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Contents
Board of Directors & Corporate Information
Mission Statement
Notice of the 29th Annual General Meeting
Five Years Statistics
Report of the Board of Directors
Audit Committee Report to the Shareholders
Certificate on Compliance of Corporate Governance

1
2
3
4
5
14

Corporate Governance Compliance Report

16

Auditor's Report to the Shareholders

18

15

Audited Financial Statements


19
Proxy Form 39

T$


sm

Chairman

Managing Director

Professor Mohammad Abdul Momen


Directors

Mr. Mohammad Abdul Moyeed


: Professor (Dr.) Muhammad Abdul Moyeen
Ms. Ruhey Rawa
Ms. Sumbal Azwad Momen
Ms. Sana Kainat Moyeen

Independent Directors: Professor Mushtaque Ahmed


Mr. Mohammad Kabiruzzaman

Company Secretary

: Md. Wall Ullah

Auditors

: ATA KHAN & Co.


Chartered Accountants
67, Motij heel C/A
Dhaka-1000

Bankers AB Bank Limited


:
Trust Bank Limited
Mutual Trust Bank Limited
The Honkong and Shanghai Banking Corporation Ltd.
Share & Corporate Office

Green Deluxe (2nd Floor)


House # 67/D, Road # 11
Block # E, Banani, Dhaka-1 213
Tel: 8826846, 8828911, 8811574, 9893747
Fax: (8802) 8811574

Operational Office & Factory

4, Karnapara (Near Bank Town)


Savar, Dhaka
Tel: (8802) 7748694 - 96
Fax: (8802) 7745819

,!$
.9

Annual Report 2013

MISSION
Be a caring company through enriching customer experiences
by providing innovative solutions & process excellence.

VISION
Be an industry thought leader.

Annual Report 201

Notice of the 29th Annual General Meeting


Notice is hereby given that the 291h Annual General Meeting of the Shareholders of H.R. Textile
Mills Limited will be held on Monday, 21St April 2014, at Trust Milonayaton, 545 Old Airport Road,
Dhaka Cantonment, Dhaka-1 206 at 10:00 am., to transact the following business:

Agenda
1. Confirmation of the minutes of the 28' Annual General Meeting of the Shareholders held on
9th April 2013.
2. To receive, consider and adopt the Directors Report and the Audited Financial Statements
for the year ended 30th September 2013 together with the Auditors report thereon.
3. To declare dividend for the year ended 30' September 2013 as recommended by the Board
of Directors.
4. To elect Directors in place of retiring Directors.
S. To approve appointment of the Independent Director
6. To appoint auditors for the year 2014 and to fix their remuneration.
7. To transact any other business on the company with the permission of the Chair.
By Order of the Board

Date: 29/01/2014

0^pw

Md. Wali Uilah


Company Secretary

Notes
a.
b.
C.

Shareholders whose names appeared in CDS/Company's Register on the Record date of 20th February 2014 will be
eligible to attend the meeting and will be entitled for dividend for the year ended 30th September 2013.
Member entitled to attend and vote at the annual general meeting may appoint a Proxy to attend and vote on
his/her behalf. The proxy form must be affixed with requisite revenue stamp and must be submitted to the
Corporate Office of the company not less than 48 hours before the time fixed for the annual general meeting.
For smooth conduct of the meeting, members having queries on the audited accounts or on the Directors Report
are requested to submit the same to the office of the company at least 3 days ahead of the meeting.

Al

I;1

Annual Report 2013

General
1.
2.
3.
4.

Financial

1984

1995
1996
1997

Year of Incorporation
Converted into Public Ltd. Co.

Initial Public Offering of Share

Enlistment with DSE and CSE

1,000 Million
253 Million

1. Authorised Capital
2. Paid up Capital

vYa1s....
For the year ended 30 September (1k. in '000)

Particulars
2013

2012

2010

2011

2009

Operations Results
Turnover
Gross Profit

1,780,820 1,618,091 1,787,093 1,192,399 1,256,238


263,536

240,413 261,344
64,689
70,651

178,398

184,664

38,137

30,685

Operating Profit

70,013

Net Profit before tax

68,599

61,957

67,635

36,578

29,498

Net Profit after tax

58,309

52,663

57,489

31,091

25,074

Basic Earning per share oflk. 10

2.30

2.08

2.61

1.55

1,25

Cash Dividend per share of (1k. 10)

1.50
-

1.50

0.50

1.00

1.50

1.00

179,578

75,837

141,676

49,972

107,110

Stock Dividend (for 10 shares)


Cash Inflows from Operating Activities
Financial Details
Total Assets

1,233,793 1,203,178 1,154,709 1,102,704 1,039,677

Fixed Assets - Net

489,057

392,857 432,858 474,645 471,067

Reserve and Surplus

144,762

124,403

106,332

50,412

51,706

14,862

35,300

6,271

(12,534)

(36,529)
500,000

Working Capital
Authorised Capital

1,000,000 1,000,000 500,000 500,000

Shareholders Equity

397,762

377,403 326,334 270,412

Paid up Capital

253,000

253,000 220,000 200,000 200,000

251,706

Long Term Loan

97,041

44,727

110,736

193,918

184,667

1.02

1.05

1.01

0.98

0.94

Key Financial Ratios, Figures and Market Data


Current Ratio
Return on Investment (%(

4.73

4.38

4.98

2.82

2.41

Net Assets Value per share Ilk. 101

15.72

14.92

14.83

13.52

12.58

Market value of share (at DSE)Tk.

38.40

Market value of share (at CSE) 1k.

38.70

Closing value per share ofTk. 10


Closing value per share ofTk. 10

Price Earning Ratio (Based on DSE price) (Times)

3.91

The Financial Express on 19th February 2014

Price Earning Ratio (Based on CSE price) (Times)

3.88

The Financial Express on 19th February 2014

Other

Number of shares - Paid-up (Figures in thousand)

25,300

25,300

22,000

20,000

20,000

Number of shareholders

13,549

13,837

13,246

13,111

14,094

I:

Annual Report 2013

Report of the Board of Directors


For the year ended 30th September 2013

"Bismillah Hir Rahmanir Rahim"

Distinguished Shareholders
Assalamu Alaikum
It is my pleasure to welcome you to the 29th
Annual General Meeting of your company. It
appears to be a celebrating occasion for me to see
you after one year and I offer my heartfelt thanks
to Allah Almighty who allowed us to meet again
and to discuss on the business issues of your
company. I am also offering my prayer to
Almighty Allah for the salvation of their departed
soul whom we lost during the year. As per the
provision of the articles of the company, I have
the pleasure to present before you the Directors
Report, the Audited Accounts of the company for
the year ended 30th September 2013 along with
the report of the auditors for your consideration.

Business Outlook
Against The business environment during the last
year was turbulent. In view of the unhealthy

political situation, the export business has


suffered significantly. The Hall Mark scam, Rana
plaza collapse, Tazreen Fashion Fire, all has
created a bad image internationally on
Bangladesh. At the fag end of the year, the
political situation has forced the business
operation to almost shutdown. In addition to the
above, the wage hike as per the decision of the
government has forced the increase in wages
significantly and profit margin has declined
significantly. The full impact of the wages hike will
be on the financials of the current year.
The RMG sector is still being closely reviewed by
the international community. The withdrawal of
GSP in the USA may have significant impact on
the garments sector. The government is still to
meet the criterion set by the international
community. The stringent requirement of
infrastructure and related facilities at the garment
manufacturing units may force many factories to
close down. The aforementioned may further
increase the cost of production and may
significantly swallow up the competitive
advantages being enjoyed by Bangladesh RMG
sector. In terms of cost of production we are now
almost equivalent to China, Vietnam and Sri
Lanka. But the productivity of the workers in
Bangladesh is substantially low compared to the
above countries.

Annual Report 2013

Business Operations
Having many odds in the business environment,
the management has tried to keep the business
operation running at the same pace. The
summary result of business operation may be
stated as follows:
Taka in million
Particulars

2013

2012

Increase
(decrease)

717.27

787.20

(8.88)

Garments Sale

1,063.55

830.90

28.00

Cash Incentive

43.60

48.56

(10.21)

Total Revenue

1824.42

1666.66

9.47

Cost of Goods Sold

1,560.88

1426.24

9.44

Gross Profit

263.54

240.42

9.62

Administrative, Selling
and General Expenses

193.52

175.72

10.13

68.60

61.96

10.72

2.30

2.08

10.58

Fabric Sale

Net Profit Before Tax


Earning Per Share

The above business operational result will reflect


that the company, even at the face of severe
unhealthy atmosphere could maintain its
operational result unaffected.
Compliance Issues
The Compliance issues in the garment industry
have become one of the very important issues in
Bangladesh. BGMEA and the garment owners are
constantly keeping vigilant as to the international
requirements regarding the electrical and fire
safety regulations. A significant number of
factories operating in the country were in rental
buildings where mandated facilities are not
available. H.R. Textile Mills Ltd. has been
operating from its own premises. However, the
infrastructure was developed in phases. In order
to remain compliant, the company needs to

update the existing facilities and also to review


the new requirements being initiated by the
buyers. The management has set up a compliance
department which is constantly looking after
requirements in the areas of working
environment, production facilities, wages, safety
issues, health hazards, medical care and many
other issues that are considered to be necessary
for a better working environment.
Board of Directors
The Board of directors consisted of 8 members
including two independent Directors. The
members are qualified and experienced. The
independent directors are university professors
having long experience in business and finance
education. The Chairman of the Board, Professor
Mohammad A. Momen, is the professor of
Institute of Business Administration, University of
Dhaka. The Managing Director Mr. Mohammad
Abdul Moyeed is a B.Sc. Engineer (Chemical) from
BUET, Dhaka. Another Director, Dr. Muhammad
Abdul Moyeen is a professor at Department of
Management Studies, Faculty of Business Studies
of University of Dhaka. In addition to the above,
other directors are young professionals with
business education from abroad. During the year
the board organized five meetings. The
attendance was as follows:
No

Name of
the Directors

Fee
No of
No of
meetings meetings Paid
attended Taka
held

1 Professor M.A Momen

4 20,000

2 Mr. M.A Moyeed

5 25,000

3 Professor Dr. M.A Moyeen

25,000

25,000

4 Professor Dr. A.H.M.H. Rahman 5


5 Professor Mushtaque Ahmed

4 20,000

6 Ms. Ruhey Rawa

7 Ms. Sumbal Azwad Momen

5 25,000

Ms. Sana Kainat Moyeen

25,000

El

Annual Report 2013

Directors Remuneration
Other than the Managing Director all are non-executive directors. The Managing Directors is paid his
monthly remuneration as shown in the Financial Statements. Except the meeting attendance fee of
1k. 5,000 per attendance, non executive directors including the independent director(s) does not
receive benefits of any other kind.
Summary of key operating and financial data of preceding five years.
The directors are pleased to furnish the summary of the current years key financial data, along with the
same for preceding five years.
Financial Details
Particulars

For the year ended 30th September (Tk. in '000)


2013

Total Assets

2012

2011

2010

2009

1,233,793

1,203,178

1,154,709

1,102,704

1,039,677

Fixed Assets - Net

489,057

392,857

432,858

474,645

471,067

Reserve and Surplus

144,762

124,403

106,334

50,412

51,706

Working Capital

14,862

35,300

6,270

(12,534)

(36,529)

1,000,000

1,000,000

500,000

500,000

500,000

Shareholders' Equity

397,762

377,403

326,334

270,412

251,706

Paid up Capital

253,000

253,000

220,000

20,000

200,000

Long Term Loan

97,041

44,727

110,736

193,918

184,667

Authorised Capital

Total Assets (Tk.in'OOO)


1,233,793
1,203,178

1,154,709

2013

III
Iii

2012

1,102,704
1,039,677

2011

2010

2009

Annual Report 2013

Business Risk Perception


Going Concern Risk
H.R. Textile Mills Ltd has been operating as a
sustainable organization since 1984. The sponsors
having substantial equity in the company always
decides on operational and financial issues from the
perspective of going concern. Having its own land,
building and infrastructure, the company has been
operating in such an industry, which is a basic
requirement of human being the management does
not see any risk of continuance of the company as a
going concern.

Operational Risk
Operational risk arises from internal management,
systems failure, maintenance product of quality etc.
The company, over a period of time, has developed
human resources, systems and procedures,
equipped the production facilities with modern
technology. With the above the company is now
operating as a quality product supplier, with high
franchise value. It has developed a pool of quality
human resources who are capable to undertake any
type of export orders relating to knit garments.
Therefore, the management does not foresee any
significant operational risk.

Foreign Exchange Fluctuation Risk


The company is in the export business. The total
export is in foreign currency and most of the imports
required to execute the export, is also in foreign
currency. Since the exports are more than the
imports to the extent of value addition, and the
imports are mostly against back to back Letter of
Credit, the company does not have any foreign
exchange fluctuation risk.

Interest rate risk


The interest rate of the banks and financial
institutions are quite high at present. The company
management has been trying to use low cost
funding to keep the financial service cost as low as
possible.

10

Market Risk
The RMG export market is volatile. Since the export
market of the company is mainly within Europe, and
Europe is still under recession, the market has
potential risk. But our exports are the low cost
essential products and with the increasing trend of
labour cost in the Chinese market, Bangladesh is the
direct beneficiary. However, the wage cost in
Bangladesh is also increasing. In order to keep the
cost at minimum, the company has been trying to
increase the efficiency of the workers. Therefore,
although there are market risks to some extent, the
management does not consider it to be very
significant.

Compliance Risk
In light of the recent incidences in some RMG
factories, the compliance requirement is becoming
more strict and there is the possibility of imposing
additional requirements for compliance by buyers
and regulators. The management of the company
has been constantly keeping an eye to remain
compliant always and taking required measures to
comply with the buyer's requirements.

Subsidiary Company
H.R. Textile Mills Limited does not have any
subsidiary company.

Extra-Ordinary Gain or Loss


There is no extra-ordinary gain or loss during the
financial year.

Related Party Transactions


H.R. Textile Mills Limited exports garments and also
fabric as "Deemed Export" to one concern, namely,
Fashion Knit Garments Limited. The Fashion Knit
Garments Limited is owned by three sponsor
Directors of the company. The transactions between
HR Textile Mills Limited and Fashion Knit Garments
Limited are being transacted on Arms Length Basis
and at market price.

Annual Report 2013

The Board constantly keeps an eye on the


changes that are taking place in the environment,
product demand, and compliance issues in
addition to dealing with the business policies,
forecasts and in resolving operational issues. The
Board also dealt with negotiating issues related to
availing financial assistance from banks and
leasing companies, review of the cost reduction
programs, expansion of facilities, review of
compliance related issues etc. The vigilance
assisted the company in keeping the business in
its growth rate especially during a period of
turmoil and business depression. The
independent Directors are also contributing
significantly by taking part in the policy issues and
guiding the management in order to keep the
company on track.
Board Audit Committee
The Audit Committee plays a significant role in
guiding the internal management. The
Committee reviewed the draft financial
statements, financial position of the company,
and report of the Auditors and the operational
results of the company from time to time. A
separate Report of the Audit Committee to the
shareholders is enclosed.
Human Resource Development
The management of the company is completely
aware that the RMG industry is a human resource
based industry and there is significant turnover in
the workforce due to wages competition and
other factors. Your company has been trying
utmost to keep the working environment
congenial for all. In order to increase worker
efficiency and effectiveness, on the job training
through system based approached are
continuously followed. Performance evaluation is
also done to keep the workers motivated.
Corporate and Financial Reporting
The Board of Directors is pleased to confirm that
a) The Financial statements together with the
notes therein have been drawn in conformity
II '1
liii

b)
c)

d)

e)

f)
g)

with the companies Act 1994 and Bangladesh


Securities and Exchange Rules 1987. These
statements fairly present the company's
statement of affairs, the results of its
operations, cash flow and changes in equity
That proper books of account of the company
have been maintained.
That, appropriate accounting policies have
been consistently applied in preparation of
the financial statements and that the
accounting estimates are based on
reasonable and prudent judgment.
That, the International Accounting Standards,
as applicable in Bangladesh, have been
followed in preparation of the financial
statements and any departure there-from has
been adequately disclosed.
That, the system of internal control is sound in
design and has been effectively implemented
and monitored.
That, there are no significant doubts upon the
company's ability to continue as a going concern.
That, there are no significant deviations from
last year in operating results.

Financial Performance
The financial performance of the company was
satisfactory. The summarized financial result of
the company is as follows:
Particulars

Amount in Taka (million)


2013 F2012

Net Profit before Tax


Less: Provision for Income Tax
Net Profit after Tax
Add: Profit brought forward
from previous year
Profit Available for Appropriation
Recommended for Appropriations:
Proposed Dividend (Cash)
Un-appropriated Profit
carried forward

68.60
(10.29)
58.31

61.96
(9.29)
52.67

45.50
103.81

30.79
83.46

(37.95) (37.95)
65.86

45

Annual Report 2013

Dividend

Independent Director

During the year under report, the company


earned a profit after tax of 1k. 58,309,783. Out of
the above the Board recommended a cash
dividend of Tk. 1.50 (i.e. 15%) per share of Tk. 10
against 15% cash dividend per share ofTk. 10 each
in the last year. The above would require a cash
outflow of Tk. 37,950 Million. The balance amount
of Tk. 20,359 Million of un-appropriated profits
will be used to meet the working capital
requirement of the company as well to finance the
developmental works.

Election of Directors
Pursuant to Article 102, 103 and 104 of the
company, Ms. Ruhey Rawa and Ms. Sumbal Azwad
Momen, Directors of the company, will retire and
being eligible, offer themselves for re-election.

The existing Independent Director Professor (Dr.)


A.H.M. Habibur Rahman is now retiring after two
terms of his service as independent Director. As
per SEC Notification (SEC/CMRRCD/ 2006-158/
134/Admin/44: dated 7th August 2012 issued
under section 2CC of the Bangladesh Securities
and Exchange Ordinance, 1969) he is not eligible
for reappointment. The Board and the
management of the company offered heartfelt
thanks to Professor (Dr.) A.H.M. Habibur Rahman
for his wonderful contribution in the affairs of the
company for the last six years.
As per regulation, the Board approved the
appointment of Mr. Md. Kabiruzzaman, having
over 30 years of business experience who meets
all the requirements to be appointed as
Independent Director. It is expected that his
expertise will help the company to protect the
interest of all investors in general and smaller
investors in particular.

Net profit after tax (Tk. in '000)


58.309

57,489
52,663
31,091

2013

2012

25,074

I
2011

2010

2009

II,
Ii I

Annual Report 2013

Shareholding Pattern
The shareholding of the sponsors remained at 51.04% without any change during the year as shown
below:
Name of Shareholders
i)

Parent Company/Subsidiary/Associated Companies!


Other Related Parties:

No. ofShares

Percentage

Nil

3,762,256
3,762,254
3,762,254
507,285
507,285
507,285
Nil
Nil
40,320
15,812
15,812
15,812
3,870
3,870
3,870
3,870
Nil
Nil
Nil
Nil
12,911,855

14.87
14.87
14.87
2.01
2.01
2.01
0.15
0.06
0.06
0.06
0.02
0.02
0.02
0.02
51.04

ii) Directors, Chief Executive Officer, Company Secretary


Chief Financial Officer, Head of Internal Audit and their Spouse
and Minor Children:
Mr. Mohammad Abdul Moyeed
Professor Dr. M.A Moyeen
Professor M.A Momen
Ms. Ruhey Rawa
Ms. Sumbal Azwad Momen
Ms. Sana Kainat Moyeen
Professor Mushtaque Ahmed
Mr. Md. Kabiruzzaman
Mrs. Rokeya Sultana
Mrs. Umbrrin Moyeed
Dr. Shaheen Afroze
Mrs. Shiny Momen
Mrs. Rukhsana Sultana
Mrs. Umme Saleha
Mrs. Umme Salma
Ms. Sayma Rahman
Chief Financial Officer
Company Secretary
Head of Internal Auditor
Minor Children
Total Shares

Out of the balance shares, the institutions and ICB Unit Fund are holding 11.33%, which was 13.01% in
the previous year. The shareholding of the general public has increased to 37.63% compared to 35.95%
in the previous year, on the date of year closing. The above change was mainly due to sell of shares by
Financial Institutional shareholders. The shareholding pattern has been shown at page 32 of this report.

It,

Iii

Annual Report 2013

iii)

Non of the top executives of the company other than Mr. Ziaul Haque, Manager, Income Tax
and Mr. Kamal Ahmed, Manager, Production holds 1,000 share each which was issued to
them at the time of IPO from employees quota.

iv)

Shareholders holding ten percent (10%) or more votes' interest


in the company
Name

No. of shares

Mr. Mohammad Abdul Moyeed


Professor (Dr.) Muhammad Abdul Moyeen
Professor Mohammad Abdul Momen

3,762,256
3,762,254
3,762,254

v) Board Audit Committee


Name
Professor Mushtaque Ahmed
Professor (Dr.) Muhammad Abdul Moyeen
Professor Mohammad Abdul Momen
Mr. Md. Kabiruzzaman

Designation
Chairman
Member
Member
Member

Appointment of Auditor
The existing Auditor M/s. Ata Khan & Co,
Chartered Accountants has been carrying out the
audit of the company for the last one year. They
are now retiring and, being eligible for
re-appointment have shown their interest to
continue as auditors of the company. On the
recommendation of the Board Audit Committee,
the Directors of the company is proposing their
appointment and fixing remuneration at the 29th
Annual General Meeting.

12

Qualifications
B.Sc. Engineer and MBA
B.Com (Hons). M.Com , and PhD
B.Com (Hons). M.Com , MBA
B.S.S. (Hons). M,S.S.
in Public Administration

Future Programs
As you are aware, Bangladesh is the second largest
exporter of garments in the global market where
knit garments are playing a vital and significant role.
Your company, with long years of experience in the
field, has created a franchise value in the global
market as a quality exporter. The director, with their
experience and acumen, has worked hard to create
this value. The senior directors, with their high
confidence in the industry, have inducted the
second generation to look after the business, The
Board has the program to expand both horizontally
and vertically but cautiously, so that the history
created by the company with the support of general
shareholders can be continued with confidence.

10

Annual Report 2013

Corporate Governance Compliance Report


In accordance with the requirement of the
Bangladesh Securities and Exchange
Commission, Corporate Go .'rnance Compliance
Report' as audited by M/S. N.M Tareque and
Associates, a firm of Cost and Management
Accountants is enclosed.
Conclusion
The Board of Directors of the company takes the
opportunity to express its sincere thanks and
appreciation to its valued shareholders, the
Bangladesh Securities and Exchange
Commission, Dhaka Stock Exchange, Chittagong
Stock Exchange, Government Agencies, Banks,
Financial Institutions, Contractors, Suppliers and
Auditors for their cooperation and support. We
offer our heartfelt thanks to our valued


ED

international buyers and local buying houses who


have contributed significantly as our strategic
partners.
In conclusion, the Board offers its sincere thanks
to the professionals, whom the management
considers as the most valuable asset of the
company and hopes that they will continue to
keep the spirit of team work in the coming years
for the smooth growth of the company.
For and on behalf of the Board of Directors

MohammadA
bdul Momen
Chairman
Dated: January 29, 2014

13

Annual Report 2013

Audit Committee Report to the Shareholders


For the year ended 30th September 2013

I have the pleasure to inform that the year under report is my second year as the Chairman of the Audit
Committee of HR Textile Mills Limited. HR being a public limited company has tremendous amount of
responsibility to protect the interest of stakeholders and the Audit Committee shares this responsibility
to see that the interest of the stakeholders is protected. As an independent director our role was limited
to specific areas where we considered that the management may look closely so that the company functions by complying with rules regulations and cost effective manner.With the above in view, during the
year, the Audit Committee organized a number of meetings.The committee was especially interested to
see that the financials of the company has bearing with the operation, internal audit functions are
carried out smoothly. The meeting also reviewed the pre-audit reports, systems and procedures and
guided the board for further necessary action as and when needed.
The Audit Committee consisted of the following persons
Names

Designation

Professor Mushtaque Ahmed

Chairman

Professor Dr. Muhamamd Abdul Moyeen

Member

Professor Dr. A.H.M. Habibur Rahman

Member

Professor Mohammad Abdul Momen

Member

Md.Wali Ullah

Secretary

The Committee held 4 (four) meeting during the year.The meetings were also attended by the company
secretary and chief financial officer.
The Board Audit Committee expressed its sincere thanks to the members of the Board, management,
auditors for their support in carrying out its duties and responsibilities effectively.

Professor Mushtaque Ahmed


Chairman
Audit Committee
Date: January 29, 2014

14

Iii

Annual Report 2013

Certificate of Compliance with the Conditions of


Corporate Governance Guidelines
To the shareholders of
H.R.Textile Mills Limited
Certificate on Compliance of
Corporate Governance by H.R.Textile Mills Limited

We have been appointed by the Management to carry out an audit on the compliance status of the
company on the points specified vide Bangladesh Securities and Exchange Commission a Notification No. SEC/CMRRCD/2006-1 58/Admin/44: dated 7th August 2012. Our views on the specific points
is enclosed.
We do hereby certify that we have examined the books and records of H.R. Textile Mills Limited
specially related the governance areas. We are of the opinion that the company has complied with
the conditions of Corporate Governance Guidelines for the year ended 30th September 2013 as
prescribed by the above BSEC Notification.

Dated:

January

N.M Tare ue & Associates 'i


23,
2014
Cost and Management
Accountants

15

Annual Report 2013

Corporate Governance Compliance Report


Status of compliance with conditions imposed by the Bangladesh Securities and Exchange Commissions, Notification
No. SEC/CMRRCD/ 2006-1 58/1 34/Admin/44: dated 7th August 2012 issued under section 2CC of the Securities and
Exchange Ordinance, 1969:

ReDort under Condition No. 7.00


Condition
No.

Compliance status (Put V in Remarks


(if any)
the appropriate column)
CompliedNon-complied

Title

Board of Directors:
1
1.1
Board Size
1.2(i) Appointment of Independent Director
1.2 (ii) Independent Directors appointment by the elected Directors
1.3 Qualification of Independent Director (ID)
1.4 Chairman of the Board and Chief Executive Officer of the Company

E
/

1.5 Inclusion of statements in Directors' Report prepared


under Section 184 of the Companies Act, 1994:
1.5 (i) Industry outlook and possible future developments in the industry
1.5(H) Segment-wise or product-wise performances
1.5 (iii) Risks and concerns
V
1.5 (iv) A discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin
1.5 (v) I Discussion on continuity of any Extra-ordinary gain or loss
1.5 (vi) Related party transactions
1.5 (vii) Utilization of proceeds
V
1.5 (viii) Explanation if the financial results deteriorate after the company goes
Right
_offer,
_Direct
_Listing,
for _IPO,_RPO_
V
1.5 (ix) Significant variance
V
1.5 (x) Remuneration to directors
V
1.5 (xi) Fairness of state of the affairs
V
1.5 (xii) Keeping proper books of accounts
V
1.5 (xiii) Consistent application of Accounting Policies and preparation
of financial statements
1.5 (xiv) Compliance with Bangladesh Accounting Standards (BAS)
1.5 (xv) Soundness and efficiency of internal control system
1.5 (xvi) Ability to continue as a going concern
1.5(xvii) Significant deviations from last year in operation results
1.5 (xviii) Presentation of key operation and financial data for last five years
1.5 (xix) Declaration of dividend
1.5 (xx) Number of Board Meeting held during the year and attendance by each other
1.5 (xxi) Shareholding pattern/position
1.5 (xxii) Appointment/re-appointment of Director

V
V
V
V
V
V
V

2 CFO, Head of Internal Audit and Company Secretary:


2.1 Appointment of CFO, H.I. Audit and CS
2.2 Attendance of CFO and the Company Secretary in the Board Meeting
3(i), (ii), (iii) Audit Committee
3.1 (i) Audit Committee composed of 3 (Three) members
3.100 Members of the audit committee have been appointed by the Board of Directors
3.1 (iii) Qualified members in audit committee
3.1 (iv) Term and conditions of service of audit committee members
3.1 (v) Secretary of the audit committee

V
V
V
V
V
V
V

III
16

Iii

Condition
No.

Annual Report 2013

Title

3.3 (vi) Review of quarterly and half yearly financial statements


3.3 (vii) Review of adequacy of internal audit function
3.3 (viii) Related party transaction
3.3 (ix) Management Letters/Letter of internal control weakness
3.3 (x) Purposes of fund utilization
3.4 Reporting of the Audit Committee:
3.4.1 (i) Reporting by the audit Committee on its activities to the Board of Directors
3.4.1 (ii) Report to the Board of Directors by the audit committee on:
3.4.1 (ii)a Conflicts of interest;
3.4.1 (ii)b Suspected or presumed fraud or irregularity or material defect
in the internal control system;
3.4.1 (ii) c Infringement of laws, rules and regulations;
3.4.1 (ii)d Any other mater
3.4.2 Reporting to Authorities
3.5 Reporting to the Shareholders and Investors
4 External/Statutory Auditor:
4(i) Appraisal or valuation services
4 (ii) Financial information system design and implementation
4 (iii) Book-keeping or other services related to the accounting records
or financial statements
4(iv) Broker-dealer services
4(v) Actuarial services
4
(vi) Internal Audit Services
4 (vii) Any other services that the Audit Committee determines
4 (viii) Possess any share of the company
4 (ix) Audit/certification services on compliance of corporate governance
as required under clause (i) of condition No. 7.
5 Subsidiary Company:
5(i) Composition of the Board of Directors of the subsidiary company
5 (ii) Independent director on the Board of Director of the holding company
5 (iii) Submission of Minutes to the holding company
5 (iv) Review of Minutes by the holding company
5 (v) Financial statements is reviewed by the Audit Committee
6 Duties of CEO and CFO:
6 (i) Reviewed financial statements to the best of their knowledge:
6 (i)a Materially
6 (i)b True and fair view of the company's affairs
6 (ii) Reviewed about fraudulent, illegal or violation of
the company's code of conduct
7(i) Obtain certificate regarding compliance of conditions
of Corporate Governce Guidelines
7 00 Annexure attached in the Director's Report

Compliance status (Put V in Remarks


the appropriate column)
(if any)
Complied Non-complied
V

V
V'

V"

V
V

/
V"

V
V

V
V
V
V

Annual Report 2013

ATA KHAN &CO.


Chartered Accountants

Auditors' Report
to
The Shareholders of H.R. Textile Mills Limited
We have audited the accompanying financial statements of HR. Textile Mills Limited (the Company) which comprise
the Statement of Financial Position as at September 30, 2013, Statement of Comprehensive Income, Statement of
Cash Flows, Statement of Changes in Equity and a summary of significant accounting policies and other explanatory
information disclosed in Notes 1-36 to the financial statements for the year then ended.
Management's responsibility for the Financial Statements
Management of the Company is responsible for the preparation and fair presentation of these financial statements in
accordance with Bangladesh Financial Reporting Standards (BFRS); the Companies Act, 1994 and Bangladesh Securities and Exchanges Rules, 1984 and for such internal control as the management determines is necessary to enable
the preparation of financial statements that are free from material misstatements, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit
in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free 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 auditors' judgment, including the assessment of the risks of
material misstatements of the financial statements, whether due to fraud or error. In making those risk assessments,
we consider internal control relevant to the Company's preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the circumstance, but not for the purpose of expressing
an opinion on the effectiveness of the Company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of H.R Textile Mills
Limited as at September 30, 2013 and its financial performance and its cash flows for the year then ended in
accordance with Bangladesh Financial Reporting Standards and comply with the applicable sections of the Companies Act, 1994, the Bangladesh Securities and Exchange Rule, 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 account as required by law have been kept by the Company so far as it appeared
from our examination of those books;
(C) The statement of financial position and statement of comprehensive income dealt with by the report are in
agreement with the books of account and returns; and
(d) The expenditure incurred was for the purposes of the Company's business.
ATA KHAN & Co.
Chartered Accountants
18

Annual Report 2013

H.R.Textile Mills Limited

Statement of Financial Position


As on 30 September 2013
CAPITAL EMPLOYED IN:
NON-CURRENT ASSETS:

2013
Taka

Notes

Property, Plant and Equipment


Deferred Lease Interest
Total Non-Current Assets

2
3

2012
Taka

489,057,212
489,057,2 12

392,857,224
3,088,405
395,945,629

[s2,61 5
340,320,542
84,747,154
34,158,014
78,258,456
744,736,781

125,824,4 53
531,494,230
64,879,600
40,074,232
44,960,118
807,232,633

35,975,524
16,706,788
536,789,159
35,077,154
15,000,086
61,958,063
28,367,322
729,874,096
14,862,685
503,9 19,897

37,921,412
30,622,236
510,663,063
30,364,678
10,710,124
113,734,359
22,415,582
15,500,750
771,932,204
35,300,429
431,246,058

253,000,000
6,956,752
22,378,988
10,000,000
105,427,165
397,762,905

253,000,000
6,956,752
22,378,988
10,000,000
1,613,915
83,453,467
377,403,122

CURRENT ASSETS:
Stocks and Stores
Trade Debtors
Export Incentive Receivables
Advances, Deposits and Prepayments
Cash and Bank Balances
Total Current Assets
LESS CURRENT LIABILITIES:
Bank Overdrafts - Secured
Liability againstTrust Receipts
Creditors
Accrued Expenses
Provision for Taxation
Bills Receivable Discounted
Workers' Participation/Welfare Funds
Dues to Associated Company

4

5

6

7

8


9

10

11

12

13

14

15
16

WORKING CAPITAL
NET ASSETS
FINANCED BY:
SHAREHOLDERS EQUITY:
Share Capital
General Reserve
Tax Holiday Reserve
Dividend Equalisation Reserve
Capital Reserve
Unappropriated Profit
TOTAL SHAREHOLDERS EQUITY

18
19
20
21
22

LONG-TERM LIABILITIES:
Long-term Loans - Secured
Provision for Gratuity


23

24

Net Assets value per share ofTk.1 0

97,041,566

9,115,426

106,156,992

503,9 19,897

15.72

44,727,510
9,115,426
53,842,936
431,246,058
14.92

The annexed notes 1 to 36 form an integral part of these financial statements.


oy ee
anaging Direct

A.Moyeen(^^M
IA AMA ^o
^A
meg 7L-.O
Director
Director

Md. Wali Utah


Company Secretary

Signed in terms of our separate report of even date.


Dated: Dhaka
January 29, 2014

ATA KHAN &Co.


Chartered Accountants

19

Annual Report 2013

H.R.Textile Mills Limited

Statement of Comprehensive Income


For the year ended 30 September 2013

Particulars

2013

Taka

Notes

1,618,091,942
48,565,642

1,824,420,648
1,560,884,821
263,535,827
193,522,486

1,666,657,584
1,426,244,288
240,4 1 3,296
175,723,590

15

70,013,341
2,016,391
72,029,732
3,429,987

30

68,599,745
10,289,962

64,689,706
365,400
65,055,106
3,097,862
61,957,244

26

Turnover
Less: Cost of Goods Sold
Gross Profit
Less: Administrative, Selling and General Expenses
Operating Profit
Add: Other Income
Profit before Contribution to Workers' Participation/Welfare Funds
Less: Contribution to Workers' ParticipationfWelfare Funds

27
28
29

Net Profit before Tax


Less: Provision for Income-tax

2012
Taka

1,780,820,020
43,600,628

25

Sales
Export Incentive

58,309,783
45,503,467

Net Profit
Unappropriated Profit brought forward

9,293,587
52,663,657
30,789,810

1,613,915

Transfer from Capital Reserve


Profit available for appropriations
Dividend Declared Cash (2011: Stock)

105,427,165

83,453,467
37,950,000

Unappropriated Profit carried forward

105,427,165

45,503,467

2,30

2.08

Earning per share (EPS) ofTk. 10

The annexed notes ito 36 form an integral part of these financial statements.

oyeed
]:2^
A
Direct

A.Moyeen
Director

!iUIlah
Company Secretary

Director

Signed in terms of our separate report of even date.


Dated: Dhaka
January 29,2014

20

ATA KHAN & Co.


Chartered Accountants

Annual Report 2013

H.R.Textile Mills Limited

Statement of Cash Flow


For the year ended 30 September 2013

Particulars

2013

Notes

2012
Taka

Taka

CASH FLOWS FROM OPERATING ACTIVITIES:


Cash received from customers and export incentives
Cash paid for goods and services
Cash from operation
Interest paid
Income-tax paid/deducted at sources
Net Cash inflows from operating activities

1,997,743,173
(1,749,235,575)
248,507,598
(46,527,167)

(1,509,861,584)
143,810,279
(52,796,118)

(22,402,348)

(15,176,611)

179,578,083

75,837,550

(153,283,890)

(11,337,953)

1,653,671,863

CASH FLOWS FROM INVESTING ACTIVITIES:


Acquisition of fixed assets
Net Cash outflows from investing activities

2.2

CASH FLOWS FROM FINANCING ACTIVITIES:


Bank Overdraft received/(paid)
Loans received/(paid) against Trust Receipts
Dues (paid) to Associated Companies
Long Term Loans received/(paid)
Lease Finance paid
Dividend paid
Net Cash inflow from financing activities

30,830,914

(1,945,888)
(13,915,448)
(15,500,750)
68,575,111
(16,261,055)
( 3,947,825)
7,004,145

(3,2 1 8,235)
(9,570,250)

(43,803,190)
(22,205,715)

Net increase/(decrease) in cash and bank balances

33,298,338

Cash and bank balances on opening


Net increase/(decrease) in cash and bank balances
Cash and bank balances at closing - Note S
Net operating cash flow per share (NOCFPS) of Tk. 10

44,960,118

(5,716,390)
(53,682,866)

10,816,731
34,143,387
10,816,731
44,960,118
3,00

33,298,338

78,258,456
7.10

The annexed notes 1 to 36 form an integral part of these financial statements.

^:2t
A

o;e
Directi

Dated: Dhaka
January 29, 2014

liii

A.Moyeen
Director

9VM. A .k
'MA gme
o

Director

Md. Wali Ullah


Company Secretary

ATA KHAN & Co.


Chartered Accountants

21

Annual Report 2013


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I i I

Annual Report 2013

H.R.Textile Mills Limited

Value Added Statement


For the year ended 30 September 2013
2013
Taka

Notes

Particulars
Turnover and other income

25,26 & 29

Finished Stock differential

27.1

Output
Less: Bought-in goods and services

2012
Taka

1,826,437,039

1,667,022,984

2,562,559

173,270

1,828,999,598

1,667,196,254

(1,504,870,130)

(1,370,477,540)

324,1 29,468

296,718,714

Value added

Value distributed:
To Employees in the form of salaries, wages and allowances
To Government in the form of income-tax
To Lenders in the form of interest
For replacement of fixed assets as depreciation

27.1 & 28.1



30

28.4

2

For future growth as retained profit

204,582,311

189,711,189

10,289,962

9,293,587

46,527,167

57,083,902

5,646,126

324,129,468

52,796,118
49,743,917

(4,826,097)
296,718,714

The annexed notes 1 t 36 form an integral part of these financial statements.

oed
Direct

A.Moyeen
Director

GM`A. AMk
APome
Director

Md. Wali UlIah


Company Secretary

Dated: Dhaka
January 29, 2014

I IIll]

23

Annual Report 2013

HR. Textile Mills Limited

Notes to the Financial Statements


For the year ended 30 September 2013
Forming an Integral Part of the Financial Statements
Notes - General
(a) Status and Activities:
This is a public limited company incorporated in Bangladesh under the Companies Act, 1913 on 3 December 1984
under the entrepreneurship of the Pride Group. The other shareholders are the general public and local financial
institutions. The shares of the Company are listed with both the Dhaka and Chittagong Stock Exchanges in
Bangladesh.The address of the registered office is B-87, Malibag Chowdhury Para, Dhaka and the mills are located at
4, Karnapara, Savar, Dhaka.The Company owns textile mills and its principal activities are knitting, processing and
finishing of textile products and making garments.
(b) Components of the Financial Statements:
(i) Statement of Financial Position as on 30 September 2013;
(ii) Statement of Comprehensive Income for the year ended 30 September 2013;
(iii) Statement of Changes in Shareholders' Equity for the year ended 30 September 2013;
(iv) Cash Flows Statement for the year ended 30 September 2013;
(v) Value Added Statement for the year ended 30 September 2013 and
(vi) Notes to the Financial Statements for the year ended 30 September 2013.
(C)

Reporting Period:
The financial period of the Company covers an accounting year from 1 October to 30 September next consistently.

(d) Reporting Currency:


The figures in the financial statements represent Bangladesh Taka currency, which have been rounded off to the
nearest Taka, except where indicated otherwise.
(e) Comparative Information:
Comparative information have been disclosed in respect of the year 2012 for all numerical information in the
financial statements and also narrative and descriptive information when it is relevant to an understanding of the
current years financial statements. Figures of the previous year have been re-classified whenever considered
necessary to ensure comparability with the current period.
(1) Statement of compliance with local laws:
The financial statements have been prepared in compliance with requirements of the Companies Act, 1994,
Securities and Exchange Rules, 1987 and other relevant laws as applicable.The cash flows from operating activities is
computed by the direct method as prescribed by the Securities and Exchange Rules, 1987.
(g) Statement of compliance with Bangladesh Accounting Standard (BAS) and Bangladesh Financial Reporting
Standards (BFRSs):
The financial statements complied with requirements of Bangladesh Accounting Standards (BAS) and Bangladesh
Financial Reporting Standards (BFRSs) as issued by the International Accounting Standards Board (IASB) and as
adopted by the Institute of Chartered Accountants of Bangladesh (ICAB).
(h) Statement of Measurement Basis:
The financial statements have been prepared using the Historical Cost basis, except for the earlier revaluation of
certain non-current assets.
(i) Accrual basis Accounting:
The financial statements have been prepared, except for cash flows information, under the accrual basis of
accounting.

24

-.-".-,-

III
IiI

Annual Report 2013

(j ) Statement of Specific Accounting Policies Applied:


(i) Revenue Recognition:
Sales are recognized at the time of delivery from godown.
(ii) Fixed Assets and Depreciation:
No Depreciation is charged on land and land development. Depreciation is charged on all other fixed assets on
straight line method. Depreciation on "revaluation surplus" is charged to "Capital Reserve': The rates at which
assets are depreciated depend on the nature and estimated useful life of each asset, and are given below:

Item
Rate

Factory Building
2.50%

Plant and Machinery
7.00%

Factory Shed
7.50%
Electric, Gas,Water, Steam and Telephone Installation,
Furniture & Fixture, Office Equipment, Factory Equipment and

Tools & Apparatus
10.00%

Motor Vehicles
15.00%
Net carrying amounts (written down value) is arrived at after deduction of accumulated depreciation from
gross carrying ame ints (cost).
The gross carryir amounts (cost) represents cost of acquisition or construction and capitalization of
pre-production ex j enditure including interest during construction period and lease payments.
Leased plant and machinery has been capitalized at "Principal amount" thereof and proportionate interest
thereof has been charged to interest expenses interms of BAS 17- "Lease".
(iii) Stocks:
Stocks are valued at lower of weighted average cost and net realizable value. Cost of work in process includes
material and proportionate conversion cost. Finished goods include material and conversion cost.
(iv) Provision for Income Tax:
Provision for current income-tax has been made during the year under review in respect of net profit at the
rate of 15%. Provision for deferred tax has been made at 15% on the timing difference relating to depreciation
in terms of BAS 12 "Income Taxes".
(v) Transaction in foreign currencies:
Foreign currencies are converted into Bangladesh Taka at the exchange rate ruling on the date of
transaction.

liii

25

Annual Report 2013

vi) Translation of closing balances in foreign currencies:


These are converted into Bangladesh Taka at the exchange rate ruling on the date of Balance Sheet as follows:

2013
Receivables
1 US Dollar

Tk. 78.05

2012
Payables

Tk. 78.21

Receivables

Payables

Tk. 81.18

Tk. 81.35

vii) Cash and cash equivalents:


Cash in hand and cash at bank have been considered as the cash and cash equivalents for the preparation of these financial
statements, which were held and available for use by the Company without any restriction and there was insignificant risk
of changes in value of these current assets.
viii) Earnings Per Share (EPS):
The Company calculates Earnings Per Share (EPS) in accordance with Bangladesh Accounting Standard, BAS-33, Earning
Per Share.
ix) Retrial Benefits (Gratuity):
No further provision for retrial benefits (gratuity) has been made as no such provision is required under the Bangladesh
Labour Law.

26

liii

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Annual Report 2013

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Annual Report 2013

2.3. Depreciation for the year is charged as below:


Particulars
Cost of Goods Sold - Note 27.1
Administrative and General Expenses -

Note 28.1

2013
Taka

2012
Taka

51,375,512
5,708,390
57,083,902

46,057,648
3,686,269
49,743,917
1,595,134
51,339,051

Capital Reserve - Note 22


57,083,902
3. Deferred Lease Interest
The break-up is as follows:
International Leasing and Financial Services Ltd.

3,088,405
3,088,405

These interest has been charged to revenue as and when these have been due.
4. Stocks and Stores
4.1 The make-up is as follows:

Item
Stock of Yarn - Note 4.2
Stock of Dyes and Chemicals - Note 4.3
Stock of Work-i n-Process - Note 4.4
Stock of Finished Products -Note 4.5
Stock of Accessories
Goods in Transit

2013

2012

Quantity
(In Kg.)

Amount
(InTaka)

380,973
118,592

124,091,343
22,462,733
19,827,536
23,421,522
8,253,401
5,626,069
203,682,604
3,570,011
207,252,615

181,834
136,252

53,523,472
19,643,629
18,254,536
20,858,963
4,223,939
7,056,940
123,561,479
2,262,974
125,824,453

380,973
380,973

124,091,343
124,091,343

181,834
181,834

53,523,472
53,523,472

16,943
101,649
118,592

12,054,842
10,407,891
22,462,733

17,560
118,692
136,252

10,921,314
8,722,315
19,643,629

Stock of Spares

Quantity
(In Kg.)

Amount
(In laka)

4.2 Stock of Yarn

Stock of Yarn
4.3 Stock of Dyes and Chemicals

Dyes
Chemicals
4.4 Stock in Work in Process

Cost of Materials
Cost of Conversion

7,707,710
12,119,826
19,827,536

7,991,136
10,263,400
18,254,536

4.5 Stock of Finished Products

Finished Garments
Knitted Fabrics
S.

Trade Debtors

Export Sales Receivable

7,495,476
15,926,046
23,421,522

-
34,945
34,945

2013
US$
Taka
4,363,647
340,320,542
340,320,542

US$
6,547,108

-
43,943
43,943

8,254,666
12,604,297
20,858,963
2012
Taka
531,494,230
531,494,230

These are unsecured but considered good.

28

II,
Iii

Annual Report 2013

6. Export Incentives Receivables


Opening Balance
Less: Received
For the year
Closing Balance

2013
Ta ka
64,879,600
23,733,073
41,146,527
43,600,627
84,747,154

2012
Taka
59,838,659
43,524,701
16,313,958
48,565,642
64,879,600

951,100
-
7,677,000
14,641,584
23,269,684

1,657,358
16,500,000
3,932,354
7,350,230
29,439,942

The advances are unsecured but considered good.


7. Advances, Deposits and Prepayments
Advances:
Salary Advance
Advance to Suppliers
Operational Advance
Tax deducted at source
Deposits:
Security deposit
Bank Guarantee margin
Lease Deposit

The advances are unsecured but considered good.


8. Cash and Bank Balances
Cash at Banks with Banks on Current Account:
Sonali Bank Ltd, V.I.P. Road Branch, CD A/c
BRAC Bank Ltd, Dhanmondi Branch, CD A/c
Islami Bank Bangladesh Ltd, FEX Branch CD A/c
Mutual Trust Bank Ltd, Guishan Branch, CD A/c
Mutual Trust Bank Ltd, Gulshan Branch, Dollar A/c
Mutual Trust Bank Ltd, Gulshan Branch, ERQ A/c
The Honkon and Shanghai Banking Corporation Ltd.
Trust Bank Ltd, SKB Branch, EURO A/c
Trust Bank Ltd, SKB Branch, Dollar A/c
Trust Bank Ltd, 5KB Branch, FCAD A/c
Trust Bank Ltd, SKB Branch, L/C Margin A/c
AB Bank Ltd, Motijheel Branch, FCAD A/c
AB Bank Ltd, Motijheel Branch, Dollar A/c
AB Bank Ltd, Motijheel Branch, Back to Back A/c
AB Bank Ltd, Margin under Acceptance A/c
AB Bank Ltd, Motijheel Branch, CD A/c
AB Bank Ltd, Motijheel Branch, Notice A/c
AB Bank Ltd, Motijheel Branch, L/C Margin A/c
With Bank on Short Term Deposit Account:
AB Bank Ltd, Motijheel Branch, Dividend A/c
Mutual Trust Bank Ltd, Gualshan Branch, Fixed Deposit A/c
Mutual Trust Bank Ltd, Gualshan Branch, Fixed Deposit A/c
Trust Bank Ltd, SKB Branch, SND A/c
Southeast Bank Ltd, Principal Branch, STD A/c
Cash at Banks
Cash in hand

liii

6,416,121
5,405,819
1,176,9891,805,651
3,295,220
3,422,820
10,888,330
10,634,290
34,158,014
40,074,232

422,710
508
474,369
9,482,767
222,805
764,199
915
36,016,826
1,1 14,735
142,000
29,268
14,091,459
93,870

6,061
11,881
766
176,397

80,008
1,850,137
54,655
64,841,231

906
16,270,781
510,658
969,357
134,368
13,918,522
6,340
204,758
81,278
2,418,295
166,556
34,876,924

1,391,647
513,500
9,167,581
1,109,345
865,205
13,047,278
77,888,509
369,947
78,258,456

2,678,708
1,542,583
3,944,516
1,043,226
823,591
10,032,624
44,909,548
50,570
44,960,118

29

Annual Report 2013


2013

Taka

15,275,755

20,699,769

35,975,524

2012
Taka
15,708,552
22,212,860
37,921,412

10. Loan against Trust Receipts



12,684,300
AB Bank Ltd, Motijheel Branch

4,022,488
Trust Bank Ltd, SKB Branch
16,706,788
These are secured

16,992,224
13,630,012
30,622,236

9. Bank Overdraft


Trust Bank Ltd, 5KB Branch
AB Bank Ltd, Motijheel Branch
These are secured

For Import Purchases

2012

2013

11. Creditors
uss
6,016,816

For Local Purchases


For Buying House Commission
For Dividend Payable
For Staff Income Tax
For Refund Warrant

Taka
470,575,169

US$
5,779,145

Taka
470,133,442
18,235,751
873,707
20,994,367
54,327
371,469
510,663,063

19,535,284
1,135,821
44,996,542
174,874
371,469
536,789,169

These are unsecured but creditors for import purchases are against back to back L/cs.
12. Accrued Expenses
Gas Expenses (Factory)
Electricity bill
Telephone
Salaries,Wages and Allowances
Insurance Premium for Factory
Security bill
Legal Fee
Auditors' Fee
AGM Expense

13.Provision for Taxation


13.1 The break-up is as follows:
Provision for current tax- Note 13.2
Provision for deferred tax-Note 13.3
13.2 The break-up of provision for current tax is as follows:
Opening balance
Provision for current Income-tax for the year- Note-30
Less: Paid during the year
Closing balance

30

2013
Taka
11,355,484
46,500
45,633
16,411,845
5,286,027
771,665
60,000
100,000
1,000,000
35,077,154

2012
Taka
11,022,130
70,533
48,864
13,950,213
3,576,970
535,968
60,000
100,000
1,000,000
30,364,678

15,976,112
(976,026)
15,000,086

10,425,309
284,815
10,710,124

10,425,309
11,550,803
21,976,112
(6,000,000)
15,976,112

6,663,507
11,588,183
18,251,690
(7,826,381)
10,425,309

Annual Report 2013

13.3 The break-up of provision for deferred tax is as follows:


Opening balance
Provision for deferred tax for the year-Note
Closing balance

30

14 Bills Receivable Discounted


Opening balance
Add: Discounted during the year
Less: Collected during the year
Closing balance
15. Workers Participation/Welfare Funds
Opening balance
Add: Contributions for the year
Add: Interest during the year
Closing balance

2013
Taka
284,815
(1,260,841)
(976,026)

2012
Take
2,579,411
(2,294,596)
284,815

113,734,359
328,781,272
442,5 1 5,631
380,557,568

128,535,450
441,512,715
570,048,165
456,31 3,806

61,958,063

113,734,359

22,41 5,582
3,429,987
2,521,753
28,367,322

17,364,243
3,097,862
1,953,477
22,415,582

16. Dues to Associated Company


The company in normal course of business carried out a number of transactions with other entities that fall
within the definition of related party contained in Bangladesh Accounting Standard -24: "Related Party
Disclosures". Total Balance sheet exposure with the related parties as at 30 September 2013 is as under:

2013
2012
Nature of Transaction
Relationship
Name of the related party
Taka
Taka

-
15,500,750
Fashion Knit Garments Ltd. Common Director Sale of Finished Fabrics

17. Event after Balance Sheet date


The Board of Directors of the Company in its meeting held on January 29, 2014 (2012: 22 January 2013)
recommended 15% cash dividend i.e. Tk. 1,50 per share of Tk. 10.00 each (2012: 15% cash dividend) for all
shareholders of the company subject to their approval in the AGM.
18. Share Capital
18.1 Authorized:
100,000,000 Ordinary Shares of Tk. 10 each
18.2 Issued, Subscribed and Paid-up:
25,300,000 Ordinary Shares ofTk. 10 each fully paid-up
14,000,000 Ordinary Shares ofTk. 10 each fully paid-up in cash
6,000,000 Ordinary Shares ofTk. 10 each issued as fully paid-up bonus shares
2,000,000 Ordinary Shares ofTk. 10 each issued as fully paid-up bonus shares
3,300,000 Ordinary Shares ofTk. 10 each issued as fully paid-up bonus shares
25,300,000


2013

Taka

1,000,000,000

2012
Take
1,000,000,000

253,000,000
140,000,000
60,000,000
20,000,000
33,000,000
253,000,000

253,000,000
140,000,000
60,000,000
20,000,000
33,000,000
253,000,000

I: 1

31


Annual Report 2013

18.3 Composition of shareholdings:


Classes of Holdings

Sponsor/Directors

Financials Institutions

ICB

ICB Investors A/c

ICB Mutual Fund

ICB Unit Fund

General
Public
Total

No. of Shares

12,911,855

1336,290

178,020

2013

2012
No. of Shares

12,911,855

1,583,349

5,520

235,356

83,836

1,384,394

9,095,690

25,300,000

51.04

5.28

0.70

60,836

1,293,615

9,519,384

25,300,000

0.24

5.11

37.63

100.00

51.04
6.26
0.02
0.93
0.33
5.47
35.95
100.00

Distribution schedule - Disclosures Under the Listing Regulations of Stock Exchanges:


The distribution schedule showing the number of shareholders and their share holdings in percentage has been disclosed
below as a requirement of the Listing Regulations of Dhaka and Chittagong Stock Exchange'

Shareholdings range in number of shares


00000000001 - 00000000499
00000000500 - 00000000500
00000000501 -00000002000
00000002001 -00000005000
00000005001 -00000010000
00000010001 -00000050000
00000050001 -00000100000
00000100001 -00000250000
00000250001 -00000500000
00000500001 and above
Total

No.of
Shareholders
5,861
5,811
879
710
201
58
13
6
3
7
13,549

2013
No.of
Shares
1,254,737
2,905,500
884,250
1,727,500
1,1 54,500
528,000
952,015
840,000
951,264
14,102,234
25,300,000

Holdings
(ib)
4.96
11.49
3.51
6.82
4.56
2.08
3.76
3.32
3.76
55.74
100.00

No.of
Shareholders
6,374
5,532
935
691
219
48
21
7
3
7
13,837

2012
No.of
Shares
1,304,737
2,766,000
888,250
1,727,500
1,204,500
528,000
1,092,000
840,000
756,000
14,193,013
25,300,000

Holdings
(%)
5.16
10.93
3.51
6.83
4.76
2.09
4.31
3.32
2.99
56.10
100.00

18.4 Option on unissued shares:


There is no option regarding authorized capital not yet issued but can be used to increase the issued, subscribed
and paid up capital through the issuance of new shares.

19. General Reserve

Opening and Closing Balance

32


2013
Taka

6,956,752

6,956,752

2012
Taka
6,956,752
6,956,752

I
I I I

Annual Report 2013

20. Tax Holiday Reserve


Opening & Closing balance

2013
Taka
22,378,988
22,378,988

2012
Taka
22,378,988
22,378,988

10,000,000
10,000,000

10,000,000
10,000,000

21. Dividend Equalisation Reserve


Opening & Closing balance
22. Capital Reserve
Capital reserve represents re-valuation surplus arising out of revaluation of certain tangible fixed assets of the
company as of 30 September 1995 by a professional valuer, following the replacement cost method less
depreciation adjusted there against.
The movement is as follows:

2013
Taka
52,227,962
(44,107,921)
(6,506,1 26)
(1,613,915)
-

Revaluation surplus
Depreciation charged
Adjustment of revaluation surplus on Discarded Machines
Transfer to Retained Earnings
Closing balance

2012
Taka
52,227,962
(44,107,921)
(6,506,126)
1,613,915

23. Long Term Loan


23.1 The break-up is as follows:
Lease Finance Liabilities - Note 23.2
Long Term Loans - Note 23.3
Deferred L/C Liabilities - Note 23.7

16,261,055
28,466,455


53,859,302
43,182,264

97,041,566

44,727,510

23.2 The break-up of lease finance liabilities is as follows:

International Leasing and Financial Services Ltd.

Principal


2013

Interest

Total
-
-

23.3 The movement of loans is as follows:


2012
Interest

Total

13,172,650
13,172,650

3,088,405
3,088,405

16,261,055
16,261,055


2013

Taka

5,000,000

388,767
48,470,535

53,859,302

17% Loan - Note 23.4



17% Loan - Note 23.5

5% Loan - Note 23.6

I I i 1

Principal

.,.. .

2012
Taka
43,845,930
28,423,715
72,269,645

33

Annual Report 2013

23.4 The movement of loans is as follows:


Opening balance

Loan re-paid

Closing balance

2013
Taka

19,499,280
(14,499,280)
5,000,000

2012
Taka
43,845,930
(24,346,650)
19,499,280

The loan has been taken from AB Bank Ltd, Motijheel Branch for import of Plant and machinery,The loan carries interest at
17% and is repayable in 36 monthly installments, starting from 9th December 2009.The loan is secured by hypothecation of
stock and machinery, equipment and book debts.
23.5 The movement of loans is as follows:
Opening balance

Loan re-paid

Closing balance

2013
Taka
8,967,175
(8,578,408)
388,767

2012
Taka
28,423,715
(19,456,540)
8,967,175

The loan has been taken from Trust Bank Ltd, Motijheel Branch for import of Plant and machinery.The loan carries interest
at 16.50% and is repayable in 60 monthly installments, starting from 2 July 2008. The loan is secured by hypothecation of
stock, machinery, equipment and book debts.
2013
Taka
48,470,535

23.6 The movement of loan is as follows:


Opening balance
Loan re-paid

Closing balance

2012
Taka

48,470,535

The offshore term loan has been taken from The Honkong and Shanghai Banking Corporation Limited, Anchor Tower, 108
Bir Uttam C.R. Dutta Road, Dhaka-1205, Bangladesh, for import of Plant and Machinery. The loan carries interest at 5% and is
repayable in 16 monthly installments, starting from 1 January 2014.
2013
Taka
43,182,264

23.7 The movement of Deferred IC Liabilities is as follows:


Opening balance
Loan re-paid

Closing balance

2012
Taka

43,182,264

The offshore term loan has been taken from Mutual Trust Bank Limited, MTB Centre, 26 Gulshan Avenue, Gulshan-1,
Dhaka-1 212, Bangladesh,for import of Plant and Machinery at 360 days deferred L/C payment.
24. Provision for Gratuity
Opening and Closing balance

25. Sales
Item

34

Quantity
(In Kg.)

2013
Amount
(US$/EURO)

Amount
(InTaka)

9,189,846

717,267,480

Export sales:
Knit fabrics

1,570,093 kgs

Garments
Total

5,620377 pcs 13,626,554 1,063,552,540


22,816,400 1,780,820,020

Quantity
(In Kg.)

2013
Taka
9,115,426

2012
Taka
9,115,426

2012
Amount
(In USS/EURO)

Amount
(InTaka(

1,434,448 Kgs 9,696,935

787,197,190

3,917,434 pcs 10,235,215 830,894,752


19,932,150 1618,091,942

Annual Report 2013

26. Export Incentives


Cash Incentive

27.Cost of Goods Sold


27.1 The break-up is as follows:
Materials Consumed - Note-27.2
Salary,Wages and Allowances - Note 27.3
Tiffin & Entertainment expenses
Depreciation - Note 2.3
Stores and Spares Consumed
Factory Conveyance
Power and Gas
Vehicle expenses
Repairs and Maintenance
Packing & Loading expenses
Import Landing Clearing and Insurance
Factory Stationery expenses
Carriage Inward & Outward
Knitting, Sewing & Processing charge
Factory Insurance
Sewing Machine Rental
Miscellaneous
Total Manufacturing Costs for the year
Add: Opening Work in Process
Total Manufacturing Costs
Less: Closing Work in Process
Cost of Goods Manufactured
Add: Opening Finished Goods
Cost of Goods available for use
Less: Closing Finished Goods
Cost of Goods Sold

2013
Taka
43,600,628
43,600,628

2012
Taka
48,565,642
48,565,642

2013
Taka
1,199,021,896
154,046,141
886,694
51,375,512
12,810,184
1,117,808
46,861,468
3,747,032
25,948,258
3,853,602
3,856,930
3,270,264
4,430,324
43,558,336
6,251,783
3,323,288
659,860
1,565,020,380
18,254,536
1,583,274,916
19,827,536
1,563,447,380
20,858,963
1,584,306,343
23,421,522
1,560,884,821

2012
Taka
1,081,777,037
145,678,583
645,441
46,057,648
12,467,151
942,529
44,735,878
3,260,078
28,050,670
3,595,683
3,569,300
3,171,638
3,727,209
42,0 1 5,700
3,576,970
4,090,743
655,300
1,428,01 7,558
16,654,536
1,444,672,094
18,254,536
1,426,417,558
20,685,693
1,447,103,251
20,858,963
1,426,244,288

27.2 Materials Consumed


2013

Yarn

Dyes

Chemicals
Accessories
Total Materials Consumption

liii

Quantity (Kg)
2,738,786
181,480
760,358
-
-


Taka

877,643,818

128,850,740

129,260,895

63,266,443

1,199,021,896

Quantity (Kg)

2,694,406

189,227

643,754

2012
Take
793,098,360
117,687,631
118,064,536
52,926,510
1,081,777,037

35


Annual Report 2013

27.3 Salaries, Wages and Allowances


Employees drawing 1k. 3,000 or more
Employees drawing less than Tk. 3,000
Total

2013
Taka
No.of Employee
76,859,300
625
77,187,141
1,245
154,046,441
1,870

2012
Taka
No. of Employee
71,866,023
412
73,812,560
1,210
145,678,583
1,622

2012
2013
28. Administrative, Selling and General Expenses
Taka
Taka
28.1 The break-up is as follows:
2,600,000
2,600,000
Directors Remuneration - Note 28.2
44,032,606
50,535,870
Salaries and Allowances - Note 28.3
4,279,900
4,110,285
Security Service charge
3,686,269
5,708,390
Depreciation - Note 2.3
2,263,450
2,1
93,935
Postage, Courier,Telephone and Fax
1,697,573
11639,557
Traveling and Conveyance
60,000
60,000
Legal and Professional expenses
100,000
100,000
Auditors Fee - Note 28.2
1,931,798
2,052,630
A.G.M expenses
1,896,500
1,962,906
Registration and Fees
3,359,680
3,691,208
Staff welfare
3,520,279
3,523,445
Stationery expenses
4,868,630
5,042,173
Office Repairs and Maintenance
5,614,453
5,685,451
Vehicle expenses
813,768
934,030
Entertainment expenses
6,145,956
6,514,194
Buying House Commission
13,403,313
20,544,098
Freight Charges & Freight out
52,796,118
46,527,167
Interest expense- Note 28.4
21,099,737
28,561,504
Bank Charges
1,553,560
1,535,643
Miscellaneous
175,723,590
193,522,486
Total
28.2 No remuneration or fee, other than that specified in note 28.1 was paid to directors and auditors.
2012
2013
28.3 Salaries and Allowances:
No.of Employees Taka
No.of Employees Taka
41,756,965
92
46,732,660
98
Employees drawing Tk.3,000 or more
2,275,641
28
3,803,210
33
Employees drawing less than Tk.3,000
44,032,606
120
50,535,870
131
28.4 Interest expense is as follows:
Particulars
Interest on Lease Finance
Interest on Workers' Participation/Welfare Funds
Interest on Long Term Loans
Interest on Loan against Trust Receipt and Bills Dscount
Interest on Bank Overdraft
29.Others Income
Rental income
Interest on fixed deposits
30.Provision for Taxation
Current Tax expense
Deferred Tax expense

36

2013
Taka
3,602,990
2,521,753
3,956,247
31,476,273
4,969,904
46,527,167

2012
Taka
4,219,613
1,953,477
5,623,174
37,868,762
3,131,092
52,796,118

2013
Taka
365,400
1,650,991
2,016,391

2012
Taka
365,400

11,550,803
(1,260,841)
10,289,962

11,581,136
(1,435,885)
10,145,251

365,400

.
..

ED


Annual Report 2013

31. Remuneration/Payments to Directors/Officers:


31.1 The aggregate amount paid/provided during the year in respect of directors and officers of the company as defined in the
Bangladesh Securities and Exchange Rules,1 987 are disclosed below:
2012
2013
Officers
Directors
Officers
Directors
Particulars
Remuneration
Basic salary
House rent allowance
Other benefits and perquisites

2,600,000
-
-
-
2,600,000

-
30,081,520
1,440,760
5,013,590
50,535,870

2,600,000
-
-
2,600,000

26,419,563
13,009,780
4,603,263
44,032,606

31.2 No compensation was allowed by the company to its Managing Director.


31.3 No amount of money was spent by the company for compensating any member of the board for services rendered
except as stated above.
32. The Company has obtained bank credit facilities from the following banks
Utilised
Limit
Type of facility
Bank& Branch Name

It,]

Taka
36,210,18
-
26,666,000
20,699,769
5,000,000
12,684,300
11,769,893
-
113,030,120

(75,844,668) 37,6 1 7,638


64,707,937 53,449,641
43,488,960 35,306,430
36,477,512 26,869,988
4,291,448
4,724,245
1,000,000
1,000,000
14,571,233 29,132,825
89,125,219 187,667,970

AB Bank Ltd.
Motijheel Branch, Dhaka

Back to Back Letter of Credit


Cash Letter of Credit
IBP
Overdraft
Time Loan
Trust receipt
Bank guarantee
Term Loan

Trust Bank Ltd.


SKB Branch, Dhaka

Back to Back Letter of Credit


IBP
Cash Letter of Credit
Trust receipt
Overdraft
Bank guarantee
Term Loan

300,000,000
100,000,000
45,000,000
40,500,000
20,000,000
1,000,000
14,960,000
521,460,000

375,844,668
35,292,063
1,511,040
4,022,488
15,275,755
-
388,767
432,334,781

Mutual Trust Bank Ltd.


Guishan Branch, Dhaka

Back to Back Letter of Credit


IBP

200,000,000
50,000,000
250,000,000

51,046,785

Foreign Exchange Limit


HSBC
AnchorTower, 108 Bir Uttam Import Line (PRM)
C.R. Datta Road, Dhaka-1 205 Import Line
Overdraft
Bank guarantee
Term Loan
Export Cash Limit
Credit Card

Taka
500,000,000
50,000,000
100,000,000
20,000,000
5,000,000
45,000,000
15,000,000
68,390,740
803,390,740

Unutilised
2012
2013
Taka
Taka
463,789,842 292,249,000
50,000,000 48,334,440
73,334,000 32,816,000
(699,769) (2,212,860)
-
32,3 1 5,700 28,007,776
3,230,107 (3,056,500)
68,390,740 48,891,460
690,360,620 455,029,316

51,046,785

20,000,000
395,000,000
280,000,000
40,000,000
20,000,000
20,000,000
54,000,000
1,200,000
830,200,000

48,470,535
48,470,535

.-

148,953,215
50,000,000
198,953,215

20,000,000
395,000,000
280,000,000
40,000,000
20,000,000
20,000,000
5,529,465
1,200,000
781,729,465

37


Annual Report 2013

33. The analysis of consumption of materials and spares as to origin is as below


2012

2013

Imported

Local

Taka
422,023,137
789,809,643
1,211,832,780

%
34.83
65.17
100.00

Taka

475,693,540
618,550,648

43.47
56.53

1,094,244,188

100.00

34. The capacity and actual production of the company are as follows

Item

Finished Garments (Lac Pcs.)


Knit Fabrics) MTs.)

Capacity
84

Actual
Production

Percentage (%)
of achievement

56.20(2012:39.17)

66.90(2012:46.63%)

2,990

1,570(2012:1,434)

52.51 (2012:47.95%)

35.The Company's transaction with the related parties are as follows


Related Party
Fashion Knit Garments Ltd

Nature of Transaction
Export Sale

Fashion Knit Garments Ltd

Current Dues

2013
Taka
689,626,316

Taka
753,546,346

15,500,750

2012

36. General
36.1 There was no sum for which the company was contingently liable as on 30 September 2013 and 2012.
36.2 There was no claim, except an aggregate amount of Tk. 26,01 9,493 (2012: 22,338,256) claimed by the Tax Authority
but appealed against by the company, not acknowledged as debt as on 30 September 2013 and 2012. Such claim,
being contingent liability, needs not be provided for.
36.3 There was no credit facilities available to the company, except trade credits and back to back L/c facilities, during the
years ended 30 September 2013 and 2012.
36.4 There was no foreign shareholder of the company as on 30 September 2013 and 2012 and no dividend was remitted
to any foreign shareholders during the years ended 30 September 2013 and 2012.
36.5 There was no capital expenditure contracted but not incurred or provided for at 30 September 2013 and 2012.
36.6 There was no capital expenditure authorised by the Board but not contracted for at 30 September 2013 and 2012.

The annexed notes 1 to 36 form an integral part of these financial statements.

anaging Direct*

A.Moyeen
Director

CkM.1AA A AMA ^o m e

Directory

Md. Wali Utah


Company Secretary

Dated: Dhaka
January 29,2014


38

Eil

Annual Report 2013

H.R.Textile Mills Limited


Green Deluxe (2nd Floor), House # 671D
Road #11, Block# E, Banani, Dhaka-1213
PROXY FORM

I/We .................................................................................... of........................................................................................................................


.......................................................... being a shareholder of HR. Textile Mills Limited hereby appoint

Mr./Mrs/Miss .................................................................................................... of .....................................................................................


as my proxy to attend and vote for me on my behalf at the 29th Annual General Meeting of the company to
be held on 21st April 2014 at 10:00 a.m. at the Trust Milonayaton, 545 Old Airport Road, Dhaka
Cantonment, Dhaka and at any adjournment thereof.
As witness my hands this ................... day of April 2014
Signature of Proxy ..........................................................................
Signature of Shareholder ................................................

Revenue
Stamp
1k 10.00

Registered Folio! BO No ........................................................................


Important:
1. This Form of Proxy duly completed must be deposited at the Company's Dhaka Office at least 48 (forty eight) hours
before the meeting. The proxy will not be valid if it is not duly stamped and signed. Signature of the Shareholder(s)
and the Proxy must agree with the respective specimen signatures recorded with the Company.
2. A member of the Company may only be appointed as Proxy.

ATTENDANCE SLIP

Mr.!Mrs. .............................................................................................. Folio ! BO No .............................................................................


I hereby record my presence of the 29th Annual General Meeting of H.R. Textile Mills Limited to be
on 21st Apil 2014 at 10:00 a.m. at the Trust Milonayaton, 545 Old Airport Road, Dhaka Cantonment,
Dhaka.

Authorized Signature

Signature of Shareholder! Proxy

Note: Shareholders attending the meeting in person or by proxy are requested to complete the attendance slip and
hand it over at the registration counter of the meeting hall, Valued shareholders may kindly note that the entry of non
members is restricted.

I'll

liii

39

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