IFCO GARMENTS & TEXTILES LTD. - Citizen Securitiescitizensecurities.com/IFCO_PROPECTUS-4.05.2016.pdf · Prospectus: IFCO Garments & Textiles Limited Page | 1 ... e-mail: [email protected]

Prospectus: IFCO Garments & Textiles Limited

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“প ুঁ জি বািারে জবজির াগ ঝ ুঁ জিপূর্ণ।জিরি ও ব রঝ জবজির াগ িরুি”

“Investment in capital market involves certain degree of risks. The investors are required to read the prospectus and risk factors carefully, assess their own financial conditions and risk taking ability before making their investment decisions.”

PUBLIC ISSUE OF 20,000,000 ORDINARY SHARES

OFFER PRICE TK. 10.00 EACH AT PAR, TOTAL SIZE OF FUND TO BE RAISED TK.

200,000,000.00

Opening date of subscription: ……………..

Closing date of subscription: .………….

PROSPECTUS

OF

IFCO GARMENTS & TEXTILES LTD.

Managers to the Issue:

CAPM Advisory Limited

And

Citizen Securities & Investment Limited


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ISSUE DATE OF THE PROSPECTUS: ______


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Preliminary Information and Declarations

NAME & ADDRESS CONTACT PERSON TELEPHONE & FAX NUMBER, E-MAIL, WEB

ADDRESS

ISSUER

IFCO Garments & Textiles Ltd. Registered Office: 63, North Jatrabari, Dhaka-1204, Bangladesh

Nur Mohammed Siddique Managing Director

Phone: +88 01916456922 Fax: +88-00-7547415

Email: [email protected] Website: www.oligroup-bd.com

ISSUE MANAGERS

CAPM Advisory Limited Tower Hamlet (9th Floor), 16, Kemal Ataturk Avenue, Banani C//A, Dhaka-1213

Mufakhkharul Islam Managing Director & CEO

Phone: +88-02-9822391 Fax: +88-02-9822393

Email: [email protected] Website: www.capmadvisorybd.com

Citizen Securities & Investment Limited Al-Razi Complex (8th Floor), Suite G-802, 166-167, Shaheed Syed Nazrul Islam Sarani, Purana Paltan, Dhaka-1000

Tahid Ahmed Chowdhury, FCCA

Managing Director & CEO

Phone:+880-2 9514542, 9515439 Fax: +880-2-9570546

Email: [email protected] Website: www.citizensecurities.com

UNDERWRITERS

Lankabangla Investments Limited Eunoos Trade Center (Level-21) 52-53, Dilkhusha C/A, Dhaka-1000.

Khandakar Kayes Hasan, CFA

Chief Executive Officer

Phone:+88-02-7113585, 7125890 Fax: +88-02-7115756

E-mail: [email protected]

Website: www.lankabangla-

investments.com



Phone: +88-02-9822391 Fax: +88-02-9822393


Prime Finance Capital Management Limited 56-57, Dilkusha C/A, (6th Floor), Dhaka-1000,Bangladesh

M. Mosharraf Hossain PhD, FCA Managing Director & CEO

Phone:+880-2- 9584874-6 Fax:+880-2-9584877

Email: [email protected] Website: www.primefincap.com


Tahid Ahmed Chowdhury, FCCA Managing Director & CEO

Phone:+880-2 9514542, 9515439 Fax: +880-2-9570546


AUDITOR

AHMAD & AKHTAR Chartered Accountants BCIC Bhaban (3rd Floor), 30-31, Dilkusha C/A, Dhaka-1000

Md. Naser

Phone: +880 2 9561289, Fax: +880 2 9564366

Email: [email protected], Website: www.aacabd.org

“If you have any query about this document, you may consult the issuer, issue managers and underwriters”

“Prospectus of the IFCO Garments and Textiles Ltd. may be obtained from the Issuer Company and Issue Managers”

“CONSENT OF THE BANGLADESH SECURITIES AND EXCHANGE COMMISSION HAS BEEN OBTAINED TO THE

ISSUE/OFFER OF THESE SECURITIES UNDER THE SECURITIES AND EXCHANGE ORDINANCE, 1969, AND THE

BANGLADESH SECURITIES AND EXCHANGE COMMISSION (PUBLIC ISSUE) RULES, 2015. IT MUST BE DISTINCTLY

UNDERSTOOD THAT IN GIVING THIS CONSENT THE COMMISSION DOES NOT TAKE ANY RESPONSIBILITY FOR THE

FINANCIAL SOUNDNESS OF THE ISSUER COMPANY, ANY OF ITS PROJECTS OR THE ISSUE PRICE OF ITS SECURITIES

OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE OR OPINION EXPRESSED WITH REGARD TO THEM. SUCH RESPONSIBILITY LIES WITH THE ISSUER, ITS DIRECTORS, CHIEF EXECUTIVE OFFICER, MANAGING DIRECTOR, CHIEF FINANCIAL OFFICER, COMPANY SECRETARY, ISSUE MANAGER, ISSUE MANAGER’S CHIEF EXECUTIVE

OFFICER, UNDERWRITERS, AUDITOR(S), VALUER AND/OR CREDIT RATING COMPANY (IF ANY)."

RISKS IN RELATION TO THE FIRST ISSUE "THIS BEING THE FIRST ISSUE OF THE ISSUER, THERE HAS BEEN NO FORMAL MARKET FOR THE SECURITIES OF THE ISSUER. THE FACE

VALUE OF THE SECURITIES IS TK. 10.00 (TEN) AND THE ISSUE PRICE IS TK. 10.00 (TEN), I.E. ‘1 TIME’ OF THE FACE VALUE. THE ISSUE

PRICE HAS BEEN DETERMINED AND JUSTIFIED BY THE ISSUER AND THE ISSUE MANAGER/BIDDING BY THE ELIGIBLE INVESTORS AS STATED

UNDER THE PARAGRAPH ON “JUSTIFICATION OF ISSUE PRICE” SHOULD NOT BE TAKEN TO BE INDICATIVE OF THE MARKET PRICE OF THE

SECURITIES AFTER LISTING. NO ASSURANCE CAN BE GIVEN REGARDING AN ACTIVE OR SUSTAINED TRADING OF THE SECURITIES OR THE

PRICE AFTER LISTING."

GENERAL RISK "INVESTMENT IN SECURITIES INVOLVES A DEGREE OF RISK AND INVESTORS SHOULD NOT INVEST ANY FUNDS IN THIS OFFER UNLESS

mailto:[email protected]


http://www.lankabangla-investments.com/



http://www.aacabd.org/


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THEY CAN AFFORD TO TAKE THE RISK OF LOSING THEIR INVESTMENT. INVESTORS ARE ADVISED TO READ THE RISK FACTORS

CAREFULLY BEFORE TAKING AN INVESTMENT DECISION IN THIS OFFER. FOR TAKING AN INVESTMENT DECISION, INVESTORS MUST RELY

ON THEIR OWN EXAMINATION OF THE ISSUER AND THE OFFER INCLUDING THE RISKS INVOLVED. THE SECURITIES HAVE NOT BEEN

RECOMMENDED BY THE BANGLADESH SECURITIES AND EXCHANGE COMMISSION (BSEC) NOR DOES BSEC GUARANTEE THE ACCURACY

OR ADEQUACY OF THIS DOCUMENT. SPECIFIC ATTENTION OF INVESTORS IS INVITED TO THE STATEMENT OF ‘RISK FACTORS’ GIVEN ON

PAGE NUMBER(S) 65-71. "

IFCO GARMENTS AND TEXTILES LIMITED’S ABSOLUTE RESPONSIBILITY "THE ISSUER, HAVING MADE ALL REASONABLE INQUIRIES, ACCEPTS RESPONSIBILITY FOR AND CONFIRMS THAT THIS RED HERRING

PROSPECTUS/ PROSPECTUS/INFORMATION MEMORANDUM CONTAINS ALL MATERIAL INFORMATION WITH REGARD TO THE ISSUER AND

THE ISSUE, THAT THE INFORMATION CONTAINED IN THE RED-HERRING PROSPECTUS/PROSPECTUS/INFORMATION MEMORANDUM ARE

TRUE, FAIR AND CORRECT IN ALL MATERIAL ASPECTS AND ARE NOT MISLEADING IN ANY RESPECT, THAT THE OPINIONS AND

INTENTIONS EXPRESSED HEREIN ARE HONESTLY HELD AND THAT THERE ARE NO OTHER FACTS, THE OMISSION OF WHICH MAKE THIS

DOCUMENT AS A WHOLE OR ANY OF SUCH INFORMATION OR THE EXPRESSION OF ANY SUCH OPINIONS OR INTENTIONS MISLEADING IN

ANY MATERIAL RESPECT."

Availability of Prospectus

Hard Copy and Soft Copy of the Prospectus and Abridged Version of Prospectus of IFCO Garments and Textiles Ltd. may be obtained from the following institutions:

NAME & ADDRESS CONTACT PERSON TELEPHONE & FAX NUMBER, E-MAIL, WEB

ADDRESS

ISSUER

IFCO Garments & Textiles Ltd. Registered Office: 63, North Jatrabari, Dhaka-1204, Bangladesh

Nur Mohammed Siddique Managing Director

Phone: +88 01916456922 Fax: +88-00-7547415

Email: [email protected] Website: www.oligroup-bd.com

ISSUE MANAGERS



Phone: +88-02-9822391 Fax: +88-02-9822393





Phone:+880-2 9514542, 9515439 Fax: +880-2-9570546


UNDERWRITERS

Lankabangla Investments Limited Eunoos Trade Center (Level-21), 52-53, Dilkhusha C/A, Dhaka-1000

Khandakar Kayes Hasan, CFA

Chief Executive Officer

Phone:+88-02-7113585, 7125890 Fax: +88-02-7115756


Website: www.lankabangla-investments.com



Phone: +88-02-9822391 Fax: +88-02-9822393


Prime Finance Capital Management Limited 56-57, Dilkusha C/A, (6th Floor), Dhaka-1000,Bangladesh

M. Mosharraf Hossain PhD, FCA Managing Director & CEO

Phone:+880-2- 9584874-6 Fax:+880-2-9584877



Tahid Ahmed Chowdhury, FCCA Managing Director & CEO

Phone:+880-2 9514542, 9515439 Fax: +880-2-9570546


STOCK EXCHANGES

Dhaka Stock Exchange Limited (DSE) DSE Library, Research and Information Department, 9/F, Motijheel C/A, Dhaka – 1000

Mr. Md. Afzalur Rahman Manager

Tel: +88 02 956 46 01-7, +88 02 966 6944-8

Fax:+88 02 956 9755, +88 02 956 47 27 e-mail: [email protected]

website: www.dsebd.org

Chittagong Stock Exchange Limited (CSE) CSE Building, 1080, Sheikh Mujib Road, Chittagong – 4100.

Mr. Mohammad Jabed Sarwar Assistant Manager

Tel: +88 031 714 632-3, 031 720 871

Fax: +88 031 714 101; +88 02 951 39 11-

15

e-mail: [email protected]






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Dhaka Liaison Office: 52-53, Dilkusha C/A, Dhaka - 1000

website: www.cse.com.bd

Prospectus would also be available on the web sites of BSEC (www.secbd.org), DSE (www.dsebd.org), CSE (www.csebd.com), IFCO Garments & Textiles Ltd. (www.oligroup-bd.com), CAPM Advisory Limited (www.capmadvisorybd.com) and Citizen Securities & Investment Limited (www.citizensecurities.com) and at the Public Reference Room of the Bangladesh Securities and Exchange Commission (BSEC) for reading and studying.

DATE OF PUBLICATION OF ABRIDGED VERSION OF PROSPECTUS: …………

Names and dates of the newspapers where abridged version of prospectus was published:

Sl. No.

Newspaper Name Date Page Number of the Newspaper

1

2

3

4

http://www.secbd.org/

http://www.dsebd.org/

http://www.csebd.com/


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Definitions and Acronyms/Elaborations

Terms Description

AGM : Annual General Meeting

Allotment : Letter of allotment for shares

BAS : Bangladesh Accounting Standards

BGMEA : Bangladesh Garments Manufactures and Export Association

BO A/C : Beneficiary Owner Account or Depository Account

BSEC : Bangladesh Securities and Exchange Commission

CAPMAL : CAPM Advisory Limited

CDBL : Central Depository Bangladesh Limited

CIB : Credit Information Bureau

Certificate : Share Certificate

Commission : Bangladesh Securities and Exchange Commission

Companies Act : Companies Act, 1994 (Act. No. XVIII of 1994)

CPOs : Chief Purchasing Officers

CSE : Chittagong Stock Exchange Limited

CSIL : Citizen Securities & Investment Limited

CVC : Chief Value Cotton

DSE : Dhaka Stock Exchange Limited

FC Account : Foreign Currency Account

IGTL : IFCO Garments & Textiles Ltd

IPO : Initial Public Offering

Issue : Public Issue of shares of IFCO Garments & Textiles Ltd

Issue Manager : CAPM Advisory Limited (CAPMAL) Citizen Securities & Investment Limited (CSIL)

MP : Market Price

NAV : Net Asset Value of the Company

NRB : Non- Resident Bangladeshi

PC : Polyester Cotton

Securities Market : Share market

SC : Share Certificate

Securities : Shares of IFCO Garments & Textiles Ltd

Sponsors : The Sponsors Shareholders of IFCO Garments & Textiles Ltd

STD Account : Short Term Deposit Account

Stockholders : Shareholder

Subscription : Application money

Taka/Tk./BDT : Bangladeshi Taka

The Company/Issuer : IFCO Garments & Textiles Ltd


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TABLE OF CONTENTS

Particulars Page No.

SECTION I: EXECUTIVE SUMMARY 7-11

About the industry 7

About the Issuer 8

Financial Information 8

Features of the issue and its objects 9

Legal and other Information 9

Directors’ background 9

Capital structure and history of capital raising 10

Summary of Valuation Report of securities 11

SECTION II: CONDITIONS IMPOSED BY THE COMMISSION IN THE CONSENT LETTER

11-16

Disclosure in Respect of Issuance of Security in Demat Form 11

Conditions under 2CC of the Securities and Exchange Ordinance, 1969 11

SECTION III: DECLARATION AND DUE DILIGENCE CERTIFICATES 17-23

Declaration about the responsibility of the Director(s), including the CEO of IFCO Garments & Textiles Ltd. in respect of Prospectus

17

Due Diligence Certificate of the Manager to the Issue 18

Due Diligence Certificate of the Underwriter(s) 20

SECTION IV: ABOUT THE ISSUER 24-25

SECTION V: CORPORATE DIRECTORY OF THE ISSUER 25

SECTION VI: DESCRIPTION OF THE ISSUER 26-46

Summary 26

General Information 27

Capital Structure 29

Description of Business 33

Description of Property 36

Plan of Operation and Discussion of Financial Condition 39

SECTION VII: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS

47-49

Overview of business and strategies 47

SWOT ANALYSIS 48

Analysis of the financial statements of last five years 48

Known trends demands, commitments, events or uncertainties 49

Trends or expected fluctuations in liquidity 49

Off-balance sheet arrangements 49

SECTION VIII: DIRECTORS AND OFFICERS 50-54

SECTION IX: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 55

SECTION X: EXECUTIVE COMPENSATION 56

SECTION XI: OPTIONS GRANTED TO DIRECTORS, OFFICERS AND EMPLOYEES 56

SECTION XII: TRANSACTION WITH THE DIRECTORS AND SUBSCRIBERS TO THE 57


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MEMORANDUM

SECTION XIII: OWNERSHIP OF THE COMPANY’S SECURITIES 57-59

SECTION XIV: CORPORATE GOVERNANCE 60

SECTION XV: VALUATION REPORT OF SECURITIES PREPARED BY THE ISSUE MANAGER

61-62

SECTION XVI: DEBT SECURITIES 62

SECTION XVII: PARTIES INVOLVED AND THEIR RESPONSIBILITIES 62

SECTION XVIII: OWNERSHIP OF THE COMPANY’S SECURITIES 63-64

SECTION XIX: OUTSTANDING LITIGATIONS, FINE OR PENALTY 64

SECTION XX: RISK FACTORS AND MANAGEMENT’S PERCEPTIONS ABOUT THE RISKS

65-71

SECTION XXI: DESCRIPTION OF THE ISSUE 71-72

SECTION XXII: USE OF PROCEEDS 72-74

SECTION XXIII: LOCK-IN 74-76

SECTION XXIV: MARKETS FOR THE SECURITIES BEING OFFERED 76

SECTION XXV: DESCRIPTION OF SECURITIES OUTSTANDING OR BEING OFFERED

77

SECTION XXVI: FINANCIAL STATEMENTS 78-109

SECTION XXVII: PUBLIC ISSUE APPLICATION PROCEDURE 110-113


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SECTION -I: EXECUTIVE SUMMARY

(a) About the Industry:

Global Economy Outlook

Lower growth in China and its implications for emerging Asia: Growth in China is expected to slow to 6.3 percent in 2016 and 6.0 percent in 2017, primarily reflecting weaker investment growth as the economy continues to rebalance. India and the rest of emerging Asia are generally projected to continue growing at a robust pace, although with some countries facing strong headwinds from China’s economic rebalancing and global manufacturing weakness.

The decline in the price of oil has led to a large reallocation of real income from oil exporters to oil importers. The early evidence suggests that, in oil importers, from the United States, to the euro area, to China, and to India, the increase in real income is increasing spending. Oil exporters have cut spending but to a smaller extent: many have substantial financial reserves and are in a position to reduce spending slowly.

Exchange rate movements have been unusually large. Among major currencies, the dollar has seen a major appreciation, and the euro and the yen a major depreciation. These movements clearly reflect differences in monetary policy, with the United States expecting to exit the zero lower bound this year, but with no such prospects for the euro area or Japan. To the extent that both the euro area and Japan were at risk of another relapse, the euro and yen depreciations will help. To some extent, the United States has the policy room to offset the adverse effects of the dollar appreciation. Thus, this adjustment of exchange rates must be seen, on net, as good news for the world economy.


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(Source: IMF)


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Outlook of Bangladesh’s Textile Industry

The textile industry has played an important role in Bangladesh’s economy for a long time. Currently, the textile industry in Bangladesh accounts for 45 percent of all industrial employment and contributes 5 percent to the total national income. The industry employs nearly 4 million people, mostly women.

A huge 81.71% of the country’s export earnings come from textiles and apparel, according to the latest figures available. Bangladesh exports its apparel products worth nearly $25.5 billion in the financial year 2014-2015 to the United States, European Union (EU), Canada and other countries of the world. It is the sixth largest apparel supplier to the United States and EU countries. Moreover Bangladesh's apparel exports could triple by 2020 as the European and the US buyers plan to strengthen their presence in the country and new players are planning to enter the market seen as the 'Next China', according to a study.

A survey shows that chief purchasing officers (CPOs) of leading apparel buyers in Europe and the US almost unanimously favor moving some of their sourcing away from China. In the survey, 54 percent of CPOs shared their plans to decrease their sourcing activities in China by up to 10 percent and 32 percent stated that they sought to decrease their share of sourcing in China by more than 10 percent over the next five years. As Western RMG buyers search for the “next China,” they are evaluating all options to strengthen their proximity sourcing, moving on to Northwest China, Southeast Asia, and other Far East supplier countries. Bangladesh is clearly the preferred next stoppage for the sourcing caravan.

In the last 15 years, Bangladesh’s share of apparel imports to Europe and the US more than doubled, securing Bangladesh’s No. 3 position among importers to the European Union 15 (EU-15) and the No. 4 position among US importers. Within just the last three years, 39 percent of the companies represented in the CPO interviews have increased their share of sourcing in Bangladesh by more than 30 percent, 13 percent of the companies by 20 to 30 percent, and 30 percent of the companies by 10 to 20 percent.

Bangladesh’s growth has been recognized. Goldman Sachs included Bangladesh in the “Next 11” emerging countries to watch following BRIC (Brazil, Russia, India, and China) and JP Morgan lists Bangladesh among its “Frontier Five” emerging economies in which it is worth investing.

(Source: http://www.bgmea.com.bd/) (b) About the Issuer:

IFCO Garments & Textiles Ltd. (IGTL) is an export oriented garments & textile company for readymade all kinds of knit & woven garments. The commercial production of the factory commenced on the year of March 16, 2005. Being an integrated company, IFCO Garments & Textile Ltd. is engaged in every stage of the production process. IGTL offers an entire process line starting from CAD to packaging of finished products.

(c) Financial Information: Major financial information of IFCO Garments & Textiles Ltd. (IGTL) is as follows.

0 20 40 60 80 100

Bangladesh

Vietnam

Indonesia

Cambodia

% of Respondents

% of Respondents


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Sl. Particulars June 30, 2015 June 30, 2014 June 30, 2013 June 30, 2012 June 30, 2011

1 Turnover 1,233,721,942 1,201,755,575 1,512,600,470 1,075,864,278 846,529,754

2 Gross Profit 236,491,107 243,421,139 398,851,091 282,483,053 204,166,083

3 Net profit before tax 157,155,485 162,620,917 317,310,546 195,830,917 123,292,603

4 Net Profit after tax 153,428,160 152,101,819 302,772,255 195,830,917 123,292,603

5 Total Assets 1,923,476,534 1,871,841,827 2,289,452,721 1,789,567,632 1,601,360,679

6 Share Capital 495,995,700 495,995,700 99,800,000 5,000,000 5,000,000

7 Retained Earnings 918,136,821 764,708,661 612,606,842 309,834,587 114,003,670

8 No. of Shares 49,599,570 49,599,570 998,000 50,000 50,000

9 Face Value 10.00 10.00 100.00 100.00 100.00

10 NAV Per Share 28.51 25.42 167.27 2,733.17 2,341.51

11 Earnings per Share (EPS) 3.09 4.82 176.50 391.66 246.59

(d) Features of the issue and its objects:

Offer Price BDT 10

Number of Shares 20,000,000 ordinary shares

Offer Size BDT 200,000,000

Issue Manager CAPM Advisory Limited and Citizen Securities & Investment Limited

Register to the Issue N/A

Underwriter(s) CAPM Advisory Limited, Citizen Securities & Investment Limited, Prime Finance Capital Management Limited, LankaBangla Investments Limited

NAV per Share BDT 28.51

EPS per Share BDT 3.09

Purpose of Raising Fund Net Proceeds from initial public offering (IPO) will be used for Expansion of Civil Work, repayment of high interest- bearing loan.

(e) Legal and other Information:

Name of the Company IFCO Garments & Textiles Ltd. (IGTL)

Private/ Public Company Public Limited Company

Date of Incorporation 16th march, 2005

Date of Commencement of Business

16th march, 2005

Registration Number CH-5372/2005

Particulars Certificate/ License No Validity

Certificate of Incorporation CH-5372/2005 N/A

TIN Certificate 375-200-7268/CO-10 N/A

VAT Reg. No. 24061000395 N/A

Trade License 034931 Valid up to 30/06/2016

Import Registration Certificate

BA-0164978 Valid up to 30/06/2016

Export Registration Certificate RA-73332 Valid up to 30/06/2016

Fire License CH-7844/2006-07 Valid up to 30/06/2016

Environment Clearance certificate

18431/2012/975 Valid up to 14/10/2016

Factory License 3560/Chattragram Valid up to 2016

BOI License 20050416-C N/A

Certificate of CCCI M/GEN/36/2889/2015-2016 Valid up to 30/06/2016

NOC N/A N/A

(f) Directors’ background:

Mr. Mohammed Shahed, Chairman

Mr. Mohammed Shahed aged 53, Chairman of the Company born in well known business family in 1961 in Chittagong. After completion of his Masters of Arts from Chittagong University, he engaged himself in business. He is involved in many social activities and


Page | 13

related works. He has traveled many countries throughout the world for gaining technical know-how on garments industry and latest development of production technology and became very successful businessman in short time of his business career with his sincerity, honesty, conceptual and practical problem solving minded. His interpersonal skills, leadership behavior, high analytical ability in business and very hard working nature made him business leader.

Mr. Nur Mohammed Siddique, Managing Director

Mr. Nur Mohammed Siddique aged 52, Managing Director of the Company born in well known Muslim business family in 1962 in Chittagong. After completion of his Masters of Commerce from Chittagong University, he engages himself in business. He has visited many countries of the world including Japan, China, India, America, U.K. etc. in connection of business and has bagged to his credit a vast experience and knowledge in modern method, technology, production, marketing and management techniques of garments industries by attaching several courses / seminars and visiting similar industrial concerns of the world. He became a successful businessman in short time of his business career with his sincerity, honesty, conceptual and practical problem solving minded. He is also involved in many social and cultural activities of the country.

Mr. MD. Solaiman, Director

Mr. MD. Solaiman aged 66, Director of the Company born in well known business family in 1948 in Chittagong. After completion of his Bachelor of Arts from Chittagong University, he engaged himself in business. During his tenure of business career, he gained business knowledge in textiles and readymade garments industries. He is involved in many social activities and related works. He has traveled many countries including Japan, China, India, Hong Kong, America, U.K. etc. for gaining technical know-how on garments industry and latest development of production technology.

Mr. Mohammed Morshed, Director

Mohammad Morshed aged 44, born in well known business family in 1968 in Chittagong. After completing his Bachelor of Commerce from National University he engages himself in business. He became a successful business man in short time of his business career with his sincerity, honesty, conceptual and practical problem solving minded. He has started his carrier as an entrepreneur of C & A Fashion Ltd since 1992. He is also the Director C & A Textiles Ltd and managing Director of FamilyTex. During his tenor of business career, he gained business knowledge in textiles and readymade garments industries.

Mr. Md. Nurul Huda, Director

Mr. Md. Nurul Huda, aged 31, Director of the Company. He was born in well known muslim business family in 1984 in Muladi, Barisal. He is the son of Mr. Abdul Hakim and Mrs. Rizia Begum. After completion of Masters Degree, he engaged himself in business. He has traveled many countries throughout the world for gaining technical know-how on garments industry and latest development of production technology. He is also involved in many social and cultural activities of the country.

Mr. Mohammad Mehedi Hasan, Independent Director

Mr. Mohammad Mehedi Hasan, aged 42 , obtained his Master’s Degree in 1999. He was born in well known muslim family in Barisal. He is the son of Mr. Md. Fazlur Rahman and Mrs. Shetara Rahman. He has vast experience in Financial, Corporate & Business Management. He has a total working experience of seventeen years of which thirteen years in the field of Garments & Textile Industry. He worked for different capacities like Head of Commercial, Head of Accounts in different corporate house. He is also involved in many social and cultural activities of the country.


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Mr. Abdul Mannan, Independent Director

Mr. Abdul Mannan, aged 61, is the independent director of the Company. He was born in well known muslim family in Gosairhat, Shariatpur. After completion of M.Com (Accounting) from Dhaka University, he started career in the field of Accounts & Finance in banking sector. There after he engaged himself in corporate sector and achieved vast experience in field of Financial & Corporate Management. He has a total working experience of thirty five years. During his service tenure, he worked for different capacities like CFO, Head of Corporate Affairs etc. He has vast experiences in readymade garments, textile, chemicals and dyeing industries also. He is also involved in many social and cultural activities of the country.

(g) Capital structure and history of capital raising:

The Company intends to issue 20,000,000 ordinary shares of Tk. 10.00 each at par through Initial public offering (IPO) totaling to Tk. 200,000,000.00 subject to regulatory approvals.

Particulars No of Shares Face Value (Tk.) Amount in Taka

Before IPO:

Authorized Capital 162,000,000 10.00 1,620,000,000

Paid up capital 49,599,570 10.00 495,995,700

Total paid up capital before IPO (A) 49,599,570 10.00 495,995,700

After IPO:

To be issued as IPO (B) 20,000,000 10.00 200,000,000

Paid up capital (Post IPO) (A+B) 69,599,570 10.00 695,995,700

The Company has raised its paid-up capital in following phases:

Particulars Date of

allotment

Consideration in cash or other

than cash

No. of shares

Face value

Total (in BDT)

First (Subscription to the MoA and AoA at the time of incorporation)

16.03.2005

Cash 10,000

100 1,000,000

2nd allotment 16.07.2006

Cash 40,000 100 4,000,000

3rd allotment 14.05.2013

Cash 940,000 100 94,000,000

4th allotment 08.06.2013

Cash 8,000 100 800,000

5th allotment 12.12.2013

Cash 3,961,957 100 396,195,700

Total 495,995,700

(h) Summary of Valuation Report of securities:

Method Particulars Amount in BDT

Method-1 Net Asset Value(NAV) per share 28.51

Method-2 Historical Earning based value per share 40.64

Method-3 Average market price per share of similar stocks 26.20

SECTION -II: CONDITIONS IMPOSED BY THE COMMISSION IN THE

CONSENT LETTER

DISCLOSURE IN RESPECT OF ISSUANCE OF SECURITY IN DEMAT FORM


Page | 15

As per provision of the Depository Act, 1999 and regulation made there under, shares will be issued in dematerialized condition. All transfer/transmission/splitting will take place in the Central Depository Bangladesh Ltd. (CDBL) system and any further issuance of shares (rights/bonus) will be issued in dematerialized form only.

CONDITIONS UNDER 2CC OF THE SECURITIES AND EXCHANGE ORDINANCE, 1969

PART–A

1. The Company shall go for Initial Public Offer (IPO) for 20,000,000 ordinary shares of Tk.

10.00 each at par totaling to Tk. 200,000,000.00 (Taka twenty crore) following the Securities and Exchange Ordinance, 1969, the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015, the Depository Act, 1999 and rules made thereunder.

2. The abridged version of the prospectus, as approved by the Commission, shall be

published by the issuer in 4 (Four) national daily newspapers (two in Bangla and two in English), within 02 (two) working days of issuance of this consent letter. The issuer shall post the full prospectus, vetted by Commission, in the issuer’s website and shall also put on the websites of the Commission, stock exchanges, and the issue manager, within 3 (three) working days from the date of issuance of this letter and shall remain posted till the closure of the subscription list. The issuer shall submit to the Commission, the stock exchanges and the issue manager a diskette containing the text of the vetted prospectus in “MS -Word” format.

3. The company shall submit 40 (Forty) copies of the printed prospectus to the Commission for official record within 5 (Five) working days from the date of publication of the abridged version of the prospectus in the newspaper.

4. The issuer company and the issue manager shall ensure transmission of the prospectus and its abridged version for NRBs through email to the Bangladesh Embassies and Missions abroad within 5 (Five) working days from the date of publication of the abridged version of the prospectus in the newspaper. A compliance report shall be submitted in this respect to the Commission jointly by the issuer and the Issue Manager within 02 (Two) working days from the date of said transmission of the prospectus.

5. The following declaration shall be made by the company in the prospectus, namely: - “Declaration about Listing of Shares with the stock exchange (s):

None of the stock exchange(s), if for any reason, grants listing within 75 (Seventy Five) days from the closure of subscription, any allotment in terms of this prospectus shall be void and the company shall refund the subscription money within 15 (Fifteen) days from the date of refusal for listing by the stock exchanges, or from the date of expiry of the said 75 (Seventy Five) days, as the case may be.

In case of non-refund of the subscription money within the aforesaid 15 (Fifteen) days, the Directors of the company, in addition to the issuer company, shall be collectively and severally liable for refund of the subscription money, with interest at the rate of 2% (two percent) above the bank rate, to the subscribers concerned.

The issue manager, in addition to the issuer company, shall ensure due compliance of the above mentioned conditions and shall submit compliance report thereon to the Commission within 07 (Seven) days of expiry of the aforesaid 15 (Fifteen) days time period allowed for refund of the subscription money.”

6. The IPO shall stand cancelled and the issuer and issue manger shall inform the Commission

within 2 (two) working days and release the subscription money within 10 (ten) working


Page | 16

days after receiving verification report from CDBL and the information from exchanges to the effect that at least 35% of the IPO in any category is not subscribed.

7. 20% of the securities reserved for general public shall be reserved for ¶wZMÖ¯— ¶z`ª

wewb‡qvMKvix. In case of over subscription in the general public category, the issuer and

the issue manager shall jointly conduct an open lottery. In case of over subscription in the eligible investors category, securities shall be allotted on pro-rata basis as per rules.

8. All applicants under general public category shall apply for minimum market lot of 500 shares worth Taka 5,000/- (Taka five thousand only) and eligible investors shall apply for a market lot or its multiples.

9. An applicant cannot submit more than two applications, one in his/her own name and the other jointly with another person. In case, an applicant submits more than two applications, all applications will be treated as invalid and will not be considered for allotment purpose. In addition, 15% (fifteen) of the application money will be forfeited by the Commission and the balance amount will be refunded to the applicant.

10. The applicants who have applied for more than two applications using same bank account, their application will not be considered for lottery and the Commission will forfeit 15% of their subscription money.

11. Making of any false statement in the application or supplying of incorrect information therein or suppressing any relevant information in the application shall make the application liable to rejection and subject to forfeiture of 25% of the application money and/or forfeiture of share (unit) before or after issuance of the same by the issuer. The said forfeited application money or share (unit) will be deposited in account of the Bangladesh Securities and Exchange Commission (BSEC). This is in addition to any other penalties as may be provided for by the law.

12. The company shall furnish the list of allotees to the Commission and the stock exchange(s) simultaneously in which the shares will be listed, within 24 (Twenty Four) hours of allotment.

13. Shares not allotted at the time of according this consent, but allotted after listing, in favor of sponsors, directors or shareholders having 5% or more shares through stock dividends, shall be subject to a lock-in period of 02(two) years from the date of issuance of the prospectus.

14. If any share shares of Sponsors/Directors/Promoters is in paper format, it shall be handed over to securities custodian registered with the Commission and shall remain held till completion of lock-in period and the name of the securities custodian shall be furnished to the Commission jointly by the issuer and issue manager, along with a confirmation thereof from the custodian, within one week of listing of the shares with the stock exchange(s). Or they (shares of Sponsors/ Directors/ Promoters) can be demated and shall remain in lock-in under CDBL system and issuer shall submit a dematerialization confirmation report generated by CDBL and attested by Managing Director of the company along with the lock-in confirmation to the Commission within one week of listing of the shares with the stock exchange(s). In respect of shares other than Sponsors/Directors/Promoters the issuer will ensure their lock-in of those shares and submit a statement to this effect to the Commission.

15. The company shall not declare any dividend/bonus shares before listing of its capital with any Exchange from the date of this consent for raising of capital.


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PART–B Application Process Step-1 (Applicant) 1. An applicant for public issue of securities shall submit application/buy instruction to the

Stockbroker/ Merchant Banker where the applicant maintains customer account, within the cut-off date (i.e. The subscription closing date), which shall be the 25th(twenty fifth) working day from the date of publication of abridged version of prospectus.

2. The application/buy instruction may be submitted in prescribed paper or electronic form, which shall contain the Customer ID, Name, BO Account Number, Number of Securities applied for, Total Amount and Category of the Applicant. At the same time:

a. Other than non-resident Bangladeshi (NRB) and Foreign applicants shall make the

application money and service charge available in respective customer account maintained with the Stockbroker/Merchant Banker. No margin facility, advance or deferred payment is permissible for this purpose. In case the application is made through a margin account, the application money shall be deposited separately and the Stockbroker/Merchant Banker shall keep the amount segregated from the margin account, which shall be refundable to the applicant, if become unsuccessful.

b. Non-resident Bangladeshi (NRB) and Foreign applicants shall submit bank drafts (FDD), issued in favor of the Issuer for an amount equivalent to the application money, with their application to concerned Stockbroker/Merchant Banker. The draft (FDD) shall be issued by the Bank where the applicant maintains NITA/Foreign Currency account debiting the same account. No banker shall issue more than two drafts from any NITA/Foreign Currency account for any public issue. At the same time, the applicant shall make the service charge available in respective customer account maintained with the Stockbroker/Merchant Banker.

Step-2 (Intermediary)

3. The Stockbroker/Merchant Banker shall maintain a separate bank account only for this purpose namely “Public Issue Application Account”. The Stockbroker/Merchant Banker shall: a. post the amount separately in the customer account (other than NRB and Foreign

applicants), and upon availability of fund, block the amount equivalent to the application money;

b. Accumulate all the application/buy instructions received up to the cut-off date, deposit the amount in the “Public Issue Application Account” maintained with its bank within the first banking hour of next working day of the cut-off date. In case of application submitted by the Stock-dealer or the Merchant Banker’s own portfolio, the application amount should also be transferred to the “Public Issue Application Account”;

c. Instruct the banker to block the account for an amount equivalent to the aggregate application money and to issue a certificate in this regard.

4. Banker of the Stockbroker/Merchant Banker shall block the account as requested for, issue

a certificate confirming the same and handover it to the respective Stockbroker/Merchant Banker.


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5. For Non-resident Bangladeshi (NRB) and Foreign applicants, the Stockbroker/Merchant Banker shall hold the bank drafts (FDD) submitted by the applicants in their custody with a list containing the draft information against the respective applicant’s particulars.

6. The Stockbroker/Merchant Banker shall prepare category wise lists of the applicants containing Customer ID, Name, BO Account Number and Number of Securities applied for, and within 03 (three) working days from the cut-off date, send it to the respective Stock Exchange in electronic (text format with tilde ‘~’ separator) format and the certificate(s) issued by its banker.

7. On the next working day, the stock exchanges shall provide the Issuer with the information received from the Stockbroker/Merchant Bankers. Stock Exchanges shall verify and preserve the bankers’ certificates in their custody.

8. The application/buy instructions shall be preserved by the Stockbroker/Merchant Bankers up to 6 months from listing of the securities with exchange.

Step-3 (Issuer)

9. The Issuer shall prepare consolidated list of the applications and send the applicants’ BOIDs in electronic (text) format in a CDROM to CDBL for verification. The Issuer shall post the consolidated list of applicants on its website. CDBL shall verify the BOIDs as to whether the BO accounts of the applicants are active or not.

10. On the next working day, CDBL shall provide the Issuer with an updated database of the applicants containing BO Account Number, Name, Addresses, Parents’ Name, Joint Account and Bank Account Information along with the verification report.

11. After receiving verification report and information from CDBL, the Issuer shall scrutinize the applications, prepare category wise consolidated lists of valid and invalid applications and submit report of final status of subscription to the Commission and the stock exchanges within 10 (ten) working days from the date of receiving information from the stock exchanges.

12. The Issuer and the issue manager shall conduct category wise lottery with the valid applications within 03 (three) working days from the date of reporting to the Commission and the Stock Exchanges, if do not receive any observation from the Commission or the Stock Exchanges.

13. The Issuer and issue manager shall arrange posting the lottery result on their websites within 06 (six) hours and on the websites of the Commission and Stock Exchanges within 12 (twelve) hours of lottery.

14. Within 02 (two) working days of conducting lottery, the Issuer shall:

a. Send category wise lists of the successful and unsuccessful applicants in electronic (text format with tilde ‘~’ separator) format to the respective Stock Exchange.

b. send category wise lists of unsuccessful applicants who are subject to penal provisions as per conditions of the Consent Letter issued by the Commission in electronic (text format with tilde ‘~’ separator) format to the respective Stock Exchange mentioning the penalty amount against each applicant.

c. Issue allotment letters in the names of successful applicants in electronic format with digital signatures and send those to respective Stock Exchange in electronic form.

d. Send consolidated allotment data (BOID and number of securities) in electronic text format in a CDROM to CDBL to credit the allotted shares to the respective BO accounts.


Page | 19


15. On the next working day, Stock Exchanges shall distribute the information and allotment letters to the Stockbroker/Merchant Bankers concerned in electronic format and instruct them to:

a. remit the amount of successful (other than NRB and Foreign) applicants to the Issuer’s respective Escrow account opened for subscription purpose and unblock the amount of unsuccessful applicants;

b. send the penalty amount of other than NRB and Foreign applicants who are subject to penal provisions to the Issuer’s respective Escrow Accounts along with a list and unblock the balance application money;

16. On the next working day of receiving the documents from the Stock Exchanges, the Stockbrokers/Merchant Bankers shall request its banker to:

a. release the amount blocked for unsuccessful (other than NRB and Foreign) applicants;

b. remit the aggregate amount of successful applicants and the penalty amount of unsuccessful (other than NRB and foreign) applicants who are subject to penal provisions to the respective ‘Escrow’ account of the Issuer opened for subscription purpose.

17. On the next working day of receiving request from the Stockbrokers/Merchant Bankers,

their bankers shall unblock the amount blocked in the account(s) and remit the amount as requested for to the Issuer’s ‘Escrow’ account.

18. Simultaneously, the stockbrokers/Merchant Bankers shall release the application money

blocked in the customer accounts; inform the successful applicants about allotment of securities and the unsuccessful applicants about releasing their blocked amounts and send documents to the Exchange evidencing details of the remittances made to the respective ‘Escrow’ accounts of the Issuer. The unblocked amounts of unsuccessful applicants shall be placed as per their instructions. The Stockbroker/Merchant Banker shall be entitled to recover the withdrawal charges, if any, from the applicant who wants to withdraw the application money, up to an amount of Tk. 5.00 (five) per withdrawal.

19. All drafts submitted by NRB or Foreign applicants shall be deposited in the Issuer’s

respective ‘Escrow’ accounts and refund shall be made by the Issuer by refund warrants through concerned stockbroker or merchant banker or transfer to the applicant’s bank account through banking channel within 10 (ten) working days from the date of lottery.

Miscellaneous:

20. The Issuer, Issue Manager(s), Stockbrokers and Merchant Bankers shall ensure compliance of the above.

21. The bank drafts (FDD) shall be issued considering TT Clean exchange rate of Sonali Bank Ltd. on the date of publication of abridged version of prospectus.

22. Amount deposited and blocked in the “Public Issue Application Account” shall not be withdrawn or transferred during the blocking period. Amount deposited by the applicants shall not be used by the Stockbrokers/Merchant Bankers for any purpose other than public issue application.

23. The Issuer shall pay the costs related to data transmission, if claimed by the Exchange concerned up to an amount of Tk.2,00,000.00 (taka two lac) for a public issue.


Page | 20

24. The Stockbroker/Merchant Bankers shall be entitled to a service charge of Tk.5.00 (taka five) only per application irrespective of the amount or category. The service charge shall be paid by the applicant at the time of submitting application.

25. The Stockbroker/Merchant Banker shall provide the Issuer with a statement of the

remittance and drafts sent. 26. The Issuer shall accumulate the penalty amount recovered and send it to the Commission

through a bank draft/payment order issued in favor of the Bangladesh Securities and Exchange Commission.

27. The concerned Exchange are authorized to settle any complaints and take necessary actions

against any Stockbroker/Merchant Banker in case of violation of any provision of the public issue application process with intimation to the Commission.

PART–C

1. The issue manager shall carefully examine and compare the published prospectus and its

abridged version on the date of publication with the copies vetted by the Commission. If any discrepancy is found, both the issuer and the issue manager shall jointly publish a corrigendum immediately in the same newspapers concerned, simultaneously endorsing copies thereof to the Commission and the stock exchanges concerned. In this regard, the issue manager shall submit a compliance report to the Commission within 5 working days from the date of such publications.

2. The fund collected through Public Offering shall not be utilized prior to listing with

Exchange(s) and that utilization of the said fund shall be effected through banking channel, i.e. through account payee cheque, pay order or bank drafts etc.

3. The company shall furnish status report on utilization of Public Offering proceeds

audited by foreign affiliated auditors and authenticated by the board of directors to the Commission and the exchanges within 15 (Fifteen) days of the closing of each month until such fund is fully utilized, as mentioned in the schedule contained in the prospectus, and in the event of any irregularity or inconsistency, the Commission may employ or engage any person, at issuer’s cost, to examine whether the issuer has utilized the proceeds for the purpose disclosed in the prospectus.

4. While auditing the utilization of IPO proceeds, the auditors will perform their jobs under

the following terms of reference (TOR) and confirm the same in their report/certificate:

(a) Whether IPO proceeds have been utilized for the purposes/heads as specified in the prospectus;

(b) Whether IPO proceeds have been utilized in line with the condition (if any) of the Commission’s consent letter;

(c) Whether utilization of IPO proceeds have been completed within the time

schedule/implementation schedule as specified in the published prospectus;

(d) Whether utilization of IPO proceeds is accurate and for the purpose of the company as mentioned/specified in the published prospectus; and

(e) The auditors should also confirm that:(i)assets have been procured/imported/constructed maintaining proper/required procedure as well as at reasonable price; and (ii) auditors’ report has been made on verification of all


Page | 21

necessary documents/papers/vouchers in support of IPO proceeds making reconciliation with Bank Statement.

5. All transactions, excluding petty cash expenses, shall be effected through the company’s

bank account(s). 6. Proceeds of the public offering shall not be transferred to any other bank account before

listing with the Exchange(s) and used for any purpose other than those specified in the prospectus. Any deviation in this respect must have prior approval of the shareholders in the shareholders meeting under intimation to the Commission and the exchanges.

7. If any quarter or half-year of the financial year ends after publication of the abridged

version of prospectus and before listing of its securities with any exchange, the company shall disseminate/transmit/submit the said quarterly/half yearly financial statements in accordance with the Commission’s Notification SEC/CMRRCD/2008-183/admin/03-34 dated September 27, 2009 and Rules 13 of the Securities and Exchange Rules, 1987.

8. In the event of arising issues concerning Price Sensitive Information as defined under the

wmwKDwiwUR I G·‡PÄ Kwgkb (myweav‡fvMx e¨emv wbwl×KiY) wewagvjv 1995 after publication of the abridged

version of prospectus and before listing of its securities with any exchange, the company shall disseminate/transmit/submit the information as price sensitive in accordance with the Commission’s Notification No. SEC/SRMI/200-953/1950 dated October 24, 2000.

PART-D 1. As per provision of the Depository Act, 1999 & regulations made there under, shares will

only be issued in dematerialized condition. All transfer/transmission/splitting will take place in the Central Depository Bangladesh Ltd. (CDBL) system and any further issuance of shares (Including rights/bonus) will be made in dematerialized form only.

2. The issuer and the issue manager shall ensure due compliance of all the above conditions,

the ‘Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015’ and the listing regulations of the exchanges.

3. The Commission may impose further conditions/restrictions etc. from time to time as and

when considered necessary which shall also be binding upon the issuer company.


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SECTION -III: DECLARATION AND DUE DILIGENCE CERTIFICATES DECLARATION ABOUT THE RESPONSIBILITY OF THE DIRECTORS, INCLUDING THE CEO OF IFCO GARMENTS & TEXTILES LTD. IN RESPECT OF THE PROSPECTUS

[Rule 4 (1)(d)]

This prospectus has been prepared, seen and approved by us, and we, individually and

collectively, accept full responsibility for the authenticity, accuracy and adequacy of the

statements made, information given in the prospectus, documents, financial statements,

exhibits, annexes, papers submitted to the Commission in support thereof, and confirm, after

making all reasonable inquiries that all conditions concerning this public issue and prospectus

have been met and that there are no other information or documents, the omission of which

make any information or statements therein misleading for which the Commission may take

any civil, criminal or administrative actions against any or all of us as it may deem fit. We also confirm that full and fair disclosures have been made in this prospectus to enable the

investors to make a well informed decision for investment. Sd/- Mohammed Shahed

Chairman

Sd/- Nur Mohammed Siddique

MD & Director Sd/- Mohammed Morshed

Director

Sd/- MD Solaiman

Director Sd/- Md. Nurul Huda Director

Sd/- Mr. Mohammad Mehedi Hasan

Independent Director

Sd/- Mr. Abdul Mannan


Date: April 28, 2016


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DUE DILIGENCE CERTIFICATE BY ISSUE MANAGER(S)

[Rule 4(1)(d)] To The Bangladesh Securities and Exchange Commission

Sub: Public Issue of 20,000,000 Ordinary Shares of Tk. 200,000,000.00 by IFCO Garments & Textiles Ltd.

Dear Sir,

We, the issue manager to the above-mentioned forthcoming issue, state and confirm as follows:

(1) We have examined all the documents submitted with the application for the above mentioned public issue, visited the premises of the issuer and interviewed the Chairperson, Directors and key management personnel of the issuer in connection with the finalization of the prospectus pertaining to the said issue;

(2) On the basis of such examination and the discussions with the directors, officers and auditors of the issuer, other agencies, independent verification of the statements concerning objects of the issue and the contents of the documents and other materials furnished by the issuer.

WE CONFIRM THAT: (a) The prospectus filed with the Commission is in conformity with the documents, materials

and papers relevant to the issue;

(b) All the legal requirements relating to the issue as also in the rules, notification, guidelines, instructions, etc. framed/issued by the Commission, other competent authorities in this behalf and the Government have been duly complied with;

(c) The disclosures made in prospectus are true, fair and adequate to enable the investors to make a well informed decision for investment in the proposed issue and such disclosures are in accordance with the requirements of the Companies Act, 1994, the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015 and other applicable laws;

(d) Besides ourselves, all the intermediaries named in the prospectus are registered with the Commission and that till date such registrations are valid;

(e) We have satisfied ourselves about the capability of the underwriters to fulfill their underwriting commitments;

(f) The proposed activities of the issuer for which the funds are being raised in the present issue fall within the ‘main objects’ listed in the object clause of the Memorandum of Association or other charter of the issuer and that the activities which have been carried out till now are valid in terms of the object clause of its Memorandum of Association;

(g) Necessary arrangements have been made to ensure that the moneys to be received pursuant to the issue shall be kept in a separate bank account and shall be used for the purposes disclosed in the use of proceeds section of the prospectus;

(h) All the applicable disclosures mandated in the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015 have been made in addition to other disclosures which, in our view, are fair and adequate to enable the investor to make a well informed decision;

(i) We enclose a note explaining how the process of due diligence has been exercised by us in view of the nature of current business background or the issuer, situation at which the proposed business stands, the risk factors, sponsors experiences etc. We also confirm that the due diligence related process, documents and approval memos shall be kept in record by us for the next 5 (five) years after the IPO for any further inspection by the Commission;

(j) We enclose a checklist confirming rule-wise compliance with the applicable provisions of the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015 containing details such as the rule number, its text, the status of compliance, page numbers of the prospectus where the rules has been complied with and our comments, if any;

(k) We also declare that we have managed the public issue of following issuers in the last 05 (Five) years:


Page | 24

SL. NAME OF THE ISSUE ISSUE MONTH/YEAR ISSUE PRICE (TK.) DIVIDEND PAYMENT HISTORY

CASH BONUS

1 OLYMPIC ACCESSORIES LIMITED FEBRUARY/2015 10.00 5% - 2015 7% - 2015

FOR THE ISSUE MANAGER

Sd/- Mufakhkharul Islam PLACE: DHAKA Managing Director & CEO DATE: APRIL 28, 2016 CAPM Advisory Limited


Page | 25

DUE DILIGENCE CERTIFICATE BY ISSUE MANAGER(S) [Rule 4(1)(d)]

To The Bangladesh Securities and Exchange Commission Sub: Public Issue of 20,000,000 Ordinary Shares of Tk. 200,000,000.00 by IFCO Garments & Textiles Ltd.

Dear Sir,

We, the issue manager to the above-mentioned forthcoming issue, state and confirm as follows:

(3) We have examined all the documents submitted with the application for the above mentioned public issue, visited the premises of the issuer and interviewed the Chairperson, Directors and key management personnel of the issuer in connection with the finalization of the prospectus pertaining to the said issue;

(4) On the basis of such examination and the discussions with the directors, officers and auditors of the issuer, other agencies, independent verification of the statements concerning objects of the issue and the contents of the documents and other materials furnished by the issuer.

WE CONFIRM THAT:

(e) The prospectus filed with the Commission is in conformity with the documents, materials and papers relevant to the issue;

(f) All the legal requirements relating to the issue as also in the rules, notification, guidelines, instructions, etc. framed/issued by the Commission, other competent authorities in this behalf and the Government have been duly complied with;

(g) The disclosures made in prospectus are true, fair and adequate to enable the investors to make a well informed decision for investment in the proposed issue and such disclosures are in accordance with the requirements of the Companies Act, 1994, the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015 and other applicable laws;

(h) Besides ourselves, all the intermediaries named in the prospectus are registered with the Commission and that till date such registrations are valid;

(l) We have satisfied ourselves about the capability of the underwriters to fulfill their underwriting commitments;

(m) The proposed activities of the issuer for which the funds are being raised in the present issue fall within the ‘main objects’ listed in the object clause of the Memorandum of Association or other charter of the issuer and that the activities which have been carried out till now are valid in terms of the object clause of its Memorandum of Association;

(n) Necessary arrangements have been made to ensure that the moneys to be received pursuant to the issue shall be kept in a separate bank account and shall be used for the purposes disclosed in the use of proceeds section of the prospectus;

(o) All the applicable disclosures mandated in the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015 have been made in addition to other disclosures which, in our view, are fair and adequate to enable the investor to make a well informed decision;

(p) We enclose a note explaining how the process of due diligence has been exercised by us in view of the nature of current business background or the issuer, situation at which the proposed business stands, the risk factors, sponsors experiences etc. We also confirm that the due diligence related process, documents and approval memos shall be kept in record by us for the next 5 (five) years after the IPO for any further inspection by the Commission;

(q) We enclose a checklist confirming rule-wise compliance with the applicable provisions of the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015 containing details such as the rule number, its text, the status of compliance, page numbers of the prospectus where the rules has been complied with and our comments, if any;


Page | 26

(r) We also declare that we have managed the public issue of following issuers in the last 05 (Five) years:

SL. NAME OF THE ISSUE ISSUE

MONTH/YEAR ISSUE PRICE

(TK.)

DIVIDEND PAYMENT HISTORY

CASH BONUS

1 HWA WELL TEXTILES (BD) LIMITED JANUARY/2014 10.00 15% - 2014 15% - 2015

-

FOR THE ISSUE MANAGER

Sd/- Tahid Ahmed Chowdhury, FCCA PLACE: DHAKA Managing Director & CEO DATE: APRIL 28, 2016 Citizen Securities &Investment Limited

DUE DILIGENCE CERTIFICATE BY THE UNDERWRITER(S) [Rule 4 (1)(d)]

To The Bangladesh Securities and Exchange Commission

Sub: Public Offer of 20,000,000 Ordinary Shares of Tk. 10.00 each totaling to

Tk.200,000,000.00 of IFCO Garments & Textiles Limited

Dear Sir,

We, the under-noted Underwriter(s) to the above-mentioned forthcoming issue, state individually and collectively as follows: (1) We, while underwriting the above mentioned issue on a firm commitment basis, have

examined the draft prospectus, other documents and materials as relevant to our underwriting decision; and

(2) On the basis of such examination and the discussions with the issuer company, its directors and officers, and other agencies, independent verification of the statements concerning objects of the issue and the contents of the documents and other materials furnished by the issuer company.

WE CONFIRM THAT:

(a) We are registered with the Bangladesh Securities and Exchange Commission as a merchant banker and eligible to carry out the underwriting activities. Our present paid-up capital stands at Tk. 100,000,000.00 (Ten Crore) and we have the capacity to underwrite a total amount of Tk. 500,000,000.00 (Fifty Crore) as per relevant legal requirements. We have committed to underwrite for up to Tk. 17,500,000.00 (One Crore Seventy Five Lac) for the upcoming issue.

(b) At present, the following underwriting obligations are pending for us:

Sl. No. Name of The Company Amount Underwritten (in Tk.)

1. Leads Corporation Limited 30,250,000

2. IDLC Finance Limited 50,000,000

3. BD Thai Aluminium Limited 20,000,000

4. Baraka Patenga Power Limited 38,250,000

5. Delta Hospital Limited 13,115,075

6. The Dacca Dyeing & Manufacturing Co. Limited

40,000,000

Total 191,615,075

(c) All information as are relevant to our underwriting decision have been received by us and


Page | 27

the draft prospectus forwarded to the Commission has been approved by us;

(d) We shall subscribe and take up the un-subscribed securities against the above-mentioned public issue within 15 (fifteen) days of calling up thereof by the issuer; and

(e) This underwriting commitment is unequivocal and irrevocable.

For the Underwriter: Sd/- Mufakhkharul Islam Managing Director & CEO CAPM Advisory Limited Place: Dhaka Date: February 08, 2016


Page | 28


To The Bangladesh Securities and Exchange Commission

Sub: Public Offer of 20,000,000 Ordinary Shares of Tk. 10.00 each totaling to

Tk.200,000,000.00 of IFCO Garments & Textiles Limited

Dear Sir,

We, the under-noted Underwriter(s) to the above-mentioned forthcoming issue, state individually and collectively as follows: (3) We, while underwriting the above mentioned issue on a firm commitment basis, have



WE CONFIRM THAT:

(f) We are registered with the Bangladesh Securities and Exchange Commission as a merchant banker and eligible to carry out the underwriting activities. Our present paid-up capital stands at Tk. 250,275,000/- (Taka twenty five crore two lac and seventy five thousand only) and we have the capacity to underwrite a total amount of Tk. 1, 251,375,000 (Taka one hundred twenty five crore thirteen lac seventy five thousand) only as per relevant legal requirements. We have committed to underwrite for up to Tk. 17,500,000.00 (One Crore Seventy Five Lac) for the upcoming issue.

(g) At present, the following underwriting obligations are pending for us:

Sl. No.

Name of the Company Amount Underwritten (in Tk.)

1 Express Insurance Limited 25,000,000.00 2 Supreme Seed Company Limited 33,000,000.00

3 Ananda Shipyard & Slipways Limited 34,000,000.00 4 Hemple Rhee Mfg Co,. (BD) LIMITED 70,000,000.00 5 IDLC Finance Limited 30,000,000.00

6 STS Holdings Limited 59,500,000.00 7 BANGAS Limited 32,944,720.00

8 Bd. Thai Limited 283,350,280.00

9 Shamsul Alamin Real Estate Limited 31,034,475.00 10 Delta Hospital Limited 13,115,075.00

11 VFS Thread Dyeing Limited 17,000,000.00

12 IFCO Garments & Textiles Ltd 17,500,000.00

Total 646,444,550.00

(h) All information as are relevant to our underwriting decision have been received by us and the draft prospectus forwarded to the Commission has been approved by us;

(i) We shall subscribe and take up the un-subscribed securities against the above-mentioned public issue within 15 (fifteen) days of calling up thereof by the issuer; and

(j) This underwriting commitment is unequivocal and irrevocable.


Page | 29

For the Underwriter:

Sd/- Tahid Ahmed Chowdhury, FCCA Managing Director & CEO Citizen Securities &Investment Limited

Place: Dhaka Date: April 11, 2016

DUE DILIGENCE CERTIFICATE BY THE UNDERWRITER(S)

[Rule 4 (1)(d)] To

The Bangladesh Securities and Exchange Commission Sub: Public Offer of 20,000,000 Ordinary Shares of Tk. 10.00 each totaling to

Tk.200,000,000.00 of IFCO Garments & Textiles Limited Dear Sir, We, the under-noted Underwriter(s) to the above-mentioned forthcoming issue, state individually and collectively as follows:

(1) We, while underwriting the above mentioned issue on a firm commitment basis, have



WE CONFIRM THAT:

(a) We are registered with the Bangladesh Securities and Exchange Commission as a merchant banker and eligible to carry out the underwriting activities. Our present paid-up capital stands at Tk. 1,670,000,000.00 (Taka One Hundred Sixty Seven Crore only) and we have the capacity to underwrite a total amount of Tk. 8,350,000,000.00 (Taka Eight Hundred Thirty Five Crore only) as per relevant legal requirements. We have committed to underwrite for up to Tk. 907,898,600.00 (Taka Ninety Crore Seventy Eight Lac Ninety Eight Thousand Six Hundred only) for the upcoming issue.

(b) At present, the following underwriting obligations are pending for us:

Sl. No. Name of The Company Amount Underwritten (in BDT)

1 Energypac Power Generation Limited 7,812,500.00

2 Pacific Denims Limited 37,500,000.00

3 VFS Thread Dyeing Limited 45,500,000.00

4 Evince Textiles Limited 20,000,000.00

5 Summit Alliance Port Limited 154,586,100.00

6 IDLC Finance Limited 70,000,000.00

7 GPH Ispat Limited 525,000,000.00

8 Bangladesh Thai Aluminum Limited 30,000,000.00

9 IFCO Garments & Textiles Limited 17,500,000.00


Page | 30

Total 907,898,600.00

(c) All information as are relevant to our underwriting decision have been received by us and the draft prospectus forwarded to the Commission has been approved by us;



For the Underwriter: Sd/- Khandakar Kayes Hasan, CFA Chief Executive Officer LankaBangla Investments Limited Place: Dhaka Date: February 08, 2016


Page | 31


To

The Bangladesh Securities and Exchange Commission

Sub: Public offer of 20,000,000 Ordinary Shares of Tk. 200,000,000 of IFCO Garments &

Textiles Limited

Dear Sir,

We, the under-noted Underwriter(s) to the above-mentioned forthcoming issue, state individually and collectively as follows:

(1) We, while underwriting the above mentioned issue on a firm commitment basis, have examined the draft prospectus, other documents and materials as relevant to our underwriting decision; and


WE CONFIRM THAT:

(a) We are registered with the Bangladesh Securities and Exchange Commission as a merchant banker and eligible to carry out the underwriting activities. Our present paid-up capital stands at Tk. 2,032,800,000 (Taka two billion thirty two million eight hundred thousand) and we have the capacity to underwrite a total amount of Tk. 10,068,719,220 (Taka ten billion sixty eight million seven hundred nineteen thousand two hundred and twenty) as per relevant legal requirements. We have committed to underwrite for up to Tk. 17,500,000 (Taka seventeen million five hundred thousand) for the upcoming issue.

(b) At present, the following underwriting obligations are pending for us: Sl. Name of the issue Amount underwritten

1 Royal Denim Limited 5,500,000

2 M.L Dyeing Limited 100,000,000

3 Rupsha Fish & Allied Industries Limited 25,000,000

4 GQ Ball Pen Industries Limited 50,100,000 5 Bangladesh National Insurance Company Limited 61,950,000

6 Care Specialized Hospital and Research Centre Limited 75,900,000

7 IDLC Finance Limited 70,000,000

8 Bangas Limited 131,778,890

9 Summit Alliance Port Limited 103,057,395

10 Bangladesh Thai Aluminium Limited 10,000,000

11 Dhaka Regency Hotel Limited 25,000,000

12 VFS Thread Dyeing Limited 40,000,000

13 The ACME Laboratories Limited 51,120,000 Total 749,406,285

(c) All information as are relevant to our underwriting decision have been received by us

and the draft prospectus forwarded to the Commission has been approved by us;




Page | 32

For the Underwriter: Sd/- M. Mosharraf Hossain FCA, PhD Managing Director & CEO Prime Finance Capital Management Limited Place: Dhaka Date: 09 February 2016

SECTION -IV: ABOUT THE ISSUER (a) Name of the issuer, dates of incorporation and commencement of its commercial

operations, its logo, addresses of its registered office, other offices and plants, telephone number, fax number, contact person, website address and e-mail address:

Particulars Description

Name of the issuer : IFCO Garments & Textiles Ltd.

Dates of incorporation : 16th march, 2005

Commencement of its commercial operations

: The commercial production of the factory commenced on the year of March 16, 2005.

Logo :


Registered Office : 63, North Jatrabari, Dhaka-1204, Bangladesh

Factory : Plot # 41, 42, 56, & 57, Road # 01, BSCIC Industrial Estate Extd., Kalurghat, Chittagong, Bangladesh

Telephone number : +88 01916456922

Fax number : +88-00-7547415

Contact person : Nur Mohammed Siddique, Managing Director

Website address : www.oligroup-bd.com

E-mail address : [email protected]

(b)The names of the sponsors and directors of the issuer:

Sponsors:

Sl. No.

Sponsors

1 Mr. S. M. Mortuza Hossain

2 Mrs. Kazi Rokeya Begum

3 Mr. Sayed Niaz Mahmud

4 Mr. Sayed Shakil Mahmud

5 Mr. Sayed Adil Mahmud

Directors:

Sl. No.

Directors

1 Nur Mohammed Siddique, Managing Director and Director

2 Mohammed Morshed, Director

3 Mohammed Shahed, Chairman



Page | 33

4 MD Solaiman, Director

5 Md.Nurul Huda, Director

6 Mohammad Mehedi Hasan

7 Abdul Mannan

(c) The name, logo and address of the auditors along with their telephone numbers, fax

numbers, contact persons, website and e-mail addresses:

Particulars Description

Name : AHMAD & AKHTAR

Logo :

Address : BCIC Bhaban (3rd Floor), 30-31, Dilkusha C/A, Dhaka-1000

Telephone number : +880 2 9561289

Fax numbers : +880 2 9564366

Contact person : Md. Naser

Website address : www.aacabd.org E-mail address : [email protected]

http://www.aacabd.org/



Page | 34

(d) The name(s) of the stock exchanges where the specified securities are proposed to be listed.

Dhaka Stock Exchange Limited (DSE)

9/F, Motijheel C/A, Dhaka-1000 Chittagong Stock Exchange Limited

(CSE) CSE Building, 1080 Sk. Mujib Road,

Agrabad C/A, Chittagong

“Declaration about Listing of Shares with the stock exchange (s):

None of the stock exchange(s), if for any reason, grants listing within 75 (Seventy Five) days from the closure of subscription, any allotment in terms of this prospectus shall be void and the company shall refund the subscription money within 15 (Fifteen) days from the date of refusal for listing by the stock exchanges, or from the date of expiry of the said 75 (Seventy Five) days, as the case may be.

In case of non-refund of the subscription money within the aforesaid 15 (Fifteen) days, the Directors of the company, in addition to the issuer company, shall be collectively and severally liable for refund of the subscription money, with interest at the rate of 2% (two percent) above the bank rate, to the subscribers concerned.

The issue manager, in addition to the issuer company, shall ensure due compliance of the above mentioned conditions and shall submit compliance report thereon to the Commission within 07 (Seven) days of expiry of the aforesaid 15 (Fifteen) days time period allowed for refund of the subscription money.”

SECTION -V: CORPORATE DIRECTORY OF THE ISSUER

Name of the issuer : IFCO Garments & Textiles Ltd.

Dates of incorporation : 16th march, 2005

Commencement of its commercial operations

: March 16, 2005.

Logo :


Authorized Capital BDT 1,620,000,000

Issued, Subscribed and Paid up capital BDT 495,995,700

Registered Office : 63, North Jatrabari, Dhaka-1204, Bangladesh

Factory : Plot # 41, 42, 56, & 57, Road # 01, BSCIC Industrial Estate Extd., Kalurghat, Chittagong, Bangladesh

Auditor : AHMAD & AKHTAR Chartered Accountants BCIC Bhaban (3rd Floor), 30-31, Dilkusha C/A, Dhaka-1000

Managers to the Issue :

CAPM Advisory Limited Tower Hamlet (9th Floor), 16, Kemal Ataturk Avenue, Banani C//A, Dhaka-1213 Phone: +88-02-9822391, Fax: +88-02-9822393 Email: [email protected]; Website: www.capmadvisorybd.com




Page | 35

Al-Razi Complex (8th Floor), Suite # G-802, 166-167,Shaheed Syed Nazrul Islam Sarani, Purana Paltan, Dhaka – 1000 Phone: +88-02-9514542, 9515439, Fax: +88-02-9570546 Email: [email protected]; Website: www.citizensecurities.com

Lead Banker for IPO :

BRAC Bank Limited

Company Secretary :

Mr. Sudip Banik

*All investors are hereby informed that Sudip Banik, Company Secretary, would be designated as Compliance Officer who will monitor the compliance of the acts, rules, regulations, notification, guidelines, conditions, orders/directions etc. issued by the Commission and/or Stock Exchange(s) applicable to the conduct of the business activities of the Company so as to promote the interest of the investors in the security issued by the Company, and for redressing investors’ grievances.

SECTION -VI: DESCRIPTION OF THE ISSUER

(a) Summary: (i) The summary of the industry and business environment of the issuer:

The textile industry has played an important role in Bangladesh’s economy for a long time. Currently, the textile industry in Bangladesh accounts for 45 percent of all industrial employment and contributes 5 percent to the total national income. The industry employs nearly 4 million people, mostly women.

A huge 81.71% of the country’s export earnings come from textiles and apparel, according to the latest figures available. Bangladesh exports its apparel products worth nearly $25.5billion in the financial year 2014-2015 to the United States, European Union (EU), Canada and other countries of the world. It is the sixth largest apparel supplier to the United States and EU countries. Moreover Bangladesh's apparel exports could triple by 2020 as the European and the US buyers plan to strengthen their presence in the country and new players are planning to enter the market seen as the 'Next China', according to a study.


http://www.citizensecurities.com/


Page | 36

A survey shows that chief purchasing officers (CPOs) of leading apparel buyers in Europe and the US almost unanimously favor moving some of their sourcing away from China. In the survey, 54 percent of CPOs shared their plans to decrease their sourcing activities in China by up to 10 percent and 32 percent stated that they sought to decrease their share of sourcing in China by more than 10 percent over the next five years. As Western RMG buyers search for the “next China,” they are evaluating all options to strengthen their proximity sourcing, moving on to Northwest China, Southeast Asia, and other Far East supplier countries. Bangladesh is clearly the preferred next stop for the sourcing caravan.

In the last 15 years, Bangladesh’s share of apparel imports to Europe and the US more than doubled, securing Bangladesh’s No. 3 position among importers to the European Union 15 (EU-15) and the No. 4 position among US importers. Within just the last three years, 39 percent of the companies represented in the CPO interviews have increased their share of sourcing in Bangladesh by more than 30 percent, 13 percent of the companies by 20 to 30 percent, and 30 percent of the companies by 10 to 20 percent.

Bangladesh’s growth has been recognized. Goldman Sachs included Bangladesh in the “Next 11” emerging countries to watch following BRIC (Brazil, Russia, India, and China) and JP Morgan lists Bangladesh among its “Frontier Five” emerging economies in which it is worth investing.

(ii) Summary of consolidated financial, operating and other information.

Sl. Particulars June 30, 2015 June 30, 2014 June 30, 2013 June 30, 2012 June 30, 2011

1 Turnover 1,233,721,942 1,201,755,575 1,512,600,470 1,075,864,278 846,529,754

2 Gross Profit 236,491,107 243,421,139 398,851,091 282,483,053 204,166,083

3 Net profit before tax 157,155,485 162,620,917 317,310,546 195,830,917 123,292,603

4 Net Profit after tax 153,428,160 152,101,819 302,772,255 195,830,917 123,292,603

5 Total Assets 1,923,476,534 1,871,841,827 2,289,452,721 1,789,567,632 1,601,360,679

6 Share Capital 495,995,700 495,995,700 99,800,000 5,000,000 5,000,000

7 Retained Earnings 918,136,821 764,708,661 612,606,842 309,834,587 114,003,670

8 No. of Shares 49,599,570 49,599,570 998,000 50,000 50,000

9 Face Value 10.00 10.00 100.00 100.00 100.00

10 NAV Per Share 28.51 25.42 167.27 2,733.17 2,341.51

11 Earnings per Share (EPS) 3.09 4.82 176.50 391.66 246.59

(b) General Information:

(i) Name and address, telephone and fax numbers of the registered office, corporate head office, other offices, factory, business premises and outlets of the issuer:

Registered office & Corporate office:

Address 63, North Jatrabari, Dhaka-1204

Telephone numbers +88 01916456922

Fax numbers +88-00-7547415

0 20 40 60 80 100

Bangladesh

Vietnam

Indonesia

Cambodia

% of Respondents

% of Respondents


Page | 37

Factory:

Address Plot # 41, 42, 56, & 57, Road # 01, BSCIC Industrial Estate Extd., Kalurghat, Chittagong

Telephone numbers +88 031 2572891-2

Fax numbers +88 031 670517

(ii) The board of directors of the issuer:

Sl. No. Board of Directors Designation

1 Mohammed Shahed Chairman

2 Nur Mohammed Siddique MD & Director

3 Mohammed Morshed Director

4 MD Solaiman Director

5 Md.Nurul Huda Director

6 Mohammad Mehedi Hasan Independent

Director

7 Abdul Mannan Independent

Director

(iii) Names, addresses, telephone numbers, fax numbers and e-mail addresses of the

chairman, managing director, whole time directors, etc. of the issuer:

Sl. Name Position Address Telephone, fax & E-mail

address

1 Mohammed Shahed

Chairman 592/B, Mehidibag Road, Chittagong

Tel: +88 01916456922, Fax: +88-00-7547415,


2 Nur Mohammed Siddique

MD & Director

592/B, Mehidibag Road, Kotwali Chittagong

3 Mohammed Morshed

Director 592/B, Mehidibag Road, Kotwali Chittagong

4 MD Solaiman Director 592/B, Mehidibag Road, Chittagong

5 Md.Nurul Huda Director Village-Bahadurpur, CharBahadurpur,

P.O.-Sujabad, Muladi, Barisal-8250


Independent

Director

H-167, Tinshed Koloni, Section-13, Kafrul, Mirpur-

1216

7 Abdul Mannan Independe

nt Director

Village-Pachkathi, P.O.-Haturia-8050,

Goshairhat, Shariatpur

(iv) Names, addresses, telephone numbers, fax numbers and e-mail addresses of the CFO, company secretary, legal advisor, auditors and compliance officer:

Sl. Name Position Address Telephone, fax & E-mail

address

1 Gopal Chandra Basak

CFO 63, North Jatrabari, Dhaka-1204, Bangladesh

Tel: +88 01916456922, Fax: +88-00-7547415,


2 Sudip Banik Company Secretary & Compliance Officer

3 AHMAD & AKHTAR Auditors BCIC Bhaban (3rd Tel: +880 2 9561289,


Page | 38

Floor), 30-31, Dilkusha C/A, Dhaka-

1000

Fax: +880 2 9564366, E-mail:

[email protected]

(v) Names, addresses, telephone numbers, fax numbers, contact person, website addresses and e-mail addresses of the issue manager(s):

Name Address Telephone & Fax Contact Person E-mail & Website

Address

CAPM Advisory Limited

Tower Hamlet (9th Floor), 16, Kemal Ataturk Avenue,

Banani C//A, Dhaka-1213

Tel:+88-02-9822391,

Fax: +88-02-9822393

Mufakhkharul Islam

MD & CEO

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


Al-Razi Complex (8th Floor), Suite # G-802,

166-167, Shaheed Syed Nazrul Islam

Sarani, Purana Paltan, Dhaka – 1000

Tel:+88-02-9514542, 9515439,

Fax: +88-02-9570546

Tahid Ahmed Chowdhury,

FCCA MD & CEO

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

(vi) The following details of credit rating, where applicable:

Since the issue is at par value, therefore Credit Rating Report is not a requirement in accordance with rule no. 3 of ‘The Credit Rating Companies Rules 1996.’

(vii) The Following details of underwriting:

a) The names, addresses, telephone numbers, fax numbers, contact persons and e-mail addresses of the underwriters and the amount underwritten by them;

Names & Address Contact Person Telephone & Fax Number and E-

mail address Amount

Underwritten


Mufakhkharul Islam Managing Director &

CEO

Phone: +88-02-9822391 Fax: +88-02-9822393

Email: [email protected] Website:

www.capmadvisorybd.com

17,500,000.00




Phone:+880-2 9514542, 9515439 Fax: +880-2-9570546

Email: [email protected] Website:

www.citizensecurities.com 17,500,000.00

Lankabangla Investments Limited Eunoos Trade Center (Level-21) 52-53, Dilkhusha C/A, Dhaka-1000.

Khandakar Kayes

Hasan, CFA

Chief Executive

Officer

Phone: +88-02-7113585, 7125890 Fax: +88-02-7115756

E-mail: shakil.bhuiyan@lankabangla-

investments.com Web: www.lankabangla-investments.com

17,500,000.00

Prime Finance Capital Management Limited 56-57, Dilkusha C/A, (6th Floor), Dhaka-1000

M. Mosharraf Hossain PhD, FCA


Phone:+880-2- 9584874-6 Fax:+880-2-9584877


17,500,000.00

http://www.capmadvisorybd.com/

http://www.capmadvisorybd.com/








Page | 39

b) Declaration by the underwriters that they have sufficient resources as per the regulatory requirements to discharge their respective obligations;

As per the Declaration by the underwriters (Section III, Due Diligence Certificate of the Underwriters.), they are registered with the Bangladesh Securities and Exchange Commission as a merchant banker and eligible to carry out the underwriting activities and have the adequate capacity to underwrite as per relevant legal requirements.

c) Major terms and conditions of the underwriting agreements.

1. The Issuer shall within 10 (Ten) days of the closure of subscription call upon the underwriter in writing with a copy of said writing to the Bangladesh Securities and Exchange Commission, to subscribe for the shares not subscribed by the closing date and to pay for in cash in full for such unsubscribed shares within 15(Fifteen) days of the date of said notice and the said amount shall have to be credited into shares subscription account within the said period.

2. In any case within 7 (Seven) days after the expiry of the aforesaid 15(Fifteen) days, the Company shall send proof of subscription and Deposit of Money by the underwriter to the Commission.


Page | 40

(c) Capital Structure:

(i) Authorized, issued, subscribed and paid up capital:

Particulars No. of

Ordinary Shares Nominal

price Issue price Amount in Taka

Before IPO:

Authorized Capital 162,000,000 10.00 10.00 1,620,000,000

Issued, Subscribed and Paid up capital 49,599,570 10.00 10.00 495,995,700

Total paid up capital before IPO (A) 49,599,570 10.00 10.00 495,995,700

After IPO:

To be issued as IPO (B) 20,000,000 10.00 10.00 200,000,000

Paid up capital (Post IPO) (A+B) 69,599,570 10.00 - 695,995,700

The Company has raised its paid-up capital in following phases:

Date of allotment

Form of Consideration

Amount (TK.) In cash

Other than in cash

Bonus Share

16.03.2005 (At the time of incorporation)

10,000 - - 1,000,000

16.07.2006(1st allotment) 40,000 - - 4,000,000

14.05.2013 (2nd allotment) 940,000 - - 94,000,000

08.06.2013 (3rd allotment) 8,000 - - 800,000

12.12.2013 (4th allotment) 3,961,957 - - 396,195,700

Total 495,995,700

(ii) Size of the present issue, with break-up:

Particulars No. of

Ordinary Shares Nominal

price Issue price Amount in Taka

Before IPO:

Authorized Capital 162,000,000 10.00 10.00 1,620,000,000

Issued, Subscribed and Paid up capital 49,599,570 10.00 10.00 495,995,700

Total paid up capital before IPO (A) 49,599,570 10.00 10.00 495,995,700

After IPO:

To be issued as IPO (B) 20,000,000 10.00 10.00 200,000,000

Paid up capital (Post IPO) (A+B) 69,599,570 10.00 - 695,995,700

(iii) Paid up capital before and after the present issue, after conversion of convertible

instruments (if any) and share premium account (before and after the issue);

The Company has no convertible instruments and share premium account.

Particulars Amount in BDT Paid up capital before the present issue 495,995,700

Paid up capital after the present issue 695,995,700

Paid up capital after conversion of convertible instruments (if any)

N/A

Share premium account before the present issue N/A Share premium account after the present issue N/A

(iv) Category wise shareholding structure with percentage before and after the present issue

and after conversion of convertible instruments (if any);

Directors’ & Sponsors’ Shareholdings

Sl. Name of Director & No. of Percentage (%)


Page | 41

Sponsor Share Pre- IPO Post- IPO After conversion

1 Mohammed Morshed 6,493,333 13.09% 9.33% N/A

2 Nur Mohammed Siddique 4,328,889 8.73% 6.22% N/A 3 Md. Shahed 4,328,889 8.73% 6.22% N/A 4 Md Solaiman 4,328,889 8.73% 6.22% N/A 5 Md.Nurul Huda 1,400,000 2.82% 2.01% N/A

Total 20,880,000 42.10% 30.00%


Page | 42

Other than Directors’ & Sponsors’ Shareholdings (if there is any capital raising through other than existing shareholders)

Sl. Name of the Shareholders No. of Share

Percentage (%)

Pre- IPO Post- IPO After conversion

11 Mrs. Ruksana Morshed 200,000 0.40% 0.29% N/A 12 Farzana Rahman 1,782,710 3.59% 2.56% N/A 13 Abdul Kader Faruk 302,140 0.61% 0.43% N/A 14 Jaheda Khandaker 30,000 0.06% 0.04% N/A 15 Abid Mustafizur Rahman 2,436,360 4.91% 3.50% N/A 16 Rezaur Rahman Razon 2,457,890 4.96% 3.53% N/A 17 Faize Kader Sadman 2,132,350 4.30% 3.06% N/A 18 M. A. Quyum Howlader 2,471,510 4.98% 3.55% N/A 19 Nazmul Sakhawat Hossain 2,237,340 4.51% 3.21% N/A 20 Rebeka Sultana 100,000 0.20% 0.14% N/A 21 Md. Sahabuddin 100,000 0.20% 0.14% N/A 22 Abdul Quddus Amin 10,000 0.02% 0.01% N/A 23 Nasrin Akter Banu 2,437,380 4.91% 3.50% N/A 24 Kazi Hosnara Begum 2,436,360 4.91% 3.50% N/A 25 Md. Motiur Rahman 1,153,470 2.33% 1.66% N/A 26 Orion Capital Limited 792,310 1.60% 1.14% N/A 27 Razwana Rahman (Rini) 2,453,390 4.95% 3.53% N/A 28 Shirin Faruk 2,436,360 4.91% 3.50% N/A 29 Md. Badiuzzaman 50,000 0.10% 0.07% N/A 30 Feroza Begum 150,000 0.30% 0.22% N/A 31 Md. Jahangir Alam 100,000 0.20% 0.14% N/A 32 Sayed Iqbal Hossain 200,000 0.40% 0.29% N/A 33 Mohibullah Kabir 10,000 0.02% 0.01% N/A 34 Abdul Quayum Mamun 10,000 0.02% 0.01% N/A 35 Arife Billaha 10,000 0.02% 0.01% N/A 36 Abdul Mabut Masum 10,000 0.02% 0.01% N/A 37 Sajedul Mabut Khabir 10,000 0.02% 0.01% N/A 38 Md.Mosharraf Uddin Khaled 200,000 0.40% 0.29% N/A 39 Tasrin Mujib 200,000 0.40% 0.29% N/A 40 Asif Iqbal Chowdhury 500,000 1.01% 0.72% N/A 41 Md.Tazul Islam 300,000 0.60% 0.43% N/A 42 Touhida Shirin 200,000 0.40% 0.29% N/A 43 Ratan Das 800,000 1.61% 1.15% N/A

Total 28,719,570 57.87% 41.23%

(v) Where shares have been issued for consideration in other than cash at any point of time, details in a separate table, indicating the date of issue, persons to whom those are issued, relationship with the issuer, issue price, consideration and valuation thereof, reasons for the issue and whether any benefits have been accrued to the issuer out of the issue;

There was no such issue.

(vi) Where shares have been allotted in terms of any merger, amalgamation or acquisition scheme, details of such scheme and shares allotted;

There was no such scheme and shares allotted.


Page | 43

(vii) Where the issuer has issued equity shares under one or more employee stock option schemes, date-wise details of equity shares issued under the schemes, including the price at which such equity shares were issued;

There has no such option.

(viii) If the issuer has made any issue of specified securities at a price lower than the issue price during the preceding two years, specific details of the names of the persons to whom such specified securities have been issued, relation with the issuer, reasons for such issue and the price thereof;

There has no such transaction.

(ix) The decision or intention, negotiation and consideration of the issuer to alter the capital structure by way of issue of specified securities in any manner within a period of one year from the date of listing of the present issue;

The Company has no such decision or intention, negotiation and consideration to alter the capital structure by way of issue of specified securities in any manner within a period of one year from the date of listing of the present issue.

(x) The total shareholding of the sponsors and directors in a tabular form, clearly stating the names, nature of issue, date of allotment, number of shares, face value, issue price, consideration, date when the shares were made fully paid up, percentage of the total pre and post issue capital, the lock in period and the number and percentage of pledged shares, if any, held by each of them;

Sl.

Name of Director

Nature of Issue

Date of Allotment

No. of Ordinary

Share

Face Value &

Issue Price

Consideration

date when the shares were made fully paid

up

% of shares holding *Lock

In Period Pre-

IPO Post- IPO

1 Mohammed Morshed

Ordinary

Shares

03/03/2010

250,000 10.00 Cash 03/03/2010

3-years

12/12/2013

920,890

10.00 Cash 12/12/2013

3-years

23/07/2015

5,322,443

10.00 Cash 23/07/2015

3-years

6,493,333

10.00 Cash 13.09%

9.33%


Ordinary

Shares

03/03/2010

125,000 10.00 Cash 03/03/201

0

3-years

12/12/2013

1,225,900

10.00 Cash 12/12/2013

3-years

23/07/2015

2,977,989

10.00 Cash 23/07/2015

3-years

4,328,889

10.00 Cash 8.73% 6.22%

3 Md. Shahed

Ordinary

Shares

03/03/2010

125,000 10.00 Cash 03/03/201

0

3-years

12/12/2013

1,091,380

10.00 Cash 12/12/2013

3-years

23/07/2015

3,112,509

10.00 Cash 23/07/2015

3-years

4,328,889

10.00 Cash 8.73% 6.22%

4 Md Solaiman

Ordinary

Shares

12/10/2014

20,000 10.00 Cash 12/10/201

4 3-

years

23/07/2015

4,308,889

10.00 Cash 23/07/2015

3-years

4,328,88 10.00 Cash 8.73% 6.22 3-


Page | 44

9 % years

5 Md.Nurul Huda

Ordinary

Shares

23/07/2015

1,400,000

10.00 Cash 23/07/201

5

2.82% 2.01%

3-years

Note: (i) there is no pledged shares (ii) Lock-in period’s starts from the date of Issuance of Prospectus

(xi) The details of the aggregate shareholding of the sponsors and directors, the aggregate number of specified securities purchased or sold or otherwise transferred by the sponsor and/or by the directors of the issuer and their related parties within six months immediate preceding the date of filing the prospectus;

Aggregate shareholding of the sponsors and directors:

Sl. Name of Director &

Sponsor

Face Value & Issue Price

No. of Ordinary

Share

% of shares holding Date of

Acquisition Pre-IPO Post- IPO

1 Mohammed Morshed

10.00 250,000

03/03/2010

10.00 920,890 12/12/2013

10.00 5,322,443 23/07/2015

10.00 6,493,333 13.09% 9.33%


10.00 125,000

03/03/2010

10.00 1,225,900 12/12/2013

10.00 2,977,989 23/07/2015

10.00 4,328,889 8.73% 6.22%

3 Md. Shahed

10.00 125,000

03/03/2010

10.00 1,091,380 12/12/2013

10.00 3,112,509 23/07/2015

10.00 4,328,889 8.73% 6.22%

4 Md Solaiman

10.00 20,000 12/10/2014

10.00 4,308,889 23/07/2015

10.00 4,328,889 8.73% 6.22%

5 Md.Nurul Huda 10.00 1,400,000 2.82% 2.01% 23/07/2015

6 Mr. S. M. Mortuza Hossain

- - - - -

7 Mrs. Kazi Rokeya Begum

- - - - -

8 Mr. Sayed Niaz Mahmud - - - - -

9 Mr. Sayed Shakil Mahmud

- - - - -

10 Mr. Sayed Adil Mahmud - - - - -

Total 10.00 20,880,000 42.10% 30.00% -

Transferred by the sponsor and/or by the directors of the issuer:

Transferor Transferee

Name No. of Share Date Name No. of Share

Md. Emdad Hossain 100,000 23-July-2015 Mrs. Tasrin Mujib 100,000

Abdul Kader Ffaruk 2,086,880 23-July-2015 Nur Mohammad Siddique 2,086,880

Naser Uddin 3,400,810 23-July-2015

Mohammed Morshed 262,443

Md. Shahed 3,112,509

Md. Solaiman 25,858

Jahada Khondoker 564,240 23-July-2015 Md. Solaiman 264,240

Md. Tazul Islam 300,000

Rezaur Rahman Razon 3,700,000 23-July-2015 Md. Solaiman 3,700,000

Anower Zahid Bhuiyan 100,000

23-July-2015 Mrs. Tasrin Mujib 100,000


Page | 45

Jun Kyung Won 30,600 23-July-2015 Md. Solaiman 30,600

A.S.A. Muiz 100,000 23-July-2015 Touhida Shirin 100,000

M.A. Quyum Howlader 949,300 23-July-2015 Nur Mohammed Siddique 891,109

Md. Solaiman 58,191

Nazmul Sakhawat Hossain

2,770,000 23-July-2015

Md. Solaiman 70,000

Md. Nurul Huda 1,400,000

Asif Iqbal Chowdhury 500,000

Ratan Das 800,000

Abdul Quddus Amin 590,000 23-July-2015 Md. Motiur Rahman 480,000

Md. Solaiman 110,000

Razwana Rahman (Rini) 5,060,000

23-July-2015 Mohammed Morshed 5,060,000

Monjur Ahmed 100,000 23-July-2015 Touhida Shirin 100,000

Md. Badiuzzaman 100,000 23-July-2015 Sayed Iqbal Hossain 100,000

Rafeza Akhtar 50,000 23-July-2015 Md. Solaiman 50,000

Sk. Akter Hossain 100,000 23-July-2015 Md. Mosharraf Uddin Khaled 100,000

Mohammad Arshad Adnan 100,000

23-July-2015 Md. Mosharraf Uddin Khaled 100,000

Naser Uddin 20,000 12-Oct-2014 Md. Solaiman 20,000

(xii) The name and address of any person who owns, beneficially or of record, 5% or more of

the securities of the issuer, indicating the amount of securities owned, whether they are owned beneficially or of record, and the percentage of the securities represented by such ownership including number of equity shares which they would be entitled to upon exercise of warrant, option or right to convert any convertible instrument;

Sl. Name of

Shareholders Position Address

No. of Share

%

1 Mohammed Morshed Director 592/B, Mehidibag Road, Chittagong 6,493,333 13.09

%


Managing Director

592/B, Mehidibag Road, Kotwali Chittagong

4,328,889 8.73%

3 Md. Shahed Chairman 592/B, Mehidibag Road, Kotwali

Chittagong 4,328,889 8.73%

4 Md Solaiman Director 592/B, Mehidibag Road, Chittagong 4,328,889 8.73%

5 Md. Nurul Huda Directors Village-Bahadurpur, Char

Bahadurpur, P.O.-Sujabad, Muladi, Barisal-8250

1,400,000 2.82%

(xiii) The number of securities of the issuer owned by each of the top ten salaried officers, and all other officers or employees as group, indicating the percentage of outstanding shares represented by the securities owned.

None of the employees of the company own any shares of the issuer company “IFCO Garments & Textiles Ltd.” except Chairman and Managing Director.

(d) Description of Business:

(i) The date on which the issuer company was incorporated and the date on which it

commenced operations and the nature of the business which the company and its subsidiaries are engaged in or propose to engage in;

IFCO Garments & Textiles Ltd. (IGTL) is an export oriented garments & textile company for readymade all kinds of knit & woven garments, was incorporated on16th march, 2005 vide registration no.CH-5372/2005 with the Register of Joint Stock Companies and Firms as a Private Limited Company under Companies Act, 1994. Later on, it converted into a public Limited Company on December 22, 2013.


Page | 46

The commercial production of the factory commenced on the year of March 16, 2005.

The principal activities of the company are manufacturing and supplying all types of readymade garments and export thereof.

The Company has no subsidiaries.

(ii) Location of the project; Its factory location is at at Plot # 41, 42, 56 & 57, Road # 01, BSCIC Industrial Estate Extd., Kalurghat, Chittagong, Bangladesh.

(iii) Plant, machinery, technology, process, etc.

IFCO Garments & Textiles Ltd. (IGTL) has been using sophisticated machineries and technology in order to produce high quality of goods. It helps us to be competitive over our competitors because of our latest machineries and technology.

(iv) Details of the major events in the history of the issuer, including details of capacity/facility creation, launching of plant, products, marketing, change in ownership and/or key management personnel etc;

Date of Incorporation As a private limited company on16th march, 2005 vide registration no.CH-5372/2005

Conversion of Private to Public Limited Company

Converted into a public limited company on December 22, 2013 with Register of Joint Stock Companies and Firms (RJSC) in Bangladesh under the Companies Act, 1994

Capacity 6,500,000 Pcs/Year

Date of Commercial Operation March 16, 2005

Appointment of New Managing Director

November 14, 2014

Appointment of Independent Director(s)

April 23, 2016

(v) Principal products or services of the issuer and markets for such products or services.

Past trends and future prospects regarding exports (if applicable) and local market, demand and supply forecasts for the sector in which the product is included with source of data;

IGTL’s vast infrastructure allows manufacturing almost every knitwear product for men, women and kids. It specializes in value added products, such as: Peach-Finished, Pigment-Piece-Dyed, and Heavy Enzyme-Washed, Bamboo-Charcoal and Eco-Friendly products. Following are the principal products of IGTL:

Sl. No. Product Types Of Clothing

1. Women’s Clothing Skirt & shorts etc.

2. Men’s Clothing Polo Shirt & Jacket etc.

3. Teen’s Clothing Jacket, Fitted Jeans, sweet shirts etc.

4. Kids and Baby Clothing Jacket, Shirts, Bottoms etc.

IGTL has crossed the border of using only ordinary yarns, such as: Cotton, Polyester, CVC, PC, etc. and it can now make use of Organic, Rayon, Modal, Pima and Fair trade yarns.

IFCO Garments & Textiles Ltd. is an export oriented readymade garments manufacturing Company that exports readymade garments products to European Union, UK and USA. Dependency on a single product for overall revenue generation creates some product non diversification risk, but its widely diversified customer base and sound relationship


Page | 47

maintenance make them a successful player in the relevant market. Most importantly their buyer composition remains more or less same over last three years.

(vi) If the issuer has more than one product or service, the relative contribution to sales and income of each product or service that accounts for more than 10% of the company’s total revenues;

IGTL produces a single product ‘denim fabrics’. Therefore, 100% revenue generated for the Company is contributed by its only product denim fabrics.

(vii) Description of associates, subsidiary and holding company of the issuer and core areas of business thereof; The Company produces 100% synthetic/acrylic and cotton readymade garments products. List of the products contributing more than 10% are given below:

Sl. No. Product Types Of Clothing Percentage (%)

1. Women’s Clothing Skirt & shorts etc. 30%

2. Men’s Clothing Polo Shirt & Jacket etc. 25%

3. Teen’s Clothing Jacket, Fitted Jeans, sweet shirts etc. 25%

4. Kids and Baby Clothing Jacket, Shirts, Bottoms etc. 20%

(viii) How the products or services are distributed with details of the distribution channel.

Export possibilities and export obligations, if any;

Distribution involves the physical distribution of the company’s products to the sub-distributor or directly to the customer base. Typically this is a combined transport and warehousing operation, responsible for storing and delivering products to meet the customer’s needs. Again this combined activity will often be placed with a 3rd party service provider who will control and implement the processes.

The Company supplies its products from its own factory premises to its customers at the risk of customers against delivery order.

Process:

(ix) Competitive conditions in business with names, percentage and volume of market

shares of major competitors;

The Textile and Apparel industry comprises of over 5000 manufacturers, most of which are Ready Made Garments manufacturers. However, among the listed companies in textile sector, only five companies can be considered as major competitors of IFCO Garments & Textile Ltd. and those are:

Name Volume of Market Share in Million

Pcs Percentage of Market

share

Thermax Textiles Limited 24.00 19.42%

Paramount Textiles Ltd. 24.00 19.42%

Zaber & Zubair 18.00 14.56%

Akij Textile Mills Ltd. 12.00 9.71%

Silver Line Composite Textile Mills Ltd.

12.00 9.71%

Others 19.20 15.53%

(x) Sources and availability of raw materials, names and addresses of the principal suppliers and contingency plan in case of any disruption;

Packaging Dyeing Cutting Sewing Finishing Weaving


Page | 48

The raw materials of IFCO Garments & Textiles Ltd. are imported from overseas, mainly from China as well as from local market. Major raw materials contain Accessories and Yarn. Suppliers are evaluated periodically on supply reliability, quality and prices with new suppliers being added after they meet the required quality and reliability benchmarks through supplier appraisals and track record. The names of main suppliers are mentioned below:

Contingency plan: As number of suppliers of raw materials are plenty in the market, if one supplier fails to provide raw material there are always other suppliers available. So there is no possibility of disruption.

(xi) Sources of, and requirement for, power, gas and water; or any other utilities and

contingency plan in case of any disruption;

Utilities Requirements Sources

Power 2 mw (approx.) Power requirement for the project is 2mw (approx.) which are met up from the project power connection from REB. Yet for smooth operation power generator system has been arranged as stand by.

Water 6000m3/month

The project is required 200 cubic meter/day, which supplied by Deep Tube Well with a capacity of 60 m3 per hour.

Gas 480 PSI/month Bakhrabad Gas Systems Limited supplies required gas for the project

Contingency plan: The Company has set up a diesel generator having flexibility of duel fuel firing capabilities in case of emergency or non-committal supply lapses.

(xii) Names, address(s), telephone number, web address, e-mail and fax number of the customers who account for 10% or more of the company’s products/services with amount and percentage thereof;

The Company’s products are sold to various customers. However, no single customer provides 10% or more of the Company’s total revenue.

(xiii) Names, address(s), telephone number, web address, e-mail and fax number of the

suppliers from whom the issuer purchases 10% or more of its raw material/finished goods with amount and percentage thereof;

The Company’s raw materials procure from various suppliers. However, no single supplier provides 10% or more of the Company’s total raw materials.

(xiv) Description of any contract which the issuer has with its principal suppliers or

customers showing the total amount and quantity of transaction for which the contract is made and the duration of the contract. If there is not any of such contract, a declaration is to be disclosed duly signed by CEO/MD, CFO and Chairman on behalf of Board of Directors;

Name of Major Suppliers Name of Raw Materials

Address

Youngone Synthetic Fiber Prods. Ind. Ltd.

Accessories and Yarn DEPZ, Savar, Dhaka

Shenzhen Textiles Co. Ltd. Accessories and Yarn South of Pingwang Town, Wujiang city, Jiangsu Province, China

Reverco (HK) Limited Accessories and Yarn 820/D, Setu Road, Bahaddarhat, Chittaging

Mein Industrial Crop. Accessories and Yarn 4/F-1, No. 12, 2 Wast, Mujib Road, Chittagong

Unitex International Accessories and Yarn 130, Baizid Bostami Road, Nasirabad 3/A, Chittagong


Page | 49

The company does not entered into any contract with any of its suppliers or customers.

Declaration regarding Contract with Principal suppliers or customers

We, on behalf of the Board of Directors certify that The IFCO Garments & Textiles Ltd. did not enter into any contract with its principal suppliers or customers.

Sd/- Sd/- Sd/-

Gopal Chandra Basak Nur Mohammed Siddique Mohammed Shahed Chife Finanace Officer Managing Director & Director Chairman

(xv) Description of licenses, registrations, NOC and permissions obtained by the issuer with

issue, renewal and expiry dates;

Particulars License Issuer/Issuing

Authority Certificate/ License

No Issue Date

Renewal Date

Expiry Date

Certificate of Incorporation

Registrar of Joint Stock Companies & Firms (RJSC)

CH-5372/2005 16/03/2005 N/A N/A

Trade License Chittagong City Corporation 034931 29/09/2009 12/10/2015 30/06/2016

Import Registration Certificate

Controller of Exports and Imports, Bangladesh

BA-0164978 20/02/2006 11/10/2015 30/06/2016

Export Registration Certificate

Controller of Exports and Imports, Bangladesh

RA-73332 30/01/2006 11/10/2015 30/06/2016

TIN Certificate National Board of Revenue, Bangladesh

375-200-7268/CO-10 N/A N/A N/A

VAT Reg. No. Customs, Excise and VAT Commissionerate

24061000395 15/01/2013 N/A N/A

Fire License Bangladesh Fire Service & Civil Defense

CH-7844/2006-07 27/09/2006 01/11/2015 30/06/2016

Environment Clearance certificate

Department of Environment, Chittagong, Bangladesh

18431/2012/975 15/10/2012

04/04/2016 14/10/2016

Factory License Ministry of Labor & Employment

3560/Chattragram 25/07/2006 30/12/2015 2016

BOI License Board of Investment Bangladesh

20050416-C 23/04/2005 N/A N/A

Certificate of CCCI Chittagong Chamber of Commerce and Industries

M/GEN/36/2889/2015-2016

10/11/2015 - 30/06/2016

NOC Al Arafah Islami Bank Ltd. N/A 23.09.2014 N/A N/A

(xvi) Description of any material patents, trademarks, licenses or royalty agreements;

The Company neither obtained any Patent Right/Trademarks nor signed any royalty agreement with any party. However, it has several regulatory licenses and certificate in order to continue its operation.

(xvii) Number of total employees and number of full-time employees;

As of June 30, 2015 the total number of employees of the company (Head Office & Factory) is as follows:

Salary Range Officer & Staff

Workers Total Employee Factory Head Office

Below 5300 17 10 330 357

Above 5300 40 29 630 699

Total 57 39 960 1056

All employees are full-time employee.

(xviii) A brief description of business strategy;


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IGTL has modern machineries and technology that ensures quality products. Quality is main concern while formulating our strategy. We try to produce goods with cheap cost so that we can get competitive advantages over our competitors. We also believe in providing customizing products to our customer as per need basis so that we can get maximum market share of our products. So innovation is always there.

(xix) A table containing the existing installed capacities for each product or service, capacity utilization for these products or services in the previous years, projected capacities for existing as well as proposed products or services and the assumptions for future capacity utilization for the next three years in respect of existing as well as proposed products or services. If the projected capacity utilization is higher than the actual average capacity utilization, rationale to achieve the projected levels.

Existing capacity and utilization: Name

of Produ

ct

Unit

2015 2014 2013

Production

Capacity

Capacity Utilizati

on

Utilization (%)

Production

Capacity

Capacity Utilizati

on

Utilization (%)

Production

Capacity

Capacity Utilizati

on

Utilization (%)

RMG Piece

s 6,500,000 5,684,65

9 87.46% 6,500,000 5,274,96

1 81.15%

6,500,000 5,564,650

85.61%

Projected capacity and utilization: Name

of Produ

ct

Unit

2018 2017 2016

Production

Capacity

Capacity Utilizati

on

Utilization (%)

Production

Capacity

Capacity Utilizati

on

Utilization (%)

Production

Capacity

Capacity Utilizati

on

Utilization (%)

RMG Piece

s 8,5000,00

0 7,225,00

0 85% 8,5000,00

0 7,225,00

0 85% 8,5000,00

0 7,225,00

0 85%

(e) Description of Property:

(i) Location and area of the land, building, principal plants and other property of the company and the condition thereof; The written down value of Property, Plant & Equipments owned by the company as per audited accounts as on June 30, 2015 are stated below:

Particulars W.D. Value

Balance as at 30-06-2015

Leasehold land Development 55,326,984

Factory Building 344,205,643

Plant & Machinery 1,037,299,519

Electrical installation 41,780,690

Furniture & Fixtures 9,016,351

Generator 21,043,316

Water Pump 2,764,938

Office equipment 1,550,082

Computer 402,253

Cookeries 223,275

Transformer 2,352,379

Motor Car 1,119,648

Fire Extinguishers 2,710,322

Air Condition 651,172

Total 1,520,446,572

Location and area of the land:

Particulars Location of the land Total Areas of Land (Decimal)

Factory Plot # 41, 42, 56, & 57, Road # 01, BSCIC Industrial Estate Extd.,

Kalurghat, Chittagong

27.55


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All the Property, Plant & Equipments owned by the company are located in the above‐mentioned land except some Furniture and Fixtures and Office Equipment are in the rented registered office of IFCO Garments & Textiles Ltd. i.e 63, North Jatrabari, Dhaka-1204, Bangladesh. All of the abovementioned Property, Plant & Equipments are in working condition.

(ii) Whether the property is owned by the company or taken on lease;

All the assets of the Company are in its own name and no asset are taken as lease.

(iii) Dates of purchase, last payment date of current rent (LvRbv)and mutation date of lands,

deed value and other costs including details of land development cost, if any and current use thereof;

Deed No.

Dates of lease

Last payment date of current

rent (LvRbv) Plot no.

Deed Value (BDT)

Area of Land (Sq.

ft.)

Land development &

Other Cost (BDT)

2592 04/08/2005 31/12/2015 B-41, 42, 56, 57

462,120 12,000 55,326,984

(iv) The names of the persons from whom the lands has been acquired/proposed to be acquired along with the cost of acquisition and relation, if any, of such persons to the issuer or any sponsor or director thereof;

IFCO Garments & Textiles Ltd. has acquired its land from Bangladesh Small and Cottage Industries Corporation (BSCIC) on lease for 99 years in the year 2005. At that time IGTL has paid an amount of BDT 462,120 as a premium.

(v) Details of whether the issuer has received all the approvals pertaining to use of the land, if required;

The issuer has received all the approvals pertaining to use of the land.

(ii) If the property is owned by the issuer, whether there is a mortgage or other type of charge on the property, with name of the mortgagee;

Entire plant and machinery is owned by the Company which is mortgaged for short and long term financing to Al-Arafah Islami Bank Ltd.

(vii) If the property is taken on lease, the expiration dates of the lease with name of the lessor, principal terms and conditions of the lease agreements and details of payment;

There is no property under lease agreement. The Company is the legal and absolute owner of all other fixed assets including land and properties of the Company.

(viii) Dates of purchase of plant and machineries along with sellers name, address, years of sale, condition when purchased, country of origin, useful economic life at purchase and remaining economic life, purchase price and written down value;

Sl.

Name of Machineries

Year of Purchas

e

Seller’s name

Seller’s Address

Condition when

purchased

Country of

origin

Purchase price

Estimated Life at the

time of Acquisitio

n

Remaining

Economic Life

Written down

value on 30.06.2015

Brand New Capital

Machineries

Brand New Capital

Machineries

Brand New Capital

Machineries

Brand New Capital

Machineries


Page | 52

Brand New Capital

Machineries

Brand New Capital

Machineries

(ix) Details of the machineries required to be bought by the issuer, cost of the machineries, name of the suppliers, date of placement of order and the date or expected date of supply, etc. No machineries are required to be bought by the issuer.

(x) In case the machineries are yet to be delivered, the date of quotations relied upon for

the cost estimates given shall also be mentioned; No machineries are yet to be delivered by the issuer.

(xi) If plant is purchased in brand new condition then it should be mentioned;

All the assets are in good condition and no re-conditioned or second hand Assets or Machinery are used by the company.

(xii) Details of the second hand or reconditioned machineries bought or proposed to be

bought, if any, including the age of the machineries, balance estimated useful life, etc. as per PSI certificates of the said machineries as submitted to the Commission;

The Company has no plan to purchase any second hand or reconditioned machineries.

(xiii) A physical verification report by the issue manager(s) regarding the properties as submitted to the Commission;

Visit Report on


Company Overview IFCO Garments & Textiles Ltd. (IGTL) was incorporated as a Private Limited Company on 16th march, 2005 under the Companies act 1994. It was converted into a Public Limited Company on December 22, 2013. The authorized and paid-up capital of the company is as follows:

Particulars No. of Shares Face value Total (in BDT)

Authorized Capital 162,000,000 10 1,620,000,000

Issued & Fully paid up capital (A) 49,599,570 10 495,995,700

Capital to be issued through IPO (B) 20,000,000 10 200,000,000

Total Paid –up Capital after IPO [A+B] 69,599,570 10 695,995,700

Registered Office: The Registered office of the Company is situated at 63, North Jatrabari, Dhaka-1204, Bangladesh.

Nature of Business: The principal activities of the company are manufacturing and supplying all types of readymade garments and export thereof.

Products IGTL’s vast infrastructure allows manufacturing almost every knitwear product for men, women and kids. It specializes in value added products, such as: Peach-Finished, Pigment-Piece-Dyed, and Heavy Enzyme-Washed, Bamboo-Charcoal and Eco-Friendly products. Following are the principal products of IGTL: Skirts and Shorts, Polo Shirt and Jacket, Jacket, Fitted Jeans, Sweat Shirts and Shirts and Bottom etc.

Factory Location:


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The factory is situated at Plot # 41, 42, 56, & 57, Road # 01, BSCIC Industrial Estate Extd., Kalurghat, Chittagong.

Physical Status of Buildings: During the course of our visit we have identified that IFCO Garments & Textiles Ltd. (IGTL) has office premise located at 63, North Jatrabari, Dhaka-1204, Bangladesh as their registered offices. We have also inspected the factory buildings of IFCO Garments & Textiles Ltd. (IGTL). The factory is located at Plot # 41, 42, 56, & 57, Road # 01, BSCIC Industrial Estate Extd., Kalurghat, Chittagong.

Sd/- Sd/- Mufakhkharul Islam Tahid Ahmed Chowdhury, FCCA Managing Directoe & CEO Managing Directoe & CEO CAPM Advisory Limited Citizen Securities & Investment Limited

Date: November 03, 2015

(xiv) If the issuer is entitled to any intellectual property right or intangible asset, full description of the property, whether the same are legally held by the issuer and whether all formalities in this regard have been complied with;

The Company has no intellectual property right or intangible asset. (xv) Full description of other properties of the issuer.

(f) Plan of Operation and Discussion of Financial Condition:

a) Internal and external sources of cash;

The internal sources of the cash of the Company are the share capital, share money deposit and retained earnings and the external sources of cash are the bank loans & various payables.

(As per Audited Accounts –Amount in

Taka)

Particulars As at

June 30, 2015 As at

June 30, 2014 As at

June 30, 2013 As at

June 30, 2012 As at

June 30, 2011

Internal sources of Cash:

Share Capital 495,995,700 495,995,700 99,800,000 5,000,000 5,000,000

Share Money Deposit - - 956,950,000 1,051,750,000 1,051,750,000

Retained earnings 918,136,821 764,708,661 612,606,842 309,834,587 114,003,670

Sub Total 1,414,132,521 1,260,704,361 1,669,356,842 1,366,584,587 1,170,753,670

External Sources of Cash:

Long Term Borrowings 218,018,748 292,215,682 398,146,975 302,546,975 345,986,529

Short Term Borrowings 80,640,666 84,948,176 26,065,934 29,709,171 32,882,672

Creditors & Accruals 22,899,475 33,396,598 30,006,148 9,177,950 7,994,783

Trade and other Payables

120,585,124 133,377,010 98,676,822 81,548,949 43,743,025

Sub Total 442,144,013 543,937,466 552,895,879 422,983,045 430,607,009

Grand Total 1,856,276,534 1,804,641,827 2,222,252,721 1,789,567,632 1,601,360,679

b) Any material commitments for capital expenditure and expected sources of funds for such expenditure; IGTL has no other material commitments for capital expenditures except for those mentioned in the Utilization of IPO proceeds in this prospectus.


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c) Causes for any material changes from period to period in revenues, cost of goods sold,

other operating expenses and net income; The Company’s revenue and other income as well as operating expenses and net income have continued to change due to increasing business volume.

(As per Audited Accounts-Amount in BDT)

Particulars For the year

ended June 30, 2015

For the year ended

June 30, 2014

For the year ended

June 30, 2013

For the year ended

June 30, 2012

For the year ended

June 30, 2011

Sales Turnover 1,233,721,942 1,201,755,575 1,512,600,470 1,075,864,278 846,529,754

Less: Cost of Goods Sold 997,230,835 958,334,436 1,113,749,379 793,381,225 642,363,671

Gross Profit 236,491,107 243,421,139 398,851,091 282,483,053 204,166,083

Less: Operating Expenses 28,381,670 27,012,835 24,470,883 28,811,441 27,085,038

Operating Income 208,109,437 216,408,304 374,380,208 253,671,612 177,081,045

Less: Other Operating Expenses (Welfare Expense)

7,857,774 8,131,046 542,834 426,538 352,678

Net Operating Income 200,251,663 216,408,304 373,837,374 253,245,074 176,728,367

Financial Expenses 43,626,705 46,173,973 57,153,282 57,940,644 54,280,554

Net Operating Profit 156,624,958 170,234,331 316,684,092 195,304,430 122,447,813

Add: Other Non Operating Income

530,527 517,632 626,454 526,487 844,790

Net Profit before Tax 157,155,485 162,620,917 317,310,546 195,830,917 123,292,603

Provision for taxation 3,727,325 10,519,098 14,538,291 - -

Net Profit after tax 153,428,160 152,101,819 302,772,255 195,830,917 123,292,603

Causes for Changes in Sales Due to few occurrences i.e., Rana Plaza tragedy and standstill of GSP facility in the year 2013; the sales revenue of the year 2014 has dropped. But in the year 2014 the Company has increased the sales revenue again by applying it’s efficient management of inventory and overall increasing demand of textiles in the economy.


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Causes for Changes in COGS As the Company increased its production capacity, its raw material consumption, factory overhead expenses and cost of production also increased proportionately. As a result, the Cost of Goods Sold (COGS) also increased year to year.

Causes for Changes in Operating Expenses The Company’s operating expenses mainly increased as it’s warehouse, distribution & selling expenses have increased in spite of decreasing of sales revenue.

Causes for Changes in Other Operating Expenses The other operating expenses has bolstered in the year 2014 & 2015 from the year 2013, as the Company has transferred 5% of profit before tax to the Worker’s profit participation/welfare fund from the year 2014.

Causes for Changes in Operating Profit As the sales revenue has decreased in the year 2014 as a result the operating profit also decreased though the Company efficiently managed its operating expenses. d) Any seasonal aspects of the issuer’s business;

In general demand for readymade garments is prevailed in whole year since the company receives export orders continuously and steadily since its operation.

e) Any known trends, events or uncertainties that may have material effect on the issuer’s

future business;

The known events that may affect the business operations of the Company are: Decrease in demand of the readymade garments products in the local and

international market Increased production cost Scarcity of raw materials

Scarcity of gas

Technological change Increased competition

Govt. Policy change towards the industry Political unrest & Hartal

Flood and natural calamities.

f) Any assets of the company used to pay off any liabilities;

None of the operating assets of the company has been disposed of to liquidate any liabilities of the company.

g) Any loan taken from or given to any related party or connected person of the issuer with details of the same;

The company did not take or give any loan from or to its subsidiary during last five years.

h) Any future contractual liabilities the issuer may enter into within next one year, and the impact, if any, on the financial fundamentals of the issuer;

The company has no plan to enter into any contract creating future liabilities for the company except for those which are created in the normal course of business activities.

i) The estimated amount, where applicable, of future capital expenditure;

The Company has not any plan to make any capital expenditure except for those mentioned in the ‘Use of Proceeds’ section in this prospectus.


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j) Any VAT, income tax, customs duty or other tax liability which is yet to be paid, including any contingent liabilities stating why the same was not paid prior to the issuance of the prospectus. Updated income tax status for the last 5 years or from commercial operation, which is shorter;

VAT: The Company is 100% export oriented and has VAT Registration no. 24061000395. Government of Bangladesh has declared that there is no VAT on 100% export oriented project except local sale by the Bangladesh Gazzette dated June 06, 2013 General Order No. 25/VAT/2013. As such, The Company does not have any outstanding VAT as on June 30, 2015.

Income Taxes: As per section 53BB of Income Tax Ordinance 1984, tax has been deducted at source from export proceeds @ 0.30% and the deducted amount is treated as the final settlement as final discharge of income tax liability of the company under the provision of section 82 (C) vide SRO No. 2015-AAIN/AYKOR/2005 dated July 07, 2005. Taxes on non operating income charged @ 35.00% since it is not related with final settlement.

Status of Tax Return

Accounting Year Assessment Year Status

30 June 2015 2015-2016 Not yet due

30 June 2014 2014-2015 Income Tax Return is submitted

30 June 2013 2013-2014

Income Tax Assessment is completed 30 June 2012 2012-2013 30 June 2011 2011-2012

Customs Duty: There is no custom duty of the Company as on June 30, 2015.

k) Any financial commitment, including lease commitment, the company had entered into

during the past five years or from commercial operation, which is shorter, giving details as to how the liquidation was or is to be effected;

The Company has obtained following financial commitments during last five years.

Name of Bank & A/C No.

Type of Loan

Amount of

Loan (Tk.)

Rate of Interest

Sanction Date

Amount of Installment (Monthly)

Tk.

Outstanding Balance as on

30.06.2015

Al-Arafah Islami Bank Ltd.

Long term loan

49.73 Crore

14.00% 2012 (Yearly renewable)

56.00 lac 28.52 Crore

l) Details of all personnel related schemes for which the company has to make provision

for in future years; The company’s remuneration packages include salary and allowances, festival bonus, transport facility, conveyance allowance, maternity incentive and group medical insurance.

The Company considers its human resources as the most valuable assets and the profitability of company largely depends on the efficient & effective productivity of human resources. So the company provides various benefit packages for the employees to ensure


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employees motivation and to improve profitability and prosperity. In addition to company’s monthly remuneration benefits of salary, wages and allowances, the company also provides following benefits to the employees.

1. Group Insurance: All Permanent employees of the company are entitled to group insurance schemes.

2. Provident Fund and Gratuity: The Company has a registered provident fund scheme for employees eligible to be members of the fund.

3. WPPF: The Company has established a profit participation fund for the welfare of its workers. The Company has already made provision for WPPF during the year.


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m) Break down of all expenses related to the public issue;

The following table shows the amounts paid to the Issue Manager, Underwriters and other costs are estimated as follows:

Sl. Particulars Basis Amount in

BDT

ISSUE MANAGEMENT FEES

1 Managers to the Issue fee 1.00% on the public offer amount (including premium) or Tk. 03.00 million whichever is lower.

2,000,000

2 VAT against Issue Management Fees

@ 15% of issue management fees 300,000

LISTING RELATED EXPENSES

3 Application Fee for Stock Exchanges

Tk. 50,000 for each exchanges 100,000

4 Listing Fee for Stock Exchanges (DSE & CSE)

@ 0.25% on Tk. 100 million of paid-up capital and 0.15% on the rest amount of paid-up capital; minimum Tk. 50,000 and Maximum Tk. 10 million for each exchanges

2,287,987

5 Annual Fee for DSE & CSE

@ 0.05% on Tk. 100 million of paid-up capital and 0.02% on the rest amount of paid-up capital; minimum Tk. 50,000 and Maximum Tk. 6 lacs for each exchanges

288,398

BSEC FEES

6 Application fee Fixed 10,000

7 BSEC Consent Fee Fee @ 0.40% on the public offering amount 800,000

IPO COMMISSION

8 Underwriting commission Commission @ 1% on Underwritten amount 700,000

9 Auditors Certification fees At Actual 500,000

CDBL FEES AND EXPENSES

10 Security Deposit At Actual 500,000

11 Documentation fee At Actual 2,500

12 Annual fee At Actual 100,000

13 Connection Fee At Actual 6,000

14 Initial Public Offering (IPO) fee @0.0175% of issue size+0.0175% of Pre-IPO paid up capital

121,800

PRINTING AND POST PUBLIC OFFER EXPENSES

15 Publication of prospectus Estimated (5000 copies) 700,000

16 Abridge Version of Prospectus and Notice in 4 daily news paper

Estimated 850,000

17 Notice for prospectus, Lottery, Refund etc .in 4 daily news paper

Estimated 300,000

18 Lottery related expenses and BUET fee

Estimated 1,000,000

19 Collection of Forms, Data Processing and Share Software Charge

Estimated 3,500,000

20 Allotment and Refund Estimated 300,000

21 Stationeries and other expenses Estimated 200,000

Grand Total 14,566,685

N.B.: Actual costs will vary if above mentioned estimates differ and will be adjusted accordingly.


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n) If the issuer has revalued any of its assets, the name, qualification and experiences of the valuer and the reason for the revaluation, showing the value of the assets prior to the revaluation separately for each asset revalued in a manner which shall facilitate comparison between the historical value and the amount after evaluation and giving a summary of the valuation report along with basis of pricing and certificates required under the revaluation guideline of the Commission;

No revaluation has been made to the Company’s assets and liabilities.

o) Where the issuer is a holding/subsidiary company, full disclosure about the transactions, including its nature and amount, between the issuer and its subsidiary/holding company, including transactions which had taken place within the last five years of the issuance of the prospectus or since the date of incorporation of the issuer, whichever is later, clearly indicating whether the issuer is a debtor or a creditor;

The Company has no subsidiary nor it is operated under a holding company nor does it have any associate company. Hence, no transaction has taken place.


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p) Financial Information of Group Companies: following information for the last three years based on the audited financial statements, in respect of all the group companies of the issuer, wherever applicable, along with significant notes of auditors:

Sl. Particulars IFCO Garments & Textiles Ltd.

2015 2014 2013

1 Date of Incorporation 2005

2 Nature of Business 100% export oriented RMG

3 Equity Capital 495,995,700 495,995,700 99,800,000

4 Reserves - - -

5 Sales 1,233,721,942 1,201,755,575 1,512,600,470

6 Profit after tax 153,428,160 152,101,819 302,772,255

7 Earnings per share 3.09 4.82 1,765

8 Net Asset Value 28.51 25.42 167.27

9 The highest and lowest market price of shares during the preceding six months with disclosures for changes in capital structure during the period, if any securities of the group are listed with any exchange;

N/A N/A N/A

10 Information regarding significant adverse factors relating to the group;

N/A N/A N/A

11 Any of the group companies has become sick or is under winding up;

N/A N/A N/A

12 The related business transactions within the group and their significance on the financial performance of the issuer;

N/A N/A N/A

13 Sales or purchase between group companies/ subsidiaries/ associate companies when such sales or purchases exceed in value in the aggregate ten per cent of the total sales or purchases of the issuer and also material items of income or expenditure arising out of such transactions;

N/A N/A N/A

14 Where the issuer is a banking company, insurance company, non-banking financial institution or any other company which is regulated and licensed by another primary regulator, a declaration by the board of directors shall be included in the prospectus stating that all requirements of the relevant laws and regulatory requirements of its primary regulator have been adhered to by the issuer;

N/A N/A N/A

15 A report from the auditors regarding any allotment of shares to any person for any consideration otherwise than cash along with relationship of that person with the issuer and rationale of issue price of the shares;

N/A N/A N/A

16 Any material information, which is likely to have an impact on the offering or change the terms and conditions under which the offer has been made to the public;

N/A N/A N/A

17 Business strategies and future plans. Projected statement of financial position, compressive statement of income and earnings per share for the next three accounting years as per the issuers own assessment.

N/A N/A N/A

q) Discussion on the results of operations shall inter-alia contain the following:

1) A summary of the past financial results after adjustments as given in the auditor’s report containing significant items of income and expenditure;

Particulars June 30, 2015 June 30, 2014 June 30, 2013 June 30, 2012 June 30, 2011

Non-Current Assets 1,522,412,443 1,509,145,863 1,637,475,818 1,220,498,938 1,212,749,401

Current Asset 401,064,091 362,695,964 651,976,903 569,068,694 388,611,278

Shareholders' Equity 1,414,132,521 1,260,704,361 1,669,356,842 1,366,584,587 1,170,753,670 Long Term Borrowings 218,018,748 292,215,682 398,146,975 302,546,975 345,986,529

Current Liabilities 291,325,265 318,921,784 221,948,904 187,636,070 84,620,480


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Turnover 1,233,721,942 1,201,755,575 1,512,600,470 1,075,864,278 846,529,754

Gross Profit 236,491,107 243,421,139 398,851,091 282,483,053 204,166,083

Net profit before tax 157,155,485 162,620,917 317,310,546 195,830,917 123,292,603



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2) A summary of major items of income and expenditure;

Particulars June 30, 2015 June 30, 2014 June 30, 2013 June 30, 2012 June 30, 2011

Turnover 1,233,721,942 1,201,755,575 1,512,600,470 1,075,864,278 846,529,754

Gross Profit 236,491,107 243,421,139 398,851,091 282,483,053 204,166,083

Net profit before tax 157,155,485 162,620,917 317,310,546 195,830,917 123,292,603


3) The income and sales on account of major products or services;

The Company produces 100% synthetic/acrylic and cotton readymade garments products. List of the products contributing more than 10% are given below:

Sl. No. Product Types Of Clothing Percentage (%)

1. Women’s Clothing Skirt & shorts etc. 30%

2. Men’s Clothing Polo Shirt & Jacket etc. 25%

3. Teen’s Clothing Jacket, Fitted Jeans, sweet shirts etc.

25%

4. Kids and Baby Clothing

Jacket, Shirts, Bottoms etc. 20%

4) In case, other income constitutes more than 10% of the total income, the breakup of the same along with the nature of the income, i.e., recurring or non-recurring;

The Company’s other income is not more than 10% of the total income.

5) If a material part of the income is dependent upon a single customer or a few major

customers, disclosure of this fact along with relevant data. Similarly, if any foreign customer constitutes a significant portion of the issuer’s business, disclosure of the fact along with its impact on the business considering exchange rate fluctuations;

The Company’s income is not dependent upon a single customer or a few major customers nor foreign customer.

6) In case the issuer has followed any unorthodox procedure for recording sales and

revenues, its impact shall be analyzed and disclosed.

The issuer has not followed any unorthodox procedure for recording sales and revenues.

r) Comparison of recent financial year with the previous financial years on the major

heads of the profit and loss statement, including an analysis of reasons for the changes in significant items of income and expenditure, inter-alia, containing the following:



ended June 30, 2015

For the year ended

June 30, 2014

For the year ended

June 30, 2013

For the year ended

June 30, 2012

For the year ended

June 30, 2011

Sales Turnover 1,233,721,942 1,201,755,575 1,512,600,470 1,075,864,278 846,529,754


Gross Profit 236,491,107 243,421,139 398,851,091 282,483,053 204,166,083



Less: Other Operating Expenses (Welfare Expense)

7,857,774 8,131,046 542,834 426,538 352,678


Financial Expenses 43,626,705 46,173,973 57,153,282 57,940,644 54,280,554


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Net Operating Profit 156,624,958 170,234,331 316,684,092 195,304,430 122,447,813

Add: Other Non Operating Income

530,527 517,632 626,454 526,487 844,790


Provision for taxation 3,727,325 10,519,098 14,538,291 - -



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1) Unusual or infrequent events or transactions including unusual trends on account of

business activity, unusual items of income, change of accounting policies and discretionary reduction of expenses etc.

Causes for Changes in Sales Due to few occurrences i.e., Rana Plaza tragedy and standstill of GSP facility in the year 2013; the sales revenue of the year 2014 has dropped. But in the year 2014 the Company has increased the sales revenue again by applying it’s efficient management of inventory and overall increasing demand of textiles in the economy.

Causes for Changes in COGS As the Company increased its production capacity, its raw material consumption, factory overhead expenses and cost of production also increased proportionately. As a result, the Cost of Goods Sold (COGS) also increased year to year.

Causes for Changes in Operating Expenses The Company’s operating expenses mainly increased as it’s warehouse, distribution & selling expenses have increased in spite of decreasing of sales revenue.

Causes for Changes in Other Operating Expenses The other operating expenses has bolstered in the year 2014 & 2015 from the year 2013, as the Company has transferred 5% of profit before tax to the Worker’s profit participation/welfare fund from the year 2014.

Causes for Changes in Operating Profit As the sales revenue has decreased in the year 2014 as a result the operating profit also decreased though the Company efficiently managed its operating expenses.

2) Significant economic changes that materially affect or are likely to affect income

from continuing operations;

There are no significant economic changes that materially affect or are likely to affect income from continuing operations.

3) Known trends or uncertainties that have had or are expected to have a material

adverse impact on sales, revenue or income from continuing operations;

The known events that may affect the business operations of the Company are:

Decrease in demand of the readymade garments products in the local and international market,

Increased production cost Scarcity of raw materials,

Scarcity of gas, Technological change,

Increased competition Govt. Policy change towards the industry,

Political unrest & Hartal, Flood and natural calamities

4) Future changes in relationship between costs and revenues, in case of events such as future increase in labor or material costs or prices that will cause a material change are known;

We are aware of the fact that future is always uncertain that affect business and plan as well. So, in future labor price or material price may change. However, revenue is always adjusted and follows the trend in line with production cost. Hence, any change in cost will be reflected in sales price. It is mentioned-worthy that Bangladesh is the 2nd largest


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RMG producer of the world. So we have strong influence over market to set the trend as well.

5) The extent to which material increases in net sales or revenue are due to increased

sales volume, introduction of new products or services or increased sales prices;

We are expecting the increased net sales or revenue because of sales volume, new product line and sales price. It is forecasted that we will be able to increase our net sales or revenue around 25 percent on an average for the next 3 years.

6) Total turnover of each major industry segment in which the issuer operated;

Year Export of RMG (in million US$)

Total Export (in million US$)

% of RMG's to Total Export

2009-2010 12,496 16,204 77.12%

2010-2011 17,914 22,924 78.15%

2011-2012 19,089 24,287 78.60%

2012-2013 21,515 27,018 79.63%

2013-2014 24,491 30,186 81.13%

2014-2015 25,491 31,208 81.68%

2015-2016(July-Feb) 18,128 22,123 81.94%

7) Status of any publicly announced new products or business segment;

The Company did not announce new products or business segment.

8) The extent to which the business is seasonal.

In general demand for readymade garments is prevailed in whole year since the company receives export orders continuously and steadily since its operation. Therefore, the company’s business is not significantly affected by the seasonal aspect.

s) Defaults or rescheduling of borrowings with financial institutions/banks, conversion of loans into equity along with reasons thereof, lock out, strikes and reasons for the same etc.

The Company has rescheduled of its borrowing with Al-Arafah Islami Bank Limited.

t) Details regarding the changes in the activities of the issuer during the last five years which may had a material effect on the profits/loss, including discontinuance of lines of business, loss of agencies or markets and similar factors;

There were no changes in the activities of the Company during the last five years and had not any material effect on the profits/loss, including discontinuance of lines of business, loss of agencies or markets and similar factors.

u) Injunction or restraining order, if any, with possible implications;

There was no injunction or restraining order.

v) Technology, market, managerial competence and capacity built-up;

IGTL has invested in latest and most modern machinery. The company keeps track of the latest developments in technology and has developed a system of upgrading its machines as and when the need arises. The company has found the right mix between technology and the required investments. Managerial competence is interlinked with technology to get maximum production and smooth line of production as per demand. So we are always in line with increasing our capacity built-up to meet up the demand and have a maximum market share.


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w) Changes in accounting policies in the last three years;

The management of the Company has not change any accounting policies in the last three years.

x) Significant developments subsequent to the last financial year: A statement by the

directors whether in their opinion there have arisen any circumstances since the date of the last financial statements as disclosed in the prospectus and which materially and adversely affect or is likely to affect the trading or profitability of the issuer, or the value of its assets, or its ability to pay its liabilities within the next twelve months;

There were no significant events occurred subsequent to the last financial year and no adverse effect will happen in the profitability of the issuer.

y) If any quarter of the financial year of the issuer ends after the period ended in the audited financial statements as disclosed in the prospectus, unaudited financial statements for each of the said quarters duly authenticated by the CEO and CFO of the issuer;

Year-end duly authenticated audited financial statement has been incorporated in the prospectus.

z) Factors that may affect the results of operations.

There are no such factors that may affect the results of operations.


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SECTION-VII: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS

a) Overview of business and strategies:

Production Process IFCO Garments & Textiles Ltd. was commissioned in 2005 with a goal to produce world-class premium RMG fabrics in Bangladesh. Currently the mill has the capacity to produce 6.5 million pieces of RMG per year. Our product range includes almost every knitwear for men, women and kids. It specializes in value added products, such as: Peach-Finished, Pigment-Piece-Dyed, and Heavy Enzyme-Washed, Bamboo-Charcoal and Eco-Friendly products. Following are the principal products of IGTL:

Skirts and Shorts Polo Shirt and Jacket

Jacket, Fitted Jeans, Sweat Shirts

Shirts and Bottom etc. Weaving The versatility in weaving is one of our major advantages. Our weaving section contains 78 rapier weaving machines. All looms are capable of 6 colors in the weft and equipped with Electronic Dobby. Furthermore, a number of looms are equipped with double beams with the purpose of handling seersucker and designs with varying warp tension. In additional there are 20 latest Air-jet looms. Yarn Dyeing The current yarn dyeing capacity is around 4,000 kg per day. Our facility is fully equipped with a complete lab for shade matching and color development. Dyeing vessel capacities range from 5 kg to 500 kg, supported by two 300 kg pressure dryers. Cutting It is the second section of apparel manufacturing. This section is consists of a) Marker Making: for industrial garments preparation, marker making is a very important chapter for highest usage of fabric and for lowest wastage of fabric. We have a strong team working for marker making in cutting section of each floor. This is a process which is performed to draw the pattern pieces on the fabric before cutting. This may be done by drawing the pattern pieces on the fabric directly or by drawing the pattern pieces on a thin marker paper and then placement the paper onto the fabric lay. b) Fabric Spreading: The fundamental purpose of spreading machines is to superimpose layers of fabric in a smooth, tension-free manner for accurate and efficient cutting. c) Fabric Cutting: After completing the fabric spreading then the fabric cutting is started. To cut out pattern pieces of garment components as per exact dimension of the patterns from a fabric lay is called fabric cutting. The term fabric cutting is only applicable for garments manufacturing technology. Sewing Garment’s cut parts are assembled here in automated machines. Finishing The in house finishing unit ensures that any fabric that moves out of our factory is of high quality. The finishing plant machineries are carefully selected so that it can customize the process. Packaging This is the last stage of our production process. Finished products are transfer in this section and packed to deliver to the customer.


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b) SWOT Analysis:

Strengths

Established marketing platform and a proven track record of performance

Large base of experienced professionals

Diversified business sector exposures Uses state of the art technology for production enhancement Have backward and forward business linkage support

Produces RMGs for world class companies like At-Last, Broadway International, K-mart, HIS International, Lamour, Lollytogs, Out Door Group U. K., Sears, Wal-mart, Sprocket, Takko etc.

Weaknesses

Lack of coordination between different sectors.

Major apparel export destination of Bangladesh European Union. Currently the BDT is highly appreciated against the Euro which is lowering the export revenue receipt in BDT.

Opportunities

Low Labor Cost Shift of the Chinese Textile Industry towards industrial products, thereby creating

opportunity in Bangladesh RMG Sector

Huge untapped demand for fabric production Several Government incentives like tax benefits, Export Development Fund (EDF)

facility, cash benefits are available

Threats

The Company and the whole industry will be adversely affected if political situation deteriorates.

Major apparel export destination of Bangladesh is European Union. Currently the BDT is highly appreciated against the Euro which is lowering the export revenue receipt in BDT.

USA is planning international trade agreement named Trans-Pacific Partnership with 11 Pacific Rim countries. If the deal is passed, least developed countries like Bangladesh will lose market share in US market.

c) Analysis of the financial statements of last five years with reason(s) of fluctuating

revenue/sales, other income, total income, cost of material, finance cost, depreciation and amortization expense, other expense; changes of inventories, net profit before & after tax, EPS etc.



ended June 30, 2015

For the year ended

June 30, 2014

For the year ended

June 30, 2013

For the year ended

June 30, 2012

For the year ended

June 30, 2011

Revenue/Sales 1,233,721,942 1,201,755,575 1,512,600,470 1,075,864,278 846,529,754

Other Income 530,527 517,632 626,454 526,487 844,790

Total Income 153,428,160 152,101,819 302,772,255 195,830,917 123,292,603

Cost of Material 997,230,835 958,334,436 1,113,749,379 793,381,225 642,363,671

Finance Cost 43,626,705 46,173,973 57,153,282 57,940,644 54,280,554

Depreciation and amortization expense

124,686,170 135,647,326 102,218,910 107,698,674 115,993,900

Other Expenses 36,239,444 35,143,881 25,013,717 29,237,979 27,437,716

Changes of Inventories 173,494,548

184,099,267

380,860,526

220,784,541 151,596,544


Net Profit after Tax 153,428,160 152,101,819 302,772,255 195,830,917 123,292,603

Earnings per share (Basic) 3.09 4.82 176.50 391.66 246.59

Earnings per share (Diluted) 3.09 3.07 6.10 3.95 2.49


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Reasons of Fluctuation:

Revenue/Sales Due to few occurrences i.e., Rana Plaza tragedy and standstill of GSP facility in the year 2013; the sales revenue of the year 2014 has dropped. But in the year 2015 the Company has increased the sales revenue again by applying it’s efficient management of inventory and overall increasing demand of textiles in the economy.

Other Income The company enjoys a stable trend in Other Income.


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Total Income Combined effect of revenue and other income are reflected in the total income. As such, aforesaid explanation is applicable here also. Cost of Material IGTL’s cost of material is in line with revenue and capacity utilization. Finance Cost Finance cost decreased over time due to loan pay off. The company intended to decrease the dependence on external finance and focus on equity based financing. Depreciation and amortization expense There is growth of depreciation in the year 2014 due to purchase of long term assets. Other expense Other expenses consist of Operating expense and Welfare expense. Over the year’s trend of other expenses are consistent. Changes of Inventories The inventory has dropped in the year 2014; as such, aforesaid explanation is applicable here also. Net Profit before & After Tax Due to downward sales in the year 2014, net profit before & after tax also affected in the same year. Causes for Fluctuation of EPS EPS decreased in 2014 for many reasons, like; downward sales revenue, share price split and increase of paid up capital etc.

d) Known trends, demands, commitments, events or uncertainties that are likely to have an effect on the company’s business:

The known events that may affect the business operations of the Company are:

Decrease in demand of the readymade garments products in the local and international market,

Increased production cost Scarcity of raw materials, Scarcity of gas,

Technological change,

Increased competition Govt. Policy change towards the industry,

Political unrest & Hartal, Flood and natural calamities

e) Trends or expected fluctuations in liquidity:

There are no trends or expected fluctuations in liquidity.

f) Off-balance sheet agreements those have or likely to have a current or future effect on financial condition:

There are no off-balance sheet agreements those have or likely to have a current or future effect on financial condition.


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SECTION -VIII: DIRECTORS AND OFFICERS

a) Name, Father’s name, age, residential address, educational qualification, experience and position of each of the directors of the company and any person nominated/represented to be a director, showing the period for which the nomination has been made and the name of the organization which has nominated him;

Name Father’s Name

Age Residential

address Educational Qualification

Experience Position

Name of the Institutions And

Duration For Nominated

Director

Nur Mohammed Siddique

MD Solaiman

41 yrs

592/B, Mehidibag Road, Kotwali,

Chittagong

M.Com 25 yrs Director &

MD

N/A

Mohammed Morshed

Md. Sekander

Meah

48 yrs


Chittagong

B.Com 20 yrs Director N/A

Mohammed Shahed

MD Solaiman

33 yrs


Chittagong

M.A. 26 yrs Chairman N/A

MD Solaiman Late Md. Kabir

Ahmed

68 yrs


Chittagong

B.A. 35 yrs Director N/A

Md. Nurul Huda

Abdul Hakim

32 yrs

Village # Bahadurpur, Char Bahadurpur, P.O-Sojabad, Muladi,

Barisal-8250

M.A 05 yrs Director N/A

Mohammad Mehedi Hasan

Md. Fazlur Rahman

42 yrs

H-167, Tinshed Koloni, Section-13,

Kafrul, Mirpur-1216

Masters 17 yrs Independent Director

N/A

Abdul Mannan

Late Nur Box Ukil

61 yrs

Village-Pachkathi, P.O.-Haturia-8050,


M.Com 35 yrs Independent Director

N/A

b) Date of first Directorship and Expiry of Current Tenure of the directors:

SL Name of the Director Position Date of first Directorship

Date of Expiration of Current term


Director & MD 15.10.2014 **

2 Mohammed Morshed Director From Inception **

3 Mohammed Shahed Chairman 15.10.2014 **

4 MD Solaiman Director 15.10.2014 **

5 Md. Nurul Huda Director 05.08.2015 **



23.04.2016 **


Director 23.04.2016 **

**As per Articles of Association of the company, one-third of the directors or if their number is not three or multiple of three then the number nearest to one-third shall retire from office by rotation at the Annual General Meeting.

c) If any director has any type of interest in other businesses, names and types of business of such organizations. If any director is also a director of another company or owner or partner of any other concern, the names of such organizations;:

Name Designation in

IFCO Garments & Textiles Ltd. Directorship/Sponsorship/

Ownership Position

Nur Mohammed Siddique Managing Director N/A N/A


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Mohammed Morshed Director Familytex BD Ltd. C & A Textiles Ltd.

Managing Director Director

Mohammed Shahed Chairman N/A N/A

MD Solaiman Director N/A N/A

Md. Nurul Huda Director N/A N/A


Independent Director N/A N/A

Abdul Mannan Independent Director N/A N/A

d) Statement of if any Directors of the issuer are associated with the securities market in any manner and any director of the issuer company is also director of any issuer of other listed securities during last three years with dividend payment history and market performance:

Name of the Directors

Designation in IFCO Garments & Textiles

Ltd.

Name of the Company

Listing Year

Publication Date of

Prospectus

Issue Price

Dividend payment history

Mohammed Morshed

Director

Familytex BD Ltd.

2013 February 07,

2013 BDT 10

Bonus 100% - 2013

Bonus 10% - 2014

C & A Textiles Ltd.

2015 September 10,

2015 BDT 10

Bonus 11% - 2014

Bonus 12% - 2015

e) Family relationship (father, mother, spouse, brother, sister, son, daughter, spouse’s father, spouse’s mother, spouse’s brother, spouse’s sister) among the directors and top five officers:

Name Position Relationship with other directors

Mohammed Shahed Chairman Son of Md. Solaiman


Managing Director Son of Md. Solaiman

Mohammed Morshed Director N/A

Md. Solaiman Director Father of Mohammed Shahed and Nur Mohammad Siddique

Md. Nurul Huda Director N/A



N/A

Abdul Mannan Independent Director

N/A

Family relationship among directors and top five officers of the Company:

f) Brief description of other businesses of the directors:

Name Directorship/Owners

hip with other companies

Brief Description Position

Mohammed Morshed

Familytex BD Ltd. Manufacturing and exporting knit and woven RMG

Managing Director

Name Position Relationship with other directors

Mohammed Shahed Chairman Son of Md. Solaiman


Managing Director Son of Md. Solaiman

Md. Solaiman Director Father of Mohammed Shahed and Nur Mohammad Siddique


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C & A Textiles Ltd. 100% Export oriented knit composite Textiles industry

Director

g) Short bio-data of each director: Mr. Mohammed Shahed Chairman

Mr. Mohammed Shahed aged 33, Chairman of the Company born in well known business family in 1983 in Chittagong. After completion of his Masters of Arts from Chittagong University, he engaged himself in business. He is involved in many social activities and related works. He has traveled many countries throughout the world for gaining technical know-how on garments industry and latest development of production technology and became very successful businessman in short time of his business career with his sincerity, honesty, conceptual and practical problem solving minded. His interpersonal skills, leadership behavior, high analytical ability in business and very hard working nature made him business leader. Mr. Nur Mohammed Siddique Managing Director

Mr. Nur Mohammed Siddique aged 41, Managing Director of the Company born in well known Muslim business family in 1975 in Chittagong. After completion of his Masters of Commerce from Chittagong University, he engages himself in business. He has visited many countries of the world including Japan, China, India, America, U.K. etc. in connection of business and has bagged to his credit a vast experience and knowledge in modern method, technology, production, marketing and management techniques of garments industries by attaching several courses / seminars and visiting similar industrial concerns of the world. He became a successful businessman in short time of his business career with his sincerity, honesty, conceptual and practical problem solving minded. He is also involved in many social and cultural activities of the country. Mr. MD. Solaiman Director

Mr. MD. Solaiman aged 68, Director of the Company born in well known business family in 1948 in Chittagong. After completion of his Bachelor of Arts from Chittagong University, he engaged himself in business. During his tenure of business career, he gained business knowledge in textiles and readymade garments industries. He is involved in many social activities and related works. He has traveled many countries including Japan, China, India, Hong Kong, America, U.K. etc. for gaining technical know-how on garments industry and latest development of production technology. Mohammed Morshed Director

Mohammad Morshed aged 48, born in well known business family in 1968 in Chittagong. After completing his Bachelor of Commerce from National University he engages himself in business. He became a successful business man in short time of his business career with his sincerity, honesty, conceptual and practical problem solving minded. He has started his carrier as an entrepreneur of C & A Fashion Ltd since 1992. He is also the Director C & A Textiles Ltd and managing Director of FamilyTex. During his tenor of business career, he gained business knowledge in textiles and readymade garments industries. Mr. Md. Nurul Huda Director


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Mr. Md. Nurul Huda, aged 31, Director of the Company. He was born in well known muslim business family in 1984 in Muladi, Barisal. He is the son of Mr. Abdul Hakim and Mrs. Rizia Begum. After completion of Masters Degree, he engaged himself in business. He has traveled many countries throughout the world for gaining technical know-how on garments industry and latest development of production technology. He is also involved in many social and cultural activities of the country. Mr. Mohammad Mehedi Hasan Independent Director

Mr. Mohammad Mehedi Hasan, aged 42 , obtained his Master’s Degree in 1999. He was born in well known muslim family in Barisal. He is the son of Mr. Md. Fazlur Rahman and Mrs. Shetara Rahman. He has vast experience in Financial, Corporate & Business Management. He has a total working experience of seventeen years of which thirteen years in the field of Garments & Textile Industry. He worked for different capacities like Head of Commercial, Head of Accounts in different corporate house. He is also involved in many social and cultural activities of the country. Mr. Abdul Mannan Independent Director

Mr. Abdul Mannan, aged 61, is the independent director of the Company. He was born in well known muslim family in Gosairhat, Shariatpur. After completion of M.Com (Accounting) from Dhaka University, he started career in the field of Accounts & Finance in banking sector. There after he engaged himself in corporate sector and achieved vast experience in field of Financial & Corporate Management. He has a total working experience of thirty five years. During his service tenure, he worked for different capacities like CFO, Head of Corporate Affairs etc. He has vast experiences in readymade garments, textile, chemicals and dyeing industries also. He is also involved in many social and cultural activities of the country. h) Loan status of the issuer, its directors and shareholders who hold 5% or more shares in

the paid-up capital of the issuer in terms of the CIB Report of Bangladesh Bank:

Neither the Company nor any of its Directors or shareholders who hold 5% or more shares in the paid up capital of the issuer is loan defaulter in terms of the CIB report of Bangladesh Bank.


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i) Name, position, educational qualification, age, date of joining in the company, overall experience (in year), previous employment, salary paid for the financial year of the CEO, MD, CFO, CS, Advisers, Consultants and all Departmental Heads. If the Chairman, any director or any shareholder received any monthly salary than this information should also be included:

Sl Name Position Educational Qualification

Age

Date of Joining Overall

Experience

Previous Employment Salary paid for the financial year 2015


Managing Director M.Com 41

November 2014 16 yrs

IFCO Garments & Textiles

Ltd.

BDT 300,000

2 Gopal Chandra Basak CFO M.Com, Acc. 40 July 2010 15 yrs Panna Group BDT 480,000

3 Sudip Banik Company

Secretary MBA 38 August 2010

8 yrs Standard Chartered

Bangladesh

BDT 500,000

4 Anisur Rahman Manager- Accounts M.Com 40 January 2008

16 yrs Shah & Mazumder

Associates BDT 300,000

5 Kulsum Begum GM-Admin MBA 42 May 2009 18 yrs Nitol Niloy Group BDT 400,000

6 Sajedur Rahman GM-Marketing M.Com 44 April 2008

20 yrs IFCO Garments & Textiles

Ltd.

BDT 450,000

j) Changes in the key management persons during the last three years:

There was no change in the key management persons during the last three years except the Managing Director, Mr. Nur Mohammed Siddique has joined in November 2014 in IFCO Garments & Textiles Ltd.

k) A profile of the sponsors including their names, father’s names, age, personal addresses, educational qualifications, and

experiences in the business, positions/posts held in the past, directorship held, other ventures of each sponsor and present position:

Currently no Sponsors of the Company are present in the IFCO Garments & Textiles Ltd.

l) If the present directors are not the sponsors and control of the issuer was acquired within five years immediately preceding

the date of filing prospectus details regarding the acquisition of control, date of acquisition, terms of acquisition, consideration paid for such acquisition etc.

Name Acquisition of

control Date of Acquisition

Terms of Acquisition

Consideration paid for such acquisition

Mohammed Shahed 03/03/2010 03/03/2010 No terms of acquisition Cash

Nur Mohammed Siddique 03/03/2010 03/03/2010 No terms of acquisition Cash

Mohammed Morshed 03/03/2010 03/03/2010 No terms of acquisition Cash Md. Solaiman 14/11/2014 14/11/2014 No terms of acquisition Cash Md. Nurul Huda 05/08/2015 05/08/2015 No terms of acquisition Cash


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Mohammad Mehedi Hasan 23/04/2016 23/04/2016 No terms of acquisition N/A

Abdul Mannan 23/04/2016 23/04/2016 No terms of acquisition N/A

m) If the sponsors/directors do not have experience in the proposed line of business, the fact explaining how the proposed

activities would be carried out/managed:

All the directors have adequate experience and knowledge to carry out this line of business.

n) Interest of the key management persons:

There is no other interest with the key management except the Managing Director as Compliance Director who are given remuneration.


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o) All interests and facilities enjoyed by a director, whether pecuniary or non-pecuniary:

SL Name Position Facilities enjoyed by

Directors Amount in

BDT

1 Md Shahed Chairman Meeting attendance fee 3,750/year


Managing Director Director’s Remuneration & Meeting attendance fee

33,750/year

3 Md. Solaiman Director Meeting attendance fee 3,750/year

4 Mohammed Morshed Director Meeting attendance fee 3,750/year

5 Md.Nurul Huda Director Meeting attendance fee 3,750/year



N/A -


Director N/A -

p) Number of shares held and percentage of shareholding (pre issue):

SL Name Position No of Shares

Held % of Holdings

1 Md Shahed Chairman 4,328,889 8.73%

2 Nur Mohammed Siddique Managing Director 4,328,889 8.73%

3 Md. Solaiman Director 4,328,889 8.73%

4 Mohammed Morshed Director 6,493,333 13.09%

5 Md.Nurul Huda Director 1,400,000 2.82%

Total 20,880,000 42.10%

q) Change in board of directors during last three years:

Name 2015 2014 2013

Md Shahed Elected as Chairman N/A N/A


Elected as Managing Director Director Director

Md. Solaiman Co-Opt as new director N/A N/A

Mohammed Morshed Director Managing

Director Managing Director

Md.Nurul Huda Director N/A N/A


Appointed as Independent Director

N/A N/A

Abdul Mannan Appointed as Independent Director

N/A N/A

r) Director’s engagement with similar business:

Name of the Directors Designation in IFCO Garments &

Textiles Ltd. Name of the Company

Mohammed Morshed Director Familytex BD Ltd.

C & A Textiles Ltd.


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SECTION -IX: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

a) Description of any transaction during the last five years, or any proposed transactions certified by the auditors, between the issuer and any of the following persons, giving the name of the persons involved in the transaction, their relationship with the issuer, the nature of their interest in the transaction and the amount of such interest:

This is to certify that the status of related party transactions as Directors remuneration of IFCO Garments & Textiles Ltd. for the last five years were as follows:

I. Any director or sponsor or executive officer of the issuer; II. Any person holding 5% or more of the outstanding shares of the issuer; III. Any related party or connected person of any of the above persons;

A: Director Remuneration & meeting Attendance Fee

Name Current & Previous Position

Year Ended June 30,

2015

Year Ended June 30,

2014

Year Ended June 30,

2013

Year Ended June 30,

2012

Year Ended June 30,

2011 Nur Mohmmed Siddique

MD & Director

305,250 800 800 - -

Mohmmed Morshed MD & Director

4500 300,800 300,800 300,000 150,000

Md. Shahed Director 4,500 800 800 - -

Rukshana Morshed Director - 600 600 - -

Naser Uddin Director - 600 600 - -

MA. Quyum Howladere Director - 600 600 - -

Nazmul sakhawat hossain

Director - 600 600 - -

Mr. Solaiman Director 4500 - - - -

Total 3,18,750 3,04,800 3,04,800 3,00,000 1,50,000

The above balance is certified on the basis of books of accounts records and other supporting documents for the period from 01 July, 2010 to 30 June, 2015.

Place: Dhaka Sd/- Date: May 2, 2016 AHMAD & AKHTAR

Chartered Accountants

b) Transaction or arrangement entered into by the issuer or its subsidiary or associate or

entity owned or significantly influenced by a person who is currently a director or in any way connected with a director of either the issuer company or any of its subsidiaries/holding company or associate concerns, or who was a director or connected in any way with a director at any time during the last three years prior to the issuance of the prospectus:

There is no Transaction or arrangement entered into by the issuer or its subsidiary or associate or entity owned or significantly influenced by a person who is currently a director or in any way connected with a director of either the issuer company or any of its subsidiaries/holding company or associate concerns, or who was a director or connected in any way with a director at any time during the last three years prior to the issuance of the prospectus except the transaction mentioned in Section IX (a).


Page | 80

c) Loans either taken or given from or to any director or any person connected with the

director, clearly specifying details of such loan in the prospectus, and if any loan has been taken from any such person who did not have any stake in the issuer, its holding company or its associate concerns prior to such loan, rate of interest applicable, date of loan taken, date of maturity of loan. and present outstanding of such loan

The company hasn’t taken from or given to any loans to any director or any person connected with the director.


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SECTION -X: EXECUTIVE COMPENSATION

a) The total amount of remuneration/salary/perquisites paid to the top five salaried officers of the issuer in the last accounting year and the name and designation of each such officer:

Sl. Name Designation Salary

As on June 30, 2015

01. Nur Mohammed Siddique Managing Director 300,000

02. Gopal Chandra Basak CFO 480,000

03. Sudip Banik Company Secretary 500,000

04. Mrs. Kulsum Begum GM-Admin 400,000

05. Sajedur Rahman GM-Marketing 450,000

06. Anisur Rahman Manager-Accounts 300,000

Total 2,430,000 b) Aggregate amount of remuneration paid to all directors and officers as a group during

the last accounting year:

Sl. Particulars Year ended June 30, 2015

01. Directors' Fees & Remuneration 318,750

02. Officers & Executive salaries 2,000,418

Total 2,785,418

c) If any shareholder director received any monthly salary/perquisite/benefit it must be mentioned along with date of approval in AGM/EGM, terms thereof and payments made during the last accounting year:

No shareholder director received any monthly salary/perquisite/benefit except Mr. Nur Mohammed Siddique, Managing Director receives monthly salary of BDT 25,000 from October 15, 2014.

d) The board meeting attendance fees received by the director including the managing director along with date of approval in AGM/EGM: The board meeting attendance fees received by the director are as follows:

Name Designation/ Relationship

30-June-15 Date of approval in AGM/EGM Remuneration Board Meeting Fee

Md Shahed Chairman - 4,500

14/11/2014


Managing Director 300,000 5,250

Md. Solaiman Director - 4,500

Mohammed Morshed Director - 4,500

Md.Nurul Huda Director - -

Md. Mehedi Hasan Independent

Director - -

Abdul Mannan Independent

Director - -

Total 300,000 18,750

e) Any contract with any director or officer providing for the payment of future compensation:

The Company has not entered into any contract with any of its Directors or Officers for any future compensation packages.

f) If the issuer intends to substantially increase the remuneration paid to its directors and officers in the current year, appropriate information regarding thereto:


Page | 82

The company has no plan for substantially increasing remuneration to its directors and/or officers except for those that are paid as annual increment to their salaries.

g) Any other benefit/facility provided to the above persons during the last accounting

year:

No directors and officers of IFCO Garments & Textiles Ltd. received any other benefit/facility in the last accounting year except which is disclosed above.

SECTION -XI: OPTIONS GRANTED TO DIRECTORS, OFFICERS AND EMPLOYEES

IFCO Garments & Textiles Ltd. did not grant any options to its directors, officers and/or any other employees for the purpose of issuing shares.


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SECTION-XII: TRANSACTION WITH THE DIRECTORS AND SUBSCRIBERS TO THE MEMORANDUM

a) The names of the directors and subscribers to the memorandum, the nature and amount of anything of value received or to be received by the issuer from the above persons, or by the said persons, directly or indirectly, from the issuer during the last five years along with the description of assets, services or other consideration received or to be received;

Related Parties Nature of

Transaction

Amount in BDT

2015 2014 2013 2012 2011

Md Shahed Meeting attendance fee 3,750 - - - -


Remuneration & Meeting attendance fee 300,000 3,750 3,750 3,750 3,750

Md. Solaiman Meeting attendance fee 3,750 - - - -

Mohammed Morshed Remuneration & Meeting attendance fee 3,750 300,000 300,000 300,000 300,000

Md. Nurul Huda Meeting attendance fee 3,750 - - - -

b) Assets were acquired or to be acquired from the Directors and Subscribers to the Memorandum:

The issuer also has not received any assets, services or other considerations from its Directors and subscribers to the memorandum except fund against allotment of shares.

SECTION -XIII: OWNERSHIP OF THE COMPANY’S SECURITIES

a) The names, addresses, BO ID Number of all shareholders of the company before IPO, indicating the amount of securities owned and the percentage of the securities represented by such ownership:

Sl. Name of Shareholder Address BO ID No. of Share

share %

1 Mohammed Morshed 592/B, Mehidibag Road, Kotwali, Chittagong 6,493,333 13.09%


592/B, Mehidibag Road, Kotwali, Chittagong

4,328,889 8.73%

3 Md. Shahed 592/B, Mehidibag Road, Kotwali, Chittagong 4,328,889 8.73%

4 Md Solaiman 592/B, Mehidibag Road, Kotwali, Chittagong 4,328,889 8.73%

5 Md.Nurul Huda Vill.-Bahadurpur, Char Bahadurpur, P.O-Sojabad, Muladi, Barisal-8250

1,400,000 2.82%

6 Mrs. Ruksana Morshed 592/B, Mehidibag Road, Kotwali, Chittagong 200,000 0.40%

7 Farzana Rahman Green Delta Insurance Co. Ltd., 2 Dilkusha, hadi Mansion, Dhaka

1,782,710 3.59%

8 Abdul Kader Faruk 22/A, Chamilibag, Shantinagar, Dhaka 302,140 0.61%

9 Jaheda Khandaker M.L Tower, 1 East Rampura, Dhaka 30,000 0.06%

10 Abid Mustafizur Rahman 22/A, Chamilibag, Shantinagar, Dhaka 2,436,360 4.91%

11 Rezaur Rahman Razon 22/A, Chamilibag, Shantinagar, Dhaka 2,457,890 4.96%

12 Faize Kader Sadman 22/A, Chamilibag, Shantinagar, Dhaka 2,132,350 4.30%

13 M. A. Quyum Howlader 111/33 Tilar Gati Sataeh Tongi, Gazipur, Dhaka 2,471,510 4.98%

14 Nazmul Sakhawat Hossain

Vill-P.O-P.S: Monohordi, Dist : Norsingdi

2,237,340 4.51%

15 Rebeka Sultana 67/8, Kakril Road, Ramna, Dhaka 100,000 0.20%

16 Md. Sahabuddin 67/8, Kakril Road, Ramna, Dhaka 100,000 0.20%

17 Abdul Quddus Amin 32/6, East Noyatola, Mogbazar, Dhaka 10,000 0.02%

18 Nasrin Akter Banu 22/A, Chamilibag, Shantinagar, Dhaka 2,437,380 4.91%

19 Kazi Hosnara Begum 208, Sohid Nazrul Islam Sarani, Bijoy Nagar, Dhaka 2,436,360 4.91%

20 Md. Motiur Rahman Green Delta Insurance Co. Ltd. 2, Dilkusha, Hadi Mansion, Dhaka

1,153,470 2.33%

21 Orion Capital Limited Orion House, 153-154, Tejgaon, Dhaka 792,310 1.60%

22 Razwana Rahman (Rini) M.L Tower, 1 East Rampura, Dhaka 2,453,390 4.95%

23 Shirin Faruk 22/A, Chamilibag, Shantinagar, Dhaka 2,436,360 4.91%

24 Md. Badiuzzaman House-25, Road-02, Sector-03, Uttara, Dhaka 50,000 0.10%


Page | 84

25 Feroza Begum House-25, Road-02, Sector-03, Uttara, Dhaka 150,000 0.30%

26 Md. Jahangir Alam Vill+P/O- Zaforpara, P/S- Pirgong,Rangpur 100,000 0.20%

27 Sayed Iqbal Hossain Vill+P/O- Gangapur, P/S+ Dist-Laksmipur 200,000 0.40%

28 Mohibullah Kabir M.L Tower, 1 East Rampura, Dhaka 10,000 0.02%

29 Abdul Quayum Mamun 32/5, East Noyatola, Mogbazar, Dhaka 10,000 0.02%

30 Arife Billaha M.L Tower, 1 East Rampura, Dhaka 10,000 0.02%

31 Abdul Mabut Masum M.L Tower, 1 East Rampura, Dhaka 10,000 0.02%

32 Sajedul Mabut Khabir M.L Tower, 1 East Rampura, Dhaka 10,000 0.02%

33 Md.Mosharraf Uddin Khaled

West Katgarh Hindu par, West katgarh,P.O-potenga, Chittagong-4204

200,000 0.40%

34 Tasrin Mujib House # 381/1/A,North goran,Khilgoan,Dhaka-1219 200,000 0.40%

35 Asif Iqbal Chowdhury House # B-58/F-5,AGB Coloni, Motigheel, Dhaka 500,000 1.01%

36 Md.Tazul Islam Hazinagar,Sharulia,Demra,Dhaka 300,000 0.60%

37 Touhida Shirin Hazinagar ideal Road,Saruli,Demra,Dhaka 200,000 0.40%

38 Ratan Das 55 K B Abdus Sattar Road,Ranamatgang, Andarkilla, Kotoali, Chittagong-4000

800,000 1.61%

Total 49,599,57

0 100%


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b) There shall also be a table showing the name and address, age, experience, BO ID Number, TIN number, numbers of shares

held including percentage, position held in other companies of all the directors before the public issue:

Name of Director Address Age Experienc

e BO ID E-TIN

No. of Share

(%)

Position held in other Organization

Other Organization

Position


592/B, Mehidibag Road, Kotwali, Chittagong

41 years

25 years 637620473883 4,328,889 8.73% N/A N/A

Mohammed Morshed 592/B, Mehidibag Road,

Kotwali, Chittagong 48

years 20 years 142363650215 6,493,333 13.09%

Familytex BD Ltd. Managing Director

C & A Textiles Ltd. Director

Mohammed Shahed 592/B, Mehidibag Road,


years 26 years 146114916921 4,328,889 8.73% N/A N/A

MD Solaiman 592/B, Mehidibag Road,


years 35 years 254541712865 4,328,889 8.73% N/A N/A

Md. Nurul Huda Village-Bahadurpur, Char Bahadurpur, P.O-Sojabad,

Muladi, Barisal-8250

32 years

05 years 365766579729 1,400,000 2.82% N/A N/A


H-167, Tinshed Koloni, Section-13, Kafrul, Mirpur-

1216

42 yrs 17 years 550672238541 - - N/A N/A

Abdul Mannan Village-Pachkathi, P.O.-Haturia-8050,


61 yrs 35 years 377682742712 - - N/A N/A

c) The average cost of acquisition of equity shares by the directors certified by the auditors:

This is to certify that the shares in the equity of IFCO Garments & Textiles Ltd. have been allotted at face value in cash or bonus and the average cost of acquisition of equity by the directors is Tk. 10.00 each. Name wise shareholdings position, allotment date and consideration are given below:

Date of Allotment

Allotment/Transfer


Mohammed Morshed

Mohammed Shahed

Md. Solaiman

Md. Nurul Huda

Consideration

Face value of Share

(Tk.)

03.03.2010 Allotment 125,000 250,000 125,000 - - Cash 10.00

12.12.2013 Allotment 1,225,900 920,890 1,091,380 - - Cash 10.00

12.10.2014 Allotment - - - 20,000 - Cash 10.00

23.07.2015 Transfer 2,977,989 5,322,443 3,112,509 4,308,889 1,400,000 Cash 10.00

Total 4,328,889 6,493,333 4,328,889 4,328,889 1,400,000 Cash 10.00


Page | 86

Sd/- Place: Dhaka AHMAD & AKHTAR Date: May 2, 2016 Chartered Accountants


Page | 87

d) A detail description of capital built up in respect of shareholding (name-wise) of the issuer’s sponsors/ directors. In this connection, a statement to be included:


Date of Allotment/ Transfer of fully paid- up

shares

Consideration Nature of issue

No. of Equity shares

Face value

Issue Price/Acquisition

Price/Transfer Prices

Cumulative no. of Equity

shares

% Pre- issue paid up capital

% Post issue paid up capital

Sources of fund

03.03.2010 (Transfer) Cash Ordinary

Share

125,000 10.00 10.00 125,000

8.73% 6.22% Own

Source 12.12.2013(Allotment) Cash 1,225,900 10.00 10.00 1,350,900

23.07.2015 (Transfer) Cash 2,977,989 10.00 10.00 4,328,889

Mohammed Morshed


shares Consideration

Nature of issue


Face value




shares



Sources of fund


Share

250,000 10.00 10.00 250,000

13.09% 9.33% Own

Source 12.12.2013(Allotment) Cash 920,890 10.00 10.00 1,170,890

23.07.2015 (Transfer) Cash 5,322,443 10.00 10.00 6,493,333

Mohammed Shahed



Nature of issue


Face value




shares



Sources of fund


Share

125,000 10.00 10.00 125,000

8.73% 6.22% Own

Source 12.12.2013(Allotment) Cash 1,091,380 10.00 10.00 1,216,380

23.07.2015 (Transfer) Cash 3,112,509 10.00 10.00 4,328,889

Md. Solaiman



Nature of issue


Face value




shares



Sources of fund

12.10.2014 (Transfer) Cash Ordinary Share

20,000 10.00 10.00 20,000 8.73% 6.22%

Own Source 23.07.2015 (Transfer) Cash 4,308,889 10.00 10.00 4,328,889

Md. Nurul Huda



Nature of issue


Face value




shares



Sources of fund


Share 1,400,000 10.00 10.00 1,400,000 2.82% 2.01%

Own Source

e) Detail of shares issued by the company at a price lower than the issue price:

All the shares are issued by the Company at face value of Tk. 10.00 before this issue.

f) History of significant (5% or more) changes in ownership of securities from inception:

Date of Allotment /Transfer Nur Mohammed Siddique Mohammed Morshed Mohammed Shahed Md. Solaiman Md. Nurul Huda


Page | 88

03.03.2010 (Transfer) 125,000 250,000 125,000 - -

14.05.2013 (Allotment) - - - - -

08.06.2013(Allotment) - - - - -

12.12.2013 (Allotment) 1,225,900 920,890 1,091,380 - -

12.10.2014(Transfer) - - - 20,000 -

23.07.2015(Transfer) 2,977,989 5,322,443 3,112,509 4,308,889 1,400,000

Total 4,328,889 6,493,333 4,328,889 4,328,889 1,400,000


Page | 89

SECTION -XIV: CORPORATE GOVERNANCE

a) Management disclosure regarding compliance with the requirements of Corporate Governance Guidelines of the Bangladesh Securities and Exchange Commission (BSEC);

The Company declares that it has been complied with the requirements of the applicable regulations of Corporate Governance Guidelines of Bangladesh Securities and Exchange Commission (BSEC) and accordingly constitutes several committees under the board for good governance. A certificate of compliance from competent authority has been incorporated accordingly. Sd/- Nur Mohammed Siddique Managing Director IFCO Garments & Textiles Ltd.

b) A compliance report of Corporate Governance requirements certified by competent authority;

CERTIFICATE ON CORPORATE GOVERNANCE COMPLIANCE

OF IFCO GARMENTS & TEXTILES LTD.

We have examined the compliance to the BSEC guidelines on Corporate Governance by IFCO Garments & Textiles Ltd. for the year ended 30 June 2015. These guidelines relate to the Notification no. SEC/CMRRCD/2006-158/134/Admin/44 dated 7 August 2012 of Bangladesh Securities and Exchange Commission (BSEC) on Corporate Governance. Such compliance to the codes of Corporate Governance is the responsibility of the company. Our examination was limited to the procedures and implementation thereof as adopted by the management in ensuring compliance to the conditions of Corporate Governance. In our opinion and to the best of our information and according to the explanations provided to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned guidelines is issued by BSEC.

Sd/- Place -Dhaka. Mahboob Mohsin & Co. Date- April 28, 2016 Chartered Accountants

c) Details relating to the issuer's audit committee and remuneration committee, including the names of committee members and a summary of the terms of reference under which the committees operate.

The Company’s Board of Directors has been constituted in compliance with the Companies Act, 1994 and in accordance with best practices relating to corporate governance. The Board of Directors functions either as a full board or through various committees constituted to


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oversee specific operational areas. The Company’s executive management provides the Board of Directors with detailed reports on its performance periodically.


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SECTION -XV: VALUATION REPORT OF SECURITIES PREPARED BY THE ISSUE MANAGER

Valuation under Different Methods Amount in BDT

Method-1 Net Asset Value(NAV) per share 28.51

Method-2 Earning based value per share 51.11

Method-3 Average market price per share of similar stocks 26.20

Method-1: Net Asset Value per share NAV per share is based on the information of the latest audited financial statements as on June 30, 2015. NAV per share at current costs is BDT 28.51 that has been derived by dividing the net assets at the end of the period by the number of outstanding shares before IPO as shown in the table below:

Particulars Note June 30, 2015

BDT

Share Capital as on 30 June, 2015 A 495,995,700

Retained Earnings as on 30 June, 2015 B 918,136,821

Total Shareholders’ Equity as on 30 June, 2015 A+B 1,414,132,521

Number of share as on 30 June, 2015 D 49,599,570

Net Assets Value (NAV) per share as on 30 June, 2015 28.51

Method-2: Earnings Based Value per Share Earning-based-value per share based on historical information sourced from audited financial statements and statistics from Dhaka Stock Exchange Limited (DSE). The value was calculated by considering weighted net profit after tax for last 5 (five) years as per audited financial statements and market earnings multiple. The weighted average Earnings per share (EPS) is BDT 3.36 and the three months average DSE market P/E is 15.21.Therefore, Earning-based-value per share has been derived as BDT 51.11.

Year No. of shares Net profit after Tax

Weighted average no. of shares

Weighted average net profit after tax

June 30, 2015 49,599,570 153,428,160 .4502 69,069,070

June 30, 2014 49,599,570 152,101,819 .4502 68,471,989

June 30, 2013 9,980,000 302,772,255 .0906 27,425,038

June 30, 2012 500,000 195,830,917 .0045 888,693

June 30, 2011 500,000 123,292,603 .0045 559,510

Total 110,179,140 927,425,754 1 166,414,300

Total number of shares outstanding before IPO 49,599,570

EPS based on Weighted Average of Net Profit after tax 3.36

Relevant P/E Multiple* 15.21

Earnings – based –Value per share (BDT) 51.11

*Calculation of relevant P/E multiple:

Month Market P/E

December’15 15.24

January’16 15.22

February’16 15.17

Average 15.21

Source: DSE Monthly Review

Method-3: Average market price per share of similar stocks

Month Closing Price of

Familytex (BD)Ltd. Envoy Textile Zahintex Ind. Ltd.


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Ltd.

30-Apr-15 12.9 46.3 12.9

31-May-15 14.9 46.8 14.7

30-Jun-15 15.0 47.5 16.1

30-Jul-15 13.9 49.2 17.8

31-Aug-15 13.5 49.1 22.1

30-Sep-15 13.0 51.4 22.0

29-Oct-15 11.5 47.2 25.4

30-Nov-15 11.1 47.2 20.4

31-Dec-15 10.6 41.9 22.5

31-Jan-16 10.9 41.6 22.6

15-Feb-16 10.6 41.0 20.9

Average market price 12.54 46.29 19.76

Average market price of 3 stocks 26.20

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

SECTION -XVI: DEBT SECURITIES

IFCO Garments & Textiles Ltd. has not issued or is planning to issue any debt security within six months.

SECTION -XVII: PARTIES INVOLVED AND THEIR RESPONSIBILITIES

Major Parties involved with IGTL Responsibilities

Issue manager(s)

(1) CAPM Advisory Limited (2) Citizen Securities &

Investment Limited

The Issue Managers will act as the manager to the issue for the public issue as described in the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015.

Underwriters

(1) CAPM Advisory Limited (2) Citizen Securities &

Investment Limited (3) Lankabangla Investments

Limited (4) Prime Finance Capital

Management Limited

The Underwriter(s) is responsible to underwrite the public offering on a firm- commitment basis as per requirement of Bangladesh Securities and Exchange Commission (Public Issue) Rules 2015. In case of under subscription in any category by up to 35% in an initial public offer, the unsubscribed portion of securities shall be taken up by the underwriter(s)

Auditors AHMAD & AKHTAR


Auditors’ responsibility is to express an opinion on the consolidated financial statements based on the audit. Auditors conducted the audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards required to comply with relevant ethical requirements and plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to


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obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we 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 an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Cost and Management Accountants

Not applicable for the company N/A

Valuer Not applicable for the company N/A

Credit Rating Company

Not applicable for the company N/A

SECTION -XVIII: MATERIAL CONTRACTS

The following are material contracts in the ordinary course of business, which have been

entered into by the Company:

(a) Major agreements entered into by the issuer;

i) Underwriting Agreement between the Company and the Underwriters.

ii) Issue Management Agreement between the Company and the Managers to the issue, CAPM Advisory Limited & Citizen Securities & Investment Limited.

Copies of the aforementioned contracts and documents and a copy of Memorandum of Association and Articles of Association of the Company and the Consent Letter from the Bangladesh Securities and Exchange Commission may be inspected, on any working day during office hours at the Corporate Office of the Company and the Managers to the Issue.

(b) Material parts of the agreements;

Underwriter(s):

Contract Material parts of the agreements

Underwriting Agreements with CAPM Advisory Limited, Citizen Securities & Investment Limited, Lankabangla Investments Limited and Prime Finance

Signing Date: February 8, 2016

Tenure:

This Agreement shall be valid until completion of subscription of shares and unless this Agreement is extended or earlier terminated in accordance with the terms of this Agreement

Principal Terms and Condition:

The Issuer shall within 10 (Ten) days of the closure of subscription call upon the underwriter in writing with a copy of said writing to the Bangladesh Securities and Exchange Commission, to subscribe for the shares not subscribed by


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Capital Management Limited

the closing date and to pay for in cash in full for such unsubscribed shares within 15(Fifteen) days of the date of said notice and the said amount shall have to be credited into shares subscription account within the said period.

In any case within 7 (Seven) days after the expiry of the aforesaid 15(Fifteen) days, the Company shall send proof of subscription and Deposit of Money by the underwriter to the Commission.

Fees Payable: The Company shall pay to the underwriter an underwriting commission at the rate of 1% of the value of the shares hereby agreed to be underwritten by it

Issue Manager:

Contract Material parts of the agreements

Issue Management Agreement with CAPM Advisory Limited and Citizen Securities & Investment Limited

Signing Date: December 07, 2015

Tenure:

This Agreement shall be valid until completion of subscription of shares and unless this Agreement is extended or earlier terminated in accordance with the terms of this Agreement

Principal Terms and Condition:

1. According to Article 2.1; the scope of the services to be rendered by the ISSUE MANAGER to the ISSUER under this agreement shall cover Regulatory Compliance, Underwriting Co-operation, Issue Arrangements and Public offer and invitation.

3. According to Article 3; without prejudice ISSUER hereby declares that it agrees to comply with all statutory formalities under Companies Act, Guidelines issued by Bangladesh Securities and Exchange Commission and other relevant status to enable it to make the issue.

4. According to Article 6; The ISSUE MANAGER hereby undertake to keep in strict compliance all information (whether written or oral) proprietary documents and data secured in connection with or as a result of this Agreement (Confidential Information) and shall limit the availability of such information to employees, who have a need to see and use it for the express and limited purpose stated in this Agreement.

5. According to Article 7; The ISSUE MANAGER takes the responsibility to take such steps as are necessary to ensure completion of allotment and dispatch of letters of allotment and refund warrants to the applicants according to the basis of allotment approved by the Bangladesh Securities and Exchange Commission. The ISSUER undertakes to bear all expenses relevant to share application processing, allotment, and dispatch of letters of allotment and refund warrant. The ISSUER shall also bear all expenses related to printing and issuance of share certificate and connected govt. stamps and hologram expenses.

5. According to Article 8 & 9.1; The ISSUE MANAGER and


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Issuer shall ensure compliance of the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015, The Listing Regulations of Stock Exchanges, The Companies Act, 1994, the Securities and Exchange (Amendment) Act, 2012 and other relevant rules, regulations, practices, directives, guidelines etc.

Fees Payable: The Issue Management Fee for the IPO shall be BDT 2,000,000.00.

SECTION -XIX: OUTSTANDING LITIGATIONS, FINE OR PENALTY

(a) Outstanding litigations against the issuer or any of its directors and fine or penalty

imposed by any authority: The issuer or any of its directors or IFCO Garments & Textiles Ltd. was not involved in any of the following type of legal proceedings mentioned below;

(i) Litigation involving Civil Laws (ii) Litigation involving Criminal Laws

(iii) Litigation involving Securities, Finance and Economic Laws (iv) Litigation involving Labor Laws (v) Litigation involving Taxation (Income tax, VAT, Customs Duty and any other

taxes/duties) (vi) Litigation involving any other Laws

(b) Outstanding cases filed by the Company or any of its directors:

There are no outstanding cases filed by the issuer or any of its directors to any of the following types of legal proceedings mentioned below;

(i) Litigation involving Civil Laws; (ii) Litigation involving Criminal Laws;

(iii) Litigation involving Securities, Finance and Economic Laws; (iv) Litigation involving Labor Laws; (v) Litigation involving Taxation (Income tax, VAT, Customs Duty and any other

taxes/duties); (vi) Litigation involving any other Laws.


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SECTION -XX: RISK FACTORS AND MANAGEMENT’S PERCEPTIONS ABOUT THE RISKS

(i) Internal risk factors may include, among others:

a) Credit Risk: This is the risk of default on a debt that may arise because of default by the borrower to pay the loan. In operating any business there is always credit risk lies in the business. As there is always lending and borrowing between parties in the form of money and goods. Management Perception: Credit Risk mainly lies with Financial Institutions. Since IFCO Garments & Textiles Ltd. is concentrating in Manufacturing, Dyeing, Weaving & Finishing RMG Fabrics and exporting the same, there is no such credit risk.

b) Liquidity Risk: The risk that a company may be unable to meet short term financial demands. This usually occurs due to the inability to convert its current assets to cash without a loss of capital or income. Liquidity is a common phenomenon of the business. Management Perception: Finance is an arts and science of managing fund so that it can manage working capital in efficient way. IFCO Garments & Textiles Ltd. is also doing its level best to manage working capital management in efficient way to maintain liquidity risk. Management is dealing with accounts payable, inventory and accounts receivable efficiently.

c) Risk associated with the issuer’s interest in subsidiaries, joint ventures and associates: Management Perception: As we do not have any interest in subsidiaries, joint ventures, there is no risk related as such.

d) Significant revenue generated from limited number of customers, losing any one or more of which would have a material adverse effect on the issuer. Management Perception: Our management is always keen to find out new buyers which boost up the sales. So we are not dependent on any particular or limited number of customers to operate our business. Our customer includes At-Last, Broadway International, K-mart, HIS International, Lamour, Lollytogs, Out Door Group U. K., Sears, Wal-mart, Sprocket, Takko etc. We are doing business with these types of super shops for a long time.

e) Dependency on a single or few suppliers of raw materials, failure of which may affect production adversely. Management Perception: In business, having many suppliers of raw materials helps to get competitive advantage of cheaper price of raw materials. Because, it helps to bargain over price with suppliers. In addition, having many supplier helps to maintain doing business efficiently. As we hold the views, we are not dependent on a single or few suppliers.

f) More than 20% revenue of the issuer comes from sister concern or associate or subsidiary Management Perception:


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Our customer includes At-Last, Broadway International, K-mart, HIS International, Lamour, Lollytogs, Out Door Group U. K., Sears, Wal-mart, Sprocket, Takko etc. So we do not generate 20% revenue from our sister concerns or associate or subsidiary.

g) Negative earnings, negative cash flows from operating activities, declining turnover or profitability, during last five years, if any. Management Perception: We have been operating our business efficiently since its inception. In the year 2014 our turnover declined from the year 2013 due to GSP quota cancellation. But we have boost up our turnover again in the year 2015. It is a regular incident for a going concern like IFCO Garments & Textiles Ltd.

h) Loss making associate/subsidiary/group companies of the issuer. Management Perception: We do not have any investment in subsidiary or associates.

i) Financial weakness and poor performance of the issuer or any of its subsidiary or associates Management Perception: Sales is one of the key indicators of success of a business if there is good margin of profit. IFCO Garments & Textiles Ltd. has been experiencing with increasing sales growth which is boosting up the profitability for last five years. Current and quick ratios are also in favor of the company. Debt to Equity ratio is less than 1 and it is in decreasing trend which means that company is reducing its dependency on debt capital and we do not have any subsidiary.

j) Decline in value of any investment

Management Perception: We do not have any investment.

k) Risk associated with useful economic life of plant and machinery, if purchased in second hand or reconditioned. Management Perception: We are used to using new branded machineries. Hence, there is no chance to use second hand or reconditioned machineries.

l) Adverse effect on future cash flow if interest free loan given to related party or such loans taken from directors may recall.

Management Perception: There is no as such loan given to related party or loan taken from directors.

m) Potential conflict of interest, if the sponsors or directors of the issuer are involved with one or more ventures which are in the same line of activity or business as that of the issuer and if any supplier of raw materials or major customer is related to the same sponsors or directors. Management Perception: Mohammad Morshed, Director of IFCO Garments & Textiles Ltd. has been involved in Familytex (BD) Ltd. and C & A Textiles Ltd., both of these companies are RMG exporter as IGTL. We are involved with many suppliers for our raw materials, other hand we have so


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many loyal customers for long time. So there will not arise any conflict of interest with those companies Mohammad Morshed is involved.

n) Related party transactions entered into by the company those may adversely affect competitive edge.

Management Perception: There is no as such transaction which may adversely affect competitive edge except director’s remuneration and equity investment.

o) Any restrictive covenants in any shareholders' agreement, sponsors' agreement or any agreement for debt or preference shares or any restrictive covenants of banks in respect of the loan/ credit limit and other banking facilities.

Management Perception: There are no restrictive covenants in any shareholders’ agreement, sponsors’ agreement or any agreement relating to debt or preference shares or any restrictive covenants of Banks in respect of loan or credit limit and other banking facilities.

p) Business operations may be adversely affected by strikes, work stoppages or increase in wage demands by employees.

Management Perception: We are habituated with the political unrest for long era and our business industries are used to dealing with this phenomenon. IFCO Garments & Textiles Ltd. has been operating business since 2005 and it is a profitable entity. Employee unrest is part of business and it is important to deal with labor unrest efficiently. We have different incentive packages for our employees like, WPPF, Festival Bonus, Provident fund etc. so that they can be beneficial to such package. Because we believe that employees are very important part of our business and we all know that there are government rules relating to paying minimum wage.

q) Seasonality of the business of the issuer

Management Perception: Garment sector is the leading industry of our country. It is also the 2nd largest industry of the world. Bangladesh is looking forward to earn 50 billion US dollar from this industry in near future. We run our business throughout the year. So it is not seasonal business.

r) Expiry of any revenue generating contract that may adversely affect the business

Management Perception: A huge 81.71% of the country’s export earnings come from textiles and apparel, according to the latest figures available. Bangladesh exports its apparel products worth nearly $25.5 billion in the financial year 2014-2015. A survey shows that 54 percent of chief purchasing officers (CPOs) shared their plans to decrease their sourcing activities in China by up to 10 percent and 32 percent stated that they sought to decrease their share of sourcing in China by more than 10 percent over the next five years. As Western RMG buyers search for the “next China,” they are evaluating all options to strengthen their proximity sourcing, moving on to Northwest China, Southeast Asia, and other Far East supplier countries. Bangladesh is clearly the preferred next stop for the sourcing caravan. So, there is no possibility to affect this business.

s) Excessive dependence on debt financing which may adversely affect the cash flow.

Management Perception: For last five years we have been reducing our dependence on debt financing and it is now less than 1 in comparison with debt to equity ratio.


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t) Excessive dependence on any key management personnel absence of whom may have adverse effect on the issuer’s business performance.

Management Perception: Corporate Governance is well practiced in our company. We have also well placed

organogram in our company. So any change in the key management can be replaced with other person. It is mentioned-worthy that the industry is growing over 40 years. So we can hire key management as per our needs.

u) Enforcement of contingent liabilities which may adversely affect financial condition.

Management Perception: We do not have any contingent liabilities which may adversely affect financial condition.

v) Insurance coverage not adequately protect against certain risks of damages. Management Perception: We have different insurance coverage for all the relating issues that are risky to operating our business.

w) Absence of assurance that directors will continue its engagement with Company after expiry of lock in period.

Management Perception: Our directors are involved in the business for long time and they will continue the business after expiry of lock in period.

x) Ability to pay any dividends in future will depend upon future earnings, financial condition, cash flows, working capital requirements and capital expenditure. Management Perception: We have been a profitable entity over a long time and the profit is on the uptrend. So we are in belief that we will be able to pay dividend from our earning profit.

y) History of non-operation, if any and short operational history of the issuer and lack of adequate background and experience of the sponsors. History of non-operation indicates weak operational management of the Company. Non-operation leads to negative cash flow, incurring of losses and bankruptcy in worst case scenario.

Management Perception: As a manufacturer we take our operation very seriously. We know, if operation is closed for one day that can hamper supply to our customers. In any situation, we do not compromise with our operation. Our company started commercial operation from April, 2006 and we are proud to declare that the company has never been non-operative till date. For the smooth operation, we are very serious about our responsibilities towards our employees and the society as a whole. In addition, we are self-sufficient with an uninterrupted power supply.

z) Risks related to engagement in new type of business, if any. Management Perception: There is no as such risk relating to engagement in new type of business.

aa) Risk in investing the securities being offered with comparison to other available investment options. Management Perception:


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We are profitable entity over long time and we have been operating our business efficiently. Therefore, it is not risky in investing securities in comparison with other available investment option.

bb) Any penalty or action taken by any regulatory authorities for non-compliance with provisions of any law.

Management Perception: Such case did not happen in the history of our company.

cc) Litigations against the issuer for Tax and VAT related matters and other government claims, along with the disclosures of amount, period for which such demands or claims are outstanding, financial implications and the status of the case Management Perception: No, we did not have any litigation relating to Tax, VAT or other government claims against of our company.

dd) Registered office or factory building or place of operation is not owned by the issuer.

Management Perception: Our factory building is owned by us but corporate office is rented. So it is not a risk.

ee) Lack of renewal of existing regulatory permissions/ licenses.

Management Perception: There is no such issue relating to lack of existing regulatory permissions/ licenses.

ff) Failure in holding AGM or declaring dividend or payment of interest by any listed securities of the issuer or any of its subsidiaries or associates

Management Perception: There is no incident of failure in holding AGM or declaring dividend or payment of interest by the issuers.

gg) Issuances of securities at lower than the IPO offer price within one year

Management Perception: IFCO Garments & Textiles Ltd. is a profitable entity and it is experienced with growth over the years. So we believe that our IPO offer price will not be lower within one year.

hh) Refusal of application for public issue of any securities of the issuer or any of its subsidiaries or associates at any time by the Commission.

Management Perception: Such cases did not happen for our company and associates.

(ii) External risk factors may include among others:

a) Interest Rate Risks; A business entity tends to get exposed to the unpredictability in the interest rates in the money markets. Higher rate and/or rising in the rate, of interests adversely affect the profitability of the company having outsiders’ loan in its financing, sometimes casting significant doubt on the sustainability of the company.

Management Perception: IGTL is financially sound and operates with low independence on long term and short term debt. Average impact of interest rate fluctuation is insignificant. Production capacity is


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expanded with own funds. The management of the Company emphasizes on equity based financing to reduce the dependency on borrowings. The management strongly believes that fluctuation of interest rate would have a little impact upon the performance of the Company.

b) Exchange Rate Risks; A business involved in overseas transactions may face a potential loss arising from fluctuation of foreign currency rates. The loss may be aggravated due to consistently downwards trends of Bangladesh Taka against other foreign currencies.

Management Perception: IGTL settles its foreign transaction through US Dollars in cases of both export and import. While the value of functional currency fluctuates, the loss or gain arising from currency fluctuation for export automatically sets off against the loss or gain arising currency fluctuation for import. As the value of export is always greater than the value of import, some balance is created in the foreign currency transaction. Furthermore, the Company is contemplating about setting a system of hedging on foreign currency transactions in the future.

c) Industry Risks; Company’s sales and revenues are dependent on the aggregate demand of its products. Any economic recession, changes in requirements, national income and other related factors may cause to decline the market demand of the company products.

Management Perception: Strong brand loyalty of the company’s products to its customers has enabled the company to capture significant market share in the sector. Our customer includes At-Last, Broadway International, K-mart, HIS International, Lamour, Lollytogs, Out Door Group U. K., Sears, Wal-mart, Sprocket, Takko etc. We are doing business with these types of super shops for a long time. Additionally, the company is continuously penetrating into the market and upgrading the quality of the products to minimize the market risks.

d) Economic and Political risks;

Economic risks; Our performance and growth are dependent on the health of the Bangladesh economy. The economy could be adversely affected by various factors such as political or regulatory action, including adverse changes in liberalization policies, social disturbances, terrorist attacks and other acts of violence or war, natural calamities, commodity and energy prices and various other factors. Any significant changes may adversely affect our business and financials.

Management Perception: Bangladesh economy is booming for last few years. Consistent industrial growth along with increased agricultural production has made the Per Capita Income higher than that of recent years. In addition, favorable government policies and industry friendly policies by other regulatory bodies have proved to be congenial to the economy of the country.

Political risks; Bangladesh is prone to serious unrest in the political condition which produces Hartal, Road-Block and many other barriers to the business. This could also propel the cost of the product upwards.

Management Perception: During the last forty years of post-independence period, Bangladesh has gone through a variety of political situations. But presently, a sound political atmosphere is prevailing in the country. Both the ruling and opposition parties are committed to the betterment of the


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country. Last democratic national assembly election and local council polls are instances of peaceful political situation in Bangladesh.

e) Market and Technology-related Risks;

Market risks; Refer to the risk of adverse market conditions affecting the sales and profitability of the company. Such as, shortage in raw material supplies, inefficient labor supplies, fall in product demand, etc. which signifies the adverse external and internal business environment. Those types of risks may impede the success of the business.

Management perception: The company has successfully entered into the market by offering better quality products at competitive terms. The force, which is helping the company for its strong existence, is emergence of back-ward linkage industry. Back-ward linkage industry is supporting for minimizing the lead time and cost of production. Textile industry of Bangladesh is enjoying comparative advantage over other countries despite some threats from local & foreign economic conditions. The global recessions could not affect the company as the earnings were increased in that time and thus IGTL is going ahead which proves a strong position of the company against such risk.

Today’s ever changing fashion world, style and trends are rapidly moving and textile manufacturers have to cope up with the change. IGTL firmly ensures quality in production and integration in supply chain with appropriate branding which increases index of its product demand in world market. Demand of textile product is growing at a rapid pace and support from Government through declaring special financial packages as well as continuation of GSP facility (EU market) will further enhance the industry growth. Besides, in the field of textile, the management of IGTL is aware of the changes which take place almost routinely at customer’s choice. The factory of IGTL is fully equipped to meet the wide-ranging demands of quality conscious customers worldwide.

Technology-related risks; Stems from the contemporary changes in the technology which make the existing technology obsolete or reduces its cost efficiency compared to that of the competitors. New entrant may come forward with a more sophisticated technology which can give a threat to the cost efficiency of the company. Management perception: The project is equipped with world’s modern and latest machinery and technology and to cope with the pace in harmony with modern textile world the Company is continuing modernization program of its machinery. The plant and machinery implanted in the company’s manufacturing plant, which are imported from world renowned brand name, are efficient and cost effective in its kind. The management of the company is aware of any technological changes in the future.

f) Potential or existing government regulations;

The Company operates under the Companies Act, 1994; Securities Related Ordinance, Act, Rules and Regulations; Income Tax Ordinance 1984; Value Added Tax (VAT) Act, 1991; and contemporary notifications made under those laws. Any unexpected changes of the policies made by the regulatory authorities may adversely affect the business of the Company.

Management perception: Economy of Bangladesh has been developing over the decades because of business friendly rules and regulations adopted by the various regulatory bodies of the country. Our fiscal policy gives various incentives to the newly established companies so that it can grow and mature. Unless any policy change negatively and materially affects the industry as a whole,


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the business of the Company is expected not to be affected. The textile sector is largest contributor to the GDP and contributes to a major portion of the total foreign exchange earned by the country. This sector generates the maximum employment among all the industries. Therefore, it is highly unlikely that the Government will frustrate the growth of the industry with an adverse policy.

g) Potential or existing changes in global or national policies; Every company operates under the economic policies formulated and imposed by the political government. The government tends to reshape these policies time to time for the sake of greater interest of the country’s economy. Sometimes those changes in existing policy or any future policy framework adversely affects the smooth operation of the companies.

Management perception: Since the independence, all the governments of our country have shown objectivity and sincerity in developing industrial sector of the country. In the fiscal policies, there are various protective measures to protect the local industries against any sort of aggressive moves by global entrants. The government of the country has also taken a number of initiatives for the local business to market their products in the international arena. The company can prosper in a situation of political stability and a congenial business environment. The management of the company is always concerned about the prevailing and upcoming further changes in the global or national policy and shall response appropriately and timely to safeguard its interest.

h) Statutory clearances and approvals those are yet to be received by the issuer;

Management Perception: We have been in the business over 10 years. We have collected all the statutory clearance to operate our business. Hence, there are no as such risk for our company.

i) Competitive condition of the business; IGTL is operating in a free market economy regime. The company might have to face stiff competition from its competitors. Easily availability of global products in the local markets adds to the competition, challenging the profitability of the business.

Management Perception: Bangladesh is the prime source of cheapest labor in the world, gaining comparative advantages for its industries over their global competitors. Other overhead costs are also low in Bangladesh. As a result, the company has been able to maintain its cost of products most competitive. Moreover, over the last few years the company has built a trustworthy relationship with its customers, which helps the company avoid competition with others.

j) Complementary and supplementary products/services which may have an impact on business of the issuer.

Management Perception: The company has not faced any challenges relating to supplementary and complementary products and Management are concerned with the issue. In future, if necessary, management may diversify the product to be competitive over the competitors.

SECTION -XXI: DESCRIPTION OF THE ISSUE

Issue Size Number of securities to be

Authorized capital

Paid-up capital

Face value and offer price per unit of


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issued securities

Tk. 200,000,000

20,000,000 Tk. 1,620,000,000

Tk. 495,995,700

Tk. 10.00

Number of securities to be entitled for each category of applicants;

Category Particulars Number of Shares

Amount in BDT

Eligible investors (EIs)

10% of IPO Shares shall be reserved for Mutual Funds as Eligible Investors (EIs)

2,000,000 20,000,000

40% of IPO Shares shall be reserved for Other Eligible Investors (EIs)

8,000,000 80,000,000

General public

10% of IPO Shares shall be reserved for Non- Resident Bangladeshis (NRB)

2,000,000 20,000,000

40% of IPO Shares shall be reserved for ¶wZMÖ¯— ¶z`ª

wewb‡qvMKvix and General Public 8,000,000 80,000,000

Holding structure of different classes of securities before and after the issue;

Shareholder Category

No. of Shares Shareholding Structure

(Before Issue) Shareholding Structure

(After Issue)

Directors 20,880,000 42.10% 30%

shareholders 28,719,570 57.90% 41.26%

Initial Public Offering 20,000,000 - 28.74%

Total 69,599,570 100.00% 100.00%

Objective of the issue including financing requirements and feasibility in respect of enhanced paid-up capital.

Net Proceeds from initial public offering (IPO) will be used for Expansion of Civil Work, Repayment of Term loan.

Sl. Name of the FC Accounts Currency Account No. Bank and Branch

1 IFCO Garments & Textiles Ltd. BDT 1501203049328001 BRAC Bank Limited

Gulshan Branch 2 IFCO Garments & Textiles Ltd. US Dollar 1501203049328002

3 IFCO Garments & Textiles Ltd. GB Pound 1501203049328003

4 IFCO Garments & Textiles Ltd. EURO 1501203049328004

SECTION -XXII: USE OF PROCEEDS

a) Use of net proceeds of the offer indicating the amount to be used for each purpose with head-wise break-up:

Net Proceeds from initial public offering (IPO) will be used for Expansion of Civil Work, Repayment of Term loan and for IPO expenses. Use of Proceeds and Implementation schedule given under as follows:

Description Amount in BDT

Expansion of Civil Work 118,833,315


Page | 105

Repayment of Term Loan of Al-Arafah Islami Bank Limited

66,600,000

IPO expenses 14,566,685

Total IPO Proceeds Utilization 200,000,000

Breakdown of Use of IPO Proceeds:

Total Floor Area: 62,000 Sq.ft (Six stored building)

Sl. Type of work Description of Item Unit Quantity Unit Rate Amount Remarks

A. Earth Work Earth cutting including removing

Cft 100,000.00 10.00 1,000,000.00

Sand filling Truck 10,000.00 1,750.00 17,500,000.00

B. R.C.C Cast in Situ Piling works

18" dia Pile installation bill

Feet 4,570.00 200.00 914,000.00

20" dia pile installation bill

Feet 4,680.00 250.00 1,170,000.00

Pile Cap Nos. 58.00 5,000.00 290,000.00

C. Material for Civil works for Piling

Cement including carrying

Bags 10,000.00 475.00 4,750,000.00

Sand (Domer) Cft 25,000.00 40.00 1,000,000.00

Stone Chips Cft 50,000.00 120.00 6,000,000.00

M.S Rod (500W) Ton 100.00 65,000.00 6,500,000.00

D. Labour charge for Mason & Rod

Ground Floor Sq.ft 12000 150.00 1,800,000.00

1st Floor Sq.ft 10000 150.00 1,500,000.00

2nd Floor Sq.ft 10000 150.00 1,500,000.00

3rd Floor Sq.ft 10000 150.00 1,500,000.00

4th Floor Sq.ft 10000 150.00 1,500,000.00

5th Floor Sq.ft 10000 150.00 1,500,000.00

E. Tiles & Marble installation charge

Wall Tiles work Sq.ft 10,000.00 15.00 150,000.00

Floor Tiles work Sq.ft 70,000.00 15.00 1,050,000.00

Marble work Sq.ft 5,000.00 80.00 400,000.00

F. Painting Sealer + Plastic Paint Sq.ft 50,000.00 9.50 475,000.00

Cement + Plastic Paint Sq.ft 62,000.00 5.00 310,000.00

Paint (Grill) Sq.ft 10,000.00 5.00 50,000.00 Door Paint Pcs 110.00 500.00 55,000.00

G. Material for Civil works


Bag 10,000.00 475.00 4,750,000.00

Domar Sand Cft 25,000.00 40.00 1,000,000.00

Local Sand Truck 500.00 2,500.00 1,250,000.00

1st Class Brick Nos. 400,000.00 10.50 4,200,000.00


Page | 106

Stone Chips Cft 56,000.00 120.00 6,720,000.00

M.S Rod (500W) Ton 175.00 65,000.00 11,375,000.00

Misc.(Bamboo, Polythene, Nails etc)

Sft 62,000.00 8.00 496,000.00

H. Material cost for finishing work


Bag 35,000.00 475.00 16,625,000.00

Local Sand Truck 200.00 2,500.00 500,000.00

Wall Tiles Sft 10,000.00 65.00 650,000.00

Floor Tiles Sft 70,000.00 110.00 7,700,000.00

Marble Sft 5,000.00 600.00 3,000,000.00

Doors Pcs 90.00 15,500.00 1,395,000.00 Painting Material 1,614,673.00

Grill + Railing 1,167,642.00

I. Thai Glass Work Thai Glass work Sft 4200 280.00 1,176,000.00

J. Electrical Work Electrical work with material

3,300,000.00

K. Sanitary Work Sanitary work with material

1,000,000.00

Grand total 118,833,315

Sd/- Sd/- Sd/- Gopal Chandra Basak Sudip Banik Nur Mohammed Siddique

Chief Financial Officer Company Secretary Managing Director b) Where the sponsors’ contribution or privately placed fund has been brought prior to the

public issue and has already been deployed by the issuer, indication of use of such funds in the cash flow statement;

IFCO Garments & Textiles Ltd. or any of its related party have not been brought any privately placed fund prior to the public issue.

c) If one of the objects is an investment in a joint venture, a subsidiary, an associate or any acquisition, details of the form of investment, nature of benefit expected to accrue to the issuer as a result of the investment, brief description of business and financials of such venture:

The issuer has no objects to investment in a joint venture, a subsidiary, an associate or any acquisition.

d) If IPO proceeds are not sufficient to complete the project, then source of additional fund

must be mentioned. In this connection, copies of contract to meet the additional funds are required to be submitted to the Commission. The means and source of financing, including details of bridge loan or other financial arrangement, which may be repaid from the proceeds of the issue along with utilization of such funds:

IPO proceeds are sufficient to complete the project.

e) A schedule mentioning the stages of implementation and utilization of funds received through public offer in a tabular form, progress made so far, giving details of land acquisition, civil works, installation of plant and machinery, the approximate date of


Page | 107

completion of the project and the projected date of full commercial operation etc. The schedule shall be signed by the Chief Executive Officer or Managing Director, Chief Financial Officer and Chairman on behalf of Board of Directors of the issuer:

Projects Progress made so

Far

Approximate date of Completion of the

projects

Projected date of full commercial operation

Expansion of Civil Work Civil Work will be started after

receiving of IPO fund

to be completed within 09 months

Within three month of

the completion of the project

Repayment of Term Loan of Al-Arafah Islami Bank Limited

N/A Within 15 days of IPO fund received

N/A

Sd/- Sd/- Sd/- Gopal Chandra Basak Sudip Banik Nur Mohammed Siddique

Chief Financial Officer Company Secretary Managing Director


Page | 108

f) If there are contracts covering any of the activities of the issuer for which the proceeds of sale of securities are to be used, such as contracts for the purchase of land or contracts for the construction of buildings, the issuer shall disclose the terms of such contracts, and copies of the contracts shall be enclosed as annexure to the prospectus:

As per Annexure-E(B)(21)(f) of the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015 there is no contract covering any of the activities of the issuer Company for which the proceeds of sale of securities from IPO is to be used.

g) If one of the objects of the issue is utilization of the issue proceeds for working capital, basis of estimation of working capital requirement along with the relevant assumptions, reasons for raising additional working capital substantiating the same with relevant facts and figures and also the reasons for financing short with long term investments and an item wise break-up of last three years working capital and next two years projection:

Net Proceeds from initial public offering (IPO) will be used for Expansion of Civil Work and Repayment of Term loan.

h) Where the issuer proposes to undertake one or more activities like diversification, modernization, expansion, etc., the total project cost activity-wise or project wise, as the case may be:

The company has planned to expand its existing projects by Civil Construction, which have been mentioned in Use of IPO proceeds and projects Implementation schedule.

i) Where the issuer is implementing the project in a phased manner, the cost of each phase, including the phases, if any, which have already been implemented:

The company has planned to implement to the existing projects by using IPO proceeds after receiving the funds, which have been mentioned in Use of IPO proceeds and projects Implementation schedule.

j) The details of all existing or anticipated material transactions in relation to utilization of the issue proceeds or project cost with sponsors, directors, key management personnel, associates and group companies:

There is no existing or anticipated material transaction in relation to utilization of the issue proceeds or project cost with sponsors, directors, key management personnel, associates and group companies.

k) Summary of the project appraisal/ feasibility report by the relevant professional people with cost of the project and means of finance, weaknesses and threats, if any, as given in the appraisal/ feasibility report:

IFCO Garments & Textiles Ltd. is not starting any new project, they are only going to expand their existing project. So IGTL does not need any project appraisal/ feasibility report.

SECTION -XXIII: LOCK-IN

Ordinary shares of the issuer shall be subject to lock-in, from the date of issuance of prospectus or commercial operation, whichever comes later, in the following manner:

(1) All shares held, at the time of according consent to the public offer, by sponsors, directors and shareholders holding 5% or more shares, other than alternative investment funds, for 03(three) years;

(2) All shares allotted, before 02(two) years of according consent to the public offer, to any person, other than alternative investment funds, for 03(three) years;


Page | 109

(3) In case any existing sponsor or director of the issuer transfers any share to any person, other than existing shareholders, within preceding 12 (twelve) months of submitting an application for raising of capital or initial public offer (IPO), all shares held by those transferee shareholders, for 03(three) years;

(4) 25% of the shares allotted to eligible investors, for 03 (three) months and other 25% of the shares allotted to them, for 06 (six) months;

(5) All shares held by alternative investment funds, for 01(one) year; and

(6) Shares allotted, within two years of according consent to the public offer, to any person other than the shares mentioned in sub-rules (1), (2), (3), (4), and (5) above, for 01(one) year.

Provided that ordinary shares converted from any other type of securities shall also be subject to lock-in as mentioned above.


Page | 110

(a) The following table indicates the Lock-In status of the shareholders of IFCO Garments & Textiles Ltd.:

Sl. Name of Shareholder Position No. of Share

% Date of

Acquisition BO ID

Lock In Period

1 Mohammed Morshed Director

250,000 03/03/2010 3-years

920,890 12/12/2013 3-years

5,322,443 23/07/2015 3-years

6,493,333 13.09%


Managing Director

125,000 03/03/2010 3-years

1,225,900 12/12/2013 3-years

2,977,989 23/07/2015 3-years

4,328,889 8.73%

3 Md. Shahed Chairman

125,000 03/03/2010 3-years

1,091,380 12/12/2013 3-years

3,112,509 23/07/2015 3-years

4,328,889 8.73%

4 Md Solaiman Director

20,000 12/10/2014 3-years

4,308,889 23/07/2015 3-years

4,328,889 8.73% 3-years

5 Md.Nurul Huda Director 1,400,000 2.82% 23/07/2015 3-years

6 Mrs. Ruksana Morshed Shareholders 200,000 0.40% 14/05/2013 3-years

7 Farzana Rahman Shareholders

100,000 14/05/2013 3-years

1,682,710 12/12/2013 3-years

1,782,710 3.59% 3-years

8 Jaheda Khandaker Shareholders 30,000 0.06% 14/05/2013 3-years

9

Abid Mustafizur Rahman

Shareholders

600,000 14/05/2013 3-years

1,836,360 12/12/2013 3-years

2,436,360 4.91%

10

Rezaur Rahman Razon Shareholders

10,000 08/06/2013 3-years

600,000 14/05/2013 3-years

1,847,890 12/12/2013 3-years

2,457,890 4.96%

11

Faize Kader Sadman Shareholders

10,000 08/06/2013 3-years

600,000 14/05/2013 3-years

1,522,350 12/12/2013 3-years

2,132,350 4.30%

12 M. A. Quyum Howlader Shareholders

100,000 14/05/2013 3-years

2,371,510 12/12/2013 3-years

2,471,510 4.98%

13 Nazmul Sakhawat Hossain

Shareholders

10,000 08/06/2013 3-years

600,000 14/05/2013 3-years

1,627,340 12/12/2013 3-years

2,237,340 4.51%

14 Abdul Kader Faruk Shareholders 302,140 0.61% 14/05/2013 3-years

15 Rebeka Sultana Shareholders 100,000 0.20% 14/05/2013 3-years

16 Md. Sahabuddin Shareholders 100,000 0.20% 14/05/2013 3-years

17 Abdul Quddus Amin Shareholders 10,000 0.02% 14/05/2013 3-years

18 Nasrin Akter Banu Shareholders

600,000 14/05/2013 3-years

1,837,380 12/12/2013 3-years

2,437,380 4.91%

19 Kazi Hosnara Begum Shareholders

600,000 14/05/2013 3-years

1,836,360 12/12/2013 3-years

2,436,360 4.91%

20 Md. Motiur Rahman Shareholders

100,000 14/05/2013 3-years

573,470 12/12/2013 3-years

480,000 23/07/2015 3-years

1,153,470 2.33%


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21 Orion Capital Limited Shareholders

100,000 14/05/2013 3-years

692,310 12/12/2013 3-years

792,310 1.60%

22 Razwana Rahman (Rini) Shareholders

600,000 14/05/2013 3-years

1,853,390 12/12/2013 3-years

2,453,390 4.95%

23 Shirin Faruk Shareholders

700,000 14/05/2013 3-years

1,736,360 12/12/2013 3-years

2,436,360 4.91%

24 Md. Badiuzzaman Shareholders 50,000 0.10% 14/05/2013 3-years

25 Feroza Begum Shareholders 150,000 0.30% 14/05/2013 3-years

26 Md. Jahangir Alam Shareholders 100,000 0.20% 14/05/2013 3-years

27 Sayed Iqbal Hossain Shareholders

100,000 14/05/2013 3-years

100,000 23/07/2015 3-years

200,000 0.40%

28 Mohibullah Kabir Shareholders 10,000 0.02% 08/06/2013 3-years

29 Abdul Quayum Mamun Shareholders 10,000 0.02% 08/06/2013 3-years

30 Arife Billaha Shareholders 10,000 0.02% 08/06/2013 3-years

31 Abdul Mabut Masum Shareholders 10,000 0.02% 08/06/2013 3-years

32 Sajedul Mabut Khabir Shareholders 10,000 0.02% 08/06/2013 3-years

33 Md.Mosharraf Uddin Khaled

Shareholders 200,000 0.40% 23/07/2015 3-years

34 TasrinMujib Shareholders 200,000 0.40% 23/07/2015 3-years

35 Asif Iqbal Chowdhury Shareholders 500,000 1.01% 23/07/2015 3-years

36 Md.tazul Islam Shareholders 300,000 0.60% 23/07/2015 3-years

37 Touhida Shirin Shareholders 200,000 0.40% 23/07/2015 3-years

38 Ratan Das Shareholders 800,000 1.61% 23/07/2015 3-years

Total 49,599,570 100%

*Note: Lock-in periods start from the date of Issuance of Prospectus.

SECTION -XXIV: MARKETS FOR THE SECURITIES BEING OFFERED The issuer shall apply to all the relevant exchanges in Bangladesh within 7 (seven) working days from the date of consent for public offer accorded by the Commission. The Exchange shall complete the listing procedures within a maximum period of 30 (thirty) working days from the date of closure of subscription list.

“Declaration about Listing of Shares with the stock exchange (s): None of the stock exchange(s), if for any reason, grants listing within 75 (Seventy Five) days from the closure of subscription, any allotment in terms of this prospectus shall be void and the company shall refund the subscription money within 15 (Fifteen) days from the date of refusal for listing by the stock exchanges, or from the date of expiry of the said 75 (Seventy Five) days, as the case may be. In case of non-refund of the subscription money within the aforesaid 15 (Fifteen) days, the Directors of the company, in addition to the issuer company, shall be collectively and severally liable for refund of the subscription money, with interest at the rate of 2% (two percent) above the bank rate, to the subscribers concerned. The issue manager, in addition to the issuer company, shall ensure due compliance of the above mentioned conditions and shall submit compliance report thereon to the Commission within 07


Page | 112

(Seven) days of expiry of the aforesaid 15 (Fifteen) days time period allowed for refund of the subscription money.”

Trading and Settlement

Trading and Settlement Regulation of the stock exchanges will apply in respect of trading and settlement of the shares of the Company.

THE ISSUE SHALL BE PLACED IN “N” CATEGORY


Page | 113

SECTION -XXV: DESCRIPTION OF SECURITIES OUTSTANDING OR BEING OFFERED

Details of allotment Types Of Securities

Outstanding Issue Price

Number Of Securities

16.03.2005 (At the time of incorporation)

Ordinary Shares BDT 10 100,000

16.07.2006(1st allotment) Ordinary Shares BDT 10 400,000

14.05.2013 (2nd allotment) Ordinary Shares BDT 10 9,400,000

08.06.2013 (3rd allotment) Ordinary Shares BDT 10 80,000

12.12.2013 (4th allotment) Ordinary Shares BDT 10 3,9619,570

Total 49,599,570

The Company has issued Ordinary Share to the Subscriber to the Memorandum and other than existing shareholder time to time which has been disclosed in the Section “OWNERSHIP OF THE COMPANY’S SECURITIES”.

Dividend, voting and preemption rights;

The Share Capital of the company is divided into Ordinary Shares, carrying equal rights to vote and receive dividend in terms of the relevant provisions of the Companies Act 1994 and the Articles of Association of the company. All Shareholders shall have the usual voting rights in person or by proxy in connection with, among others, election of Directors & Auditors and other usual agenda of General Meeting – Ordinary or Extra-ordinary. On a show of hand, every shareholder presents in person and every duly authorized representative of a shareholder present at a General Meeting shall have one vote and on a poll every shareholder present or by proxy shall have one vote for every share held by him or her.

In case of any additional issue of shares for raising further capital the existing shareholders shall be entitled to Right Issue of shares in terms of the guidelines issued by the BSEC from time to time.

Conversion and liquidation rights;

In terms of provisions of the Companies Act 1994, Articles of Association of the Company and other relevant rules in force, the shares of the Company are freely transferable. The Company shall not charge any fee for registering transfer of shares. No transfer shall be made to a firm, an infant or person of unsound mind.

Dividend policy;

i. The profit of the Company, subject to any special right relating thereto created or authorized to be created by the Memorandum and subject to the provisions of the Articles of Association, shall be divisible among the members in proportion to the amount of capital paid-up on the shares held by them respectively.

ii. No large dividend shall be declared than is recommended by the Directors, but the

Company in its General Meeting may declare a smaller dividend. The declaration of

Directors as to the amount of Net profit of the Company shall be conclusive.

iii. No dividend shall be payable except out of the profits of the Company or any other

undistributed profits. Dividend shall not carry interest as against the Company.

iv. The Directors may from time to time pay the members such interim dividend as in their

judgment the financial position of the Company may justify.

v. A transfer of shares shall not pass the right to any dividend declared thereon before the

registration of transfer.

vi. No limitation in payment of dividend is stipulated in any debt instrument or otherwise.

Other rights of the securities holders;


Page | 114

In terms of the provisions of the Companies Act 1994, Articles of Association of the Company and other relevant rules in force, the shares of the Company are transferable. The Company shall not charge any fee, other than Government duties for registering transfer of shares. No transfer shall be made to a minor or person of unsound mind.

The Directors shall present the financial statements as required under the law & International Accounting Standard. Financial statements will be prepared in accordance with the International Accounting Standards consistently applied throughout the subsequent periods and present with the objective of providing maximum disclosure as par law and International Accounting Standard to the shareholders regarding the financial and operational position of the company. The shareholders shall have the right to receive all periodical statement and reports, audited as well as un audited, published by the company from time to time.

The shareholder holding minimum of 10% shares of paid-up capital of the company shall have the right to requisition extra ordinary General Meeting of the company as provided for the section 84 of the Companies Act 1994.

SECTION -XXVI: FINANCIAL STATEMENTS

AUDITORS’ REPORT Report on the Financial Statements: We have audited the accompanying financial statement of IFCO Garments & Textiles Limited, which comprise the statement of financial position as on 30 June 2015 and the related statement of profit or loss & other comprehensive income, statement of cash flows and statement of changes in equity and a summary of significant accounting policies and notes there on for the year then ended. Management’s Responsibility for the Financial Statements: Management is responsible for the preparation and fair presentation of these financial statements in accordance with the basis of accounting policy described of the financial statements. This responsibility includes: designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. 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 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 our 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, we 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 an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.


Page | 115

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 of the company along with the notes thereon prepared in accordance with Bangladesh Financial Reporting Standards (BFRS), give a true and fair view of the state of the statement of financial position of the company as at 30 June, 2015 and of the results of their financial performance and cash flows for the year then ended and comply with the Companies Act 1994 and other applicable laws and regulations. We also report that:

i. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof;

ii. in our opinion, proper books of accounts as required by the law have been kept by the

Company so far as it appeared from our examination of those books;

iii. the Company’s Statement of Financial Position, Statement of Comprehensive Income, Statement of Cash Flows and Statement of Changes in Equity dealt with by the report are in agreement with the books of accounts; and

iv. the expenditures was incurred for the purpose of the Company’s business.

Sd/-

Date: October 26, 2015 Dhaka

AHMAD & AKHTAR Chartered Accountants


Page | 116

30-06-2015 30-06-2014

ASSETS

Non Current Assets 1,522,412,443 1,509,145,863

Property, Plant & Equipment Annexure-A 1,520,449,572 1,507,182,992

Security Deposit 3.00 1,962,871 1,962,871

Current Assets 401,064,091 362,695,964

Inventories 4.00 173,494,548 184,099,267 Trade and other Receivables 5.00 208,981,994 163,938,242 Advance, Deposits and Prepayments 6.00 7,967,455 12,583,781 Cash and Bank balances 7.00 10,620,094 2,074,674

Total Assets 1,923,476,534 1,871,841,827

EQUITY AND LIABILITIES

Capital and Reserves 1,414,132,521 1,260,704,361

Share Capital 8.00 495,995,700 495,995,700

Retained Earnings 9.00 918,136,821 764,708,661

Non-Current Liabilities 218,018,748 292,215,682

Long Term Borrowings 10.00 218,018,748 292,215,682

Current Liabilities 291,325,265 318,921,784

Current portion Long Term Loan 11.00 67,200,000 67,200,000 Trade and other Payables 12.00 120,585,124 133,377,010 Short Term Borrowings 13.00 80,640,666 84,948,176 Creditors & Accruals 14.00 22,899,475 33,396,598

Total Equity and Liabilities 1,923,476,534 1,871,841,827

Net Asset Value (NAV) Per Share 23.00 28.51 25.42

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

Managing Director

As per our annexed report of even date

Dated: October 26, 2015

Dhaka

AHMAD & AKHTAR


ChairmanSd/-

Chief Financial OfficerSd/- Sd/-

Sd/-

IFCO GARMENTS AND TEXTILES LIMITED

STATEMENT OF FINANCIAL POSITION

AS AT JUNE 30, 2015

Particulars NotesAmount in Taka


Page | 117

30-06-2015 30-06-2014

Sales 15.00 1,233,721,942 1,201,755,575

Less: Cost of Goods Sold 16.00 997,230,835 958,334,436

Gross Profit 236,491,107 243,421,139

Less: Operating expenses 17.00 28,381,670 27,012,835

Operating Profit 208,109,437 216,408,304

Less: Financial expenses 18.00 43,626,705 46,173,973

Net operating Profit 164,482,732 170,234,331

Add: Non-Operating Income 19.00 530,527 517,632

Profit before Contribution to WPPF 165,013,259 170,751,963

20.00 7,857,774 8,131,046

Profit before Tax 157,155,485 162,620,917

Provision for Current Tax 21.00 3,727,325 10,519,098

Net Profit after tax 153,428,160 152,101,819

Other Comprehensive Income - -

Total Comprehensive Income 153,428,160 152,101,819

Earnings Per Share (EPS) 22.00 3.09 4.82

Sd/-


Dhaka


STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED JUNE 30, 2015

Particulars Notes

AHMAD & AKHTAR

Sd/- Chairman

Sd/-

Chief Financial Officer

Less:Provision to Workers' PP/

Welfare fund


Amount in Taka

Managing Director



Sd/-


Page | 118

ParticularsOrdinary

Share Capital

Share Money

Deposit

Retained

EarningsTotal

As at July 01, 2014 495,995,700 - 764,708,661 1,260,704,361

Net Profit during the year - - 153,428,160 153,428,160

Total 495,995,700 - 918,136,821 1,414,132,521

ParticularsOrdinary

Share Capital

Share Money

Deposit

Retained

EarningsTotal

As at July 01, 2013 99,800,000 956,950,000 612,606,842 1,669,356,842

Addition/ Deduction during the year - 197,282,000 - 197,282,000

Return during the year - (758,036,300) - (758,036,300)

Transfer during the year 396,195,700 (396,195,700) - -

Net Profit during the year - - 152,101,819 152,101,819

Total 495,995,700 - 764,708,661 1,260,704,361

Sd/- Sd/- Sd/-

Chairman Managing Director


Sd/-


Dhaka


STATEMENT OF CHANGES IN EQUITY

AS AT JUNE 30, 2015


STATEMENT OF CHANGES IN EQUITY

AS AT JUNE 30, 2014

AHMAD & AKHTAR


Chief Financial Officer


Page | 119

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED JUNE 30, 2015

30-06-2015 30-06-2014

A .Cash Flow From Operating Activities:

Receipts from Customers and Others 1,189,208,717 1,291,140,852

Payment to Suppliers, Employees and Others (916,843,645) (618,774,382)

Cash generated from Operations 272,365,072 672,366,470

Paid to Financial Expenses (43,626,705) (46,173,973)

Tax Paid (3,735,753) (10,559,906)

Net cash flow from Operating activities 225,002,614 615,632,591

B. Cash Flow From Investing Activities:

Acquisition of Property, Plant and Equipment (137,952,750) (7,317,371)

Net cash flow from Investing activities (137,952,750) (7,317,371)

C. Cash Flow From Financing Activities:

Received/ Payment of Short term loan from bank (4,307,510) 58,882,242

Received/ Payment of Long term loan from bank (74,196,934) (105,931,293)

Received/Payment of Share money deposit - (560,754,300)

Net Cash flow from financing activities (78,504,444) (607,803,351)

D.Increase/(Decrease) cash and cash equivalents (A+B+C) 8,545,420 511,869

E.Opening cash and cash equivalents 2,074,674 1,562,805

F.Closing cash and cash equivalents (E + D) 10,620,094 2,074,674

Net Operating Cash Flow (NOCF) Per Share 24.00 4.54 12.41

Sd/- Sd/-


Dhaka

Particulars


Notes


Sd/-

Amount in Taka

Chairman Managing Director Chief Financial Officer


Page | 120

IFCO GARMENTS AND TEXTILES LIMITED Notes to the Financial Statements For the year ended June 30, 2015

1.0 The Company and its operations 1.01 Legal form of the Company

The Company was incorporated in Bangladesh as Private Limited Company on March 16, 2005 as a Company limited by Shares under the Companies Act 1994, vide certificate of incorporate on No. CH-5372/2005. Later on the company converted into public Limited Company on the date on December 30, 2013. The principal activities of the Company are manufacturing and exporting of Fashion Apparel as judged by international norms of Professionalism, Quality and Systems. The Company’s Authorized Capital is Tk. 162.00 Crore.

1.02 Address of the Registered Office

The registered office of the company is located at 63, North Jatrabari, Dhaka-1204, Bangladesh.

1.03 Nature of Business Activities

The principal activities of the Company are manufacturing and supplying all types of readymade garments and export thereof.

1.04 Capital Structure of the Company:

IFCO Garments & Textiles Limited is a Public Limited Company formed by local investors. The details of the capital structure are shown in the Note 8.00.

1.05 Production Unit

The production unit of the company is situated at plot # 41, 42, 56, & 57, Road # 01, BSCIC Industrial Estate, Kalurghat, Chandgoan, in Bangladesh.

2.00 Summary of significant accounting as per rules 2.01 Basis of preparation and presentation of the financial statements

The financial statements have been prepared and the disclosures of information made in accordance with the requirements of the Companies Act 1994 and BAS’s adopted by the Institute of Chartered Accountants of Bangladesh (ICAB), & Bangladesh Financial Reporting Standard (BFRS) as long as applicable for the company. The financial position and statement of profit or loss & other comprehensive have been prepared According to BAS 1 Presentation of Financial Statements based on accrual basis of Accounting following going concern assumption under Generally Accepted Accounting Principles and practices in Bangladesh and cash flow statement according to BAS 7.

2.02 Accounting convention and assumption

The financial statements are prepared under the historical cost convention. 2.03 Principal accounting policies


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The specific accounting policies have been selected and applied by the company’s management for significant transactions and events that have a material effect within the framework for the preparation and presentation of financial Statements. Financial Statements have been prepared and presented in compliance with applicable BAS and BFRS. Previous year’s figures were re-arranged for companies, there were no significant changes in the accounting policies and valuation policies affecting the financial position and performance of the Company. However, changes made to the presentation are explained in the note for each respective item.

Accounting and valuation methods are disclosed for reasons of clarity. The company classified the expenses using the function of expenses method as per BAS 1.

2.04 Application Accounting Standards of the company The following BAS are applicable to the financial statements for the year under review:

BAS 1 Presentation of Financial Statements BAS 2 Inventories BAS 7 Cash Flow Statements BAS 8 Accounting policies, Changes in Accounting Estimates and Errors BAS 16 Properties, Plant and Equipment BAS 17 Leases BAS 18 Revenue BAS 23 Borrowing Costs BAS 24 Related Party Disclosures BAS 33 Earnings per Share BAS 37 Provisions, Contingent liabilities and Contingent Assets BAS 38 Intangible Assets

2.05 Property, Plant and equipment

Tangible fixed assets are accounted for according to BAS 16 Property, Plant and Equipment at Historical cost less accumulated depreciation and the Capital work-in-progress is stated at cost. Both tangible and intangible assets are depreciated/ amortized according to the reducing balance depreciation method. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized as non operating income and reflected in the profit loss & other comprehensive.

2.06 Depreciation of fixed assets

Depreciation is provided on reducing balance method except Land & Land Development (BSCIC Industrial Estate) on the cost. The management of the company changes the depreciation policy not to charge the depreciation on land & land development from 2014 and onward due to long term (99 years) operating lease.


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Depreciation has been charged on additions during the period available for utilization.

The depreciation /amortization rate are as follows: Category of fixed assets Rate % Land and Development (BSCIC Industrial Estate) 0 Factory Building 2.50 Plant & Machinery 10 Electrical Installation 10 Furniture & Fixture 10 Generator 20 Water Pump 10 Office Equipment 10 Computer 20 Cookeries 20 Transformer 10 Motor Car 10 Fire Extinguisher 10 Air Condition 10


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2.07 Valuation of Inventory

Inventories are stated at the lower of cost or net realizable value in compliance with the requirements of Para 21 and 25 of BAS 2. Category of Inventory Basis of valuation Raw & packing materials including w-i-p : Moving average (Weighted) Cost Finished Goods at Factory : At lower of cost or net estimated Realizable value At warehouses : At cost Stores Items : At cost Materials in-transit : Book value i.e. cost so far incurred Cost comprises the value of materials and all other distributable direct labour, depreciation & Production overheads.

2.08 Bills Receivable

Bills Receivable is carried at invoice amount without making any provision for doubtful debts for export are being based on 100% confirmed letter of credit basis with fixed maturity dates.

2.09 Cash and cash equivalents

Cash and cash equivalents include cash in hand, cash at banks, term deposits, etc. which are available for use by the company without any restrictions. There is an insignificant risk of change in value of the same.

2.10 Foreign currency transaction

Foreign currency transactions are recorded at the applicable rates of exchange ruling at the transaction date in accordance with BAS 21 “the Effects of changes in Foreign Exchange Rates”. Foreign currency transaction are translated at the financial position date are charged/credited to the profit or loss & other comprehensive whenever arise.

2.11 Creditors and accrued expenses 2.11.1 Trade and other payables

Liabilities are recorded at the amount payable for settlement in respect of goods and services received by the company.

2.11.2 Provision

The preparation of financial statements in conformity with Bangladesh accounting standard BAS 37 “Provisions, Contingent Liabilities and Contingent Assets” requires management to make estimates and Assumption that affect the reported amounts of revenues and expenses, assets and liabilities, and the Disclosure requirements for contingent assets and liabilities during and at the date of the financial statements.

In accordance with the guidelines as prescribed by BAS 37 provisions were recognized in the following situations:


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When the Company has a present obligation as a result of past event; When it is probable that an outflow of resources embodying economic

benefits will be required to settle the obligation; and Reliable estimates can be made of the amount of the obligation. We have shown the provisions in the financial position at an appropriate level with regard to an adequate provision for risks and uncertainties. An amount recorded as a provision represents the best estimate of the probable expenditure required to fulfill the current obligation on the Financial position date.

2.12 Contingent liabilities and assets Contingent liabilities and assets are current or possible obligations or assets, arising from past events and whose existence is due to the occurrence or non-occurrence of one or more uncertain future events which are not within the control of the company. In accordance with BAS 37 “Provisions, Contingent Liabilities and Contingent Assets” are disclosed in the notes to the financial statements.

2.13 Revenue recognition

In compliance with the requirements of BAS 18 “Revenue”, revenue is recognized only when; a) The products are invoiced and dispatched to the customers; b) Interest income is accrued on a time basis by reference to the principal

outstanding at the effective interest rate applicable; c) Income from export is recognized at delivery of the consignment on accrual basis.

2.14 Borrowing costs

In compliance with the requirements of BAS 23 “Borrowing Costs”, borrowing costs of operational. Period on short term loan and overdraft facilities from Al Arafa Islami Bank Ltd. was charged off as revenue expenditure as they incurred.

2.15 Lease arrangements

The company has 1 lease arrangements with BSCIC Industrial Estate for plot No. 41, 42, 56 & 57. The lease is classified as an operating lease as it does not transfer substantial risks and rewards incident to ownership consistent with the view laid down in BAS 17 Leases.

2.16.1 Measurement of lease payments

Lease payments (excluding cost for services such as insurance and maintenance) are recognized as expense in the income statement.

2.17 Intangible Assets

In compliance with the requirements of BAS 38 intangible assets are usually absorbed as revenue charges as and when incurred, as being not that material in the company’s and / or local context.

2.18 Repairs, upkeep and maintenance charges


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These are usually charged out as revenue expenditure in the period in which it is incurred.

2.19 Bad and doubtful debts

We are not making any provision for bad and doubtful debts because our export is based on 100% confirm letter of credit doing with fixed maturity date.

2.20 Advertising and promotional expenses

All costs associated with advertising and promotional activities are charged in the year they were incurred.

2.21 Worker’s Profit Participation / Welfare Fund

The company contributed 5% of net profit before charging the amount to the aforementioned fund in accordance with the requirement of section 234 of labour Act 2006. The management of the company has established workers profit participation/welfare fund in the year 2014.


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2.22 Related Party Transaction

According to BAS 24: “Related Party Disclosures” the company should be disclosed carried out a number of transactions with related parties in the normal course of business and on arms’ length basis. During the period the company has not been any transaction with related party.

2.23 Income Tax 2.23.1 Current Tax

As per section 53BB of the Income Tax Ordinance 1984 tax has been deducted at source from export proceeds @ 0.30% and the deducted amount is treated as the final settlement as final discharge of income tax liability of the company under the provision of section 82 (C) vide SRO No. 2015-AAIN/AYKOR/2005 dated July 07, 2005.

Taxes on non operating income charged @ 35.00% since it is not related with final settlement.

2.23.2 Deferred Tax

Deferred tax arises due to temporary difference deductible or taxable for the events or transaction which is recognized in the income statement. A temporary difference is the difference between the tax bases of an asset or liability and its carrying amount/reported in the balance sheet. Deferred tax assets or liability is the amount of income tax recoverable or payable in future period’s recognized in the current period as per “BAS 12: Income Tax”. The income of the company is being assessed and applicable income tax rate is deducted in the gross turnover of the company. Thus there arises a permanent difference due to unavailability of temporary differences, unused tax losses and unused tax credit for the company. Therefore, no deferred tax policy has been adopted by the management during the year.

2.24 Cash flow statement

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 considering the provisions that ‘Enterprises are Encouraged to Report Cash Flow From Operating Activities Using the Direct Method”.

2.25 Reporting period:

The financial period of the Company covers one calendar year from 1st July, 2014 to June 30, 2015 Consistently.


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30-06-2015 30-06-2014

3.00 Security Deposit

The above balance is made up as follows:

Bakhrabad Gas System Ltd.(BGSL) - Gas Line 1,652,871 1,652,871

Electricity 310,000 310,000

1,962,871 1,962,871

4.00 Inventories

Raw Materials (note-4.01) 90,708,226 88,542,453

Chemicals (note-4.02) 17,142,104 41,205,486

Work in process (note-4.03) 30,216,520 30,125,486

Consumable Items (note-4.04) 3,521,048 4,210,356

Finished goods (note-4.05) 28,754,163 17,451,268

Store items (note-4.06) 3,152,487 2,564,218

173,494,548 184,099,267

The above balance is made up as follows: note-4.01 to note-4.06

4.01 Raw Materials

Opening Balance 88,542,453 245,476,268

Add: Purchase during the year 721,470,834 480,187,456

Raw materials available for production 810,013,287 725,663,724

Less: Raw material consumption during the year 719,305,061 637,121,271

Closing balance 90,708,226 88,542,453

4.02 Raw Materials- Chemicals

Opening Balance 41,205,486 42,416,090

Add: Purchase during the year 853,894 19,052,689


Less: Input to production 24,917,276 20,263,293

Closing balance 17,142,104 41,205,486

4.03 Work in process

Opening Balance 30,125,486 43,061,406

Add: Current year 784,433,132 697,228,824

814,558,618 740,290,230

Less: Transfer to finished goods 784,342,098 710,164,744

Closing balance 30,216,520 30,125,486

4.04 Consumable Items

Opening Balance 4,210,356 5,835,853


43,731,843 44,054,616

Less: Consumption during the year 40,210,795 39,844,260

Closing balance 3,521,048 4,210,356

Amount in Taka


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30-06-2015 30-06-2014

4.05 Finished Goods

Opening Balance 17,451,268 39,544,208

Add: Production during the year 1,008,851,279 936,496,182

Less: Cost of Sample (317,549) (254,686)

Production available for export 1,025,984,998 975,785,704

Less: Cost of goods sold 997,230,835 958,334,436

Closing balance 28,754,163 17,451,268

4.06 Store items

Opening Balance 2,564,218 4,526,701


8,216,405 6,632,190

Less: Consumption during the year 5,063,918 4,067,972

Closing balance 3,152,487 2,564,218

Work in process: It consist of cost of raw materials only.

Finished Goods: It includes the cost incurred upto cost of goods available for sale.

Store Items: It consist of the total cost of spare parts and loose tools.

5.00 Trade and other Receivable

Bill Receivable 208,981,994 163,938,242

208,981,994 163,938,242

Receivables due below six months 208,981,994 163,938,242

Receivables due over six months - -

208,981,994 163,938,242

30-06-2015 30-06-2014

I208,981,994 163,938,242

II- -

III - -

IV - -

V- -

208,981,994 163,938,242 Total

Receivables considered good in respect of which the company isfully secured

Receivables considered good in respect of which the company holdsno security other than the debtor personal security

Receivables considered doubtful or bad

Receivables due by common management

The maximum amount of receivable due by any director or otherofficer of the company

Sl ParticularsAmount in Taka

Being the amount of receivable against export bills as on June 30, 2015. This is considered as good & realizable andis secured by export letter of credit duly accepted by L/ C opening by the bank.

Raw materials: It consist of import value and local expenses incurred upto warehouse. Inventory system ismaintained on FIFO basis.

Amount in Taka

This is considered as fully secured and guaranteed payment by export letter of credit opening bank against export order and

is considered good & realizable within one year as per the terms of export letter of credit. The classification of receivables as

required by the Schedule XI of the Companies Act, 1994 are given below:


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30-06-2015 30-06-2014

6.00 Advance, Deposit & Prepayments

Sundry Advances (note-6.01) 4,425,814 2,258,795

Advance Income Tax (note-6.02) 3,541,641 10,324,986

7,967,455 12,583,781

6.01 Sundry Advances

M/ S. Rajib International 732,186 652,389

M/ S. Banarupa Enterprise 216,569 -

M/ S. Cas Scale (BD) Pvt. Ltd. 63,254 54,263

M/ S. Abul Khair Steel Mills Ltd. 254,180 52,498

M/ S. Annex Engineering & Electric Co. 332,024 54,674

M/ S. Micro Trade 74,589 56,320

M/ S. Eastern Sanitary 452,167 125,458

M/ S. Gazi Enterprise 77,304 -

M/ S. China Plastic (BD) Ltd. 613,205 523,659

M/ S. Danmark Refrigeration Work. 685,475 210,236

M/ S DHL World Wide Express Ltd 91,547 85,476

M/ S. Light House 432,548 21,548

M/ S. Dhaka Com Ltd. 87,516 65,239

M/ S. A B B Ltd. 313,250 357,035

4,425,814 2,258,795

6.02 Advance Income Tax

Particulars

Income Tax deduction at source -Opening 10,324,986 14,303,371

Add: Tax deduction at source during the year 3,541,641 10,324,986

13,866,627 24,628,357

Less: Adjustment During the year 10,324,986 14,303,371

3,541,641 10,324,986

Aging Schedule

7.00 Cash and bank balances

Cash in hand 3,254,876 1,754,126

Al-Arafa Islami Bank Ltd. 7,365,218 320,548

10,620,094 2,074,674

8.00 Share Capital:

8.01 Authorized Share Capital :

162,000,000 ordinary shares of Taka 10/ = each. 1,620,000,000 1,620,000,000

8.02 Issued, subscribed, called-up and paid-up share capital:

49,599,570 ordinary shares of Tk 10/ = each fully paid-up 495,995,700 495,995,700

495,995,700 495,995,700

The Bank balance are in agreement with respective bank statement balances.

Amount in Taka


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9.00 Retained Earnings

Opening balance 764,708,661 612,606,842 Add: Current year profit 153,428,160 152,101,819

918,136,821 764,708,661

10.00 Long term borrowings

Hire Purchase Com. 285,218,748 359,415,682

Less: Current Portion of Long Term Loan 67,200,000 67,200,000

218,018,748 292,215,682

11.00 Current portion of long Term Loan

Hire Purchase Com. 67,200,000 67,200,000

67,200,000 67,200,000

12.00

Youngone Synthetic Fibre Prods. Ind. Ltd. 2,154,278 12,451,876

Swiss Tex Ltd. 33,255,823 23,264,850

M/ S. Biswas Textiles Ltd. - 874,596

Shenzhen Textiles Co. Ltd. 25,410,524 39,502,457

The Padma Fabrics (Pvt) Ltd. - 6,541,263

Roverco (HK) Limited 2,541,278 10,325,857

Global Garments Sourcing 8,613,861 9,520,165

Park Accessories Limited 6,525,127 4,521,036

Pack One Accessories 6,152,187 3,652,039

R.M. Interlinings Ltd. 12,052,187 6,985,204

DAF CTG. Accessories Ltd. 4,259,874 12,012,356

M/ S. Hasan Enterprise 4,521,897 2,103,569 Unitex International 6,352,105 746,321 Friends Accessories 8,745,983 875,421

120,585,124 133,377,010

13.00 Short Term Borrowings

Bi-Moazel Commercial 45,218,793 25,421,689

Trust Receipt 35,421,873 59,526,487

80,640,666 84,948,176

14.00 Creditors & Accruals

Fuel , Water & Power 918,829 2,502,860

Rent 15,000 15,000

Salary & Wages 5,521,876 4,256,428

Director Remuneration and Fees 25,000 154,800

Sundry Creditors (note-14.01) 4,583,671 7,567,366

Income Tax Payalbe (note-14.02) 3,727,325 10,519,098

Provision to WPP / Welfare fund (note-20.00) 7,857,774 8,131,046

Audit Fees 250,000 250,000

22,899,475 33,396,598

Trade and other Payable

This represent amount of term loan sanctioned by the Al-Arafa Islami Bank Limited.

This represent amount of term loan sanctioned by the Al-Arafa Islami Bank Limited.

Amount in Taka


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30-06-2015 30-06-201414.01 Sundry Creditors

Mr. Fazlu 875,418 895,324

M/ S. Shubho Enterprise 825,200 745,168

M/ S.Rakhi Suppliers 1,468 632,567

M/ S. Lablu Enterprise 784,522 421,056

M/ S. Kabir Hardware 63,251 320,456

Mr. Shadin Printers 521,874 87,546

M/ S. Shafiq Enterprise - 2,084,501

M/ S. Malek Bricks 638,754 632,987

M/ S. Jublee Suppliers 241,086 784,521

M/ S. Rafiq Brothers 632,098 963,240

Total 4,583,671 7,567,366

14.02 Income Tax Payable

Income Tax Payable -Opening 10,519,098 14,538,291

Add: Charge for the year 3,727,325 10,519,098

14,246,423 25,057,389

Less: Adjustment During the year 10,519,098 14,538,291

3,727,325 10,519,098

15.00 Gross Turnover

The break-up of the above is given as under:

Polo and T-Shirt 707,845,214 683,205,418

Teens Pant 178,542,193 185,487,616

Jaket 105,218,746 115,429,754

Upper Top 98,542,148 82,065,218

Girls Sweet Shirts 91,418,768 74,512,693

Others 52,154,873 61,054,876

1,233,721,942 1,201,755,575

16.00 Cost of goods Sold

Raw materials consumed - Yarn & Fabrics (note-16.01) 719,305,061 637,121,271

Raw materials consumed-Chemicals (note-16.02) 24,917,276 20,263,293

Consumable item consumed (note-16.03) 40,210,795 39,844,260

784,433,132 697,228,824

Work in Process- opening 30,125,486 43,061,406

Work in Process- closing 30,216,520 30,125,486

Change in work in process (91,034) 12,935,920

Total consumption 784,342,098 710,164,744

Add: Manufacturing Overhead (note-16.04) 224,509,181 226,331,438

Cost of production 1,008,851,279 936,496,182

Finished Goods - opening 17,451,268 39,544,208

Finished Goods - closing 28,754,163 17,451,268

Change of finished goods stock (11,302,895) 22,092,940

Cost of Sample (317,549) (254,686)

997,230,835 958,334,436

Amount in Taka


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16.01 Raw materials consumed - Yarn & Fabrics

Opening Stock 88,542,453 245,476,268



Less: Closing Stock 90,708,226 88,542,453

719,305,061 637,121,271

16.02 Raw materials consumed-Chemicals

Opening Stock 41,205,486 42,416,090

Add: Purchase during the year 853,894 19,052,689

Chemicals available for Production 42,059,380 61,468,779


24,917,276 20,263,293

16.03 Consumable Item consumed

Opening Stock 4,210,356 5,835,853


Consumable Item available for packing. 43,731,843 44,054,616


40,210,795 39,844,260

16.04 Manufacturing overhead

Salary & Wages 69,521,054 64,512,897

Festival Bonus 5,148,761 4,685,428

Medical Expenses 205,418 129,754

Food & Tiffin 1,798,542 1,524,689

Labor Charge 754,187 642,158

Night Allowance 532,015 635,218

Carrying Charge 1,452,487 1,320,548

Fuel , Water & Power 7,854,123 7,102,356

Rent, Rates and Taxes 3,985,412 3,652,104

Repairs & Maintenance (note-16.04.A) 2,596,931 2,100,134

Washing Charge 1,657,198 1,205,487

Store & Spare Consumed 5,063,918 4,067,972

Embriodery Expeses 127,320 320,546

Other Overhead 621,879 412,589

Depreciation 123,189,936 134,019,558

224,509,181 226,331,438

16.04.A Repairs & Maintenance

Plant and Machinery 1,754,289 1,524,689

Building 421,589 254,876

Others 421,053 320,569

2,596,931 2,100,134

Amount in Taka


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17.00 Operating Expenses

Warehouse, Distribution & Selling Exp. (note-17.01) 18,056,185 17,431,573

Administrative Expenses (note-17.02) 9,680,230 8,949,219

Welfare Expenses 645,255 632,043

28,381,670 27,012,835

17.01 Warehouse, Distribution & Selling Exp.

Advertising Expenses 299,336 542,187

Salary & Welfare 5,421,876 5,565,248

Transportation and Handling expenses 5,125,487 4,952,168

Repair and Maintenance 652,187 512,489

Rent 69,854 65,218

Fuel , Water & Power 114,215 107,542

Sales promotion expenses 715,428 612,053

Traveling Expenses 1,784,521 1,652,487

Entertainment Expenses 652,187 521,634

Printing & Stationery 1,745,106 1,565,238

Miscellaneous Expenses 77,021 71,254

Sample,Test & Analysis 950,097 775,725

Depreciation 448,870 488,330

18,056,185 17,431,573

17.02 Administrative Expenses

Salary & Welfare 2,785,418 2,652,487

Postage & Telecommunication 351,254 285,642

Traveling, Haultage & passage 521,548 415,267

Repair & Maintenance 421,589 341,259

Fuel , Water & Power 215,487 312,058

Printing and Stationery 821,546 712,468

Rent, Rates and Taxes 1,754,289 1,652,314

Subscription & Donation 185,472 105,623

Entertainment 206,548 203,154

Legal & Professional Charge 352,649 245,167

Audit fees 250,000 250,000

Miscellaneous Expenses 440,471 320,121

News paper & periodical 7,845 9,421

Director Remuneration 300,000 300,000

Meeting Attendance Fees 18,750 4,800

Depreciation 1,047,364 1,139,438

9,680,230 8,949,219

18.00 Financial Expenses

Interest on Loan (note-18.01) 43,626,705 46,173,973

43,626,705 46,173,973

18.01 Interest on loan

Interest on Long Term Loan 41,974,518 43,298,547

Interest on Short Term Loan 1,652,187 2,875,426

43,626,705 46,173,973

19.00 Other non-operating Income

Sale of Wastage 530,527 517,632

530,527 517,632

Amount in Taka


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20.00 Contribution to Workers' Profit Participation/ Welfare Fund:

Profit before WPPF 165,013,259 170,751,963

Contribution to Workers' profit participation/ Welfare fund (5% of PBT) 7,857,774 8,131,046

21.00 Provision for Income Tax

Particulars

Taxes on operating income @ 0.30% of Sales proceeds realized 3,541,641 10,324,986

Taxes on non operating income @ 35.00 % 185,684 194,112

3,727,325 10,519,098

22.00 Earning per share (EPS)

Net Profit During the Year 153,428,160 152,101,819

Weighted Average Number of Share (note-22.01) 49,599,570 31,580,807

Earnings Per Share 3.09 4.82

22.01 Weighted Average Number of Share for the year-2014

Opening Shares 9,980,000 365 9,980,000

Issue on 12.12.2013 39,619,570 199/ 365 21,600,807

Total 49,599,570 31,580,807

23.00 Net Asset Value (NAV) Per Share

Total Assets 1,923,476,534 1,871,841,827

Less: Total Liabilities 509,344,013 611,137,466

Net Asset Value 1,414,132,521 1,260,704,361

Total Number of Share outstanding 49,599,570 49,599,570

Net Asset Value (NAV) Per Share 28.51 25.42

24.00 Net Operating Cash Flow Per Share (NOCFPS)

Net Operating Cash Flow (Numerator) 225,002,614 615,632,591

Number of Ordinary Shares (Denominator) 49,599,570 49,599,570

Net Operating Cash Flow Per Share(NOCFPS) 4.54 12.41

25.00 Production and Product Mix

During the period company produces 56,84,659 Pieces different types of Clothing which ismade up as following ratios:

Particulars Types of Clothing Product Mix

Women's Clothing 30%

Men's Clothing Polo Shirt & Jaket etc. 25%

Teen's Clothing Jaket, Fitted Jeans , Sweet shirts etc. 25%

Kids and Baby Clothing Jaket, Shirts, Bottom etc. 20%

Total 100%

Skirt & Shorts etc.

Weighted average No

of SharesWeightParticulars No of Shares

Amount in Taka


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An

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-A

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Page | 136

30-06-2015 30-06-2014 30-06-2013 30-06-2012 30-06-2011

Result Result Result Result Result

Liquidity Ratios

Current Ratio 1.38 1.14 2.94 3.03 4.59

Quick Ratio 0.78 0.56 1.22 1.86 2.80

Time Interest Earned Ratio (Times) 4.77 4.69 6.54 4.37 3.256

Debt-Equity Ratio 0.26 0.35 0.29 0.24 0.32

Operating Ratios

Accounts Receivable Turnover Ratio 6.62 5.77 5.11 3.79 5.43

Inventory-Turnover Ratio 5.58 3.39 3.70 4.26 4.49

Asset - Turnover Ratio 0.65 0.58 0.74 0.63 0.54

Profitability Ratios

Gross Margin Ratio (%) 19.17% 20.26% 26.37% 26.26% 24.12%

Operating Income Ratio (%) 16.87% 18.01% 24.71% 23.54% 20.88%

Net Profit Ratio (Before Tax) % 13.38% 14.21% 20.98% 18.20% 14.56%

Net Profit Ratio (after Tax) % 12.44% 12.66% 20.02% 18.20% 14.56%

Return on Assets (%) 8.09% 7.31% 14.85% 11.55% 7.88%

Return on Equity (%) 10.85% 12.06% 18.14% 14.33% 10.53%

Earnings Per Share 3.09 4.82 1,764.97 3,916.62 2,465.85

EBITDA Margin * 6.80% 7.68% 18.00% 13.58% 7.27%

Coverage RatioDebt to total Asset Ratio 19.02% 23.74% 21.46% 18.57% 23.66%

Debt to service Coverage Ratio 170.40% 142.28% 614.90% 242.22% 142.78%

Cash flows

Net Operating cash flow per share 4.54 12.41 354.74 3240.22 2138.68

Net Operating cash flow per share/EPS 1.47 2.58 0.20 0.83 0.87

Sd/-

Date : 08 March 2016

Dhaka

AHMAD & AKHTAR


We have examined the calculation procedure of the above ratios of IFCO Garments & Textiles Limited for

the year ended 30 June 2015 and the year ended 30 June 2013, 2012, 2011 and no material deviation found

in the result.

The following Ratios have been calculated by the management based on audited financial statements of

IFCO Garments & Textiles Limited for the year ended ended 30 June 2015 and the year ended 30 June

2013, 2012, 2011. Selected Ratio as specified in rule 4 (1) (d) Annexure D of the Securities and Exchange

Commission (Public Issue) Rules, 2015.

Particulars

(c) Auditors’ Certificate regarding statement of Ratio Analysis:


Page | 137

Particulars 30.06.2015 31.12.2015 30.06.2014 31.12.2014 30.06.2013 31.12.2013 30.06.2012 31.12.2012 30.06.2011 31.12.2011

IFCOIndistry

AverageIFCO

Indistry

AverageIFCO

Indistry

AverageIFCO

Indistry

AverageIFCO

Indistry

Average

Liquidity Ratios:

Current Ratio 1.38 1.27 1.14 1.49 2.94 0.98 3.03 0.97 4.59 0.86

Quick Ratio 0.78 0.54 0.56 0.68 1.22 0.54 1.86 0.54 2.80 0.27

Time Interest Earned Ratio (Times) 4.77 2.38 4.69 1.93 6.54 1.71 4.37 1.7 3.26 1.78

Debt-Equity Ratio 0.26 0.76 0.35 0.70 0.29 2.55 0.24 0.64 0.32 1.12

Operating Ratios:

Accounts Receivable Trunover Ratio 6.62 3.34 5.77 2.73 5.11 2.61 3.79 4.13 5.43 8.44

Inventory Turnover Ratio 5.58 2.20 3.39 2.21 3.70 2.52 4.26 2.54 4.49 2.76

Asset Trunover Ratio 0.65 0.72 0.58 0.80 0.74 0.76 0.63 0.74 0.54 0.68

Profitability Ratios

Gross Margin Ratio 0.19 0.20 20.26% 21.05% 26.37% 20.81% 26.26% 21.36% 24.12% 20.73%

Operating Income Ratio 16.87% 13.48% 18.01% 15.24% 24.71% 17.37% 23.54% 17.93% 20.88% 21.83%

Net Profit Ratio (Before Tax) 13.38% 6.61% 14.21% 6.31% 20.98% 6.07% 18.20% 6.72% 14.56% 1.16%

Net Profit Ratio (after Tax) 12.44% - 12.66% - 20.02% - 18.20% - 14.56% -

Return on Assets 8.09% 5.39% 7.31% 6.42% 14.85% 5.26% 11.55% 5.12% 7.88% 1.67%

Return on Equity 10.85% 8.35% 12.06% 8.57% 18.14% 16.31% 14.33% 18.97% 10.53% 21.78%

Earnings Per Share 3.09 1.27 4.82 2.23 1,764.97 3.27 3916.62 3.47 2465.85 3.88

EBITDA Margin * 0.07 0.08 0.08 0.29 0.18 0.28 0.14 0.22 0.07 0.36

Coverage Ratio

Debt to Total Asset Ratio 0.19 0.43 0.24 0.45 0.21 0.30 0.19 0.36 0.24 5.52

Debt to Service Coverage Ratio 1.70 0.21 1.42 0.27 6.15 0.49 2.42 0.38 1.43 0.29

Cash flow

Net Operating cash flow per share 4.54 3.48 12.41 3.04 354.74 4.79 3240.22 (4.90) 2138.68 4.91

Net Operating cash flow per share/EPS 1.47 1.97 2.58 1.86 0.20 1.45 0.83 (1.41) 0.87 1.27

Industry Average Ratios compare with IFCO Garments & Textiles Ltd.:


Page | 138

A. Statement of Assets and Liabilities:

30-06-2015 30-06-2014 30-06-2013 30-06-2012 30-06-2011

Fixed Assets:

Property, Plant & Equipment 1,520,449,572 1,507,182,992 1,635,512,947 1,218,536,067 1,210,786,530

Security Deposit 1,962,871 1,962,871 1,962,871 1,962,871 1,962,871

1,522,412,443 1,509,145,863 1,637,475,818 1,220,498,938 1,212,749,401

Current Assets:

Inventories 173,494,548 184,099,267 380,860,526 220,784,541 151,596,544

Trade and Other Receivables 208,981,994 163,938,242 252,805,887 338,926,766 228,153,979

Advance, Deposit & Prepayments 7,967,455 12,583,781 16,747,685 1,782,487 1,235,522

Cash & Cash Eqivalents 10,620,094 2,074,674 1,562,805 7,574,900 7,625,233

Total Current Assets 401,064,091 362,695,964 651,976,903 569,068,694 388,611,278

Total Assets 1,923,476,534 1,871,841,827 2,289,452,721 1,789,567,632 1,601,360,679

Equity & Liabilities:

Share Capital 495,995,700 495,995,700 99,800,000 5,000,000 5,000,000

Share Money Deposit - - 956,950,000 1,051,750,000 1,051,750,000

Retained Earnings 918,136,821 764,708,661 612,606,842 309,834,587 114,003,670

Total Equity 1,414,132,521 1,260,704,361 1,669,356,842 1,366,584,587 1,170,753,670

Non Current Liabilities:

Long Term Loan from Bank 218,018,748 292,215,682 398,146,975 235,346,975 345,986,529

Total Non-Current Liabilities 218,018,748 292,215,682 398,146,975 235,346,975 345,986,529

Current Liabilities:

Current portion of Long Term Loan 67,200,000 67,200,000 67,200,000 67,200,000 -

Trade and Other Payable 120,585,124 133,377,010 98,676,822 81,548,949 43,743,025

Short term Loan from Bank 80,640,666 84,948,176 26,065,934 29,709,171 32,882,672

Creditors & Accruals 22,899,475 33,396,598 30,006,148 9,177,950 7,994,783

Total Current Liabilities 291,325,265 318,921,784 221,948,904 187,636,070 84,620,480

Total Liabilities 509,344,013 611,137,466 620,095,879 422,983,045 430,607,009

Total Liabilities and Owners Equity 1,923,476,534 1,871,841,827 2,289,452,721 1,789,567,632 1,601,360,679

Net Assets Value (NAV) Per Share 28.51 25.42 167.27 2,733.17 2,341.51

Net Assets Value Per Share ( Re-Stated) 28.51 25.42 33.66 27.55 23.60

Sd/ -

Date : November 18, 2015

Place : Dhaka Chartered Accountants

We have examined the financial statements of IFCO Garments & Textiles Limited for the year ended June 30, 2015 and for the years ended June 30, 2014, 2013, 2012, 2011

and 2010. Financial statement for the year ended June 30, 2015 was audited by us. Financial statement for the year ended June 30, 2014 audited by Hafiz Ahmed & Co, 2013

were audited by Shiraz Khan Basak & Co, Chartered Accountants and for the year ended June 30, 2012 & 2011 was audited by M/ S. Sarwar Salamat & Co., Chartered

Accountants. In pursuance of Section-135 (1) and Para-24 (1) of Part-II of Schedule-III of the Companies Act 1994, our report is as under:

As At

AHMAD & AKHTAR

(d) Auditors’ report Under Section-135 (1) and Para-24(1) of Part-II of Schedule-III of the Companies Act 1994 of IFCO Garments & Textiles Ltd.:


Page | 139

B. Statement of Operating Result:

30-06-2015 30-06-2014 30-06-2013 30-06-2012 30-06-2011

Sales 1,233,721,942 1,201,755,575 1,512,600,470 1,075,864,278 846,529,754


GROSS PROFIT 236,491,107 243,421,139 398,851,091 282,483,053 204,166,083



Less: Financial Expenses 43,626,705 46,173,973 57,153,282 57,940,644 54,280,554


Add: Other non-operation Income 530,527 517,632 626,454 526,487 844,790

Profit before Contribution to WPPF 165,013,259 170,751,963 317,310,546 195,830,917 123,292,603

Less: Provision to Worker's PP/ Welfare Fund 7,857,774 8,131,046 - - -

Profit before Income Tax 157,155,485 162,620,917 317,310,546 195,830,917 123,292,603

Provision for Income Tax 3,727,325 10,519,098 14,538,291 - -

Net Profit after Tax 153,428,160 152,101,819 302,772,255 195,830,917 123,292,603

Basic Earnings per Share 3.09 4.82 176.50 391.66 246.59

Diluted Earnings per Share 3.09 3.07 6.10 3.95 2.49

Sd/ -


Place : Dhaka

For the financial year ended

AHMAD & AKHTARChartered Accountants


Page | 140

C. Statement of Cash Flows:

30-06-2015 30-06-2014 30-06-2013 30-06-2012 30-06-2011

Cash Flow From Operating Activities: -

Collection from Turnover 1,188,678,190 1,290,623,220 1,598,721,349 965,091,491 702,220,550

Collection from other non-operating income 530,527 517,632 626,454 526,487 844,790

Payment for cost of Expenses (878,395,085) (603,227,818) (1,170,670,406) (718,903,973) (509,025,929)

Paid for operating Expenses (42,184,313) (26,106,470) (16,954,349) (26,335,890) (32,472,057)

Payment for financial Expenses (43,626,705) (46,173,973) (57,153,282) (57,940,644) (54,280,554)

Expenses paid for other operating activities - - (542,834) (426,538) (352,678)

Net cash flow from Operating activities 225,002,614 615,632,591 354,026,932 162,010,933 106,934,122

Cash Flow From Investing Activities:

Purchase of Fixed Assets (137,952,750) (7,317,371) (519,195,790) (115,448,212) (32,305,568)

Increase/ Decrease in Security Deposit -

Net cash used in investing activities (137,952,750) (7,317,371) (519,195,790) (115,448,212) (32,305,568)

Cash Flow From Financing Activities:

Increase/ Decrease in Short term loan from Bank (4,307,510) 58,882,242 (3,643,237) (3,173,501) (20,956,138)

Increase/ Decrease in Long term loan from Bank (74,196,934) (105,931,293) 162,800,000 (43,439,553) (48,541,335)

Increase/ Decrease in Share Money Deposit - (560,754,300) - - -

Net Cash Flow from Financing Activities(78,504,444) (607,803,351) 159,156,763 (46,613,054) (69,497,473)

Increase/ (Decrease) cash and cash equivalents (A+B+C) 8,545,420 511,869 (6,012,095) (50,333) 5,131,081

Opening Cash and Cash Equivalents 2,074,674 1,562,805 7,574,900 7,625,233 2,494,152

Closing Cash and Cash Equivalents 10,620,094 2,074,674 1,562,805 7,574,900 7,625,233

E. The company has no subsidiary company as on the Statement of financial position date.

Sd/ -


Place : Dhaka

AHMAD & AKHTAR


F. Figures related to previous years have been rearranged wherever considered necessary.

D. The company was incorporated as a Private Limited Company on March 16, 2005 and coverted into a Public Limited Company on December 30, 2013 with the Registrar of Joint Stock Companies and Firms (RJSC) in Bangladesh;


Page | 141


Page | 142

Statement of Financial Position:

Amount in BDT

% on

Total

Assets

Amount in BDT

% on

Total

Assets

Amount in BDT

% on

Total

Assets

Amount in BDT

% on

Total

Assets

Amount in BDT% on Total

Assets

ASSETS:

Non Current Assets

Property, Plant & Equipment 1,520,449,572 79.05% 1,507,182,992 80.52% 1,635,512,947 71.44% 1,218,536,067 68.09% 1,210,786,530 75.61%

Security Deposits 1,962,871 0.10% 1,962,871 0.10% 1,962,871 0.09% 1,962,871 0.11% 1,962,871 0.12%

Total Non Current Assets 1,522,412,443 79.15% 1,509,145,863 80.62% 1,637,475,818 71.52% 1,220,498,938 68.20% 1,212,749,401 75.73%

Current Assets

Inventory 173,494,548 9.02% 184,099,267 9.84% 380,860,526 16.64% 220,784,541 12.34% 151,596,544 9.47%

Trade and Other Receivable 208,981,994 10.86% 163,938,242 8.76% 252,805,887 11.04% 338,926,766 18.94% 228,153,979 14.25%

Advances, Deposits and Prepayments 7,967,455 0.41% 12,583,781 0.67% 16,747,685 0.73% 1,782,487 0.10% 1,235,522 0.08%

Cash and Cash Equivalents 10,620,094 0.55% 2,074,674 0.11% 1,562,805 0.07% 7,574,900 0.42% 7,625,233 0.48%

Total Current Assets 401,064,091 20.85% 362,695,964 19.38% 651,976,903 28.48% 569,068,694 31.80% 388,611,278 24.27%

Total Assets 1,923,476,534 100% 1,871,841,827 100% 2,289,452,721 100% 1,789,567,632 100% 1,601,360,679 100%

EQUITY AND LIABILITIES:

Capital and Reserve

Share Capital 495,995,700 25.79% 495,995,700 26.50% 99,800,000 4.36% 5,000,000 0.28% 5,000,000 0.31%

Share Money Deposit - 0.00% 0.00% 956,950,000 41.80% 1,051,750,000 58.77% 1,051,750,000 65.68%

Retained Earnings 918,136,821 47.73% 764,708,661 40.85% 612,606,842 26.76% 309,834,587 17.31% 114,003,670 7.12%

1,414,132,521 73.52% 1,260,704,361 67.35% 1,669,356,842 72.92% 1,366,584,587 76.36% 1,170,753,670 73.11%

Non-Current Liabilities

Long Term Loan from Bank 218,018,748 11.33% 292,215,682 15.61% 398,146,975 17.39% 235,346,975 13.15% 345,986,529 21.61%

Total Non-Current Liabilities 218,018,748 11.33% 292,215,682 15.61% 398,146,975 17.39% 235,346,975 13.15% 345,986,529 21.61%

Current Liabilities

Current portion of Long Term Loan 67,200,000 3.49% 67,200,000 3.59% 67,200,000 2.94% 67,200,000 3.76% - 0.00%

Trade and Other Payable 120,585,124 6.27% 133,377,010 7.13% 98,676,822 4.31% 81,548,949 4.56% 43,743,025 2.73%

Short term Loan from Bank 80,640,666 4.19% 84,948,176 4.54% 26,065,934 1.14% 29,709,171 1.66% 32,882,672.00 2.05%

Creditors & Accruals 22,899,475 1.19% 33,396,598 1.78% 30,006,148 1.31% 9,177,950 0.51% 7,994,783 0.50%

Total Current Liabilities 291,325,265 15.15% 318,921,784 17.04% 221,948,904 9.69% 187,636,070 10.48% 84,620,480 5.28%

Total Equity & Liabilities 1,923,476,534 100% 1,871,841,827 100% 2,289,452,721 100% 1,789,567,632 100% 1,601,360,679 100%

Particulars

30-06-2015 30-06-2014 30-06-2013 30-06-2012 30-06-2011

(e) Financial Spread Sheet Analysis:


Page | 143

Amount in BDT% on

SalesAmount in BDT

% on

SalesAmount in BDT

% on

SalesAmount in BDT

% on

Sales

Amount in

BDT

% on

Sales

Sales 1,233,721,942 100% 1,201,755,575 100% 1,512,600,470 100% 1,075,864,278 100% 846,529,754 100%

Less: Cost of Goods Sold 997,230,835 80.83% 958,334,436 79.74% 1,113,749,379 73.63% 793,381,225 73.74% 642,363,671 75.88%

GROSS PROFIT 236,491,107 19.17% 243,421,139 20.26% 398,851,091 26.37% 282,483,053 26.26% 204,166,083 24.12%

Less: Operating Expenses 28,381,670 2.30% 27,012,835 2.25% 25,013,717 1.65% 29,237,979 2.72% 27,437,716 3.24%

Operating Income 208,109,437 16.87% 216,408,304 18.01% 373,837,374 24.71% 253,245,074 23.54% 176,728,367 20.88%

Less: Financial Expenses 43,626,705 3.54% 46,173,973 3.84% 57,153,282 3.78% 57,940,644 5.39% 54,280,554 6.41%

Net Operating Income 164,482,732 13.33% 170,234,331 14.17% 316,684,092 20.94% 195,304,430 18.15% 122,447,813 14.46%

Add: Other non-operation Income 530,527 0.04% 517,632 0.04% 626,454 0.04% 526,487 0.05% 844,790 0.10%

Profit before Contribution to WPPF 165,013,259 13.38% 170,751,963 14.21% 317,310,546 20.98% 195,830,917 18.20% 123,292,603 14.56%

Less: Provision to Worker's

PP/Welfare Fund7,857,774 0.64% 8,131,046 0.68% - 0.00% - 0.00% - 0.00%

Profit before Income Tax 157,155,485 12.74% 162,620,917 13.53% 317,310,546 20.98% 195,830,917 18.20% 123,292,603 14.56%

Provision for Income Tax 3,727,325 0.30% 10,519,098 0.88% 14,538,291 0.96% - 0.00% - 0.00%

Net Profit after Tax 153,428,160 12.44% 152,101,819 12.66% 302,772,255 20.02% 195,830,917 18.20% 123,292,603 14.56%

Basic Earnings per Share 3.09 4.82 176.50 391.66 246.59

Diluted Earnings per Share 3.09 3.07 6.10 3.95 2.49

Particulars

2015 2014 2013 2012 2011


Page | 144

(f) Earnings per Share (EPS) on fully diluted basis (The total existing no. of shares):

(g) Net profit excluding Extra-ordinary income or non-recurring income coming from other

than core operations:

Particulars Amount in Taka

2015

Net profit before Tax 157,155,485

Less: Other Income 530,527

Net profit before tax except other income 156,624,958

Less: Provision for Taxation 3,727,325

Net profit after tax except other income 152,897,633

Earnings per shares excluding extra-ordinary income or non-recurring income coming from other than core operations:

Particulars Amount in Taka 2015

Net profit before Tax 157,155,485

Less: Other Income 530,527

Net profit before tax except other income 156,624,958

Less: Provision for Taxation 3,727,325

Net profit after tax except other income 152,897,633

No. of shares 49,599,570

Earnings per Share (EPS) 3.08

(h) Quarterly or half-yearly EPS should not be annualized while calculating the EPS:

Not applicable for IFCO Garments & Textiles Ltd.

(i) Net Asset Value per Share:

IFCO Garments & Textiles Ltd. does not have any Revaluation Reserve, so Net Asset Value per Share is-

Particulars Amount in Taka

2015

Paid-up Capital 495,995,700

Retained earnings 918,136,821

Total Shareholders' Equity 1,414,132,521

Total Number of Ordinary Share 49,599,570

Net Assets Value (NAV) at BDT 10.00 per share 28.51

(k) Auditors Certificates:

i. Statement of Long Term and Short Term Borrowings Including Borrowing from Related Party or Connected Persons

After due verification, we certify that the Long Term and Short Term Borrowings Including Borrowing from Related Party or Connected Persons of IFCO Garments & Textiles Ltd. for the last five years made up as follows:-

Particulars Amount in Taka 2015

Profit Attributable/ Net profit after Tax 153,428,160

No. of shares before IPO 49,599,570

Earnings per Share (EPS) 3.09


Page | 145

For the Year ended June 30, 2015:

Name Of the Parties Nature of Relationshi

p

Nature of Borrowings

Balance as on

June 30, 2015

Interest Rate (%)

Interest Paid (BDT)

Interest Accrued

(BDT)

Al-Arafah Islami Bank Limited

Lender Long term 285,218,748 14% 41,974,518

No outstanding balance of interest for the period

Sub total 285,218,748 41,974,518


Lender Short Term(Bi Moazel Com.)

45,218,793 14% 917,365


Lender Short Term (TR)

35,421,873 14% 734,822

Sub total 80,640,666 16,521,87

Grand Total 365,859,414 43,625,705



p


Balance as on

June 30, 2014

Interest Rate (%)

Interest Paid (BDT)

Interest Accrued

(BDT)


Lender Long term 359,415,682 15% 43,298,547


Sub total 359,415,682 43,298,547


Lender Short Term(Bi

Moazel Com.)

25,421,689 15% 964,811


Lender Short Term(TR)

59,526,487 15% 1,910,615

Sub total 84,948,176 2,875,426

Grand Total 444,363,858 46,173,973



p


Balance as on

June 30, 2013

Interest Rate (%)

Interest Paid (BDT)

Interest Accrued

(BDT)


Lender Long term 465,346,975 17% 53,950,720


Sub total 465,346,975 53,950,720



Moazel Com.)

15,045,247 17% 1,760,372



11,020,687 17% 1,442,190

Sub total 26,065,934 3,202,562

Grand Total 491,412,909 57,153,282




Balance as on

Interest Rate (%)

Interest Paid

Interest Accrued


Page | 146

p June 30, 2012

(BDT) (BDT)


Lender Long term 302,546,975 17% 54,415,765


Sub total 302,546,975 54,415,765



Moazel Com.)

19,852,647 16% 2,768,177



9,856,524 16% 756,702

Sub total 29,709,171 3,524,879

Grand Total 332,256,146 57,940,644



p


Balance as on

June 30, 2011

Interest Rate (%)

Interest Paid (BDT)

Interest Accrued

(BDT)


Lender Long term 345,986,529 17% 51,025,678 No outstanding balance of interest for the period

Sub total 345,986,529 51,025,678


Lender Short Term(Bi Moazel Com.)

26,358,794 16% 2,753,153



6,523,878 16% 5,01,723

Sub total 32,882,627 3,254,876

Grand Total 378,869,201 54,280,554




Page | 147

(ii) Statement of Principal Terms of Secured Loans and Assets on which Charge have been Created against Those Loans

This is to certify that the Principal Terms of Secured Loans as per Agreement and Assets on which charge have been Created Against Those Loans IFCO Garments & Textiles Ltd. for the last five years were as follows:

Long term Loan:

Particulars 30-June-15 30-June-14 30-June-13 30-June-12 30-June-11

Names of lenders Al-Arafah Islami

Bank Ltd. Al-Arafah Islami


Bank Ltd. Al-Arafah

Islami Bank Ltd. Al-Arafah Islami

Bank Ltd.

Purpose Purchase of

Capital Machinery

Purchase of Capital

Machinery

Purchase of Capital

Machinery

Purchase of Capital

Machinery

Purchase of Capital

Machinery

Collateral Asset

27.55 Decimal land &

72,000 Sft building


72,000 Sft building


72,000 Sft building


72,000 Sft building


72,000 Sft building

Sanctioned Amount 47.00 Crore 47.00 Crore 47.00 Crore 40.00 Crore 40.00 Crore

Rate of Interest 14% 15% 17% 17% 17%

Primary/Collateral/Other Security

Land, factory buildings & Machinery





Re-payment schedule 5 Year 5 Year 5 Year 5 Year 5 Year

Status (Outstanding balance Tk.)

285,218,748 359,415,682 465,346,975 302,546,975 345,986,529

Short term Loan (Bi-Moazel Com.):


Names of lenders Al-Arafah Islami Bank Ltd.





Purpose To repay Local

Bills and Salaries

To repay Local Bills and Salaries





Rate of Interest 14% 15% 17% 16% 16%


Land, factory buildings & Machinery, Inventories



,Inventories


,Inventories




45,218,793 25,421,689 15,045,247 19,852,647 26,358,794

Short term Loan (TR):


Names of lenders Al-Arafah Islami


Bank Ltd. Al-Arafah

Islami Bank Ltd. Al-Arafah

Islami Bank Ltd. Al-Arafah Islami

Bank Ltd.

Purpose Purchase of Raw

Materials Purchase of Raw

Materials Purchase of

Raw Materials Purchase of

Raw Materials Purchase of Raw

Materials


Rate of Interest 14% 15% 17% 16% 16%








Page | 148



35,421,873 59,526,487 11,020,687 9,856,524 6,523,878

The above information is certified on the basis of books of accounts, records and supporting bank statements and documents for the period from 01 July, 2010 to 30 June, 2015.



(iii) Statement of Unsecured Loans with Terms & Conditions

This is to certify that based on the books of record and related documents; there was no unsecured loan of IFCO Garments & Textiles Ltd. for the period from 01 July 2010 to 30 June, 2015.



(iv) Statement of Inventories

This is to certify that the statement of inventories showing amount of raw material, packing material, stock-in process and finished goods, consumable items, store & spare parts, inventory of trading goods etc of IFCO Garments & Textiles Ltd. for the last five years were as follows:

Items June 30,2015 June 30,2014 June 30,2013 June 30,2012 June 30,2011

Raw Materials

90,708,226 88,542,453 245,476,268 142,548,762 83,265,486

Packing Materials

17,142,104 41,205,486 42,416,090 9,054,287 12,548,768

Stock-In-Process

30,216,520 30,125,486 43,061,406 9,524,876 9,125,486

Finished Goods

28,754,163 17,451,268 39,544,208 54,287,560 42,685,246

Consumable Items

3,521,048 4,210,356 5,835,853 3,526,489 2,542,765

Store & Spares parts

3,152,487 2,564,218 4,526,701 1,842,567 1,428,793

Trading Goods

- - - - -

Total 173,494,548 184,099,267 380,860,526 220,784,541 151,596,544



Page | 149


(v) Statement of Trade Receivables

Particulars Amount in BDT

2015 2014 2013 2013 2011

General 208,981,994

163,938,242 252,805,887

338,926,766 228,153,979

From Related Party Nil Nil Nil Nil Nil From Connected Persons

Nil Nil Nil Nil Nil

Total 208,981,994

163,938,242 252,805,887

338,926,766 228,153,979



(vi) Statement of Loan Given by the Issuer Including Loans to Related Party or Connected Persons

This is to certify that according to books of accounts, records and other supporting documents of IFCO Garments & Textiles Ltd. (issuer) no loan given by the issuer including loans to related party and connected person during the period from 01 July 2010 to 30 June, 2015.



(vii) Statement of Other Income

This is to certify that there were no interest income, dividend income and discount received except non-operating income as below for the period from 01 July 2010 to 30 June 2015. by IFCO Garments & Textiles Ltd. (issuer). Details are as follows:

The above balance is certified on the basis of books of account records and other supporting documents during the period from 01 July 2010 to 30 June 2015.




2015 2014 2013 2012 2011

Sale of Wastage 530,527 517,632 626,454 526,487 844,790

Total 530,527 517,632 626,454 526,487 844,790


Page | 150

(viii) Statement of Turnover

This is to certify that the details of turnover and receipts from turnover for last five years showing separately in cash and through banking channel of IFCO Garments & Textiles Ltd. are given below:

The above balance is certified on the basis of books of accounts, records and other supporting documents during the period from 01 July 2010 to 30 June 2015.



(ix) Statement of Related Party Transaction

This is to certify that the status of related party transactions as Directors remuneration of IFCO Garments & Textiles Ltd. for the last five years were as follows: A: Director Remuneration & meeting Attendance Fee

Name Current & Previous Position

Year Ended June 30,

2015

Year Ended June 30,

2014

Year Ended June 30,

2013

Year Ended June 30,

2012

Year Ended June 30,

2011 Nur Mohmmed Siddique

MD & Director

305,250 800 800 - -

Mohmmed Morshed MD & Director

4500 300,800 300,800 300,000 150,000

Md. Shahed Director 4,500 800 800 - -

Rukshana Morshed Director - 600 600 - -

Naser Uddin Director - 600 600 - -

MA. Quyum Howladere Director - 600 600 - -

Nazmul sakhawat hossain

Director - 600 600 - -

Mr. Solaiman Director 4500 - - - -

Total 3,18,750 3,04,800 3,04,800 3,00,000 1,50,000

The above balance is certified on the basis of books of accounts records and other supporting documents for the period from 01 July, 2010 to 30 June, 2015.




2015 2014 2013 2012 2011

In Cash - - - - -

Through Banking Channel

Total Turnover 1,233,721,942

1,201,755,575

1,512,600,470

1,075,864,278

846,529,754

Receipt from Turnover

1,188,678,190

1,290,623,220

1,598,721,349 965,091,491 702,220,550


Page | 151

(x) Reconciliation of Business Income Shown in Tax Return with Net Income Shown in Audited Financial Statements

This is to certify that the income of IFCO Garments & Textiles Ltd. as per Audited financial statements and Income shown in Tax Return are similar during last five years ended 01 July 2010 to 30 June 2015 as such there was no matters of reconciliation.



(xi) Auditors’ Discloser Regarding Confirmation That All Receipts And Payments Of The Issuer Above Tk.5,00,000/- (Taka Five Lac) Were Made Through Banking Channel

We have conducted such test of accounting transactions of IFCO Garments & Textiles Ltd. as were considered necessary and do hereby confirm that the company made all receipts and payments except petty cash over Tk. 500,000 (five lac) from 01 July, 2010 to June 30, 2015 through banking channel so far as it appeared from our test of those accounting transactions. Place: Dhaka Sd/- Date: May 2, 2016 AHMAD & AKHTAR


(xii) Auditors’ Discloser Regarding Confirmation that Bank Statements of the Issuer are in

Conformity with Its Books of Accounts

This is to certify that the books of accounts of IFCO Garments & Textiles Ltd. from 01 July, 2010 to June 30, 2015 are in conformity with bank statements.



(xiii) Statement of Payment Status of TAX, VAT and Other Taxes/Duties This is to certify that based on the books of record and related documents of IFCO Garments & Textiles Ltd. payment status of income tax and other taxes/duties are as follows:

Particulars Payment Status

2015 2014 2013 2012 2011

TAX 3,735,753 10,559,906 14,303,371 7,720,732 4,213,323

VAT Exempted Exempted Exempted Exempted Exempted

Custom Duties N/A N/A N/A N/A N/A Place: Dhaka Sd/- Date: May 2, 2016 AHMAD & AKHTAR


Page | 152



Page | 153

SECTION -XXVIII: PUBLIC ISSUE APPLICATION PROCEDURE Step-1 (Applicant) 1. An applicant for public issue of securities shall submit application/buy instruction to the

Stockbroker/ Merchant Banker where the applicant maintains customer account, within the cut-off date (i.e. The subscription closing date), which shall be the 25th(twenty fifth) working day from the date of publication of abridged version of prospectus.

2. The application/buy instruction may be submitted in prescribed paper or electronic form, which shall contain the Customer ID, Name, BO Account Number, Number of Securities applied for, Total Amount and Category of the Applicant. At the same time:

a. Other than non-resident Bangladeshi (NRB) and Foreign applicants shall make the

application money and service charge available in respective customer account maintained with the Stockbroker/Merchant Banker. No margin facility, advance or deferred payment is permissible for this purpose. In case the application is made through a margin account, the application money shall be deposited separately and the Stockbroker/Merchant Banker shall keep the amount segregated from the margin account, which shall be refundable to the applicant, if become unsuccessful.

b. Non-resident Bangladeshi (NRB) and Foreign applicants shall submit bank drafts (FDD), issued in favor of the Issuer for an amount equivalent to the application money, with their application to concerned Stockbroker/Merchant Banker. The draft (FDD) shall be issued by the Bank where the applicant maintains NITA/Foreign Currency account debiting the same account. No banker shall issue more than two drafts from any NITA/Foreign Currency account for any public issue. At the same time, the applicant shall make the service charge available in respective customer account maintained with the Stockbroker/Merchant Banker.


3. The Stockbroker/Merchant Banker shall maintain a separate bank account only for this purpose namely “Public Issue Application Account”. The Stockbroker/Merchant Banker shall: a. post the amount separately in the customer account (other than NRB and Foreign

applicants), and upon availability of fund, block the amount equivalent to the application money;

b. Accumulate all the application/buy instructions received up to the cut-off date, deposit the amount in the “Public Issue Application Account” maintained with its bank within the first banking hour of next working day of the cut-off date. In case of application submitted by the Stock-dealer or the Merchant Banker’s own portfolio, the application amount should also be transferred to the “Public Issue Application Account”;

c. Instruct the banker to block the account for an amount equivalent to the aggregate application money and to issue a certificate in this regard.

4. Banker of the Stockbroker/Merchant Banker shall block the account as requested for, issue

a certificate confirming the same and handover it to the respective Stockbroker/Merchant Banker.


Page | 154

5. For Non-resident Bangladeshi (NRB) and Foreign applicants, the Stockbroker/Merchant Banker shall hold the bank drafts (FDD) submitted by the applicants in their custody with a list containing the draft information against the respective applicant’s particulars.

6. The Stockbroker/Merchant Banker shall prepare category wise lists of the applicants containing Customer ID, Name, BO Account Number and Number of Securities applied for, and within 03 (three) working days from the cut-off date, send it to the respective Stock Exchange in electronic (text format with tilde ‘~’ separator) format and the certificate(s) issued by its banker.

7. On the next working day, the stock exchanges shall provide the Issuer with the information received from the Stockbroker/Merchant Bankers. Stock Exchanges shall verify and preserve the bankers’ certificates in their custody.

8. The application/buy instructions shall be preserved by the Stockbroker/Merchant Bankers up to 6 months from listing of the securities with exchange.

Step-3 (Issuer)

9. The Issuer shall prepare consolidated list of the applications and send the applicants’ BOIDs in electronic (text) format in a CDROM to CDBL for verification. The Issuer shall post the consolidated list of applicants on its website. CDBL shall verify the BOIDs as to whether the BO accounts of the applicants are active or not.

10. On the next working day, CDBL shall provide the Issuer with an updated database of the applicants containing BO Account Number, Name, Addresses, Parents’ Name, Joint Account and Bank Account Information along with the verification report.

11. After receiving verification report and information from CDBL, the Issuer shall scrutinize the applications, prepare category wise consolidated lists of valid and invalid applications and submit report of final status of subscription to the Commission and the stock exchanges within 10 (ten) working days from the date of receiving information from the stock exchanges.

12. The Issuer and the issue manager shall conduct category wise lottery with the valid applications within 03 (three) working days from the date of reporting to the Commission and the Stock Exchanges, if do not receive any observation from the Commission or the Stock Exchanges.

13. The Issuer and issue manager shall arrange posting the lottery result on their websites within 06 (six) hours and on the websites of the Commission and Stock Exchanges within 12 (twelve) hours of lottery.

14. Within 02 (two) working days of conducting lottery, the Issuer shall:

a. Send category wise lists of the successful and unsuccessful applicants in electronic (text format with tilde ‘~’ separator) format to the respective Stock Exchange.

b. send category wise lists of unsuccessful applicants who are subject to penal provisions as per conditions of the Consent Letter issued by the Commission in electronic (text format with tilde ‘~’ separator) format to the respective Stock Exchange mentioning the penalty amount against each applicant.

c. Issue allotment letters in the names of successful applicants in electronic format with digital signatures and send those to respective Stock Exchange in electronic form.


Page | 155

d. Send consolidated allotment data (BOID and number of securities) in electronic text format in a CDROM to CDBL to credit the allotted shares to the respective BO accounts.


15. On the next working day, Stock Exchanges shall distribute the information and allotment letters to the Stockbroker/Merchant Bankers concerned in electronic format and instruct them to:

a. remit the amount of successful (other than NRB and Foreign) applicants to the Issuer’s respective Escrow account opened for subscription purpose and unblock the amount of unsuccessful applicants;

b. send the penalty amount of other than NRB and Foreign applicants who are subject to penal provisions to the Issuer’s respective Escrow Accounts along with a list and unblock the balance application money;

16. On the next working day of receiving the documents from the Stock Exchanges, the Stockbrokers/Merchant Bankers shall request its banker to:

a. release the amount blocked for unsuccessful (other than NRB and Foreign) applicants;

b. remit the aggregate amount of successful applicants and the penalty amount of unsuccessful (other than NRB and foreign) applicants who are subject to penal provisions to the respective ‘Escrow’ account of the Issuer opened for subscription purpose.

17. On the next working day of receiving request from the Stockbrokers/Merchant Bankers,

their bankers shall unblock the amount blocked in the account(s) and remit the amount as requested for to the Issuer’s ‘Escrow’ account.

18. Simultaneously, the stockbrokers/Merchant Bankers shall release the application money

blocked in the customer accounts; inform the successful applicants about allotment of securities and the unsuccessful applicants about releasing their blocked amounts and send documents to the Exchange evidencing details of the remittances made to the respective ‘Escrow’ accounts of the Issuer. The unblocked amounts of unsuccessful applicants shall be placed as per their instructions. The Stockbroker/Merchant Banker shall be entitled to recover the withdrawal charges, if any, from the applicant who wants to withdraw the application money, up to an amount of Tk. 5.00 (five) per withdrawal.

19. All drafts submitted by NRB or Foreign applicants shall be deposited in the Issuer’s

respective ‘Escrow’ accounts and refund shall be made by the Issuer by refund warrants through concerned stockbroker or merchant banker or transfer to the applicant’s bank account through banking channel within 10 (ten) working days from the date of lottery.

Miscellaneous:

20. The Issuer, Issue Manager(s), Stockbrokers and Merchant Bankers shall ensure compliance of the above.

21. The bank drafts (FDD) shall be issued considering TT Clean exchange rate of Sonali Bank Ltd. on the date of publication of abridged version of prospectus.

22. Amount deposited and blocked in the “Public Issue Application Account” shall not be withdrawn or transferred during the blocking period. Amount deposited by the applicants shall not be used by the Stockbrokers/Merchant Bankers for any purpose other than public issue application.


Page | 156

23. The Issuer shall pay the costs related to data transmission, if claimed by the Exchange concerned up to an amount of Tk.2,00,000.00 (taka two lac) for a public issue.

24. The Stockbroker/Merchant Bankers shall be entitled to a service charge of Tk.5.00 (taka five)

only per application irrespective of the amount or category. The service charge shall be paid by the applicant at the time of submitting application.

25. The Stockbroker/Merchant Banker shall provide the Issuer with a statement of the

remittance and drafts sent. 26. The Issuer shall accumulate the penalty amount recovered and send it to the Commission

through a bank draft/payment order issued in favor of the Bangladesh Securities and Exchange Commission.

27. The concerned Exchange are authorized to settle any complaints and take necessary actions

against any Stockbroker/Merchant Banker in case of violation of any provision of the public issue application process with intimation to the Commission.

All eligible Stock Brokers and Merchant Bankers shall receive the IPO Subscription.


Page | 157

APPLICATION FORM

APPLICATION FOR PUBLIC ISSUE

Date:

Name of applicant :

Client Code :

BO ID No. :

Category of applicant :

Name of the Company

:

Number of Shares : …………………………. Shares of Tk. …………………… each

Total amount in Tk. :

Amount in word :

Applicants Authorized Officer

“প ুঁ জি বািারে জবজির াগ ঝ ুঁ জিপূর্ণ।জিরি ও ব রঝ জবজির াগ িরুি”

Documents

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