAV is also calculated considering the

revaluation surplus of revalued assets.2.10 Earning per share (EPS): The company calculates earning per share (EPS) are according with BAS 33 "Earning per Share" which has been shown on face of

profit and loss account and computation is stated in accounts. This has been arrived at on the basis of profit attributable ordinary shareholder divided by weighted average no of shares.

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Annual Report 2015

2.11 Risk and uncertainties for use of estimates in preparation of Financial Statement: The Preparation of Financial Statement is Conformity with, the International Accounting Standards requires management to

make estimates and assumption that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of effects Financial Statements and revenues and expenses during the period reported. Actual results could differ from those estimates. Estimates are used for, accounting of certain items such as long term contract, provision for doubtful accounts, depreciation and amortization, employees benefit plans, taxes, reserve and contingencies.

2.12 Compliance with local laws: The financial statements have been prepared in compliance with the requirements of the Companies Act 1994, Securities and

Exchange Rules 1987 and other relevant local laws and rules.2.13 Compliance with International Accounting Standard (IAS): The financial statements have been prepared in compliance with requirements of BAS's adopted by the institute of Chartered

Accountants of Bangladesh (ICAB) and applicable in Bangladesh.2.14 Taxation: The tax holiday period of the company has expired on June 30, 1994: The Corporate tax rate for textile sector is 15% as per

financial act 2015-16 SRO # 193-Law/ITO/2015 U/S-44 Sub-section (4) Clouse (b). Provision was made and calculated on the above basis which is adequate under income tax ordinance 1984.

3.00 SIGNIFICANT ACCOUNTING POLICIES:

3.01 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". The previous year's figures were presented following the same accounting principles.

3.02 Recognition of property, plant and equipment and depreciation: Fixed assets are stated at their historical cost less accumulated depreciation in accordance with BAS-16 "Property, Plant and

Equipment". Cost represents cost of acquisition or construction and includes purchase price and other directly attributable cost of bringing the assets to working conditions for its intended use.

Depreciation has been charged on assets including particular revalued assets, where applicable, at the rates varying from 10% to 15% applying reducing balance method irrespective which is allocated to Cost of Goods Sold and Administrative Overhead proportionately. No depreciation was charged on land and land development.

Impairment losses/gains of assets are not provided, as these have been performing as per intended use of such assets assessed by the management. The annual depreciation rates are applied on principal category of assets as below:

Category of fixed assets Rate Category of fixed assets Rate Factory Structures, Sheds and Buildings, Go-down & ware house 10% Office Equipment’s 15% Plant and Machinery 10% Motor Vehicles 15% Electrical Installation 15% Furniture and Fixtures 10% Gas Line Installation 15% Cookeries & Cutleries 15% Generator 15% Tools and Equipment/ Loose Tools 15% Air Cooler & Celling Fan Equipment. 15% Water Tank Reservoir & Tube well & Water Pump 15%3.03 Revaluation of fixed assets: The Company has revalued fixed assets, viz. land, building and construction and machinery which have been included in the

balance sheet being revalued depreciated value. It is relevant to note that some assets were revalued in June 30, 2007 by M/S. Asian Surveyors Limited.

3.04 Inventories: Inventories comprise of Raw Materials, Dyes and Chemical, Grey Fabrics, Spare parts, Work in Progress and WIP Finished stage.

They are stated at the lower of cost or net realizable value in accordance with the Para 21 and 25 of BAS-2 " Inventories" after making due allowance for any obsolete or slow moving item. The cost of inventories is assigned by using average cost.Net realizable value is determined after deducting the estimated cost of completion and or cost to be incurred for the sale from sales price.

3.05 Accounts receivables: These are carried at original at invoice amount, trade& other receivables are unsecured and considered goods and collectible.3.06 Cash and cash equivalent: According to BAS-7 'Statement of Cash Flows' comprise of cash-in-hand and demand deposits and cash equivalents are short terms,

highly liquid investments that are readily convertible to know amounts of cash and which are subject to and insignificant risk of changes in value, 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- I, Cash in hand and Bank balances have been considered as cash and cash equivalents.

3.07 Reserve for revaluation of fixed assets: This has been created against revalued value of fixed assets, viz. land, building and construction and machinery and stated in the

statement of financial position being surplus of revalued value of aforesaid assets and its book value.3.08 Accounts payable: This has been recognized for the amounts to be paid in future for goods and services received, whether or not billed by the

suppliers.3.09 Others Liabilities: This has been recognized for amounts to be paid within short time for expenses and utilities services etc.3.10 Revenue from goods sold: The company recognizes revenue when a risk and renewal relating to sold goods has been transfer to buyer as well as when

satisfied all other conditions sets out in IAS-18 “Revenue Recognition”


3.11 Lease Finance In compliance with the BAS-17, Lease, Cost of assets acquired under finance lease along with related obligation has been

accounted for as assets and liabilities respectively of the company. It is relevant to note that we are continuing a lease agreement with United Lease Finance Ltd. for a vehicle purpose.

3.12 Bad and doubtful debts: No provision for bad and doubtful debt was made as the company's sales / export are based on 100% confirmed letter of credit

with fixed maturity date.3.13 Contribution to Workers' profit participation fund: The company made provision for worker's profit participation fund at 5% of the net profit before tax as per provision of the

complained profit and is payable to the workers as per law.3.14 Income tax provision: This has been recognized in the profit or loss account except to the extent that it relates directly to equity and income tax

provision is made in accordance with BAS-12 following the applicable tax rate 15 % for SRO No. 193-Law/Income Tax/2015 ITO-1984 textile sector industries in accordance with the provisions of Income Tax Ordinance 1984.

3.15 Deferred tax: The Company has calculated deferred tax assets/liabilities for the temporary difference of net assets of accounting and tax base.

On assets for the purpose of complying BAS requirement. But, it is neither assets nor liabilities so reflected in the statement of financial position for the year under audit. However, it is relevant to mention that tax deducted from export is final settlement of tax liabilities in accordance with particular Income Tax SROs for the time being in force unless any deviation in accounts attributable to section 19 or 30 of Income Tax Ordinance 1984.

3.16 Events after the reporting period: There is no significant event has been occurred for reporting for the period from cut-off date of financial year to the date of

signing of the financial statements.3.17 Basic Earnings: This represents earnings for the year attributable to ordinary shareholders. As there was no preference dividend, minority interest

of extra ordinary items, the net profit after tax for the year has been considered as fully attributable to the ordinary shareholders.3.18 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.3.19 Diluted earnings per share: No diluted EPS is required to be calculated for the year, as there was no scope for dilution during the year under review.3.20 General Comments & Observations: a. All shares have been fully called and paid up. There were no preference shares issued by the company. b. There was no bank guarantee issued by the company on behalf of their directors or the company itself except bank loan. c. The company has not incurred any foreign currency against royalties, technical fees etc. d. There was no sum for which the company contingently liable as on June 30, 2015. e. Auditors are paid only statutory audit fee approved by the shareholders in the last AGM. f. There were no foreign exchanges remitted to the relevant shareholders during the year under audit. g. There has no claim against the company not acknowledged as debit at the date of Financial Statement. h. No amount of money was expended by the company for compensating any number of the board of special service.3.21 Application of Bangladesh Accounting Standards (BAS): BAS-1 Presentation of Financial Statements Complied with BAS-2 Inventories Complied with BAS-7 Cash Flow Statements Complied with BAS-8 Net Profit or Loss for the Period ,Fundamental Errors and Accounting Policies, Changes in Accounting Estimates Complied with BAS-10 Events after the Reporting Period Complied with BAS-11 Construction, Contracts Complied with BAS-12 Income Taxes Complied with BAS-14 Segment Reporting N/A BAS-16 Property, Plant and Equipment Complied with BAS-17 Leases Complied with BAS-18 Revenue Complied with BAS-19 Employee Benefits Complied with BAS-21 The Effects of Changes in Foreign Exchange Rates Complied with BAS-23 Borrowing Costs Complied with BAS-24 Related Party Disclosures Complied with BAS-26 Accounting and Reporting by Retirement Benefit Plants Complied with BAS-27 Consolidated Financial Statement and Accounting for N/A BAS-28 Investment in Subsidiaries N/A BAS-32 Financial Instruments: Presentation N/A BAS-33 Earing Per Share Complied with BAS-36 Impairment of Assets Complied with BAS-37 Provisions, Contingent Liabilities and Contingent Assets Complied with BAS-38 Intangible Assets N/A BAS-39 Financial Instruments: Recognition and Measurement. N/A BAS-40 Investment Property N/A

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Annual Report 2015

3.22 Retirement Benefit: The Company has operated provident fund benefit to its employees.

3.23 Discloser as per requirement of schedule XI, part II of company act 1994

A. Discloser as per requirement of schedule XI, part II notes 5 of para 3 Number of Employees/Directors: The numbers of employees/Directors including their payments/perquisites range during the year are as follows:

Particulars Range (Tk.) No. of Employee

Remuneration 100,000.00-150,000.00 01Salary 0-14,999.00 69 15,000.00-29,999.00 66 30,000.00-59,999.00 23 60,000.00-99,999.00 10 100,000.00 above 04Wages 0-5,299.00 Nil 5,300.00-6,999.00 79 7,000.00-10,000.00 87 10,000.00 Above 84

B. Discloser as per requirement of schedule XL, part II para 7Capacity of industrial unit actual production shortfall and achievement are as follows:

Unit Installed Capacity Actual Production Short fall % of achievementDyeing, Printing & 265.20 220.20 45.00 83.03%Finishing unit(Yards in lac)

C. Discloser as per requirement of schedule XI, part II para-8Value of Dyes & Chemical, Spare parts, Packing Materials and Capital Machinery (BDT) :Particulars Local Purchase Import Total Purchase ConsumedGrey Fabrics 22,870,392.00 - 22,870,392.00 24,664,229.00Dyes & Chemical 119,105,893.00 124,053,278.00 243,159,171.00 253,783,744.00Printing, Design Materials & 14,281,103.00 17,771,397.00 32,052,500.00 37,083,408.00Spare Parts etc.

3.24 Related Party Transaction: In the period under review the company has transactions with related party in the normal course of business. The transaction

are as follows :Name of Sister Concern Accounts Receivable TransactionJ.M. Fabrics Limited 9,511,107.76 12,270,378.85Knit Asia Limited 19,167,497.58 35,914,525.93Salek Textile Limited 692,103.72 10,581,111.20

3.25 Approval of Financial Statements: The Board of Directors has approved these financial statements on October 26, 2015.

4.00 PROPERTY PLANT & EQUIPMENT ASSETS : Tk. 448,490,698

Details of Fixed Assets and Depreciation as on 30th June, 2015 are shown in the Schedule A-1 This is arrived at as follows:

COST: 30.06.2015 30.06.2014 Opening balance 705,446,226 628,106,057 Addition this year 3,844,760 119,793,950 Less: Sale/Adjustment 0 42,453,781 Closing balance 709,290,986 705,446,226 ACCUMULATED DEPRECIATION : Opening balance 322,225,077 302,490,424 Addition this year 38,581,530 40,298,142 Less: Sale/ Adjustment - 20,563,490 Closing balance 360,806,607 322,225,077

Written Down Value at Reporting Date 348,484,378 383,221,149


REVALUATION OF FIXED ASSETS :Opening balance 123,483,815 125,852,009Addition this year Less: Adjustment for this year on Revaluation - 2,368,194Written Down Value at Reporting Date 123,483,815 123,483,815Opening balance 20,853,590 19,159,574Addition this year 2,623,905 2,835,118Less: Adjustment for this year on Revaluation - 1,141,102Closing balance 23,477,495 20,853,590Written Down Value at Reporting Date: 100,006,320 102,630,226

a). The factory land was charged to the AB bank Ltd. and pariparsu agreement was also made with The City Bank Ltd.for same properties against bank loan facilities.

5.00 INVENTORIES: Tk. 49,008,794

The total amount is arrived as follows : 30.06.2015 30.06.2014

Dyes & Chemicals 5.01 25,322,070 35,946,643 Grey Fabric 5.02 10,042,118 11,835,955 Printing & Design Material 5.03 3,290,291 4,226,507 Spares & Accessories 5.03 5,278,381 9,373,073 Work in Process 5.04 578,000 573,855 Work in Process (Finished Stage) 5.05 4,497,934 6,327,165 Tk. 49,008,794 Tk. 68,283,198

5.01 Dyes & Chemicals: Items Quantity(kg) 30.06.15 Qty(kg) 30.06.14 Dyes 10,293,764 30,654 15,592,064 Chemicals 15,028,306 177,888 20,354,579 - 25,322,070 208,542 35,946,643 5.02 Grey Fabrics: Items Quantity(Yds) 30.06.15 Quantity 30.06.14 Grey Fabrics 64,788 10,042,118 140,904 11,835,955 5.03 Printing & Design Materials & Spares Accessories: Items 30.06.15 30.06.14 Printing & Design Materials 3,290,291 4,226,507 Spare Parts & Accessories 5,278,381 9,373,073 Tk. 8,568,672 TK. 13,599,5805.04 Work-In-Process: Items Quantity 30.06.15 Quantity 30.06.14 Work-In-Process 205,382 578,000 197,956 573,855 5.05 Work in Process (Finished Stage) Items Quantity( yds) 30.06.15 Quantity(yds) 30.06.14 Work in Process (Finished Stage) 102,631 4,497,934 397,595 6,327,165

- Physical counting of the stock was carried out by inventory team, consisting of auditor & management staff. - - Inventory at june 30,2015 are valued at lower of average cost and net realisable value- the inventories are collateralised against short term loan.

6.00 ACCOUNTS RECEIVABLE: 30.06.15 Tk. 86,527,620

- The above amount is receivable from debtors against confirm export L/C & credit sales. It considered as good. - Most of the balances have subsequently been realised. The Debtors have no securities except their personal securities and

Related parties Tk.29,370,709.06 & other parties Tk.57,156,910.94

7.00 ADVANCES, DEPOSITS & PREPAYMENTS: Tk. 16,959,776 This consists as follows: 7. (a), Security Deposit : 30.06.15 30.06.14 Security Deposit to CDBL 100,000 100,000 Security deposit to Titas Gas 2,962,437 2,962,437 Security deposit to FAX - 3,000 Security deposit to T & T - 2,300 Security deposit to Grameen Phone 5,616 5,616 Security deposit to REB 126,926 126,926 Total (A) : 3,194,979 3,200,279

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Annual Report 2015

7. (b), Deposits : Guarantee Margin 559,305 559,305 Security deposit to COD - 20,000 Security deposit DGDP (Army) 441,250 1,445,925 Total (B) : 1,000,555 2,025,230

7. (c), Advance & Prepayments : Advance Income Tax deducted at Source (i) 7,732,266 12,263,557 Advance for Local Purchse 107,965 191,056 Legal expenses to Barister Khurshid Alam 250,000 250,000 H M Monsur Ali Land Lord - 62,500 Hejaz Publications Ltd Land Lord 2,400,000 2,400,000 New Asia Ltd - 12,781 Mr Abdus Salam, Manager Estate - 106,467 Mr Karim, Land Officer 150,000 150,000 Payment to Drivers for fuel 20,000 15,000 Mr Monowarul Islam-Tax Advisor - 6,000 Mr Zahirul Haque-Security Incharges - 3,315 Riant Engineering - 65,000 Lease rent - ULC 56,681 99,939 Material in Transit 2,040,623 1,804,132 Machine in Transit 6,707 83,536 Total (C) : 12,764,242 17,513,283 Total (A+B+C) : 16,959,776 22,738,792

7. (c) i. Advance Income Tax deducted at Source : Opening balance 12,263,557 7,077,727 Add : Addition during this year 6,563,813 5,185,829 Total AIT at source 18,827,370 12,263,557 Less : Tax adjustment for FY-2012-13 & 2013-14 6,021,359 - 12,806,011 12,263,557 Less : Prior years AIT adjustment 5,073,744 - Advance Income Tax deducted at Source : 7,732,266 12,263,557

- Security deposit are made to statutory authorities and it will be realized when the service received from government authority will discontinue

- In the opinion of the Directors, all of the current assets , loans and advances have on the realisation in the ordinary course

of business , a value at least equal to the amount at which they are stated in the Balance sheet. - No amount is due by the associated undertakings.

8.00 CASH & BANK BALANCES: TK. 23,357,113 30.06.15 30.06.14 Cash in hand - (Head Office) 28,180 4,824 Cash in hand - Factory (Petty Cash) 54,640 48,176 Cash at Bank with Eastern Bank Ltd. - 264 Cash at Bank with IFIC Bank Ltd. 52,294 74,959 Cash at Bank with The City Bank Ltd -1101 (1,030,299) 2,130,127 Cash at Bank with The City Bank Ltd.-ERQ A/C -5121 3,504,539 442,774 Cash at Bank with The City Bank Ltd.-FBPAR A/C-1104 1,736,162 827,622 Cash at Bank with AB Bank Ltd.-254 13,128,558 814,433 Cash at Bank with AB Bank Ltd.-251 241 121,000 Cash at Bank with AB Bank Ltd.-001 10,007 310,158 Cash at Bank with AB Bank Ltd.-002 234,032 149,426 Cash at Bank with AB Bank Ltd.-003 350 1,856,823 Cash at Bank with AB Bank Ltd.-047 3,585,341 549,628 21,304,043 7,330,214 FDR for Bank Guarantee AB Bank Ltd - 200 2,053,069 1,894,760 23,357,113 9,224,974- Cash in hand was physically counted and found in order.- The Bank Balances were confirmed and reconciled with Bank statements and found in order. 9.00 SHARE CAPITAL : Tk. 34,684,650 a) Authorized Capital : As on 30.06.15 50,000,000 Ordinary Shares of Tk. 10/- each TK. 500,000,000 b) Issued, Called & Paid up Capital :Tk.34,684,650 3,468,465 Ordinary shares of Tk. 10/- each fully paid up Tk. 34,684,650


(i) Composition of Shareholding : As on 30.06.2015 As on 30-06-2014 No. of Share % No. of Share % Sponsors & Directors 2,662,592 76.76% 2,192,535 79.65% Government - 0.00% - 0.00% Institutions 93,373 2.69% 63,915 2.32% Foreign Investors - 0.00% - 0.00% General Investors /Public 712,500 20.55% 496,300 18.03% 3,468,465 100.00% 2,752,750 100.00% DETAILS OF SPONSORS & DIRECTORS SHARE CAPITAL ARE AS FOLLOWS : 30.06.15( in Tk.) 30.06.14( in Tk.) 01. A.Matin Chowdhury 6,753,000 5,359,530 02. Dr. Shamim Matin Chowdhury 5,097,870 4,045,930 03. Didar A. Husain 6,560,340 6,000,270 04. Saima Matin Chowdhury 6,959,790 5,523,650 05. Azizur Rahim Chowdhury 1,254,920 995,970 06. Dr. Sultan Hafeez Rahman ( Independent Director) - - 07. Md. Qamrul Huda ( Independent Director) - - Tk. 26,625,920 21,925,350 Details of the Share holding is given below: Holding Range No.of Holders No. of Share Percentage 1 - 50 942 38,669 1.11% 51-500 1,497 230,509 6.65% 501-5,000 185 214,301 6.18% 5,001-10,000 5 35,965 1.04% 10,001-20,000 2 36,602 1.06% 20,001-30,000 3 82,793 2.39% 30,001-40,000 - - 0.00% 40,001-50,000 - - 0.00% 50,001-100,000 1 61,981 1.79% 100,001-1,000,000 6 2,767,645 79.79% Total: 2,641 3,468,465 100.00%The number of share holding by Sponsors & Directors and others increased as on 30th June,2015 from that of 30th June, 2014 due to declaration and allotment of 26% Stock Dividend for the year of 2013-2014. 10.00 Revaluation Surplus of Fixed Assets : Tk. 88,192,250 30.06.2015 30.06.2014 Opening Balance 90,816,155 106,692,435 Less : Prior year adjustment (Note-29) - (11,814,071) Reatated Balance 90,816,155 94,878,364 Less: Adjustment of cost during the year - 2,368,194 90,816,155 92,510,170 Less: Addition of Depreciation during the year 2,623,905 2,835,118 88,192,250 89,675,052 Add: Adjustment of depreciation during the year - 1,141,102 Closing Balance 30.06.2015 88,192,250 90,816,155

Land,Building,Plant & Machinery were revalued on 30.07.2007 by M/S Asian Surveyors Ltd. 28 dilkhusha C/A, 12th floor,Suite No.1203,Dhaka-1000 a firm of professional valuers on the basis of present market price prevailing in the country.The valuation of land was assessed on the basis of market price prevailing in the locality, Valuation of Building were assessed on the basis of present construction cost, Present market value of plant & Machinery has been estimated on the bas is of devaluation of Bangladesh currency, inflation over the years, Increase of price level in international market.

11.00 LONG TERM LOAN : Tk. 88,894,890 The consists of the above head as follows: 30.06.2015 30.06.2014Long Term loan from AB Bank -TL-467 12,895,427 18,996,515Long Term loan from AB Bank -TL-468 105,456,031 96,883,910Long Term loan from The City Bank - 6211 - 56,142,431Long Term loan from The City Bank - 6201 - 10,915,567United Leasing Company Ltd. 1,278,116 2,138,515 119,629,574 185,076,938Less: Current portion of Long Term Loan [Note : 13] 30,734,684 75,820,884 88,894,890 109,256,054

a) The AB Bank's loan taken in 2012 & 2014 which will be liquidated within 2017 & 2019.b) The balances were reconciled and confirmed.

33

Annual Report 2015

12.00 SHORT TERM LOAN FROM OTHERS : Tk. 14,953,649 30.06.2015 30.06.2014Loan from Directors 14,953,649 24,953,649 14,953,649 24,953,649

Interest free un-secured loan received from Directors to meet the liquidity problem.

13.00 DEFERRED TAX LIABILITIES: 16,559,299 17,180,121 30.06.15 30.06.14Opening Balance restated (Notes-29) 17,180,121 16,017,039Provision this Year (620,822) 1,163,082 16,559,299 17,180,121 Tempurary Tempurary Accounts based Tax based Diff.2014-15 Diff..2013-14WDV of Fixed Assets 348,484,378 338,095,374 10,389,004 11,903,921Revaluation Surplus of Fixed Assets (without land) 100,006,320 - 100,006,320 102,630,226 Total 448,490,698 338,095,374 110,395,324 114,534,147 Deferred tax @ 15% 16,559,299 17,180,121

14.00 ACCOUNTS PAYABLE Tk. 140,205,094 Trade Creditors for supply of fabrics and chemicals are the regular suppliers of the Company and the amount are due on account. Most of the bills have been paid within 120 days.

15.00 CURRENT PORTION OF LONG TERM LOAN: Tk. 30,734,684 30.06.15 30.06.14 Long Term loan from AB Bank -TL-467 7,682,011 6,598,280 Long Term loan from AB Bank -TL-468 22,540,519 5,200,432 Long Term loan from The City Bank - 6211 - 47,849,327 Long Term loan from The City Bank - 6201 - 15,331,327 United Leasing Company Ltd 512,154 841,519 30,734,684 75,820,884

16.00 SHORT TERM LOAN FROM BANK Tk. 117,157,755 The consists of this head as follows: 30.06.15 30.06.14 Cash Credit Account (with AB Bank) - 000 (3,175) 17,446 Cash Credit Account (with City Bank) -6331 (720) 35,346 Deferred Liability UPAS (Foreign L/C with AB Bank ) - 2,648,000 Deferred Liability EDF(Foreign L/C with AB Bank ) 9,488,990 14,468,824 Deferred Liability (Local L/C with AB Bank ) 7,850,000 6,800,000 Deferred Liability (Local L/C with City Bank ) - 24,650,000 Deferred Liability (Foreign L/C with City Bank )-EDF 60,565,013 85,721,521 Inland Bill Purchase Loan A/C(with AB Bank) - 707 8,466,758 19,573,893 Inland Bill Purchase Loan A/C(with The City Bank) - 6551-USD - 16,680,213 Inland Bill Purchase Loan A/C(with The City Bank) - 9911-USD 30,790,890 Inland Bill Purchase Loan A/C(with The City Bank) - 6551 - 24,556,000 117,157,755 195,151,243 - Cash credit account with AB Bank & The City Bank Ltd. : - Now we are availing credit facility with term loan at AB Bank Ltd. & The City Bank Ltd. - All the balances were reconciled and confirmed. - Deferred Liability create against Foreign & Local import L/C. - Working capital loan are secured against total inventories & book debts. - All the above loans bears interest @14.50% p.a. to 12.75% p.a - Apart from the above, the company has availed Long Term loan facilities from AB Bank Ltd. 17.00 OTHER LIABILITIES : Tk. 11,107,030 The consists of this head as follows: 30.06.2015 30.06.2014 Directors Remuneration 85,000 85,000 Workers & Employees P.F. 94,409 67,854 Salary Payable 4,457,513 4,049,878 Wages Payable 2,972,913 2,616,029 Overtime Payable 461,148 1,205,472 Legal Fees - 44,860 Audit fees 57,500 57,500 Gas Charges 1,560,733 1,711,440 Utility Expenses 1,021,399 Office Rent 131,259 - Deduction of Tax & VAT at source 63,270 144,605 Employees PF Loan 35,065 36,104 Employees Income Tax Against Salary 72,412 39,954 Employer's PF Contribution 94,409 67,854 11,107,030 10,126,550


18.00 PROVISION FOR WPPF & WF: Tk. 6,935,689 30.06.2015 30.06.2014 Opening balance 5,249,515 3,896,089 Provided this year @ 5% 1,686,174 1,353,426 6,935,689 5,249,515

We observed that the above fund has not been paid to the beneficiaries / employees or invested outside the business for earning profit as specified in the companies Bangladesh sromo ain-2006.

19.00 UNCLAIM DIVIDEND : 30.06.15 30.06.14 Tk. 1,135,691 1,050,150

This is the amount which represents dividend warrant not presented to the bank for payment. 20.00 PROVISION FOR TAX: Tk. 5,705,855 30.06.15 30.06.14 Opening Balance 6,021,359 3,296,031 Income Tax for FY 2014-2015 5,705,855 2,725,328 11,727,214 6,021,359 Less.Adjustment for 2012-13 & 2013-14 6,021,359 - 5,705,855 6,021,359 21.00 TURNOVER : Tk. 598,621,652 22.00 COST OF GOODS SOLD : Tk. 506,311,834 Raw Material Consumed : Quanty. in Yards 30.06.15 % Consumption 30.06.14 Grey Fabrics (i) 24,664,229 7.82% 80,626,883 Dyes & Chemicals (ii) 253,783,744 80.43% 228,598,437 Printing & Design Materals(iii) 37,083,408 11.75% 14,821,374 315,531,380 100.00% 324,046,694 Direct Wages & Salaries including festival bonus 95,550,800 82,636,122 Factory Overhead (iv) 93,404,568 100,896,884 504,486,748 507,579,700 Add: Opening Work in Process 197,956 573,855 197,908 1,318,495 197,956 505,060,603 197,908 508,898,195 Less: Closing Work in process 205,382 578,000 197,956 573,855 COST OF PRODUCTION: 504,482,603 508,324,340 Add: Opening Work in Process (Finished Stage) 397,595 6,327,165 263,655 3,084,877 397,595 510,809,768 263,655 511,409,217 Less: Closing Work in process( Finished Stage) 102,631 4,497,934 397,595 6,327,165 506,311,834 505,082,052i) Grey Fabrics Consumed : Name of Products: Qty. (yards) 30.06.15 Qty. (yards) 30.06.2014 a) Opening Stock 140,904 11,835,955 547 82,050 b) Purchase During the year (A) 179,879 22,870,392 700,752 92,380,788 320,783 34,706,347 701,299 92,462,838 Less : Closing Stock 64,788 10,042,118 140,904 11,835,955 255,995 24,664,229 560,395 80,626,883ii) Dyes & Chemicals Consumed 30.06.2015 30.06.2014 a) Opening Stock 35,946,643 30,042,659 b) Purchase during the year (B) 243,159,171 234,502,421 279,105,814 264,545,080 Less : Closing Stock 25,322,070 35,946,643 Tk. 253,783,744 Tk. 228,598,437

iii) Printing & Design Materials, Spares & Accessories Consumed: 30.06.2015 30.06.2014 a) Opening Stock 13,599,580 9,764,463 b) Purchase during the year (C) 32,052,500 18,656,491 45,652,080 28,420,954 c) Less : Closing Stock 8,568,672 13,599,580 Tk. 37,083,408 Tk. 14,821,374A) Procurement / Supplied by Raw Materials: Fabrics: Yards US$ 30.06.2015 30.06.2014 Imported - - - - Local Purchase through BBL/C & Deferred L/C 179,879 - 22,870,392 92,380,788 179,879 - 22,870,392 92,380,788 Average Price Per Yard Imported - - Local Purchase 127.14 131.83(B) Dyes & Chemicals : 30.06.2015 30.06.2014 Imported 124,053,278 155,533,607 Local Purchase through Back to Back L/C 119,105,893 78,968,815 Tk. 243,159,171 Tk. 234,502,421

35

Annual Report 2015

(C) Printing & Design Material,Spares & Accessories: 30.06.2015 30.06.2014 Imported 17,771,397 10,032,920 Local Purchase 14,281,103 8,623,571 Tk. 32,052,500 Tk. 18,656,491IV. Factory Overhead : Tk. 93,404,568 30.06.2015 30.06.2014 Gas & Electric Charges 19,376,822 21,005,447 Insurance Premium 1,505,608 1,660,456 Uniform & Liveries 119,975 432,580 Repairs & Maintenance 20,532,304 20,624,847 Telephone Charges 391,962 408,239 Packing Expenses 759,630 3,382,930 Travelling & Conveyance 1,233,330 1,059,237 Fuel Lubricant 4,544,121 4,872,649 Medical expenses 70,222 755,761 Contribution to P.F. 784,757 486,170 Entertainment 273,792 325,295 Stationery 497,115 591,542 Newspaper & Periodicals 6,940 6,910 Testing Charges 82,825 89,704 Rent, Rates & Taxes 171,403 90,000 Design & Printing Expenses 270,049 496,498 Food & Refreshment Expenses for Staff & Workers. 2,206,114 2,068,428 Lab Expenses 346,440 183,605 Loading & Unloading Exp. 235,972 306,850 Fire Fighting Material 73,015 234,406 Depreciation 39,922,172 41,815,330 Tk. 93,404,568 Tk. 100,896,884 23.00 ADMINISTRATIVE & SELLING EXPENSES: Tk. 26,517,063 30.06.2015 30.06.2014 Director's Remuneration - 23.01 1,200,000 1,200,000 Salary & Allowances 10,742,535 9,283,584 Festival Bonus 911,824 722,150 Printing 120,750 340,540 Stationery 277,537 294,049 Advertisement 659,995 364,628 Insurance Premium 181,039 267,031 Telephone & Fax Charges 267,804 239,656 Travelling & Conveyance 1,513,801 1,329,752 Fees, Forms & Stamps 1,097,298 1,294,850 Donation & Subscription 60,000 60,000 Selling & Distribution Expenses 5,431,710 3,431,976 Training Expenses 42,000 24,000 Postage & Telegram 22,509 22,876 Repairs & Maintenance 375,349 393,899 Head Office Rent 1,553,528 1,209,505 Annual General Meeting Expenses 135,960 228,524 Entertainment 35,842 60,108 Contribution to P.F. 216,088 173,203 Audit Fees 57,500 57,500 Software Servicing Charges 88,306 124,410 Food & Refreshment Expenses for Staff 242,424 167,412 Depreciation 1,283,263 1,317,930 Tk. 26,517,063 Tk. 22,607,58223.01 Directors Remuneration: Mr.Didar A.Husain, Director Tk. 1,200,000 1,200,000 Dr. Sultan Hafeez Rahman,Independent Director Nill Nill Md. Qamrul Huda ,Independent Director Nill Nill Total Tk. 1,200,000 1,200,000 Salary & Allowance increase due to increment . Selling & Distribution expenses increase due to economic use. 24.00 Financial Expenses: The break-up of the above amount is as follows : Tk. 30,501,381 30.06.2015 30.06.2014 Interest on Commercial Bank Loan & Overdraft 29,764,704 32,116,157 Interest on Lease Finance 252,353 340,646 Bank Charges & Commission 484,325 470,837 30,501,381 32,927,640- Interest decrease due to repayment of loan.

RAHIM TEXTILE MILLS LIMITED 36RAHIM TEXTILE MILLS LIMITED 36

25.00 NON OPERATING INCOME : Tk. 118,287 30.06.2015 30.06.2014 Gain/Loss on disposal of Fixed Assets - 25.01 - 13,471,392 Other Income - 25.02 118,287 275,221 118,287 13,746,612 25.01 GAIN/( LOSS ) ON DISPOSAL OF FIXED ASSETS: Tk. - The break-up of the above amount is as follows : 30.06.2015 30.06.2014 Gain on sale of machinery - 13,460,078 Gain on sale of motor vehicles - 11,314 - 13,471,392 25.02 OTHER INCOME: Tk. 118,287 The consists of this head as follows: 30.06.2015 30.06.14 Interest received on FDR 177,010 209,666 Gain on Foreign Currency Exchange rate (58,723) 65,555 Tk. 118,287 Tk. 275,221 26.00 CONTRIBUTION TO WPPF & WF Tk. 1,686,174 30.06.2015 30.06.14 Contribution this year @ 5% 1,686,174 1,353,426 1,686,174 1,353,426 27.00 INCOME TAX PROVISION (CURRENT TAX) Tk. 5,705,855 Amount 30.06.2015 Amount 30.06.2014 Operating Profit 35,291,374 14,675,323 Less : Provision for Contribution to WPPF & WF 1,686,174 1,353,426 Net Profit / (Loss) for the year 33,605,200 13,321,897 Add : Depreciation during this year as per accounts based 41,205,435 43,133,260 74,810,635 56,455,157Less : Depreciation during this year as per Tax based 37,066,619 38,670,691 On Operating Income @ 15% 37,744,016 5,661,602 17,784,466 2,667,670 On Non-Operating Income: Profit on Sale of Assets @ nil rate% - - 13,471,392 - Other Income @ 25% 177,010 44,253 57,658 57,658 37,921,026 5,705,855 31,313,516 2,725,328 28.00 INCOME TAX PROVISION (DEFERRED TAX): Tk. (620,822) Opening Balance 17,180,121 16,017,039 Closing Balance 16,559,299 17,180,121 Addition/(Adjustment) during this year (620,822) 1,163,082

29.00 RESTATEMENT OF FINANCIAL STATEMENT : The company previously did not recognize the deferred tax on revaluation surplus of land. For more compliance with Accounting Standard the company is going to recognize 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 of land : 30.06.2014 30.06.2013 Opening balance (as present in last years financial statements) 102,630,226 106,692,435 Deferred tax @ 15% 11,814,071 11,814,071 Restated opening balance 90,816,155 94,878,364 Deferred Tax (Assets)/Liability : 5,366,050 4,202,968 Revaluation surplus of land. 11,814,071 11,814,071 Restated opening balance 17,180,121 16,017,039

30.00 EARNINGS PER SHARE (EPS): Tk. 6.79 6.68 30.06.15 30.06.14 a. Net Profit/ ( Loss) after Tax for this year 23,564,710 23,180,100 b. Total Number of Share 3,468,465 3,468,465 Earning per share (Restated in 2014). 679 6.68

31.00 RELATED PARTIES TRANSACTION : In the period under review the company has transctions with related party in the normal course of business. The transaction are as follows: Name of Sister Concern Accounts Receivable Transaction J.M Fabrics Limited 9,511,107.76 12,270,378.85 Knit Asia Limited 19,167,497.58 35,914,525.93 Salek Textile Limited 692,103.72 10,581,111.20

37

Annual Report 2015

RAHIM TEXTILE MILLS LIMITEDFIXED ASSETS SCHEDULE AS ON JUNE 30, 2015

Schedule -A-1 Sl. COST DEPRECIATION Written down Written downNo. Name of Assets Balance as Addition Adjustment Total as on Rate Balances as Charges Adjustment Total as on value as on value as on on 01.07.14 During the During the 30.06.15 (%) on 01.07.14 During the During the 30.06.15 30.06.15 30.06.14 Year Year Year Year 1 Land & Land Development 14,345,373 - 14,345,373 - 0 - 14,345,373 14,345,3732 Factory Building 119,183,504 - - 119,183,504 10 61,420,590 5,776,291 67,196,881 51,986,623 57,762,9143 Plant & Machinery 498,935,656 2,537,886 - 501,473,542 10 214,957,245 28,651,630 - 243,608,875 257,864,667 283,978,4114 Office Building 465,320 - 465,320 10 437,502 2,782 440,284 25,036 27,8185 Godown / Ware House 2,417,477 - 2,417,477 10 761,989 165,549 927,538 1,489,939 1,655,4886 Tubewell & Water Pump 5,445,170 - 5,445,170 15 3,725,159 258,002 3,983,161 1,462,009 1,720,0117 Electric Installation 17,688,521 - 17,688,521 15 11,842,830 876,854 12,719,684 4,968,838 5,845,6918 Furniture & Fixtures 1,431,011 94,343 1,525,354 10 956,870 56,848 1,013,718 511,636 474,1419 Crokeries & Cutleries 83,506 - 83,506 15 51,022 4,873 55,895 27,611 32,48410 Air Cooler & Celling Fan 1,983,688 544,480 2,528,168 15 1,261,823 189,952 1,451,775 1,076,393 721,86511 Office Equipments 3,277,557 460,051 3,737,608 15 2,057,200 252,061 2,309,261 1,428,347 1,220,35712 Loose Tools & Equip. 1,341,128 208,000 1,549,128 15 962,179 88,042 1,050,221 498,907 378,94913 Gas Line Installation 1,476,783 1,476,783 15 842,553 95,135 937,688 539,096 634,23014 Boundary Wall 2,155,312 - 2,155,312 15 1,552,864 90,367 1,643,231 512,081 602,44815 Other Machine & Equip. 3,329,014 - 3,329,014 15 2,303,917 153,765 2,457,682 871,333 1,025,09716 Generator 20,431,739 - 20,431,739 15 14,504,233 889,126 15,393,359 5,038,380 5,927,50617 Water Tank Reservoir 951,779 - 951,779 15 579,106 55,901 635,007 316,772 372,67418 Motor Vehicles 10,503,687 - - 10,503,687 15 4,007,995 974,354 - 4,982,349 5,521,338 6,495,692 Sub Total Tk. 705,446,226 3,844,760 0 709,290,986 322,225,077 38,581,530 - 360,806,607 348,484,378 383,221,149

REVALUATED FIXED ASSETS SCHEDULE AS ON JUNE 30, 2015

Schedule -A-2 Sl. COST DEPRECIATION Written down Written downNo. Name of Assets Revalued Addition Adjustment Total as on Rate Balances as Charges Adjustment Total as on value as on value as on assets as on During the During the 30.06.15 (%) on 01.07.14 During the During the 30.06.15 30.06.15 30.06.14 01.07.14 Year Year Year Year 1 Land & Land Development 78,760,479 78,760,479 - 0 - - 78,760,479 78,760,4792 Factory Building 18,710,765 18,710,765 10 8,767,097 994,367 9,761,464 8,949,301 9,943,6683 Plant & Machinery 16,571,539 - - 16,571,539 10 7,384,070 918,747 - 8,302,817 8,268,722 9,187,4694 Boundary Wall 6,035,141 6,035,141 15 3,006,005 454,370 3,460,375 2,574,766 3,029,1375 Tubewell & Water Pump 3,405,891 3,405,891 15 1,696,418 256,421 1,952,839 1,453,052 1,709,473 Sub Total Tk. 123,483,815 0 0 123,483,815 20,853,590 2,623,905 - 23,477,495 100,006,320 102,630,226 Grand Total Tk. 828,930,041 3,844,760 0 832,774,801 0 343,078,667 41,205,435 0 384,284,102 448,490,698 485,851,375 Depreciation charged to : Amount Amount a) i) A i)Depreciation of cost of Fixed Assets charged to cost of production 37,298,267 ii) A ii)Depreciation of cost of Revalued Assets charged to cost of production 2,623,905 39,922,172 b) B )Depreciation of cost of Fixed Assets charged to Profit & Loss A/C 1,283,263 41,205,435

39

Annual Report 2015--

Rahim Textile Mills LimitedRegistered Office: 134 New Eskaton Road, Dhaka-1000, Bangladesh

Corporate & Share Office: Mehnaj Monsur Tower, House # 11A, Road # 130Gulshan-1, Dhaka

PROXY FORM

I/We -----------------------------------------------------------------------------------------------------------------------------------------------------

of --------------------------------------------------------------------------------------------------------------------------------------------------------

being a shareholder(s) of Rahim Textile Mills Limited and a holder of ----------------------------------------------------------------------- shares

hereby appoint Mr/Mrs/Miss ----------------------------------------------------------------------------------------------------------------------------

of --------------------------------------------------------------------------------------------------------------------------------------------------------as my/our proxy to attend and vote on my/our behalf at the 34th Annual General Meeting of the Company to be held on Sunday, December 27, 2015 at 9.00 a.m. at Trust Milonayaton, 545, Puraton Biman Bandar Sarak (Adjacent to Shahid Bir Shresta Jahangir Gate), Dhaka Cantonment, Dhaka-1206 and at any adjournment thereof.

Signed this -------------------- day of December, 2015 Afix Revenue

Stamp

Signature of shareholder(s)--------------------------------- Signature of Proxy-----------------------------

Name of shareholder (s) --------------------------------- Name of Proxy --------------------------------Folio/BO ID No. Folio/BO ID No. of Proxy (if any):

Note: A member entitled to attend and vote at the Annual General Meeting may appoint proxy to attend and vote in his/her stead. The proxy from should reach the Corporate & Share Office of the Company not less than 48 hours before the time fixed for the meeting.

----------------------------------------------------------------------------------------------------------------------------------------------------------

Rahim Textile Mills LimitedRegistered Office: 134 New Eskaton Road, Dhaka-1000, Bangladesh

Corporate & Share Office: Mehnaj Monsur Tower, House # 11A, Road # 130Gulshan-1, Dhaka

Attendance Slip

I hereby record my attendance at the 34th Annual General Meeting of Rahim Textile Mills Limited being held today, the December 27, 2015 at 9.00 a.m. at Trust Milonayaton, 545, Puraton Biman Bandar Sarak (Adjacent to Shahid Bir Shresta Jahangir Gate), Dhaka Cantonment, Dhaka-1206 as a holder of --------------------------------------shares of the Company.

Signature of Shareholder/Proxy -------------------------------------------------------

Name of Shareholder/Proxy -------------------------------------------------------

Folio/BO ID No.

NOTE: Shareholder (s) attending the meeting in person or by proxy are requested to complete the Attendance Slip and hand it over at the entrance of the meeting hall.

Registered Office: 134, New Eskaton Road, Dhaka-1000

Head Office & Share Office: Mehnaj Monsur Tower, House #11A, Road #130

Gulshan-1, Dhaka-1212Factory:

Shafipur, Kaliakoir, GazipurTel: +880-2-8832771-82, 8816128, Fax: 880-2-8828953

E-mail: [email protected], Website: www.rahimtextile.com

rahim textile mills ltd. · member of the board of directors of agrani bank and ... bank limited...

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