annual report 2016 - maksonsgroup.com.bd...maksons spinning mills ltd., holding # 87, ward # 5,...

Metro Spinning LimitedThe name you can trust for best Quality Yarn

ANNUAL REPORT 2016

Corporate OfficeHouse # 17, Road # 06, Sector # 01, Uttara, Dhaka-1230, Bangladesh

Tel : 8933 612, 8933 739, 8933740, Fax : 88-02-8933 656

Registered OfficeDilkusha Centre, 28 Dilkusha C/A, Suite # 401 (4th Floor) Dhaka-1000, Bangladesh

Tel : 7168 613-4, 9564 543, Fax : 88-02-9564 543E-mail : [email protected], Web : www.maksonsgroup.com.bd

from field to fashionMAKSONS GROUP

01Metro Spinning Limited

GENERAL CONTENTS

Notice of the 21st Annual General Meeting 5 Corporate Governance Guidline 6-8 Introducing the Board of Directors 9 Company Profile 11 Message from the Chairman 13 Message from the Managing Director 15-16

DIRECTORS’ REPORT

Report Presentation 18-21 Annexure - I (Status Report on Corporate Reporting) 22 Annexure - II (Pattern of Shareholding) 24 Annexure - III (Brief Resume of Directors) 26 Annexure - IV (Audit Committee Report) 27 Annexure - V (Auditor Certificate of Compliance on Corporate Governance) 28 Annexure - V[a] (CEO & CFO's Declaration) 29 Annexure - VI (Status of Complience with the conditions imposed by BSEC) 30-34 Annexure - VII (Value Added Statement) 35 Annexure - VIII 36-38 Five Years Financial Highlights 36 Financial Performance of the Company 37 Earning Per Share 38 Minutes of 20th Annual General Meeting 39

FINANCIAL REPORT

Auditor's Report 42 Statement of Financial Position 43 (Balance Sheet)

Statement of Comprehensive Income 44 (Profit & Loss Account)

Statement of Changes in Equity 45 Statement of Cash Flow 46 Notes to the Financial Statement 47-64 Proxy Form & 65 SHAREHOLDER'S ATTENDANCE SLIP

Table of Contents

02 Metro Spinning Limited

CORPORATE VISIONWe see Business as a means to the well being of Shareholders, Stakeholders and Society at a large keeping in line with the Nation’s interest.

MISSION STATEMENTOur Corporate Mission is to provide world class products to our valued Customers, maintaining high Ethical Standards while we conduct Business.

OBJECTIVE Our Primary Business Objective is to conduct transparent Business Operations within Legal and Social framework, aiming to attain the mission with qualitative/quantitative targets while we operate.

FINANCIAL MANAGEMENT POLICY All Financial Policies like Investments, Dividend disbursement and other related Financial Policies are aimed to maximize the value of the organization within.

CORPORATE FOCUSOur vision is to polestar to our mission that fulfils our objectives with emphasis on the quality of product process and services blended with good governance that help build the image of the most venerable corporate citizenship at home and abroad.

Our Corporate Mission is to provide world class products to our valued Customers, maintaining high Ethical Standards while we conduct business.

Corporate Mission Statement


Letter of Transmittal

To

All Shareholders

Bangladesh Securities and Exchange Commission

Registrar of Joint Stock Companies & Firms

Dhaka Stock Exchange Limited

Chittagong Stock Exchange Limited

Subject: Annual Report for the Year Ended on 30 June, 2016.

Dear Sir/Madam (s),

We are pleased to enclose a copy of the Annual Report together with the Audited Accounts including

Consolidated and Separate Balance Sheets, Income Statements, Cash Flow Statements for the Year

Ended on 30 June, 2016, along with notes thereon of Metro Spinning Limited for your reference and

record.

Yours sincerely,

____________________

(Mohd. Mohsin Adnan)

Company Secretary &Executive Director


We at Metro Spinning Limited StriveTo provide top quality products at least possible price.

To protect Shareholders Capital invested in the company, ensuring highest return with promising growth.

To better compensate all our valued employees for they constitute as the backbone of the management and operational strength for the company.

To cooperate well with all the creditors and debtors who helped us in every manner whenever we need their assistance. The Banks and Financial Institutions who provide financial support the raw material suppliers, the utilities such as gas, power, water, etc; service providers and customers who buy our products by redeeming their claim in time by making prompt payment and we, as a company, have achieved this triumph by distributing products in due times to the customers.

To fulfill our corporate social responsibilities towards the Government of Bangladesh by making regular tax payments, duties and claims by various public agencies like municipalities, port authorities, etc.

To be a responsible citizen as an entity, for attaining social order we devoid all sorts of malpractices anti-environmental behaviors, unethical and immoral activities and corruptive dealings.

To practice good corporate governance in every aspects of activities covering intra alias by not being limited to disclosures and reporting to shareholders through holding AGM regularly, by distributing dividends and other benefits as much as possible from our Company’s end to the Valued Shareholders, Reporting/ Dissemination of Price Sensitive Information, etc.

To provide equality to all races, religion and discourage gender discrimination in terms of operating in the Industry.

To avail an environment free from pollution and poisoning for all citizens.

To achieve a millennium development goal for the Human Civilization existing and for our future generation at the same time.

Metro Spinning Limited has adopted the Ten Principles of the Global Compact initiated by the United Nations Secretary General. They are discussed below:

Human Rights:

(1) Our Business Operation fully supports and takes necessary measures for the protection of the internationally proclaimed Human Rights within its sphere of influence; and

(2) The Management has made sure that the responsible authorities involved in different Business segments are not complicit in Human Rights abuse.

Labor Standards:

(3) Our Business operation upholds the freedom of association and effectiveness recognized for the rights to collective bargaining,

(4) We do not practice any forms of forced or compulsory Labor,(5) We practice effective abolition of Child labor and(6) We eliminate discriminatory acts in respect of Employment and Occupation.

Environmental Issues:

(7) Our Business supports a precautionary approach to environmental challenges,(8) We undertake initiatives to promote greater environmental responsibilities; and(9) We highly encourage the development and diffusion of environment friendly technologies.

Ethical Standards:

(10) We are proud to announce that our Business operates against all sort of corruption in all respect, including extortion and bribery.

The Principles of the Company


Notice is hereby given that the 21st Annual General Meeting of the Shareholders of Metro Spinning Limited will be held on Sunday, 18 December, 2016 at 09.30 am at the Maksons Group Conference Hall (Situated at Maksons Spinning Mills Ltd., Holding # 87, Ward # 5, Block # B, Shahid Minnat Ali Road # 4, Gouripur, Ashulia, Savar, Dhaka) to transact the following Business:

Agenda- 1: To Confirm the Minutes of the 20th Annual General Meeting held on Monday, 30 May, 2016.

Agenda- 2: To Receive, Consider and Adopt the Audited Financial Statements of the Company for the Year Ended on 30 June, 2016 and Report of the Auditor and Director thereon for the said Year.

Agenda- 3: To Declare Dividend.

Agenda- 4: To Elect Chairman of the company.

Agenda- 5: To Elect Directors.

Agenda- 6: To appoint Auditors of the company for the term until the next AGM and to fix their remuneration.

Agenda- 7: To transact any other Business of the Company with permission of the Chair.

BY ORDER OF THE BOARD OF DIRECTORS

_____________________MOHD. MOHSIN ADNANCompany Secretary & Executive Director

Place & Dated: Dhaka –30/10/2016

Notes:1. A Shareholder is entitled to attend and vote at the meeting, may appoint a Proxy to attend and vote

instead of him/her. The Proxy form, a specimen of which is enclosed, is must affixed with a requisite Stamp and must be submitted to the Corporate Office of the Company, not later than 48 hours before the day of the Annual General Meeting.

2. The Record Date shall be on Sunday, 20 November, 2016. The Shareholders, whose names will appear in the Depository Register on that date, will be entitled to attend at the Annual General Meeting.

3. Shareholders are requested to submit their quires on the Directors’ Report and Audited Accounts, if any, at the Corporate Office of the Company by Thursday, 15 December, 2016.

4. Members are requested to notify change of addresses, if any, to the Company.

Notice of The21st Annual General Meeting


Corporate Governance involves decision-making process for all corporate bodies as an ongoing concern for the benefit of the whole race existing and for the future. These decisions may be categorized as policy and strategic, operational and executing, performance and evaluation and sharing of accretion assets between present and future cohorts. The involvement of the entrepreneur in all these area invokes decision making governance on a continual basis. The degree of involvement being a variable with the extent of delegation of authority top down and reporting for accountability bottom up of the management is a requirement. The Board of Directors, Executive Management Authority and Operational participants inclusive of workers and others share these aspects of governance in order to fulfill the common goal that converges in increasing the benefit of the stakeholders at the highest level. Till this time the entire corporate governance efforts are blended with “Good Governance Practice” as ethically and morally acceptable standards under a given socio political environmental phenomenon as per societal need we operate and exist with consistency

Corporate Governance is key to its sustenance. Good Corporate Governance is key to successful sustenance. Our Corporate Governance is as follows:

BOARD OF DIRECTORS Constitution:The Board of Directors, top Management echelon, consisting of the founder entrepreneurs/ successors and the inclusion of an Independent Director, provides the policy and strategic support and direction for the entire range of the corporate activities. The Board of Directors consist of Five (5) Members including the Independent Director with varied educational qualification and diversified experience, provides a balancing character in the decision making process. As the Board is reconstituted every year before each Annual General Meeting when one-third of the members retires and seeks re-election. A director is liable to be removed if the conditions of the Articles of Association and if the provisions of the Company Act 1994 are not fulfilled.

Roles and Responsibilities:The main role of the Board of Directors, considered the highest authority in the Company, is to provide general superintendence, oversee the operations and control the affairs of the Company through appropriate delegation and accountability process via the chain of command. The Board of Directors however, holds the ultimate responsibility and looks out for the Shareholders interest. They also look out for the best interest of the Stakeholders, the society at large including the country’s overall benefit in terms of economy. The Board of Directors in respect of fulfilling its full responsibilities holds periodic meetings, at least once a quarter and delivers appropriate decisions and gives directions to the Executive Management body. Such meetings usually are based on operational performances, financial results, and review of overall allocated and actual budget, capital expenditure, and proposals for BMRE or new project/ division/ product lines, collection of funds through issuance of shares or borrowing, procurement of raw materials, plant and machineries, pricing of product/ discounts, recruitment, training and promotion of officers, approval of audited accounts and distribution of dividends and other interest of the stakeholders including the employees and workers. The Board of Directors takes special care in designing and articulating productivity and compensation plans of the employees and workers. Company employees are rewarded appropriately on the basis of quantity measures and quality of performance as an incentive. The Board also remains responsible for removal of operational hazards towards their life and care regarding their well being of health, provided friendly and cordial work environment and favorable social relation as demanded by a good citizen operating as a separate business entity in a country like Bangladesh.

Management CommitteeComprising top executives, deal with entire organizational matters.Standing Committees

Audit Committees Internal Audit Committee Social / Environmental Committee Performance Evolution Audit Committee

Corporate GOVERNANCE


Management Committees Product Planning & Development Committee Quality Control & Research Committee Product and Inventory Management Committee Export Promotion Committee

Relationship with Shareholders and Public:

The shareholders as owners of the company are to be provided with material information of Company operations such as 1st Quarterly, Half-yearly, 3rd Quarterly unaudited and Annually audited financial statements published and distributed prior to and on the day of AGM. The Company Secretary, in this regard, outlined some routine services according the prevailing rules and regulation and guide line of regulatory authorities. The Board is however obligated to the Shareholders for the publication of any Price Sensitive Information as per SEC Regulations. In order to better comply with all these responsibilities a qualified and efficient Company Secretary have been working diligently.

Relationship with Government:

In its role on accountability to the government, the Board of Directors have to ensure up to date payment of all dues of Governmental Fees in the form of Import Duty, Custom Duty and Port Charges, VAT, Corporate Taxes and other tariffs. In case these fees are pending, on the basis of actual operations, it is then vital to make sure that corruption is avoided with highest priority. These practices have enabled the Company to enhance its contribution to the National Exchequer on a progressive rate since its commencement and are committed to do so in future.

Relationship with Financiers/Bankers:

The Board oversees the financial transactions and ensures that those who are the lenders are being well taken care of and treated well, as per commitment, to meet Company’s obligation to the lenders without making any default.

Relationship with Suppliers:

As the Company has to import plant and machinery and almost all the raw materials from abroad, therefore the company makes sure that the international suppliers are well communicated at all times. Additionally the company maintains cordial and mutually beneficial interest with its local suppliers. This has enabled the company to attain reduced number of legal disputes in both the international and local courts and thus enhanced the Company’s illustration as a superior client to suppliers.

Corporate Social Responsibilities (CSR):

As Corporate Social Responsibility is a mandatory part of any artificial entity as per Company law. Now being a public limited company the stake at this point is higher. The Board of Directors realizes this fact and concentrates on the Corporate Social Responsibilities (CSR) activities especially in the areas outlined below:

1) Encourages Gender equality within organization structure,

2) Discourages Racism within the workplace,

3) Demoralizes Religious distinguishing trend,

4) Highly discourages Child-labor in the facility layout locations,

5) Exercises Human Rights policy set at internal level,

6) Raise voice from time to time for emitting Environmental Pollution and also avoids operating on such values, and

7) Aiming to capitalize high on Social-Marketing and Social Welfare activities even more in future.

8) Equal Employment Opportunity providing employer.


Audit Committee of Board:

The Board of Directors has constituted an Audit Committee of the Board consisting of Three Directors and two other members. The Audit Committee is headed by the Independent Director Mr. Haider Ahmed Khan, FCA and companying him the other members are respectively Mrs. Laila Ali (Director), Mr. Md. Ferdous Kawser Masud (Director Finance), Mr. Mohd. Mohsin Adnan (Executive Director & Company Secretary) and Mr. Younus Bhuiyan (CFO & GM-Finance & Accounts Department).

The Audit Committee carries out its responsibilities as per the provisions of law and subsequently submits its report to the Board of Directors in stipulated time. The Audit Committee synchronizes with the Internal and External Auditors as and when required. The Audit Committee ensures that adequate internal check & balance is maintained by adequate Management Information System that is in place for detection of errors, frauds and other deficiencies.

Other responsibilities comprise of inter alia, not being limited to, the anticipation of conflict of interests between the Company and its Directors, Officials, Customers, Suppliers, Government and any other Interest Groups, that may be present, and detect or eliminate possibilities of internal trading of the Company’s stocks, which is strictly considered as a malpractice within the scope of compliance issue . The Audit Committee guarantees SEC and other Agencies, relevant, compliance issues as regulations and requirement.

Auditor:

Ahmad & Akhtar Chartered Accountants is the statuary auditor of the company. They have conducted the audit in accordance with Bangladesh standard on Auditing. In order to comply the corporate governance, the company did not involve its statuary auditor to perform the services other than statuary services as appointed for.


Mr. Mohd. Ferdous Kawser MasudDirector & Director (Finance)

Mr. Haider Ahmed Khan, FCAChairman & Independent Director

Mr. Mohammad Ali KhokonDirector & Managing Director

Mr. Mohd. Showkot AliDirector & Deputy Managing Director

Introducing the Board of Directors

Mrs. Laila Ali Director


Senior Executives

Mr. A.K.M. Wahiduzzaman Executive Director (Estate & Admin)

Mr. Abdul Jalil SheikhGeneral Manager (Admin & HR)

Mr. Mohd. Younus BhuiyanChief Financial Officer

Mr. Mohd. Aslam ParvezSr. General Manager (Commerce & Banking)

Mr. Mohd. Mohsin AdnanExecutive Director & Company Secretary


Company Profile

REGISTERED OFFICE Dilkusha Centre, 28, Dilkusha C/A, Suite # 401 Dhaka-1000

CORPORATE & SHARE OFFICE House # 17, Road # 6, Sector # 1, Uttara Model Town, Dhaka-1230

LOCATION OF FACTORY Kornogoph, Rupganj, Narayanganj (On Dhaka-Narasingdhi Highway)

YEAR OF INCORPORATION 1993

AUTHORIZED CAPITAL Tk.100,00,00,000.00 (One Hundred Crore)

PAID-UP CAPITAL Tk. 60,48,85,050.00 (Sixty Crore Forty Eight Lac Eighty Five Thousand Fifty)

LEGAL STATUS Public Limited Company Listed with Dhaka Stock Exchange Limited & Chittagong Stock Exchange Limited. (on March 14, 2002)

BANKERS & FINANCIAL INSTITUTIONS SOUTHEAST BANK LTD- Principal Branch, Dilkusha, Dhaka. MUTUAL TRUST BANK LTD.- Principal Branch, Motijheel, Dhaka JAMUNA BANK LTD. - Dilkusha Branch, Dhaka. BAY LEASING & INVESTMENT LIMITED-Motijheel C/A Dhaka.

INSURERS PROGATI INSURANCE LTD. ASIA INSURANCE CO. LTD. CONTINENTAL INSURANCE LTD.

AUDITOR AHMAD & AKHTAR CHARTERED ACCOUNTANTS 39, DILKUSHA (4TH FLOOR) MOTIJHEEL C/A, DHAKA - 1000

BRAND KANGAROO & CROCODILE

VARIETY 20 TO 80 COUNT OF 100% COTTON YARN & MELANGE YARN

CAPACITY 34,872 SPINDLES

PRODUCTION 4.5 Million KG Annually (Rated Capacity)


Chairman's MessageDear Shareholders,

AssalamuAlaikum,

I would like to take the opportunity to greet you all, on behalf of the members of the Board of Directors of the Metro Spinning Limited in the 21st Annual General Meeting of your Company and to present the Annual Report for the Year Ended on 30 June, 2016.

Anyway I would like to mention few words relating to financial performance of the company and overall economic situation of the country. We know, the year under review have passed amidst the process, recession in the Western economies, World economy, despite infrastructural deficiencies in fuel, power and gas have shown signs of resilience and attained not a far Lower rate of GDP growth than expected.

We must therefore be prepared to continue delivering our best efforts for maintaining the standard operational levels. This would obviously comprise the strategic policies set for ploughs back the profit margin lost in the previous fiscal quarters for increased proportions for increased level of investments which is essentials for job creations in the country. In view of the prevailing situations in the recent past, I would like to request to our valued shareholders to look into our policy operations rationally and then stand by the Board of Directors to with stand the grave threats that have been faced up in the recent past and also to lend a hand to overcome the after effects.

The Board of Directors is committed to establish the highest standard of corporate governance such as integrity, transparency, accountability and responsible business conduct to safeguard the interest of its shareholders and stakeholders and I would like to assure you that, our hard efforts to increase the shareholders’ interest will continue as before. We are confident of our ability and team spirit; it is due to this prudent management.

I would personally want to show my utmost gratitude to all the valued shareholders, customers, well-wishers for their continuous support and my deepest gratitude goes to our regulators especially BSEC, DSE, CSE and RJSC for their prudent guidance and advice. Now let us all move ahead to a greater future though Innovation, Achieving Excellence in Service.

Thank You.

______________________(Haider Ahmed Khan)Chairman

Mr. Mohammad Ali KhokonManaging Director



Managing Director’s MessageDear Shareholders,

Assalamu Alaikum,

At the very beginning I would like to thank you most sincerely for your continued trust in Metro Spinning Limited and cordially welcome you on behalf of the Board of Directors in this 21st Annual General Meeting of your company. I feel honored and privileged to place before you Annual Report for the Year Ended 30 June, 2016 along with Auditors & Directors report and overall performance of the company and its prospects for the future.

Metro spinning Limited is one of the renowned companies in textile sector of the country; believed to works in competitive environment and challenging situations. The Board of Directors, Management and Employees are obligated to the Valued Shareholders to offer them assurance of our sincere efforts in maintaining operational results up to their expectations. Our major responsibility is to accomplish our commitments, in our own sphere of activities, so that the nation may attain its expected goals leading through eradication of poverty, employment for all, substantial improvement of living standard for the mass population through our part of contribution to the GDP considering the overall Economy of the nation.

CONSOLIDATED BUSINESS (OPERATION) RESULTSEven though shortage of natural gas, lack of adequate financial resources and higher rate of inflation in the local and international market, high raw material cost especially raw cotton and finally dampen in the Textile Industry by the main competitors, your company was able to continue with its reasonable volume of sales during the year. Operation of your company of this year is almost close to previous year. This is possible by the dint of continued efforts of every single member of your company. On the other hand, we have strong backward and forward linkage support, newly added machineries in the production line and have excellent customer relationship built up. Full details may be found later in the Annual Report; here I will only summarize our business outcome for the Year 2015-2016.

Consolidated Sales amounted to Tk. 809.25 Crore; consolidated Gross Profit stood at Tk. 17.50 Crore and consolidated Net Profit before tax summed to Tk. 1.32 Crore for the Year Ended on 30 June, 2016. Net profit decreased compare to previous year due to increase the cost of raw materials, wages, power, transportation and other expenses relating to cost of Goods sold.

Respected Shareholders now I would like to mention some important facts of the Annual Report-2016, for your due consideration. We are very unfortunate in a sense that, like other local spinners we also depend on imported cotton due to inadequate cotton production in Bangladesh. That is why we could not escape from the impacts of volatile price of cotton in the international market. Though RMG sector of Bangladesh has achieved the second spot for the highest number of garments exporter, but it has a lot of problems. The major problems faced by RMG sector currently is the lack of safety in working place and working conditions for the millions of garments workers. But it’s good news for RMG sector that, following the unfortunate incidents, various platforms such as the Bangladesh Accord on Fire and Building Safety, the Alliance for Bangladesh Worker Safety and National Plan of Action have been formed to improve building and fire safety of Bangladesh’s garment industry.



Spinning Sector: Spinning sector remains crucial to RMG value chain helping to stabilize supply chain, while controlling costs. The products of the spinning sector are cotton yarn, polyester, synthetic yarn, woolen yarn and blended yarn mixed of cotton and polyester of different counts. Your company is currently producing 100% Viscose and Blended yarn (mixed of cotton and viscose) of different counts. The Viscose yarn we produce for local market and blended yarn we produce for RMG sector for 100% export market. The private sector spinning mills can now meet around 100% demand of yarn at the domestic level as well as 95% of the demand for yarn for export oriented knit fabrics mills. In addition, almost 85% of cotton yarns and 50% demand for synthetic and blended yarn of export-oriented fabric producing mills are being met by the private sector spinning mills. The rest of the import is being met from China, India and other countries.

Finally I would like to extend my deepest appreciation to the company’s shareholders for their trust and enduring support to the Board of Directors to operate the company. I also would like to put on record my sincere thanks to the Banks, Financial and Regulatory Agencies, Suppliers Customers, various people with whom we have interacted in course of business, management staff and members of the Company at all levels for their loyalty and extensive hard work, and express our hope for and prosperity.

We are looking forward to better days ahead!

Thank you

___________________________(Mohammad Ali Khokon)Managing Director


Directors’ Report


Dear Shareholders,

In terms of provisions of section 184 of the Companies Act 1994, Rule 12 (and the schedule there under) of the Securities and Exchange Rules 1987 and IAS – 1 (International Accounting Standards – 1) codes as adopted by the Institute of Chartered Accountants of Bangladesh (ICAB), It is the pleasure of Board of Directors to submit its Report to the Shareholders for the Year Ended 30 June, 2016 in the following paragraph.

PRINCIPAL ACTIVITY

The Principal Activity of the company in the period under review was that of production and sales of high quality 100% Cotton Yarn through export.

OPERATIONAL ACTIVITY

The Company’s installed Production Capacity during the Year 2015-2016 remained same as previous Year, which is 34,872 Spindles. The production during the Year for Unit-1 & Unit-2 was 2,996 M. Ton which is 213 M. Tons less than the previous Year. During the Year under review the Company was able to make Sales of Tk. 80.92 Crore, Net Profit before Tax is Tk. 1.32.

WORKING/OPERTING RESULTS

The Working/Operating Result of the Company for the Year under review is as follows:

FOR THE FINANCIAL YEAR ENDED ON 30 JUNE, 2016Directors’ Report

PARTICULARSTurnover

LESS: Cost of Goods Sold

Gross Profit

LESS: Operating Expenses

Operating Profit

ADD: Other Income

Less: non operatingexp

Net Profit before WPPF

LESS : Contribution to WPPF

Net Profit before Tax

LESS: Provision for Tax

Retained Earnings

As on 30.06.2016809,245,562

634,237,582

175,007,980

41,999,239

16,643,697

5,975

2,808,576

13,841,096

659,100

13,181,997

2,146,560

11,035,437

As on 30.06.201577,44,63,983

57,83,60,959

19,61,03,024

37,248,165

275,92,446

15,34,864

21,24,722

270,02,588

12,85,838

257,16,750

38,66,431

218,50,319


1.5 (XVII) Significant deviations from the last year’s operating result and its reasons

Significant deviations from the last year’s operating results are- increase in turnover, cost of goods sold, operating expenses and decrease in gross profit, operating profit, net profit and retained earnings –these deviations have been made due to increase of the expenses relating to the cost of goods sold.

Particulars As on As on Deviation Reasons 30.06.2016 30.06.2015 Increase /Decrease

Cost of Goods Sold

Gross Profit

Operating Expenses

Operating Profit

Other Income

Less: Non Operating Exp

Net Profit before WPPF

Contribution toWPPF

Net Profit before Tax

Provision for Tax

Retained Earnings

809,245,562

634,237,582

175,007,980

41,999,239

16,643,697

5,975

2,808,576

13,841,096

659,100

13,181,997

2,146,560

11,035,437

774,463,983

578,360,959

196,103,024

37,248,165

27,592,446

1,534,864

2,124,722

27,002,588

1,285,838

25,716,750

3,866,431

21,850,319

34,781,579

55,876,623

(21,095,044)

4,751,074

(10,948,749)

(1,528,889)

683,854

(13,161,492)

(626,738)

(12,534,753)

(1,719,871

(10,814,882)

FINANCIAL RESULT AND APPROPRIATIONThe presentation herewith of the comparative financial results of the Year under review (2015-2016) and the immediate Past Year (2014-2015) is provided below for you. Also recommendations have been placed before you for appropriation of the Profits generated during the Year under review:

DIVIDEND PROPOSED Your company has earned Net Profit before Tax to the extent of Tk. 1.32 Crore and Retained Earnings of Tk. 1.10 crore. The Board has also discussed intensively on the financial statements and real financial strength of the company and mentioned that we have been declaring dividend every year since inception and it is our greatest desire to declare dividend for the Shareholders of the company but we were really vulnerable this year and need to mention here that we couldn’t declare any Stock dividend as the paid up capital will soar drastically and may impact negatively in capital market and future growth of the company and we are not in a position to declare any cash dividend due to liquidity crisis, raw cotton price increased, disruption of power supply, cost of goods sold increased made us unable to allow any cash dividend for this year. Finally, considering all the situations and consequences the Board unanimously did not recommended any Dividend for the Financial Year 2015-16 to the Shareholders of the company and the same is being placed before you for your approval.

PARTICULARS

Net Profit before Providing Income taxAdd: Revaluation AdjustmentsAdd: Profit brought Forward from Previous YearProfit available for Appropriation

Recommended for AppropriationLess: Transfer to Tax ProvisionLess: Dividend Less Prior adjustment of deferred tax Un-appropriated Profit Carried Forward

2015-1613,181

3,47867,01583,675

(2,146)(30,244)

51,285

2014-1525,716

3,65170,31799,684

(3,865)(28,804)

67,015

Figure in '000' Tk.


CONTRIBUTION TO NATIONAL EXCHEQUER During the Financial Year under review the Company has contributed an amount of Tk. 10.26 Million to National Exchequer as Value Added Tax, Custom Duty and Income Tax.

DIRECTOR’S RETIREMENT AND THEIR RE-ELECTION.In accordance with Article Nos. 124 & 125 Section 91(2) of Company Act 1994, Mr. Mohd. Showkot Ali and Mr. Mohd. Ferdous Kawser Masud, Director both are due to Retire by rotation from the Board of Directors and being eligible, offer them for Re-Election. Board of Directors have re-elected both the Directors for the next term.

APPOINTMENT OF AUDITORS The Auditors M/S. Ahmed Zaker & Co. Chartered Accountants, House -15, Road- 17, Sector- 4, Uttara, Dhaka-1230 have expressed their willingness to continue with us being eligible they have offered their service for 3 years as Auditors of the company from 2016-2017. The Board of Directors has decided to appoint M/S. Ahmed Zaker & Co. Chartered Accountants as Statutory Auditors of the company for the term until next Annual General Meeting subject to approval of Shareholders.

CORPORATE GOVERNANCE Corporate Governance is the system through which the Company is directed, guided and controlled by the Board, keeping in view with its accountability to the shareholders. Now in accordance with the requirement of the Securities and Exchange Commission, “Corporate Governance Compliance Report” is also annexed. Additionally, the Status Report that is required to be presented by the Company in pursuance to Notification No. SEC/CMRRCD/2006-158/134/Admin/44 of 07August, 2012 issued by Securities & Exchange Commissions is attached as Annexure-1.

MARKETING STRATEGYAdopting the Marketing Theory, the 4P’s consideration is noteworthy; Price, Place, Promotion and People. We consider that People and Place are Company internal factors and conversely Price and Promotion are external variables which can alter as well depending on market situation. However, our marketing strategies are laid before you.

Price is an important determinant in terms of sourcing a product. On the other hand Price tool is not controllable but can be realized. Coping up with the changing price by making necessary adjustments, is always a smarter idea to procure and produce quality products. Our primary objective is to market quality products to buyers at competitive price through effective procurement.

Place or availability of quality products at buyer’s doorstep is required. In time delivery within projected lead-time and early delivery also increases good will of the company and at the same time adds value. Promotion is an active marketing tool that needs highest emphasis in now days marketing operations. Having a proper marketing planning or promotional plan is required in order to survive in the competitive environment sustaining worldwide. Establishing good relationship with buyers located both home and abroad is vital. Our objective behind this strategy is to stand on the building block of trust and faith laid through competitive promotional activities.

People are the most important asset for us. Our aim is to make our buyers feel that we are always standing next to them in all shapes and at all situations. Nevertheless we consider our people as our company partners not as employees. We value our shareholders, stakeholders, investors and also partners/ employees. Through earning their commitment and dedication we make sure that our company serves better and the best to the market.

It is vital to realize that alongside with price, quality; in time delivery within shortened lead time and technical cooperation with buyers are all key elements that play progressively more chief functions in modernized marketing era.


We have intensified our efforts to sell to our target customers and have achieved significant breakthrough even in this competitive situation. We are at a faster pace expanding our customer base by adding several new highly successful buyer to our list of customers. On top our strong focus on differentiation, innovation and value addition have so far strengthened our marketing team and expanded our product development activities through R&D. Our continuous efforts to deploy new marketing strategies and tactics for quality based demonstration rather than volume based sales has so far led to significant reduction in terms of facing unnecessary competition.

SHAREHOLDERS POISEOur respected shareholders reposed their trust and confidence in us. We also believe the key element in maintaining shareholders confidence is to deliver consistently strong business performance and competitive result. I firmly believe that we have real strength on which to grow our business and enhance our reputation. We have the resources, the people and the determination to ensure our business continuous to get the full confidence of our Shareholders based on both the performance we deliver and the principles and values by which we deliver it.

INNOVATION & EXPANSION- TAPPING TO THE FUTURE While faced up with adverse variables, explained earlier, your company was keen to adapt and deploy new strategies and lay greater emphasis on innovation in the textile sector. To cope with this pace in harmony with modern textile world, we are planning to consider modernization program of our plant and machineries whether by the way of replacing machineries or by the way of relocating the project. Additionally extensive marketing plan deployment, recruitment of best capable and qualified employees were undertaken and new machineries were also installed in order to ensure better and increased production.

This will enable new and improved quality products made available for both local and international market gaining competitive edge in the Industry.

HUMAN RESOURCEIn the perspective of our national economy of the country, the principal goal is to generate more and more employment. Under these circumstances, our company has not only earned profit rather simultaneously has ensured ample opportunity for employment as well. All of you know that the skilled manpower plays a very vital role in achieving a gradual increase of production of the company. You would be pleased to know that we have been able to develop skilled manpower by deploying experienced technicians in the project to run the hi-tech machinery at the best of their efficiency and that has helped a considerable growth of production. Besides, the total working atmosphere with the extra curriculum activities has elevated all the officers and staffs to come closer to each other. This has given a positive improvement on the overall image status of the company. The employees are self-motivated towards the achievement of organizational goal as well as the attainment of individual goals. The immediate effect is better teamwork and transfer of experience and knowledge down the line. The lower level management is well groomed to take independent decisions, which enhances dynamism.

MANAGEMENT APPRECIATION The Board of Directors record with deep appreciation the performance of the Management, the officers, staff members and employees or partners; whose relentless efforts helped company to minimize the natural and unnatural adverse factors of Production and Marketing throughout the country and the world as much as possible. It is expected that the employees and the management team will have to continue to improve the results or outcomes for the best interest of the Shareholders and Stakeholders, whose unswerving trust in the Management has always been an inspiration to the Board of Directors. The Directors humbly want to express their gratitude and acknowledge the cooperation and unflinching support it has received so far from various agencies including the Securities and Exchange Commission, Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited, National Board of Revenue and other Public Agencies and Private Sectors. However, we are confident, that with your understanding and support we will continue to build on our capabilities for sustainable high performance in future. Finally we pray to almighty Allah for the bright future of the company and our valued shareholders.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

_____________________(Haider Ahmed Khan)CHAIRMAN


SStatus Report required to be presented by the Company in pursuance to Notification No. SEC/CMRRCD/2006-158/134/Admin/44 of 07 August, 2012 issued by the Bangladesh Securities & Exchange Commissions.

ANNEXURE-ICORPORATE REPORTING

The Company has complied with all the requirements of Corporate Governance as required by the Securities and Exchange Commissions.

Accordingly, the Directors are pleased to report the following:

a. Related Party Transactions are depicted in Note No. 26 in the Notes of Accounts.

b. The remunerations of Directors including Independent Directors have been shown in Note No. 27 in the Notes of Accounts.

c. The Financial Statements together with the notes thereon have been drawn up in conformity with the Companies Act, 1994 and Securities and Exchange Commission Rules, 1987. These statements present fairly the Company’s State of Affairs, the result of its Operations, Cash Flow and Changes in Equity for the Year Ended on 30 June, 2016.

d. Proper Book of Accounts of the Company has been maintained.

e. Appropriate Accounting Policies have been consistently applied in preparation of the Financial Statements and that the Accounting estimates are based on reasonable and prudent judgments’.

f. The International Accounting Standards, as applicable in Bangladesh, has been followed in preparation of the Financial Statements.

g. The systems of internal control are sound and have been effectively implemented and monitored.

h. There are no significant doubts upon the Company’s ability to continue as an ongoing concern.

i. The key Operating and Financial Data for the last Five Years is Annexed.

j. The pattern of Shareholding is also annexed.

k. The Internal Control System is sound in design and effectively implemented and monitored.

l. The number of Board Meeting and Attendance of Directors during the Financial Year 2014-15 is provided below.

BOARD MEETING

NAME OF DIRECTOR POSITIONMEETING

HELDMEETING

ATTENDED

MR. MD HAIDER AHMED KHAN, FCA

MR. MOHAMMAD ALI KHOKON

MR. MOHD. SHOWKOT ALI

MR. MOHD. FERDOUS KAWSER MASUD

MRS. LAILA ALI

MR. MOHD. MOHSIN ADNAN

MR. YOUNUS BHUIYAN

CHAIRMAN & INDEPENDENT DIRECTOR

MANAGING DIRECTOR

DY. MANAGING DIRECTOR

DIRECTOR (FINANCE)

DIRECTOR

EXECUTIVE DIRECTOR & COMPANY SECRETARY

CHIEF FINANCIAL OFFICER

5

5

5

5

5

5

5

5

5

5

5

5

5

5


MANAGEMENT COMMITTEE

The Management Committee of the Company comprises of the following:

NAME

MOHAMMAD ALI KHOKON

MOHD. SHOWKOT ALI

MOHD. FERDOUS KAWSER MASUD

MOHD. AMJAD ALI BADAL

MOHD. MOHSIN ADNAN

MD. ASLAM PARVEZ

ABDUL JALIL SHEIKH

DESIGNATION

Managing Director

Dy. Managing Director

Director (Finance)

Director (Procurement)

Executive Director & Company Secretary

Senior General Manager

General Manager (Admin)

POSITIONIN THE COMMITTEE

Chairman

Member

Member

Member

Member

Member

Member Secretary

PURCHASE COMMITTEE

The Purchase Committee of the Company comprises of the following:

NAME

MOHAMMAD ALI KHOKON

MOHD. SHOWKOT ALI

MOHD. FERDOUS KAWSER MASUD

MOHD. AMZAD ALI BADAL

MOHD. MOHSIN ADNAN

MD. ASLAM PARVEZ

DESIGNATION

Managing Director

Dy. Managing Director

Director (Finance)

Director (Procurement)

Executive Director & Company Secretary

Senior General Manager

POSITIONIN THE COMMITTEE

Chairman

Member

Member

Member

Member

Member Secretary

Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit andtheir spouses and minor children 1.4 (k) (ii):

Haider Ahmed Khan FCA

Mohammad Ali Khokon

Mohd. Showkot Ali

Mohd. Ferdous Kawser Masud

Mrs. Laila Ali

Mohd. Mohsin Adnan

Mohd. Younus Bhuiyan

Ms. Zabun Nahar

Mrs. Wahida Nasrin

Mrs. Laila Ali

Mrs. Shameema Nasrin

Polly Yasmin

Mohammad Ali Khokon

Iffat Adnan Dina

Mrs. Shamima Akhter

Harunur Rashid

Usama Ahmed Khan

Sanjid Hasan Amit

Nagib HasanOrnob

Mohd. Tausif Kawser

Sanjid Hasan Amit

Tahmim Adnan

Shuhail Sadman

Irtisham Rashid

Rubaba Ferdous

Navil Hasan Norit

Joyria Sabrin Ornima

Tasniya Muntaha

Navil HasanNorit

Tabib Adnan

Chidratul Muntaha

Intisar Rashid

Chairman & Independent Director

Managing Director

Director (DMD)

Director (DF)

Director

Executive Director &Company Secretary

Chief Financial Officer

Head of Internal Audit& GM (Audit & MIS)

Name Position Spouse Name 1st Child 2nd Child


Executives: Top five salaried employees of the company other than the Directors, Chief Executive Officer,Company Secretary, Chief Financial Officer and Head of Internal Audit 1.4 (k) (iv):

Mr. A.K.M. Wahiduzzaman

Mr. Mohd. AslamParvez

Mr. Abdul Jalil Sheikh

Mr. Prodip Kumar Sen

Mr. GolamFaruqe

1

2

3

4

5

Executive Director

Sr. General Manager

General Manager

Deputy General Manager

Deputy General Manager

Estate & Admin

Commerce & Banking

Admin &HR

Marketing

Production & Quality

SL NAME DESIGNATION DEPARTMENT

ANNEXURE - IIPATTERN OF SHAREHOLDING AS ON JUNE 30, 2016Shareholding in terms of Holding of Shares by Shareholders for the Year Ended on 30 June, 2016 Classified as follows.

RANGE OF HOLDINGS IN NUMBER OF SHARES

NUMBER OF SHAREHOLDERS

NUMBER OF SHARES

PERCENTAGEOF SHARE CAPITAL

Below 500

500 to 5000

5,001 to 10,000

1,0001 to 20,000

20,001 to 30,000

30,001 to 40,000

40,001 to 50,000

50,001 to 100,000

100,001 to 1000,000

1000,001 to above

2,865

4,642

615

373

118

55

22

71

42

10

8,813

461,731

7,899,299

4,353,088

5,247,223

2,843,038

1,890,856

979,811

4,946,013

10,698,242

21,169,204

6,04,88,505

0.76

13.06

7.20

8.67

4.70

3.13

1.62

8.18

17.69

35.00

100.00

CATEGORY TOTAL SHAREHOLDERS TOTAL SHAREHOLDING PERCENTAGE (%)

Sponsor

Financial Institution

General Public

8

165

8,640

8,813

15,856,309

7,823,069

36,809,127

6,04,88,505

26.21

12.93

60.85

100

Shareholders list for the Year Ended on 30 June, 2016 Summarized as follows.


The aggregate number of shares held by Parent/Subsidiary/Associated companies and other related parties (name wise details) – 1.4 (k) (i):

- Not applicable since there is no aggregate number of shares held by any Parent/Subsidiary/Associated companies and other related parties.

Shareholders holding Ten Percent (10%) or more voting interest in the company (name wise details) 1.4 (K) (iii):

Not applicable since there are no shareholders holding Ten Percent (10%) or more voting interest in the company.

PAID-UP-CAPITAL STRUCTURE

SPONSOR

7,823,06936,809,127

15,856,309 FINANCIALINSTITUTIONS

GENERAL PUBLIC


Brief resume of the DirectorsANNEXURE - III

Mr. Haider Ahmed Khan, FCA is holding the position of Chairman of the company. He is a Chartered Accountant and partner of Ahmed Khan & Co. He shares his vast knowledge in consideration and recommendation of any decision by the Board as well as Audit Committee and also involved to set business planning, financial planning, marketing policy, procurement policy, dividend policy and other business affairs of the company.


Mr. Mohammad Ali Khokon is the Managing Director of the company. He has 30 years of Business Experience. He has visited many countries of the world in connection of business and thus gained vast experience and knowledge in Modern Methods, Technology, Production, Marketing and Management Techniques of textile industries. His wisdom helps company to formulate policy &to set strategic planning and direction for the Entire range of its activities. Involved to set business planning, financial planning, marketing policy, procurement policy, dividend policy, operational policy, expansion/future business policy and other business affairs of the company. Deals with financial institutions, Government Regulatory Bodies, International vendors, legal bodies, and other concern department.


Mr. Mohd. Showkot Ali, the Deputy Managing Director of the company. He has 25 years of experience in textile business. Being Deputy Managing Director & Head of Operations for all concerns of the Group he oversees, supervises and administers overall production Supply chain management (Domestic & International), Import, Export of the Group.Control and maintain as Head of Operations for all the affairs of the company. Oversees, supervise and administer overall production Supply Chain Management (Domestic & International), Import, Export, of the company.

Mr. Mohd. Showkot Ali Deputy Managing Director

Mr. Mohd. Ferdous Kawser Masud is the Director Finance of the company. He has passed 16 auspicious years in this sector. He gathered knowledge in Modern Methods, Technology, Production and Marketing & Management Techniques of textile industries being associated with his family business. Involved in financial planning strategy. Leading the R&D team to expedite financial planning, expansion, growth and exploring new business avenues for the company.

Mr. Mohd. Ferdous Kawser MasudDirector

Mrs. Laila Ali is the Director of the Company. She is a dynamic & hard working personnel and as well as bagged knowledge in Modern Methods, Technology, Production and Marketing & Management Techniques of textile industries by attending several course/seminars and visiting similar industrial concerns. Monitors organizational performance and aids the Managing Director to develop strategically goal which are attainable.

Mrs. Laila Ali Director


ANNEXURE – IVAUDIT COMMITTRR REPORT

Date: 27 October, 2016For the financial year 2015-16

Metro Spinning Limited having an Audit Committee as a subcommittee of the Board of Directors in order to assist the Board of Directors in ensuring and fulfilling its oversight responsibilities

AUDIT COMMITTEEThe Audit Committee of the Company comprises of the following:

The 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 principals, internal control risk management process,

auditing matter, haring 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 systems 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 yearThe Committee reviewed the integrity of the quarterly and annual financial statement 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.

(HAIDER AHMED KHAN, FCA)ChairmanAudit Committee

MR. HAIDER AHMED KHAN, FCA


MRS. LAILA ALI


MR. YOUNUS BHUIYAN

NAME OF MEMBERMeeting Date and Attendance

√

√

√

x

√

21/10/15

√

√

√

√

√

01/11/15

√

√

√

√

√

17/01/16

√

√

√

√

√

13/04/16 Remarks

MR. HAIDER AHMED KHAN, FCA


MRS. LAILA ALI

MR. YOUNUS BHUIYAN


Independent Director

Director Finance

Director

Chief Financial Officer

Executive Director &Company Secretary

Chairman

Member

Member

Member

Member Secretary

NAME DESIGNATION POSITION IN THE COMMITTEE REMARKS


ANNEXURE - V


ANNEXURE - V(a)


ANNEXURE - VI

Compliance Status(Appropriate Comments are

inserted in relevant columns)

Complied Not Complied

Remarks (if any)

ConditionNo.

Title

BOARD OF DIRECTORS : Board's Size: The number of the board members of the company not be less than 5 (five) and more than 20 (twenty).

Independent Directors: At least one fifth 1/5th of the total number of directors in the company's board shall be independent directors.

Who either does not hold any share in the company or holds less than one percent (1%) shares of the total paid-up shares of the company;

who is not sponsor of the company and is not connected with the company's any sponsor or director or shareholder who holds one percent (1%) or more shares of the total paid-up shares of the company on the basis of family relationship. His/her family members also should not hold above mentioned shares in the company.

who does not have any other relationship, whether pecuniary or otherwise, with the company or its subsidiary/associated companies;

who is not a member, director or officer of any stock exchange;

who is not a shareholder, director or officer of any member of stock exchange or an intermediary of the capital market;

Who is not a partner or an executive or was not a Partner or and executive during the preceding 3 (three) years of the concerned company's statutory audit firm;

who shall not be an independent director in more than 3 (three) listed companies;

who has not been convicted by a court of competent jurisdiction as a defaulter in payment of any loan to a bank or a Non-Bank Financial Institution (NBFI);

who has not been convicted for a criminal offence involving moral turpitude.

The independent director(s) shall be appointed by the board of directors and approved by the shareholders in the Annual General Meeting (AGM).

The post of independent director(s) can not remain vacant for more than 90 (ninety) days.

The Board shall lay down a code of conduct of all Board members and annual compliance of the code to be recorded.

The tenure of office of an independent director shall be for a period of 3(three) years, which may extended for 1(one) term only.

Qualification of Independent Director (ID): Independent director shall be a knowledgeable individual with integrity who is able to ensure compliance with financial, regulatory and corporate laws and can make meaningful contribution to business.

The person should be a Business Leader/Corporate Leader/Bureaucrat/University Teacher with Economics or Business Studies or Law background/Professionals like Chartered Accountants, Cost & Management Accountants, Chartered Secretaries. The independent director must have at least 12(twelve) years of corporate management /professional experiences.

In special cases the above qualifications may be relaxed subject to prior approval of the Commission.

1.1

1.2 (i)

1.2 (ii) a)

1.2 (ii) b)

1.2 (ii) c)

1.2 (ii) d)

1.2 (ii) e)

1.2 (ii) f)

1.2 (ii) g)

1.2 (ii) h)

1.2 (ii) i)

1.2 (iii)

1.2 (iv)

1.2 (v)

1.2 (vi)

1.3 (i)

1.3 (ii)

1.3 (iii)

Complied

Complied

Complied

Complied

Complied

Complied

Complied

Complied

Complied

Complied

Complied

Complied

Complied

Complied

Complied

Complied

Complied

N/A

Status of compliance with the conditions imposedBy the Securities & Exchange Commission’s Notification

No. BSEC/CMRRCD/2006-158/134/Admin/44 Dated 07August, 2012


Chairman of the Board and Chief Executive Officer : The position of the Chairman of the Board and the Chief executive Officer of the companies shall be filled by different individuals. The Chairman of the company shall be elected from among the directors of the company. The Board of Directors shall clearly define respective roles and responsibilities of the Chairman and the Chief Executive Officer.

The Directors' Report to Shareholders: Industry outlook and possible future development in the industry.

Segment-wise or product-wise performance.

Risks and concerns.

A discussion Cost of Goods sold, Gross Profit Margin and Net Profit Margin.

Discussion on continuity of any Extra-Ordinary gain or loss.

Basis for related party transactions-a statement of all related party transaction should be disclosed in the annual report.

Utilization of proceeds from public issues, rights issues and/or through any other instruments.

An explanation if the financial results deteriorate after the company goes for Initial Public Offering (IPO), Repeat Public Offering (RPO), Rights Offer, Direct Listing, etc.

If significant variance occurs between Quarterly Financial Performance and Annual Financial Statements the management shall explain about the variance on their Annual Report.

Remuneration to directors including independent directors.

The financial statements prepared by the management of the issuer company present fairly its state of affairs, the result of its operations, cash flows and changes in equity.

Proper books of account of the issuer company have been maintained.

Appropriate accounting policies have been consistently applied in preparation of the financial statements and that the accounting estimates are based on reasonable and prudent judgment.

International Accounting Standards (IAS)/Bangladesh Accounting Standards (BAS)/International Financial Reporting Standard (IFRS)/Bangladesh Financial Reporting Standards (BFRS), as applicable in Bangladesh, have been followed in preparation of the financial statements and any departure there-from has been adequately disclosed.

The system of internal control is sound in design and has been effectively implemented and monitored.

There are no significant doubts upon the issuer company's ability to continue as a going concern. If the issuer company is not considered to be a going concern, the fact along with reasons thereof should be disclosed.

Significant deviations from the last year's operating results of the issuer company shall be highlighted and the reasons thereof should be explained.

Key operating and financial data of at least preceding 5(five) years shall be summarized.

If the issuer company has not declared dividend (cash or stock) for the year, the reasons thereof shall be given.

The number of Board meeting held during the year and attendance by each director shall be disclosed.

Parent/Subsidiary/Associated Companies and other related parties (name wise details);

Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and their spouses and minor children (name wise details);

Executives;

Shareholders holding ten percent (10%) or more voting interest in the company (name wise details).

a brief resume of the director;

1.4

1.5 (i)

1.5 (ii)

1.5 (iii)

1.5 (iv)

1.5 (v)

1.5 (vi)

1.5 (vii)

1.5 (viii)

1.5 (ix)

1.5 (x)

1.5 (xi)

1.5 (xii)

1.5 (xiii)

1.5 (xiv)

1.5 (xv)

1.5 (xvi)

1.5 (xvii)

1.5 (xviii)

1.5 (xix)

1.5 (xx)

1.5 (xxi) a)

1.5 (xxi) b)

1.5 (xxi) c)

1.5 (xxi) d)

1.5 (xxii) a)

Complied

Complied

Complied Complied

Complied Complied

Complied

Complied

N/A

N/A

Complied

Complied

Complied

Complied

Complied

Complied

Complied

Complied

CompliedN/A

Complied

Complied

Complied

Complied

Complied

Complied


nature of his/her expertise in specific functional areas;

name of companies in which the person also holds the directorship and the membership of committees of the board.

CHIEF FINANCIAL OFFICER (CFO), HEAD OF INTERNAL AUDIT AND COMPANY SECRETARY (CS)Appointment : The company shall appoint a Chief Financial Officer (CFO), a Head of Internal Audit (Internal Control and Compliance) and a Company Secretary (CS). The Board of Directors should clearly define respective roles, responsibilities and duties of the CFO, the Head of Internal Audit and the CS.

Requirement to attend the Board Meetings : The CFO and the Company Secretary of the companies shall attend the meetings of the Board of Directors, provided that the CFO and/or the Company Secretary shall not attend such part of a meeting of the Board of Directors which involves consideration of an agenda item relating to their personal matters.

AUDIT COMMITTEE : The company shall have an Audit Committee as a sub-committee of the Board of Directors.

The Audit Committee shall assist the Board of Directors in ensuring that the financial statements reflect true and fair view of the state of affairs of the company and in ensuring a good monitoring system within the business.

The Audit Committee shall be responsible to the Board of Directors. The duties of the Audit Committee shall be clearly set forth in writing.

Constitution of Committee: The Audit Committee shall be composed of at least 3(three) members.

The Board of Directors shall appoint members of the Audit Committee who shall be directors of the company and shall include at least 1 (one) independent director.

All members of the audit committee should be "financially literate" and at least 1 (one) member shall have accounting or related financial management experience.

when the term of service of the Committee members expires or there is any circumstance causing any Committee member to be unable to hold office until expiration of the term of service, thus making the number of the Committee members to be lower than the prescribed number of 3 (three) persons, the Board of Directors shall appoint the new Committee member(s) to fill up the vacancy(ies) immediately or not later than 1(one) month from the date of vacancy(ies) in the Committee to ensure continuity of the performance of work of the Audit Committee.

The company secretary shall act as the secretary of the Committee.

The quorum of the Audit Committee meeting shall not constitute without at least 1 (one) independent director.

Chairman of the committee : The Board of Directors shall select 1 (one) member of the Audit Committee to be Chairman of the Audit Committee, who shall be an independent director.

Chairman of the Audit Committee shall remain present in the Annual General Meeting (AGM).

Role of the Audit Committee: Oversee the financial reporting process.

Monitor choice of accounting policies and principles.

Monitor Internal Control Risk management process.

Oversee hiring and performance of external auditors.

Review along with the management, the annual financial statements before submission to the board for approval.

Review along with the management, the quarterly and half yearly financial statement before submission to the board for approval.

Review the adequacy of internal audit function.

1.5 (xxii) b)

1.5 (xxii) c)

2.1

2.2

3 (i)

3 (ii)

3 (iii)

3.1 (i)

3.1 (ii)

3.1 (iii)

3.1 (iv)

3.1 (v)

3.1 (vi)

3.2 (i)

3.2 (ii)

3.3 (i)

3.3 (ii)

3.3 (iii)

3.3 (iv)

3.3 (v)

3.3 (vi)

3.3 (vii)

Complied

Complied

Complied

Complied

Complied

Complied

Complied

Complied

Complied

Complied

N/A

Complied

Complied

Compiled

Complied

Complied

Complied

Complied

Complied

Complied

Complied

Complied


Review statement of significant related party transactions submitted by the management.

Review Management Letters/Letter of Internal Control weakness issued by statutory auditors.

When money is raised through Initial Public Offering (IPO)/Repeat Public Offering (RPO)/Rights Issue the company shall disclose to the Audit Committee about the uses/applications of funds by major category (capital expenditure, sales and marketing expenses, working capital, etc), on a quarterly basis, as a part of their quarterly declaration of financial results. Further, on an annual basis, the company shall prepare a statement of funds utilized for the purposes other than those stated in the offer document/prospectus.

Reporting to the Board of Directors : The Audit Committee shall report in its activities to the Board of Directors.

report on conflicts of interests;

suspected or presumed fraud or irregularity or material defect in the internal control system;

suspected infringement of laws, including securities related laws, rules and regulations;

any other matter which shall be disclosed to the Board of Directors immediately.

Reporting to the Authorities : If the Audit Committee has reported to the Board of Directors about anything which has material impact on the financial condition and results of operation and has discussed with the Board of Directors and the management that any rectification has been unreasonably ignored, the Audit committee shall report such finding to the Commission, upon reporting of such matters to the Board of Directors for three times or completion of a period of 6 (six) months from the date of first reporting to the Board of Directors, whichever is earlier.

Reporting to the Shareholders and General Investors : Report on activities carried out by the Audit Committee, including any report made to the Board of Directors under condition 3.4.1 (ii) above during the year, shall be signed by the Chairman of the Audit Committee and disclosed in the annual report of the issuer company.

EXTERNAL/ STATUTORY AUDITORS: Non-engagement in appraisal or valuation services or fairness opinions.

Non-engagement in Financial information systems design and implementation.

Non-engagement in Book-keeping or other services related to the accounting records or financial statements.

Non-engagement in Broker-dealer services.

Non-engagement in Actuarial services.

Non-engagement in Internal audit services.

Non-engagement in any other service that the Audit Committee determines.

No partner or employees of the external audit firm shall possess any share of the company they audit at least during the tenure of their audit assignment of that company.

3.3 (viii)

3.3 (ix)

3.3 (x)

3.4.1(i)

3.4.1 (ii) a)

3.4.1(ii) b)

3.4.1 (ii) c)

3.4.1(ii) d)

3.4.2

3.5

4 (i)

4 (ii)

4 (iii)

4 (iv)

4 (v)

4 (vi)

4 (vii)

4 (viii)

Complied

Complied

Complied

Complied

N/A

N/A

N/A

-

-

-

Complied

Complied

Complied

Complied

Complied

Complied

Complied

Complied

There was nosuch event toreport.


There was nosuch event toreport.There was nosuch event toreport.




SUBSIDIARY COMPANY : Provisions relating to the composition of the Board of Directors of the holding company shall be made applicable to the composition of the Board of Directors of the subsidiary company.

At least 1 (one) independent director on the Board of Directors of the holding company shall be a director on the Board of Directors of the subsidiary company.

The minutes of the Board meeting of the subsidiary company shall be placed for review at the following Board meeting of the holding company.

The minutes of the respective Board meeting of the holding company shall state that they have reviewed the affairs of the subsidiary company also.

The Audit Committee of the holding company shall also review the financial statement, in particular the investments made by the subsidiary company.

DUTIES OF CHIEF EXECUTIVE OFFICER (CEO) AND CHIEF FINANCIAL OFFICER (CFO) : these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

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.

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.

REPORTING AND COMPLIANCE OF CORPORATE GOVERNANCE : The company shall obtain a certificate from a practicing Professional Accounting/Secretary (Chartered Accountant/Cost and Management Accountant/Chartered Secretary) regarding compliance of conditions of Corporate Governance Guidelines of the Commission and shall send the same to the shareholders along with the Annual Report on a yearly basis.

The directors of the company shall state, in accordance with the Annexure attached, in the directors' report whether the company has complied with these conditions.

5 (i)

5(ii)

5(iii)

5(iv)

5(v)

6(i) a)

6(i) b)

6(ii)

7(i)

7(ii)

N/A

N/A

N/A

N/A

N/A

Complied

Complied

Complied

Complied

Complied


1

2

Net Turnover

Less: Brought in Materials & Services

806,442

554,621

251,821 100.00VALUE ADDED TOTAL 100.00

SOURCE OF FUND

2015-16(In BDT Tk.)PARTICULARS In % In %

1 Salaries, Wages, Gratuity & Other Benefits

GOVERNMENT

2 Duties & Taxes

PROVIDER OF CAPITAL

3 Dividend

RETAINED BY THE COMPANY

4 Depreciation & Retention

LENDERS

5 Financial Charges

VALUE ADDED TOTAL

EMPLOYEES

APPLIED IN THE FOLLOWING WAY

91,154

4,201

30,244

9,857

116,365

251,821

36.20%

1.67%

12.01%

3.91%

46.21%

100%

79,302

5,891

28,804

22,734

131,262

267,993

29.59%

2.20%

10.75%

8.48%

48.98%

100%

Value in '000

Value in '000

INSTALLED CAPACITY OF PRODUCTION

ACHIEVABLE CAPACITY IN M.TON

UTILIZATION OF CAPACITY IN M.TOM

7,73,873

505,880

267,993

2014-15(In BDT Tk.)

2012-13

34,872 Spindle

4,500 M.Ton

2012-13

3,373 M.Ton

2011-12

3,319 M.Ton

2014-15

3,526 M.Ton

2011-12

34,872 Spindle

4,500 M.Ton

2014-15

34,872 Spindle

4,500 M.Ton

2012-13

3,036 M.Ton

90%

2013-14

34,872 Spindle

4,500 M.Ton

2013-14

3,522 M.Ton

2013-14

3,205 M.Ton

91%

2011-12

2,655 M.Ton

82%

2014-15

3,209 M.TON

91%

PRODUCTION TABLE

ANNEXURE - VII VALUE ADDED STATEMENT

2015-16

34,872 Spindle

4,500 M.Ton

2015-16

3292 M.Ton

2015-16

2996 M.TON

91%


Value in '000

Financial Position

Authorised Capital

Paid-up-capital

Retained Earnings

Turnover

Gross Profit

Gross Profit in %

Net Profit Before Tax

Net Profit Before Tax

Fixed Asset

Current Asset

Current Liabilities

Net Current Assets

Key Financial Ratios

Current Ratio (Times)

Quick Ratio (Times)

Debt- Equity Ratio (Times)

Time interest earned ratio (Times)

Inventory Turnover (Times)

Assets Turnover

Return on Assets

Return on Equity

Earning per Share (EPS)

Net Operating Cash Flow Per Share

Net Asset Value Per Share

Dividend Per Share (DPS)

Book Value Per Share

Dividend Payout Ratio

Other Information

Total Share

Number of Shareholders

Number of Employees

2012-2013

1,000,000

523,710

32,341

849,573

233,199

27.45%

38,508

4.53%

822,064

1,052,857

996,591

56,266

1.05 : 1

0.53 :1

0.88 times

1.26

1.67

40.85%

1.85

3.83

0.62

3.26

19.48

10%

Bonus Share

14.6

162%

52,371,000

10,930

917

2013-2014

1,000,000

576,081

48,595

923,490

244,879

26.52%

58,772

6.36%

829,294

1,053,457

958,629

94,828

1.09:1

0.57:1

0.82 times

1.41

1.8

44.96%

2.86

5.66

0.84

1.09

18.28

5%

Bonus Share

16.9

59%

57,608,100

11,025

914

2011-2012

1,000,000

476,100

-52,804

766,316

120,457

15.72%

(48,973)

-6.39%

809,647

1,113,975

1,070,542

43,433

1.04:1

0.46:1

1 Times

0.64

1.64

36.81%

-2.35

-4.65

-1.11

-1.32

21.55

10%

Bonus share

Tk. 19.3

-90.16%

47,610,000

9,174

880

2014-2015

1,000,000

604,885

21,850

774,463

196,103

25.32%

25,716

3.32%

818,570

1,014,033

886,621

127,412

1.14

0.563

0.80 times

1.21

1.52

38.76%

1.29%

2.48%

0.36

1.18

16.83

5%

Cash

10.1

138.40%

60,488,505

10,454

833

ANNEXURE - VIII

FIVE YEARS FINANCIAL STATISTICS

2015-2016

1,000,000

604,885

11,035

809,245

175,007

21.63%

13,181

1.63%

806,393

1,084,432

964,333

120,099

1.12

0.667

0.91 times

1.14

1.69

41.26%

0.67%

1.32%

0.18

-0.83

16.12

No Dividend

60,488,505

8,813

860


( Figures in '000 )SALES & PRODUCTION IN TERMS OF QUANTITY OVER 5 YEARS

PATICULARS

Production (Lbs.)

Sales (Lbs.)

2014-2015

7075

6472

2011-2012

5,853

5,916

2012-2013

6,693

6,164

2013-2014

7,067

6,666

2015-2016

6,605

7,398

SALES & PROFITABILITY OVER 5 YEARS (Tk. in '000)

2013-14

923,490

244,879

48,594

PARTICULARS

Sales

Gross Profit

Net Profit

2012-13

849,573

233,199

32,341

2011-12

766,316

120,457

-52,804

2014-15

774,463

196,103

21,850

2015-16

809,245

175,007

11,035


PATICULARS

Earnings Per Share

2014-2015

0.36

2011-2012

-1.11

2012-2013

0.62

EARNING PER SHARE (EPS)

2013-2014

0.84

2015-2016

0.18


The Twentieth Annual General Meeting (AGM) of shareholders of Metro Spinning Limited was held on May 30, 2016 at 09.30 AM at the Maksons Group Conference Hall (Situated at Maksons Spinning Mills Ltd., Holding # 87, Ward # 5, Block # B, Shahid Minnat Ali Road # 4, Gouripur, Ashulia, Savar, Dhaka). A large number of shareholders attended at the Annual General Meeting.

Mr. Haider Ahmed Khan, Chairman the company, presided over the meeting. Mr. Mohammad Ali Khokon, Managing Director of the company along with other Directors of the company was also present in the meeting. Verses from the Holy Quran along with its translation in Bengali were recited at the very outset of the meeting.

The Chairman of the meeting welcomed the shareholders in the Annual General Meeting. With the permission of the Chair, the meeting began and the shareholders expressed their valued opinion on the audited financial statement of the Company for the year ended 30 June 2015 and also on their affairs. Mr. Mohammad Ali Khokon, Managing Director of the company replied to the queries and explained various comments of distinguished shareholders. He also gave hints of future activities of the Company.

After approving the audited financial statements, declaring dividend (Cash dividend @5%), electing directors, appointing auditors and fixing their remuneration by the shareholders, the meeting ended with a vote of thanks to and from the Chair.

______________________(Haider Ahmed Khan)Chairman

Minutes of The Twentieth AGM


Audited Financial Statements

Audited Financial Statements


Independent Auditor’s Report to the Shareholders ofMETRO SPINNING LIMITED

We have audited the accompanying financial statements of Metro Spinning Limited (the company), which comprise the Statement of Financial Position as at 30 June 2016 and Statement of Profit or Loss and other Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the financial year ended, and a summary of significant accounting policies and other explanatory information thereon.

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Financial Reporting Standards (BFRS), Bangladesh Accounting Standards (BAS), the Companies Act 1994, the Securities & Exchange Commission Rules 1987 and other applicable laws and regulations. This responsibility includes: designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control . An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 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 give a true and fair view of the financial position of Metro Spinning Ltd. as at June 30, 2016 and of its financial performance and its cash flows for the year then ended in accordance with Bangladesh Financial Reporting Standards (BFRSs).

Report on other Legal and Regulatory Requirements In accordance with the companies Act 1994 and Bangladesh Securities and Exchange Rules 1987, we also report that:

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

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

(iii) the statement of financial position, Statement of Profit or Loss and other Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows dealt with by the report are in agreement with the books of account; and

(iv) the expenditure was incurred for the purpose of the company’s business.

Date : 30 October, 2016Place : Dhaka AHMAD & AKHTAR

Chartered Accountants


Assats Non-Current Assets 894,257,523 930,397,836

Property, Plant& Equipment 4.00 806,393,172 818,570,649

Investments in Share 5.00 87,864,351 111,827,187

Current Assets 1,084,432,592 1,014,033,064

Inventories 6.00 441,611,938 514,599,628

Trade and Others Receivable 7.00 478,081,413 424,300,038

Advance, Deposit & Prepayments 8.00 158,071,135 74,342,605

Cash and Cash Equivalent 9.00 6,668,106 790,793

Total Assets 1,978,690,115 1,944,430,900

Shareholders' Equity and Liabilities

Shareholders' Equity 974,842,119 1,018,013,770

Share Capital 10.00 604,885,050 604,885,050

Reserve & Surplus 11.00 369,957,069 413,128,720

Non-Current Liabilities 39,514,149 39,795,326

Deferred Tax Liability 12.00 39,514,149 39,795,326

Current Liabilities 964,333,847 886,621,804

Trade and other payables 13.00 11,496,542 19,818,160

Liability for WPPF 14.00 3,345,938 5,436,753

Short Term Loan from Bank & others 15.00 893,488,336 818,673,491

Provision for Tax 16.00 4,604,689 10,380,213

Liabilities for Expenses 17.00 51,398,342 32,313,187

Total Equity and Liabilities 1,978,690,115 1,944,430,900

Net Assets Value (NAV) per share 26.00 16.12 16.83

The annexed notes form an integral part of these financial statements

METRO SPINNING LIMITEDStatement of Financial Position

As at 30 June, 2016

Notes 30 June, 2016BDT

30 June, 2015BDT

Director Managing DirectorChief Financial Officer Company Secretary

Date: 30 October, 2016Place: Dhaka

AHMAD & AKHTARChartered Accountants





As per our annexed report of even date.

METRO SPINNING LIMITEDStatement of Profit or Loss and other Comprehensive Income

For the year ended 30 June, 2016

Notes 30 June, 2016BDT

30 June, 2015BDTParticulars

Sales (Net off VAT) 18.00 809,245,562 774,463,983

Less: Cost of Goods Sold 19.00 634,237,582 578,360,959

Gross Profit 175,007,980 196,103,024

Less : Operating Expenses 41,999,239 37,248,165

Administrative Expenses 20.00 33,302,249 27,758,858

Selling & Distribution Expenses 21.00 8,696,990 9,489,307

Operating Profit before Financial expenses & WPPF 133,008,741 158,854,860

Less: Financial Expenses 22.00 116,365,044 131,262,413

Operating Profit before WPPF 16,643,697 27,592,447

Add. Non-operating income 23.00 5,975 1,534,864

Less: Non-operating expense 24.00 2,808,576 2,124,722

Profit before WPPF 13,841,096 27,002,589

Less: Provision for WPPF 659,100 1,285,838

Profit before Tax 13,181,997 25,716,751

Provision for Taxation 2,146,560 3,866,431

Provision for current tax 2,427,737 3,857,513

Provision Deferred Tax (281,177) 8,918

Net Profit after Tax for the year 11,035,437 21,850,320

Other Comprehensive Income (23,962,836) (57,453,763)

Gain/(Loss) on Marketable Securities (Unrealized) (23,962,836) (57,453,763)

Total Comprehensive Income/Loss for the year (12,927,399) (35,603,443)

Basic Earning per Share (EPS) 25.00 0.18 0.36



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A. CASH FLOWS FROM OPERATING ACTIVITIES

Cash Received from Turnover and Others 752,661,587 738,194,776

Payment for Cost and Expenses (678,229,351) (529,508,795)

Income Tax Paid (8,203,261) (6,293,859)

Interest Paid (116,365,044) (131,262,413)

Net cash inflow /(outflow) from Operating Activities (50,136,069) 71,129,709

B. CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of Fixed Assets (16,888,860) (19,207,872)

Sale of Assets - 680,000

Net cash inflow /(outflow) from Investing Activities (16,888,860) (18,527,872)

C. CASH FLOWS FROM FINANCING ACTIVITIES

Dividend Paid (1,912,603) -

Short Term Loan from Bank & others 74,814,845 (52,216,610)

Long Term Loan (1,523,124)

Net cash inflow /(outflow) from Financing Activities 72,902,242 (53,739,734)

D Net increase/(Decrese) in cash & cash equivalents (A+B+C) 5,877,313 (1,137,897)

E Cash and cash equivalents at the beginning 790,793 1,928,690

F Cash and cash equivalents at the end (D+E) 6,668,106 790,793

Cash and cash equivalents as on 30 June 2016

Cash In hand 71,671 11,601

Cash at Bank (Note:8.01) 6,596,435 779,192

6,668,106 790,793

Net Operating Cash Flows Per Share (NOCFPS) 27.00 (0.83) 1.18


METRO SPINNING LIMITEDStatement of Cash Flows

For the year ended 30 June, 2016

Notes FY 2015-2016BDT

FY 2014-2015BDT




As per our annexed report of even date.


1.00 Background of the Company

The company was incorporated in Bangladesh on 9 May 1993 with the Registrar of Joint Stock Companies and firms as a Private Limited Company under the Companies Act, 1913. Subsequently it was converted into Public Limited Company on 2 June 1994 by a special resolution. In 2001 the Company went on (IPO) and was listed with Dhaka Stock Exchange on 14 March 2002. The registered office of the Company is located at 28, Dilkusha C/A. 4th Floor, Dhaka-1000 and the factory is located at Rupganj in Narayanganj. The Company is listed with Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) as a publicly quoted company. Trading of the shares of the company started in two stock exchanges from 14 March 2002.

1.01 Nature of Business

The principal activities of the Company are manufacturing Yarn and sales to export oriented Knit Garments.

1.02 Business with Associats Company

Sl No. Name of Related Party Relationship Nature of the Business

1 Maksons Pharmaceuticals Limited Affiliated Medicine

2 Maksons Spinning Mills Limited Affiliated Spinning

2.00 BASIS OF PREPARATION OF FINANCIAL STATEMENTS

2.01 Statement of Compliance

The financial statements have been prepared incompliance with the requirements of the Companies Act 1994, the Securities & Exchange Rules 1987, the Listing Regulations of Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) and other relevant local laws as applicable and in accordance with the applicable Bangladesh Financial Reporting Standards (BFRSs) include Bangladesh Accounting Standards (BAS) adopted by the Institute of Chartered Accountants of Bangladesh (ICAB) based on International Accounting Standards (IAS) and International Financial Reporting Standards (IFRSs).

2.02 Regulatory Compliances

As required by the company, the management complies with the following major legal provisions in addition to the Companies Act 1994 and other applicable laws and regulations:

The Income Tax Ordinance 1984; The Income Tax Rules 1984; The Value Added Tax Act 1991; The Value Added Tax Rules 1991; The Customs Act, 1969; and Bangladesh Labour Law, 2006. 2.03 Components of the Financial Statements According to the International Accounting Standards (IAS)-1 as adopted by ICAB as BAS-1 “Presentation of

Financial Statements” the complete set of financial statements includes the following components.

METRO SPINNING LIMITEDComprising Significant Accounting Policies and others Explanatory Information

For the year ended June 30, 2016


i. Statement of financial position as at 30 June 2016;ii. Statement of profit or loss and other comprehensive income for the year ended 30 June 2016;iii. Statement of changes in equity for the year ended 30 June 2016;iv. Statement of cash flows for the year ended 30 June 2016; andv. Notes Comprising Significant Accounting Policies and others Explanatory Information for the year

ended 30 June 2016.

2.04 Measurement Bases used in preparing the Financial Statements The financial statements have been prepared on the historical cost basis, and therefore, do not take into

consideration the effect of inflation. The accounting policies, unless otherwise stated, have been consistently applied by the company and are consistent with those of the previous year.

2.05 Reporting Currency and Level of Precision The financial statements are presented in Bangladeshi currency (Taka), which is the Company’s functional

currency. All financial information presented in Taka have been rounded off to the nearest Taka.

2.06 Preparation and Presentation of Financial Statements of the Company The Board of Directors of the company is responsible for the preparation and presentation of financial

statements of Metro Spinning Limited.

2.07 Use of Estimates and Judgments The preparation of these financial statements, in conformity with BASs/BFRSs, required management to make

judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual amounts may differ from these estimates.

Estimates and underlying assumptions are reviewed on an on going basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

In particular, information about significant areas of estimation on uncertainty and critical judgments in applying accounting policies that have the most significant affect on the amounts recognized in the financial statements are included in the following notes:

Note: 6 Inventories Note: 11 Reserves and Surplus Note: 12 Deferred Tax Liabilities Note: 14 Liability for (WPPF) Note: 16 Provision for Tax 2.08 Reporting Period The financial period of the companies covers one year from 1 July 2015 to 30 June 2016 and is followed consistently.

2.09 Statement of Cash Flows Statement of cash flows is prepared in accordance with “BAS 7: Statement of Cash Flows” and the cash flows

from operating activities have been presented under Direct Method as required by the Securities and Exchange Rules 1987 and considering the provisions that “Enterprises are Encouraged to Report Statement of Cash Flows from Operating Activities using the Direct Method”.

2.10 Compliance with the Requirements of Notification of the Securities and Exchange Commission dated 04.06.2008 under ref. # SEC/CMMRPC/2008-181/53/Adm/03/28

a) Notes to the financial statements marked from 3.00 to 3.19 setting out the policies are unambiguous with respect to the reporting framework on which the accounting policies are based.

b) The accounting policies on all material areas have been stated clearly in the notes marked from 3.00 to 3.19.

c) The accounting standards that underpin the policies adopted by the company can be found in the following places of the notes to the financial statements:


d) The financial statements are in compliance with the Bangladesh Financial Reporting Standards (BFRS) which are adopted from the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).

2.11 Standards, amendments or interpretations which became effective during the year During the year certain amendments to Standards and new interpretations became effective however they

did not have any material effect on the financial statements of the Company.

Sl. No. Name of the BAS BAS's no. Comments1 Presentation of Financial Statements 1 A2 Inventories 2 A3 Cash Flow Statements 7 A4 Accounting policies, Changes in accounting Estimates & Errors 8 A5 Events after the Reporting Period 10 A6 Construction Contracts 11 N/A7 Income Taxes 12 A8 Property, Plant and Equipment 16 A9 Leases 17 N/A10 Revenue 18 A11 Employees Benefits 19 A12 Accounting for Government Grants & Disclosure of Government Assistance 20 N/A13 The Effects of Changes in Foreign Exchange Rates 21 A14 Borrowing Costs 23 A15 Related Party Disclosures 24 A16 Accounting and Reporting by Retirement Benefit Plans 26 N/A17 Consolidated and Separate Financial Statements 27 N/A18 Investment in Associates 28 N/A19 Interest in Joint Ventures 31 N/A20 Financial Instruments: Presentation 32 A21 Earning Per Share 33 A22 Interim Financial Reporting 34 A23 Impairment of Assets 36 A24 Provision, Contingent Liabilities and Contingent Assets 37 A25 Intangible Assets 38 N/A26 Financial Instruments Recognition &Measurement 39 A27 Investment Property 40 N/A28 Agriculture 41 N/A

SL. No. Name of the BFRS/IFRS BFRS/ IFRS No. Comments1 First-time Adoption of Bangladesh Financial Reporting Standards 1 N/A2 Share based payment 2 N/A3 Business Combinations 3 N/A4 Insurance Contracts 4 N/A5 Non-Current Assets held for sale and discontinued operations 5 N/A6 Exploration for and evaluation of mineral resources 6 N/A7 Financial Instruments: Disclosures 7 N/A8 Operating Segments 8 N/A9 Financial Instruments 9 A10 Consolidated Financial Statements 10 N/A11 Joint Arrangements 11 N/A12 Disclosure of Interests in Other Entities 12 N/A13 Fair Value Measurement 13 A


2.12 New/revised accounting standards, amendments to published accounting standards, and Interpretations that are not yet effectiveThe following new standards, amendments and interpretations of approved accounting standards are only effective for annual periods beginning from the dates specified below and have not been early adopted by the company.

Amendments to IAS 12: income tax, deferred tax on investment property (effective for annual periods beginning on after1 January 2012). The 2010 amendment provides an exception to the measurement principle in respect of investment property measured using the fair value model in accordance with IAS 40 Investment property. The measurement of deferred tax assets and liabilities, in this limited circumstance, is based on a rebuttable presumption that the carrying amount of the investment property will be recovered entirely through sale. The presumption can be rebutted only if the investment property is depreciable and held within a business model whose objective is to consume substantially all of the asset’s economic benefits over the life of the asset. The amendment has no impact on financial statements of the Company.

IAS 19: (Amendment) regarding defined benefit plans (effective for periods beginning on or after July 1, 2015) amendments that require actuarial gains and losses to be recognized immediately in other comprehensive income; this change will remove the corridor method and eliminate the ability for entities to recognize all changes in the defined benefit obligation and in plan assets in profit or loss, which currently is allowed under IAS 19: and that the expected return on plan assets recognized in profit or loss is calculated based on the rate used to discount the defined benefit obligation. The Company is yet to assets the full impact of the amendment.

Presentation of items of Other Comprehensive income {Amendments to IAS-1) (effective for annual periods beginning on or after 1 July 2012). The amendments require that an entity present separately the items of other comprehensive income that would be reclassified to profit or loss in the future it certain conditions are met from those that would never be reclassified to profit or loss. The amendments do not address which items are presented in other comprehensive income or which items need to be reclassified. The requirements of other IFRS’s continue to apply in this regard. The amendments have no impact on financial statements of the Company.

Offsetting Financial Assets and Financial Liabilities Amendments to IAS 32: Financial Instruments-Presentation (effective for annual periods beginning on or after 1 January 2014). The amendments address inconsistencies in current practice when applying the offsetting criteria in IAS 32 Financial Instruments: Presentation. The amendments clarify the meaning of ‘currently has a legally enforceable right of set-off’; and that some gross settlement systems may be considered equivalent to net settlement.

Offsetting Financial Assets and Financial Liabilities Amendments to IFRS 7: Financial Instruments-Disclosures (effective for annual periods beginning on or after 1 January 2013). The amendments to IFRS 7 contain new disclosure requirements for financial assets and liabilities that are offset in the statement of financial position or subject to master netting agreement or similar arrangement.

Annual Improvements 2009-2011 (effective for annual periods beginning on or after 1 January 2013). The new cycle of improvements contains amendments to the following three standards, with consequential amendments to other standards and interpretations.

IAS 1: Presentation of Financial Statements is amended to clarify that only one comparative period -which is the preceding period -is required for a complete set of financial statements. If an entity presents additional comparative information, then that additional information need not be in the form of a complete set of financial statements. However, such information should be accompanied by related notes and should be in accordance with IFRS. Furthermore, it clarifies that the ‘third statement of financial position’, when required, is only required if the effect of restatement immaterial to statement of financial position.

IAS 16: Property, Plant and Equipment is amended to clarify the accounting of spare parts, stand-by equipment and servicing equipment. The definition of ‘property. Plant and equipment in IAS 16 is now considered in determining whether these items should be accounted for under that standard. If these items do not meet the definition, then they are accounted for using IAS 2 Inventories.

IAS 32: Financial Instruments: Presentation - is amended to clarify that IAS 12- Income Taxes applies to the accounting for income taxes relating to distributions to holders of an equity instrument and transaction costs of an equity transaction. The amendment removes a perceived inconsistency between IAS 32 and IAS 12.

3.00 SIGNIFICANT ACCOUNTING POLICIES

The specific accounting policies have been selected and applied for significant transactions and events that have a material effect within the framework for the preparation and presentation of financial statements.


3.01 Property, Plant & Equipment

3.01.1 Recognition and Measurement

Property, plant & Equipment are accounted for according to BAS 16 “Property, Plant and Equipment” at Historical cost less cumulative depreciation except land and land development which consider at revalued and includes expenditures that are directly attributable to the acquisition of the assets. The cost of self constructed/installed assets includes the cost of materials, direct labor and any other costs directly attributable to bringing the assets to the working condition for its intended use and the cost of dismantling and removing the items and restoring the site on which they are located.

3.01.2 Depreciation Depreciation has been charged on addition from the date of acquisition & revaluation date. Deprecation was

computed using the diminishing balance method. The cost and accumulated depreciation of depreciable assets retired or otherwise disposed off are climmated from the assets and accumulated depreciation:

Category Rate

Land and Land Development 0%

Building & Other 5%

Plant & Machinery 6.66%

Furniture & Fixture 15%

Office Equipment 10%

Motor Vehicle 20%

Disposal: The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales

proceeds and the carrying amount of the asset and is recognized in the Statements of Profit or Loss and other Comprehensive Income. Sales of land and buildings are accounted for when there is an unconditional exchange of contracts. There was no disposal of asset during the year.

3.02 Inventories

Valuation of Inventories Inventories comprise Raw Materials, Finished Yarn, Waste Cotton, Store & Spares, Stores-in-Transit and Work in

process. They are stated at the lower of cost or net realizable value in accordance with BAS 2 “Inventories” after making due allowance for any obsolete or slow moving item. The costs of inventories are assigned by using weighted average cost method. Net realizable value of Work in Process is determined after deducting the estimated cost of completion and estimated cost necessary to make the sale from estimated selling price.

3.03 Capital Work-In-Progress Property, Plant and Equipment under construction/acquisition is accounted for as capital work-in-progress until

construction/acquisition is completed and measured at cost.

3.04 Leased assets The leased liability is considered as a capital lease. So the interest expense on Lease liability is charge to income

statement under finance cost.

3.05 Revenue Recognition Revenue from net sales of the company represents invoiced value of sale of yarn which are recognized after

considering the conditions, set in paragraph-14 of BAS-18: “Revenue”. Revenue from the sale of goods is recognized when all the following conditions are satisfied:

• the company has transferred to the buyer the significant risks and rewards of ownership of the goods; • the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; • the amount of revenue can be measured reliably; • it is probable that the economic benefits associated with the transaction will flow to the company; and • the cost incurred or to be incurred in respect of the transaction can be measured reliably.


3.06 Foreign Currency Transaction/Translation Foreign currency transactions are translated into Bangladeshi Taka at the exchange rates ruling at the transaction

dates according to BAS 21: The effect of changes in Foreign Exchange Rates”. Monetary assets and liabilities denominated in the foreign currencies are translated at prevailing rates on the balance sheet (financial position) date. Non monetary assets and liabilities denominated in foreign currencies, which are related at historical cost, are translated into Bangladesh Taka at the exchange date ruling at the date of transactions. Foreign exchange fluctuation gain/losses are charged to Statement of profit or loss and other Comprehensive Income for the respective period.

3.07 Financial Expenses Financial costs comprise of interest expense on short term loan. The costs are charged to revenue except those are

capitalized in accordance with BAS 23: Borrowing Costs.

3.08 Financial Instruments Non-derivative financial instruments comprise trade receivables, trade payables, cash and cash equivalents and share

capital.

Trade Receivables Trade receivables are recognized initially at invoice value and subsequently measured at the remaining amount less

allowance for doubtful receivable at the year end, if any. Receivables from foreign currency transactions are recognized in Bangladeshi Taka using exchange rates prevailing on the date of transaction.

Trade Payables Liabilities are recorded at the amount payable for settlement in respect of goods and services received by the

company, whether or not billed by the suppliers

Cash and Cash Equivalents Cash and cash equivalents consist of cash in hand and with banks on current and deposit accounts and short term

investments which are held and available for use by the company without any restriction. There is insignificant risk of change in value of the same.

Share Capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are

recognized as a deduction from equity, net of any tax effect.

3.09 Taxation

3.9.1 Current Tax Current tax is the expected tax payable on the taxable income for the financial year, using tax rates enacted or

subsequently enacted after the reporting date and any adjustment to tax payable in respect of previous years. Provision for taxation is calculated on the basis of applicable current tax rate and incompliance with Finance Act. 2015.

3.9.2 Deferred Tax The company has decided to adopt policy of recognition of deferred tax in accordance with the Bangladesh

Accounting Standard 12 (BAS-12), deferred tax is provided using the liability method for temporary difference between the carrying value of fixed assets as per accounts and the corresponding income tax written down value. Deferred tax is calculated at the effective income tax rate prevailing at the statement of financial position date.

3.10 Provisions As per “BAS 37: Provisions, Contingent Liabilities and Contingent Assets’ a provision recognized on the date of

statement of financial position if, as a result of past even Company has a present obligation that can be estimated reliably, and it is probable the outflow of economic benefits will be required to settle the obligation.

A provision is recognized if, as a result of a past event, the company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefit will be required to settle the obligation.

3.11 Contingencies Contingencies arising from claim, litigation assessment, fines, penalties etc are recorded it is probable that a liability

has been incurred and the amount can be measured reliably accordance with “BAS 37: Provisions, Contingent Liabilities and Contingent Assets”.


3.12 Earning Per Share (EPS) The company calculates Earning Per Share (EPS) in accordance with BAS 33 “Earning Per Share” which has been shown

on the face of statement of profit or loss and other Comprehensive Income and the computation of EPS is stated in Note – 25 of the financial statements.

Basic Earnings This represents earnings for the period attributable to the ordinary shareholders. As there no preference dividend,

minority interest or extra ordinary items, the net profit for the year has been considered as fully attributable to ordinary shareholders. Basic earnings per has been calculated by dividing the net profit or loss by the weighted average number of ordinary share outstanding during the year.

Diluted Earnings Per Share (DEPS) Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and weighted average

number of ordinary shares outstanding, for the effect of all dilutive potential ordinary shares. However, dilution of EPS is not applicable for these financial statements as there were no potential ordinary shares during the relevant period.

3.13 Contingent Liabilities and Assets Contingent liabilities are current or possible obligations, arising from past events and whose existence is due to the

occurrence or non- occurrence of one or more uncertain future events, which are not within the control of the company.

3.14 Worker’s profit participation & welfare funds The company contributed 5% of net profit before charging the amount to the aforementioned fund in accordance with

the requirement of section 234 of labour Act. 2006.

3.15 Segment Reporting No segmental reporting is applicable for the company as required by “BFRS-08: Operating Segment” as the company

operates in a single industry segment and within as geographical segment.

3.16 Event after Statement of Financial Position Date In compliance with the requirements of “BAS-10: Event After the reporting period” that provide additional information

about the company’s position at the date of the financial position are reflected in the financial statements and events after the reporting period that are not adjusting events are disclosed in the notes of financial statements when arise.

3.17 Going Concern The company has adequate resources to continue its operations for foreseeable future. For this reason the directors

continue to adopt the going concern basis in preparing the accounts. The resources of the company are sufficient to meet the present obligation of its existing businesses and operations.

3.18 Related Party Disclosures The company carried out a number of transactions with related parties in the normal course of business and on arms’

length basis. The information as required by BAS 24: Related Party Disclosures has been disclosed in a separate note 33 to the accounts.

3.19 Financial Risk Management Policies The company is exposed to normal business risks from changes in market interest rates and currency exchange rates

and from non-performance of contractual obligations by counterparties. The company does not hold or issue derivative financial instruments for speculative or trading purposes.

Interest Rate Risk The company has no significant risk of fluctuations in interest rates.

Foreign Currency Risk The company is exposed to foreign currency risk relating to purchases which are denominated in foreign currencies.

The company primarily utilizes forward exchange contracts with maturities of less than one year to hedge such financial liabilities denominated in foreign currencies. The forward exchange contracts entered into at the reporting date also relate to anticipated purchases, denominated in foreign currencies, for the subsequent period.


Credit Risk Credit risk is the potential financial loss resulting from the failure of a customer or counterparty to settle its financial

and contractual obligations to the company as and when they fall due.

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. At the reporting date there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position. However, due to the large number of parties comprising the group’s customer base, Management does not anticipate material losses from its debt collection.

Liquidity Risk The company monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by

management to finance the company operations and to mitigate the effects of fluctuations in cash flows.

Fair Values The fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable,

willing parties in an arm’s length transaction.

The fair value of trade and other short-term receivables are taken to approximate their carrying value. The fair value of financial assets and liabilities approximate their carrying value.

3.20 General

Comparative information has been disclosed for all numerical information in the Financial statements and also the narrative and descriptive information where it is relevant for understanding of the current period’s financial statements.

Comparative figure have been re-arranged wherever considered necessary to insure better comparability with the current period without causing any impact on the profit and value of assets and liabilities as reported in the financial statements.


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-A


FY 2015-2016BDT

FY 2014-2015BDT 4.00 Property, Plant & Equipments

(A) At Cost Opening Balance 1,198,731,641 1,180,295,130 Add: Addition during the year 16,888,860 19,207,872 Less : Disposal during the period - 771,361 Closing Balance 1,215,620,501 1,198,731,641

(B) Accumulated Depreciation Opening Balance 380,160,992 351,001,220 Add:Charged during the pediod 29,066,337 29,688,728 Less : Disposal during the period - 528,956 Closing Balance 409,227,329 380,160,992

Written Down Value 30 June 2016 (A-B) 806,393,172 818,570,649 **Details have been presented in Schedule-A.

5.00 Investments in Share Maksons Pharmaceutical limited 400,000 400,000 Maksons Spinning Mills limited 87,464,351 111,427,187 87,864,351 111,827,187

Maksons Pharmaceuticals Limited (MPL) was incorporated as a public limited company in 3rd February 2002. Metro Spinning Limited (MSL) has made an investment in shares of Maksons Pharmaceuticals Limited (MPL) at the time of incorporation. The project of the company is in the preliminary stage of the implementation. Maksons Pharmaceuticals Limited (MPL) is not a listed company.

Initially, Metro Spinning Mills Limited has invested Taka 3,00,00,000 against 30,00,000 shares of Taka 10/- each of Maksons Spinning Mills Limited. Then again invested Taka 15,00,00,000 after attaining 1:2 Right Share, consists of 60,00,000 shares @ Taka 25/- each. Thus the total investment is now Taka 18,00,00,000. Presently, Metro Spinning Mills Limited holds 11,981,418 number of shares in Maksons Spinning Mills Limited after receiving bonus shares. Which Market Value is Tk 87,464,351 as on 30.06.2016.

6.00 Inventories Raw Cotton (Note-6.01) 289,610,499 283,676,802 Work in Process (Note-6.02) 7,658,290 7,587,624 Finished Goods (Note-6.03) 134,753,025 212,662,184 Store & Spares 8,203,353 9,386,078 Oil & Lubricant 386,359 246,794 Packing Material 842,843 908,113 Construction Materials 157,569 132,033 441,611,938 514,599,628

6.01 Raw Cotton Cotton 289,610,499 283,676,802 Total 289,610,499 283,676,802

6.02 Work in Process Blow Room 221,282 531,272 Carding 136,705 130,157 Drawing 219,561 420,033 Simplex 2,666,376 3,252,427 Ring 3,583,112 2,793,392 Cone Winding 831,254 460,343 Total 7,658,290 7,587,624 6.03 Finished Goods Yarn (Various Count) 134,753,025 212,662,184 134,753,025 212,662,184


FY 2015-2016BDT

FY 2014-2015BDT

7.00 Trade Other Receivable Trade Debtor-Secured 424,300,038 389,058,285 Add. Increased during the year 809,245,562 772,339,261 Less:Realised During the year (755,464,187) (737,097,508) 478,081,413 424,300,038

Ageing Schedule of Trade Receivable Due within 06 Months 256,240,236 248,289,845 Due Over 06 Months 221,841,177 176,010,193 478,081,413 424,300,038 8.00 Advance, Deposit & Prepayment Advance (Note: 8.01) 152,108,425 68,585,722 Deposit (Note: 8.02) 4,256,883 4,256,883 Prepayment (Note: 8.03) 1,705,827 1,500,000 158,071,135 74,342,605 8.01 Advance 152,108,425 68,585,722 Advance to Parties (Note: 8.01.1) 108,817,780 21,221,077 Advance against Lease 3,469,597 3,469,598 Advance Income Tax & VAT 2,872,165 3,053,261 Raw Cotton in Transit 28,872,678 33,279,010 Claim of Short Weight 7,913,746 7,176,000 Assets in Transit 162,459 386,776 8.01.1 Ageing of Advance to Parties Within 06 Months 3,641,750 2,125,586 Over 06 Months 105,176,030 19,095,491 108,817,780 21,221,077 8.02 Deposit 4,256,883 4,256,883 Titas Gas 1,074,458 1,074,458 Other Deposit 3,182,425 3,182,425 8.03 Prepayments 1,705,827 1,500,000 Prepaid Office rent 1,500,000 1,500,000 Prepaid insurance 205,827 -

9.00 Cash and Cash Equivalent Cash in hand 71,671 11,601 Cash at Bank (Note: 9.01) 6,596,435 779,192 6,668,106 790,793 9.01 Cash at Bank Current Account (Note-9.01.1) 5,560,202 654,837 Short Term Deposit (Note-9.01.2) 1,036,233 124,355 6,596,435 779,192


FY 2015-2016BDT

FY 2014-2015BDT

9.01.1 Current Account 5,560,202 654,837 Sonali Bank Ltd., Local Office 69,732 71,032 City Bank Ltd., Nikunja Branch 53,008 10,000 Mutual Trust Bank Ltd., Principal Br. 24,808 27,820 Dutch Bangla Bank Ltd., Uttara Br. (223,351) 49,267 Islami Bank Bangladesh Ltd., Local Office 2,152 2,439 Jamuna Bank Ltd., Uttara Br. 19,512 19,224 Southeast Bank Ltd., Principal Br. 24,657 412 Southeast Bank Ltd., Uttara Br. 1,256,771 6,277 Southeast Bank Ltd., Company Secretary 24,834 53,402 City Bank Ltd., Foreign Exchange Br. 171,440 171,440 EXIM Bank Ltd., Motijheel Br. 454 454 NRB Global, Uttara Brance 47,593 - One Bank Ltd., Motijheel Br. 493 493 Jamuna Bank Ltd., Dilkusha Br. 4,070,590 1,767 Social Islami Bank Ltd., Uttara Branch 17,509 240,810 9.01.2 Short Term Deposit 1,036,233 124,355 Dhaka Bank Ltd., Local Office 313 1,888 Dhaka Bank Ltd., Dilkusha Branch 5,386 6,586 HSBC Bank Ltd., Dhaka Br. 15,274 15,274 Southeast Bank Ltd,. Principal Br 924,414 8,638 Southeast Bank Ltd., Uttara Br 68,222 67,313 First Security Bank Ltd., Dilkusha Branch 4,993 5,932 EXIM Bank Ltd., Motijheel Br. 17,631 18,724 10.00 Share Capital: This represents Authorized 1,000,00,000 ordinary shares of Tk. 10/- each 1,000,000,000 1,000,000,000 Issued, Subscribed and Paid-up 604,885,050 576,081,000 Paid up Share Capital of Tk. 604,885,050 is arrived at as follows: Sponsors' Contribution 15,856,309 Ordinary Shares @ Tk 10/- each 158,563,090 158,563,090 Public Issued of 44,632,196 Ordinary Shares @ Tk 10/- each 446,321,960 446,321,960 604,885,050 604,885,050 Distribution Schedule-Disclosures under the listing regulation of Stock Exchanges: The distribution schedule showing the number of shareholders and their shareholdings in percentage has been disclosed

below as a requirement of the "Listing Regulations of Dhaka and Chittagong Stock Exchanges".

Range of holdingin number of shares 2015-16 2015-16 2015-16 2014-15 2015-16 2014-15

2,865 4,642

615 373 118

55 22 71 42 10

8,813

33 53

7 4 1 1 0 1 0 0

100

461,731 7,899,299 4,353,088 5,247,223 2,843,038 1,890,856

979,811 4,946,013

10,698,242 21,169,204 60,488,505

598,105 9,068,436 4,812,284 5,987,308 3,277,446 1,546,421 1,315,114 4,221,954 9,912,464

19,748,973 60,488,505

1 13

7 9 5 3 2 8

18 35

100

1 15

8 10

5 3 2 7

16 33

100

No. of shareholders % of total holders No. of shares % of share capital

Below 500500 to 5,0005001 to 10,00010,001 to 20,00020,001 to 30,00030,001 to 40,00040,001 to 50,00050,001 to 100,000100,001 to 1,000,0001,000,001 and aboveTotal

2014-153452

74100100

100

2014-1535795424

697434136

45296041

9 10,454


FY 2015-2016BDT

FY 2014-2015BDT

Market Price The Company was listed in the Dhaka and Chittagong Stock Exchanges, on 14/03/2002 each share was quoted at tk 8.10 (on

30-06-2016) in the Dhaka Stock Exchange LTd and Tk8.10 ( on 30-06-2016) in the Chittagong Stock Exchange Ltd. Summarized List of Shareholders as on 30-06-2016

Category Total Shareholder Total Shareholding Percentage (%) Sponsors 8 15,856,309 26 Financial Institutions 165 7,823,069 13 General Public 8,640 36,809,127 61 8,813 60,488,505 100

Option on Unissued Shares: There is no option regarding the authorized capital not yet issued can be used to increase the Issued, Subscribed and Paid-up

Capital through the issuance of new shares against cash contribution and bonus.

11.00 Reserve & Surplus Revaluation reserve (Note :11.01) 307,707,630 311,186,099 Retained Earnings (Note : 11.02) 51,285,088 67,015,434 Share Premium 103,500,000 103,500,000 Loss on Marketable Securities (Unrealized) (92,535,649) (68,572,813) 369,957,069 413,128,720 11.01 Revaluation Surplus Opening balance 311,186,099 314,837,641 Add: Addition during the year - - Less: Depreciation during the year (3,478,469) (3,651,542) Closing balance 307,707,630 311,186,099 11.02 Retained Earnings Opening Balance 67,015,434 70,317,622 Add : Profit during the year 11,035,437 21,850,320 Less: Declaration of Bonus Share/ Dividend (30,244,252) (28,804,050) Add : Depreciation on Revluation Surplus 3,478,469 3,651,542 Closing Balance 51,285,088 67,015,434 12.00 Deferred Tax Liabilities Opening balance 39,795,326 39,786,408 Addition during the year (281,177) 8,918 39,514,149 39,795,326 13.00 Trade and other payables For Trading Suppliers 11,496,542 19,818,160 11,496,542 19,818,160 14.00 Liability for (WPPF) Opening Balance 5,436,753 8,945,915 Add: Provision made during the year (14.01) 659,100 1,285,838 Less: Paid this year (2,749,915) (4,795,000) Closing balance 3,345,938 5,436,753

Provision for Workers Participation Fund has been made @ 5% of net profit after charging the contribution and such contribution provided as per provision of the Companies Profits (Workers Participation) (amendment) Ordinance, 1985 and payable to workers as defined in the said Ordinance.

14.01 WPPF Provision during the year Net Profit after charging the Contribution 13,841,096 27,002,589 WPPF Percentage 5% 5% 659,100 1,285,838


FY 2015-2016BDT

FY 2014-2015BDT

15.00 Short Term Loan from Bank and Other Short Term Loan from Bank: (15.01) 776,475,302 767,878,579 Loan From Maksons Spinning Mills Ltd. (15.02) 117,013,034 50,794,912 893,488,336 818,673,491 15.01 Short Term Loan from Bank: Jamuna Bank OD A/c-134000403 41,321,822 41,680,877 Southeast Bank Ltd. OD A/C-73300000358 79,961,215 127,183,436 Loan on Export 115,249,391 69,603,850 Jamuna Bank Term Loan 77,243,372 - Jamuna Bank Demand Loan - 98,414,478 Jamuna Bank Ltd- LTR 97,522,272 103,990,515 Southeast Bank Ltd.-LTR 138,356,727 147,594,092 Southeast Bank Term Loan 206,547,805 137,538,648 Mutual trust Term Loan 20,272,698 41,872,683 776,475,302 767,878,579 15.02 Loan From Maksons Spinning Mills Limited 117,013,034 50,794,912 Loan From Maksons Spinning Mills ltd The amount was received from Maksons Spinning Mills Limited against Advance for Land Sales. Jamuna Bank Limited (Cash Credit Hypo) The Cash credit was sanctioned by Jamuna Bank limited (Dilkusha Branch) for one year and usually renewed on annual basis. the

interest rate is subject to change from time to time, Such loan is secured against stock of raw materials and finished goods. Southeast Bank Limited (Overdraft) The Overdraft limit was sanctioned by Southeast Bank Limited (Principal Branch) for one year a revolving limit of Tk.80, 000,000

and is usually renewed on annual basis .The interest rate is subject to change from time to time. Southeast Bank Limited (Loan against Trust Receipt) The loan against trust receipt (LTR) were sanctioned by Southeast Bank Limited (Principal Branch) for 180 days is usually renewed

on annual basis. the interest rate is subject to change from time to time. Such loan is secured against project finance security.

Jamuna Bank Limited (Loan against Trust Receipt) The loan on trust receipt (LTR) were sanctioned by Jamuna Bank Limited (Principal Branch) for 180 days. The interest rate is subject

to change that May be Made By the Bank from time to time .Such loan is secured against Land. Mutual Trust Bank Limited (Term Loan) Two Term Loan were sanctioned by Mutual Trust bank limited (Principal Branch) . The interest rate is subject to change that may

be made by the Bank from time to time. Such loan is secured against loan.

16.00 Provision for Tax Opening Balance 10,380,213 12,816,559 Add : Provision made for the year 2,427,737 3,857,513 Less: Tax Paid during the year (8,203,261) (6,293,859) 4,604,689 10,380,213 17.00 Liabilities for Expenses Liabilities for Audit Fees 235,350 272,300 Welfare Fund 912,355 444,440 Provision for Expenses 7,259,325 9,032,023 Salary & Wages 1,189,279 6,704,820 Others Parties 11,669,972 14,415,413 Dividend Payable 24,292,729 - Unclaimed Dividends 938,256 938,257 Liability for vat/Tax Deduction 4,901,076 505,934 51,398,342 32,313,187 18.00 Sales Sale of Cotton Yarn (Local) 293,704,457 377,216,754 Less: Value Added Tax (VAT) 2,055,000 2,025,000 291,649,457 375,191,754 Add: Export Sales 517,596,105 399,272,229 809,245,562 774,463,983


FY 2015-2016BDT

FY 2014-2015BDT

19.02 Direct Expenses Direct Labour/Wages 43,067,784 41,323,971 Overtime (Workers) 2,502,896 1,176,740 Bonus (Workers) 2,674,953 2,657,532 48,245,633 45,158,243 19.03 Manufacturing Overhead Factory Salary & Allowances 16,464,550 14,472,902 Factory Bonus 2,502,919 582,988 Overtime 331,445 208,413 Entertainment (Factory) 403,846 281,605 Fuel For Vehicle 1,132,080 965,975 Gas Bill 24,544,265 12,748,885 Insurance Premium 3,855,815 2,904,817 Worker Group Insurance 44,200 - Land Revenue 168,941 60,483 Lease Rent 13,916,970 7,128,690 Loading Unloading 550,808 473,551 Carrying charge - 11,800 Office Expense (Factory) 88,892 74,079 Other Expenses 78,994 55,752 Power & Fuel 6,994,710 5,596,587 Printing & Stationery 153,923 129,865 Repair & Maintenance (building) 873,190 598,280 Repair & Maintenance (Factory building) 18,925 25,540 Repairs & Maintenance (Gas Generator) 3,792,871 2,964,469 Repairs & Maintenance (Machinery) 946,984 759,120 Sanitation 44,700 60,562 Store & Spare 8,170,239 4,790,652 Uniform 32,245 26,785 Vehicle Running & Maintenance 976,744 494,077 Fire Fighting & Safety Expenses 26,700 15,800 Medical Expenses 16,700 41,750 Traveling & Conveyance 222,852 200,582 Depreciation (Schedule-A) 28,332,977 28,865,601 114,687,485 84,539,610

19.00 Cost of Goods Sold Particulars Quantity(Lbs) Amount Amount Opening Work in Process 90,566 7,587,625 7,794,687 Raw Material Consumed (Note-19.01) 7,449,959 393,465,970 508,477,316 7,540,525 401,053,595 516,272,003 Less: Recovery 858,765 - - 6,681,760 401,053,595 516,272,003 Less: Invisible 5,945 - - Material available for Consumption 6,675,815 401,053,595 516,272,003 Less: Closing Work in Process 69,927 7,658,290 7,587,625 Production during the year 6,605,888 393,395,305 508,684,378 Add: Direct Expenses (Note-19.02) - 48,245,633 45,158,243 Add: Manufacturing Overhead (Note-19.03) - 114,687,485 84,539,610 Cost of Production 6,605,888 556,328,423 638,382,231 Opening Finished Goods 2,034,828 212,662,184 152,640,912 Finished Goods available for Sale 8,640,716 768,990,607 791,023,143 Less: Closing Finished Goods 1,242,557 134,753,025 212,662,184 7,398,159 634,237,582 578,360,959 19.01 Raw Material Consumed Quantity(Lbs) Amount Amount Opening Stock of Raw Cotton 3,939,712 283,676,800 333,523,556 Add: Purchase of Raw Cotton 7,817,345 399,399,669 458,630,562 Raw Cotton Consumption for available 11,757,057 683,076,469 792,154,118 Less: Closing Stock of Raw Cotton (4,307,098) (289,610,499) (283,676,802) Total Raw Material Consumed 7,449,959 393,465,970 508,477,316


FY 2015-2016BDT

FY 2014-2015BDT

20.00 Administrative Expenses Salary & wages 19,879,889 17,133,486 Festival Bonus 3,875,421 1,460,289 Printing & Stationery 202,957 330,515 Traveling & Conveyance 203,743 278,083 Documentation 177,756 94,589 Telephone & Fax 589,808 633,323 Board Meeting fees & Expense 326,000 350,000 Vehicle maintenance 1,535,139 990,809 Office Expense 640,484 561,120 Entertainment Expense 437,830 460,078 Fees & professionals 172,500 175,000 Share Expense 37,590 - Internal Audit Committee Fees 45,000 50,550 AGM Expense 666,762 968,469 Company Contribution to PF 189,908 497,313 Medical Expense 26,000 - Subscription to BTMA 79,872 54,872 Postage & Telegram 1,878 58,715 Credit Rating Expense 63,250 - CDBL Expense 222,000 83,341 Courier Expense 101,450 - Stock Exchange Fee 632,106 314,020 License & Renewal 112,510 104,335 Fuel for Vehicles 688,678 557,690 Fuel for Generator - 13,600 Gas For Vehicle 521,867 271,464 Internal Audit Fees - 287,500 Audit Fees 155,250 115,000 Sanitation 51,601 91,118 Repair & Maintenance - 15,100 Miscellaneous Expense 129,627 163,058 Utility Expense 185,725 191,529 ICT Expenses 450,688 513,265 Legal Expenses 165,600 117,500 Deprecation (Schedule-A) 733,360 823,127 33,302,249 27,758,858

21.00 Selling & Distribution Expenses Packing Materials 8,127,540 8,886,700 Advertisement 569,450 602,607 8,696,990 9,489,307 22.00 Financial Expenses Interest on Bank & Other (Note 22.01) 113,644,136 128,290,003 Bank Charges and Commission 2,720,908 2,972,410 116,365,044 131,262,413 22.01 Details break up of Interest on Bank & Other Financial Interest is given below Jamuna bank Hypo 5,778,445 6,648,951 Loan on Export 12,703,968 19,988,239 Interest on PAD 371,018 681,375 Southeast Bank Ltd. 13,881,919 17,585,542 Term loan 19,104,526 13,911,153 Demand Loan 5,824,309 5,564,478 Jamuna Bank Term Loan 6,737,842 - Force Loan - 1,666,931 Term loan 5,070,015 7,873,398 LTR A/C 39,108,442 47,416,413 Interest on other Loan 5,063,652 6,953,523 113,644,136 128,290,003


FY 2015-2016BDT

FY 2014-2015BDT

23.00 Non operating income Interest received on Bank A/C 5,975 7,552 Cash Incentive Received - 1,089,717 Profit/loss on sale of Assets - 437,595 5,975 1,534,864 24.00 Non operating expense Loss from currency fluctuation 2,808,576 2,124,722 2,808,576 2,124,722

25.00 Basic Earning Per Share (EPS) The computation of EPS is given below:

(a) Earning attributable to the ordinary shareholders (Net Profit after WPPF) 11,035,437 21,850,320

(b) Weighted average number of ordinary shares outstanding during the year 60,488,505 60,488,505

(c) Basic EPS (Before Considering Unrealized Gain/Loss on Marketable Securities) 0.18 0.36

(d) Basic EPS (Comparative Restated) 0.36 0.36

(e) Basic EPS (After Considering Unrealized Gain/Loss on Marketable Securities) (0.21) (0.59) 26.00 Net Assets Value (NAV) per share Total Assets 1,978,690,115 1,944,430,900 Total Liabilities 1,003,847,996 926,417,130 A. Net Assets 974,842,119 1,018,013,770 B. Total Number of Shares outstanding 60,488,505 60,488,505 Net Assets Value (NAV) per share (A/B) 16.12 16.83 27.00 Net Operating Cash Flow Per Share (NOCFPS) A. Net Operating Cash Flow (Numerator) (50,136,069) 71,129,709 B. No. of Shares Outstanding 60,488,505 60,488,505 Net Operating Cash Flow Per Shares (A/B) (0.83) 1.18

Particulars Import Total purchaseLocal purchase

Raw Materials

Machineries & spare parts

Packing Materials

109,429,884

14,461,212

8,265,825

289,969,785

5,512,753

-

399,399,669

19,973,965

8,265,825

28.00 Disclosure as per requirement of Schedule XI, Part II Para 8 Value of Raw materials, spare parts, paking materials

29.00 Value of Export

Particulars In foreign Currency $ In BDTQuantity (LBS)

Export 4,661,780 6,635,848 517,596,105

Particulars Installed Capacity Utilization duringthe periods

Annual Production of Yarn in KG 45,00,000 2,996,370

30.00 Plant Capacity and Capacity Utilization as per requirement of Schedule XI, Part II Para 7


32.00 Payment to Directors as per requirement of Schedule XI, Part II Para 4

90,000

1,200,000

720,000

1,560,000

600,000

4,170,000

1,080,000

1,200,000

720,000

1,080,000

300,000

4,380,000

Chairman

Mamaging Director

Deputy Managing Director

Director

Director

Total

PositionJuly 1, 2015 -June 30, 2016

July 1, 2014 -June 30, 2015Name of Directors

Al Haj Abdul Ali

Mohammad Ali Khokon

Md Shawkat Ali

Md Ferdous Kawser Masud

Mrs. Laila Ali

34.00 Proposed Dividend The Board of Directors did not recommend any dividend for approval of the shareholders at the Annual General Meeting

(AGM) for the year ended 30 June 2016.

35.00 Approval of the Financial Statements

These financial statements were authorised for issue in accordance with a resolution of the company's Board of Directors on 30th October 2016.

Salary Range Worker Total employeeFactory Head Office

Officer & Staff

Below 5,999 643

73

716

655

205

860

Above 5,999

Total

1

67

68

11

65

76

31.00 EEmployee Position as per Schedule XI, Para II, Note 5 of Para 3

Particulars Transactionduring the year

Outstanding Balanceas on 30 June, 2015

Nature of Relationship

Maksons Spinning Mills ltd. 5(Five) Common Director 89,029,470 (117,013,034)

33.00 Disclosure on Related party Transaction as per BAS-24 ''Related Party Disclosure''


34.00 Proposed Dividend The Board of Directors did not recommend any dividend for approval of the shareholders at the Annual General Meeting

(AGM) for the year ended 30 June 2016.

35.00 Approval of the Financial Statements

These financial statements were authorised for issue in accordance with a resolution of the company's Board of Directors on 30th October 2016.

METRO SPINNING LIMITEDCorporate & Head Office: Holding#17, Road#6, Sector#1, Uttara Model Town, Dhaka-1230

PROXY FORM

The Managing Director Register Folio/BO No._________________________Metro Spinning LimitedHolding#17, Road#6, Sector#1Uttara Model Town, Uttara, Dhaka-1230

I/We______________________________________________of________________________________________

being a Member of Metro Spinning Limited do hereby appoint Mr./Ms. _______________________________________

of____________________________________or (failing him / her) Mr./Ms. ________________________________

of _____________________________________________________________________________as my/our

proxy, to vote for me/us and on my/our behalf at the 21st Annual General Meeting of the Company to be held on Sunday,

18 December, 2016 and any adjournment thereof or at any ballot to be taken in consequence thereof.

Signed this ____________________________day of ______________________________2016.

Signature of Shareholder ____________________________

Folio/BO No. ____________________________________

No. of Shares held ________________________________Signature of Proxy ______________________

PLEASE NOTE:1. This Form of Proxy, duly completed, must be deposited at least 72 hours before the meeting at the Company's Registered Office. Proxy

is invalid if not signed and stamped as explained above.

2. Signature of the Shareholder should agree with the Specimen Signature registered with the Company.

______________________ Signature Verified Authorized Signature

METRO SPINNING LIMITEDCorporate & Head Office: Holding#17, Road#6, Sector#1, Uttara Model Town, Dhaka-1230

SHAREHOLDERS ATTENDANCE SLIP

The Managing DirectorMetro Spinning LimitedHolding#17, Road#6, Sector#1Uttara Model Town, Uttara, Dhaka-1230

I hereby record my attendance at the 21st ANNUAL GENERAL MEETING of the Company being held on Sunday, 18 December, 2016 at Maksons Group Conference Hall (Situated at Maksons Spinning Mills Ltd., Holding # 87, Ward # 5, Block # B, Shahid Minnat Ali Road # 4, Gouripur, Ashulia, Savar, Dhaka) 10.00 AM.

Name of Shareholder/Proxy __________________________________________________________________________

Folio/BO No. ___________________________________________ Dated ____________________________________

Authorized Signature _______________________________________________________________________________

PLEASE NOTE:1. Shareholders attending the meeting in Person or by Proxy are requested to complete the attendance slip and deposit the same at the entrance of the Meeting Hall. SHAREHOLDER/PROXY (Please Tick Above)

Revenue StampTK 8/=

No. of Shares held__________________

Leading in 100% cotton yarn spinning.

Committed for tomorrow's market with knit yarns.

Devoted to economic contribution in national progress.

Dedicated to strive for better tomorrow, leaving behind the past.

Also committed for best services to our valued shareholders as apublic limited company.

We are

Corporate OfficeHouse # 17, Road # 06, Sector # 01Uttara, Dhaka-1230, BangladeshTel : 8933 612, 8933 739, 8933740Fax : 88-02-8933 656

Registered OfficeDilkusha Centre, 28 Dilkusha C/A

Suite # 401 (4th Floor) Dhaka-1000, BangladeshTel : 7168 613-4, 9564 543, Fax : 88-02-9564 543

E-mail : [email protected] : www.maksonsgroup.com.bd


Our cotton yarn is auto connedand spliced with the best and most

modern machinery. In addition, thecotton yarn is electronically cleaned.Metro has a complete range of latesttesting laboratory equipment which

further ensures high quality of our yarn.

Our cotton yarn is auto connedand spliced with the best and most

modern machinery. In addition, thecotton yarn is electronically cleaned.Metro has a complete range of latesttesting laboratory equipment which

further ensures high quality of our yarn.

www.maksonsgroup.com.bd

Corporate OfficeHouse # 17, Road # 06, Sector # 01, Uttara, Dhaka-1230Tel : 8933 612, 8933 739, 8933740, Fax : 88-02-8933 656

Registered OfficeDilkusha Centre, 28 Dilkusha C/A, Suite # 401 (4th Floor) Dhaka-1000, Bangladesh

Tel : 7168 613, 7168 614, 9564 543, Fax : 88-02-9564 543E-mail : [email protected]


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