Rahim Textile Mills Ltd. - New Asia GroupRAHIM TEXTILE MILLS LIMITED TRANSMITTAL LETTER The Shareholders Bangladesh Securi es and Exchange Commission Registrar of Joint Stock Companies

Rahim Textile Mills Ltd.

Annual Report2 0 1 5 - 2 0 1 6

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Annual Report 2016

35th

Annual Report 2015-2016

9848953

RAHIM TEXTILE MILLS LIMITED

TRANSMITTAL LETTER

The ShareholdersBangladesh Securi�es and Exchange CommissionRegistrar of Joint Stock Companies & FirmsDhaka Stock Exchange Ltd.

Sub: Annual Report for the year ended 30th June, 2016.

Dear Sir (s), We are pleased to enclose a copy of Annual Report together with the Audited Financial Statements comprising Statement of Financial Posi�on as at 30th June, 2016, Statement of Profit or Loss and other Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year ended 30th June, 2016 along with notes thereon for your informa�on and records.

Yours sincerely

Syed Saiful HaqueCompany Secretary

Dated: November 16, 2016

RAHIM TEXTILE MILLS LIMITED2

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

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

NOTICE OF THE 35th ANNUAL GENERAL MEETING

No�ce is hereby given that the 35th ANNUAL GENERAL MEETING of the Shareholders of the Company will be held on Monday, 26th December, 2016 at 9.00 a.m. at Trust Milonayaton, 545, Puraton Biman Bandar Sarak (Adjacent to Shahid Bir Shresta Jahangir Gate), Dhaka Cantonment, Dhaka-1206 to transact the following business:

Agenda-1. To receive, consider and adopt the Audited Financial Statements for the year ended 30th June, 2016 together with the Report of the Directors’ and the Auditors’ thereon.

Agenda-2. To declare dividend for the year ended 30th June, 2016.

Agenda-3. To elect Directors in terms of the relevant provision of Ar�cles of Associa�on.

Agenda-4. To appoint Auditors for the year 2016-2017 and to fix their remunera�on.

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

By order of the Board

Syed Saiful HaqueCompany Secretary Dated: November 16, 2016

Notes: (i) The Shareholders whose names would appear in the Share Register of the Company and/or Depository

Register of CDBL on the record date i.e. November 09, 2016 would be en�tled to a�end at the AGM and to receive the dividend.

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

(iii) Admi�ance to the mee�ng venue will be on produc�on of a�endance slip sent with the Annual Report.

(iv) The Annual Report is available in the Company’s website at www.rahimtex�le.com

N.B: No gi� or benefit in cash or kind shall be paid/offered to the hon’ble Shareholders in the 35th AGM of the Company as per BSEC Circular under reference No.SEC/CMRRCD/2009-193/154 dated 24.10.2013.

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Annual Report 2016

Corporate Philosophy:VisionWe view business as a means to the material and social well being of the investors, employees and society at large, leading to accre�on of wealth through financial and moral gains as a part of the process of the human civiliza�on.

Mission:Our mission is to produce and provide world class tex�le and garments products and services and posi�on the country in the higher value segment in the interna�onal market.

Objec�ves:Our objec�ves are to conduct transparent business opera�on based on market mechanism within the legal & social frame work with aims to a�ain the mission reflected by our vision.

Quality Policy:Rahim Tex�le Mills Ltd. is commi�ed to be a provider of world class tex�le products and services by offering unrivalled quality and sa�sfying the customers. The Company is commi�ed to avoid use of dyes and chemicals those are health hazard and harmful for the mankind and environment.

Corporate Governance:Corporate Governance involves decisions making process for any corporate body as a going concern for the benefit of all concerned, present and future. These decisions may be categorized as policy & strategic, opera�onal and execu�ng, performance & evalua�on and sharing of the accre�onal assets between present and future cohorts. The involvement of the entrepreneur in all these areas invokes decision making governance on a con�nuous basis, the degree of involvement being variable with the extent of delega�on of authority top down and repor�ng for accountability bo�om up of the management echelon. These aspects of governance are shared by the Board of Directors, Execu�ve Management, opera�onal par�cipants and workers and others in fulfillment of the common goals that converge in increasing the benefits of the stakeholders. To this end en�re corporate governance efforts are blended with ‘good governance prac�ces’ as ethically and morally acceptable standards under a given socio poli�co environmental phenomenon of our society in which we work live and exist.

The organisms through which the corporate governance func�ons are carried out are:

BOARD OF DIRECTORS:

(a) Cons�tu�on: The Board of Directors, the top Management echelon, consis�ng of the founder entrepreneurs/ successors and Independent Directors, provides the policy and strategic support and direc�on for the en�re range of the corporate ac�vi�es. The Board of Directors consist of Seven (7) members including two Independent Directors with varied educa�on and experience which provides a balancing character in decision making process. The Board is re-cons�tuted every year at each Annual General Mee�ng when one –third of the members re�res and seek re-elec�on. A director is liable to be removed if the condi�ons of the Ar�cles of Associa�on and the provisions of the Companies Act 1994 are not fulfilled.

(b ) Role & Responsibili�es:The main role of the Board of Directors, which is the highest level of authority, is to provide general superintendence, oversee the opera�ons and control the affairs of the Company through appropriate delega�on and accountability processes via the lines of command. However, the Board of Directors hold the ul�mate responsibility & accountability with due diligence for conduc�ng the ac�vi�es of the Company as per provisions of law in the interest of the shareholders, the stakeholders, the state and the society. The Board of Directors, in fulfillment of its responsibility holds periodic mee�ngs, at least once a quarter and provides appropriate decisions/direc�ons to the Execu�ve Management. Such mee�ng usually consider opera�onal performance, financial results, review of budgets, capital expenditure proposals for BMRE or new projects/divisions/product lines, procurement of funds by issue of shares or borrowing, procurement of raw materials, plant & machinery, pricing of products/discounts, recruitment, training and promo�on of officers, approval of audited accounts and distribu�on of dividends and other interest of the stakeholders including the employees and workers. The Board of Directors take special care in designing and ar�cula�ng produc�vity and compensa�on plans of employees and workers and rewarding them appropriately on the basis of quality and quan�ty of performance as an incen�ve. Board also remains responsible for removal of opera�onal hazards to life and health of workers, friendly environmental work condi�on and social rela�onship as demanded of good ci�zen in a country.

(C) Rela�onship with Shareholders and Public:The shareholders as owners are required to be provided with material informa�on on the Company’s opera�on quarterly, half-yearly and annually, the la�er at the AGM. They are also provided rou�ne services by the Company Secretary. The Board is, however, responsible to the Shareholders as well as investors for publica�on of any Price Sensi�ve Informa�on as per BSEC Regula�ons. A qualified & experienced Company Secretary is in charge to discharge all these responsibili�es. The Company has also a web site to provide permissible informa�on/no�ces/price sensi�ve informa�on/financial reports and others for the Shareholders and interested investors.


(d) Rela�onship with Government:In its role on accountability to the government, the Board of Directors is to ensure payments of all dues to government in the form of import duty, custom duty, port charges, VAT, Corporate Taxes and other levies as and when they become due on the basis of actual opera�ons and make sure to avoid corrup�on. This has enabled the Company to enhance its contribu�on to the Na�onal Exchequer on a progressive rate year a�er year.

(e) Rela�onship with Financiers/ Bankers:The Board oversees the financial transac�ons and ensures to meet company’s commitments to the lenders without default.

(f) Rela�onship with Suppliers:The Company has to import plant and machinery and the raw materials from abroad, it has to maintains cordial rela�onship for mutually beneficial interest with its interna�onal as well as local suppliers. This has enabled the company to avoid any legal disputes in interna�onal/local courts and enhanced the Company’s image as a good customer.

(g) Corporate Social Responsibili�es (CSR):The Board of Directors is also aware of the Corporate Social Responsibili�es (CSR) especially in the areas of gender equality, race-religion- regional equality, non- employment of child labor, human rights, environmental pollu�on, social–marke�ng and social-ac�vi�es.

SEPARATE ROLE OF THE CHAIRMAN AND MANAGING DIRECTOR:The posi�ons of Chairman and Managing Director are held separate persons. The Chairman is responsible for func�ons of the Board while the Managing Director serves as the Chief Execu�ve Officer (CEO) of the Company to implement the decision of the Board and to oversee the day to day func�ons as permi�ed by the Ar�cles of Associa�on.

CHIEF FINANCIAL OFFICER, HEAD OF INTERNAL AUDIT AND COMPANY SECRETARY:The Company has appointed Mohammad Sakhawat Hossain, as Chief Financial Officer, Md. Rakibul Islam, as Head of Internal Audit and Syed Saiful Haque, as Company Secretary of the Company as per requirement of Bangladesh Securi�es and Exchange Commission guidelines.

AUDIT COMMITTEE OF BOARD:The Board of Directors has cons�tuted an Audit Commi�ee of the Board consis�ng of three Directors. The Audit Commi�ee is headed by the Independent Director, Dr. Sultan Hafeez Rahman, a renowned economist and former Director General, South Asia of Asian Development Bank (ADB). Other members are Mr. Azizur Rahim Chowdhury, Director and Dr. Shamim Ma�n Chowdhury, Director. The Audit Commi�ee carries out its responsibili�es as per the provisions of law and submits its report to the Board of Directors from �me to �me. The Audit Commi�ee shall also co-ordinates with the Internal and External Auditors as and when required. The Audit Commi�ee ensures that adequate internal checks & balances supported by adequate MIS are in place for detec�on of errors, frauds and other deficiencies. The other responsibili�es include inter alia, not being limited to, the preven�on of conflict of interest between the Company and its Directors, Officials, customers, suppliers, government and any other interest groups and detect or remove any scope of insider trading in the Company’s stock. The Audit Commi�ee also ensures compliance of requirements of BSEC and other agencies. The Audit Commi�ee of the Board held 4 (four) Mee�ngs during the year 2015-2016.

OTHER GOVERNANCE APPARATUS:The Company, in its efforts for Corporate Good Governance Prac�ces, uses a series of top ranking professional service providers including Bankers, Insurers and Technical experts who con�nuously assist the Board of Directors and the Execu�ve Management in properly discharging their du�es to all the shareholders, stakeholders, the Government, and the Public as highlighted below:

(a) Independent Director:In compliance of the BSEC Regula�ons on Good Governance, the Board of Directors as empowered by the Regula�ons, appointed Dr. Sultan Hafeez Rahman, one of the renowned economist and former Director General, South Asia of Asian Development Bank (ADB) and Senior Research Fellow of Bangladesh Ins�tute of Development Studies (BIDS), Adviser/consultant to the Ministry of Jute, Industry and Commerce and Finance and Planning of Govt. of Bangladesh, Member of the Board of Directors of Agrani Bank and Md. Qamrul Huda, one of the Senior Bankers of the country, former Managing Director of Pubali Bank Limited, Eastern Bank Limited and former Chief Execu�ve of BCCI and addi�onal Managing Director of U�ara Bank Limited and General Manager of Janata Bank as the non-shareholder Independent Directors. It is expected that their exper�se would help contribute to the further disclosure and protect the interest of all investors in general and smaller investors in par�cular.

(b) Bankers:The degree of efficient business opera�on largely depends on the quality & efficiency of banking services received by the company. Efficient banking service brings down cost of opera�ons. On the other hand, cost of financial services and interest on the lending by the banks are also required to be the minimum. With this end of view, the company has established long term business rela�onship with the banks namely AB Bank Limited and The City Bank Limited who provide most efficient service at minimum cost/interest that benefit the shareholders.The company has neither ever defaulted in any commitment with its Bankers nor did get entangled in legal dispute at any court.

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Annual Report 2016

(c) Insurer:Insurance services cover certain opera�onal risks which are required by law/business prac�ces to be covered by legi�mate insurance service providers for protec�on of the interest of the company, the investors. To this end, the company has to select insurer with the most efficient, reputed and financially sound history so that claims, if any, are se�led promptly and the premium rates are market compe��ve. The Company, based on these considera�ons, is maintaining insurance business rela�onship with the highly reputed and publicly listed insurance companies namely Pioneer Insurance Co. Ltd., Peoples Insurance Co. Ltd. and United Insurance Co. Ltd.

The company has not yet faced any dispute over any claims and the company enjoys special premium rates which protects the interest of the investors.

(d) Auditors:The role of the auditors in cer�fica�on of the financial statement is the most significant aspect of Corporate Governance and protec�on of interest of investors. As evident from the Annual Reports, the company rigidly follows the code of Interna�onal Accoun�ng Standards (IAS) and Bangladesh Accoun�ng Standards (BAS) with legally required disclosures of Accounts and Financial Statements. This has been possible due to the high level capability and integrity of M/s. Malek Siddiqui Wali, Chartered Accountants whose performance has played a very trustworthy role in the protec�on of interest of the investors.

MANAGEMENT COMMITTEE:The Management Commi�ee is led by the Managing Director (CEO) who has been appointed by the Board of Directors for a term of 5 years (renewable) with the approval of Shareholders in the Annual General Mee�ng. The Managing Director is supported by professional, well educated, trained and experienced team consis�ng of Mr. Ghaus Mohammad, Director-HR & Admin, Mr. Saiful Haq, Execu�ve Director and Mohammad Sakhawat Hossain, Chief Financial Officer.

SEGMENT REPORT:The company’s opera�ons are carried out on a single business and geographic segment within which the company operates and as such no segment repor�ng is felt necessary.

RISK PERCEPTION:The Company Management perceives investment risk within the na�onal and interna�onal economic perspec�ves in rela�on to legal and moral requirements involving inter alia, intellectual property right, scien�fic inven�on, WTO Regula�on etc. and monetary and fiscal investment policies and has prepared its produc�on & marke�ng strategies to meet the challenges from these risks.

WE STRIVE FOR

• We in Rahim, strive, above all, for top quality products at the least cost.

• We owe our shareholders and strive for protec�on of their capital as well as ensure highest return and growth of their assets.

• We strive for best compensa�on to all the employees who cons�tute the back-bone of the management and opera�onal strength of the Company.

• We strive for the best co-opera�on of the creditors and debtors the banks & financial ins�tu�ons who provide financial support when we need them, the suppliers of raw materials & suppliers who offer them at the best prices at the opportune moments, the providers of u�li�es- power, gas & water etc. and the customers who buy our products and services by redeeming their claim in �me by making prompt payment and by distribu�ng proper product on due dates to our customers.

• We strive for fulfillment of our responsibility to the Government through payment of en�re range of due taxes, du�es and claims by various public agencies like municipali�es etc.

• We strive, as responsible ci�zen, for a social order devoid of malprac�ces, an� environmental behaviors, unethical and immoral ac�vi�es and corrup�ve dealings.

• We strive for prac�cing good-governance in every sphere of ac�vi�es covering inter alia not being limited to, disclosure & repor�ng to shareholders, holding AGM in �me, distribu�on of dividends and other benefits to shareholders, repor�ng/dissemina�on of price sensi�ve informa�on etc.

• We strive for equality in sexes, races, religions and regions in all sphere of opera�on without any discriminatory treatment.

• We strive for an environment free from pollu�on and poisoning.

• We strive for the achievement of Millennium development goals for the Human Civiliza�on.


CORPORATE REVIEWI. MANAGEMENT APPARATUS:

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

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

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

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

(e) AUDITORS: Malek Siddiqui Wali Chartered Accountants

(f ) COMPANY SECRETARY: Mr. Syed Saiful Haque

(g) BANKERS: i. AB Bank Ltd. ii. The City Bank Ltd. (h) INSURERS: i. Pioneer Insurance Co. Ltd. ii. Peoples Insurance Co. Ltd. iii. United Insurance Co. Ltd.

(i) LISTING: Dhaka Stock Exchange Ltd.

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

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

(l) INVESTORS’ RELATION DEPARTMENT: Md. Kamruzzaman Fax No-880-2-9848953, E-mail: [email protected], Tel: 880-2-8832771-82, Ext-282 Cell: 8801729272080

(m) FACTORY: Shafipur, Kaliakoir, Gazipur.

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Annual Report 2016

II. CORPORATE HISTORY:

• Year of Incorpora�on : 31 December, 1981• Year of Commencement of Produc�on : 01 July, 1987• Year of Ini�al Public Offering (IPO) : 1988• Stock Exchange Lis�ng date : 29 March, 1988• Awarded Oeko-Tex Cer�ficate : 20.09.2010• Authorized Capital : Tk.500 Million• Paid Up Capital : Tk.48.559 Million• Product Lines : Dyeing, Prin�ng of Woven & Knit Fabrics• Number of Shareholders (30th June 2016) : 2555• Number of Employees (30th June 2016) : 588

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

Par�culars 2015-16 2014-15 2013-14 2012-13 2011-12Turnover 630,290 598,622 575,293 572,483 470,214Gross Profit 108,568 92,310 70,211 83,094 68,151Opera�ng Profit 60,540 35,291 14,675 19,276 2,859Net Profit before Tax 54,060 33,723 27,069 15,623 5,225Net Profit a�er Tax 43,331 23,565 23,180 12,795 4,418Total Assets 655,513 624,344 710,654 571,726 644,672Fixed Assets 444,607 448,491 485,851 432,308 467,306Total Bank Loan 197,886 236,787 380,228 272,338 339,883Total Current Assets 210,906 175,853 224,802 139,418 177,366Total Current Liabili�es 365,522 327,935 416,828 325,056 333,527Current Ra�o 0.58:1 0.54:1 0.54:1 0.43:1 0.53:1Authorized Capital 500,000 500,000 500,000 500,000 500,000Paid up Capital 48,559 34,685 27,527 22,022 20,020Number of shares outstanding 4,855,851 3,468,465 2,752,750 2,202,200 2,002,000Shareholder’s Equity 234,285 190,954 167,390 156,024 147,899Face Value per Share 10 10 10 10 10Cash Dividend Per Share (%) - - - - -Stock Dividend (%) 40 40 26 25 10Return on Paid up Capital 40% 40% 26% 25% 10%Net Assets Value per Share (NAV) 48.25 55.05 60.81 70.85 73.88Net Opera�ng Cash Flow per Share 32.66 26.89 20.13 24.58 72.36Earning per share (Tk.) 8.92 *4.85 6.68 4.65 0.51Number of Shareholders 2555 2641 2,429 2,423 1,257Number of Employees 588 423 363 351 328Produc�on (In Lac yards) 230.68 220.20 195.92 199.78 162.00• Earning per share for the year 2014-15 has been restated.

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MESSAGEFROM THE CHAIRMAN

Dear Shareholders,

I consider it a great honor to welcome you on behalf of the Board of Directors to the 35th Annual General Mee�ng of Shareholders of Rahim Tex�le Mills Ltd. and to present before you the Annual Report along with the Audited Financial Statements and the Auditors’ and Directors’ Report thereon of the Company for the year ended 30th June, 2016.

During the financial year 2015-2016 the Company succeeded in making the net profit due to increase in turnover of Tk.31.67 million compared to previous year and decrease in percentage of cost of goods sold by 1.81% (Tk.506.31 million i.e. 84.58% of turnover in 2014-15 and Tk.521.72 million i.e. 82.77% of turnover in 2015-16) and decrease in percentage of financial expenses by 2.50% compared to previous year.

Earlier the Board of Directors in its mee�ng held on 8th November, 2010 had approved a BMRE plan (Plan No.-1) for Tk.35.00 crore out of which a sum of Tk.16.08 crore had so far been u�lized. The Board, taking considera�on of overall social, economical, poli�cal situa�on and careful review, decided to discon�nue the remaining work of exis�ng BMRE plan No.-1 and in its Board mee�ng held on 21st March, 2016 passed another BMRE plan (Plan No.-2) for Tk. 57.53 crore, which was disseminated as price sensi�ve informa�on. As against our BMRE plan No.-2, The City Bank Ltd. approved Tk.47.00 crore as project loan. Out of which import of Machinery & Equipment’s and construc�on of Building are under process. At present our produc�on capacity stood 265.20 lac yards.

Bangladesh Securi�es and Exchange Commission (BSEC) has introduced mandatory Guidelines on Corporate Governance. The Board of Directors of the Company is commi�ed to deliver good governance and exercise best prac�ces in all respects, for us, good governance is about managing the business effec�vely and responsibly and in a way which is honest, transparent, showing accountability and abiding by the laws of the land.

As you are aware, though the global recession which began in 2008-09 has gradually weakened over the years, the nega�ve impacts however s�ll remains. In fact, the world economic trend was never in our favor during this period. In spite of this our GDP growth rate had exceeded 7.00 percent. The vital export market for Ready Made Garments (RMG) products from Bangladesh is under watchful scru�ny of USA and EU. We are striving to ensure that our compliance standards improve and we remain compe��ve and con�nue to grow and gain further access to the markets abroad.

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

Didar A. HusainChairman

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Annual Report 2016

RAHIM TEXTILE MILLS LIMITEDDIRECTORS’ REPORT TO THE SHAREHOLDERS

FOR THE YEAR 2015-2016

Dear Shareholders, In terms of provisions of Sec�on 184 of the Companies Act 1994, Rule 12 of the Bangladesh Securi�es and Exchange Rules 1987, BSEC No�fica�on dated 07 August 2012 and IAS (Interna�onal Accoun�ng Standards) codes as adopted by the Ins�tute of Chartered Accountants of Bangladesh (ICAB), it is the pleasure of the Board of Directors to submit its Report to the Shareholders for the year ended 30th June, 2016 in the following paragraphs.

TEXTILE SECTOR:Industry outlook and possible future developments in the industry: Although we are not ge�ng uninterrupted power supply in spite of this our produc�on capacity u�liza�on has been increased by 3.95% compared to previous year. At present our installed produc�on capacity is 265.20 lac yards. The turnover growth of our company during the past few years are given below: Year Company’s Growth Rate 2015-2016 5.29% 2014-2015 4.06% 2013-2014 0.49% 2012-2013 21.75% 2011-2012 14.90%COMPANY’S OPERATIONS:Segment-wise or product wise performance: The actual produc�on performance for the year under review has been affected due to shortage of power/gas supply. In spite of this u�liza�on of produc�on capacity has increased from 83.03% to 86.98%. We are pleased to inform you that we have performed well in net profits and are regular in debt servicing. Earlier the Board of Directors in its mee�ng held on 8th November, 2010 had approved a BMRE plan No.-1 for Tk.35.00 crore out of which a sum of Tk.16.08 crore had so far been u�lized. The Board, taking considera�on of overall social, economical, poli�cal situa�on and careful review, decided to discon�nue the remaining work of exis�ng BMRE plan No.-1 and in its Board mee�ng held on 21st March, 2016 passed another BMRE plan No.-2 for Tk. 57.53 crore. Thus as against our BMRE plan No.-2 we got sanc�on from The City Bank Ltd. Tk.47.00 crore as project loan. Out of this import of Machinery and Equipment’s & construc�on of Building is under process. A compara�ve statement of produc�ons posi�on are given below:

Par�culars 2015-2016 2014-2015 % Increase/(decrease)01 Produc�on Capacity:a) Dyeing, Prin�ng & Finishing unit (Lac yards) 265.20 265.20 0%

02 Actual Produc�on:a) Dyeing, Prin�ng & Finishing unit (Lac yards) 230.68 220.20 4.76%

03 Capacity U�liza�on:a) Dyeing, Prin�ng & Finishing unit (Lac yards) 86.98 83.03 3.95%

Risk and concerns:Global market is changing con�nuously with demand for fabric on the increase. New trends in fabric development were seen in the year under review. Environment, economic & poli�cal issues affects the trends and nature of business. Health and safety issues are also factors of concern. Price increase of raw materials and the price hike of energy has affected manufacturing cost. The call to go green to meet environmental and compliance requirements has caused a shi� in selec�ng eco-friendly chemicals which are expensive. Our efforts are to offset this imbalance through constant research and exploring alterna�ve sources. Our objec�ve is to reduce the chemical usage in produc�ons. Analysis of Cost of Goods sold, Gross Profit Margin and Net Profit Margin:(a) Cost of Goods Sold:This year’s cost of goods sold was Tk.521.72 million (82.77% of turnover) as compared to last year’s cost of goods sold of Tk.506.31 million (84.58% of turnover). This is due to the fact that there has been decrease in average produc�on cost by Tk.0.38 per yds (Tk.22.62 in 2015-2016 per yds and Tk.23.00 in 2014-2015 per yds). The increase in produc�on quan�ty is 10.48 Lac yards over the last year. Produc�on capacity u�lized during the year was 86.98%.

(b) Gross Profit:The turnover of the company during the year was Tk.630.290 million as against last year’s turnover of Tk.598.622 million. The increase in turnover is 5.29% over the last year. Gross Profit earned during the year was Tk.108.568 million (17.23% of turnover) as against last year’s gross profit of Tk.92.310 million (15.42% of turnover). The increase in Gross Profit ra�o is due to decrease in prices of Dyes & Chemicals (Raw materials) and other overheads. The Gross profit ra�o has increased by 1.81% over the previous year due to turnover quan�ty has increased compared to the previous year.(c) Net Profit:Net profit (a�er tax) earned during the year was Tk.43.331 million as compared to last year’s Net profit (a�er tax) of Tk.23.565 million. During the year net profit a�er tax has increased due to increase of turnover and decrease of financial expenses on turnover by 2.50% compared to previous year.


Extra-Ordinary gain or loss:During the year the company incurred loss on disposal of fixed assets (old machinery) at Tk.3,828,601 and a�er adjustment of Tk.51,803 as other income (net interest received from FDR) balance amount of Tk.3,776,798 has been shown as Non Opera�ng Income which has been shown in note no.25.00 in the Notes of Account.

Related party transac�ons:Related party transac�ons are depicted in Note no. 30.00 in the Notes of Account.

U�liza�on of proceeds from public issues and/or right issues:There were no public issues and/or right issues offered during the year.

Financial results a�er the company goes for Ini�al Public Offering (IPO), Repeat Public Offering (RPO), Rights Offer, Direct Lis�ng, etc.:Ini�al Public Offering was made on 1988. There were no Repeat Public Offering, Rights Offer, Direct Lis�ng, etc. in the history of the company.

Variance between Quarterly Financial performance and Annual Financial Statements:The unaudited Earning per share (EPS) for 1st quarter was Tk.2.69, 2nd quarter Tk.4.36 and 3rd quarter Tk.6.40. A�er Audit the Annual Earning per share (EPS) stood at Tk.8.92. The quarterly variance between 1st quarter to 2nd quarters occurred due to allotment of 1,387,386 number Bonus share for the year 2014-15. Otherwise there were no major variance between the quarterly financial performances.

Remunera�on to directors including independent directors:The remunera�on of Directors including Independent Directors are depicted in Note no.23.01 in the Notes of Account.

Statement of Directors on Financial Reports:The above reports are depicted in Annexure-I

Significant devia�ons from the last year’s opera�ng results:Turnover increased by 5.29% over the last year. However, the Cost of goods sold (COGS) decreased by 1.81% due to decrease in price of Dyes & Chemicals and increase of sales quan�ty. Financial expenses decreased by 2.50% due to repayment of term loan in �me. As a result, opera�ng profit has increased by 3.70% on sales compared to last year (2014-2015 was 5.90% and 2015-2016 is 9.60%).

FINANCIAL RESULTS:The compara�ve statements of financial results of the Company for the year 2015-2016 as compared to previous year are summarized as follows: (Tk. in Thousand)Par�culars 2015-16 2014-15 % Increase/(Decrease)Turnover 630,290 598,622 5.29%Cost of goods sold 521,722 506,312 (1.81%)Gross profit 108,568 92,310 1.81%Opera�ng expenses 31,638 26,517 0.59%Financial expenses 16,390 30,501 (2.50%)Opera�ng profit 60,540 35,291 3.70%Net profit (AT) 43,331 23,565 2.93%Gross profit margin 17.23% 15.42% 1.81%Net profit margin 6.87% 3.94% 2.93%Earning per share (Tk.) 8.92 *4.85 --Face value per share 10 10 --*Earning per share restated in the year 2014-15.Key opera�ng and financial data of last 5 (five) years have been presented in summarized form at page no. 08

Dividend:Board of Directors has recommended for declara�on of Stock Dividend @ 40% i.e. 0.40 (Zero point four zero) Bonus Share for every 01 (One) ordinary shares held by the shareholders on the Record date.

MARKETING: Global market behavior is guided by trends, fashion demands, value etc. These challenges were faced con�nuously in achieving our objec�ves to capturing a greater market share. The most effec�ve tools were innova�on. New prin�ng and dyeing houses posed a threat and compe��on was intense. Through innova�on we used different techniques in dyeing, prin�ng and finishing. We adopted the new trends in our marke�ng policy. Good intercommunica�on with buyers and our suppliers helped in a�aining our goals and ensured a good bonding. We have moved forward and are shredding our image of commission woven dyeing to a complete woven package dyeing house. We are providing dyed and printed woven fabric to buyers. In prin�ng the trend is towards digital prin�ng. We need to adopt this trend in order to remain strong. We are happy to inform that we have weathered the compe��on and impediments and made posi�ve progress. The future looks strong.

CAPITAL EXPENDITURES:During the year 2015-16 the following capital expenditure were incurred by us with own finance: (Tk. in million)Par�culars 2015-2016 2014-2015 2013-2014Land/civil construc�on 2.20 ----- 1.24Plant & Machinery 34.04 2.54 110.89Other Fixed Assets 4.97 1.31 7.66Total 41.21 3.85 119.79

11

Annual Report 2016

LONG TERM LOAN REPAYMENT:During the year the company has repaid the Term Loan amoun�ng to Tk.93,189,088 and Director’s loan amoun�ng to Tk.14,953,649. As a -result the Term Loan posi�on and Director’s loan posi�on as on 30th June, 2016 stood at Tk.66,864,433 and Tk. Zero respec�vely.

APPROPRIATION OF PROFIT:The Board of Directors recommended for appropria�on of profit as follows:Retained Earnings brought forward from previous year : Tk. 68,077,465.00Less: Dividend distribu�on for the year 2014-2015 : (Tk.13,873,860.00)Balance surplus brought forward : Tk. 54,203,605.00Add: Net Profit (a�er tax) during the year 2015-2016 : Tk. 43,331,033.00Add: Transfer to retained earnings : Tk. 2,302,793.00Add: Transfer for disposed Assets : Tk. 89,811.00Total net free surplus available for appropria�on : Tk. 99,927,242.00Appropria�on Proposed: (i) Stock Dividend (Bonus Shares) in the ra�o of 1:0.40 (40%) i.e. 0.40 (Zero point four zero) Bonus Share for every 01(One) ordinary share held on Record Date :(Tk.19,423,404.00)Retained Earnings a�er payment of Dividend Tk. 80,503,838.00

DECLARATION OF DIVIDEND:In the line of proposed appropria�on of profit, the Board of Directors proposed and recommended for declara�on of Stock Dividend (Bonus Share) @ 40% for the year 2015-2016. This will need issuance of 1,942,340.40 Ordinary Shares of Tk.10.00 each by capitaliza�on of Tk. 19,423,404.00 out of Retained Earnings (free reserves). The stock dividend will be available to the Shareholders whose names would appear in the Share Register of the Company or in the Depository on the record date.

ELECTION OF DIRECTORS:Rota�on of Directors:Pursuant to Ar�cle clause 120 of the Ar�cles of Associa�on of the Company Mr. Didar A. Husain, Director and Ms. Saima Ma�n Chowdhury, Director shall re�re by rota�on and being eligible as per Ar�cle 121 of the Ar�cles of Associa�on of the Company, they offered themselves for re-elec�on. Brief resume and other informa�on of the above men�oned directors as per clause 1.5 (xxii) of BSEC no�fica�on date 7th August, 2012 are depicted in ANNEXURE –III.

APPOINTMENT OF AUDITORS:M/s. Malek Siddiqui Wali, Chartered Accountants, Auditors of the Company, will re�re at this Annual General Mee�ng (AGM) and being eligible offered themselves for re-appointment as auditors of the company for the year 2016-2017. M/s. Malek Siddiqui Wali, Chartered Accountants, is a panel auditors of BSEC. The Board recommended M/s. Malek Siddiqui Wali., Chartered Accountants, 9-G, Mo�jheel C/A, Dhaka-1000 for re-appointment as auditors of the Company of the year 2016-2017 with fixa�on of their remunera�on.

RE-APPOINTMENT OF INDEPENDENT DIRECTOR:The Board of Directors in its mee�ng held on 06th June, 2016 decided to re-appoint Md. Qamrul Huda as Independent Director of the Company for a further period of 3 (three) years with effect from 19th June, 2016 as per BSEC Regula�ons and recommended for approval by the shareholders in the ensuing Annual General Mee�ng. Brief resume and other informa�on of the above men�oned director is depicted in ANNEXURE-III.

CORPORATE GOVERNANCE:Corporate Governance is the prac�ce of good ci�zenship, through which the Company is governed by the Board, keeping in view its accountability to the shareholders and to the society. A statement in pursuance to clause 1.5, report of compliance, audit commi�ee report as per clause 3.5, cer�ficate from professional accountant as per clause 7(i) and a status of compliance as per clause 7(ii) of the BSEC No�fica�on No.SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012 are depicted/disclosed in the ANNEXURE -I, II, III, IV, V, VI and VII respec�vely.

ACKNOWLEDGEMENT:The Directors are pleased to express their gra�tude for the co-opera�on and support provided by the Shareholders, Customers, Bankers, Insurance Companies, Suppliers, BSEC, DSE, CDBL and dedica�on by Workers and Employees of the company without whose ac�ve support the result would not have been possible.

Looking forward to a bright future for all of us.

On behalf of the Board of Directors,

Didar A. HusainChairman

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


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13

Annual Report 2016

(M) bxU gybvdv tPjwZ eQ‡i (Ki cieZ©x) bxU gybvdv AwR©Z n‡q‡Q 43.331 wgwjqb UvKv hv weMZ eQ‡i wQj 23.565 wgwjqb UvKv| PjwZ eQ‡i Ki cieZx© bxU gybvdv e„w× cvIqvi Kvib n‡”Q c~e©eZ©x eQ‡ii Zzjbvq Avw_©K LiP 2.50% n«vm cvIqv Ges weµ‡qi cwigvb e„w× cvIqv|A¯^vfvweK jvf ev ÿwZ tPjwZ eQ‡i †Kv¤úvbx ¯’vqx m¤úwË (civZb ‡gwkbvix) ÿwZ‡Z weµq K‡i‡Q 3,828,601 UvKv hvn‡Z 51,803 UvKv Ab¨vb¨ Avq mgš^q Kivi ci 3,776,798 UvKv bb-Acv‡iwUs Avq wn‡m‡e cÖ`k©b Kiv n‡q‡Q, hv wnmv‡ei †bvU bs 25.00 G cª`wk©Z n‡q‡Q| AvšÍtm¤ú©wKZ †Kv¤úvbxi †jb‡`b mg~n twnmv‡ei †bvU bs 30.00 †Z AvšÍtm¤úwK©Z †jb‡`bmg~n eb©bv Kiv n‡q‡Q|cvewjK Bmy¨ A_ev ivBU Bmy¨ n‡Z cÖvß Znwe‡ji eënvi tG eQi †Kvb cvewjK Bmy¨ A_ev ivBU Bmy¨ Kiv nq bvB|Bbwmqvj cvewjK Advwis (AvBwcI), wiwcU cvewjK Advwis (AviwcI), ivBU Advi, WvB‡i± wjw÷s BZ¨vw` †_‡K A_© ev Znwej cÖvwßi ci †Kv¤úvbxi Avw_©K Ae¯’v tBbwmqvj cvewjK Advwis (AvBwcI) m¤úbœ n‡q‡Q 1988 mv‡j| cieZ©x‡Z †Kvb wiwcU cvewjK Advwis (AviwcI), ivBU Advi, WvB‡i± wjw÷s BZ¨vw` Kiv nq bvB|evwl©K Avw_©K weeibx I ˆÎgvwmK Avw_©K Ae¯’vi weeibxi g‡a¨ cv_©K¨ t‡Kv¤úvbxi AwbixwÿZ wnmve Abyqvqx cÖ_g †KvqvUv‡ii Avwb©s cvi †kqvi (BwcGm) wQj 2.69 UvKv, wØZxq †KvqvUv‡ii 4.36 UvKv Ges Z…Zxq †KvqvUv‡ii 6.40 UvKv| wbixÿvi ci evwl©K PzovšÍ wnmv‡e Avwb©s cvi †kqvi (BwcG&m) `vwi‡q‡Q 8.92 UvKv| cÖ_g †KvqvUvi Ges wØZxq †KvqvUv‡i BwcGmG cv_©K¨ nIqvi Kvib 2014-2015 A_© eQ‡ii jf¨vsk eve` 1,387,386 wU †evbvm †kqvi eivÏ Kiv| &GQvov †KvqvUviwj Avw_©K cÖwZ‡e`‡bi g‡a¨ †Zgb †Kvb cv_©K¨ cwijwÿZ nqwb|¯̂Zš¿ cwiPvjKmn cwiPvjK‡ì cvwikÖwgK twnmv‡ei †bvU bs 23.01-G ¯̂Zš¿ cwiPvjKmn cwiPvjK‡ì cvwikÖwgK eb©bv Kiv n‡q‡Q|Avw_©K cÖwZ‡e`‡bi Dci cwiPvjKM‡Yi wee„wZ tDc‡iv³ wi‡cvU©mg~n G‡b·vi-1 G eb©bv Kiv n‡q‡Q|weMZ eQ‡ii cwiPvjbvMZ djvd‡ji mwnZ PjwZ eQ‡ii eëavb tweMZ eQ‡ii Zzjbvq Uvb©Ifvi 5.29% e„w× †c‡q‡Q| hwÌ wewµZ c‡bï e¨q n«vm †c‡q‡Q 1.81% WvBm I K¨vwg‡Kjm Gi LiP n«vm cvIqv Ges weµ‡qi cwigvb ‡e‡o hvIqvi Rb¨| Avw_©K LiP 2.50% n«vm †c‡q‡Q Uvg© †jvb h_v mg‡q cwi‡kva Kivi Rb¨| djkÖæwZ‡Z Acv‡iwUs gybvdv weµ‡qi Dci e„w× ‡c‡q‡Q 3.70% weMZ eQ‡ii Zzjbvq (2014-2015 eQ‡i wQj 5.90% Ges 2015-2016 eQ‡i 9.60%)|

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15

Annual Report 2016

ANNEXURE –I

The Directors also report that:• Related Party Transac�ons are depicted in Note no.3.24 in the Notes of Account.• Remunera�on of Directors including Independent Director have been shown in Note no.23.01 in the Notes of Account.• The Financial Statement of the Company present true and fair view of the Company’s state of affairs, result of its opera�ons, cash

flows and changes in equity.• Proper books of accounts as required by the prevailing law have been maintained.• Appropriate accoun�ng policies have been followed in formula�ng the financial statements and accoun�ng es�mates were

reasonable and prudent.• The financial statement was prepared in accordance with IAS/BAS/IFRS/BFRS.• The internal control system is sound in design and is effec�vely implemented and monitored.• There is no significant doubt about the company’s ability to con�nue as a going concern.• Significant devia�on from the opera�ng result compared to the last year is depicted in page no 11 above• Key opera�ng and financial data of last five years have been presented in summarized form in page no. 08• The number of Board Mee�ng and the a�endance of directors during the year 2015-2016 were as follows:

Name of Directors Posi�on Mee�ng Held A�ended Didar A. Husain Chairman 08 04 A. Ma�n Chowdhury Managing Director 08 08 Dr. Shamim Ma�n Chowdhury Director 08 08 Saima Ma�n Chowdhury Director 08 03 Azizur Rahim Chowdhury Director 08 07 Dr. Sultan Hafeez Rahman Independent Director 08 07 Md. Qamrul Huda Independent Director 08 07

• The pa�ern of shareholding as required by clause 1.5 (xxi) of the BSEC No�fica�on dated 07 August, 2012, stated in Annexure-II.

• Informa�on of Directors who seek appointment/re-appointment as required by clause 1.5 (xxii) of the BSEC No�fica�on dated 07 August, 2012, stated in Annexure-III.

• Status of compliance with the condi�ons imposed by the Bangladesh Securi�es and Exchange Commission is enclosed as Annexure –VII.

ANNEXURE-IIPa�ern of Shareholding as on 30th June, 2016:

Name of the Shareholders Status Shares held %i. Parent/Subsidiary/Associated Companies and other related par�es Nil Nil Nilii. Directors: Didar A. Husain Chairman 918,447 18.91 A. Ma�n Chowdhury Managing Director 945,420 19.47 Dr. Shamim Ma�n Chowdhury Director 713,701 14.70 Saima Ma�n Chowdhury Director 974,370 20.06 Azizur Rahim Chowdhury Director 175,688 3.62 Dr. Sultan Hafeez Rahman Independent Director Nil Nil Md. Qamrul Huda Independent Director Nil Niliii. Chief Execu�ve Officer, Chief Financial Officer, Company Secretary, Head of Internal Audit and their Spouses and Minor Childrens: A. Ma�n Chowdhury Chief Execu�ve Officer 945,420 19.47 Mohammad Sakhawat Hossain Chief Financial Officer Nil Nil Syed Saiful Haque Company Secretary Nil Nil Md. Rakibul Islam Head of Internal Audit Nil Nil Shirin Didar Husain Wife of Mr. Didar A. Husain 143,294 2.95 Dr. Shamim Ma�n Chowdhury Wife of Mr. A. Ma�n Chowdhury 713,701 14.70iv. Execu�ves Nil Nil Nilv. Shareholders holding 10% or more vo�ng interest in the Company Didar A. Husain Chairman 918,447 18.91 A. Ma�n Chowdhury Managing Director 945,420 19.47 Dr. Shamim Ma�n Chowdhury Director 713,701 14.70 Saima Ma�n Chowdhury Director 974,370 20.06


ANNEXURE-IIIBrief Resume of the Directors

Directors who seek re-appointment:

Mr. Didar A. Husain:Mr. Didar A. Husain is a renowned and dynamic personality in the Tex�le Sector of Bangladesh. Just a�er comple�ng HSC with Honors from Faujdarhat College and while a freshman at Dhaka University, Department of History, he joined the Libera�on War of Bangladesh in 1971, and was commissioned in the Bangladesh Army during the war. Having served with the Army with dis�nc�on which included being Instructor in the Infantry School for 3 (three) years, he re�red as a Major in 1981.

He is the founder sponsor Director of Rahim Tex�le Mills Limited since 1981. He has more than 34 (thirty four) years’ experience in the Tex�le Sector. He is the Chairman of Rahim Tex�le Mills Limited and Managing Director of Graphics Informa�on System Ltd, Property Care Services Bangladesh (Pvt.) Ltd. and Director of Hejaz Publica�ons Ltd. Mr. Husain has been ac�vely involved in the organiza�onal ac�vi�es of Bangladesh Tex�le Mills Associa�on (BTMA) and was Vice President for the year 2005 and 2006. He was also a Member of the Business Advisory Body of CRP (Center for Rehabilita�on of the Paralyzed), Savar.

Ms. Saima Ma�n Chowdhury:Ms. Saima Ma�n Chowdhury is a Director of the Company since 2007, daughter of Mr. A. Ma�n Chowdhury. She is a bright young execu�ve having High School gradua�on from Concord Academy, Concord, Massachuse�s, USA- B.Sc. from Swarthmore College, Pennsylvania, USA and MBA from Wharton Business School, University of Pennsylvania USA. She has work experience in the Unites States with Ernst & Young and Victoria’s Secret. She has more than 09 (nine) years working experience in the tex�le sector. She is also the Director of Malek Spinning Mills Limited (listed company), Salek Tex�le Limited, J.M. Fabrics Limited, Fatehbagh Tea Company Limited and Design Asia Limited.

Re-Appointment of Independent Director:Md. Qamrul HudaMd. Qamrul Huda, one of the Senior Bankers of the country former Managing Director of Pubali Bank Limited, Eastern Bank Limited and former Chief Execu�ve of BCCI and addi�onal Managing Director of U�ara Bank Limited and General Manager of Janata Bank. Mr. Qamrul Huda has been re-appointed as Independent Director of the Company for a further period of 3 (three) years by the Board of Directors of Rahim Tex�le Mills Limited on 06th June 2016 with effect from 19th June 2016.

ANNEXURE-IVAUDIT COMMITTEE REPORT

For the Year 2015-2016

Rahim Tex�le Mills Limited having an Audit Commi�ee as a sub commi�ee of the Board of Directors in order to assist the Board of Directors in ensuring and fulfilling its oversight responsibili�es.

The Audit Commi�ee consists of the following persons: Dr. Sultan Hafeez Rahman, Independent Director Chairman Dr. Shamim Ma�n Chowdhury, Director Member Mr. Azizur Rahim Chowdhury, Director Member Mr. Syed Saiful Haque, Company Secretary Secretary

The scope of Audit Commi�ee was defined as under:a. Review and recommend to the Board to approve the quarterly, half yearly and annual financial statements prepared for statutory

purpose;

b. Monitor and oversee choice of accoun�ng policies and principles, internal control risk management process, audi�ng ma�er, hiring and performance of external auditors;

c Review statement of significant related party transac�ons submi�ed by the management;d. Carry on a supervision role to safeguard the system of governance and independence of statutory auditors; and e. Review and consider the report of internal auditors and statutory auditors’ observa�ons on internal control.

Ac�vi�es carried out during the year:The Commi�ee reviewed the integrity of the quarterly, half yearly and annual financial statements and recommended to the Board for considera�on. The Commi�ee had overseen, reviewed and approved the procedure and task of the internal audit, financial report prepara�on and the external audit reports. The Commi�ee found adequate arrangement to present a true and fair view of the ac�vi�es and the financial status of the company and didn’t find any material devia�on, discrepancies or any adverse finding/observa�on in the areas of repor�ng.

Dr. Sultan Hafeez RahmanChairmanAudit Commi�eeDate: 17th October, 2016.

17

Annual Report 2016


ANNEXURE-V

CEO & CFO’s DECLARATION TO THE BOARD OF DIRECTORS.

The Board of DirectorsRahim Tex�le Mills Limited134, New Eskaton Road, Dhaka-1000.

Subject: CEO & CFO’s Declara�on to the Board of Directors.

Dear Sirs:

In compliance with the condi�on no.6 imposed by the Bangladesh Securi�es and Exchange Commission’s No�fica�on No. SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012 issued under Sec�on 2CC of the Securi�es and Exchange Ordinance, 1969, we do hereby cer�fy to the Board of Directors that;(i) We have reviewed the financial statements of the company for the year ended on 30th June 2016 and that to the best of our

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

might be misleading; (b) these statements together present a true and fair view of the company’s affairs and are in compliance with exis�ng

accoun�ng standards and applicable laws.(ii) There are, to the best of knowledge and belief, no transac�ons entered into by the company during the year which are

fraudulent, illegal or viola�on of the company’s code of conduct.

Sincerely yours,

(Mohammad Sakhawat Hossain) (A. Ma�n Chowdhury) Chief Financial Officer Managing Director

Dated: 05th October, 2016Dhaka

ANNEXURE-VI

AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE COMPLIANCE OF

RAHIM TEXTILE MILLS LIMITED

We have examined the compliance of the condi�ons of corporate governance guidelines of the Bangladesh Securi�es and Exchange Commission (BSEC) of Rahim Tex�le Mills Limited for the year ended on 30June 2016 as s�pulated in clause 7(i) of the BSEC No�fica�on No. SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012.

The compliance of the condi�ons of corporate governance guidelines as stated in the aforesaid no�fica�on and repor�ng of the status of compliance is the responsibility of the management of Rahim Tex�le Mills Limited. Our examina�on for the purpose of issuing this cer�fica�on was limited to the checking the procedures and implementa�on thereof as adopted by Rahim Tex�le Mills Limited for ensuring the compliance of condi�ons of corporate governance and correct repor�ng of compliance status on the a�ached statement on the basis of evidence gathered and representa�on received.

To the best of our informa�on and according to the explana�ons given to us, we cer�fy that, as reported on the a�ached status of compliance statement, Rahim Tex�le Mills Limited has complied with condi�ons of corporate governance s�pulated in the above men�oned BSEC no�fica�on dated 07 August 2012 and subsequent amendment made thereon.

Dhaka,15 November 2016 Das Chowdhury Du�a & Co. Chartered Accountants

ANNEXURE-VII Corporate Governance Compliance ReportStatus of compliance with the condi�ons imposed by the Bangladesh Securi�es and Exchange Commission’s No�fica�on No. SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012.Condi�on No. Title Complied Not Complied Remarks (if any)

√

√ √ √

√

√

√ √

√

√

√ √ √

√

√

√√

N/A

√

√ √ √ √ √ √ N/A

N/A

√

√√√ √ √ √ √ √√ N/A√ √√ √ √

√

1.1 Board Size : The number of the Board members shall not be less than 5 (Five) and more than 20 (Twenty)

1.2 Independent Directors: 1.2 (i) One fi�h (1/5th) of the total number of directors 1.2 (ii) a) Does not hold any share or holds less than 1% shares of the total paid up shares1.2 (ii) b) Not connected with any sponsor/ director/shareholder who holds 1% or more shares of the

total paid up shares on the basis of family rela�onship.1.2 (ii) c) Does not have any other rela�onship, whether pecuniary or otherwise, with the company or

its subsidiary/associated companies1.2 (ii) d) Not a member, director or officer of any stock exchange1.2 (ii) e) Not a shareholder, director or officer of any member of stock exchange or an intermediary of

the capital market1.2 (ii) f) Not a partner or an execu�ve or was not a partner or an execu�ve during the preceeding 3

(three) years of any statutory audit firm1.2 (ii) g) Not be an independent director in more than 3 (three) listed companies1.2 (ii) h) Not been convicted by a court of competent jurisdic�on as a defaulter in payment of any loan

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

code to be recorded1.2 (vi) Tenure of office of an Independent Director shall be for a period of 3(three) years, which may

be extended for 1(one) term only1.3 Qualifica�on of Independent Director (ID)1.3 (i) Knowledge of Independent Directors1.3 (ii) Background of Independent Directors1.3 (iii) Special cases for qualifica�ons 1.4 Individual Chairman of the Board and Chief Execu�ve Officer 1.5 The Director’s Report to Shareholders:1.5 (i) Industry outlook and possible future developments in the industry1.5 (ii) Segment-wise or product-wise performance 1.5 (iii) Risks and concerns1.5 (iv) Discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin1.5 (v) Discussion on con�nuity of any Extra-Ordinary gain or loss1.5 (vi) Basis for related party transac�ons1.5 (vii) U�liza�on of proceeds from public issues, rights issues and/or through any others1.5 (viii) Explana�on if the financial results deteriorate a�er the company goes for IPO, RPO, Rights

Offer, Direct Lis�ng1.5 (ix) Explana�on about significant variance occurs between Quarterly Financial performance and

Annual Financial Statements1.5 (x) Remunera�on to directors including independent directors1.5 (xi) Fairness of Financial Statements 1.5 (xii) Maintenance of proper books of accounts 1.5 (xiii) Adop�on of appropriate accoun�ng policies and es�mates1.5 (xiv) Followed IAS, BAS, IFRS and BFRS in prepara�on of financial statements1.5 (xv) Soundness of internal control system1.5 (xvi) Ability to con�nue as a going concern1.5 (xvii) Significant devia�ons from the last year’s 1.5 (xviii) Key opera�ng and financial data of at least preceding 5 (five) years1.5 (xix) Reasons for not declared dividend 1.5 (xx) Number of Board mee�ngs held during the year and a�endance1.5 (xxi) Pa�ern of shareholding:1.5 (xxi) a) Parent/Subsidiary/Associated Companies and other related par�es 1.5 (xxi) b) Directors, CEO, CS, CFO,HIA and their spouses and minor children 1.5 (xxi) c) Execu�ves1.5 (xxi) d) 10% or more vo�ng interest 1.5 (xxii) Appointment/re-appointment of director:1.5(xxii) a) Resume of the director

19

Annual Report 2016

Condi�on No. Title Complied Not Complied Remarks (if any)√ √ √√ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ N/A

√ √ √ √ √ √ √ √

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

√ √

1.5(xxii)b) Exper�se in specific func�onal areas1.5(xxii) c) Holding of directorship and membership of commi�ees of the board other then this company2.1 Appointment of CFO, HIA and CS:2.2 A�endance of CFO and CS at the mee�ng of the Board of Directors3.0 Audit Commi�ee: 3 (i) Cons�tu�on of Audit Commi�ee 3 (ii) Assistance of the Audit Commi�ee to Board of Directors3 (iii) Responsibility of the Audit Commi�ee 3.1 Cons�tu�on of the Audit Commi�ee:3.1 (i) At least 3(three) members3.1 (ii) Appointment of members of the Audit Commi�ee3.1 (iii) Qualifica�on of Audit Commi�ee members 3.1 (iv) Term of Service of Audit Commi�ee members3.1 (v) Secretary of the Audit Commi�ee3.1 (vi) Quorum of the Audit Commi�ee mee�ng 3.2 Chairman of the Audit Commi�ee:3.2 (i) Board of Directors shall select the Chairman 3.2 (ii) Chairman of the audit commi�ee shall remain present in the AGM3.3 Role of Audit Commi�ee:3.3 (i) Oversee the financial repor�ng process3.3 (ii) Monitor choice of accoun�ng policies and principles3.3 (iii) Monitor Internal Control Risk management process3.3 (iv) Oversee hiring and performance of external auditors3.3 (v) Review the annual financial statements before submission to the board for approval3.3 (vi) Review the quarterly and half yearly financial statements before submission to the board for

approval3.3 (vii) Review the adequacy of internal audit func�on3.3 (viii) Review statement of significant related party transac�ons3.3 (ix) Review Management Le�ers/Le�er of Internal Control weakness issued by statutory auditors3.3 (x) Disclosure about the uses/applica�ons of funds raised by IPO/RPO/Rights Issue 3.4 Repor�ng of the Audit Commi�ee:3.4.1 Repor�ng to the Board of Directors:3.4.1 (i) Ac�vi�es of Audit Commi�ee 3.4.1 (ii)a) Conflicts of interest3.4.1 (ii)b) Material defect in the internal control system3.4.1 (ii)c) Infringement of laws, rules and regula�ons3.4.1 (ii)d) Any other ma�er3.4.2 Repor�ng to the Authori�es3.5 Repor�ng to the Shareholders and General Investors4 Engagement of External/Statutory Auditors:4 (i) Appraisal or valua�on services or fairness opinions4 (ii) Financial informa�on systems design and implementa�on4 (iii) Book-keeping4 (iv) Broker-dealer services4 (v) Actuarial services4 (vi) Internal audit services4 (vii) Services that the Audit Commi�ee determines4 (viii) Audit firms shall not hold any share of the company they audit.4 (ix) Audit/cer�fica�on services on compliance of corporate governance5 Subsidiary Company:5 (i) Composi�on of the Board of Directors5 (ii) At least 1 (one) independent director to the subsidiary company 5 (iii) Submission of Minutes to the holding company5 (iv) Review of Minutes by the holding company5 (v) Review of Financial Statement by the audit commi�ee of the holding company6 Du�es of Chief Execu�ve Officer and Chief Financial Officer:6 (i) a) Reviewed the materially untrue of the financial statement6 (i) b) Reviewed about compliance of the accoun�ng standard6 (ii) Reviewed about fraudulent, illegal or viola�on of the company’s code of conduct7 Repor�ng and Compliance of Corporate Governance:7 (i) Obtain cer�ficate about compliance of condi�ons of Corporate Governance Guidelines 7 (ii) Annexure a�ached, in the director’s report


21

Annual Report 2016

Malek Siddiqui Wali PHONE: OFF : +88029513471 CHARTERED ACCOUNTANTS PABX: 9576128, 9576118-9 Partners: Md. Waliullah, FCA FAX: +88-02-9516236 Mr.Swadesh Ranjan Saha, FCA Email: [email protected] Md. Habibur Rahman Sarker, FCA 9-G, Mo�jheel C/A, Mr. Anjan Mallik, FCA Dhaka-1000, Bangladesh

AUDITORS’ REPORTto the shareholders of

Rahim Tex�le Mills Limited

We have audited the accompanying Financial Statements of Rahim Tex�le Mills Limited which comprises Statement of Financial Posi�on as at 30th June 2016 and the related Statement of Profit or Loss and other Comprehensive Income, Statement of Cash Flows, Statement of Change in Equity and Notes for the year then ended, and a summary of significant accoun�ng policies and other explanatory notes.

Management’s Responsibility for the Financial Statements:

The Management is responsible for the prepara�on and fair presenta�on of these financial statements in accordance with Bangladesh Accoun�ng Standard(BAS)/Bangladesh Financial Repor�ng Standards (BFRS), the companies Act 1994, Bangladesh Securi�es Exchanges Commission Rules 1987 and other applicable laws and regula�on and for such internal control as management determines is necessary to enable the prepara�on of financial statements that are free from material misstatement, where due to fraud or error.

Auditor’s Responsibility:

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Audi�ng (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance where the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments the auditor consider internal control relevant to the en�ty’s prepara�on and fair presenta�on of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing and opinion on the effec�veness of the en�ty’s internal control. An audit also includes evalua�on the appropriateness of accoun�ng policies used and the reasonableness of accoun�ng es�mates made by management, as well as evalua�ng the overall presenta�on of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion:

In our opinion, the financial statements prepared in accordance with Bangladesh Accoun�ng Standard/Bangladesh Financial Repor�ng Standards (BFRS), give a true and fair view of the state of the company’s affairs as of 30th June 2016 and of the results of its opera�ons and its cash flows for the period then ended and comply with the Companies Act 1994, relevant schedule of Bangladesh Securi�es Exchanges Commission Rules 1987 and other applicable laws and regula�ons.

We also report that:

a) We have obtained all the informa�on and explana�ons which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verifica�on thereof;

b) In our opinion, proper books of accounts as required by law have been kept by the company so far as it appeared from our examina�on of those books;

c) The Company’s Statement of Financial Posi�on and Statement of Profit or Loss and other Comprehensive Income dealt with by the report are in agreement with the books of accounts;

d) The expenditures incurred and payments made were for the purpose of the company’s business.

Dated: Dhaka Malek Siddiqui Wali18 October, 2016 Chartered Accountants


RAHIM TEXTILE MILLS LIMITEDStatement of Financial Posi�on

As at 30 June 2016

As at 30 June 2016 As at 30 June 2015Item Note Taka TakaASSETS: Non Current Assets Property Plant & Equipment 4.00 444,606,595 448,490,698 444,606,595 448,490,698 Current Assets Inventories 5.00 49,562,477 49,008,794 Accounts Receivable 6.00 71,293,504 86,527,620 Advances, Deposits & Pre-Payments 7.00 23,826,293 16,959,776 Cash & Bank Balances 8.00 66,224,225 23,357,113 210,906,499 175,853,303

TOTAL ASSETS 655,513,094 624,344,002

SHARE HOLDER'S EQUITY & LIABILITIES:Shareholder's Equity Share Capital 9.00 48,558,510 34,684,650 Retained Earnings 99,927,242 68,077,465 Revalua�on Surplus of Fixed Assets 10.00 85,799,646 88,192,250 234,285,398 190,954,365 Non-Current Liabili�es: Long Term Loan 11.00 39,705,037 88,894,890 Deferred Tax Liabili�es 13.00 16,000,370 16,559,299 55,705,407 105,454,189 Current Liabili�es Accounts Payable 14.00 183,246,196 140,205,094 Current Por�on of Long Term Loan 15.00 27,159,396 30,734,684 Short Term Loan From Bank 16.00 131,021,816 117,157,755 Short Term Loan From Others 12.00 - 14,953,649 Other Payable 17.00 3,991,610 11,107,030 Provision for WPPF & WF 18.00 9,638,678 6,935,689 Unclaim Dividend 19.00 1,203,338 1,135,691 Provision for Income Tax 20.00 9,261,255 5,705,855 365,522,288 327,935,448TOTAL SHARE HOLDER'S EQUITY & LIABILITIES: 655,513,094 624,344,002 Net Asset Value (NAV ) per share 48.25 55.05 Par Value Tk. 10.

The annexed notes are integral part of these financial statement.

These financial statements were approved by the Board of Directors on October 18, 2016 and were signed on it's behalf by.

Syed Saiful Haque Mohammad Sakhawat Hossain Dr. Shamim Ma�n Chowdhury A. Ma�n ChowdhuryCompany Secretary Chief Financial Officer Director Managing Director Signed in terms of our separate report of even date annexed.

Date: Dhaka Malek Siddiqui Wali October 18, 2016 Chartered Accountants

23

Annual Report 2016

RAHIM TEXTILE MILLS LIMITEDStatement of Profit or Loss and other comprehensive income

For the year ended 30 June 2016

For the year ended For the year ended 30 June 2016 30 June 2015Par�culars Notes Taka Taka

Sales Revenue 21.00 630,290,462 598,621,652 Cost of Goods Sold 22.00 (521,722,286) (506,311,834)Gross Profit 108,568,176 92,309,818

Opera�ng Expenses: Administra�ve & Selling Expenses 23.00 (31,638,440) (26,517,063)Opera�ng Profit before Financial Expenses 76,929,736 65,792,755 Financial Expenses 24.00 (16,390,179) (30,501,381)Opera�ng Profit 60,539,558 35,291,374

Non Opera�ng Income/(Loss) 25.00 (3,776,798) 118,287 Net Profit before WPPF & WF 56,762,760 35,409,661

Provision for Contribu�on to WPPF & WF 26.00 (2,702,989) (1,686,174)Net Profit / (Loss) for the year 54,059,771 33,723,487

Less : Income Tax expenses 10,728,738 10,158,777 Current Tax 27.00 9,261,255 5,705,855 Prior years tax 2,026,411 5,073,744 Deferred Tax 28.00 (558,928) (620,822)

Net Profit / (Loss) for the year a�er tax 43,331,033 23,564,710

Other comprehensive income:

Total comprehensive income 43,331,033 23,564,710

Earning Per Share (Restated in 2015). 29.00 8.92 4.85 Par Value Tk.10 Number of shares used to compute EPS 4,855,851 4,855,851



Syed Saiful Haque Mohammad Sakhawat Hossain Dr. Shamim Ma�n Chowdhury A. Ma�n ChowdhuryCompany Secretary Chief Financial Officer Director Managing Director Signed in terms of our separate report of even date annexed.



RAHIM TEXTILE MILLS LIMITED Statement of Changes in Equity


Par�culars Share Capital Revalua�on Surplus Retained Earnings Total of Fixed AssetsAs at July 1, 2015 34,684,650 88,192,250 68,077,465 190,954,365 Net Profit this year - 43,331,033 43,331,033 Stock Dividend 13,873,860 (13,873,860) - Transfer to Retained Earnings (2,302,793) 2,302,793 - Transfer for disposed Assets (89,811) 89,811 - As at June 30, 2016 48,558,510 85,799,646 99,927,242 234,285,398

Rahim Tex�le Mills Limited Statement of Changes in Equity


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

The annexed notes are integral part of these financial statement. These financial statements were approved by the Board of Directors on October 18, 2016 and were signed on it's behalf by.

Syed Saiful Haque Mohammad Sakhawat Hossain Dr. Shamim Ma�n Chowdhury A. Ma�n ChowdhuryCompany Secretary Chief Financial Officer Director Managing Director


RAHIM TEXTILE MILLS LIMITED Statement of Cash Flows For the year ended 30 June 2016

For the year ended For the year ended 30 June 2016 30 June 2015 Par�culars Taka Taka I. Cash Flow From Opera�ng Ac�vi�es

Collec�ons from turnover, bills receivable and other receipts. 645,576,382 636,767,614 Payment for purchase of raw materials, accessories, creditors and other expenses (464,720,038) (501,909,237) Financial Expenses Paid (16,390,179) (30,501,381) Income Tax Paid (5,880,112) (11,095,103) Net cash generated/(used) from opera�ng ac�vi�es 158,586,052 93,261,893

II. Cash Flow From Inves�ng Ac�vi�es

Acquisi�on of Property Plant & Equipment (50,267,797) (3,767,931) Disposal of Machinery 2,200,000 - Net cash used in inves�ng ac�vi�es (48,067,797) (3,767,931) III. Cash Flow From Financing Ac�vi�es Loan received/(repayment) from Bank (52,765,142) (65,447,363) Loan received/(repayment) from Directors (14,953,649) (10,000,000) Sale of Fac�on share against stock dividend 203,545 236,738 Dividend Paid (135,898) (151,197) Net cash generated/(used) from financing ac�vi�es (67,651,144) (75,361,823)

Net Cash Inflow / ( Ou�low ) { I + II + III } 42,867,112 14,132,139

Cash & Cash Equivalent as at July 01, 2015 23,357,113 9,224,974 Cash & Cash Equivalent as at June 30, 2016 66,224,225 23,357,113

Net Opera�ng Cash Flow Per Share ( NOCFPS ) 32.66 26.89 Par Value Tk.10 Number of Shares used to compute NOCFPS 4,855,851 3,468,465



Syed Saiful Haque Mohammad Sakhawat Hossain Dr. Shamim Ma�n Chowdhury A. Ma�n Chowdhury Company Secretary Chief Financial Officer Director Managing Director

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


25

Annual Report 2016

RAHIM TEXTILE MILLS LIMITEDNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2016

1.0 Significant Accoun�ng Policies and Relevant Informa�on:1.1 Legal form of the enterprise: Rahim Tex�le Mills Limited (RTML) was incorporated as a Private Limited Company on 31st December 1981, under the Companies Act

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

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

Shafipur,Kaliakair, Gazipur, Bangladesh.1.3 Nature of business ac�vi�es: Rahim Tex�le Mills Limited is a 100% export-oriented industry of tex�le sector engaged in dyeing, prin�ng & finishing fabrics. The

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

2.0 Basis of prepara�on:2.1 Statement of compliance: The financial statements of the company under repor�ng have been prepared under historical cost conven�on other than land &

building which is stated at revalued amount as a going concern concept and on accrual basis in accordance with generally accepted accoun�ng principles and prac�ce in Bangladesh in compliance with the Companies Act, 1994, the Securi�es and Exchange Rules 1987, Interna�onal Accoun�ng Standards (IAS) so far adopted by the Ins�tute of Chartered Accountants of Bangladesh (ICAB) as Bangladesh Accoun�ng Standard (BAS), Bangladesh Financial Repor�ng Standard (BFRS) and other applicable laws and regula�ons.

2.2 Responsibility for prepara�on and presenta�on of financial statements: The Board of Directors is responsible for the prepara�on and presenta�on of Financial Statements under Sec�on 183 of the Companies

Act 1994 and as per the provision of “The Framework for the Prepara�on and Presenta�on of Financial Statements” issued by the Interna�onal Accoun�ng Standards Board (IASB) and comple�on with the requirement of Bangladesh Securi�es and Exchange Commission rules 1987 and Interna�onal Accoun�ng Standards (IAS).

2.3 Repor�ng period: Financial statements of the company cover the period from 01 July 2015 to 30 June 2016.2.4 Components of the financial statements: Financial Statements includes the following components in accordance with the Bangladesh Accoun�ng Standard BAS-1 “Presenta�on

of Financial Statements” the complete set of: i. Statement of Financial Posi�on as on 30 June 2016; ii. Statement of Comprehensive Income for the year ended 30 June 2016; iii. Statement of Changes in Equity for the year ended 30 June 2016; iv. Statement of Cash Flows for the year ended 30 June 2016; v. Accoun�ng Policies and Explanatory Notes.2.5 Compara�ve informa�on: Compara�ve informa�on has been provided in accordance with in respect of the year 2014-15 for all numerical informa�on in the

financial statements and also the narra�ve and descrip�ve informa�on when it is relevant for understanding of the current period's financial statement.

Figures of the year 2014-15 have been rearranged whenever considered necessary to restated ensure comparability or in accordance with Interna�onal Accoun�ng Standards (IAS).

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

Bangladeshi Taka.2.7 Foreign currency transla�on: Transac�ons in foreign currencies are translated into Bangladeshi Taka at the exchange rate prevailing on the date of transac�ons in

accordance with BAS- 21 "The Effects of Changes in Foreign Exchange Rate." Foreign Currency balancehave been translated into taka at prevailing rate of cutoff date and the difference between transla�on value or realiza�on value and ini�al recogni�on is recognized in the face in statement of comprehensive income .

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

ac�vi�es have been presented under direct method as required by the Securi�es and Exchange Rules 1987 and considering the provisions that "Enterprises are Encouraged to Report Cash Flow From Opera�ng Ac�vi�es Using the Direct Method".

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

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

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


2.11 Risk and uncertain�es for use of es�mates in prepara�on of Financial Statement: The Prepara�on of Financial Statement is Conformity with, the Interna�onal Accoun�ng Standards requires management to make

es�mates and assump�on that affect the reported amount of assets and liabili�es and disclosure of con�ngent assets and liabili�es at the date of effects Financial Statements and revenues and expenses during the period reported. Actual results could differ from those es�mates. Es�mates are used for, accoun�ng of certain items such as long term contract, provision for doub�ul accounts, deprecia�on and amor�za�on, employees benefit plans, taxes, reserve and con�ngencies.

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

Rules 1987 and other relevant local laws and rules.2.13 Compliance with Interna�onal Accoun�ng Standard (IAS): The financial statements have been prepared in compliance with requirements of BAS's adopted by the ins�tute of Chartered

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

2016-17 SRO # 193-LawIncome Tax/2015 ITO 1984.. Provision was made and calculated on the above basis which is adequate under income tax ordinance 1984.

3.00 Significant accoun�ng policies:3.01 Principal accoun�ng policies: Specific accoun�ng policies were selected and applied by the company's management for significant transac�ons and events that have

a material effect within the framework of BAS-1 "Prepara�on of Financial Statement". The previous year's figures were presented following the same accoun�ng principles.

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

Equipment". Cost represents cost of acquisi�on or construc�on and includes purchase price and other directly a�ributable cost of bringing the assets to working condi�ons for its intended use.

Deprecia�on has been charged on assets including par�cular revalued assets, where applicable, at the rates varying from 10% to 15% applying reducing balance method irrespec�ve which is allocated to Cost of Goods Sold and Administra�ve Overhead propor�onately. No deprecia�on was charged on land and land development.

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

Category of fixed assets Rate Category of fixed assets Rate Factory Structures, Sheds and Buildings, Go-down & ware house 10% Office Equipment’s 15% Plant and Machinery 10% Motor Vehicles 15% Electrical Installa�on 15% Furniture and Fixtures 10% Gas Line Installa�on 15% Cookeries & Cutleries 15% Generator 15% Tools and Equipment/ Loose Tools 15% Air Cooler & Celling Fan Equipment. 15% Water Tank Reservoir & Tube well & Water Pump 15%

3.03 Revalua�on of fixed assets: The Company has revalued fixed assets, viz. land, building and construc�on and machinery which have been included in the balance

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

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

stated at the lower of cost or net realizable value in accordance with the Para 21 and 25 of BAS-2 " Inventories" a�er making due allowance for any obsolete or slow moving item. The cost of inventories is assigned by using average cost.Net realizable value is determined a�er deduc�ng the es�mated cost of comple�on and or cost to be incurred for the sale from sales price.

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

highly liquid investments that are readily conver�ble to know amounts of cash and which are subject to and insignificant risk of changes in value, BAS-1. Presenta�on of Financial Statements’ provides that cash and cash equivalents are not restricted in use. Considering the provisions of BAS-7 and BAS- I, Cash in hand and Bank balances have been considered as cash and cash equivalents.

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

statement of financial posi�on being surplus of revalued value of aforesaid assets and its book value.3.08 Accounts payable: This has been recognized for the amounts to be paid in future for goods and services received, whether or not billed by the suppliers.3.09 Others Liabili�es: This has been recognized for amounts to be paid within short �me for expenses and u�li�es services etc.3.10 Revenue from goods sold: The company recognizes revenue when a risk and renewal rela�ng to sold goods has been transfer to buyer as well as when sa�sfied all

other condi�onssets out in IAS-18 “Revenue Recogni�on”

27

Annual Report 2016

3.11 Lease Finance In compliance with the BAS-17, Lease, Cost of assets acquired under finance lease along with related obliga�on has been accounted for

as assets and liabili�es respec�vely of the company. It is relevant to note that we are con�nuing a lease agreement with United Finance Ltd. for 3 vehicles purpose.

3.12 Bad and doub�ul debts: No provision for bad and doub�ul debt was made as the company's sales / export are based on 100% confirmed le�er of credit with

fixed maturity date.3.13 Contribu�on to Workers' profit par�cipa�on fund: The company made provision for worker's profit par�cipa�on fund at 5% of the net profit before tax as per provision of the complained

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

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

3.15 Deferred tax: The Company has calculated deferred tax assets/liabili�es for the temporary difference of net assets of accoun�ng and tax base. On

assets for the purpose of complying BAS requirement. But, it is neither assets nor liabili�es so reflected in the statement of financial posi�on for the year under audit. However, it is relevant to men�on that tax deducted from export is final se�lement of tax liabili�es in accordance with par�cular Income Tax SROs for the �me being in force unless any devia�on in accounts a�ributable to sec�on 19 or 30 of Income Tax Ordinance 1984.

3.16 Events a�er the repor�ng period: The Board of Directors of the company has approved the financial statements as on October 18, 2016 and they recommended 40%

stock dividend for the financial year 30th June 2016. Except the fact stated above, on circumstances have arisen that to be disclosed as note or adjusted in the financial statements.

3.17 Basic Earnings: This represents earnings for the year a�ributable to ordinary shareholders. As there was no preference dividend, minority interest of

extra ordinary items, the net profit a�er tax for the year has been considered as fully a�ributable to the ordinary shareholders.3.18 Basic earnings per share: Basic Earnings per share is calculated by dividing the net profit or loss for the year a�ributable to ordinary shareholders by the number

of ordinary shares outstanding during the year.3.19 Diluted earnings per share: No diluted EPS is required to be calculated for the year, as there was no scope for dilu�on during the year under review.3.20 General Comments & Observa�ons:a. All shares have been fully called and paid up. There were no preference shares issued by the company.b. There was no bank guarantee issued by the company on behalf of their directors or the company itself except bank loan.c. The company has not incurred any foreign currency against royal�es, technical fees etc.d. There was no sum for which the company con�ngently liable as on June 30, 2016.e. Auditors are paid only statutory audit fee approved by the shareholders in the last AGM.f. There were no foreign exchanges remi�ed to the relevant shareholders during the year under audit.g. There has no claim against the company not acknowledged as debit at the date of Financial Statement.h. No amount of money was expended by the company for compensa�ng any number of the board of special service.3.21 Applica�on of Bangladesh Accoun�ng Standards (BAS):BAS-1 Presenta�on of Financial Statements Complied withBAS-2 Inventories Complied withBAS-7 Cash Flow Statements Complied withBAS-8 Accoun�ng Policies, Changes in Accoun�ng Es�mates and Errors Complied withBAS-10 Events a�er the Repor�ng Period Complied withBAS-11 Construc�on, Contracts N/ABAS-12 Income Taxes Complied withBFRS-8 Opera�ng Segments N/ABAS-16 Property, Plant and Equipment Complied withBAS-17 Leases Complied withBAS-18 Revenue Complied withBAS-19 Employee Benefits Complied withBAS-21 The Effects of Changes in Foreign Exchange Rates Complied withBAS-23 Borrowing Costs Complied withBAS-24 Related Party Disclosures Complied withBAS-27 Consolidated Financial Statement and Accoun�ng for N/ABAS-28 Investment in Subsidiaries N/ABAS-32 Financial Instruments: Presenta�on Complied withBAS-33 Earing Per Share Complied withBAS-36 Impairment of Assets Complied withBAS-37 Provisions, Con�ngent Liabili�es and Con�ngent Assets Complied withBAS-38 Intangible Assets N/ABAS-39 Financial Instruments: Recogni�on and Measurement. N/ABAS-40 Investment Property N/A


3.22 Re�rement Benefit:The Company has operated provident fund benefit to its employees.3.23 Disclosure as per requirement of schedule XI, part II of company act 1994A. Disclosure as per requirement of schedule XI, part II notes 5 of para 3 Number of Employees/Directors:The numbers of employees/Directors including their payments/perquisites range during the year are as follows:

Par�culars Range (Tk.) No. of Employee Remunera�on 100,000.00-200,000.00 01 0-14,999.00 69 15,000.00-29,999.00 73 Salary 30,000.00-59,999.00 30 60,000.00-99,999.00 10 100,000.00 above 07 0-5,199.00 Nil 5,200.00-6,999.00 214 Wages 7,000.00-10,000.00 73 10,000.00 Above 111 Total number of Employees 588

B. Disclosure as per requirement of schedule XL, 'part II para 7Capacity of industrial unit actual produc�on shor�all and achievement are as follows: Unit Installed Capacity Actual Produc�on Short fall % of achievement Dyeing, Prin�ng & Finishing unit(Yards in lac) 265.20 230.68 34.52 86.98%

C. Disclosure as per requirement of schedule XI, part II para-8 Value of Dyes & Chemical, Spare parts, Packing Materials and Capital Machinery (BDT) : Par�culars Local Import and Purchase Import Total Purchase Consumed Grey Fabrics 29,217,226.00 9,323,458.00 38,540,684.00 42,375,982.00 Dyes & Chemical 121,014,747.00 118,582,750.00 239,597,497.00 242,013,541.00 Prin�ng Design Materials & Spare Parts etc. 13,693,831.00 23,616,516.00 37,310,347.00 31,644,032.00 Total 163,925,804.00 151,522,724.00 315,448,528.00 316,033,555.00

3.24 Related Party Transac�on: The company, in normal course of business carried out a number of transac�ons with other en��es that fall within the defini�on of

related party contained in Bangladesh Accoun�ng Standard 24: Related Party Disclosures.All transac�ons involving related par�es arising in normal course of business are conducted on an arm’s length basis at commercial rates on the same terms and condi�ons as applicable to the third par�es. Details of transac�ons with related par�es and business with them as at 30 June 2016 were as follows:

Name of Sister Concern Nature of Transac�on Opening Balance Transac�on Realiza�on Accounts Receivable J.M Fabrics Limited Sales 9,511,107.76 23,385,806.59 32,475,117.65 421,796.70 Knit Asia Limited Sales 19,167,497.58 31,516,666.77 32,849,048.61 17,835,115.74 Salek Tex�le Limited Sales 692,103.72 6,263,678.15 5,023,103.33 1,932,678.54 Total 29,370,709.05 61,166,151.51 70,347,269.59 20,189,590.98

3.25 Approval of Financial Statements:The Board of Directors of the company has approved the financial statements as on October 18, 2016

4.00 Property Plant & Equipment Assets : Tk. 444,606,595Details of Fixed Assets and Deprecia�on as on 30th June, 2016 are shown in the Schedule A-1 This is arrived at as follows: Cost: 30.06.2016 30.06.2015 Opening balance 709,290,986 705,446,226 Addi�on this year 41,215,038 3,844,760 Less: Sale/Adjustment 21,503,825 - Closing balance 729,002,198 709,290,986 Accumulated Deprecia�on : Opening balance 360,806,607 322,225,077 Addi�on this year 36,767,747 38,581,530 Less: Sale/ Adjustment 15,565,035 - Closing balance 382,009,319 360,806,607

Wri�en Down Value at Repor�ng Date 346,992,879 348,484,378

29

Annual Report 2016

Revalua�on of Fixed Assets: Opening balance 123,483,815 123,483,815 Less: Adjustment for this year on Revalua�on 231,818 - Wri�en Down Value at Repor�ng Date 123,251,997 123,483,815 Opening balance 23,477,495 20,853,590 Addi�on this year 2,302,793 2,623,905 Less: Adjustment for this year on Revalua�on 142,007 - Closing balance 25,638,281 23,477,495 Wri�en Down Value at Repor�ng Date: 97,613,716 100,006,320 Wri�en Down Value of Property Plant & Equipment at Repor�ng Date: 444,606,595 448,490,698

a). The factory land has charged to the AB bank Ltd. and pariparsu agreement was also made with The City Bank Ltd.for same proper�es against bank loan facili�es.

5.00 Inventories: Tk. 49,562,477

The total amount is arrived as follows : 30.06.2016 30.06.2015 Dyes & Chemicals 5.01 22,906,026 25,322,070 Grey Fabric 5.02 6,206,820 10,042,118 Prin�ng & Design Material 5.03 8,411,531 3,290,291 Spares & Accessories 5.03 5,823,456 5,278,381 Work in Process 5.04 1,142,808 578,000 Work in Process (Finished Stage) 5.05 5,071,836 4,497,934 49,562,477 49,008,794

5.01 Dyes & Chemicals: Items Qty(kg) 30.06.2016 Qty(kg) 30.06.2015 Dyes 24,939 9,167,436 24,319 10,293,764 Chemicals 155,210 13,738,590 186,517 15,028,306 180,149 22,906,026 210,836 25,322,070

5.02 Grey Fabrics: Items Qty(Yds) 30.06.2016 Qty(Yds) 30.06.2015 Grey Fabrics 103,447 6,206,820 64,788 10,042,118

5.03 Prin�ng & Design Materials & Spares Accessories: Items 30.06.2016 30.06.2015 Prin�ng & Design Materials 8,411,531 3,290,291 Spare Parts & Accessories 5,823,456 5,278,381 Tk. 14,234,987 TK. 8,568,672

5.04 Work-In-Process: Items Qty(Yds) 30.06.2016 Qty(Yds) 30.06.2015 Work-In-Process 280,749 1,142,808 205,382 578,000

5.05 Work in Process (Finished Stage) Items Qty(Yds) 30.06.2016 Qty(Yds) 30.06.2015 Work in Process (Finished Stage) 848,601 5,071,836 102,631 4,497,934

- Physical coun�ng of the stock was carried out by inventory team, consis�ng of auditor & management staff.- Inventory at june 30,2016 are valued at lower of average cost and net realisable value- the inventories are collateralised against short term loan. 30.06.2016 30.06.2015

6.00 Accounts Receivable: Tk. 71,293,504 86,527,620- The above amount is receivable from debtors against confirm export L/C & credit sales. It considered as good. - Most of the balances have subsequently been realised. The Debtors have no securi�es except their personal securi�es and Related par�es Tk.20,189,590.98 & other par�es Tk.51,103,912.02

7.00 Advance Deposite & Pre-payments : Tk. 23,826,293 This consists as follows: 7.(a), Security Deposit : 30.06.2016 30.06.2015 Security Deposit to CDBL 100,000 100,000 Security deposit to Titas Gas 2,962,437 2,962,437 Security deposit to Grameen Phone 5,616 5,616 Security deposit to REB 126,926 126,926 Total (A) : 3,194,979 3,194,979

7.(b), Deposits : Guarantee Margin 559,305 559,305 Security deposit DGDP (Army) 441,250 441,250 Total (B) : 1,000,555 1,000,555


7.(c), Advance & Prepayments : Advance Income Tax deducted at Source (i) 5,880,112 7,732,266 Advance for Local Purchse 403,629 107,965 Legal expenses to Barister Khurshid Alam 250,000 250,000 AB Power Engineering Ltd. 1,804,050 - Hejaz Publica�ons Ltd Land Owners. - 2,400,000 Mr. Shah Md. Iqbal Prin�ng Manager 80,000 - Mr Karim, Land Officer 150,000 150,000 Advance to Drivers for fuel 30,000 20,000 Mr. Abdur Rahman Manager Logis�c 31,575 - Mr. Alamgir Kabir Asst. Manager Admin 29,900 - Mr. Abdur Rouf Asst. Manager Project 500,000 - Lease rent - ULC 134,218 56,681 Material in Transit 3,081,858 2,040,623 Machine in Transit 7,255,416 6,707 Total (C) : 19,630,759 12,764,242 Total (A+B+C) : 23,826,293 16,959,776

7,(c),i Advance Income Tax deducted at Source : Opening balance 7,732,266 12,263,557 Add : Addi�on during this year 5,880,112 6,563,813 Total AIT at source 13,612,378 18,827,370 Less : Tax adjustment for FY-2014-15 5,705,855 6,021,359 7,906,523 12,806,011 Less : Prior years AIT adjustment 2,026,411 5,073,744 Advance Income Tax deducted at Source : 5,880,112 7,732,266 - Security deposit are made to statutory authori�es and it will be realized when the service received from government authority will

discon�nue- In the opinion of the Directors, all of the current assets , loans and advances have on the realisa�on in the ordinary course of business , a

value at least equal to the amount at which they are stated in the Balance sheet- No amount is due by the associated undertakings.- Guarantee Margin includes Guarantee issued to Titas gas & DGDP against Performance and workorder.

8.00 Cash and Bank Balance: Tk. 66,224,225 30.06.2016 30.06.2015 Cash in hand - (Head Office) 50,000 28,180 Cash in hand - Factory (Pe�y Cash) 4,028 54,640 Cash at Bank with IFIC Bank Ltd. 338,015 52,294 Cash at Bank with The City Bank Ltd -1101 11,154,276 (1,030,299) Cash at Bank with The City Bank Ltd.-ERQ A/C -5121 11,761,930 3,504,539 Cash at Bank with The City Bank Ltd.-FBPAR A/C-1071 2,738,778 1,736,162 Cash at Bank with AB Bank Ltd.-254 16,516,787 13,128,558 Cash at Bank with AB Bank Ltd.-251 516 241 Cash at Bank with AB Bank Ltd.-001 13,085,373 10,007 Cash at Bank with AB Bank Ltd.-002 300,020 234,032 Cash at Bank with AB Bank Ltd.-003 350 350 Cash at Bank with AB Bank Ltd.-047 8,076,153 3,585,341 64,026,225 21,304,043 FDR for Bank Guarantee AB Bank Ltd - 200 2,198,000 2,053,069 66,224,225 23,357,113 - Cash in hand was physically counted and found in order.- The Bank Balances were confirmed and reconciled with Bank statements and found in order.

9.00 Share Capital : Tk. 48,558,510

a) Authorized Capital : As on 30.06.2016 As on 30.06.2015 50,000,000 Ordinary Shares of Tk.10/- each Tk. 500,000,000 500,000,000 b) Issued, Called & Paid up Capital : Tk. 48,558,510 4,855,851 Ordinary shares of Tk. 10/- each fully paid up Tk. 48,558,510 34,684,650 (i) Composi�on of Shareholding : As on 30.06.2016 As on 30-06-2015 No. of Share % No. of Share % Sponsors & Directors 3,727,626 76.76% 2,662,592 76.76% Government - 0.00% - 0.00% Ins�tu�ons 77,878 1.60% 93,373 2.69% Foreign Investors - 0.00% - 0.00% General Investors /Public 1,050,347 21.64% 712,500 20.55% 4,855,851 100.00% 3,468,465 100.00%

31

Annual Report 2016

Details of Sponsors & Directors Share Capital are as Follows : 30.06.2016 30.06.201501. A.Ma�n Chowdhury 9,454,200 6,753,000 02. Dr. Shamim Ma�n Chowdhury 7,137,010 5,097,870 03. Didar A. Husain 9,184,470 6,560,340 04. Saima Ma�n Chowdhury 9,743,700 6,959,790 05. Azizur Rahim Chowdhury 1,756,880 1,254,920 06. Dr. Sultan Hafeez Rahman ( Independent Director) - - 07. Md. Qamrul Huda ( Independent Director) - - Tk. 37,276,260 26,625,920 Details of the Share holding is given below: Holding Range No.of Holders No. of Share Percentage 1 - 50 897 37,797 0.78% 51-500 1,428 263,961 5.44% 501-5,000 203 305,000 6.28% 5,001-10,000 11 79,363 1.63% 10,001-20,000 6 79,296 1.63% 20,001-30,000 1 26,679 0.55% 30,001-40,000 1 38,686 0.80% 40,001-50,000 1 40,152 0.83% 50,001-100,000 - 0.00% 100,001-1,000,000 7 3,984,917 82.06% Total: 2,555 4,855,851 100.00%

The number of share holding by Sponsors & Directors and others increased as on 30th June,2016 from that of 30th June,2015 due to declara�on and allotment of 40% Stock Dividend for the year of 2014-2015.

10.00 Revalua�on Surplus of Fixed Assets : Tk. 85,799,646 30.06.2016 30.06.2015 Opening Balance 88,192,250 90,816,155 Reatated Balance 88,192,250 90,816,155 Less: Adjustment of cost during the year 231,818 - 87,960,432 90,816,155 Less: Addi�on of Deprecia�on during the year 2,302,793 2,623,905 85,657,639 88,192,250 Add: Adjustment of deprecia�on during the year 142,007 - Closing Balance at repor�ng date. 85,799,646 88,192,250

Land,Building,Plant & Machinery were revalued on 30.07.2007 by M/S Asian Surveyors Ltd. 28 dilkhusha C/A, 12th floor,Suite No.1203,Dhaka-1000 a firm of professional valuers on the basis of present market price prevailing in the country.The valua�on of land was assessed on the basis of market price prevailing in the locality, Valua�on of Building were assessed on the basis of present construc-�on cost, Present market value of plant & Machinery has been es�mated on the basis of devalua�on of Bangladesh currency, infla�on over the years, Increase of price level in interna�onal market.

11.00 Long Term Loan : Tk. 39,705,037 88,894,890

The consists of the above head as follows: 30.06.2016 30.06.2015 Long Term loan from AB Bank -TL-467 - 12,895,427 Long Term loan from AB Bank -TL-468 63,257,092 105,456,031 United Leasing Company Ltd. 3,607,340 1,278,116 66,864,432 119,629,574 Less: Current por�on of Long Term Loan [Note : 15] 27,159,396 30,734,684 39,705,037 88,894,890

a). The AB Bank's loan taken in 2014 which will be liquidated within 2019. b). The balances were reconciled and confirmed. c). Total ini�al loan facility 95,754,385.50 @ of interest rate 11.00%. P.A. d). Monthly installment @ Tk. 2,967,655 Total installment due 27 out of 60 Installment

12.00 Short Term Loan From Others: Tk. - 30.06.2016 30.06.2015 Loan from Directors - 14,953,649 - 14,953,649

13.00 Deferred Tax Liabili�es: 16,000,370 16,559,299

30.06.2016 30.06.2015 Opening Balance 16,559,299 17,180,121 Provision this Year (Note-28) (558,928) (620,822) 16,000,370 16,559,299 Temporary Temporary Accounts based Tax based Diff.2015-16 Diff..2014-15 WDV of Fixed Assets 346,992,879 337,937,458 9,055,420 10,389,004 Revalua�on Surplus of Fixed Assets 97,613,716 - 97,613,716 100,006,320 Total 444,606,595 337,937,458 106,669,136 110,395,324 Deferred tax @ 15% 16,000,370 16,559,299


14.00 Accounts Payable: Tk. 183,246,196

Trade Creditors for supply of fabrics,chemicals,spareparts of machineries & service charges are the regular suppliers of the Company and the amount are due on account. Most of the bills have been paid within 120 days.

15.00 Current Por�on of Long Term Loan: Tk. 27,159,396 30.06.2016 30.06.2015

Long Term loan from AB Bank -TL-467 - 7,682,011 Long Term loan from AB Bank -TL-468 25,906,755 22,540,519 United Leasing Company Ltd 1,252,641 512,154 27,159,396 30,734,684

16.00 Short Term Loan from Bank : Tk. 131,021,816 The consists of this head as follows: 30.06.2016 30.06.2015 Cash Credit Account (with AB Bank) - 000 (1,817,111) (3,175) Cash Credit Account (with City Bank) -6331 (4,963,059) (720) Back to Back Liability with AB Bank 2,591,288 - Back to Back Liability with The City Bank 1,961,663 Deferred Liability UPAS (Foreign L/C with AB Bank ) 21,480,000 - Deferred Liability EDF(Foreign L/C with AB Bank ) 41,412,173 9,488,990 Deferred Liability (Local L/C with AB Bank ) - 7,850,000 Deferred Liability EDF (Foreign L/C with City Bank ) 70,356,864 60,565,013 Inland Bill Purchase Loan A/C(with AB Bank) - 707 - 8,466,758 Inland Bill Purchase Loan A/C(with The City Bank) - 9911-USD - 30,790,890 131,021,816 117,157,755 - Cash credit account with AB Bank & The City Bank Ltd. : - Now we are availing credit facility with Short term loan at AB Bank Ltd. & The City Bank Ltd. - All the balances were reconciled and confirmed.- Deferred Liability create against Foreign & Local import L/C.- Short Term loan are secured against total inventories & book debts.- All the above loans bears interest @12.75% p.a. to 11.00% p.a- Apart from the above, the company has availed Long Term loan facili�es from AB Bank Ltd.

17.00 Others Payable : Tk. 3,991,610 The consists of this head as follows: 30.06.2016 30.06.2015 Directors Remunera�on - 85,000 Workers & Employees P.F. - 94,409 Salary Payable 180,000 4,457,513 Wages Payable 131,448 2,972,913 Over�me Payable 253,702 461,148 Bonus Payable 17,143 - Audit fees 86,250 57,500 Gas Charges 2,411,963 1,560,733 U�lity Expenses 500,000 1,021,399 Office Rent - 131,259 Deduc�on of Tax & VAT at source 411,104 63,270 Employees PF Loan - 35,065 Employees Income Tax Against Salary - 72,412 Employer's PF Contribu�on - 94,409 3,991,610 11,107,030

18.00 Provision For WPPF & WF: Tk 9,638,678 30.06.2016 30.06.2015 Opening balance 6,935,689 5,249,515 Provided this year @ 5% (Note-26) 2,702,989 1,686,174 9,638,678 6,935,689

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

19.00 Unclaimed Dividend : 30.06.2016 30.06.2015

Tk. 1,203,338 1,135,691 Opening Balance Tk. 1,135,691 1,050,150 Add : Sale of Fac�on Share Tk. 203,545 236,738 Total Unclaimed Dividend 1,339,236 1,286,888

Less : Dividend issue during this year Tk. 135,898 151,197 Closing Balance 1,203,338 1,135,691 This is the amount which represents dividend warrant issued including sale proceds of fac�on bonus share but not presented to the bank for payment.

33

Annual Report 2016

20.00 Provision For Income Tax: Tk. 9,261,255 30.06.2016 30.06.2015 Opening Balance 5,705,855 6,021,359 Income Tax for FY 2015-2016 (Note-27) 9,261,255 5,705,855 14,967,110 11,727,214 Less.Adjustment for 2014-15 5,705,855 6,021,359 9,261,255 5,705,855

21.00 Sales Revenue : Tk. 630,290,462

22.00 Cost of Goods Sold : Tk. 521,722,286 Raw Material Consumed : Qty. (yards) 30.06.2016 % Consump�on 30.06.2015 Grey Fabrics (i) 42,375,982 13.41% 24,664,229 Dyes & Chemicals (ii) 242,013,541 76.58% 253,783,744 Prin�ng & Design Materals(iii) 31,644,032 10.01% 37,083,408 316,033,555 100.00% 315,531,380 Direct Wages & Salaries including fes�val bonus 102,534,822 95,550,800 Factory Overhead (iv) 104,292,619 93,404,568 522,860,996 504,486,748 Add: Opening Work in Process 205,382 578,000 197,956 573,855 205,382 523,438,996 197,956 505,060,603 Less: Closing Work in process 280,749 1,142,808 205,382 578,000 Cost of Produc�on: 522,296,188 504,482,603 Add: Opening W.I.P.(Finished Stage) 102,631 4,497,934 397,595 6,327,165 102,631 526,794,122 397,595 510,809,768 Less: Closing W.I.P.( Finished Stage) 848,601 5,071,836 102,631 4,497,934 521,722,286 506,311,834

i) Grey Fabrics Consumed : Name of Products: Qty. (yards) 30.06.2016 Qty. (yards) 30.06.2015 a) Opening Stock 64,788 10,042,118 140,904 11,835,955 b) Purchase During the year (A) 419,681 38,540,684 179,879 22,870,392

484,469 48,582,802 320,783 34,706,347 Less : Closing Stock 103,447 6,206,820 64,788 10,042,118 381,022 42,375,982 255,995 24,664,229 ii) Dyes & Chemicals Consumed 30.06.2016 30.06.2015

a) Opening Stock 25,322,070 35,946,643 b) Purchase during the year (B) 239,597,497 243,159,171 264,919,567 279,105,814 Less : Closing Stock 22,906,026 25,322,070 Tk 242,013,541 Tk. 253,783,744 iii) Prin�ng & Design Materials, Spares & Accessories Consumed: 30.06.2016 30.06.2015

a) Opening Stock 8,568,672 13,599,580 b) Purchase during the year (C) 37,310,347 32,052,500 45,879,019 45,652,080 c) Less : Closing Stock 14,234,987 8,568,672 Tk 31,644,032 Tk. 37,083,408 (A) Procurement / Supplied by Raw Materials: Fabrics: Yards US$ 30.06.2016 30.06.2015 Imported 151,780 - 9,323,458 - Local Purchase through EDF,BBL/C & Deferred L/C 267,901 - 29,217,226 22,870,392 419,681 - 38,540,684 22,870,392 Average Price Per Yard Imported 61.43 - Local Purchase 109.06 127.14

(B) Dyes & Chemicals : 30.06.2016 30.06.2015 Imported 118,582,750 124,053,278 Local Purchase through Back to Back L/C 121,014,747 119,105,893 Tk. 239,597,497 Tk. 243,159,171 (C) Prin�ng & Design Material,Spares & Accessories: 30.06.2016 30.06.2015 Imported 23,616,516 17,771,397 Local Purchase 13,693,831 14,281,103 Tk. 37,310,347 32,052,500

IV. Factory Overhead : Tk. 104,292,619 30.06.2016 30.06.2015 Gas & Electric Charges 26,911,205 19,376,822 Insurance Premium 1,273,842 1,505,608 Uniform & Liveries 177,165 119,975


Repairs & Maintenance 21,243,529 20,532,304 Telephone Charges 497,476 391,962 Packing Expenses 1,108,798 759,630 Travelling & Conveyance 2,264,234 1,233,330 Fuel Lubricant 4,266,038 4,544,121 Medical expenses 57,606 70,222 Contribu�on to P.F. 1,008,899 784,757 Entertainment 378,758 273,792 Sta�onery 646,319 497,115 Newspaper & Periodicals 6,460 6,940 Tes�ng Charges 1,038,010 82,825 Rent, Rates & Taxes 120,000 171,403 Back Processing Charges 20,868 - Design & Prin�ng Expenses 385,030 270,049 Food & Refreshment Expenses for Staff & Workers. 4,433,193 2,206,114 Lab Expenses 393,434 346,440 Loading & Unloading Exp. 573,995 235,972 Fire Figh�ng Material 115,485 73,015 Deprecia�on 37,372,275 39,922,172 Tk. 104,292,619 93,404,568

- Gas & electricity Charges has increased compare to last years to increase in gas price w.e.f. september 2015.- Repair & Maintenance cost has increased because the machine is going older day by day.- Travelling & conveyance cost has increased due to frequent visit of the higher management outside of the country for business purpose.- Tes�ng charge has increased due to development of new product for our new buyer( H & M).- Food & Refreshment has increased due to addi�on of picnic cost and i�ar cost twice in a financial year.- Loading & unloading expenses increase due to more imported goods received from previous period.

23.00 Administra�ve & Selling Expenses: Tk. 31,638,440 30.06.2016 30.06.2015 Director's Remunera�on - 23.01 1,800,000 1,200,000 Salary & Allowances 14,003,381 10,742,535 Fes�val Bonus 2,045,521 911,824 Prin�ng 42,975 120,750 Sta�onery 347,054 277,537 Adver�sement 627,897 659,995 Insurance Premium 87,766 181,039 Telephone & Fax Charges 276,843 267,804 Travelling & Conveyance 1,660,561 1,513,801 Fees, Forms & Stamps 1,477,900 1,097,298 Dona�on & Subscrip�on 65,000 60,000 Selling & Distribu�on Expenses 3,791,694 5,431,710 Consultancy Fees 35,300 Training Expenses 487,231 42,000 Postage & Telegram 44,063 22,509 Repairs & Maintenance 444,700 375,349 Head Office Rent 1,719,492 1,553,528 Annual General Mee�ng Expenses 246,011 135,960 Entertainment 230 35,842 Contribu�on to P.F. 252,435 216,088 Audit Fees 86,250 57,500 So�ware Servicing Charges 54,074 88,306 Income Tax Expenses 44,502 Survey & Inspec�on Expenses 62,200 - Food & Refreshment Expenses for Staff 237,094 242,424 Deprecia�on 1,698,266 1,283,263 Tk. 31,638,440 26,517,063

23.01 Directors Remunera�on: Mr.Didar A.Husain, Director Tk. 1,800,000 1,200,000 Dr. Sultan Hafeez Rahman,Independent Director Nill Nill Md. Qamrul Huda ,Independent Director Nill Nill Total Tk. 1,800,000 1,200,000 Salary & Allowance has increased due to annual increment . Selling & Distribu�on expenses has decrease due to economic use.

24.00 Financial Expenses: The break-up of the above amount is as follows : Tk. 16,390,179 30.06.2016 30.06.2015

Interest on Commercial Bank Loan & Overdra� 15,865,943 29,764,704 Interest on Lease Finance 229,596 252,353 Bank Charges & Commission 294,640 484,325 16,390,179 30,501,381 - Financial expenses has decrease due to repayment of loan as advance and bank has reduced interest rate respec�vely.

35

Annual Report 2016

25.00 Non Opera�ng Income/(Loss) : Tk. (3,776,798) 30.06.2016 30.06.2015 Gain/Loss on disposal of Fixed Assets - 25.01 (3,828,601) - Other Income - 25.02 51,803 118,287 (3,776,798) 118,286

25.01 Gain/( Loss ) on Disposal of Macninery: Tk. (3,828,601) The break-up of the above amount is as follows : 30.06.2016 30.06.2015 Cost Value on sale of Machinery 21,503,825 - Revalua�on of sale of Machinery 231,818 - Total Cost value of sale of Machinery 21,735,643 Less : Accumulated deprecia�on of disposal machine (15,565,035) Less : Accumulated deprecia�on of disposal machine -Revalued (142,007) wri�en Down Value of Sale of Machinery 6,028,601 Sale Value of Machinery 2,200,000 - - Loss on sale of machinery (3,828,601) - Scarp Machinery sold as per decision of Board of Directors' mee�ng held on 21.03.2016.

25.02 Other Income: Tk. 51,803 The consists of this head as follows: 30.06.2016 30.06.2015 Interest received on FDR 161,256 177,010 Gain/(Loss) on Foreign Currency Exchange rate (109,453) (58,723) Tk. 51,803 118,287

26.00 Provision for WPPF & WF Tk. 2,702,989

30.06.2016 30.06.2015 Contribu�on this year @ 5% (Net profit before WPPF & WF (56,762,760/21) 2,702,989 1,686,174 2,702,989 1,686,174

27.00 Income Tax Provision (Current Tax) Tk. 9,261,255 Based Amount 30.06.2016 Based Amount 30.06.2015 Opera�ng Profit 60,539,558 35,291,374 Less : Provision for Contribu�on to WPPF & WF (2,702,989) (1,686,174) Net Profit / (Loss) for the year 57,836,569 33,605,200

Add : Deprecia�on during this year as per F.A. Schedule 39,070,540 41,205,435 96,907,109 74,810,635 Less : Deprecia�on during this year as per Tax based 35,434,170 37,066,619 On Opera�ng Income @ 15% as per SRO. 61,472,940 9,220,941 37,744,016 5,661,602 On Non-Opera�ng Income: Profit/(Loss) on Sale of Assets (3,828,601) - - - Other Income @ 25% 161,256 40,314 177,010 44,253 57,805,595 9,261,255 37,921,026 5,705,855

28.00 Income Tax Provision (Deferred Tax): Tk. (558,928) (620,822) Opening Balance 16,559,299 17,180,121 Closing Balance -28.01 16,000,370 16,559,299 Addi�on/(Adjustment) during this year (558,928) (620,822)

28.01 WDV of Fixed Assets on Accounts Base 444,606,595 448,490,698 WDV of Fixed Assets on Tax Base 337,937,458 338,095,374

Addi�on/(Adjustment) during this year 106,669,136 110,395,324 Deferred tax @ 15% on Tk. 106,669,136 16,000,370 16,559,299

29.00 Earnings Per Share (EPS): Tk. 8.92 4.85 30.06.2016 30.06.2015 a. Net Profit/ ( Loss) a�er Tax for this year 43,331,033 23,564,710 b. Total Number of Share 4,855,851 4,855,851 Earning per share (Restated in 2015). 8.92 4.85

30.00 Related Par�es Transec�on : The company, in normal course of business carried out a number of transac�ons with other en��es that fall within the defini�on of

related party contained in Bangladesh Accoun�ng Standard 24. Related Party Disclosures. All transac�ons involving related par�es arising in normal course of business are conducted on an arm’s length basis at commercial rates on the same terms and condi�ons as applicable to the third par�es. Details of transac�ons with related par�es and business with them as at 30 June 2016 were as follows :

Name of Sister Concern Nature of Transac�on Opening Balance Transac�on Realiza�on Accounts Receivable J.M Fabrics Limited Sales 9,511,108 23,385,807 32,475,118 421,797 Knit Asia Limited Sales 19,167,498 31,516,667 32,849,049 17,835,116 Salek Tex�le Limited Sales 692,104 6,263,678 5,023,103 1,932,679 Total Amount 29,370,709 61,166,152 70,347,270 20,189,591


RAHIM TEXTILE MILLS LIMITEDFIXED ASSETS SCHEDULE AS ON 30 JUNE 2016

Schedule -A-1

COST DEPRECIATION Wri�en down Items Balance as Addi�on Adjustment Total as on Rate Charges Adjustment Total as on value as on on 01.07.15 During the During the 30.06.16 (%) As on 01.07.15 During the During the 30.06.16 30.06.16 Year Year Year Year

Land & Land Development 14,345,373 - 14,345,373 - - - 14,345,373

Factory Building 119,183,504 2,199,818 - 121,383,322 10 67,196,881 5,418,644 72,615,525 48,767,797

Plant & Machinery 501,473,542 32,784,568 21,503,825 512,754,285 10 243,608,875 26,914,541 15,565,035 254,958,381 257,795,904

Office Building 465,320 - 465,320 10 440,284 2,504 442,787 22,533

Godown / Ware House 2,417,477 - 2,417,477 10 927,538 148,994 1,076,532 1,340,945

Tubewell & Water Pump 5,445,170 - 5,445,170 15 3,983,161 219,301 4,202,462 1,242,708

Electric Installa�on 17,688,521 - 17,688,521 15 12,719,684 745,326 13,465,009 4,223,512

Furniture & Fixtures 1,525,354 837,249 2,362,603 10 1,013,718 134,888 1,148,607 1,213,996

Crokeries & Cutleries 83,506 - 83,506 15 55,895 4,142 60,036 23,470

Air Cooler & Celling Fan 2,528,168 - 2,528,168 15 1,451,775 161,459 1,613,234 914,934

Office Equipments 3,737,608 472,830 4,210,438 15 2,309,261 285,177 2,594,438 1,616,000

Loose Tools & Equip. 1,549,128 663,040 2,212,168 15 1,050,221 174,292 1,224,513 987,655

Gas Line Installa�on 1,476,783 1,476,783 15 937,688 80,864 1,018,552 458,231

Boundary Wall 2,155,312 - 2,155,312 15 1,643,231 76,812 1,720,043 435,269

Other Machine & Equip. 3,329,014 1,257,532 4,586,547 15 2,457,682 319,330 2,777,011 1,809,535

Generator 20,431,739 - 20,431,739 15 15,393,359 755,757 16,149,116 4,282,623

Water Tank Reservoir 951,779 - 951,779 15 635,007 47,516 682,523 269,256

Motor Vehicles 10,503,687 3,000,000 - 13,503,687 15 4,982,349 1,278,201 - 6,260,550 7,243,137

As at 30 June 2016 709,290,986 41,215,038 21,503,825 729,002,198 360,806,607 36,767,747 15,565,035 382,009,319 346,992,879

As at 30 June 2015 70,446,226 3,844,760 0 709,290,986 322,225,077 38,581,530 - 360,806,607 348,484,378

Revalued Fixed Assets Schedule As on 30 June 2016 COST DEPRECIATION Wri�en down Items Revalued Assets Addi�on Adjustment Total as on Rate Balances as Charges Adjustment Total as on value as on as on 01.07.15 During the During the 30.06.16 (%) on 01.07.15 During the During the 30.06.16 30.06.16 Year Year Year Year

Land & Land Development 78,760,479 78,760,479 - - - - 78,760,479

Factory Building 18,710,765 18,710,765 10 9,761,464 894,930 10,656,394 8,054,371

Plant & Machinery 16,571,539 - 231,818 16,339,721 10 8,302,817 803,690 142,007 8,964,500 7,375,221

Boundary Wall 6,035,141 6,035,141 15 3,460,375 386,215 3,846,590 2,188,551

Tubewell & Water Pump 3,405,891 3,405,891 15 1,952,839 217,958 2,170,797 1,235,094

Sub Total as at 30.06.16 123,483,815 0 231,818 123,251,997 23,477,495 2,302,793 142,007 25,638,281 97,613,716

Grand Total as at 30.06.16 832,774,801 41,215,038 21,735,643 852,254,195 384,284,102 39,070,540 15,707,042 407,647,601 444,606,595

Total as at 30.06.15 828,390,041 3,844,760 0 832,774,801 343,078,667 41,205,435 0 384,284,102 448,490,968

Deprecia�on charged to :

A i) Deprecia�on of cost of Fixed Assets charged to cost of produc�on 35,069,481

A ii) Deprecia�on of cost of Revalued Assets charged to cost of produc�on 2,302,793

B ) Deprecia�on of cost of Fixed Assets charged to Profit & Loss A/C 1,698,266

1,698,266

37

Annual Report 2016

34th Annual General Meeting


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

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

PROXY FORM

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

of. -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

being a shareholder(s) of Rahim Tex�le Mills Limited and a holder of ---------------------------------------------------------------------------------------------------------------------------- shares

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

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

as my/our proxy to a�end and vote on my/our behalf at the 35th Annual General Mee�ng of the Company to be held on Monday, December 26, 2016 at 9.00 a.m. at Trust Milonayaton, 545, Puraton Biman Bandar Sarak (Adjacent to Shahid Bir Shresta Jahangir Gate), Dhaka Cantonment, Dhaka-1206 and at any adjournment thereof.

Afix Revenue

Signed this --------------------------------------------day of December, 2016 Stamp

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

Name of shareholder (s) ----------------------------------------------------------------------- Name of Proxy-----------------------------------------------------------------------

Folio/BO ID No.

Folio/BO ID No. of Proxy (if any):

Note: A member en�tled to a�end and vote at the Annual General Mee�ng may appoint proxy to a�end and vote in his/her stead. The proxy

from should reach the Corporate & Share Office of the Company not less than 48 hours before the �me fixed for the mee�ng.

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

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

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

A�endance Slip

I hereby record my a�endance at the 35th Annual General Mee�ng of Rahim Tex�le Mills Limited being held today, the December 26, 2016 at 9.00 a.m. at Trust Milonayaton, 545, Puraton Biman Bandar Sarak (Adjacent to Shahid Bir Shresta Jahangir Gate), Dhaka Cantonment, Dhaka-1206 as a holder of -------------------------------------------------------------------- shares of the Company.

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

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

Folio/BO ID No.

NOTE: Shareholder (s) a�ending the mee�ng in person or by proxy are requested to complete the A�endance Slip and hand it over at the entrance of the mee�ng hall.

39

Annual Report 2016

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

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

Gulshan-1, Dhaka-1212Factory:

Shafipur, Kaliakoir, GazipurTel: +880-2-8832771-82, 8816128, Fax: 880-2-9848953

E-mail: [email protected], Website: www.rahimtex�le.com

Documents

Rahim Textile Mills Ltd. - New Asia GroupRAHIM TEXTILE MILLS LIMITED TRANSMITTAL LETTER The Shareholders Bangladesh Securi es and Exchange Commission Registrar of Joint Stock Companies