Rahim Textile Mills Ltd. · Factory: Shaﬁpur, Kaliakoir, Gazipur Tel: IPT+8809612111177-92,...

Rahim Textile Mills Ltd.

2016�2017

ANNUALREPORT

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36th

Annual Report 2016-2017

Rahim Tex�le Mills LimitedRegistered Office: 134, New Eskaton Road, Dhaka-1000

Corporate Head Office: Tower-117117/A, Tejgaon Industrial Area, Dhaka-1208

Factory: Shafipur, Kaliakoir, GazipurTel: IPT+8809612111177-92, 880-2-8878065, Fax: 880-2-8878064E-mail: [email protected], Website: www.rahimtex�le.com

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, 2017.

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, 2017, 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, 2017 along with notes thereon for your informa�on and records.

Yours sincerely

Syed Saiful HaqueCompany Secretary

Dated: November 19, 2017

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

Corporate Head Office: Tower-117, 117/A, Tejgaon Industrial Area, Dhaka-1208

NOTICE OF THE 36th ANNUAL GENERAL MEETING

No�ce is hereby given that the 36th ANNUAL GENERAL MEETING of the Shareholders of the Company will be held on Wednesday, 27th December, 2017 at 9.00 a.m. at Spectra Conven�on Centre Limited, House # 19, Road # 7, Gulshan-1, Dhaka-1212 to transact the following business:

Agenda-1. To receive, consider and adopt the Audited Financial Statements for the year ended 30th June, 2017 together with the Report of the Directors’ and the Auditors’ thereon.

Agenda-2. To declare dividend for the year ended 30th June, 2017.

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 2017-2018 and to fix their remunera�on.

By order of the Board

Syed Saiful HaqueCompany Secretary Dated: November 19, 2017

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 14, 2017 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 Head 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 36th AGM of the Company as per BSEC Circular under reference No. SEC/CMRRCD/2009-193/154 dated 24.10.2013.

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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, 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.

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(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, are nowned 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 2016-2017.

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 .

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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(a) 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., Green Delta 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.

(b) 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. The Company Management also perceives credit risk, liquidity risk, market risk, currency risk and interest rate risk.

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.

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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. S. H. Abdur Rahman 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. Green Delta 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: Tower-117, 117/A, Tejgaon Industrial Area, Dhaka-1208

(l) INVESTORS’ RELATION DEPARTMENT: Md. Kamruzzaman, Fax No-880-2-8878064, E-mail: [email protected], Tel: 880-2-8878065, Cell: 8801709998863

(m) FACTORY: Shafipur, Kaliakoir, Gazipur.

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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.67.982 Million• Product Lines : Dyeing, Prin�ng & Finishing for Woven & Knit Fabrics• Number of Shareholders (30th June 2017) : 2808• Number of Employees (30th June 2017) : 669

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

Par�culars 2016-17 2015-16 2014-15 2013-14 2012-13Turnover 717,463 630,290 598,622 575,293 572,483Gross Profit 118,454 108,568 92,310 70,211 83,094Opera�ng Profit 59,598 60,540 35,291 14,675 19,276Net Profit before Tax 59,683 54,060 33,723 27,069 15,623Net Profit a�er Tax 44,958 43,331 23,565 23,180 12,795Total Assets 1,119,955 655,513 624,344 710,654 571,726Fixed Assets 549,749 444,607 448,491 485,851 432,308Total Bank Loan 456,235 197,886 236,787 380,228 272,338Total Current Assets 570,205 210,906 175,853 224,802 139,418Total Current Liabili�es 646,772 365,522 327,935 416,828 325,056Current Ra�o 0.88:1 0.58:1 0.54:1 0.54:1 0.43:1Authorized Capital 500,000 500,000 500,000 500,000 500,000Paid up Capital 67,982 48,559 34,685 27,527 22,022Number of shares outstanding 6,798,191 4,855,851 3,468,465 2,752,750 2,202,200Shareholder’s Equity 279,244 234,285 190,954 167,390 156,024Face Value per Share 10 10 10 10 10Cash Dividend Per Share (%) 15 - - - -Stock Dividend (%) 15 40 40 26 25Return on Paid up Capital 30% 40% 40% 26% 25%Net Assets Value per Share (NAV) 41.08 48.25 55.05 60.81 70.85Net Opera�ng Cash Flow per Share 17.81 32.66 26.89 20.13 24.58Earning per share (Tk.) 6.61 *6.37 4.85 6.68 4.65Number of Shareholders 2,808 2,555 2,641 2,429 2,423Number of Employees 669 588 423 363 351Produc�on (In Lac yards) 212.29 230.68 220.20 195.92 199.78• Earning per share for the year 2015-16 has been restated

Turnover (Figure in thousand)

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2015-16 2016-17 2014-15 2013-14 2012-13

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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 36th 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, 2017.

During the financial year 2016-2017 the Company succeeded in making the net profit due to increase in turnover of Tk.87.17 million compared to previous year though increase in percentage of cost of goods sold by 0.72% (Tk.521.72 million i.e. 82.77% of turnover in 2015-16 and Tk.599.01 million i.e. 83.49% of turnover in 2016-17) and decrease in percentage of financial expenses by 0.21% compared to previous year.

Earlier the Board of Directors in its mee�ng held on 21st March, 2016 passed a 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 installa�on of Machinery & Equipment’s, construc�on of Building and others investment stood at Tk.15.09 crore as on 30th June 2017. At present our produc�on capacity stands at 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 average GDP growth rate is 6.30 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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RAHIM TEXTILE MILLS LIMITEDDIRECTORS’ REPORT TO THE SHAREHOLDERS

FOR THE YEAR 2016-2017

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, 2017 in the following paragraphs.

TEXTILE SECTOR:Industry outlook and possible future developments in the industry:We are not ge�ng uninterrupted power supply so our produc�on capacity u�liza�on has decreased by 6.93% compared to previous year. At present our installed produc�on capacity is 265.20 lac yards and actual produc�on was 212.29 lac yards during the period 1st July 2016 to 30th June 2017.The turnover of our company during past few years are given below: Year Company’s Growth Rate 2016-2017 13.83% 2015-2016 5.29% 2014-2015 4.06% 2013-2014 0.49% 2012-2013 21.75%

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 and varia�on of product. As a result u�liza�on of produc�on capacity has decreased from 86.98% to 80.05%. We are pleased to inform you that we have performed well in marginal net profits and are regular in debt servicing. Earlier the Board of Directors in its mee�ng held on 21st March, 2016 passed a 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 Tk.15.09 crore has been invested as on 30th June 2017 for import and installa�on of Machinery and Equipment’s, construc�on of Building and other purposes.

A compara�ve statement of produc�ons posi�on are given below:

Par�culars 2016-2017 2015-2016 % 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) 212.29 230.68 (7.97%)

03 Capacity U�liza�on:a) Dyeing, Prin�ng & Finishing unit (Lac yards) 80.05 86.98 (6.93%)

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 and economic issues affect the trends and nature of business. Health and safety issues are also factors of concern. Price increases of raw material 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 usages in produc�ons. On line orders and sales is the new trend of buyers. These are speed and super speed orders which is a cause of risks & concerns. Very short lead �me to deliver finished product shall remain a concern to be addressed. The trend is on the increase. Investments for import of grieg is a risk. We need to find alterna�ves to meet the new challenge of speed and super speed orders as well as reduce the risk factor in investments.

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.599.01 million (83.49% of turnover) as compared to last year’s cost of goods sold of Tk.521.72 million (82.77% of turnover). This is due to the fact that there has been increase in average produc�on cost by Tk.5.60 per yds (Tk. 28.22 in 2016-2017 per yds and Tk.22.62 in 2015-2016 per yds). The decrease in produc�on quan�ty is 1.84 million yards compared with the last year. Produc�on capacity u�lized during the year was 80.05%.

(b) Gross Profit:The turnover of the company during the year was Tk.717.463 million as against last year’s turnover of Tk.630.290 million. The increase in turnover is 13.83% over the last year. Gross Profit earned during the year was Tk.118.454 million (16.51% of turnover) as against last year’s gross profit of Tk.108.568 million (17.23% of turnover).The decrease in Gross Profit ra�o is due to increase in prices of Dyes & Chemicals (Raw materials) and imported Gray fabrics against H&M order. The Gross profit ra�o has decreased by 0.72% over the previous year.

(c) Net Profit:Net profit (a�er tax) earned during the year was Tk.44.958 million as compared to last year’s Net profit (a�er tax) of Tk.43.331 million. During the year net profit a�er tax has marginally increased due to marginal increase of turnover.

Extra-Ordinary gain or loss:During the year the company received interest of FDR Tk.135,976 and Gain on Foreign Currency Exchange rate Tk.2,933,530 total Tk.3,069,506 which has been shown as Non Opera�ng Income in note no.21.00 in the Notes of Account.

Related party transac�ons:Related party transac�ons are depicted in Note no.25.00 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.1.69, 2nd quarter Tk.4.49 and 3rd quarter Tk.5.37. A�er Audit the Annual Earning per share (EPS) stood at Tk.6.61. The quarterly variance between 1st quarter to 2nd quarters occurred due to allotment of 1,942,340 number Bonus share for the year 2015-16. 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.19.01 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 13.83% overthe last year. However, the Cost of goods sold (COGS) marginally increased by 0.72% due to increase in price of Dyes & Chemicals and other Raw materials. As a result, opera�ng profit has decreased by 1.29% on sales compared to last year (2015-2016 was 9.60% and 2016-2017 is 8.31%).

FINANCIAL RESULTS:The compara�ve statements of financial results of the Company for the year 2016-2017 as compared to previous year are summarized as follows: (Tk. in Thousand)Par�culars 2016-17 2015-16 % Increase/(Decrease)Turnover 717,463 630,290 13.83%Cost of goods sold 599,008 521,722 0.72%Gross profit 118,454 108,568 (0.72%)Opera�ng expenses 41,714 31,638 0.79%Financial expenses 17,143 16,390 (0.21%)Opera�ng profit 59,598 60,540 (1.30%)Net profit (AT) 44,958 43,331 (0.60%)Gross profit margin 16.51% 17.23% (0.72%)Net profit margin 6.27% 6.87% (0.60%)Earning per share (Tk.) 6.61 *6.37 --Face value per share 10 10 --*Earning per share restated in the year 2015-16.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 Cash Dividend @ 15% i.e. Tk.1.50 per share of Tk.10.00 each and Stock Dividend @ 15% i.e. 0.15 (Zero point one five) Bonus Share for every 01 (One) ordinary shares held by the shareholders on the Record date.

Marke�ng: Global market behavior is guided by trends, Genera�on changes, fashion demands etc. These challenges were faced con�nuously in achieving our objec�ves of capturing a greater marker share. The most effec�ve tools were innova�on. New prin�ng and dyeing houses posed a threat and compe��on was intense. We adopted the new trends along with innova�ve ideas in our marke�ng policy. We have successfully implemented our unique ideas & techniques to enhance the current trends to achieve greater market value. Good intercommunica�on with buyers and our suppliers helped in a�aining our goals and ensured a good bonding. We have moved forward with the image of a complete woven package dyeing and prin�ng 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 2016-17 the following capital expenditure were incurred: (Tk. in million)Par�culars 2016-2017 2015-2016 2014-2015Land/civil construc�on 0.03 2.20 -----Plant & Machinery 142.46 34.04 2.54Other Fixed Assets 16.05 4.97 1.31Total 158.54 41.21 3.85Sources of funds are borrowing from banks and internal genera�on

11

LONG TERM LOAN REPAYMENT:During the year the company has repaid the Term Loan amoun�ng to Tk.68,603,237.34 and created new Term Loan for new BMRE plan. As a result the Term Loan posi�on as on 30th June, 2017 stood at Tk.182,110,856.00.

APPROPRIATION OF PROFIT:The Board of Directors recommended for appropria�on of profit as follows:Retained Earnings brought forward from previous year : Tk. 99,927,242.00Less: Dividend distribu�on for the year 2015-2016 : (Tk.19,423,400.00)Balance surplus brought forward : Tk. 80,503,842.00Add: Net Profit (a�er tax) during the year 2016-2017 : Tk. 44,958,320.00Add: Adjustment of excess deprecia�on : Tk. 2,056,506.00Total net free surplus available for appropria�on : Tk.127,518,668.00

Appropria�on Proposed: (i) Stock Dividend (Bonus Shares) in the ra�o of 1:0.15 (15%) i.e.0.15(Zero point one five)Bonus Share for every 01(One) ordinary share held on Record Date :(Tk.10,197,286.50) (ii ) Cash Dividend @ 15% i.e. Tk.1.50 (One point five zero) Per share of Tk.10.00 each :(Tk.10,197,286.50)Retained Earnings a�er payment of Dividend Tk.107,124,095.00

DECLARATION OF DIVIDEND:In the line of proposed appropria�on of profit, the Board of Directors proposed and recommended for declara�on of Cash Dividend @ 15% and Stock Dividend (Bonus Share) @ 15% for the year 2016-2017. This will need cash disbursement of Tk.10,197,286.50 and issuance of 1,019,728.65 Ordinary Shares of Tk.10.00 each by capitaliza�on of Tk.10,197,286.50 total Tk.20,394,573.00 out of Retained Earnings (free reserves). The cash and 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. A. Ma�n Chowdhury, Director and Mr. Azizur Rahim 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 dated 7th August, 2012 are depicted in ANNEXURE –III.

APPOINTMENT OF AUDITORS:M/s.Malek Siddiqui Wali, Chartered Accountants, exis�ng auditors of the Company, will re�re at this Annual General Mee�ng (AGM) on comple�on of consecu�ve three years audit. As they are not eligible for re-appointment as per clause 15(2) & (3) of the Dhaka Stock Exchange & Chi�agong Stock Exchange (Lis�ng) Regula�ons, 2015, a new Firm of Chartered Accountants have to be appointed as Auditors for the year 2017-2018.

M/s. Shiraz Khan Basak & Co., Chartered Accountants (a panel auditor of BSEC), have expressed their interest to be appointed as Auditors of the company for the year 2017-2018. The Board recommended M/s. Shiraz Khan Basak & Co., Chartered Accountants, R.K. Tower (Level-10), 86, Bir U�am C.R. Da�a Road, (312, Sonargaon Road), Dhaka-1205 for appointment as auditors of the Company of the year 2017-2018 with fixa�on of their remunera�on.

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 the CEO & CFO to the Board as per clause 6, 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, RJSC 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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14

g~jabx e¨q:2016-17 mv‡j †Kv¤úvbxi g~jabx e¨q wbgœiæc: (wgwjqb UvKvq) weeib 2016-2017 2015-2016 2014-2015f~wg I BgviZ 0.03 2.20 ---hš¿cvwZ 142.46 34.04 2.54Ab¨vb¨ ’̄vqx m¤úwË 16.05 4.97 1.31‡gvU 158.54 41.21 3.85

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15

ANNEXURE –IThe Directors also report that:

• Related Party Transac�ons are depicted in Note no.25.00 in the Notes of Account.• Remunera�on of Directors including Independent Director have been shown in Note no.19.01 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 2016-2017 were as follows:

Name of Directors Posi�on Mee�ng Held A�ended Didar A. Husain Chairman 06 02 A. Ma�n Chowdhury Managing Director 06 06 Dr. Shamim Ma�n Chowdhury Director 06 06 Saima Ma�n Chowdhury Director 06 03 Azizur Rahim Chowdhury Director 06 05 Dr. Sultan Hafeez Rahman IndependentDirector 06 05 Md. Qamrul Huda IndependentDirector 06 05

• 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, 2017:

Name of the Shareholders Status Shares held %i. Parent/Subsidiary/AssociatedCompanies and other related par�es Nil Nil Nilii. Directors: Didar A. Husain Chairman 1,285,825 18.91 A. Ma�n Chowdhury Managing Director 1,173,588 17.27 Dr. Shamim Ma�n Chowdhury Director 999,181 14.70 Saima Ma�n Chowdhury Director 1,364,118 20.06 Azizur Rahim Chowdhury Director 245,963 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 1,173,588 17.27 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 190,911 2.81 Dr. Shamim Ma�n Chowdhury Wife of Mr. A. Ma�n Chowdhury 999,181 14.70iv. Execu�ves Nil Nil Nilv. Shareholders holding 10% or more vo�ng interest in the Company Didar A. Husain Chairman 1,285,825 18.91 A. Ma�n Chowdhury Managing Director 1,173,588 17.27 Dr. Shamim Ma�n Chowdhury Director 999,181 14.70 Saima Ma�n Chowdhury Director 1,364,118 20.06

16

ANNEXURE-IIIBrief Resume of the Directors

Directors who seek re-appointment:

Mr. A. Ma�n Chowdhury:

Mr. A. Ma�n Chowdhury is a Sponsor Director of the Company since 1981. He is a renowned and dynamic personality in the Tex�le Sector of Bangladesh. A�er his ac�ve par�cipa�on in the libera�on War of Bangladesh in 1971, he voluntarily re�red from the Bangladesh Army as a Major. He entered into the family business with his brother late Mr. A. Malek Chowdhury into Graphics Limited, a company that pioneered prin�ng, office equipment and other technology equipment.

In the last many years, he moved from inden�ng to the manufacturing and is currently the Managing Director of Rahim Tex�le Mills Ltd, New Asia Ltd, Malek Spinning Mills Ltd, Salek Tex�le Ltd, Knit Asia Ltd, Hejaz Publica�ons Ltd and the Chairman of J.M. Fabrics Ltd. and Newasia Synthe�cs Ltd. He is also the Independent Director of Pioneer Insurance Company Ltd.

He is the former Chairman of Bangladesh Tex�le Mills Associa�on (BTMA) and Under Previleged Children’s Programs (UCEP). He is also involved with many other non-profit organiza�ons including Diabe�c Associa�on of Bangladesh (DAB) as a Member of the Na�onal Council, Founder Trustee of Independent University Bangladesh (IUB), Founder Member, Board of Governors of Bangladesh Enterprise Ins�tute (BEI), Bangladesh Legal Aid and Services Trust (BLAST) and many other voluntary organiza�ons. He has more than 45 (forty five) years’ experience in the tex�le sector.

Mr. Azizur Rahim Chowdhury:Mr. Azizur Rahim Chowdhury is a Director of the Company since 2007, son of Mr. A. Ma�n Chowdhury. He obtained gradua�on from Purdue University in the U.S.A. with a major in Computer Science and Business Management. He is the Member of Audit Commi�ee of RahimTex�le Mils Limited and Malek Spinning Mills Limited. He has more than 10 (ten) years working experience in the tex�le sector. He is also the Director of Malek Spinning Mills Limited (listed company), Salek Tex�le Limited, Knit Asia Limited, Hejaz Publica�ons Limited, Fatehbagh Tea Company Limited and also the Managing Director of J.M. Fabrics Limited and Director of Bangladesh Tex�le Mills Associa�on (BTMA).

ANNEXURE-IVAUDIT COMMITTEE REPORT

For the Year 2016-2017Rahim 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:TheCommi�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�ee Date: 19th October, 2017.

17

18

ANNEXURE-VCEO & 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 2017 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: 07th October, 2017Dhaka

ANNEXURE-VIAUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE COMPLIANCE

OFRAHIM 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 30 June 2017 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,19 November 2017 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

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

20

21

AUDITORS’ REPORTTo the shareholders of

Rahim Tex�le Mills Limited

We have audited the accompanying Financial Statements of Rahim Tex�le Mills Limited, which comprise Statement of Financial Posi�on as at 30th June 2017 and the related Statement of Profit or Loss and Other Comprehensive Income, Statement of Change in Equity, Statement of Cash Flows 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 and other applicable laws and regula�ons and for such internal control as management determines, which 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 an 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 (BAS)/Bangladesh Financial Repor�ng Standards (BFRS), give a true and fair view of the state of the company’s affairs as of June 30, 2017 and of the results of its opera�ons and its cash flows for the period then ended and comply with the Companies Act 1994 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 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 Wali October 22, 2017 Chartered Accountants

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Malek Siddiqui Wali CHARTERED ACCOUNTANTS PHONE: 9513471, 9569867 9-G, Mo�jheel C/A, 2nd Floor, PABX: 9576118-9, 9576128 Dhaka-1000, Bangladesh. FAX: +88029516236 Extension Office: Property Heights, 1st Floor Email: [email protected] 12, RK Mission Road, Dhaka – 1000. Web: www.msw-bd.com

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RAHIM TEXTILE MILLS LIMITEDStatement of Financial Posi�on

As at 30 June 2017

As at 30 June 2017 As at 30 June 2016Item Notes Taka Taka

ASSETS:Non Current AssetsProperty Plant & Equipment 4.00 549,749,118 444,606,595 549,749,118 444,606,595 Current AssetsInventories 5.00 151,713,301 49,562,477 Accounts Receivable 6.00 233,601,876 71,293,504 Advances, Deposits & Pre-Payments 7.00 175,860,621 23,826,293 Cash & Bank Balances 8.00 9,029,663 66,224,225 570,205,461 210,906,499

TOTAL ASSETS 1,119,954,579 655,513,094

SHARE HOLDER'S EQUITY & LIABILITIES:Shareholder's EquityShare Capital 9.00 67,981,910 48,558,510 Retained Earnings 127,518,668 99,927,242 Revalua�on Surplus of Fixed Assets 10.00 83,743,140 85,799,646 279,243,718 234,285,398 Non-Current Liabili�es:Long Term Loan 11.00 169,845,300 39,705,037 Deferred Tax Liabili�es 12.00 24,093,474 16,000,370 193,938,774 55,705,407 Current Liabili�esAccounts Payable 13.00 306,721,513 183,246,196 Current Por�on of Long Term Loan 14.00 12,265,556 27,159,396 Short Term Loan From Bank 15.00 274,124,259 131,021,816 Others Payable 16.00 53,660,759 24,094,881 646,772,087 365,522,288

TOTAL SHARE HOLDER'S EQUITY & LIABILITIES: 1,119,954,579 655,513,094

Net Asset Value (NAV ) per share 41.08 48.25 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 22, 2017 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 22, 2017 Chartered Accountants

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

For the year ended 30 June 2017

For the year ended For the year ended 30 June 2017 30 June 2016Par�culars Notes Taka Taka

Sales Revenue 17.00 717,462,840 630,290,462

Cost of Goods Sold 18.00 (599,008,501) (521,722,286)

Gross Profit 118,454,339 108,568,176

Opera�ng Expenses:Administra�ve & Selling Expenses 19.00 (41,713,623) (31,638,440)

Opera�ng Profit before Financial Expenses 76,740,716 76,929,736

Financial Expenses 20.00 (17,142,708) (16,390,179)

Opera�ng Profit 59,598,008 60,539,558

Non Opera�ng Income/(Loss) 21.00 3,069,506 (3,776,798)

Net Profit before WPPF & WF 62,667,514 56,762,760

Provision for Contribu�on to WPPF & WF 22.00 (2,984,167) (2,702,989)

Net Profit / (Loss) for the period 59,683,347 54,059,771

Less : Income Tax expenses 14,725,027 10,728,738

Current Tax 23.00 10,013,065 9,261,255

Prior years Tax (3,381,143) 2,026,411

Deferred Tax 12.00 8,093,104 (558,928)

Net Profit / (Loss) for the period a�er tax 44,958,320 43,331,033 Other comprehensive income: - - Total comprehensive income 44,958,320 43,331,033

Earning Per Share (Restated in 2016). 24.00 6.61 6.37 Par Value Tk.10Number of shares used to compute EPS 6,798,191 6,798,191






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RAHIM TEXTILE MILLS LIMITED Statement of Changes in Equity

For the year ended 30 June 2017

Par�culars Share Capital Revalua�on Surplus Retained Earnings Total of Fixed AssetsAs at July 1, 2016 48,558,510 85,799,646 99,927,242 234,285,398 Net Profit this period - 44,958,320 44,958,320 Stock Dividend 19,423,400 - (19,423,400) - Excess Deprecia�on Adjustments (2,056,506) 2,056,506 -

As at June 30, 2017 67,981,910 83,743,140 127,518,668 279,243,718

Rahim Tex�le Mills Limited Statement of Changes in EquityFor the year ended 30 June 2016

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 period - 43,331,033 43,331,033 Stock Dividend 13,873,860 (13,873,860) - Excess Deprecia�on Adjustments (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 TEXTILE MILLS LIMITED Statement of Cash Flows For the year ended 30 June 2017

For the year ended For the year ended 30 June 2017 30 June 2016 Par�culars Taka Taka

Cash Flow From Opera�ng Ac�vi�es

Collec�ons from turnover, bills receivable and other receipts. 558,223,974 645,576,382Payment for purchase of raw materials, accessories, creditors and other expenses (413,243,955) (464,720,038)Financial Expenses Paid (17,142,708) (16,390,179)Income Tax Paid (6,765,632) (5,880,112)Net cash generated/(used) in opera�ng ac�vi�es 121,071,679 158,586,052 Cash Flow From Inves�ng Ac�vi�es Acquisi�on of Property Plant & Equipment (293,613,643) (50,267,797)Disposal of Machinery - 2,200,000 Net cash generated/(used) in inves�ng ac�vi�es (293,613,643) (48,067,797) Cash Flow From Financing Ac�vi�es Loan received/(repayment) from Bank 115,246,423 (52,765,142)Loan received/(repayment) from Directors - (14,953,649)Sale of Fac�on share against stock dividend 244,562 203,545 Dividend Paid (143,584) (135,898)Net cash generated/(used) in financing ac�vi�es 115,347,401 (67,651,144) Net Cash Inflow / ( Ou�low ) (57,194,562) 42,867,112 Cash & Cash Equivalent as at July 01, 2016 66,224,225 23,357,113 Cash & Cash Equivalent as at June 30, 2017 9,029,663 66,224,225 Net Opera�ng Cash Flow Per Share ( NOCFPS ) 17.81 32.66 Par Value Tk.10

Number of Shares used to compute NOCFPS 6,798,191 4,855,851






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RAHIM TEXTILE MILLS LIMITEDNOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 20171.0 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 - 9702/528 of December 31, 1981. Subsequently the company was converted into Public Limited Company in the year of 1988. The Company was listed in the Dhaka Stock Exchange Limited on 29th March 1988.

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

Shafipur,Kaliakair, Gazipur, Bangladesh.

1.3 Nature of business 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. We have also cer�fied by Control Union for organic content standard (OCS 100, blended) and proud member of Be�er Co�on Ini�a�ve (BCI). Our major customer includes H&M, CARREFOUR, ZOLA, LEGAN 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 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 Security 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 2016 to 30 June 2017.

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 2017; ii. Statement of Comprehensive Income for the year ended 30 June 2017; iii. Statement of Changes in Equity for the year ended 30 June 2017; iv. Statement of Cash Flows for the year ended 30 June 2017; 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 2015-16 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 2015-16 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 balance have 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.

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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

2015-16 SRO # 193-Law/ITO/2015 U/S-44 Sub-sec�on (4) Clouse (b). 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 provided, 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 Property Plant & Equipment’s Rate Category of Property Plant & Equipment’s 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 Property Plant &Equipment’s : 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 Property Plant &Equipment’s : 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�ons sets out in IAS-18 “Revenue Recogni�on”

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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 Lease Finance Ltd. for a vehicle 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.Bangladesh Sromo Ain-2006.

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 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.

3.17 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.

3.18 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.

3.19 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, 2017. 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.

3.20 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 Net Profit or Loss for the Period ,Fundamental Errors and Accoun�ng Policies, Changes in Accoun�ng Es�mates Complied withBAS-10 Events a�er the Repor�ng Period Complied withBAS-11 Construc�on, Contracts Complied withBAS-12 Income Taxes Complied withBAS-14 Segment Repor�ng 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-26 Accoun�ng and Repor�ng by Re�rement Benefit Plants Complied withBAS-27 Consolidated Financial Statement and Accoun�ng for N/ABAS-28 Investment in Subsidiaries N/ABAS-32 Financial Instruments: Presenta�on N/ABAS-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

3.21 Re�rement Benefit: The Company has operated provident fund benefit to its employees.

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3.22 Financial Risk Management : The company management has overall responsibility for the establishment and oversight of the company’s risk management

framework. Risk management policies, procedures and systems are reviewed regularly to reflect changes in market condi�ons and the company’s ac�vi�es. The company has exposure to the following risks its use of financial instruments.

3.22.1 Credit risk : Credit risk is the risk of a financial loss to the company if a customer or counter party to a financial instrument fails to meet its

contractual obliga�ons and arises principally from the company’s receivables. Management has a credit policy in place and exposure to credit risk is monitored on an ongoing basis. Risk exposures from other financial assets, i.e. Cash at bank and other external receivables are nominal.

3.22.2 Liquidity risk : Liquidity risk is the risk that the company will not be able to meet its financial obliga�ons as they fall due. The company’s

approach to managing liquidity (cash and cash equivalents) is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabili�es when due, under both normal and stressed condi�ons, without incurring unacceptable losses or risking damage to the company’s reputa�on. Typically, the company ensures that it has sufficient cash and cash equivalents to meet expected opera�onal expenses, including financial obliga�ons through prepara�on of the cash flow forecast, prepared based on �me line of payment of the financial obliga�on and accordingly arrange for sufficient liquidity/fund to make the expected payment within due date. In extreme stressed condi�ons, the company may get support from the related company in the form of short term financing.

3.22.3 Market risk : Market risk is the risk that any change in market prices such as foreign exchange rates and interest will affect the company’s

income or the value of its holdings financial instruments. The objec�ve of market risk management is to manage and control market risk exposures within acceptable parameters.

3.23 Currency risk : The company is exposed to currency risk on certain purchases such as import of raw material, machineries and equipment

Majority of the company’s foreign currency transac�ons are denominated in USD and relates to procurement of raw materials, machineries and equipment from abroad.

3.24 Interest rate risk : Interest rate risk is the risk that arises due to changes in interest rates on borrowing. There was no foreign currency loan which

is subject to floa�ng rates of interest. Local loans are, however, not significantly affected by fluctua�ons in interest rates. The company has not entered into any type of deriva�ve instrument in order to hedge interest rate risk as at therepor�ng date

4.00 Property Plant & Equipment Assets : Tk. 549,749,118 Details of Fixed Assets and Deprecia�on as on 30th June, 2017 are shown in the Schedule A-1 This is arrived at as follows: Cost: 30.06.2017 30.06.2016 Opening balance 729,002,198 709,290,985 Addi�on this year 158,542,723 41,215,038 Less: Sale/Adjustment - 21,503,825 Closing balance 887,544,922 729,002,198 Accumulated Deprecia�on : Opening balance 382,009,319 360,806,607 Addi�on this year 51,343,694 36,767,747 Less: Sale/ Adjustment - 15,565,035 Closing balance 433,353,013 382,009,319 Wri�en Down Value at Repor�ng Date 454,191,908 346,992,879 Revalua�on of Fixed Assets: Opening balance 123,251,997 123,483,815 Less: Adjustment for this year on Revalua�on - 231,818 Wri�en Down Value at Repor�ng Date 123,251,997 123,251,997 Opening balance 25,638,281 23,477,495 Addi�on this year 2,056,506 2,302,793 Less: Adjustment for this year on Revalua�on - 142,007 Closing balance 27,694,787 25,638,281 Wri�en Down Value at Repor�ng Date: 95,557,210 97,613,716 Wri�en Down Value of Property Plant & Equipment at Repor�ng Date: 549,749,118 444,606,595

4.01 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. 151,713,301 The total amount is arrived as follows : Items 30.06.2017 30.06.2016 Dyes & Chemicals 5.01 51,238,843 22,906,026 Grey Fabric 5.02 42,276,480 6,206,820 Prin�ng & Design Material 5.03 4,685,788 8,411,531 Spares & Accessories 5.03 17,085,505 5,823,456 Work in Process 5.04 6,959,220 1,142,808 Work in Process (Finished Stage) 5.05 29,467,465 5,071,836 151,713,301 49,562,477

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30

5.01 Dyes & Chemicals: Items Qty(kg) 30.06.2017 Qty(kg) 30.06.2016 Dyes 21,639 17,801,555 24,939 9,167,436 Chemicals 253,321 33,437,288 155,210 13,738,590 274,960 51,238,843 180,149 22,906,026 5.02 Grey Fabrics: Items Qty(Yds) 30.06.2017 Qty(Yds) 30.06.2016 Grey Fabrics 701,190 42,276,480 103,447 6,206,820

5.03 Prin�ng & Design Materials & Spares Accessories: Items 30.06.2017 30.06.2016 Prin�ng & Design Materials 4,685,788 8,411,531 Spare Parts & Accessories 17,085,505 5,823,456 Tk. 21,771,293 TK. 14,234,987 5.04 Work-In-Process: Items Qty(Yds) 30.06.2017 Qty(Yds) 30.06.2016 Work-In-Process 494,723 6,959,220 280,749 1,142,808

5.05 Work in Process (Finished Stage) Items Qty(Yds) 30.06.2017 Qty(Yds) 30.06.2016 Work in Process (Finished Stage) 2,760,196 29,467,465 848,601 5,071,836

5.06 Physical coun�ng of the stock was carried out by inventory team, consis�ng of auditor & management staff. 5.07 Inventory at june 30,2017 are valued at lower of average cost and net realisable value 5.08 The inventories are collateralised against short term loan.

6.00 Accounts Receivable: Tk. 233,601,876 The total amount is arrived as follows : 30.06.2017 30.06.2016 Below 60 days 104,667,508 Within 61-90 days 78,272,611 Above 90 days 50,661,757

Total Tk 233,601,876 71,293,504

6.01 The above amount is receivable from debtors against confirm export L/C & credit sales. It considered as good. 6.02 Most of the balances have subsequently been realised. The Debtors have no securi�es except their personal securi�es.6.03 The above balance included due to related party Tk. 20,143,803.42 & other par�es Tk. 213,458,072.58

7.00 Advance Deposite & Pre-payments : Tk 175,860,621 This consists as follows:

7.01 Security Deposit : 30.06.2017 30.06.2016 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 2,795,580 126,926 Total : 5,863,633 3,194,979

7.02 Deposits : Guarantee Margin 563,676 559,305 Security deposit DGDP (Army) 445,900 441,250 Total : 1,009,576 1,000,555

7.03 Advance & Prepayments : Advance Income Tax deducted at Source (i) 6,765,632 5,880,112 Advance for Local Procurement 670,832 403,629 Advance to Barister Khurshid Alam 250,000 250,000 Advance to AB Power Engineering Ltd. 2,476,050 1,804,050 Advance to Expotech 36,000 Advance to FCL 100,000 Advance to Office Work & Others 980,785 821,475 Advance to United Finance Ltd. 134,218 134,218 Material in Transit 15,919,559 3,081,858 Machine in Transit 141,654,336 7,255,416 Total : 168,987,412 19,630,759 Grand Total (1+2+3) : 175,860,621 23,826,293

7,(03),i Advance Income Tax Deducted at Source : Opening balance 5,880,112 7,732,266 Add : Addi�on during this year 6,765,632 5,880,112 Total AIT at source 12,645,744 13,612,378 Less : Tax adjustment for FY-2015-16 5,880,112 5,705,855 6,765,632 7,906,523 Less : Prior years AIT adjustment - 2,026,411 Advance Income Tax deducted at Source : 6,765,632 5,880,112

7.04 Security deposit are made to statutory authori�es and it will be realized when the service received from government authority will discon�nue

7.05 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

7.06 No amount is due by the associated undertakings. 7.07 Guarantee Margin includes Guarantee issued to Titas gas & DGDP against Performance and workorder. 7.08 Maturity within one year Tk. 17,442,491 & more than one year Tk. 2,188,268.7.09 There has no balance due to Related par�es, Directors & other sister Concern.

8.00 Cash and Bank Balance: Tk. 9,029,663 30.06.2017 30.06.2016 Cash in hand - (Head Office) 18,978 50,000 Cash in hand - Factory (Pe�y Cash) 340 4,028 Cash at Bank with IFIC Bank Ltd. 59,579 338,015 Cash at Bank with The City Bank Ltd 426,099 11,154,276 Cash at Bank with The City Bank Ltd. 1,034,737 11,761,930 Cash at Bank with The City Bank Ltd. 484,393 2,738,778 Cash at Bank with AB Bank Ltd.-254 2,379,652 16,516,787 Cash at Bank with AB Bank Ltd.-251 516 516 Cash at Bank with AB Bank Ltd.-001 300,008 13,085,373 Cash at Bank with AB Bank Ltd.-002 1,316,540 300,020 Cash at Bank with AB Bank Ltd.-003 350 350 Cash at Bank with AB Bank Ltd.-047 689,592 8,076,153 6,710,784 64,026,225 FDR for Bank Guarantee AB Bank Ltd - 200 2,318,879 2,198,000 9,029,663 66,224,225 8.01 Cash in hand was physically counted at the end of the year and found in order. 8.02 The Bank Balances were confirmed and reconciled with Bank statements and found in order.

8.03 It includes foreign currency deposit amoun�ng USD $ 56,940.47 as on 30th June 2017 (2016 USD $ 500,911.85) equivalent of Tk.4,588,374 as on 30th june 2017 (2016 Tk. 39,093,647).

9.00 Share Capital : Tk. 67,981,910 a) Authorized Capital : As on 30.06.2017 As on 30.06.2016 50,000,000 Ordinary Shares of Tk. 10/- each TK. 500,000,000 500,000,000

b) Issued, Called & Paid up Capital :Tk. 67,981,910 6,798,191 Ordinary shares of Tk. 10/- each fully paid up Tk. 67,981,910 48,558,510

(i) Composi�on of Shareholding : As on 30.06.2017 As on 30-06-2016 No. of Share % No. of Share % Sponsors & Directors 5,068,675 74.56% 3,727,626 76.76% Government - 0.00% - 0.00% Ins�tu�ons 111,673 1.64% 77,878 1.60% Foreign Investors - 0.00% - 0.00% General Investors /Public 1,617,843 23.80% 1,050,347 21.64% 6,798,191 100.00% 4,855,851 100.00%

Details of Sponsors & Directors Share Capital are as Follows : 30.06.2017 30.06.2016 01. A.Ma�n Chowdhury 11,735,880 9,454,200 02. Dr. Shamim Ma�n Chowdhury 9,991,810 7,137,010 03. Didar A. Husain 12,858,250 9,184,470 04. Saima Ma�n Chowdhury 13,641,180 9,743,700 05. Azizur Rahim Chowdhury 2,459,630 1,756,880 06. Dr. Sultan Hafeez Rahman ( Independent Director) - - 07. Md. Qamrul Huda ( Independent Director) - - Tk. 50,686,750 37,276,260 Details of the Share holding is given below: Holding Range No.of Holders No. of Share Percentage 1 - 50 304 6,779 0.10% 51-500 2,124 497,835 7.32% 501-5,000 333 479,170 7.05% 5,001-10,000 26 196,904 2.90% 10,001-20,000 10 148,781 2.19% 20,001-30,000 1 26,414 0.39% 30,001-40,000 2 72,350 1.06% 40,001-50,000 Nil Nil 0.00% 50,001-100,000 2 110,372 1.62% 100,001-1,000,000 6 5,259,586 77.37% Total: 2,808 6,798,191 100.00%

31

32

9.01 The number of share holding by Sponsors & Directors and others increased as on 30th June,2017 from that of 30th June,2016 due to declara�on and allotment of 40% Stock Dividend for the year of 2015-2016.

10.00 Revalua�on Surplus of Fixed Assets : Tk. 83,743,140 30.06.2017 30.06.2016 Opening Balance 85,799,646 88,192,250 Less: Adjustment of cost during the year - 231,818 85,799,646 87,960,432 Less: Excess Deprecia�on Adjustment during the year 2,056,506 2,302,793 83,743,140 85,657,639 Add: Adjustment of deprecia�on during the year - 142,007 Closing Balance at repor�ng date. 83,743,140 85,799,646

10.01 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. 169,845,300 The consists of the above head as follows: 30.06.2017 30.06.2016 Long Term loan from AB Bank -TL-461 24,428,000 - Long Term loan from AB Bank -TL-464 26,752,000 Long Term loan from AB Bank -TL-468 - 63,257,092 Long Term loan from City Bank -MTL-6001 944,339 Long Term loan from City Bank -MTL-6002 931,872 Long Term loan from City Bank -MTL-6003 12,406,037 Long Term loan from City Bank -MTL-6004 4,968,711 Long Term loan from City Bank -MTL-6005 2,187,846 Long Term loan from City Bank -MTL-6006 327,810 Long Term loan from City Bank -MTL-6007 17,385,809 Long Term loan from City Bank -MTL-6008 14,761,985 Long Term loan from City Bank -MTL-6009 1,806,933 Long Term loan from City Bank -MTL-6010 11,511,908 Long Term loan from City Bank -MTL-6011 20,187,076 Long Term loan from City Bank -MTL-6012 23,519,461 Long Term loan from City Bank -MTL-6013 3,125,366 Long Term loan from City Bank -MTL-6014 11,944,885 Long Term loan from City Bank -MTL-6015 1,314,625 Long Term loan from City Bank -MTL-6016 1,253,103 United Leasing Company Ltd. 2,353,092 3,607,340 182,110,856 66,864,432 Less: Current por�on of Long Term Loan [Note : 14] 12,265,556 27,159,396 169,845,300 39,705,037

11.01 Name of Lander AB Banl Ltd. City Bank Ltd. 11.02 Ini�al Loan Facility 51,180,000 128,577,764 11.03 Repayment Term Quarterly Quarterly11.04 Tenor 20 20 11.05 Installment Size 4,360,911 11.06 Interest Rate 10% P.A. 9% P.A. 11.07 Date of Maturity 2022 202211.08 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.

12.00 Deferred Tax Liabili�es: 24,093,474 30.06.2017 30.06.2016 Opening Balance 16,000,370 16,559,299 Provision during this Year 8,093,104 (558,928) 24,093,474 16,000,370

Tempurary Tempurary Accounts based Tax based Diff.2016-17 Diff..2015-16 WDV of Fixed Assets 454,191,908 389,125,957 65,065,951 9,055,420 Revalua�on Surplus of Fixed Assets 95,557,210 - 95,557,210 97,613,716 Total 549,749,118 389,125,957 160,623,161 106,669,136 Deferred tax @ 15% on 160,623,161 24,093,474 16,000,370

13.00 Accounts Payable: Tk. 306,721,513

13.01 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.

14.00 Current Por�on of Long Term Loan: Tk. 12,265,556 30.06.2017 30.06.2016 Long Term loan from AB Bank -TL-461 2,980,632 - Long Term loan from AB Bank -TL-464 1,418,705 - Long Term loan from AB Bank -TL-468 - 25,906,755 Long Term loan from City Bank -MTL-6001 231,000 Long Term loan from City Bank -MTL-6005 581,171 Long Term loan from City Bank -MTL-6006 84,633 Long Term loan from City Bank -MTL-6010 698,750 Long Term loan from City Bank -MTL-6011 4,996,197 Long Term loan from City Bank -MTL-6013 386,424 - United Finance Company Ltd 888,045 1,252,641 Tk. 12,265,556 27,159,396 15.00 Short Term Loan from Bank : Tk. 274,124,259 The consists of this head as follows: 30.06.2017 30.06.2016 Cash Credit Account (with AB Bank) - 000 9,065,572 (1,817,111) Cash Credit Account (with City Bank) -6331 (85,006) (4,963,059) 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) 16,068,391 21,480,000 Deferred Liability EDF(Foreign L/C with AB Bank) 70,226,147 41,412,173 Deferred Liability EDF (Foreign L/C with City Bank) 77,347,831 70,356,864 Deferred Liability (Foreign L/C with City Bank) 571,641 Deferred Liability UPAS (Foreign L/C with City Bank) 98,136,830 - Inland Bill Purchase Loan A/C(with AB Bank) - 707 2,792,855 - 274,124,259 131,021,816 15.01 Cash credit account with AB Bank & The City Bank Ltd. : 15.02 Now we are availing credit facility with Short term loan at AB Bank Ltd. & The City Bank Ltd. 15.03 All the balances were reconciled and confirmed.15.04 Deferred Liability create against Foreign & Local import L/C15.05 Short Term loan are secured against total inventories & book debts.15.06 All the above loans bears interest @10.00% p.a. to 09.00% p.a15.07 Apart from the above, the company has availed Long Term loan facili�es from AB Bank Ltd & The City Bank Ltd.16.00 Others Payable : Tk. 53,660,759 The consists of this head as follows:

16.01 Liability for Expenditure : Tk. 29,720,533 The consists of this head as follows: 30.06.2017 30.06.2016 Directors Remunera�on 427,750 - Workers & Employees P.F. 141,389 - Employer's PF Contribu�on 141,389 Salary Payable 5,576,281 180,000 Wages Payable 2,072,141 131,448 Over�me Payable 299,639 253,702 Bonus Payable - 17,143 Audit fees 115,000 86,250 Gas Charges 2,420,435 2,411,963 U�lity Expenses 2,400,000 500,000 Deduc�on of Tax & VAT at source 15,877,441 411,104 Employees PF Loan 30,388 - Employees Income Tax Against Salary 218,680 - 29,720,533 3,991,610

16.02 Provision For WPPF & WF: Tk 12,622,845 30.06.2017 30.06.2016 Opening balance 9,638,678 6,935,689 Provided this year @ 5% (Note-22) 2,984,167 2,702,989 Closing balance 12,622,845 9,638,678

16.03 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.

16.04 Unclaimed Dividend : Tk. 1,304,316 30.06.2017 30.06.2016 Opening Balance Tk. 1,203,338 1,135,691 Add : Sale of Frac�on Share Tk. 244,562 203,545 Total Unclaimed Dividend 1,447,900 1,339,236 Less : Dividend issue during this year Tk. 143,584 135,898 Closing Balance Tk. 1,304,316 1,203,338

16.05 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.

16.06 Provision For Income Tax: Tk. 10,013,065 30.06.2017 30.06.2016 Opening Balance 9,261,255 5,705,855 Income Tax for the year 10,013,065 9,261,255 19,274,320 14,967,110 Less.Adjustment during the year 9,261,255 5,705,855 10,013,065 9,261,255 17.00 Sales Revenue : Tk. 717,462,840

33

18.00 Cost of Goods Sold : Tk. 599,008,501 Raw Material Consumed : 30.06.2017 % Consump�on 30.06.2016 Grey Fabrics (18.01) 169,759,771 43.33% 42,375,982 Dyes & Chemicals (18.02) 210,488,139 53.73% 242,013,541 Prin�ng & Design Materals (18.03) 11,516,460 2.94% 31,644,032 391,764,370 100.00% 316,033,555 Direct Wages & Salaries including fes�val bonus 120,150,975 102,534,822 Factory Overhead (18.04) 117,305,197 104,292,619 Qty. (yards) 629,220,542 Qty. (yards) 522,860,996 Add: Opening Work in Process 280,749 1,142,808 208,382 578,000 280,749 630,363,350 208,382 523,438,996 Less: Closing Work in process 494,723 6,959,220 280,749 1,142,808 Cost of Produc�on: 623,404,130 522,296,188 Add: Opening W.I.P.(Finished Stage) 848,601 5,071,836 102,631 4,497,934 848,601 628,475,966 102,631 526,794,122 Less: Closing W.I.P.( Finished Stage) 2,760,196 29,467,465 848,601 5,071,836 599,008,501 521,722,286 18.01 Grey Fabrics Consumed : Name of Products: Qty. (yards) 30.06.2017 Qty. (yards) 30.06.2016 a) Opening Stock 103,447 6,206,820 64,788 10,042,118 b) Purchase During the year (A) 3,797,332 205,829,431 410,681 38,540,684 3,900,779 212,036,251 475,469 48,582,802 Less : Closing Stock 701,190 42,276,480 103,447 6,206,820 3,199,589 169,759,771 372,022 42,375,982

18.02 Dyes & Chemicals Consumed 30.06.2017 30.06.2016 a) Opening Stock 22,906,026 25,322,070 b) Purchase during the year (B) 238,820,956 239,597,497 261,726,982 264,919,567 Less : Closing Stock 51,238,843 22,906,026 Tk 210,488,139 Tk. 242,013,541

18.03 Prin�ng & Design Materials, Spares & Accessories Consumed: 30.06.2017 30.06.2016 a) Opening Stock 14,234,987 8,568,672 b) Purchase during the year (C) 19,052,766 37,310,347 33,287,753 45,879,019 c) Less : Closing Stock 21,771,293 14,234,987 Tk 11,516,460 Tk. 31,644,032 (A) Procurement / Supplied by Raw Materials: Fabrics: Qty.(Yards) 30.06.2017 Avg.Price per Yard 30.06.2016 Imported 3,441,757 176,237,014 51.21 9,323,458 Local Purchase through EDF & Deferred L/C 355,575 29,592,418 83.22 29,217,226 3,797,332 205,829,431 38,540,684 (B) Dyes & Chemicals : 30.06.2017 30.06.2016 Imported 153,590,563 118,582,750 Local Purchase through EDF L/C 85,230,393 121,014,747 Tk. 238,820,956 Tk. 239,597,497 (C) Prin�ng & Design Material,Spares & Accessories: 30.06.2017 30.06.2016 Imported 13,047,079 23,616,516 Local Purchase 6,005,687 13,693,831 Tk. 19,052,766 37,310,347 18.04 Factory Overhead : Tk. 117,305,197 30.06.2017 30.06.2016 Gas & Electric Charges 31,944,704 26,911,205 Insurance Premium 1,617,550 1,273,842 Uniform & Liveries 149,802 177,165 Repairs & Maintenance 13,583,778 21,243,529 Telephone Charges 655,518 497,476 Packing Expenses 1,844,786 1,108,798 Travelling & Conveyance 2,762,099 2,264,234 Fuel Lubricant 4,026,209 4,266,038 Medical expenses 138,743 57,606 Contribu�on to P.F. 1,215,915 1,008,899 Entertainment 363,638 378,758 Sta�onery 654,824 646,319 Newspaper & Periodicals 7,000 6,460 Tes�ng Charges 1,824,745 1,038,010 Rent, Rates & Taxes 182,392 120,000 Back Processing Charges 174,985 20,868 Compliance Expenses 167,900 - Design & Prin�ng Expenses 201,521 385,030 Survey & Inspec�on Charges 117,599 - Training Expenses 833,206 - Food & Refreshment Expenses for Staff & Workers. 2,002,902 4,433,193 Lab Expenses 751,256 393,434 Loading & Unloading Exp. 466,835 573,995 Fire Figh�ng Material 52,810 115,485 Deprecia�on 51,564,479 37,372,275 Tk. 117,305,197 104,292,618

34

18.05 Gas & electricity Charges has been increased due to increase of unit price.18.06 Travelling & conveyance cost has been increased due to engineering team went outside of country for machine inspec�on.18.07 Tes�ng charge has increased due to development of new product for new buyer( H & M).18.08 Insurance premium cost has been increased due to Addi�on of Fixed Assets.18.09 Packing cost has been increased due to increase of delivery of finished goods.18.10 Lab expenses has been increased due to some new product development purpose.19.00 Administra�ve & Selling Expenses: Tk. 41,713,623 30.06.2017 30.06.2016 Director's Remunera�on - 19.01 4,200,000 1,800,000 Salary & Allowances 17,927,523 14,003,381 Fes�val Bonus 1,988,603 2,045,521 Electricity Charges 125,220 - Prin�ng 138,475 42,975 Sta�onery 384,258 347,054 Adver�sement 508,178 627,897 Insurance Premium 58,340 87,766 Telephone & Fax Charges 326,182 276,843 Travelling & Conveyance 1,982,561 1,660,561 Fees, Forms & Stamps 1,702,989 1,477,900 Dona�on & Subscrip�on 105,000 65,000 Selling & Distribu�on Expenses 4,086,043 3,791,694 Consultancy Fees 184,861 35,300 Training Expenses 563,822 487,231 Postage & Telegram 18,705 44,063 Repairs & Maintenance 772,217 444,700 Head Office Rent 3,762,657 1,719,492 Annual General Mee�ng Expenses 196,180 246,011 Entertainment 1,190 230 Contribu�on to P.F. 317,682 252,435 Audit Fees 120,750 86,250 So�ware Servicing Charges 135,315 54,074 Income Tax Expenses - 44,502 Survey & Inspec�on Expenses - 62,200 Food & Refreshment Expenses for Staff 271,151 237,094 Deprecia�on 1,835,721 1,698,266 Tk. 41,713,623 31,638,441 19.01 Directors Remunera�on: Mr.Didar A.Husain, Chairman Tk. 2,400,000 1,800,000 Mr.A. Ma�n Chowdhury,Managing Director Tk. 1,200,000 - Mr.Azizur Rahim Chowdhury, Director Tk. 600,000 - Total Tk. 4,200,000 1,800,000 19.02 Salary & Allowance has increased due to annual increment .19.03 Office rent has increase due to shi� to new office20.00 Financial Expenses: Tk. 17,142,708 The break-up of the above amount is as follows : 30.06.2017 30.06.2016 Interest on Commercial Bank Loan & Overdra� 15,228,269 15,865,943 Interest on Lease Finance 329,818 229,596 Bank Charges & Commission 1,584,621 294,640 17,142,708 16,390,179

20.01 Financial expenses has inecrease due to avealled new Term Loan for construc�on & Machinery purpose.

21.00 Non Opera�ng Income/(Loss) : Tk. 3,069,506 30.06.2017 30.06.2016 Gain/Loss on disposal of Fixed Assets - 21.01 - (3,828,601) Other Income - 21.02 3,069,506 118,287 3,069,506 (3,710,315)21.01 Gain/( Loss ) on Dsposal of Macninery: Tk. - The break-up of the above amount is as follows : 30.06.2017 30.06.2016 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 -Revalud - (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)

21.02 Other Income: Tk. 3,069,506 The consists of this head as follows: 30.06.2017 30.06.2016 Interest received on FDR 135,976 161,256 Gain/(Loss) on Foreign Currency Exchange rate 2,933,530 (109,453) Tk. 3,069,506 51,803

22.00 Provision for WPPF & WF Tk. 2,984,167 30.06.2017 30.06.2016

Contribu�on this year @ 5% (Net profit before WPPF & WF (62,667,514/21) 2,984,167 2,702,989 2,984,167 2,702,989

35

23.00 Income Tax Provision (Current Tax) Tk. 10,013,065 30.06.2017 30.06.2016 Based Amount Tax Amount Based Amount Tax Amount Opera�ng Profit 59,598,008 60,539,558 Less : Provision for Contribu�on to WPPF & WF (2,984,167) (2,702,989) Net Profit / (Loss) for the year 56,613,841 57,836,569 Add : Deprecia�on as per F.A. Schedule 53,400,200 39,070,540 110,014,041 96,907,109 Less : Deprecia�on as per Tax based 43,486,898 35,434,170 On Opera�ng Income @ 15% 66,527,143 9,979,071 61,472,940 9,220,941 On Non-Opera�ng Income: Profit/(Loss) on Sale of Assets - - (3,828,601) - Other Income @ 25% 135,976 33,994 161,256 40,314 66,663,119 10,013,065 57,805,595 9,261,255

24.00 Earnings Per Share (EPS): Tk. 6.61 6.37 30.06.2017 30.06.2016 Net Profit/ ( Loss) a�er Tax for this year 44,958,320 43,331,033 Total Number of Share 6,798,191 6,798,191 Earning per share (Restated in 2016). 6.61 6.37 25.00 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 2017 were as follows :

Name of Sister Concern Opening Balance Transac�on Realiza�on Accounts Receivable J.M Fabrics Limited 421,797 5,330,571 4,514,387 1,237,981 Knit Asia Limited 17,835,116 27,354,807 26,284,101 18,905,823 Salek Tex�le Limited 1,932,679 3,969,467 5,902,145 - Total Amount 20,189,591 36,654,845 36,700,633 20,143,803 25.01 Events a�er the repor�ng period : The Board of Directors of the company has approved the financial statements as on October 22, 2017 and they recom-mended 15%

Stock & 15% Cash dividend for the financial year 30th June 2017. Except the fact stated above, on circum-stances have arisen that to be disclosed as note or adjusted in the financial statements.

25.02 Disclosure as per requirement of schedule XI, part II of company act 199425.03 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 Employees Remunera�on 100,000.00-200,000.00 3 Salary 0-14,999.00 75 15,000.00-29,999.00 97 30,000.00-59,999.00 43 60,000.00-99,000.00 13 100,000 Above 9 Wages 0-5,299.00 Nil 5,300.00-6,999.00 173 7,000.00-10,000.00 72 10,000.00 Above 184 Total number of Employees 669

25.04 Disclosure as per requirement of schedule XL, part II para 7 Capacity of industrial unit actual produc�on shor�all and achievement are as follows: Unit Installed Actual Short fall % of achievement Dyeing, Prin�ng & Finishing unit (Yards in lac) 265.2 212.29 52.91 80.05%

25.05 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 Purchase Import Total Purchase Consumed Grey Fabrics 29,592,418 176,237,014 205,829,431 169,759,771 Dyes & Chemical 85,230,393 153,590,563 238,820,956 210,488,139 Prin�ng, Design Materials & Spare Parts etc. 6,005,687 13,047,079 19,052,766 11,516,460 Total 120,828,498 342,874,655 463,703,153 391,764,37025.06 Remunera�on of External Auditors : The audit fee represents the fees for audi�ng the accounts of the Company for the financial year 2016-17. No other fees was

paid to the auditor for any other services. . 25.07 Post Closing Events : There is no significant event has been occurred for repor�ng for the period from cut-off date of financial year to the date of

signing of the financial statements.

36

RAHIM TEXTILE MILLS LIMITEDProperty Plant & Equipments As On 30 June 2017

Schedule -A-1

COST DEPRECIATION Wri�en down Items Balance as Addi�on Adjustment Total as on Rate Balances as Charges Adjustment Total as on value as on on 01.07.16 During the During the 30.06.17 (%) As on 01.07.16 During the During the 30.06.17 30.06.17

Year Year Year Year

Land & Land Development 14,345,373 - 14,345,373 - 0 - 14,345,373

Factory Building 121,383,322 33,467 - 121,416,789 10 72,615,525 4,880,126 77,495,652 43,921,137

Plant & Machinery 512,754,285 136,353,225 - 649,107,510 10 254,958,381 39,414,913 - 294,373,294 354,734,216

Office Building 465,320 - 465,320 10 442,787 2,253 445,041 20,279

Godown / Ware House 2,417,477 - 2,417,477 10 1,076,532 134,095 1,210,626 1,206,851

Tubewell & Water Pump 5,445,170 1,684,000 7,129,170 15 4,202,462 439,006 4,641,468 2,487,702

Electric Installa�on 17,688,521 577,500 18,266,021 15 13,465,009 720,152 14,185,161 4,080,860

Furniture & Fixtures 2,362,603 1,168,940 3,531,543 10 1,148,607 238,294 1,386,900 2,144,643

Crokeries & Cutleries 83,506 - 83,506 15 60,036 3,520 63,557 19,949

Air Cooler & Celling Fan 2,528,168 317,250 2,845,418 15 1,613,234 184,828 1,798,061 1,047,357

Office Equipments 4,210,438 1,783,215 5,993,653 15 2,594,438 509,882 3,104,320 2,889,333

Loose Tools & Equip. 2,212,168 521,000 2,733,168 15 1,224,513 226,298 1,450,812 1,282,356

Gas Line Installa�on 1,476,783 1,476,783 15 1,018,552 68,735 1,087,287 389,497

Gas Boiler 4,999,220 4,999,220 15 749,883 749,883 4,249,337

Boundary Wall 2,155,312 - 2,155,312 15 1,720,043 65,290 1,785,334 369,978

Other Machine & Equip. 4,586,547 6,109,907 10,696,453 15 2,777,011 1,187,916 3,964,928 6,731,526

Generator 20,431,739 - 20,431,739 15 16,149,116 642,393 16,791,509 3,640,230

Water Tank Reservoir 951,779 - 951,779 15 682,523 40,388 722,911 228,868

Motor Vehicles 13,503,687 4,995,000 - 18,498,687 15 6,260,550 1,835,721 - 8,096,270 10,402,417

As at 30 June 2017 729,002,198 158,542,723 0 887,544,922 382,009,319 51,343,694 - 433,353,013 454,191,908

Revalued Property Plant & Equipments As on 30 June 2017

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 01.07.16 During the During the 30.06.17 (%) on 01.07.16 During the During the 30.06.17 30.06.17 Year Year Year Year

Land & Land Development 78,760,479 78,760,479 - 0 - - 78,760,479

Factory Building 18,710,765 18,710,765 10 10,656,394 805,437 11,461,831 7,248,934

Plant & Machinery 16,339,721 - - 16,339,721 10 8,964,500 737,522 - 9,702,022 6,637,699

Boundary Wall 6,035,141 6,035,141 15 3,846,590 328,283 4,174,873 1,860,268

Tubewell & Water Pump 3,405,891 3,405,891 15 2,170,797 185,264 2,356,061 1,049,830

Sub Total as at 30.06.17 123,251,997 0 0 123,251,997 25,638,281 2,056,506 - 27,694,787 95,557,210

Grand Total as at 30.06.17 852,254,195 158,542,723 0 1,010,796,919 407,647,601 53,400,200 0 461,047,801 549,749,118

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

Deprecia�on charged to : A i) Deprecia�on of Cost Of Goods Sold. 51,564,479

B ) Deprecia�on of Administra�ve & Selling Expenses. 1,835,721

53,400,200

37

35th Annual General Meeting

38

Rahim Tex�le Mills LimitedRegistered Office: 134 New Eskaton Road, Dhaka-1000, Bangladesh

Corporate Head Office: Tower-117, 117/A, Tejgaon Industrial Area, Dhaka-1208, Bangladesh

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 36th Annual General Mee�ng of the Company to be held on Wednesday, December 27, 2017 at 9.00 a.m. at Spectra Conven�on Centre Limited, House # 19, Road # 7, Gulshan-1, Dhaka-1212 and at any adjournment thereof.

Afix RevenueSigned this--------------------------------------------------------- day of December, 2017 Stamp

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

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

Folio/BOID No.

Folio/BOID 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 Head Office of the Company not less than 48 hours before the �me fixed for the mee�ng.

………………………………………………

Rahim Tex�le Mills LimitedRegistered Office: 134 New Eskaton Road, Dhaka-1000, Bangladesh

Corporate Head Office: Tower-117, 117/A, Tejgaon Industrial Area, Dhaka-1208, Bangladesh

A�endance Slip

I hereby record my a�endance at the 36thAnnual General Mee�ng of Rahim Tex�le Mills Limited being held today, the December 27, 2017at 9.00 a.m.at Spectra Conven�on Centre Limited, House # 19, Road # 7, Gulshan-1, Dhaka-1212 as a holder of ------------------------------------------------------------------------------ shares of the Company.

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

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

Folio/BOID 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

Rahim Tex�le Mills LimitedRegistered Office:

134, New Eskaton Road, Dhaka-1000

Corporate Head Office: Tower-117, 117/A, Tejgaon Industrial Area, Dhaka-1208

Factory: Shafipur, Kaliakoir, Gazipur

Tel: IPT+8809612111177-92, 880-2-8878065, Fax: 880-2-8878064E-mail: [email protected], Website: www.rahimtex�le.com

Rahim Textile Mills Ltd. · Factory: Shaﬁpur, Kaliakoir, Gazipur Tel: IPT+8809612111177-92,...

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