BEXTEX LIMITED - Beximcobextex.net/AR_2009.pdf · held on Thursday, the 17th June, 2010 at 11.30...

$: BEXTEX LIMITED - Beximcobextex.net/AR_2009.pdf · held on Thursday, the 17th June, 2010 at 11.30 a.m. at Beximco Industrial Park, Sarabo, Kashimpur, ... Group (pJrJ IJ∂\tJKfT msJP¥r$
Annual Report 2009

BEXTEX LIMITED

Annual Report 2009

missionEach of our activities must benefit and add value to the common wealth of our society. We firmly believe that, in the final analysis we are accountable to each of the constituents with whom we interact; namely: our employees, our customers, our business associates, our fellow citizens and our shareholders.

content

2 Notice of the Twenty-Sixth Annual General Meeting 3 Board and Management4 Chairman’s Statement 8 Corporate Governance10 Report of the Directors12 Corporate Governance Compliance Report13 Five Years’ Statistics14 Value Added Statement 15 Twenty-Fifth Annual General Meeting17 Report of Auditors to the Shareholders18 Balance Sheet19 Profit and Loss Account20 Statement of Changes in Equity21 Cash Flow Statement22 Notes to the Accounts Proxy Form and Attendance Slip

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BEXTEX • 2009 ANNUAL REPORT

Notice of the TWENTY-SIXTH Annual General Meeting

BEXTEX LIMITED17, DHANMONDI R.A, ROAD NO. 2, DHAKA-1205

NOTICE OF THE TWENTY-SIXTH ANNUAL GENERAL MEETING

Notice is hereby given that the TWENTY-SIXTH ANNUAL GENERAL MEETING of the Shareholders of Bextex Limited will be held on Thursday, the 17th June, 2010 at 11.30 a.m. at Beximco Industrial Park, Sarabo, Kashimpur, Gazipur to transact the following business :

AGENDAA. As Ordinary Businesses:

1. To receive, consider and adopt the Audited Financial Statements of the Company for the year ended 31st December, 2009 together with reports of the Auditors and the Directors thereon.

2. To elect Director.3. To confirm the re-appointment of Managing Director.4. To declare 15% Stock Dividend.5. To appoint Auditors for the year 2010 and to fix their remuneration.6. To transact any other business of the Company with the permission of the Chair.

B. As Special Business:To pass special resolutions for amendment of Clause-V of the Memorandum of Association and Article-5 of the Articles of Association of the Company to increase the Authorized Capital of the Company from Tk.500,00,00,000/- to Tk.800,00,00,000/-. Proposed resolutions are as follows :(i) CLAUSE-V OF THE MEMORANDUM OF ASSOCIATION:“Resolved that the words and figures “Tk.500,00,00,000/- (Taka five hundred crore) divided into 50,00,00,000 (Fifty crore) ordinary shares of Tk.10/- (Taka Ten) each” in Clause-V of the Memorandum of Association of the Company be substituted by the words and figures “Tk.800,00,00,000/- (Taka eight hundred crore) divided into 80,00,00,000 (Eighty crore) ordinary shares of Tk.10/- each”. (ii) ARTICLE-5 OF THE ARTICLES OF ASSOCIATION:“Resolved that the words and figures “Tk.500,00,00,000/- (Taka five hundred crore) divided into 50,00,00,000 (Fifty crore) ordi-nary shares of Tk.10/- each” in Article-5 of the Articles of Association of the Company be substituted by the words and figures “Tk.800,00,00,000/- (Taka eight hundred crores) divided into 80,00,00,000 (Eighty Crores) ordinary shares of Tk.10/- (Taka Ten) each”.

By order of the Board,

(MD. ASAD ULLAH, FCS)Dated : 10th May, 2010 Executive Director & Company Secretary

NOTES:(1) The Record Date shall be on 19th May, 2010. The Shareholders whose names will appear in the Share Register of the Company or in the Deposi-

tory Register on that date will be entitled to attend at the Annual General Meeting and to receive the dividend.(2) A member entitled to attend and vote at the General Meeting may appoint a Proxy to attend and vote in his/her stead. The Proxy Form, duly

stamped, must be deposited at the Registered Office of the Company not later than 48 hours before the time fixed for the meeting.(3) Admission to the meeting room will be strictly on production of the attendance slip sent with the Notice as well as verification of signature of

Member(s) and/or proxy-holder(s). (4) No gift or benefit in cash or kind shall be paid to the holders of equity securities in terms of Clause (c) of the Notification No.SEC/SRMI/2000-

953/1950 dated 24 October 2000 for attending this AGM of the Company.

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Board and Management

BOARD OF DIRECTORS

A S F Rahman Chairman and Managing DirectorSalman F Rahman Vice ChairmanM A Qasem DirectorA B Siddiqur Rahman Director

MANAGEMENT TEAM

Syed Naved Husain Chief Executive OfficerSardar Ahmed Khan Chief Operating OfficerAjay Pratap Singh Chief Financial Officer

COMPANY SECRETARY

Md. Asad Ullah, FCS

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Chairman’s Statement

I take this opportunity to welcome you all on behalf of the Board of Directors to this 26th Annual General Meeting of your company and to present to you the Auditor’s Report which includes the Audited Financial Statements and the Directors Report for the year ended 31st December 2009.

Operation

Operations of your Company for the period under review have considerably improved over the preceeding years which will be evident from the increase in production in all the divisions of the company and simultaneously increase in the revenue by 65 % and corresponding increase in the profitability in comparison to the previous year .

During the year the Company has taken effective steps to enhance the capacities of the spinning , woven fabric and denim fabric division by making an additional investment of Tk. 2382 million from sponsor’s own resources in new technology. The new technology acquired will undoubtedly increase the overall productivity and profitability of the Company and the same will be evident from the half yearly results of the company for the year 2010 which will be shortly published.

Another significant achievement, which will go a long way in increasing the profitability of the Company , has been conversion of the Foreign Loan equivalent to Tk. 3152 million into Equity Share Capital . Consequent to conversion, the Company benefited substantially and in subsequent years, there will be an annual savings of Tk 200 million on interest. Besides , the foreign loan , the Company also converted Tk 3200 miilion interest bearing loan from Sponsor’s Group Companies into Equity. The overall impact of the conversion has been that the Debt : Equity ratio has reduced from 2.33 : 1 to 0.63 : 1 signifying a healthier Balance Sheet and annual savings of interest.

Marketing

As a result of our intensified marketing efforts during last year , you will be glad to know that our old customers like J C Penny and Inditex Group, which owns international brands like Zara, Bershka and Pull

& Bear, have started placing orders in big volumes in more than one product categories. Phillips Van Huesen has also come back with a bang and besides dress shirts, they are now placing orders in women’s casual wear for both tops and bottoms for well known brands like IZOD, Calvin Klien , Bass etc.

Another major development has been that H&M has also started placing garments orders which hitherto had been only placing fabrics orders . Our garments orders have reached a stage where single shift working in garment factories was not enough , as such, for the first time in Bangladesh , we experimented with second shift operations in garment factories and , I take pleasure in informing you that this experiment was successful and now , gradually, we are converting all of our garment manufacturing facilities into two shift. This will double our garment manufacturing capacity with existing machineries and infra structure facilities which consequently will double our garments turnover .

During the period under review , we have also more than doubled our garments washing facilities and have also introduced new techniques of garment dyeing , dry finishing etc. Our washing plant is capable of offering latest trend and right product to our fashion conscious customers.

In addition to the above mentioned existing customers there are many other international brands who are knocking at our doors to get in due to our quality and high fashion products. Our order books are full for next six months and more orders are coming every day.

Human Resources

Your company has always recognized the importance of human resources development and makes considerable investment for acquisition, development and retention of talented and dynamic professionals. Through its programs for training, allocation of responsibilities & authority, performance appraisal, job enlargement & enrichment , Bextex provides an environment, which is conducive to individual growth and motivates employees to put in their best effort for achieving organizational goals.

Dear Shareholders,

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Environment

The company is very committed to preserve healthy and pollution free environment. It has a very efficient waste collection and disposal system. In order to reduce air pollution by exhaust of gas from engine generators, it maintains a costly plant that uses the exhaust gas to generate steam for chilling unit. Above measures not only help keep the water & air free from pollution but also help save cost of water treatment & air conditioning. Your company uses only AZO-free dyes and is dedicated to ensure a healthy and eco-free-friendly environment.

Future Plans

Bextex has always remained as an important strategic partner to our core customers because of its position as a South Asians leading producer of innovative fabrics and designs and integrated state of the art facilities from yarn to fabric.

The Company has always emphasized on strengthening of our research and development activities for product development and have focused on our operational excellence to maintain quality and standards which has enabled us to sustain competition.

Your Company has already imported a new state of the art Denim manufacturing plant which is now under installation. This will increase Denim capacity to 16 million yards per year.

Dividend

In comparison to the previous years, this year the net operational results have been better. Keeping in view the performance of the company, the board of directors recommended 15 % stock dividend for the year. They are confident that you will stand by this decision in the interest of the long-term prospects of your company.

Conclusion

I would like to take this opportunity to show my appreciation and sincere gratitude to the valued shareholders, government agencies, employees,

banks, financial institutions, suppliers and to our customer for their unforgettable co-operation. In fact, you are the real strength to overcome the challenges in our way. I am confident, that with your understanding and support we will continue to build on our capabilities for sustained high performance in future. Again I offer my heartiest thanks to all shareholders for their support during the year.

A S F RahmanChairman

Dated : 29th April, 2010Place : Dhaka

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CORPORATE GOVERNANCE

BEXTEX Limited is a trend setting pioneer in corporate governance in the country and enjoys reputation as a world class producer of yarn, fabric and apparel that is admired worldwide for their quality and design. A team of highly qualified and experienced and committed professionals under the guidance of top management of the company have achieved admirable measure of success in a short span of time. This has been possible because the company never compromises on quality and settles for nothing but the best.Transparency and fair business practices coupled with strict quality control regimen have inspired the confidence of internationally reputed buyers like PVH, Perry Ellis, Wal-Mart, JC Penny, Philippine Van Heusen, Zara of Spain Kid Headquarter, to name a few, to enter into business partnership with BEXTEX.The company, as part of its corporate responsibility, shares its experience with others, especially educational and training institutes like the National Defence College ( NDC ), Ordnance School, Marine Academy which send trainees from time to time to visit the company’s plants, which stand as symbols of the nation’s march

towards high-tech industries. BEXTEX also receives students from different institutions as interns and on industrial attachments to enable them to gain first hand knowledge on corporate management practices. An important hallmark of the company’s policy is talent hunting. It goes for the best talents in the country and outside; and through intensive training programme expands their perspectives and hone their thinking. Training programmes are specially designed to prepare them to take over and confidently discharge management responsibilities. Towards this end, BEXTEX has hired competent professionals from India, China, Pakistan, Sri Lanka, the Philippines, et al.All the efforts of BEXTEX in hiring best talents, providing best training and ensuring best quality production aim at one goal: put Bangladesh on the global map as the producer of quality goods. The export strategy of the company is not profit motive; it is geared to fostering economic growth of the country.The company abides by all relevant Health, Safety and Environment Conservation Rules; Fire and Boiler maintenance

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instructions and all relevant policies of the government, as is evident throughout the entire Industrial Park where BEXTEX plants are located. Sufficient Personal Protective Equipment (PPE), Safety Equipment, signs and symbols etc. are made available throughout the plants. Necessary training is also imparted to all the workers on the use of these equipment so that they are able to use them, if required, and meet the health, safety & hygiene requirement properly. Necessary’ plantation, treatment, control measures etc. are also properly ensured as per the guidelines of the World Bank, Department of Environment and other concerned bodies. It also follows the Buyers’ Code of Conduct and satisfactorily meets the buyers’ set standard of compliance. The certification of compliance from internationally reputed companies bear testimony to BEXTEX’s compliance of global standard.BEXTEX Limited can confidently say that earning admiration from around the globe are the benchmarks of the success of the company. This success has been earned by ensuring the highest level of human resources management and conforming to various compliance issues at the

level of international standard. BEXTEX’s Human Resources Team Management is way ahead of others in the industry. Herein lies the strength of the company and explains in no uncertain manner why it has achieved unparalleled success. The team of Human Resources Department in BEXTEX consisting of highly qualified and vastly experienced personnel having appropriate training at home and abroad, made the department equipped with necessary policies, guidelines, standard operating procedures (SOPs), job descriptions, training materials, code of conducts (COC). Continuous development of human resources is also taking place simultaneously in each and every section of the company.

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REPORT OF THE DIRECTORSFor the year ended 31 December 2009

The Directors are pleased to present the Audited Financial Statements of the Company for the year ended 31 December 2009, together with the Directors’ and Auditors’ Reports thereon..

PRINCIPAL ACTIVITYThe principal activity of the Company in the period under review was that of production and sale of high quality yarns and woven, denim & knit fabrics.

WORKING RESULTSThe working result of the Company for the year under review are as follows:

(Taka in million) 2009 2008Net Profit/(Loss) after income tax 933.45 (608.66)Profit brought forward (1,341.71) (733.05)Profit avaiable for appropriations (408.26) (1,341.71)The Directors recommended the following appropriation:Proposed Stock Dividend (Bonus Share) for the year 2009 at 15% (608.41) (188.28)Profit/(Loss) carried forward (1,016.67) (1,529.99)

DIVIDENDThe Board of Directors have recommended 15% stock Dividend (Bonus share); i.e., 15 (fifteen) bonus share for every 100 (hundred) ordinery shares held, fully paid up, for the approval of the shareholders for the year ended 31 December 2009.

DIRECTORMr. A B Siddiqur Rahman, Director, retires by rotation as per Articles 126 and 127 of Articles of Association of the Company and being eligible offers himself for re-election.

RE-APPOINTMENT OF MANAGING DIRECTORAs per provision of Companies Act 1994, Mr. A S F Rahman had been appointed as Managing Director of the Company for a period of 5 years which expired on 31st December, 2009. The Board has re-appointed him as Managing Director of the Company for another period of 5 years w.e.f. 1st January, 2010 to 31st December, 2014, subject to the approval of Shareholders in the 26th Annual General Meeting.

BOARD MEETING AND ATTENDANCEDuring the year,24 (Tweenty Four) Board Meetings were held. The attendance record of the Directors is as follows:

Name of Directors Meetings AttendedA S F Rahman 22Salman F Rahman 24M A Qasem 24A B Siddiqur Rahman 19

BOARD AUDIT COMMITTEE

The company has an audit committee, which met three times in 2009, to consider the annual accounts ended 31st December,2008 , the half-year accounts ended 30th June, 2009 and 3rd quarter accounts ended 30th september, 2009 and also auditors report on the annual accounts of 2008.

CORPORATE & FINANCIAL REPORTING

The Company has complied with all the requirements of Corporate Governance as required by the Securities and Exchange Commission Accordingly, the Directors are pleased to confirm the following :(a) The financial statements together with the notes

thereon have been drawn up in conformity with the Companies Act, 1994 and Securities and Exchange Rules, 1987. These statements present fairly the Company’s state of affairs, the result of its operations, cash flow and changes in equity.

(b) Proper books of accounts of the Company have been maintained.

(c) Appropriate Accounting Policies have been consistently applied in preparation of the financial statements and that the accounting estimates are based on reasonable and prudent judgement.

(d) The International Accounting Standards, as applicable in Bangladesh, have been followed in preparation of the financial statements,

(e) The systems of internal control are sound and have been effectively implemented and monitored.

Dear Shareholders,

10

(f) There are no significant doubts upon the Company’s ability to continue as a going concern.(g) The Company has incurred net loss, mainly due to higher raw material costs, higher depreciation and

higher expenses-manufacturing, administrative and selling.(h) The key operating and financial data for the last five years is Annexed.(i) The pattern of shareholding is as follows :

Name-wise details Shares held(i) Parent/Subsidiary/Associate Companies and other related parties : Bangladesh Export Import Co. Ltd 52,027,274 Beximco Holdings Ltd 30,503,595 Beximco Apparels Ltd 663,492 Beximco Pharmaceuticals Ltd. 263,290 New Dacca Industries Ltd. 15,915,358(ii) Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and their spouses and minor children : Mr. A S F Rahman, Chairman 37,892,497 Mr. Salman F Rahman, Vice Chairman 43,844,853 Chief Executive Officer, spouse and minor children Nil Company Secretary, spouse and minor children Nil Chief Financial Officer, spouse and minor children Nil Head of Internal Audit, spouse and minor children Nil(iii) Executives Nil(iv) Shareholders holding ten percent (10%) or more voting interest in the Company Mr. A S F Rahman, Chairman (mentioned in Sl. No. (ii)) 37,892,497 Mr. Salman F Rahman, Vice Chairman (mentioned in Sl. No. (ii)) 43,844,853

CORPORATE GOVERNANCE COMPLIANCE REPORTIn accordance with the requirement of the Securities and Exchange Commission, “Corporate Governance Compliance Report” is also Annexed.

AUDITORSThe directors hereby report that the existing Auditors, M.J. Abedin & Co. Chartered Accountants, Nationa Plaza, (3rd Floor), 109, Bir Uttam C.R. Datta Road, Dhaka-1205, who were appointed as Auditors of the Company in the twenty-Fifth Annual General Meeting of the Company has carried out the audit for the year ended 31st December 2009.M.J. Abedin & Co. Chartered Accountants, National Plaza (3rd Floor), 109, Bir Uttam C. R. Datta Road, Dhaka-1205, the Auditors of the Company retire at this meeting and have expressed their willingness to continue in office for the year 2010.

On behalf of the Board,

A S F RahmanChairmanApril 29, 2010Dhaka.

11


Corporate Governance Compliance ReportANNEXURE

Status of compliance with the conditions imposed by the Commission’s Notification No. SEC/CMRRCD/2006/158/Admin/02-08 dated 20th February 2006 issued under section 2CC of the Securities and Exchange Ordinance, 1969. (Report under Condition No. 5.00)

Condition. Title Compliance status Explanation No (Put (√) in the appropriate column) for non-compliance Complied Not complied with the condition

1.1 Board’s Size √ 1.2(I) Independent Directors √ 1.2(II) Independent Directors Appointment √ 1.3 Chairman & Chief Executive √1.4(a) Directors’ Report on financial Statements √1.4(b) Books of Accounts √1.4(c) Accounting Policies √1.4(d) IAS Applicable in Bangladesh √1.4(e) System of Internal Control √1.4(f) Going Concern √1.4(g) Deviation in Operating Results √1.4(h) Key operating and Financial Data √1.4(i) Declaration of Dividend √1.4(j) Number of Board Meetings √1.4(k) Pattern of Shareholdings √

2.1 CFO, HIA & CS Appointment √2.2 Board Meeting Attendance √

3 Audit Committee √3.1(i) Composition of Audit Committee √3.1(ii) Audit Committee Members Appointment √3.1(iii) Terms of service of Audit Committee √3.2(I) Chairman of Audit Committee √3.2(ii) Audit Committee Chairman’s Qualification √3.3.1(I) Reporting to the Board of Directors √3.3.1(ii)(a) Report of Conflicts of Interest √3.3.1(ii)(b) Defect in the Internal Control System √3.3.1(ii)(c) Suspected infringement of Laws √3.3.1(ii)(d) Any other matter √3.3.2 Reporting to the Authorities √3.4 Reporting to the Shareholders √4.00 (I) Appraisal or Valuation Services √4.00 (ii) Financial information system √4.00 (iii) Book keeping or other services √4.00 (iv) Broker dealer services √4.00 (v) Actuarial services √4.00 (vi) Internal Audit services √4.00 (vii) Any other services √

12

FIVE YEARS’ STATISTICS

2009 2008 2007 2006 2005

Results of Operations:* Revenue 7,866,258 4,760,237 4,267,027 5,201,514 2,570,597* Gross Profit 2,929,568 1,670,052 1,245,302 2,030,146 499,931* Operating Profit 2,615,780 1,409,417 996,034 1,774,503 449,975* Net Profit/(loss) before tax 1,098,173 (608,656) (983,404) (200,709) 156,569* Net Profit/(loss) after tax 933,447 (608,656) (994,072) (208,649) 123,599** Basic Earning per share 4.16 (3.23) (5.28) (1.11) 2.03** Cash Dividend Per Share - - - - 0.50Stock Dvidend in % 15 10 - 10 10* Cash Generated from/(Used in) Operating Activities (775,747) (1,134,776) (407,370) 269,201 88,167

Financial Position:* Total Assets 22,155,834 19,086,298 14,738,938 14,956,940 6,168,193* Fixed Assets - Gross 19,678,904 12,915,855 11,579,984 11,431,174 4,107,057* Fixed Assets - Net 13,416,140 11,805,281 6,805,566 7,293,540 1,661,658* Financial Assets 5,056,866 3,812,236 3,492,995 3,458,925 3,113,777* Reserve and Surplus 6,581,683 1,469,666 46,824 1,248,829 1,230,994* Gross Working Capital 8,677,167 7,230,983 7,881,489 7,572,906 4,496,276* Net Working Capital 1,993,905 (675,955) (177,009) 1,611,525 2,793,425* Authorised Capital 5,000,000 3,000,000 3,000,000 3,000,000 1,000,000* Share holders’ Equity 10,637,748 3,552,512 1,929,670 2,960,507 2,076,601* Paid up Capital 4,056,065 1,882,846 1,882,846 1,711,678 608,108* Total Long Term Debt 6,683,262 7,826,849 4,735,768 6,020,051 2,373,739

Key Financial Ratios, Figures and Market Data:Current Ratio 1.79 : 1 0.92 : 1 0.98 : 1 1.27:1 2.64:1Debt Equity Ratio 0.63 2.33 2.45 2.03 1.14Return on Investment 4.21% -3.19% -6.74% -1.39% 2.00%** Net Assets Value per Share 42.70 59.37 35.48 52.55 73.43Payout Ratio - - - - 73.89%** Market value of share (at DSE) 81.40 23.90 18.90 22.50 21.90** Market value of share (at CSE) 81.70 23.80 18.75 22.50 22.10Price Earning Ratio (Based on DSE price)(Times) 19.57 (7.40) (3.58) (18.44) 10.79Price Earning Ratio (Based on CSE price)(Times) 19.64 (7.37) (3.55) (18.44) 10.89

Others:Number of shares 405,606,503 188,284,625 188,284,625 171,167,841 60,810,750Number of shareholders 50,826 37,216 37,929 36,470 9,147Number of EmployeesNo. of Employees 7,189 5,230 5,181 6,206 2,652* Figures in Thousand Taka** Figures in Taka

Note Statistics for 2005 relate to erstwhile Padma Textile Mills Ltd., and accordingly, are not comparable with those of 2006, 2007, 2008, & 2009

13


Value Added Statement

2009 2008 Taka in ‘000 % Taka in ‘000 %

Turnover 7,866,258 4,760,237Brought-in-materials and services (4,456,673) (2,902,499)

3,409,585 100.00 1,857,738 100.00

Govt - as Duties and taxes 4,137 0.12 21,538 1.16Employees - as Salaries, wages and allowances 559,567 16.41 426,783 22.97Lenders - as Financial Charges 688,668 20.20 1,300,657 70.01Shareholders - as Dividend - - - - 1,252,372 36.73 1,748,977 94.15

Depreciation and retention 2,157,213 63.27 108,760 5.85

3,409,585 100.00 1,857,738 100.00

Govt 0.12 %

Govt 1.16 %

Employees 16.41 %

Employees 22.97 %

Lenders20.20 %

Lenders70.01 %

Depreciation and retention63.27 %

Depreciation and retention5.85 %

FY 2009 FY 2008

.01 %

14

Twenty-Fifth Annual General Meeting

The Twenty Fifth Annual General Meeting ( AGM ) of shareholders of BEXTEX Limited was held on 18th June 2009 at 4:00 PM at 1,Shahbag C/A , Dhaka. A large number of shareholders attended at the AGM.Mr. A.S.F Rahman, Chairman of the Board of Directors of the Company, presided over the meeting. Mr. Salman F Rahman, Mr. M. A. Qasem were also present in the meeting. Verses from the Holy Quaran along with its translation in Bengali were recited at the very outset of the meeting.The Chairman welcomed the shareholders in the AGM . With the permission of the Chair, the meeting began and the shareholders expressed their valued opinion on the audited financial statements of the Company for the year ended 31 December 2008 and also on their affairs.Mr. Salman F Rahman ,Vice Chairman of the Company replied to the queries and explained various comments of distinguished shareholders. He also gave hints of future activities of the Company.After approving the audited financial statements , declaring dividend (stock dividend @ 10%), electing directors, appointing auditors and fixing their remuneration by the shareholders, the meeting ended with a vote of thanks to and from the Chair.

15


Financials

16

BEXTEX LimiTEd Annual Report 2009 17

TO THE SHAREHOLdERS OF BEXTEX LimiTEdAUDITORS’ REPORT

We have audited the accompanying Balance Sheet of the Bextex Limited as of december 31, 2009 and the related Profit and Loss Account, Statement of Changes in Equity and Statement of Cash Flows for the year then ended. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis of our opinion.

in our opinion, the financial statements prepared in accordance with Bangladesh Financial Reporting Standards (BFRSs), give a true and fair view of the state of the company’s affairs as of december 31, 2009 and of the results of its operations and it’s cash flows for the year then ended and comply with the applicable sections of the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations.

We also report that:

(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof;

(b) in our opinion, proper books of account as required by law have been kept by the company so far as it appeared from our examination of those books;

(c) the company’s balance sheet and profit and loss account dealt with by the report are in agreement with the books of account; and

(d) the expenditure incurred was for the purposes of the company’s business.

April 29, 2010 M. J. ABEDIN & CO.dhaka. Chartered Accountants

BEXTEX LimiTEd Annual Report 200918

As at december 31, 2009Balance Sheet

ASSETSProperty, Plant and Equipment-Carrying Value 4 13,416,139,550 11,805,280,797Long Term Security deposits 5 43,530,686 29,191,074deferred Assets 6 18,997,013 20,843,945Total Non-Current Assets 13,478,667,249 11,855,315,816

Current Assets 8,677,166,758 7,230,982,538inventories 7 2,742,675,600 2,733,063,864Trade debtors 8 4,986,086,053 3,765,912,622 Advances, deposits and Prepayments 9 921,155,433 714,873,842 Cash and Cash Equivalents 10 27,249,672 17,132,210Total Assets Tk. 22,155,834,007 19,086,298,354

EQUITY AND LIABILITIESShareholders’ Equity 10,637,748,057 3,352,511,836issued Share Capital 11 4,056,065,030 1,882,846,251 Reserves & Surplus 6,581,683,027 1,469,665,585

Non-Current Liabilities 6,683,261,956 7,826,848,879 10% debentures - Net of Current maturity (Secured) 12 871,051,272 1,009,534,505Long Term Loans-Net of Current maturity (Secured) 13 5,797,210,684 6,802,314,374Security deposit from distributor 14 15,000,000 15,000,000

Current Liabilities 4,834,823,994 7,906,937,639Short Term Loans 15 2,704,930,953 4,283,771,41510% debentures - Current maturity (Secured) 16 173,888,054 -Long Term Loans - Current maturity (Secured) 17 1,393,544,111 2,029,139,603Creditors & Accruals 18 562,460,876 1,594,026,621

Total Shareholders’ Equity and Liabilities Tk. 22,155,834,007 19,086,298,354

The notes are an integral part of the Financial Statements.

Approved and authorized for issue by the board of directors on April 29, 2010 and signed for and on behalf of the Board.

A S F Rahman Salman F Rahman M A QasemChairman and managing director Vice Chairman director

Per our report of even date.

April 29, 2010 M.J. Abedin & Co.dhaka. Chartered Accountants

Notes 2009 2008 Amount in Taka Amount in Taka


For the year ended 31 december 2009Profit and Loss Account

Revenue 19 7,866,257,822 4,760,237,189Cost of Revenue 20 (4,936,690,149) (3,090,184,887)Gross Profit 2,929,567,673 1,670,052,302Operating Expenses (313,997,191) (260,635,288)

Administrative Expenses 23 (294,146,231) (240,784,328)distribution (Selling) Costs (19,850,960) (19,850,960)Profit before Interest, Tax & Depreciation 2,615,570,482 1,409,417,014

Financial Expenses 24 (688,667,966) (1,300,656,669)depreciation 4 (770,931,098) (717,416,211)Profit/(Loss) before Contribution to WPWF 1,155,971,418 (608,655,866)

Contribution to Workers’ Participation/Welfare Fund (57,798,571) -Net Profit/(Loss) before Tax 1,098,172,847 (608,655,866)

income Tax Expenses 25 (164,725,927) -Net Profit/(Loss) for the year transferred to Tk. 933,446,920 (608,655,866)

Statement of Changes in Equity

Earnings Per Share (Par value Tk.10/-) 26 Tk. 4.16 (2.94)(Adjusted EPS of 2008)






Notes 2009 2008 Amount in Taka Amount in Taka


For the year ended december 31, 2009Statement of Changes in Equity

At the beginning of the year 1,882,846,250 450,000,000 329,879,705 2,031,497,144 (1,341,711,264) 3,352,511,835 10 % Stock dividend for 2008 188,284,620 (188,284,620) - - - - New Allotment of Share 28 1,984,934,160 4,366,855,142 - - - 6,351,789,302 Profit for the year - - - - 933,446,920 933,446,920 At the end of the year Tk. 4,056,065,030 4,628,570,522 329,879,705 2,031,497,144 (408,264,344) 10,637,748,057






Particulars Notes Share Capital Share Premium Capital Reserve on Revaluation Retained Total Taka Taka Marger Surplus Earnings Taka Taka Taka Taka


For the year ended 31 december 2009CASH FLOWS STATEMENT

Cash Flows from Operating Activities : Cash Receipts from Customers and Others 6,646,084,391 3,190,602,600 Cash Paid to Suppliers and Employees (5,359,326,918) (3,043,303,205) Cash Generated from Operations 1,286,757,473 147,299,395 interest Paid (2,006,166,127) (1,261,679,027) income Tax Paid & deducted at Source (56,338,512) (20,396,366) Net Cash (Used in) / Generated from Operating Activities (775,747,166) (1,134,775,998) Cash Flows from Investing Activities : Acquisition of Property, Plant and Equipment (2,381,789,851) (986,841,760) Net Cash Used in Investing Activities (2,381,789,851) (986,841,760) Cash Flows from Financing Activities : New Allotment of Shares including Premium 6,351,789,302 - increase /(decrease) in Long Term Borrowings (1,605,294,361) 1,945,272,911 increase/(decrease) in Short Term Borrowing (1,578,840,462) 181,255,969 Net Cash Generated from/(Used in) Financing Activities 3,167,654,479 2,126,528,880 increase in Cash and Cash Equivalents 10,117,462 4,911,122 Cash and Cash Equivalents at Beginning of Year 17,132,210 12,221,088 Cash and Cash Equivalents at End of Year Tk. 27,249,672 17,132,210






2009 2008 Amount in Taka Amount in Taka

Notes to the Financial Statements


As at and for the year ended 31 december 2009

1.00 Reporting Entity

1.01 Company Profile

Bextex Limited (formerly known as Padma Textile mills Limited) was incorporated in Bangladesh in 1984 under the Companies Act, 1913 as a Public Limited Company. it commenced its manufacturing operation in 1990. The company became a listed company in 1992.

The name of the company has been changed during the year 2006.

The shares of the Company are traded in dhaka and Chittagong Stock Exchanges of Bangladesh.

during the year 2006, the company took over, under a Scheme of Amalgamation, erstwhile Beximco Textiles Ltd., Beximco Knitting Ltd. and Beximco denims Ltd., the three listed companies of the Beximco Group engaged in manufacturing and marketing of high quality woven, knit and denim fabric that are consumed by the export oriented garments industries of Bangladesh.

The registered office of the company is located at House No. 17, Road No. 2, dhanmondi R/A, dhaka. The industrial units are located at Tatki of Narayanganj and Beximco industrial Park in Sarabo of Gazipur.

1.02 Nature of Business

it is engaged in manufacturing and marketing of yarn that are consumed by weaving mills of Bangladesh including its own weaving mills producing and marketing of high quality fabric, that are eventually consumed by the export oriented garments industries of Bangladesh including the garments factories of Beximco Group.

2.00 Basis of Preparation of Financial Statements

2.01 Basis of Measurement

The financial statements have been prepared on the Historical Cost basis except for certain fixed assets that were restated at replacement costs, and therefore, do not take into consideration the effect of inflation except that the Lands, Buildings and Plant & machinery as of 31st december, 2009 are re-stated at current cost.

Accordingly, historical cost is employed to determine the monetary amounts at which the elements of the financial statements are to be recognized and carried in the balance sheet and income statement.

Under the Historical Cost, assets are recorded at the amount of cash or cash equivalents paid or the fair value of the consideration given to acquired them at the time of their acquisition. Liabilities are recorded at the amount of proceeds received in exchange for the obligation, or in some circumstances (for example, income taxes), at the amounts of cash or cash equivalents expected to be paid to satisfy the liability in the normal course of business.

2.02 Statement of Compliance

The financial statements have been prepared in compliance with the requirements of the Companies Act 1994, the Securities & Exchange Rules 1987, the Listing Regulations of dhaka and Chittagong Stock Exchanges and other relevant local laws as applicable, and have been prepared in accordance with the applicable Bangladesh Financial Reporting Standards (BFRSs) including Bangladesh Accounting Standards (BASs) adopted by the institute of Chartered Accountants of Bangladesh (iCAB) based on international Financial Reporting Standards (iFRSs) and international Accounting Standards (iASs).

2.03 Presentation of Financial Statements

The presentation of these financial statements is in accordance with the guidelines provided by BAS 1: Presentation of Financial Statements.

2.04 Reporting Period

The financial period of the company covers one calendar year from 1st January to 31st december consistently.2.05 Approval of Financial Statements

The financial statements were approved by the Board of directors on April 29, 2010.




2.06 Reporting Currency

The financial statements are prepared and presented in Bangladesh Currency (Taka), which is the company’s functional currency. All financial information presented has been rounded off to the nearest Taka except where indicated otherwise.

2.07 Comparative Information

Comparative information has been disclosed in respect of the year 2008. Comparative amounts have been re-classified to conform with the current year’s presentation whenever considered necessary.

2.08 Use of Estimates and Judgments

The preparation of financial statements in conformity with Bangladesh Accounting Standards requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses, and disclosure requirements for contingent assets and liabilities during and at the date of the financial statements.

Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions of accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected as required by BAS 8: Accounting Policies, Changes in Accounting Estimates and Errors. in particular, significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements include depreciation, inventory valuation, accrued expenses and other payables.

2.09 Provisions

in accordance with the guidelines as prescribed by BAS 37 : Provisions, Contingent Liabilities and Contingent Assets, provisions are recognized in the following situations:

a. when the company has an obligation (legal or constructive) as a result of past events;

b. when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and

c. reliable estimate can be made of the amount of the obligation.

3.00 Significant Accounting Policies

The accounting policies in respect of material items of financial items of financial statements have been set out below:

3.01 Revenue Recognition

in compliance with the requirements of BAS 18 : Revenue, revenue from receipts from customers against sales is recognized when products are dispatched to customers, that is, when the significant risk and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods.

3.02.00 Property, Plant and Equipment

3.02.01 Recognition and Measurement

Property, plant and equipment are capitalized at historical cost except for certain fixed assets that were restated at replacement costs of acquisition and subsequently stated at cost less accumulated depreciation in compliance with the requirements of BAS 16 : Property, Plant and Equipment. The historical cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the assets to its working condition for its intended use inclusive of inward freight, duties and non-refundable taxes. However, as a requirement of the Companies Act 1994, exchange loss/gain relating to foreign currency loan has been capitalized to/deducted from cost of relevant fixed assets being procured under the said loan.

3.02.02 Pre-Operating Expenses and Borrowing Costs

in respect of major projects involving construction, related pre-operational expenses form part of the value of assets capitalized. Expenses capitalized also include applicable borrowing cost considering the requirement of BAS 23: Borrowing Costs.




3.02.03 Subsequent Costs and Maintenance Activities

The company recognizes in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when the cost is incurred, it is probable that the future economic benefits embodied with the item will flow to the company and the cost of the item can be measured reliably. Expenditure incurred after the assets have been put into operation, such as repair and maintenance is normally charged off as revenue expenditure in the period in which it is incurred. in situation where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefit expected to be obtained from the use of fixed assets, the expenditure is capitalized as an additional cost of the assets. All other costs are recognized to the profit and loss account as expenses if incurred. All up-gradation/enhancement are generally charged off as revenue expenditure unless they bring similar significant additional benefits.

3.02.04 Software

Software is generally charged off as revenue expenditure. Purchased software that is integral to the functionality of the related equipment is capitalized as part of that equipment.

3.02.05 Disposal of Fixed Assets

On disposal of Fixed Assets, the cost and accumulated depreciation are eliminated and gain or loss on such disposal is reflected in the income statement, which is determined with reference to the net book value of the assets and net sales proceeds.

3.02.06 Depreciation of Fixed Assets

depreciation is provided at the following rates on straight-line basis over the periods appropriate to the estimated useful lives of the different types of assets:

Factory Building and Other Construction 2% - 10% Plant & machinery 5% - 10% Furniture & Fixtures 20% Transport & Vehicle 20% Equipment 10% - 20%

3.02.07 Impairment

in accordance with the provisions of BAS 36 : impairment of Assets, the carrying amount of non-financial assets, other than inventories are reviewed at each reporting date to determine whether there is any indication of impairment. if any such indication exists, then the assets recoverable amount is estimated and impairment losses are recognized in profit and loss account. No such indication of impairment has been raised till to date.

3.03 Borrowing Costs

This has been dealt with the requirement of BAS 23 : Borrowing Costs.

Borrowing costs relating to projects in commercial operation are recognized as expenses in the year in which they are incurred. in respect of projects that have not yet commenced commercial production, borrowing costs are debited to capital work in progress.

3.04 Inventories

inventories are carried at the lower of cost and net realizable value as prescribed by BAS 2: inventories, Cost is determined on weighted average cost basis. The cost of inventories comprises of expenditure incurred in the normal course of business in bringing the inventories to their present location and condition. Net realizable value is based on estimated selling price less any further costs expected to be incurred to make the sale.

3.05 Accounts Receivable

Accounts Receivable are recognized at cost which is fair value of the consideration given for them.




3.06 Advance, Deposits and Prepayments

Advances are initially measured at cost. After initial recognition, advances are carried at cost less deductions, adjustments or charges to other account heads.

deposits are measured at payment value.

Prepayments are initially measured at cost. After initial recognition, prepayments are carried at cost less charges to profit and loss account.

3.07 Cash and Cash Equivalents

Cash and Cash Equivalents are carried in the balance sheet at cost and includes cash in hand and with banks on current and deposit accounts, which are held and available for use by the company without any restriction. There is insignificant risk of change in value of the same.

3.08 Income Tax Expense

(a) Current Tax has been provided at 15% tax rate applicable for textile industries.

(b) deferred Tax income is not provided as it is probable that future taxable profit will not be available against which temporary differences can be utilised.

3.09 Lease Assets

in compliance with the BAS 17: Leases, cost of assets acquired under finance lease along with related obligation has been accounted for as assets and liabilities respectively of the company, and the interest element has been charged as expenses.

3.10 Lease Payment

Lease payments made under finance leases are apportioned between the finance expenses and the reduction of the outstanding liability.

3.11 Employee Benefits

The company has accounted for and disclosed of employee benefits in compliance with the provisions of BAS 19: Employee Benefits.

The costs of employee benefits are charged off as revenue expenditure in the period to which the contributions relate.

The company’s employee benefit includes the following:

defined Contribution Plan

This represents recognized contributory provident fund for all its permanent employees. Assets of provident fund are held in a separate trustee administered fund as per the relevant rules and are funded by contributions from both the employees and the company at pre-determined rates.

3.12 Statement of Cash Flows

The Statement of Cash Flows has been prepared in accordance with the requirements of BAS 7 : Statement of Cash Flows.

The cash generating from operating activities has been reported using the direct method as prescribed by the Securities and Exchange Rules 1987 and as the benchmark treatment of BAS 7 whereby major classes of gross cash receipts and gross cash payment from operating activities are disclosed.

3.13 Earnings Per Share (EPS)

This has been calculated in compliance with the requirements of BAS 33: Earnings Per Share by dividing the basic earnings by the weighted average number of ordinary shares outstanding during the year.

Basic Earnings

This represents earnings for the year attributable to ordinary shareholders. As there was no preference dividend, minority interest or extra ordinary items, the net profit after tax for the year has been considered as fully attributable to the ordinary shareholders.




Weighted Average Number of Shares in Issue

Current Year (2009)

This represents the number of ordinary shares outstanding at the beginning of the year plus the number of ordinary shares issued during the year multiplied by a time-weighting factor is the number of days the specific shares are outstanding as a proportion of the total number of days in the year. However, the Bonus Shares issued during the year 2009 were treated as if they always had been in issue. Hence, in computing the Basic EPS of 2009, the total number of bonus shares has been considered.

Earlier Year (2008)

The number or shares outstanding before the bonus shares issue has been adjusted for the proportionate change in the number of shares outstanding as if the bonus issues had occurred at the beginning of the earliest period reported (2008), and accordingly, in calculating the adjusted EPS of 2008, the total number of shares including the subsequent bonus issue in 2009 has been considered as the weighted average number of shares outstanding during the year 2008.

The basis of computation of number of shares as stated above, is in line with the provisions of BAS 33 : Earnings Per Share. The logic behind this basis, as stated in the said BAS is that the bonus shares are issued to the existing shareholders without any consideration, and therefore, the number of shares outstanding is increased without an increase in resources generating new earnings.

Diluted Earnings Per Share

No diluted EPS is required to be calculated for the year as there was no scope for dilution during the year under review.

3.14 Foreign Currency Transactions

The financial records of the company are maintained and the financial statements are stated in Bangladeshi Taka. Foreign currency transactions are recorded at the applicable rates of exchange ruling at the transaction date.

The monetary assets and liabilities, if any, denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchanges ruling at that date. Exchange differences are charged off as revenue expenditure in compliance with the provisions of BAS 21: The Effects of Changes in Foreign Exchange Rates. However, as a requirement of the Companies Act 1994, exchange loss relating to foreign currency loan has been capitalized to/deducted from cost of relevant fixed assets being procured under the said loan.

The rates of relevant foreign currency exchanges at year-end are: 2009 2008

1 US dollar ($) = Tk. 69.4500 69.4500 1 EURO (€) = Tk. 100.3126 99.6469 1 Japanese Yen (¥) = Tk. 0.7590 00.7953 1 Pound Sterling (£) = Tk. 111.9618 102.4665

3.15 Proposed Dividend

The amount of proposed dividend has not been accounted for but disclosed in the notes to the accounts alongwith dividend per share in accordance with the requirements of Para 125 of international Accounting Standard (iAS) 1: Presentation of Financial Statements. Also, the proposed dividend has not been considered as “Liability” in accordance with the requirements of Para 12 & 13 of international Accounting Standard (iAS) 10: Events After The Reporting Period, because no obligation exists at the time of approval of accounts and recommendation of dividend by the Board of directors.




4 Property, Plant and Equipment : Tk.13,416,139,550

The movement in Property, Plant and Equipment is as follows:

Particulars Land Building & Other Plant & Equipment Furniture & Transport & Capital Work in Total Construction Machinery Fixtures Vehicles Progress Taka

Cost/Valuation as at 1 January 2009 3,888,500,000 2,820,214,137 10,295,909,698 135,185,513 124,009,183 33,296,116 - 17,297,114,647

Additions in 2009 95,865,328 602,500,000 826,242,684 3,706,912 559,927 2,915,000 850,000,000 2,381,789,851

At 31 December 2009 3,984,365,328 3,422,714,137 11,122,152,382 138,892,425 124,569,110 36,211,116 850,000,000 19,678,904,498

Accumulated Depreciation At 1 Januray 2009 - 676,981,593 4,561,851,131 97,750,980 121,954,031 33,296,115 - 5,491,833,850

depreciation charge for 2009 - 96,763,292 659,434,055 13,889,243 261,508 583,000 - 770,931,098

At 31 december 2009 - 773,744,885 5,221,285,186 111,640,223 122,215,539 33,879,115 - 6,262,764,948

Carrying Amount at 31 December 2009 3,984,365,328 2,648,969,252 5,900,867,196 27,252,203 2,353,571 2,332,001 850,000,000 13,416,139,550

Carrying Amount at 31 December 2008 3,888,500,000 2,143,232,544 5,734,058,567 37,434,533 2,055,152 1 - 11,805,280,797

Property, Plant & Equipment at cost includes Tk. 143,703,483 acquired under finance lease, the written down value of which was Tk. 116,584,995 as at 31 december 2009.

2009 20085 Long Term Security Deposits : Tk. 43,530,686

This represents the amount deposited with utility providers in respect of :

Rural Electrification Board (REB) for Electricity 1,896,983 1,896,983

dhaka Electric Supply Authority (dESA) for Electricity 1,072,000 1,072,000

Bangladesh Telegraph and Telephone Board (BTTB) for Telephone 50,000 675,715

Titas Gas Transmission & distribution Co. Ltd. for Gas 23,011,703 25,546,376

Bank Gaurantee for Power Plant 17,500,000 -

Tk. 43,530,686 29,191,0746 Deferred Assets : Tk. 18,997,013

This consists of : deferred Loss on Asset Sale and Lease Back 18,997,013 20,843,945

Tk. 18,997,013 20,843,945




2009 20087 Inventories : Tk. 2,742,675,600

This consists of :

(a) Raw Material : 723,864,801 738,790,578 Cotton (3,801,352 Lbs.) (in 2008: 3,654,696 Lbs.) 257,240,305 233,535,066 Polyester (81,799 Lbs.) (in 2008: 331,845 Lbs.) 3,952,546 15,606,753 Yarn (2,005,324 Kgs.) (in 2008: 2,736,308 Kgs.) 363,236,626 426,462,700 dyes & Chemical (567,009 Kgs.) (in 2008: 357,428 Kgs.) 99,435,324 63,186,059

(b) Work In Process 999,753,470 1,027,951,758 Fiber (907,157 Lbs.) (in 2008: 1,099,926 Lbs.) 67,673,935 54,589,320 Yarn (3,712,906 Lbs.) (in 2008: 4,023,586 Lbs.) 355,125,497 382,884,435 Fabric - Knit (952,876 Kgs.) (in 2008: 934,303 Kgs.) 226,885,539 222,317,493 Fabric (3,661,135 Lm.) (in 2008: 3,561,733 Lm.) 350,068,499 368,160,510

(c) Finished Goods 862,921,128 809,666,972 Yarn (3,867,944 Lbs.) (in 2008: 4,539,174 Lbs.) 370,725,461 360,790,520 Woven Fabric (2,203,859 Lm.) (in 2008: 1,905,310 Lm.) 256,780,394 230,466,218 Knit Fabric (213,539 Kgs.) (in 2008: 156,331 Kgs.) 72,411,081 51,917,596 denim Fabric (1,085,898 Lm.) (in 2008: 1,135,383 Lm.) 163,004,192 166,492,638

(d) Packing Materials 1,468,328 9,444,860

(e) Stores and Spares 154,667,873 147,209,696

Tk. 2,742,675,600 2,733,063,864

8 Trade Debtors : Tk.4,986,086,053

This is considered good, and is falling due within one year.

No amount was due by the directors (including managing director), managing Agent, managers and other officers of the Company and any of them severally or jointly with any other person.

9 Advances, Deposits and Prepayments : Tk. 921,155,433

This consists of :

Advances : 411,364,143 228,086,250

Suppliers 285,987,564 164,480,488 Salaries 34,169,872 2,352,200 mill Petty Expenses 2,250,938 13,242,976 Other Suppliers 6,458,796 1,379,055 Expenses 45,898,732 19,536,192 duty & Clearing Advance 36,598,241 27,095,339

Deposits : 431,931,555 432,518,910

L.C. margin 266,626,149 280,939,966 Guarantee margin and miscellaneous deposits 165,305,406 151,578,945

Prepaid Expenses 77,859,735 54,268,682

Tk. 921,155,433 714,873,842

(a) No amount was due by the directors (including managing director), managing Agent, managers and other officers of the company and any of them severally or jointly with any other person.

(b) The advances are good and unsecured.




2009 200810 Cash and Cash Equivalents : Tk. 27,249,672

This consists of : (a) Cash in Hand 7,575,139 13,326,311 (b) Cash at Banks: 19,674,533 3,805,899

in Current Accounts 18,961,112 3,407,487 in STd Accounts 713,421 398,412 Tk. 27,249,672 17,132,21011 Share Capital : Tk. 4,056,065,030

(a) Authorised Capital: 500,000,000 Ordinary Shares of Tk 10 each Tk. 5,000,000,000 3,000,000,000

(b) Issued, Called-up and Paid-up Capital: 405,606,503 Ordinary Shares of Tk 10 each 4,056,065,030 1,882,846,251 405,606,503 Ordinary Shares of Tk 10 each Tk. 4,056,065,030 1,882,846,251

(c) Composition of shareholdings 2009 2008 No. of Shares % No. of Shares %

Sponsor 81,737,350 20.15 74,306,683 39.47 Public 323,869,153 79.85 113,977,942 60.53

405,606,503 100 188,284,625 100

(d) Distribution Schedule - Disclosures Under the Listing Regulations of Stock Exchanges

The distribution schedule showing the number of shareholders and their Share holdings in percentage has been disclosed below as a requirement of the “Listing Regulations of dhaka and Chittagong Stock Exchanges”.

2009 Share holdings range in number of shares Number of No. of Shares % of total shareholders shareholders

1 to 499 32,436 4,952,316 1.22 500 to 5,000 15,984 25,086,805 6.19 5,001 to 10,000 1,211 9,014,619 2.22 10,001 to 20,000 551 8,174,707 2.02 20,001 to 30,000 213 5,353,098 1.32 30,001 to 40,000 99 3,500,842 0.86 40,001 to 50,000 68 3,185,917 0.79 50,001 to 100,000 120 9,435,870 2.33 100,001 to 1,000,000 114 36,659,240 9.04 over 1,000,000 30 300,243,089 74.02

Total 50,826 405,606,503 100.00

(e) Option of Unissued Shares

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

(f) Market Price

The shares of the company are listed with in the dhaka and Chittagong Stock Exchanges and quoted at Tk.81.40 (in 2008: Tk. 23.90) per share and Tk. 81.70 (in 2008: Tk. 23.80) per share in the dhaka and Chittagong Stock Exchanges respectively on 31 december, 2009.

(g) Voting Rights

The rights and privileges of the shareholders are stated in the Bye-laws (Articles of Association) of the Company.




12 10% Debentures-Net of Current Maturity (Secured) : Tk. 871,051,272

This is redeemable after twelve months from the date of balance sheet.

The debentures are secured by first paripassu charge by way of an equitable mortgage on all the fixed assets of the Company alongwith CdC Group plc., dEG, Bangladesh development Bank and marubeni Corporation. The debenture holders will rank senior alongwith CdC Group plc., dEG, BdB and marubeni Corporation to other creditors on the assets of the Company on liquidation / winding up.

On 24.11.2008, a meeting was held between the Company, the institutional debentureholders and the investment Corporation of Bangladesh, the trustee of debentures, in which decision was taken to consider re-scheduling the principal and interest on the outstanding debentures of Bextex Ltd on such terms and conditions as decided in the meeting .

13 Long Term Loans - Net of Current Maturity (Secured) : Tk. 5,797,210,684

This represents that portion of long term loans which is repayable after twelve months from the balance sheet date.

2009 2008 (a) Secured Loans from Banking Companies and other Financial Institutions :

Foreign Currency Loans: - 1,351,944,294 CdC Group Plc (in 2008: GBP 1,142,856) - 117,104,454 dEG, Germany (in 2008: EURO 1,169,018) - 116,488,980 marubeni Corporation (in 2008 : JPY 1,406,200,000) - 1,118,350,860

Local Currency Loans : 5,744,295,326 3,663,401,790

Sonali Bank Ltd. - iBP Loan 707,324,558 789,379,729 Sonali Bank Ltd. - PAd Block 1,467,532,189 862,452,120 Sonali Bank Ltd. - interest free 100,349,531 63,136,441 Sonali Bank Ltd. - interest bearing Block A/C (CCP & CCH) 670,772,451 - Rupali Bank Ltd. -Term Loan 1 354,892,000 303,613,942 Rupali Bank Ltd. -Term Loan 2 235,484,000 202,033,379 Rupali Bank Ltd.- interest Free Block Loan 180,346,902 112,306,902 Rupali Bank Ltd.- PAd Segrigation A/C (Force Loan) 666,973,987 665,219,710 Rupali Bank Ltd.- CCP & CCH Segrigation A/C 776,523,280 - Bangladesh development Bank Ltd. ( Former BSB) -Term Loan 92,236,856 91,159,753 Bangladesh development Bank Ltd. ( Former BSB) - interest Block 52,501,596 17,315,154 Citibank NA - Term Loan PTmL 92,574,778 142,574,701 iFiC Bank Ltd. - Term Loan (PAd) 88,690,742 114,442,404 iFiC Bank Ltd. - Term Loan 143,954,916 228,234,555 Standard Chartered Bank Plc - Fixed Loan - 45,358,000 The City Bank Ltd. 97,040,000 - Janata Bank Ltd. - CCH Block 3,366,000 8,415,000 Janata Bank Ltd. - PAd Block 5,366,000 17,760,000 National Bank Ltd. 8,365,540 -

Lease Finance : 52,915,358 55,432,032

iidFC Ltd. - 9,565,589 international Leasing And Financial Services Ltd 14,323,333 - First Lease international Ltd 38,592,025 45,866,443

(b) Unsecured Loans from Associated Undertakings/Related Parties : - 1,731,536,258

Bangladesh Export import Co. Ltd.-interest bearing - 1,321,750,374 Bangladesh Online Ltd.- No interest - 150,000,000 Shine Pukur Ceramic Ltd - interest bearing - 259,785,884

Tk. 5,797,210,684 6,802,314,374




Nature of Security :

Pursuant to supplemental Lenders’ Paripassu Security Sharing Agreement between the Company and the Lenders, the loans are secured by :

(i) first paripassu equitable mortgage of immovable property of present and future; and (ii) first paripassu charge by way of hypothecation on all other assets of the company both present and future Terms of Repayment :

Terms of repayment of foreign currency loans as per repayment schedule

CdC Group Plc. : in 14 (fourteen) half-yearly installments beginning from 30 November 2004 and ending on 30 November 2011. dEG : in 14 (fourteen) half-yearly installments beginning from 30 October 2004 and ending on 30 April 2011. marubeni (PTmL): in 16 (sixteen) semi-annual installments beginning from 25 July 2005 and ending on 25 Jan 2013. marubeni (BTL): in 12 (twelve) semi-annual installments beginning from 24 Aug 2005 and ending on 24 Feb 2011.

Rate of interest

CdC Group Plc. : 3.00% over GBP LiBOR dEG : 3.00% over Euro LiBOR marubeni : 3.00% over LTPR Local bank loans : varies 10% to 15% Bangladesh Export import Co. Ltd. : 15% p.a. Shine Pukur Ceramic Ltd. : 15% p.a. Beximco Holdings Ltd. : 10% p.a.

14 Security Deposit From Distributor : Tk. 15,000,000

This was received from Bangladesh Yarn Syndicate, the distributor of the company. 2009 200815 Short Term Loans : Tk. 2,704,930,953

This consists of :

(a) Secured Loans from Banks : Standard Chartered Bank Plc -CCH 42,462,221 46,007,040 Standard Chartered Bank Plc -LATR - 29,825,433 Standard Chartered Bank Plc - 40,173 Citi Bank NA - Cash Credit 84,895,736 80,788,571 Rupali Bank Ltd. - Overdraft 889,116,120 1,314,971,538 Rupali Bank Ltd. - CCP 102,869,790 157,950,634 Sonali Bank Ltd. - CCH 602,082,218 736,942,125 Sonali Bank Ltd. - CCP 530,494,266 800,704,500 Sonali Bank Ltd. - PAd - 637,575,998 Sonali Bank Ltd. - Cash Subsidy 52,142,906 57,431,678 State Bank of india - CCH 122,056,754 122,051,172 Janata Bank Ltd. - Cash Subsidy - 20,064,613 Janata Bank Ltd. - CCH 278,810,942 279,417,941

Tk. 2,704,930,953 4,283,771,415

16 10% Debentures - Current Maturity (Secured) : Tk. 173,888,054

This is redeemable after twelve months from the date of balance sheet.




2009 200817 Long Term Loans - Current Maturity (Secured) : Tk. 1,393,544,111

This represents that portion of long term loans which is repayable within twelve months from the balance sheet date and includes the following :

Foreign Currency Loans : - 1,446,900,158

CdC Group Plc (in 2008: GBP 2,089,958) - 214,150,662 dEG, Germany (in 2008: EURO 2,098,758) - 209,134,772 marubeni Corporation (in 2008: JPY 1,287,080,000) - 1,023,614,724

Local Currency Loans : 1,340,773,622 523,013,216

Sonali Bank Ltd. - iBP Loan 251,373,957 - Sonali Bank Ltd. - PAd Block 521,985,570 - Sonali Bank Ltd. - interest free 9,122,686 46,330,176 Sonali Bank Ltd. - interest bearing Block A/C (CCP & CCH) 152,313,720 - Rupali Bank Ltd. -Term Loan 1 28,999,505 - Rupali Bank Ltd. -Term Loan 2 19,114,886 - Rupali Bank Ltd. - interest Free Block Loan 10,610,000 78,650,000 Rupali Bank Ltd. - PAd Block Loan 42,584,214 - Rupali Bank Ltd. - CCP & CCH Segrigation A/C 42,940,000 - Bangladesh development Bank Ltd. (Former BSB) -Term Loan 11,600,000 75,803,232 Bangladesh development Bank Ltd. (Former BSB) - interest Block 5,600,000 7,814,573 Citibank NA - Term Loan PTmL 77,145,649 61,716,519 iFiC Bank Ltd. - idBP 33,572,255 6,653,031 iFiC Bank Ltd. - Term Loan 46,856,030 76,072,504 Standard Chartered Bank plc-Fixed Loan 15,458,000 - The City Bank Ltd. - Term Loan 32,290,442 145,240,004 Janata Bank Ltd. - CCH Block 6,872,393 10,242,271 Janata Bank Ltd. - PAd Block 15,747,700 14,490,906 National Bank Ltd. -Term Loan 16,586,615 -

Lease Finance : 52,770,489 59,226,229 iidFC Ltd. 25,747,523 45,237,238 international Leasing And Financial Services Ltd. 6,167,449 - First Lease international Ltd. 20,855,517 13,988,991

Tk. 1,393,544,111 2,029,139,60318 Creditors and Accruals : Tk. 562,460,876

This is falling due within one year.

19 Revenue : Tk. 7,866,257,822

This is arrived at as follows:

Sale of Yarn (13,095,429 Lbs.) (in 2008: 13,417,685 Lbs.) 1,259,749,690 1,161,270,242 Sale of Woven Fabric (34,729,053 Lm.) (in 2008: 17,557,735 Lm.) 5,161,193,116 2,471,112,313 Sale of Knit Fabric (1,203,434 kgs.) (in 2008: 1,247,567 Kgs.) 467,234,568 406,080,296 Sale of denim Fabric (3,866,341 Lm.) (in 2008: 2,264,973 Lm.) 565,765,088 303,160,913 Cash Subsidy 196,739,439 123,555,616 Sale of Waste 160,852,404 112,507,509 Commission Work 54,723,517 182,550,300

Tk. 7,866,257,822 4,760,237,189




2009 200820 Cost of Revenue : Tk. 4,936,690,149

This is arrived at as follows : material Consumed (Note - 21) 4,136,120,997 2,383,465,451 External Processing cost 38,436,155 11,577,471 manufacturing Overhead (Note - 22) 787,188,865 642,778,273 manufacturing costs for the year 4,961,746,017 3,037,821,195 Work in Process inventory differential 28,198,288 29,316,890 Cost of Goods manufactured 4,989,944,305 3,067,138,085 Finished Goods inventory differential (53,254,156) 23,046,802 Cost of Revenue Tk. 4,936,690,149 3,090,184,887

21 Material Consumed : Tk. 4,136,120,997

This is arrived at as follows : Cotton (29,668,501 Lbs.) (in 2008: 22,428,208 Lbs.) 2,011,179,158 1,307,115,436 Polyester (3,456,865 Lbs.) (in 2008: 2,017,874 Lbs.) 165,966,356 112,979,935 Yarn (5,675,298 Kgs.) (in 2008: 3,028,616 Kgs.) 1,086,618,352 490,570,152 Gray Fabric (5,580,362 Lm.) (in 2008; 2,465,522 Lm.) 414,799,422 153,775,041 dyes & Chemical (2,569,452 Kgs.) (in 2008: 3,669,115 Kgs.) 457,557,709 319,024,887

Tk. 4,136,120,997 2,383,465,451

22 Manufacturing Overhead : Tk. 787,188,865

This consists of : Wages & Allowances 344,194,410 263,067,267 Power and Gas 297,041,718 229,306,784 indirect materials 70,147,202 31,581,998 insurance premium 2,422,368 4,864,626 Repairs & maintenance 67,417,103 104,329,452 medical Expenses & Others 1,015,426 620,916 Travel, Training & Conveyance 487,487 380,609 Telephone, Telex & Fax 71,673 125,640 Printing & Stationery 1,127,001 822,735 miscellaneous Overhead 3,264,477 7,678,246

Tk. 787,188,865 642,778,273

23 Administrative Expenses : Tk. 294,146,231

This consists of : Salary & Allowances 215,372,910 163,715,786 Office Rent 1,675,284 1,619,196 Traveling and Conveyance 21,999,927 19,184,924 Entertainment 4,019,394 2,600,397 Telephone, Telex, Fax and Postage 11,293,819 9,143,942 Vehicle Upkeep & Fuel 14,508,611 25,847,952 Utilities 569,920 444,029 AGm and Secretarial expenses 3,629,750 5,747,338 Auditors’ Remuneration (Audit fee) 522,500 418,000 directors’ Board meeting Fee 3,000 3,000 insurance Premium 7,319,401 818,812 Repairs & maintenance 4,147,224 2,401,613 Printing, Stationery & Photocopy 487,862 1,682,529 Write off deferred Loss on Asset Sale and Lease Back 1,846,932 1,846,932 Other Expenses 6,749,697 5,309,878

Tk. 294,146,231 240,784,328




2009 200824 Financial Expenses : Tk. 688,667,966

This is made up as follows : interest on Long Term Loans 756,213,213 732,803,471 interest on Short Term Loans 409,433,530 497,810,267 Bank Charges & Commission 130,022,323 70,042,931

1,295,669,066 1,300,656,669

interest Waived on Final settlement of Foreign Loan & interest (Notes-29) (607,001,100) -

Tk. 688,667,966 1,300,656,66925 Income Tax Expenses : Tk. 164,725,927

Current Tax @15% on Net Profit Before Tax 164,725,927 - Tk. 164,725,927 -

26 Basic Earnings Per Share (EPS) : Tk. 4.16

(a) Profit after tax Tk. 933,446,920 (608,655,866) (b) Weighted average number of shares in issue (Notes -27) 224,572,628 207,113,087 Basic EPS (a/b) (adjusted EPS of 2008) Tk. 4.16 (2.94)

27 Computation of Weighted Average Number of Shares of 2009 No. of Shares Issued Date of Issue Days Weighted Weighted Average Number

Opening Shares 188,284,625 Opening 365 188,284,625 Bonus Shares issued (10% stock dividend for 2008) 18,828,462 Opening 365 18,828,462 New allotment made (1st Stage) 126,004,874 12-Nov-09 50 17,260,942 New allotment made (2nd Stage) 72,488,542 31-dec-09 1 198,599

Total 405,606,503 224,572,628

28 New Allotment of shares (Against Loans)

Loan Amount BDT Nos. of Shares Share Value @ Tk.10 Premium Value @ Tk.22

Loan outstanding as at Sept’09 for dEG 394,370,614 12,324,082 123,240,820 271,129,794 Loan outstanding as at Sept’09 for CdC 437,785,359 13,680,792 136,807,920 300,977,439 Loan outstanding as at Sept’09 for marubeni Corporation 2,319,633,329 72,488,542 724,885,420 1,594,747,909 Beximco Group 3,200,000,000 100,000,000 1,000,000,000 2,200,000,000

Total 6,351,789,302 198,493,416 1,984,934,160 4,366,855,142

29 Remission of Foreign Loans : Tk. 607,001,100

Currency Foreign Currency BDT

Loan outstanding as at Sept’09 for dEG Euro 4,100,953 394,370,614 Paid to dEG as Final Settlement 3,280,762 340,302,944 Gain on Final Settlement 820,191 54,067,670

Loan outstanding as at Sept’09 for CdC GBP 3,980,084 437,785,359 Paid to CdC as Final Settlement 3,151,862 355,687,627 Gain on Final Settlement 828,222 82,097,732

Loan outstanding as at Sept’09 for marubeni Corporation Japaness Yen 3,300,954,197 2,319,633,329 Paid to marubeni Corporation as Final Settlement 2,310,667,000 1,848,797,631 Gain on Final Settlement 990,287,197 470,835,698

Total Gain on Foreign Loan Repayment TK. 607,001,100




30 Related Party Transactions

The Company carried out a number of transactions with related parties in the normal course of business and on arm’s length basis. The nature of transactions and their total value is shown below: Name of related parties Nature of Value of Receivable/ Transactions Transactions (Payable) in 2009 at year end

Bangladesh Export import Co. Ltd.-intt. bearing Long Term Loan 1,321,750,374 - Bangladesh Online Ltd.-No intt. Long Term Loan 150,000,000 - Shinepukur Ceramic Ltd. intt. Bearing Long Term Loan 259,785,884 - Nature of Relationship

The Company and the parties as stated above are subject to common control from same source i.e., BEXimCO Group.

31 Contingent Liabilities

There was no contingent liability as on 31 december, 2009.

32 Capital Expenditure Commitment 2009 2008

Amount contracted but not provided for in these financial statements. Nil Nil

Amount authorised by the board of directors but not contracted for. Nil Nil

33 Un-Availed Credit Facility There was no credit facility available to the company under any contract, but not availed of as on 31 december, 2009 other than trade

credit available in the ordinary course of business.

34 Foreign Exchange Earned

The Company had “deemed export” and as such, no foreign exchange was earned against sales. No other foreign exchange was earned or received by Company during the year 2009.

35 Payment in Foreign Currency

in 2009, the Company remitted foreign currency in respect of the following:

(a) Repayment of loans and interest:

Lenders 2009 2008 Foreign Currency Total Foreign Currency Total Principal Interest in Taka Principal Interest in Taka

CdC Group Plc.: GBP 3,151,862 - 355,687,627 - - - dEG : Euro 3,280,762 - 340,302,944 - - - AFiC : US$ - - - 500,000 - 34,685,000 marubeni : JPY 2,310,667,000 - 1,848,797,631 - 10,550,000 7,069,555

(b) Payment against imported Raw materials & Spares:

2009 2008 Foreign Currency In Taka Foreign Currency In Taka

US $ 13,353,401 934,738,280 US $ 3,857,719 268,111,468

(c) No other expenses including royalty, technical expert and professional advisory fees etc. was incurred or paid by the company in foreign currency, during the year 2009.

36 Commission, Brokerage or Discount Against Sales

(a) distribution commission of Tk. 1,861,692 was incurred and paid during the year 2009 to the Bangladesh Yarn Syndicate, the distributor of the Company.

(b) No other commission, brokerage or discount was incurred or paid by the Company against sales during the year 2009.




37 Production Capacity, Actual Production and reason of Excess/Short fall

(a) YARN SPINDLES No. of spindles installed 119,520 No. of spindles actually operated 119,520

Output capacity (Lbs) installed capacity 43,200,000 Actual production 28,804,600

(b) WOVEN FABRIC LOOMS No. of looms installed 293 No. of looms actually operated 293

Output capacity (Lm.) installed capacity 40,800,000 Actual production 34,966,037

(c) KNIT FABRIC (Quantity in Kgs.) installed capacity 2,600,000 Actual production 1,280,095

(d) DENIM FABRIC (Capacity in Lm.) installed capacity 4,940,000 Actual production 3,786,254

38 Payments/Perquisites to Directors/Officers

(a) The aggregate amounts paid/provided during the year in respect of directors and officers of the Company as defined in the Securities and Exchange Rules 1987 are disclosed below:

2009 2008 Directors Officers Directors Officers

Board meeting Fees 3,000 - 3,000 - Basic Salary - 81,700,382 - 61,794,026 Provident fund Contribution - 7,339,141 - 5,682,696 House Rent Allowance - 27,233,461 - 15,769,306

Total Tk. 3,000 116,272,984 3,000 83,246,028

(b) No compensation was allowed by the company to the managing director of the company.

(c) No amount of money was spent by the company for compensating any member of the Board for special services rendered except as stated above.

39 Events After The Reporting Period

(a) Subsequent to the balance sheet date, the directors recommended 15% stock dividend (bonus share) subject to shareholders’ approval at the forthcoming Annual General meeting.

(b) Findings and observations of SEC and replies and clarifications by the company on the previous year’s financial statements are included as Annexture A.

Except the facts stated above, no circumstances have arisen since the balance sheet date which would require adjustments to, disclosure in, the financial statements or notes thereto.


April 29, 2010dhaka.


FiNdiNGS/OBSERVATiONS OF SEC and CLARiFiCATiONS FURNiSHEd BY THE COmPANYON AUdiTEd FiNANCiAL STATEmENT FOR THE YEAR ENdEd dECEmBER 31, 2008

in relation to the Financial Statement of the Company for the year ended 31 december, 2008 SEC required to the Company (vide SEC letter No.SEC/CFd/12:17/99/455 dated may 21, 2009 ) to :

(i) explain/clarify the following observations along with the break-up of “Reserve”; and

(ii) include appropriate disclosures regarding the following points (a) & (b) of the letter under reference in the annual report as well as to present the same before the shareholders in this Annual General meeting; points of those are as follows:

(a) There is no explanatory note as regard “Reserve & Surplus” shown in the Balance Sheet for the year ended on december 31, 2008, though the amount is material to the financial statements. moreover, no break-up has also been given as regard “Reserves” of Tk.779,879,705 shown in the “Statement of Changes in Equity”. in this regard, it may be mentioned that as per the requirement under Para 8(ii) of Part i of the Schedule under rule 12(2) of the Securities and Exchange Rules 1987, the break-up of reserves has to be given.

(b) “Revaluation Surplus” aggregating Tk.4,381,259,484 has been shown under Note No.20 Property, Plant and Equipment however, an amount of Tk.2,031,497,144 has been shown as “Revaluation Surplus-Net” in the Statement of Changes in Equity for the year ended december 31, 2008. it ap-pears that there is no explanatory note regarding the difference between the said two figures (Tk.4,381,259,484 & Tk.2,031,497,144) in the audited financial statements.

As desired by SEC to present the same before the shareholders in the relevant AGm, the Vice-Chairman informed the shareholders in 25th AGm of the Company held on 18th June 2009 that, before starting the AGm, a printed copy of the disclosures of the above points have been circulated to all the share-holders present in the meeting. The Vice- Chairman clarified the same before the shareholders as follows:

Quote The Shareholders, We furnish hereunder the disclosures as instructed by the SEC vide their letter No.SEC/12:17/99/455 dated 21.5.2009:

(a) The break-up of “Reserves & Surplus” as at 31st december 2008 is as follows

item Taka Reserves 779,879,705 Revaluation Surplus 2,031,497,144 Retained Earnings (1,341,711,264) 1,469,665,585

The aforesaid items, although not shown separately in its Balance Sheet as at 31 december 2008, have been separately stated in the statement of Changes in Equity for the year ended on that date.

(b) The Break-up of “Reserves” at Tk.779,879,705 as at 31 december 2008 is as below:

item Taka Share Premium 450,000,000 Excess of shareholders’ equity over issued share capital to the shareholders of amalgamated units erstwhile Beximco Textiles Limited, Beximco Knitting Limited and Beximco denims Limited 329,879,705 779,879,705

(c) in the Statement of Changes in Equity for the year ended 31 december 2008, the Revaluation Surplus at Tk.4,381,259,484 from Plant, machin-ery and Equipment is shown net of Revaluation deficit on Current Assets at Tk.2,349,762,340 so as to reflect overall Revaluation Surplus-Net at Tk.2,031,497,144 based on the concept of prudence. Revaluation Surplus/deficit on Current Assets/Liabilities is not charged/credited to Profit & Loss Account of a year, as it does not relate to or arise in that year. Unquote.

Annexture A


The shareholders present in the meeting appreciated the management for disclosing and clarifying the above points as instructed by the SEC.

There after SEC (vide their letter No.SEC/CFd/12:17/99/521 July 9, 2009) informed the Company that – “it appears to us that you have not given specific clarification as regard our observations mentioned in our letter No.SEC/CFd/12:17/99/501 dated June 15, 2009. Hence, you are requested again to furnish your specific clarification regarding our observations mentioned in our said letter within July 28,2009.

Further, in your letter dated June 21, 2009 you mentioned that you have placed a disclosure to your shareholders in the AGm held on that day ( it is evident from your disclosed price sensitive information dated June 18, 2009 that the 25th AGm held on June 18, 2009). in this regard, you are also requested to send a copy of the said disclosure presented in the AGm within the date mentioned above.”

The Company replied to SEC as follows:

Quote

15 July 2009Securities and Exchange Commission (SEC)Jiban Bima Tower10 dilkusha C/Adhaka-1000

dear Sir

Audited financial statements for the year ended 31 december 2008

We thank you for your letter SEC/CFd/12:17/99/521 dated 9 July 2009.

With regard to the issue raised in your letter SEC/CFd/12:17/99/501 dated 15 June 2009, we would like to inform you that-

(a) We made the following disclosure (copy of our disclosures in the AGm is attached as Annexure), as desired by you, in our AGm held on 18 June 2009:

“in the Statement of Changes in Equity for the year ended 31 december 2008, the Revaluation Surplus at Tk.4381,259,484 from Plant, machinery and Equipment is shown net of Current Assets adjustments relating to Notes 23,24 & 25 at Tk 2,349,762,340 so as to reflect overall Revaluation Surplus at Tk.2,031,497,144, based on the concept of prudence. Revaluation Surplus on Current Assets/Liabilities is not charged/credited to Profit & Loss Ac-count of a year, as it does not relate to or arise in that year.”

(b) After perusal of our disclosure and our explanation of our treatment of Revaluation Surplus; our shareholders in the aforesaid AGm have unanimously approved our audited financial statements for the year ended 31 december, 2008.

(c) The current assets in the notes 23, 24 & 25 are net of adjustment thereagainst” as referred to in para (a) above; and thus, the net amounts are “con-sidered good by us”. The inventories in note 23 is also net of “adjustments thereagainst”.

Considering our shareholders’ unanimous approval of our treatment of Revaluation Surplus in the aforesaid AGm; and our foregoing explanation, we would request you to kindly accept our reply. Unquote.


However, further to our aforesaid letter dated 15 July 2009, the company further clarified, as desired by SEC, as follows:

Quote

15 march 2010Securities and Exchange Commission (SEC)Jiban Bima Tower10 dilkusha C/Adhaka-1000

dear Sir

Audited financial statements for the year ended 31 december 2008

This is further to our letter dated 15 July 2009 on the above accounts.

We further clarify, as desired by you, as follows:-

(a) The break-down of deficit on Current Assets at Tk 2,349,762,340 as at 31 december 2008 is as below:- inventories- Tk 893,297,562 Trade debtors- Tk 1,255,304,208 Advances, deposits & Prepayments- Tk 238,291,281 Total- Tk 2,386,893,050 Less : Gain from AFiC Loan Repayment Tk 37,130,710 Net Total Tk 2,349,762,340

(b) deficit on Current Assets as at 31 december 2008 is not charged to Profit & Loss Account for the year ended 31 december 2008, as it does not relate to that year. The deficit relates to period(s) prior to merger of the four companies into Bextex Limited, i.e., prior to 31 december 2006. Accordingly, such deficit can not be charged to Profit & Loss Account for the year ended 31 december 2008 or to Retained Earnings at that date as such Retained Earnings as at 31 december 2006 was transferred to Reserve (comprising of all reserves including revaluation reserve and retained earnings) on 1 January 2007.

(c) No international/Bangladesh Accounting Standard covers such treatment of pre-merger deficit on Current Assets; and accordingly, we treated in a way that gave “most fair picture”.

(d) in order to give full picture to our shareholders, the following disclosure was made in our AGm held on 18 June 2009: “in the Statement of Changes in Equity for the year ended 31 december 2008, the Revaluation Surplus at Tk 4381,259,484 from Plant, machinery

and Equipment is shown net of Revaluation deficit on Current Assets at Tk 2,349,762,340 so as to reflect overall Revaluation Surplus-Net at Tk 2,031,497,144, based on the concept of prudence. Revaluation Surplus/deficit on Current Assets/ Liabilities is not charged/ credited to Profit & Loss Account of a year, as it does not relate to or arise in that year.”

(e) After perusal of our aforesaid disclosure and our explanation of our treatment of Revaluation Surplus/deficit; our shareholders in the aforesaid AGm have unanimously approved our audited financial statements for the year ended 31 december 2008.

Considering our shareholders’ unanimous approval of our treatment of Revaluation Surplus/ deficit in the aforesaid AGm; and our foregoing explanation, we once again request you to kindly accept our reply; and close the matter once and for all. Unquote.

The foregoing explanations/ clarifications point out the company’s treatments of various reserves and surplus and how such treatments comply with the iAS. This is now re-submitted in the 26th AGm in compliance with SEC’s directive No. SEC/CFd/12: 17/99/637 dated April 18, 2010 for consideration/deci-sion of the shareholders.

Corporate Headquarters17 Dhanmondi R/A, Road No. 2, Dhaka-1205, Bangladesh

Phone: 8611891-5, 8618220-7, 9677701-5, 7701165 E-mail : [email protected]

Web : www.beximco.com

Operational Headquarters Beximco Industrial Park, Sarabo

Kashimpur, Gazipur, Bangladesh Phone : 8611891-5, 8618220-7, 9677701-5, 7701165

Business LineManufacturing and Marketing of

Yarn, Woven, Knit and Denim Fabrics

Date of Incorporation13 May 1984

Commercial Production1990

Listing StatusPublic Listed Company

Stock Exchange ListingDhaka and Chittagong

Authorized Capital5,000 Million taka

Paid-Up Capital4,056.065 Million Taka

Number of Shareholders50,826

Number of Employees7,189

Number of Spindles Installed119,520

Number of Woven Loom Installed293

Number of Circular Knitt Machine Installed30

Number of Denim Looms Installed56

SHAREHOLDERS’ INFORMATION

Mailing Address, Registration Office & Corporate Share Office17 Dhanmondi R/A, Road No. 1, Dhaka -1205, Bangladesh

Independent AuditorsM. J. Abedin & Co., Chartered Accountants

National Plaza (6th Floor)109, Bir Uttam C.R. Datta Road, Dhaka-1205

Telephone : 88-02-8629771, Fax : 88-02-8617681e-mail : [email protected]

Legal AdvisersM/S. Huq & Co.

47/1 Purana Paltan, Dhaka-1000

BankersSonali Bank • Janata Bank • Rupali Bank Ltd. • The City Bank Ltd.

Citibank, N.A. • Standard Chartered Bank • IFIC Bank Ltd.State Bank of India • Bank Asia Ltd. • South East Bank Ltd.

Registered Office17 Dhanmondi R/A, Road No. 2, Dhaka-1205, Bangladesh

FactoryTatki, Rupganj, Narayanganj (Yarn Plant-1)

Sarabo, Kashimpur, Gazipur (Other Plants)

Day, Date, Time & Venue of AGM Thursday, The 17th June 2010, At 11:30 am,

BEXIMCO Industrial Park, Sarabo, Kasimpur, Gazipur

COMPANY PROFILE

www.beximco.com

BEXTEX LIMITED - Beximcobextex.net/AR_2009.pdf · held on Thursday, the 17th June, 2010 at 11.30...

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