MALEK SPINNING MILLS LIMITED gv‡jK w¯úwbs wgjm& … · MALEK SPINNING MILLS LIMITED 10 MALEK SPINNING MILLS LIMITED DIRECTORS’ REPORT TO THE SHAREHOLDERS FOR THE YEAR 2014-2015

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Drcv`b ¶gZv/Drcv`bt2. LvZIqvix A_ev cb¨ wfwËK djvdj tAvgv‡ì †Kv¤úvbx 100% ißvbxgyLx bxU myZv Drcv`b Ki‡Q| †Kv¤úvbxi evrmwiK Drcv`b ¶gZv 12,600,000 †KwR Bqvb© 63,624 w¯úÛjm&G|

2014-2015 Ges 2013-2014 mv‡ji †Kv¤úvbxi cwiPvjbvMZ/Avw_©K Kvh©µ‡gi ZzjbvMZ Ae¯’v wb‡¤œ †ck Kiv nj t

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4. wewµZ c‡bï e¨q we‡k−lY, †gvU cÖvwš—K gybvdv Ges bxU cÖvwš—K gybvdv t(K) wewµZ c‡bï e¨q t PjwZ eQ‡i wewµZ c‡bï e¨q wQj 87.54% hv weMZ eQ‡i wQj 87.10%, hv e„w×i nvi 0.44% hv LyeB AZvrch©cyY©|(L) ißvbx t 30‡k Ryb 2015 Zvwi‡L mgvß eQ‡i ißvbx Uvb©Ifvi n‡q‡Q 2,994.45 wgwjqb UvKv, hv weMZ eQ‡i wQj 3,065.01 wgwjqb UvKv|

weMZ eQ‡ii Zzjbvq Uvb©Ifvi n«v‡mi nvi 2.30%| hv wewµZ c‡Yï weµq g~j¨ n«vm cvIqvi Rb¨ n‡q‡Q| (M) †gvU gybvdv t PjwZ eQ‡i ‡gvU gybvdv AwR©Z n‡q‡Q 372.92 wgwjqb UvKv hv weMZ eQ‡i wQj 395.47 wgwjqb UvKv| weMZ eQ‡ii Zzjbvq †gvU gybvdv

n«vm cvIqvq KviY wewµZ c‡bï weµq g~j¨ n«vm cvIqv|

(N) bxU gybvdv/(¶wZ) t PjwZ eQ‡i †Kv¤úvbx bxU gybvdv K‡i‡Q 225.20 wgwjqb UvKv †hLv‡b weMZ eQ‡i bxU gybvdv wQj 215.23 wgwjqb UvKv| bxU gybvdv

mvgvb¨ e„w× cvIqvi KviY weMZ eQ‡ii ZzjbvB Avw_©K e¨q n«vm cvIqv|

5. A¯^vfvweK jvf ev ¶wZ tPjwZ eQ‡i †Kv¤úvbx 34,730,375 UvKv bM` cÖ‡Yv`bv Ges e¨vs‡Ki my` eve` bb-Acv‡iwUs BbKvg wn‡m‡e DcvR©b K‡i‡Q hv weMZ eQ‡ii wQj 41,477,984 UvKv, hv Ab¨vb¨ Avq wnmv‡e Avq-weeiYx‡Z I wnmv‡ei †bvU bs 21.1G cÖ`k©b Kiv n‡q‡Q|

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8. Bbwmqvj cvewjK Advwis (AvBwcI), wiwcU cvewjK Advwis (AviwcI), ivBU Advi, WvB‡i± wjw÷s BZ¨vw` †_‡K A_© ev Znwej cÖvwßi ci †Kv¤úvbxi Avw_©K Ae¯’v tBbwmqvj cvewjK Advwis (AvBwcI) m¤úbœ n‡q‡Q 2010 mv‡j| cieZ©x‡Z †Kvb wiwcU cvewjK Advwis (AviwcI), ivBU Advi, WvB‡i± wjw÷s BZ¨vw` Kiv nq bvB|

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13. weMZ 05 (cuvP) eQ‡ii gyL¨ cwiPvjb Ges Avw_©K WvUvmg~n msw¶ß AvKv‡i c„ôv bs 08 G eb©bv Kiv n‡q‡Q|14. jf¨vsk tcwiPvjbv cl©` 12% bM` jf¨vsk A_©vr cÖwZ 10.00 UvKvi mvaviY †kqv‡ii wecix‡Z 1.20 UvKv bM` jf¨vsk †Nvlbvi Rb¨ AÎ mvavib mfvq mycvwik K‡i‡Qb, †iKW© †W‡U †h mKj †kqvi †nvìvie„›` †kqvi aviY Ki‡eb Zv‡ì Rb¨|

15. 2014-2015 eQ‡ii †evW© wgwUs‡qi msL¨v Ges cwiPvjK‡ì Dcw¯’wZ G‡b·vi-1G eb©bv Kiv n‡q‡Q|

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MALEK SPINNING MILLS LIMITED 10

MALEK SPINNING MILLS LIMITEDDIRECTORS’ REPORT

TO THE SHAREHOLDERS FOR THE YEAR 2014-2015Dear Shareholders,In terms of provisions of section 184 of the Companies Act 1994, Rule 12 of the Bangladesh Securities and Exchange Rules 1987, BSEC Notification dated 07 August, 2012 and IAS (International Accounting Standards) codes as adopted by the Institute 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 30 June, 2015 in the following paragraphs: The company owns 3 (three) subsidiaries as follows:

1. Salek Textile Limited- A composite mill of the Textile sector with three operational units. The rotor unit produces open end yarn of various counts having a capacity of 14,621 tons yarn per annum. The fabric unit produces denim fabric of various size and grade having capacity of 9,600,000 yards and the RMG unit produces denim products having capacity of 1,800,000 pcs per annum.

2. J.M. Fabrics Limited- A knitting, dyeing, finishing and garments factory located at South Nayapara, 6 No. Dogri, P.O. Bhawal, Mirzapur, Gazipur with a capacity of 29.64 million pcs. T-Shirt & Intimate garments per annum.

3. Newasia Synthetics Limited- A project promoted for setting up a polyester staple fibre and chips plant the implementation of which has since been kept in abeyance due to non-availability of energy/fuel & gas.

COMPANY’S OPERATIONS:(i) Industry outlook and possible future developments in the industry: Our Company falls within the primary textile sector producing world class yarn of various counts. Bangladesh is the 2nd largest exporter of RMG product and depend on domestic supply of quality yarn. Spinning mill is labour oriented industry. Since Bangladesh does not produce enough basic raw materials i.e. cotton, we have to depend largely on imported raw cotton and supply of skilled labour. The growth & challenges of the company depends on: (a) Labor relations (b) Labor productivity (c) Energy(d) Other infrastructures (e) Law and order (f) Financial costsIf these issues are appropriately addressed in time, the growth is expected to improve substantially as Bangladesh has already attained the name for being a quality manufacturer with a very reasonably priced supplier.CAPACITY/PRODUCTION(ii) Segment-wise or product wise performance:Our company produces 100% export oriented Knit Yarn. The installed production capacity of the company is 12,600,000 kg. yarn per annum with 63,624 Spindles. Comparative position of its operating/financial performance for the year 2014-2015 and 2013-2014 are given below:Sl. No. Description 2014-2015 (Kg.) 2013-2014 (Kg.)01 Production capacity 12,600,000 12,600,00002 Actual Production 10,858,524 10,640,59803 Capacity Utilization 86.18% 84.45%04 Quantity Sold (kg) 11,420,968 10,708,09205 Sales Revenue (Tk.) 2,994,445,635 3,065,012,79106 Average selling price (Tk.) 262.19 286.23(iii) Risk and concerns:All sectors of the textile industry face many of the similar challenges. These are lack of power, labor unrest, political unrest with hartal causing disruption of production and increased cost of fund. Since a Spinning Mill has to depend on imported raw materials and local supply of labour. Price variation of raw material and labour due to political turmoil are the main risk for this type of industry. Uninterrupted power supply due to irregular gas supply and price variation also affects this type of industry. (iv) Analysis of Cost of Goods Sold, Gross Profit Margin and Net Profit Margin:(a) Cost of Goods Sold:The cost of goods sold was 87.54% during the year as compared to 87.10% during the previous year, an insignificant increase of 0.44%. (b) Export:The company had achieved an export turnover of Tk.2,994.45 million during the year ended 30th June 2015. Last year’s export turnover was Tk. 3,065.01 million. The turnover had decreased by 2.30% over the last year due marginal fall in export prices.(c) Gross Profit:Gross Profit earned during the year amounted to Tk.372.92 million as against Tk.395.47 million during the previous year. Gross profit decreased due to decrease of selling price compared to last year.(d) Net Profit/(Loss):The company had succeeded in earning a Net Profit of Tk.225.20 million compared to last year’s Net Profit of Tk.215.23 million. The Net Profit increased marginally due to decrease in financial expenses. (v ) Extra-Ordinary gain or loss:During the year extra-ordinary gain of Tk.34,730,375 was earned from cash incentive & interest income from banks as against Tk.41,477,984 during the previous year which has been shown as Other Income in the Statement of Profit or Loss and other Comprehensive Income and in the note no.21.1 in the Notes of Account.(vi) Related party transactions:Related party transactions are depicted in Note no.27.1 in the Notes of Account.

Avw_©K cÖwZ‡e`‡bi Dci gš—e¨ t1| wewµZ c‡Yï g~j¨ K‡g hvIqvi Rb¨ weµq mvgvb¨ Kg n‡q‡Q|2| wewµZ c‡Yï e¨q/cwiPvjbv LiP mvgvb¨ e„w× cvIqvq ‡gvU gybvdv mvgvb¨ K‡g‡Q| gybvdv e›Ub:cwiPvjbv cl©` wb‡gœv³ Dcv‡q gybvdv e›U‡bi mycvwik K‡i‡Qb: c~e©eZ©x eQ‡ii wi‡UBb Avwb©sm UvKv 294,827,434.00 ev` : 2013-2014 eQ‡ii jf¨vsk weZiY UvKv (193,600,000.00) DØ„Ë ¯’vbvš—i UvKv 101,227,434.00 †hvM: bxU gybvdv (Ki cieZ©x) 2014-2015 mv‡ji UvKv 225,196,724.00 ‡hvM: m¤úwË cyb:g~j¨vq‡bi AePq mgš^q UvKv 65,823,094.00 Ave›U‡bi Rb¨ bxU wd« Znwej UvKv 392,247,252.00cÖ¯—vweZ jf¨vsk: bM` jf¨vsk 12% cÖwZ 10.00 (`k) UvKvi mvavib †kqv‡ii Rb¨ 1.20 (GK `kwgK `yB k~b¨) UvKv UvKv (232,320,000.00) jf¨vsk cÖ`v‡bi ci DØ„Ëc‡Î ¯’vbvš—i UvKv 159,927,252.00jf¨vsk †Nvlbv:cÖ¯—vweZ gybvdv Ave›Ub Abyhvqx cwiPvjbv cl©` 2014-2015 eQ‡ii Rb¨ 12% bM` jf¨vsk †Nvlbvi Rb¨ mycvwik K‡i‡Qb| Gi Rb¨ cÖwZwU 10.00 (`k) UvKvi mvaviY †kqv‡ii wecix‡Z 1.20 (GK `kwgK `yB k~b¨) UvKv jf¨vsk cÖ`vb Ki‡Z n‡e| hvi Rb¨ cÖ‡qvRb n‡e 232,320,000.00 UvKv hv wi‡UBb Avwb©s (wd«-wiRvf©) n‡Z cÖ`vb Kiv n‡e| †iKW© †W‡U †h mKj †kqvi†nvìvi‡ì bvg †Kv¤úvbxi †kqvi †iwRóvi A_ev wW‡cvwRUwi †iwRóv‡i wjwce× _vK‡e Zviv Dc‡iv³ jf¨vsk cv‡eb| wnmv‡ei GKÎxKiY tweGmBwm Gi wewagvjv I B›Uvib¨vkbvj G¨vKvDw›Us ÷¨vÛvW©-28 Ges AvB Gd Avi Gm -10 Gi wbqgvejx AbymiY K‡i †kqvi‡nvìvie„‡›ì †gvU myweav/wewb‡qvM g~j¨ wba©viY Kiv n‡q‡Q|cwiPvjK wbev©Pb:†Kv¤úvbxi AvwU©‡Kjm Ae G‡mvwm‡qk‡bi 110 Aby‡”Q` †gvZv‡eK Rbve G. gwZb ‡PŠayix, cwiPvjK I Rbve AvwRRyi iwng †PŠayix, cwiPvjK, cwiPvjbv cl©` n‡Z †iv‡Ukb Abyhvqx Aemi wb‡”Qb Ges †hvM¨ weavq 112 Aby‡”Q` †gvZv‡eK Zviv c~b: wbev©wPZ nIqvi Rb¨ AvMÖn cÖKvk K‡i‡Qb| Dc‡i ewY©Z cwiPvjK e„‡›ì msw¶ß Rxeb e„Ëvš— I Ab¨vb¨ Z_¨vw` weGmBwm ‡bvwUwd‡Kkb ZvwiL 07 AvMó, 2012 Gi aviv 1.5 Abyhvqx G‡b·vi-3 G mwbœ‡ewkZ Kiv n‡q‡Q| wbix¶K wb‡qvM:‡Kv¤úvbxi eZ©gvb wbix¶K, †gmvm© gv‡jK wmwÏKx Iqvjx, PvU©vW GKvD›U¨v›Um avivevwnK fv‡e 3 eQi wbix¶v Kvh© m¤úv`b Kivi ci AÎ evwl©K mvavib mfvq Aemi MÖnb Ki‡eb| †h‡nZy XvKv ÷K G·‡PÄ I PÆMÖvg ÷K G·‡PÄ (wjw÷s) †i¸‡jmbm&, 2015 Gi aviv 15(2) Ges (3) Abyhvqx Zviv cyb-bevq‡bi †hvM¨ bq weavq 2015-2016 eQ‡ii Rb¨ GKwU bZzb AwWU dvg© wb‡qvM Ki‡Z n‡e| †gmvm© wmivR Lvb emvK GÛ †Kvs., PvU©vW GKvD›U¨v›Um (weGmGwm Gi c¨v‡bjf~³ AwWU dvg©) 2015-2016 eQ‡ii Rb¨ AwWUi wn‡m‡e wb‡qvM †c‡Z AvMÖn cÖKvk K‡i‡Qb| †hvM¨ weavq, cwiPvjbv cl©` †gmvm© wmivR Lvb emvK GÛ †Kvs., PvU©vW GKvD›U¨v›Um, Avi. †K. UvIqvi, 86, exi DËg wm. Avi. `Ë †ivW, (312 †mvbviMv †ivW), †j‡fj-10, nvwZicyj, XvKv-1205 Õ†K 2015-2016 eQ‡ii Rb¨ †Kv¤úvbx AwWUi wn‡m‡e wb‡qvM Kivi mycvwik K‡i‡Qb Ges Zv‡ì cvwikÖwgK wba©vi‡bi mycvwik K‡i‡Qb| eë¯’vcbv cwiPvj‡Ki cyb:wb‡qvM:eZ©gvb eë¯’vcbv cwiPvjK, Rbve G. gwZb †PŠayixi wb‡qv‡Mi †gqv` 31†k wW‡m¤î 2015 Zvwi‡L ‡kl n‡e| cwiPvjbv cl©` 27 A‡±vei 2015 Zvwi‡L AbywôZ ‡evW© mfvq Zv‡K cybivq 5 (cvuP) eQ‡ii Rb¨ eZ©gvb envj K…Z k‡Z© wb‡qv‡Mi wm×vš— MÖnb K‡i‡Qb hv Rvbyqvwi 01, 2016 ZvwiL †_‡K Kvh©Ki n‡e| cwiPvjbv cl©` Rbve G. gwZb †PŠayixi, eë¯’vcbv cwiPvjK wn‡m‡e cyb:wb‡qv‡Mi welqwU AÎ evwl©K mvavib mfvq ‡kqvi‡nvìvie„‡›ì Aby‡gv`‡bi Rb¨ mycvwik K‡i‡Qb| eë¯’vcbv cwiPvjK, Rbve G. gwZb †PŠayixi Rxeb e„Ëvš— I Ab¨vb¨ Z_¨vw` msw¶ßKv‡i G‡b·vi-3 G mwbœ‡ewkZ Kiv n‡q‡Q|¯^Zš¿ cwiPvj‡Ki cyb:wb‡qvM:cwiPvjbv cl©` 12B RyjwB, 2015 Zvwi‡L AbywôZ mfvq Rbve Gg. †m‡K›`vi Avjx †K cybivq 3 (wZb) eQ‡ii Rb¨ ¯^Zš¿ cwiPvjK wn‡m‡e weGmBwmi †i¸‡jkb Abyhvqx wb‡qv‡Mi wm×vš— MÖnb K‡i‡Qb hv †m‡Þ¤î 24, 2015 ZvwiL †_‡K Kvh©Ki nq, hv AÎ evwlK mvavib mfvq ‡kqvi‡nvìvie„‡›ì Aby‡gv`‡bi Rb¨ mycvwik K‡i‡Qb| Rbve Gg. †m‡K›`vi Avjxi Rxeb e„Ëvš— I Ab¨vb¨ Z_¨vw` msw¶ßKv‡i G‡b·vi-3 G mwbœ‡ewkZ Kiv n‡q‡Q| K‡cv©‡iU Mf©‡bÝ cÖwZ‡e`b: wmwKDwiwUR GÛ GK‡PÄ Kwgkb Gi †bvwUwd‡Kkb bs GmBwm/wmGgAviAviwmwW/2006-158/134/GWwgb/44 ZvwiL: 07 AvMó 2012 Gi wbwi‡L GKwU weeibx 1.5 aviv Abymv‡i cÖwZcvjb cÖwZ‡e`b, AwWU KwgwU cÖwZ‡e`b 3.5 aviv Abymv‡i, aviv 7(1) Abymv‡i cÖ‡dkbvj GKvDb‡U›U KZ…©K mvwU©wd‡KU Ges K‡cv©‡iU Mf©‡bÝ cÖwZcvjb 7(2) Gi Ae¯’v h_vµ‡g mshyw³- I, II, III, IV, V, Ges VI Gi gva¨‡g eb©bv/cÖKvk Kiv n‡jv|abëv` Ávcb :cwiPvjbv cl©‡ì c¶ †_‡K †Kv¤úvbxi †kqvi†nvìvi, MÖvnK, e¨vsK, BÝy¨‡iÝ †Kv¤úvbx, mieivnKvix, weGmBwm, wWGmB, wmGmB, wmwWweGj, Avi‡RGmwm I Ab¨vb¨ cÖwZôv‡bi mn‡hvMxZv I Dc‡`‡ki Rb¨ abëv` Rvbvw”Q| ZvQvov †Kv¤úvbxi kªwgK, Kg©Pvix‡ì wbôv I HKvwš—K Kg© DÏxcbvi Rb¨ m‡š—vl cÖKvk Ges abëv` Rvbvw”Q|

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eY©bv 2014-2015 2013-2014Drcv`b (†KwR) Bqvb© 10,888,027 10,455,062Drcv`b (MR) †dweª· 5,980,426 *1,596,792Drcv`b (wcm) AviGgwR 1,642,895 .....weµq †iwfwbD (UvKv) 2,977,370,517 2,178,916,498MÖm jvf (UvKv) 375,923,436 342,496,255wbU jvf Ki cÖwfkb cieZ©x (UvKv) 117,564,540 135,713,206MÖm gvwR©b 12.63% 15.72%wbU gvwR©b 3.95% 6.23%BwcGm (UvKv) 2.44 **2.95GbGwf (UvKv) 52.85 ***504.15

∗ 2013-2014 mv‡ji †dweª· Drcv`b ïay 3 gv‡mi|** 2013-2014 mv‡ji Avwb©s cvi †kqvi (BwcGm) wba©vi‡Y †kqvi g~j¨ 10.00 UvKv we‡ePbv Kiv n‡q‡Q|*** 2013-2014 eQ‡i GbGwf wi‡q‡÷‡UW Kiv n‡q‡Q|

L) wbDGwkqv wmb‡_wUK wjwg‡UW (GbGmGj): †Kv¤úvbx (GgGmGg) wbDGwkqv wmb‡_wUK wjwg‡UW Gi 99.293% †kqvi aviY K‡i A_©vr cÖwZwU 100/- UvKv gyj¨gv‡bi 5,000,000 wU †kqv‡ii g‡a¨ cÖwZwU 100/- UvKv gyj¨gv‡bi 4,964,650 †kqvi avib K‡i| evsjv‡`k wmwKDwiwUR GÛ GK‡PÄ Kwgk‡bi (weGmBwm) m¤§wZcÎ bs SEC/CI/CPLC-442/2013/2903 ZvwiL wW‡m¤î 19, 2013 Abyhvqx †Kv¤úvbxi cwi‡kvwaZ g~jab 93,715,000.00 UvKv n‡Z e„w× K‡i 500,000,000,00 UvKvq DwbœZ Kiv n‡q‡Q| wZZvm M¨vm UªvÝwgkb GÛ wWw÷ªweDkb †Kv¤úvbx ‡_‡K M¨vm ms‡hvM bv cvIqvi Rb¨ cÖKíwU ¯’wMZ i‡q‡Q| †Kv¤úvbxwU 2014-2015 eQ‡i f~wg I f~wg Dbœqb I i¶bv‡e¶b eve` 60,377,513.00 UvKv wewb‡qvM K‡i‡Q| 30†k Rb 2015 Zvwi‡L †Kv¤úvbxi cÖwZ †kqv‡ii bxU G¨‡mU f¨vjy 366.41 UvKv|

(M) †R. Gg. †dweªKm wjwg‡UW (†RGgGdGj) t ‡Kv¤úvbx (GgGmGg) †R. Gg. †dweªKm wjwg‡UW Gi 99.998% †kqvi aviY K‡i A_©vr cÖwZwU 100/- UvKv gyj¨gv‡bi 4,000,000 †kqv‡ii g‡a¨ cÖwZwU 100/- UvKv gyj¨gv‡bi 3,999,900 †kqvi avib K‡i| †Kv¤úvbxwU 100% ißvbxgyLx Mv‡g©›Um Ges bxU †dweªK Drcv`‡b wb‡qvwRZ, hvi Drcv`b ¶gZv 15 †gwUªK Ub WvBW †dweªK Ges 68 jvBb KvwUs I my¨Bs Acv‡ikb mv‡_ cÖ‡qvRbxq mKj d¨vwmwjwUR I ¸`vgRvZKiY myweav we`¨vgvb| †Kv¤úvbxwU PjwZ eQ‡i wewb‡qvM K‡i‡Q 108.27 wgwjqb UvKv|2014-2015 eQ‡ii wewb‡qvM wbgœi“c:weeib UvKvd¨v±ix KvVv‡gv, ‡kW I wewìs 9,120,131c−v›U I †gwkbvix 85,226,967Ab¨vb¨ m¤ú` 13,918,127‡gvU 108,265,2252014-2015 Ges 2013-2014 mv‡ji †Kv¤úvbxi cwiPvjbv djvdj wbgœi“c: eY©bv 2014-2015 2013-2014Drcv`b (wcQ) 25,094,084 16,983,987weµq †iwfwbD (UvKv) 2,522,840,505 2,625,078,615MÖm jvf (UvKv) 152,981,663 88,555,338wbU jvf (UvKv) 57,800,157 72,365,854MÖm gvwR©b 6.06% 3.37%wbU gvwR©b 2.29% 2.76%BwcGm (UvKv) 14.45 18.09GbGwf (UvKv) 199.23 188.03*2013-2014 eQ‡ii wewfbœ As‡Ki cwigvb wi‡q‡÷‡UW Ges wiG¨v‡iÄW Kiv n‡q‡Q|

Avw_©K djvdj :weMZ eQ‡ii mv‡_ †Kv¤úvbxi (GgGmGg) ZzjbvgyjK Avw_©K djvdj wb‡¤œ msw¶ßKv‡i Dc¯’vcb Kiv n‡jv: (wgwjqb UvKvq)

weeiY 2014-2015 2013-2014weµq 2,994.446 3,065.013wewµZ c‡Yï e¨q 2,621.473 2,669.542†gvU jvf 372.972 395.471cwiPvjb e¨q 76.226 67.517Avw_©K e¨q 57.264 107.488cwiPvjbv gybvdv 239.482 220.465Ab¨vb¨ Avq 34.730 41.478bxU Acv‡iwUs gybvdv/(‡jvKmvb) 274.213 261.943Wwe−DwcwcGd G Pvu`v 13.058 12.473AvqKi cÖwfkb 35.958 34.238bxU jvf (Ki cieZ©x) 225.197 215.231†gvU Av‡qi nvi 12.46% 12.90%bxU Av‡qi nvi 7.52% 7.02%‡kqvi cÖwZ Avq-BwcGm (UvKv) 1.16 1.11wiUvb© Ab BKy¨BwU 4.19% 3.93%AvDU÷¨vwÛs †kqvi msL¨v 193,600,000 193,600,000‡kqv‡ii AwfwnZ g~j¨ (UvKv) 10 10Kbmwj‡W‡UW †kqvi cÖwZ Avq-BwcGm (UvKv) 2.05 2.33




































11

Annual Report 2015

(vii) Utilization of proceeds from public issues and/or right issues:There were no public issues and/or right issues during the year.(viii) Financial results after the company goes for Initial Public Offering (IPO), Repeat Public Offering (RPO), Rights Offer, Direct Listing, etc.:Initial Public Offering was made on the year 2010. There were no Repeat Public Offering, Rights Offer, Direct Listing, etc. in the history of the company.(ix) Variance between Quarterly Financial performance and Annual Financial Statements:The company’s earnings per share (EPS) in all quarter were almost same. There was no major fluctuation in EPS in between the quarters during the year. Profitability had marginally increased in the 4th quarter due to receipt of cash incentives as other income in last quarter.(x) Remuneration to directors including independent directors:The remuneration of Directors including Independent Directors are depicted in Note no.3.35 in the Notes of Account.(xi) to (xvi) Statement of Directors on Financial Reports:The above reports are depicted in Annexure-I.(xvii) Significant deviations from the last year’s operating results:The company’s Operating Profit ratio during the year 2014-2015, had increased by 0.81% i.e. 8.00% on sales as compared to last year’s Operating Profit ratio of 7.19%. This is due to mainly decrease of financial expenses, although operating expenses had increased marginally.(xviii) Key operating and financial data of last 5 (five) years have been presented in summarized form in page no. 08.(xix) Dividend:Board of Directors has recommended for declaration of a Cash Dividend @ 12% i.e. Tk.1.20 (one point two zero) per share of Tk.10.00 each for ordinary shares held by the shareholders as on the Record Date.(xx) The number of Board Meeting and the Attendance of Directors during the year 2014-2015, stated in Annexure-I.(xxi) The pattern of shareholding as required by clause 1.5 (xxi) of the BSEC Notification dated 07 August 2012, stated in Annexure-II.(xxii) Appointment/re-appointment of the directors:Brief resume and other required information of the directors who seek re-appointed in the ensuing AGM are stated in Annexure-III.CAPITAL EXPENDITURES:The following Capital Expenditure was incurred during the years 2014-2015 & 2013-2014.Description 2014-2015 (Tk.) 2013-2014 (Tk.)Land and Land Development 12,415,760 1,825,257Factory Building 419,486 ----Plant & Machinery 10,760,640 34,933,578Furniture & Fixtures 5,300 19,310Office Equipments 775,500 322,908Electrical Installation 724,800 ----Motor Vehicles --- 2,910,000Total 25,101,486 40,011,053The capital expenditures were financed by internal generation of fund.SUBSIDIARY OPERATION:Salek Textile Limited, Newasia Synthetics Limited and J.M. Fabrics Limited are subsidiaries and as such Directors Report along with, Auditors Report and Audited Accounts containing Statement of Financial Position, Statement of Profit or Loss and other Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows have been included as part of this report. Salek Textile Limited (STL):The Company (MSM) holds 97.925% share of Salek Textile Limited i.e. 47,259,700 shares of Tk.10.00 each amounting to Tk. 472,597,000.00 out of 48,260,870 shares of Tk.10.00 each amounting to Tk.482,608,700.00. To comply the condition No. 9 of capital raising consent order No.BSEC/CI/CPLC(Pvt)-333/2011/446 dated June 24, 2014 of Bangladesh Securities and Exchange Commission (BSEC) and Notification No. SEC/CMRRCD/2006-159/36/Admin/03-44 dated May 05, 2010 published in the Bangladesh Gazette dated 01-06-2010 the status of the Company was converted from Private Limited Company to Public Limited Company on 23rd August, 2014. Subsequently the par value of share was changed from Tk.100.00 per share to Tk.10.00 per share.The production capacity of STL is 14,621,000 kgs yarn, 9,600,000 yards fabric and 1,800,000 Pcs RMG products per annum. The company made additional investment of Tk.165,352,825 during the year 2014-2015.The Company’s operating results as on 2014-2015 and 2013-2014 are given below: Description 2014-2015 2013-2014Production (Kg) Yarn 10,888,027 10,455,062Production (Yards) Fabric 5,980,426 *1,596,792Production (Pcs) RMG 1,642,895 -----Sales Revenue (Tk.) 2,977,370,517 2,178,916,498Gross Profit (Tk.) 375,923,436 342,496,255Net Profit after tax provision (Tk.) 117,564,540 135,713,206Gross Margin 12.63% 15.72%Net Margin 3.95% 6.23%EPS (Tk.) 2.44 **2.95NAV (Tk.) 52.85 ***504.15




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* Production of Fabric in the year 2013-2014 was 3 (three) months only. ** Earning per share (EPS) in the year 2013-2014 has been calculated considering the face value of share Tk.10.00 each.***NAV in the year 2013-2014 has been restated.

(b) Newasia Synthetics Limited (NSL):The Company (MSM) holds 99.293% share of the Newasia Synthetics Ltd. i.e. 4,964,650 shares of Tk.100.00 each amounting to Tk. 496,465,000.00 out of 5,000,000 shares of Tk.100.00 each amounting to Tk.500,000,000.00 as on 30th June, 2015. The company had increased its paid up capital from Tk.93,715,000.00 to Tk.500,000,000.00 after obtaining capital raising consent from Bangladesh Securities and Exchange Commission (BSEC) vide their letter SEC/CI/CPLC-442/2013/2903 dated December 19, 2013. Due to non-availability of Gas connection from Titas Gas Transmission & Distribution Company Ltd. the project has been shelved until the situation changes regarding the availability of gas connection. The Company made additional investment of Tk. 60,377,513.00 during the year 2014-2015 under Land & Land Development. The Net Assets Value (NAV) per share of the company as on 30th June 2015 stood at Tk.366.41.

(c) J.M. Fabrics Limited (JMFL):The Company (MSM) holds 99.998% share of J.M. Fabrics Limited i.e. 3,999,900 shares of Tk.100.00 each amounting to Tk. 399,990,000.00 out of 4,000,000 shares of Tk.100.00 each amounting to Tk.400,000,000.00. The Company is engaged in the production of 100% export oriented garments and knit fabric with a production capacity of 15 M.Tons dyed fabric and 68 (sixty eight) lines of cutting and sewing operation with all necessary facilities, storage etc. During the year additional investment of Tk.108.27 million has been made. The investments made during the year 2014-2015 as follows:Particulars TakaFactory Structures, Shades & Building 9,120,131Plant & Machinery 85,226,967Other Assets 13,918,127Total 108,265,225The Company’s operating results as on 2014-2015 and 2013-2014 are given below:Description 2014-2015 2013-2014 Production (Pcs) 25,094,084 16,983,987Sales Revenue (Tk.) 2,522,840,505 2,625,078,615Gross Profit (Tk.) 152,981,663 88,555,338Net Profit (Tk.) 57,800,157 72,365,854Gross Margin 6.06% 3.37%Net Margin 2.29% 2.76%EPS (Tk.) 14.45 18.09NAV (Tk.) 199.23 188.03• During the year 2013-2014 figures have been restated and rearranged.

FINANCIAL RESULTS:The company’s (MSM) operating financial results, as compared to the previous year are summarized as follows: (Tk. in million)

Description 2014-2015 2013-2014Sales 2,994.446 3,065.013Cost of goods sold 2,621.473 2,669.542Gross profit 372.972 395.471Operating expenses 76.226 67.517Financial expenses 57.264 107.488Operating profit 239.482 220.465Other Income 34.730 41.478Net Operating Profit/(Loss) 274.213 261.943Contribution to WPPF 13.058 12.473Provision for Income Tax 35.958 34.238Net profit (after tax) 225.197 215.231Gross Margin 12.46% 12.90%Net Margin 7.52% 7.02%Earning per share –EPS (Tk.) 1.16 1.11Return on Equity (ROE) 4.19% 3.93%No. of shares outstanding 193,600,000 193,600,000Face value per share (Tk.) 10 10Consolidated Earning per share–EPS (Tk.) 2.05 2.33

Observation on Financial Result:1. Turnover had marginally decreased due to lower selling price.2. Gross Profit had marginally decreased due to marginal increase in Cost of Goods Sold/Operating expenses.




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13

Annual Report 2015

APPROPRIATION OF PROFIT:The Board of Directors recommended for appropriation of profit as follows:Retained Earnings brought forward from previous year : Tk. 294,827,434.00Less: Dividend Distribution for the year 2013-2014 :( Tk.193,600,000.00)Balance surplus brought forward : Tk. 101,227,434.00Add: Net Profit (after tax) during the year 2014-2015 : Tk. 225,196,724.00Add: Transfer of excess depreciation of revalued assets : Tk. 65,823,094.00Total net free surplus available for appropriation :Tk. 392,247,252.00Appropriation Proposed:(a) Cash Dividend @ 12% i.e. Tk.1.20 (One point two zero) per share of Tk.10.00 each :(Tk.232,320,000.00)Retained Earnings after payment of Dividend Tk. 159,927,252.00

DECLARATION OF DIVIDEND:In the line of proposed appropriation of profit, the Board of Directors proposed and recommended for declaration of Cash Dividend at the rate of 12% i.e Tk.1.20 (One point two zero) per share of Tk.10.00 each for the year 2014-2015. This will involve an amount of Tk.232,320,000.00 out of Reserve & Surplus/Retained Earnings (free reserves). The cash 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.CONSOLIDATION OF ACCOUNTS:In terms of BSEC Regulations, the Company has consolidated the Accounts following the codes of International Accounting Standard -28 & IFRS-10 reflecting shareholders gross benefits/value of investments.ELECTION OF DIRECTORS:Rotation of Directors:Pursuant to Article 110 of the Articles of Association of the Company Mr. A. Matin Chowdhury, Director and Mr. Azizur Rahim Chowdhury, Director would retire by rotation and being eligible as per Article 112 of the Articles of Association of the Company they offered themselves for re-election. Brief resume and other information of the above mentioned directors as per clause 1.5 (xxii) of BSEC notification dated 7th August, 2012 are depicted in Annexure –III.APPOINTMENT OF AUDITORS:The existing Auditors of the company M/s. Malek Siddiqui Wali, Chartered Accountants retires at this Annual General Meeting on completion of consecutive three years. As they are not eligible for re-appointment as per clause 15(2) & (3) of the Dhaka Stock Exchange & Chittagong Stock Exchange (Listing) Regulations, 2015, a new Firm of Chartered Accountants have to be appointed as Auditors for the year 2015-2016. M/s. Shiraz Khan Basak & Co., Chartered Accountants (a panel auditor of BSEC), expressed their interest to be appointed as auditors of the company for the year 2015-2016. The Board recommended M/s. Shiraz Khan Basak & Co, Chartered Accountants, R.K. Tower, 86, Bir Uttam C.R. Datta Road, (312 Sonargaon Road), Level-10, Hatirpool, Dhaka-1205 for appointment as auditors of the Company of the year 2015-2016 with fixation of their remuneration.RE-APPOINTMENT OF MANAGING DIRECTOR:The current tenure of the Managing Director, Mr. A. Matin Chowdhury would expire on 31st December 2015. The Board of Directors in its meeting held on 27th October 2015 decided to re-appoint him for a further period of 5 (five) years with effect from 1st January, 2016 on the existing terms and conditions. Accordingly, the Board of Directors had recommended for approval of re-appointment of Mr. A. Matin Chowdhury by the shareholders in the ensuing Annual General Meeting. Brief resume and other information of the Managing Director is depicted in ANNEXURE-III.

RE-APPOINTMENT OF INDEPENDENT DIRECTOR:The Board of Directors in its meeting held on 12th July, 2015 decided to re-appoint Mr. M. Sekander Ali as Independent Director of the Company for a further period of 3 (three) years with effect from 24th September, 2015 as per BSEC Regulations and recommended for approval by the shareholders in the ensuing Annual General Meeting. Brief resume and other information of the above mentioned director is depicted in ANNEXURE-III.CORPORATE GOVERNANCE:Corporate Governance is the practice of good citizenship, through which the Company is governed by the Board, keeping in view its accountability to the stakeholders and to the society. A statement in pursuance to clause 1.5, report of compliance, audit committee report as per clause 3.5, certificate from professional accountant as per clause 7(i) and a status of compliance as per clause 7(ii) of the BSEC Notification No.SEC/CMRRCD/2006-158/134/Admin/44 dated 07th August 2012 are depicted/disclosed in the ANNEXURE -I, II, III, IV, V and VI respectively.ACKNOWLEDGEMENT:The Board of Directors are pleased to record with appreciation and gratitude the co-operation and support provided by Shareholders, Customers, Bankers, Insurance Companies, Suppliers, BSEC, DSE, CSE, CDBL, RJSC and dedication by Workers and Employees of the company without whose active support the result achieved would not have been possible.Looking forward for a bright future for all of us.On behalf of the Board of Directors,

A. F. M. Zubair Chairman

In the event of conflict between English text and Bangla text of this report, English text shall prevail.




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14

FINANCIAL PERFORMANCE

SALES & PROFITABILITY OVER 2 YEARS TIME

(Tk. in ,000) Particulars 2013-14 2014-15 Sales 3,065,013 2,994,446 Gross Profit 395,471 372,972 Net Profit 215,231 225,196

PRODUCTION VS. SALES FIGURES TABLE

(Quantity in, 000 Kg.)

Particulars 2013-14 2014-15 Production 10,640 10,859 Sales 10,708 11,421

EARNING PER SHARE (EPS)

Particulars 2013-14 2014-15 Earning Per Share 1.11 1.16








0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

Sales Gross Profit Net Profit

2013-14

2014-15

10,200

10,400

10,600

10,800

11,000

11,200

11,400

11,600

2013-14 2014-15

Production

Sales

1.08

1.09

1.1

1.11

1.12

1.13

1.14

1.15

1.16

2013-14 2014-15

Earning Per Share

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Annual Report 2015







































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Annual Report 2015




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Annual Report 2015

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ANNEXURE –I

The Directors also report that:• Related Party Transactions are depicted in Note no. 27.1 in the Notes of Account.• Remuneration of Directors including Independent Director have been shown in Note no. 3.35 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

operations, cash flows and changes in equity.• Proper books of accounts as required by the prevailing law have been maintained.• Appropriate accounting policies have been followed in formulating the financial statements and accounting estimates

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 effectively implemented and monitored.• There is no significant doubt about the company’s ability to continue as a going concern.• Significant deviation from the operating result compared to the last year is depicted in page no. 11 clause (xvii) above.• Key operating and financial data of last five years have been presented in summarized form in page no. 08• The number of Board Meeting and the Attendance of Directors during the year 2014-2015 were as follows:

Name of Directors Position Meeting Held AttendedMr. A. F. M. Zubair Chairman 07 04Mr. A. Matin Chowdhury Managing Director 07 05Dr. Shamim Matin Chowdhury Director 07 06Ms. Saima Matin Chowdhury Director 07 04Mr. Azizur Rahim Chowdhury Director 07 07Mr. Moshiur Rahman Director 07 07Mr. M. SekanderAli Independent Director 07 06Md. Qamrul Huda Independent Director 07 06

• The pattern of shareholding as required by clause 1.5 (xxi) of the BSEC Notification dated 07th August, 2012, stated in Annexure-II.

• Information of Directors who seek appointment/re-appointment as required by clause 1.5 (xxii) of the BSEC Notification dated 07 August, 2012, stated in Annexure-III.

• Status of compliance with the conditions imposed by the Bangladesh Securities and Exchange Commission is enclosed as Annexure –VI.

ANNEXURE –IIPattern of Shareholding as on June 30, 2015Name of the Shareholders Status Shares held %i. Parent/Subsidiary/Associated Companies and other related parties Nil Nil Nilii. Directors: Mr. A.F.M. Zubair Chairman 8,470,000 4.37% Mr. A. Matin Chowdhury Managing Director 13,358,400 6.90% Dr. Shamim Matin Chowdhury Director 13,310,000 6.88% Mr. Azizur Rahim Chowdhury Director 18,585,600 9.60% Ms. Saima Matin Chowdhury Director 15,004,000 7.75% Mr. Moshiur Rahman Director (Nominated by Paragon Poultry Ltd.) 12,100,000 6.25% Mr. M. Sekander Ali Independent Director Nil Nil Md. Qamrul Huda Independent Director Nil Nil Mr. Shyan Zubair Sponsor Shareholder 3,872,000 2.00%iii. Chief Executive Officer, Chief Financial Officer, Company Secretary, Head of Internal Audit and their Spouses and Minor Childrens: Mr. A. Matin Chowdhury Chief Executive Officer 13,358,400 6.90% Mr. B. K. Chaki Chief Financial Officer Nil Nil Mr. Syed Saiful Haque Company Secretary Nil Nil Md. Rakibul Islam Head of Internal Audit Nil Niliv. Executives Nil Nil Nilv. Shareholders holding 10% or more voting interest in the Company Nil Nil Nil




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ANNEXURE-IIIBrief Resume of the Directors

Directors who seek re-appointment:Mr. A. Matin Chowdhury:Mr. A. Matin Chowdhury is a Sponsor Director of the Company since 1989. He is a renowed and dynamic personality in the Textile Sector of Bangladesh. After his active participation in the liberation War of Bangladesh in 1971, he voluntarily retired 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 printing, office equipment and other technology equipment. In the last many years, he moved from indenting to the manufacturing and is currently the Managing Director of Malek Spinning Mills Ltd, New Asia Ltd, Rahim Textile Mills Ltd, Salek Textile Ltd, Knit Asia Ltd, Hejaz Publications Ltd, Fatehbagh Tea Co. Ltd, and the Chairman of J.M. Fabrics Ltd. and Newasia Synthetics Ltd.He is the former Chairman of Bangladesh Textile Mills Association (BTMA) and Under Previleged Children’s Programs (UCEP). He is also involved with many other non-profit organizations including Diabetic Association of Bangladesh (DAB) as a Member of the National Council, Founder Trustee of Independent University Bangladesh (IUB), Founder Member, Board of Governors of Bangladesh Enterprise Institute (BEI) and many other voluntary organizations. He has more than 43(forty three) years experience in the textile sector. Mr. Azizur Rahim Chowdhury:Mr. Azizur Rahim Chowdhury is a Director of the Company since 2007, son of Mr. A. Matin Chowdhury. He obtained graduation from Purdue University in the U.S.A. with a major in Computer Science and Business Management. He is the Member of Audit Committee of RahimTextile Mils Limited and Malek Spinning Mills Limited. He has more than 8 (eight) years working experience in the textile sector. He is also the Director of Rahim Textile Mills Limited (listed company), Salek Textile Limited, Knit Asia Limited, Hejaz Publications Limited, Fatehbagh Tea Company Limited and also the Managing Director of J.M. Fabrics Limited and Director of Bangladesh Textile Mills Association (BTMA).Re-Appointment of Independent Director:Mr. M. Sekander AliMr. M. Sekander Ali, B.Com (Hons), Dhaka University (1960), MBA (IBA), Karachi University (1962), having Capital Market Training in USA (1968-69). Mr. M. Sekander Ali, one of the Senior Development/Investment Bankers of the country, former (retired) Managing Directors of Investment Corporation of Bangladesh, erstwhile Bangladesh Shilpa Bank & Bangladesh Shilpa Rin Shangstha (now Bangladesh Development Bank Ltd.), and Former Senior Adviser of the Bangladesh Securities and Exchange Commission (1997-98). He is the Independent Director and Chairman of Audit Committee of Malek Spinning Mills Ltd. and Independent Director of Square Pharmaceuticals Ltd. & Square Textile Ltd.

ANNEXURE-IVAUDIT COMMITTEE REPORT

For the Year 2014-2015Malek Spinning Mills Limited having an Audit Committee as a sub committee of the Board of Directors in order to assist the Board of Directors in ensuring and fulfilling its oversight responsibilities.The Audit Committee consists of the following persons:Mr. M. Sekander Ali, Independent Director ChairmanDr. Shamim Matin Chowdhury, Director MemberMr. Azizur Rahim Chowdhury, Director MemberMr.Syed Saiful Haque, Company Secretary SecretaryThe scope of Audit Committee 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 accounting policies and principles, internal control risk management process, auditing matter, hiring and

performance of external auditors;c. Review statement of significant related party transactions submitted 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 observations on internal control.Activities carried out during the year:The Committee reviewed the integrity of the quarterly, half yearly and annual financial statements and recommended to the Board for consideration. The Committee had overseen, reviewed and approved the procedure and task of the internal audit, financial report preparation and the external audit reports. The Committee found adequate arrangement to present a true and fair view of the activities and the financial status of the company and didn’t find any material deviation, discrepancies or any adverse finding/observation in the areas of reporting.

M. Sekander AliChairmanAudit Committee

Date: 26th October, 2015.




































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Annual Report 2015

ANNEXURE-V

CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE GOVERNANCE GUIDELINES

To the Members of Malek Spinning Mills Limited,We have examined the compliance of the conditions of corporate governance guidelines of the Bangladesh Securities and Exchange Commission (BSEC) of Malek Spinning Mills Limited for the year ended on 30th June, 2015 as stipulated in clause 7(i) of the BSEC Notification No. SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012.The compliance of the conditions of corporate governance guidelines as stated in the aforesaid notification and reporting of the status of compliance is the responsibility of the management of Malek Spinning Mills Limited. Our examination for the purpose of issuing this certification was limited to the checking the procedures and implementation thereof, adopted by Malek Spinning Mills Limited for ensuring the compliance of conditions of corporate governance and correct reporting of compliance status on the attached statement on the basis of evidence gathered and representation received.To the best of our information and according to the explanations given to us, we certify that, as reported on the attached status of compliance statement, Malek Spinning Mills Limited has complied with conditions of corporate governance stipulated in the above mentioned BSEC notification dated 07 August, 2012 and subsequent amendment made thereon.

Dated: 08th November, 2015 Ramendra Nath Basak, FCA Dhaka Partner Shiraz Khan Basak & Co. Chartered Accountants

CEO & CFO’s DECLARATION TO THE BOARD OF DIRECTORS

The Board of DirectorsMalek Spinning Mills Limited117/A, Tejgaon Industrial Area Dhaka-1208.

Subject: CEO & CFO’s Declaration to the Board of Directors.

Dear Sirs:In compliance with the condition no.6 imposed by the Bangladesh Securities and Exchange Commission’s Notification No. SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012 issued under Section 2CC of the Securities and Exchange Ordinance, 1969, we do hereby certify to the Board of Directors that;

(i) We have reviewed the financial statements of the company for the year ended on 30th June 2015 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 existing accounting standards and applicable laws.

(ii) There are, to the best of knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violation of the company’s code of conduct.

Sincerely yours,

(B. K. Chaki) (A. Matin Chowdhury)Chief Financial Officer Managing Director

Dated: 12th October, 2015Dhaka




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Documents

MALEK SPINNING MILLS LIMITED gv‡jK w¯úwbs wgjm& … · MALEK SPINNING MILLS LIMITED 10 MALEK SPINNING MILLS LIMITED DIRECTORS’ REPORT TO THE SHAREHOLDERS FOR THE YEAR 2014-2015